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Rental expense, which includes hire of vessels, specialized equipment and real estaterental, was approximately $73 million, $69 million and $74 million in 2011, 2010 and2009, respectively.In 2012, we chartered a vessel and crew for three years with two one-year options for ourfield operations contract in Angola. Total charter hire will be $94 million for the first threeyears.InsuranceWe self-insure for workers' compensation, maritime employer's liability andcomprehensive general liability claims to levels we consider financially prudent, andbeyond the self-insurance level of exposure, we carry insurance, which can be byoccurrence or in the aggregate. We determine the level of accruals for claims exposureby reviewing our historical experience and current year claim activity. We do not recordaccruals on a present-value basis. We review larger claims with insurance adjusters andestablish specific reserves for known liabilities. We establish an additional reserve forincidents incurred but not reported to us for each year using our estimates and based onprior experience. We believe we have established adequate accruals for uninsuredexpected liabilities arising from those obligations. However, it is possible that futureearnings could be affected by changes in our estimates relating to these matters.LitigationVarious actions and claims are pending against us, most of which are covered byinsurance. Although we cannot predict the ultimate outcome of these matters, we believethe ultimate liability, if any, that may result from these actions and claims will notmaterially affect our results of operations, cash flow or financial position.Letters of CreditWe had $38 million and $30 million in letters of credit outstanding as ofDecember 31, 2011 and 2010, respectively, as guarantees in force for self-insurancerequirements and various performance and bid bonds, which are usually for the durationof the applicable contract.2011 Annual Report 47