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, 2012			December 31, 2011
Accounts receivable	$	1,316		$	1,362
Less: allowance for doubtful accounts	(82		)	(81		)
Less: allowance for sales returns	(37		)	(35		)
	$	1,197		$	1,246

The following is a rollforward of our allowance for doubtful accounts for the third quarter and first nine months of 2012 and 2011:



	Three Months Ended September 30,						Nine Months Ended September 30,
(in millions)	2012			2011			2012			2011
Beginning balance	$	83		$	67		$	81		$	83
Charges to expenses	1			12			7			1
Utilization of allowances	(2		)	(4		)	(6		)	(9		)
Ending balance	$	82		$	75		$	82		$	75

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, 2012		December 31, 2011
Finished goods	$	617	$	637
Work-in-process	79		71
Raw materials	215		223
	$	911	$	931

Property, plant and equipment, net



	As of
(in millions)	September 30, 2012		December 31, 2011
Land	$	111	$	111
Buildings and improvements	936		923
Equipment, furniture and fixtures	1,943		1,919
Capital in progress	203		230
	3,193		3,183
Less: accumulated depreciation	1,569		1,513
	$	1,624	$	1,670

Depreciation expense was $70 million for the third quarter of 2012, $75 million for the third quarter of 2011, $205 million for the first nine months of 2012, and $215 million for the first nine months of 2011.

Accrued expenses



	As of
(in millions)	September 30, 2012		December 31, 2011
Payroll and related liabilities	$	422	$	466
Accrued contingent consideration	198		37
Legal reserves	94		129
Other	611		695
	$	1,325	$	1,327

Other long-term liabilities



	As of
(in millions)	September 30, 2012		December 31, 2011
Accrued income taxes	$	1,162	$	1,095
Accrued contingent consideration	406		321
Legal reserves	317		170
Other long-term liabilities	413		422
	$	2,298	$	2,008

Accrued warranties

We offer warranties on certain of our product offerings. The majority of our warranty liability as of September 30, 2012 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 2012 and 2011 consisted of the following (in millions):



	Nine Months Ended September 30,
	2012			2011
Beginning Balance	$	30		$	43
Provision	6			4
Settlements/reversals	(9		)	(12		)
Ending Balance	$	27		$	35