Bermuda
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94-2708455
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(State or other jurisdiction of
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(I.R.S. Employer
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incorporation or organization)
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Identification No.)
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80 South Main Street,
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03755-2053
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Hanover, New Hampshire
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(Zip Code)
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(Address of principal executive offices)
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Large accelerated filer
ý
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Accelerated filer
o
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Non-accelerated filer
o
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Smaller reporting company
o
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Emerging growth company
o
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Page No.
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Consolidated Balance Sheets, March 31, 2018 and December 31, 2017
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Three Months Ended March 31, 2018 and 2017
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Consolidated Statements of Changes in Equity, Three Months Ended March 31, 2018 and 2017
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Consolidated Statements of Cash Flows, Three Months Ended March 31, 2018 and 2017
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Results of Operations for the Three Months Ended March 31, 2018 and 2017
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Item 1.
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Financial Statements
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March 31, 2018
|
|
December 31, 2017
|
||||
Millions, except share and per share amounts
|
|
|
||||||
Assets
|
|
Unaudited
|
|
|
||||
Financial Guarantee (HG Global/BAM)
|
|
|
|
|
||||
Fixed maturity investments, at fair value
|
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$
|
622.1
|
|
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$
|
623.6
|
|
Short-term investments, at fair value
|
|
88.0
|
|
|
69.8
|
|
||
Total investments
|
|
710.1
|
|
|
693.4
|
|
||
Cash
|
|
9.4
|
|
|
25.6
|
|
||
Insurance premiums receivable
|
|
5.2
|
|
|
4.5
|
|
||
Deferred acquisition costs
|
|
15.9
|
|
|
14.8
|
|
||
Accrued investment income
|
|
4.4
|
|
|
3.4
|
|
||
Accounts receivable on unsettled investment sales
|
|
—
|
|
|
.1
|
|
||
Other assets
|
|
5.1
|
|
|
5.6
|
|
||
