STENA AB FINANCIAL REPORT 2013

STENA ABFINANCIAL REPORT 2013

CONTENTS

DIRECTORS’ REPORT 1

GROUP

CONSOLIDATED INCOME STATEMENTS 6

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME 7

CONSOLIDATED BALANCE SHEETS 8

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY 10

CONSOLIDATED STATEMENTS OF CASH FLOWS 11

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 12

PARENT COMPANY

INCOME STATEMENTS 67

BALANCE SHEETS 68

STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY 69

STATEMENTS OF CASH-FLOW 69

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 70

PROPOSED TREATMENT OF UNAPPROPRIATED EARNINGS 74

AUDIT REPORT 75

FIVE-YEAR SUMMARY 76

STENA AB 2013 1

DIRECTORS’ REPORT

General information about the business

The Stena Group is one of the largest family owned companies

in Sweden and operates in five business areas: Ferry opera-

tions, Drilling, Shipping, Property and other investments within

Adactum.

Ferry operations, which are one of the world´s largest inter-

national passenger and freight ferry services, are operated by

Stena Line in Scandinavia, the North Sea, the Irish Sea and the

Baltic Sea.

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

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

Aberdeen, Scotland and through its world wide global organi-

sation with offices in the US, Norway, Cyprus, Luxembourg,

West Africa, Egypt, Brazil and Australia.

The shipping business is operated by Stena RoRo for RoRo

and RoPax ferry market activities, and by Stena Bulk for tanker

market activities and Stena LNG for LNG (Liquefied Natural

Gas) market activities. Stena RoRo’s head office is located in

Gothenburg. Stena Bulk’s head office is located in Gothenburg

and offices in Houston, Cyprus and branch offices in Singapore

and Rio de Janeiro. Stena LNG has its head office located in

Gothenburg and an office in Cyprus. The ship ping business also

includes manning and crewing of vessels by Northern Marine

Management which head office is located in Glasgow. Northern

Marine Management also have offices in Manila, Mumbai,

Singapore, St Petersburg, Gothenburg, Hamburg, Houston

and Aberdeen. Technical maintenance and development is

managed by Stena Teknik in Gothenburg.

Stena Property, based in Gothenburg, owns properties in

Gothenburg, Stockholm and Malmö and is one of the largest

private property owners in Sweden. The international property

part of the business, based in Amsterdam, has properties in

the Netherlands, France, Luxembourg, Hungary, USA, the

United Kingdom and Germany.

Stena Adactum, located in Gothenburg, invests in compa-

nies not directly related to the core business of Stena and has

Ballingslöv, S-Invest, Envac, Mediatec and Stena Renewable

in the portfolio.

Stena Finance works from Gothenburg, Luxembourg, Cyprus,

Zug, Amsterdam, London and Singapore.

The parent company of the group is Stena AB (publ), Co.

Reg. ID. 556001-0802. The company is a limited company

with its registered office in Gothenburg, Sweden. The head

office’s address is Masthuggskajen, 405 19 Göteborg, Sweden.

The year in summary

• Another year of high operational performance within

all sectors.

• Continued operational growth.

– Total income SEK 30.2 billion compared to SEK 27.4 billion

in 2012.

– Consolidated EBITDA (income from operation before depre-

ciations) excluding net valuation of investment properties

and sale of assets, is the highest EBITDA ever, in creased by

10% to SEK 7.7 billion compared to 2012.

– EBITDA has increased in all sectors compared to 2012,

mainly for the ferry operations, LNG, Property and

Adactum operations.

– Income before taxes amounted to SEK 2.1 billion compared

to SEK 1.8 billion in 2012, including net gain on sale of

assets amounting to MSEK 76 and MSEK 90, respectively.

• Healthy balance sheet with a solidity of 33% as of

31 December 2013.

• Ferry operations improved the EBITDA, excluding restructur-

ing expenses MSEK 121 by MSEK 372 in 2013 compared to

2012. It was achieved by strategic acquisitions, tonnage

changes and continued improvements in the current opera-

tion. The focus forward is to increase the revenues on our

routes at the same time as the business is reviewed for cost

reduction actions.

• Stena Drilling has had another strong year with an average

commercial utilization of more than 97%. Despite two SPS

during the year, the net income was on the same level as

last year. Stena Drilling has a strong contract coverage for

the coming years with four out of seven units of our drilling

fleet contracted to 2018 or beyond.

• Stena Bulks operation in Stena Weco continued to improve

during 2013. However, the market has been continuously

weak with low tanker rates.

• Stena LNG generated good results in 2013 due to new

strong contracts and high utilisation of the fleet.

• Stena RoRo showed a continued high utilization of the fleet

and has during the year also worked with chartering out

or selling vessels no longer in the operation of the Ferry

Operations.

• Stena Property continued to be profitable during 2013. The

occupancy rate was high in Sweden was, on average, 97%.

• Stena Adactum had another profitable year in all business

areas and improved the total result compared to last year at

the same time as business development and expansion were

performed. During 2013, Stena Renewable has completed

further new windmills and owned 86 windmills as per

31 December 2013.

• Available liquidity remains high. The credit profile of the

group is strong, due to long term securitization of the credit

facilities.

2 STENA AB 2013

DIRECTORS’ REPORT

Significant business events

Ferry Operations

As of 1 January 2013, Mr. Carl-Johan Hagman became

Managing Director of Stena Line Holding B.V. Mr. Carl-Johan

Hagman is also responsible for Shipping of the Group and

Managing Director of Stena Rederi AB.

In May 2013, Stena Voyager was sold to Stena Recycling

in Landskrona, Sweden. The vessel had already been written

down and was sold without any effect on the result.

During the year, Stena Line has continued their work

re gard ing increased profitability by increased revenue and

lowered costs.

Drilling

In March 2013, Stena Carron extended the charter for Statoil/

Sonangol, which expired at the end of 2013, for a new three-

year period.

In May 2013, a three-year contract was signed with Tullow

Oil Plc for Stena DrillMAX, following its five-year SPS (Special

Periodic Survey), which was completed in May 2013.

On 26 June 2013, we ordered two new semi-submersible

Moss CS60 drilling rigs from Samsung Heavy Industries in

South Korea with an option to cancel one unit. The contractual

delivery dates of these vessels are March 2016 and September

2016, respectively. The capital cost for each unit is estimated to

be approximately MUSD 800.

In 2013, the drillship Stena Forth has received an extension

of the contract from Hess for up to an additional five years

starting from 29 October 2014.

Bulk

In January 2013 the newbuilt Suezmax vessel Stena Sunrise

was delivered from the Samsung yard in South Korea.

In March 2013, Stena Bulk declared two options to,

to gether with the JV partner Golden Agri Resources, build

two  IMOIIMAX vessels. In total, Stena Bulk has ordered

8  IMOIIMAX vessels in collaboration with partners.

LNG

In June 2013, we entered into a new contract for the LNG

carrier Stena Blue Sky for a contract period until 2015.

RoRo

In January 2013, Stena Baltica was sold through a hire-

purchase contract to an Italian ferry operator, SNAV Spa Italy,

in Napels for a profit of MSEK 23.

In May 2013, the RoPax vessel Stena Alegra was acquired

for MSEK 89. The vessel has been employed within the Stena

Line route network until October 2013, and in November 2013

was chartered out on a bareboat charter.

In December 2013, another three RoPax vessels were

acquired, Stena Egeria, Stena Partenope and Stena Trinacria,

for a total investment of MEUR 69.5.

Other shipping

In January 2013, Northern Marine Management Ltd acquired

the remaining shares of its joint venture (50%) partner Austen

Maritime Group. The Group is consolidated as a subsidiary as

from 1 January, 2013.

In March 2013 a new ferry route was opened between

Sokcho in South Korea and Zarubino and Vladivostok in Russia.

This is a step towards an expansion on the Asian markets.

Adactum

Ballingslöv International AB has in January 2013 acquired all

shares in the English kitchenmaker Southdown Kitchen Ltd,

that has the brand name Manhattan Furniture. Through this

acquisition Ballingslöv International is strengthening its

position on the English market.

In the first quarter of 2013, Mediatec was split into two

separate groups, Mediatec Broadcast and Mediatec Solutions.

During 2013, Adactum increased its ownership in the two

companies and as of 31 December 2013 Adactum held a

62.5% stake in Mediatec Broadcast and a 63.5% stake in

Mediatec Solutions.

During 2013, Stena Renewable put 53 windmills into opera-

tion, which increased the installed effect with 223 MW with a

production capacity of 0.7 TWh. Total amount of windmills as

of 31 December 2013 were 86.

Property

In August 2013, we acquired a commercial fully let office prop-

erty, with a total size of approximately 3,000 sqm, in London in

the U.K. for a total investment of MGBP 15.6.

During the summer of 2013, Stena Realty signed a lease with

Jacobs Engineering, one of the world’s largest companies for

technology consultation, for approximately 8,000 sqm in a

newly built house in Houston. In the end of 2013 the chemistry

and energy group Sasol also signed a lease of 17,500 sqm.

Because of the new lease Stena is constructing another build-

ing in Houston. The investments in Houston amounts to

approximately MUSD 100 and both leases are long-term leases.

The construction of the new office building is expected to be

completed in the third quarter of 2014.

In 2013 the final stage of Ängby Park in west Stockholm was

completed. Ängby Park consists of 320 rental apartments that

STENA AB 2013 3

has been finalized in different stages since 2011. The occu-

pancy rate was high during 2013, on average 97%. In Sweden

the occupancy rate for residential properties was 98% and

83% for commercial properties. The occupance rate abroad

was, on average 78% due to a weak Dutch market.

During 2013 properties were sold for a total gain of MSEK 51.

Finance

On 5 March 2013 we called for repayment of the Senior Note

with remaining debt MUSD 128.8, due 2016. The payment

was done on 5 April 2013.

Subsequent events

In January 2014, the Ropax vessel Dieppe Seaways, was

acquired. The vessel is a sister vessel to Stena Superfast VII and

Stena Superfast VIII. Dieppe Seaways is on a charter to DFDS

Seaways until November 2014.

In January 2014, a ten year bond of MUSD 600 was issued.

The purpose of this transaction was to extend existing profile

of amortization and pay off outstanding amounts under our

credit facility.

In February 2014 another ten year bond of MUSD 350 and

MUSD 650 was issued in a so called Term loan B, which is a

seven year loan with low rate of amortization. The securities

for both bond and loan consists of the units Stena DrillMAX

and Stena Carron. The purpose of this transaction is to extend

existing profile of amortization and increase liquidity. As a

result of the transaction the available facilities in existing RCF

(Revolver Credit Facility) of MUSD 1,000 will be reduced to

MUSD 600.

In February 2014, Stena Line acquired the operation on the

route Rosslare (Ireland) – Cherbourg (France). The acquisition

will benefit the network as well as improve Stena Line’s strate-

gic position in the southern part of Ireland. The operation will

be taken over as from April 2014.

System for internal control and risk management

regarding the financial reporting

This description of Stena’s internal control and risk manage-

ment regarding financial reporting has been prepared in

accordance with the Annual Accounts Act in Sweden.

The Board of Directors is responsible for the company’s

internal control, the overall aim of which is to safeguard the

company’s assets and thereby its shareholder’s investment.

Stena uses the COSO framework as a basis for internal con-

trol with respect to financial reporting. The COSO framework,

which is issued by the Committee of Sponsoring Organizations

of the Treadway Commission, is made up of five components;

control environment, risk assessment, control activities, infor-

mation and communication as well as monitoring. The imple-

mentation of the COSO framework was executed during 2007

when the Stena AB Group for the first time became compliant

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

repayment of the bond on 5 March 2013, the Stena AB Group

was deregistered from SEC and is no longer required to report

in accordance with the Sarbanes-Oxley Act 404. Stena has,

however, kept the COSO framework for the work with the

internal control regarding the financial reporting.

Control environment

The Board of Directors have the overall responsibility for inter-

nal control of financial reporting. The control environment

forms the basis of internal control, because it includes the cul-

ture that the Board and management communicate and by

which they work. The control environment is made up primar-

ily of integrity, ethical values, expertise, management philoso-

phy, organisational structure, responsibility and authority, poli-

cies and guidelines as well as routines.

Of particular importance is that management documents,

such as internal policies and guidelines exist in significant areas

and that these provide employees with solid guidance. Exam-

ples of important policies and guidelines within Stena are

“Code of Conduct”, “Power Reserved List”, “Principles, con-

victions and basic values for Stena AB”, “Finance Policy” and

“Financial Manual” that defines the accounting and reporting

regulations. These policies and guidelines have been made

available to all relevant employees through established infor-

mation and communi cation channels.

Furthermore, the Board has appointed an Audit Committee,

whose primary task is to ensure compliance with established prin-

ciples for financial reporting and internal control and that ap p-

ropriate relations are maintained with the company’s auditors.

Risk Assessment

Stena carries out regular risk assessments in order to review

the risks of errors within its financial reporting. The risk assess-

ment of financial reporting aims to identify and evaluate the

most significant risks that affect internal control over financial

reporting in the Group’s companies and processes.

During the year the Group’s overall risk assessment was

up dated in order to obtain a general idea of the main risks.

To limit risks there are appropriate policies and guidelines as

well as processes and control activities within the business.

The risk assessment is updated on an annual basis under the

4 STENA AB 2013

DIRECTORS’ REPORT

direction of the “Corporate Governance” staff function and

the results are reported to the Audit Committee.

Control activities

The most significant risks identified regarding financial report-

ing are managed through various control activities. There are a

number of control activities built into every process to ensure

that the business is run effectively and that financial reporting

provides a true and fair view.

The control activities, which aim to prevent, find and correct

potential inaccuracies, include account reconciliations, authori-

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

IT systems are scrutinized regularly during the year to en sure

the validity of Stena’s IT systems with respect to financial

reporting.

Information and communication

Policies and guidelines are of particular importance for accu-

rate accounting and reporting and also define the control

activities to be carried out. Stena’s policies and guidelines

relating to financial reporting are updated on an ongoing basis

and available to all employees concerned on Stena’s intranet.

Information and communication relating to financial reporting

is also provided through training. The Group holds internal

seminars and conferences regularly, with a focus on quality

assurance in financial reporting and governance models.

Monitoring

The Board of Directors and the Audit Committee continuously

evaluate the information provided by the executive manage-

ment team, including information on internal control. The

Audit Committee’s task of monitoring the efficiency of internal

control by the management team is of particular interest to

the Board. This work includes checking that steps are taken

with respect to any problems detected and suggestions made

during the assessment by the external and internal auditors.

The work on internal control during the year has further

increased awareness of internal control within the Group

and improvements are being made on continuous basis.

Internal audit

The Groups “Corporate Governance” staff function works as

the Group’s internal audit function and reports to the Audit

Committee and the deputy CEO. The function focuses on pro-

actively developing and enhancing internal control over the

financial reporting as well as examining the effectiveness of

the internal control. The “Corporate Governance” function

plans the work in consultation with the Audit Committee and

regularly reports the findings of its examinations to the Com-

mittee. The unit communicates continuously with Stena’s

external auditors on matters concerning internal control.

Major Shareholders

All of the issued and outstanding voting shares of Stena AB

were owned as following as of 31 December 2013:

Name of beneficial ownerNumber of

sharesPercentage ownership

Dan Sten Olsson 25,500 51.0

Madeleine Olsson Eriksson 9,250 18.5

Stefan Sten Olsson 12,250 24.5

Gustav Eriksson 3,000 6.0

The holders listed above have sole voting and investment power

over the shares beneficially owned by them. Dan Sten Olsson,

Stefan Sten Olsson and Madeleine Olsson Eriksson are siblings.

Gustav Eriksson is the son of Madeleine Olsson Eriksson.

Dan Sten Olsson is the only officer or director of Stena AB

who owns any voting shares of Stena AB. All shares of Stena

AB have the same voting rights.

Future developments

The Group’s overall business is expected to continue in the

same direction over the coming year and to the same extent

as in 2013.

Research and development

The Group executes vessel construction development via

Stena Teknik. The Group also makes payments to universities

and the Sten A Olsson Foundation for Research and Culture,

whose purpose include promoting scientific research and

development.

Environment

The Group conducts several environment related projects

with the purpose of reducing our general environmental

impact. Since shipping comprises a large part of Stena’s

activities, one of our major challenges is to develop more

efficient vessels. The most important measure for Stena’s

shipping divisions is to reduce energy consumption in relation

to work performed.

Environmental thinking is also fundamental for Stena

Fastigheter that deals with consideration for the tenants and

safeguarding of the world’s limited resources. The initiative to

cut energy consumption continued and targets were set for

each building.

Since the implementation of the Environmental Code, the

port operation run by Stena Line Scandinavia AB has become

STENA AB 2013 5

subject to permit requirements. The permit mainly regulates

noise. These requirements have been met.

Financial risks

For financial risks, see Note 1, Summary of Significant Ac count-

ing Principles and Note 30 Financial instruments and risk

management.

Staff

In 2013, the average number of employees was 11,347 com-

pared to 10,565 on 31 December 2012. A vital factor for real-

izing Stena Group’s vision is its employees, their expertise,

enthu siasm and skills.

Future development depends on the Company retaining

its position as an attractive employer. To support this goal the

Company strives for a working climate where energy, passion

and respect for the individual are the guiding principles. An

intra group attitude survey is carried out every year and the

number of satisfied employees is rising steadily. Every em ploy ee

must attend a career development meeting once a year. For

more information about employees see Note 32.

Sales and results

Consolidated income for 2013 amounted to MSEK 30,240,

in cluding profit from vessel sales of MSEK 25 and property

sales of MSEK 51. For 2012 the consolidated income amounted

to MSEK 27,388, including profit from vessel sales of MSEK 24

and property sales of MSEK 66. The profit before tax for the

year was MSEK 2,148 with a net profit of MSEK 1,910. For

2012 the profit before tax amounted to MSEK 1,777 with a

net profit of MSEK 1,735.

Financing and liquidity

Liquid assets and short-term investments on 31 December

2013 amounted to MSEK 3,747, of which MSEK 2,401 was

available. On 31 December 2012 liquid assets and short-term

investments amounted to MSEK 3,676, of which MSEK 1,779

was available. Along with marketable securi ties and available

credit facilities, the total available amount on 31 December

2013 was SEK 12.2 billion versus SEK 14.8 billion on 31

December 2012.

In 2012 we refinanced the RCF of USD 1 billion with matu-

rity in 2018. The utilization of the facility on 31 December

2013 was MUSD 625, of which MUSD 6 is for guarantees.

On 31 December 2012 the utilization was MUSD 644, of

which MUSD 5 was for guarantees. In 2010 we entered into a

RCF with a guarantee provided by the EKN (the Swedish

Export Credit) for MSEK 6,660. The facility was utilized with

MSEK 6,436 on 31 December 2013 and utilized with MSEK

5,173 on 31 December 2012. Loan amortization over the year

amounted to MSEK 4,946. In 2012 MSEK 3,103 was amor-

tized.

In January 2014, a bond of MUSD 600 was issued. The

purpose of this transaction was to extend existing profile of

amortization and pay off outstanding amounts under our

credit facility.

In February 2014 another bond of MUSD 350 and MUSD

650 was issues in a so called Term loan B, which is considered

a loan with low rate of amortization. The securities for both

bond and loan consists of the units Stena DrillMAX and Stena

Carron. The purpose of this transaction is to extend existing

profile of amortization and increase liquidity. As a result of the

transaction the available facilities in existing RCF of MUSD

1,000 will be reduced to MUSD 600.

Total consolidated assets increased during the year to

MSEK 108,212 compared to MSEK 104,900 31 December

2012. Capital expenditure in tangible and intangible fixed

assets amounted to MSEK 7,169. In 2012 capital expenditures

amounted to MSEK 10,917. The consolidated debt/equity

ratio, defined as net interest-bearing liabilities in relation

to net interest-bearing liabilities, shareholders’ equity and

de ferr ed tax liabilities was 55% 31 December 2013 and 57%

31 December 2012.

Total retained earnings on 31 December 2013 was MSEK

35,586, of which MSEK 1,914 was the net profit for the year.

Parent Company

Revenues for the year amounted to MSEK 136 and the result

before tax was MSEK 33. In 2012 the revenues amounted to

MSEK 149 and the result before tax to MSEK 203, whereof

dividends from subsidiaries were MSEK 1,137.

The Board propose a dividend of MSEK 200 to the share-

holders, with the remaining profit to be carried forward, see

page 74.

The Group´s and the Parent Company´s earnings, liquidity

and financial position are described in the following income

statements, cash-flow statements and balance sheets, and in

the notes relating to them.

6 STENA AB 2013

GROUP

CONSOLIDATED INCOME STATEMENTS

Years ended 31 December

2012 2013 2013Note MSEK2) MSEK MUSD1)

Revenues

Ferry operations 10,395 11,164 1,737

Drilling 7,011 7,146 1,112

Shipping 2,426 2,568 399

Investment properties 2,454 2,564 399

New Businesses – Adactum 4,977 6,453 1,004

Other 21 45 7

Total revenues 27,284 29,940 4,658

Net gain on sales of assets 4 90 76 12

Total other income 90 76 12

Net valuation on investment properties 12 14 224 35

Total income 3 27,388 30,240 4,705

Direct operating expenses

Ferry operations (8,110) (8,520) (1,326)

Drilling (3,122) (3,036) (472)

Shipping (1,296) (1,503) (234)

Investment properties (843) (847) (132)

New Businesses – Adactum (3,593) (4,338) (675)

Other (1) (8) (1)

Total direct operating expenses (16,965) (18,252) (2,840)

Gross profit 10,423 11,988 1,865

Selling expenses 17 (1,276) (1,167) (182)

Administrative expenses 5 (1,997) (2,798) (435)

Depreciation and amortization 3 (3,749) (4,136) (643)

Income from operations 3, 32 3,401 3,887 605

Share of associated companies´ results 6 18 (51) (8)

Dividends received 99 60 9

Gain (loss) on sale of securities 485 444 68

Interest income 438 489 76

Interest expense (2,357) (2,386) (371)

Foreign exchange gain/loss (65) (41) (6)

Other financial income/expense (242) (254) (39)

Finance net 7 (1,624) (1,739) (271)

Income before taxes 1,777 2,148 334

Income taxes 8 (42) (238) (37)

Profit for the year 1,735 1,910 298

Earnings attributable to:

Equity holders of the Parent Company 1,732 1,914 299

Non-controlling interests 13 3 (4) (1)

Net income 1,735 1,910 298

1) Unaudited, Note 12) 2012 has been restated due to the revised accounting standard for pensions, IAS 19 Employee benefits, see Note 1

STENA AB 2013 7

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Years ended 31 December

2012 2013 2013MSEK2) MSEK MUSD1)

Profit for the year 1,735 1,910 298

Other comprehensive income

Items that may subsequently be reclassified to profit or loss:

This year’s change in fair value reserve, net of tax 325 366 57

This year’s change in net investment hedge, net of tax (175) 722 112

Change in currency translation differences (808) 355 55

Items that will not be reclassified to profit or loss:

Remeasurements of post employment benefit obligations (10) 443 68

This year’s change in revaluation reserve 13 2

Other comprehensive income for the year (668) 1,899 294

Total comprehensive income for the year 1,068 3,809 592

Other comprehensive income attributable to:

Owners of the company 1,072 3,813 593

Non-controlling interest (4) (4) (1)

Total comprehensive income for the year, net of tax 1,068 3,809 592

1) Unaudited, Note 12) 2012 has been restated due to the revised accounting standard for pensions, IAS 19 Employee benefits, see Note 1

See also Note 20 and 21

8 STENA AB 2013

CONSOLIDATED BALANCE SHEETS

31 December

2012 2013 2013Note MSEK2) MSEK MUSD1)

Assets

Non-current assets

Intangible assets 9

Goodwill 2,201 2,372 369

Brands 724 704 110

Rights to routes 698 726 113

Other intangible assets 286 353 55

Total intangible assets 3,909 4,155 647

Tangible fixed assets

Vessels 10 40,708 40,956 6,372

Construction in progress 10 2,647 2,450 381

Equipment 10 2,260 3,930 611

Buildings and land 10 892 962 150

Ports 11 1,817 3,261 507

Total tangible fixed assets 48,324 51,559 8,021

Investment properties 12 26,658 27,831 4,330

Financial fixed assets

Investment in associated companies 6 1,073 934 145

Investment included in SPEs 13 5,170 4,311 671

Marketable securities 14 5,118 4,243 660

Other non-current assets 15, 21 3,526 3,904 607

Total financial fixed assets 14,887 13,392 2,083

Total non-current assets 93,778 96,937 15,081

Current assets

Inventories 16 692 716 111

Trade debtors 17 2,823 2,849 443

Other current receivables 17 1,802 1,793 279

Prepaid expenses and accrued income 17 2,129 2,170 338

Short-term investments 18 2,095 1,694 264

Cash and cash equivalents 19 1,581 2,053 319

Total current assets 11,122 11,275 1,754

Total assets 3 104,900 108,212 16,835

1) Unaudited, Note 12) 2012 has been restated due to the revised accounting standard for pensions, IAS 19 Employee benefits, see Note 1

GROUP

STENA AB 2013 9

31 December

2012 2013 2013Note MSEK2) MSEK MUSD1)

Shareholders´ equity and liabilities

Equity attributable to shareholders of the company 20

Share capital 5 5 1

Reserves (2,884) (449) (70)

