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Discontinued Operations (Tables) | 6 Months Ended
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Jun. 30, 2017
Discontinued Operations and Disposal Groups [Abstract] |
Disposal Groups, Including Discontinued Operations | Summary of Reclassified Balances and Related Items Net Assets Held for Sale The following table summarizes the assets and liabilities associated with business classified as held for sale. At June 30, 2017, amounts presented relate to OneBeacon. At December 31, 2016, amounts presented relate to OneBeacon, Star & Shield and SSIE.
Millions |  | June 30, 2017 |  | December 31, 2016
Assets held for sale |  |  |  |
Fixed maturity investments, at fair value |  | $ | 2,288.6 |  |  | $ | 2,175.7 |
Short-term investments, at amortized cost (which approximates fair value) |  | 55.5 |  |  | 112.3 |
Common equity securities, at fair value |  | 205.5 |  |  | 188.7 |
Other long-term investments |  | 134.1 |  |  | 150.5 |
Total investments |  | 2,683.7 |  |  | 2,627.2 |
Cash |  | 71.3 |  |  | 70.5 |
Reinsurance recoverable on unpaid and paid losses |  | 198.0 |  |  | 179.8 |
Insurance and reinsurance premiums receivable |  | 245.4 |  |  | 229.8 |
Deferred acquisition costs |  | 106.9 |  |  | 96.3 |
Deferred tax asset |  | 130.1 |  |  | 126.7 |
Ceded unearned insurance and reinsurance premiums |  | 56.6 |  |  | 44.2 |
Accounts receivable on unsettled investment sales |  | 5.8 |  |  | 1.4 |
Goodwill and other intangible assets |  | .6 |  |  | 1.2 |
Other assets |  | 198.0 |  |  | 222.4 |
Total assets held for sale |  | $ | 3,696.4 |  |  | $ | 3,599.5 |
Liabilities held for sale |  |  |  |
Loss and loss adjustment expense reserves |  | $ | 1,411.2 |  |  | $ | 1,370.6 |
Unearned insurance and reinsurance premiums |  | 595.2 |  |  | 576.3 |
Debt |  | 273.3 |  |  | 273.2 |
Accrued incentive compensation |  | 39.5 |  |  | 44.3 |
Funds held under reinsurance treaties |  | 210.2 |  |  | 153.0 |
Accounts payable on unsettled investment purchases |  | 9.3 |  |  | — |
Other liabilities |  | 140.1 |  |  | 151.9 |
Total liabilities held for sale |  | 2,678.8 |  |  | 2,569.3 |
Net assets held for sale |  | $ | 1,017.6 |  |  | $ | 1,030.2 |
Net Income (Loss) from Discontinued Operations The following table 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, 2017, the amounts presented relate to OneBeacon and Sirius Group. For the three and six months ended June 30, 2016, the amounts presented relate to OneBeacon, Sirius Group and Tranzact. The results of discontinued operations from Sirius Group and Tranzact up to the closing date of the transaction inured to White Mountains. Given the fixed price nature of the OneBeacon Transaction, OneBeacon’s results were economically transferred to the buyer at signing.
