Form 20-F

20-F 1 d338351d20f.htm FORM 20-F Form 20-F

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

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

For the fiscal year ended December 31, 2011

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

¨	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.

Marica Derenstrand, Group Chief Accountant, +46 31 85 50 00, e-mail: marica.derenstrand@stena.com,

(Name, Telephone, E-mail and/or Facsimile number and address of Company Contact Person)

None

(Title of Class)

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

None

(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.

7% 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, 2011)

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

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

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data file required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x 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 x

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

U.S. GAAP ¨

International Financial Reporting Standards as issued

by the International Accounting Standards Board x

Other ¨

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

TABLE OF CONTENTS


		Page
PART I
Item 1.	Identity of Directors, Senior Management and Advisors		4
Item 2.	Offer Statistics and Expected Timetable		4
Item 3.	Key Information		4
Item 4.	Information on the Company		23
Item 4A.	Unresolved Staff Comments		47
Item 5.	Operating and Financial Review and Prospects		47
Item 6.	Directors, Senior Management and Employees		63
Item 7.	Major Shareholders and Related Party Transactions		66
Item 8.	Financial Information		68
Item 9.	The Offer and Listing		69
Item 10.	Additional Information		69
Item 11.	Quantitative and Qualitative Disclosures about Market Risk		71
Item 12.	Description of Securities Other than Equity Securities		74

PART II
Item 13.	Defaults, Dividend Arrearages and Delinquencies		75
Item 14.	Material Modifications to the Rights of Security Holders and Use of Proceeds		75
Item 15.	Controls and Procedures		75
Item 16.	[Reserved]
Item 16A.	Audit Committee Financial Expert		75
Item 16B.	Code of Ethics		75
Item 16C.	Principal Accountant Fees and Services		76
Item 16D.	Exemptions from the Listing Standards for Audit Committees		77
Item 16E.	Purchases of Equity Securities by the Issuer and Affiliated Purchasers		77
Item 16F.	Change in Registrant’s Certifying Accountant		77
Item 16G.	Corporate Governance		77

PART III
Item 17.	Financial Statements		78
Item 18.	Financial Statements		78
Item 19.	Exhibits		79

Introduction

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

Forward-looking Information

This Annual Report includes statements that are, or may be deemed to be, “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Some of these statements can be identified as “forward-looking statements” by the use of forward-looking terminology including terms such as “anticipate”, “should”, “likely”, “foresee”, “believe”, “estimate”, “expect”, “intend”, “continue”, “could”, “may”, “plan”, “project”, “predict”, “will” or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this Annual Report and include statements regarding our intentions, beliefs or current expectations concerning, among other things, our results of operations, financial condition, liquidity, prospects, growth, strategies and the industries in which we operate.

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

•

changes in general economic and business conditions;

•

changes in laws and regulations;

•

changes in International Financial Reporting Standards (IFRS);

•

changes in currency exchange rates and interest rates;

•

risks incident to vessel and drilling rig operations, including discharge of pollutants;

•

introduction of competing services or products by other companies;

•

changes in trading or travel patterns;

•

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

•

changes in our business strategy; and

•

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

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

PART I

Item 1.

Identity of Directors, Senior Management and Advisors

Not applicable.

Item 2.

Offer Statistics and Expected Timetable

Not applicable.

Item 3.

Key Information

The following selected consolidated financial information should be read in conjunction with, and is qualified in its entirety by reference to, our Consolidated Financial Statements and the notes thereto included elsewhere herein. The selected consolidated financial information for each of the years in the five-year period ended December 31, 2011, has been derived from the audited financial statements. The financial statements for the years 2007, 2008, 2009, 2010 and 2011 were prepared in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”). See Note 1 for more information.

Currency of Presentation

Stena AB maintains its consolidated financial accounts in Swedish kronor. In this Annual Report, references to “SEK” are to Swedish kronor, references to “U.S. dollars”, “dollars”, “USD”, “U.S.$” or “$” are to U.S. dollars, references to “EUR,” “€” and “euro” are to the currency introduced at the start of the third stage of the European Economic and Monetary Union pursuant to the treaty establishing the European Community, as amended by the Treaty on the European Union, references to “GBP”, “British pounds” or “£” are to Pound sterling, and references to “DKK” are to Danish kronor. Our financial reports are presented in SEK, which is the functional currency of the Company. Unless otherwise indicated, all amounts are rounded to the nearest million. Figures in the reports are based on a consolidation system in SEK thousands. Totals in tables may not always equal the sum of the included rounded numbers as a result of rounding. For the convenience of the reader, this Annual Report contains translations of Swedish kronor amounts into U.S. dollars at specified rates. Unless otherwise stated, the translations of Swedish kronor into U.S. dollars have been made at $1.00 = SEK 6.9146, the noon buying rate as certified for customs purposes by the United States Federal Reserve (the “Noon Buying Rate”) on December 31, 2011. 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, 2011. No representation is made that these amounts have been, could have been or could be converted into such amounts at the rates indicated or at any other rates.

GLOSSARY

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

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

American Bureau. American ship classification society.

Annual survey. The yearly inspection of a vessel pursuant to international conventions, by a classification society surveyor, on behalf of the flag state.

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 (CoA). A contract between a shipowner and a shipper, whereby the shipowner undertakes to carry a cargo over a certain route on specified occasions.

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

DNV. Norwegian ship classification society.

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

DrillMAX ICE. Sixth generation, high specification, ultra-deepwater drillships designed by Stena for worldwide operations, including in harsh and arctic environments with ice-infested waters.

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 12,000 ft. 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 thereof.

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

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

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

EKN. Svenska Exportkreditnämnden. An association commissioned and controlled by the Swedish government to promote Swedish exports and the internationalization of Swedish companies.

Freight unit. Trucks, trailers, containers and railcars.

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

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

Hull. The shell or body of a ship.

IFRS. International Financial Reporting Standards as issued by the IASB.

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 its draft. A lighter is a small vessel used to transport cargo from a vessel anchored offshore.

Linkspan. The docking facility for vessels.

Lloyds Register. British ship classification society.

LNG carriers. Liquefied Natural Gas vessels.

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 required under its contract. Offhire periods, which may be scheduled or unscheduled, include days spent on repairs, drydockings, special surveys, vessel upgrades, initial positioning after the purchase of a vessel and periods awaiting employment.

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

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

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

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

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

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

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

Semi-submersible rig. Floating platforms that, by means of a water ballasting system, can be submerged to a predetermined depth so that a substantial portion of the lower hulls, or pontoons, is below the water surface during drilling operations. These rigs maintain their position over the well through the use of an anchoring system or through dynamic positioning. Semi-submersible rigs are divided into six generations, which are determined by rig design and the year of delivery of the units. Generally, first generation drilling rigs are drilling rigs that were delivered before 1973, second generation drilling rigs are drilling rigs that were delivered or upgraded between 1973 and 1981, third generation drilling rigs are drilling rigs that were delivered or upgraded between 1982 and 1985, fourth generation drilling rigs are drilling rigs that were delivered or upgraded between 1986 and 1996, fifth generation drilling rigs are drilling rigs that were delivered or upgraded between 1997 and 2005 and sixth generation drilling rigs are drilling rigs that have been delivered or upgraded since 2006.

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

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

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

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

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

Service speed. The average speed a vessel operates in when utilized on a daily basis.

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

Slot Charter. A voyage charter whereby the shipowner agrees to place an agreed number of container slots at the charterer’s disposal.

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

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

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

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

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

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

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

SELECTED FINANCIAL DATA


	YEAR ENDED DECEMBER 31,
	2007			2008			2009			2010			2011			2011
	SEK			SEK			SEK			SEK			SEK			USD ¹⁾
				(in millions)
CONSOLIDATED GROUP
INCOME STATEMENT DATA:
Total income		22,402			26,472			27,812			27,150			27,968			4,044
Direct operating expenses		(14,085	)		(16,679	)		(17,188	)		(16,784	)		(16,548	)		(2,394	)
Selling and administrative expenses		(2,177	)		(2,920	)		(3,207	)		(3,104	)		(3,225	)		(466	)
Depreciation and amortization		(1,680	)		(2,501	)		(3,415	)		(3,704	)		(3,617	)		(523	)
Total operating expenses		(17,942	)		(22,100	)		(23,810	)		(23,592	)		(23,390	)		(3,383	)
Income from operations		4,460			4,372			4,002			3,558			4,578			661
Share of associated companies’ result		(61	)		(80	)		24			131			60			9
Interest income		919			957			685			477			394			57
Interest expense		(1,739	)		(2,260	)		(1,864	)		(1,798	)		(1,914	)		(277	)
Other financial items²⁾		882			(1,611	)		(503	)		312			(339	)		(50	)
Income before taxes		4,461			1,378			2,344			2,680			2,779			400
Net income		3,829			1,745			2,364			2,566			2,526			363
BALANCE SHEET DATA
Cash and marketable securities³⁾		11,562			9,174			7,088			9,922			7,720			1,117
Investments in SPEs⁴⁾		9,251			9,973			8,174			6,175			4,548			658
Total assets		81,524			97,369			92,205			94,938			98,596			14,260
Debt in SPEs⁴⁾		8,021			9,492			8,249			5,140			4,143			599
Other debt⁵⁾		32,731			45,490			41,898			47,964			49,501			7,159
Shareholders’ equity		26,386			27,454			29,183			29,448			30,397			4,397
OTHER FINANCIAL DATA
Capital expenditures		(8,368	)		(9,696	)		(9,230	)		(10,189	)		(10,651	)		(1,540	)
Cash dividends paid		(550	)		(390	)		(190	)		(316	)		(240	)		(35	)
Cash flow from operating activities		4,586			5,381			7,084			5,065			4,895			707
Cash flow used in investing activities		(12,862	)		(7,397	)		(6,456	)		(9,681	)		(5,579	)		(807	)
Cash flow used in/provided from financing activities		8,064			(2,714	)		(907	)		5,151			559			82

(1)	Amounts in U.S. dollars have been translated, solely for the convenience of the reader, at an exchange rate of $1.00 = SEK 6.9146, the Noon Buying Rate on December 31, 2011.

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

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

(4)	As of December 31, 2011, we had invested in three SPEs.

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

Restricted Group Data as of December 31, 2011

For the year ended December 31, 2011, Restricted Group Data represents the selected consolidated financial information excluding (i) the property business segment (other than two small properties), (ii) the business segment of New Businesses, Adactum (“Adactum”), whose activities consist primarily of investing in companies outside our traditional lines of business, and (iii) our subsidiaries Stena Investment Luxembourg S.àr.l., Stena Royal S.àr.l. (“Stena Royal”), Stena Investment Cyprus Ltd and Mondaldi Ltd. Our real estate operations and the business of Adactum are conducted through various subsidiaries, which, together with our subsidiaries Stena Investment Luxembourg S.àr.l., Stena Royal, Stena Investment Cyprus Ltd and Mondaldi Ltd, are designated as unrestricted subsidiaries under the indentures governing the Senior Notes and, as a result, are not bound by the restrictive provisions of those indentures.

As of December 31, 2009, we had outstanding $153.1 million principal amount of Senior Notes due 2013, $128.8 million principal amount of Senior Notes due 2016, €300 million principal amount of Senior Notes due 2017 and €102 million principal amount of Senior Notes due 2019.

In March 2010, we completed an offering of €200 million of Senior Notes due 2020. In April 2010, we redeemed the total $153 million outstanding principal amount of our Senior Notes due 2013 at a price of 102.5%. As of December 31, 2010, we had outstanding $128.8 million principal amount of Senior Notes due 2016, €300 million principal amount of Senior Notes due 2017, €102 million principal amount of Senior Notes due 2019 and €200 million principal amount of Senior Notes due 2020.

As of December 31, 2011, we had outstanding $128.8 million principal amount of Senior Notes due 2016, €300 million principal amount of Senior Notes due 2017, €102 million principal amount of Senior Notes due 2019 and €200 million principal amount of Senior Notes due 2020.

As of March 31, 2012, we had outstanding $128.8 million principal amount of Senior Notes due 2016, €300 million principal amount of Senior Notes due 2017, €102 million principal amount of Senior Notes due 2019 and €200 million principal amount of Senior Notes due 2020.

SELECTED RESTRICTED GROUP FINANCIAL DATA

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


	YEAR ENDED DECEMBER 31,
	2007			2008			2009			2010			2011			2011
	SEK			SEK			SEK			SEK			SEK			USD ¹⁾
	(in millions)
RESTRICTED GROUP
INCOME STATEMENT DATA:
Revenues from operations		17,550			20,617			20,810			19,533			18,842			2,725
Net gain on sale of vessel		253			203			149			2			1,577			228

Total revenues		17,803			20,820			20,959			19,535			20,419			2,953
Direct operating expenses		(11,547	)		(13,083	)		(12,912	)		(12,597	)		(12,344	)		(1,787	)
Selling and administrative expenses		(1,773	)		(2,109	)		(2,068	)		(1,985	)		(2,120	)		(308	)
Depreciation and amortization		(1,645	)		(2,376	)		(3,195	)		(3,487	)		(3,424	)		(495	)

Total operating expenses		(14,966	)		(17,568	)		(18,175	)		(18,069	)		(17,888	)		(2,590	)
Income from operations		2,838			3,252			2,784			1,466			2,531			363
Interest income		543			474			265			229			302			44
Interest expense		(643	)		(887	)		(1,032	)		(1,128	)		(1,158	)		(167	)
Other financial items²⁾		(237	)		206			20			101			(55	)		(8	)

Total financial income and expense		(337	)		(207	)		(747	)		(798	)		(911	)		(131	)
Minority interest		(2	)		(3	)		0			(1	)		(1	)		0

Income before taxes		2,499			3,042			2,037			667			1,619			232
Net income		2,077			3,010			2,151			962			1,635			234

(1)	Amounts in U.S. dollars have been translated, solely for the convenience of the reader, at an exchange rate of $1.00 = SEK 6.9146, the Noon Buying Rate on December 31, 2011.

(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).


	YEAR ENDED DECEMBER 31,
	2007		2008		2009		2010		2011		2011
	SEK		SEK		SEK		SEK		SEK		USD ¹⁾
	(in millions)
RESTRICTED GROUP
BALANCE SHEET DATA:
Intangible fixed assets		177		398		300		262		772		112
Tangible fixed assets		22,744		33,541		35,619		38,150		42,867		6,200
Marketable securities		610		885		548		789		588		85
Other noncurrent assets		13,936		13,654		11,635		13,268		15,546		2,248

Total noncurrent assets		37,467		48,478		48,102		52,469		59,773		8,645
Short-term investments		2,559		3,618		2,487		3,613		2,417		350
Cash and cash equivalents		505		917		568		727		809		117
Other current assets		7,200		9,716		6,380		5,039		5,187		750

Total current assets		10,264		14,251		9,435		9,379		8,413		1,217
Total assets		47,731		62,729		57,537		61,848		68,186		9,862
Total shareholders’ equity		19,599		23,672		23,331		22,405		24,365		3,524
Deferred income taxes		1,400		778		857		943		1,115		161
Other provisions		4,149		3,140		2,934		2,445		2,221		321
Long-term debt		17,003		27,225		24,283		30,761		32,098		4,642
Other noncurrent liabilities		828		2,591		1,097		874		1,242		180

Total noncurrent liabilities		17,831		29,816		25,380		31,635		36,676		5,304
Short-term debt		1,115		972		1,989		1,599		2,005		290
Other current liabilities		3,637		4,350		3,046		2,821		5,140		744

Total current liabilities		4,752		5,322		5,035		4,420		7,145		1,034
Total shareholders’ equity and liabilities		47,731		62,729		57,537		61,848		68,186		9,862

(1)	Amounts in U.S. dollars have been translated, solely for the convenience of the reader, at an exchange rate of $1.00 = SEK 6.9146, the Noon Buying Rate on December 31, 2011.


	YEAR ENDED DECEMBER 31,
	2007			2008			2009			2010			2011			2011
	SEK			SEK			SEK			SEK			SEK			USD ¹⁾
	(in millions)
RESTRICTED GROUP
CONSOLIDATED STATEMENT OF CASH FLOW:
Net income		2,077			3,010			2,151			962			1,635			234
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		1,645			2,376			3,195			3,487			3,424			495
(Gain) on sale of assets		(253	)		(203	)		(148	)		(2	)		(1,577	)		(228	)
(Gain)/loss on securities, net		58			(180	)		(380	)		(95	)		154			23
Unrealized foreign exchange (gains) losses		(149	)		(125	)		352			(28	)		354			52
Deferred income taxes		335			(164	)		(218	)		(426	)		(163	)		(23	)
Minority interest		3			3			—			—			1			0
Other non cash items		65			(165	)		346			(86	)		250			36
Provision for pensions		(221	)		(235	)		(198	)		(445	)		(166	)		(24	)
Net cash flows from trading securities		(699	)		994			(107	)		(27	)		159			23
Changes in working capital		1,377			(185	)		571			625			386			56

Net cash provided by operating activities		4,238			5,126			5,564			3,965			4,457			644
*Net cash flows from investing activities:*
Purchase of intangible assets		(37	)		(44	)		(38	)		(21	)		(30	)		(4	)
Cash proceeds from sale of property, vessels and equipment		821			692			249			82			3,272			473
Capital expenditure on property, vessels and equipment		(7,299	)		(7,878	)		(7,764	)		(9,073	)		(8,980	)		(1,299	)
Purchase of subsidiary net of cash acquired		—			(53	)		—			(127	)		(115	)		(17	)
Proceeds from sale of securities		95			691			704			100			110			16
Purchase of securities		(233	)		(1,448	)		(70	)		(296	)		(98	)		(14	)
Increase of non-current assets		(38	)		(589	)		(14	)		(336	)		(130	)		(19	)
Decrease of non-current assets		10			424			177			35			20			3
Other investing activities		(18	)		(990	)		(44	)		(13	)		(491	)		(71	)

Net cash used in investing activities		(6,699	)		(9,195	)		(6,800	)		(9,649	)		(6,442	)		(932	)
*Net cash flows from financing activities:*
Proceeds from issuance of debt		6,915			6,418			4,079			6,024			3,304			478
Principal payments on debt		(2,352	)		(1,093	)		(721	)		(2,816	)		(1,133	)		(164	)
Net change in borrowings on line-of-credit agreements		440			120			(3,888	)		5,118			(1,098	)		(159	)
Proceeds from new capitalized lease obligations		—			46			1			618			—			—
Principal payments capital lease obligations		(38	)		(686	)		(184	)		(136	)		(231	)		(33	)
Net change in restricted cash accounts		(692	)		(1,922	)		1,003			(1,425	)		1,027			149
Intercompany accounts		(1,123	)		1,353			532			(1,286	)		501			73
Dividends paid		(550	)		(390	)		(190	)		(316	)		(240	)		(35	)
Other financing activities		(313	)		618			235			66			(60	)		(9	)

Net cash provided by financing activities		2,287			4,464			867			5,847			2,070			300
Effect of exchange rate changes on cash and cash equivalents		22			17			20			(4	)		(3	)		0
Net change in cash and cash equivalents		(152	)		412			(349	)		159			82			12
Cash and cash equivalents at beginning of year		657			505			917			568			727			105
Cash and cash equivalents at end of year		505			917			568			727			809			117

(1)	Amounts in U.S. dollars have been translated, solely for the convenience of the reader, at an exchange rate of $1.00 = SEK 6.9146, the Noon Buying Rate on December 31, 2011.

Exchange Rate Information

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


Year	Average¹⁾		High		Low		Period end

2007		6.7575		7.1060		6.2356		6.4568
2008		6.5935		8.4858		5.8346		7.8770
2009		7.6520		9.3294		6.7491		7.1890
2010		7.2038		8.1131		6.5244		6.7835
2011		6.4878		7.0054		5.9968		6.8737

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


Month	Average²⁾		High		Low		Period end
October 2011		6.6396		6.9050		6.3575		6.4635
November 2011		6.7377		7.0013		6.5507		6.7555
December 2011		6.8553		7.0054		6.7128		6.8737
January 2012		6.8463		7.0137		6.7350		6.8161
February 2012		6.6619		6.7389		6.5561		6.5843
March 2012		6.7319		6.8522		6.6191		6.6191
April 2012(through April 20, 2012)		6.7368		6.8118		6.5950		6.6936

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

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

On April 20, 2012, the Noon Buying Rate for the Swedish kronor, expressed as Swedish kronor per U.S. dollar, was $1.00 = SEK 6.6936.

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, 2011, we had outstanding consolidated indebtedness (excluding SPEs) of SEK 49.5 billion, of which SEK 15.4 billion was the obligation of unrestricted subsidiaries (as defined in the indentures governing our Senior Notes), all of which was non-recourse to Stena AB. Our total interest bearing debt (excluding SPEs) as a percentage of our total capitalization (excluding SPEs) was approximately 55%. For the Restricted Group, the total interest bearing debt as a percentage of total capitalization was approximately 54%.

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

•

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

•

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

•

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

•

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

•

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

•

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

Subject to compliance with various financial and other covenants imposed by our revolving credit facilities, the agreements governing our other indebtedness and the indentures governing our Senior Notes, we and our subsidiaries may incur additional indebtedness from time to time, including indebtedness to finance the purchase or completion of Newbuildings, other vessels and ports. As of March 31, 2012, the remaining cost for a Suezmax tanker we ordered from a shipyard in Korea in May 2010 was approximately $40 million.

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

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

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

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

•

refinance all or a portion of our debt;

•

obtain additional financing;

•

sell certain of our assets or operations;

•

reduce or delay capital expenditures; or

•

revise or delay our strategic plans.

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

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

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

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

•

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

•

issue preferred stock;

•

pay dividends or make distributions;

•

make redemptions and repurchases of capital stock;

•

make loans, investments and capital expenditures;

•

prepay, redeem or repurchase debt;

•

engage in mergers, consolidations and asset dispositions;

•

engage in sale-leaseback transactions and affiliate transactions;

•

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

•

restrict distributions from subsidiaries.

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

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

Stena AB is a holding company. All of our operations are conducted by, and substantially all of our assets (including our vessels) are owned by, our subsidiaries. Repayment of our indebtedness is dependent on the generation of cash flow by our subsidiaries and their ability to make such cash available to us, by dividend, debt repayment or otherwise. Under the Swedish Companies Act, there are restrictions as to the ability of our subsidiaries to pay us dividends or make loans and advances to us. The indenture governing our Senior Notes due 2016 contains covenants that restrict the ability of our subsidiaries to enter into agreements limiting distributions and transfers, including dividends. However, our real estate operations and certain of our investment activities are conducted through unrestricted subsidiaries that are not bound by the restrictive provisions of this indenture 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 the Senior Notes.

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

Our real estate operations and certain investment activities are conducted through various subsidiaries. For purposes of the indentures governing our Senior Notes, the subsidiaries that conduct our real estate operations (other than two small properties) and the subsidiaries that conduct a large portion of our investment activities are designated as unrestricted subsidiaries. As a result, these

unrestricted subsidiaries are not bound by the restrictive provisions of our indentures. As of December 31, 2011, these unrestricted subsidiaries had outstanding indebtedness (including SPEs) of approximately SEK 19.5 billion, all of which was non-recourse to Stena AB and its restricted subsidiaries. Such debt of the real estate subsidiaries is secured by their real property interests, the debt of Adactum is secured by its investments in listed shares and shares in subsidiaries, and the credit facility of Stena Royal is secured by its medium and long-term investment portfolios. Neither we nor any of our restricted subsidiaries have guaranteed payment of any of this indebtedness. There is no limitation in the indentures governing our Senior Notes on the amount of indebtedness our unrestricted subsidiaries may incur in the future. The indentures require that any indebtedness of an unrestricted subsidiary must be non-recourse to Stena AB and its restricted subsidiaries. Nevertheless, there can be no assurance that a creditor of an unrestricted subsidiary could not successfully seek satisfaction from us and our restricted subsidiaries or that, in the event of bankruptcy of Stena AB or one or more of our unrestricted subsidiaries, a bankruptcy court would not consolidate our assets and debts and those of our restricted subsidiaries with those of our unrestricted subsidiaries.

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

In addition, because restrictions in the indenture governing our Senior Notes due 2016 prohibiting, subject to certain limitations, the creation of limitations on the ability of our subsidiaries to pay dividends do not apply to the unrestricted subsidiaries and because our real estate investments are subject to significant indebtedness, there can be no assurance that the cash flows or assets of the unrestricted subsidiaries will be available to us to pay our obligations under any of our indebtedness. All our indentures also provide for designating other of our subsidiaries as unrestricted subsidiaries. The indentures governing our Senior Notes due 2017, 2019 and 2020 do not contain any prohibitions on the creation of limitations on the ability of our subsidiaries to pay dividends.

The industries in which we operate are highly competitive.

Our ferry operations compete with other ferry operators and forms of transportation, including airlines, other freight carriers and fixed links such as bridges and tunnels. In particular, competition from low cost airlines and fixed links have increased. Some of these other forms of transportation are faster and/or less expensive or may be more convenient than ferry service. Competition with other ferry operators is based on the location of routes, rates charged, quality and reliability of vessels and onshore and onboard services provided. The principal effect of this competition is to affect our volumes and limit our ability to increase prices. Some of our competitors may have greater financial resources than us, be owned by governments or benefit from government subsidies. As a result, such competitors may be able to withstand price competition and price volatility better than we are.

The offshore drilling rig market also is highly competitive. Drilling contracts generally are awarded on a competitive bid basis with price competition as the primary factor. Some oil companies are seeking to negotiate contracts with a lower day rate and an incentive payment payable only upon achieving specified operating goals. In these cases, in the event of rig equipment failures or if we do not achieve the stated goals, our revenues will be lower. However, contracts for drilling projects are increasingly being negotiated directly between an oil company and its preferred contractor, with suitability of equipment, quality of service, safety and price being significant factors in awarding the contract. We cannot predict the timing or extent of any changes in the industry or the future level of demand for our drilling rigs.

The shipping industry also is highly competitive, as well as fragmented, and includes several large companies that compete in the markets the Group serves, as well as numerous small companies that compete with the Group on a local basis. The Group’s larger competitors’ greater resources could allow them to better withstand industry downturns and compete more effectively on the basis of price, location, vessel quality, size, condition and reputation for safety and customer service. In particular, significant price competition, particularly during industry downturns, which could have a material adverse effect on the Group’s results of operations and financial condition.

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

Fuel represents a significant cost incurred by us in the operation of our fleet. Fuel prices were affected by the global financial crisis in 2008-2009 and decreased substantially from earlier levels. However, since the first quarter of 2009 when fuel prices reached their lowest levels during the economic downturn, fuel prices have increased. The price and supply of fuel is unpredictable and fluctuates based on events outside our control, including geopolitical and regulatory developments, supply and demand for oil and gas, actions

by the Organization of Petroleum Exporting Countries (“OPEC”) and other oil and gas producers, war and unrest in oil producing countries and regions, regional production patterns and environmental concerns. Further or sustained increases in the price of fuel or reductions in supply could increase our operating expenses and have a material adverse effect on our financial condition and results of operations. Road and port blockades in the future, arising from fuel protests or other reasons, may have similar effects.

We primarily use swaps and options to hedge our exposure to variations in the price of fuel. However, there can be no assurance that such hedging activities will be successful, and generally our bunker fuel requirements are not fully hedged.

In addition, our existing bunker hedges will expire during the next four years and 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.

Currently, the Company have three vessels, which are contracted on short to medium-term charters, which expire between mid 2013 and 2016. Short to medium-term time charters generally provide reliable revenues but they also limit the portion of our fleet available to the long-term market. The charter rates payable under time charters or in the spot market may be uncertain and volatile and will depend upon, among other things, economic conditions in the LNG market. The supply and demand balance for LNG carriers is also uncertain.

Future demand for our drilling units is unpredictable.

All our drilling units are currently contracted, with expiration dates ranging from the fourth quarter of 2012 through June 2017. 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.

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.

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

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

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

•

shortages of equipment, materials or skilled labor;

•

unscheduled delays in the delivery of ordered materials and equipment;

•

unanticipated cost increases;

•

weather interferences;

•

difficulties in obtaining necessary permits or in meeting permit conditions;

•

design and engineering problems;

•

failure to meet agreed-upon specifications; and

•

bankruptcy or other failures of the shipyard.

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

Historically, the profitability of the shipping industry has been cyclical. The cyclicality of the shipping industry has been due to changes in the level and pattern of global economic growth and trading and the highly competitive nature of the shipping industry, as well as changes in the supply of and demand for vessel capacity, which impact charter rates and vessel values. The worldwide supply of vessels is influenced by the number of newbuildings and scrappings and government and industry regulation of maritime transportation practices. The overall demand for vessel capacity is influenced by global and regional economic conditions, increases and decreases in industrial and agricultural production, energy consumption, tourism patterns, political changes and armed conflicts, developments in international trade and changes in sea borne and other trading patterns. Because many of the factors influencing the supply of and demand for vessel capacity are unpredictable, the timing, direction and degree of changes in the shipping markets in which we participate, including the RoRo, RoPax, car/passenger ferry, tanker and LNG 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 or our ability to dispose of vessels at a profit will increase or even remain stable.

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

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

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

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

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

We are subject to risks pertaining to conflicts in the Middle East and in North Africa. The tankers owned, chartered in or managed by us trade from time to time in the Arabian Gulf and North Africa. 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 these regions could adversely impact our tanker operations.

These circumstances may materially adversely affect our trade patterns, operations and results of operations.

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

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

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

Acts of piracy have historically affected ocean-going vessels trading in regions such as the South China Sea, the Gulf of Aden and certain parts of the Indian Ocean. Throughout 2009, 2010 and 2011, the frequency and geographic range of piracy incidents increased significantly, particularly in the Indian Ocean. If these piracy attacks occur in areas where our vessels are deployed and which are characterized by insurers as war risk zones (as the Gulf of Aden temporarily was in May 2008) or Joint War Committee (JWC) war and strikes listed areas, premiums payable for insurance coverage could increase significantly and such insurance coverage may be more difficult to obtain. In addition, crew costs, including costs for employing onboard security guards, could increase in such circumstances. We may not be adequately insured to cover losses from these incidents, which could have a material adverse effect on our operations. In addition, detention hijacking as a result of an act of piracy against our vessels, or an increase in cost, or unavailability of insurance for our vessels, could have a material adverse impact on our business, financial condition and results of operations.

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

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

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

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

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

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

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

We are party to separate agreements covering substantially all our employees in our ferry operations in Sweden, the United Kingdom and The Netherlands. Generally, the terms of these agreements are for one to two years or the agreements continue until

terminated or renegotiated. In the United Kingdom, we have an agreement with our labor unions for which the pay level is negotiated on an annual basis. Although, we have not experienced any major strike or work stoppage in the last ten years, there can be no assurance that we will in the future be able to favorably negotiate the terms and conditions of such labor agreements or that strikes or disruptions will not occur in the future as a result of the failure to negotiate such terms or otherwise.

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

Although we report our results of operations in Swedish kronor, we earn a substantial portion of revenues and incur a substantial portion of expenses in other currencies, principally U.S. dollars, British pounds, euros and Norwegian kroner. In particular, we incur significant expenses in U.S. dollars for fuel and for expenses in our tanker, LNG and offshore drilling operations, and as of December 31, 2011, approximately SEK 22 billion of our debt was denominated in U.S. dollars, excluding the debt of our SPEs and SEK 13 billion of our debt was denominated in euro. Fluctuations in the exchange rates between the U.S. dollar and euro and other currencies could have a material effect on the amount of funds denominated in other currencies needed by us to satisfy our U.S. dollar-denominated and euro-denominated obligations. In addition, a substantial portion of our assets and liabilities are denominated in currencies other than the Swedish kronor. As a result, these assets and liabilities will also be impacted by changes in the exchange rate between the Swedish kronor and such other currencies. Our financial results, as reported in Swedish kronor, in the past have been and in the future are expected to be significantly affected by changes in the exchange rate between the Swedish kronor and such other currencies. We seek to manage our foreign currency exposure by using forward exchange contracts. We also hedge certain of our currency exchange exposures with borrowings denominated in the same currency as the investment. However, there can be no assurance that such hedging will be successful, and foreign exchange fluctuations may have a material adverse effect on our financial results and/or our operating margins.

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

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

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

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

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

As of December 31, 2011, the fair value of our marketable securities and short-term investments (including restricted cash of SEK 2.5 billion) amounted to SEK 6.1 billion, as compared to SEK 8.3 billion (including restricted cash of SEK 3.7 billion) as of December 31, 2010. Our investments in equities include both publicly traded and private companies. The debt securities currently held by us are primarily floating rate notes and high yield corporate bonds. We have also invested in SPEs, which we consolidate, whose purpose is to make investments, primarily in high yield securities and bank loans. As of December 31, 2011, we had investments in three SPEs whose total assets amounted to SEK 4.5 billion, which were financed in part by U.S. dollar-denominated notes issued by the SPEs in an aggregate amount of SEK 4.1 billion (which is non-recourse to Stena AB). Our investments are subject to various risks and fluctuations and are highly volatile and, as a result, there can be no assurance that our investment activities will be profitable.

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

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

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

•

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

•

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

•

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

•

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

•

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

•

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

•

International Code for the Construction and Equipment of Ships Carrying Liquefied Gases in Bulk

•

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

•

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

•

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

•

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

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

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

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

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

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

Additionally, in the course of operating vessels, marine disasters such as oil and gas 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, increased liabilities or higher costs, personal injury, loss of life, severe damage to and destruction of property and equipment, pollution or environmental damage and suspension of operations. Damage arising from such occurrences may result in lawsuits asserting large claims. In addition, offshore drilling operations are subject to many of the same risks as shipping, including risks relating to the environment and possible catastrophic loss or liability, and are subject to the usual hazards inherent in drilling for oil and gas offshore, such as blowouts, reservoir damage, loss of well control, punchthroughs, craterings or fires.

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

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

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

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

•

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

•

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

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

•

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

•

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

Item 4.

Information on the Company

History and Development of the Company

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

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

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

We own and operate one of the world’s largest international passenger and freight ferry services and own, charter in and out, and operate drilling rigs, crude oil and petroleum product tankers, LNG carriers and Roll-on/Roll-off vessels. We also invest in and manage residential and commercial real estate, principally in Sweden and The Netherlands. We also invest in other businesses not related to our traditional lines of business. For the year ended December 31, 2011, we generated revenues of SEK 28.0 billion including net gain on sale of tangible fixed assets of SEK 1.7 billion and net valuation of investment properties of SEK 350 million. Cash flows from operating activities for the same period were SEK 4.9 billion.

Since January 1, 2009, our principal capital expenditures and divestitures have consisted of the purchase and sale of vessels and the purchase and sale of real estate. From January 1, 2009 through December 31, 2011, we have invested approximately SEK 17.6 billion for the purchase of vessels and SEK 0.8 billion for the purchase of real estate. During the same period, we have sold vessels for a total consideration of SEK 3.5 billion and real estate for a total consideration of SEK 1.3 billion. As of the date of this Annual Report, our capital expenditures in progress consist of one Suezmax tanker under construction in Korea. We expect that the purchase price of the newbuilding will be financed by the existing financing arrangements.

