OTHER INCOME AND OTHER OPERATING EXPENSES

12 Months Ended

Oct. 31, 2011

OTHER INCOME AND OTHER OPERATING EXPENSES

OTHER INCOME AND OTHER OPERATING EXPENSES

9. OTHER INCOME AND OTHER OPERATING EXPENSES

The major components of other income and other operating expenses consisted of the following in millions of dollars:

	2011		2010		2009
Other income
Revenues from services	$	217	$	276	$	236
Insurance premiums and fees earned	236		198		182
Investment income	11		10		9
Other	160		122		87
Total	$	624	$	606	$	514
Other operating expenses
Depreciation of equipment on operating leases	$	306	$	288	$	288
Cost of services	115		198		190
Insurance claims and expenses	193		146		167
Other	102		116		73
Total	$	716	$	748	$	718

The company issues insurance policies for crop insurance and extended equipment warranties. In 2011, the crop insurance subsidiary utilized reinsurance to limit its losses and reduce its exposure to claims. Prior to 2011, the crop insurance business was conducted through managing general agency agreements with external insurance companies. Although reinsurance contracts permit recovery of certain claims from reinsurers, the insurance subsidiary is not relieved of its primary obligation to the policyholders. The premiums ceded by the crop insurance subsidiary in 2011 and claims recoveries on the ceded business were $246 million and $271 million, respectively. These amounts from reinsurance are netted against the insurance premiums and fees earned and the insurance claims and expenses in the table above.