|  | Three Months Ended |  | Three Months Ended
|  | June 30, 2017 |  | June 30, 2016
Millions |  | OneBeacon |  | Sirius Group |  | Total |  | OneBeacon |  | Sirius Group |  | Other Disc Ops |  | Total
Revenues |  |  |  |  |  |  |  |  |  |  |  |  |  |
Earned insurance premiums |  | $ | 277.4 |  |  | $ | — |  |  | $ | 277.4 |  |  | $ | 271.4 |  |  | $ | 37.7 |  |  | $ | — |  |  | $ | 309.1 |
Net investment income |  | 14.5 |  |  | — |  |  | 14.5 |  |  | 12.1 |  |  | 2.2 |  |  | — |  |  | 14.3 |
Net realized and unrealized gains |  | 12.3 |  |  | — |  |  | 12.3 |  |  | 24.7 |  |  | 7.3 |  |  | — |  |  | 32.0 |
Other revenue |  | 2.1 |  |  | — |  |  | 2.1 |  |  | .8 |  |  | 4.7 |  |  | 47.0 |  |  | 52.5 |
Total revenues |  | 306.3 |  |  | — |  |  | 306.3 |  |  | 309.0 |  |  | 51.9 |  |  | 47.0 |  |  | 407.9 |
Expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loss and loss adjustment expenses |  | 188.6 |  |  | — |  |  | 188.6 |  |  | 179.7 |  |  | 41.2 |  |  | — |  |  | 220.9 |
Insurance and reinsurance acquisition expenses |  | 48.4 |  |  | — |  |  | 48.4 |  |  | 48.7 |  |  | 10.6 |  |  | — |  |  | 59.3 |
Other underwriting expenses |  | 59.6 |  |  | — |  |  | 59.6 |  |  | 50.9 |  |  | 4.2 |  |  | — |  |  | 55.1 |
General and administrative expenses |  | 8.8 |  |  | — |  |  | 8.8 |  |  | 3.5 |  |  | 2.3 |  |  | 47.1 |  |  | 52.9 |
Interest expense |  | 3.3 |  |  | — |  |  | 3.3 |  |  | 3.2 |  |  | 1.3 |  |  | 1.3 |  |  | 5.8 |
Total expenses |  | 308.7 |  |  | — |  |  | 308.7 |  |  | 286.0 |  |  | 59.6 |  |  | 48.4 |  |  | 394.0 |
Pre-tax (loss) income |  | (2.4 | ) |  | — |  |  | (2.4 | ) |  | 23.0 |  |  | (7.7 | ) |  | (1.4 | ) |  | 13.9 |
Income tax benefit (expense) |  | 5.8 |  |  | — |  |  | 5.8 |  |  | 2.0 |  |  | 2.2 |  |  | (1.1 | ) |  | 3.1 |
Net income (loss) from discontinued operations |  | 3.4 |  |  | — |  |  | 3.4 |  |  | 25.0 |  |  | (5.5 | ) |  | (2.5 | ) |  | 17.0 |
Net (loss) gain from sale of discontinued operations |  | — |  |  | (.6 | ) |  | (.6 | ) |  | — |  |  | 366.6 |  |  | — |  |  | 366.6 |
Total (loss) income from discontinued operations |  | 3.4 |  |  | (.6 | ) |  | 2.8 |  |  | 25.0 |  |  | 361.1 |  |  | (2.5 | ) |  | 383.6 |
Change in foreign currency translation and other from discontinued operations |  | .2 |  |  | — |  |  | .2 |  |  | .2 |  |  | (5.2 | ) |  | — |  |  | (5.0 | )
Change in foreign currency translation and other from sale of Sirius Group |  | — |  |  | — |  |  | — |  |  | — |  |  | 113.3 |  |  | — |  |  | 113.3 |
Comprehensive (loss) income from discontinued operations |  | $ | 3.6 |  |  | $ | (.6 | ) |  | $ | 3.0 |  |  | $ | 25.2 |  |  | $ | 469.2 |  |  | $ | (2.5 | ) |  | $ | 491.9 |
|  | Six Months Ended |  | Six Months Ended
|  | June 30, 2017 |  | June 30, 2016
Millions |  | OneBeacon |  | Sirius Group |  | Other Disc Ops |  | Total |  | OneBeacon |  | Sirius Group |  | Other Disc Ops |  | Total
Revenues |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Earned insurance premiums |  | $ | 539.2 |  |  | $ | — |  |  | $ | — |  |  | $ | 539.2 |  |  | $ | 550.0 |  |  | $ | 240.1 |  |  | $ | — |  |  | $ | 790.1 |
Net investment income |  | 26.7 |  |  | — |  |  | — |  |  | 26.7 |  |  | 26.5 |  |  | 14.4 |  |  | — |  |  | 40.9 |
Net realized and unrealized gains (losses) |  | 27.3 |  |  | — |  |  | — |  |  | 27.3 |  |  | 41.3 |  |  | (1.5 | ) |  | — |  |  | 39.8 |