Business Overview

Ferry Operations

We currently operate 17 routes with a total fleet of 32 vessels in Scandinavia, the United Kingdom, Germany, Poland, The Netherlands and the Republic of Ireland under the “Stena Line”, “Scandlines” and “HH-ferries” brand names. Our ferry operations generate revenues from: (i) travel, which consists primarily of ticket sales for passengers and private cars, package tours and hotel sales; (ii) onboard sales, which consist primarily of cabin occupancy, retail sales, restaurants, bars, arcades, gaming and, on our Norway-Denmark route, duty and tax free sales; and (iii) freight, which consists primarily of trailer and truck transportation. For the year ended December 31, 2011, we carried a total of 10.2 million passengers, 2.1 million private cars and 1.4 million freight units on our routes. For the financial year ended December 31, 2011, our ferry operations generated revenues of SEK 9.7 billion and a gain on sale of vessels of SEK 16 million and recorded an operating loss of SEK (234) million, including depreciation and amortization expense of SEK 1.2 billion. For the year ended December 31, 2011, ferry operation revenues were generated from travel revenues (41%), onboard sales (17%) and freight/other (42%).

Pursuant to a tax subsidy system in Sweden, our ferry operations receive a subsidy equal to all social security costs and income taxes payable by the employers on behalf of employees who work onboard Swedish-flagged vessels. The amount of this subsidy was SEK 383 million for the financial year ended December 31, 2011.

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, 2009, 2010 and 2011.


	Year Ended December 31
(SEK in millions)	2009		2010		2011
Travel		3,726		3,536		3,984
Onboard sales		1,830		1,698		1,606
Freight/other		4,043		3,856		4,094
Net gain sale of assets		—		2		16

Total revenues		9,599		9,092		9,700

Set forth below is certain operating data for our ferry operations for the years ended December 31, 2009, 2010 and 2011.


	Year Ended December 31
Volumes (in thousands)	2009		2010		2011
Number of passengers		11,349		10,519		10,247
Private Cars		2,526		2,228		2,136
Freight units		1,360		1,321		1,381

Route Network

We currently operate 17 routes in Scandinavia, the United Kingdom, Germany, Poland, The Netherlands and the Republic of Ireland. Our routes are geographically well positioned and generally located in high traffic areas.

Sweden-Denmark. We operate ferry services on three routes. We estimate that we had an approximate 22%, 13% and 41% share of the volume of passengers, private cars and freight units, respectively, transported on Roll-on and Roll-off vessels between Sweden and Denmark for the year ended December 31, 2011.

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)	2009		2010		2011		2009		2010		2011		2009		2010		2011
Göteborg-Fredrikshavn		1,285		1,253		1,279		261		254		246		145		151		152
Varberg-Grena		163		163		166		42		42		41		38		36		39
Helsingborg- Helsingör¹⁾		3,668		4,202		4,056		716		887		822		142		179		182
HH-Ferries²⁾		1,224		—		—		436		—		—		64		—		—

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

(2)	2009 volumes until August 31, 2009, when the HH-Ferries vessels were chartered out to Scandlines and is now part of the partnership with Scandlines Danmark A/S. Volumes are thereafter included in the numbers of Helsingborg-Helsingör.

Sweden-Germany. We operate ferry services on three routes, including two routes operated in cooperation with Scandlines Deutschland GmbH. We estimate that we had an approximate 37%, 43% and 20% 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, 2011.

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)	2009		2010		2011		2009		2010		2011		2009		2010		2011
Göteborg-Kiel		427		431		354		85		79		74		28		52		85
Göteborg-Travemunde¹⁾		4		3		—		—		—		—		46		39		—
Trelleborg-Sassnitz²⁾		294		270		260		75		69		66		11		11		11
Trelleborg-Rostock²⁾		131		146		141		21		21		21		63		78		72
Trelleborg-Travemunde³⁾		28		—		—		—		—		—		49		—		—

(1)	The Göteborg-Travemünde route was closed in August 2010, concentrating the operations to the Göteborg-Kiel route.

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

(3)	The Trelleborg-Travemünde route was closed in January 2010.

Norway-Denmark/Germany. We operate ferry services on one route. We estimate that we had an approximate 10%, 7% and 10% share of the volume of passengers, private cars and freight units, respectively, transported on Roll-on/Roll-off vessels between Norway and Denmark/Germany for the year ended December 31, 2011. 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)

2009

2010

2011

2009

2010

2011

2009

2010

2011

Oslo-Fredrikshavn

552

491

471

Sweden-Poland. We operate ferry services on one route. We estimate that we had an approximate 41%, 25% and 21% share of the volume of passengers, private cars and freight units, respectively, transported on Roll-on/Roll-off vessels between Sweden and Poland for the year ended December 31, 2011.

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)

2009

2010

2011

2009

2010

2011

2009

2010

2011

Karlskrona-Gdynia

351

377

435

Wales/England-Republic of Ireland. We operate ferry services on three routes. We estimate that we had an approximate 48%, 51% and 28% share of the volume of passengers, private cars and freight units, respectively, transported on Roll-on/Roll-off vessels between Wales/England and the Republic of Ireland for the year ended December 31, 2011.

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


	Passengers						Private cars						Freight units
(In Thousands)	2009		2010		2011		2009		2010		2011		2009		2010		2011
Fishguard-Rosslare		501		419		410		138		120		113		34		34		31
Holyhead-Dun Laoghaire		343		252		199		97		72		56		4		1		1
Holyhead-Dublin		673		804		763		161		193		190		149		155		178

Scotland/England-Northern Ireland. We operate ferry services on three routes. In December 2010, Stena Line acquired two routes on the Irish Sea from DFDS: Belfast-Liverpool and Belfast-Heysham. Following formal approval by Irish and British competition authorities, these routes have been included as from July 1, 2011. We estimate that we had an approximate 60%, 58% and 48% 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, 2011.

As of November 2011, the Stanraer-Belfast operation was transferred to Cairnryan where the new port Loch Ryan has been built.

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)	2009		2010		2011		2009		2010		2011		2009		2010		2011
Stranraer-Belfast, Cairnryan-Belfast		1,109		1,084		1,018		244		244		228		102		94		100
Fleetwood-Larne¹⁾		54		51		—		8		9		—		117		98		—
Belfast-Liverpool²⁾		—		—		126		—		—		38		—		—		79
Belfast-Heysham²⁾		—		—		4		—		—		—		—		—		55

(1)	The Fleetwood-Larne route was closed in December 2010.

(2)	Included as from July 1, 2011 following formal approval of acquisition by Irish and British competition authorities.

England-The Netherlands. We operate ferry services on three routes. We estimate that we had an approximate 24%, 27% and 17% share of the volume of passengers, private cars and freight units, respectively, transported on Roll-on/Roll-off vessels between England and The Netherlands for the year ended December 31, 2011.

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)	2009		2010		2011		2009		2010		2011		2009		2010		2011
Harwich-Hoek van Holland		469		510		509		100		100		105		138		139		142
Killingholme-Hoek van Holland		51		50		46		—		—		—		78		80		79
Harwich-Rotterdam		21		15		7		—		—		—		72		81		67

As from December 2010, Stena Line has a slotcharter agreement with DFDS on the Esbjerg-Harwich/Immingham routes.

As of December 31, 2011, our ferry fleet consisted of 32 vessels. The table below sets forth certain information about our ferries as of December 31, 2011.

Ferry Fleet


Type of vessel	Number of vessels		Average age (years)
HSS Vessels		2		15
Day Ferries		5		21
Night Ferries		1		30
RoRo Vessels		4		11
RoPax Vessels		20		13

Total		32		15

Newbuildings. In August 2007, we ordered two RoPax vessels from Samsung Heavy Industries (“SHI”) in Korea. The first one was delivered in January 2011 and the second was delivered in October 2011.

Vessel changes. In March 2009, capacity on the Harwich-Rotterdam route was reduced when the RoPax vessel Stena Transporter was taken out of service.

In November 2009, the capacity on the Stranraer-Belfast route was increased when the RoPax vessel Stena Navigator was put into operation.

As of January 1, 2010, the RoPax vessel Götaland was chartered out to another operator who continued to operate the vessel on the Trelleborg-Travemünde route. The vessel has subsequently been sold to the operator.

During 2010, in May and October, respectively, two Superferries were introduced on the Hoek van Holland-Harwich route, replacing Stena Hollandica and Stena Britannica. Stena Hollandica was modified and as of August 31, 2010 was introduced as Stena Germanica III on the Göteborg-Kiel route. Stena Britannica was modified, and as of April 16, 2011, was introduced as Stena Scandinavica IV on the Göteborg-Kiel route.

During 2010, Stena Germanica was modified and as of November 4, 2010, introduced as Stena Vision on the Karlskrona-Gdynia route. Stena Scandinavia was also modified and renamed Stena Spirit, and was introduced on the Karlskrona-Gdynia route on June 27, 2011. Stena Baltica was subsequently taken out of operation and was transferred to Stena RoRo.

In August, 2010, the route Göteborg-Travemünde was closed. Stena Carrier was moved to Rotterdam-Harwich. Stena Freighter was temporarily moved to Göteborg-Kiel, and was then, in April 2011, also moved to Rotterdam-Harwich. The two vessels Stena Transfer and Stena Partner have both been taken out of operation on Rotterdam-Harwich and have been sold.

On the Hoek van Holland-Killingholme route, Stena Trader and Stena Traveller were taken out of operation in September and November 2010, respectively. Awaiting new tonnage to be delivered during 2011, two replacement ships were temporarily chartered in for the route. Two newbuildings, Stena Transporter and Stena Transfer, commenced operations on the route on March 1 and November 7, 2011, respectively.

In December, 2010, the Fleetwood-Larne route was closed. The three ships operating on the route, Stena Seafarer, Stena Leader and Stena Pioneer, were sold during 2011.

On November 21, 2011 we commenced operations on the renamed Cairnryan-Belfast route, replacing Stanraer-Belfast and operating out of the newly built Port of Loch Ryan. The route is operated by two externally chartered ships, Stena Superfast VII and Stena Superfast VIII. The three ships formerly operating on the route, Stena Voyager, Stena Caledonia and Stena Navigator were transferred to Stena RoRo.

Recent acquisitions and sales

In September 2010, we sold the RoPax vessel Götaland, which had been chartered out during 2010.

In September and December 2010, respectively, we sold the RoRo vessels Stena Transfer and Stena Partner which had been taken out of operation on the Rotterdam-Harwich route.

In December 2010, Stena Line acquired from DFDS two routes on the Irish sea: Belfast-Liverpool and Belfast-Heysham. Formal approvals by the Irish and British competition authorities were granted in April and June 2011, respectively.

In December 2010, Stena Line entered into a slot charter agreement with DFDS on the Esbjerg-Harwich and Esbjerg-Immingham routes. As a result, starting from January 2011 Stena Line can also offer freight service between Denmark and the UK.

As of January 1, 2011, Stena Line acquired a Danish travel agency DTF (Dansk Total Ferie), a market leading travel agency for vacations by car in Denmark.

In May 2011, we sold the RoPax vessels Stena Seafarer, Stena Leader and Stena Pioneer.

In October 2011, we sold the Fast Ferry Stena Lynx.

In April 2012, we acquired two modern RoPax vessels, Stena Mersey, and Stena Lagan. The vessels were already on bare-boat charter to Stena Line.

Sales and Marketing

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

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

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

Other Properties

Ports. We own three ports: Holyhead, located in England and Stranraer and Loch Ryan (in Cairnryan) each located in Scotland. In February 2010, we committed to invest approximately GBP 80 million in a new ferry port facility at Loch Ryan for the future development of our Scotland-Northern Ireland route. The construction work at Loch Ryan was completed in October 2011 and operations began at the new port in November 2011. Development plans for alternative use of the old port in Stranraer have commenced.

We also own land along the quay in Hoek van Holland, The Netherlands, enabling us to control our port area at Hoek van Holland. In addition, we own 50% of the capital stock of a company owning the ports of Rosslare and Fishguard. We operate the latter.

In July 2010, we acquired 51% of the shares in a company owning the port of Verkö in Karlskrona in the south of Sweden, from which we operate our Karlskrona — Gdynia route. In the case of our other routes, we use port facilities owned by third parties and pay applicable port and harbor fees.

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

Offshore Drilling

We currently own and operate two third generation and, one fifth generation semi-submersible drilling rig. We also own four sixth generation ultra-deepwater drillships including one enhanced ice-classed ultra-deepwater drillship, Stena IceMAX, delivered from Samsung Heavy Industries (“SHI”) in Korea in the first quarter of 2012. We believe our quality of service, excellent safety record and fleet provide us with a significant competitive advantage. For the year ended December 31, 2011, our drilling operations generated revenues of SEK 6.5 billion and operating income of SEK 3.2 billion, including depreciation and amortization expenses of SEK 1.7 billion.

The table below sets forth selected information with respect to our drilling units as of March 31, 2012.

Drilling Rig Fleet

Drilling Rig/Drillship

Generation

Year Built

Maximum
Water
Depth (Ft.)

Class

Stena Clyde

3rd

¹⁾

1976

1,640

DNV

Stena Spey

3rd

1983

1,500

DNV

Stena Don

5th

2001

1,640

DNV

Stena DrillMAX

6th

2007

10,000

DNV

Stena Carron

6th

2008

10,000

DNV

Stena Forth

6th

2009

10,000

DNV

Stena IceMAX

6th

2012

10,000

DNV

(1)	Upgraded 2nd generation semi-submersible.

Our offshore drilling headquarters are in Aberdeen, Scotland with offices in Norway, Luxembourg, Cyprus and Hungary. We also have base offices in Australia, Norway, the United States and Brazil. All of the drilling units are equipped to drill high pressure wells. As of December 31, 2011, the average age of our owned fleet was approximately 14 years.

For the five years ended December 31, 2011, our average drilling unit utilization rate was approximately 91%. The table below sets forth the average utilization rates for our drilling units for each of the past five years.

Drilling Unit Utilization


	2007		2008		2009		2010		2011
Total vessel days available		1,825		2,328		2,405		2,555		2,396
Vessel days utilized		1,714		2,171		2,106		2,207		2,189
Vessel utilization (percentage)		93.9		93.3		87.6		86.4		91.4
Offhire days planned		47		104		224		196		15
Offhire days planned (percentage)		2.6		4.5		9.3		7.7		0.6
Unutilized days		64		53		75		152		192
Unutilized days (percentage)		3.5		2.2		3.1		5.9		8.0
Average daily rates in		329,000		404,000		470,000		406,035		454,000

The table below sets forth selected information with respect to the drilling contracts for our drilling units in operation as of March 31, 2012.


Rig/Drillship	Customer	Expected Contract Expiration Date
Stena Clyde	Origin	November 2012 (plus one four-well option)
Stena Don	Statoil	November 2013
Stena Spey	Enquest	November 2012 (plus two option wells)

Stena DrillMAX	Hess	March 2013 (plus four one-well options)
Stena Carron	Chevron	November 2013
Stena Forth	Hess	August 2014
Stena IceMAX	Shell	June 2017 ¹⁾

(1)	Delivery from SHI yard in April 2012. Commencement of operations expected in the second quarter of 2012.

We remain confident that we will be able to secure new rig charter contracts upon expiry of our current contracts. Our customers may terminate some of our drilling contracts if the drilling unit is destroyed or lost or if drilling operations are suspended for a specified period of time as a result of a breakdown of major equipment or, in some cases, due to other events beyond the control of either party. In reaction to depressed market conditions, our customers may also seek renegotiation of firm drilling contracts to reduce their obligations. We expect a significant number of new drilling rigs to be delivered in the industry in the coming years, which could have a negative effect on charter rates. Following the BP Macondo/Deepwater Horizon incident, we have seen an increased focus on safety and a demand for newer and high specification units. With a modern and well maintained fleet, Stena Drilling is well positioned to meet these industry demands. The market for drilling rigs is tightening and driven by high oil prices with increased profit margins for the oil companies and a series of exploration successes in frontier areas as well as in the more established regions such as the North Sea and West Africa. Our modern deepwater rig fleet is especially well positioned to take advantage of the increased demand for high spec units, and if the high oil prices prevail, we expect to see an even tighter supply demand balance.

The contracts for our drilling units typically provide for compensation on a “day rate” basis, under which we receive a fee for each day that the rig is operating under contract. Under day rate contracts, we pay the operating expenses of the rig, including wages and the costs of incidental supplies. As at March 31, 2012, the daily charter rates for our drilling rigs were as follows: Stena Clyde: $325,000; Stena Spey: $242,500; Stena Don: $399,000, excluding dayrate adjustment related to changes in operating costs; Stena

DrillMAX: $442,000 to $492,000, depending on the incentive earned and excluding dayrate adjustment related to changes in operating costs, Stena Carron: $422,000, excluding dayrate adjustment related to changes in operating costs, and Stena Forth: $498,500 to $538,500, depending on the incentive earned and excluding dayrate adjustment related to changes in operating costs.

Newbuildings. We have ordered four DrillMAX drillships. One was delivered in December 2007, two were delivered in August 2008 and August 2009, respectively, and the fourth, the enhanced ice-classed ultra-deepwater drillship Stena IceMAX, will be delivered in April 2012. In December 2011, a five year contract was signed with Shell for drilling services to be provided by Stena IceMAX with operational commencement scheduled for the second quarter of 2012.

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

Recent acquisitions and sales.

Stena Tay was sold in October 2011. We realized a net gain of SEK 1.5 billion on the sale.

We took delivery of Stena IceMax in April, 2012.

Competition.

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

Shipping

Our shipping operations consist of the ownership and chartering of crude oil and petroleum product tankers, LNG carriers and Roll-on/Roll-off vessels. To support these activities, we are also engaged in the design, purchase, sale, management and crewing of these vessels. We generally collect charter hire payments monthly in advance in the case of time charters and bareboat charters and upon completion with respect to charters on the spot market. For the financial year ended December 31, 2011, our shipping operations generated revenues of SEK 2.6 billion but recorded a loss of SEK 70 million, including depreciation and amortization expenses of SEK 428 million and a write-down of shares in an associated company of SEK 49 million recorded in operating expenses.

Business Overview

Crude oil, petroleum product and LNG transportation

We own, charter in and provide commercial management services for crude oil, product tankers and LNG carriers. As of March 31, 2012, we owned three product tankers, two Suezmax tankers and three LNG carriers, we leased two product tankers pursuant to long-term finance leases and we had a 50% interest in one crude oil tanker and four shuttle tankers. We also have one Suezmax tanker on order from SHI scheduled for delivery in the first quarter of 2013. Through our 35% stake in Paradise Tankers we have an interest in three Panamax tankers. All our owned and finance leased tankers are double hulled. As of March 31, 2012, we also chartered in 19 Product, Aframax, Panamax and Suezmax tankers where the product tankers consists of our part of the fleet in our 50/50 joint venture in Stena Weco.

As of March 31, 2012, the average period of the charter contracts for the 19 chartered in tankers was 16 months. Of these tankers, two were chartered out for an average period of 40 months. The other 17 tankers are currently trading on the spot market and are partly covered by contracts of affreightment (CoA).

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

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

The table below sets forth certain information with respect to our owned and finance leased tankers as of March 31, 2012.

Owned and finance leased tankers


Tankers	Year Built	Type	DWT	Type of charter	Current charter expiration date
Stena Conquest¹⁾	2003	Product	47,400	Spot	n/a
Stena Conqueror¹⁾	2003	Product	47,400	Spot	n/a
Stena Concert¹⁾	2004	Product	47,400	Spot	n/a
Stena Calypso²⁾	2002	Product	9,996	Time	January 2013
Stena Arctica³⁾	2005	Ice Aframax	117,099	Time	December 2016
Nordic Rio⁴⁾	2004	Shuttle	152,000	Bareboat	July 2017
Stena Alexita⁴⁾	1998	Shuttle	127,535	Time	November 2011
Stena Natalita⁴⁾	2001	Shuttle	108,073	Time	March 2012
Navion Gothenburg⁴⁾	2007	Shuttle	152,000	Bareboat	July 2020
Stena Clear Sky⁵⁾.	2011	LNG	96,890	Time	March 2015
Stena Crystal Sky⁵⁾	2011	LNG	96,890	Time	July 2015
Stena Blue Sky⁵⁾	2006	LNG	83,668	Time	April 2013
Stena Superior¹⁾	2011	Suezmax	158,000	Spot	n/a
Stena Suede¹⁾	2011	Suezmax	158,000	Time	September 2016

(1)	Owned tankers

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

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

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

(5)	Owned LNG carriers

In addition, in 2006, we commenced a 8.5-year long-term bareboat charter agreements (with an option to extend the charter for 1.5 years). for Stena Atlantica and Stena Antarctica, two ice-class Aframax tankers that had been delivered from the shipyard earlier that year. The vessels were simoltaniously chartered out to Argo Shipping International Corp.

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

Tankers sales and purchases


	2007			2008			2009			2010			2011
Fleet as of January 1		6	²⁾		8	³⁾		12	³⁾		10	³⁾		10	³⁾
Newbuildings delivered/vessels bought		3	¹⁾		6			—			—			5
Vessels sold		1			2			2			—			—
Fleet as of December 31		8	³⁾		12	³⁾		10	³⁾		10	³⁾		15	³⁾

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

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

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

Recent acquisitions and sales.

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

In May 2010, we ordered one additional Suezmax from SHI for a total investment of $70 million, for delivery in the first quarter 2013.

In March, 2011, we signed a joint venture agreement with Dannebrog Rederi A/S and bought 50% of the shares in Stena Weco A/S. The joint venture charters and operates a fleet of 30-40 handy and medium range product tankers.

In May 2011, we bought three LNG carriers from a Taiwanese company, TMT. The investment included two newbuildings and one five-year old vessel with a total value of close to USD 700 million.

In March 2012, we sold the C-Max vessel Stena Caribbean.

Chartering activities. As of March 31, 2012, 17 of our 19 chartered in tankers were chartered out on the spot market. The spot market refers to a segment of the shipping market where contracts are made for single voyages. Under our contracts of affreightment, we provide transportation services for crude oil and clean oil products using designated vessels for approximately twelve months over specified routes. Under a charter on the spot market or under contracts of affreightment, the person chartering out the vessel provides the crew, captain, insurance and daily maintenance, as well as bunker, harbor dues, channel fees and any other costs in connection with the voyage. As of March 31, 2012, two of our chartered in tankers were on time charter contracts with remaining periods ranging up to three years.

From January 1, 2012 until March 31, 2012, spot market rates have ranged from $ 7,500 to $30,000 per day for Aframax tankers, $2,700 to $13,000 per day for Panamax tankers, $4,100 to $19,200 per day for Product tankers and $12,700 to $ 33,500 for Suezmax tankers. Spot market rates as of March 31, 2012, were $ 20,250 for Aframax tankers, $ 11,000 for Panamax tankers, $ 3,000 for Product tankers and $ 13,200 for Suezmax tankers.

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

For the five years ended December 31, 2011, 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,
	2007		2008		2009		2010		2011
Total tanker days available(1)		15,550		15,826		11,054		11,065		11,126
Tanker days utilized		15,389		15,537		10,907		10,943		10,950
Tanker utilization (percentage)		99.0		98.1		98.7		98.9		98.4
Offhire days planned(2)		97		229		116		75		81
Offhire days planned (percentage)		0.6		1.4		1.0		0.7		0.7
Unutilized days		64		60		31		47		95
Unutilized days (percentage)		0.4		0.4		0.3		0.4		0.8

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

(2)	Due to planned dry-dockings.

For the five years ended December 31, 2011, the utilization for our fleet of chartered in, owned and finance leased tankers has averaged approximately 99%. As of March 31, 2012, we have long-term time charters in place for 10 of our 14 owned and finance leased tankers (including five tankers in which we have a 50% ownership interest). However, 17 of our 19 chartered in tankers were trading on the spot market as of March 31, 2012 and there can be no assurance that rates on the spot market will not further decline, that charters on the spot market will continue to be available or that dependence on the spot market will not result in generally lower overall utilization and lower profitability. The time charters for our finance leased tanker expire in November 2012. We expect a significant number of new tankers to be delivered in the industry in coming years, which could have a negative impact on charter rates.

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

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

Roll-on/Roll-off Vessel Operations

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

Over the past five years, the fleet size within our Roll-on/Roll-off operations has ranged from six to thirteen vessels. As of March 31, 2012 we owned five RoRo vessels and eight RoPax vessels. We also chartered in one RoPax vessel.

For the five years ended December 31, 2011, 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 during the last five years.

Roll-on/Roll-off Vessel Utilization


	Year ended December 31,
	2007		2008		2009		2010		2011
Total vessel days available¹⁾		3,152		2,641		2,920		2,929		4,027
Vessel days utilized²⁾		3,101		2,593		2,905		2,849		3,624
Vessel utilization (percentage)²⁾		98.4		98.2		99.5		97.25		90,0
Offhire days³⁾		41		23		13		59		56,1
Offhire days (percentage)		1.3		0.9		0.4		2.0		1,4
Unutilized days		10		25		2		16		73	⁽⁴⁾
Unutilized days (percentage)		0.3		0.9		0.1		0.5		1.8

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

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

(3)	Due to planned dry-dockings.

(4)	Excluding vessels transferred from Stena Line for sale by Stena RoRo.

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.

In the case of our RoRo and RoPax vessels, a substantial portion of our vessel utilization has been through long-term charters. For the five years ended December 31, 2011, the RoRo and RoPax vessels have averaged a utilization rate of approximately 97%. As of December 31, 2011, most of the vessels in our Roll-on/Roll-off fleet were under charter, with expiration dates ranging from the

second quarter of 2012 to 2016. 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.

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

The tables below set forth information about existing chartering arrangements in place with respect to our Roll-on/Roll-off and RoPax vessels, as of March 31, 2012.

RoRo Vessels


Vessel	Type of charter	Current charter expiration date
Mont Ventoux	Time	November 2012
Stena Foreteller	Time	January 2015
Ark Forwarder	Time	May 2012
Stena Forecaster	Time	January 2015
Stena Forerunner	Time	January 2015

RoPax Vessels


Vessel	Type of charter	Current charter expiration date
Norman Asturias(renamed from Baltic Amber)	Time	Open
Stena Challenger¹⁾	Bareboat	June 2013
Blue Puttees	Bareboat	December 2015
Highlanders	Bareboat	February 2016
Stena Feronia	Time	Open
Stena Caledonia		Asset held for sale
Stena Baltica		Open
Stena Voyager		Asset held for sale

(1)	Chartered in vessel.

Blue Puttees and Highlanders were delivered to the Canadian company Marine Atlantic Inc in November 2010 and February 2011, respectively. Both Blue Puttees and Highlanders were rebuilt to increase passenger capacity. Blue Puttees and Highlanders are operating in Canada between North Sydney, Nova Scotia and Port aux Basque, Newfoundland on a charter for a minimum of five years.

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

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

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


	2007		2008		2009		2010		2011
Fleet as of January 1		7		8		9		8		9
Newbuildings delivered		—		—		—		—		—
Vessels purchased		1		1		—		—		1
Vessels sold		1		1		1		1		1
Transfer from Ferry Operations		1		1		—		2		4
Fleet as of December 31		8		9		8		9		13
Net gain on sale of vessels (SEK in millions)		100		33		148		—		(8	)

Recent acquisitions and sales.

In June 2009, we sold the HSS vessel Stena Discovery. In the fourth quarter of 2010, the two RoPax vessels Stena Trader (renamed Blue Puttees) and Stena Traveller (renamed Highlanders) were transferred from Ferry Operations to Roll-on/Roll-off Operations.

In April 2011, we acquired the RoPax vessel Stena Feronia ex Dublin Seaways. In July 2011, the vessel Stena Baltica was transferred internally from Stena Line to Stena RoRo and, in late November 2011, the vessels Stena Voyager, Stena Caledonia, Stena Navigator were also transferred from Stena Line. The Seatrade, which was in a hire-purchase scheme was repossessed by us and subsequently sold in October 2011. In February 2012, we sold Stena Navigator.

In April 2012, we acquired two modern RoPax vessels, Norman Voyager and Watling Street, which are on charter to LD Lines and Scandlines A.G, respectively.

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

Ship management

In order to maintain a high quality fleet and efficient operations, we own and operate a ship management company, Northern Marine Management Ltd (NMM), which provides ship management services from offices in Glasgow, St. Petersburg, Aberdeen, Gothenburg, Houston, Singapore, Manila and Mumbai. The main areas of focus are operational safety, security, quality, operational efficiency and energy management.

As of December 31, 2011, NMM provided services for approximately 100 vessels and in excess of 6,600 seafarers for us, Concordia Maritime, Chevron, Technip, Principal Maritime, Emirates Shipping and several other third parties.

Technical developments and patents

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

Real estate

General. We are involved in the acquisition, selling, construction, refurbishment and management of residential and commercial properties. In the financial year ended December 31, 2011, our real estate operations, generated revenues of SEK 2.4 billion and operating income of SEK 1.8 billion, including net gain on sale of properties of SEK 106 million and net valuation of investment properties of SEK 350 million. Substantially all our real estate operations are conducted through our unrestricted subsidiaries. As of December 31, 2011, our real estate portfolio consisted of two segments: 273 leasehold and freehold properties in Sweden; and 54 freehold and leasehold properties located in The Netherlands, Germany, Luxembourg, France, the U.S., Hungary and the U.K. The occupancy rates for our residential properties were 99% and for the commercial properties 84%, based on square meters, for the year ended December 31, 2011. The majority (84%) 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 (Sweden), Amsterdam (The Netherlands) and Sophia Antipolis (France). We also manage properties owned by the Olsson family. As of December 31, 2011, our management estimated, based on external and internal valuations, that the market value of properties owned by our real estate operations was approximately SEK 26 billion, which equals the book value of these properties.

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

Swedish properties. Our real estate portfolio in Sweden as of December 31, 2011, consisted of 273 residential and commercial properties totaling approximately 1.8 million square meters.

As of December 31, 2011, our residential properties consisted primarily of multi-family rental properties (approximately 20,500 units) that, in terms of square meters, comprise approximately 79% of our properties in Sweden or approximately 1.4 million square meters. Our commercial properties in Sweden consist mainly of office buildings and comprise the remaining 21% of our Swedish property portfolio or approximately 400,000 square meters. The occupancy rates for our Swedish properties, based on square meters, as of December 31, 2010 and 2011, were 96% and 97%, respectively.

Of our Swedish properties, 38 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 2011, investments in new constructions, particularly in Stockholm and Malmö, amounted to SEK 248 million and investments in existing properties amounted to SEK 593 million. In 2011 we did not acquire any properties and disposals amounted to SEK 312 million.

International. As of December 31, 2011, our properties outside Sweden consisted of 54 commercial properties, 40 of which were located in The Netherlands. The remaining properties are located in Germany, Luxembourg, France, the U.S., the U.K and Hungary. Our non-Swedish properties total approximately 251,000 square meters. The occupancy rates for our non-Swedish properties, based on square meters, as of December 31, 2010 and December 31, 2011, were 85% and 81%, respectively.

We also invest indirectly in real estate. We hold a 20.2% stake in the Acre Fund, which is majority owned by Schiphol Airport. The Acre Fund owns approximately 202,000 square meters of office and warehouse space at the Schiphol Airport. External bank financing is in place for 28.7% of our total investment.

We have invested a total of €37 million in a fund, managed by ING, for development of residential complexes in China. As of December 31, 2011, our stake in the fund amounted to 11.25%. As of December 31, 2011, approximately 95% of our investment had been repaid as a number of projects had come to maturity.

Since 2007, we have held a stake in the ING Dutch Office Fund, which owns a portfolio of prime office buildings in The Netherlands. 80% of the offices are located in four major Dutch cities and includes the World Trade Center in Amsterdam and the head office of Nationale Nederlanden, The Netherlands’ tallest building, in Rotterdam. As of December 31, 2011 our stake in the fund amounted to 4.84%. Bank financing is in place for 47.5% of our investment.

During 2011, one commercial property was acquired in London in the U.K for a total investment amount of GBP 32.5 million and no properties were disposed of in the non-Swedish property portfolio. In 2011, investments in existing properties amounted to €5.3 million related to renovations, upgrades and energy saving installations.

In January 2012, another commercial property was acquired in London in the U.K for a total investment amount of GBP 22 million. Furthermore, in March 2012, we entered into a purchase agreement for a small unit valued at EUR 0.5 million, in Sophia Antipolis, France. Delivery of this unit will take place in May 2012.

Property management. In Sweden, we also manage property owned by the Olsson family. We receive a fee for these services equal to 5% of the rents collected with respect to such properties. Such fee aggregated to SEK 14 million and 15 million for each of the years ended December 31, 2010 and December 31, 2011, respectively.

New Businesses Adactum

General. Through our unrestricted subsidiary Adactum, we make long-term investments in listed as well as private companies in new businesses outside of our traditional lines of business. Our objective is to create value in industries outside of our core business by building strong, profitable companies that can create platforms for new business opportunities within the group. We contribute mainly capital and active ownership to these businesses. In the year ended December 31, 2011, Adactum generated revenues of SEK 4,7 billion and operating income of SEK 268 million, which includes depreciation and amortization expenses of SEK 202 million. As of December 31, 2011, Adactum had direct investments in five private companies, of which four are wholly owned, and held significant ownership interests in two listed companies. Adactum’s investments are financed through equity contributions and debt that is non-recourse to Stena AB and the Restricted Group.

Investments in private companies. In April 2004, Adactum acquired Blomsterlandet AB (“Blomsterlandet”) through which we have created a chain of retailers for gardening products with one of Sweden’s most extensive range of indoor and outdoor plants. Since our acquisition, the number of garden centers in Sweden has increased from 18 to 44 as of December 31, 2011. Revenue of Blomsterlandet increased in the year ended December 31, 2011, to SEK 1,210 million, representing an increase of 12% compared to SEK 1,081 million for the year ended December 31, 2010.

In June 2005, Adactum acquired Envac AB (“Envac”), which operates automated household and municipal waste collection systems with 35 offices in 20 countries. The Envac group is organized in five business regions: North Europe, South Europe and the Americas, Middle East and India, South Korea and South East Asia and China. Revenue in Envac for the year ended. December 31, 2011, was SEK 1,102 million, representing a decrease of 9% compared to SEK 1,215 million in the year ended December 31, 2010.

In December 2005, we ordered five wind power systems (windmills) for a total investment of SEK 140 million. In January 2007, through our subsidiary Stena Renewable AB (“Stena Renewable”), we commenced operation of one of Sweden’s largest land-based wind power generating plant, near Ludvika, Sweden. In November 2007, we acquired an additional twelve wind power systems (installed at the same location) for approximately SEK 360 million. Operations of these new systems commenced in the fourth quarter of 2008. In April 2010, Stena Renewable acquired a company with five new wind power systems near Härnösand, Sweden, for a price of SEK 56 million. In 2011, Stena renewable ordered 11 new wind power systems for approximately SEK 340 million, of which 10 were in operation as of December 31, 2011. In total, Stena Renewable had 32 wind power systems in operation as per December 31, 2011. Revenues in Stena Renewable for the year ended December 31, 2011, was SEK 114 million, representing an increase of 34% compared to SEK 85 million for the year ended December 31, 2010.

As of December 31, 2007, Adactum held 29% of the shares in Ballingslöv International AB (publ) (“Ballingslöv”), a company listed on the Stockholm stock exchange that operates in the manufacturing of kitchens, bathrooms and storage units. By July 2008, we had acquired an additional 51% of the shares through a takeover bid for a price of SEK 1.0 billion. As a result thereof, Ballingslöv became a subsidiary of Adactum as of the third quarter of 2008 and was subsequently de-listed. In December 2010, we acquired an additional 16% of the shares. Our aggregate investment of SEK 1.5 billion represented 96% of the shares as of December 31, 2010. During 2011 we acquired the remaining outstanding shares through a redemption process and, as of December 31, 2011, we owned 100% of the shares. Revenue in Ballingslöv for the year ended December 31, 2011, was SEK 2,306 million, representing an increase of 3% compared to SEK 2,249 million for the year ended December 31, 2010.

