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Discontinued Operations | 3 Months Ended
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Mar. 31, 2016
Discontinued Operations and Disposal Groups [Abstract] |
Discontinued Operations | Discontinued Operations Sirius Group On April 18, 2016, White Mountains completed the sale of Sirius Group to CMI for approximately $2.6 billion. $161.8 million of this amount was used to purchase certain assets to be retained by White Mountains out of Sirius Group, including shares of OneBeacon. The amount paid at closing was based on an estimate of Sirius Group’s closing date tangible common shareholder’s equity. The purchase price will be adjusted upon determination of Sirius Group’s actual closing date tangible common shareholder’s equity. As of March 31, 2016, Sirius Group’s results are reported as discontinued operations and assets and liabilities held for sale within White Mountains’s GAAP financial statements. Assets held for sale does not include White Mountains’s investment in OneBeacon and certain other investments that are in the Sirius Group legal entities as of March 31, 2016. As of March 31, 2016 and December 31, 2015, the value of these investments, net of related tax effects, is $161.8 million and $686.2 million, of which $528.6 million as of December 31, 2015 is related to Symetra. Net income (loss) from discontinued operations does not include White Mountains’s net investment income and realized and unrealized investment gains and losses associated with these investments. For the three months ended March 31, 2016, $4.1 million of net investment income and realized and unrealized investment gains and losses, net of related tax effects, that are included in the Sirius Group legal entities have been excluded from net income (loss) from discontinued operations. For the three months ended March 31, 2015, $0.3 million of net investment income and realized and unrealized investment gains and losses, net of related tax effects, that had been previously included in the Sirius Group legal entities have been excluded from net income (loss) from discontinued operations. OneBeacon Runoff The loss from discontinued operations, net of tax, of $0.1 million for the three months ended March 31, 2015, was the result of post-closing expenses incurred in connection with the Runoff Business, which was completed in December of 2014. Esurance For the three months ended March 31, 2015, White Mountains recorded a net gain from the sale of discontinued operations of $8.0 million, which primarily related to an installment payment from Allstate for the favorable development on loss reserves. (See Note 18 - “Contingencies”). Summary of Reclassified Balances and Related Items Net Assets Held for Sale The following summarizes the assets and liabilities associated with the business classified as held for sale, which all relate to Sirius Group:
Millions |  | March 31, 2016 |  | December 31, 2015
Assets held for sale |  |  |  |
Fixed maturity investments, at fair value |  | $ | 2,758.3 |  |  | $ | 2,374.0 |
Short-term |  | 534.5 |  |  | 352.0 |
Common equities |  | 214.3 |  |  | 174.4 |
Other |  | 61.3 |  |  | 72.2 |
Total investments |  | 3,568.4 |  |  | 2,972.6 |
Cash |  | 134.8 |  |  | 143.9 |
Reinsurance recoverable on unpaid losses |  | 286.2 |  |  | 283.1 |
Reinsurance recoverable on paid losses |  | 11.1 |  |  | 10.2 |
Insurance premiums receivable |  | 483.3 |  |  | 323.6 |
Deferred acquisition costs |  | 91.6 |  |  | 74.6 |
Deferred tax asset |  | 291.2 |  |  | 303.1 |
Ceded unearned insurance and reinsurance premiums |  | 134.7 |  |  | 87.7 |
Accounts receivable on unsettled investment sales |  | 9.8 |  |  | 29.0 |
Goodwill and intangible assets |  | 10.2 |  |  | 10.2 |
Other assets |  | 194.2 |  |  | 169.0 |
Total assets held for sale |  | $ | 5,215.5 |  |  | $ | 4,407.0 |
Liabilities held for sale |  |  |  |
Loss and loss adjustment expense reserves |  | $ | 1,649.5 |  |  | $ | 1,644.4 |
Unearned insurance premiums |  | 501.3 |  |  | 342.2 |
Debt |  | 403.6 |  |  | 403.5 |
Deferred tax liability |  | 278.5 |  |  | 263.6 |
Accrued incentive compensation |  | 43.1 |  |  | 63.2 |
Ceded reinsurance payable |  | 132.4 |  |  | 67.1 |
Funds held under reinsurance treaties |  | 57.0 |  |  | 52.9 |
Accounts payable on unsettled investment purchases |  | 5.4 |  |  | — |
Other liabilities |  | 50.3 |  |  | 47.1 |
Total liabilities held for sale |  | 3,121.1 |  |  | 2,884.0 |
Net assets held for sale |  | $ | 2,094.4 |  |  | $ | 1,523.0 |
Net Income from Discontinued Operations The following summarizes the results of operations, including related income taxes associated with the business classified as discontinued operations. The results of Sirius Group up to but not including the closing date of the transaction inures to White Mountains.