Retained earnings 31,335 33,542 5,218

Net income 1,732 1,914 298

Equity attributable to shareholders of the company 30,188 35,013 5,447

Non-controlling interest 280 262 41

Total equity 30,468 35,274 5,488

Non-current liabilities

Deferred income taxes 21 4,011 3,940 613

Pension liabilities 22 1,226 649 101

Other provisions 768 707 110

Long-term debt 23 46,113 45,287 7,045

Debt included in SPEs 13 3,974 3,944 614

Senior Notes 24 5,154 5,324 828

Capitalized lease obligations 25 764 642 100

Other non-current liabilities 26 934 722 112

Total non-current liabilities 62,944 61,215 9,523

Current liabilities

Short-term debt 23 2,724 4,616 718

Senior Notes 24 838

Capitalized lease obligations 25 203 231 36

Trade accounts payable 1,764 1,722 268

Income tax payable 35 243 38

Other current liabilities 3,249 1,655 257

Accrued costs and prepaid income 27 2,675 3,256 507

Total current liabilities 11,488 11,723 1,824

Total equity and liabilities 104,900 108,212 16,835

Pledged assets and commitments and contingent liabilities

Pledged assets 28 65,075 66,155 10,292

Commitments and contingent liabilities 28 3,843 3,301 514

1) Unaudited, Note 12) 2012 has been restated due to the revised accounting standard for pensions, IAS 19 Employee benefits, see Note 1

10 STENA AB 2013

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

GROUP

Equity attributable to the owners of the parent company

MSEKShare

capital Reserves1)

Retained earnings

including net income Total

Non- controlling

interests

Total share-holders’

equity

Closing balance at 31 December 2011 5 (2,233) 32,415 30,186 211 30,397

Effects of changes in accounting principles2) (796) (796) (796)

Balance at 1 January 2012 (restated) 5 (2,233) 31,619 29,390 211 29,601

Change in fair value reserves 325 325 325

Change in net investment hedge (175) (175) (175)

Change in translation reserve (801) (801) (7) (808)

Remeasurement of post employment benefit obligation (10) (10) (10)

Other comprehensive income (651) (10) (661) (7) (668)

Net income 1,732 1,732 3 1,735

Total comprehensive income (651) 1,722 (1,071) (4) 1,067

Dividends (260) (260) (260)

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

Sale of non-controlling interests 73 73

Closing balance as of 31 December 2012 5 (2,884) 33,067 30,188 280 30,467

Effect of changes in accounting principles3) 1,012 189 1,201 28 1,229

Balance at 1 January 2013 (restated) 5 (1,872) 33,256 31,389 308 31,696

Change in fair value reserves 366 366 366

Change in net investment hedge 722 722 722

Change in revaluation reserve (20) 33 13 13

Change in translation reserve 355 355 355

Remeasurement of post employment benefit obligation 443 443 443

Other comprehensive income 1,423 476 1,899 1,899

Net income 1,914 1,914 (4) 1,910

Total comprehensive income 1,423 2,390 3,813 (4) 3,809

Dividends (189) (189) (189)

Acquisition of non-controlling interests (42) (42)

Closing balance at 31 December 2013 5 (449) 35,457 35,013 262 35,274

1) See Note 202) Effects of changes in accounting principles for pensions, in accordance to the updated accounting standard IAS 19 Employee benefits3) Effects of changes in valuation of ports, from cost method to revaluation method

STENA AB 2013 11

CONSOLIDATED STATEMENTS OF CASH FLOWS

Years ended 31 December

20122) 2013 2013Note MSEK MSEK MUSD1)

Net cash flows from operating activities

Net income 1,735 1,910 297

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

Depreciation and amortization 3 3,749 4,136 643

Net valuation of investment properties (14) (224) (35)

Share of affiliated companies´ results (18) 51 8

Dividend from associated companies 20 23 4

Gain on sale of assets 4 (90) (76) (12)

Loss/gains on securities, net (485) (444) (69)

Unrealized foreign exchange losses/gains 286 482 75

Deferred income taxes 8 (231) (49) (80)

Provision for pensions (194) (109) (17)

Other non cash items 366 165 26

Net cash flows from trading securities (88) 75 12

Cash flow from operations before changes in working capital 5,036 5,940 924

Changes in working capital

Receivables (70) (68) (11)

Prepaid expenses and accrued income (161) (125) (19)

Inventories (50) 6 1

Trade accounts payable 429 (154) (24)

Accrued costs and prepaid income (187) 350 54

Income tax payable (168) (17) (3)

Other current liabilities 205 (915) (142)

Net cash provided by operating activities 5,034 5,017 780

Net cash flows from investing activities

Purchase of intangible assets (388) (147) (23)

Cash proceeds from sale of tangible fixed assets 4 1,198 534 83

Capital expenditure on tangible fixed assets (10,529) (7,022) (1,092)

Purchase of subsidiary, net of cash acquired 29 (187) (13) (2)

Investments in affiliated companies (73)

Proceeds from sale of securities 4,456 7,505 1,168

Purchase of securities (6,008) (5,084) (791)

Increase of noncurrent assets (67) (392) (60)

Decrease of noncurrent assets 30 12 2

Other investing activities 15 24 4

Net cash used in investing activities (11,553) (4,583) (712)

Net cash flows from financing activities

Proceeds from issuance of debt 7,622 3,676 572

Principal payments on debt (3,103) (4,946) (769)

Net change in borrowings on line-of-credit agreements 3,943 1,228 191

Principal payments on capitalized lease obligations (1,331) (238) (37)

Net change in restricted cash accounts (275) 484 75

Dividends paid (260) (189) (29)

Other financing activities 29 (107) (34) (5)

Net cash provided by/used in financing activities 6,489 (19) (2)

Effect of exchange rate changes on cash and cash equivalents 24 57 9

Net change in cash and cash equivalents (6) 472 74

Cash and cash equivalents at beginning of year 19 1,587 1,581 245

Cash and cash equivalents at end of year 19 1,581 2,053 319

1) Unaudited, Note 12) 2012 has been restated due to the revised accounting standard for pensions, IAS 19 Employee benefits, see Note 1

GROUP

12 STENA AB 2013

Basis of preparation

The consolidated financial statements have been prepared in accord-

ance with International Financial Reporting Standards (IFRS) as adopted

by the EU. In addition RFR 1 Supplementary Rules for Groups, has been

applied, issued by the Swedish Financial Reporting Board.

In accordance with IAS 1, the companies of the Stena Group apply

uniform accounting principles, irrespective of local legislation. The prin-

ciples below have been applied consistently for all the years covered by

this Financial Report. Conversion to IAS 33, Earnings Per Share, is not

applied, since Stena AB is not a listed company.

The Parent Company’s financial statements have been prepared

according to the same accounting principles applied for the Group.

All exceptions are described in the section “Parent Company’s acc-

ounting principles”.

The Financial Report and Consolidated Financial Statements are

approved for issue by the Board of Directors on 28 April 2014. The

balance sheets and income statements were approved by the Annual

General Meeting on 28 April 2014.

In conjunction with the preparation of these financial statements,

senior management has made estimates and assumptions which affect

the carrying amounts of assets and liabilities, as well as contingent lia-

bilities at the date of the financial statements and recognised revenues

and costs. The actual future outcome of specific transactions may

differ from the outcome estimated at the date of preparation of this

financial statements. Differences of this type will impact the outcome

of financial statements in forthcoming accounting periods. Areas

involving a high degree of assessment, which are complex or in which

the assumptions and estimations are of material significance to the

consolidated financial statements are stated in Note 2.

Assets and liabilities are accounted for at historical acquisition values,

except certain financial assets and liabilities and investment properties

that are valued at fair value and ports that are recognized according to

revaluation model. Financial assets and liabilities valued at fair value are

derivative instruments, financial assets classified as financial assets val-

ued at fair value through the income statement or financial assets held

for sale.

Solely for the convenience of the reader, the 2013 financial state-

ments have been translated from Swedish kronor (SEK) into United

States dollars (USD) using the 31 December 2013 rate, USD 1.00 = SEK

6.4279.

New or amended accounting standards 2013

During the year 2013, no new or amended IFRS standards have had

any particular impact on the group accounting, except for below:

– IAS 19 Employee Benefits (Amendments). IAS 19 prescribes the

accounting and disclosure by employers for employee benefits. The

amended standard requires an entity to regularly determine the pre-

sent value of defined benefit obligations and the fair value of plan

assets and to recognize the net of those values in the financial state-

ments as a net defined benefit liability. The amended standard

removes the option to use the corridor approach previously used by

the Group. The standard also requires an entity to apply the discount

rate on the net defined benefit liability (asset) in order to calculate the

net interest expense (income). The standard thereby removes the use

of an expected return on the plan assets. All changes in the net

defined benefit liability (asset) are recognized as they occur, as follows:

(i) service cost and net interest in profit or loss; and (ii) remeasurement

in other comprehensive income.

The standard has had the following impact on the presentation of

the Group´s financial results and position: All historical actuarial gains

or losses are now included in the measurement of the net defined

benefit liability. This initially increased the liabilities of the Group and

reduced the equity (after deduction for deferred tax). Changes in the

net defined benefit liability from changes in, e.g., discount rate and

mortality rate are presented in other comprehensive income. The

removal of the expected return reduced the financial items with the

difference between the expected return and the discount rate applied

on the plan assets. For the opening balance of 2012, the changes

increased the net defined benefit liability by MSEK 1,060 and reduced

equity by MSEK 796. The modified net interest calculation and the

removal of the amortization of the actuarial losses increased the

income for the period by MSEK 20. The standard was applied as of

1 January 2013, with full retrospective application. The impacts on

the 2013 accounts are in all major aspects similar to 2012.

– Ports are recorded for in accordance with the revaluation model in

IAS 16 since 1 January 2013. Ports are carried at a revalued amount,

being its fair value at the date of revaluation less subsequent deprecia-

tion and impairment. The change in accounting principles increased

the value of the ports with MSEK 1,363, whereof MSEK 122 on acqui-

sition costs and MSEK 1,241 on accumulated amortization, and

increased the revaluation reserve in equity with MSEK 1,012 after tax.

Basis of consolidation

The consolidated financial statements has been prepared in accordance

with the principles set forth in IAS 27, consolidated and separate finan-

cial statements and include Stena AB and all subsidiaries, defined as

companies in which Stena AB, directly or indirectly, owns shares repre-

senting more than 50% of the voting rights or, in any other way, has a

controlling influence.

As regards companies acquired or divested during the year, the

following applies:

• Companies acquired during the year have been included in the

consolidated income statement as of the date upon which control

was gained.

• Companies divested during the year are included in the consolidated

income statement until the date upon which Stena’s control ceased.

The Group’s consolidated financial statements include the financial

statements for the Parent Company and its directly or indirectly owned

subsidiaries after:

• elimination of intercompany transactions and

• amortisation of acquired surplus values.

NOTESAmounts are shown in MSEK unless otherwise stated.

1. SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES

STENA AB 2013 13

Equity in the Group includes equity in the Parent Company and the

portion of equity in the subsidiaries arising after the acquisition.

Non-controlling interest is recognised in equity as a separate cate-

gory. Non-controlling interest share of profit/loss for the year is specified

following the net profit/loss for the year in the income statement.

Business combinations and goodwill

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

tions, prior acquisitions, before 1 January 2010, are not restated.

All business combinations are accounted for in accordance with pur-

chase method. This method entails that the assets, liabilities and con-

tingent liabilities owned by the acquiring company at acquisition date

are valued to determine their group acquisition value. The valuation

method requires that estimates have to be made. The valuation of

acquired land, buildings and equipment is carried out either by an

external party or by an internal party on the basis of available market

information. The reporting of financial assets and liabilities, as well as

inventories,

is based on available market information. The fair value of significant

intangible fixed assets is determined either with the help of independent

valuation experts or internally, through the use of generally accepted

valuing methods, which are usually based on future cash flows.

Acquisition of investment properties and vessels, in companies with

only assets, are accounted for as an asset deal.

In the event that the acquisition cost exceeds the market value of

the identified assets, liabilities and contingent liabilities, the difference

is accounted for as goodwill.

In the event that the fair value of the acquired net assets exceeds

the acquisition cost, the acquirer shall identify and value the acquired

assets again. Any remaining surplus in a revaluation shall immediately

be taken up as income. The acquisition analysis (the method utilised for

the allocation of acquisition cost to acquired identified net assets and

goodwill), shall, in accordance with IFRS, be completed within twelve

months of acquisition date. Once the acquisition analysis has been

reviewed and approved by management, goodwill is allocated to cash

generating units and impairment testing is carried out at least once per

year from the date upon which this allocation is completed. If the

acquisition is achieved in stages, the goodwill value is decided at the

time when the control has been transferred. Previous shares are valued

to fair value and the change in value is accounted for in the Income

statement. Goodwill is not amortized.

Transaction costs, exempt from transaction costs which is assignable

to equity- or liability instruments, are reported as costs in the Income

Statements. For acquisitions before 1 January, 2010 transaction costs

have been capitalized. Conditional purchase-sum is reported according

to fair-value at the date of acquisition. If the conditional purchase-sum is

classified as equity-instrument, no revaluation is carried out and the

adjustment is reported in equity. For other conditional purchase-sum,

these are revalued each quarter and the variation is reported in the

Income Statement.

Associated companies and jointly controlled entities

(equity-accounted investments)

The equity method of accounting is used for companies in which the

Company owns shares representing between 20% and up to a maximum

of 50% of the voting rights and/or has a significant interest. This method

entails that investments are initially reported at acquisition value. The

Group´s investment in associated companies includes goodwill identified

on acquisition, net of any accumulated impairment loss. See “Impairment

of non-financial assets” including Goodwill below. The carrying amount

is subsequently increased or decreased to reflect the owner company’s

share of the associated companies’/Joint Ventures gains or losses after

the acquisition. In the Group Balance Sheet these assets are accounted

for as “Investments in associated companies” (Financial assets – see

note 6) and “Other non-current assets” (Operational assets – see note

15). The Group’s share of the associated companies’ net income is

reported in the consolidated income statement under the line “Result

from associated companies”, in the finance net. Received dividends are

settled against the book value of the respective participations.

Joint ventures are, in accounting, the companies in the Group that,

through common cooperation agreements with one or several parties,

have common control of the operation, both operationally and financially.

Special purposed entities (SPE)

Special purposed entities (SPE) are consolidated in the group accounts

according to SIC 12 and they are consolidated, when the group has a

significant economic impact of the SPE. Definition of significant eco-

nomic impact is if the group stands behind the majority of the risks

which are related to the SPE and its assets or if it has the right to keep

the majority of the rewards in the SPE.

Acquisition with non-controlling interest

Acquisition with non controlling interest arise when less than 100%

is acquired. This kind of acquisition is reported as a proportion of the

acquired net assets. The acquisition is reported as a transaction within

equity i.e. between the owner of the parent company and the non-

controlling interest. Therefore no goodwill arise in this kind of trans-

actions. The change in non-controlling interest is based on the propor-

tional share of the net assets.

Translation of foreign operations

The functional currency of the parent company, as well as the reporting

currency, and the reporting currency of the Group is Swedish krona

(SEK). All foreign subsidiaries report in their functional currencies, the

currency used in the primary economic environment of the companies.

In consolidation, all balance sheet items have been translated into SEK

at the closing rate of exchange. Profit/loss items have been translated

using average exchange rates.

Transactions in foreign currency

Foreign currency transactions are converted to the functional currency

at the exchange rate prevailing on the transaction day. The functional

currency is the currency of the primary economic environment in which

the company generates and expends cash. Monetary assets and liabili-

GROUP

14 STENA AB 2013

ties in foreign currencies are converted to the functional currency at the

exchange rate prevailing on the closing date. Ex change differences which

arise are reported in the Income Statement. Non monetary assets and

liabilities which are reported at historical cost, are revaluated at trans-

action date. Non monetary assets and liabilities which are reported at

fair value are revalued to the functional currency at the exchange rate

ruling at the time for revaluation at fair value.

Segment reporting

Operating income is reported in such a manner as to correspond with the

internal reporting submitted to the Chief operating decision-maker. The

Chief operating decision-maker is the function responsible for the alloca-

tion of resources and the assessment of the operating segments’ results.

In the Group, this function has been identified as Stena AB’s Board of

Directors, which make strategic decisions.

The Group’s segments, its business areas, have implemented systems

and procedures to support internal control and reporting. This forms the

basis of the identification of primary risks and the varying returns that

exist in the business, and is based on the various business models for the

Group’s end clients. The segments are responsible for operating profit/

loss, EBITDA (operating income before amortisation) and for those assets

utilised in their operations, whilst net financial income, taxes and equity

are not reported per segment. Operating profit/loss and assets for the

segment are consolidated in accordance with the same principles as the

rest of the Group as a whole. Sales between segments take place on

market conditions and at market prices. The Stena Group’s business

areas and, thereby, its Segments are:

• Ferry operations

• Drilling operations

• Shipping operations

• Property operations

• New businesses – Adactum

Revenue recognition

Revenue includes the fair value of amounts received or to be received

regarding services and goods sold in the Group’s operating activities.

Revenue is reported excluding value added tax, returns and discounts

and after elimination of internal Group sales.

The Group reports revenue when the amount can be measured in a

reliable way, it is probable that future economic benefits will be gener-

ated to the Company and specific criteria have been fulfilled for each

of the Group’s operations. Revenue amounts are not considered to be

reliably measurable until all commitments regarding sales have been

met or have fallen due. The Group bases its judgements on historical

outcome, thereby considering the type of client, type of transaction,

and special circumstances in each individual case.

The Group’s shipping and drilling revenues are derived from charter

contracts. Revenue is recognised evenly within the charter period.

Provisions are made in advance for any ongoing loss contracts.

Revenues from the Group’s ferry operations consist of ticket sales,

onboard sales, and freight revenues and are recognised in the period

in which services are rendered.

Rental income from the Company’s investment properties opera-

tions is derived from leases and is recognised on a straight line basis

over the life of the leases.

Sales of goods are recognised at the date upon which the Group

company sells a product to the customer in accordance with the terms

of sale. Sales are usually paid for in cash or by credit card.

Contract assignments in progress from operations within the

Adactum Group are recognised according to the percentage of com-

pletion method on all of the assignments in which outcome can be

calculated in a satisfactory manner. Revenues and costs are reported

in the income statement in relation to the assignment’s degree of com-

pletion. The degree of completion is determined on the basis of assign-

ment costs incurred in relation to the estimated assignment costs for

the entire assignment. Anticipated losses are expensed immediately.

Customer Loyalty Programmes, addresses the accounting by Stena

Line and Blomsterlandet that operate customer loyalty programmes

under which the customer can redeem credits for awards such as free

or discounted goods or services. The fair value of the total consideration

received in the initial sales transaction is allocated between the award

credits and the sale of the goods or services. The revenue related to

the award credits granted is recognised in the income statement when

the risk of a claim being made expires.

Sales of vessels and investment properties are recognised in other

income. Revenue recognition takes place when all material benefits

and risks have been transferred to the buyer.

Interest income is recognised as income in the finance net distrib-

uted over the term with application of the effective interest method.

Dividend income is recognised when the right to payment is

received and reported in the financial net.

Tangible fixed assets

Tangible fixed assets are recognised in the balance sheet when, on

the basis of available information, it is likely that the future economic

bene fit associated with the holding accrues to the Group and the

acquisition cost of the asset can be reliably calculated.

Ports are carried at a revalued amount according to the revaluation

model in IAS 16, being its fair value at the date of revaluation less subse-

quent depreciation and impairment. If a revaluation result in an increase

in value, it is credited to other comprehensive income and accumulated

in equity under the heading “revaluation surplus”. A decrease arising as

a result of a revaluation are recognised as an expense.

Vessels, equipment and buildings used in business operations are

recorded at acquisition cost less accumulated depreciation and any

impairment charges. Acquisition expenditure is capitalised upon acqui-

sition. Repairs and maintenance costs for tangible fixed assets are

charged to the income statement for the year.

Dry-docking costs for vessels are capitalized and amortized over a

period of two to five years.

For vessels, the Company uses appraisals carried out by independent

vessel brokers for impairment assessment. If a review indicates that the

net book value of an asset exceeds its recoverable amount, discounted

cash flows based upon estimated capital expenses and future expected

earnings are utilised. Assets having a direct joint income, e.g. a ferry

CONT. NOTE 1

STENA AB 2013 15

route, the smallest cash generating unit is used. If a write-down

requirement arises on balance sheet date, the recoverable amount of

the asset is estimated and the asset is impaired to this value. Impairment

is reversed if any change is made to the calculations used to determine

recoverable amount.

Construction in progress includes advance payments, as well as

other direct and indirect project costs, including financial expenses,

which are capitalized on the basis of the actual borrowing cost.

Buildings used in business operations is split into buildings and land

and refer to properties used by the Company in its own operations.

Tangible fixed assets are depreciated according to plan, using the

straight-line method. The residual values and useful lives of the assets

are tested on every balance sheet date and adjusted when needed.

No depreciation is carried out regarding land.

The residual values are estimated to zero. All assets are divided to

components.

Depreciation takes place from the date upon which the asset is ready

for use and over the following periods:

Vessels:

Drilling rigs 20 years

Drilling rig vessels 20 years

Crude oil tankers 20 years

RoRo vessels 20 years

RoPax vessels 20 years

Superferries 20 years

LNG carriers 20 years

HSS vessels 10–20 years

Other tangible fixed assets:

Buildings 50 years

Port terminals 20–50 years

Windmills 20 years

Equipment 3–10 years

Investment property

Investment properties are reported at fair value in accordance with the

fair value model in IAS 40. Investment properties, that is properties

held in order to generate rental income or increase in value or a combi-

nation of these, are valued continuously with the fair value model

(estimated market value). These properties are initially valued at

acquisition cost. Fair value is based on the estimated market value on

balance sheet date, which means the value at which a property could

be transferred between well informed parties that are independent of

each other and that have an interest in the transaction being carried

out. Changes in fair value are reported in the income statement, with

an impact on changes in value of properties.

The term investment properties, which mainly includes residential

and office buildings, also includes land and buildings, land improve-

ments and permanent equipment, service facilities etc in the building

or at the site.

Sales and purchases of properties are reported when the risks and

rewards associated with ownership are transferred to the buyer from

the seller, which normally takes place on the day of taking possession

as long as this does not conflict with the conditions of the sales contract.

Profit or loss arising upon the sale or disposal of investment proper-

ties is composed of the difference between the net proceeds from sale

and the most recently determined valuation (carrying amount based on

the most recently determined translation to fair value). Income arising

from sales or disposals is reported in the income statement as net gain

on sale of assets.

In the event that Stena utilises a portion of a property for its own

administration, such a property will only be considered to be an invest-

ment property if an insignificant portion is used for administrative

means. In any other case, the property will be classified as a building

used in business operations, and be accounted for in accordance with

IAS 16 – Property, Plant & Equipment.

Additional expenses are added to the carrying amount only when

it is likely that future economic benefits associated with the asset will

accrue to the Company and when acquisition cost can be reliably

calculated. Other expenses are recognized as costs in the period in

which they arise. One decisive factor for the assessment of when an

additional expense may be added to the carrying amount is whether

this expense refers to the replacement of identified components, or

parts of these, in which case such expenses are capitalized. Expenses

are also added to carrying amount in cases where new components

are created.

The valuation of investment properties at fair value (assessed market

value) utilises an internal valuation model which has been quality

assured through the reconciliation of assumptions with external prop-

erty values, as well as through external valuation. The internal valua-

tion is determined on an earnings basis, which means that each indi-

vidual property’s net rental income is divided by the required return by

market yield for the property in question. Assumptions have been

made in the calculation of net rental income regarding operating and

maintenance expenses, as well as vacancies. These assumptions are

based on market assumptions of those cash flows. However, historical

outcome, budget and normalised costs have been a part of these con-

siderations. Different required returns have been utilised for different

markets and types of properties.

Intangible assets

Goodwill

Goodwill is comprised of the amount by which the acquisition cost

exceeds the fair value of the Group’s portion of the acquired subsidi-

ary’s identifiable net assets at acquisition date. Goodwill on the acqui-

sition of subsidiaries is recognized as an intangible asset. Goodwill is

tested annually for impairment and is recognized at acquisition cost

less accumulated impairment losses.

Impairment of goodwill is not reversed. Profit or loss on the disposal

of a unit includes the remaining carrying amount of the goodwill refer-

ring to the unit divested.

Goodwill is allocated to cash generating units during impairment

testing. This allocation refers to those cash generating units, determined

in accordance with the Group’s operating segments, which are expected

to benefit by the business combination in which the goodwill item arose.

GROUP

16 STENA AB 2013

Trademarks

Trademarks acquired are reported at fair value on acquisition date.

Amortisation is performed over periods of 10 respectively 40 years.

Trademarks have a definable useful lifetime and are reported at

acquisition value less accumulated amortization. Amortization takes

place from the date on which the trademark was acquired by the Stena

Group over its estimated useful lifetime, as follows:

Kvik 40 years

Ballingslöv 40 years

Sembo 10 years

IT investments

Acquired software is capitalized on the basis of acquisition and imple-

mentation costs. These costs are amortized over the asset’s useful life,

which is judged to be between three and five years, in accordance with

the straight line method. Useful life is reviewed on a yearly basis.

Distribution agreements

Distribution agreements are reported at acquisition cost, less accumu-

lated amortization. Amortization takes place according to the straight

line method over the asset’s estimated useful life of 10 years. Useful

life is reviewed on a yearly basis.

Rights to routes

Rights to routes is capitalized on the basis of acquisition and amortized

over the assets useful life, which is judged to be 20 years, in accordance

with the straight line method. Useful life is reviewed on a yearly basis.

Customer relations

Customer relations are reported at acquisition cost, less accumulated

amortization. Amortization of customer relations takes place according

to the straight line method over the asset’s estimated useful life of

5 years. Useful life is reviewed on a yearly basis.

Maintenance of intangible assets

Expenses for maintenance of intangible assets are expensed as they arise.