In June 2007, Adactum acquired a 45% interest in MediaTec Group (“MediaTec”) for a total investment of approximately SEK 340 million. MediaTec is one of Europe’s largest groups in the media technology industry. The business areas within MediaTec are Broadcast and Solutions. Revenue in MediaTec increased by 1% in the year ended December 31, 2011, to SEK 902 million compared to SEK 889 million for the year ended December 31, 2010. As of March 31, 2012 Adactum held a 42.7% stake in MediaTec.

In 2010, Adactum sold its holding of 19% of the shares in SentoClone AB (“SentoClone”) at a loss of SEK 120 million.

Investments in listed companies. Our listed holdings held through Adactum in Gunnebo AB (publ) (“Gunnebo”) (developer of security products and systems) and Midsona AB (publ) (“Midsona”) (manufacturer of health and beauty products) had a total market value of SEK 0.5 billion as of December 31, 2011. During 2009, additional investments were made in Gunnebo of SEK 133 million and in Midsona of SEK 30 million, in connection with new share issues in these companies. During 2011, additional shares were acquired in Gunnebo of SEK 12 million. As of March 31, 2012, Adactum held a 26.2% stake in Gunnebo and held 23.0% of the capital and 24.7% of the votes in Midsona.

Investment activities

We maintain an investment portfolio of marketable securities and other short-term investments. As of December 31, 2011, the fair value of these investments (including restricted cash of SEK 2.5 billion) amounted to SEK 6.1 billion, as compared to SEK 8.3 billion (including restricted cash of SEK 3.7 billion) as of December 31, 2010. Our equity investments currently include both publicly traded and private companies. The debt securities currently held by us are primarily bank floating rate notes and bonds.

We have also invested in SPEs, whose purpose is to invest primarily in high yield securities and corporate bank loans. As of December 31, 2011, total assets of these SPEs amounted to SEK 4.5 billion, which was financed in part by U.S. dollar-denominated notes issued by the SPEs in an aggregate amount of SEK 4.1 billion. These SPE’s are consolidated in the Group financial statements.

In addition to our hedging arrangements, we actively trade in currencies and to a lesser extent in interest rates. As of December 31, 2011, the notional amounts of such instruments were SEK 966 million as compared to SEK 795 million as of December 31, 2010.

The net gains on our portfolio of debt and equity securities and investment in SPEs, together with dividends received and the results from our currency and interest rate trading activities, for the years ended December 31, 2009, 2010 and 2011, amounted to gains of SEK 0.3 billion, SEK 0.6 billion and SEK 0.1 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 designed to manage the risks of these activities on a day-to-day basis. Investments are subject to various risks and currency rates are highly volatile and, as a result, there can be no assurance that our investment activities will be profitable.

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

Classification of vessels

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

The aggregate appraised value of our owned and finance leased vessels and drilling rigs, as of December 31, 2011, was approximately SEK 42.5 billion as compared with the net book value as of December 31, 2011, of SEK 34.2 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 Netherlands, Germany, 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 64% 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, LNG carriers 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, tankers and LNG carriers owned by us. Some of our drilling rigs are covered by loss of hire insurance, and vessels used in our ferry operations have loss of hire insurance at the option of the applicable route director.

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

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

Since February 20, 1996, the maximum exposure of all P&I clubs for liabilities to third parties has been capped at an amount based on a formula specified in the International Convention on Liability for Maritime Claims of 1976. Oil pollution coverage is also limited. We believe we have adequate oil pollution coverage.

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

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

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

Significant Subsidiaries

The following table sets forth significant subsidiaries owned, directly or indirectly as of December 31, 2011:


Name of Company	Domicile	Percentage Owned
Stena Fastigheter AB	Sweden		100	%
Stena Line Scandinavia AB	Sweden		100	%
Stena Adactum AB	Sweden		100	%
Stena Bulk AB	Sweden		100	%
Stena Rederi AB	Sweden		100	%
Stena International S.ár.l.	Luxembourg		100	%
Stena Holland BV	The Netherlands		100	%
Stena Realty BV	The Netherlands		100	%
Stena Line Holding BV	The Netherlands		100	%
Stena Maritime AG	Switzerland		100	%
Stena Cyprus Holding Ltd	Cyprus		100	%

Regulation

General

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

Environmental

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

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

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

•

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

•

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

•

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

•

Other vessels than single-hull vessels

•

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

•

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

•

Any other vessel

•

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

Adjustments to the limits of liability are scheduled for 2012 and every three years thereafter, based on increases in the U.S. Consumer Price Index (CPI). These limits of liability do not apply if the incident was proximately caused by a violation of applicable United States Federal safety, construction or operating regulations or by the responsible party’s gross negligence or willful misconduct, or if the responsible party fails or refuses to report the incident or to cooperate and assist in connection with the oil removal activities.

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

Owners, bareboat charterers or operators of tankers operating in United States waters are required to file vessel response plans with the Coast Guard, and their tankers are required to be operated in compliance with their Coast Guard approved plans. Such response plans must, among other things, (i) address a “worst case” scenario and identify and provide, through contract or other approved means, the availability of necessary private response resources to respond to a “worst case discharge”, (ii) describe crew training and drills and (iii) identify a qualified individual with full authority to implement removal actions. We have filed vessel response plans with the Coast Guard for the tankers owned or bareboat chartered by us that trade in United States waters and have received approval for all of such tankers to operate in United States waters.

Under OPA ’90, with certain limited exceptions, all newly built or converted tankers operating in United States waters must be built with double-hulls, and existing vessels which do not comply with the double-hull requirement must be phased out over a 25-year period (1990-2015), based on size, age and place of discharge, unless retrofitted with double-hulls. All our newbuildings are double-hulls and compliant with OPA ’90.

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

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

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

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

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

Convention on Civil Liability (“CLC”). Many countries other than the United States have ratified and follow the liability scheme adopted by the IMO and set out in CLC. Under CLC, a tanker’s registered owner is strictly liable for pollution damage caused in the territorial waters of a contracting state by a discharge of persistent oil, such as crude oil, fuel oil, heavy diesel oil and lubricating oil, subject to certain complete defenses, including pollution damage resulting from an act of war, caused by a third party, or caused by the negligence or wrongful act of a government responsible for the maintenance of lights or other navigational aids. CLC liability is currently limited to between approximately $950 and $990 per gross ton plus $7.0 million for the first 5,000 gross tons, an amount that is subject to periodic adjustment. The right to limited liability is forfeited only where pollution damage is caused by the owner’s personal act or omission committed with intent to cause such damage or recklessly and with knowledge that the damage would result. Tankers trading in the territorial waters of contracting states must provide evidence of insurance covering the maximum amount for which the owner is strictly liable. In jurisdictions where CLC has not been adopted, various legislative schemes or common law govern and liability is imposed on the basis of fault or in a manner similar to CLC.

MARPOL 73/78. Annex 1 of MARPOL 73/78 deals with the prevention of pollution from oil. MARPOL 73/78 provides stringent construction and operating standards to prevent the release of oil into the environment. Under the requirements of MARPOL 73/78, all new oil tankers built since 1996 are required to have double hulls. MARPOL 73/78 was modified following the Erika and Prestige incidents on the West Coast of Europe in 1999 and 2002, respectively. In 2002, new amendments came in to force to Annex 1 of MARPOL 73/78 that set a global timetable for the accelerated phase out of single hull tankers.

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

Annex VI of MARPOL entered into force on May 19, 2005 and subsequent amendments entered into force on July 1, 2010. This annex sets limits on sulphur oxide and nitrogen oxide emissions from ship exhausts and prohibits deliberate emissions of ozone depleting substances. The sulphur content of fuel oil is today limited to 4.5% m/m globally with a decided global reduction to 3.5% by 2012 and a global reduction to 0.5% by 2020 or, subject a review in 2018, possibly deferred to 2025. Annex VI also contains provisions allowing for special SOx Emission Control Areas (“Sox ECAs”) 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 1.0% until 2014. From 2015, the level is

further lowered to 0.1% within Sox ECAs. The additional cost of fuel to comply with the 0.1% regulation (2015) will be significant and for shipping operators in competition with land based transport alternatives, the regulation may adversely affect transported freight volumes. Annex VI also sets limits on emissions of nitrogen oxides (NOx) from diesel engines and prohibits deliberate emissions of ozone depleting substances, which include halons and chlorofluorocarbons (CFCs). Annex VI also prohibits the incineration onboard ship of certain products, such as contaminated packaging materials and polychlorinated biphenyls (PCBs). Our fleet is in compliance with these new requirements. In 2011, IMO adopted mandatory measures to reduce emissions of greenhouse gases from international shipping, with a new Annex VI chapter 4 on energy efficiency for ships, to make mandatory the Energy Efficiency Design Index, for new ships, and the Ship Energy Efficiency Management Plan for all ships. These regulations are expected to enter into force on January 1, 2013.

EU Directive 2005/33/EC amends the Directive 1999/32/EC as regards the sulphur content of marine fuels and entered into force on July 6, 2005. The IMO regulations on sulphur content in marine fuels under MARPOL Annex VI have, to some extent, made Directive 2005/33/EC redundant, with some notable exceptions as to the requirement on sulphur content when at berth in a EU port. The EU Directive is currently (2011) undergoing a revision, which is planned to be presented during 2011-2012.

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

The Convention will enter into force 12 months after ratification by 30 States, representing 35 per cent of world merchant shipping tonnage. As of July 2011, 28 States had ratified the Convention, representing 25.43% of world merchant shipping tonnage. We expect that the ratification criteria for the IMO requirements will be met in 2012 and that the requirements will consequently enter into force during 2013.

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

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

SOLAS ’90 was adopted in 1990 to set new stability criteria for passenger carrying vessels.

At the SOLAS ’95 convention, several amendments to SOLAS and IMO resolutions were adopted concerning RoRo passenger vessel stability, arrangements of bow doors, operations, communications, life-saving and search and rescue. In particular, Resolution No. 14, also known as the Stockholm Agreement, allows for regional agreements to establish specific stability requirements for RoPax and car/passenger ferry vessels. All our RoPax and car/passenger ferry vessels are currently in full compliance with SOLAS ’90 as well as the Stockholm Agreement.

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

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

In May 1994, the International Code of Safety for High Speed Craft was added to SOLAS’ 74, and entered into force under tacit acceptance as Chapter X of the SOLAS convention held on January 1, 1996. These regulations mandate a variety of safety measures

including requirements pertaining to structural stability and fire prevention. The rapid pace of development in this sector of shipping led to additional revisions of the Code of Safety for High Speed Craft in 2000, which entered into force on July 1, 2002. High Speed Craft to which these regulations apply are required to obtain a safety certificate and a permit to operate. Our HSS ferries have been designed to be in compliance with these regulations and we have obtained applicable permits and certifications during operation of these vessels.

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

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

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

•

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

•

establish safeguards against all identified risks; and

•

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

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

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

The Athens Convention and the limits have been substantially altered and increased by the 2002 Protocol to the Athens Convention. The carrier is now strictly liable for the death or personal injury to a passenger with limited defenses if the carrier can prove that the incident resulted from an act of war, hostilities, civil war, insurrection or a natural phenomena of an exceptional, inevitable and irresistible character or thoroughly caused by an act of omission done with intent to cause the incident by a third party. However, if the incident occurred as a result of the fault or neglect of the carrier then the limit is increased from approximately $390,000 per passenger on each distinct occasion to approximately $623,000 per passenger (exact amounts are determined by the applicable daily conversion rate of USD to Special Drawing Rights (SDRs), the unit of account used for liability under the Athens Convention), provided that if the carrier is responsible for an act or omission with intent to cause damage or recklessly and with knowledge that damage would result, then the right to the limit is lost. A scheme of compulsory insurance has been introduced by the Athens Convention to ensure that the carrier can meet these potential liabilities.

HNS Convention. The International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by sea 1996 (“HNS”) has been superseded by the 2010 Protocol thereto (the “2010 HNS Convention”), which was adopted in April 2010 and will enter into force following ratification by at least twelve states. The liability aspects of the 2010 HNS Convention are based on the CLC by establishing a regime of strict liability and the registered shipowner’s right to limit liability. However, the 2010 HNS Convention 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. The present limits of liability to shipowners are between 100 million and 115 million Special Drawing Rights (approximately $160 million and $183 million, respectively), after which a fund, financed by shipowners, provides compensation up to a limit of 250 million Special Drawing Rights (approximately $400 million).

Item 4A.

Unresolved Staff Comments

Not applicable.

Item 5.

Operating and Financial Review and Prospects

General

The following discussion and analysis should be read in conjunction with the “Selected Financial Data” section of Item 3 and our Consolidated Financial Statements and the Notes thereto. Our Consolidated Financial Statements as of December 31, 2009, 2010 and 2011, and for each of the years in the three-year period ended December 31, 2011, have been prepared in accordance with IFRS as issued by the IASB.

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

Significant events

Ferry Operations

In 2010, Stena Line entered into a slot charter agreement with DFDS on the Esbjerg-Harwich and Esbjerg-Immingham routes. Consequently, as of January 2011, Stena Line also offers freight services between Denmark and UK.

In December 2010, Stena Line acquired from DFDS two routes on the Irish Sea: Liverpool–Belfast and Heysham–Belfast. Pending formal approval from the Irish and British competition authorities, these routes were held separately from our other businesses. Final approval was given in June 2011 and the two routes were consolidated from July 1, 2011.

Effective January 1, 2011, Stena Line acquired the Danish travel agency DTF (Dansk Total Ferie), a market leading travel agency for vacations by car in Denmark.

In January 2011 and September 2011, two new built RoPax vessels, were delivered from Samsung Heavy Industries in Korea, Stena Transporter and Stena Transit, respectively. The vessels operate on the Hoek van Holland - Killingholme route.

In May 2011, three vessels, Stena Leader, Stena Pioneer and Stena Seafarer were sold for an aggregate profit of SEK 26 million.

In May 2011, the English Court of Appeals affirmed a High Court ruling that contributions to repair the deficit in the Merchant Navy Ratings Pension fund can be required from any company that has participated in the fund, including companies that no longer employ any members. In the late 1990s, the Fund was found to have a deficit and Stena Line has been providing funds to reduce this deficit. As a result of the Court of Appeals decision, the non-contributing employers will also be required to contribute funds to reduce the deficit and the Company’s future contributions are expected to be significantly reduced.

In July 2011, the vessel Stena Lynx was sold for a price of EUR 3.8 million, with delivery in October 2011.

In November 2011, the new port Loch Ryan in Cairnryan in Scotland was opened. The Cairnryan-Belfast route is now operated with two chartered in superfast ferries.

Drilling

During 2011, the drilling rig Stena Tay was sold generating a net profit of SEK 1.5 billion. Stena Tay joined the Stena Drilling fleet in 1999 and operated in various locations worldwide, including in the US, the Gulf of Mexico, Brazil, Angola and Nigeria.

During 2011 we entered into several new charter contracts. We successfully entered into a new contract for our drilling unit Stena DrillMAX with commencement in early 2012, in direct continuation of its current contract, and an estimated duration of 15 – 18 months plus four one-well options.

The drilling unit Stena Spey was awarded a contract that commenced in the first quarter of 2012 and will continue until the fourth quarter of 2012. We entered into a new contract for our drilling unit Stena Clyde which commenced in the first quarter of 2012 and is expected to last until at least the fourth quarter of 2012. In December 2011, we successfully signed a five-year contract for our enhanced ice-classed drillship Stena IceMAX which was delivered to us in April 2012.

Bulk

In March 2011, Stena Bulk Denmark Aps and Dannebrog Rederi A/S signed a joint venture agreement regarding the ownership in Stena Weco A/S. The new joint venture, which commenced operation in April 2011, charters, manages and operates a fleet of 30-40 “MR” (Handy and Medium Range) product tankers.

In May 2011, we acquired three LNG (Liquefied Natural Gas) vessels for a total purchase price of USD 667 million. The first vessel, Bluesky, was built in 2006 and is on a charter to Gazprom until the first quarter of 2013. The second and third vessels, Stena Clear Sky and Stena Crystal Sky, are newly built and were delivered in May 2011. The two latter vessels have been on charter to BP and British Gas, respectively, since July 2011. We have successfully signed a three-year (with a one-year option) contract for Stena Crystal Sky to commence in direct continuation of its current charter in March 2012. The charter contract for Stena Clear Sky expires in July 2012.

In September 2011, we took delivery of the newly built Suezmax vessel, Stena Superior, from the Samsung shipyard in Korea. The vessel entered into operations in the Stena Sonangol Suezmax pool.

In November 2011, we took delivery of our second Suezmax newbuilding vessel, Stena Suede, from the Samsung shipyard in Korea. Stena Suede has successfully commenced operations for Total, to whom the vessel is contracted for 5 years.

RoRo

In February, 2011 the vessel Highlanders was delivered to the Canadian company Marine Atlantic Inc. on a charter for a minimum of five years. Highlanders has been shortened by 12 meters and has had its passenger capacity increased. Highlanders and Blue Puttees, its sister vessel, are operating between North Sydney, Nova Scotia and Port aux Basque, Newfoundland.

In April 2011 Stena RoRo acquired the vessel Dublin Seaways from DFDS for EUR 24 million. The vessel has been renamed Stena Feronia.

Adactum

Ballingslöv: In the fourth quarter of 2011, Ballingslöv acquired the Swedish company Macro, a manufacturer of shower systems with a yearly turnover of approximately SEK 100 million and 40 employees.

Envac: In 2011, the company won a number of prestigious orders, such as Western & Fish Harbour in Helsinki, Finland and Clichy-Batignolles in Paris, France.

Blomsterlandet: In the first quarter of 2011, Blomsterlandet acquired Ella Trädgård in Stockholm with two shops and a turnover of approximately SEK 45 million.

Stena Renewable: In 2011, a new wind farm with 11 wind turbines was built and put into operation in Mjölby and Boxholm municipalities. Stena Renewable has committed to invest in three more wind farms and are planning for additional investments.

Property

In 2011, Stena Property sold properties for SEK 307 million. In July 2011, one property was purchased in London for an amount of GBP 32.5 million.

Results of Operations


	Year ended December 31,
	2009			2010			2011
	(SEK in millions)
CONSOLIDATED GROUP

Income Statement Data:
Total revenues		27,812			27,150			27,968
Direct operating expenses		(17,188	)		(16,784	)		(16,548	)
Selling and administrative expenses		(3,207	)		(3,104	)		(3,225	)
Depreciation and amortization		(3,415	)		(3,704	)		(3,617	)

Income from operations		4,002			3,558			4,578
BUSINESS SEGMENT DATA
Revenues:
Ferry operations		9,599			9,092			9,684
Drilling operations		8,112			7,777			6,546
Shipping Roll-on/Roll-off vessels		473			396			540
Crude Oil tankers		2,401			2,055			1,780
Other Shipping		214			200			275

Total Shipping		3,088			2,651			2,595
Property operations		2,335			2,380			2,368
New Businesses operations		4,797			4,630			4,732
Other		3			7			10

Total revenues		27,934			26,537			25,935
Other income:
Net gain on sale of assets		179			189			1,683
Net valuation on investment properties		(301	)		424			350

Total other income		(122	)		613			2,033

Total income		27,812			27,150			27,968
Income (Loss) from Operations:
Ferry operations		445			(79	)		(250	)
Net gain on sale of vessels		—			2			16

Total Ferry operations		445			(77	)		(234	)
Drilling operations		3,250			2,279			1,651
Net gain on sale of vessels		—			—			1,561

Total Drilling operations		3,250			2,279			3,212
Shipping: Roll-on/Roll-off vessels		102			35			93
Net gain on sale of vessels		148			—			—

Total Roll-on/Roll-off vessels		250			35			93
Crude oil tankers		(736	)		(461	)		(185	)
Impairment charges		(150	)		—			(49	)
Net gain on sale of vessels		—			—			—

Total crude oil tankers		(886	)		(461	)		(233	)
Other shipping		7			1			70

Total Shipping		(629	)		(425	)		(71	)
Property operations		1,338			1,307			1,345
Net valuations on investment properties		(301	)		424			350
Net gain on sale of properties		31			187			106

Total Property		1,068			1,918			1,801
New Businesses operations		178			210			268
Other		(310	)		(347	)		(398	)

Total		4,002			3,558			4,578
Depreciation & Amortization:
Ferry operations		1,119			1,173			1,261
Drilling		1,665			2,076			1,704
Shipping: Roll-on/Roll-off vessels		141			126			211
Crude oil tankers		247			86			209
Other shipping		12			9			8

Total Shipping		400			221			428
Property		2			2			4
New Businesses operations		219			215			202
Other		10			17			18

Total		3,415			3,704			3,617

Comparison of the year ended December 31, 2011 to the year ended December 31, 2010

Currency effects

Our revenues and expenses, reported in Swedish kronor, are significantly affected by fluctuations in currency exchange rates, primarily relative to the U.S. dollar, the British pound and the euro. We seek to mitigate the impact of potential adverse foreign currency exchange fluctuations by matching, to the extent possible, revenues and expenses in the same currency. In addition, we enter into certain derivative financial instruments. In the year ended December 31, 2011, approximately 33% of our total revenues were generated in U.S. dollars and approximately 29% were generated in SEK.

In the year ended December 31, 2011, approximately 30% of our total expenses were incurred in U.S. dollars and approximately 33% were incurred in SEK. The reported gross revenues and expenses were influenced by changes in the currency rates. The exchange rates as used for consolidation purposes are as follows:


Average rates:	January-December 2010		January-December 2011		Change

US		7.2049		6.4969		(10	)%
British pound		11.1256		10.4115		(6	)%
Euro		9.5413		9.0035		(6	)%


Closing rates:	As of December 31, 2010		As of December 31, 2011		Change
US		6.7273		6.8748		2	%
British pound		10.4942		10.6803		2	%
Euro		9.0089		8.9177		(1	)%

Revenues

Total revenues decreased SEK 602 million, or 2%, in the twelve months ended December 31, 2011, to SEK 25,935 million from SEK 26,537 million in the twelve months ended December 31, 2010, as a result of decreased revenues in the drilling, shipping and property segments, together with the weakening of the U.S. dollar, the Euro and the GBP against the SEK, offset by increased revenues in the ferry and new businesses Adactum segments.

Ferry operations. Ferry revenues are primarily generated from ticket sales, freight haulage and on-board sales. Revenues from ferry operations increased SEK 592 million, or 7%, in the twelve months ended December 31, 2011, to SEK 9,684 million from SEK 9,092 million in the twelve months ended December 31, 2010, mainly due to increased travel revenues after the consolidation of the Danish travel agency DTF as from January 1, 2011 and increased revenues from freight haulage as a consequence of higher volumes of freight units, offset by reduced revenues from onboard sales as a consequence from lower car and passenger volumes together with the effect of the weakening of the Euro and the GBP against the SEK.

Drilling. Drilling revenues consist of charter hires for our drilling rigs. Revenues from drilling operations decreased SEK 1,231 million, or 16%, in the twelve months ended December 31, 2011, to SEK 6,546 million from SEK 7,777 million in the twelve months ended December 31, 2010. The decrease is mainly reflecting the weakening of the U.S. dollar against the SEK, reduced revenues for the rig Stena Tay, which was on SPS from mid July until the sale in October, together with a contract at higher day rates for the rig Stena Carron during the first two quarters of 2010, offset by planned off-hire periods for Stena Don and Stena Clyde, which both undertook five-year SPSs in the first and second quarter of 2010, respectively. In local currency revenues decreased 7% in the twelve months ended December 31, 2011 compared to the same period last year.

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 decreased SEK 56 million, or 2%, in the twelve months ended December 31, 2011, to SEK 2,595 million from SEK 2,651 million in the twelve months ended December 31, 2010.

Revenues from crude oil tankers and LNG carriers decreased SEK 275 million, or 13%, in the twelve months ended December 31, 2011, to SEK 1,780 million from SEK 2,055 million in the twelve months ended December 31, 2010, mainly due to the fact that as from April 2011 19 MR vessels are operating in the joint venture Stena Weco A/S in which the operating results are reported as a net

revenue. The operating results from these vessels were previously reported gross within revenues and operating expenses. Revenues also decreased as an effect of the weakening of the U.S. dollar against the SEK, offset by revenues generated from our LNG vessels, one of which was put into operation in May 2011, with the other two put into operation in July 2011. In local currency revenues decreased 4% in the twelve months ended December 31, 2011, compared to the same period last year. In the twelve months ended December 31, 2011, the Company operated an average of 30 tankers (chartered-in or owned), compared to an average of 27 tankers in the twelve months ended December 31, 2010.

Revenues from chartering out Roll-on/Roll-off vessels increased SEK 144 million, or 36%, in the twelve months ended December 31, 2011, to SEK 540 million from SEK 396 million in the twelve months ended December 31, 2010, mainly due to new charter contracts with Marine Atlantic for Highlanders and Blue Puttees, offset by the weakening of the Euro against the SEK.

Revenues from Other Shipping increased SEK 75 million, or 38%, in the twelve months ended December 31, 2011, to SEK 275 million from SEK 200 million in the twelve months ended December 31, 2010, mainly due to the receipt of USD 10 million (SEK 64.8 million) for a patent infringement in the first quarter of 2011, offset by the weakening of the U.S. dollar and the GBP against the SEK.

Property. Property revenues consist of rents for properties owned and management fees for properties managed by the Company. Revenues from property operations decreased SEK 12 million, or 1%, in the twelve months ended December 31, 2011, to SEK 2,368 million from SEK 2,380 million in the twelve months ended December 31, 2010, mainly due to a lower number of properties owned together with the weakening of the Euro against the SEK.

New Businesses Adactum. Adactum revenues consist of revenues from Adactum’s subsidiaries. Revenues from Adactum increased SEK 102 million, or 2%, in the twelve months ended December 31, 2011, to SEK 4,732 million from SEK 4,630 million in the twelve months ended December 31, 2010, mainly due to increased revenues from Blomsterlandet, which has increased its market share and also increased its number of shops. Revenues from Stena Renewable increased due to five new wind power plants near Härnösand in Sweden acquired in April 2010 and due to the new wind farm with 11 wind turbines being built and put into operation during 2011 in Mjölby and Boxholm, Sweden, offset by the strengthening of the SEK affecting both Envac and Ballingslöv. Of the total revenues in the twelve months ended December 31, 2011, SEK 2,306 million related to Ballingslöv, SEK 1,210 million related to Blomsterlandet, SEK 1,102 million related to Envac and SEK 114 million related to Stena Renewable, as compared to SEK 2,249 million related to Ballingslöv, SEK 1,081 million related to Blomsterlandet, SEK 1,215 million related to Envac and SEK 85 million related to Stena Renewable in the twelve months ended December 31, 2010.

Other Income

Net valuation on investment properties. As a result of revaluation to fair value according to IAS 40 “Investment properties”, the Company had net gains of SEK 350 million for the twelve months ended December 31, 2011, as compared to net gains of SEK 424 million for the twelve months ended December 31, 2010, mainly due to an increase in investment property market values in the Swedish market.

Net Gain on Sale of Vessels. In the twelve months ended December 31, 2011, gains of MSEK 16 were recorded on the sale of the vessels Stena Leader, Stena Pioneer, Stena Seafarer and Stena Lynx. In the twelve months ended December 31, 2010, gains of SEK 2 million were recorded on the sale of the vessels Götaland, Stena Transfer and Stena Partner.

Net Gain on Sale of Properties. In the twelve months ended December 31, 2011, gains of SEK 106 million were recorded on sale of properties. In the twelve months ended December 31, 2010, gains of SEK 187 million were recorded on sale of properties.

Direct operating expenses

Total direct operating expenses decreased SEK 236 million, or 1%, in the twelve months ended December 31, 2011, to SEK 16,548 million from SEK 16,784 million in the twelve months ended December 31, 2010, mainly as a result of reduced operating expenses in drilling, shipping and property, together with the weakening of the Euro, the U.S. dollar and the GBP against the SEK, offset by increased operating expenses for the ferry and the new businesses, Adactum operations.

Ferry operations. Direct operating expenses for ferry operations consist principally of personnel costs, costs of goods sold on the vessels, bunker fuel costs, vessel charter costs, commissions, package tour costs and other related costs. A significant portion of these costs do not vary as a result of changes in our seasonal requirements. Direct operating expenses for ferry operations increased SEK

586 million, or 8%, in the twelve months ended December 31, 2011, to SEK 7,703 million from SEK 7,117 million in the twelve months ended December 31, 2010, mainly due to increased product costs due to the consolidation of the Danish travel agency DTF as from January 1, 2011, and increased expenses for bunker fuel, offset by lower ship costs due to rationalization with less vessels in operation, together with the weakening of the Euro and the GBP against the SEK. Direct operating expenses for ferry operations for the twelve months ended December 31, 2011, were 80% of revenues, as compared to 78% for the twelve months ended December 31, 2010.

Drilling. Direct operating expenses for drilling consist primarily of personnel costs, insurance, maintenance and catering costs. Direct operating expenses for drilling operations decreased SEK 223 million, or 8%, in the twelve months ended December 31, 2011, to SEK 2,736 million from SEK 2,959 million in the twelve months ended December 31, 2010. The decrease mainly reflects reduced expenses for the rig Stena Tay, which was on SPS as from June 2011 until its sale in October, together with the weakening of the U.S. dollar against the SEK, offset by planned off-hire periods for Stena Don and Stena Clyde in the first and second quarter of 2010 as they both undertook five-year SPSs, respectively. Direct operating expenses from drilling operations for the twelve months ended December 31, 2011, were 42% of drilling revenues, as compared to 38% for the twelve months ended December 31, 2010.

Shipping. Direct operating expenses for shipping consist primarily of vessel charter costs, fuel costs, personnel costs, insurance and other related vessel costs. Direct operating expenses for shipping operations decreased SEK 622 million, or 25%, in the twelve months ended December 31, 2011, to SEK 1,895 million from SEK 2,517 million in the twelve months ended December 31, 2010.

Direct operating expenses associated with crude oil tankers decreased SEK 621 million, or 27%, in the twelve months ended December 31, 2011, to SEK 1,657 million from SEK 2,278 million in the twelve months ended December 31, 2010, mainly due to the fact that as from April 2011 19 MR vessels are operating in the joint venture Stena Weco A/S, in which the operating results are reported as net revenue. The operating results from these vessels were previously reported gross within revenues and operating expenses. Operating expenses were also reduced as an effect of the weakening of the U.S. dollar against the SEK, offset by increased expenses generated from our three LNG vessels, which were in operation as from May and July 2011, respectively. Direct operating expenses for crude oil operations for the twelve months ended December 31, 2011, were 93% of revenues, as compared to 111% for the twelve months ended December 31, 2010. Direct operating expenses for tankers include time-charter costs, which normally are fixed for periods between 6 months and 5 years, while revenues in the spot market vary with each voyage.

Direct operating expenses with respect to Roll-on/Roll-off vessels increased by SEK 2 million, or 1%, in the twelve months ended December 31, 2011, to SEK 198 million from SEK 196 million in the twelve months ended December 31, 2010, mainly due to increased costs of the operating vessels, offset by the weakening of the Euro against the SEK. Direct operating expenses for Roll-on/Roll-off vessels for the twelve months ended December 31, 2011, were 37% of revenues, as compared to 49% for the twelve months ended December 31, 2010.

Direct operating expenses with respect to Other Shipping decreased SEK 3 million, or 7%, in the twelve months ended December 31, 2011, to SEK 40 million from SEK 43 million in the twelve months ended December 31, 2010. Direct operating expenses for Other Shipping for the twelve months ended December 31, 2011, were 15% of revenues, as compared to 22% for the twelve months ended December 31, 2010.

Property. Property expenses consist primarily of maintenance, heating and personnel costs. Direct operating expenses for property operations decreased SEK 56 million, or 6%, in the twelve months ended December 31, 2011, to SEK 829 million from SEK 885 million in the twelve months ended December 31, 2010, mainly due to reduced operating expenses as a consequence of a lower number of properties owned together with the weakening of the Euro against the SEK. Direct operating expenses for property operations for the twelve months ended December 31, 2011, were 35% of property revenues, as compared to 37% for the twelve months ended December 31, 2010.

New Businesses Adactum. Direct operating expenses for Adactum consist of expenses from Adactum’s subsidiaries. Direct operating expenses for Adactum increased SEK 75 million, or 2%, in the twelve months ended December 31, 2011, to SEK 3,381 million from SEK 3,306 million in twelve months ended December 31, 2010, mainly due to increased costs of goods sold in Blomsterlandet due to increased sales volumes, offset by lower operating costs in Envac and Ballingslöv due to effective cost control and reduced volumes, together with the weakening of the Euro and the GBP against the SEK. Of the total operating expenses in the twelve months ended December 31, 2011, SEK 1,490 million related to Ballingslöv, SEK 1,070 million related to Blomsterlandet, SEK 806 million related to Envac and SEK 21 million related to Stena Renewable, as compared to SEK 1,434 million related to Ballingslöv, SEK 969 million related to Blomsterlandet, SEK 888 million related to Envac and SEK 12 million related to Stena Renewable in the twelve months ended December 31, 2010. Direct operating expenses for Adactum operations for the twelve months ended December 31, 2011, were 71% of revenues, same as for the twelve months ended December 31, 2010.

Selling and administrative expenses

Selling and administrative expenses increased SEK 121 million, or 4%, in the twelve months ended December 31, 2011, to SEK 3,225 million from SEK 3,104 million in the twelve months ended December 31, 2010. Costs increased mainly due to the consolidation of the Danish travel agency DTF as from January 1, 2011, together with increased pension costs, offset by the weakening of the U.S. dollar and the Euro against the SEK. Total selling and administrative expenses in the twelve months ended December 31, 2011 were 12% of total revenues, same as for the twelve months ended December 31, 2010.

Depreciation and amortization

Depreciation and amortization charges decreased SEK 87 million, or 2%, in the twelve months ended December 31, 2011, to SEK 3,617 million from SEK 3,704 million in the twelve months ended December 31, 2010, mainly as a result of reduced depreciation charges due to a five-year extension to twenty years of the useful life of the DrillMAX drillships, offset by increased depreciation charges for new vessels delivered and by the effect of impairment charges of SEK 49 million related to the shares in the associated company Paradise during 2011. The weakening of the U.S. dollar with respect to the SEK, which primarily impacted depreciation charges on drilling rigs, which are denominated in U.S. dollars, contributed to the decrease in depreciation and amortization charges.

Financial income and expense, net

Financial income and expense, net decreased by SEK (921) million in the year ended December 31, 2011, to SEK (1,799) million from SEK (878) million in the year ended December 31, 2010.

Share of associated companies’ results in the years ended December 31, 2010 and 2011, refers to our portion of the results of Midsona, Gunnebo and MediaTec. As of December 31, 2011, our interest in the capital of Midsona was 23.0%, our interest in the capital of Gunnebo was 26.2% and our interest in the capital of MediaTec was 42.7%. In 2010 the previous write-down of Gunnebo of SEK 140 million was reversed and Midsona was written-down by SEK 40 million. As of December 31, 2010, our interest in the capital of Midsona was 23.0%, our interest in the capital of Gunnebo was 25.7% and our interest in the capital of MediaTec was 42.7%.

Net gain (loss) on securities in the year ended December 31, 2011, was SEK (69) million, of which SEK 199 million related to net realized gains on marketable securities and equity securities and investments in SPEs, SEK (354) million related to net unrealized losses on marketable securities and SEK 86 million related to the termination of the financial lease of Stena Carron. Net gain (loss) on securities in the year ended December 31, 2010, was SEK 445 million, of which SEK 124 million related to net realized gains on marketable securities and equity securities and investments in SPEs, SEK 229 million related to net unrealized gains on marketable securities and SEK 91 million related to the termination of the financial lease of Stena Carron.

