Other (Income) Expense



(In millions)	2018			2017			2016
Gain on TireHub transaction, net of transaction costs	$	(272	)	$	—		$	—
Non-service related pension and other postretirement benefits	121			62			35
Interest income on indirect tax settlements in Brazil	(38		)	—			—
Financing fees and financial instruments	36			55			83
Royalty income	(20		)	(32		)	(23		)
Interest income	(16		)	(13		)	(15		)
Net foreign currency exchange (gains) losses	(16		)	(7		)	(13		)
General and product liability (income) expense - discontinued products	9			—			(27		)
Net (gains) losses on asset sales	(1		)	(14		)	(31		)
Miscellaneous expense	23			19			16
	$	(174	)	$	70		$	25

On July 1, 2018, we formed a 50/50 joint venture with Bridgestone Americas, Inc. ("Bridgestone") that combined our Company-Owned Wholesale Distribution (“COWD”) business and Bridgestone’s tire wholesale warehouse business to create TireHub, LLC ("TireHub"), a national tire distributor in the United States. Upon formation, we transferred certain assets and liabilities of the COWD business, with a net book value of $6 million, to TireHub. With the assistance of a third party valuation specialist, we determined the fair value of our equity interest in TireHub to be $292 million as of July 1, 2018, using a discounted cash flow method. As a result, we recognized a gain of $286 million, which represents the difference between the fair value of the equity interest received and the net book value of the assets and liabilities contributed. For the year ended December 31, 2018, we incurred transaction costs of $14 million in connection with the formation of the joint venture.

Non-service related pension and other postretirement benefits cost consists primarily of the interest cost, expected return on plan assets and amortization components of net periodic cost, as well as curtailments and settlements which are not related to rationalization plans. Non-service related pension and other postretirement benefits cost for the year ended December 31, 2018 includes expense of $9 million related to the adoption of the new accounting standards update which no longer allows non-service related pension and other postretirement benefits cost to be capitalized in inventory. Refer to Note 17.

We have previously filed claims with the Brazilian tax authorities challenging the legality of the calculation of certain indirect taxes for the years 2001 through 2018. During 2018, we received favorable rulings related to these claims. As a result of the rulings, we have recorded a gain of $53 million in CGS and related interest income of $38 million in Other (Income) Expense in 2018.

Financing fees and financial instruments expense consists of commitment fees and charges incurred in connection with financing transactions. Financing fees and financial instruments expense in 2017 included a premium of $25 million related to the redemption of our $700 million 7% senior notes due 2022 in May 2017. Financing fees and financial instruments expense in 2016 included premiums of $53 million related to the redemption of our $900 million 6.5% senior notes due 2021 in June 2016 and our €250 million 6.75% senior notes due 2019 in January 2016.

Royalty income is derived primarily from licensing arrangements related to divested businesses as well as other licensing arrangements.

Interest income consists primarily of amounts earned on cash deposits.

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.

General and product liability (income) expense - discontinued products includes charges for claims against us related primarily to asbestos personal injury claims, net of probable insurance recoveries. General and product liability (income) expense - discontinued products in 2018, 2017 and 2016 includes a benefit of $3 million, $5 million and $24 million, respectively, for the recovery of past costs from certain asbestos insurers. General and product liability (income) expense - discontinued products in 2016 included a benefit of $10 million related to changes in assumptions for probable insurance recoveries for asbestos claims in future periods.

Net (gains) losses on asset sales in 2017 included a gain of $6 million related to the sale of a former wire plant site in Luxembourg. Net (gains) losses on asset sales in 2016 included a gain of $16 million related to the sale of the former wire plant site and a gain of $9 million related to the sale of our interest in a supply chain logistics company.

Miscellaneous expense in 2018 and 2017 includes $12 million and $14 million, respectively, related to expenses incurred by the Company as a direct result of hurricanes Harvey and Irma during 2017.