Other (Income) Expense



(In millions)	2015			2014			2013
Royalty income	$	(192	)	$	(35	)	$	(51	)
Financing fees and financial instruments	111			77			64
Net foreign currency exchange losses	77			239			118
Net gains on asset sales	(71		)	(3		)	(8		)
General and product liability — discontinued products (gains) losses	(25		)	25			15
Interest income	(22		)	(28		)	(41		)
Miscellaneous	7			27			—
	$	(115	)	$	302		$	97

Royalty income in 2015 was $192 million, compared to income of $35 million and $51 million in 2014 and 2013, respectively. Royalty income in 2015 included a one-time pre-tax gain of $155 million on the recognition of deferred income resulting from the termination of a licensing agreement associated with the sale of our former Engineered Products business ("Veyance"). The licensing agreement was terminated following the acquisition of Veyance by Continental AG in January 2015. Royalty income in 2013 included a one-time royalty of $11 million related to our chemical operations. Royalty income is derived primarily from licensing arrangements related to divested businesses.

Financing fees and financial instruments expense was $111 million in 2015, compared to $77 million in 2014 and $64 million in 2013. 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 2015 included a $41 million redemption premium and $14 million of expense for the write-off of deferred financing fees and unamortized discount related to the redemption of the $1.0 billion 8.25% senior notes due 2020.

Net foreign currency exchange losses in 2015 were $77 million, compared to losses of $239 million and $118 million in 2014 and 2013, respectively. Net foreign currency exchange losses in 2014 and 2013 included net charges of $200 million and $115 million, respectively, resulting from the devaluation of the Venezuelan bolivar fuerte against the U.S. dollar. 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, including $34 million of losses in 2015 related to changes in the SICAD exchange rate in Venezuela.

Prior to the deconsolidation of our Venezuelan subsidiary, we were required to remeasure our bolivar-denominated monetary assets and liabilities at the rate expected to be available for future dividend remittances by our Venezuelan subsidiary. Effective February 13, 2013, Venezuela's official exchange rate changed from 4.3 to 6.3 bolivares fuertes to the U.S. dollar for substantially all goods. In the first quarter of 2013, we recorded a $115 million remeasurement loss on bolivar-denominated net monetary assets and liabilities, including deferred taxes, primarily related to cash deposits in Venezuela.

Effective January 24, 2014, Venezuela’s exchange rate applicable to the settlement of certain transactions, including payments of dividends and royalties, changed to an auction-based floating rate, the Complementary System of Foreign Currency Administration (“SICAD”) rate, which was 11.4, 12.0 and 13.5 bolivares fuertes to the U.S. dollar at January 24, 2014, December 31, 2014 and December 31, 2015, respectively.

We expected that future remittances of dividends by our Venezuelan subsidiary would be transacted at the SICAD rate and, therefore, in 2014 we recorded net foreign currency exchange losses of $200 million related to the remeasurement of our bolivar-denominated monetary assets and liabilities using the SICAD rate.

Net gains on asset sales in 2015 were $71 million and included a gain of $48 million related to the dissolution of the global alliance with SRI and a gain of $30 million on the sale of our investment in shares of SRI. Refer to Note 5. Net gains on asset sales in 2015 also included losses of $14 million in EMEA, primarily related to the sales of certain sub-Saharan Africa retail businesses.

General and product liability — discontinued products includes charges for claims against us related primarily to asbestos personal injury claims, net of probable insurance recoveries. General and product liability — discontinued products for the year ended December 31, 2015 included a benefit of $25 million for the recovery of past costs from one of our asbestos insurers and a benefit of $21 million related to changes in assumptions for probable insurance recoveries for asbestos claims in future periods. The benefits were partially offset by an $8 million increase in the net asbestos liability based on updated assumptions for defense and indemnity costs in future periods based on historical cost data and trends.

Interest income consists primarily of amounts earned on cash deposits. Interest income in 2014 also included $10 million earned on the settlement of indirect tax claims and in 2013 also included $11 million earned on favorable tax judgments, both in Latin America.

Miscellaneous expense in 2015, 2014 and 2013 includes $4 million, $22 million and $6 million, respectively, of charges for labor claims relating to a previously closed facility in Greece. These claims have been settled and we do not expect any additional charges. Miscellaneous expense in 2014 also includes a charge of $16 million related to a government investigation involving our compliance with the U.S. Foreign Corrupt Practices Act in certain countries in Africa.