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)	June 30, 2011			December 31, 2010
Accounts receivable	$	1,438		$	1,445
Less: allowance for doubtful accounts	(67		)	(83		)
Less: allowance for sales returns	(37		)	(42		)
	$	1,334		$	1,320

The following is a rollforward of our allowance for doubtful accounts for the second quarter and first half of 2011 and 2010:



	Three Months Ended June 30,						Six Months Ended June 30,
(in millions)	2011			2010			2011			2010
Beginning balance	$	61		$	69		$	83		$	71
Net (credits) charges to expenses	8			8			(11		)	11
Utilization of allowances	(2		)	(5		)	(5		)	(10		)
Ending balance	$	67		$	72		$	67		$	72

During the first quarter and half 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.

Inventories



	As of
(in millions)	June 30, 2011		December 31, 2010
Finished goods	$	630	$	622
Work-in-process	93		95
Raw materials	204		177
	$	927	$	894

Property, plant and equipment, net



	As of
(in millions)	June 30, 2011		December 31, 2010
Land	$	119	$	119
Buildings and improvements	941		919
Equipment, furniture and fixtures	2,024		1,889
Capital in progress	256		241
	3,340		3,168
Less: accumulated depreciation	1,638		1,471
	$	1,702	$	1,697

Depreciation expense was $71 million for the second quarter of 2011, $75 million for the second quarter of 2010, $140 million for the first half of 2011, and $149 million for the first half of 2010.

Accrued expenses



	As of
(in millions)	June 30, 2011		December 31, 2010
Legal reserves	$	133	$	441
Payroll and related liabilities	423		436
Accrued contingent consideration	17		9
Other	756		740
	$	1,329	$	1,626

Other long-term liabilities



	As of
(in millions)	June 30, 2011		December 31, 2010
Legal reserves	$	145	$	147
Accrued income taxes	1,096		1,062
Accrued contingent consideration	354		62
Other long-term liabilities	419		374
	$	2,014	$	1,645

Accrued warranties

We offer warranties on certain of our product offerings. Approximately 90 percent of our warranty liability as of June 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. Changes in our product warranty accrual during the first half of 2011 and 2010 consisted of the following (in millions):



	Six Months Ended June 30,
	2011			2010
Beginning Balance	$	43		$	55
Provision	7			7
Settlements/reversals	(13		)	(15		)
Ending Balance	$	37		$	47