1 ptsThe fourth quarter 2008 effective tax rate was 74

$39 million increase in bad debt expenses to $80 million, reflecting anincrease in write-offs, including several high value account bankruptcies in theU.S., U.K and Germany. Overall, bad debt as a percentage of revenue increasedin the fourth quarter 2008, however the full year 2008 remains comparable withthe prior year at approximately 1-percent.Restructuring and Asset Impairment ChargesDuring the fourth quarter 2008, we recorded $349 million of net restructuringand asset impairment charges. The charges include $296 million for restructuringactions primarily for severance costs related to headcount reductions ofapproximately 3,400. The charges also include $53 million of asset impairmentsrelated to decisions regarding the rationalization of our worldwide operatinglocations. The restructuring actions apply equally to both North America andEurope, with about half focused on SAG expense reductions, a third on grossmargin improvements and the remainder focused on the optimization of R,D&Einvestments. We expect to realize savings in 2009 of approximately $200 millionas a result of the fourth quarter 2008 restructuring. The restructuring reserve balance as of December 31, 2008 for all programs was$352 million, of which approximately $325 million is expected to be spent overthe next twelve months.

Other Expenses, NetThree Months Ended December 31, (in millions) 2008 2007Non-financing interest expense$72$60 Interest income(6 ) (12) Losses (gains) on sales of businesses and assets 1(2 ) Currency losses, net 414 Amortization of intangible assets14 13 Litigation matters (21) -All other expenses, net98Total Other expenses, net $73$81Non-Financing Interest ExpenseFourth quarter 2008 non-financing interest expense of $72 million was $12million higher than fourth quarter 2007 due to higher average debt balances. Interest IncomeFourth quarter 2008 interest income of $6 million decreased $6 million,reflecting lower average cash balances. Currency Losses, NetFourth quarter 2008 net currency losses of $4 million, were $10 million lowerthan fourth quarter 2007. The fourth quarter 2008 reflects net remeasurementlosses associated with our unhedged foreign currency denominated assets andliabilities as well as the cost of hedging. Fourth quarter 2007 currency lossesof $14 million primarily reflected the mark-to-market of derivative contractswhich were economically hedging anticipated foreign currency transactions. Legal MattersLitigation matters of $(21) million reflects reductions of approximately $(75)million to the previously established provision for securities litigation as aresult of recent favorable developments in these matters.

This was partiallyoffset by additional reserves of approximately $55 million for probable losseson other litigation matters, including $36 million for the previously disclosedBrazilian labor-related litigation. Income TaxesThree Months EndedDecember 31,20082007Change Income tax (benefits) expense$(59 )$125$(184)Effective tax rate74.7 26.6 48.1 ptsThe fourth quarter 2008 effective tax rate was 74.7 and included a $124 millionbenefit from the tax effect of the fourth quarter 2008 restructuring and assetimpairment charges as well as the equipment write-off. Excluding these items,the adjusted effective tax rate was 21.06 as compared to 26.6 in the fourthquarter 2007 The 2008 tax rate was lower than the U.S. statutory tax rateprimarily reflecting the benefit to taxes from the geographical mix of incomebefore taxes and the related tax rates in those jurisdictions and theutilization of foreign tax credits as well as a tax law change The 2007 taxrate was lower than the U.S.