Total Financial Guarantee assets
|
|
750.1
|
|
|
747.4
|
|
||
|
|
|
|
|
||||
Marketing Technology (MediaAlpha)
|
|
|
|
|
||||
Cash
|
|
15.9
|
|
|
9.1
|
|
||
Goodwill and other intangible assets
|
|
50.8
|
|
|
53.7
|
|
||
Accounts receivable from publishers and advertisers
|
|
35.4
|
|
|
32.4
|
|
||
Other assets
|
|
1.6
|
|
|
1.3
|
|
||
Total Marketing Technology assets
|
|
103.7
|
|
|
96.5
|
|
||
|
|
|
|
|
||||
Other
|
|
|
|
|
||||
Fixed maturity investments, at fair value
|
|
711.7
|
|
|
1,506.1
|
|
||
Short-term investments, at fair value
|
|
675.0
|
|
|
106.3
|
|
||
Common equity securities, at fair value
|
|
945.6
|
|
|
866.1
|
|
||
Other long-term investments
|
|
253.1
|
|
|
208.8
|
|
||
Total investments
|
|
2,585.4
|
|
|
2,687.3
|
|
||
Cash
|
|
94.9
|
|
|
62.4
|
|
||
Accrued investment income
|
|
10.7
|
|
|
13.9
|
|
||
Accounts receivable on unsettled investment sales
|
|
14.0
|
|
|
20.9
|
|
||
Goodwill and other intangible assets
|
|
8.4
|
|
|
8.4
|
|
||
Other assets
|
|
16.5
|
|
|
19.1
|
|
||
Assets held for sale
|
|
3.3
|
|
|
3.3
|
|
||
Total Other assets
|
|
2,733.2
|
|
|
2,815.3
|
|
||
Total assets
|
|
$
|
3,587.0
|
|
|
$
|
3,659.2
|
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
Millions, except share and per share amounts
|
|
|
||||||
Liabilities
|
|
Unaudited
|
|
|
||||
Financial Guarantee (HG Global/BAM)
|
|
|
|
|
||||
Unearned insurance premiums
|
|
$
|
140.2
|
|
|
$
|
136.8
|
|
Accrued incentive compensation
|
|
8.4
|
|
|
18.2
|
|
||
Accounts payable on unsettled investment purchases
|
|
18.8
|
|
|
.6
|
|
||
Other liabilities
|
|
12.2
|
|
|
11.4
|
|
||
Total Financial Guarantee liabilities
|
|
179.6
|
|
|
167.0
|
|
||
|
|
|
|
|
||||
Marketing Technology (MediaAlpha)
|
|
|
|
|
||||
Debt
|
|
21.5
|
|
|
23.8
|
|
||
Amounts due to publishers and advertisers
|
|
37.4
|
|
|
31.6
|
|
||
Accrued incentive compensation
|
|
.9
|
|
|
2.0
|
|
||
Other liabilities
|
|
.9
|
|
|
2.4
|
|
||
Total Marketing Technology liabilities
|
|
60.7
|
|
|
59.8
|
|
||
|
|
|
|
|
||||
Other
|
|
|
|
|
||||
Accrued incentive compensation
|
|
23.7
|
|
|
60.6
|
|
||
Accounts payable on unsettled investment purchases
|
|
17.7
|
|
|
—
|
|
||
Other liabilities
|
|
9.5
|
|
|
11.0
|
|
||
Total Other liabilities
|
|
50.9
|
|
|
71.6
|
|
||
Total liabilities
|
|
291.2
|
|
|
298.4
|
|
||
|
|
|
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|
||||
Equity
|
|
|
|
|
||||
White Mountains’s common shareholders’ equity
|
|
|
|
|
||||
White Mountains’s common shares at $1 par value per share—authorized 50,000,000
shares; issued and outstanding 3,753,405 and 3,750,171 shares |
|
3.8
|
|
|
3.8
|
|
||
Paid-in surplus
|
|
671.5
|
|
|
666.8
|
|
||
Retained earnings
|
|
2,765.0
|
|
|
2,823.2
|
|
||
Accumulated other comprehensive loss, after-tax:
|
|
|
|
|
||||
