SUPPLEMENTAL BALANCE SHEET INFORMATION

Components of selected captions in our accompanying unaudited condensed consolidated balance sheets are as follows:

Trade accounts receivable, net



	As of
(in millions)	September 30, 2011			December 31, 2010
Accounts receivable	$	1,341		$	1,445
Less: allowance for doubtful accounts	(75		)	(83		)
Less: allowance for sales returns	(29		)	(42		)
	$	1,237		$	1,320

The following is a rollforward of our allowance for doubtful accounts for the third quarter and first nine months of 2011 and 2010:



	Three Months Ended September 30,					Nine Months Ended September 30,
(in millions)	2011			2010		2011			2010
Beginning balance	$	67		$	72	$	83		$	71
Net charges to expenses	12			6		1			17
Utilization of allowances	(4		)			(9		)	(10		)
Ending balance	$	75		$	78	$	75		$	78

During the first quarter of 2011, we reversed $20 million of previously established allowances for doubtful accounts against long-outstanding receivables in Greece. These receivables had previously been fully reserved as we had determined that they had a high risk of being uncollectible due to the economic situation in Greece. During the first quarter of 2011, the Greek government converted these receivables into bonds, which we were able to monetize, reducing our allowance for doubtful accounts as a credit to selling, general and administrative expenses. We continue to monitor the European economic environment for any collectibility issues related to our outstanding receivables in this region.

Inventories



	As of
(in millions)	September 30, 2011		December 31, 2010
Finished goods	$	658	$	622
Work-in-process	97		95
Raw materials	217		177
	$	972	$	894

Property, plant and equipment, net



	As of
(in millions)	September 30, 2011		December 31, 2010
Land	$	119	$	119
Buildings and improvements	911		919
Equipment, furniture and fixtures	2,033		1,889
Capital in progress	263		241
	3,326		3,168
Less: accumulated depreciation	1,642		1,471
	$	1,684	$	1,697

Depreciation expense was $75 million for the third quarter of 2011, $72 million for the third quarter of 2010, $215 million for the first nine months of 2011, and $221 million for the first nine months of 2010.

Accrued expenses



	As of
(in millions)	September 30, 2011		December 31, 2010
Legal reserves	$	130	$	441
Payroll and related liabilities	440		436
Accrued contingent consideration	8		9
Other	718		740
	$	1,296	$	1,626

Other long-term liabilities



	As of
(in millions)	September 30, 2011		December 31, 2010
Legal reserves	$	139	$	147
Accrued income taxes	1,076		1,062
Accrued contingent consideration	368		62
Other long-term liabilities	398		374
	$	1,981	$	1,645

Accrued warranties

We offer warranties on certain of our product offerings. Approximately 85 percent of our warranty liability as of September 30, 2011 related to implantable devices offered by our CRM business, which include defibrillator and pacemaker systems. Our CRM products come with a standard limited warranty covering the replacement of these devices. We offer a full warranty for a portion of the period post-implant, and a partial warranty over the substantial remainder of the useful life of the product. We estimate the costs that we may incur under our warranty programs based on the number of units sold, historical and anticipated rates of warranty claims and cost per claim, and record a liability equal to these estimated costs as cost of products sold at the time the product sale occurs. We reassess the adequacy of our recorded warranty liabilities on a quarterly basis and adjust these amounts as necessary. The current portion of our warranty accrual is included in other accrued expenses in the table above and the non-current portion of our warranty accrual is included in other long-term liabilities in the table above. Changes in our product warranty accrual during the first nine months of 2011 and 2010 consisted of the following (in millions):



	Nine Months Ended September 30,
	2011			2010
Beginning Balance	$	43		$	55
Provision	4			12
Settlements/reversals	(12		)	(22		)
Ending Balance	$	35		$	45