Interest income decreased by SEK 83 million in the year ended December 31, 2011, to SEK 394 million from SEK 477 million in the year ended December 31, 2010. Interest income related to investments in SPEs decreased during the same period by SEK 61 million to SEK 270 million from SEK 331 million partly due to lower investments in interest bearing assets.

Interest expense increased by SEK 116 million to SEK (1,914) million in the year ended December 31, 2011, from SEK (1,798) million for the year ended December 31, 2010. Interest expense for the investments in SPEs decreased during the same period by SEK 49 million to SEK (53) million from SEK (102) million.

During the year ended December 31, 2011, we had foreign exchange gains, net of SEK 36 million. During the year ended December 31, 2010, we had foreign exchange gains, net of SEK 48 million.

Other financial income (expense) of SEK (370) million for the year ended December 31, 2011, included SEK (189) million related to amortization of the deferred financing charges for our Senior Notes, revolving credit facilities, bank loans, capital lease obligations and investments in SPEs and a loss of SEK (119) million related to bunker hedges. Other financial income (expense) of SEK (219) million for the year ended December 31, 2010, included SEK (188) million related to amortization of the deferred financing charges for our Senior Notes, revolving credit facilities, bank loans, capital lease obligations and investments in SPEs and a gain of SEK 9 million related to bunker hedges.

Income taxes

Income taxes for the year ended December 31, 2011, were SEK (253) million, consisting of current taxes of SEK (240) million and deferred taxes of SEK (13) million. Income taxes for the year ended December 31, 2010, were SEK (114) million, consisting of current taxes of SEK (191) million and deferred taxes of SEK 77 million. The provision for taxes is based upon the applicable tax rates in the various jurisdictions where revenues are generated.

Comparison of the year ended December 31, 2010 to the year ended December 31, 2009

Currency effects

Our revenues and expenses, reported in Swedish kronor, are significantly affected by fluctuations in currency exchange rates, primarily relative to the U.S. dollar, the British pound and the euro. We seek to mitigate the impact of potential adverse foreign currency exchange fluctuations by matching, to the extent possible, revenues and expenses in the same currency. In addition, we enter into certain derivative financial instruments. In the year ended December 31, 2010, approximately 34% of our total revenues were generated in U.S. dollars and approximately 29% were generated in SEK.

In the year ended December 31, 2010, approximately 31% of our total expenses were incurred in U.S. dollars and approximately 29% were incurred in SEK. The reported gross revenues and expenses were influenced by changes in the currency rates. The exchange rates as used for consolidation purposes are as follows:


Average rates:	January-December 2009		January-December 2010		Change
US		7.6457		7.2049		(6	)%
British pound		11.9260		11.1256		(7	)%
Euro		10.6213		9.5413		(10	)%


Closing rates:	As of December 31, 2009		As of December 31, 2010		Change
US		7.1553		6.7273		(6	)%
British pound		11.5704		10.4942		(9	)%
Euro		10.2506		9.0089		(12	)%

Revenues

Total revenues decreased SEK 1,398 million, or 5%, in the twelve months ended December 31, 2010, to SEK 26,537 million from SEK 27,934 million in the twelve months ended December 31, 2009, as a result of lower revenues in all segments except for property operations, mainly due to the weakening of the U.S. dollar, the euro and the GBP against the SEK.

Ferry operations. Ferry revenues are primarily generated from ticket sales, freight haulage and on-board sales. Revenues from ferry operations decreased SEK 507 million, or 5%, in the twelve months ended December 31, 2010, to SEK 9,092 million from SEK 9,599 million in the twelve months ended December 31, 2009, mainly due to lower revenues from ticket sales, onboard sales and freight haulage as a consequence of lower volumes of cars, passengers and freight units, as well as the weakening of the euro and the GBP against the SEK.

Drilling. Drilling revenues consist of charter hires for our drilling rigs. Revenues from drilling operations decreased SEK 335 million, or 4%, in the twelve months ended December 31, 2010, to SEK 7,777 million from SEK 8,112 million in the twelve months ended December 31, 2009. The decrease is mainly due to the weakening of the U.S. dollar against the SEK and the planned off-hire periods for Stena Don and Stena Clyde, which both undertook their respective five-year special periodic surveys during the first and second quarter 2010, respectively.

Shipping. Shipping revenues primarily consist of charter hires for our owned and chartered-in vessels and management fees for vessels managed by us. Revenues from shipping operations decreased SEK 437 million, or 14%, in the twelve months ended December 31, 2010, to SEK 2,651 million from SEK 3,088 million in the twelve months ended December 31, 2009.

Revenues from crude oil tankers decreased SEK 346 million, or 14%, in the twelve months ended December 31, 2010, to SEK 2,055 million from SEK 2,401 million in the twelve months ended December 31, 2009, mainly due to lower charter rates in the spot market and less tonnage operated, as well as the weakening of the U.S. dollar against the SEK. In the twelve months ended December 31, 2010, the Company operated an average of 27 tankers (chartered-in or owned), compared to an average of 32 tankers in the twelve months ended December 31, 2009.

Revenues from chartering out Roll-on/Roll-off vessels decreased SEK 77 million, or 16%, in the twelve months ended December 31, 2010, to SEK 396 million from SEK 473 million in the twelve months ended December 31, 2009, mainly due to off-hire periods for the RoPax vessel Baltic Amber and for the RoRo vessel Mont Ventoux during the first and third quarter 2010, respectively, lower charter hires and the weakening of the euro against the SEK.

Revenues from Other Shipping decreased SEK 14 million, or 7%, in the twelve months ended December 31, 2010, to SEK 200 million from SEK 214 million in the twelve months ended December 31, 2009, mainly due to the weakening of the U.S. dollar and the GBP against the SEK.

Property. Property revenues consist of rents for properties owned and management fees for properties managed by the Company. Revenues from property operations increased SEK 45 million, or 2%, in the twelve months ended December 31, 2010, to SEK 2,380 million from SEK 2,335 million in the twelve months ended December 31, 2009, mainly due to higher rents and occupancy rates, partly offset by the weakening of the euro against the SEK.

New Businesses Adactum. Adactum revenues consist of revenues from Adactum’s subsidiaries. Revenues from Adactum decreased SEK 167 million, or 3%, in the twelve months ended December 31, 2010, to SEK 4,630 million from SEK 4,797 million in the twelve months ended December 31, 2009, mainly due to the strengthening of the SEK affecting Envac and Ballingslöv, together with lower revenues generated from Envac due to the delayed startup of new projects. Of the total revenues in the twelve months ended December 31, 2010, SEK 2,249 million related to Ballingslöv, SEK 1,081 million related to Blomsterlandet, SEK 1,215 million related to Envac and SEK 85 million related to Stena Renewable, as compared to SEK 2,317 million related to Ballingslöv, SEK 1,076 million related to Blomsterlandet, SEK 1,328 million related to Envac and SEK 74 million related to Stena Renewable in the twelve months ended December 31, 2009.

Other Income

Net valuation on investment properties. As a result of revaluation to fair value according to IAS 40 “Investment properties”, the Company had net gains of SEK 424 million for the twelve months ended December 31, 2010, as compared to net losses of SEK 301 million for the twelve months ended December 31, 2009, mainly due to an increase in investment property market values in the Swedish market.

Net Gain on Sale of Vessels. In the twelve months ended December 31, 2010, gains of SEK 2 million were recorded on the sale of the RoPax vessel Götaland, and the RoRo vessels Stena Transfer and Stena Partner. In the twelve months ended December 31, 2009, gains of SEK 148 million were recorded on the sales of the HSS vessel Stena Discovery and the RoPax vessel Stena Transporter.

Net Gain on Sale of Properties. In the twelve months ended December 31, 2010, gains of SEK 187 million were recorded on the sale of properties. In the twelve months ended December 31, 2009, gains of SEK 31 million were recorded on the sale of properties.

Direct operating expenses

Total direct operating expenses decreased SEK 404 million, or 2%, in the twelve months ended December 31, 2010, to SEK 16,784 million from SEK 17,188 million in the twelve months ended December 31, 2009, mainly as a result of lower operating expenses in the tanker, other shipping and new business segments, together with the weakening of the euro, the U.S. dollar and the GBP against the SEK, partly offset by higher operating expenses for the ferry, drilling and property operations.

84 million, or 1%, in the twelve months ended December 31, 2010, to SEK 7,117 million from SEK 7,033 million in the twelve months ended December 31, 2009, mainly due to higher expenses for bunker fuel, partly offset by lower costs for products due to lower sales, and the weakening of the euro and the GBP against the SEK. Direct operating expenses for ferry operations for the twelve months ended December 31, 2010, were 78% of revenues, as compared to 73% for the twelve months ended December 31, 2009.

Drilling. Direct operating expenses for drilling consist primarily of personnel costs, insurance, maintenance and catering costs. Direct operating expenses for drilling operations increased SEK 237 million, or 9%, in the twelve months ended December 31, 2010, to SEK 2,959 million from SEK 2,722 million in the twelve months ended December 31, 2009. The increase was mainly due to additional costs related to the full year operation of the DrillMAX vessel Stena Forth, delivered in August 2009, partly offset by a reduction in costs due to planned off-hire periods for Stena Don and Stena Clyde and the return of the bareboat chartered drilling unit Songa Dee to the lessor in March 2009. Direct operating expenses from drilling operations for the twelve months ended December 31, 2010, were 38% of drilling revenues, as compared to 34% for the twelve months ended December 31, 2009.

Shipping. Direct operating expenses for shipping consist primarily of vessel charter costs, fuel costs, personnel costs, insurance and other related vessel costs. Direct operating expenses for shipping operations decreased SEK 607 million, or 19%, in the twelve months ended December 31, 2010, to SEK 2,517 million from SEK 3,124 million in the twelve months ended December 31, 2009.

Direct operating expenses relating to crude oil tankers decreased SEK 602 million, or 21%, in the twelve months ended December 31, 2010, to SEK 2,278 million from SEK 2,880 million in the twelve months ended December 31, 2009, mainly due to lower volumes of activity and a reduced fleet, together with the weakening of the U.S. dollar against the SEK. Direct operating expenses for crude oil operations for the twelve months ended December 31, 2010, were 111% of revenues, as compared to 120% for the twelve months ended December 31, 2009.

Direct operating expenses with respect to Roll-on/Roll-off vessels increased by SEK 6 million, or 3%, in the twelve months ended December 31, 2010, to SEK 196 million from SEK 190 million in the twelve months ended December 31, 2009, mainly due to costs related to the transfer of the RoPax vessels Blue Puttees (formerly Stena Trader) and Highlanders (formerly Stena Traveller) from Ferry Operations- to the RoRo segment, partly offset by the weakening of the euro against the SEK. Direct operating expenses for Roll-on/Roll-off vessels for the twelve months ended December 31, 2010, were 49% of revenues, as compared to 40% for the twelve months ended December 31, 2009.

Direct operating expenses with respect to Other Shipping decreased SEK 11 million, or 20%, in the twelve months ended December 31, 2010, to SEK 43 million from SEK 54 million in the twelve months ended December 31, 2009. Direct operating expenses of Other Shipping for the twelve months ended December 31, 2010, were 22% of revenues, as compared to 25% for the twelve months ended December 31, 2009.

Property. Property expenses consist primarily of maintenance, heating and personnel costs. Direct operating expenses for property operations increased SEK 81 million, or 10%, in the twelve months ended December 31, 2010, to SEK 885 million from SEK 804 million in the twelve months ended December 31, 2009, mainly due to higher energy costs due to a colder winter in Sweden in 2010, together with higher costs for maintenance, partly offset by the weakening of the euro against the SEK. Direct operating expenses for property operations for the twelve months ended December 31, 2010, were 37% of property revenues, as compared to 34% for the twelve months ended December 31, 2009.

New Businesses Adactum. Direct operating expenses for Adactum consist of expenses of Adactum’s subsidiaries. Direct operating expenses for Adactum decreased SEK 170 million, or 5%, in the twelve months ended December 31, 2010, to SEK 3,306 million from SEK 3,476 million in twelve months ended December 31, 2009, mainly due to lower operating costs in Envac and Ballingslöv due to cost control measures and the delayed startup of new projects, together with the weakening of the euro and the GBP against the SEK. Of the total operating expenses in the twelve months ended December 31, 2010, SEK 1,434 million related to Ballingslöv, SEK 969 million related to Blomsterlandet, SEK 888 million related to Envac and SEK 12 million related to Stena Renewable, as compared to SEK 1,517 million related to Ballingslöv, SEK 972 million related to Blomsterlandet, SEK 979 million related to Envac and SEK 11 million related to Stena Renewable in the twelve months ended December 31, 2009. Direct operating expenses for Adactum operations for the twelve months ended December 31, 2010, were 71% of revenues, as compared to 72% for the twelve months ended December 31, 2009.

Selling and administrative expenses

Selling and administrative expenses decreased SEK 103 million, or 3%, in the twelve months ended December 31, 2010, to SEK 3,104 million from SEK 3,207 million in the twelve months ended December 31, 2009, mainly due to lower personnel costs in Ferry operations as a result of cost-saving programs, together with the weakening of the U.S. dollar and the euro against the SEK, partly offset by higher pension costs. Total selling and administrative expenses in the twelve months ended December 31, 2010 were 12% of total revenues, as compared to 11% for the twelve months ended December 31, 2009.

Depreciation and amortization

Depreciation and amortization charges increased SEK 289 million, or 8%, in the twelve months ended December 31, 2010, to SEK 3,704 million from SEK 3,415 million in the twelve months ended December 31, 2009, mainly as a result of depreciation charges for the third DrillMAX vessel Stena Forth delivered in August 2009 and for the first of the two new superferries, Stena Hollandica, offset by the effect of increased depreciation during 2009 due to impairment charges of SEK 150 million related to three medium range product tankers. The weakening of the U.S. dollar with respect to the Swedish kroner, which primarily impacted depreciation charges on drilling rigs (denominated in U.S. dollars) offset by the decrease in depreciation and amortization charges.

Financial income and expense, net

Financial income and expense, net increased by SEK 780 million in the year ended December 31, 2010, to SEK (878) million from SEK (1,658) million in the year ended December 31, 2009.

Share of associated companies’ results in the years ended December 31, 2009 and 2010, refers to our portion of the results of Midsona, Gunnebo and MediaTec. As of December 31, 2010, our interest in the capital of Midsona was 23.0%, our interest in the capital of Gunnebo was 25.7% and our interest in the capital of MediaTec was 42.7%. During 2010 the previous write-down of Gunnebo of SEK 140 million was reversed and Midsona was written-down by SEK 40 million. As of December 31, 2009, our interest in the capital of Midsona was 23.0%, our interest in the capital of Gunnebo was 25.7% and our interest in the capital of MediaTec was 42.7%.

Net gain (loss) on securities in the year ended December 31, 2010, was SEK 445 million, of which SEK 124 million related to net realized gains on marketable securities and equity securities and investments in SPEs, SEK 229 million related to net unrealized gains on marketable securities and SEK 91 million related to the termination of the financial lease of Stena Carron. Net gain (loss) on securities in the year ended December 31, 2009, was SEK (81) million, of which SEK (701) million related to net realized losses on marketable securities and equity securities and investments in SPEs, SEK 510 million related to net unrealized gains and SEK 110 million related to the termination of the financial leases for Stena Carron.

Interest income decreased by SEK 208 million in the year ended December 31, 2010, to SEK 477 million from SEK 685 million in the year ended December 31, 2009. Interest income related to investments in SPEs decreased during the same period by SEK 145 million to SEK 331 million from SEK 477 million partly due to lower investments in interest bearing assets.

Interest expense decreased SEK 66 million to SEK (1,798) million in the year ended December 31, 2010, from SEK (1,864) million for the year ended December 31, 2009. Interest expense for the investments in SPEs decreased during the same period by SEK 112 million to SEK (102) million from SEK (214) million.

During the year ended December 31, 2010, we had foreign exchange gains, net of SEK 48 million. During the year ended December 31, 2009, we had foreign exchange losses, net of SEK (282) million.

Other financial income (expense) of SEK (219) million for the year ended December 31, 2010, included SEK (188) million related to amortization of the deferred financing charges for our Senior Notes, revolving credit facilities, bank loans, capital lease obligations and investments in SPEs and a gain of SEK 9 million related to bunker hedges. Other financial income (expense) of SEK (201) million for the year ended December 31, 2009, included SEK (67) million related to amortization of the deferred financing charges for our Senior Notes, revolving credit facilities, bank loans, capital lease obligations and investments in SPEs and a loss of SEK (163) million related to bunker hedges.

Income taxes

Income taxes for the year ended December 31, 2010, were SEK (114) million, consisting of current taxes of SEK (191) million and deferred taxes of SEK 77 million. Income taxes for the year ended December 31, 2009, were SEK 20 million, consisting of current taxes of SEK (210) million and deferred taxes of SEK 230 million. The provision for taxes is based upon the applicable tax rates in the various jurisdictions where revenues are generated.

Liquidity and capital resources

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

As of December 31, 2011, we had total cash and marketable securities of SEK 7,720 million as compared with SEK 9,922 million as of December 31, 2010.

For the year ended December 31, 2011, cash flows provided by operating activities amounted to SEK 4.895 million as compared to SEK 5,065 million in the year ended December 31, 2010. For the year ended December 31, 2011, cash flows used in investing activities amounted to SEK (5,579) million, including SEK (10,651) million related to capital expenditures. For the year ended December 31, 2010, cash flows used in investing activities amounted to SEK (9,681) million, including SEK (10,189) million related to capital expenditures. For the year ended December 31, 2011, cash flows provided by financing activities amounted to SEK 559 million. For the year ended December 31, 2010, cash flows provided by financing activities amounted to SEK 5,151 million.

Total interest bearing debt as of December 31, 2011, was SEK 49,501 million, excluding debt in SPEs, as compared with SEK 47,964 million as of December 31, 2010. Interest bearing debt in SPEs as of December 31, 2011, was SEK 4,143 million as compared with SEK 5,140 million as of December 31, 2010. As of December 31, 2011, $776 million was utilized under our $1 billion revolving credit facility, plus $26 million which was used for issuing bank guarantees and letters of credit. As of December 31, 2010, $909 million was utilized under our $1 billion revolving credit facility, of which $25 million was used for issuing bank guarantees and letters of credit. As of December 31, 2011, $32 million was utilized under the $200 million revolving credit facility entered into by Stena Royal, compared to $107 million as of December 31, 2010. In June 2009, Adactum entered into a revolving credit facility of SEK 450 million. As of December 31, 2010, the utilized portion of this facility was SEK 450 million. During 2010 we entered into a new SEK 6,660 million revolving credit facility with Svenska Handelsbanken and Nordea and guaranteed by EKN. This facility was unutilized as of December 31, 2011.

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

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, Nordea, Citigroup Global Markets Limited, DnB NOR Bank ASA and HSBC Bank plc act as lead arrangers and Svenska Handelsbanken acts as facility agent. The revolving credit facility was made available for the purposes of refinancing Stena Holland BV’s existing debt, including the 2002 and 2001 revolving credit facilities, together with certain other vessel financings, and to provide financing for general corporate purposes. Stena Holland BV’s and SSAG’s obligations under the revolving credit facility are guaranteed by Stena AB and certain of its subsidiaries.

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

The obligations of Stena AB, Stena Holland BV, AB Stena Finans and SSAG under the revolving credit facility are secured by, among other things, first priority security interests on Stena Baltica, Stena Carisma (and its linkspans), Stena Clyde, Stena Don, Stena Danica, Stena Europe, Stena Forecaster, Stena Forerunner, Stena Foreteller, Stena Forwarder, Stena Vision (ex. Stena Germanica),

Stena Nautica, Stena Saga, Stena Spirit (ex.Stena Scandinavica), Stena Scanrail, Stena Spey, Aurora af Helsingborg, Stena Scotia, Stena Hibernia, Stena Feronia and the Holyhead and Stranraer ports. In the event that an asset securing the revolving credit facility is sold or declared a total loss, availability under the revolving credit facility will, unless appropriate replacement collateral is provided within 270 days, be reduced by the lesser of net sale or net loss proceeds and the amount required to bring the security value of the remaining collateral (net of any debt secured by a prior mortgage therein) to 140% of the facility amount.

The revolving credit facility imposes various financial and operating covenants upon the restricted group. Among other things, the principal financial covenants (i) require us to maintain current assets and committed undrawn facilities in an amount greater than or equal to 125% of consolidated current liabilities, (ii) require us and our subsidiaries to maintain minimum cash and cash equivalents of not less than $50 million, (iii) require our net debt to be no greater than 65% of the capitalization, and (iv) require us to maintain ownership of the security parties that, at the date of execution of the credit facility agreement, are members of the Stena AB group.

As of December 31, 2011, the amount of indebtedness under the revolving credit facility was $776 million plus $26 million used in connection with guarantees and letters of credit.

Adactum secured bank facility. On June 30, 2009, Adactum entered into a new secured revolving credit facility with Svenska Handelsbanken and Nordea with a total principal amount of SEK 450 million. The facility matures on June 30, 2012, and bears interest at a rate based on Stockholm Interbank Offered Rates plus an applicable margin of 2.0%. Adactum may select an interest period of one, three, six or twelve months every time it borrows funds under the facility. Interest is payable at the end of the relevant interest period. The facility includes a cross-default provision ($15 million threshold) with respect to debt of Stena, Adactum or any present or future subsidiary of Stena. As of December 31, 2011, SEK 450 million under the facility was utilized. The facility is non-recourse to Stena AB.

Stena Royal secured bank facility. On September 28, 2007, Stena Royal entered into a new $350 million secured revolving credit facility with Svenska Handelsbanken and Nordea. The facility matures on September 28, 2012. The facility bears interest at a rate based on LIBOR, EURIBOR or Stockholm Interbank Offered Rates, as applicable depending on currency drawn down, plus an applicable margin of 0.45% to 0.70%, depending on the ratio between the aggregated drawn down amount and the value of the underlying security. Stena Royal may select every time it borrows funds under the facility an interest period of three or six months or such other period as may be agreed up to a maximum of twelve months. Interest is payable at the end of the relevant interest period. The medium and long-term investment portfolios held by Stena Royal are pledged as security for the facility. The facility does not include any cross-default provision. In 2010, the amount of the facility was reduced to $200 million as the providing banks are the providers of the SEK 6,660 million EKN revolving credit facility (described below). As of December 31, 2011, $32 million was utilized under the facility.

Debt in SPEs. As of December 31, 2011, we had investments, through unrestricted subsidiaries, in three SPEs: Canyon Capital CLO-2004 Ltd, Canyon Capital CLO-2006 Ltd and Canyon Capital CLO-2007 Ltd. The assets and liabilities of the SPEs are consolidated in our financial statements, although the debt of the SPEs is non-recourse to Stena. Canyon Capital CDO-2002 Ltd was terminated in 2011 and the remaining assets were sold.

As of December 31, 2011, Canyon Capital CLO-2004 Ltd and Canyon Capital CLO-2006 Ltd, had issued senior secured notes to fund their portfolio investments in the U.S. high yield bond and corporate loan markets.

As of December 31, 2011, the total outstanding debt of all SPEs was SEK 4.1 billion. The remaining funding for the SPEs has been provided by the Company and other investors as subordinated secured notes and preferred share capital.

Canyon Capital CLO-2004 Ltd issued notes maturing in October 2016, consisting of $200 million Class A1 notes, $77.5 million Class A2 notes, $36 million Class B notes, $29 million Class C notes and $16 million Class D senior secured notes. The Class A, B, and C notes bear interest at a variable interest rate of LIBOR, plus a margin of 0.37%, 1.25% and 2.50%, respectively, and the Class D notes bear a fixed interest rate of 12.88%. Canyon Capital CLO-2006 Ltd issued senior secured notes maturing in August 2020, consisting of $266 million Class A notes, $15.2 million Class B notes, $22.8 million Class C notes, $22.8 million Class D notes and $13.3 million Class E notes. The notes bear interest at a variable rate of LIBOR plus a margin of 0.25-0.27% for Class A notes and 0.42%, 0.70%, 1.60% and 3.75% for Class B, C, D and E notes, respectively. Interest is payable semi-annually. Each series of notes is secured by the underlying securities held by the issuing SPE. During 2010, the previous funding of Canyon Capital CLO-2007 was refinanced, using the $200 million secured revolving credit facility in the unrestricted group. The $200 million funding of Canyon Capital CLO-2007 was repaid during 2010. During 2011 the CLO 2007 has been reduced down to notional USD 38 million and the funding from the secured RCF has been repaid in its entirely.

Senior Notes due 2016. As of December 31, 2011, we had outstanding $129 million principal amount of 7% Senior Notes due 2016. In 2007, we repurchased $78 million of our Senior Notes due 2016. 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. The indentures governing the notes contain certain covenants with respect to, among other things, limitations on consolidated and subsidiary debt and preferred stock, limitations on restricted payments and investments, limitations on restrictions concerning distributions and transfers by subsidiaries, limitations on liens and guarantees, limitations on business activities and limitations on mergers, consolidations and certain sales and purchases of assets. The notes are unsecured obligations of Stena AB and rank pari passu in right of payment with Stena AB’s other unsubordinated indebtedness.

Senior Notes due 2017, Senior Notes due 2019 and Senior Notes due 2020. As of December 31, 2011, we had outstanding €300 million principal amount of 6.125% Senior Notes due 2017, € 102 million principal amount of 5.875% Senior Notes due 2019 and €200 million principal amount of 7.875% Senior Notes due 2020. The 6.125% Senior Notes, issued in February 2007, mature on February 1, 2017, and interest is payable semi-annually on February 1 and August 1 of each year. The 5.875% Senior Notes, issued in February 2007, mature on February 1, 2019, and interest is payable semi-annually on February 1 and August 1 of each year. The 7.875% Senior Notes, issued in March 2010, mature on March 15, 2020, and interest is payable semi-annually on March 15 and September 15 of each year. The indentures governing these notes contain certain covenants with respect to, among other things, limitations on consolidated and subsidiary indebtedness and limitations on liens on capital markets indebtedness. The notes are unsecured obligations of Stena AB and rank pari passu in right of payment with Stena AB’s other unsubordinated indebtedness.

SEK 6,660 million EKN revolving credit facility. In 2010, Stena entered into a SEK 6,660 million multicurrency Revolving Credit facility agreement with Svenska Handelsbanken and Nordea backed by a guarantee provided by EKN. Borrowings under the revolving credit facility bear interest at a rate equal to the aggregate of the applicable Interbank Offered Rates plus a margin of 1.85%. 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 semi-annually. The facility is unsecured and matures on September 29, 2017. As of December 31, 2011 and 2010, respectively, the facility was unutilized.

The $1 billion revolving credit facility as well as certain vessel financings provide that the failure of immediate members of the Olsson family or their legal representatives to own at least 75% of the voting equity in Stena AB, which 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 the borrowing entities, then all amounts outstanding under the $1 billion revolving credit facility become immediately payable on demand, and upon such demand the facility terminates. In addition, the SEK 450 million Adactum facility will become payable on demand if Stena AB ceases to own, directly or indirectly, 100% of the equity in Adactum.

The indentures governing all of our Senior Notes require Stena AB to make an offer to purchase all notes outstanding under such indenture at 101% of their principal amount if any person or group other than shareholders ultimately controlled by the Olsson family and certain related entities directly or indirectly beneficially owns or controls more than 50% of the voting equity in Stena AB.

Other

Property-related debt. As of December 31, 2011, we had bank facilities and mortgage loans secured by the real estate, buildings and land in our real estate business segment of approximately SEK 12.2 billion that are denominated in Swedish kroner and euro, with maturities from 2012 through 2026. These facilities and loans are non-recourse to Stena AB. In addition, there are loans secured by indirect investments in real estate of approximately SEK 0.5 billion that are denominated in euro. These facilities and loans are non-recourse to Stena AB.

Other interest bearing debt. As of December 31, 2011, we were obligated with respect to the guarantees of lease obligations and certain loans used to finance the acquisition of vessels and other assets in the aggregate amount of approximately SEK 24 billion. These are denominated in U.S. dollar, British pound, euro and Swedish kroner.

Construction in Progress

Total construction in progress, which includes a DrillMAX drillship and one other vessel on order as of December 31, 2011, was SEK 5,290 million as compared to SEK 6,541 million as of December 31, 2010. The remaining capital expenditure commitment for newbuildings on order as of December 31, 2011, was SEK 2,899 million, of which SEK 2,635 million is due during 2012 and SEK 264 million is due during 2013. Financing for approximately 90% of this unpaid balance has already been arranged. We plan to finance the remainder of this unpaid balance, together with additional expenses and financing costs, through cash from operations, existing revolving credit facilities, new capital lease agreements, new bank loans or other financing arrangements.

Long-Term Financial Obligations and Other Contractual Obligations

Our long-term financial obligations as of December 31, 2011, were as follows:


	Payments due by period
	Total		Less than one year		1-2 years		3-5 years		More than 5 years		Not specified
	(SEK million)
Property loans		12,490		906		1,224		902		9,458
Other bank loans		22,748		1,629		4,587		4,375		12,156
Revolving credit facility		5,560										5,560
Other credit facilities		764		307								457
Senior Notes		6,236								6,236
Capital leases		1,703		222		161		520		800
Operating leases		6,900		1,578		2,324		1,231		1,767
Trade accounts payable		1,281		1,281
Total		57,682		5,924		8,296		7,028		30,418		6,017

The Company also has a pension obligation to members of the Olsson family. This contractual obligation is current fully funded. For committed contracts for newbuildings on order, see page F-43, “Vessels, Construction in progress and Equipment.”

Off Balance Sheet Arrangements

One of our subsidiaries and TeeKay have each guaranteed the performance of the obligations of one of the Stena/TeeKay joint ventures under a charter agreement with Esso Norway. Our liability under this guarantee is limited to 50% of any claim caused by the non-performance of the joint venture. We and TeeKay have also guaranteed the repayment by the other Stena/TeeKay joint ventures of loans from a group of banks. Our liability under these loans is limited to 50% of the amount outstanding under the loan agreements, including interest, charges, expenses and damages. As of December 31, 2011, the outstanding total loan amounts were $92 million.

Trend information

Charter rates for RoRo and RoPax vessels and freight volumes and rates in Northern Europe increased in the period between 2001 and July 2008. In particular, freight volumes increased by an average of approximately 5% per year during the period. Demand, driven by increases in global and regional trade, increased charter rates and freight volumes and rates on these vessels. Freight volumes in Northern Europe have in the past increased by approximately two times GDP growth in this area and a general economic downturn or slowdown could lead to decreased freight volumes and rates for our ferry operations and lower charter rates for our chartered out RoRo and RoPax vessels. As of the third quarter of 2008, freight volumes and rates and charter rates began to fall as a result of the global recession. Charter rates were stable, during 2009 and 2010, but have decreased during 2011, primarily as a result of lower economic activity in the European market. The RoRo and ferry freight businesses are exposed to the current economic climate and competition for customers’ products. There can be no assurance that freight volume and rates and charter rates will not decrease from current levels or that we will be able to charter out our RoRo and RoPax vessels when our current charter contracts expire.

Charter rates for tankers increased in the period between February 2008 and August 2008, which marked the end of a “super cycle” for the tanker market. Demand, driven by increases in global trade and demand for crude oil, significantly increased charter rates. In October 2008, charter rates began to fall as a result of increased capacity and reduced demand for crude oil. By the end of 2008, rates stabilized at a lower level which generally continued during 2010 and 2011. The decline in charter rates was also affected by the expected over-capacity of available tankers. Going forward, we expect the tanker industry will be positively affected by an increase in worldwide oil consumption. This, however, will be partly offset by a continuously high level of newbuildings delivered from shipyards. Our tankers subject to long term charters are not expected to be affected by the current events in the tanker market until the current charters expire. Tankers trading in the spot market are subject to changes in the demand for vessels and changes in market rates.

Oil price and profits for the oil companies are the main drivers for the drilling market. Charter rates for drilling rigs increased in the period between 2005 and 2008, primarily driven by increased offshore exploration and development activities as a consequence of

increased demand for oil and depletion of existing offshore fields. In particular, charter rates for newer, larger rigs that are equipped to operate in deep water have increased over the last few years. In 2009, charter rates were slightly affected by lower crude prices, reduced exploration as a result of lower exploration budgets on the part of oil companies and reduced forecasted demand for oil. The market improved in 2010. With a higher oil price, the economics of offshore exploration and production change, remote and frontier areas become economically viable for exploratory campaigns and re-investment by oil companies in more mature areas increases. Throughout 2011, demand grew faster than supply and dayrates improved with utilization. The ultra deepwater market utilization remains at 100% and such utilization is expected to continue for several years. As a result of the fully utilized ultra deepwater market, we have seen increased demand and a tightening in the mid-deepwater (3,000-7,500 feet) market. We also see positive signs for the coming year in the midwater segment with dayrates on the rise. All of our seven drilling units are on time charter with expirations ranging from the fourth quarter 2012 through June 2017. The demand for drilling units has been volatile and demand for drilling units and charter rates historically have fluctuated significantly with long-term sustained oil price changes. 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.

Application of Critical Accounting Policies

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

Investment properties. Our investment properties, i.e. properties held in order to generate rental income or increase in value or a combination of these, are valued continuously at fair value (estimated market value). These properties are initially valued at acquisition cost. Fair value is based on the estimated market value on balance sheet date, which means the value at which a property could be transferred between well-informed parties that are independent of each other and that have an interest in the transaction being carried out. Changes in fair value are reported in the income statement, with an impact on changes in value of properties.

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

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

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

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

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

Accounting policies

The Group has not adopted any new or revised IFRSs on or after January 1, 2011, that have had a material impact on the financial statements presented in this Annual Report.

IFRS standards that have been issued but are not yet effective

The following standards and amendments to existing standards have been published and are mandatory for the group’s accounting periods beginning on or after January 1, 2012 or later periods, and the group has not early adopted them:

IAS 19, “Employee benefits” was amended in June 2011 and will be effective beginning on January 1, 2013. The impact on the Group will be as follows: (i) to eliminate the corridor approach and recognize all actuarial gains and losses in OCI as they occur, (ii) to immediately recognize all past service costs and (iii) to replace interest cost and expected return on plan assets with net interest amount that is calculated by applying the discount rate on the net defined benefit liability (assets).

IFRS 9, “Financial instruments”, addresses the classification, measurement and recognition of financial assets and financial liabilities. IFRS 9 was issued in November 2009 and October 2010. It replaces the part of IAS 39 that relate to the classification and measurement of financial instruments. IFRS 9 requires financial assets to be classified into two measurement categories, those measured at fair value and those measured at amortized cost. The determination is made at initial recognition. For financial liabilities, the standard retains most of the IAS 39 requirements. The standard is effective as of January 1, 2015.

Item 6.

Directors, Senior Management and Employees

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

The following table sets forth the name, year of birth and position of each of our directors as of March 31, 2012.


Name	Year born	Title
Lennart Jeansson	1941	Chairman of the Board of Directors
Dan Sten Olsson	1947	Chief Executive Officer and Director¹⁾
Lars Westerberg	1948	Director
Gunnar Brock	1950	Director
Åke Plyhm	1951	Director
Christian Caspar	1951	Director
Anne-Marie Pouteaux	1951	Director
Jörgen Lorén	1961	Director (Employee Representative)
Jens Ole Hansen	1951	Director (Employee Representative)
Pia Carlsson	1969	Deputy Director (Employee Representative)

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

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

Lennart Jeansson was appointed chairman of the board of Stena AB in 2000. Mr. Jeansson also serves as a director on the board of Stena Metall. Mr. Jeansson is chairman of the boards of BIL Sweden, Consortio Fashion Group and the Volvo Pensionsstiftelse.