Net unrealized foreign currency translation losses
|
|
(1.3
|
)
|
|
(1.3
|
)
|
||
Total White Mountains’s common shareholders’ equity
|
|
3,439.0
|
|
|
3,492.5
|
|
||
Non-controlling interests
|
|
(143.2
|
)
|
|
(131.7
|
)
|
||
Total equity
|
|
3,295.8
|
|
|
3,360.8
|
|
||
Total liabilities and equity
|
|
$
|
3,587.0
|
|
|
$
|
3,659.2
|
|
|
|
Three Months Ended March 31,
|
||||||
Millions
|
|
2018
|
|
2017
|
||||
Revenues:
|
|
|
|
|
||||
Financial Guarantee (HG Global/BAM)
|
|
|
|
|
||||
Earned insurance premiums
|
|
$
|
3.0
|
|
|
$
|
2.0
|
|
Net investment income
|
|
3.7
|
|
|
2.6
|
|
||
Net realized and unrealized investment (losses) gains
|
|
(7.9
|
)
|
|
1.3
|
|
||
Other revenues
|
|
.2
|
|
|
.4
|
|
||
Total Financial Guarantee revenues
|
|
(1.0
|
)
|
|
6.3
|
|
||
Marketing Technology (MediaAlpha)
|
|
|
|
|
||||
Advertising & commission revenues
|
|
70.1
|
|
|
32.5
|
|
||
Other revenues
|
|
1.6
|
|
|
—
|
|
||
Total Marketing Technology revenues
|
|
71.7
|
|
|
32.5
|
|
||
Other
|
|
|
|
|
||||
Earned insurance premiums
|
|
—
|
|
|
1.0
|
|
||
Net investment income
|
|
16.0
|
|
|
10.2
|
|
||
Net realized and unrealized investment (losses) gains
|
|
(45.8
|
)
|
|
35.0
|
|
||
Advertising & commission revenues
|
|
.9
|
|
|
1.3
|
|
||
Other revenues
|
|
.3
|
|
|
2.5
|
|
||
Total Other revenues
|
|
(28.6
|
)
|
|
50.0
|
|
||
Total revenues
|
|
42.1
|
|
|
88.8
|
|
||
|
|
|
|
|
||||
Expenses:
|
|
|
|
|
||||
Financial Guarantee (HG Global/BAM)
|
|
|
|
|
||||
Insurance acquisition expenses
|
|
1.4
|
|
|
1.2
|
|
||
Other underwriting expenses
|
|
.1
|
|
|
.1
|
|
||
General and administrative expenses
|
|
11.8
|
|
|
10.6
|
|
||
Total Financial Guarantee expenses
|
|
13.3
|
|
|
11.9
|
|
||
Marketing Technology (MediaAlpha)
|
|
|
|
|
||||
Cost of Sales
|
|
57.4
|
|
|
27.7
|
|
||
General and administrative expenses
|
|
11.2
|
|
|
3.2
|
|
||
Amortization of other intangible assets
|
|
2.9
|
|
|
2.4
|
|
||
Interest expense
|
|
.4
|
|
|
.2
|
|
||
Total Marketing Technology expenses
|
|
71.9
|
|
|
33.5
|
|
||
Other
|
|
|
|
|
||||
Loss and loss adjustment expenses
|
|
—
|
|
|
1.1
|
|
||
Insurance acquisition expense
|
|
—
|
|
|
.1
|
|
||
Cost of sales
|
|
.7
|
|
|
1.1
|
|
||
General and administrative expenses
|
|
22.0
|
|
|
44.5
|
|
||
Interest expense
|
|
.2
|
|
|
.2
|
|
||
Total Other expenses
|
|
22.9
|
|
|
47.0
|
|
||
Total expenses
|
|
108.1
|
|
|
92.4
|
|
||
Pre-tax loss from continuing operations
|
|
(66.0
|
)
|
|
(3.6
|
)
|
||
Income tax (expense) benefit
|
|
(.7
|
)
|
|
.3
|
|
||
Net loss from continuing operations
|
|
(66.7
|
)
|
|
(3.3
|
)
|
||
Gain (loss) from sale of discontinued operations, net of tax
|
|
.1
|
|
|
(1.0
|
)
|
||
Net income from discontinued operations, net of tax
|
|
—
|
|
|
32.3
|
|
||
Net (loss) income
|
|
(66.6
|
)
|
|
28.0
|
|
||
