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Part II
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS, continued
The table below shows a regional breakdown of 2008 consolidated net sales based on location of customers and
percentage variances from prior year:
Percent Change Due to:
Percent
2008 Change vs. Local Currency
(Dollars in billions) Net Sales 2007 Price Effect Volume Portfolio
Worldwide $30.5 4 7 3 (5) (1)
United States 11.0 (2) 8 - (10) -
Europe, Middle East, and Africa
(EMEA) 9.5 857(4)-
Asia Pacific 5.5 6 6 2 - (2)
Latin America 3.6 14 12 1 1 -
Canada 0.9 (5) 5 4 (13) (1)
(Dollars in millions) 2009 2008 2007
OTHER INCOME, NET $1,219 $1,307 $1,275
2009 versus 2008 Other income, net, decreased $88 million versus 2008. The decrease was attributable to a
$47 million reduction in interest income due to lower interest rates in 2009 partially offset by higher interest from
increased cash and customer deferred receivables, and the absence of a $51 million favorable litigation settlement in
2008. The decrease was partially offset by an increase of $23 million in asset sales.
2008 versus 2007 Other income, net, increased $32 million versus 2007. The increase was attributable to an increase
of $211 million in equity in earnings of affiliates, primarily due to the absence of the 2007 impairment charge of
$165 million to write down the company’s investment in a polyester films joint venture in the Performance Materials
segment, and a favorable $51 million litigation settlement in 2008. The increases are partially offset by additional net
pre-tax exchange losses of $154 million and a decrease of $86 million in asset sales.
Additional information related to the company’s other income, net is included in Note 3 to the Consolidated Financial
Statements.
(Dollars in millions) 2009 2008 2007
COST OF GOODS SOLD AND OTHER OPERATING CHARGES $19,708 $23,548 $21,746
As a percent of net sales 75% 77% 74%
2009 versus 2008 Cost of goods sold and other operating charges (COGS) for the year 2009 were $19.7 billion,
versus $23.5 billion in 2008, a decrease of 16 percent. COGS was 75 percent of net sales for 2009 versus 77 percent for
the year 2008. The 2 percentage point decrease principally reflects a $1.1 billion decrease in the combined costs for
raw materials, energy and freight and the absence of a $227 million charge for hurricane-related cleanup and repair in
2008, partially offset by significantly lower capacity utilization and an unfavorable currency impact.
2008 versus 2007 COGS for the year 2008 were $23.5 billion, versus $21.7 billion in 2007, an increase of 8 percent.
COGS was 77 percent of net sales for 2008 versus 74 percent for the year 2007. The 3 percentage point increase
19