Impairment of non-financial assets

Assets with indeterminable useful lives, goodwill, are not amortized;

rather they are reviewed on a yearly basis with consideration of any

impairment requirements. Assets that are amortized or depreciated are

tested with consideration of impairment whenever events or changes

in circumstances indicate that the carrying amount may not be recover-

able. Impairment is carried out in the amount by which the asset’s car-

rying amount exceeds its recoverable amount. The recoverable amount

is the higher of the asset’s fair value, less selling expenses, and its value

in use. In the assessment of impairment requirements, assets are

grouped on the lowest level at which there exist separate identifiable

cash flows (cash generating units).

For other non-financial assets other than goodwill that have previ-

ously been impaired, an assessment is carried out on each balance

sheet date to determine whether a reversal should be made.

Borrowing expences

Borrowing expenses, for completing of so called qualifying assets, are

capitalized on the acquisition value of the qualifying asset. A qualified

asset is an asset which takes a certain amount of time to complete.

Borrowing expenses on loans specified for the qualifying asset are cap-

italized on the asset.

Accounting for subsidies

Any subsidies (government grants) received in conjunction with new

acquisitions of vessels, properties or port installations are reported as

a decrease of the acquisition cost; subsidies relating to operating activi-

ties reduce the corresponding costs. Recognition takes place when the

subsidy can be reliably calculated. For Swedish-flagged vessels em ployed

in international shipping activities, the company has received subsidies

equal to all security costs and income taxes payable by the employers

on behalf of employees who work on board such vessels. The amounts

received have reduced personnel costs.

Fixed assets held for sale

Fixed assets are classified as assets held for sale when their carrying

amounts will be recovered through a sales transaction and a sale is

considered highly likely. They are recognized at the lowest of book

value and fair value less selling costs if their carrying amount will be

recovered primarily through a sales transaction and not through

continuous usage.

Financial assets and liabilities

General

A financial instrument is any form of agreement which giving rise to

a financial asset in a company and a financial liability or equity instru-

ment in another company. Financial assets in the consolidated balance

sheet consist of cash and cash equivalents, trade debtors, other finan-

cial assets, shares and derivative assets. Financial liabilities are material-

ised through requirements regarding the repayments of cash or of

other financial assets. In the consolidated balance sheet, financial

liabilities consist of trade accounts payable, loans, financial leasing

liabilities, bonds and derivative liabilities.

Accounting

Financial assets and liabilities are reported in the balance sheet when

the Group becomes party to the instrument’s contractual terms. Finan-

cial assets and liabilities are reported on settlement date, with the

exception of derivatives, which are reported on trade date. Financial

instruments are initially reported at fair value, which usually corre-

sponds to acquisition cost on acquisition date. Transaction costs are

included in the acquisition cost of all financial instruments not valued

at fair value in the income statement. Netting of financial liabilities and

assets only takes place when there is a contractual possibility and when

the intention is to net the gross amounts of the liabilities or assets.

CONT. NOTE 1

STENA AB 2013 17

Financial expenses

Financial expenses are reported in the period in which they arise.

Financial expenses regarding new construction projects of vessels and

properties are capitalized as a portion of the acquisition cost. Expenses

for the financing of long-term loans and credits are deferred and

amortized over the expected term of the financing.

Derecognition

Financial assets are derecognized in the balance sheet when the agreed

rights to cash flows have ceased or been transferred and when essen-

tially all the risks and advantages associated with the ownership of the

financial asset have been transferred. Financial liabilities are derecog-

nized from the balance sheet when they have been extinguished.

Realized result is defined as proceeds from sales less the net book

value as of the previous year end.

Classification of financial assets

Financial assets in the Group are divided into the following categories:

• Financial assets at fair value through the income statement

– Trading

– Assets classified as financial assets at the acquisition date at fair

value through the income statement

• Financial assets held for hedging purposes

• Financial assets held to maturity

• Available-for-sale financial assets

• Loans receivable and trade debtors

The basis for classification is formed of the aim of the acquisition of

the financial instrument. The classification is carried out by senior

management on initial recognition date.

Financial assets at fair value through the income statement

Financial assets belonging to this category are valued and continuously

reported at fair value through the income statement.

The category is divided into two subcategories:

1) trading and 2) assets classified as financial assets at fair value

through the income statement at acquisition date. Trading consists of

financial assets acquired with the primary intention of being sold in the

short term and those derivative instruments to which hedge account-

ing is not applied. The trading shares are classified as short-term invest-

ments in the balance sheet and changes in fair value are reported in

the income statement under gains (loss) on securities.

Fair value option is applied, because the investments are managed

and their performance, are evaluated on a fair value basis in line with

the Groups investment policy. These assets are classified as Marketable

securities in the balance sheet and changes in fair value are reported in

the income statement under gains (loss) on securities.

Internally, the Group follows up and reports on these assets on the

basis of their fair values and, consequently, considers that this valuation

and recognition in the income statement and balance sheet provides

readers of the Financial Report with the most relevant information.

Financial assets, classified as financial assets at fair value through the

income statement at acquisition date, are classified as current assets if

they are expected to be realized within 12 months of balance sheet date.

Assets held to maturity

Held-to-maturity financial assets are non-derivative financial assets

with fixed or determinable payments and fixed maturities that the

Group’s management has the positive intention and ability to hold to

maturity. If the Group were to sell other than an insignificant amount

of held-to-maturity financial assets, the whole category would be

tainted and reclassified as available for sale. Held-to-maturity assets

are measured at amortized cost and interest revenue is recorded in the

income statement using the effective interest rate method. Held-to-

maturity financial assets are included in non-current assets, except for

those with maturities less than 12 months from the balance sheet date,

which are classified as current assets.

Assets in this category are classified as Investments in SPEs in the

balance sheet.

Loan receivables and trade debtors

Loans and receivables are financial assets that are not designated as

derivatives, that have fixed or fixable payments and that are not listed

on an active market. Receivables are reported under current assets,

with the exception of receivables with a maturity date later than 12

months after balance sheet date which are classified as financial fixed

assets. Loans receivables and trade debtors are listed in the balance

sheet under other receivables and trade debtors. Assets in this cate-

gory are valued at amortized cost, with allowances for bad debt losses

and loan losses, when applicable.

Available-for-sale financial assets

Investments in certain shares (with the exception of participations in

subsidiaries and associated companies) and bonds are categorised as

available-for-sale financial assets when the investments are not held

for trading. These assets are classified as Marketable securities or other

non-current assets in the balance sheet. Period changes in fair value,

with the exception of impairment charges, are reported in other com-

prehensive income for these instruments and are cumulated in the fair

value reserve which is a specific component of equity. When these

financial instruments are sold, the accumulated gains or losses are

reclassified through other comprehensive income and are recognized

in the income statement.

Assets in this category are recognised as other long-term securities,

other long-term assets and investments in securities.

Receivables and liabilities in foreign currency

Transactions in foreign currency are translated in accordance with

current exchange rates per transaction date.

Both in the individual Group companies and in the Group’s annual

accounts, receivables and liabilities in foreign currency are translated

at the closing rate of exchange. Related exchange rate differences on

current payments are included in operating income, while differences

GROUP

18 STENA AB 2013

in financial receivables and liabilities are reported among financial

items. All exchange rate differences affect net profit/loss for the year.

An exception is formed by that portion of the difference consisting of

an effective hedging of net investments, where recognition takes place

directly against comprehensive income.

Translation differences on non-monetary financial assets and liabili-

ties, such as equities held at fair value through the income statement,

are recognised in the income statement as part of the fair value gain

or loss. Translation differences on non-monetary financial assets, such

as equities classified as available for sale, are included in the available-

for-sale reserve in comprehensive income. The following currency

exchange rates have been applied in the Group’s annual accounts:

Average rates

2012 2013 Change in %

USD 6.7754 6.5140 (4)

GBP 10.7340 10.1863 (5)

EUR 8.7053 8.6494 (1)

Closing rates

2012 2013 Change in %

USD 6.5104 6.4279 (1)

GBP 10.5865 10.6529 1

EUR 8.5843 8.8567 3

Financial liabilities

Financial liabilities in the group are divided into the following categories:

• Financial liabilities at fair value through the income statement,

held for trading

• Other financial liabilities

The basis for classification is formed based on the purpose of the

acquisition of the financial instrument. The classification is carried out

by senior management on initial recognition date.

Other financial liabilities

Other financial liabilities in the balance sheet consist of senior notes,

other long-term interest bearing debt, other non-current liabilities,

short-term interest bearing debt, trade accounts payable, debt in SPEs

and other current liabilities.

Financial liabilities are recognised initially at fair value, net of trans-

action costs incurred. Financial liabilities are subsequently stated at

amortized cost; any difference between the proceeds (net of transaction

costs) and the redemption value is recognised in the income statement

over the period of the liabilities using the effective interest method.

The liabilities in the balance sheet, long-term and short term debt,

debt in SPEs and senior notes are initially reported at fair value, net

after transactions costs and, subsequently, at amortized cost.

Loan amounts are reported as liabilities in the balance sheet,

where liabilities with a term of over 12 months are reported as long-

term and all others as short-term.

The early redemption of liabilities reduces the outstanding liabili-

ties by a nominal principal loan amount. Any premiums or discounts

are taken up as income.

Derivative financial instruments and hedge accounting

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

risk and foreign exchange risk related to net assets in foreign opera-

tions as well as in highly probable forecasted transactions in foreign

currency. The Group uses options and swaps to hedge oil price risk,

interest rate swaps to hedge interest rate risk, foreign currency forward

contracts to hedge foreign exchange risk.

Derivatives are initially recognized at fair value on the date a deriva-

tive contract is entered into and are subsequently remeasured at their

fair value. The method of recognising the resulting gain or loss de pends

on whether the derivative is designated as a hedging instrument, and if

so, the nature of the item being hedged. The group designates certain

derivatives as either:

(a) hedges of a particular risk associated with a recognised asset or

liability or

(b) a highly probable forecast transaction (cash flow hedge); or

(c) hedges of a net investment in a foreign operation

(net investment hedge).

The group documents at the inception of the transaction the relation-

ship between hedging instruments and hedged items, as well as

its risk management objectives and strategy for undertaking various

hedging transactions. The group also documents its assessment, both

at hedge inception and on an ongoing basis, of whether the derivatives

that are used in hedging transactions are highly effective in offsetting

changes in fair values or cash flows of hedged items. The effectiveness

of a hedge has to be in the range of 80%–125%.

Currency swap agreements are valued at market rates, unrealised

exchange gains are recognised in the balance sheet as current receiva-

bles, and unrealised exchange losses are presented as current liabilities.

The fair values of various derivative instruments used for hedging

purposes are disclosed in Note 31. Movements on the hedging reserve

in shareholders’ comprehensive income are shown in the Consolidated

Statements of Changes in Shareholders Equity. The full fair value of a

hedging derivative is classified as a non-current asset or liability when

the remaining hedged item is more than 12 months, and as a current

asset or liability when the remaining maturity of the hedged item is

less than 12 months.

Cash flow hedging

For the Stena Group’s hedges of oil price risk in bunker-oil (bunker

hedges), the cash flow interest rate risk in floating rate debt- and

foreign currency risk in highly probable forecasted purchase and/or

sales transactions, cash flow hedge accounting is applied. The hedged

item consists of a highly probable forecast consumption of bunker

fuels, highly probable forecast cash flow in foreign currencies and the

floating interest rate cash outflows of issued debt instruments.

The Group is exposed to the price of bunker fuels for vessel operations

and uses a fixed price contract, swaps and options to hedge its oil price

CONT. NOTE 1

STENA AB 2013 19

risk. Hedging contracts are regularly entered into, so as to match the

underlying cost of delivery of bunker fuel. Hedging instruments (oil

options and futures in the case of bunker hedges and interest rate

swaps in cash of interest rate hedges), forming an effective hedge, are

measured at fair value with changes in fair value regards to the hedged

risk reported through other comprehensive income and is cumulated in

the hedge reserve until the hedged item affects the income statement,

that is, when the purchase takes place or when the interest rate pay-

ment is made. In conjunction with the purchase, when the accumu-

lated fair value of the hedging instruments is removed from the hedg-

ing reserve and is reclassified through other comprehensive income it

is, reported in item direct operating expenses in the income statement

as an adjustment of the cost of bunker fuel for the current period or as

part of interest rate expense in cash of interest rate hedges.

Positive or negative fair values of the derivatives are accounted for

as an other non-current asset or other non-current liability. The short-

term part of the hedged item is accounted for as other current receiva-

bles or other current liabilities.

The accounting for cash flow hedges of interest rate risk and foreign

currency risk in highly probable forecasted transactions in foreign cur-

rency follows the same principles as the above described policy for the

bunker hedges.

Changes in fair value of the hedging instruments are accounted for

through other comprehensive income and are cumulated in the

hedged reserve. The cumulative changes in fair values are reclassified

through other comprehensive income into the income statement in the

same period as the hedged items affects the income statement and is

presented in the same line item as the hedged item.

It is Group’s policy that duration and dates of maturity for financial

instruments which are held and classified as hedge contracts for

interest – and FX exposure should correspond with the underlying

exposure’s dates of maturity.

Results of operations from all types of financial derivative instru-

ments, with the exception of those contracts referring to financial

trading, are reported as an adjustment of the revenue or costs for

the period and for those transactions the contracts are designated

to hedge.

When hedge accounting is terminated but the hedged item is still

expected to occur, the previous cumulated unrealised changes in fair

value are continued to be recognised in the fair value reserve until the

hedge item is recognised in the income statement. Then the change in

fair value is reclassified through other comprehensive income into the

in come statement.

If an underlying asset or liability is sold or redeemed, the pertaining

financial instruments are market valued and the result is reported as an

adjustment of the market or redemption value of the underlying asset

or liability.

Hedging of net investments

Hedging of net investments in foreign operations is reported in the

same manner as cash flow hedges. The gains or losses attributable to

the effective part of the hedging are reported through other compre-

hensive income and is cumulated in the translation reserve. Gains or

losses attributable to the ineffective portion of hedging are directly

reported in the income statement as financial items.

Accumulated gains or losses are reclassified through other compre-

hensive income and reported in the income statement when the for-

eign operations, or portions of these operations, are sold.

Fair value determination of financial instruments

valued at fair value in the balance sheet

(i) Financial instruments listed on an active market

(level 1 measurement)

For financial instruments listed on an active market, fair value is deter-

mined on the basis of the asset’s listed buying current bid-rate on bal-

ance sheet date, with no addition for any transaction costs (for exam-

ple brokerage) on acquisition date. A financial instrument is considered

to be listed on an active market if the listed prices are easily available on

a stock exchange, with a trader, broker, industry organization, company

providing current price information or supervisory authority, and if these

prices represent actual and regular market transactions carried out under

arm’s length conditions. Any future transaction costs from disposals are

not considered. The fair value of financial liabilities is determined on

the basis of the listed selling rate.

(ii) Valuation techniques using observable market data

(level 2 measurement)

If the market for a financial instrument is not active, the Company

determines fair value by utilising a valuation technique. The valuation

techniques employed are based, as far as possible, on market informa-

tion, with company specific information being used to the least extent

possible. The Company calibrates valuation techniques at regular inter-

vals and tests their validity by comparing the outcome of these valu-

ation techniques with prices from observable current market trans-

actions in the same instruments. The valuation models applied are

cali brated so that fair value on initial recognition date amounts to the

transaction price, with changes in fair value subsequently being contin-

uously reported on the basis of changes in the underlying market risk

para meters.

(iii) Valuation techniques using significant unobservable data

(level 3 measurement)

If there are no similar financial instruments on a quoted market and no

observable pricing information from the market, the valuation is based

on an estimated discounted cash flows. Fair value is determined by

hypothesizing what a market price would be if there was a market

i.e. calculated fair value is a prediction instead of an observation.

Offsetting of Financial Instruments

Financial assets and liabilities are accounted at gross amount in the

balance sheet. See Note 31 for information about financial instruments

subject to offsetting, i e where there is a legal right to offset the

accounted amount or is an intention to simultaneously realize the

asset and liability.

GROUP

20 STENA AB 2013

Impairment of financial assets

The Group makes an assessment on each balance sheet date regarding

whether there exists any objective evidence that an impairment require-

ment has arisen for a financial asset or a group of financial assets. In

regards of shares classified as available-for-sale assets, any significant

or extended decline in the fair value of a share to a level below its

acquisition value is regarded as an indication that an impairment

requirement exists.

If such evidence is present for available-for-sale financial assets,

the accumulated loss – calculated as the difference between acquisi-

tion cost and current fair value, less any previous impairment charges

reported in the income statement – is reclassified from equity to the

income statement. Impairment of equity instruments, which is reported

in the income statement, is not reversed through the income statement.

Reversal of impairment of bonds is recorded in the Income Statement

on the same line as the impairment. Bonds are impaired when insol-

vency exists for the counterpart. Reversal of impairment of bonds is

recorded in the Income Statement on the same line as the impairment.

Income taxes

General

The Group’s total tax consists of current tax calculated on taxable

profit and deferred tax. Current tax and changes in deferred tax are

reported in the income statement, with the exception of those

deferred taxes reported directly against other comprehensive income.

Deferred tax includes unutilised deficits from the translation of tax

assessment to current tax rates, and other temporary differences

between book residual value and fiscal residual value. The tax value of

unutilised loss carry-forward is capitalized to the degree it is probable

that this will entail lower tax payments in the near future.

Significant assessments are required from management in the calcu-

lation of income tax liabilities, income tax receivables and deferred tax

for provisions and receivables. This process requires the assessment of

the Group’s tax exposure of current tax and the adoption of temporary

differences created by various taxation and accounting regulations. In

particular, management must assess the likelihood that deferred tax

assets can be settled against surpluses in future tax assessment see

also Note 2.

Current tax

All companies within the Group calculate income tax in accordance

with the tax regulations and ordinances in force in those countries

where the profit is taxed.

Deferred taxes

The Group uses the balance sheet method to calculate deferred taxes.

The balance sheet method implies that deferred tax assets and liabilities

are valued according to the tax rates adopted or announced on bal-

ance sheet date and which are expected to apply to the period in

which the acquisition is executed or the liability settled. The tax rates

are applied to the existing differences between the accounting or fiscal

value of an asset or liability, as well as to loss carry forwards.

These loss carry forwards can be used to reduce future taxable income.

Deferred tax assets are reported to the extent that it is probable

that a sufficient taxable surplus will exist to allow for accounting of

such receivables.

Leasing

Any leasing agreements in which the economic risks and benefits

associated with ownership are essentially transferred to the lessee are

defined as financial leases.

Assets leased under financial leasing agreements are classified in the

consolidated balance sheet as tangible fixed assets. The commitment to

pay future minimum lease payments is reported as long and short-term

liabilities. The assets are depreciated according to plan, while rental

payments are reported as interest and repayments of liabilities.

Other leased assets are reported as operating leasing agreements,

which implies that the leasing charges are expensed over the term of

the lease on the basis of utilisation.

Inventories

Inventories are valued at the lower of acquisition cost, according to the

first-in, first-out method (FIFO), or net realisable value, less deductions

for any obsolescence. The acquisition cost for finished goods, products

in process and work in progress consists of raw materials, direct salaries,

other direct expenses, and related indirect manufacturing expenses

(based on normal manufacturing capacity). The net realisable value is

the estimated sales price in the operating activities, with deductions for

applicable variable selling expenses. Inventories mainly include bunker

fuel, spare parts, merchandise for onboard sale, products for bars and

restaurants onboard the vessels and finished goods and products in pro-

gress. Costs for inventories include transfers from comprehensive income

of any gains or losses from cash flow hedges that comply with the

conditions for hedge accounting as regards purchases of raw material.

Trade debtors

Trade debtors are reported at amortized cost reduced by any provision

for uncollectibility. A write-down of trade debtors is made when there

exist objective evidence that the Group will be unable to receive all

the amounts that are due in accordance with the original conditions

of the receivable. The amount of the allocation consists of the differ-

ence between the asset’s carrying amount and the present value of

estimated future cash flows, discounted by the effective interest rate.

The allocated amount is reported in the income statement.

Accounts payable

Accounts payable are initially reported at fair value and subsequently

at amortized cost.

Trade payables are obligations to pay for goods or services that have

been acquired in the ordinary course of business from suppliers. Accounts

payable are classified as current liabilities if payment is due within one

year or less. If not, they are presented as non-current liabilities.

Cash and cash equivalents

Cash and cash equivalents include cash and bank balances with an

original maturity of three months or less.

CONT. NOTE 1

STENA AB 2013 21

Employee benefits

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

predominantly settled by the means of regular payments to independent

authorities or bodies thereby assuming pension commitments towards

the employees – that is to say, through so-called defined contribution

plans. The Company thus pays set fees to a separate legal entity and

has no commitment to pay any further fees. Expenses are charged to

the Group’s income statement, as administration costs, at the rate that

the benefits are earned. The remaining portion of post-employment

benefits consists of defined benefit plans, in which the commitments

remain with the Company. Remuneration to employees and former

employees is paid on the basis of salary at retirement date and number

of years of service. The Company bears the risk for ensuring that the

remuneration undertaken is paid. For defined benefit plans, the

Company’s costs and the value of outstanding commitments on

balance sheet date are calculated on the basis of actuarial assumptions

intended to determine the present value of issued commitments.

The amount recognized in the balance sheet is the net total of the

estimated present value of the commitments and the fair value of the

plan assets, either as a provision or as a long-term financial receivable.

In cases in which a surplus in a plan cannot be fully utilised, only

that portion of the surplus that the company can recover through

decreased future contributions or repayments is recognised. The setoff

of a surplus in a plan against a deficit in another plan is allowed only if

a company has the right to utilise a surplus in a plan to settle a deficit

in another plan, or if the commitments are to be settled on a net basis.

The pension expense and the pension commitment for defined bene-

fit pension plans are calculated annually by independent actuaries.

The commitment consists of the present value of expected future pay-

ments. The most important actuarial assumptions are stated in Note 22.

Actuarial gains and losses may result upon determination of the pre-

sent value of the defined benefit commitment and the fair value of

plan assets. These result either from differences between the actual

return and expected returns, or changes in assumptions. Changes in

the present value of the obligations due to revised actuarial assump-

tions and experience adjustments on the obligation are recorded in

other comprehensive income as remeasurements. The actual return

less calculated interest income on plan assets is also included in the

other comprehensive income as remeasurements. Past-service costs are

recognised immediately in income for the period. The described account-

ing principle is only applicable for group accounting. The parent com-

pany and the subsidiaries apply local rules and accounting principles.

Provisions

Generally, provisions are reported when there is an undertaking as a

result of a historical event, in which it is probable that an outflow of

resources will be required to settle the undertaking and the amount

can be reliably estimated. Provisions are made in the amount that rep-

resents the best estimate of the amount required to settle the existing

commitment on the balance sheet date. Where there is doubt in the

estimates referring to forthcoming events outside the Group’s control,

the actual outcome may differ significantly.

When a commitment does not meet the criteria for recognition in

the balance sheet, it may be considered to comprise a contingent liabil-

ity and be disclosed. These commitments derive from historical events

and their existence will be confirmed only when one or several uncer-

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

take place or fail to take place. Contingent liabilities also include exist-

ing commitments where an outflow of resources is not likely or a suffi-

ciently reliable estimate of the amount cannot be made.

New IFRS issued but not effective for the financial year

beginning 1 January 2013 and not early adopted

The following standards have been adopted by the group for the first

time for the financial year beginning on or after 1 January 2013 and

have a material impact on the group:

– IFRS 10, ”Consolidated financial statements” builds on existing prin-

ciples by identifying the concept of control as the determining factor in

whether an entity should be included within the consolidated financial

statements of the parent company. The standard provides additional

guidance to assist in the determination of control where this is difficult

to assess. The Group will apply IFRS 10 for the accounting year com-

mencing on 1 January 2014. The Group has not yet evaluated the full

impact on the financial report.

– IFRS 11, “Joint arrangements” focuses on the rights and obligations

of the parties to the arrangement rather than its legal form. There are

two types of joint arrangements: joint operations and joint ventures.

Joint operations arise where the investors have rights to the assets and

obligations for the liabilities of an arrangement. A joint operator

accounts for its share of the assets, liabilities, revenue and expenses.

Joint ventures arise where the investors have rights to the net assets of

the arrangement; joint ventures are accounted for under the equity

method. Proportional consolidation of joint arrangements is no longer

permitted. The Group has not yet evaluated the full impact on the

financial report.

– IFRS 12, “Disclosures of interests in other entities” includes the dis-

closure requirements for all forms of interests in other entities, includ-

ing joint arrangements, associates, structured entities and other off

balance sheet vehicles. The Group will apply IFRS 12 for the accounting

year commencing on 1 January 2014. The Group has not yet evaluated

the full impact on the financial report.

– IFRS 9, “Financial instruments”, addresses the classification, measure-

ment and recognition of financial assets and financial liabilities. IFRS 9

was issued in November 2010 and October 2011. It replaces the parts

of IAS 39 that relate to the classification and measurement of financial

instruments. IFRS 9 requires financial assets to be classified into two

measurement categories: those measured as at fair value and those

measured at amortised cost. The determination is made at initial rec-

ognition. The classification depends on the entity’s business model for

managing its financial instruments and the contractual cash flow char-

acteristics of the instrument. For financial liabilities, the standard

retains most of the IAS 39 requirements. The main change is that, in

cases where the fair value option is taken for financial liabilities, the

part of a fair value change due to an entity’s own credit risk is recorded

GROUP

22 STENA AB 2013

2. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTSEstimates and judgements are evaluated continuously and are based

on historical experience and other factors, including expectations of

future events that are considered reasonable under the prevailing

circumstances.

