Annual Report 2011 - PGS

Notes to the consolidated financial statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 28 - Accrued Expenses
Accrued expenses consist of the following:
December 31,
(In thousands of dollars) 2011 2010
Accrued employee benefits 57,874 67,008
Customer advances and deferred revenue 56,274 39,388
Accrued revenue share 40,673 22,598
Accrued vessel operating expenses 38,508 31,155
Received, not invoiced, property and equipment 14,420 17,286
Accrued sales tax and VAT 13,204 18,871
Unrealized loss interest swaps/forward exchange contracts (Note 26) 10,226 4,075
Accrued commissions 8,653 8,725
Accrued office cost 7,311 8,755
Accrued interest expenses 4,440 2,918
Accrued project cost 3,142 4,204
Accrued legal, audit and consulting fee 2,597 3,803
Accrued onerous contracts (Note 27) 1,532 2,422
Accrued liabilities UK leases (Note 27) 714 889
Other 6,435 12,841
Total 266,003 244,938
Note 29 - Other Long-Term Liabilities
Other long-term liabilities consist of the following:
December 31,
(In thousands of dollars) 2011 2010
Pension liability (Note 30) 29,676 37,539
Unrealized loss interest swaps/forward exchange contracts (Note 26) 20,031 28,464
Tax contingencies 7,182 11,731
Accrued liabilities UK leases (Note 27) 1,979 4,885
Accrued onerous contracts (Note 27) 259 3,789
Other 3,613 4,423
Total 62,740 90,831
Note 30 - Pension Obligations
Defined benefits plans
The Company has historically had defined benefit pension plans for substantially all of its Norwegian and UK employees, with
eligibility determined by certain period-of-service requirements. In Norway these plans are generally funded through
contributions to insurance companies. In the UK, the plans are funded through a separate pension trust. It is the Company's
general practice to fund amounts to these defined benefit plans at rates that are sufficient to meet the applicable statutory
requirements. As of January 1, 2005, the Norwegian defined benefit plans were closed for further entrants (except for seismic
crew) and new defined contribution plans were established for new employees. As of March 31, 2006, the UK defined benefit
plan was closed for new entrants. As of January 1, 2008, the Norwegian defined benefit plan for seismic crew were closed for
further entrants, and new defined contribution plans were established for new seismic crew members. At December 31, 2011,
448 employees were participating in these plans.
Actuarial valuations and assumptions
The actuarial valuations were carried out by independent actuaries in Norway and UK.
Reconciliation of the plans' aggregate projected benefit obligations and fair values of assets are summarized as follows:
Change in projected benefit obligations (PBO)
(In thousands of dollars) 2011 2010
Projected benefit obligations (PBO) at January 1, 155,794 134,510
Service cost 2,808 8,721
Interest cost 7,797 7,093
Employee contributions 1,373 1,261
Social security tax 192 73
Actuarial loss, net 26,011 8,627
Benefits paid (1,082) (643)
Exchange rate effects (7,573) (3,848)
Projected benefit obligations (PBO) at December 31, (a) 185,320 155,794
(a) $3.5 million and $2.8 million arise from unfunded plans per December 31, 2011 and 2010, respectively.
37 PGS ANNUAL REPORT 2011
108 PGS Annual Report 2011