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Discontinued Operations | 6 Months Ended
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Jun. 30, 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. White Mountains recorded $366.6 million of gain from sale of Sirius in discontinued operations in the statement of operations and $113.3 million in other comprehensive income from discontinued operations for a total increase to book value of $479.9 million in the second quarter of 2016. For the stub period ended April 18, 2016, Sirius Group reported a $3.4 million net loss from discontinued operations in the statement of operations and $5.2 million of other comprehensive loss from discontinued operations. For the six months ended June 30, 2016, White Mountains recorded a $4.3 million net loss from discontinued operations from Sirius Group and $32.0 million of other comprehensive income. Through April 18, 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 did not include White Mountains’s investment in OneBeacon and certain other investments that are in the Sirius Group legal entities. As of December 31, 2015, the value of these investments, net of related tax effects, was $686.2 million, of which $528.6 million 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 and six months ended June 30, 2016, $0.4 million and $3.7 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 and six months ended June 30, 2015, $2.4 million and $2.7 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. As part of the sale of Sirius Group, White Mountains purchased Ashmere, a subsidiary formerly owned by Sirius Group. Ashmere is currently under an agreement to be sold and the completion of the sale is pending on regulatory approval. As of June 30, 2016, Ashmere's assets and liabilities are presented as held for sale. Tranzact On June 9, 2016, White Mountains announced that it had entered into a definitive agreement for the sale of Tranzact to an affiliate of Clayton, Dubilier & Rice, LLC. On July 21, 2016, White Mountains completed the sale of Tranzact and received net proceeds of $221.3 million. As of June 30, 2016 and December 31, 2015, Tranzact’s results are reported as discontinued operations and assets and liabilities held for sale within White Mountains’s GAAP financial statements. Net loss from discontinued operations related to Tranzact was $0.5 million and $2.5 million for the three and six months ended June 30, 2016 and $6.5 million and $4.0 million for the three and six months ended June 30, 2015. Star & Shield SSIE voluntarily ceased writing new policies effective July 1, 2016 and will voluntarily cease renewing policies at a future date, subject to regulatory approval. White Mountains is pursuing a sale of Star & Shield and its investment in SSIE surplus notes as of June 30, 2016 and as a result White Mountains has presented Star & Shield's and SSIE's assets and liabilities as held for sale. OneBeacon Runoff For both the three and six months ended June 30, 2015, the gain from the sale of discontinued operations relating to the Runoff Business was $0.3 million. The gain related to an adjustment to the estimated loss on sale, which included the final settlement of certain post-closing items. For the three and six months ended June 30, 2015, the net loss from discontinued operations relating to the Runoff Business, net of tax, was $0.2 million and $0.3 million. The Runoff Business was completed in December of 2014. Esurance For the three months June 30, 2015, White Mountains recorded a net loss from the sale of discontinued operations of $0.3 million, which related to a tax payment to Allstate pursuant to the Esurance sale. For the six months June 30, 2015, White Mountains recorded a net gain from the sale of discontinued operations of $7.6 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 business classified as held for sale. At December 31, 2015, amounts presented relate to Sirius Group, Tranzact, Abiaka and SSIE. At June 30, 2016, the amounts presented relate to Tranzact, Abiaka, SSIE and Ashmere, a subsidiary formerly owned by Sirius Group.
