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Goodwill and Other Intangible Assets | 9 Months Ended
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Sep. 30, 2020
Goodwill and Intangible Assets Disclosure [Abstract] |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets White Mountains accounts for purchases of businesses using the acquisition method. Under the acquisition method, White Mountains recognizes and measures the assets acquired, liabilities assumed and any noncontrolling interest in the acquired entities at their acquisition date fair values. The acquisition date fair values of certain assets and liabilities, generally consisting of intangible assets and liabilities for contingent consideration, may be recorded at provisional amounts in circumstances where the information necessary to complete the acquisition accounting is not available at the reporting date. Any such provisional amounts are finalized as measurement period adjustments within one year of the acquisition date. The following table presents the acquisition date fair values, accumulated amortization and net carrying values for other intangible assets and goodwill, by company as of September 30, 2020 and December 31, 2019:
$ in Millions |  | Weighted Average Economic Life (in years) |  | September 30, 2020 |  | December 31, 2019
| Acquisition Date Fair Value |  | Accumulated Amortization |  | Impairments |  | Net Carrying Value |  | Acquisition Date Fair Value |  | Accumulated Amortization |  | Impairments |  | Net Carrying Value
Goodwill: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
NSM (1) |  | N/A |  | $ | 511.8 |  |  | $ | — |  |  | $ | — |  |  | $ | 511.8 |  |  | $ | 381.6 |  |  | $ | — |  |  | $ | — |  |  | $ | 381.6 |
Kudu |  | N/A |  | 7.6 |  |  | — |  |  | — |  |  | 7.6 |  |  | 7.6 |  |  | — |  |  | — |  |  | 7.6 |
Other Operations |  | N/A |  | 20.7 |  |  | — |  |  | — |  |  | 20.7 |  |  | 13.1 |  |  | — |  |  | 7.6 |  |  | 5.5 |
Total goodwill |  |  |  | 540.1 |  |  | — |  |  | — |  |  | 540.1 |  |  | 402.3 |  |  | — |  |  | 7.6 |  |  | 394.7 |
Other intangible assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
NSM (1) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Customer relationships |  | 9 |  | 118.4 |  |  | 28.4 |  |  | 3.5 |  |  | 86.5 |  |  | 121.7 |  |  | 19.8 |  |  | 1.4 |  |  | 100.5 |
Trade names |  | 19 |  | 60.8 |  |  | 7.1 |  |  | 1.0 |  |  | 52.7 |  |  | 61.9 |  |  | 5.3 |  |  | .4 |  |  | 56.2 |
Information technology platform |  | 0 |  | 3.1 |  |  | 1.4 |  |  | 1.7 |  |  | — |  |  | 3.9 |  |  | 1.4 |  |  | .6 |  |  | 1.9 |
Renewal rights |  | 12 |  | 82.5 |  |  | 3.9 |  |  | — |  |  | 78.6 |  |  | 82.5 |  |  | .7 |  |  | — |  |  | 81.8 |
Other |  | 3 |  | 1.7 |  |  | 1.0 |  |  | — |  |  | .7 |  |  | 1.7 |  |  | .7 |  |  | — |  |  | 1.0 |
Subtotal |  |  |  | 266.5 |  |  | 41.8 |  |  | 6.2 |  |  | 218.5 |  |  | 271.7 |  |  | 27.9 |  |  | 2.4 |  |  | 241.4 |
Kudu |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Trade names |  | 7 |  | 2.2 |  |  | .5 |  |  | — |  |  | 1.7 |  |  | 2.2 |  |  | .2 |  |  | — |  |  | 2.0 |
Other Operations |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Trade names |  | 10 |  | 1.0 |  |  | .1 |  |  | — |  |  | .9 |  |  | 1.7 |  |  | .5 |  |  | .2 |  |  | 1.0 |
Customer relationships |  | 11 |  | 7.2 |  |  | .8 |  |  | — |  |  | 6.4 |  |  | 7.2 |  |  | .4 |  |  | — |  |  | 6.8 |
Information technology platform |  | 5 |  | — |  |  | — |  |  | — |  |  | — |  |  | .5 |  |  | .3 |  |  | .2 |  |  | — |
Insurance Licenses |  | N/A |  | 8.6 |  |  | — |  |  | — |  |  | 8.6 |  |  | 8.6 |  |  | — |  |  | — |  |  | 8.6 |
Other |  | 5 |  | .2 |  |  | .1 |  |  | — |  |  | .1 |  |  | .2 |  |  | — |  |  | — |  |  | .2 |
Subtotal |  |  |  | 17.0 |  |  | 1.0 |  |  | — |  |  | 16.0 |  |  | 18.2 |  |  | 1.2 |  |  | .4 |  |  | 16.6 |