Dan Sten Olsson has served as Chief Executive Officer and a director of Stena AB since 1983. Mr. Olsson also serves as member or chairman of the board of a majority of the main companies in the Stena Sphere. Mr. Olsson has been employed by Stena AB since 1972.

Lars Westerberg has served as a director of Stena AB since 2011. Mr Westerberg also serves as chairman of the board of Husqvarna AB and a director on the board of Volvo AB, SSAB Svenskt Stål AB and Sandvik AB.

Gunnar Brock has served as a director of Stena AB since 2011. Mr Brock also serves as chairman of the board of Mölnlycke Health Care AB, Stora Enso Oyj and Roling Optics AB. He is also a director on the board of Investor AB, Stockholm School of Economics, Total SA, SOS Childrens Villages Sweden and a member of the Royal Swedish Academy of Engineering Sciences (IVA).

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

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

Christian Caspar has served as a director of Stena since 2011. Mr. Caspar is also a director of Bonnier AB, Industrivärlden AB, Goodgrower SA and serves as an advisor to Benteler AG and Triton. Mr, Caspar is also a director of Mckinsey for Children Switzerland.

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

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

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

Other Key Employees

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

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

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

Claes Davidsson (born 1950) has served as Director of Ship Management and HR since 2003. Mr. Davidsson also serves as chairman of NMM in Glasgow in Scotland, Stena Insurance AG in Switzerland and of Austen Maritime PTE Ltd., Singapore. Mr. Davidsson has been employed in the Stena Sphere since 1984.

Carl-Johan Hagman (born 1966) has served as a Shipping Director of Stena AB Group since 2011. He is the new managing director of Stena Rederi AB, responsible for our global Shipping (Stena Bulk, Stena RoRo, Stena Teknik, Ship Management, HR) as well as for Stena Drilling’s and Stena Line’s operations.

Staffan Hultgren (born 1961) has served as Deputy Chief Executive Officer of Stena AB since 2010. He also serves as the principal financial officer of Stena AB. Previously he served as Director of Business Administration of the Company. Mr. Hultgren is a member of the board of directors of many of our companies. Mr. Hultgren has been employed in the Stena Sphere since 2004.

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

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

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

Per Westling (born 1961) has served as Managing Director of Stena RoRo since 2011. Mr Westling has been employed in the Stena Sphere since 1985.

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

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

Compensation of Directors

Salaries of in total SEK 13 million and SEK 12 million were paid to the Chief Executive Officer and the Deputy Chief Executive Officer in 2011 and 2010, respectively. The corresponding pension charges amounted to SEK 18 million in 2011 and SEK 2 million in 2010. The aggregate compensation paid by the Stena AB to its directors (a total of nine persons, CEO included) amounted to MSEK 10 in 2011, the same as in 2010. Of total salaries paid to other employees MSEK 37 were paid to other officers than the Chief Executive Officer, the Executive Vice President and the board members in 2011 (a total of seven persons) and MSEK 36 in 2010.

The Chief Executive Officer has retirement conditions allowing retirement from 65 years of age with a salary of 65% of his then prevailing salary. The period of notice from either party is 12 months. Severance pay amounts to a maximum of 24 months salary.

The board members of Stena AB were paid SEK 250,000 in 2011, out of which SEK 50,000 was paid to the Chairman of the Board and SEK 25,000 was paid to each of the Chief Executive Officer and the Executive Vice President. In 2010, the board members of Stena AB were paid SEK 250,000, out of which SEK 50,000 was paid to the Chairman of the Board and SEK 25,000 was paid to the Chief Executive Officer.

The Chairman of the Board was in addition paid SEK 3,311,000 and SEK 2,398,000 for consulting services for the years 2011 and 2010, respectively.

Audit Committee

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

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

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

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

Employees

The chart below sets forth the average number of employees in each of our principal business areas for the three years ended December 31, 2011.


	2009		2010		2011
Ferry operations		5,798		5,558		5,757
Drilling		1,002		902		966
Shipping		817		809		902
Property operations		286		276		269
New businesses Adactum		2,253		2,213		2,256
Other		80		89		92

Total		10,236		9,847		10,242

In addition to the employees referred to above, NMM employed approximately 5,334 persons in 2011 in external ship management services, as compared to 5,500 persons in 2010 and 4,800 persons in 2009.

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

Options

No options exist to purchase securities from us.

Item 7.

Major Shareholders and Related Party Transactions

Major Shareholders

All of the issued and outstanding voting shares of Stena AB were owned as follows as of March 31, 2012:


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	12,250		24.5	%

The holders listed above have sole voting and investment power over the shares beneficially owned by them. Dan Sten Olsson, Stefan Olsson, and Madeleine Olsson Eriksson are brothers 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 the late Birgit Olsson) is obligated to offer such shares to the other shareholders. If any person other than the current shareholders of Stena AB as of December 30, 1993, or lineal descendants of Sten A. Olsson and the late Birgit Olsson acquires 48% or more of the voting power of Stena AB, then the remaining shareholders have the right to put all or

a part of their shares to such shareholder at a price equal to the highest price per share paid by such shareholder. Under the Articles of Association, a vote of at least 75% of shares represented at the annual general meeting of our shareholders is required to amend this put provision. In addition, under the Swedish Companies Act, shareholder resolutions in the ordinary course of business require the vote of a majority of shares voting thereon, and extraordinary items (including amendments to the Articles of Association other than the amendment to the put option described above) require support by shareholders holding at least two-thirds of the votes cast as well as two-thirds of all shares present or represented at the shareholders meeting. Holders of at least 10% of the outstanding shares have the right to require us to pay dividends within certain statutory parameters.

Related Party Transactions

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

Concordia

Concordia and the Company (indirectly through Stena Bulk AB, a wholly owned subsidiary of the Company) are parties to an allocation agreement (the “Allocation Agreement”) pursuant to which Concordia may elect to participate 100%, 50% or not to participate in business opportunities identified by Stena Bulk relating to the chartering of crude oil tankers. The net outcome of the agreement, including results of forward contracts, was SEK 0 million in 2009, SEK 0.7 million in 2010 and SEK 0 million in 2011.

We provide certain services to Concordia such as administration, marketing, commercial management, insurance and technical support for Concordia’s owned and chartered vessels, including administration of jointly chartered vessels, offices and office services for Concordia’s personnel and certain financial and other services. We earned fees for these services of SEK 34 million in 2009, SEK 37 million in 2010 and SEK 31 million in 2011.

Sessan

Since June 1999, we have served as the business manager of Sessan for its 50% participation in a Norwegian partnership that owns the shuttle tanker Stena Sirita, which is chartered pursuant to a 10-year contract to ESSO Norway. In 2003, we also became the business manager of Sessan for its 50% participation in the shuttle tanker Stena Spirit, which is chartered pursuant to a 10-year contract to Petrobras in Brazil. We earned total fees for these services of SEK 1.5 million in each of the years 2009, 2010 and 2011.

In December 2002, we sold the remaining 50% of the RoPax vessel Stena Jutlandica to Sessan who acquired the first 50% of this vessel from us in 1996. The vessel is chartered back under an operating lease, for which we paid charterhire of SEK 59 million in each of the years 2009, 2010 and 2011, respectively.

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

Stena Metall

We purchase a substantial part of our bunker fuel from Stena Metall. Such purchases aggregated SEK 1,941 million, SEK 2,023 million and SEK 2,771 million in 2009, 2010 and 2011, respectively.

We provide management and other services to Stena Metall. We received SEK 1 million in each of the years 2009, 2010 and 2011 for these services.

In December 2008, we acquired the vessels Stena Nordica, Stena Freighter, Stena Carrier and Mont Ventoux from Stena Metall at market value for a total of SEK 1,443 million. The consideration was paid through (i) the issuance of a loan note of SEK 682 million, bearing interest at market rate and maturing on August 31, 2010, and (ii) the assumption by us of the outstanding bank loans relating to the acquired assets for a total amount of SEK 761 million. These loans were repaid during 2010.

Olsson Family

We rent office space from members of the Olsson family. In each of the years 2009, 2010 and 2011, we paid SEK 39 million, SEK 24 million and SEK 39 million, respectively, in respect of such properties.

We manage certain properties owned by members of the Olsson family. In each of the years 2009, 2010 and 2011, members of the Olsson family paid us SEK 13 million, SEK 14 million and SEK 15 million, respectively, for such management services.

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

Item 8.

Financial Information

Consolidated Financial Statements

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

Legal Proceedings

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

In November 2008, Transocean filed a second patent infringement suit against Stena Drilling in the United States District Court for the Southern District of Texas (the “second Texas Action”), originally naming Stena Drilling, Stena DrillMAX Limited and Stena DrillMAX III Limited as defendants, and later adding Stena DrillMax I Limited and Stena DrillMax I (Hungary) Kft as additional defendants (the “Stena Defendants”). In the second Texas Action, Transocean alleges that the Stena Defendants infringed four U.S. patents owned by Transocean by virtue of certain acts of selling, offering for sale and/or using the DrillMAX I vessel in the United States and selling and/or offering for sale the DrillMAX III vessel within the United States. The Stena Defendants answered Transocean’s complaint in the second Texas Action in December 2008 and July 2009 by alleging non-infringement, invalidity and unenforceability of Transocean’s patent claims. The second Texas Action was administratively stayed in August 2009, pending the outcome in a separate case involving Transocean and a third party involving the same patents. In July 2011, the Court in the separate Transocean action issued an Amended Final Judgment holding, inter alia, that the asserted claims of the Transocean patents are invalid. In August 2011, Transocean appealed the Amended Final Judgment in the separate action. The Court in the second Texas Action has administratively stayed the second Texas Action pending the outcome of Transocean’s appeal in the separate action.

In June 2009, Heerema Engineering Services BV (“Heerema”) brought a patent infringement suit against Stena Services Brazil LTDA and Stena DrillMax I (Hungary) KFT (“Stena Brazil Defendants”) in Brazilian state court. Heerema alleges that the Stena Brazil Defendants infringe Heerema’s Brazilian Patent PI 9502391-7 by virtue of the DrillMAX I’s operations off the coast of Brazil. The Stena Brazil Defendants answered Heerema’s complaint in August 2009 by alleging non-infringement, invalidity, and inapplicability of Heerema’s Brazilian patent in the “territorial” waters where the DrillMAX I has operated. A recent decision by the Brazilian state court in which the action is pending has stayed the action pending the outcome of a separate nullity action filed by the Stena Brazil Defendants in Brazilian federal court in December 2009. The nullity action named both Heerema and the Brazilian Patent and Trademark Office (“BPTO”) as defendants. The BPTO answered the nullity complaint by asserting that Heerema’s Brazilian patent is invalid. The Stena Brazil Defendants are awaiting the final outcome of the nullity action.

We believe it is highly unlikely that the outcome in these cases will have a material adverse impact on our financial condition or results of operations.

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

Dividends

We paid a cash dividend of SEK 240 million, SEK 316 million and SEK 190 million for the years ended December 31, 2009, 2010 and 2011, respectively. The dividends are made out of unrestricted earnings in the shareholders’ equity and paid out the year after the respective financial year.

Item 9.

The Offer and Listing

Not applicable.

Item 10.

Additional Information

Organization

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

Articles of Association

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

Directors

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

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

Shareholder Rights

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

In order to change the rights of shareholders, our Articles of Association must be amended. Under the Swedish Companies Act, shareholder resolutions in the ordinary course of business require the vote of a majority of shares voting thereon, and extraordinary items (including amendments to the Articles of Association other than the amendment to the put option described below) require

support by shareholders holding at least two-thirds of the votes cast as well as two-thirds of all shares present or represented at the shareholders meeting. Holders of at least 10% of the outstanding shares have the right to require us to pay dividends within certain statutory parameters.

General Meetings

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

Ownership and Transfer Restrictions

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

Change in Control

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

Disclosure of Shareholdings

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

Material Contracts

For a discussion of our material contracts, see “Item 5—Operating and Financial Review and Prospects—Financial Contracts” and “Item 5—Operating and Financial Review and Prospects—Other”.

Exchange Controls

None.

Taxation

Not Applicable.

Documents on Display

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

Item 11.

Quantitative and Qualitative Disclosures about Market Risk

In the course of our operations, we are exposed to various types of market risks. Our primary market risks are foreign exchange risks, interest rate risks, oil price risks, equity price risks and trading risks. We seek to manage our exposure to adverse changes in foreign currency exchange rates, interest rates and oil prices through the use of various derivative financial instruments. We conduct

monitoring and control of these risks continuously in each company as well as centrally. Our positions are monitored using a variety of techniques, such as market value and sensitivity analyses. The majority of our financial transactions are carried out through the central finance functions located in Sweden, Luxembourg, Switzerland, Cyprus and the Netherlands, which conduct their operations within established risk mandates and limits.

Foreign Exchange Risks

We are exposed to the risk of fluctuations in foreign currency exchange rates due to the international nature and scope of our operations. Our currency risk is related to changes in contracted and projected flows of payments denominated in currencies other than the functional currency (transaction exposure), to the translation of our monetary assets and liabilities that are denominated in such currencies (translation exposure), to the translation of net assets of foreign subsidiaries (equity exposure) and financial trading activities. The objective of our foreign exchange risk management program is to seek to manage the risk of adverse foreign exchange movements on our income and financial position.

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

We use forward exchange contracts to seek to hedge against the risk of adverse movements in currency exchange rates of future payment flows from firm commitments such as bunker fuel purchases and charter hires.

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

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

After taking into account hedging instruments as above, we recorded net translation exchange losses of SEK 48 million and SEK 36 million for the financial years ended December 31, 2010 and 2011, respectively. This equals 0.05% and 0.04% of total assets of SEK 94.9 billion and SEK 98.6 billion as of December 31, 2010 and 2011, respectively.

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

The book value of our net assets of subsidiaries denominated in a foreign currency, as of December 31, 2011 and 2010, was approximately SEK 22.8 billion and SEK 18.7 billion, respectively. The net assets are expressed mainly in Swedish kronor, Euro, British pounds and U.S. dollars. A 1% change in the value of the Swedish kronor against each of the functional currencies of our such subsidiaries would affect our shareholders’ equity as of December 31, 2011, by SEK 228 million. In 2011, our shareholders’ equity decreased by SEK 243 million due to exchange rate differences and after net impact of equity hedge adjustments (see also our Consolidated Statement of Changes in Shareholders’ Equity).

Bunker Fuel Exposure

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

We use fixed price swaps and, to a lesser extent, option contracts to seek to hedge against the risk of adverse movements in the price of oil. Contracts related to hedging of bunker fuels normally extend to 12 to 36 months based on management’s assessment of acceptable risk levels and future oil prices (see also Note 33 in our Consolidated Financial Statements).

Financial Trading Activities

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

We recorded net gains/(losses) from currency and interest rate trading activities of SEK (4) million and SEK (5) million for the financial years ended December 31, 2010 and 2011, 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 2011, 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 50% floating rate borrowings, 10% fixed rate borrowings and 40% 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, 2011, to manage these interest rate risks, including interest rate swaps to effectively convert floating rate borrowings to fixed rate borrowings.

Credit Risks

In our operating activities, credit risks occur in the form of receivables on customers. In our Ferry operations, credit checks are regularly made on our customers using well known credit-rating agencies. If the credit worthiness of the customer is not satisfactory according to the credit policy, payment in cash is required. In our Offshore Drilling operations, our customers are generally highly credit rated. Our RoRo vessels are typically chartered out on a time or bareboat charter. Although such charterhire is paid in advance and we have the contractual right to withdraw the vessel and cancel the charter contract if payment is not received within a certain time, before entering into a charter agreement the credit worthiness of the charterer is investigated using well known credit-rating agencies. If the credit worthiness is not satisfactory a guarantee is required from the charterer, e.g. in the form of a bank guarantee.

In our Crude oil tanker operations where a spot charter arrangement is made, the charterer is scrutinized before the contract is signed in accordance with our QA system rules. If the charterer is not considered “first class” or has certain remarks on his payment possibility, chartering of the vessel can either be denied, or the charterer can be offered to provide a bank guarantee, or to pay the freight before discharge of the cargo (called BBB). In a period charter arrangement the charterhire is paid in advance. If the charterhire is not paid within a certain time we have the right to withdraw the vessel and cancel the charter contract. Regarding buy and sell arrangements of vessels the procedures are dictated by the buy/sale contract (MOA) where a vessel is not released to a buyer until the full payment has been received into sellers bank account.

In our Property operations, both residential and commercial tenants make the rental payments in advance. Nevertheless, a credit check is always made on new tenants, residential as well as commercial, and commercial tenants are put on regular “credit-watch” throughout the rental period. If the potential tenant does not fulfill the criteria set out in our finance policy, the tenant can either be denied a rental contract or be asked to make additional pre-payment or provide a bank guarantee (commercial tenants).

All financial instruments are entered into with counterparties who are considered to be creditworthy institutions and terms and conditions are documented. In the normal course of business, none of the parties demand collateral for credit exposure from financial instruments. All financial derivatives are traded within the framework of established ISDA agreements, where positive and negative market values are netted. See “Notes to Our Consolidated Financial Statements” in the F-pages hereto.

Liquidity Risks

Liquidity risk is managed by maintaining an adequate level of cash, cash equivalents and available financing through unutilized committed credit facilities and the possibility to sell short term marketable holdings in equities and bonds. Due to the dynamic character of the business, the need for financing flexibility is satisfied by arranging part of the company’s funding in the form of committed Revolving Credit Facilities, under which short term requirements for liquidity can be met.

The management regularly monitors the company’s liquidity reserves, based on anticipated cash flows. This is carried out on both operational company level and centrally at the treasury department in line with best practice and the limits set up for on a group wide basis. Furthermore, it is the policy of the group to calculate future cash flows in all major currencies and quantify the liquidity needed to meet those cash flows, to monitor balance sheet liquidity ratios in relation to both internal and external minimum levels and to maintain plans for debt financing.

Equity Securities Rate Risks

At December 31, 2011, the fair value of our marketable securities and short-term investments (excluding restricted cash) amounted to SEK 3.7 billion. The potential change in fair value resulting from a hypothetical 1% change of prices would be SEK 37 million. Under IFRS, movements in fair value of these investments will result in an immediate charge to our financial statements.

Item 12.

Description of Securities Other than Equity Securities

Not applicable.

PART II

Item 13.

Defaults, Dividend Arrearages and Delinquencies

Not applicable.

Item 14.

Material Modifications to the Rights of Security Holders and Use of Proceeds

Not applicable.

Item 15.

Controls and Procedures

Evaluation of Controls and Procedures. An evaluation of our disclosure controls and procedures was conducted as of December 31, 2011, (the “Evaluation Date”) under the supervision of our Chief Executive Officer and Principal Financial Officer.

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

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

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

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

Item 16A.

Audit Committee Financial Expert

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

Item 16B.

Code of Ethics

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

Item 16C.

Principal Accountant Fees and Services

Audit, Audit-Related, Tax and Other Fees

Aggregate fees for professional services rendered by auditors and advisors for the years ended December 31, 2010 and 2011, were:


SEK in million	2010		2011
KPMG:
Audit services		21		25
Other audit related services		1		1
Tax services		25		21
Other services		2		1

Total KPMG		49		48

Other auditors
Audit services		2		—
Other audit related services		1		—

Total		52		—

The audit fees for the years ended December 31, 2010 and 2011, were for professional services rendered for the annual audits of our Consolidated Financial Statements, statutory audits required by Sweden and foreign jurisdictions, quarterly reviews, issuance of consents and the review of documents filed with the Securities and Exchange Commission. The other audit related service fees for the years ended December 31, 2010 and 2011, include fees for supporting guidelines concerning accounting practices and standards.

Tax service fees for the years ended December 31, 2010 and 2011, were for services performed in connection with income tax compliance, consulting and tax research services and assistance with tax audits.

The Other service fees category for the years ended December 31, 2010 and 2011, includes fees primarily related to other general consulting.

Pre-Approval Policies

Our Board of Directors has adopted policies and procedures for the approval of audit and non-audit services rendered by our independent auditors, KPMG AB (“KPMG”). The policies and procedures require that any non-audit related services performed for the Company by KPMG shall be pre-approved by the Board of Directors. Under the policy, at the beginning of each year, the Board of Directors reviews a list of audit and non-audit related services that are subject to general pre-approval, determines limits of estimated fees per project for general pre-approval and the limits of estimated fees for interim pre-approval by a designated member of the Board. All services not within the pre-approved limits require pre-approval by the Board of Directors at their regular Board meetings except if circumstances require, interim pre-approval 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 2011, 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.

Item 16F.

Change in Registrant’s Certifying Accountant

Not Applicable.

Item 16G.

Corporate Governance

Not Applicable.

PART III

Item 17.

Financial Statements

Not applicable.

Item 18.

Financial Statements

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


	Page
Consolidated Financial Statements — Stena AB (publ)		F-1
Index to the Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm
Consolidated Income Statements for each of the years in the three-year period ended December 31, 2011		F-3
Consolidated Statements of Comprehensive Income for each of the years in the three-year period ended December 31, 2011		F-4
Consolidated Balance Sheets as of December 31, 2010 and 2011		F-5
Consolidated Statements of Changes in Shareholders’ Equity for each of the years in the three-year period ended December 31, 2011		F-7
Consolidated Statements of Cash Flows for each of the years in the three-year period ended December 31, 2011		F-8
Notes to the Consolidated Financial Statements		F-9
Schedules to Stena AB Consolidated Financial Statements		13
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		8

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).

8		List of Subsidiaries of the Company.*

11.1		Amended Code of Ethics relating to the Chief Executive Officer, Principal 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 for the year ended December 31, 2007).

12.1		Certification of Dan Sten Olsson, Chief Executive Officer of Stena AB, dated April [—], 2012.*

12.2		Certification of Staffan Hultgren, Principal Financial Officer of Stena AB, dated April [—], 2012.*

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

*	Filed herewith.

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 27, 2012


STENA AB (publ)

By:		/s/ Dan Sten Olsson
Name: Dan Sten Olsson
Title: Chief Executive Officer

By:		/s/ Staffan Hultgren
Name: Staffan Hultgren
Title: Principal Financial Officer

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, 2011		F-3
Consolidated Statements of Comprehensive Income for each of the years in the three-year period ended December 31, 2011		F-4
Consolidated Balance Sheets as of December 31, 2010 and 2011		F-5
Consolidated Statements of Changes in Shareholders’ Equity for each of the years in the three-year period ended December 31, 2011		F-7
Consolidated Statements of Cash Flows for each of the years in the three-year period ended December 31, 2011		F-8
Notes to Consolidated Financial Statements		F-9

F-1

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders

Stena AB (publ)

We have audited the accompanying consolidated balance sheets of Stena AB (publ) and subsidiaries (the “Company”) as of December 31, 2011 and 2010, and the related consolidated statements of income, comprehensive income, changes in shareholders’ equity and cash flows for each of the years in the three-year period ended December 31, 2011. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2011 and 2010, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2011, in conformity with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

Gothenburg, Sweden

April 27, 2012

KPMG AB

Thomas Thiel

F-2

CONSOLIDATED INCOME STATEMENTS


		Years ended 31 December
In million	Note	2009 SEK			2010 SEK			2011 SEK			2011 USD¹⁾

Revenues
Ferry operations			9,599			9,092			9,684			1,401
Drilling			8,112			7,777			6,546			947
Shipping			3,088			2,651			2,595			375
Investment properties			2,335			2,380			2,368			342
New Businesses – Adactum			4,797			4,630			4,732			684
Other			3			7			10			1

Total revenues			27,934			26,537			25,935			3,750


Net gain on sales of assets	4		179			189			1,683			243

Total other income						189			1,683			243


Net valuation on investment properties	12		(301	)		424			350			51


Total income	3		27,812			27,150			27,968			4,044


Direct operating expenses
Ferry operations			(7,033	)		(7,117	)		(7,703	)		(1,114	)
Drilling			(2,722	)		(2,959	)		(2,736	)		(396	)
Shipping			(3,124	)		(2,517	)		(1,895	)		(274	)
Investment properties			(804	)		(885	)		(829	)		(120	)
New Businesses – Adactum			(3,476	)		(3,306	)		(3,381	)		(489	)
Other			(29	)					(4	)		(1	)

Total direct operating expenses			(17,188	)		(16,784	)		(16,548	)		(2,394	)


Gross profit			10,624			10,366			11,420			1,650

Selling expenses	17		(1,305	)		(1,202	)		(1,298	)		(188	)
Administrative expenses	5		(1,902	)		(1,902	)		(1,927	)		(278	)
Depreciation and amortization	3		(3,415	)		(3,704	)		(3,617	)		(523	)

Income from operations	3, 33		4,022			3,558			4,578			661

Share of associated companies’ results	6		24			131			60			9
Dividends received			61			38			64			9
Gain (loss) on sale of securities			(81	)		445			(69	)		(10	)
Interest income			685			477			394			57
Interest expense			(1,864	)		(1,798	)		(1,914	)		(277	)
Foreign exchange gain/loss			(281	)		48			36			5
Other financial income/expense			(201	)		(219	)		(370	)		(54	)

Finance net	7		(1,658	)		(878	)		(1,799	)		(261	)

Income before taxes			2,344			2,680			2,779			400

Income taxes	8		20			(114	)		(253	)		(37	)

Profit for the year			2,364			2,566			2,526			363

Earnings attributable to:
Equity holders of the Parent Company			2,401			2,568			2,476			356
Non-controlling interests	13		(37	)		(2	)		50			7

Net income			2,364			2,566			2,526			363

¹⁾	Unaudited – Note 1

F-3

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME


	Years ended 31 December
In million	2009 SEK			2010 SEK			2011 SEK			2011 USD¹⁾

Profit for the year		2,364			2,566			2 526			363
Other comprehensive income
Change in fair value reserve, net of tax		939			159			(214	)		(31	)
Change in Cash flow hedges, net of tax		626			216			(813	)		(118	)
Change in currency translation differences		(2,097	)		(2,450	)		(147	)		(21	)
Change in equity hedge, net of tax		107			191			(96	)		(11	)
Equity method, net of tax					(50	)

Other comprehensive income for the year		1,939			632			1,256			182

Other comprehensive income attributable to:
– owners of the Company		1,995			642			1,264			183
– non-controlling interest		(56	)		(10	)		(8	)		(1	)

Total comprehensive income for the year		1,939			632			1,256			182

¹⁾	Unaudited – Note 1

See also Note 9.

As of 31 December 2011, the net book value of trademarks and other intangible assets amounts to SEK 1,545 million, as compared to SEK 1,280 million as of 31 December 2010.

F-24

Impairment testing of vessels

Twice a year, or if an indication of an impairment requirement exists, Stena makes an assessment of whether or not a write-down requirement exists as regards the value of vessels. See further the description under Note 1, “Impairment of non-financial assets”.

The recoverable amount is determined on the basis of calculations of value in use. These calculations are based on estimated future cash flows.

Retirement benefits

If the discount rate used increase by 0.25% from management’s assessments, the carrying amount on the pension commitments would be estimated at SEK 349 million lower.

Deferred taxes

In the preparation of the financial statements, Stena prepares a calculation of income tax, including a calculation of every fiscal area in which the Group operates, as well as of deferred taxes attributable to temporary differences.

Deferred tax assets that are primarily attributable to loss carry forwards and temporary differences are reported if the tax assets can be expected to be recovered through future taxable income. Changes in the assumptions regarding forecast future taxable income, as well as changes in tax rates, may result in significant differences in the valuation of deferred taxes.

Provisions

Generally, provisions are reported when there is an undertaking as the result of a historical event, where it is likely that an outflow of resources will be required to settle the undertaking and a reliable amount can be reliably estimated.

Provisions are made in the amount that represents the best estimate of the amount required to settle the existing commitment on balance sheet date. Where there is doubt in the estimates referring to forthcoming events outside the Group’s control, the actual outcome may differ significantly.

When a commitment does not meet the criteria for reporting in the balance sheet, the amount can be considered to comprise a contingent liability and be disclosed. These commitments originate from events that have taken place and their existence will be confirmed only when one or several uncertain future events, which do not lie entirely within the Group’s control, take place or fail to take place. Contingent liabilities also include present commitments where an outflow of resources is not likely or a sufficiently reliable estimate of the amount cannot be made.

Fair value of derivative instruments or other financial instruments

The Group calculates discounted cash flows for different available-for-sale financial assets which are not traded on an active market.

Valuation of investment properties

The fair value of an investment property can only be set at the date of sale. The valuation of investment properties is based on accepted principles and assumptions, therefore, the fair value is not the exact value but an estimate. In a normal market the fair value of a property is within a range of +/–5% to 10% and in a less liquid market the range can be larger. For Stena a fair value within the range of +/–5% is equal to SEK 1,288 million.

F-25

3 – Segment information

We are active internationally, primarily in the areas of ferry operations, offshore drilling, shipping, real estate, new businesses and finance. There are no significant transactions between the operating segments.

Ferry operations are conducted in Scandinavia, the United Kingdom, Germany, Poland, The Netherlands and the Republic of Ireland under the “Stena Line”, “Scandlines” and “HH-Ferries” brand names. We are one of the world’s largest ferry operators. The business currently consists of 17 strategically located ferry routes, 32 vessels, and five ports in Scandinavia, the United Kingdom and the Netherlands.

Ferry revenues are primarily generated from: (i) travel, which consists primarily of ticket sales for passengers and private cars, package tours and hotel sales; (ii) onboard sales, which consists primarily of cabin occupancy, retail sales, restaurants, bars, arcades, gaming and, on our Norway–Denmark route, duty and tax free sales; and (iii) freight, which consists primarily of trailer and truck transportation. Direct operating expenses for ferry operations consist mainly of personnel costs, costs of goods sold on the vessels, bunker fuel costs, vessel charter costs, commissions, package tour costs and other related costs.

Offshore drilling is operated through Stena Drilling, headquartered in Aberdeen, Scotland. We are one of the world’s leading companies in the development, construction and operation of offshore drilling rigs and drillships. We currently own and operate two third generation and one fifth generation semi-submersible drilling rigs and three sixth generation ultra-deepwater drillships. We have also one enhanced ultra-deepwater ice-class drillship, Stena IceMAX, on order scheduled for delivery in the first quarter of 2012.

Drilling revenues consist of charter hires for drilling rigs and drillships. Direct operating expenses for drilling consist primarily of personnel costs, insurance, maintenance and catering costs.

Shipping operations consists of the ownership and chartering of crude oil and petroleum product tankers, LNG carriers (Liquefied Natural Gas) and Roll-on/Roll-off vessels. To support these activities, we are also engaged in the design, purchase, sale, management and crewing of such vessels.

Stena Bulk is one of the world’s leading tanker shipping companies. We develop pioneering tankers to meet the customers’ need for safe transportation and innovative logistics. We currently control a fleet of approximately 80 tankers and are active in all segments of the tanker market. We also have one Suezmax tanker on order scheduled for delivery in the first quarter of 2013.

Stena RoRo provides vessels, innovative solutions and project management. Our customers are operators and ship owners around the world.

Northern Marine Management (“NMM”) is the Company’s international ship management company based in Glasgow, Scotland, with a world-wide customer base. With an extensive portfolio of clients and a wide range of vessels under management, NMM is a market leader in quality services. NMM operates a diverse high-tech fleet of approximately 100 vessels from its worldwide network of offices including Aberdeen, Gothenburg, St Petersburg, Hamburg, Houston, Manila, Mumbai, and Singapore.

Stena Teknik is a common resource for all maritime areas within our group. The operation consists of new construction and conversion projects, marine technical advice and purchasing, as well as research and development within marine areas.

Shipping revenues consist primarily of charter hires for owned and chartered in vessels and management fees for vessels managed by us. Direct operating expenses for shipping consist primarily of vessel charter costs, fuel costs, personnel costs, insurance and other related vessel costs.

Real Estate operations relate to investments through unrestricted subsidiaries in residential and commercial real estate. The properties are located in Sweden, The Netherlands, France, Hungary, Germany, the United States, Luxembourg and, the United Kingdom.

We own a total of 2.4 million sqm, mainly in Sweden, about 300,000 sqm are managed on behalf of affiliated companies. The property portfolio consists of approximately 23,400 apartments and commercial properties. We are one of Sweden’s largest privately-owned property companies.

Real estate revenues consist of rents for properties owned and management fees for properties managed by us. Real estate expenses consist primarily of maintenance, heating and personnel costs.

F-26

New Businesses – Adactum include long-term investments in listed as well as private companies, in new businesses outside our traditional lines of business through our unrestricted subsidiary Stena Adactum. Our objective is to create value in industries outside of our core business by building strong, profitable companies that can create platforms for new business opportunities within the Group. As of 31 December 2011 Stena Adactum had direct investments in four private companies, three associated companies (whereof two listed companies).

The four subsidiaries operate in different businesses:

•

“Blomsterlandet”, through which the Company is creating a chain of retailers for gardening products with one of Sweden’s most extensive range of indoor and outdoor plants.

•

“Envac”, which operates automated household and municipal waste collection systems with activities in 20 countries.

•

“Stena Renewable”, through which the Company has commenced operation of Sweden’s largest land-based wind power generating plan, near Ludvika, Sweden. In total 32 wind power systems (windmills) have been installed and are in operation.

•

“Ballingslöv”, which is an international group in the field of kitchens, bathrooms and storage products with an ambition to become one of the leading players in the European market. The Company has one manufacturing site in Ballingslöv, one in the United Kingdom and five in Denmark.

Other operations includes non-allocated central administration costs.

Primary measures of profitability for all these segments are “Income from operations” and “EBITDA”. These measurements are also the information reported to the Company’s chief operating decision-maker. In the Group this function has been identified as Stena AB’s Board of Directors, which takes strategic decisions.

Income from operations by segment


	Years ended 31 December
SEK million	2009			2010			2011
Ferry operations
Operations		445			(79	)		(250	)
Net gain on sale of vessels					2			16

Total ferry operations		445			(77	)		(234	)


Drilling
Operations		3,250			2,279			1,651
Net gain on sale of vessels								1,561

Total Drilling		3,250			2,279			3,212


Shipping
RoRo operations		102			35			93
Net gain sale of vessels		148

Total RoRo		250			35			93

Tanker operations		(736	)		(461	)		(185	)
Impairment charges		(150	)					(49	)

Total Tanker		(886	)		(461	)		(234	)

Other shipping operations		7			1			70

Total shipping		(629	)		(425	)		(71	)


Property
Operations		1,338			1,307			1,345
Net valuation on investment properties		(301	)		424			350
Net gain on sale of investment properties		31			187			106

Total property		1,068			1,918			1,801


New Businesses – Adactum
Operations		178			210			268

Total New Businesses – Adactum		178			210			268


Other		(310	)		(347	)		(398	)
Income from operations		4,002			3,558			4,578

F-27

Impairment charges of MSEK 49 which are included in the operating expenses for the tanker operation, were recorded for the shares in the associated company Paradise Holding. No impairment charges were recorded for 2010. In 2009, impairment charges of MSEK 150 were recorded for three crude oil tankers in 2009. All impairment charges are accounted for as depreciation.