|  | Three Months Ended |  | Three Months Ended
|  | March 31, 2016 |  | March 31, 2015
Millions |  | Sirius Group |  | Other Disc Ops |  | Total |  | Sirius Group |  | Other Disc Ops |  | Total
Revenues |  |  |  |  |  |  |  |  |  |  |  |
Earned insurance premiums |  | $ | 202.4 |  |  | $ | — |  |  | $ | 202.4 |  |  | $ | 205.0 |  |  | $ | — |  |  | $ | 205.0 |
Net investment income |  | 12.2 |  |  | — |  |  | 12.2 |  |  | 9.0 |  |  | — |  |  | 9.0 |
Net realized and unrealized (losses) gains |  | (8.8 | ) |  | — |  |  | (8.8 | ) |  | 78.4 |  |  | — |  |  | 78.4 |
Other revenue |  | (4.1 | ) |  | — |  |  | (4.1 | ) |  | (27.4 | ) |  | — |  |  | (27.4 | )
Total revenues |  | 201.7 |  |  | — |  |  | 201.7 |  |  | 265.0 |  |  | — |  |  | 265.0 |
Expenses |  |  |  |  |  |  |  |  |  |  |  |
Loss and loss adjustment expenses |  | 113.7 |  |  | — |  |  | 113.7 |  |  | 97.5 |  |  | — |  |  | 97.5 |
Insurance and reinsurance acquisition expenses |  | 48.4 |  |  | — |  |  | 48.4 |  |  | 42.6 |  |  | — |  |  | 42.6 |
Other underwriting expenses |  | 26.7 |  |  | — |  |  | 26.7 |  |  | 25.5 |  |  | — |  |  | 25.5 |
General and administrative expenses |  | 8.1 |  |  | — |  |  | 8.1 |  |  | 6.3 |  |  | — |  |  | 6.3 |
Interest expense |  | 6.6 |  |  | — |  |  | 6.6 |  |  | 6.8 |  |  | — |  |  | 6.8 |
Total expenses |  | 203.5 |  |  | — |  |  | 203.5 |  |  | 178.7 |  |  | — |  |  | 178.7 |
Pre-tax (loss) income |  | (1.8 | ) |  | — |  |  | (1.8 | ) |  | 86.3 |  |  | — |  |  | 86.3 |
Income tax benefit (expense) |  | .9 |  |  | — |  |  | .9 |  |  | (20.4 | ) |  | — |  |  | (20.4 | )
Net (loss) income from discontinued operations |  | (.9 | ) |  | — |  |  | (.9 | ) |  | 65.9 |  |  | — |  |  | 65.9 |
Net losses from sales of discontinued operations - OneBeacon |  | — |  |  | — |  |  | — |  |  | — |  |  | (.1 | ) |  | (.1 | )
Net gain from sales of discontinued operations - Esurance |  | — |  |  | — |  |  | — |  |  | — |  |  | 8.0 |  |  | 8.0 |
Total (loss) income from discontinued operations |  | $ | (.9 | ) |  | $ | — |  |  | $ | (.9 | ) |  | $ | 65.9 |  |  | $ | 7.9 |  |  | $ | 73.8 |
Change in foreign currency translation and other from discontinued operations |  | $ | 37.2 |  |  | $ | — |  |  | $ | 37.2 |  |  | $ | (87.6 | ) |  | $ | — |  |  | $ | (87.6 | )
Comprehensive income (loss) from discontinued operations |  | $ | 36.3 |  |  | $ | — |  |  | $ | 36.3 |  |  | $ | (21.7 | ) |  | $ | 7.9 |  |  | $ | (13.8 | )
Net Change in Cash from Discontinued Operations The following summarizes the net change in cash, including income tax (payment to) refund from national governments and interest paid associated with the business classified as discontinued operations:
|  | Three Months Ended
|  | March 31,
(Millions) |  | 2016 |  | 2015
Net cash provided from operations |  | $ | (50.7 | ) |  | $ | (14.3 | )
Net cash provided from investing activities |  | 35.0 |  |  | 36.0 |
Net cash used for financing activities |  | 2.4 |  |  | 1.8 |
Effect of exchange rate changes on cash |  | 4.2 |  |  | (8.5 | )
Net change in cash during the period |  | (9.1 | ) |  | 15.0 |
Cash balances at beginning of period |  | 143.9 |  |  | 111.5 |
Cash balances at end of period |  | $ | 134.8 |  |  | $ | 126.5 |
Supplemental cash flows information: |  |  |  |
Interest paid |  | $ | — |  |  | $ | (12.8 | )
Net income tax payment to national governments |  | $ | (36.4 | ) |  | $ | (7.0 | )
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, 2016 and 2015:
|  | Three Months Ended
|  | March 31,
|  | 2016 |  | 2015
Basic and diluted earnings per share numerators (in millions): |  |  |  |
