Supplemental Balance Sheet Information

3 Months Ended

Mar. 31, 2022

Supplemental Balance Sheet Information [Abstract]

SUPPLEMENTAL BALANCE SHEET INFORMATION

NOTE F – SUPPLEMENTAL BALANCE SHEET INFORMATION

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

Trade accounts receivable, net

	As of
(in millions)	March 31, 2022		December 31, 2021
Trade accounts receivable	$	1,979	$	1,886
Allowance for credit losses	(113)		(108)
	$	1,866	$	1,778

The following is a roll forward of our Allowance for credit losses:

	Three Months Ended March 31,
(in millions)	2022		2021
Beginning balance	$	108	$	105
Credit loss expense	11		2
Write-offs	(5)		(6)
Ending balance	$	113	$	101

In accordance with FASB ASC Topic 326, we record credit loss reserves to Allowance for credit losses when we establish Trade accounts receivable if credit losses are expected over the asset's contractual life. We base our estimates of credit loss reserves on historical experience and adjust, as necessary, to reflect current conditions using reasonable and supportable forecasts not already reflected in the historical loss information. We utilize an accounts receivable aging approach to determine the reserve to record at accounts receivable commencement for certain customers, applying country or region-specific factors. In performing the assessment of outstanding accounts receivable, regardless of country or region, we may consider significant factors relevant to collectability, including those specific to a customer such as bankruptcy, lengthy average payment cycles and type of account.

We closely monitor outstanding receivables for potential collection risks, including those that may arise from economic and geopolitical conditions. Our sales to government-owned or supported customers, particularly in southern Europe, are subject to an increased number of days outstanding prior to payment relative to other entities, and, in southern Europe, relative to those in other countries. More recently, we have seen an increase in the volume of our U.S. business conducted in ambulatory surgery centers and office-based laboratories. Many of these customers are smaller than those we have historically done business with and may have more limited liquidity. We have adjusted our estimates of credit loss reserves for these customers, regions and conditions based on collection trends.

Inventories

	As of
(in millions)	March 31, 2022		December 31, 2021
Finished goods	$	1,095	$	1,029
Work-in-process	142		128
Raw materials	499		452
	$	1,736	$	1,610

Other current assets

	As of
(in millions)	March 31, 2022		December 31, 2021
Restricted cash and restricted cash equivalents	$	146	$	188
Derivative assets	266		226
Licensing arrangements	114		132
Other	363		254
	$	889	$	799

Property, plant and equipment, net

	As of
(in millions)	March 31, 2022		December 31, 2021
Land	$	120	$	109
Buildings and improvements	1,415		1,335
Equipment, furniture and fixtures	3,492		3,475
Capital in progress	539		605
	5,565		5,525
Less: accumulated depreciation	3,300		3,273
	$	2,265	$	2,252

Depreciation expense was $76 million for the first quarter of 2022 and $83 million for the first quarter of 2021.

Other long-term assets

	As of
(in millions)	March 31, 2022		December 31, 2021
Restricted cash equivalents	$	59	$	55
Operating lease right-of-use assets	424		435
Derivative assets	155		169
Investments	406		412
Licensing arrangements	101		114
Other	230		225
	$	1,375	$	1,410

Accrued expenses

	As of
(in millions)	March 31, 2022		December 31, 2021
Legal reserves	$	279	$	264
Payroll and related liabilities	705		848
Rebates	329		350
Contingent consideration	393		289
Other	601		686
	$	2,306	$	2,436

Other current liabilities

	As of
(in millions)	March 31, 2022		December 31, 2021
Deferred revenue	$	212	$	208
Licensing arrangements	122		138
Taxes payable	459		209
Other	241		228
	$	1,034	$	783

Other long-term liabilities

	As of
(in millions)	March 31, 2022		December 31, 2021
Accrued income taxes	$	451	$	442
Legal reserves	230		284
Contingent consideration	63		197
Licensing arrangements	109		143
Operating lease liabilities	378		389
Deferred revenue	279		276
Other	490		489
	$	2,000	$	2,220