Investments in Unconsolidated Affiliates

White Mountains’s investments in unconsolidated affiliates represent investments in other companies in which White Mountains has a significant voting and economic interest but does not control the entity.



Millions	March 31, 2015		December 31, 2014
Symetra common shares	$	378.9	$	373.8
Unrealized gains from Symetra’s fixed maturity portfolio	68.4		37.6
Carrying value of Symetra common shares	447.3		411.4
Hamer	3.5		3.0
Total investments in unconsolidated affiliates	$	450.8	$	414.4

Symetra

At March 31, 2015 and December 31, 2014, White Mountains owned 20.05 million common shares of Symetra Financial Corporation (“Symetra”), a 17.27% and 17.31% common share ownership. White Mountains accounts for its investment in common shares of Symetra using the equity method. During the three months ended March 31, 2015 and 2014, White Mountains received cash dividends from Symetra of $2.2 million and $2.0 million on its common share investment that were recorded as a reduction of White Mountains’s investment in Symetra.

As of December 31, 2011, White Mountains concluded that its investment in Symetra common shares was other-than-temporarily impaired and wrote down the GAAP book value of the investment to its estimated fair value of $261.0 million or $15 per share. This impairment, as well as the effect of Symetra capital transactions, has resulted in a basis difference between the GAAP carrying value of White Mountains’s investment in Symetra common shares and the amount derived by multiplying the percentage of White Mountains common share ownership by Symetra’s total GAAP equity. As of March 31, 2015, the pre-tax unamortized basis difference was $165.7 million, of which $35.1 million is attributable to equity in earnings of unconsolidated affiliates and $130.6 million is attributable to equity in net unrealized gains of unconsolidated affiliates. As of December 31, 2014, the pre-tax unamortized basis difference was $170.4 million, of which $36.4 million is attributable to equity in earnings of unconsolidated affiliates and $134.0 million is attributable to equity in net unrealized gains of unconsolidated affiliates.

The pre-tax basis difference is being amortized over a 30-year period with a weighted average of 28-years remaining. The amortization is based on estimated future cash flows associated with Symetra’s underlying assets and liabilities to which the basis differences have been attributed. White Mountains continues to record its equity in Symetra's earnings and net unrealized gains (losses). In addition, White Mountains recognizes the amortization of the basis difference through equity in earnings of unconsolidated affiliates and equity in net unrealized gains (losses) from investments in unconsolidated affiliates consistent with the original attribution of the basis differences between equity in earnings and equity in net unrealized gains (losses). For the three months ended March 31, 2015 and 2014, White Mountains recognized after-tax amortization of $0.7 million and $0.7 million through equity in earnings of unconsolidated affiliates and $2.8 million and $2.9 million through equity in net unrealized gains from investments in unconsolidated affiliates.

The following table summarizes amounts recorded by White Mountains relating to its investment in Symetra for the three months ended March 31, 2015 and 2014:



	Three Months Ended
	March 31,
Millions	2015			2014
Carrying value of investment in Symetra at beginning of period	$	411.4		$	317.3
Equity in earnings ⁽¹⁾⁽²⁾	7.2			14.4
Equity in net unrealized gains (losses) from Symetra’s fixed maturity portfolio⁽³⁾	30.9			39.3
Dividends received	(2.2		)	(2.0		)
Carrying value of investment in Symetra at end of period⁽⁴⁾⁽⁵⁾	$	447.3		$	369.0

⁽¹⁾Equity in earnings excludes tax expense of $0.4 and $1.0.

⁽²⁾Equity in earnings includes $0.7 and $0.7 increase relating to the pre-tax amortization of the Symetra common share basis difference.

⁽³⁾Net unrealized gains includes $2.9 and $3.1 increase relating to the pre-tax amortization of the Symetra common share basis difference.

⁽⁴⁾Includes White Mountains’s equity in net unrealized gains from Symetra’s fixed maturity portfolio of $68.4 and $39.3 as of March 31, 2015 and 2014, which excludes tax expense of $4.6 and $2.8.

⁽⁵⁾The aggregate value of White Mountains’s investment in common shares of Symetra was $470.3 based upon the quoted market price of $23.46 per share at March 31, 2015.