Millions |  | June 30, 2016 |  | December 31, 2015
Assets held for sale |  |  |  |
Fixed maturity investments, at fair value |  | $ | 14.4 |  |  | $ | 2,383.5 |
Short-term investments, at amortized cost (which approximates fair value) |  | 4.2 |  |  | 352.1 |
Common equity securities, at fair value |  | — |  |  | 174.4 |
Other long-term investments |  | — |  |  | 72.2 |
Total investments |  | 18.6 |  |  | 2,982.2 |
Cash |  | 1.9 |  |  | 150.2 |
Reinsurance recoverable on unpaid losses |  | .4 |  |  | 283.6 |
Reinsurance recoverable on paid losses |  | — |  |  | 10.2 |
Insurance and reinsurance premiums receivable |  | 2.4 |  |  | 326.6 |
Deferred acquisition costs |  | — |  |  | 74.6 |
Deferred tax asset |  | — |  |  | 303.1 |
Ceded unearned insurance and reinsurance premiums |  | — |  |  | 87.7 |
Accounts receivable on unsettled investment sales |  | — |  |  | 29.0 |
Goodwill and intangible assets |  | 315.1 |  |  | 330.5 |
Other assets |  | 46.2 |  |  | 212.7 |
Total assets held for sale |  | $ | 384.6 |  |  | $ | 4,790.4 |
Liabilities held for sale |  |  |  |
Loss and loss adjustment expense reserves |  | $ | 5.7 |  |  | $ | 1,650.4 |
Unearned insurance and reinsurance premiums |  | 1.8 |  |  | 344.3 |
Debt |  | 96.9 |  |  | 506.4 |
Deferred tax liability |  | 8.7 |  |  | 270.6 |
Accrued incentive compensation |  | 1.0 |  |  | 64.2 |
Ceded reinsurance payable |  | (.2 | ) |  | 67.7 |
Funds held under reinsurance treaties |  | — |  |  | 52.9 |
Accounts payable on unsettled investment purchases |  | — |  |  | — |
Other liabilities |  | 36.7 |  |  | 111.9 |
Total liabilities held for sale |  | 150.6 |  |  | 3,068.4 |
Net assets held for sale |  | $ | 234.0 |  |  | $ | 1,722.0 |
Net Income from Discontinued Operations The following summarizes the results of operations, including related income taxes associated with the business classified as discontinued operations. For the three and six months ended June 30, 2016, the amounts presented relate to Sirius Group and Tranzact. For the three and six months ended June 30, 2015, the amounts presented relate to the sales of Sirius Group, Tranzact, Esurance, and the OneBeacon's runoff business. The results of discontinued operations from Sirius Group up to the closing date of the transaction inure to White Mountains.
|  | Three Months Ended |  | Three Months Ended
|  | June 30, 2016 |  | June 30, 2015
Millions |  | Sirius Group |  | Other Disc Ops |  | Total |  | Sirius Group |  | Other Disc Ops |  | Total
Revenues |  |  |  |  |  |  |  |  |  |  |  |
Earned insurance premiums |  | $ | 37.7 |  |  | $ | — |  |  | $ | 37.7 |  |  | $ | 215.5 |  |  | $ | — |  |  | $ | 215.5 |
Net investment income |  | 2.2 |  |  | — |  |  | 2.2 |  |  | 9.1 |  |  | — |  |  | 9.1 |
Net realized and unrealized gains (losses) |  | 7.3 |  |  | — |  |  | 7.3 |  |  | (46.1 | ) |  | — |  |  | (46.1 | )
Other revenue |  | 4.7 |  |  | 47.0 |  |  | 51.7 |  |  | 5.4 |  |  | 34.7 |  |  | 40.1 |
Total revenues |  | 51.9 |  |  | 47.0 |  |  | 98.9 |  |  | 183.9 |  |  | 34.7 |  |  | 218.6 |
Expenses |  |  |  |  |  |  |  |  |  |  |  |
Loss and loss adjustment expenses |  | 41.2 |  |  | — |  |  | 41.2 |  |  | 92.1 |  |  | — |  |  | 92.1 |
Insurance and reinsurance acquisition expenses |  | 10.6 |  |  | — |  |  | 10.6 |  |  | 47.5 |  |  | — |  |  | 47.5 |
Other underwriting expenses |  | 4.2 |  |  | — |  |  | 4.2 |  |  | 27.7 |  |  | — |  |  | 27.7 |
General and administrative expenses |  | .2 |  |  | 49.2 |  |  | 49.4 |  |  | 6.7 |  |  | 38.0 |  |  | 44.7 |
Interest expense |  | 1.3 |  |  | 1.3 |  |  | 2.6 |  |  | 6.6 |  |  | .9 |  |  | 7.5 |