Other revenue |  | 5.5 |  |  | — |  |  | — |  |  | 5.5 |  |  | 1.7 |  |  | .6 |  |  | 104.8 |  |  | 107.1 |
Total revenues |  | 598.7 |  |  | — |  |  | — |  |  | 598.7 |  |  | 619.5 |  |  | 253.6 |  |  | 104.8 |  |  | 977.9 |
Expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loss and loss adjustment expenses |  | 339.2 |  |  | — |  |  | — |  |  | 339.2 |  |  | 338.5 |  |  | 154.9 |  |  | — |  |  | 493.4 |
Insurance and reinsurance acquisition expenses |  | 93.7 |  |  | — |  |  | — |  |  | 93.7 |  |  | 99.7 |  |  | 59.0 |  |  | — |  |  | 158.7 |
Other underwriting expenses |  | 111.3 |  |  | — |  |  | — |  |  | 111.3 |  |  | 106.2 |  |  | 30.9 |  |  | — |  |  | 137.1 |
General and administrative expenses |  | 13.8 |  |  | — |  |  | — |  |  | 13.8 |  |  | 7.4 |  |  | 10.4 |  |  | 100.5 |  |  | 118.3 |
Interest expense |  | 6.6 |  |  | — |  |  | — |  |  | 6.6 |  |  | 6.5 |  |  | 7.9 |  |  | 2.7 |  |  | 17.1 |
Total expenses |  | 564.6 |  |  | — |  |  | — |  |  | 564.6 |  |  | 558.3 |  |  | 263.1 |  |  | 103.2 |  |  | 924.6 |
Pre-tax income (loss) |  | 34.1 |  |  | — |  |  | — |  |  | 34.1 |  |  | 61.2 |  |  | (9.5 | ) |  | 1.6 |  |  | 53.3 |
Income tax benefit (expense) |  | 1.6 |  |  | — |  |  | — |  |  | 1.6 |  |  | 10.1 |  |  | 3.1 |  |  | (2.1 | ) |  | 11.1 |
Net income (loss) from discontinued operations |  | 35.7 |  |  | — |  |  | — |  |  | 35.7 |  |  | 71.3 |  |  | (6.4 | ) |  | (.5 | ) |  | 64.4 |
(Loss) gain from sale of discontinued operations |  | — |  |  | (.6 | ) |  | (1.0 | ) |  | (1.6 | ) |  | — |  |  | 366.6 |  |  | — |  |  | 366.6 |
Total income (loss) from discontinued operations |  | 35.7 |  |  | (.6 | ) |  | (1.0 | ) |  | 34.1 |  |  | 71.3 |  |  | 360.2 |  |  | (.5 | ) |  | 431.0 |
Change in foreign currency translation and other from discontinued operations |  | .3 |  |  | — |  |  | — |  |  | .3 |  |  | .2 |  |  | 32.0 |  |  | — |  |  | 32.2 |
Change in foreign currency translation and other from sale of Sirius Group |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 113.3 |  |  | — |  |  | 113.3 |
Comprehensive (loss) income from discontinued operations |  | $ | 36.0 |  |  | $ | (.6 | ) |  | $ | (1.0 | ) |  | $ | 34.4 |  |  | $ | 71.5 |  |  | $ | 505.5 |  |  | $ | (.5 | ) |  | $ | 576.5 |
Net Change in Cash from Discontinued Operations The following summarizes the net change in cash, including income tax payment to national governments and interest paid associated with the business classified as discontinued operations:
|  | Six Months Ended
|  | June 30,
(Millions) |  | 2017 |  | 2016
Net cash provided from (used for) operations |  | $ | 87.3 |  |  | $ | (61.2 | )
Net cash (used for) provided from investing activities |  | (43.6 | ) |  | 276.8 |
Net cash used for financing activities |  | (42.0 | ) |  | (43.1 | )
Net change in cash during the period |  | 1.7 |  |  | 172.5 |
Cash balances at beginning of period |  | 70.5 |  |  | 245.4 |
Net change in cash held for sale, excluding discontinued operations |  | (.9 | ) |  | (.6 | )
Cash sold as part of sale of consolidated subsidiaries |  | — |  |  | 343.1 |
Cash balances at end of period |  | $ | 71.3 |  |  | $ | 74.2 |
Supplemental cash flows information: |  |  |  |
Interest paid |  | $ | (6.3 | ) |  | $ | (1.4 | )
