OTHER (INCOME) AND EXPENSE



	Three Months Ended
	March 31,
(In millions) (Income) Expense	2012			2011
Financing fees and financial instruments	$	95		$	9
Net foreign currency exchange losses	11			3
Royalty income	(9		)	(9		)
Interest income	(4		)	(3		)
Net gains on asset sales	(4		)	(2		)
General and product liability — discontinued products	2			5
Miscellaneous	1			1
	$	92		$	4

Financing fees were $95 million in the first quarter of 2012, compared to $9 million in the first quarter of 2011. Financing fees in 2012 included $86 million of charges related to the redemption of $650 million in aggregate principal amount of our outstanding 10.5% senior notes due 2016, of which $59 million related to cash premiums paid on the redemption and $27 million related to the write-off of unamortized discount and deferred financing fees. Financing fees and financial instruments consists of the amortization of deferred financing fees, commitment fees and other charges incurred in connection with financing transactions.

Net foreign currency exchange losses in the first quarter of 2012 were $11 million, compared to $3 million in the first quarter of 2011. Foreign currency exchange in all periods reflects net gains and losses resulting from the effect of exchange rate changes on various foreign currency transactions worldwide.

Royalty income is derived primarily from licensing arrangements related to divested businesses. Interest income consists primarily of amounts earned on cash deposits.

Net gains on asset sales were $4 million in the first quarter of 2012 compared to $2 million in the first quarter of 2011. The net gains in 2012 primarily relate to the sale of property by North American Tire.

General and product liability — discontinued products includes charges for claims against us related primarily to asbestos personal injury claims, net of probable insurance recoveries. We recorded $4 million and $5 million of expense related to asbestos claims in 2012 and 2011, respectively. In addition, we recorded $2 million of income related to probable insurance recoveries in each of these periods.