The Board of Directors and Company management make estimates

and assumptions concerning future developments in conjunction with

the preparation of the annual accounts, in accordance with generally

accepted accounting principles. The resulting accounting estimates

will, by definition, rarely be equal to the actual results. Those estima-

tions and assumptions implying a significant risk for material adjust-

ments in the carrying amounts of assets and liabilities during the next

financial period are discussed below.

a) Impairment testing for intangible assets

According to IFRS, intangible assets are to be defined as having either

definite or indefinite lives. Intangible assets with indefinite useful lives

are not amortized but instead tested annually for impairment. Good-

will, according to IFRS, has by definition an indefinite useful life and is

therefore not amortized. Acquired trademarks have been deemed to

have definite useful lives and are amortized over a period of 10 respec-

tively 40 years.

Assets with indefinite useful lives

Goodwill is subject to annual impairment testing according to the

described accounting principle in Note 1. The recoverable amount for

cash-generating units have been determined by calculating value in

use. These calculations require the use of estimates which affects

future cash flows and the determination of a discount rate, see Note 9.

As of 31 December 2013, the net booked value of goodwill amounts

to MSEK 2,372 as compared to MSEK 2,201 as of 31 December 2012.

Assets with definite lives

Acquired trademarks rights to routes and other intangible assets which

are amortized are tested annually for impairment when there are indi-

cators that the intangible asset should be impaired. Important indica-

tors are:

– Significant decline in the economic environment.

– Decline of the operating result compared to historic and budgeted

operating results.

See also Note 9.

in other comprehensive income rather than the income statement,

unless this creates an accounting mismatch. The group is yet to assess

IFRS 9’s full impact. The Group will also consider the impact of the

remaining phases of IFRS 9 when completed by the Board.

There are no other IFRSs or IFRIC interpretations that are not yet eff-

ect ive that would be expected to have a material impact on the Group.

Parent Company accounting principles

The Parent Company applies the Swedish Annual Accounts Act and the

Swedish Financial Reporting Board’s recommendation RFR 2, Accounting

for Legal Entities.

The Parent Company primarily applies the principles regarding con-

solidated financial statements described above. The discrepancies

arising between the principles applied by the Parent Company and the

Group result from limitations in the possibilities of applying IFRS in the

Parent Company due to the Annual Accounts Act and, in some cases,

due to taxation legislation.

The most significant differences between the accounting principles

applied by the Group and the Parent Company are shown below.

The Parent Company applies RFR 2, which includes the exception in

the application of IAS 39, which concerns accounting and valuation of

financial contracts of guarantee in favour of subsidiaries and associated

companies. Available for sale shares are accounted according to ÅRL

4:14d. Valuation changes in available for sale shares are accounted

for in the finance net in the Income Statement. Hedge accounting is

not applied.

Shares in subsidiaries are recorded at acquisition cost, reduced by

any impairment.

Group contributions are accounted for in the income statement

after the financial net.

In the Parent Company, in accordance with the Swedish Annual

Accounts Act, the equity is split between restricted and unrestricted equity.

CONT. NOTE 1

STENA AB 2013 23

As of 31 December 2013, the net book value of trademarks right to

routes and other intangible assets amounts to MSEK 1,783, as com-

pared to MSEK 1,708 as of 31 December 2012.

b) Impairment testing of vessels

Twice a year, or if an indication of an impairment requirement exists,

the Group makes an assessment of whether or not a write-down

requirement exists as regards the value of vessels. See further the

description under Note 1, “Impairment of non-financial assets”.

The recoverable amount is determined on the basis of external valu-

ations and calculations of value in use where impairment indications

has been found. These calculations are based on estimated future cash

flows.

c) Retirement benefits

The Group sponsors defined benefit pension plans in the United Kingdom,

Sweden and the Netherlands. The pension calculations are based on

actuarial assumptions about e g discount rate, mortality rate, inflation

and future pension and salary increases. Changes in assumptions directly

affect the present value of the defined benefit obligation and costs and

revenues associated to pensions. An analysis of sensitivity of the most

essential assumptions is presented in Note 22, Employee benefits.

d) Deferred taxes

In the preparation of the financial statements, Stena prepares a cal cu-

lation of income tax, including a calculation of every fiscal area in

which the Group operates, as well as of deferred taxes attributable

to temporary differences.

Deferred tax assets that are primarily attributable to loss carry for-

wards and temporary differences are reported if the tax assets can be

expected to be recovered through future taxable income. Changes in

the assumptions regarding forecast future taxable income, as well as

changes in tax rates, may result in significant differences in the valua-

tion of deferred taxes.

e) Provisions

Generally, provisions are reported when there is an undertaking as

the result of a historical event, where it is likely that an outflow of

resources will be required to settle the undertaking and a reliable

amount can be reliably estimated.

Provisions are made in the amount that represents the best estimate

of the amount required to settle the existing commitment on balance

sheet date. Where there is doubt in the estimates referring to forth-

coming events outside the Group’s control, the actual outcome may

differ significantly.

When a commitment does not meet the criteria for reporting in the

balance sheet, the amount can be considered to comprise a contingent

liability and be disclosed. These commitments originate from events that

have taken place and their existence will be confirmed only when one

or several uncertain future events, which do not lie entirely within the

Group’s control, take place or fail to take place. Contingent liabilities also

include present commitments where an outflow of resources is not likely

or a sufficiently reliable estimate of the amount cannot be made.

f) Fair value of financial instruments

The Group calculates discounted cash flows for different available-for-

sale financial assets which are not traded on an active market.

g) Valuation of investment properties

The fair value of an investment property can only assertively be set at

the date of sale. The valuation of investment properties is based on

accepted principles and assumptions, therefore, the fair value is not the

exact value but an estimate. In a normal market the fair value of a

property is within a range of +/–5% to 10% and in a less liquid market

the range can be larger. For the Group a fair value within the range of

+/–5% is equal to +/– MSEK 1,392.

GROUP

24 STENA AB 2013

We are active internationally, primarily in the areas of ferry operations,

offshore drilling, shipping, real estate and new businesses. There are

no significant transactions between the operating segments.

Ferry operations are conducted in Scandinavia, the North Sea, the Irish

Sea and the Baltic Sea under the “Stena Line”, Scandlines and HH fer-

ries brand name in Scandinavia, the UK, Germany, Estonia, Poland, the

Netherlands and Ireland. We are one of the world’s largest ferry opera-

tors. The business currently consists of 22 strategically located ferry

routes, 40 vessels, and six ports in Scandinavia, the United Kingdom

and the Netherlands.

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

sists primarily of ticket sales for passengers and private cars, package

tours and hotel sales; (ii) onboard sales, which consists primarily of

cabin occupancy, retail sales, restaurants, bars, arcades, gaming and,

on our Norway–Denmark route, duty and tax free sales; and (iii) freight,

which consists primarily of trailer and truck transportation. Direct oper-

ating expenses for ferry operations consist mainly of personnel costs,

costs of goods sold on the vessels, bunker fuel costs, vessel charter

costs, commissions, package tour costs and other related costs.

Drilling is operated through Stena Drilling, headquartered in Aberdeen,

Scotland. We are one of the world’s leading companies in the develop-

ment and operation of offshore drilling rigs and drillships. We currently

own and operate two third generation and one fifth generation semi-

submersible drilling rigs and four sixth generation ultra-deepwater

drillships whereof one ice-classed vessel.

Drilling revenues consist of charter hires for drilling rigs and drillships.

Direct operating expenses for drilling consist primarily of personnel

costs, insurance, maintenance and catering costs.

Shipping operations consists of the ownership and chartering of crude

oil and petroleum product tankers and Roll-on/Roll-off vessels. To sup-

port these activities, we are also engaged in the design, purchase, sale,

management and crewing of such vessels.

Stena Bulk is one of the world’s leading tanker shipping companies. We

develop pioneering tankers to meet the customers’ need for safe trans-

portation and innovative logistics. We currently control a fleet of approxi-

mately 80 tankers and are active in all segments of the tanker market.

Stena RoRo provides vessels, innovative solutions and project manage-

ment. Our customers are operators and ship owners around the world.

Northern Marine Management (“NMM”) is the Company’s interna-

tional ship management company based in Glasgow, Scotland, with a

world-wide customer base. With an extensive portfolio of clients and

a wide range of vessels under management, NMM is a market leader

in quality services. NMM operates a diverse high-tech fleet approxi-

mately 100 ships from its worldwide network of offices including

Aberdeen, Gothenburg, St Petersburg, Hamburg, Houston, Manila,

Mumbai, Singapore and Glasgow.

Stena Teknik is a common resource for all maritime areas within our

group. The operation consists of new construction and conversion pro-

jects, marine technical advice and purchasing, as well as research and

development within marine areas.

3. SEGMENT INFORMATION

Shipping revenues consist primarily of charter hires for owned and

chartered in vessels and management fees for vessels managed by us.

Direct operating expenses for shipping consist primarily of vessel

charter costs, fuel costs, personnel costs, insurance and other related

vessel costs.

Real Estate operations relate to investments through unrestricted

subsidiaries in residential and commercial real estate. The properties

are mainly located in Sweden and the Netherlands.

We own a total of 2.0 million sqm, mainly in Sweden, about

192,000 sqm are managed on behalf of affiliated companies. The

property portfolio consists of approximately 20,700 apartments and

commercial properties. We are one of Sweden’s largest privately-

owned property companies.

Real estate revenues consist of rents for properties owned and

management fees for properties managed by us. Real estate expenses

consist primarily of maintenance, heating and personnel costs.

New Businesses – Adactum include long-term investments in listed as

well as private companies, in new businesses outside our traditional

lines of business through our unrestricted subsidiary Stena Adactum.

Our objective is to create value in industries outside of our core busi-

ness by building strong, profitable companies that can create platforms

for new business opportunities within the group. As of 31 December

2013 Stena Adactum had direct investments in five private companies,

(of which 4 are fully owned and 1 owned to 63%) and two listed asso-

ciated companies. The five subsidiaries are all operating in different

range of businesses:

• “Blomsterlandet” through which the Company is creating a chain for

gardening products of retailers with one of Sweden’s most extensive

range of indoor and outdoor plants.

• “Envac” which operates automated household and municipal waste

collection systems with activities in 30 countries.

• “Stena Renewable” through which the Company commence success-

ful operations of Sweden’s largest land-based wind power generating

plan, in Sweden. In total 86 wind power systems (windmills) have

been installed and are in operation.

• “Ballingslöv” which is an international group in the field of kitchens,

bathrooms and storage products with an ambition to become one of

the leading players in the European market. The Company has one

manufacturing site in Ballingslöv, one in the United Kingdom and five

in Denmark.

• “Mediatec” is one of the leading companies in Europe within Media

technology such as big screens and other technical solutions

at fairs and events.

Other operations includes non-allocated central administration costs.

Primary measures of profitability for all these segments are “Income

from operations” and “EBITDA”. These measurements are also the

information reported to the Company’s Chief operating decision-

maker. In the Group this function has been identified as Stena AB’s

Board of Directors, which make strategic decisions.

STENA AB 2013 25

Income from operations by segment

Years ended 31 December

MSEK 20123) 2013

Ferry operations

Operations 36 270

Net gain on sale of vessels 2

Total ferry operations 36 272

Drilling

Operations 1,761 1,561

Net gain on sale of vessels 14

Total Drilling 1,775 1,561

Shipping operations

RoRo operations (41) (65)

Net gain on sale of vessels (5) 23

Total RoRo (46) (42)

Tanker operations (38) (99)

Impairment charges1) (132)

Net gain on sale of vessels 15

Total Tanker (155) (99)

LNG operations 329 412

Total LNG 329 412

Other shipping operations (18) (118)

Total shipping2) 110 153

Property

Operations 1,406 1,512

Net valuation on investment properties 14 224

Net gain on sale of investment properties 66 51

Total property 1,486 1,787

New Businesses – Adactum

Operations 319 440

Total New Businesses – Adactum 319 440

Other (325) (326)

Income from operations 3,401 3,887

1) Impairment charges of MSEK 132 in 2012, to estimated value in use, which are included in the operating expenses for the tanker operation, were recorded for the shares in the associated company Paradise Holding

2) Income from operations include result from joint ventures (see Note 15) of MSEK 57 and MSEK 94 in 20123) 2012 has been restated due to the revised accounting standard for pensions, IAS 19 Employee benefits, see Note 1

GROUP

26 STENA AB 2013

CONT. NOTE 3 Reconciliation between EBITDA and Income from operations by segment

Years ended 31 december

MSEK 20121) 2013

Ferry operations EBITDA 1,274 1,525

Depreciation and amortization (1,238) (1,253)

Income from operation 36 272

Drilling EBITDA 3,424 3,335

Depreciation and amortization (1,649) (1,774)

Income from operation 1,775 1,561

Shipping operations EBITDA 768 856

Depreciation and amortization (658) (703)

Income from operation 110 153

Property EBITDA 1,477 1,568

Net valuation of investment properties 14 224

Depreciation and amortization (5) (5)

Income from operation 1,486 1,787

New Businesses – EBITDA 506 816

Adactum Depreciation and amortization (187) (376)

Income from operation 319 440

Other EBITDA (313) (301)

Depreciation and amortization (12) (25)

Income from operation (325) (326)

Total EBITDA 7,136 7,799

Net valuation of investment properties 14 224

Depreciation and amortization (3,749) (4,136)

Income from operation 3,401 3,887

Depreciation and amortization by segment

Years ended 31 December

MSEK 2012 2013

Ferry operations 1,238 1,253

Drilling 1,649 1,774

Shipping operations RoRo vessels 266 282

Tanker operations 118 139

LNG 263 254

Other shipping 11 28

Total shipping 658 703

Property 5 5

New Businesses – Adactum 187 376

Other 12 25

Total 3,749 4,136

1) 2012 has been restated due to the revised accounting standard for pensions, IAS 19 Employee benefits, see Note 1

STENA AB 2013 27

Depreciation and amortization expense consists of the following components

Years ended 31 December

MSEK 2012 2013

Vessels 3,070 3,330

Equipment 422 498

Buildings and land 39 42

Ports 82 119

Total tangible fixed assets 3,613 3,989

Intangible assets 136 147

Total 3,749 4,136

Depreciation and amortization expense includes amorti zation of assets under capitalized leases amounting to MSEK 39 and MSEK 681 for the years

ended 31 December 2013, and 2012, respectively.

Investments in tangible fixed assets by segment

Years ended 31 December

MSEK 2012 2013

Ferry operations 1,655 344

Drilling 5,895 3,361

Shipping operations RoRo vessels 616 674

Tanker operations 179 415

LNG operations 51 19

Other shipping 28 22

Total shipping 874 1,130

Property 1,405 1,104

New Businesses – Adactum 1,247 1,080

Other 1 33

Total 11,077 7,052

Total assets by segment

As of 31 December

MSEK 20121) 2013

Ferry operations 17,779 17,917

Drilling 26,060 27,659

Shipping operations RoRo operations 2,852 2,725

Tanker operations 2,522 2,827

LNG operations 4,325 4,037

Other shipping operations 633 724

Total shipping 10,332 10,313

Property 28,237 29,969

New Businesses – Adactum 8,556 9,534

Other 13,936 12,820

Total 104,900 108,212

1) 2012 has been restated due to the revised accounting standard for pensions, IAS 19 Employee benefits, see Note 1

GROUP

28 STENA AB 2013

Geographic information

The Groups shipping operations within Stena RoRo, Stena LNG and

Stena Bulk are mainly conducted between ports all over the world by

short- and long-term contracts. These activities are not allocated to a

geographic area. The ferry operations and the property operations are

conducted in Scandinavia and the rest of Europe. The Company’s drilling

operations are conducted in the North Sea (Scandinavia and Europe,

respectively) but also in markets outside Europe. The Company´s invest-

ments in SPEs are included in Other markets.

Total revenue per geographic area

Years ended 31 December

MSEK 2012 2013

Scandinavia 12,469 13,164

Europe, other 8,510 8,085

Other markets 3,983 6,594

Shipping 2,426 2,397

Total 27,388 30,240

Total assets per geographic area

As of 31 December

MSEK 20121) 2013

Scandinavia 36,682 39,492

Europe, other 30,070 29,634

Other markets 11,773 12,610

Shipping 26,375 26,476

Total 104,900 108,212

1) 2012 has been restated due to the revised accounting standard for pensions, IAS 19 Employee benefits, see Note 1

4. SALE OF TANGIBLE FIXED ASSETSYears ended 31 December

MSEK 2012 2013

Vessels Cash proceeds from sale of vessels 163 335

Net book value of vessels sold (139) (310)

Net gain on sale of vessels 24 25

Investment properties Cash proceeds from sale of properties 445 295

Net book value of properties sold (379) (244)

Net gain on sale of properties 66 51

Total Cash proceeds from sale of vessels and property 608 630

Net book value of assets sold (518) (554)

Total gain 90 76

Total cash proceeds include sales costs of MSEK 2 and MSEK 4, which is not included on the line “cash proceeds from sale of tangible fixed assets”

in the consolidated statement of cashflow for 2013 and 2012, respectively. Furthermore, the vessel Stena Baltica was sold as a hire-purchase contract

during 2013 which also is an explanation by comparison with the consolidated statement of cashflows, MSEK 155.

CONT. NOTE 3

STENA AB 2013 29

5. ADMINISTRATIVE EXPENSES

For the year ended 31 December 2013, administrative expenses include R&D costs amounting to MSEK 47. For the year ended 31 December 2012,

administrative expenses include R&D costs amounting to MSEK 63. Fees and other remuneration to auditors and advisors are set forth below.

Years ended 31 December

Fees to the auditors 2012 2013

Audit fees 26 20

Audit-related fees 2

Tax advisor services 20 2

Other fees 2 1

Total 50 23

Audit fees to other auditing firms 1

Group Total 50 24

6. INVESTMENT IN ASSOCIATED COMPANIESInvestments in associated companies relate to major strategic invest-

ments. Results from other associated companies, having a more direct

link to normal operations, are included in direct operating expenses.

See Note 3.

As of 31 December 2013, the investment in Midsona AB (publ) rep-

resents 23.5% of the capital and 25.1% of the votes. The total market

value of the investment as of 31 December 2013 was MSEK 155. As of

31 December 2012 the total share of the market value was MSEK 72.

The Company´s share of results amounted to MSEK 12 in 2013 and

MSEK 9 in 2012.

As of 31 December 2013, the investment in Gunnebo AB (publ)

represents 26.2% of the capital and the votes. The market value of the

investment as of 31 December 2013 and 2012 was MSEK 794 and

MSEK 486, respectively. The Company´s share of results in 2013

amounted to MSEK 27 and MSEK 5 in 2012.

In December 2012 further 9.5% were acquired to a share of 52%

in the investment in MPP Mediatec Group and the company is, as an

effect of the transaction, accounted for as subsidiary.

After further acquisition of shares the total share of the company

was 57.7% as of 31 December 2012. As of 31 December 2012

Mediatec is accounted for as a subsidiary. The Company´s share of

results in 2012, until the company became a subsidiary was MSEK 11.

The investments in Midelfart Sonesson and Gunnebo are pledged as

security for bank debt.

In 2011, the subsidiary Stena Investment Sarl invested MSEK 106 in

Wisent Oil & Gas Plc (renamed from Silurian Hallwood Plc), which is an

oil exploration company. The value of the investment as of 31 Decem-

ber 2011 was MGBP 10. During 2012 Stena Investment invested further

MGBP 7. During 2013 the shares have been written down by MSEK 90.

The Company´s share of results in 2013 amounted to MSEK (49) and

MSEK (7) in 2012. As per 31 December 2013 and 2012 the investment

represents 30% of the capital and votes.

Audit fees relate to examination of the annual report, financial account-

ing and the administration by the Board and the President as well as

other tasks related to the duties of a company auditor. Tax services

include both tax consultancy and tax compliance services. All other

tasks are defined as other fees.

The fees for 2013 refer to PWC whereas the fees for 2012 refer

to KPMG.

GROUP

30 STENA AB 2013

Investments in associated companies

As of 31 December

MSEK 2012 2013

Opening balance 1,374 1,073

Investments 67

Reclassification to subsidiary (351)

Share of profit 18 (3)

Write down (48)

Exchange differences (15) (27)

Other changes (20) (61)

Closing balance 1,073 934

For the years ended 31 December 2013 and 2012, Investments in associated companies include Goodwill amounting to MSEK 342, respectively.

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

MSEKCountry of

incorporation Assets Liabilities Revenues Profit/(loss) % Interest held Group result

2012

Midsona AB (publ) Sweden 1,184 498 869 35 23% 9

Gunnebo AB (publ) Sweden 4,252 2,600 5,236 22 26% 5

MPP Mediatec Group AB Sweden 1) 1) 1) 1) 1) 11

Wisent Oil & Gas Plc Jersey 202 12 0 (13) 30% (7)

Total 18

MSEKCountry of

incorporation Assets Liabilities Revenues Profit/(loss) % Interest held Group result

2013

Midsona AB (publ) Sweden 1,172 462 916 51 23% 12

Gunnebo AB (publ) Sweden 4,335 2,872 5,271 102 26% 27

Wisent Oil & Gas Plc Jersey 68 13 0 (141) 30% (90)

Total (51)

1) Accounted for as a subsidiary as of 31 December 2013

CONT. NOTE 6

STENA AB 2013 31

The gain on termination of leases in 2012 relate partly to the financ-

ing of the DrillMAX vessel Stena Carron and partly to termination

of other financial leases.

7. TOTAL FINANCE NET Years ended 31 December

MSEK 2012 2013

Share of associated companies’ result (please find Note 6) 18 (51)

Dividends received from share holdings 82 48

Dividends received from financial fixed assets 17 12

Total Dividends 99 60

Realized result from sale of trading shares (8) (52)

Realized result from sale of available sale shares 12 70

Realized result from sale of financial instruments measured at fair value through the income statement 74 223

Realized result from security investments (20) 119

Unrealized result from sale of trading shares 17 20

Unrealized result from sale of financial instruments measured at fair value through the income statement 119 64

Gain on termination of leases 291

Total Gain (loss) on sale of securities 485 444

Interest income from investments in SPEs 198 207

Other interest income 240 282

Total Interest income 438 489

Interest expense from investments in SPEs (55) (127)

Other Interest expense (2,302) (2,259)

Total Interest expense (2,357) (2,386)

Exchange differences pertaining to trading operations 30 (4)

Translation difference (95) (37)

Total Foreign Exchange gains (65) (41)

Deferred finance costs (104) (97)

Commitment fees (39) (38)

Bank charges (44) (23)

Capitalized internal guarantee fees 8

Other financial items (26) (26)

Other financial expenses from investments in SPE’s (37) (70)

Total other financial income/expense (242) (254)

Finance net (1,624) (1,739)

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

Deferred financing costs include costs for the issuances of Senior

Notes, revolving credit facilities, finance leases etc. See Note 30.

GROUP

32 STENA AB 2013

8. INCOME TAXES

Income before taxes was distributed geographically as follows:

Years ended 31 December

MSEK 20121) 2013

Sweden 15 86

Rest of the world 1,762 2,062

Total income before taxes 1,777 2,148

Current tax

For the period, Sweden (4) (19)

Adjustments previous years, Sweden (35)

For the period, rest of the world (202) (213)

Adjustments previous years, rest of the world (31) (55)

Total current tax (272) (287)

Deferred tax

For the period, Sweden 198 234

Adjustments previous years, Sweden 2 (1)

For the period, rest of the world 3 (14)

Adjustments previous years, rest of the world 27 (170)

Total deferred tax 230 49

Total income taxes (42) (238)

1) 2012 has been restated due to the revised accounting standard for pensions, IAS 19 Employee benefits, see Note 1

The reconciliation of the difference between the statutory tax rate in Sweden

and the effective tax rate is explained below:

Years ended 31 December

Percentage 2012 2013

Statutory income tax rate 26 22

Differences in foreign tax rates (23) 7

Taxes related to previous years 3 1

Increase in loss carried forward without recognition of deferred tax (5)

Expenses not deductible 1 1

Non-taxable income (1) (2)

Tax losses not recognized 9 1

Restructuring (9) (18)

Change in tax rate, net (11) (1)

Other 6 5

Effective income tax rate 1 11

The principle reason why the effective income tax rate is lower than the statutory income tax rate for 2013 and 2012 is that the inter national ship-

ping activities and capital gains, sales of financial instruments, are to a large extent tax exempt in many countries. During the year the Company have

reversed provisions for law suits that has gained legal force.

STENA AB 2013 33

9. INTANGIBLE FIXED ASSETS

MSEK GoodwillTrade-marks

Rights to routes

Distribution agreements

Customer relations

IT invest-ments1)

Other in -tangible

assets1) Total

Acquisition costs

Opening balance as per 1 January 2012 1,556 834 354 513 10 681 3,948

Purchase of company (Note 29) 481 74 555

Additions 179 308 77 564

Disposals (6) (6)

Transfers 156 (199) 5 (38)

Translation differences (33) (4) (6) (4) (47)

Closing balance as of 31 December 2012 2,333 830 730 314 10 759 4,976

Additions 231 98 46 375

Disposals (39) (39)

Transfers (85) 61 10 (14)

Translation differences 26 3 12 1 1 43

Closing balance as of 31 December 2013 2,505 833 803 314 10 829 47 5,341

Accumulated amortization

Opening balance as per 1 January 2012 (52) (85) (9) (200) (8) (545) (899)

Purchase of company (Note 29) (82) (82)

Translation differences (2) 1 1 5 5

Disposals 4 4

Transfers 42 (4) 38

Current year amortization (22) (23) (25) (2) (61) (133)

Closing balance as of 31 December 2012 (132) (106) (32) (182) (10) (605) (1,067)

Translation differences (4) (1) (2) (1) (8)

Disposals 33 33

Transfers 3 3

Current year amortization (22) (45) (25) (55) (147)

Closing balance as of 31 December 2013 (133) (129) (77) (207) (10) (629) (1) (1,186)

Net book value as of 31 December 2012 2,201 724 698 132 0 154 3,909

Net book value as of 31 December 2013 2,372 704 726 107 0 200 46 4,155

1) Reported as other intangible assets in the balance sheet

GROUP

34 STENA AB 2013

Goodwill is allocated to the Group’s cash-generating units

(CGUs) identified by segment. A segment-level summary of

the goodwill allocation is presented below.