Net loss attributable to non-controlling interests
|
|
18.6
|
|
|
1.0
|
|
||
Net (loss) income attributable to White Mountains’s common shareholders
|
|
$
|
(48.0
|
)
|
|
$
|
29.0
|
|
|
|
Three Months Ended March 31,
|
||||||
Millions
|
|
2018
|
|
2017
|
||||
Net (loss) income attributable to White Mountains’s common shareholders
|
|
$
|
(48.0
|
)
|
|
$
|
29.0
|
|
Other comprehensive income, net of tax:
|
|
|
|
|
||||
Other comprehensive income, net of tax
|
|
—
|
|
|
.1
|
|
||
Comprehensive income from discontinued operations, net of tax
|
|
—
|
|
|
.1
|
|
||
Comprehensive (loss) income
|
|
(48.0
|
)
|
|
29.2
|
|
||
Comprehensive income attributable to non-controlling interests
|
|
—
|
|
|
—
|
|
||
Comprehensive (loss) income attributable to White Mountains’s common shareholders
|
|
$
|
(48.0
|
)
|
|
$
|
29.2
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2018
|
|
2017
|
||||
Basic (loss) earnings per share
|
|
|
|
|
||||
Continuing operations
|
|
$
|
(12.85
|
)
|
|
$
|
(0.52
|
)
|
Discontinued operations
|
|
0.03
|
|
|
6.86
|
|
||
Total consolidated operations
|
|
$
|
(12.82
|
)
|
|
$
|
6.34
|
|
Diluted (loss) earnings per share
|
|
|
|
|
||||
Continuing operations
|
|
$
|
(12.85
|
)
|
|
$
|
(0.52
|
)
|
Discontinued operations
|
|
0.03
|
|
|
6.86
|
|
||
Total consolidated operations
|
|
$
|
(12.82
|
)
|
|
$
|
6.34
|
|
Dividends declared and paid per White Mountains’s common share
|
|
$
|
1.00
|
|
|
$
|
1.00
|
|
|
|
White Mountains’s Common Shareholders’ Equity
|
|
|
|
|
||||||||||||||||||
(Millions)
|
|
Common shares and paid-in surplus
|
|
Retained earnings
|
|
AOCI, after tax
|
|
Total
|
|
Non-controlling interest
|
|
Total Equity
|
||||||||||||
Balance at January 1, 2018
|
|
$
|
670.6
|
|
|
$
|
2,823.2
|
|
|
$
|
(1.3
|
)
|
|
$
|
3,492.5
|
|
|
$
|
(131.7
|
)
|
|
$
|
3,360.8
|
|
Net (loss) income
|
|
—
|
|
|
(48.0
|
)
|
|
—
|
|
|
(48.0
|
)
|
|
(18.6
|
)
|
|
(66.6
|
)
|
||||||
Net change in foreign currency translation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total comprehensive income
|
|
—
|
|
|
(48.0
|
)
|
|
—
|
|
|
(48.0
|
)
|
|
(18.6
|
)
|
|
(66.6
|
)
|
||||||
Dividends declared on common shares
|
|
—
|
|
|
(3.8
|
)
|
|
—
|
|
|
(3.8
|
)
|
|
—
|
|
|
(3.8
|
)
|
||||||
Dividends to non-controlling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(.3
|
)
|
|
(.3
|
)
|
||||||
Repurchases and retirements of common shares
|
|
(1.9
|
)
|
|
(6.4
|
)
|
|
—
|
|
|
(8.3
|
)
|
|
—
|
|
|
(8.3
|
)
|
||||||
Recognition of equity-based units of subsidiary
|
|
4.1
|
|
|
—
|
|
|
—
|
|
|
4.1
|
|
|
2.3
|
|
|
6.4
|
|
||||||
Dilution from equity-based units of subsidiary
|
|
(.9
|
)
|
|
—
|
|
|
—
|
|
|
(.9
|
)
|
|
.9
|
|
|
—
|
|
||||||
Capital contributions from BAM members, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4.2
|
|
|
4.2
|
|
||||||