Net income attributable to White Mountains’s common shareholders |  | $ | (.9 | ) |  | $ | 73.8 |
Allocation of income for participating unvested restricted common shares(1) |  | — |  |  | (.7 | )
Net income attributable to White Mountains’s common shareholders, net of restricted common share amounts (2) |  | $ | (.9 | ) |  | $ | 73.1 |
Basic earnings per share denominators (in thousands): |  |  |  |
Total average common shares outstanding during the period |  | 5,539.6 |  |  | 5,978.4 |
Average unvested restricted common shares(3) |  | (54.0 | ) |  | (58.8 | )
Basic earnings per share denominator |  | 5,485.6 |  |  | 5,919.6 |
Diluted earnings per share denominator (in thousands): |  |  |  |
Total average common shares outstanding during the period |  | 5,540.5 |  |  | 5,978.4 |
Average unvested restricted common shares(3) |  | (54.0 | ) |  | (58.8 | )
Average outstanding dilutive options to acquire common shares(4) |  | — |  |  | — |
Diluted earnings per share denominator |  | 5,486.5 |  |  | 5,919.6 |
Basic and diluted earnings per share (in dollars): |  | $ | (.17 | ) |  | $ | 12.33 |
(1) Restricted shares issued by White Mountains contain dividend participation features, and therefore, are considered participating securities. (2) Net earnings attributable to White Mountains’s common shareholders, net of restricted share amounts, is equal to undistributed earnings for the three months ended March 31, 2016 and 2015. (3) Restricted common shares outstanding vest either in equal annual installments or upon a stated date. (See Note 15 - “Employee Share-Based Compensation Plans”). (4) The diluted earnings per share denominator for the three months ended March 31, 2016 includes the impact of 125,000 common shares issuable upon exercise of the non-qualified options outstanding, which results in 882 incremental shares outstanding over the period. The incremental shares had an effect on diluted earning per share of less than $0.01 per share. The diluted earnings per share denominator for the three months ended March 31, 2015 does not include the impact of 125,000 common shares issuable upon exercise of the non-qualified options outstanding as they are anti-dilutive to the calculation. Fair Value of Financial Instruments The SIG Senior Notes are recorded as debt at face value less unamortized original issue discount, and the SIG Preference Shares are recorded as non-controlling interest at face value. The following table summarizes the fair value and carrying value of these financial instruments as of March 31, 2016 and December 31, 2015:
|  | March 31, 2016 |  | December 31, 2015
Millions |  | Fair Value |  | Carrying Value |  | Fair Value |  | Carrying Value
SIG Senior Notes |  | $ | 409.0 |  |  | $ | 399.9 |  |  | $ | 410.0 |  |  | $ | 399.8 |
SIG Preference Shares |  | 247.5 |  |  | 250.0 |  |  | 255.0 |  |  | 250.0 |
The fair value estimates for the SIG Senior Notes and the SIG Preference Shares have been determined based on indicative broker quotes and are considered to be Level 3 measurements. Interest Rate Cap In May 2007, Sirius International Group, Ltd. (“SIG”), an intermediate holding company of Sirius Group, issued the SIG Preference Shares, with an initial fixed annual dividend rate of 7.506%. In June 2017, the fixed rate will move to a floating rate equal to the greater of (i) 7.506% and (ii) 3-month LIBOR plus 320 basis points. In July 2013, SIG executed the Interest Rate Cap for the period from June 2017 to June 2022 to protect against a significant increase in interest rates during that 5-year period. The Interest Rate Cap economically fixes the annual dividend rate