As of 31 December

MSEK 2012 2013

New businesses – Adactum 1,697 1,903

Ferry operations 504 430

Other 39

Total 2,201 2,372

Impairment testing of goodwill is conducted annually and whenever

conditions indicate that impairment may be necessary. The recovera-

ble value for cash generating units is based on the calculated value in

use. The key assumptions used for calculated value in use are discount

rate and growth rate.

The discount rate before tax used in Adactum was 7–9%. The growth

rate for revenues used in Adactum has been individually assessed for

each company and year until 2022. During this period growth rate

fluctuates between 3–8% until 2016 and 2% after 2016 until 2022. For

subsequent periods growth rate for revenues is estimated to have

a growth corresponding to 1.5%. This growth rate is based on reasona-

ble prudence. These assumptions are based on existing operation.

An extended time for prognosis can be verified as all companies

have been in operation for a substantial time and have a well-estab-

lished business model. Adactum has a long-term ownership perspec-

tive and are working to further develop the companies through active

ownership and financial strength without any disposals of companies.

The same principles were applied within Adactum last year.

Within Ferry Operations impairment testing of goodwill for ferry lines

and for the travel operation within Stena Line Travel Group has been

performed. The discount rate used for Stena Line Travel Group was

7.5% before tax and the growth rate for revenues has been individually

assessed for each company. The average growth rate used was 4%.

Goodwill that has been acquired within ferry operations during the

fourth quarter of 2012 have been tested for each route. The tax dis-

count rate for ferry routes was 6% while the growth rate has been

deemed to be 2%, for the next five years. For the next period the

growth rate varies between 0–2%.

As of 31 December 2013, the recoverable values based on value in

use of the cash generating units were found not to fall short of their

net booked values in any test and therefore the related goodwill was

not impaired.

A number of sensitivity tests have been made in order to examine

possible need for impairment. For these sensitivity tests the used dis-

count rate was 1% higher than above described discount rate. Also

when applying these estimates no goodwill impairment is indicated

for material cash generating units.

Trademarks

Trademarks are mainly related to the segment Adactum. During 2013

impairment testing has been performed for all trademarks within

Adactum. The tests have been performed according to the same

procedure as for establishing the recoverable value for goodwill, see

description above. The discount rate before tax used for the individual

trademarks was 7.5%. The growth rate for revenues used until year

2016 was 3–5%. For subsequent periods growth rate for revenues is

estimated to have a growth corresponding to 1%. None of the per-

formed tests indicated any impairment for trademarks. The trademarks

are annually depreciated.

CONT. NOTE 9

STENA AB 2013 35

10. TANGIBLE FIXED ASSETS

MSEK VesselsConstruction in

progressOther

equipment1) Windmills1)Buildings and land Total

Acquisition costs

Opening balance as per 1 January 2012 49,688 5,290 4,366 693 1,543 61,580

Purchase of company (Note 29) 160 1,564 54 1,778

Additions 2,615 6,641 279 57 76 9,668

Disposals (372) (2) (343) (517) (14) (1,248)

Transfers 8,302 (8,820) (25) 274 (101) (370)

Translation differences (2,063) (462) (149) (36) (2 ,710)

Closing balance as of 31 December 2012 58,330 2,647 5,692 507 1,522 68,698

Purchase of company (Note 29) 258 74 63 395

Additions 2,510 2,482 243 754 56 6,045

Disposals (2,211) (161) (110) (29) (12) (2,523)

Transfers 1,089 (2,484) (174) 1,085 (19) (503)

Translation differences (35) (34) 22 17 (30)

Closing balance as of 31 December 2013 59,941 2,450 5,747 2,317 1,627 72,082

Accumulated depreciation

Opening balance as per 1 January 2012 (15,503) (2,652) (104) (604) (18,863)

Purchase of company (Note 29) (132) (1,115) (2) (1,249)

Disposals 233 105 40 378

Translation differences 641 81 16 738

Transfers 209 128 (1) 336

Current year depreciation (3,070) (373) (49) (39) (3,531)

Closing balance as of 31 December 2012 (17 622) (3,826) (113) (630) (22,191)

Purchase of company (Note 29) (46) (41) (3) (90)

Disposals 1,990 101 16 5 2,112

Translation differences 28 (37) (9) (18)

Transfers (5) 264 14 273

Current year depreciation (3,330) (392) (106) (42) (3,870)

Closing balance as of 31 December 2013 (18,985) (3,931) (203) (665) (23,784)

Net book value as of 31 December 2012 40,708 2,647 1,866 394 892 46,507

Closing balance as of 31 December 2013 40,956 2,450 1,816 2,114 962 48,298

1) Recorded as equipment in the balance sheet

The insured value of the whole vessel fleet as of 31 December 2013 was

MSEK 52,837, as compared to MSEK 50,247 as of 31 December 2012.

As of 31 December 2013, construction in progress includes new

orders of two IMOMAX-vessels and two drilling rigs. The drilling rigs

were ordered from Samsung in South Korea on the 26 June 2013 for

delivery in March and September 2016, with an option to cancel one

rig. The estimated cost is MUSD 800 per unit. Construction in progress

also includes investments in windmills in Sweden.

Altogether the vessel orders at Samsung valued to MSEK 5,065. In

the closing value for construction in progress an advance of MSEK 752

to the shipyard and MSEK 227 for windmill projects are included. Capi-

talized interest of MSEK 65 and other capitalized costs of MSEK 1,406

are also included.

The amount of interest capitalized on vessel projects and on vessels

was MSEK 51 and MSEK 55 for the years ended 31 December 2013

and 2012, respectively. The amount of interest capitalized on wind mill

projects and on windmills was MSEK 26 and MSEK 27 for the years

ended 31 December 2013 and 2012, respectively.

Valuation certificates issued on 31 December 2013 by independent

valuation institutions indicate that the values in the vessel fleet exceeds

net book value with MSEK 5,315, as compared to MSEK 6,809 as

of 31 December 2012. Part of the vessels net booked value as of

31 December 2013 refers to vessels held in accordance with financial

leasing agreements, see Note 25.

GROUP

36 STENA AB 2013

11. PORTS

MSEK Ports

Acquisition costs

Opening balance 2,643

Additions 5

Transfers 111

Translation differences (21)

Closing balance as of 31 December 2012 2,738

Revaluation 122

Additions 1

Disposal (2)

Transfers 461

Translation differences 25

Closing balance as of 31 December 2013 3,345

Accumulated depreciation

Opening balance (848)

Translation differences 8

Current year depreciation (82)

Closing balance as of 31 December 2012 (922)

Revaluation 1,241

Translation differences (13)

Disposals 2

Transfers (273)

Current year depreciation (119)

Closing balance as of 31 December 2013 (84)

Net book value as of 31 December 2012 1,816

Net book value as of 31 December 2013 3,261

The group owns ports in Sweden, the United Kingdom and the

Netherlands. Ports are used in our own regime and includes ports,

terminal buildings etc.

As of 1 January 2013 the Group changed accounting principle in

regards to valuation of ports from cost method to revaluation method.

It had an effect of MSEK 1,363 increase in value of ports, MSEK 122

allocated at cost and MSEK 1,241 allocated at depreciation. In conjunc-

tion to the revaluation, a transfer from equipment and land to ports

was made in regards to the port located in the Netherlands. The net

value of the transfer was MSEK 188.

In determining fair value independent assessors was used for the

ports in the United Kingdom and the Netherlands. In determining fair

value of ports in Sweden an internal valuation model was used.

The closing balance as of 31 December 2013 had been MSEK 1,939

if ports had been valued at cost.

STENA AB 2013 37

12. INVESTMENT PROPERTIES

As of 31 December

MSEK 2012 2013

Opening balance as of 1 January 25,429 26,367

Additions 1,193 809

Reclassification construction in progress 244 289

Disposals (378) (239)

Unrealized fair value adjustments 14 224

Exchange differences (135) 176

Fair value as of 31 December 26,367 27,626

Investment Properties – Construction in progress

Opening balance as of 1 January 324 291

Additions 211 203

Reclassification construction in progress (244) (289)

Closing balance at fair value 291 205

Total fair value of Investment properties as of 31 December 26,658 27,831

Investment Property – impact on the result

For the years ended 31 December

MSEK 2012 2013

Rental Income 2,357 2,396

Direct cost (847) (848)

Valuation of investment properties 14 224

Total 1,524 1,772

Investment properties are residential and commercial properties.

Valuation of the investment properties is performed at year end

and at each quarter by assessing each individual property’s fair value.

The valuation method is based on the direct yield method and the net

operating income is based on market rental income with a deduction

for rental vacancy level of 0 to 1% for residential properties and 0 to

15% for commercial properties. This assessment consideration of type

of property, technical standard and type of construction has been

taken. The assessment of the yield requirements is based on informa-

tion obtained about the market yield requirements in respect of the

purchase and sale of comparable properties in similar locations.

At the valuation as of 31 December 2013, the following rates of

returns have been used.

Rate of return, %

Location Residential Commercial

Sweden 2.50–6.00 5.00–8.00

Eurozon n/a 6.00–12.00

The estimated market value of investment properties is MSEK 27,831

of which MSEK 24,297 are attributable to Swedish properties. Last

year the estimated market value of investment properties was MSEK

26,658, of which MSEK 23,055 was attributable to Swedish properties.

To guarantee the valuation, external valuations have been obtained

from DTZ. The external valuations cover 20% of the total property

value in absolute terms but these selected properties represent 70%

of the properties in terms of property types, technical standard and

building design. A comparision between the internal and external valu-

ations reveals that the internal valuation are within a normal +/– 10%

range compared to the external valuation.

GROUP

38 STENA AB 2013

13. INVESTMENT IN SPEs

Since late 2002, the Company has invested in variable interest entities

(“SPEs”). The SPEs have invested in different debt securities, in cluding

high yield bonds. The SPEs have issued debt securities which are

secured by their assets.

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

(“Collateral Loan Obligation”) started in December 2002 (CDO2002),

August 2003 (CLO2004) and October 2005 (CLO2006). They were

established during 2003, June 2004 and August 2006. The third CLO

was started in November 2006 (CLO2007) but not fully established and

has been gradually unwound. A new fourth CLO was started in October

2012 (CLO2012) and was established in March 2013. The Company’s

risk is limited to its equity investment.

The first investment in the CDO2002 (“Collateral Debt Obligation”)

was unwound during 2011. The CLO2004 and CLO2007 are both

expected to be unwound during 2014.

There are other investors except Stena in the “SPEs”. The non-

controlling interest share of the results is deducted in the income

statement while the minority part of total equity is shown as a liability

in the balance sheet.

The non- controlling interest for the remaining CLOs has been partly

reduced during 2012, now being 5% and 5% respectively. The corre-

sponding amounts for 2012 was 15.4% and 11.3% respectively. The

non-controlling interest in CLO2007 is 5%. The latest CLO will have a

non-controlling interest of 20%.

The assets and liabilities of the SPEs are consolidated in our financial

statements, although the debt of the SPEs is a non-recourse to Stena.

The consolidation of the SPEs has had the following impact:

Years ended

MSEK 2012 2013

Earnings attributed to Equity holders of the Parent Company 84 115

Non-controlling interest 4 14

Net income 88 129

As of 31 December

2012 2013

Investments in SPEs1) 5,170 4,311

Short-term investments2) 619 385

Other assets 66 58

Total assets 5,856 4,754

Shareholders’ equity 453 612

Minority interest 26 27

Total shareholders’ equity 479 639

Debt of SPEs3) 3,974 3,944

Other debt 1,403 171

Total liabilities 5,377 4,115

Total shareholders’ equity and liabilities 5,856 4,754

As of 31 December

MSEK 2012 2013

The investment in SPEs are classified as follows:Corporate Fixed Income Bonds are classified as “available for sale”and are revalued in other comprehensive income 447 219

Senior Bank Debt are classified as “held to maturity” and are kept at cost in the balance sheet. 4,723 4,092

Total 5,170 4,311

1) Investment in SPEs are recorded at market value with gains and losses recorded to profit and loss. Investments in these securities are recorded to market value with gains and losses recorded to comprehensive income. The corporate loans are recorded at cost in the balance sheet and tested for impairment at each reporting date. The  market value of the corporate loans is MSEK 39 lower than cost.

2) Refers to cash and cash equivalents in the SPEs. This cash is not available to the Company and is therefore included as restricted cash.3) Debt of SPEs refers to secured notes issued by the SPEs and secured bank loans borrowed by the SPEs. These obligations are secured by pledges of the assets of the SPEs

and are not guaranteed by the Stena AB Group

STENA AB 2013 39

Marketable securities as of 31 December classified as follows:

MSEK

Industrial sector 2012 2013

CDO/CLO 959 1 023

Oil & Gas 556 505

Funds 459 472

Banks 480 298

Pharmaceuticals 188 276

Oil & Gas Services 685 261

Retail 260 238

Software solution 97 122

Diversified Financial services 139 99

Shipping 87

Automanufactures 76 86

Homebuilder 74 81

Real estate 81 81

Energy production 49 77

Telecommunication 122 66

Food 36 65

Electronics 105 63

Biotechnology 50 62

Health care products 73 53

Machinery 70 51

Metal fabricate/hardware 124 50

Internet 73 38

Media 22 24

Forest products/paper 133 21

Investment companies 166 14

Power and automation technology 11 13

Construction 12

Agriculture 5

Mining 21

Equipment 9

Total listed shares 5,118 4,243

14. MARKETABLE SECURITIES As of 31 December

MSEK 2012 2013

Opening balance 3,465 5,118

Additions 2,997 2,057

Disposals (2,069) (3,123)

Reclassification 515

Revaluation of financial assets through the income statement 161 (335)

Revaluation of financial assets through other comprehensive income 230 398

Translation differences (181) 128

Investment at the end of year 5,118 4,243

MSEK 2012 2013

Marketable securities are classified as:

Financial assets at fair value through the income statement 1,835 898

Available-for-sale financial assets, valued in other comprehensive income 3,283 3,345

Total 5,118 4,243

Marketable securities refer to the Stena AB groups listed shares, these are recorded at fair value.

As of 31 December 2013 shares with a book value of MSEK 1,015 have been pledged as security for bank debt. As of 31 December 2012,

shares with a book value of MSEK 931 were pledged as security for bank debt.

GROUP

40 STENA AB 2013

15. OTHER NONCURRENT ASSETS

MSEKDeferred

tax assets1)Other

receivables1) Available for

sale sharesOther shares

Deferred costs Total

Opening balance as per 1 January 2012 892 1,192 1,666 604 377 4,731

Effects of change in accounting principles 96 (707) (611)

Additions 84 77 10 29 279 479

Disposals (3) (291) (19) (28) (266) (607)

Revaluation through the income statement (36) 15 (21)

Revaluation through other comprehensive income (2) (84) (86)

Share of profit (loss) 13 (111) (98)

Dividend received (5) (14) (19)

Reclassification 34 (515) (481)

Translation differences (21) 355 (47) (31) (17) 239

Closing balance as of 31 December 2012 1,048 622 1,034 449 373 3,526

Additions 76 651 121 49 74 971

Disposals (483) (78) (41) (45) (647)

Revaluation through the income statement 7 (124) (67) (184)

Revaluation through other comprehensive income 36 135 171

Share of profit (loss) 57 57

Dividend received (9) (9)

Reclassification (15) (8) (5) (28)

Translation differences 1 37 17 (7) 48

Closing balance as of 31 December 2013 627 1,267 1,137 539 335 3,904

1) Amounts for 2012 have been restated due to changed accounting standard for pensions, IAS 19 Employee benefits, see Note 1

Deferred tax assets mainly relate to unutilized tax losses carried for-

ward. Reclassifications include netting against deferred tax liabilities.

See Note 8.

Other receivables as of 31 December 2013 include surplus in pension

schemes of total MSEK 160 and MSEK 72 for 2012, see Note 22.

Other receivables related to holdings of non-listed shares, other

associates and bonds.

Available for sale shares include investment in non-listed shares.

These shares are accounted for as Available for sale shares valued

through the comprehensive income.

Companies held between 20% and 50%, and that are not Available

for sale shares valued through Comprehensive income, are accounted

for as other associated companies. These constitute the collaborative

arrangements of the Group in terms of pooling of business and joint

ventures that operate in shipping. Strategic holdings are accounted for

as associates in the balance sheet and in Note 6. During 2012 the share

of Paradise Holding was written down by MSEK 131 corresponding

MUSD 19.5.

The share of these companies´ results is included in direct operating

expenses. See Note 6 and Note 3.

STENA AB 2013 41

Available for sale shares

As of 31 December 2013

MSEKNo. of shares

or % held Book value

Held by parent company:

Alligator 3,345,231 23

Total available for sale shares in the Parent company 23

Held by subsidiaries:

ING DUTCH OFFICE FUNDS C.V. The Netherlands 5.0% 675

Airport Real Estate Basis Fonds C.V. The Netherlands 20.2% 309

Chase Private Equity Fund United Kingdom 100% 96

Other 34

Total available for sale shares 1,137

Other shares

MSEKNo. of shares

or % held Book value

Asahi Stena Tankers Pte Ltd Singapore 50%

Golden Stena Weco Singapore 50% 18

Partrederiet SUST I DA Norway 50% 42

Partrederiet SUST III DA Norway 50% 62

Stena Ugland Shuttle Tankers Norway 50%

Nordic Rio LLC Marshall Islands 50% 53

Stena Sonangol Suezmax pool LLC Marshall Islands 50%

Navion Gothenburg LLC Marshall Islands 50% 13

Paradise Libya 35% 106

Glacia Limited Bermuda 50% 108

RoRo Partners Ltd Bermuda 49%

Stena Weco Denmark 50% 126

Other 11

Total other shares 539

16. INVENTORIES

As of 31 December

MSEK 2012 2013

Bunker and lubricating oil 111 117

Inventories of goods for sale 202 228

Raw materials and consumables 213 209

Products in progress 45 29

Finished products 121 133

Total 692 716

GROUP

42 STENA AB 2013

Book value of Short-term investments corresponds to fair value.

Market able debt and equity securities are classified as “Financial assets

at fair value through profit or loss”.

Certain marketable debt and equity securities and restricted cash

amounting to MSEK 4 at 31 December 2013 and MSEK 3 at 31 Decem-

ber 2012 have been pledged as security for bank debt. See Note 28.

18. SHORT-TERM INVESTMENTS

As of 31 December

MSEK 2012 2013

Marketable debt and equity securities, trading 198 348

Restricted cash 1,897 1,346

Total 2,095 1,694

19. CASH AND CASH EQUIVALENTS

As of 31 December

MSEK 2012 2013

Cash & bank 1,546 1,977

Short term deposits 35 76

Total 1,581 2,053

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

17. SHORT-TERM RECEIVABLES

As of 31 December

MSEK 2012 2013

Trade debtors

Accounts receivable are classified on the basis of their due date:

Outstanding but not due 2,037 2,168

Due up to 30 days 373 327

Due more than 30 days 413 354

Total 2,823 2,849

Other current receivables

Related parties (Note 34) 1 7

Other short-term receivables 1,801 1,786

Total 1,802 1,793

Prepaid expenses and accrued income

Prepaid expenses 610 591

Accrued income 1,519 1,579

Total 2,129 2,170

Total short-term receivables 6,754 6,812

Book value of trade debtors corresponds to fair value. The total allowance for doubtful trade receivables was MSEK 116 as of 31 December 2013

and MSEK 75 as of 31 December 2012. Selling expenses as of 31 December 2013 include costs for doubtful receivables of MSEK 28 and MSEK 2

as of 31 December 2012.

Restricted cash as of 31 December 2013 includes MSEK 386 of cash

and cash equivalents in the SPEs (see Note 13) which is not avail able to

the Company. As of 31 December 2012 such restricted cash amounted

to MSEK 619. Other restricted cash represents bank accounts that have

been pledged to cover various long-term liabilities and commitments

of the Company.

STENA AB 2013 43

Fair value reserve

This reserve arises on the valuation of available-for-sale financial assets.

When an available-for-sale asset is sold, the portion of the reserve that

relates to that financial asset, and is effectively realized is recognized in

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

the portion of the reserve that relates to that financial asset is recog-

nized in the income statement.

Hedging reserve

Hedge accounting is applied on purchase of bunker fuel, interest costs,

transactions in other currency than functional currency and invest-

ments in subsidiaries.

The reserve contains gains and losses that arise from hedge revalu-

ations that is considered effective hedges. The cumulative deferred

gain or loss is recognized in the income statement when the hedged

transaction impacts the income statement.

Revaluation reserve

This reserve includes revaluation of ports. The revaluation amount

consists of the fair value of the ports at the time of revaluation. Con-

currently with depreciations of ports the revaluation reserve is released

with the same amount as the depreciation of the surplus value from

the revaluation.

If the carrying value of the port is higher due to revaluation, the

increase in value will be accounted for in other comprehensive income.

If the carrying amount of the port is lower due to revaluation, the

decrease in value will be accounted for in the income statement.

Translation reserve

Exchange differences relating to the translation from the functional

currencies of the Stena Group’s foreign subsidiaries into SEK are

accumulated to the translation reserve. Upon the sale of a foreign

operation, the accumulated translation amounts are recycled to the

income statement and included in the gain or loss on the disposal.

20. EQUITY

Dividends paid per share (SEK):

2012 5,200

2013 3,780

Specification of the reserves:

MSEKFair value

reserveHedging

reserveRevaluation

reserveTranslation

reserve Total

Opening balance as per 1 January 2012 (466) (752) (1,015) (2,233)

Change in fair value reserve, net of tax 325 325

Change in hedging reserve, net of tax

– valuation of bunker hedges (24) (24)

– valuation of interest hedges (189) (189)

– valuation of currency hedges (71) (71)

– hedge of net investment in foreign subsidiaries 109 109

Change in translation reserve, net of tax (801) (801)

Closing balance as of 31 December 2012 (141) (927) (1,816) (2,884)

Effects of changes in accounting principles1) 1,012 1,012

Change in fair value reserve, net of tax 366 366

Change in hedging reserve, net of tax

– valuation of bunker hedges (37) (37)

– valuation of interest hedges 916 916

– valuation of currency hedges (34) (34)

– hedge of net investment in foreign subsidiaries (123) (123)

Change in revaluation reserve, net of tax (20) (20)

Change in translation reserve, net of tax 355 355

Closing balance as of 31 December 2013 225 (205) 992 (1,461) (449)

1) Effect of change in valuation method for ports

44 STENA AB 2013

GROUP

21. DEFERRED TAXES

As of 31 December

MSEK 20121) 2013

Deferred tax liabilities

Tangible fixed assets 3,826 4,292

Financial fixed assets 36 181

Provisions 601 425

Other 57 61

Total deferred tax liabilities 4,520 4,959

Deferred tax assets

Tangible fixed assets 313 277

Tax loss carry forwards 1,894 2,304

Financial fixed assets 158 101

Provisions 140 130

Other 4

Less deferred tax assets not recognized (947) (1,170)

Total deferred tax assets recognized 1,558 1,646

Net deferred tax liability 2,962 3,313

Out of which:

Deferred tax assets (Note 15) 1,048 627

Deferred tax liabilities 4,011 3,940

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

Calculation of deferred taxes is based on local nominal tax rate.

20121) 2013

MSEK

Taxes charged to income statement

Taxes charged to com-prehensive income

Total taxes

Taxes charged to income statement

Taxes charged to com-prehensive income

Total taxes

Current taxes (272) (272) (287) (287)

Deferred taxes 230 269 499 49 (321) (272)

(42) 269 227 (238) (321) (559)

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

As of 31 December

MSEK 2012 2013

Sweden 4,453 4,434

Rest of the world 5,377 6,499

Total 9,830 10,933

Out of total loss carry forwards, amounting to MSEK 10,933, can MSEK 6,709 be carried forward indefinitely. Tax loss carry forwards of MSEK 4,224

expire between 2014 and 2022. Total unaccounted carry forwards amounts to MSEK 5,364 in 2013 and MSEK 4,956 in 2012.

1) 2012 has been restated due to revised accounting standard for pensions, IAS 19 Employee benefits, see Note 1

STENA AB 2013 45

22. EMPLOYEE BENEFITS

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

benefits are mainly settled by means of regular payments to independ-

ent authorities or bodies that assume pension obligations and adminis-

ter pensions through defined contribution plans. The remaining post-

employment benefits are defined benefit plans; that is, the obligations

remain within the Company. Costs and obligations at the end of a

period for defined benefit plans are calculated based on actuarial

assumptions and measured on a discounted basis. The assumptions

include discount rate, inflation, salary growth, long-term return on

plan assets, mortality rates and other factors. Discount rate assump-

tions are based on long-term high quality bonds, government bond

yield and, for Sweden, mortgage bonds at year end. The assets consist

mainly of long-term high corporate bonds, government bonds and

equities and the asset allocation for each pension scheme is defined in

an investment policy document. Defined benefits plans relate mainly

to subsidiaries in the UK operations. Other large-scale defined benefit

plans apply for salaried employees in Sweden (mainly through the

Swedish PRI pension plan) and employees in The Netherlands.