Net income tax payment to national governments |  | $ | — |  |  | $ | (18.3 | )
Earnings Per Share White Mountains calculates earnings per share using the two-class method, which allocates earnings between common and unvested restricted common shares. Both classes of shares participate equally in earnings on a per share basis. Basic earnings per share amounts are based on the weighted average number of common shares outstanding adjusted for unvested restricted common shares. Diluted earnings per share amounts are also impacted by net effect of potentially dilutive common shares outstanding. The following table outlines the Company’s computation of earnings per share for discontinued operations for the three and six months ended June 30, 2017 and 2016:
|  | Three Months Ended |  | Six Months Ended
|  | June 30, |  | June 30,
|  | 2017 |  | 2016 |  | 2017 |  | 2016
Basic and diluted earnings per share numerators (in millions): |  |  |  |  |  |  |  |  |
Net income attributable to White Mountains’s common shareholders |  | $ | 2.8 |  |  | $ | 383.6 |  |  | $ | 34.1 |  |  | $ | 431.0 |
Allocation of income for participating unvested restricted common shares(1) |  | — |  |  | (5.0 | ) |  | (.4 | ) |  | (4.9 | )
Net income attributable to White Mountains’s common shareholders |  | $ | 2.8 |  |  | $ | 378.6 |  |  | $ | 33.7 |  |  | $ | 426.1 |
Basic earnings per share denominators (in thousands): |  |  |  |  |  |  |  |  |
Total average common shares outstanding during the period |  | 4,572.1 |  |  | 5,096.1 |  |  | 4,568.4 |  |  | 5,317.8 |
Average unvested restricted common shares(3) |  | (57.2 | ) |  | (66.5 | ) |  | (54.9 | ) |  | (60.2 | )
Basic earnings per share denominator |  | 4,514.9 |  |  | 5,029.6 |  |  | 4,513.5 |  |  | 5,257.6 |
Diluted earnings per share denominator (in thousands): |  |  |  |  |  |  |  |  |
Total average common shares outstanding during the period(4) |  | 4,572.1 |  |  | 5,107.0 |  |  | 4,568.4 |  |  | 5,324.0 |
Average unvested restricted common shares(3) |  | (57.2 | ) |  | (66.5 | ) |  | (54.9 | ) |  | (60.2 | )
Diluted earnings per share denominator(4) |  | 4,514.9 |  |  | 5,040.5 |  |  | 4,513.5 |  |  | 5,263.8 |
Basic earnings per share (in dollars): |  | $ | .61 |  |  | $ | 75.27 |  |  | $ | 7.47 |  |  | $ | 81.04 |
Diluted earnings per share (in dollars): |  | $ | .61 |  |  | $ | 75.11 |  |  | $ | 7.47 |  |  | $ | 80.96 |
(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, 2017 and 2016. (3) Restricted common shares outstanding vest either in equal annual installments or upon a stated date. See Note 13 — “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 resulted in 10,863 and 6,194 incremental shares outstanding over the period. Fair Value of Financial Instruments The OBH Senior Notes are recorded as debt at face value less unamortized original issue discount. The following table summarizes the fair value and carrying value of this financial instrument as of June 30, 2017 and December 31, 2016:
|  | June 30, 2017 |  | December 31, 2016
Millions |  | Fair Value |  | Carrying Value |  | Fair Value |  | Carrying Value
OBH Senior Notes |  | $ | 282.4 |  |  | $ | 273.3 |  |  | $ | 274.2 |  |  | $ | 273.2 |
The fair value estimate for the OBH Senior Notes has been determined using quoted market prices. The OBH Senior Notes are considered a Level 2 measurement.
