Other Income, Net

6 Months Ended

Jun. 30, 2014

Other Income and Expenses [Abstract]

Other Income, Net

Other Income, Net

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2014			2013			2014			2013
Royalty income	$	34		$	50		$	72		$	87
Interest income	43			45			71			72
Equity in earnings (losses) of affiliates, excluding exchange gains/losses1	9			(7		)	22			(14		)
Gain on sale of equity method investment	—			9			—			9
Net gain on sales of businesses and other assets	404			5			411			10
Net exchange (losses) gains1	(109		)	35			(205		)	46
Cozaar®/Hyzaar® income	—			12			1			14
Miscellaneous income and expenses, net 2	27			10			53			27
Other income, net	$	408		$	159		$	425		$	251

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 interim Consolidated Income Statements. Exchange gains (losses) related to earnings of affiliates was $0 and $(2) for the three and six months ended June 30, 2014, respectively. Exchange gains (losses) related to earnings of affiliates was $0 and $5 for the three and six months ended June 30, 2013, respectively. The $(109) net exchange loss for the three months ended June 30, 2014, includes $(58) and $(7) exchange losses, associated with the devaluation of the Venezuelan bolivar and Ukrainian hryvnia , respectively. The $(205) net exchange loss for the six months ended June 30, 2014, includes $(58), $(46) and $(14) exchange losses, associated with the devaluation of the Venezuelan bolivar, Ukrainian hryvnia, and Argentinian peso, respectively. The $35 and $46 net exchange gain for the three and six months ended June 30, 2013, includes a $3 exchange gain and a $(33) exchange loss, respectively, associated with the devaluation of the Venezuelan bolivar.

²   Miscellaneous income and expenses, net, generally includes interest items, certain insurance recoveries and litigation settlements, and other items.