Amortization of restricted share awards
|
|
3.4
|
|
|
—
|
|
|
—
|
|
|
3.4
|
|
|
—
|
|
|
3.4
|
|
||||||
Balance at March 31, 2018
|
|
$
|
675.3
|
|
|
$
|
2,765.0
|
|
|
$
|
(1.3
|
)
|
|
$
|
3,439.0
|
|
|
$
|
(143.2
|
)
|
|
$
|
3,295.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
White Mountains’s Common Shareholders’ Equity
|
|
|
|
|
||||||||||||||||||
(Millions)
|
|
Common shares and paid-in surplus
|
|
Retained earnings
|
|
AOCI, after tax
|
|
Total
|
|
Non-controlling interest
|
|
Total Equity
|
||||||||||||
Balance at January 1, 2017
|
|
$
|
810.7
|
|
|
$
|
2,776.6
|
|
|
$
|
(4.6
|
)
|
|
$
|
3,582.7
|
|
|
$
|
133.3
|
|
|
$
|
3,716.0
|
|
Net income (loss)
|
|
—
|
|
|
29.0
|
|
|
—
|
|
|
29.0
|
|
|
(1.0
|
)
|
|
28.0
|
|
||||||
Net change in foreign currency translation and
benefit plan assets and obligations
|
|
—
|
|
|
—
|
|
|
.2
|
|
|
.2
|
|
|
—
|
|
|
.2
|
|
||||||
Total comprehensive income (loss)
|
|
—
|
|
|
29.0
|
|
|
.2
|
|
|
29.2
|
|
|
(1.0
|
)
|
|
28.2
|
|
||||||
Dividends declared on common shares
|
|
—
|
|
|
(4.6
|
)
|
|
—
|
|
|
(4.6
|
)
|
|
—
|
|
|
(4.6
|
)
|
||||||
Dividends to non-controlling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6.6
|
)
|
|
(6.6
|
)
|
||||||
Repurchases and retirements of common shares
|
|
(1.4
|
)
|
|
(5.1
|
)
|
|
—
|
|
|
(6.5
|
)
|
|
(1.1
|
)
|
|
(7.6
|
)
|
||||||
Dilution from restricted shares issued at OneBeacon
|
|
(4.1
|
)
|
|
—
|
|
|
—
|
|
|
(4.1
|
)
|
|
4.1
|
|
|
—
|
|
||||||
Capital contributions from BAM members, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7.0
|
|
|
7.0
|
|
||||||
Amortization of restricted share awards
|
|
2.6
|
|
|
—
|
|
|
—
|
|
|
2.6
|
|
|
.2
|
|
|
2.8
|
|
||||||
Deconsolidation of non-controlling interests
associated with the sale of Tranzact
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4.4
|
)
|
|
(4.4
|
)
|
||||||
Balance at March 31, 2017
|
|
$
|
807.8
|
|
|
$
|
2,795.9
|
|
|
$
|
(4.4
|
)
|
|
$
|
3,599.3
|
|
|
$
|
131.5
|
|
|
$
|
3,730.8
|
|
|
|
Three Months Ended March 31,
|
||||||
(Millions)
|
|
2018
|
|
2017
|
||||
Cash flows from operations:
|
|
|
|
|
||||
Net loss (income)
|
|
(66.6
|
)
|
|
$
|
28.0
|
|
|
Charges (credits) to reconcile net income to net cash used for operations:
|
|
|
|
|
|
|
||
Net realized and unrealized investment losses
|
|
53.7
|
|
|
(36.3
|
)
|
||
Deferred income benefit
|
|
(.8
|
)
|
|
(3.0
|
)
|
||
Net income from discontinued operations
|
|
—
|
|
|
(32.3
|
)
|
||
Net (gain) loss from sale of discontinued operations, net of tax
|
|
(.1
|
)
|
|
1.0
|
|
||
Amortization of restricted share and option awards
|
|
3.2
|
|
|
1.8
|
|
||
Amortization and depreciation
|
|
4.8
|
|
|
5.8
|
|
||
Net change in unearned insurance premiums
|
|
3.4
|
|
|
17.4
|
|
||
Net change in deferred acquisition costs
|
|
(1.1
|
)
|
|
(1.3
|
)
|
||
