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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2011
Income Taxes |
Schedule of total income tax benefit (expense) |
The total income tax benefit (expense) for the years ended December 31, 2011, 2010 and 2009 consisted of the following:
|  | Year Ended December 31, |
Millions |  | 2011 |  | 2010 |  | 2009 |
Current tax benefit (expense): |  |  |  |  |  |  |
U.S. federal |  | $ | 39.5 |  | $ | 52.4 |  | $ | (40.0 | )
State |  | (2.5 | ) | (2.2 | ) | (1.5 | )
Non-U.S. |  | 5.1 |  | (9.1 | ) | (2.7 | )
Total current tax benefit (expense) |  | 42.1 |  | 41.1 |  | (44.2 | )
Deferred tax benefit (expense): |  |  |  |  |  |  |
U.S. federal |  | (34.1 | ) | (61.6 | ) | (139.0 | )
State |  | — |  | — |  | — |
Non-U.S. |  | 114.7 |  | 3.6 |  | (31.0 | )
Total deferred tax benefit (expense) |  | 80.6 |  | (58.0 | ) | (170.0 | )
Total income tax benefit (expense) |  | $ | 122.7 |  | $ | (16.9 | ) | $ | (214.2 | )
Reconciliation of the U.S. federal statutory income tax rate and actual effective tax rate on pre-tax income |
A reconciliation of taxes calculated using the 35% U.S. statutory rate (the tax rate at which the majority of White Mountains’ worldwide operations are taxed) to the income tax (expense) benefit on pre-tax income follows:
|  | Year Ended December 31, |
Millions |  | 2011 |  | 2010 |  | 2009 |
Tax (expense) benefit at the U.S. statutory rate |  | $ | (21.5 | ) | $ | (53.6 | ) | $ | (279.1 | )
Differences in taxes resulting from: |  |  |  |  |  |  |
Change in valuation allowance |  | 128.2 |  | 2.6 |  | 53.7 |
Non-U.S. earnings, net of foreign taxes |  | 6.2 |  | 22.8 |  | (1.2 | )
Tax reserve adjustments |  | 4.3 |  | (2.8 | ) | 8.8 |
Tax exempt interest and dividends |  | 2.9 |  | 2.3 |  | 1.7 |
Tax rate change enacted in Luxembourg |  | 1.2 |  | 2.8 |  | — |
Withholding tax |  | .2 |  | (.2 | ) | (.7 | )
Purchase of subsidiaries |  | — |  | 4.5 |  | — |
Sale of subsidiaries |  | — |  | 4.3 |  | — |
Other, net |  | 1.2 |  | .4 |  | 2.6 |
Total income tax benefit (expense) on pre-tax income |  | $ | 122.7 |  | $ | (16.9 | ) | $ | (214.2 | )
Schedule of components of deferred income tax assets and liabilities |
An outline of the significant components of White Mountains’ deferred tax assets and liabilities follows:
|  | December 31, |
Millions |  | 2011 |  | 2010 |
Deferred income tax assets related to: |  |  |  |  |
Non-U.S. net operating loss carryforwards |  | $ | 504.0 |  | $ | 545.4 |
Loss reserve discount |  | 114.2 |  | 142.4 |
U.S. federal and state net operating loss carryforwards |  | 102.7 |  | 103.6 |
Incentive compensation |  | 43.4 |  | 36.9 |
Unearned premiums |  | 41.2 |  | 37.3 |
U.S. tax credit carryforwards |  | 13.5 |  | 12.0 |
Deferred compensation |  | 11.4 |  | 13.1 |
Loss on sale of AutoOne |  | 10.4 |  | — |
Pension and benefit accruals |  | 8.0 |  | 4.3 |
Accrued interest |  | 3.5 |  | .5 |
Investment basis differences |  | 1.6 |  | 7.3 |
Fixed assets |  | (.1 | ) | 4.8 |
Other items |  | 9.5 |  | 14.1 |
Total gross deferred income tax assets |  | 863.3 |  | 921.7 |
Less: valuation allowances |  | (232.7 | ) | (385.8 | )
Total net deferred income tax assets |  | 630.6 |  | 535.9 |
Deferred income tax liabilities related to: |  |  |  |  |
Safety reserve |  | 369.6 |  | 378.5 |
Deferred acquisition costs |  | 48.8 |  | 41.5 |
Net unrealized investment gains |  | 34.8 |  | 55.8 |
Purchase accounting |  | .7 |  | 2.1 |
Intangible assets |  | (.1 | ) | .1 |
Other items |  | 5.4 |  | (.8 | )
Total deferred income tax liabilities |  | 459.2 |  | 477.2 |
Net deferred tax asset (liability) |  | $ | 171.4 |  | $ | 58.7
Schedule of net operating and capital loss carryforwards by expiration dates and the deferred tax assets thereon |
Net operating loss and capital loss carryforwards as of December 31, 2011, the expiration dates and the deferred tax assets thereon are as follows:
|  | December 31, 2011 |
Millions |  | United States |  | Luxembourg |  | Sweden |  | Total |
2012 |  | $ | — |  | $ | — |  | $ | — |  | $ | — |
2013-2017 |  | 2.4 |  | — |  | — |  | 2.4 |
2018-2022 |  | 18.7 |  | — |  | — |  | 18.7 |
2023-2032 |  | 305.7 |  | — |  | — |  | 305.7 |
No expiration date |  | — |  | 1,740.3 |  | 10.7 |  | 1,751.0 |
