Held for Sale and Discontinued Operations

3 Months Ended

Mar. 31, 2022

Discontinued Operations and Disposal Groups [Abstract]

Held for Sale and Discontinued Operations

Sirius Group

On April 18, 2016, White Mountains completed the sale of Sirius International Insurance Group, Ltd. (“Sirius Group”) to CM International Pte. Ltd. and CM Bermuda Limited (collectively “CMI”). In connection with the sale, White Mountains indemnified Sirius Group against the loss of certain interest deductions claimed by Sirius Group related to periods prior to the sale of Sirius Group to CMI that had been disputed by the Swedish Tax Agency. In late October 2018, the Swedish Administrative Court ruled against Sirius Group on its appeal of the Swedish Tax Agency’s denial of these interest deductions. As a result, in 2018 White Mountains recorded a loss of $17.3 million within net gain (loss) on sale of discontinued operations reflecting the value of these interest deductions.

As of December 31, 2020, White Mountains’s liability related to the tax indemnification provided in connection with the sale of Sirius Group in 2016 was $18.7 million. In April 2021, the Swedish Tax Agency informed the Swedish Administrative Court of Appeal that Sirius Group should prevail in its appeal and that the interest deductions should not be disallowed. In June 2021, the Swedish Administrative Court of Appeal ruled in Sirius Group’s favor. For the three months ended March 31, 2021, White Mountains recorded a gain of $17.6 million in discontinued operations to reverse the liability accrued as of December 31, 2020 and $1.1 million gain related to foreign currency translation.

NSM

On April 12, 2021, NSM completed the sale of the Fresh Insurance motor business for net proceeds of £1.1 million ($1.5 million based upon the foreign exchange spot rate as of the transaction date). The assets and liabilities included in the transaction were measured at their estimated fair values, net of disposal, and classified as held for sale at March 31, 2021. However, the transaction did not meet the criteria to be classified as discontinued operations. In the first quarter of 2021, NSM recorded a loss of $28.7 million related to the sale.

Other

As of March 31, 2022 and December 31, 2021, White Mountains classified one of the Other Operating Businesses, which included $15.9 million and $16.1 million of insurance licenses, investments and cash, as assets held for sale.

Earnings Per Share from Discontinued Operations

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 the net effect of potentially dilutive common shares outstanding. The following table presents the Company’s computation of earnings per share for discontinued operations for the three months ended March 31, 2022 and 2021:


	Three Months Ended
	March 31,
		2022		2021
Basic and diluted earnings per share numerators (in millions):
Net income (loss) attributable to White Mountains’s common shareholders		$	33.4	$	(75.3)
Less: total income (loss) from continuing operations, net of tax		33.4		(94.0)
Net gain from discontinued operations attributable to White Mountains’s common shareholders		$	—	$	18.7
Allocation of earnings to participating restricted common shares (1)		—		(.2)
Basic and diluted earnings per share numerators (2)		$	—	$	18.5
Basic earnings per share denominators (in thousands):
Total average common shares outstanding during the period		3,006.2		3,100.2
Average unvested restricted common shares (3)		(29.6)		(32.4)
Basic earnings per share denominator		2,976.6		3,067.8
Diluted earnings per share denominator (in thousands):
Total average common shares outstanding during the period		3,006.2		3,100.2
Average unvested restricted common shares (3)		(29.6)		(32.4)

Diluted earnings per share denominator		2,976.6		3,067.8

Basic and diluted earnings (losses) per share (in dollars) - discontinued operations:		$	—	$	6.03

(1) Restricted shares issued by White Mountains receive dividends and are therefore 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, 2022 and 2021.

(3) Restricted shares outstanding vest upon a stated date. See Note 12 — “Employee Share-Based Incentive Compensation Plans”.