Total other intangible assets | 285.7 |  |  | 43.3 |  |  | 6.2 |  |  | 236.2 |  |  | 292.1 |  |  | 29.3 |  |  | 2.8 |  |  | 260.0 |
Total goodwill and other intangible assets |  | $ | 825.8 |  |  | $ | 43.3 |  |  | $ | 6.2 |  |  | 776.3 |  |  | $ | 694.4 |  |  | $ | 29.3 |  |  | 10.4 |  |  | 654.7 |
Goodwill and other intangible assets attributed to non-controlling interests |  |  |  | (27.1 | ) |  |  |  |  |  |  |  | (23.4 | )
Goodwill and other intangible assets included in White Mountains’s common shareholders’ equity |  |  |  | $ | 749.2 |  |  |  |  |  |  |  |  | $ | 631.3 |
(1) As of September 30, 2020, NSM’s goodwill and intangible assets included $5.2 and $(0.5) of the effect of foreign currency translation. As of December 31, 2019, NSM’s goodwill and intangible assets included $1.4 and $0.7 of the effect of foreign currency translation. The goodwill recognized for the entities shown on the previous page is attributed to expected future cash flows. The acquisition date fair values of other intangible assets with finite lives are estimated using income approach techniques, which use future expected cash flows to develop a discounted present value amount. The multi-period-excess-earnings method estimates fair value using the present value of the incremental after-tax cash flows attributable solely to the other intangible asset over its remaining life. This approach was used to estimate the fair value of other intangible assets associated with trade names, customer relationships and contracts and information technology. The relief-from-royalty method was used to estimate fair value for other intangible assets that relate to rights that could be obtained via a license from a third-party owner. Under this method, the fair value is estimated using the present value of license fees avoided by owning rather than leasing the asset. This technique was used to estimate the fair value of domain names, certain trademarks and brand names. The with-or-without method estimates the fair value of an other intangible asset that provides an incremental benefit. Under this method, the fair value of the other intangible asset is calculated by comparing the value of the entity with and without the other intangible asset. This approach was used to estimate the fair value of favorable lease terms. The following table presents a summary of the acquisition date fair values of goodwill and other intangible assets for acquisitions completed from January 1, 2019 through September 30, 2020:
$ in Millions |  |  |  |
Acquisition of subsidiary/ asset |  | Goodwill and Other intangible asset (1) |  | Acquisition Date
Embrace (2) |  | $ | 67.6 |  |  | April 1, 2019
Renewal Rights (3) |  | 82.5 |  |  | June 28, 2019
Kingsbridge (4) |  | 125.1 |  |  | April 7, 2020
Total NSM segment |  | $ | 275.2 |  |  |
Kudu Transaction |  | $ | 9.8 |  |  | April 4, 2019
Other Operations (4) |  | $ | 37.5 |  |  | Various
(1) Acquisition date fair values include the effect of adjustments during the measurement period and excludes the effect of foreign currency translation subsequent to the acquisition date. (2) Excludes $3.4 of software classified within other assets. (3) NSM’s purchase of the Renewal Rights from AIG was an asset acquisition. (4) The determination of the relative fair values of goodwill and other intangible assets had not yet been finalized as of September 30, 2020. On an annual basis beginning no later than the interim period included in the one-year anniversary of an acquisition, White Mountains evaluates goodwill and other intangible assets for potential impairment. Between annual evaluations, White Mountains considers changes in circumstances or events subsequent to the most recent evaluation that may indicate that an impairment may exist and, if necessary will perform an interim review for potential impairment. During the second quarter of 2020, White Mountains