Reconciliation between EBITDA and Income from operations by segment


		Years ended 31 December
SEK million		2009			2010			2011

Ferry operations	EBITDA		1,564			1,096			1,027
	Depreciation and amortization		(1,119	)		(1,173	)		(1,261	)
	Income from operation		445			(77	)		(234	)
Drilling	EBITDA		4,915			4,355			4,916
	Depreciation and amortization		(1,665	)		(2,076	)		(1,704	)
	Income from operation		3,250			2,279			3,212
Shipping	EBITDA		(229	)		(204	)		357
	Depreciation and amortization		(400	)		(221	)		(428	)
	Income from operation		(629	)		(425	)		(71	)
Property	EBITDA		1,371			1,496			1,455
	Net valuation of investment properties		(301	)		424			350
	Depreciation and amortization		(2	)		(2	)		(4	)
	Income from operation		1,068			1,918			1,801
New Businesses – Adactum	EBITDA		397			425			470
	Depreciation and amortization		(219	)		(215	)		(202	)
	Income from operation		178			210			268
Other	EBITDA		(300	)		(330	)		(380	)
	Depreciation and amortization		(10	)		(17	)		(18	)
	Income from operation		(310	)		(347	)		(398	)

Total	EBITDA		7,718			6,838			7,845

	Net valuation of investment properties		(301	)		424			350
	Depreciation and amortization		(3,415	)		(3,704	)		(3,617	)
	Income from operation		4,002			3,558			4,578

Depreciation and amortization by segment


		Years ended 31 December
SEK million		2009		2010		2011

Ferry operations			1,119		1,173		1,261
Drilling			1,665		2,076		1,704
Shipping:	RoRo vessels		141		126		211
	Tanker operations		247		86		209
	Other shipping		12		9		8

	Total shipping		400		221		428

Property			2		2		4
New Businesses – Adactum			219		215		202
Other			10		17		18

Total			3,415		3,704		3,617

F-28

Depreciation and amortization expense consists of the following components


	Years ended 31 December
SEK million	2009		2010		2011

Vessels		2,790		3,007		2,881
Equipment		396		481		485
Buildings, land and ports		78		82		99

Total tangible fixed assets		3,264		3,570		3,465


Intangible assets		151		134		152

Total		3,415		3,704		3,617

Depreciation and amortization expense includes amortization of assets under capitalized leases amounting to SEK 690 million, SEK 756 million and SEK 555 million for the years ended 31 December 2011, 2010 and 2009, respectively.

Investments in tangible fixed assets by segment


		Years ended 31 December
SEK million		2009		2010		2011

Ferry operations			2,217		4,058		1,963
Drilling			5,393		4,030		1,458
Shipping:	RoRo vessels		12		200		435
	Tanker operations		115		336		5,140
	Other shipping		2		6		62

	Total shipping		129		542		5,637


Property			1,281		800		1,237
New Businesses – Adactum			127		357		436
Other			22		7		5

Total			9,169		9,794		10,736

Total assets by segment


		Years ended 31 December
SEK million		2009		2010		2011

Ferry operations			13,017		14,837		16,130
Drilling			25,342		25,819		23,933
Shipping:	RoRo operations		2,184		2,343		3,404
	Tanker operations		2,143		2,379		7,568
	Other shipping operations		188		189		340

	Total shipping		4,515		4,911		11,312


Property			26,043		26,351		27,223
New Businesses – Adactum			6,606		6,708		7,385
Other			16,682		16,312		12,613

Total			92,205		94,938		98,596

F-29

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 throughout the world. Accordingly, such revenues and assets are not presented on a country by country basis. The ferry operations and the property operations are conducted in Scandinavia and the rest of Europe. The Company’s drilling operations are conducted in the Norwegian sector (Scandinavia) and the UK sector (Europe, other) of the North Sea as well as in the Far East and other markets. The Company’s investments in SPEs are included in Other markets.

Total revenue per geographic area


	Years ended 31 December
SEK million	2009		2010		2011

Scandinavia		11,386		10,873		12,305
Europe, other		7,726		7,370		6,846
Other markets		5,464		6,256		6,222
Shipping		3,236		2,651		2,595

Total		27,812		27,150		27,968

Total assets per geographic area


	Years ended 31 December
SEK million	2009		2010		2011

Scandinavia		32,896		34,316		35,438
Europe, other		20,658		29,448		36,570
Other markets		35,370		27,476		22,139
Shipping		3,281		3,698		4,449

Total		92,205		94,938		98,596

4 – Sale of tangible fixed assets


		Years ended 31 December
SEK million		2009			2010			2011

Vessels	Cash proceeds from sale of vessels		183			65			3,249
	Net book value of vessels sold		(35	)		(63	)		(1,672	)
	Net gain on sale of vessels		148			2			1,577

Investment properties	Cash proceeds from sale of properties		214			784			310
	Net book value of properties sold		(183	)		(597	)		(204	)
	Net gain on sale of properties		31			187			106


Total	Cash proceeds from sale of vessels and property		397			849			3,556

	Net book value of assets sold		(218	)		(660	)		(1,873	)

Total gain			179			189			1,683

Total cash proceeds include sales costs of SEK 23 million, SEK 18 million and SEK 39 million, which is not included on the line “cash proceeds from sale of tangible fixed assets” in the consolidated statement of cash flow for 2011, 2010 and 2009, respectively.

F-30

5 – Administrative expenses

For the year ended 31 December 2011, administrative expenses include R&D costs amounting to SEK 63 million. For the year ended 31 December 2010, administrative expenses include R&D costs amounting to SEK 56 million and for the year ended 31 December 2009, administrative expenses include R&D costs amounting to SEK 50 million.

Fees and other remuneration to auditors and advisors are set forth below


	Years ended 31 December
SEK million	2009		2010		2011

KPMG
Audit services		24		21		25
Other audit related services		2		1		1
Tax services		32		25		21
Other services		5		2		1
Other auditors
Audit services		2		2
Other audit related services				1

Total		65		52		48

6 – Investments in associated companies

Investments in associated companies relate to major strategic investments. Results from other associated companies, having a more direct link to normal operations, are included in direct operating expenses. See note 3.

As of 31 December 2011, the investment in Midsona AB (publ) represents 23% of the capital and 24.7% of the votes. The total value of the market value of the investment as of 31 December 2011 was SEK 70 million. As of 31 December 2010 the total share of the market value was SEK 67 million. The Company’s share of results amounted to SEK 7 million in 2011 and SEK (15) million in 2010.

As of 31 December 2011, the investment in Gunnebo AB (publ) represents 25.7% of the capital and the votes. The market value of the investment as of 31 December 2011 and 2010 was SEK 476 million and SEK 1,034 million, respectively. The Company’s share of results in 2011 amounted to SEK 60 million and SEK 46 million in 2010.

The value of the investment in MPP Mediatec Group as of 31 December 2011 was SEK 340 million and SEK 340 million for 2010. The Company’s share of results in 2011 was SEK (7) million and SEK (1) million in 2010. As per 31 December 2011 the investment represents 42.7% of the capital and votes.

The investments in Midelfart Sonesson and Gunnebo are pledged as security for bank debt.

In 2011, the subsidiary Stena Investment Sarl invested SEK 109 million in Silurian Hallwood Plc, which is an oil exploration company. The value of the investment as of December 31, 2011 was MGBP 10 million. Since the Company is newly started no share of results have been recorded in 2011. As per December 31, 2011 the investment represents 20 % of the capital and votes.


	As of 31 December
SEK million	2009			2010			2011

Opening balance		932			1,115			1,205
Investments		162						109
Revaluation					100
Share of profit		24			31			60
Exchange differences		(3	)		(2	)
Other changes					(39	)

Closing balance		1,115			1,205			1,374

For the years ended 31 December 2011, 2010 and 2009, Investments in associated companies include Goodwill amounting to SEK 551 million, SEK 551 million and SEK 441 million, respectively.

F-31

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


Name	Country of incorporation		Assets		Liabilities		Revenues		Profit/(loss)			% Interest held		Share of result¹⁾
2009
Midsona AB (publ)		Sweden		1,338		631		1,354		54			23		12
Gunnebo AB (publ)		Sweden		4,336		2,923		6,788		(205	)		26		10
MPP Mediatec Group AB		Sweden		922		643		811		(21	)		43		2

¹⁾	The share of the result in associated companies were reported with a three month time lag. The share of result is for the period 1 October 2008 to 30 September 2009.


Name	Country of incorporation		Assets		Liabilities		Revenues		Profit/(loss)			% Interest held			Share of result¹⁾
2010
Midsona AB (publ)		Sweden		1,176		556		1,134		(67	)		23	%		(15	)
Gunnebo AB (publ)		Sweden		3,735		2,129		6,384		178			26	%		46
MPP Mediatec Group AB		Sweden		884		619		889		(2	)		43	%		(1	)

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


Name	Country of incorporation		Assets		Liabilities		Revenues		Profit/(loss)			% Interest held			Share of result
2011
Midsona AB (publ)		Sweden		1 176		524		1 174		32			23	%		7
Gunnebo AB (publ)		Sweden		3 965		2 189		5 580		230			26	%		60
MPP Mediatec Group AB		Sweden		846		608		902		(16	)		43	%		(7	)
Silurian Hallwood Plc		Jersey		139		10		0		0			20	%		0

7 – Total finance net


	As of 31 December
SEK million	2009			2010			2011

Share of associated companies’ result (please find Note 6)		24			131			60
Dividends received from share holdings		43			12			21
Dividends received from financial fixed assets		18			26			43

Total Dividends		61			38			64


Realized result from sale of trading shares		(117	)		(28	)		103
Realized result from sale of available sale shares		(713	)		121			137
Realized result from sale of financial instruments measured at fair value through the income statement.		128			31			(41	)
Unrealized result from sale of trading shares		69			13			11
Unrealized result from sale of financial instruments measured at fair value through the income statement		438			217			(365	)
Gain on termination of leases		110			91			86

Total Gain (loss) on sale of securities		(81	)		445			(69	)

F-32


Interest income from investments in SPEs	477		332		270
Other interest income	208		145		124

Total Interest income	685		477		394


Interest expense from investments in SPEs	(214	)	(102	)	(53	)
Other Interest expense	(1,649	)	(1,696	)	(1,861	)

Total Interest expense	(1,864	)	(1,798	)	(1,914	)


Currency trading	58		13		(17	)
Translation difference	(340	)	35		53

Total Foreign Exchange gains	(282	)	48		36


Deferred finance costs	(67	)	(63	)	(74	)
Commitment fees					(34	)
Bank charges	(33	)	(30	)	(28	)
Capitalized internal guarantee fees	16		12		14
Other financial items	(14	)	(13	)	(221	)
Other financial expenses from investments in SPE’s	(103	)	(125	)	(27	)

Total other financial income/expense	(201	)	(219	)	(370	)

Finance net	(1,658	)	(878	)	(1,799	)

The gain on termination of leases related to the financing of the DrillMAX vessel Stena Carron was partly released during 2009, 2010 and 2011.

There has been no material ineffectiveness in our cash-flow hedges.

Deferred financing costs include costs for the issuances of Senior Notes, revolving credit facilities, finance leases etc. See note 31.

8 – Income taxes

Income before taxes was distributed geographically as follows:


	As of 31 December
SEK million	2009			2010			2011

Sweden		(180	)		531			670
rest of the world		2,524			2,151			2,109

Total income before taxes		2,344			2,682			2,779


Current tax
For the period, Sweden		(29	)		(22	)		(34	)
Adjustments previous years, Sweden					16			0
For the period, rest of the world		(209	)		(198	)		(265	)
Adjustments previous years, rest of the world		28			13			60

Total current tax		(210	)		(191	)		(239	)


Deferred tax
For the period, Sweden		129			26			114
Adjustments previous years, Sweden					(2	)		(50	)
For the period, rest of the world		(5	)		41			(85	)
Adjustments previous years, rest of the world		106			12			7

Total deferred tax		230			77			(14	)

Total income taxes		20			(114	)		(253	)

Cash paid for taxes in 2011 was SEK 264 million, as compared to SEK 206 million in 2010 and SEK 203 million in 2009.

F-33

The reconciliation of the difference between the statutory tax rate in Sweden and the effective tax rate is explained below:


	As of 31 December
SEK million	2009			2010			2011

Statutory income tax rate		26			26			26
Differences in foreign tax rates		(9	)		(14	)		(17	)
Taxes related to previous years		3						(3	)
Expenses not deductible		1			2			1
Nontaxable income		(16	)		(3	)		(3	)
Utilization of tax loss carry forwards/net losses for which no tax benefit is recognized, net		(2	)					8
Restructuring		(1	)		(6	)		(5	)
Other		(3	)		(1	)		2

Effective income tax rate		(1	)		4			9

The principal reason why the effective income tax rate is lower than the statutory income tax rate for 2011, 2010 and 2009 is that the international shipping activities and capital gains, sales of financial instruments, are to a large extent tax exempt in many countries.

9 – Intangible fixed assets


SEK million	Goodwill			Trademarks			Distribution agreements			Customer relations			IT investments			Rights to routes			Other intangible assets			Total
Acquisition costs
Opening balance as per 1 January 2010		1 464			847			540			10			575						26			3,462
Additions														29									29
Disposals		(35	)											(1	)								(36	)
Transfers								9						9									18
Translation differences		(93	)		(13	)		(39	)					(11	)					(6	)		(162	)
Closing balance as per 31 December 2010		1,336			834			510			10			601						20			3,311

Purchase of company (Note 30)		222						3						35			354						674
Additions														45									45
Disposals														(5	)								(5	)
Transfers														5									5
Translation difference		(2	)																				(2	)
Closing balance as per 31 December 2011		1,556			834			513			10			681			354			20			3,968

Accumulated amortization
Opening balance as per 1 January 2010		(88	)		(40	)		(115	)		(4	)		(401	)					(25	)		(673	)
Translation differences		3						10						8						5			26
Disposals		35												1									36
Current year amortization					(22	)		(47	)		(2	)		(63	)								(134	)
Closing balance as per 31 December 2010		(50	)		(62	)		(152	)		(6	)		(455	)					(20	)		(745	)

Purchase of company (Note 30)														(22	)								(22	)
Translation differences		(2	)		(1	)																	(3	)
Disposals														5									5
Transfers														(2	)								(2	)
Current year amortization					(22	)		(48	)		(2	)		(71	)		(9	)					(152	)
Closing balance as per 31 December 2011		(52	)		(85	)		(200	)		(8	)		(545	)		(9	)		(20	)		(919	)

Net book value as per 31 December 2010		1,286			772			358			4			146									2,566
Net book value as per 31 December 2011		1,504			749			313			2			136			345						3,049

Goodwill is allocated to the Group’s cash-generating units (CGUs) identified by segment. A segment-level summary of goodwill allocation is presented below.


SEK million
New business – Adactum			1,198
Ferry Operations			306
Total			1,504

F-34

Impairment testing of goodwill is conducted annually and whenever conditions indicate that impairment may be necessary. The recoverable value for cash generating units is based on the calculated value in use. The key assumptions used for calculated value in use are discount rate and growth rate. The discount rate before tax used in Adactum was 7–9%. The growth rate for revenues used in Adactum has been individually assessed for each company and year until the year 2019. During this period the growth rate normally fluctuates between 2–5% but has in some case exceeded this interval. For subsequent periods growth rate for revenues is estimated to have a growth corresponding to 1.5–2%. This growth rate is based on reasonable prudence and is estimated to be below the relevant industry’s long-term growth rate for revenues. The same principles were applied last year.

As of December 31, 2011, the recoverable values based on value in use of the cash generating units were found not to fall short of their net booked values in any test and therefore the related goodwill was not impaired.

A number of sensitivity tests have been made in order to examine possible need for impairment. For these sensitivity tests the used discount rate was 1% higher than above described discount rate. Also when applying these estimates no goodwill impairment is indicated for material cash generating units.

Trademarks

Trademarks are mainly related to the segment Adactum. During 2011 impairment testing has been performed for all trademarks within Adactum. The tests has been performed according to the same procedure as for establishing the recoverable value for goodwill, see description above. The discount rate before tax used for the individual trademarks was 7.5%. The growth rate for revenues used until year 2015 was 3–5%. For subsequent periods growth rate for revenues is estimated to have a growth corresponding to 1%. None of the performed tests indicated any impairment for trademarks. The trademarks are annually depreciated.

10 – Vessels, construction in progress and equipment

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


SEK million	Vessels			Construction in progress			Other equipment			Total

Acquisition costs
Opening balance as per 1 January 2010		42,116			5,474			4,354			51,944
Additions		2,256			5,822			874			8,952
Disposals		(585	)					(189	)		(774	)
Transfers		4,076			(4,117	)		34			(7	)
Translation differences		(2,862	)		(844	)		(280	)		(3,986	)

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

Additions		6,638			2,512			257			9,407
Purchase of company (note 30)								52			52
Disposals		(4,394	)					(101	)		(4,495	)
Transfers		1,772			(3,711	)		27			(1,912	)
Translation differences		671			154			31			856

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

Accumulated depreciation
Opening balance as per 1 January 2010		(14,859	)					(2,172	)		(17,031	)
Purchase of company (Note 30)								(4	)		(4	)
Disposals		522						158			680
Translation differences		1,087						153			1,240
Transfers		9						15			24
Current year depreciation		(3,007	)					(481	)		(3,488	)

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

Disposals		2,722						113			2,835
Purchase of company (Note 30)								(40	)		(40	)
Translation differences		(202	)					(16	)		(218	)
Transfers		1,106						3			1,109
Current year depreciation		(2,881	)					(485	)		(3,366	)

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

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

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

F-35

The insured value of the whole vessel fleet as of 31 December 2011 was SEK 46,480 million, as compared to SEK 45,274 million as of 31 December 2010.

As of 31 December 2011, construction in progress included two newbuildings: one drillship under construction in Korea delivered in April 2012 and one Suezmax vessel ordered from a shipyard in Korea for delivery in 2013. Construction in progress also includes investment in windmill parks in Sweden. In total, the contract amount with the shipyards amounts to SEK 6,917 million.

Yard payments of SEK 4,018 million, windmill projects of SEK 464 million, capitalized interest of SEK 214 million and other capitalized costs of SEK 594 million are included in Construction in progress as of 31 December 2011.

The amount of interest capitalized on construction in progress and on vessels was SEK 114 million and SEK 145 million for the years ended 31 December 2011 and 2010, respectively.

No capitalization of interest on real estate newbuilding has been made for 2011 or for 2010. Valuation certificates issued on 31 December 2011 by independent valuation institutions indicate that the values in the vessel fleet exceeds net book value by SEK 8,058 million, as compared to SEK 9,055 million as of 31 December 2010. Part of the vessel’s net book value as of 31 December 2011 refers to vessels held in accordance with financial leasing agreements, see Note 26.

Equipment is specified as follows:


SEK million	Windmills			Other equipment			Total
Acquisition costs
Opening balance as per 1 January 2010		506			3,848			4,354
Additions		187			687			874
Disposals					(189	)		(189	)
Transfers					34			34
Translation differences					(280	)		(280	)

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

Additions					257			257
Purchase of company (Note 30)					52			52
Disposals					(101	)		(101	)
Transfers					27			27
Translation differences					31			31

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

Accumulated depreciation
Opening balance as per 1 January 2010		(40	)		(2,132	)		(2,172	)
Purchase of company (Note 30)					(4	)		(4	)
Disposals					158			158
Translation differences					153			153
Transfers		6			9			15
Current year depreciation		(34	)		(447	)		(481	)

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

Disposals					113			113
Purchase of company (Note 30)					(40	)		(40	)
Translation differences					(16	)		(16	)
Transfers					3			3
Current year depreciation		(36	)		(449	)		(485	)

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

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

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

F-36

11 – Buildings and land together with ports

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


SEK million	Buildings and land			Ports
Acquisition costs
Opening balance as per 1 January 2010		1,478			1,712
Additions		39			7
Purchase of company (Note 30)					252
Translation differences		(116	)		(161	)

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

Additions		104
Purchase of company (Note 30)		37			16
Disposals		(1	)
Transfers					789
Translation differences		2			28

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

Accumulated depreciation
Opening balance as per 1 January 2010		(577	)		(797	)
Translation differences		52			77
Current year depreciation		(35	)		(48	)

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

Purchase of company (Note 30)		(8	)
Translation differences		(1	)		(16	)
Current year depreciation		(35	)		(64	)

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

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

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

Buildings and land together with Ports represent the Group’s assets used in its business including office buildings, ferry terminals etc.

Out of the net book value as of 31 December 2011 for buildings and land, SEK 496 million relates to Swedish buildings and land.

Out of the net book value as of 31 December 2010 for buildings and land, SEK 480 million relates to Swedish buildings and land.

F-37

12 – Investment properties


	As of 31 December
SEK million	2010			2011

Opening balance as of 1 January		24,040			24,148
Additions		635			1,043
Transfer from construction in progress		134			70
Disposals		(597	)		(204	)
Unrealized fair value adjustments		424			350
Exchange differences		(488	)		22

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

Investment Properties – Construction in progress
Opening balance as of 1 January		175			206
Additions		165			188
Transfer		(134	)		(70	)

Closing balance at fair value		206			324

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

Investment Property – impact on the result
Rental Income		2,380			2,368
Direct cost		(885	)		(829	)
Valuation of investment properties		424			350

Total		1,919			1,889

Investment properties are residential- and commercial properties.

Valuation of the investment properties is performed at year end and at each quarter by assessing each individual property’s fair value. The valuation method is based on the direct yield method and the net operating income is based on market rental income with a deduction for rental vacancy level of 0 to 1 percent for residential properties and 0 to 15% for commercial properties. This assessment consideration of type of property, technical standard and type of construction has been taken. The assessment of the yield requirements is based on information obtained about the market yield requirements in respect of the purchase and sale of comparable properties in similar locations.

At the valuation as of 31 December 2011, the following rates of returns have been used.


	Rate of return, %
Location	Residential		Commercial
Sweden		3,00–6,00		5,25–8,25
Eurozone		n/a		6,00–12,00

The estimated market value of investment properties is SEK 25,753 million compare to last year SEK 24,354 million.

To guarantee the valuation, external valuations have been obtained from DTZ Sverige and Boer Hartog Hooft in the Netherlands. The external valuations cover 20% of the total property value in absolute terms but these selected properties represent 60% of the properties in terms of property types, technical standard and building design. A comparison between the internal and external valuations reveals that Stena’s valuations are within the value range stated by the external valuation companies.

F-38

13 – Investments in SPEs

Since late 2002, the Company has invested in variable interest entities (“SPEs”). The SPEs have invested in different debt securities, including high-yield bonds. The SPEs have issued debt securities which are secured by their assets. The non-controlling interest share of the results is shown in the comprehensive income while the minority part of total equity is shown as a separate component in the equity.

The investments in the CDO (“Collateral Debt Obligation”) and CLO (“Collateral Loan Obligation”) started in December 2002, August 2003 and October 2005. They where established during 2003, June 2004 and August 2006. The latest CLO was started in November 2006 and was partly sold during 2011.

The investment in the CDO 2002 was unwound during 2011 with an additional dividend of approximately SEK 90 million.

The non-controlling interest for the remaining CLOs are 15.4%, 11.3% and 5%, respectively.

The assets and liabilities of the SPEs are consolidated in our financial statements, although the debt of the SPEs is a non-recourse to Stena.

The consolidation of the SPEs has had the following impact:


	Years ended 31 December
SEK million	2010		2011

Financial income and expense		5		382
Non-controlling interest		3		(42	)

Net income		8		340

Investments in SPEs¹⁾		6,175		4,548
Short-term investments²⁾		405		133
Other assets		168		111

Total assets		6,748		4,792


Retained earnings		225		19
Net income		8		340
Shareholders’ equity		233		359

Non-controlling interest		117		91

Total Equity		350		450


Debt of SPEs³⁾		5,140		4,143
Other debt		1,258		199

Total liabilities		6,398		4,342

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


The investments in SPEs are classified as follows:
Corporate Fixed Income Bonds are classified as “available for sale” and are revalued in other comprehensive income:		1,027		477
Senior Bank Debt are classified as “held to maturity” and are kept at cost in the balance sheet.		5,148		4,071

Total		6,175		4,548

¹⁾

Investments in SPEs are recorded at market value with gains and losses recorded to profit and loss. Investments in other securities are recorded to market value with gains and losses recorded to comprehensive income. The corporate loans are recorded at cost in the balance sheet and tested for impairment at each reporting date. The market value of the corporate loans is SEK 118 million lower than cost.

²⁾	Refers to cash and cash equivalents in the SPEs. This cash is not available to the Company and is therefore included as restricted cash

³⁾	Debt of SPEs refers to secured notes issued by the SPEs and secured bank loans borrowed by the SPEs. These obligations are secured by pledges of the assets of the SPEs and are not guaranteed by the Stena AB Group.

F-39

14 – Marketable securities


	As of 31 December
SEK million	2010			2011

Opening balance		2,211			4,130
Additions		4,360			1,677
Disposals		(2,368	)		(2,024	)
Reclassification		(64	)		176
Revaluation of financial assets through the income statement		152			(327	)
Revaluation of financial assets through other comprehensive income		152			(202	)
Translation differences		(313	)		35
Investment at the end of year		4,130			3,465

Marketable securities are classified as:
Financial assets at fair value through the income statement		2,127			2,650
Available-for-sale financial assets		2,003			815

Total		4,130			3,465

Marketable securities refer to listed shares held by the Stena AB Group and these are recorded at fair value.

As of 31 December 2011 shares with a book value of SEK 0 million have been pledged as security for bank debt. As of 31 December 2010, shares with a book value of SEK 0 million were pledged as security for bank debt.

Marketable securities as of 31 December 2011 classified as follows:


SEK million	Book Value

CDO/CLO		678
Oil & Gas		460
Banks		440
Oil & Gas Services		349
Commercial Services		162
Closed-end Funds		122
Telecommunication		121
Food		116
Retail		115
Pharmaceuticals		107
Metal Fabricate/Hardware		103
Forest Products/paper		81
Diversified Financial Services		80
Healthcare Products		73
Biotechnology		58
Mining		55
Internet		53
Cosmetics		49
Electronics		46
Miscellaneous Manufacture		41
Media		32
Auto Parts & Equipment		27
Investment Companies		25
Transportation		22
Machinery		21
Real Estate		13
Auto Manufacturers		13
Semiconductors		3

Total listed shares		3,465

F-40

15 – Other non-current assets


SEK million	Deferred tax assets			Other receivables			Available for sale shares			Other shares			Deferred costs			Total
Opening balance as per 1 January 2010		532			891			2,099			605			528			4,655
Additions		192			432			146			258			55			1,083
Disposals		(29	)		(155	)		(330	)		(12	)		(104	)		(630	)
Revaluation through the income statement					94			9									103
Share of profit (loss)											16						16
Dividend received											(14	)					(14	)
Reclassification		10			(10	)		(3	)								(3	)
Translation differences		(141	)		45			(176	)		(61	)		3			(330	)

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

Additions					135			171			119			37			462
Disposals		477			(163	)		(155	)					(147	)		12
Revaluation through the income statement					62			14									76
Revaluation through other comprehensive income		(224	)		(210	)		41									(393	)
Share of profit (loss)								16			(66	)					(50	)
Dividend received											(14	)					(14	)
Reclassification		71			65			(176	)		(241	)					(281	)
Translation differences		4			6			10			14			5			39

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

Deferred tax assets relate to unutilized tax losses carried forward. Reclassifications include netting against deferred tax liabilities. See Note 8.

Other receivables as of 31 December 2011 include receivables related to sales of subsidiaries amounting to SEK 181 million and surplus in pension schemes of total SEK 680 million, see Note 22. Other receivables as of 31 December 2010 include receivables related to sales of subsidiaries amounting to SEK 254 million and surplus in pension schemes of total SEK 622 million.

Available for sale shares include investment in non-listed shares. These shares are accounted for as available for sale shares valued through the comprehensive income.

Companies held between 20% and 50%, and that are not available for sale shares valued through comprehensive income, are accounted for as other associated companies. The shares in Paradise Holding have been written down with SEK 49 million (USD 7.5 million). The share of these companies’ results is included in direct operating expenses. See Note 6.

F-41

Available for sale shares


SEK million		No. of shares or % held			Book value

Held by parent company:
Alligator			2,888,088			21
Ram one			152,042			169

Total available for sale shares in the Parent company						190


Held by subsidiaries:
ING DUTCH OFFICE FUNDS C.V.	The Netherlands		4.8	%		771
Airport Real Estate Basis Fonds C.V.	The Netherlands		20.8	%		274
EQT Greater China II Limited Partnership	China		4.67	%		171
Gothenburg VG AB	Sweden		26.9	%		81
Southern Rock	Gibraltar		5,000,000			53
Partners Group Direct Investment	Luxembourg		2,424			34
ING China Opportunity Fund Lp	China		11.3	%		16
Chase Private Equity Fund	Cayman Islands		3,860,614			12
Other						64

Total available for sale shares						1,666


Other shares
SEK million		No. of shares or % held			Book value
Asahi Stena Tankers Pte Ltd	Singapore		50	%		3
Austen Maritime Services Pte Ltd	Singapore		50	%
Partrederiet SUST I DA	Norway		50	%		43
Partrederiet SUST III DA	Norway		50	%		61
Nordic Rio LLC	Marshall Islands		50	%		41
Stena Sonangol Suezmax pool LLC	Marshall Islands		50	%
Navion Gothenburg LLC	Marshall Islands		50	%		11
Paradise Holding	Libya		35	%		273
Glacia Limited	Bermuda		50	%		91
RoRo Partners Ltd	Bermuda		49	%
Stena Weco	Denmark		50	%		81

Total other shares						604

16 – Inventories


	As of 31 December
SEK million	2010		2011

Bunker and lubricating oil		177		119
Inventories of goods for sale		175		179
Raw materials and consumables		173		206
Products in progress		32		36
Finished products		88		92

Total		645		632

F-42

17 – Short-term receivables


	As of 31 December
SEK million	2010		2011

Trade debtors
Accounts receivable are classified on the basis of their due date:
Outstanding but not due		2,021		2,567
Due up to 30 days		262		231
Due more than 30 days		471		420

Total		2,754		3,218


Other current receivables
Related parties (Note 34)		1		1
Other short-term receivables		1,115		1,610

Total		1,116		1,611


Prepaid expenses and accrued income
Prepaid expenses		453		434
Accrued income		1,435		1,014

Total		1,888		1,448


Total short-term receivables		5,758		6,277

Book value of trade debtors corresponds to fair value.

The total allowance for doubtful trade receivables was SEK 78 million as of 31 December 2011 and SEK 94 million as of 31 December 2010.

Selling expenses as of 31 December 2011 include costs for doubtful receivables of SEK 11 million and SEK 6 million as of 31 December 2010.

18 – Short-term investments


	As of 31 December
SEK million	2010		2011

Marketable debt and equity securities, trading		403		149
Restricted cash		3,724		2,519

Total		4,127		2,668

Book value of Short-term investments corresponds to fair value. Marketable debt and equity securities are classified as “Financial assets at fair value through profit or loss”.

Certain marketable debt and equity securities and restricted cash amounting to SEK 883 million at 31 December 2011 and SEK 961 million at 31 December 2010 have been pledged as security for bank debt. See Note 29.

Restricted cash as of 31 December 2011 includes SEK 133 million of cash and cash equivalents in the SPEs (see Note 13) which is not available to the Company. As of 31 December 2010 such restricted cash amounted to SEK 405 million. Other restricted cash represents bank accounts that have been pledged to cover various long-term liabilities and commitments of the Company.

F-43

19 – Cash and cash equivalents


	As of 31 December
SEK million	2010		2011

Cash		1,509		1,537
Short term deposits		156		50

Total		1,665		1,587

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

20 – Equity


Dividends paid per share (SEK):

2010			6,320
2011			4,800

Specification of the reserves:


SEK million	Fair value reserve			Hedging reserve			Translation reserve			Total

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

Exchange differences arising on the translation of foreign operations								(2,442	)		(2,442	)
Change in Hedging reserve, net of tax
– valuation of bunker hedges					153						153
– valuation of interest swap hedge					63						63
Change in fair value reserve, net of tax
– valuation available for sale shares		159									159
Change in net investment hedge, net of tax					191						191

Closing balance as per 31 December 2010		(144	)		459			(1,411	)		(1,096	)

Exchange differences arising on the translation of foreign operations								(147	)		(147	)
Change in Hedging reserve, net of tax
– valuation of bunker hedges					(16	)					(16	)
– valuation of interest swap hedge					(797	)					(797	)
Change in fair value reserve, net of tax
– valuation available for sale shares		(214	)								(214	)
Change in net investment hedge, net of tax					(96	)					(96	)

Closing balance as per 31 December 2011		(358	)		(450	)		(1 558	)		(2 366	)

Fair value reserve

This reserve arises on the valuation of available-for-sale financial assets. When an available-for-sale asset is sold, the portion of the reserve that relates to that financial asset, and is effectively realized, is recognized in the income statement. When an available-for-sale asset is impaired, the portion of the reserve that relates to that financial asset is recognized in the income statement.

F-44

Hedging reserve

The hedging reserve represents hedging gains and losses recognized on the effective portion of cash flow hedges. The cumulative deferred gain or loss on the hedge is recognized in the income statement when the hedged transaction impacts the income statement. Hedge accounting is applied for certain bunker fuel purchases and certain interest swap instruments.

Translation reserve

Exchange differences relating to the translation from the functional currencies of the Stena Group’s foreign subsidiaries into SEK are accumulated to the translation reserve. Upon the sale of a foreign operation, the accumulated translation amounts are recycled to the income statement and included in the gain or loss on the disposal.

21 – Deferred income taxes


	As of 31 December
SEK million	2010			2011
Deferred tax liabilities
Tangible fixed assets		4,336			4,118
Financial fixed assets		128			41
Provisions		268			631
Other		301			51

Total deferred tax liabilities		5,033			4,841


Deferred tax assets
Tangible fixed assets		96			333
Tax loss carryforwards		2,291			2,022
Financial fixed assets					73
Provisions		169			63
Less deferred tax assets not recognized		(1,017	)		(1,006	)

Total deferred tax assets recognized		1,539			1,485


Net deferred tax liability		3,493			3,356
Out of which:
Deferred tax assets (Note 15)		564			892
Deferred tax liabilities		4,057			4,248

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

Calculation of deferred taxes is based on local nominal tax rates.

2010

2011

SEK million

Taxes
charged to
income
statement

Taxes
charged to
comprehensive
income

Total
taxes

Taxes
charged to
income
statement

Taxes
charged to
comprehensive
income

Total
taxes

Current taxes

(191

)

(191

)

(240

)

(240

)

Deferred taxes

493

570

(13

)

401

388

(114

)

493

379

(253

)

401

148

F-45

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


	As of 31 December
SEK million	2010		2011

Sweden		3,759		3,670
Rest of the world		5,646		5,318

Total		9,405		8,988

Most tax loss carryforwards can be carried forward indefinitely. Tax loss carryforwards of SEK 3,114 million expire between 2012 and 2020.

22 – Employee benefits

Provisions for pensions and other provisions

Post-employment benefits, such as pensions, healthcare and other benefits are mainly settled by means of regular payments to independent authorities or bodies that assume pension obligations and administer pensions through defined contribution plans. The remaining post-employment benefits are defined benefit plans; that is, the obligations remain within the Company. Costs and obligations at the end of a period for defined benefit plans are calculated based on actuarial assumptions and measured on a discounted basis. The assumptions include discount rate, inflation, salary growth, long-term return on plan assets, mortality rates and other factors. Discount rate assumptions are based on long-term high quality corporate bonds and government bond yields available at year end. The assets consist mainly of long-term high corporate bonds, government bonds and equities and the asset allocation for each pension scheme is defined in an investment policy document. Defined benefits 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.

Stena has commitments for retirement pensions and family pensions for office personnel in Sweden which are secured through an insurance policy with Alecta. According to a statement from the Swedish Financial Reporting Board, UFR 3, this is a defined benefit plan covering several employers, and a so-called multi employer plan. Alecta is currently unable to provide defined benefit accounting for such participants, and therefore premiums paid to Alecta are accounted for as, a defined contribution expense. Fees for the years 2011 and 2010 paid covering such arrangements were SEK 54 million and SEK 73 million, respectively. Alecta’s profit in the form of the so-called collective consolidation level amounted to 113% for 2011 and 146% for 2010. The collective consolidation level comprises the fair value of Alecta’s assets as a percentage of the insurance commitments calculated in accordance with Alecta’s insurance calculation principles and assumptions which are not in conformity with IAS 19.