Total |  | $ | 326.8 |  | $ | 1,740.3 |  | $ | 10.7 |  | $ | 2,077.8 |
Gross deferred tax asset |  | $ | 102.7 |  | $ | 501.2 |  | $ | 2.8 |  | $ | 606.7 |
Valuation allowance |  | (1.8 | ) | (225.5 | ) | (.3 | ) | (227.6 | )
Net deferred tax asset |  | $ | 100.9 |  | $ | 275.7 |  | $ | 2.5 |  | $ | 379.1
Reconciliation of changes in the amount of unrecognized tax benefits |
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
Millions |  | Permanent Differences(1) |  | Temporary Differences(2) |  | Interest and Penalties(3) |  | Total |
Balance at January 1, 2009 |  | $ | 61.4 |  | $ | 17.1 |  | $ | 8.3 |  | $ | 86.8 |
Changes in prior year tax positions |  | 7.2 |  | 46.1 |  | 3.1 |  | 56.4 |
Tax positions taken during the current year |  | — |  | 16.4 |  | — |  | 16.4 |
Lapse in statute of limitations |  | (1.0 | ) | — |  | (.2 | ) | (1.2 | )
Settlements with tax authorities |  | (53.7 | ) | (.9 | ) | (6.9 | ) | (61.5 | )
Balance at December 31, 2009 |  | 13.9 |  | 78.7 |  | 4.3 |  | 96.9 |
Changes in prior year tax positions |  | .5 |  | (8.5 | ) | 1.9 |  | (6.1 | )
Tax positions taken during the current year |  | .4 |  | 5.0 |  | — |  | 5.4 |
Lapse in statute of limitations |  | — |  | — |  | — |  | — |
Settlements with tax authorities |  | (.3 | ) | (.1 | ) | — |  | (.4 | )
Balance at December 31, 2010 |  | 14.5 |  | 75.1 |  | 6.2 |  | 95.8 |
Changes in prior year tax positions |  | (.9 | ) | .1 |  | 2.0 |  | 1.2 |
Tax positions taken during the current year |  | — |  | (20.4 | ) | — |  | (20.4 | )
Lapse in statute of limitations |  | (3.4 | ) | (5.7 | ) | (1.4 | ) | (10.5 | )
Settlements with tax authorities |  | (.6 | ) | — |  | — |  | (.6 | )
Balance at December 31, 2011 |  | $ | 9.6 |  | $ | 49.1 |  | $ | 6.8 |  | $ | 65.5 |
(1) Represents the amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate. (2) Represents the amount of unrecognized tax benefits that, if recognized would create a temporary difference between the reported amount of an item in the Company’s Consolidated Balance Sheet and its tax basis. (3) Net of tax benefit.

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- Definition Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Topic 740 -SubTopic 10 -Publisher FASB -Number -Article -Subparagraph -Name Accounting Standards Codification -Paragraph 9 -Section 50 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 + Details
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- Definition Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Topic 740 -SubTopic 10 -Publisher FASB -Number -Article -Subparagraph -Name Accounting Standards Codification -Paragraph 2 -Section 50 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 + Details
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- Definition Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Topic 740 -SubTopic 10 -Publisher FASB -Number -Article -Subparagraph -Name Accounting Standards Codification -Paragraph 12 -Section 50 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32687-109319 + Details
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- Definition Tabular disclosure of tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of income tax contingencies, including: (1) the policy on classification of interest and penalties; (2) a tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period; the total amount(s) of: (3) unrecognized tax benefits that, if recognized, would affect the effective tax rate, and (4) interest and penalties recognized in each of the income statement and balance sheet; (5) for positions for which it is reasonably possible that the total amounts unrecognized will significantly change within 12 months of the reporting date the: (i) nature of the uncertainty, (ii) nature of the event that could occur that would cause the change, and (iii) an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made; and (6) a description of tax years that remain subject to examination by major tax jurisdictions. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name FASB Interpretation (FIN) -Number 48 -Paragraph 21 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 + Details
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