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E. I. du Pont de Nemours and Company
Notes to the Consolidated Financial Statements (continued)
(Dollars in millions, except per share)
F-16
During 2012, as a result of strategic decisions related to deteriorating conditions within a specific industrial chemicals market, the
company determined that an impairment triggering event had occurred and that an assessment of the asset group related to this
industrial chemical was warranted. This assessment determined that the carrying value of the asset group exceeded its fair value.
As a result of the impairment test, a $33 pre-tax impairment charge was recorded within the Performance Chemicals segment.
During 2012, as a result of deteriorating conditions in an industrial polymer market, the company determined that an impairment
triggering event had occurred and that an assessment of the asset group related to this polymer product was warranted. This
assessment determined that the carrying value of the asset group exceeded its fair value. As a result of the impairment test, a $92
pre-tax impairment charge was recorded within the Performance Materials segment.
The bases of the fair value for the charges above were calculated utilizing a discounted cash flow approach which included
assumptions concerning future operating performance and economic conditions that may differ from actual cash flows. In connection
with the matters discussed above, as of December 31, 2013 and 2012, the company had long-lived assets with a remaining net book
value of approximately $90 and $150, respectively, accounted for at fair value on a nonrecurring basis after initial recognition.
These nonrecurring fair value measurements were determined using level 3 inputs within the fair value hierarchy, as described in
Note 1 to the Consolidated Financial Statements.
4. OTHER INCOME, NET
2014 2013 2012
Royalty income $ 183 $ 187 $ 177
Interest income 129 136 109
Equity in earnings of affiliates, excluding exchange gains/losses1(10) 37 99
Gain on sale of equity method investment — 9 122
Net gains on sales of businesses and other assets 749 25 130
Net exchange gains (losses)1135 (128)(215)
Cozaar®/Hyzaar® income — 14 54
Miscellaneous income and expenses, net2137 130 22
Other income, net $ 1,323 $ 410 $ 498
1. The company routinely uses foreign currency exchange contracts to offset its net exposures, by currency, related to the foreign currency-denominated
monetary assets and liabilities. The objective of this program is to maintain an approximately balanced position in foreign currencies in order to minimize,
on an after-tax basis, the effects of exchange rate changes on net monetary asset positions. The net pre-tax exchange gains (losses) are recorded in other
income, net and the related tax impact is recorded in provision for income taxes on continuing operations on the Consolidated Income Statements. Exchange
gains (losses) related to earnings of affiliates was $0, $4 and $3 for 2014, 2013 and 2012, respectively. The $135 net exchange gain for the year ended
December 31, 2014, includes $(58), $(46) and $(14) exchange losses, associated with the devaluation of the Venezuelan bolivar, Ukrainian hryvnia, and
Argentinian peso, respectively. The $(128) net exchange loss for the year ended December 31, 2013, includes a $(33) exchange loss, associated with the
devaluation of the Venezuelan bolivar.
2. Miscellaneous income and expenses, net, includes interest items, litigation settlements, and other items.