Total expenses |  | 57.5 |  |  | 50.5 |  |  | 108.0 |  |  | 180.6 |  |  | 38.9 |  |  | 219.5 |
Pre-tax (loss) income |  | (5.6 | ) |  | (3.5 | ) |  | (9.1 | ) |  | 3.3 |  |  | (4.2 | ) |  | (.9 | )
Income tax benefit (expense) |  | 2.2 |  |  | (1.1 | ) |  | 1.1 |  |  | .5 |  |  | — |  |  | .5 |
Net (loss) income from discontinued operations |  | (3.4 | ) |  | (4.6 | ) |  | (8.0 | ) |  | 3.8 |  |  | (4.2 | ) |  | (.4 | )
Net gain from sales of discontinued operations - Sirius |  | 366.6 |  |  | — |  |  | 366.6 |  |  | — |  |  | — |  |  | — |
Net gain from sales of discontinued operations - OneBeacon |  | — |  |  | — |  |  | — |  |  | — |  |  | .3 |  |  | .3 |
Net loss from sale of discontinued operations - Esurance |  | — |  |  | — |  |  | — |  |  | — |  |  | (.4 | ) |  | (.4 | )
Total income (loss) from discontinued operations |  | $ | 363.2 |  |  | $ | (4.6 | ) |  | $ | 358.6 |  |  | $ | 3.8 |  |  | $ | (4.3 | ) |  | $ | (.5 | )
Change in foreign currency translation and other from discontinued operations |  | (5.2 | ) |  | — |  |  | (5.2 | ) |  | 44.0 |  |  | — |  |  | 44.0 |
Change in foreign currency translation and other from sale of Sirius Group |  | 113.3 |  |  | — |  |  | 113.3 |  |  | — |  |  | — |  |  | — |
Comprehensive income (loss) from discontinued operations |  | $ | 471.3 |  |  | $ | (4.6 | ) |  | $ | 466.7 |  |  | $ | 47.8 |  |  | $ | (4.3 | ) |  | $ | 43.5 |
|  | Six Months Ended |  | Six Months Ended
|  | June 30, 2016 |  | June 30, 2015
Millions |  | Sirius Group |  | Other Disc Ops |  | Total |  | Sirius Group |  | Other Disc Ops |  | Total
Revenues |  |  |  |  |  |  |  |  |  |  |  |
Earned insurance premiums |  | $ | 240.1 |  |  | $ | — |  |  | $ | 240.1 |  |  | $ | 420.5 |  |  | $ | — |  |  | $ | 420.5 |
Net investment income |  | 14.4 |  |  | — |  |  | 14.4 |  |  | 18.1 |  |  | — |  |  | 18.1 |
Net realized and unrealized (losses) gains |  | (1.5 | ) |  | — |  |  | (1.5 | ) |  | 32.3 |  |  | — |  |  | 32.3 |
Other revenue |  | .6 |  |  | 104.8 |  |  | 105.4 |  |  | (22.0 | ) |  | 72.1 |  |  | 50.1 |
Total revenues |  | 253.6 |  |  | 104.8 |  |  | 358.4 |  |  | 448.9 |  |  | 72.1 |  |  | 521.0 |
Expenses |  |  |  |  |  |  |  |  |  |  |  |
Loss and loss adjustment expenses |  | 154.9 |  |  | — |  |  | 154.9 |  |  | 189.6 |  |  | — |  |  | 189.6 |
Insurance and reinsurance acquisition expenses |  | 59.0 |  |  | — |  |  | 59.0 |  |  | 90.1 |  |  | — |  |  | 90.1 |
Other underwriting expenses |  | 30.9 |  |  | — |  |  | 30.9 |  |  | 53.2 |  |  | — |  |  | 53.2 |
General and administrative expenses |  | 8.3 |  |  | 102.6 |  |  | 110.9 |  |  | 13.0 |  |  | 77.2 |  |  | 90.2 |
Interest expense |  | 7.9 |  |  | 2.7 |  |  | 10.6 |  |  | 13.4 |  |  | 1.7 |  |  | 15.1 |
Total expenses |  | 261.0 |  |  | 105.3 |  |  | 366.3 |  |  | 359.3 |  |  | 78.9 |  |  | 438.2 |
Pre-tax (loss) income |  | (7.4 | ) |  | (.5 | ) |  | (7.9 | ) |  | 89.6 |  |  | (6.8 | ) |  | 82.8 |
Income tax benefit (expense) |  | 3.1 |  |  | (2.1 | ) |  | 1.0 |  |  | (19.9 | ) |  | — |  |  | (19.9 | )
Net (loss) income from discontinued operations |  | (4.3 | ) |  | (2.6 | ) |  | (6.9 | ) |  | 69.7 |  |  | (6.8 | ) |  | 62.9 |
Net gain from sales of discontinued operations - Sirius |  | 366.6 |  |  | — |  |  | 366.6 |  |  | — |  |  | — |  |  | — |
Net gain from sales of discontinued operations - OneBeacon |  | — |  |  | — |  |  | — |  |  | — |  |  | .3 |  |  | .3 |
Net gain from sales of discontinued operations - Esurance |  | — |  |  | — |  |  | — |  |  | — |  |  | 7.6 |  |  | 7.6 |
Total income (loss) from discontinued operations |  | $ | 362.3 |  |  | $ | (2.6 | ) |  | $ | 359.7 |  |  | $ | 69.7 |  |  | $ | 1.1 |  |  | $ | 70.8 |
