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Discontinued Operations
 3 Months Ended
Mar. 31, 2012
Discontinued Operations  
Discontinued Operations

Note 14. Discontinued Operations

 

Esurance

 

On October 7, 2011, White Mountains completed the sale of Esurance Insurance and AFI to Allstate (see Note 2).  As a result of the transaction, Esurance Insurance, AFI and the business Esurance Insurance cedes to Sirius Group (collectively, “the Esurance Disposal Group”) are reported as discontinued operations.  White Mountains recognized a gain of $677.5 million on the Esurance Sale which is recorded net of tax in discontinued operations.  Effective as of December 31, 2011, the results of operations for the Esurance Disposal Group have been classified as discontinued operations and are presented, net of related income taxes, in the statement of comprehensive income. The assets and liabilities of the Esurance Disposal Group have been presented in the balance sheet as held for sale.  Prior year amounts have been reclassified to conform to the current period’s presentation.

 

AutoOne

 

On February 22, 2012, OneBeacon completed the sale of the AutoOne business to Interboro. AutoOne operated as a division within OneBeacon that offered products and services to automobile assigned risk markets. The transaction included the sale of two insurance entities, AOIC and AOSIC, through which substantially all of the AutoOne business was written on a direct basis. For the three months ended March 31, 2012, the results of operations for the AutoOne business have been classified as discontinued operations and are presented, net of related income taxes, in the statement of comprehensive income. Prior year results of operations have been reclassified to conform to the current period’s presentation. The AutoOne disposal group excludes investing and financing activities from amounts classified as discontinued operations. OneBeacon’s investing and financing operations are conducted on an overall consolidated level and accordingly, there were no separately identifiable cash investing or financing cash flows associated with AutoOne. The assets and liabilities associated with the AutoOne business as of December 31, 2011 have been presented in the balance sheet as held for sale.

 

The following summarizes the assets and liabilities associated with the businesses classified as held for sale:

 

Millions

 

December 31, 
2011

 

Assets held for sale

 

 

 

Fixed maturity investments, at fair value

 

$

111.8

 

Total investments

 

111.8

 

Cash

 

5.5

 

Insurance premiums receivable

 

8.8

 

Deferred acquisition costs

 

2.2

 

Deferred tax asset

 

1.9

 

Other assets

 

2.4

 

Total assets held for sale

 

$

132.6

 

Liabilities held for sale

 

 

 

Loss and loss adjustment expense reserves

 

$

64.7

 

Unearned insurance premiums

 

34.1

 

Other liabilities

 

8.8

 

Total liabilities held for sale

 

107.6

 

Net assets held for sale

 

$

25.0

 

 

The following summarizes the results of operations, including related income taxes associated with the businesses classified as discontinued operations:

 

Millions, except per share amounts

 

Three Months Ended
March 31,

 

 

 

2012

 

2011

 

Revenues

 

 

 

 

 

Earned insurance premiums

 

$

7.8

 

$

227.7

 

Net investment income

 

—

 

4.0

 

Net realized and unrealized investment gains (losses)

 

—

 

3.4

 

Other revenue

 

—

 

17.7

 

Total revenues

 

7.8

 

252.8

 

Expenses

 

 

 

 

 

Loss and loss adjustment expenses

 

6.7

 

168.1

 

Insurance and reinsurance acquisition expenses

 

1.0

 

49.5

 

Other underwriting expenses

 

.2

 

21.5

 

General and administrative expenses

 

—

 

12.5

 

Total expenses

 

7.9

 

251.6

 

Pre-tax (loss) income

 

(.1

)

1.2

 

Income tax benefit

 

.2

 

1.3

 

Income from discontinued operations

 

$

.1

 

$

2.5

 

 

Earnings Per Share

 

Basic earnings per share amounts are based on the weighted average number of common shares outstanding including unvested restricted shares that are considered participating securities.  Diluted earnings per share amounts are based on the weighted average number of common shares including unvested restricted shares and the net effect of potentially dilutive common shares outstanding. The following table outlines the computation of earnings per share for discontinued operations for the three months ended March 31, 2012 and 2011:

 

 

 

Three Months Ended
March 31,

 

 

 

2012

 

2011

 

Basic and diluted earnings per share numerators (in millions):

 

 

 

 

 

Net income attributable to White Mountains’ common shareholders

 

$

.1

 

$

2.5

 

Allocation of income for participating unvested restricted common shares

 

—

 

—

 

Net income attributable to White Mountains’ common shareholders, net of restricted common share amounts(2)

 

$

.1

 

$

2.5

 

Basic earnings per share denominators (in thousands):

 

 

 

 

 

Total average common shares outstanding during the period

 

7,431.7

 

8,031.8

 

Average unvested restricted common shares (1)

 

(78.3

)

(57.1

)

Basic earnings per share denominator

 

7,353.4

 

7,974.7

 

Diluted earnings per share denominator (in thousands):

 

 

 

 

 

Total average common shares outstanding during the period

 

7,431.7

 

8,031.8

 

Average unvested restricted common shares (1)

 

(78.3

)

(57.1

)

Average outstanding dilutive options to acquire common shares

 

—

 

—

 

Diluted earnings per share denominator

 

7,353.4

 

7,974.7

 

Basic and diluted earnings per share (in dollars):

 

$

.02

 

$

.31

 

 

(1)        Restricted common shares outstanding vest either in equal annual installments or upon a stated date (see Note 12).

(2)        Net income (loss) attributable to White Mountains’ common shareholders, net of restricted share amounts, is equal to undistributed earnings (loss) for the three months ended March 31, 2012 and 2011.