Expenses included in the income from operations include current

year service costs, past service costs, net interest income or expense

and gains and losses on settlements. Expenses are recognized as other

operating expenses or administrative expenses, depending on the

function of the employee. Remeasurement effects are recognized

in Other comprehensive income.

Some features of the main defined benefit plans are described below.

United Kingdom

Stena Line Holding Group’s pension schemes cover around 80% of the

Groups total defined benefit obligation in the UK. Stena Line Ltd par-

ticipates in one company-funded defined benefit pension scheme and

two industry wide defined benefit schemes, Merchant Navy Ratings

Pension Fund (MNRPF) and Merchant Navy Officers Pension Fund

(MNOPF). The Group estimates its share in MNRPF to 19% (32%) and

in MNOPF to 12% (11%), based on information from the Trustees.

In 2001, the trustee of the MNRPF adopted a deficit repair scheme

and under this scheme the Group’s share of the deficit contributions

was around 32% with half of the contributions payable by other

employers who were making voluntary contributions. However the

agreement with the voluntary employers expired 2006, and as a result

the Group’s share of the deficit contributions increased to around

60%. The Group initiated court proceedings against the Trustee of the

MNRPF to establish how the deficit in the MNRPF should be allocated

between the various employers. The Court of Appeal upheld in 2011,

the decision made by High Court, that deficit contributions can be

required from all employers who have ever participated in the MNRPF,

including companies that no longer employ any members. As a result

of the Court of Appeals decision, the non-contributing employers

can also be required to contribute funds to reduce the deficit. The

Trustee of the MNRPF has proposed provisional figures illustrating the

Group´s share of the deficit at approximately 19%. It is estimated that,

after taking into account the deficit contributions that the Group has

paid from 2001 to 2012, some of the contributions paid may be repay-

able, and based on the funding deficit as of 31 March 2012, the Group

will have no further deficit contributions to pay over the life of the

existing Recovery Plan. The payments made by the Group during 2011

and 2012, amounting to MSEK 306, were paid into an escrow account,

and cannot be used by any other member of the plan. The balance

on the escrow account is recognized as a reduction of the net debt.

The reduction of the share to 19% has been accounted for in the

Group from 2013 and the impact of reduced net debt is recognized

in Other compre hensive income.

The company scheme provides benefits which are linked to each

members final salary at the earlier of their date of leaving or retirement.

The benefits provided by the two industry schemes are linked to each

members career average salary. All schemes are closed to new members.

The funding position of each scheme is reassessed every three years

and a schedule of contributions is put in place, following consultation

with the employers, which sets out the regular contributions payable

along with any deficit contributions required to meet any shortfall of

the assets when compared with the liabilities. The trustee determines

the investment strategy which is subject to consultation with the

employers. The assets of all schemes are managed on behalf of the

trustee by independent fund managers.

The operation of each scheme is governed by a Trust Deed and

Rules and the schemes are managed through a trustee company, the

boards of which are composed of representatives of the employers

and the members and, in some cases, independent trustees.

Sweden

The main defined benefit plan in Sweden is the collectively agreed

pension plan for white collar employees, ITP 2 plan. According to an

inter pretation from the Swedish Financial Reporting Board, this is a multi-

employer defined-benefit plan. For fiscal year 2013, the Group did not

have access to information from Alecta that would have enabled this

plan to be recognized as a defined-benefit plan. Accordingly, the plan

has been recognized as a defined-contribution plan. The premium for

the defined benefit plan is individually calculated and is mainly based on

salary, accrued pension and expected remaining period of service.

The collective consolidation level measures the apportionable assets

in relation to the insurance commitment, based on Alecta’s calculation

model, which doesn´t comply with IAS 19. According to Alecta’s con-

solidation policy for defined-benefit pension insurance, the collective

46 STENA AB 2013

GROUP

CONT. NOTE 22

consolidation level is normally allowed to vary between 125% and

155%. If Alecta’s collective consolidation level is below 125% or higher

than 155% measures must be taken to create opportunities for the

consolidation level to return to an accepted level.

If the consolidation level falls short or exceeds the normal interval one

measure may be to increase the contract price for new subscription and

expanding existing benefits or introduce premium reductions. Alecta’s

consolidation ratio amounts to 148% for 2013 and 129% for 2012.

Other defined benefit pension plans in Sweden are mainly funded

by pension foundations. There is no lowest funding requirement. Bene-

fits are paid directly by the Group and not from the foundation assets.

Netherlands

The defined benefit pension plan in Netherlands is an indexed average

salary benefit pension plan and is open for new entrants. The plan is

fully funded.

Information per country as of 31 December 2012 Sweden United Kingdom The Netherlands Total

Reporting in the balance sheet

Present value of funded and unfunded obligations 488 8,575 202 9,265

Fair value of plan assets (215) (7,678) (219) (8,112)

Total (surplus)/deficit 273 897 (17) 1,153

Whereof reported as

Other non-current assets 51 4 17 72

Pension liabilities 324 901 1,226

Total funding level for all pension plans, % 44% 90% 108% 88%

Amounts included in the income statement

Current service cost 8 34 3 45

Net interest cost 10 62 (4) 68

Administration costs 1 55 56

Remeasurements (gain)/loss 13 (7) 7 13

Total expense (gain) for defined benefits 31 145 6 182

Major assumptions for the valuation of the liability

Life expectancy, year

Male – currently aged 65 19.6 21.1 22.0

Female – currently aged 65 22.8 23.7 24.2

Inflation, %1) 2.0 2.7 2.0

Discount rate, % 3.5 4.7 3.6

1) Inflation for UK concerns RPI. Used CPI is 1.0 lower than RPI for 2013. For 2012 the used CPI was 0.9 lower than RPI

STENA AB 2013 47

Information per country as of 31 December 2013 Sweden United Kingdom The Netherlands Total

Reporting in the balance sheet

Present value of funded and unfunded obligations 469 7,763 237 8,468

Fair value of plan assets (270) (7,463) (260) (7,992)

Total (surplus)/deficit 199 300 (23) 476

Whereof reported as

Other non-current assets 89 47 24 160

Pension liabilities 288 347 1 636

Total funding level for all pension plans, % 58% 96% 110% 94%

Amounts included in the income statement

Current service cost 8 36 6 50

Past service cost 2 2

Net interest cost 9 26 (1) 35

Administration costs 30 30

Remeasurements (gain)/loss (74) (477) (5) (556)

Total expense (gain) for defined benefits (57) (385) 2 (439)

Major assumptions for the valuation of the liability

Life expectancy, year 19.6 21.0 22.1

Male – currently aged 65 22.8 23.4 24.3

Female – currently aged 65 2.0 3.2 2.0

Inflation, %1) 4.0 4.7 3.5

Discount rate, %

Average duration of the obligation is 14.5 years

1) Inflation for UK concerns RPI. Used CPI is 1.0 lower than RPI for 2013. For 2012 the used CPI was 0.9 lower than RPI

Reconciliation of change in present value of defined benefit obligation for funded and unfunded obligations 2012 2013

Opening balance, 1 January 9,210 9,265

Purchase of company 42

Current service cost 45 50

Past service cost 2

Administration cost 56 30

Interest expenses 455 362

Remeasurement arising from changes in financial assumptions 148 211

Remeasurement arising from changes in demographic assumptions (58) (45)

Remeasurement from experience (158) (281)

Remeasurement from changed share in pension plan (1,007)

Contributions by plan participants 6 6

Benefits paid (350 (248)

Exchange differences (89) 81

Settlements and other

Closing balance as of 31 December 9,265 8,468

48 STENA AB 2013

GROUP

Reconciliation of change in the fair value of plan assets 2012 2013

Opening balance, January 1 7,878 8,112

Purchase of company 0 31

Interest income 387 327

Remeasurement arising from changes in assumptions (81) (34)

Remeasurement from changed share in pension plan 0 (533)

Contributions by plan participants 6 6

Employer contributions 191 195

Benefits paid (191) (182)

Exchange differences (77) 70

Settlements and other (1) 0

Closing balance as of 31 December 8,112 7,992

CONT. NOTE 22

Sensitivity analysis on defined benefit obligation Sweden United Kingdom The Netherlands Total

Longevity +1 year 13 225 6 244

Inflation +0.5% 40 440 23 503

Discount rate +0.5% (45) (557) (20) (622)

Discount rate –0.5% 45 557 23 625

Below is the sensitivity analysis for the main financial assumptions and

the potential impact of the present value of the defined pension obli-

gation. The sensitivity analysis is not meant to express any view by

Stena of the probability of a change. The analyses are based on a

change in an assumption while holding all other assumptions constant.

In practice, this is unlikely to occur, and changes in some of the

assumptions may be correlated.

2012 2013

Market value of plan assets by category Quoted Non-quoted Total Quoted Non-quoted Total

Equity 2,484 106 2,590 2,445 113 2,558

Bonds 4,417 4,417 4,261 4,261

Property 222 222 285 285

Qualifying insurance 22 22 38 38

Cash and cash equivalents 862 862 543 306 849

Total 7,784 328 8,112 7,287 704 7,992

Investment strategy and risk management

Through the defined benefit pension plans and post-employment

medical plans, the group is exposed to a number of risks.

The plan liabilities are calculated using a discount rate. If plan assets

underperform this yield, this will create a deficit. The Group manages

the allocation and investment of pension plan assets with the aim of

decreasing total pension cost over time. This means that certain risks

are accepted in order to increase the return. The investment horizon is

long-term and the allocation ensures that the investment portfolios are

well diversified. The Board of Stena approves the limits for asset alloca-

tion. The final investment decisions are taken by the local trustee that

consults with Stena.

Increased longevity and inflation are the principle risks that may

increase the future pension payments and, hence, increase the

pension obligation. The Group monitors continuously discount rate,

in flation and mortality assumptions to ensure that the plan assets

match the obligations.

STENA AB 2013 49

Issued Maturity Fair value

As of 31 December Carrying amount (MSEK)

As of 31 December

MSEK Nominal Outstanding Interest 2012 20132012

MSEK2013

MSEK

2004–2016 MUSD 250 MUSD 0 7.00% MUSD 130 838

2007–2017 MEUR 300 MEUR 300 6.125% MEUR 318 MEUR 324 2,575 2,657

2007–2019 MEUR 102 MEUR 102 5.875% MEUR 105 MEUR 109 876 903

2010–2020 MEUR 200 MEUR 200 7.875% MEUR 217 MEUR 228 1,703 1,764

Total 5,992 5,324

Whereof

Long-term Senior Notes 5,154 5,324

Short-term Senior Notes 838

24. SENIOR NOTES

In November 2004, the Company issued MUSD 250 of notes at an

interest rate of 7.0% with maturity on 1 December 2016.

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

ket. In February 2007, the Company completed an offering of MEUR

300 of the Senior Notes at an interest rate of 6.125% due 2017.

In February 2007, the Company completed an offering of MEUR 102

at an interest rate of 5.875% Senior Notes due 2019.

In March 2010, we completed an offering of MEUR 200 of Senior

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

On 5 March 2013 a bond, due in 2016, with remaining amount of

MUSD 128,8 was revoked. The payment was made on 5 April 2013.

Regarding the covenants of the loans, see Note 30.

25. LEASES

Company as lessee

The operating lease obligations include chartering of crude oil tankers

on a timecharter basis, chartering of ferries principally on a bareboat

basis, as well as obligations related to rentals of properties and ports.

Rental expense for operating leases were as follows

Years ended 31 December

MSEK 2012 2013

Rental expense 1,605 1,263

23. BANK DEBT

2012 2013

MSEK Current Non-current Total Current Non-current Total

Property loans 422 12,313 12,735 843 11,835 12,678

Other loans 2,013 23,400 25,413 3,442 21,857 25,299

Revolving credit facilities 290 10,399 10,689 331 11,595 11,926

Total 2,725 46,112 48,837 4,616 45,287 49,902

Schedule for repayment of bank debt is presented in Note 30, Liquidity risks.

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

As of 31 December

MSEK 2012 2013

SEK 12,754 14,265

GBP 1,191 1,135

USD 24,172 23,715

EUR 10,095 10,115

Other currencies 625 673

Total 48,837 49,903

Regarding assets pledged, see Note 28.

50 STENA AB 2013

GROUP

CONT. NOTE 25

2012 2013

MSEK CostAccumulated depreciation Net book value Cost

Accumulated depreciation

Net book value

Vessels 42,153 (11,454) 30,699 42,402 (12,682) 29,720

Real estate 26,658 26,658 27,831 27,831

Total 68,811 (11,454) 57,357 70,233 (12,682) 57,551

As of 31 December 2012 the future minimum rentals to be received under

non-cancellable operating leases were as follows:

2012

MSEK Vessels Real estate Total

2013 5,078 733 5,811

2014 4,292 559 4,851

2015 3,285 416 3,701

2016 2,660 295 2,955

2017 553 207 760

2018 and thereafter 365 239 604

Total minimum lease rentals 16,233 2,449 18,682

Company as lessor

The Company leases properties and certain vessels to third parties under operating leases. Operational leasing mainly refers to vessels on bareboat

and time charter basis. The cost, accumulated depreciation and net book value of these assets held for lease as of 31 December, were as follows:

As of 31 December 2012 the future minimum lease commitments under non-cancellable

operating leases and capital leases were as follows

2012

MSEK Operating leases Capital leases

2013 1,282 203

2014 1,059 207

2015 726 147

2016 600 31

2017 538 331

2018 and thereafter 1,978 48

Total minimum lease commitments 6,183 967

As of 31 December 2013 the future minimum lease commitments under non-cancellable

operating leases and capital leases were as follows:

2013

MSEK Operating leases Capital leases

2014 1,096 231

2015 713 179

2016 531 70

2017 470 370

2018 372 10

2019 and thereafter 1,911 13

Total minimum lease commitments 5,093 873

The financial leases of the Group comprises of one RoPax-vessel. The cost for vessels subject to financial leasing contracts was as of 31 december

2013 MSEK 530 and as of 31 December 2012 MSEK 499. Net carrying value was MSEK 484 for 2013 and MSEK 492 for 2012.

STENA AB 2013 51

26. OTHER NON-CURRENT LIABILITIES

As of 31 December

MSEK 2012 2013

Prepaid income 150 113

Other liabilities 784 609

Total 934 722

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

More thanMSEK 1–3 years 3–5 years 5 years Total

Prepaid income 75 7 31 113

Other liabilities 105 8 496 609

Total 180 15 527 722

27. ACCRUED COSTS AND PREPAID INCOME

As of 31 December

MSEK 2012 2013

Accrued costs

Charter hire/running costs 12 165

Interest costs 380 490

Accrued personnel costs 536 363

Other accrued costs 1,102 1,462

2,030 2,480

Prepaid income

Prepaid charter hire 32 43

Other prepaid income 613 733

645 776

Total accrued costs and prepaid income 2,675 3,256

As of 31 December 2013 the future minimum rentals to be received under

non-cancellable operating leases were as follows:

2013

MSEK Vessels Real estate Total

2014 8,787 722 9,509

2015 7,774 583 8,357

2016 4,732 462 5,194

2017 962 323 1,285

2018 217 217

2019 and thereafter 575 575

Total minimum lease rentals 22,255 2,882 25,137

The information for real estate relates to office buildings and excludes residential properties since most residential leases have a three month period.

52 STENA AB 2013

GROUP

Contingent liabilities

As of 31 December

MSEK 2012 2013

Guarantees 3,388 2,830

Other contingent liabilities 455 471

Total 3,843 3,301

Commitments

Guarantee obligations mainly relate to guarantees for property loans,

vessel projects in associated companies and warranty obligations for

delivered equipment.

Future minimum lease commitments relating to operating leases of

vessels, ports etc amount to MSEK 1,096 for 2014 and MSEK 3,997

from 2015. See Note 25. As of 31 December 2013, a total of six vessels

were on order from shipyards. The total contract amount for these

vessels amounts to MSEK 1,336. Yard payments of MSEK 259 have

been made in respect of these contracts.

In addition to the information above there are also on-going tax

issues within the Group with tax authorities.

28. PLEDGED ASSETS, COMMITMENTS AND CONTINGENT LIABILITIES

Pledged assets

Pledged assets represent assets securing various financings. These assets can only be used by the party benefitting from

the pledge if there is an event of default under the respective financing documents or the appropriate remedy period has elapsed.

The following assets have been pledged as securities for bank debt

As of 31 December

MSEK 2012 2013

Shares in subsidiaries 5,737 6,134

Mortgages on vessels 32,772 34,198

Mortgages on properties 15,971 15,944

Chattel mortgages 1,273 1,994

Investment in affiliated companies 1,028 1,028

Marketable securities 931 1,015

Trade debtors 391 386

Short term investments 3 118

Reservation of title 52 52

Assets pledged, other 1,747 975

Total assets pledged for normal bank debt 59,905 61,844

Investment in SPEs 5,170 4,311

Total assets pledged for bank debt 65,075 66,155

Long-term and short-term debt and capitalized lease obligations 49,804 50,776

Debt in SPEs 3,974 3,944

Total debt and capitalized lease obligations 53,778 54,720

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

STENA AB 2013 53

29. CONSOLIDATED STATEMENTS OF CASH FLOWSIn 2013 seven acquisitions were competed. In Adactum Ballingslöv acq-

uir ed Southdown Kitchen Furniture, S-Invest acquired three companies

and Renewable acquired Old Harbour Holding AB. Furthermore Austen

Maritime Services Pte Ltd and Ormudden Invest AB have been acquired.

The most essentials acquisitions for the group

are described below :

Austen Maritime Services Pte

On 18 January 2013 Northern Marine Management Ltd acquired the

remaining 50% in the JV Austen Maritime Services Pte Ltd and Francois

Marine Services Pte Ltd. Francois Marine Services Pte Ltd was at the

time of the acquisition a subsidiary to Austen Maritime Services Pte Ltd

due to a pre-acquisition. Austen Group is based in Singapore with 24

employees within Austen and 47 employees within Francois . The

group specializes in the supply of products, services and catering ser-

vices to all types of vessels. The total acquisition is one of the steps to

increase the market share in Singapore and the Far East. The purchase

price for Austen Maritime Services Pte Ltd with the subsidiary Francois

Marine Services Pte Ltd was MSEK 36 and the difference between the

purchase price paid and the adjusted fair value of acquired net assets

amounting to MSEK 36 is classified as goodwill. The revenue included

in the consolidated statement of comprehensive income since

18  January 2013 contributed by Austen Maritime Services Pte Ltd

and subsidiary was MSEK 401. The companies also contributed profit

of MSEK 46 over the same period.

Southdown Kitchen Furniture Ltd

3 January 2013 Ballingslöv International AB acquired 100% of the UK

kitchen manufacturer company Southdown Kitchen Furniture Ltd and

its subsidiaries. Southdown Kitchen Furniture Ltd, operates under the

brand Manhattan Furniture. Manhattan Furniture has been one of the

fastest growing kitchen manufacturers in the United Kingdom during

the last years. The group has approximately 250 employees and the

headquarter is located in Lancing, West Sussex in UK. The acquisition is

in line with Adactum´s strategy to make long-term investment to build

strong and profitable companies. The total purchase price was MSEK

140 and the difference between the purchase price paid and the

adjusted fair value of acquired net asset MSEK 128 refers to goodwill.

The revenue included in the consolidated statement of comprehensive

income since 3 January 2013 contributed by Southdown Kitchen Ltd

was MSEK 426. Southdown Kitchen Ltd also contributed with a profit

of MSEK 25 during the same period.

MSEK 2013

Assets and liabilities acquired:

Intangible assets

Tangible fixed assets 305

Financial fixed assets 5

Inventories 21

Current receivables 157

Cash and cash equivalents 314

Other provisions

Long-term debt (240)

Current liabilities (315)

Deferred tax (183)

Acquired net assets 64

Goodwill 275

Rights to routes

Non-controlling interest

Purchase price (339)

Deferred purchase price 11

Cash and cash equivalents in the acquired businesses 314

Effect on the Group’s cash and cash equivalents (13)

Total expenses related to acquisitions amounted to MSEK 6 and have been reported as direct operating expenses.

For 2012 the total expenses related to acquisitions amounted to MSEK 10.

The total value of the acquired assets and liabilities is presented in the below table. The acquisitions are presented accumulated since they separately

not are deemed as material. All acquired assets and liabilities were reported according to IFRS, at the time of the acquisition.

54 STENA AB 2013

GROUP

Interest payments Year ended 31 December

MSEK 2012 2013

Interest, paid 2,440 2,468

Interest, received 438 489

Paid tax

Cash paid for taxes in 2013 was MSEK 124, as compared to MSEK 185 in 2012.

CONT. NOTE 29

30. FINANCIAL RISK FACTORS AND FINANCIAL RISK MANAGEMENTThis note describes the financial risk management in the Stena Group.

Accounting principles for financial instruments are described in Note 1

and the financial information for the year 2013 and 2012 are described

in Note 31. Other notes that include information used in Note 30 and

31 is Note 13 Investments in SPEs, Note 14 Marketable securities, Note

15 Other noncurrent assets and Note 18 Short-term investments.

Financial instruments in the Stena Group consist of bank loans,

derivatives, finance lease contracts, accounts payable, accounts receiv-

able, bonds, shares and participations as well as cash and short-term

investments.

The primary risk deriving from trading of financial instruments are

market risks including interest-rate risk, currency risk and price risk,

Credit risk and Liquidity risk. All of these risks are handled in accord-

ance with an established financial policy.

Financial risk factors

The Group’s activities expose it to a variety of financial risks. The

Group’s overall risk management policy focuses on the unpredictability

of the financial markets and aims to minimise potential adverse effects

on the Group’s financial results.

The Group employs derivative instruments to hedge exposure to

certain risks.

Risk management is handled by a central finance department,

Stena Finance, in accordance with policies determined by the Board of

Directors. Stena Finance identifies, evaluates and hedges financial risks

in close co-operation with the Group’s operating units. The Board of

Directors prepares written policies for both overall risk management

and for risk management of specific areas such as currency risk, inter-

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

financial instruments and the investment of excess liquidity.

The Group uses financial instruments to reduce the risk of major

adverse effect on its results from price changes in currency, interest

rates and oil markets.

As a basic principle fixed assets are financed with long-term funding

in the form of issued bonds, bank debt and leasing liabilities. Each sub-

sidiary’s assets are financed in local currency and to the extent that

assets and liabilities in foreign currency cannot be matched, the net

exposure is hedged with financial derivative contracts.

To achieve a desired currency mix and interest fixing profile the

Group uses various types of interest rate derivatives such as fixed rate

swaps and cross currency interest rate swaps. Interest rate options are

also used either to cap or to lock in a range of the interest rate level.

Currency risks also arise when converting foreign currency denomi-

nated Income Statement or Balance Sheet items to SEK and when con-

verting cash flows in foreign currency. These risks are reduced by hedg-

ing with forward foreign exchange contracts or with currency options.

Fluctuations in the price of bunker fuel, which predominantly affects

Ferry operations, are managed by fixed price agreements with the

supplier for the various grades of bunker fuels or by using financial

derivatives for crude oil.

As part of its tanker operations the Group also uses, to a limited

extent, contracts for freight rates and forward freight agreements.

Financial risk management is carried out within the scope of the

Group’s financial policies and manuals mainly by the treasury unit

in Sweden.

Market risk – Interest rate risks

The Group holds fixed assets mainly in ships and real estate in USD,

SEK, EUR and GBP and as a consequence the debt portfolio and the

accompanying interest rate risks are distributed by the same currencies.

In order to manage this risk and to achieve desired interest rate levels

the Company’s management makes regular assessments of the interest

rate risks. This exposure is adjusted with interest rate derivatives which

to the largest possible extent are matched against the maturity profiles

of the underlying debt.

Financial instruments for interest rates, such as futures, swaps or

different types of interest rate options, are used to hedge future inter-

est rate payments. Interest income or interest expenses under these

contracts are allocated to specific periods and reported as an adjust-

ment of the interest expense on the underlying liability. The Group

reports accrued interest at the end of the accounting period, calculated

in accordance with the conditions in the contracts. Generally, the

Financing activities

Other financing activities includes repayment of share capital amount-

ing to MSEK 27 to the minority in the SPEs. In 2012 other financing

activities included cost for financing the Revolver credit facility amount-

ing to MSEK 85.

STENA AB 2013 55

underlying liabilities have a longer duration than the financial hedging

contracts and allocation of accrued interest over a period of time is

carried out as long as the hedging contracts are considered to form an

effective portion of the Group’s overall risk management.

Market risk – Currency risks

The Group is exposed to the risk of fluctuations in foreign currency

exchange rates due to the international nature and scope of its opera-

tions. A substantial portion of the Group’s revenues and expenses are

denominated in USD, but also in GBP and EUR.

The Group’s foreign currency risk arises from:

– the Group’s investment in foreign subsidiaries’ net assets

(equity exposure)

– certain financial assets and liabilities (translation exposure when

converting such balances to each group’s functional currency) and

– fluctuations in exchange rates on the value of the Group’s sales and

purchases in foreign currencies (transaction exposure).

The Group’s policy is to hedge its translation exposure which mainly

arises from USD and EUR borrowing in companies with SEK as their

functional currency. The Group also hedges parts of its transaction

exposure in USD, GBP, EUR, CAD, PLN, NOK, AUD and DKK from

future cash flows from its ferry operations and offshore drilling opera-

tions. In the ferry operation sale mainly relates to CAD, EUR, PLN, NOK

and DKK and purchase to USD. In the offshore drilling operation pur-

chase mainly relates to GBP and AUD.