recognized impairments of other intangible assets of $6.2 million. The impairments related to NSM’s write-off of intangible assets in its U.K. vertical. The impairments related to lower premium volumes, including due to the impact of the COVID-19 pandemic, and certain reorganization initiatives in the U.K. vertical. There were no other impairments of other intangible assets and no impairments of goodwill for the three and nine months ended September 30, 2020 and 2019. The following tables present the change in goodwill and other intangible assets for the three and nine months ended September 30, 2020 and 2019:
|  | Three Months Ended September 30,
|  | 2020 |  | 2019
Millions |  | Goodwill |  | Other Intangible Assets |  | Total Goodwill and Other Intangible Assets |  | Goodwill |  | Other Intangible Assets |  | Total Goodwill and Other Intangible Assets
Beginning balance |  | $ | 518.2 |  |  | $ | 241.7 |  |  | $ | 759.9 |  |  | $ | 428.6 |  |  | $ | 239.0 |  |  | $ | 667.6 |
Attribution of acquisition date fair value estimates between goodwill and other intangible assets |  | — |  |  | — |  |  | — |  |  | $ | (2.2 | ) |  | $ | 2.2 |  |  | — |
Acquisitions of businesses |  | 14.9 |  | (1) | — |  |  | 14.9 |  |  | — |  |  | — |  |  | — |
Acquisition of renewal rights |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Foreign currency translation |  | 7.0 |  |  | (.1 | ) |  | 6.9 |  |  | (1.6 | ) |  | (.5 | ) |  | (2.1 | )
Amortization |  | — |  |  | (5.4 | ) |  | (5.4 | ) |  | — |  |  | (4.6 | ) |  | (4.6 | )
Ending balance |  | $ | 540.1 |  |  | $ | 236.2 |  |  | $ | 776.3 |  |  | $ | 424.8 |  |  | $ | 236.1 |  |  | $ | 660.9 |
(1) The relative fair values of goodwill and other intangible assets recognized in connection with the acquisition of Other Operations had not yet been finalized at September 30, 2020.
|  | Nine Months Ended September 30,
|  | 2020 |  | 2019
Millions |  | Goodwill |  | Other Intangible Assets |  | Total Goodwill and Other Intangible Assets |  | Goodwill |  | Other Intangible Assets |  | Total Goodwill and Other Intangible Assets
Beginning balance |  | $ | 394.7 |  |  | $ | 260.0 |  |  | $ | 654.7 |  |  | $ | 379.9 |  |  | $ | 157.6 |  |  | $ | 537.5 |
Deconsolidation of MediaAlpha |  | — |  |  | — |  |  | — |  |  | (18.3 | ) |  | (23.5 | ) |  | (41.8 | )
Attribution of acquisition date fair value estimates between goodwill and other intangible assets |  | — |  |  | — |  |  | — |  |  | (29.0 | ) |  | 29.0 |  |  | — |
Acquisitions of businesses |  | 140.0 |  | (1) | — |  |  | 140.0 |  |  | 93.8 |  | (2) | — |  |  | 93.8 |
Acquisition of renewal rights |  | — |  |  | — |  |  | — |  |  | — |  |  | 82.5 |  |  | 82.5 |
Foreign currency translation |  | 5.2 |  |  | (.5 | ) |  | 4.7 |  |  | (1.6 | ) |  | — |  |  | (1.6 | )
Adjustments to reflect acquisition date fair value |  | .2 |  |  | — |  |  | .2 |  |  | — |  |  | 5.9 |  |  | 5.9 |
Impairments |  | — |  |  | (6.2 | ) |  | (6.2 | ) |  | — |  |  | — |  |  | — |
Amortization |  | — |  |  | (17.1 | ) |  | (17.1 | ) |  | — |  |  | (15.4 | ) |  | (15.4 | )
Ending balance |  | $ | 540.1 |  |  | $ | 236.2 |  |  | $ | 776.3 |  |  | $ | 424.8 |  |  | $ | 236.1 |  |  | $ | 660.9 |
(1) The relative fair values of goodwill and other intangible assets recognized in connection with the acquisition of Kingsbridge and Other Operations had not yet been finalized at September 30, 2020. (2) The relative fair values of goodwill and other intangible assets recognized in connection with the acquisitions of Embrace and Other Operations had not yet been finalized at September 30, 2019.

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- Definition The entire disclosure for goodwill and intangible assets. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -URI http://asc.fasb.org/topic&trid=2144416 + Details
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