Due to extra contributions paid during 2010, some of the pension schemes have a surplus value at 31 December 2011. Paragraph 58 of IAS 19 defines how this surplus value shall be recorded, and states an upper limit for recorded surplus value. IFRIC 14 explains this situation further, and expands to also incorporate an element of minimum funding requirements. IFRIC 14 also describes an exception to this rule if the entity has an unconditioned right to a refund. Comparing the Trust Deeds of these schemes with IFRIC 14 paragraph 11(a) and paragraph 24, the conclusion is that no additional liability is required.

In 2011, the English Court of Appeal affirmed a High Court ruling from 2010 that contributions to repair the deficit in the Merchant Navy Ratings Pension Fund can be required from any company that has participated in the Fund, including companies that no longer employ any -members. As a result of the Court of Appeals decision, the non-contributing employers will also be required to contribute funds to reduce the deficit and the Company’s future contributions will be significantly reduced and the Group’s share of the deficit has also therefore been reduced.

F-46

The following tables disclose information about defined benefit plans. The information refers to assumptions applied for actuarial calculations, periodical costs and the value of obligations and plan assets at year-end. The tables also include a reconciliation of obligations and plan assets during the year and the difference between fair values and carrying amounts reported on the balance sheet date. Costs for pensions are reported as administration costs.


Assumptions applied for actuarial calculations, %	Sweden				United Kingdom				Other Europe
	2010		2011		2010		2011		2010		2011
Discount rate		4.25		3.75		5.50		4.90		5.20		4.90
Expected return on plan assets		5.00		5.00		7.50		5.10		4.30		3.50
Expected salary increases		3.00		3.00		3.50		3.40		3.50		3.50


Pension costs	As of 31 December
SEK million	2010			2011

Current service costs		49			47
Interest costs		661			492
Expected return on plan assets		(560	)		(364	)
Actuarial gains and losses		54			71
Past service cost		(2	)		(1	)

Total pension costs for defined benefit plans		202			245

Pension costs for defined contribution plans		450			366

Total pension costs		652			611


Obligations for pensions, net SEK million	Sweden			United Kingdom			Other Europe			Total
Obligations for pensions, net, 1 January 2010		119			832			(8	)		943
Current service costs		9			35			5			49
Interest costs		17			636			8			661
Expected return on plan assets		(9	)		(542	)		(9	)		(560	)
Actuarial gains and losses		9			45						54
Exchange differences					(87	)		1			(86	)
Payment of pension fees from the Company		(15	)		(572	)		(8	)		(595	)
Benefits paid		(5	)								(5	)
Other provisions		3						2			5

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

Current service costs		7			35			5			47
Interest costs		18			466			8			492
Expected return on plan assets		(10	)		(346	)		(8	)		(364	)
Actuarial gains and losses		13			58						71
Exchange differences					9						9
Payment of pension fees from the Company		(12	)		(427	)		(8	)		(447	)
Other provisions		3			9			(4	)		8

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

F-47


Provision for pensions, net SEK million	Sweden			United Kingdom			Other Europe			Total
Net provisions for pensions, 1 January 2010		119			832			(8	)		943
Current value of funded obligations		418			11,047			154			11,619
Fair value of plan assets		(195	)		(8,847	)		(169	)		(9,211	)
Provisions, net		223			2,200			(15	)		2,408
Unrecognized actuarial gains and losses		(95	)		(1,853	)		6			(1,942	)

Net provisions for pensions, 31 December 2010		128			347			(9	)		466
Current value of funded obligations		458			8,908			153			9,519
Fair value of plan assets		(200	)		(7,521	)		(191	)		(7,912	)
Provisions, net		258			1,387			(38	)		1,607
Unrecognized actuarial gains and losses		(111	)		(1,236	)		22			(1,325	)

Net provisions for pensions, 31 December 2011		147			151			(16	)		282
whereof reported as
Other non-current assets (see Note 15)		(118	)		(545	)		(17	)		(680	)
Provisions for pensions		265			696			1			962


Historical Information
	2007			2008			2009			2010			2011

Current value of funded obligations		11,474			9,414			11,887			11,619			9,519
Fair value of plan assets		(10,505	)		(8,324	)		(9,169	)		(9,211	)		(7,912	)

Pensions, net		969			1,090			2,718			2,408			1,607
Unrecognized actuarial gains and losses		436			31			(1,775	)		(1,942	)		(1,325	)

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

23 – Other provisions


	As of 31 December
SEK million	2010			2011

Opening balance		1,920			1,492
Additions		26			1
Disposals		(241	)		(124	)
Exchange differences		(213	)		1

Closing balance		1,492			1,370

F-48

24 – Bank debt


	2010						2011
SEK million	Current		Non- current		Total		Current		Non- current		Total
Property loans		192		12,419		12,611		906		11,584		12,490
Other loans		1,106		18,710		19,816		1,629		21,119		22,748
Revolving credit facilities				6,666		6,666				5,560		5,560
Other utilized bank credit lines		351		395		746		307		457		764

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

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

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


	As of 31 December
SEK million	2010		2011

SEK		12,500		12,533
GBP		292		450
USD		18,231		20,622
EUR		8,279		7,396
Other currencies		537		561

Total		39,839		41,562

Regarding assets pledged, see Note 29.

25 – Senior notes

In November 2003, the Company issued USD 175 million of notes at an interest rate of 7.5% with maturity on 1 November 2013. In November 2004, the Company issued USD 250 million of notes at an interest rate of 7.0% with maturity on 1 December 2016. In April 2010, we redeemed all our outstanding Senior Notes due 2013, in the aggregate of USD 153.1 million at a price of 102.5%. On 8 February 2007, the Company completed an offering of €300 million Senior Notes due 2017 at an interest rate of 6.125% On 14 February 2007, the Company completed an offering of EUR 102 million at an interest rate of 5.875% Senior Notes due 2019. In March 2010, we completed an offering of EUR 200 million of Senior Notes due 2020 at an interest rate of 7.875%.

Regarding the covenants of the loans, see Note 31.

Issued – Maturity

Fair value
As of 31 December

Carrying amount
(SEK million)
As of 31 December

(million)

Nominal

Outstanding

Interest

2010

2011

2010

2011

2004 – 2016

MUSD 250

MUSD 128.8

7.00

MUSD 121

MUSD 119

874

890

2007 – 2017

MEUR 300

6.125

MEUR 287

MEUR 264

2,692

2,674

2007 – 2019

MEUR 102

5.875

MEUR 93

MEUR 80

915

909

2010 – 2020

MEUR 200

7.875

MEUR 191

MEUR 168

1,775

1,763

Total

6,256

6,236

F-49

26 – Leases

Company as lessee

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

Rental expense for operating leases were as follows:


	Years ended 31 December
SEK million	2010		2011

Rental expense		1,905		1,861

Four RoPax vessels, one Drillship and two tankers are leased under capital leases. The gross amount of vessels under capital leases as of 31 December 2010 and 2011 amounted to SEK 6,932 million and SEK 7,190 million, respectively. The net book value related to these capital leases amounted to SEK 5,391 million as of 31 December 2010 and SEK 5,434 million as of 31 December 2011.

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


SEK million	Operating leases		Capital leases

2011		1,537		225
2012		719		227
2013		639		223
2014		607		215
2015		533		193
2016 and thereafter		1,957		786

Total minimum lease commitments		5,992		1,869

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


SEK million	Operating leases		Capital leases

2012		1,578		222
2013		1,276		161
2014		1,048		150
2015		725		146
2016		506		224
2017 and thereafter		1,767		800

Total minimum lease commitments		6,900		1,703

F-50

Company as lessor

The Company leases properties and certain vessels to third parties under operating leases. The cost, accumulated depreciation and net book value of these assets held for lease as of 31 December, were as follows:


	2010							2011
SEK million	Cost		Accumulated depreciation			Net book value		Cost		Accumulated depreciation			Net book value
Vessels		29,031		(9,213	)		19,818		36,340		(11,726	)		24,614
Real estate		24,354					24,354		25,753					25,753

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

As of 31 December 2010 the future minimum rentals to be received under non-cancelable operating leases were as follows:


SEK million	Vessels		Real estate		Total

2011		3,427		709		4,136
2012		1,492		590		2,082
2013		1,386		359		1,745
2014		917		214		1,131
2015		162		132		294
2016 and thereafter		67		223		290

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

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


SEK million	Vessels		Real estate		Total

2012		459		737		1,196
2013		358		553		911
2014		283		415		698
2015		256		265		521
2016		163		159		322
2017 and thereafter		933		204		1,137

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

In addition to the minimum lease rentals as above, the Company has entered into lease agreements for the DrillMax vessel Stena IceMAX and Suezmax vessels, under construction as per 31 December 2011. The amounts in the table above exclude amounts from the Company’s portfolio of residential rental properties since those lease agreements are generally cancelable within three months.

27 – Other non-current liabilities


	As of 31 December
SEK million	2010		2011

Prepaid income		65		101
Other liabilities		881		1,701

Total		946		1,802

F-51

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

SEK million

1 – 3 years

3 – 5 years

More than
5 years

Total

Prepaid income

101

Other liabilities

1,468

165

1,701

Total

1,533

165

104

1,802

28 – Accrued costs and prepaid income


	As of 31 December
SEK million	2010		2011

Accrued costs
Charter hire/running costs		241		176
Interest costs		401		464
Accrued personnel costs		362		419
Other accrued costs		731		983
		1,735		2,042
Prepaid income
Prepaid charter hire		207		97
Other prepaid income		394		486
		601		583

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

29 – Pledged assets commitments and contingent liabilities

Pledged assets

Pledged assets represent assets securing various financings. These assets can only be used by the party benefiting from the pledge if there is an event of default under the respective financing documents or the appropriate remedy period has elapsed.

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


	As of 31 December
SEK million	2010		2011

Shares in subsidiaries		4,272		4,369
Mortgages on vessels		30,092		34,129
Mortgages on properties		14,853		15,421
Chattel mortgages		642		710
Investment in affiliated companies		1,015		1,027
Marketable securities		1,053		1,045
Trade debtors		336		344
Short term investments		961		883
Reservation of title		52		52
Assets pledged, other		988		1,589

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


Investment in SPEs		6,175		4,548

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


Long-term and short-term debt and capitalized lease obligations		41,708		43,265
Debt in SPEs		5,140		4,143

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

F-52

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

Commitments

Future minimum lease commitments relating to operating leases of vessels, ports etc amount to SEK 1,578 million for 2012 and SEK 5,322 million from 2013. See Note 26.

As of 31 December 2011, a total of two vessels were on order from different shipyards. The total contract amount for these vessels amounts to SEK 6,917 million. Yard payments of SEK 4,018 million have been made in respect of these contracts.

Contingent liabilities


	As of 31 December
SEK million	2010		2011

Guarantees		1,818		2,078
Other contingent liabilities		692		585

Total		2,510		2,663

Guarantees include mainly commitments for property loans, bank guarantees for vessels in associated companies and -guarantee commitments for equipment delivered. There are also on-going tax issues with tax authorities in the Group.

30 – Consolidated statements of cash flows

Purchase of subsidiaries

Stena Line Ferries Ltd

On 1 December, 2010 Stena Line acquired 100% of the shares in DFDS Sea Ferries Ltd, which changed its name to Stena Line Ferries Ltd. Since the acquisition required approval from both Irish and British competition authorities, which were received in April and July 2011, the acquisition was not presented in 2010 as a purchase of a subsidiary. Stena Line Ferries Ltd is included in the consolidated accounts of Stena as of July 1, 2011, within the business area Ferry operations. The purchase price was EUR 22.3 million. Full effect of the acquisition is included in the table below. The headquarter is in Belfast. The Company operates the routes Belfast–Liverpool and Belfast–Heysham and has around 200 employees. The difference between the purchase price paid and the adjusted fair value of acquired net assets is EUR 39.5 million and is classified as Rights to routes.

DTF group

On 1 January, 2011 Stena Line acquired, through its subsidiary Sembo AB, 100% of the shares in Rejser A/S, the parent company in the DTF group. The Company has its the headquarters in Hjörring, Denmark, and 130 employees. The DTF group is a package holiday company. The purchase price was SEK 122 million. The difference between the purchase price paid and the adjusted fair value of acquired net assets is SEK 182 million and refers to goodwill. The goodwill is attributable mainly to the possibilities the acquisition creates in achieving synergies by integrate the DTF operation with Sembo present operation.

Macro

On 7 October, 2011 Ballingslöv International AB acquired 100% of the shares in Macro International AB. The company has its headquarters in Laholm, Sweden, and has 44 employees. Macro has a leading position in the bathroom market in Sweden and Norway. The purchase price was SEK 37 million. The difference between the purchase price paid and the adjusted fair value of acquired net assets is SEK 19 million and refers to goodwill.

F-53

Tre Trädgårdar

On 1 February, 2011 S-Invest Trading AB, the parent company of mainly the Blomsterlandet business, acquired 100% of the shares in Tre Trädgårdar AB. The company has its headquarters in Stockholm, Sweden, and has 19 employees. Tre Trädgårdar has two shops (Ella Trädgård) and is a garden centre retailer. The purchase price was SEK 31 million. The difference between the purchase price paid and the adjusted fair value of acquired net assets is SEK 21 million and refers to goodwill.

The total value of the acquired assets and liabilities is presented in the below table. The acquisitions are presented accumulated since they separately not are deemed as material. All acquired assets and liabilities were reported according to IFRS, at the time of the acquisition.


SEK million	2010			2011

Assets and liabilities acquired:
Intangible assets					12
Tangible fixed assets		252			49
Financial fixed assets					3
Inventories					27
Current receivables		2			212
Cash and cash equivalents		1			15
Long-term debt					(69	)
Current liabilities		(4	)		(345	)
Deferred tax		(25	)		(88	)

Acquired net assets		226			(184	)

Goodwill					220
Rights to routes					354
Non-controlling interest		(98	)
Purchase price		(128	)		(390	)
Deferred purchase price					3
Cash and cash equivalents in acquired businesses		1			2

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

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

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

Interest payments


	Years ended 31 December
SEK million	2010		2011

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

Financing activities

Other financing activities includes further purchase of the shares in the subsidiary Ballingslöv International AB amounting to SEK 53 million. As per 31 December 2011 Adactum owned 100% of Ballingslöv. For 2010 purchase of shares in Ballingslöv amounted to MSEK 218. As per 31 December 2010 Adactum owned 96% of Ballingslöv.

F-54

31 – Financial risk factors and financial risk management

This note describes the financial risk management in the Stena Group. Accounting principles for financial instruments are described in Note 1 and financial outcome for the year 2011 and 2010 are described in Note 32. Other notes that include information used in Note 31 and 32 are Note 13 Investments in SPEs, Note 14 Marketable securities, Note 15 Other noncurrent assets and Note 18 Short-term investments.

Financial instruments in the Stena Group consist of bank loans, derivatives, finance leasing contracts, accounts payable, accounts receivable, bonds, shares and participations as well as cash and short-term investments.

The primary risks deriving from handling of financial instruments are Market risks including interest-rate risk, currency risk and price risk, Credit risk and Liquidity risk. All of these risks are handled in accordance with an established financial policy.

Financial risk factors

The Group’s activities expose it to a variety of financial risks. The Group’s overall risk management policy focuses on the unpredictability of the financial markets and aims to minimize potential adverse effects on the Group’s financial results. The Group employs derivative instruments to hedge exposure to certain risks.

Risk management is handled by a central finance department, Stena Finance, in accordance with policies determined by the Board of Directors. Stena Finance identifies, evaluates and hedges financial risks in close co-operation with the Group’s operating units. The Board of Directors prepares written policies for both overall risk management and for risk management of specific areas such as currency risk, interest rate risk, credit risk, the utilization of derivative and non-derivative financial instruments and the investment of excess liquidity.

The Company uses financial instruments to reduce the risk of a major adverse effect on its results from price changes in currencies, interest rates and oil markets.

As a basic principle, fixed assets are financed with long-term funding in the form of issued bonds, bank debt and leasing liabilities. Each subsidiary’s assets are financed in local currency and to the extent that assets and liabilities in foreign currency cannot be matched, the net exposure is hedged with financial derivative contracts.

To achieve a desired currency mix and interest fixing profile the Company uses various types of interest rate derivatives such as fixed rate swaps and cross currency interest rate swaps. Interest rate options are also used either to cap or to lock in a range of the interest rate level.

Currency risks also arise when converting foreign currency denominated Income Statement or Balance Sheet items to SEK and when converting cash flows in foreign currency. These risks are reduced by hedging with forward foreign exchange contracts or with currency options.

Fluctuations in the price of bunker fuel, which predominantly affects Ferry operations, are managed by fixed price agreements with the supplier for the various grades of bunker fuels or by using financial derivatives for crude oil.

As part of its tanker operations the Company also uses, to a limited extent, contracts for freight rates and forward freight agreements.

Financial risk management is carried out within the scope of the Company’s financial policies and manuals mainly by the treasury department.

Market risk – Interest rate risks

The Company holds fixed assets mainly in ships and real estate in USD, SEK, EUR and GBP and as a consequence the debt portfolio and the accompanying interest rate risks are distributed by the same currencies. In order to manage this risk and to achieve desired interest rate levels the Company’s management makes regular assessments of the interest rate risks.

This exposure is adjusted with interest rate derivatives which to the largest possible extent are matched against the maturity profiles of the underlying debt.

F-55

Financial instruments for interest rates, such as futures, swaps or different types of interest rate options, are used to hedge future interest rate payments. Interest income or interest expenses under these contracts are allocated to specific periods and reported as an adjustment of the interest expense on the underlying liability. The Group reports accrued interest at the end of the accounting period, calculated in accordance with the conditions in the contracts. Generally, the underlying liabilities have a longer duration than the financial hedging contracts and allocation of accrued interest over a period of time is carried out as long as the hedging contracts are considered to form an effective portion of the Group’s overall risk management.

Market risk – Currency risks

The Company is exposed to the risk of fluctuations in 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 USD, but also in GBP and EUR. The Company’s foreign currency risk arises from (i) the Company’s investment in foreign subsidiaries’ net assets (equity exposure), (ii) certain financial assets and liabilities (translation exposure when converting such balances to each company’s functional currency) and (iii) fluctuations in exchange rates on the value of the Company’s sales and purchases in foreign currencies (transaction exposure).

The Company’s policy is to hedge its translation exposure which mainly arises from USD and EUR borrowings in companies with SEK as their functional currency. The Company also hedges parts of its transaction exposure in USD, GBP, EUR, CAD, PLN, NOK and DKK from future cash flows from firm commitments such as charter vessel contracts as well as anticipated bunker fuel payment obligations (USD). The Company’s transaction exposure mainly originates from its ferry operations and offshore drilling operations. The currencies mainly used for sale are EUR, CAD, PLN, NOK and DKK and the currencies mainly used for purchase are USD, GBP and NOK.

Translation differences from net investments

Translation differences from the exposure of net assets in foreign subsidiaries are reported directly in the Group’s equity. Results from the translation of forward currency contracts or exchange rate differences from borrowings in foreign currency are transferred to translation differences in net financial income when the hedges are no longer considered to be effective.

Interest rate differential from currency swaps or forward agreements are reported as interest income or interest expenses in the Group’s net financial income.

The book value of our net assets of subsidiaries denominated in a foreign currency, as of 31 December 2011, was approximately SEK 23.3 billion. The net assets are expressed mainly in Swedish kronor, U.S. dollars, Euro and British pounds. A 1% change in the value of the SEK against each of the functional currencies of our subsidiaries would affect our shareholders’ equity as of 31 December, 2011 by SEK 233 million.

Translation differences from translation exposure

Monetary assets and liabilities in foreign currency are translated at the closing rate of exchange on the balance sheet date. Derivative instruments attributable to the financial hedging of the value of these balance sheet items, such as currency swaps, currency forward agreements or currency option contracts, are valued at fair value, which includes translation at the closing rate of exchange, while changes in fair value are reported gross as exchange rate differences in the Group’s net financial income, where the translation of monetary assets and liabilities is also reported. Interest rate differential from currency swaps or forward agreements are reported as interest income or interest expenses in the Group’s net financial income. According to the Group’s finance policy, 100% of such exposure should be hedged.

F-56

Translation differences from transaction exposure

Realized results from currency forward agreements or currency option contracts, including paid or received premiums from option contracts, which are intended to hedge expected or contracted future cash flows in foreign currency, are allocated to a particular period and reported as an adjustment of the underlying transaction when it takes place. The hedge contracts are valued and reported directly against comprehensive income if an effective hedge.

According to the Group’s finance policy, 0–100% of such exposure should be hedged.

Market risk – Price risk

Oil price risk

The Group is exposed to the price of bunker fuel used for the operation of its vessels and uses forward contracts, swaps and options to hedge its oil price risk. Hedge contracts are regularly entered into to match the underlying costs of deliveries of bunker fuel. The hedge contracts are valued and reported directly against comprehensive income if an effective hedge. The results of these contracts are allocated to specific periods and matched against underlying exposure. The contracts are settled on a monthly basis and reported as an adjustment of the cost for bunker fuel for the current period.

The vessels of the ferry operations have an annual consumption of bunker fuel of approximately 300,000 tons and 70,000 tons of gas oil which combined converts to an annual volume of about 2.4 million barrels. A part of this is hedged on a consecutive basis. All contracts are settled monthly at a volume corresponding to the underlying consumption.

Equity price risk

All equity holdings within Short-term investments and Marketable securities are traded at an active market at an exchange, hence no illiquidity, counterparty risk or other uncertainty discounts have been applied. A total risk limit for investment and trading in equities, equity indices and bonds has been approved by the Board of Directors and the utilizations of the limits is monitored on a daily basis. The risk mandate will be allocated per trader/portfolio, reflecting a 10% overnight adverse price movement. As a complement to the price risk measurement, specific risk, sector risks and geographic risks are followed up and reported. For liquidity purposes, a minimum share of the total financial investments should be made in liquid securities. The Finance policy also governs what type of financial instruments that are acceptable. In order to reduce the credit risk when investing in corporate bonds, there are certain approved limits for credit rating of the issuer.

Our portfolio of equities is well diversified, both in terms of markets and industries. Investments are made within the boundaries of our finance policy in terms of risk- and loss limits. As of 31 December 2011, a change of +/–10% in the unrealized value of all our equity holdings within Short-term investments and Marketable securities, would have an effect of +/–SEK 280 million on profit before tax and +/–SEK 81 million recognized in other comprehensive income less deduction of deferred tax.

Trading activities

The Company also buys and sells certain types of derivative financial instruments with the objective of generating profits on a short-term basis. Such financial instruments that are not used in the Company’s program of interest rate and foreign currency risk management are referred to as ‘trading’ for purposes of this disclosure. All trading positions are taken within the limits of the Company’s financial trading policy. All positions are recorded at fair value and the unrealized gains and losses are part of the quarterly results.

Credit risks

F-57

All financial instruments are entered into with counterparties who are considered to be creditworthy institutions and terms and conditions are documented. In the normal course of business, none of the parties demand collateral for credit exposure from financial instruments. All financial derivatives are traded within the framework of established ISDA agreements, where positive and negative market values are netted. In the table below credit risk refers to net positive market values per counterparty.

Liquidity risks

Liquidity risk is managed by maintaining an adequate level of cash, cash equivalents and available financing through unutilized committed credit facilities and the possibility to sell short term marketable holdings in equities and bonds. Due to the dynamic character of the business, the need for financing flexibility is satisfied by arranging part of the Company’s funding in the form of committed Revolving Credit Facilities, under which short term requirements for liquidity can be met.

Management regularly monitors the Company’s liquidity reserves, based on anticipated cash flows. This is carried out on both operational company level and centrally at the treasury department in line with best practice and the limits set up for on a Group wide basis. Furthermore, it is the policy of the Group to calculate future cash flows in all major currencies and quantify the liquidity needed to meet those cash flows, to monitor balance sheet liquidity ratios in relation to both internal and external minimum levels and to maintain plans for debt financing.

The table below shows the Group’s financial debts, sorted by the remaining years until the agreed maturity date. The figures shown in the table are based on agreed confirmations and constitute undiscounted cash flows. Cash flows in foreign currency is converted to SEK by using the closing exchange rates.

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


	31 December 2010				31 December 2011
SEK million	Notional amount		Credit risk		Notional amount		Credit risk

Currency forward contracts and swaps		19,706		265		30,036		50
Currency options		45				9
Interest rate forward contracts and swaps		13,195				28,041
Interest rate options		4,135				2,888
Commodity fixed price swaps – oil		3,096		235		2,612		158
Commodity options – oil		274				185		105

Total		40,451		500		63,771		313

F-58


As per 31 December 2011	Total		Less than 1 year		Between 1 and 2 years		Between 2 and 5 years		More than 5 years		Not specified
Property loans		12,490		906		1,224		902		9,458
Other bank loans		22,748		1,629		4,587		4,375		12,157
Revolving Credit Facility		5,560										5,560
Other credit facilities		764		307								457
Senior Notes		6,236								6,236
Financial leasing debt		1,703		222		161		520		800
Operational leasing debt		6,900		1,578		1,276		2,279		1,767
Trade accounts payable		1,281		1,281

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

Property loans consists principally of bank mortgage loans on real estate, buildings and land in the Company’s real estate business segment. These loans are denominated in SEK and EUR, respectively. Other loans consist of long term bank loans used to finance the acquisition of vessels and other assets. They are denominated in USD, GBP, EUR and SEK, respectively.

Since December 2004 the Company has held a revolving credit facility of USD 1 billion. The facility was renegotiated in January 2006 and expires in January 2013. Obligations under the facility are secured mainly by mortgages on certain vessels and rigs. Borrowings under the facility bear interest at a rate based on LIBOR plus an applicable margin based on the utilization of the facility. The facility imposes certain covenants regarding levels of working capital, cash and cash equivalents and interest coverage ratio. As of 31 December 2011, the utilized portion of the facility was USD 802 million, of which USD 776 million was actually drawn and USD 26 million used for issuing of bank guarantees. As of 31 December 2010 the utilized portion of the facility was USD 909 million, of which USD 884 million was actually drawn and USD 25 million used for issuing of bank guarantees. As of 2007, the Company has an additional revolving credit facility of USD 200 million and the utilized portion of the facility as of 31 December 2011, was USD 32 million. As of 31 December 2010, the utilized portion of the facility was USD 107 million. During 2010, the Company entered into a new SEK 6,660 million Revolving Credit Facility with Svenska Handelsbanken and Nordea and guaranteed by EKN. As of 31 December 2011, as well as of 31 December 2010 this facility was unutilized. As of 31 December 2011 the Company had SEK 8,090 million in other unutilized, mainly uncommitted, overdraft facilities and other similar lines of credit, as compared to SEK 7,743 million as of 31 December 2010.

“Not specified” includes borrowings and utilized credit lines for properties and vessels that have formal repayment dates in 2012. These loans have been classified as long-term because it is the intention of the Company to refinance these loans on a long-term basis. “Not specified” also includes the utilized portion of the Revolving Credit Facilities.

The revolving credit facility imposes various financial and operating covenants upon the restricted group. Among other things, the principal financial covenants (i) require us to maintain current assets and committed undrawn facilities in an amount greater than or equal to 125% of consolidated current liabilities, (ii) require us and our subsidiaries to maintain minimum cash and cash equivalents of not less than USD 50 million, (iii) require our net debt to be no greater than 65% of the capitalization, and (iv) require us to maintain ownership of the security parties that, at the date of execution of the credit facility agreement, are members of the Stena Group.

F-59

32 – Financial instruments

This note describes the financial outcome of financial instruments in the Stena Group. Accounting principles for financial instruments are described in Note 1 and financial risk management is described in Note 31.

Financial instruments per category


SEK million	Financial instruments measured at fair value through income statement
31 December 2010	Fair value option		Held for trading¹		Derivatives used for hedging		Held to maturity		Available for sale		Loans and receivables		Other financial liabilities		Total carrying value		Fair value
Assets
Marketable securities		2,127								2,003						4,130		4,130
Other noncurrent assets		365								1,380						1,745		1,745
Trade debtors												2,754				2,754		2,754
Short-term investments				151								3,976				4,127		4,127
Investments in SPEs								5,148		1,027						6,175		6,088
Other receivables				123		431										554		554

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


Liabilities
Senior notes														6,256		6,256		5,950
Other Long-term interest bearing debt														39,834		39,834		39,834
Short-term interest bearing debt														1,874		1,874		1,874
Trade accounts payable														1,313		1,313		1,313
Debt in SPEs														5,140		5,140		5,140
Other liabilities				36		57										93		93

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


31 December 2011
Assets
Marketable securities		2,650								815						3,465		3,465
Other noncurrent assets		53								1,442						1,495		1,495
Trade debtors												3,218				3,218		3,218
Short-term investments				149								2,519				2,668		2,668
Investments in SPEs								4,072		477						4,548		4,431
Other receivables				2		339										341		341

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

Liabilities
Senior notes														6,236		6,236		5,373
Other Long-term interest bearing debt														40,201		40,201		40,201
Short-term interest bearing debt														3,064		3,064		3,064
Trade accounts payable														1,281		1 281		1 281
Debt in SPEs														4,143		4,143		4,143
Other liabilities				280		1,371										1,651		1,651

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

F-60

¹⁾

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

Financial instruments at fair value

The table below shows the Group’s financial instruments, excluding investments in SPEs, at fair value as of 31 December 2010 and 2011, respectively.

The different levels indicate to what extent the market value has been used when calculating the fair value. In level 1 fair value is determined on the basis of the asset’s listed buying current bid-rate on balance sheet date, with no addition for any transaction costs (for example brokerage) on acquisition date. In level 2 fair value is determined by utilizing a valuation technique. In level 3 fair value is based on an estimated discounted cash flows.


	31 December 2010									31 December 2011
	Level 1		Level 2		Level 3			Total balance		Level 1			Level 2		Level 3			Total balance
Assets
Financial assets at fair value through profit or loss
– Trading derivatives				3					3					2					2
– Trading securities		2,278		157		208			2,643		2,799					53			2,852
Derivatives used for hedging				431					431					339					339
Available-for-sale financial assets
– Equity securities		1,122		423		1,321			2,866		(577	)		619		1,361			1,403
– Debt investments		458				59			517		773					81			854

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


Liabilities
Financial liabilities at fair value through profit or loss
– Trading derivatives				36					36					280					280
Derivatives used for hedging				57					57					1,371					1,371

Total liabilities				93					93					1,651					1,651


Specification of financial instruments in Level 3

Opening balance 1 January						1,906										1,588
Total unrealized gains/losses
– recognized in profit or loss						42										22
– recognized in other comprehensive income						(33	)									41
Proceeds from acquisitions and sales, net						(12	)									10
– whereof realized result						(20	)									8
Reclassification from level 3						(157	)									(176	)
Translation differences						(158	)									10
Closing balance 31 December						1,588										1,495

F-61

As of 31 December 2011, a change of +/– 10% in the unrealized value of all our assets in the Level 3 category, would have an effect of +/– SEK 16 million (as of 31 December 2010 +/– SEK 21 million) on profit before tax and +/– SEK 133 million (as of 31 December 2010 +/– SEK 138 million) recognized in other comprehensive income.

The majority of the financial instruments in Level 3 relate to investments in private equity funds. The book value of these funds equals the Net Asset Value (NAV) provided by the fund manager. As we have not been provided with a specification of the different variables and assumptions used by the fund manager when calculating the NAV, we can not estimate the sensitivity of the different variables used. A major part of the financial instruments in Level 3 is related to funds that have been audited. However, a 1% change in Net Asset Value will result in a change of SEK 13 million based on our shareholdings in these funds.

Fair value

The table below summarizes the fair value of balance sheet items in the case where the fair value differs from the carrying value.

The investments in SPEs are classified as follows:

Corporate Fixed Income Bond are classified as “available for sale” and are revalued in other comprehensive income.

Senior Bank Debt are classified as “held to maturity” and are kept at cost in the balance sheet. To determine the market values for the Corporate Fixed Income Bonds the Company uses generally accepted public market pricing sources.

The fair value of Senior notes has been calculated by using prices in Bloomberg.


SEK million	2010 Carrying value		2010 Fair value		2011 Carrying value		2011 Fair value

Assets
Investments in SPEs		6,175		6,088		4,548		4,431

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

Interest rate hedge contracts

Outstanding interest rate contracts for hedging of the interest rate exposure


SEK million	2010 Notional amount		2010 Carrying amount			2011 Notional amount		2011 Carrying amount

Contracts excluding SPE
Interest rate swaps floating to fixed
– receivable position		5,884		125			1,430		32
– payable position		7,224		(203	)		25,845		(1,334	)
Interest rate swaps fixed to floating
– receivable position		86		4			79		2
Interest rate caps
– receivable position		4,135		16			634		2
Interest rate collar
– payable position							2,000		(119	)

Contracts SPE
Interest rate swaps floating to fixed
– payable position		673		(18	)		687		(17	)
Interest rate caps
– receivable position		643		2			254		1


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

F-62

The fair value of the instruments used in hedge accounting, excluding SPEs, amounts to SEK (1,358) million as of 31 December 2011 and SEK (57) million as of 31 December 2010 and is included in other current liabilities against the hedge reserve.

The SPEs are investing in different debt securities, see note 13, and to reduce the potential negative effects on the actual values of these entities, interest rate contracts have been entered into at an amount equal to that of the underlying fixed rate bonds.

Currency hedge contracts

The following two tables summarize the contractual net amounts of the Company’s forward exchange and option contracts to hedge the translation and transaction exposures. Notional amount is gross amount.

Outstanding currency hedge contracts for translation and equity exposure:


SEK million	2010 Notional amount		2010 Carrying amount			2011 Notional amount		2011 Carrying amount

Currency forward contracts
– receivable position		1,649		79			129		1
– payable position		634		(5	)		174		(1	)
Currency swap contracts
– receivable position		7,672		266			6,040		188
– payable position		6,214		(77	)		10,785		(400	)

Total		16,169		263			17,128		(212	)

The fair value of the instruments used in hedge accounting for equity exposure, amounts to SEK (13) million as of 31 December 2011 and SEK 143 million as of 31 December 2010 and is included in other current liabilities (other current assets) against the hedge reserve.

Outstanding currency hedge contracts for transaction exposure:


SEK million	2010 Notional amount		2010 Carrying amount			2011 Notional amount		2011 Carrying amount

Currency forward contracts
– receivable position		818		19			7,254		65
– payable position		1,401		(47	)		1,152		(24	)
Currency swap contracts
– receivable position		645		10			2,289		103
– payable position		514		(7	)		2,213		(34	)
Currency options
– receivable position		45					4
– payable position		—					5

Total		3,423		(25	)		12,917		110

The fair value of the instruments used in hedge accounting for transaction exposure amounts to SEK 113 million as of 31 December 2011 and SEK (24) million as of 31 December 2010 and is included in other current assets (other current liabilities) against the hedge reserve.