on the SIG Preference Shares from June 2017 to June 2022 at 8.30%. The cost of the Interest Rate Cap was an upfront premium of 395 basis points of the $250.0 million notional value, or approximately $9.9 million for the full notional amount. The Interest Rate Cap does not qualify for hedge accounting. It is recorded in other assets at fair value. Changes in fair value are recognized within other revenue. Collateral held is recorded within short-term investments with an equal amount recognized as a liability to return collateral. The fair value of the Interest Rate Cap has been estimated using a single broker quote and accordingly, has been classified as a Level 3 measurement at March 31, 2016. The following tables summarize the changes in the fair value of the Interest Rate Cap for the three months ended March 31, 2016 and 2015:
|  | Three Months Ended
|  | March 31,
Millions |  | 2016 |  | 2015
Beginning of period |  | $ | 1.9 |  |  | $ | 4.1 |
Net realized and unrealized losses |  | (.8 | ) |  | (1.0 | )
End of period |  | $ | 1.1 |  |  | $ | 3.1 |
White Mountains does not provide any collateral to the interest rate counterparties. Under the terms of the Interest Rate Cap, White Mountains holds collateral in respect of future amounts due. White Mountains’s liability to return that collateral is based on the amounts provided by the counterparties and investment earnings thereon. The following table summarizes the Interest Rate Cap collateral balances held by White Mountains and ratings by counterparty:
|  | March 31, 2016
Millions |  | Collateral Balances Held |  | Standard & Poor’s Rating(1)
Barclays Bank Plc |  | $ | .7 |  |  | A-
Nordea Bank Finland Plc |  | .4 |  |  | AA-
Total |  | $ | 1.1 |  |  |
(1) | Standard & Poor’s ratings as detailed above are: “A” (Strong, which is the sixth highest of twenty-one creditworthiness ratings) and “AA-” (Very Strong, which is the fourth highest of twenty-one creditworthiness ratings).

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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 45 -Paragraph 11 -URI http://asc.fasb.org/extlink&oid=51716988&loc=SL51721533-107759 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 4B -URI http://asc.fasb.org/extlink&oid=51717284&loc=SL51721665-107760 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 5C -URI http://asc.fasb.org/extlink&oid=51717284&loc=SL51721675-107760 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -SubTopic 10 -Section 50 -Paragraph 3A -URI http://asc.fasb.org/extlink&oid=51719941&loc=SL51724579-110230 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 4A -URI http://asc.fasb.org/extlink&oid=51717284&loc=SL51721663-107760 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=51719941&loc=d3e2941-110230 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=51717284&loc=d3e1361-107760 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 5B -URI http://asc.fasb.org/extlink&oid=51717284&loc=SL51721673-107760 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 3A -URI http://asc.fasb.org/extlink&oid=51717284&loc=SL51721659-107760 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 5A -URI http://asc.fasb.org/extlink&oid=51717284&loc=SL51721671-107760 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 5D -URI http://asc.fasb.org/extlink&oid=51717284&loc=SL51721677-107760 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=51717284&loc=d3e1474-107760 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 7 -URI http://asc.fasb.org/extlink&oid=51717284&loc=SL51721683-107760 + Details
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