Net change in other assets and liabilities, net
|
|
(41.3
|
)
|
|
(35.9
|
)
|
||
Net cash used for operations - continuing operations
|
|
(44.8
|
)
|
|
(54.8
|
)
|
||
Net cash provided from (used for) operations - discontinued operations
|
|
.1
|
|
|
(1.3
|
)
|
||
Net cash provided from used for operations
|
|
(44.7
|
)
|
|
(56.1
|
)
|
||
Cash flows from investing activities:
|
|
|
|
|
|
|
||
Net change in short-term investments
|
|
(587.5
|
)
|
|
36.1
|
|
||
Sales of fixed maturity and convertible investments
|
|
1,266.5
|
|
|
375.4
|
|
||
Maturities, calls and paydowns of fixed maturity and convertible investments
|
|
40.6
|
|
|
70.2
|
|
||
Sales of common equity securities
|
|
14.4
|
|
|
15.9
|
|
||
Distributions and redemptions of other long-term investments and settlements of forward contracts
|
|
(6.9
|
)
|
|
3.2
|
|
||
Net settlement of investment cash flows and contributions with discontinued operations
|
|
.1
|
|
|
—
|
|
||
Purchases of other long-term investments
|
|
(46.0
|
)
|
|
(21.6
|
)
|
||
Purchases of common equity securities
|
|
(109.4
|
)
|
|
(111.9
|
)
|
||
Purchases of fixed maturity and convertible investments
|
|
(537.1
|
)
|
|
(363.4
|
)
|
||
Net change in unsettled investment purchases and sales
|
|
42.9
|
|
|
3.1
|
|
||
Net acquisitions of property and equipment
|
|
(.1
|
)
|
|
—
|
|
||
Net cash provided from investing activities - continuing operations
|
|
77.5
|
|
|
7.0
|
|
||
Net cash (used for) provided from investing activities - discontinued operations
|
|
(.1
|
)
|
|
32.3
|
|
||
Net cash provided from investing activities
|
|
77.4
|
|
|
39.3
|
|
||
Cash flows from financing activities:
|
|
|
|
|
|
|
||
Repayment of debt and revolving line of credit
|
|
(2.3
|
)
|
|
(1.2
|
)
|
||
Cash dividends paid to the Company’s common shareholders
|
|
(3.8
|
)
|
|
(4.6
|
)
|
||
Distribution to non-controlling interest shareholders
|
|
—
|
|
|
(.3
|
)
|
||
Contributions from discontinued operations
|
|
—
|
|
|
15.1
|
|
||
Capital contributions from BAM members
|
|
4.9
|
|
|
9.6
|
|
||
Restricted share statutory withholding tax payments
|
|
(8.4
|
)
|
|
(6.5
|
)
|
||
Net cash used for financing activities - continuing operations
|
|
(9.6
|
)
|
|
12.1
|
|
||
Net cash used for financing activities - discontinued operations
|
|
—
|
|
|
(21.0
|
)
|
||
Net cash used for financing activities
|
|
(9.6
|
)
|
|
(8.9
|
)
|
||
Net change in cash during the period - continuing operations
|
|
23.1
|
|
|
(35.7
|
)
|
||
Cash balances at beginning of period (excludes discontinued operations cash balances of $0.0 and $70.5)
|
|
97.1
|
|
|
80.2
|
|
||
Add: cash held for sale, excluding discontinued operations, at the beginning of period
|
|
—
|
|
|
.9
|
|
||
Less: cash held for sale, excluding discontinued operations, at the end of period
|
|
—
|
|
|
—
|
|
||
