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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Schedule of total income tax benefit (expense)

The following table presents the total income tax (expense) benefit for the years ended December 31, 2019, 2018 and 2017:

		Year Ended December 31,
Millions		2019				2018				2017
Current income tax benefit (expense):
U.S. federal		$	.9			$	(.1	)		$	(.3	)
State		(3.7		)		(1.4		)		(1.3		)
Non-U.S.		(1.7		)		(2.9		)		(2.0		)
Total current income tax (expense) benefit		(4.5		)		(4.4		)		(3.6		)
Deferred income tax (expense) benefit:
U.S. federal		(14.9		)		8.3				11.4
State		(10.4		)		—				—
Non-U.S.		.5				.1				—
Total deferred income tax (expense) benefit		(24.8		)		8.4				11.4
Total income tax (expense) benefit		$	(29.3	)		$	4.0			$	7.8

Reconciliation of the U.S. federal statutory income tax rate and actual effective tax rate on pre-tax income

The following table presents a reconciliation of taxes calculated for 2019 and 2018 using the 21% U.S. federal statutory rate and for 2017 using the 35% U.S. federal statutory rate (the tax rate at which the majority of White Mountains’s worldwide operations are taxed) to the income tax (expense) benefit on pre-tax income (loss):

		Year Ended December 31,
Millions		2019				2018				2017
Tax (expense) benefit at the U.S. statutory rate		$	(85.1	)		$	37.4			$	(2.7	)
Differences in taxes resulting from:
Change in valuation allowance		63.6				(31.0		)		42.6
Non-U.S. earnings, net of foreign taxes		27.1				(2.9		)		21.5
State taxes		(17.5		)		4.0				.6
Tax rate changes		(5.7		)		1.7				(44.3		)
Member’s surplus contributions		(3.6		)		(2.6		)		(3.0		)
Withholding tax		(1.6		)		(2.7		)		(2.0		)
Tax exempt interest and dividends		1.1				.6				.5
Tax reserve adjustments		(.7		)		(.8		)		(.3		)
Officer compensation		—				—				(4.1		)
Other, net		(6.9		)		.3				(1.0		)
Total income tax (expense) benefit on pre-tax income (loss)		$	(29.3	)		$	4.0			$	7.8

Schedule of components of deferred income tax assets and liabilities

The following table presents an outline of the significant components of White Mountains’s U.S. federal, state and non-U.S. deferred tax assets and liabilities:

		December 31,
Millions		2019				2018
Deferred tax assets related to:
U.S. federal and state net operating and capital    loss carryforwards		$	92.3			$	95.5
Non-U.S. net operating loss carryforwards		41.7				36.6
Incentive compensation		15.0				14.1
Investment basis difference		—				11.1
Net unrealized investment losses		—				9.5
Accrued interest		5.1				—
Deferred acquisition costs		4.3				3.5
Tax credit carryforwards		4.2				4.2
Other items		3.4				5.8
Total gross deferred tax assets		166.0				180.3
Less: valuation allowances		77.9				139.9
Total net deferred tax assets		88.1				40.4
Deferred tax liabilities related to:
Net unrealized investment gains		66.3				—
Member’s surplus contributions		43.2				32.8
Investment basis difference		6.6				—
Other items		4.6				5.4
Total deferred tax liabilities		120.7				38.2
Net deferred tax (liability) asset		$	(32.6	)		$	2.2

Schedule of net operating and capital loss carryforwards by expiration dates and the deferred tax assets thereon

The following table presents net operating loss and capital loss carryforwards as of December 31, 2019, the expiration dates and the deferred tax assets thereon:

		December 31, 2019
Millions		United States				Luxembourg				United Kingdom				Israel				Total
2019-2023		$	.1			$	—			$	—			$	—			$	.1
2024-2028		—				—				—				—				—
2029-2038		302.6				58.0				—				—				360.6
No expiration date		117.4				28.5				18.7				73.6				238.2
Total		$	420.1			$	86.5			$	18.7			$	73.6			$	598.9
Gross deferred tax asset		$	88.0			$	21.6			$	3.2			$	16.9			$	129.7
Valuation allowance		(63.5		)		(21.5		)		(3.0		)		(16.9		)		(104.9		)
Net deferred tax asset		$	24.5			$	.1			$	.2			$	—			$	24.8

Reconciliation of changes in the amount of unrecognized tax benefits

The following table presents a reconciliation of the beginning and ending amount of unrecognized tax benefits from 2017 to 2019:

Millions		Permanent Differences (1)				Temporary Differences (2)				Interest and Penalties (3)				Total
Balance at December 31, 2016		$	—			$	—			$	—			$	—
Changes in prior year tax positions		.1				—				—				.1
Tax positions taken during the current year		.2				—				—				.2
Balance at December 31, 2017		.3				—				—				.3
Changes in prior year tax positions		.8				—				—				.8
Balance at December 31, 2018		1.1				—				—				1.1
Tax positions taken during the current year		1.3				—				—				1.3
Balance at December 31, 2019		$	2.4			$	—			$	—			$	2.4

⁽¹⁾  Represents the amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate.

⁽²⁾  Represents the amount of unrecognized tax benefits that, if recognized, would create a temporary difference between the reported amount of an item in White Mountains’s Consolidated Balance Sheet and its tax basis.

⁽³⁾ 

Net of tax benefit.

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