Other Expense



(In millions) Expense(Income)	2012			2011			2010
Financing fees and financial instruments	$	156		$	89		$	95
Royalty income	(38		)	(47		)	(30		)
Net foreign currency exchange losses	26			27			159
Net gains on asset sales	(25		)	(16		)	(73		)
Interest income	(17		)	(16		)	(11		)
General and product liability — discontinued products	8			21			11
Miscellaneous expense	29			15			35
	$	139		$	73		$	186

Financing fees and financial instruments expense was $156 million in 2012, compared to $89 million in 2011 and $95 million in 2010. Financing fees and financial instruments expense consists of the amortization of deferred financing fees, commitment fees and charges incurred in connection with financing transactions. Financing fees in 2012 included $86 million 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 deferred financing fees and unamortized discount, and $24 million of charges related to the amendment and restatement of our U.S. second lien term loan facility. Financing fees in 2011 included $53 million of charges on 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 premium paid on the redemption and $16 million related to the write-off of deferred financing fees and unamortized discount. Financing fees in 2010 included $50 million of cash premiums paid and $6 million of financing fees which were written-off on the redemption of $973 million of long term debt.

Royalty income is derived primarily from licensing arrangements related to divested businesses and to our chemical operations. Royalty income in 2011 included the recognition of $6 million of income related to a non-recurring transaction.

Net foreign currency exchange losses in 2012 were $26 million, compared to losses of $27 million and $159 million in 2011 and 2010, respectively. Foreign currency exchange in all periods reflected net gains and losses resulting from the effect of exchange rate changes on various foreign currency transactions worldwide. Losses in 2010 included a first quarter loss of $110 million resulting from the January 8, 2010 devaluation of the Venezuelan bolivar fuerte against the U.S. dollar and the establishment of a two-tier exchange rate structure, and a fourth quarter foreign currency exchange loss of $24 million in connection with the January 1, 2011 elimination of the two-tier exchange rate structure.

Net gains on asset sales were $25 million in 2012 and included gains of $9 million in North American Tire, primarily from the sale of property, gains of $9 million in EMEA, primarily from the sale of a minority interest in a retail business, and gains of $4 million in Latin American Tire, primarily from the sale of certain assets related to our bias truck tire business. Net gains on asset sales were $16 million in 2011 and included gains of $9 million in Asia Pacific Tire, primarily on the sale of land in Malaysia, and gains of $4 million in Latin American Tire, primarily on the sale of the farm tire business. Net gains on asset sales were $73 million in 2010 and included gains of $58 million in Asia Pacific Tire, primarily on the sale of a closed manufacturing facility in Taiwan and land in Thailand, gains of $7 million in Latin American Tire, including the recognition of a deferred gain from the sale of a warehouse in 2008, and gains of $6 million in EMEA, due primarily to the sale of land.

Interest income consisted primarily of amounts earned on cash deposits.

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 $18 million, $17 million and $17 million of expense related to asbestos claims in 2012, 2011 and 2010, respectively. In addition, we recorded income of $10 million, $9 million and $5 million related to probable insurance recoveries in 2012, 2011 and 2010, respectively. We also recorded $13 million of expense in 2011 related to an adjustment for prior periods.

Miscellaneous expense in 2012 includes $25 million of charges for certain labor claims relating to a previously closed facility in EMEA. Miscellaneous expense in 2011 included $9 million related to our insurance deductible with respect to losses as a result of flooding in Thailand. Miscellaneous expense in 2010 included $25 million related to a claim regarding the use of value-added tax credits in prior years.