Cash balances at end of period (excludes discontinued operations cash balances of $0.0 and $79.6)
|
|
$
|
120.2
|
|
|
$
|
45.4
|
|
Supplemental cash flows information:
|
|
|
|
|
|
|
||
Interest paid
|
|
$
|
(.3
|
)
|
|
$
|
(.2
|
)
|
Net income tax refunds
|
|
$
|
.2
|
|
|
$
|
—
|
|
|
|
Three Months Ended
|
||||||
|
|
March 31,
|
||||||
Millions
|
|
2018
|
|
2017
|
||||
Investment income:
|
|
|
|
|
||||
Fixed maturity investments
|
|
$
|
10.9
|
|
|
$
|
11.9
|
|
Short-term investments
|
|
2.6
|
|
|
.2
|
|
||
Common equity securities
|
|
5.0
|
|
|
1.3
|
|
||
Other long-term investments
|
|
1.9
|
|
|
(.1
|
)
|
||
Total investment income
|
|
20.4
|
|
|
13.3
|
|
||
Third-party investment expenses
|
|
(.7
|
)
|
|
(.5
|
)
|
||
Net investment income, pre-tax
|
|
$
|
19.7
|
|
|
$
|
12.8
|
|
|
|
Three Months Ended
|
||||||
|
|
March 31,
|
||||||
Millions
|
|
2018
|
|
2017
|
||||
Net realized investment (losses) gains, pre-tax
|
|
$
|
(5.1
|
)
|
|
$
|
.6
|
|
Net unrealized investment (losses) gains, pre-tax
|
|
(48.6
|
)
|
|
35.7
|
|
||
Net realized and unrealized investment (losses) gains, pre-tax
|
|
(53.7
|
)
|
|
36.3
|
|
||
Income tax benefit (expense) attributable to net realized and
unrealized investment (losses) gains
|
|
5.7
|
|
|
(3.9
|
)
|
||
Net realized and unrealized investment (losses) gains, after-tax
|
|
$
|
(48.0
|
)
|
|
$
|
32.4
|
|
|
|
Three Months Ended
|
|
Three Months Ended
|
||||||||||||||||||||
|
|
March 31, 2018
|
|
March 31, 2017
|
||||||||||||||||||||
Millions
|
|
Net
realized (losses) gains |
|
Net
foreign exchange gains (losses) |
|
Total net realized
gains (losses) reflected in earnings |
|
Net
realized (losses) gains |
|
Net
foreign exchange gains |
|
Total net realized
(losses) gains reflected in earnings |
||||||||||||
Fixed maturity investments
|
|
$
|
(13.7
|
)
|
|
$
|
18.2
|
|
|
$
|
4.5
|
|
|
$
|
(1.0
|
)
|
|
$
|
.1
|
|
|
$
|
(.9
|
)
|
Short-term investments
|
|
(.1
|
)
|
|
—
|
|
|
(.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Common equity securities
|
|
1.2
|
|
|
—
|
|
|
1.2
|
|
|
.8
|
|
|
.1
|
|
|
.9
|
|
||||||
Other long-term investments
|
|
(3.5
|
)
|
|
(7.2
|
)
|
|
(10.7
|
)
|
|
.6
|
|
|
—
|
|
|
.6
|
|
||||||
Net realized investment (losses) gains,
pre-tax
|
|
(16.1
|
)
|
|
11.0
|
|
|
(5.1
|
)
|
|
.4
|
|
|
.2
|
|
|
.6
|
|
||||||
Income tax expense attributable to
net realized investment (losses) gains
|
|
(.6
|
)
|
|
—
|
|
|
(.6
|
)
|
|
(.2
|
)
|
|
—
|
|
|
(.2
|
)
|
||||||
Net realized investment (losses)
gains, after-tax
|
|
$
|
(16.7
|
)
|
|
$
|
11.0
|
|
|
$
|
(5.7
|
)
|
|
$
|
.2
|
|
|
$
|
.2
|
|
|
$
|
.4
|
|
|
|
Three Months Ended
|
|
Three Months Ended
|
||||||||||||||||||||
|
|
March 31, 2018
|
|
March 31, 2017
|
||||||||||||||||||||
Millions
|
|
Net
unrealized losses
|
|
Net
foreign exchange (losses)
gains
