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, 2013			December 31, 2012
Accounts receivable	$	1,360		$	1,336
Less: allowance for doubtful accounts	(85		)	(88		)
Less: allowance for sales returns	(37		)	(31		)
	$	1,238		$	1,217

The following is a rollforward of our allowance for doubtful accounts for the third quarter and first nine months of 2013 and 2012:



	Three Months Ended September 30,						Nine Months Ended September 30,
(in millions)	2013			2012			2013			2012
Beginning balance	$	84		$	83		$	88		$	81
Net (credits) charges to expenses	2			1			7			7
Utilization of allowances	(1		)	(2		)	(10		)	(6		)
Ending balance	$	85		$	82		$	85		$	82

Inventories



	As of
(in millions)	September 30, 2013		December 31, 2012
Finished goods	$	592	$	598
Work-in-process	87		70
Raw materials	216		216
	$	895	$	884

Property, plant and equipment, net



	As of
(in millions)	September 30, 2013		December 31, 2012
Land	$	81	$	81
Buildings and improvements	912		873
Equipment, furniture and fixtures	2,446		2,348
Capital in progress	177		218
	3,616		3,520
Less: accumulated depreciation	2,086		1,956
	$	1,530	$	1,564

Depreciation expense was $72 million for the third quarter of 2013 and $70 million for the third quarter of 2012, $199 million for the first nine months of 2013, and $205 million for the first nine months of 2012.

Accrued expenses



	As of
(in millions)	September 30, 2013		December 31, 2012
Payroll and related liabilities	$	450	$	452
Accrued contingent consideration	170		120
Legal reserves	159		100
Other	567		612
	$	1,346	$	1,284

Other long-term liabilities



	As of
(in millions)	September 30, 2013		December 31, 2012
Accrued income taxes	$	1,274	$	1,215
Accrued contingent consideration	366		543
Legal reserves	524		391
Other long-term liabilities	419		398
	$	2,583	$	2,547

Accrued warranties

We offer warranties on certain of our product offerings. The majority of our warranty liability as of September 30, 2013 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 2013 and 2012 consisted of the following (in millions):



	Nine Months Ended September 30,
	2013			2012
Beginning Balance	$	26		$	30
Provision	11			6
Settlements/reversals	(9		)	(9		)
Ending Balance	$	28		$	27