Translation differences from net investments

Translation differences from the exposure of net assets in foreign sub-

sidiaries are reported directly in the Group’s equity. Derivative instru-

ments attributable to this exposure, such as currency swaps, currency

forward agreements or currency option contracts, are valued at fair

value. These hedge contracts are valued and reported directly against

comprehensive income if the hedges are considered to be effective. If

hedges are no longer considered to be effective the translation differ-

ence are recognized in the finance net.

The interest rate differential is reported as interest income or inter-

est expenses in the Group’s net financial income.

The book value of our net assets of subsidiaries denominated in a for-

eign currency, as of December 31 2013, was approximately SEK 25.6 bil-

lion. The net assets are expressed mainly in Swedish kronor, U.S. dollars,

Euro and British pounds. A 1% change in the value of the SEK against

each of the functional currencies of our subsidiaries would affect our

shareholders’ equity as of December 31, 2013 by MSEK 256.

Translation differences from translation exposure

Monetary assets and liabilities in foreign currency are translated at the

closing rate of exchange. Derivative instruments attributable to the

financial hedging of the value of these balance sheet items, such as

currency swaps, currency forward agreements or currency option con-

tracts, are valued at fair value, which includes translation at the closing

rate of exchange, while changes in fair value are reported gross as

exchange rate differences in the Group’s net financial income, where

the translation of monetary assets and liabilities is also reported. Inter-

est rate differential from currency swaps or forward agreements are

reported as interest income or interest expenses in the Group’s net

financial income. According to the Group’s finance policy, 100% of

such exposure should be hedged.

Translation differences from transaction exposure

Realized results from currency forward agreements or currency option

contracts, including paid or received premiums from option contracts,

which are intended to hedge expected or contracted future cash flows

in foreign currency, are allocated to a particular period and reported as

an adjustment of the underlying transaction when it takes place. The

hedge contracts are valued and reported directly against comprehen-

sive income if an effective hedge. According to the Group’s finance

policy, 0–100% of such exposure should be hedged.

Market risk – Price risk

Oil price risk

The Group is exposed to the price of bunker fuel used for the opera-

tion of its vessels and uses forward contracts, swaps and options to

hedge its oil price risk. Hedge contracts are regularly entered into to

match the underlying costs of deliveries of bunker fuel. The hedge con-

tracts are valued and reported directly against comprehensive income

if an effective hedge. The results of these contracts are allocated to

specific periods and matched against underlying exposure. The con-

tracts are settled on a monthly basis and reported as an adjustment of

the cost for bunker fuel for the current period.

For the current route, ferry operations have an annual consumption

of marine bunker fuel and gas oil which combined converts to an

annual volume of about 2.8 million barrels crude oil. A part of this is

hedged on a consecutive basis. All contracts are settled monthly at a

volume corresponding to the underlying consumption.

Equity price risk

The majority of all equity holdings within Short-term investments and

Marketable securities are traded at an active market at an exchange,

hence no illiquidity, counterparty risk or other uncertainty discounts

have been applied. A total risk limit for investment and trading in equi-

ties, equity indices and bonds has been approved by the Board of Direc-

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

risk mandate are allocated per trader/portfolio, reflecting a 10 % over-

night adverse price movement. As a complement to the price risk meas-

urement, specific risk, sector risks and geographic risks are followed up

and reported. A minimum share of the total financial investments

should be made in liquid securities. The Finance policy also governs

what type of financial instruments that are approved. In order to

reduce the credit risk when investing in corporate bonds, there are

certain approved limits for credit rating of the issuer.

Our portfolio of equities is well diversified, both in terms of markets

and industries. Investments are made within the boundaries of our

finance policy in terms of risk- and loss limits. As of 31 December 2013,

a change of +/–10% in the unrealised value of all our equity holdings

within Short-term investments and Marketable securities, would have

56 STENA AB 2013

GROUP

CONT. NOTE 30

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

As of 31 December 2012 As of 31 December 2013

MSEKNotional amount Credit risk

Notional amount Credit risk

Currency forward contracts and swaps 20,767 85 26,857 54

Currency options 77 1

Interest rate forward contracts and swaps 33,244 34,642 87

Interest rate options 2,870 13 3,871

Commodity fixed price swaps – oil 1,958 189 2,026 143

Commodity options – oil 73

Total 58,912 287 67,473 285

an effect of +/–MSEK 125 on profit before tax and +/–MSEK 335 rec-

ognised in other comprehensive income less deduction of deferred tax.

Trading activities

The Company also buys and sells certain types of derivative financial

instruments with the objective of generating profits on a short-term

basis. Such financial instruments that are not used in the Company’s

program of interest rate and foreign currency risk management are

referred to as ‘trading’ for purposes of this disclosure. All trading posi-

tions are taken within the limits of the Company’s financial trading

policy. All positions are recorded at fair value and the unrealized gains

and losses are part of the result of the period.

Credit risks

In our operating activities, credit risks occur in the form of receivables

on customers. In our Ferry operations, credit checks are regularly made

on our customers using well known credit-rating agencies. If the credit

worthiness of the customer is not satisfactory according to the credit

policy, payment in cash is required. In our Offshore Drilling operations,

our customers have generally high credit ratings. Our RoRo vessels are

typically chartered out on a time or bareboat charter. Although such

charterhire is paid in advance and we have the contractual right to

withdraw the vessel and cancel the charter contract if payment is not

received within a certain time, before entering into a charter agree-

ment the credit worthiness of the charterer is investigated using well

known credit-rating agencies. If the credit worthiness is not satisfac-

tory a guarantee is required from the charterer, e.g. in the form of

a bank guarantee.

In our tanker operations where a spot charter arrangement is made,

the charterer is scrutinized before the contract is signed in accordance

with our QA system rules. If the charterer is not considered “first class”

or has certain remarks on his payment possibility, chartering of the ves-

sel can either be denied, or the charterer can be offered to provide a

bank guarantee, or to pay the freight before discharge of the cargo

(called BBB). In a period charter arrangement the charterhire is paid in

advance. If the charterhire is not paid within a certain time we have the

right to withdraw the vessel and cancel the charter contract. Regarding

buy and sell arrangements of vessels the procedures are dictated by

the buy/sale contract (MOA) where a vessel is not released to a buyer

until the full payment has been received into sellers’ bank account.

In our Property operations, both residential and commercial tenants

make the rental payments in advance. Nevertheless, a credit check is

always made on new tenants, residential as well as commercial, and

commercial tenants are put on regular “credit-watch” throughout the

rental period. If the potential tenant does not fulfill the criteria set out

in our finance policy, the tenant can either be denied a rental contract

or be asked to make additional pre-payment or provide a bank guaran-

tee (commercial tenants).

All financial instruments are entered into with counterparties who

are considered to be creditworthy institutions and terms and condi-

tions are documented. In the normal course of business, none of the

parties demand collateral for credit exposure from financial instru-

ments. All financial derivatives are traded within the framework of

established ISDA agreements, where positive and negative market val-

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

market values per counterparty.

Liquidity risks

Liquidity risk is managed by maintaining an adequate level of cash,

cash equivalents and available financing through unutilized committed

credit facilities and the possibility to sell short term marketable hold-

ings in equities and bonds. Due to the dynamic character of the busi-

ness, the need for financing flexibility is satisfied by arranging part

of the company’s funding in the form of committed Revolving Credit

Facilities, under which short term requirements for liquidity can

be met.

The management regularly monitors the company’s liquidity

reserves, based on anticipated cash flows. This is carried out on both

operational company level and centrally at the treasury department in

line with best practice and the limits set up for on a group wide basis.

Furthermore, it is the policy of the group to calculate future cash flows in

all major currencies and quantify the liquidity needed to meet those cash

flows, to monitor balance sheet liquidity ratios in relation to both internal

and external minimum levels and to maintain plans for debt financing.

STENA AB 2013 57

As of 31 December 2013, MSEK TotalLess than

1 yearBetween 1

and 2 yearsBetween 2

and 5 yearsMore than

5 years Not specified

Property loans 12,678 843 779 794 10,262

Other bankloans 25,299 3,442 5,562 5,840 10,455

Revolving Credit Facility 11,392 11,392

Other credit facilities 534 331 203

Senior Notes 5,324 2,657 2,667

Financial leasing debt 873 231 179 450 13

Operational leasing debt 5,093 1,096 713 1,373 1,911

Trade accounts payable 1,722 1,722

Derivatives 1,211 257 144 485 325

Total 64,126 7,922 7,377 11,599 25,633 11,595

The table below shows the group’s financial debts, sorted by the

remaining years until the agreed maturity date. The figures shown in

the table are based on agreed confirmations and constitute undis-

counted cash flows. Cash flows in foreign currency is converted to

SEK by using the closing exchange rates.

Property loans consists principally of bank mortgage loans on real

estate, buildings and land in the Company’s real estate business seg-

ment. These loans are denominated in SEK and EUR, respectively.

Other loans consist of long term bank loans used to finance the acqui-

sition of vessels and other assets. They are denominated in USD, GBP,

EUR and SEK, respectively.

As of December 2004 the Company has a Revolving Credit Facility

of USD 1 billion. The facility was renegotiated in September 2012 and

carries a maturity of 5.5 years and proceeds was used to refinance the

$1 billion “old” facility dated 8 December 2004. Obligations under

the facility are secured mainly by mortgages on certain vessels. Bor-

rowings under the facility bear interest at a rate based on LIBOR plus

an applicable margin based on the utilization of the facility. The facility

imposes certain covenants regarding levels of working capital, cash and

cash equivalents and interest coverage ratio. As of 31 December 2013,

the utilized portion of the facility was MUSD 625, of which MUSD 619

was actually drawn and MUSD 6 used for issuing of bank guarantees.

As of 31 December 2012 the utilized portion of the facility was MUSD

506, of which MUSD 501 was actually drawn and MUSD 5 used for

issuing of bank guarantees.

As of 2007, the Company has an additional Revolving Credit Facility

of MUSD 200. This facility was renegotiated during 2013 and the credit

line increased from MUSD 200 to MUSD 300. The utilized portion of

the facility as of 31 December 2013, was MUSD 146. As of 31 December

2012, the utilized portion of the facility was MUSD 138.

As of 2010, the Company has an additional Revolving Credit Facili-

ties of MSEK 6,660 Revolving Credit Facility with Svenska Handels-

banken and Nordea and guaranteed by EKN. As of 31 December 2013,

the utilized portion of the facility was MSEK 6,436. As of 31 December

2012 the utilized portion of the facility was MSEK 5,173. As of 31

December 2012 the Company had a total of MSEK 5,551 in unutilized,

mainly uncommitted, overdraft facilities and other similar lines of

credit, as compared to MSEK 7,825 as of 31 December 2012 including

unutilized portions of Revolving Credit Facilities.

“Not specified” includes borrowings and utilized credit lines that

have formal repayment dates in 2014. These loans have been classified

as long-term because it is the intention of the Company to refinance

these loans on a long-term basis. “Not specified” also includes the uti-

lized portion of the Revolving Credit Facilities.

The revolving credit facility imposes various financial and operating

covenants. The principal financial covenants (i) require us to maintain

current assets and committed undrawn facilities in an amount greater

than or equal to 125% of consolidated current liabilities, (ii) require us

and our subsidiaries to maintain minimum cash and cash equivalents of

not less than MUSD 100, (iii) require our net debt to be no greater than

65% of the capitalization, and (iv) require us to maintain ownership of

the security parties that, at the date of execution of the credit facility

agreement, are members of the Stena AB group.

58 STENA AB 2013

GROUP

31. FINANCIAL INSTRUMENTS

Financial instruments per category

Financial instruments measured at fair value through profit and loss Financial instruments

MSEK

As of 31 December 2012Fair value

optionHeld for trading1)

Deriva-tives

held for hedging

Held to maturity

Available for sale

Loans and receivables

Other financial liabilities

Totalcarrying

value

Total fair

value

Assets

Marketable securities 1,835 3,283 5,118 5,118

Other noncurrent assets 1,034 1,034 1,034

Trade debtors 2,823 2,823 2,823

Short-term investments 198 1,897 2,095 2,095

Investments in SPEs 4,723 447 5,170 5,117

Other receivables 94 400 494 494

Total 1,835 292 400 4,723 4,764 4,720 16,734 16,681

Liabilities

Senior notes 5,992 5,992 6,333

Other Long-term interest bearing debt 46,877 46,877 46,877

Short-term interest bearing debt 2,927 2,927 2,927

Trade accounts payable 1,764 1,764 1,764

Debt in SPEs 3,974 3,974 3,974

Other liabilities 279 1,710 1,989 1,989

Total 279 1,710 61,534 63,523 63,864

As of 31 December 2013

Assets

Marketable securities 898 3,345 4,243 4,243

Other noncurrent assets 1,137 1,137 1,137

Trade debtors 2,849 2,849 2,849

Short-term investments 348 1,346 1,694 1,694

Investments in SPEs 4,092 219 4,311 4,272

Other receivables 80 667 747 747

Total 898 428 667 4,092 4,701 4,195 14,981 14,942

Liabilities

Senior notes 5,324 5,324 5,850

Other Long-term interest bearing debt 45,929 45,929 45,929

Short-term interest bearing debt 4,847 4,847 4,847

Trade accounts payable 1,722 1,722 1,722

Debt in SPEs 3,944 3,944 3,944

Other liabilities 216 995 1,211 1,211

Total 216 995 61,766 62,977 63,503

1) Held for trading includes exchange contracts for hedging translation exposure, but not included in hedge accounting, reported in other liabilities, MSEK (35) and MSEK (49) in 2012 and interest rate contracts for hedging interest, but not included in hedge accounting, reported in other liabilities, MSEK (101) and MSEK (136) in 2012

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

described in Note 1 and financial risk management is described in Note 30.

STENA AB 2013 59

Financial instruments at fair value

For short term assets and liabilities in Loans and receivables and Other

financial liabilities we assume the carrying value and fair value to be

the same. For senior notes the fair value is based on quoted prices and

for other long term liabilities we assume that the fair value would not

materially impact the carrying value. For the rest of the Group’s finan-

cial instruments (excluding investments in SPEs, please see not 13)

the table below shows the fair value in different levels as of December

2012 and 2013, respectively.

The different levels indicate to what extent the market value has

been used when calculating the fair value.

Investments in level 1 consist of equity shares and fixed income clas-

sified as held for trading, fair value option or financial assets available

for sale. The financial instruments are traded on an active market and

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

bid-rate on the balance sheet date.

Financial instruments in level 2 consist of foreign exchange contracts

and interest rate swaps entered for trading or hedging purpose. The

valuation of interest rate swaps are made using discounted cash flows

based on forward interest rates in observable yield curves. Level 2

also consists of financial assets available for sale and the fair value is

received from external party. Regarding loans in level 2 the fair value

is determined by the nominal amount as long as the underlying value

of the loan has not materially been changed.

Investments in level 3 consist of equity securities and debt invest-

ments. For equity securities we calculate the value based on estimated

discounted cash-flows. Fair value is determined by hypothetical deter-

mine what the market price would have been if there would have been

a market for these instruments. For debt investments we estimate

the value based on the nominal amount taking into consideration the

credit risk of the loan.

As of 31 December 2012 As of 31 December 2013

Level 1 Level 2 Level 3Total

balance Level 1 Level 2 Level 3Total

balance

Assets

Financial assets at fair value through profit or loss

– Trading derivatives 94 94 80 80

– Trading securities 1,980 53 2,033 1,226 21 1,247

Derivatives used for hedging 400 400 667 667

Available-for-sale financial assets

– Equity securities 1,508 748 1,034 3,290 1,617 842 1,041 3,500

– Debt investments 939 88 1,027 804 81 96 981

Total assets 4,427 1,383 1,034 6,844 3,647 1,691 1,137 6,475

Liabilities

Financial liabilities at fair value through profit or loss

– Trading derivatives 280 280 216 216

Derivatives used for hedging 1,710 1,710 995 995

Total liabilities 1,990 1,990 1,211 1,211

Specification of financial instruments in Level 3

MSEKAs of 31 December 2012

Equity security Real Estate Fund 1

Equity security Real Estate fund 2

Equity security Other

Debt investment Convertible loan Total

Opening balance 1 January 2012 771 274 450 1,495

Total unrealized gains/losses

– recognised in profit or loss

– recognised in other comprehensive income (48) (33) (3) (84)

Proceeds from acquisitions and sales, net 1 1

– whereof realised result 15 15

Reclassification from Level 2 (332) (332)

Translation differences (29) (10) (7) (46)

Closing balance as of 31 December 2012 694 231 109 1,034

60 STENA AB 2013

GROUP

CONT. NOTE 31

As of 31 December 2013

Opening balance 1 January 2013 694 231 109 1,034

Total unrealized gains/losses

– recognised in profit or loss (44) (44)

– recognised in other comprehensive income 47 69 19 135

Impairment recognised in profit or loss (87) (87)

Proceeds from acquisitions and sales, net (21) 101 80

– whereof realised result (23) (23)

Translation differences 21 9 (6) (5) 19

Closing balance as of 31 December 2013 675 309 57 96 1,137

There where no transfers between Level 1–3 during 2013.

The table below shows information about the fair value measurements of level 3 instruments

As of 31 December 2013

Funds DescriptionFair value at 31 December 2013

Valuation techniques

Unobservable inputs

Range of unobserva-ble inputs (probability weighted average)

Relationship of unobservable inputs to fair value

Sensitivity analyses

ING DutchOffice FundsC.V.

The fund invests in prime office real estate only in the Netherlands, and consist of 56 pro-perties

MSEK 675 Estimated discounted cash flows

Future develop-ment of the occupancy rates

The vacancy rate is inserted in the range of 7,5% – 12,5% (weighted average of 8,25%)

The change in the properties occupancy rates lead to a lower / higher fair value

If the vacancy rated is changed with +/– 10% the effect on the fair value will be MSEK +/– 13

Airport RealEstate BasisFunds C.V.

The Schiphol fund consist 16 properties (offices and ware-houses) located on Schiphol Airport grounds in the Netherlands

MSEK 309 Estimated discounted cash flows

Future develop-ment of the occupancy rates

The vacancy rate is inserted in the range of 3,4% – 7,4% (weighted average of 5,4%)

The change in the properties occupancy rates lead to a lower / higher fair value

If the vacancy rated is changed with +/– 10% the effect on the fair value will be MSEK +/– 2

Converti-ble loan

Long term loan MSEK 96 Estimated discounted cash flows

Interest level and credit risk

Market interest rate in average 6.5%

The change in interest rate or credit risk lead to a lower/higher fair value

If the interest rate including credit risk is changed with +/– 100 points the effect on the fair value will be MSEK +/– 1

As of 31 December 2013 a change of +/– 10% in the unrealized value of all our assets in the Level 3 category, would have an effect of +/– MSEK 15

(as of 31 December 2012 +/– MSEK2) on profit before tax and +/– MSEK 99 (as of 31 December 2012 +/– MSEK 101) recognized in other compre-

hensive income.

The table below shows the financial derivatives that are included in ISDA agreements and subject for netting.

MSEK

As of 31 December 2013Financial assets/liabilities, gross

Netted balances

Amounts shown in balance sheet

Financial instruments included in ISDA agree-

ments but not nettedFinancial

instruments, net

Derivative financial assets 747 0 747 500 247

Derivative financial liabilities (1,211) 0 (1,211) (500) (711)

Total (464) 0 (464) 0 (464)

STENA AB 2013 61

Fair value

The table below summarizes the fair value of balance sheet items in

the case where the fair value differs from the carrying value.

The investment in SPEs are classified as follows: Corporate Fixed

Income Bond are classified as “available for sale” and are revalued in

other comprehensive income. Senior Bank Debt are classified as “held

to maturity” and are kept at cost in the balance sheet. To determine the

market values for the Corporate Fixed Income Bonds the company uses

generally accepted public market pricing sources.

The fair value of Senior notes has been calculated by using prices

from Bloomberg.

MSEK2012

Carrying value2012

Fair value2013

Carrying value2013

Fair value

Assets

Investments in SPEs 5,170 5,117 4,311 4,272

Liabilities

Senior notes 5,992 6,333 5,324 5,850

Interest rate hedge contracts

Outstanding interest rate contracts for hedging of the interest rate exposure

MSEK 2012

Notional amount2012

Fair value2013

Notional amount2013

Fair value

Contracts excluding SPE

Interest rate swaps floating to fixed

– receivable position 3,000 47 12,143 467

– payable position 29,593 (1,648) 22,389 (872)

Interest rate caps

– receivable position 629 0 633 0

– payable position 1,000 (16)

Interest rate collar

– payable position 2,000 (131) 2,000 (91)

Contracts SPE

Interest rate swaps floating to fixed

– payable position 651 (12)

Interest rate caps

– receivable position 241 18 238

Total 36,114 (1,726) 38,403 (512)

Whereof the fair value of the instruments used in hedge accounting,

excluding CDO/CLOs, amounts to MSEK (411) as of 31 December 2013

and MSEK (1,595) as of 31 December 2012 and is included in other

current liabilities against the hedge reserve.

The SPEs are investing in different debt securities, see Note 13, and to

reduce the potential negative effects on the actual values of these enti-

ties, interest rate contracts have been entered into at an amount equal

to that of the underlying fixed rate bonds.

62 STENA AB 2013

GROUP

CONT. NOTE 31

Currency hedge contracts

The following two tables summarize the contractual net amounts of the Company’s forward exchange and option contracts to hedge the translation

and transaction exposures. Notional amount is gross amount.

Outstanding currency hedge contracts for translation and equity exposure

MSEK2012

Notional amount2012

Fair value2013

Notional amount2013

Fair value

Currency forward contracts

– receivable position 12 0 170 3

– payable position 548 (2) 274 (5)

Currency swap contracts

– receivable position 7,107 148 10,028 87

– payable position 7,582 (104) 11,455 (135)

Total 15,249 42 21,927 (50)

Whereof the fair value of the instruments used in hedge accounting for equity exposure, amounts to MSEK (25) as of 31 December 2013 (MSEK 91

as of 31 December 2012) and is included in other current liabilities (other current assets) against the hedge reserve.

Outstanding currency hedge contracts for transaction exposure

MSEK2012

Notional amount2012

Fair value2013

Notional amount2013

Fair value

Currency forward contracts

– receivable position 1,119 36 323 13

– payable position 1,054 (23) 696 (9)

Currency swap contracts

– receivable position 1,140 60 1,368 42

– payable position 2,205 (67) 1,846 (83)

Total 5,518 6 4,233 (37)

Whereof the fair value of the instruments used in hedge accounting for transaction exposure, amounts to MSEK (27) as of 31 December 2013 and

MSEK 19 as of 31 December 2012 and is included in other current liabilities (other current assets) against the hedge reserve.

STENA AB 2013 63

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

Hedge accounting contracts for transaction exposure

MSEK2012

Notional amount2012

Fair value2013

Notional amount2013

Fair value

SEK companies

USD 643 (4) 656 (4)

EUR 622 (7) (434) (6)

NOK (121) 2 (111) 1

Other (26) 2 125 2

USD companies

GBP 318 15 607 11

NOK 421 37 54 0

AUD 63 0

EUR companies

USD 468 5 476 (19)

CAD (549) (3) (266) 31

SEK (36) 22 0

Other 248 (19)

GBP companies

EUR 85 (2) 450 (35)

USD 615 (6) (27) (6)

DKK companies

USD 47 (1) 45 (2)

Total 2,735 19 1,660 (27)

Oil price contracts

Outstanding hedge contracts for bunker fuel exposure

MSEK2012

Notional amount2012

Fair value2013

Notional amount2013

Fair value

Raw material swap contracts

– receivable position 1,957 183 2,026 135

Raw material option contracts bought call 293 3

Raw material option contracts sold put (219) (1)

Total 2,031 185 2,026 135

The fair value of the instruments used in hedge accounting for bunker fuel exposure, amounts to MSEK 135 as of 31 December 2013 and MSEK 183

as of 31 December 2012 and is included in other current assets against the hedge reserve.

Trading contracts

Outstanding derivative contracts for trading activities

MSEK2012

Notional amount2012

Fair value2013

Notional amount2013

Fair value

Foreign exchange spot and forwards 914 (1) 697 0

Currency options1 4 0 77 0

Interest rate instruments 171 (1) 123 0

Total 1,089 (2) 897 0

1) The notional amount is deltaadjusted

64 STENA AB 2013

GROUP

32. PERSONNEL

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

2012 2013

Total No. of females Total No. of females

Parent Company:

Board, CEO, Executive vice president 3 3

Other employees 27 16 30 17

Subsidiaries in Sweden 4,251 1,717 4,440 1,779

Total Sweden 4,281 1,733 4,473 1,796

Subsidiaries outside of Sweden

Great Britain 2,150 550 2,441 587

The Netherlands 721 78 698 111

Denmark 884 364 833 345

Germany 164 73 358 141

Ireland 32 21 21 15

Norway 74 35 135 37

Poland 48 36 44 32

Switzerland 5 4 16 7

Spain 137 16 128 14

Portugal 11 2 10 1

France 11 2 10 1

Luxembourg 9 5 8 4

China 93 14 93 14

Singapore 46 12 157 71

Korea 102 10 137 19

United States 26 8 24 8

Brazil 3 8

India 82 39 94 43

United Arab Emirates 68 4 74 4

Thailand 19 3

Lithuania 6 2 33 24

Australia 4 1 11 1

Russia 8 7 9 8

Other 14 3 33

Shipborne employees 1,586 18 1,481 8

Total outside of Sweden 6,284 1,304 6,875 1,498

Total Group 10,565 3,037 11,348 3,294

Shipborne employees refers to drilling and shipping activities, which are performed world wide. For Ferry operations (Stena Line), such persons

have been allocated by country. The total number of shipborne employees in Stena Line in 2013 was 3,790 as compared to 3,773 in 2012.