Par Value to Fair Value Reconciliation of Surplus Notes | Below is a table illustrating the valuation adjustments taken to arrive at estimated fair value of the OneBeacon Surplus Notes as of June 30, 2017 and December 31, 2016:
|  | Type of Surplus Note |  | Total as of June 30, 2017 |  | Total as of December 31, 2016
Millions |  | Seller Priority |  | Pari Passu |
Par Value |  | $ | 57.9 |  |  | $ | 43.1 |  |  | $ | 101.0 |  |  | $ | 101.0 |
Fair value adjustments to reflect: |  |  |  |  |  |  |  |
Current market rates on public debt and contract-based repayments (1) |  | 7.9 |  |  | 2.1 |  |  | 10.0 |  |  | 5.1 |
Regulatory approval (2) |  | 2.7 |  |  | (13.7 | ) |  | (11.0 | ) |  | (15.6 | )
Liquidity adjustment (3) |  | (19.6 | ) |  | (9.9 | ) |  | (29.5 | ) |  | (18.6 | )
Total adjustments |  | (9.0 | ) |  | (21.5 | ) |  | (30.5 | ) |  | (29.1 | )
Fair value (4) |  | $ | 48.9 |  |  | $ | 21.6 |  |  | $ | 70.5 |  |  | $ | 71.9 |
(1) | Represents the value of the surplus notes, at current market yields on comparable publicly traded debt, and assuming issuer is allowed to make principal and interest payments when its financial capacity is available, as measured by statutory capital in excess of a 250% RBC score under the National Association of Insurance Commissioners’ risk-based capital standards for property and casualty companies. The favorable year-to-date change in impact is due principally to the narrowing of non-investment grade credit spreads as well as the time value of money benefit from moving three months closer to modeled cash receipts.
(2) | Represents anticipated delay in securing regulatory approvals of interest and principal payments to reflect graduated changes in Issuer's statutory surplus. The monetary impact of the anticipated delay is measured based on credit spreads of public securities with roughly equivalent percentages of discounted payments missed. The favorable year-to-date change in impact is driven primarily by the narrowing of non-investment grade credit spreads, which causes negative valuation impact from the anticipated delay in securing regulatory approval to be lower.
(3) Represents impact of liquidity spread to account for OneBeacon's sole ownership of the notes, lack of a trading market, and unique nature of the ongoing regulatory approval process. The unfavorable year-to-date change in impact is due largely to an increase in the assumed liquidity spread to 400 basis points at June 30, 2017 from 250 basis points at December 31, 2016. (4) The decrease in the fair value of the surplus notes during the six months ended June 30, 2017 was driven primarily by an increase in the assumed liquidity spread, partially offset by the narrowing of non-investment grade credit spreads as well as the time value of money benefit generated by moving three months closer to modeled cash receipts.

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- Definition Tabular disclosure of information 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=65878427&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=64827811&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 3 -URI http://asc.fasb.org/extlink&oid=64827811&loc=d3e1474-107760 Reference 4: 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=64827811&loc=d3e1361-107760 Reference 5: 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=64827811&loc=SL51721683-107760 Reference 6: 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=64862545&loc=SL51724579-110230 Reference 7: 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=64827811&loc=SL51721675-107760 Reference 8: 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=64827811&loc=SL51721663-107760 Reference 9: 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=64862545&loc=d3e2941-110230 Reference 10: 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=64827811&loc=SL51721673-107760 Reference 11: 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=64827811&loc=SL51721659-107760 Reference 12: 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=64827811&loc=SL51721671-107760 Reference 13: 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=64827811&loc=SL51721677-107760 + Details
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- Definition Tabular disclosure of the valuation adjustments that reconcile the par value of the surplus notes to the fair value. + References No definition available. + Details
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