OTHER (INCOME) AND EXPENSE



	Three Months Ended						Six Months Ended
	June 30,						June 30,
(In millions) (Income) Expense	2012			2011			2012			2011
Financing fees and financial instruments	$	34		$	63		$	129		$	72
Net foreign currency exchange losses	6			6			17			9
Royalty income	(10		)	(11		)	(19		)	(20		)
Interest income	(4		)	(3		)	(8		)	(6		)
Net gains on asset sales	(13		)	(11		)	(17		)	(13		)
General and product liability — discontinued products	—			3			2			8
Miscellaneous	24			1			25			2
	$	37		$	48		$	129		$	52

Financing fees were $34 million in the second quarter of 2012, compared to $63 million in the second quarter of 2011. The second quarter of 2012 included $24 million of debt issuance costs primarily related to the amendment and restatement of our U.S. second lien term loan facility. The second quarter of 2011 included $53 million of charges related to the redemption of $350 million in aggregate principal amount of our outstanding 10.5% senior notes due 2016, of which $37 million related to cash premiums paid on the redemption and $16 million related to the write-off of deferred financing fees and unamortized discount. Financing fees were $129 million in the first six months of 2012, compared to $72 million in the first six months of 2011. Financing fees in 2012 also included $86 million of first quarter 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 in 2011 included the previously mentioned second quarter charges. 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 were $6 million in the second quarter of 2012 and the second quarter of 2011. Foreign currency exchange losses in the first six months of 2012 were $17 million, compared to $9 million in the first six months 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.

Net gains on asset sales were $13 million in the second quarter of 2012, compared to net gains on asset sales of $11 million in the second quarter of 2011. Net gains on asset sales were $17 million in the first six months of 2012, compared to net gains on asset sales of $13 million in the first six months of 2011. Net gains on asset sales in 2012 included second quarter gains on the sale of a minority interest in a retail business in Europe, Middle East and Africa Tire ("EMEA") and the sale of certain assets related to our bias truck tire business in Latin American Tire, and a first quarter gain on the sale of property in North American Tire. Net gains on asset sales in 2011 included second quarter gains on the sale of the farm tire business in Latin American Tire and the recognition of a deferred gain from the sale of property in 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 $2 million and $6 million of expense related to asbestos claims in the second quarter 2012 and 2011, respectively. In addition, we recorded $2 million and $3 million of income related to probable insurance recoveries in the second quarter of 2012 and 2011, respectively. We recorded $6 million and $11 million of expense related to asbestos claims in the first six months of 2012 and 2011, respectively. In addition, we recorded $4 million and $5 million of income related to probable insurance recoveries in the first six months of 2012 and 2011, respectively.

Royalty income is derived primarily from licensing arrangements related to divested businesses. Interest income consists primarily of amounts earned on cash deposits. Miscellaneous in 2012 includes a second quarter charge of $20 million related to labor claims in EMEA.