STENA AB 2013 65

For Swedish-flagged vessels employed in international shipping activi-

ties, the Company has received a subsidy equal to all social security

costs and income taxes payable by the employers on behalf of employ-

ees who work on board such vessels. The amount of this subsidy in

2013 was MSEK 378, out of which MSEK 345 related to the ferry oper-

ations. In 2012, the amount of the subsidy was MSEK 372, out of

which MSEK 300 related to the ferry operations. The amounts received

have reduced personnel costs.

Remuneration of Chief Executives

Salaries of MSEK 12 were paid to the Chief Executive Officer and

the Executive Vice President in 2013 and MSEK 12 in 2012. The

correspond ing pension charges amounted to MSEK 7 in 2013 and

MSEK 6 in 2012. The aggregate compensation paid by the Stena AB

to its directors (a total of ten persons, CEO included) amounted to

MSEK 8 in 2013 and MSEK 9 in 2012. Of total salaries paid to other

employees MSEK 42 were paid to other officers than the Chief Executive

Officer, the Executive Vice President and the board members in 2013

(a total of eight persons) and MSEK 51 in 2012.

The Chief Executive Officer has retirement conditions allowing

retirement from 65 years of age with a salary of 65% of the salary then

valid. The period of notice from either parties is 12 months. Severance

pay amounts to a maximum of 24 months salary. The board members

of Stena AB were paid KSEK 300 in 2013, out of which KSEK 50 was

paid to the Chairman of the Board and KSEK 25 was paid to the Chief

Executive Officer. In 2012, the board members of Stena AB were paid

KSEK 300, out of which KSEK 50 was paid to the Chairman of the

Board and KSEK 25 was paid to the Chief Executive Officer.

The Chairman of the Board has in addition invoiced KSEK 2,781 and

KSEK 2,715 for consultations for the years 2013 and 2012 respectively.

In the Board of Directors, 80% are men (80% in 2012) and 20%

women (20% in 2012). 88% of other senior executives are men and

12% are women. In 2012 90% where men and 10% were women.

Total personnel costs

2012 2013

MSEKParent

company Subsidiaries TotalParent

company Subsidiaries Total

Wages, salaries and other remuneration 43 4,381 4,424 48 5,048 5,096

Pension costs 11 388 399 11 421 432

Other social charges 17 520 537 18 614 632

Total 71 5,289 5,360 77 6,083 6,160

66 STENA AB 2013

GROUP

33. RELATED PARTY TRANSACTIONS

We have entered into various transactions with other companies in

the Stena Sphere, which includes the companies wholly owned by

the Sten Allan Olsson family in Sweden, Sessan and Stena Metall and

their respective subsidiaries. Another significant company within the

Stena Sphere is Concordia which is 52% owned by Sessan. Shares in

Concordia are listed on NASDAQ OMX Stockholm. The significant trans-

actions between the Company and its affiliates are described below.

All transactions have been made at arm’s length.

Concordia

Concordia and the Company (indirectly through Stena Bulk AB, a

wholly owned subsidiary of the Company) are parties to an allocation

agreement (the “Allocation Agreement”) pursuant to which Concordia

may elect to participate 100%, 50% or not to participate in business

opportunities identified by Stena Bulk relating to the chartering of

crude oil tankers. The net outcome of the agreement, including results

of forward contracts, was in 2013 and 2012 SEK 0, respectively.

We provide certain services to Concordia such as administration,

marketing, commercial management, insurance and technical support

for Concordia’s owned and chartered vessels, including administration

of jointly chartered vessels, offices and office services for Concordia’s

personnel and certain financial and other services. We earned fees for

these services of MSEK 35 in 2012 and MSEK 38 in 2013.

Sessan

Since June 1999, we have served as the business manager of Sessan

for its 50% participation in a Norwegian partnership that owns the

shuttle tanker Stena Sirita, which is chartered on a two-year charter

until 2015. In 2003, we also became the business manager of Sessan

for its 50% participation in the shuttle tanker Stena Spirit, which is

chartered pursuant to a 15-year contract to Petrobras in Brazil.

We earned total fees for these services of MSEK 1.3 in 2012 and

MSEK 1.3 in 2013.

In December 2002, we sold the remaining 50% of the RoPax vessel

Stena Jutlandica to Sessan who acquired the first 50% of this vessel

from us in 1996. The vessel is chartered back under an operating lease,

for which we paid charterhire of MSEK 59 in each of the years 2012

and 2013, respectively.

Stena Metall

We purchase a substantial part of our bunker fuel from Stena Metall.

Such purchases aggregated MSEK 2,335 and MSEK 1,753 in 2012 and

2013, respectively.

We provide management and other services to Stena Metall. We re -

ce iv ed MSEK 1 in each of the years 2012 and 2013 for these services.

Stena Metall has paid Stena Line UK MSEK 62.6 for the financial

year ended 31 December 2013 and MSEK 97 for the financial year ended

31 December 2012, for charters of two vessels – Stena Superfast VII and

Stena Superfast VIII. The vessels have been re charter ed to Stena Line

Irish Sea for MSEK 90 in 2013 and MSEK 141 in 2012. In 2013 Stena

Rederi AB acquired the company owning the vessels for MSEK 47.

As per December 2012, Stena Renewable sold two wind mill parks

to Stena Metall for MSEK 486. Stena Renewable will continue to give

management services to the companies and the annual fee is MSEK

2.6, which has been paid in 2013.

Olsson Family

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

the years 2012 and 2013, we paid MSEK 40 and MSEK 40, respectively,

in respect of such properties.

We manage certain properties owned by members of the Olsson

family. In the years 2013 and 2012, members of the Olsson family paid

us MSEK 17 and 16, respectively, for such management services.

We have sold the property Lomma 25:96 for MSEK 7,425, to

Fastighets AB Kalvringen, owned by the family.

We have agreed to pay Dan Sten Olsson an annual indexed re tire-

ment benefit for life.

34. SUBSEQUENT EVENTS

In January 2014 the RoPax vessel Dieppe Seaways was acquired. Die-

ppe Seaways is a sister vessel to Stena Superfast VII and Stena Super-

fast VIII. Dieppe Seaways is currently on a charter to DFDS Seaways

from acquisition date until November 2014.

In January 2014 a ten year bond of MUSD 600 was issued. The pur-

pose of this transaction was to extend our amortization profile and pay

outstanding amounts under our existing credit facility.

In February 2014 another ten year bond of MUSD 350 was issued

and a MUSD 650 Term loan B was issued which is a seven year loan

with low rate of amortization. The guarantee for both bond and loan

consists of the units Stena DrillMAX and Stena Carron. The purpose of

this transaction was to extend existing profile of amortization and

increase liquidity. As a result of this transaction the available facilities

in our existing RCF of MUSD 1,000 will be reduced to MUSD 600.

In February 2014 Stena Line acquired the operation on the route

Rosslare (Ireland) – Cherbourg (France). The acquisition will benefit

the network as well as improve Stena Line’s strategic position in the

southern part of Ireland. The operation will be taken over as from

April 2014.

STENA AB 2013 67

Years ended 31 December

MSEK Note 2012 2013

Revenues 1 149 136

Administration expenses 2 (187) (199)

Other operational income (42) 32

Income from operations (80) (31)

Result from shares in Group companies 3 1,337

Result from securities and receivables accounted for as tangible fixed assets 4 123 (42)

Other interest income and similar profit/loss items 5 255 237

Interest expense and similar profit/loss items 6 (472) (810)

Finance net 1,043 (615)

Group contribution 7 (760) 679

Income before tax 203 33

Taxes 8 158 (10)

Net income 361 (23)

Parent Company

INCOME STATEMENTS

68 STENA AB 2013

PARENT COMPANY

Parent Company

BALANCE SHEETS As of 31 December

MSEK Note 2012 2013

Assets

Tangible fixed assets

Shares in Group companies 9 15,651 15,801

Long-term receivables, Group companies 9 7,392 8,497

Marketable securities 10 188 342

Other non-current assets 10 478 459

Total financial fixed assets 23,709 25,099

Total non-current assets 23,709 25,099

Current assets

Short-term receivables, Group companies 1,599 820

Other receivables 89 20

Prepaid expenses and accrued income 11 35 54

Total short-term receivables 1,723 894

Cash and cash equivalents

Total current assets 1,723 894

Total assets 25,432 25,993

Shareholders’ equity and liabilities

Shareholders’ equity

Share capital, 50,000 shares, SEK 100 each 5 5

Statutory reserve 2 2

Total restricted equity 7 7

Retained earnings 12,528 12,699

Net income 361 23

Total unrestricted equity 12,889 12,722

Total shareholders’ equity 12,896 12,729

Non-current liabilities

Long-term debt 12 5,187 5,331

Senior Notes 13 5,154 6,436

Pensions and other non-current liabilities 8 12

Total non-current liabilities 10,349 11,779

Current liabilities

Senior Notes 13 838

Trade accounts payable 11 9

Current liabilities, Group companies 1,179 1,262

Other current liabilities 5 40

Accrued costs and prepaid income 14 154 174

Total current liabilities 2,187 1,485

Total shareholders´ equity and liabilities 25,432 25,993

Pledged assets 15 none none

Commitments and contingent liabilities 15 20,636 20,597

STENA AB 2013 69

Parent Company

STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITYMSEK Share Capital

Statutory reserves

Retained earnings and net income Total

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

Dividend (260) (260)

Transfer to charitable trust (14) (14)

Repayment of the capital in Group Contribution (89) (89)

Net Income 361 361

Equity as of 31 December 2012 5 2 12,888 12,895

Dividend (189) (189)

Net Income 23 23

Equity as of 31 December 2013 5 2 12,722 12,729

Parent Company

STATEMENTS OF CASH-FLOW Years ended 31 December

MSEK Note 2012 2013

Net cash flows from operating activities

Net income 361 23

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

Unrealized result on financial instruments (14) 238

Unrealized foreign exchange (gains)/losses (328) 155

Deferred income taxes 8 (158) 10

Group contributions 760 (679)

Other non cash items 15 6

Cash flow from operations before changes in working capital (636) (247)

Changes in working capital

Receivables within Group companies (2,015) 2,300

Other receivables (35) (21)

Other current liabilities 408 18

Net cash provided by/used in operating activities (1,006) 2,050

Net cash flows from investing activities

Proceeds from sale of securities and long-term receivables, net (462) (423)

Increase of long-term receivables, Group companies (3,316) (1,105)

Net cash provided by/used in investing activities (3,778) (1,528)

Net cash flows from financing activities

Dividend (260) (189)

Group contributions received/paid, net 220 (760)

New borrowings 5,173 1,265

Principal payments on debt (248) (838)

Other financing activities (101)

Net cash provided by/used in financing activities 4,784 522

Net change in cash and cash equivalents 0 0

Cash and cash equivalents at beginning of year 0 0

Cash and cash equivalents at end of year 0 0

70 STENA AB 2013

PARENT COMPANY

Parent Company

NOTES

1. REVENUESThe revenues in the parent company refer to services made for Group Companies. For 2013 the revenues were MSEK 136, whereof 88% from Group

Companies. For 2012 the revenues were MSEK 149, whereof 94% from Group Companies.

2. ADMINISTRATION EXPENSESFees to the auditors Years ended 31 December

MSEK 2012 2013

Audit services 5 5

Tax services 3 1

Total 8 6

3. RESULT FROM SHARES IN GROUP COMPANIESDuring 2012 a dividend was received from Stena International S.A. amounting to MSEK 1,137.

4. RESULT FROM SECURITIES AND RECEIVABLES ACCOUNTED FOR AS TANGIBLE FIXED ASSETS

Years ended 31 December

MSEK 2012 2013

Unrealized result from financial instruments 14 (132)

Exchange differences (86) (27)

Interest income 195 117

Total 123 (42)

Of the total interest income MSEK 117 came from Group companies. In 2012, MSEK 180 came from Group Companies.

All amounts in MSEK. Accounting principles, see Note 1 in the Consolidated Notes.

Audit fees relate to examination of the annual report, financial

accounting and the administration by the Board and the President as

well as other tasks related to the duties of a company auditor.

Tax services include both tax consultancy and tax compliance services.

All other tasks are defined as other fees.

The fees for 2013 refer to PwC whereas the fees for 2012 refer to KPMG.

STENA AB 2013 7 1

5. OTHER INTEREST INCOME AND SIMILAR PROFIT/LOSS ITEMS Years ended 31 December

MSEK 2012 2013

Intercompany interest income 51 170

Interest income from derivatives 68 67

Unrealized change in value of short-term derivatives 136

Total 255 237

6. INTEREST EXPENSE AND SIMILAR PROFIT/LOSS ITEMS Years ended 31 December

MSEK 2012 2013

Interest expense (589) (641)

Unrealized change in value of short-term derivatives (157)

Exchange differences 126 (5)

Amortization of deferred financing costs (8) (6)

Other financial expenses (1) (1)

Total (472) (810)

Of the total interest expenses MSEK (144) came from Group Companies. In 2012, MSEK (139) came from Group Companies.

7. GROUP CONTRIBUTIONThe company has in 2013 received Group contributions amounting

to MSEK 779 from AB Stena Finans and given MSEK 100 to Stena

Line Scandinavia AB. The company has in 2012 received Group

contributions amounting to MSEK 200 from Stena Fastigheter AB and

given MSEK 650 to Stena Don AB and MSEK 300 to AB Stena Finans.

8. INCOME TAXES Years ended 31 December

MSEK 2012 2013

Income before tax 203 33

Deferred tax 158 (10)

Total taxes 158 (10)

The reconciliation of the difference between the statutory tax rate

in Sweden and the effective tax rate are set forth below

Statutory income tax rate (53) (7)

Expenses not deductible (5) (3)

Non taxable income, received dividend 300

Non taxable/non deductible result of shares (92)

Effect of change in tax rate 8

Tax income/tax expense 158 (10)

Tax paid is shown in note 29 in the Consolidated Notes.

72 STENA AB 2013

PARENT COMPANY

The subsidiaries´ share of larger

Group companies

Located inOwnership,

%

Stena Bulk AB Göteborg 100

Stena Line Scandinavia AB Göteborg 100

Stena Line Holding BV The Netherlands 100

Stena Holland BV The Netherlands 100

Stena Line Ltd The UK 100

Stena Drilling (Holdings) Ltd The UK 100

Stena North Sea Ltd The UK 100

Stena Ropax Ltd The UK 100

Stena Switzerland AG Switzerland 100

Stena Maritime AG Switzerland 100

A complete list of the companies in the Group has been delivered to

the Swedish companies registration office.

The Parent company has the following long-term receivables

on Group companies

MSEKAs of 31 December, 2013

Booked value

Stena Rederi AB 710

AB Stena Finans 6,437

Stena Adactum AB 1,350

Total long-term receivables Group companies 8,497

Opening balance as of 1 January 2013 7,392

New receivables 1,264

Change in receivables (150)

Exchange differences (9)

Closing balance as of 31 December 2013 8,497

10. OTHER FINANCIAL FIXED ASSETSMarketable securities

MSEK

Opening balance as of 1 January 2013 188

Additions 284

Reclassification (133)

Exchange differences 3

Closing balance as of 31 December 2013 342

Marketable securities regard long-term holdings of listed shares (see Note 14 in the Consolidated Notes).

Other long-term assets

MSEKDeferred tax

receivablesOther long-term

receivablesOther long-term

securitiesCapitalized

costs Total

Opening balance as of 1 January 2013 432 8 22 16 478

Additions 3 3

Valuation to fair value 3 (2) 1

Disposal (10) (13) (23)

Closing balance as of 31 December 2013 422 11 23 3 459

Other long-term securities relate to holding non-listed shares (see Note 15 in the Consolidated Notes). Capitalized costs consist of costs for issuing

bonds. These costs are allocated to the loans remaining duration (see Note 6 in the Consolidated Notes).

9. SHARES IN GROUP COMPANIES As of 31 December

MSEK Reg.ID Located inShare,

%Amount of

shares in 000´sBooked value

2012Booked value

2013

Stena Rederi AB 556057-8360 Göteborg 100 25 590 590

AB Stena Finans 556244-5766 Göteborg 100 500 550 550

Stena Fastigheter AB 556057-3619 Göteborg 100 119 2,935 2,935

Stena Adactum AB 556627-8155 Göteborg 100 500 1,714 1,864

Stena International S.A. Luxembourg 100 4,768 9,862 9,862

Total shares in Group companies 15,651 15,801

Stena AB has paid MSEK 150 to Stena Adactum AB as share holders contribution.

STENA AB 2013 73

11. PREPAID EXPENSES AND ACCRUED INCOME As of 31 December

MSEK 2012 2013

Prepaid expenses 18 10

Accrued income 17 44

Total 35 54

12. OTHER LONG-TERM DEBTThe amount is regarding the utilization of credit facility. For information about the credit facility guaranteed by Svenska Exportkreditnämnden

(see Note 23 in the Consolidated Notes).

13. SENIOR NOTESFor information about the Senior Notes (see Note 24 in the Consolidated Notes).

14. ACCRUED COSTS AND PREPAID INCOME As of 31 December

MSEK 2012 2013

Accrued interest expense 140 147

Accrued vacation salaries and social security debt 11 12

Other accrued expenses 3 3

Deferred income 12

Total 154 174

15. PLEDGED ASSETS, COMMITMENTS AND CONTINGENCIES As of 31 December

MSEK 2012 2013

Guarantees, subsidiaries 19,911 20,161

Guarantees, other 725 436

Total 20,636 20,597

16. PERSONNELFor more information about employees, salaries, other remunerations and social securities for employees (see Note 32 in the Consolidated Notes).

74 STENA AB 2013

PARENT COMPANY

PROPOSED TREATMENT OF UNAPPROPRIATED EARNINGSThe following funds in the Parent company are available to the Annual General Meeting (SEK thousand)

Retained earnings 12,699,323

Net income 23,208

Unrestricted equity 12,722,531

The Board of Directors propose the following:

A dividend to the shareholders 200,000

A dividend to Sten A Olssons Foundation for Culture and Science and other public good purposes as a gift according to the Companies Act Chapter 17 Paragraph 5 10,000

A dividend to the Swedish Sea Rescue Society as a gift according to the Companies Act Chapter 17 Paragraph 5 10,000

To be carried forward 12,502,531

Total 12,722,531

Göteborg, 28 April 2014

Lennart Jeansson Dan Sten Olsson

Chairman of the Board Managing Director

Gunnar Brock Anne-Marie Pouteaux Christian Caspar

Board member Board member Board member

Lars Westerberg Jörgen Lorén Mahmoud Sifaf

Board member Employee representative Employee representative

Our Audit Report has been released on 28 April 2014

Peter Clemedtson Johan Rippe

Authorised Public Accountant Authorised Public Accountant

STENA AB 2013 75

Report on the annual accounts and consolidated accounts

We have audited the annual accounts and consolidated accounts

of Stena AB for the year 2013.

Responsibilities of the Board of Directors and the Managing

Director for the annual accounts and consolidated accounts

The Board of Directors and the Managing Director are responsible for

the preparation and fair presentation of these annual accounts and

consolidated accounts in accordance with International Financial

Reporting Standards , as adopted by the EU, and the Annual Accounts

Act, and for such internal control as the Board of Directors and the

Managing Director determine is necessary to enable the preparation of

annual accounts and consolidated accounts that are free from material

misstatement, whether due to fraud or error.

Auditor’s responsibility

Our responsibility is to express an opinion on these annual accounts and

consolidated accounts based on our audit. We conducted our audit in

accordance with International Standards on Auditing and generally

accepted auditing standards in Sweden. Those standards require that

we comply with ethical requirements and plan and perform the audit

to obtain reasonable assurance about whether the annual accounts and

consolidated accounts are free from material misstatement.

An audit involves performing procedures to obtain audit evidence

about the amounts and disclosures in the annual accounts and consoli-

dated accounts. The procedures selected depend on the auditor’s

judgement, including the assessment of the risks of material misstate-

ment of the annual accounts and consolidated accounts, whether due

to fraud or error. In making those risk assessments, the auditor consid-

ers internal control relevant to the company’s preparation and fair

presentation of the annual accounts and consolidated accounts in

order to design audit procedures that are appropriate in the circum-

stances, but not for the purpose of expressing an opinion on the

effectiveness of the company’s internal control. An audit also includes

evaluating the appropriateness of accounting policies used and the

reasonableness of accounting estimates made by the Board of Direc-

tors and the Managing Director, as well as evaluating the overall pres-

entation of the annual accounts and consolidated accounts.

We believe that the audit evidence we have obtained is sufficient

and appropriate to provide a basis for our audit opinion.

Opinions

In our opinion, the annual accounts have been prepared in accordance

with the Annual Accounts Act and present fairly, in all material re spects,

the financial position of the parent company as of 31 December 2013

and of its financial performance and its cash flows for the year then

ended in accordance with the Annual Accounts Act. The consolidated

accounts have been prepared in accordance with the Annual Accounts

Act and present fairly, in all material respects, the financial position of

the group as of 31 December 2013 and of their financial performance

and cash flows for the year then ended in accordance with Interna-

tional Financial Reporting Standards, as adopted by the EU, and the

Annual Accounts Act. A corporate governance statement has been

prepared. The statutory administration report and the corporate gov-

ernance statement are consistent with the other parts of the annual

accounts and consolidated accounts.

We therefore recommend that the annual meeting of shareholders

adopt the income statement and balance sheet for the parent com-

pany and the group.

Other matters

The audit of the annual accounts for the year 2012 was performed by

another auditor who submitted an auditor´s report dated April 29,

2013, with unmodified opinions in the Report on the annual accounts

and consolidated accounts.

Report on other legal and regulatory requirements

In addition to our audit of the annual accounts and consolidated

accounts, we have also audited the proposed appropriations of the

company’s profit or loss and the administration of the Board of Direc-

tors and the Managing Director of Stena AB for the year 2013.

Responsibilities of the Board of Directors

and the Managing Director

The Board of Directors is responsible for the proposal for appropria-

tions of the company’s profit or loss, and the Board of Directors and

the Managing Director are responsible for administration under the

Companies Act.

Auditor’s responsibility

Our responsibility is to express an opinion with reasonable assurance

on the proposed appropriations of the company’s profit or loss and on

the administration based on our audit. We conducted the audit in

accordance with generally accepted auditing standards in Sweden.

As a basis for our opinion on the Board of Directors’ proposed

appropriations of the company’s profit or loss, we examined the Board

of Directors’ reasoned statement and a selection of supporting evi-

dence in order to be able to assess whether the proposal is in accord-

ance with the Companies Act.

As a basis for our opinion concerning discharge from liability, in

addition to our audit of the annual accounts and consolidated acc-

ounts, we examined significant decisions, actions taken and circum-

stances of the company in order to determine whether any member

of the Board of Directors or the Managing Director is liable to the com-

pany. We also examined whether any member of the Board of Directors

or the Managing Director has, in any other way, acted in contravention

of the Companies Act, the Annual Accounts Act or the Articles of

Association.

We believe that the audit evidence we have obtained is sufficient

and appropriate to provide a basis for my opinions.

Opinions

We recommend to the annual meeting of shareholders that the profit

be appropriated in accordance with the proposal in the statutory admin-

istration report and that the members of the Board of Directors and the

Managing Director be discharged from liability for the financial year.

Göteborg 28 April 2014

Peter Clemedtson Johan Rippe

Authorized Public Accountant Authorized Public Accountant

To the annual meeting of the shareholders of Stena AB (publ), corporate identity number 556001-0802

AUDITOR’S REPORT

76 STENA AB 2013

GROUP

FIVE-YEAR SUMMARY

MSEK 2009 2010 2011 2012 2013

Revenues 27,812 27,150 27,968 27 388 30,240

EBITDA excluding sale of assets 7,238 7,073 6,512 7,060 7,947

Income from operations 4,002 3,558 4,578 3,401 3,887

Share of affiliated companies’ results 24 131 60 18 (51)

Income before taxes 2,344 2,680 2,779 1,777 2,148

Vessels 27,257 28,753 34,185 40,708 40,956

Investment properties 24,040 24,148 25,753 26,658 27,831

Other noncurrent assets 28,591 29,842 27,494 26,412 28,150

Cash and cash equivalents/short-term investments 4,877 5,792 4,255 3,676 3,747

Other current assets 7,440 6,403 6,909 7,446 7,528

Shareholders’ equity including deferred income taxes 32,829 33,505 34,645 34,479 39,214

Other provisions 3,042 2,580 2,332 1,994 1,356

Other noncurrent liabilities 48,952 52,176 52,382 56,939 55,919

Current liabilities 7,382 6,677 9,237 11,488 11,723

Total assets 92,205 94,938 98,596 104,900 108,212

Cash flow from operations 7,084 5,065 4,895 5,034 5,017

Net cash used in investing activities (6,456) (9,681) (5,579) (11,553) (4,583)

Net cash provided by/used in financing activities (907) 5,151 559 6,489 (19)

Net change in cash and cash equivalents (248) 482 (78) (6) 472

Number of employees, average 10,236 9,847 10,242 10,565 11,348

Number of vessels1) 91 91 106 117 137

1) Excluding new buildings and external ship management

The Annual Review, the Financial Report and the Sustainability Report are available online at www.stena.com.

Printed reports are provided by birgitta.sandh@stena.com.

Solberg.

Photos and images: Katja Andersson, Dan Ljungsvik, Peter Mild, Per-Anders Hurtigh, Johan Palmborg etc.

Printing: Falk Graphic.

STENA AB FINANCIAL REPORT 2013

CARE“ CARE NURTURES WELLBEING, INNOVATION AND PERFORMANCE AND IS THE FOUNDATION FOR EVERYTHING WE DO”

Dan Sten Olsson

Stena AB (publ)SE-405 19 Göteborg, SwedenTelephone +46 31 85 50 00 www.stena.com