DuPont 2010 Annual Report Download - page 71

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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)
Cash flows from derivative instruments accounted for as either fair value hedges or cash flow hedges are reported in
the same category as the cash flows from the items being hedged. Cash flows from all other derivative instruments are
generally reported as investing activities in the Consolidated Statements of Cash Flows. See Note 23 for additional
discussion regarding the company’s objectives and strategies for derivative instruments.
Reclassifications
Certain reclassifications of prior years’ data have been made to conform to 2010 classifications.
2. OTHER INCOME, NET
2010 2009 2008
Cozaar/Hyzaarincome $ 483 $1,032 $1,019
Royalty income 146 127 111
Interest income 93 91 138
Equity in earnings of affiliates, excluding exchange gains/losses1179 86 117
Net gains on sales of assets 127 63 40
Net exchange gains (losses)1(13) (205) (255)
Miscellaneous income and expenses, net2213 25 137
$1,228 $1,219 $1,307
1The 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 and losses are partially offset by the associated tax impact. Exchange gains (losses) related to earnings of affiliates was
$(2), $13 and $(36) for 2010, 2009 and 2008, respectively.
2Miscellaneous income and expenses, net, includes interest items, insurance recoveries, litigation settlements, and other items.
3. INTEREST EXPENSE
2010 2009 2008
Interest incurred $628 $455 $425
Interest capitalized (38) (47) (49)
$590 $408 $376
Interest expense increased in 2010 as a result of the $179 pre-tax charge on the early extinguishment of debt in the
fourth quarter 2010 (see Note 17).
F-12