Change in foreign currency translation and other from discontinued operations |  | 32.0 |  |  | — |  |  | 32.0 |  |  | (43.6 | ) |  | — |  |  | (43.6 | )
Change in foreign currency translation and other from sale of Sirius Group |  | 113.3 |  |  | — |  |  | 113.3 |  |  | — |  |  | — |  |  | — |
Comprehensive income (loss) from discontinued operations |  | $ | 507.6 |  |  | $ | (2.6 | ) |  | $ | 505.0 |  |  | $ | 26.1 |  |  | $ | 1.1 |  |  | $ | 27.2 |
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:
|  | Six Months Ended
|  | June 30,
(Millions) |  | 2016 |  | 2015
Net cash used for operations |  | $ | (43.1 | ) |  | $ | (12.9 | )
Net cash provided from investing activities |  | 229.6 |  |  | 59.3 |
Net cash provided from (used for) financing activities |  | 9.0 |  |  | (2.0 | )
Effect of exchange rate changes on cash |  | — |  |  | (2.1 | )
Net change in cash during the period |  | 195.5 |  |  | 42.3 |
Cash balances at beginning of period |  | 148.9 |  |  | 114.5 |
Cash balances at end of period |  | $ | 344.4 |  |  | $ | 156.8 |
Supplemental cash flows information: |  |  |  |
Interest paid |  | $ | (1.4 | ) |  | $ | (14.5 | )
Net income tax payment to national governments |  | $ | (31.8 | ) |  | $ | (24.6 | )
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 and six months ended June 30, 2016 and 2015:
|  | Three Months Ended |  | Six Months Ended
|  | June 30, |  | June 30,
|  | 2016 |  | 2015 |  | 2016 |  | 2015
Basic and diluted earnings per share numerators (in millions): |  |  |  |  |  |  |  |  |
Net income attributable to White Mountains’s common shareholders |  | $ | 358.6 |  |  | $ | (.5 | ) |  | $ | 359.7 |  |  | $ | 70.8 |
Allocation of income for participating unvested restricted common shares(1) |  | (4.7 | ) |  | — |  |  | (4.1 | ) |  | (.8 | )
Net income attributable to White Mountains’s common shareholders, net of restricted common share amounts (2) |  | $ | 353.9 |  |  | $ | (.5 | ) |  | $ | 355.6 |  |  | $ | 70.0 |
Basic earnings per share denominators (in thousands): |  |  |  |  |  |  |  |  |
Total average common shares outstanding during the period |  | 5,096.1 |  |  | 5,985.7 |  |  | 5,317.8 |  |  | 5,982.1 |
Average unvested restricted common shares(3) |  | (66.5 | ) |  | (71.4 | ) |  | (60.2 | ) |  | (65.2 | )
Basic earnings per share denominator |  | 5,029.6 |  |  | 5,914.3 |  |  | 5,257.6 |  |  | 5,916.9 |
Diluted earnings per share denominator (in thousands): |  |  |  |  |  |  |  |  |
Total average common shares outstanding during the period(4) |  | 5,107.0 |  |  | 5,985.7 |  |  | 5,324.0 |  |  | 5,982.1 |
Average unvested restricted common shares(3) |  | (66.5 | ) |  | (71.4 | ) |  | (60.2 | ) |  | (65.2 | )
Diluted earnings per share denominator(4) |  | 5,040.5 |  |  | 5,914.3 |  |  | 5,263.8 |  |  | 5,916.9 |
Basic earnings per share (in dollars): |  | $ | 70.37 |  |  | $ | (.08 | ) |  | $ | 67.64 |  |  | $ | 11.84 |
Diluted earnings per share (in dollars): |  | $ | 70.22 |  |  | $ | (.08 | ) |  | $ | 67.56 |  |  | $ | 11.84 |
(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 and six months ended June 30, 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 and six months ended June 30, 2016 includes the impact of 120,000 common shares issuable upon exercise of the non-qualified options outstanding, which results in 10,863 and 6,194 incremental shares outstanding over the periods.

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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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