F-63

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

Hedge accounting contracts for transaction exposure:


SEK million	2010 Notional amount		2010 Carrying amount			2011 Notional amount			2011 Carrying amount

SEK companies:
USD		498		(32	)		921			70
EUR		180		8			865			(16	)
NOK		58		3			(94	)		2
Other							(55	)		5

USD companies:
GBP		79		(1	)		769			(4	)
NOK		1,039		1			760			7
AUD		17		4

EUR companies:
USD		243		(4	)		426			35
CAD		820		3			(609	)		(17	)
SEK							36			1

GBP companies:
USD		252		(6	)		646			32
EUR							820			(2	)

Total		3,186		(24	)		4,485			113

Oil price contracts

Outstanding hedge contracts for bunker fuel exposure:


SEK million	2010 Notional amount			2010 Carrying amount			2011 Notional amount			2011 Carrying amount

Raw material swap contracts
– receivable position		2,601			270			2,612			158
– payable position		495			(35	)

Raw material option contracts bought call		701			83			716			117
Raw material option contracts bought put		880			34
Raw material option contracts sold put		(1,307	)		(62	)		(531	)		(12	)

Total		3,370			290			2,797			263

The fair value of the instruments used in hedge accounting for bunker fuel exposure amounts to SEK 226 million as of 31 December 2011 and SEK 179 million as of 31 December 2010 and is included in other current assets against the hedge reserve.

F-64

Trading contracts

Outstanding derivative contracts for trading activities


SEK million	2010 Notional amount		2010 Carrying amount			2011 Notional amount		2011 Carrying amount

Foreign exchange spot and forwards		551		3			443		(1	)
Currency options¹		39		2			403		0
Interest rate instruments		112		0			120		0
Commodity options		93		(3	)

Total		795		2			966		(1	)

¹⁾	The notional amount is delta adjusted.

33 – Personnel

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


	2010				2011
	Total		No. of females		Total		No. of females
Parent Company:
Board, CEO, Executive vice president		3				3
Other employees		25		15		23		14
Subsidiaries in Sweden		4,347		1,720		4,324		1,757

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


Subsidiaries outside of Sweden		4,246		1,107		4,511		1,214
Shipborne employees		1,226		7		1,381		10

Total outside of Sweden		5,472		1,114		5,892		1,224

Total Group		9,847		2,849		10,242		2,995

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

F-65

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


	2010						2011
SEK million	Board and CEO		Other employees		Total		Board and CEO		Other employees		Total

Parent company		12		35		47		12		32		44
Subsidiaries in Sweden		57		1,447		1,504		61		1,440		1,501

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


Subsidiaries outside of Sweden:
Great Britain		32		757		789		36		677		713
The Netherlands		5		272		277		2		258		260
Denmark		9		362		371		13		377		390
Ireland				28		28				27		27
Norway		1		32		33		1		52		53
Finland				4		4
Poland		1		10		11		1		11		12
Switzerland		5		5		10		3		3		6
Spain		2		47		49		2		43		45
Portugal				3		3				3		3
France				4		4				4		4
Luxembourg		10		20		30		9		10		19
Greenland				8		8				6		6
China		6		16		22		5		19		24
Singapore		1		30		31		1		39		40
Korea		4		24		28		2		23		25
United States		2		17		19		2		17		19
Brazil				5		5				9		9
India		1		6		7		1		5		6
United Arab Emirates		2		20		22		1		21		22
Other				3		3				3		3
Shipborne employees				839		839				902		902

Total outside of Sweden		81		2,512		2,593		79		2,509		2,588

Total Group		150		3,994		4,144		152		3,981		4,133


Total personnel costs	2010						2011
SEK million	Parent company		Subsidiaries		Total		Parent company		Subsidiaries		Total

Wages, salaries and other remuneration		47		4,097		4,144		44		4,089		4,133
Pension costs		13		437		450		30		336		366
Other social charges		16		445		461		17		464		481

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

For Swedish-flagged vessels employed in international 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 2011 was SEK 332 million, out of which SEK 308 million related to ferry operations. In 2010, the amount of the subsidy was SEK 406 million, out of which SEK 383 million related to ferry operations. The amounts received have reduced personnel costs.

Remuneration of Senior Executives

Salaries of SEK 13 million were paid to the Chief Executive Officer and the Executive Vice President in 2011 and SEK 12 million in 2010. The corresponding pension charges amounted to SEK 18 million in 2011 and SEK 2 million in 2010. The aggregate compensation paid by the Stena AB to its directors (a total of nine

F-66

persons, CEO included) amounted to MSEK 10 in 2011 same as in 2010. Of total salaries paid to other employees MSEK 37 were paid to other officers than the Chief Executive Officer, the Executive Vice President and the board members in 2011 (a total of seven persons) and MSEK 36 in 2010.

The Chief Executive Officer has retirement conditions allowing retirement from 65 years of age with a salary of 65% of the salary then valid. The period of notice from either parties is 12 months. Severance pay amounts to a maximum of 24 months salary. The board members of Stena AB were paid SEK 250,000 in 2011, out of which SEK 50,000 was paid to the Chairman of the Board and SEK 25,000 was paid to each of the Chief Executive Officer and the Executive Vice President. In 2010, the board members of Stena AB were paid SEK 250,000, out of which SEK 50,000 was paid to the Chairman of the Board and SEK 25,000 was paid to each of the Chief Executive Officer and the Executive Vice President.

The Chairman of the Board has in addition invoiced SEK 3,311,000 and SEK 2,398,000 for consultations for the years 2011 and 2010 respectively.

Women comprised 22% (22%) of the total number of Board members. Of chief directors other than the Chief Executive Officer, the Executive Vice President and the board members women comprised 11% (13%).

34 – Related Party Transactions

Concordia Maritime

Sessan

In December 2002, we sold the remaining 50% of the RoPax vessel Stena Jutlandica to Sessan, which had acquired the first 50% of this vessel from us in 1996. The vessel is chartered back under an operating lease, for which we paid charterhire of SEK 59 million in each of the years 2010 and 2011, respectively.

Stena Metall

We purchase a substantial part of our bunker fuel from Stena Metall. Such purchases aggregated SEK 2,023 million and SEK 2,771 million in 2010 and 2011, respectively.

F-67

We provide management and other services to Stena Metall. We received SEK 1 million in each of the years 2010 and 2011 for these services.

Olsson family

We rent office space from members of the Olsson family. In each of the years 2010 and 2011, we paid SEK 24 million and SEK 39 million, respectively, in respect of such properties.

We manage certain properties owned by members of the Olsson family. In each of the years 2010 and 2011, members of the Olsson family paid us SEK 14 million and SEK 15 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.

35 – Subsequent events

In January 2012, a commercial property, with a total size of approximately 5,000 square meters, were acquired in London in the U.K for a total investment amount of GBP 22 million.

In February 2012 we sold Stena Navigator and in March 2012, we sold Stena Carribean.

In March 2012, we signed a time charter contract with LNG Shipping S.p.A. The time charter is for our LNG carrier, Stena Crystal Sky and the contract period is 40 months. LNG Shipping S.p.A, is a company fully owned by the Italian Company, ENI.

The fourth DrillMax vessel, the enhanced ice-classed ultra-deepwater drillship Stena IceMAX, was delivered in April 2012. In December 2011, a five year contract was signed with Shell for drilling services to be provided by Stena IceMAX with operational commencement scheduled for second quarter 2012.

We have during April purchased four modern RoPax vessels, the Stena Mersey, Stena Lagan, Norman Voyager and Watling Street. The first two vessels were already on bare-boat charter to Stena Line and the last two vessels are on charter to LD Lines and Scandlines A.G respectively.

F-68

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders

Stena AB (publ)

Under date of April 27, 2012, we reported on the consolidated balance sheets of Stena AB (publ) and subsidiaries (“the Company”) as of December 31, 2011 and 2010, and the related consolidated statements of income, comprehensive income, changes in shareholders’ equity and cash flows for each of the years in the three-year period ended December 31, 2011, which are included in the Company’s Annual Report on Form 20-F for the year 2011. In connection with our audits of the aforementioned consolidated financial statements, we also audited the related consolidated financial statement schedules included in the Form 20-F. These financial statement schedules are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statement schedules based on our audits.

In our opinion, such financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.

Gothenburg, Sweden

April 27, 2012

KPMG AB

Thomas Thiel

Authorized Public Accountant

S-1

Schedule II

Stena AB and Consolidated Subsidiaries

Valuation and Qualifying Accounts

Years ended December 31, 2010 and 2011


Description	Balance at Beginning of Year		Additions		Companies acquired		Deductions			Balance at End of Year
	(SEK in thousands)

Allowance for Doubtful Accounts:

December 31, 2010		94,208		5,830		—		(6,233	)		93,805
December 31, 2011		93,805		5,471		—		(21,290	)		77,986

Notes:

Additions includes foreign currency translation effect

S-2

SCHEDULE III

SCHEDULE III

enclosure 1


Description Property data	Encumbrances (Mortgages)		Market value		Date of construction		Date acquired
	TSEK		TSEK
Järnbrott 126:4		34,200		66,300		1961		01/01/81
Kallebäck 7:8		10,505		12,200		1964		01/01/81
Kallebäck 12:4		9,000		34,600		1960		31/12/83
P-huset på Masthugget 712:30		0		25,200
Stampen 26:2		112,500		179,200		1988		01/01/94
Järnbrott 164:22		39,000		61,700		1966		01/02/94
Sannegården 15:4		9,759		71,800		1973		01/01/83
Sannegården 15:5		18,750		59,000		1973		01/01/83
Sannegården 22:19		0		29,200		1973		01/01/83
Partille 3:234-5		0		200				01/01/83
Törnbotten 312 mfl		0		0				01/05/83
Askim 229:2		120,000		254,400		1968/98		01/01/00
Askim 70:1		0		300		1968/98		01/01/00
Askim 59:38		0		1,200		1968/98		01/01/00
Linkärven 6		0		0		1990		01/04/90
Järnbrott 144:5		8,625		30,400		1963		01/08/83
Kallebäck 4:1		36,950		67,500		1963		01/08/83
Kobbegården 257:3		45,000		67,300		1970		01/08/81
Kobbegården 257:1		60,000		86,700		1970		01/08/81
Kobbegården 257:2		45,000		57,900		1970		01/08/81
Kobbegården 151:2		0		200
Lerum Hallegården 1:246		0		1,500
Askim 70:2-3		75,375		167,000		1968		01/08/81
Kobbegården 6:139		0		25,100		1974		01/03/86
Gullbergsvass 5:11		78,000		124,100		1988		01/04/94
Kobbegården 6:3		0		314,100		1970		12/97
Helsingör 10		39,500		87,800		1964		01/05/81
Kockum 20		0		46,800		1960		01/05/81
Kockum 21/22		23,700		57,200		1962		01/01/82
Bilden 10		21,000		36,500		1963		04/84
Almen 20		24,375		47,600		1966		05/81
Frans Suell 14		0		272,900		1906/36		02/91
Frans Suell 8		0		0		1900/79		02/94
Frans Suell 10		0		0		1900/79		02/95
Solbacken 22		10,475		8,900		1964		05/92
Pilåkern 1		83,700		219,800		1959		05/81
Pilåkern 2		0		400		1960/70		05/81
Almen 16		5,400		23,100		1961		05/81
Leonard 1		194,000		315,500		1970		11/00
Abel 14		80,000		215,600		1973		11/00
Abel 15		45,000		0		1973		11/00
Korpen 39		0		21,000		1960/70		01/99
Laboratorn 4		16,800		38,900		1960/70		01/99
Professorn 12		11,900		23,100		1960/70		01/99
Hilleröd 12		5,250		38,100		1962		01/81
Solbacken 13		0		14,400		1965		06/86
Hymnen 1		22,400		48,500		1960/70		05/94

S-3


Kantaten 1	42,000	88,100	1960/70	05/94
Kantaten 2	33,600	82,100	1960/70	05/94
Kantaten 3	37,800	92,400	1960/70	05/94
Kantaten 6	27,300	60,100	1960/70	05/94
Monbijou 18	50,000	88,600		2008
Bjärred 40:22	11,900	14,400		2008
Bjärred 9:6, 9:9-10	55,700	69,200		2008
Karstorp 22:19	0	3,000		2008
Karstorp 22:31	0	3,000		2008
Lomma 28:46	23,000	34,400		2008
Lomma 30:55	5,200	12,500		2008
Lomma 35:61	5,300	8,400		2008
Vinstorp 26:50-52	24,500	33,700		2008
Vinstorp 28:29, 33:1	24,400	36,900		2008
Docenten 6	13,500	29,600	1960/70	01/97
Laboratorn 2	20,700	46,800	1960/70	01/97
Professorn 9	19,400	40,600	1960/70	01/97
Professorn 11	21,800	45,000	1960/70	01/97
Laboratorn 3	21,800	46,200	1960/70	01/97
Altona 20 & 21	113,000	168,200	1966	09/98
Pontus 20	97,225	185,900	1935	04/01
Luggude 8	20,000	42,300	1967	04/01
Hämplingen 15	12,750	28,100	1964	04/01
Utanverket 13	48,750	74,100	1958	04/01
Kolga 6	55,000	120,800	1935	04/01
Ryttmästaren 17	0	63,100	1970	02/04
Fältspaten 1	60,000	75,100	1982	02/04
Masthugget 712:30		0	2005	2005
Halmstad 6:4 mfl	0	0		2005
Gårdsten 58:1	284,175	331,300		2006
Tynnered 13:2	225,000	315,900		2006
Gårda 18:21	0	57,600		2009
Gårda 19:7	0	120,300		2007

Total SFAB	2,639,964	5,670,900

S-4

SCHEDULE III

enclosure 2


Description Property data	Encumbrances (Mortgages)		Market value		Date of construction		Date acquired
	TSEK		TSEK
Erstavik 26: 8		20,800		41,300		1971-75		12/96
Erstavik 26: 9		21,078		33,700		1971-75		12/96
Erstavik 26: 10		20,500		32,700		1971-75		12/96
Erstavik 26: 11		47,500		88,600		1971-75		12/96
Erstavik 26: 12		44,900		83,400		1971-75		12/96
Erstavik 26: 13		42,100		77,900		1971-75		12/96
Erstavik 26: 14		37,200		68,900		1971-75		12/96
Erstavik 26: 15		36,208		66,900		1971-75		12/96
Erstavik 26: 16		36,700		68,000		1971-75		12/96
Erstavik 26: 17		36,800		67,700		1971-75		12/96
Erstavik 26: 18		41,200		75,400		1971-75		12/96
Erstavik 26: 20		7,000		12,700		1971-75		12/96
Erstavik 26: 28		14,700		28,400		1971-75		12/96
Erstavik 26: 29		15,225		28,400		1971-75		12/96
Erstavik 26: 30		14,800		26,000		1971-75		12/96
Erstavik 26: 109		40,600		75,000		1971-75		12/96
Erstavik 26: 110		40,800		78,900		1971-75		12/96
Erstavik 26: 111		37,600		68,500		1971-75		12/96
Erstavik 26: 113		38,900		70,400		1971-75		12/96
Erstavik 26: 115		38,900		72,200		1971-75		12/96
Erstavik 26: 117		41,500		74,700		1971-75		12/96
Erstavik 26: 118		41,200		75,800		1971-75		12/96
Erstavik 26: 434		0		6,700		1971-75		12/96

TOTAL SFNAB		716,211		1,322,200

S-5

SCHEDULE III

enclosure 3


Description Property data	Encumbrances (Mortgages)		Market value		Date of construction		Date acquired
	TSEK		TSEK
Blackebergs Gård 1		0		143,800		1902		04/00
Hägern Större 16		245,000		529,300		1990		04/00
Tempelriddareorden 1		17,500		32,300		1964		12/01
Tempelriddareorden 2		12,110		26,400		1964		12/01
Tempelriddareorden 3		32,900		72,400		1964		12/01
Tempelriddareorden 4		26,600		57,200		1964		12/01
Tempelriddareorden 6		12,950		26,200		1964		12/01
Tempelriddareorden 7		32,900		74,300		1964		12/01
Tempelriddareorden 8		16,450		32,800		1964		12/01
Tempelriddareorden 9		19,950		47,300		1964		12/01
Söderbymalm 3:468		177,910		241,700				12/02
Skansen 18		0		666,100		1970		09/05
Ekebo 8:2		53,500		97,900				2008
Ekebo 8:3		6,946		-4,700				2008
Ekebo 8:4		6,946		-7,100				2008
Ekebo 8:5		39,700		68,100				2008
Ekebo 8:8		97,100		179,800				2008
Vilunda 6:39		103,400		179,400				2008
Eksätra 1		40,697		75,100				2008
Eksätra 2		26,250		45,200				2008
Högsätra 9		30,750		53,800				2008
Jungruholmen 2		69,179		101,100				2008
Björksätra 1		13,125		23,500				2008

TOTAL SFSAB		1,081,862		2,761,900

SCHEDULE III

enclosure 4


Description Property data	Encumbrances (Mortgages)		Market value		Date of construction		Date acquired
	TSEK		TSEK
Haninge Söderbymalm 6:9		15,000		41,500		1955		07/01
Haninge Söderbymalm 6:10		28,000		75,200		1956		07/01
Haninge Söderbymalm 3:328		9,000		25,000		1956		07/01
Haninge Söderbymalm 3:329		10,000		27,700		1956		07/01
Haninge Söderbymalm 3:333		9,000		22,800		1957		07/01
Haninge Söderbymalm 3:372		9,000		29,100		1964		07/01
Haninge Söderbymalm 3:337		49,250		123,900		1964		07/01
Haninge Söderbymalm 9:1		29,000		78,400		1964		07/01
Haninge Söderbymalm 9:2		26,000		71,100		1964		07/01
Haninge Söderbymalm 6:13		10,500		33,200		1964		07/01
Haninge Söderbymalm 6:14		0		92,100		1964		07/01
Haninge Söderbymalm 6:15		18,250		51,600		1962		07/01
Haninge Söderbymalm 6:16		0		20,300		1962		07/01
Haninge Söderbymalm 7:16		56,500		151,900		1963		07/01
Haninge Söderbymalm 3:395		14,750		34,000		1967		07/01
Haninge Söderbymalm 3:476		45,250		96,600		1985		07/01

Totalt SFHKB		329,500		909,600

S-6

SCHEDULE III

enclosure 5


Description Property data	Encumbrances (Mortgages)		Market value			Date of construction		Date acquired
	TSEK		TSEK
Höken 56, 57, Malmö		78,370		150,300			1984		2004
Jerusalem 69, 70 Malmö		38,250		65,800			1966		2004
Möllebacken 23, Malmö		81,106		193,200			1983		2004
Stralsund 33, Malmö		90,102		226,600			1974		2004
Björnen 4, Malmö		25,715		45,000			1986		2004
Gabriel 9, Malmö		74,573		155,100			1985		2004
Mården 3, Malmö		56,361		120,000			1988		2004
Axel 33, Malmö		163,307		416,800			1988		2004
Bornholm 6, Malmö		77,337		155,900			1975		2004
Granen 14, Malmö		28,293		66,900			1979		2004
Fretten 11, 13 Malmö		88,167		200,800			1979		2004
Nötskrikan 17, Malmö		43,669		93,100			1900		2004
Jägaren 1, Nöbb. 2:15		0		12,600			1980		2004
Jägaren 2-3		250,000		167,900			1973		2004
Villebrådet 1		0		74,200			1973		2,004
Kilen 18, Lund		0		188,800			1990		2004
Kilen 19, Lund		66,385		117,400			1992		2004
Cedern 17		0		76,900			1970		2004
Danzig 22		15,975		28,500			1961		2004
Elefanten 41		91,948		135,100			1989		2004
Hermodsdal 2		21,675		42,400			1963		2004
Lars 4		14,790		30,100			1958		2004
Mjödet 11		75,225		112,900			1968		2004
Stacken 11		21,420		44,600			1960		2004
Vårdkasen 2		0		16,500			1968		2004
Hörby Häggenäs 9:62		0		500			Other		2004
Tolered 129:25-26, 35-36, 122:2-3		80,750		336,500			1960		2004
Gårdsten 62:17		196,000		237,900
Järnbrott 117:5-6		280,000		479,000			1962		2004
Kortedala 92:5, 92:8, 93:2		70,550		128,400			1958		2004
Kortedala 105:5		41,752		68,600			1957		2004
Kortedala 105:3 mfl		157,998		269,300			1956		2004
Johanneberg 39:15		140,269		251,300			1981		2004
Backa 7:12 mfl		136,000		251,600			1965		2004
Backa 886:694-695		0		9,400			Other		2004
Tynnered 27:9		615,750		899,300			1967		2004
Prästhult 1:6		0		300			Land		2004
Tolered 157:2, 158:9, 162:2, 163:2		183,600		335,400			1960		2004
Jursta 3:5 och Jursta 3:6		0		80,500			Other		2004
Jursta 3:6		0		0			Other		2004
Kungsängen 7:6, Uppsala		32,400		65,600			1961		2004
Luthagen 80:1, Uppsala		125,600		269,000			1991		2004
Kvarngärdet 15:1, Uppsala		204,000		(309,200	)		1963		2,004
Kvarngärdet 16:1, Uppsala		0		298,800			1963		2,004
Kvarngärdet 16:2, Uppsala		0		0			1963		2,004
Kvarngärdet 17:1, Uppsala		0		205,700			1963		2,004
Kvarngärdet 17:2, Uppsala		0		(1,300	)		1963		2,004
Kvarngärdet 18:1, Uppsala		0		82,800			1963		2,004
Kvarngärdet 18:2, Uppsala		0		136,600			1963		2,004
Kvarngärdet 19:1, Uppsala		0		92,300			1963		2,004
Kvarngärdet 19:2, Uppsala		0		(800	)		1963		2,004

S-7


Kvarngärdet 19:3, Uppsala	0	(600	)	1963	2,004
Brahehus 1, Malmö	59,450	139,400		1957	2004
Holmen 1, Malmö	116,564	188,400		1982	2004
Martallen 25, Sthlm	0	14,200		1931	2004
Martallen 26, Sthlm	0	9,500		1932	2005
Källsmora 1:92 (ryttarfastighet)	0	500		1929	2004
Wahrenberg 11	155,200	280,400		1939	2004
Sjukhuset 3	132,510	150,900		1950	2004
Tornet 10	81,280	80,700		1969	2004
Tornet 11	0	16,800		1969	2004
Tornet 12	0	53,900		1969	2004
Vale 9	12,000	44,900		1961	2004
Odinslund 6	70,000	104,600		1925	2004
Dalkarlshugget 2	127,500	299,400		1967	2004
Rosenbrödet 1	0	52,400		1963	2004
Smörrutan 1	0	79,200		1964	2004
Wienerbrödet 1	79,500	157,700		1907	2004
Wienerkransen 3, 4	52,105	150,300		1889	2004
Wienerkransen 1	0	49,600		1888	2004
Stativet 4	138,000	280,500		1942	2004
Jakobsberg 2:1164	0	58,400		1989	2004
Sjukhuset 16	90,000	0
Järvakrogen 2	9,500	18,400		Other	2004
Sikreno 8	0	6,500		1924	2004
Stockshem 10	0	83,800		1903	2004
Täckeråker 1:8, 1:9, 2:11	0	0		1991	2004
Täckeråker 2:11, 2:14	0	3,700		Other	2004
Pylonen 1	0	43,100		1972	2004
Tornet 1	0	43,100		1972	2004
Sfären 1-9, Solna	235,000	420,800		1938	2004
Tvålflingan 5	0	129,300		1973	2004
Tvålflingan 9	182,500	341,500
Autopiloten 5,9, Stockholm	21,996	32,000		Other	2004
Stockhem 11	0	70,600		Other	2004
Wahrenberg 9	83,500	213,400		Other	2004
Wahrenberg 10	49,200	86,900		Other	2004
Sicklaön 360:7	121,500	222,000
Briggen 1	0	55,300
Briggen 2	0	27,000
Blackebergs Gård 4	0	61,100
Blackebergs Gård 5	0	18,300
Lomma 25:96	0	6,200

Total SFFAB	5,484,642	11,219,000

S-8

SCHEDULE III

enclosure 6


Description Property data	Encumbrances (Mortgages)		Market value		Date of construction		Date acquired
	TSEK		TSEK
Archimedeslaan		60,392		90,354		1996		03/06
Atoomweg		68,428		31,738		1979		07/02
Brain Park 30		34,660		40,683		1988		05/04
Brain Park 80		10,465		18,192		1989		11/89
Brain Park 120		14,481		28,760		1989		11/89
Breguetlaan		23,357		29,848		1992		04/06
Cessnalaan		29,157		34,672		1997		01/006
Eisenhowerlaan		23,034		20,511		1979		01/02
Euclideslaan		0		58,349		1992		09/09
Haspelslaan		46,818		58,794		1986		07/01
Hogehilweg 6		35,680		33,325		1986		07/06
Keizersgracht		12,096		41,904		1750		10/88
Kiotoweg		43,267		47,201		2002		08/02
Koninginnegracht 10		5,894		44,312		1984		06/98
Koninginnegracht 12		6,861		33,406		1984		06/98
Koninginnegracht 13		14,969		32,193		1990		12/97
Koninginnegracht 14		31,212		40,486		1994		09/01
Koninginnegracht 23		25,121		28,760		1971		01/02
Lichtenauerlaan		30,182		35,305		1997		03/04
Max Euwelaan		35,360		29,527		1988		05/04
Markthalle		9,631		35,127		1987		12/87
Nacap		24,772		27,898		1989		07/89
Nacap01		78,839		75,101		1989		11/05
New York 3, Lijnden		31,390		35,787		2001		12/01
New York 9, Lijnden		28,348		26,958		2001		12/01
Nieuwezijds Kolk		42,875		57,029		1996		04/05
Parkstraat		43,796		67,132		1880		10/09
Park Voorn		46,610		36,197		1989		10/89
Park Voorn 9		14,788		31,899		1989		02/06
Paviljoensgracht		48,596		55,076		1981		12/99
San Francisco, Lijnden		1,789		2,524		2002		03/02
Scheveningseweg		27,748		42,092		1988		04/04
Schipolweg		39,987		73,642		1986		12/02
Stadhouderskade		55,389		197,804		1928		10/96
Rooseveltweg		25,359		34,993		1995		06/03
Rooseveltweg 11		36,917		36,402		2002		08/06
Veraartlaan		19,042		22,642		1978		08/99
Volmerlaan		36,438		21,099		1978		02/90
Westblaak		37,579		91,656		1976		12/06
Wilhelminalaan		30,478		61,835		1979		05/97
Zeestraat		40,672		41,985		1982		10/00
Adjustment		573,292

Total SRBV		1,845,771		1,853,196

S-9

SCHEDULE III

enclosure 7


Description Property data	Encumbrances (Mortgages)		Market value		Date of Construction		Date Acquired
	TSEK		TSEK
Hogehilweg		44,589		58,215		1986		09/05
Rue Brasseur, Luxemburg		153,161		220,463		1992		04/92
Sophia Antipolis, Nice		12,235		24,128		1989		03/90
Schiessstrasse, Duesseldorf		39,107		50,082		1990		06/89
WTC Sophia Antipolis		91,977		202,129		1990		12/00
Font de´l orme		28,492		46,126		1989		09/03
Les Deux Arcs		91,852		144,342		2003		12/04
Marco Polo		165,200		260,138		2003		12/06
Ecolucioles		89,890		127,594		2008		06/09
Pin Montard		96,133		149,309		1999		12/09
Weslayan		8,249		44,685		1979		04/09
Woodbranch 1+2		49,497		226,047		1979/1983		04/09
Hungary		46,818		50,546		1912		10/08
Leman Street		208,258		347,812		1977		07/11
Adjustment		773,292

Total SPBV		1,898,751		1,951,615

SCHEDULE III

enclosure 8


Description Property data	Encumbrances (Mortgages)		Initial cost to company Buildings and land		Additions/ Disposals Improvements			Total		Accumulated Depreciation			Net book value
	TSEK		TSEK		TSEK			TSEK		TSEK			TSEK
Hotel Fredrikshavn		1,060,240		226,198		(1,666	)		224,532		(153,915	)		70,617
Hotel Grenå				0		0			0		0			0
Other buildings, Denmark				80,004		(648	)		79,356		(73,426	)		5,930
Hook of Holland				110,999		(1,124	)		109,875		(46,818	)		63,057
Port of Helsingborg				57,579					57,579		(55,783	)		1,796
Port of Gothenburg				36,608					36,608		(24,625	)		11,983
Port of Loch Ryan				102,255		2,881			105,136		0			105,136
Rejser A/S (Sembo Group)				0		4,044			4,044		(287	)		3,757
Other				1,552		(568	)		984		7,177			8,161
Adjustment				54,000		11,000					(54,000	)

Total Stena Line		1,054,818		669,195		13,919			618,114		(401,677	)		216,437

S-10

SCHEDULE III

enclosure 9

2011-12-31


Description Property data	Encumbrances (Mortgages) TSEK		Initial cost to company Buildings and land		Additions/ Disposals Improvements		Total		Accumulated Depreciation			Net book value TSEK		Date of construction		Date acquired
Göteborg Backa 170:2		29,400		27,725		0		27,725		(5,017	)		22,708				2001-06
Strand Norum 33:4		8,250		12,602		447		13,049		(2,025	)		11,024				2004-01
Borås Ryda 9:13		600		2,540		0		2,540		(512	)		2,028
Vänersborg Galeasen 1		4,000		6,665		0		6,665		(1,898	)		4,767				1995-01
Umeå Tolvmansgården 4		5,250		7,580		0		7,580		(1,205	)		6,375				2006-09
Stockholm Bromma Hjässan 18		18,900		28,226		0		28,226		(1,635	)		26,591		2008-12		2007-11
Stockholm Nacka Sicklaön 349:5		12,600		20,678		0		20,678		(1,502	)		19,176		2009-01
Mölnlycke Solsten 1:153		21,000		36,835		360		37,195		(2,457	)		34,738		2009-08
Linköping Glaset 2		0		30,526		550		31,076		(537	)		30,539		2010-11		2008-12
Hässleholm Björken 4		0		2,708		93		2,801		0			2,801				2010-10
Stockholm Lidingö 3:390 (ofri grund)		0		7,238		405		7,643		(936	)		6,707				2008-09
Arendal Rud 2:6 (ofri grund, pantsatt arrendekontrakt)		0		8,745		45		8,790		(2,085	)		6,705				1999-01
Uppsala Valsätra 1:12 (ofri grund, pantsatt arrendekontrakt)		0		17,639		0		17,639		(3,178	)		14,461				2005-06
Investment in rented property		0		20,191		4,810		25,001		(7,238	)		17,763

Total S-Invest		100,000		229,898		6,710		236,608		(30,225	)		206,383
Envac		0		693				693		(423	)		270
Ballingslöv		269,567		365,738		35,612		401,350		(134,229	)		267,121

Total Other		269,567		366,431		35,612		402,043		(134,652	)		267,391
Total Adactum		369,567		596,329		42,322		638,651		(164,877	)		473,774

S-11


			Years ended 31 December
In million	Note		2010 SEK			2011 SEK			2011 USD¹⁾

Shareholders’ equity and liabilities
Equity attributable to shareholders of the Company		20
Share capital				5			5			1
Reserves				(1,096	)		(2,366	)		(342	)
Retained earnings				27,709			30,071			4,350
Net income				2,566			2,476			356
Equity attributable to shareholders of the Company				29,184			30,186			4,365
Non-controlling interest				264			211			31

Total equity				29,448			30,397			4,396


Non-current liabilities
Deferred income taxes		21		4,057			4,248			614
Pension liabilities		22		1,088			962			139
Other provisions		23		1,492			1,370			198
Long-term debt		24		38,190			38,720			5,600
Debt included in SPEs		13		5,140			4,143			599
Senior Notes		25		6,256			6,236			902
Capitalized lease obligations		26		1,644			1,481			214
Other non-current liabilities		27		946			1,802			261

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


Current liabilities
Short-term debt		24		1,649			2,842			411
Capitalized lease obligations		26		225			222			32
Trade accounts payable				1,313			1,281			185
Income tax payable				130			92			13
Other current liabilities				1,024			2,175			315
Accrued costs and prepaid income		28		2,336			2,625			380

Total current liabilities				6,677			9,237			1,336

Total equity and liabilities				94,938			98,596			14,259


Pledged assets and commitments and contingent liabilities
Pledged assets		29		60,439			64,117			9,273
Commitments and contingent liabilities		29		2,510			2,663			385


	Attributable to equity holders of the Company
SEK million	Share capital		Fair value reserve¹⁾			Hedging reserve¹⁾			Translation reserve¹⁾			Retained earnings including Net income			Total			Non-controlling interest			Total equity

Closing balance as per 31 December 2008		5		(1,242	)		(682	)		3,110			25,896			27,087			367			27,454
Exchange differences arising on the translation of foreign operations										(2,079	)					(2,079	)		(19	)		(2,098	)
Change in Hedgings reserve, net of tax
– bunker hedge							585									585						585
– interest swap hedge							42									42						42
Change in fair value reserve, net of tax				939												939						939
Change in net investment hedge, net of tax							107									107						107
Other comprehensive income				939			734			(2,079	)					(406	)		(19	)		(425	)

Net income													2,401			2,401			(37	)		2,364

Total comprehensive income				939			734			(2,079	)		2,401			1,995			(56	)		1,939

Dividend													(190	)		(190	)					(190	)
Transfer to charitable trust													(20	)		(20	)					(20	)
Closing balance as per 31 December 2009		5		(303	)		52			1,031			28,087			28,872			311			29,183
Acquired non-controlling interest																			96			96
Acquisition of subsidiary																			(133	)		(133	)
Exchange differences arising on the translation of foreign operations										(2,442	)					(2,442	)		(8	)		(2,450	)
Change in Hedgings reserve, net of tax
– bunker hedge							153									153						153
– interest swap hedge							63									63						63
Change in fair value reserve, net of tax				159												159						159
Change in net investment hedge, net of tax							191									191						191
Equity method													(50	)		(50	)					(50	)
Other comprehensive income				159			407			(2,442	)		(50	)		(1,926	)		(8	)		(1,934	)

Net income													2,568			2,568			(2	)		2,566

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

Dividend													(316	)		(316	)					(316	)
Transfer to charitable trust													(14	)		(14	)					(14	)
Closing balance as per 31 December 2010		5		(144	)		459			(1,411	)		30,275			29,184			264			29,448

Divestment of non-controlling interest																			(31	)		(31	)
Acquisition of non-controlling interest																			(30	)		(30	)

Exchange differences arising on the translation of foreign operations										(147	)					(147	)		58			(89	)
Change in Hedgings reserve, net of tax
– bunker hedge							(16	)								(16	)					(16	)
– interest swap hedge							(797	)								(797	)					(797	)
Change in fair value reserve, net of tax				(214	)											(214	)					(214	)
Change in net investment hedge, net of tax							(96	)								(96	)					(96	)
Other comprehensive income				(214	)		(909	)		(147	)					(1,270	)		58			(1,212	)

Net income													2 526			2,526			(50	)		(2,476	)

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

Dividend													(240	)		(240	)					(240	)
Transfer to charitable trust													(14	)		(14	)					(14	)
Closing balance as per 31 December 2011		5		(358	)		(450	)		(1,558	)		32,547			30,186			211			30,397


Vessels:
Drilling rigs		15–20 years
Drilling rig vessels		15–20 years
Crude oil tankers		20 years
RoRo vessels		20 years
RoPax vessels		20 years
Superferries		20 years
LNG carriers		20 years
HSS vessels		10–20 years

Other tangible fixed assets:
Buildings		50 years
Port terminals		50 years
Windmills		20 years
Equipment		3–10 years


	Average rates
	2010		2011		Change in %
USD		7.2049		6.4969		(10	)
GBP		11.1256		10.4115		(6	)
EUR		9.5413		9.0335		(5	)

	Closing rates
	2010		2011		Change in %
USD		6.7273		6.8748		2
GBP		10.4942		10.6803		2
EUR		9.0089		8.9177		(1	)