|
|
Total net unrealized (losses)
gains
reflected in
earnings
|
|
Net
unrealized gains
|
|
Net
foreign exchange gains (losses) |
|
Total net unrealized gains
reflected in
earnings
|
||||||||||||
Fixed maturity investments
|
|
$
|
(18.6
|
)
|
|
$
|
(14.8
|
)
|
|
$
|
(33.4
|
)
|
|
$
|
10.2
|
|
|
$
|
1.7
|
|
|
$
|
11.9
|
|
Short-term investments
|
|
(.7
|
)
|
|
—
|
|
|
(.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Common equity securities
|
|
(16.7
|
)
|
|
—
|
|
|
(16.7
|
)
|
|
19.1
|
|
|
.5
|
|
|
19.6
|
|
||||||
Other long-term investments
|
|
(1.9
|
)
|
|
4.1
|
|
|
2.2
|
|
|
6.9
|
|
|
(2.7
|
)
|
|
4.2
|
|
||||||
Net unrealized investment (losses) gains, pre-tax
|
|
(37.9
|
)
|
|
(10.7
|
)
|
|
(48.6
|
)
|
|
36.2
|
|
|
(.5
|
)
|
|
35.7
|
|
||||||
Income tax benefit (expense) attributable to net unrealized
investment gains (losses)
|
|
6.3
|
|
|
—
|
|
|
6.3
|
|
|
(3.7
|
)
|
|
—
|
|
|
(3.7
|
)
|
||||||
Net unrealized investment (losses) gains, after-tax
|
|
$
|
(31.6
|
)
|
|
$
|
(10.7
|
)
|
|
$
|
(42.3
|
)
|
|
$
|
32.5
|
|
|
$
|
(.5
|
)
|
|
$
|
32.0
|
|
|
|
Three Months Ended
|
||||||
|
|
March 31,
|
||||||
Millions
|
|
2018
|
|
2017
|
||||
Other long-term investments
|
|
$
|
(5.1
|
)
|
|
$
|
.2
|
|
Total net unrealized investment (losses) gains, pre-tax - Level 3 investments
|
|
$
|
(5.1
|
)
|
|
$
|
.2
|
|
|
|
March 31, 2018
|
||||||||||||||||||
Millions
|
|
Cost or
amortized
cost
|
|
Gross
unrealized
gains
|
|
Gross
unrealized
losses
|
|
Net foreign
currency
gains
|
|
Carrying
value
|
||||||||||
U.S. Government and agency obligations
|
|
$
|
199.9
|
|
|
$
|
—
|
|
|
$
|
(2.2
|
)
|
|
$
|
—
|
|
|
$
|
197.7
|
|
Debt securities issued by corporations
|
|
760.5
|
|
|
.7
|
|
|
(17.5
|
)
|
|
—
|
|
|
743.7
|
|
|||||
Mortgage and asset-backed securities
|
|
132.5
|
|
|
.1
|
|
|
(2.6
|
)
|
|
—
|
|
|
130.0
|
|
|||||
Municipal obligations
|
|
261.8
|
|
|
1.9
|
|
|
(1.3
|
)
|
|
—
|
|
|
262.4
|
|
|||||
Total fixed maturity investments
|
|
$
|
1,354.7
|
|
|
$
|
2.7
|
|
|
$
|
(23.6
|
)
|
|
$
|
—
|
|
|
$
|
1,333.8
|
|
|
|
December 31, 2017
|
||||||||||||||||||
Millions
|
|
Cost or
amortized
cost
|
|
Gross
unrealized
gains
|
|
Gross
unrealized
losses
|
|
Net foreign
currency
gains
|
|
Carrying
value
|
||||||||||
U.S. Government and agency obligations
|
|
$
|
297.8
|
|
|
$
|
—
|
|
|
$
|
(1.3
|
)
|
|
$
|
—
|
|
|
$
|
296.5
|
|
Debt securities issued by corporations
|
|
867.6
|
|
|
2.9
|
|
|
(4.3
|
)
|
|
14.7
|
|
|
880.9
|
|
|||||
Mortgage and asset-backed securities
|
|
697.2
|
|
|
1.6
|
|
|
(4.1
|
)
|
|
—
|
|
|
694.7
|
|
|||||
Municipal obligations
|
|
252.0
|
|
|
3.7
|
|
|
(.8
|
)
|
|
—
|
|
|
254.9
|
|
|||||
Foreign government, agency and provincial obligations
|
|
2.6
|
|
|
—
|
|
|
—
|
|
|
.1
|
|
|
2.7
|
|
|||||
Total fixed maturity investments
|
|
$
|
2,117.2
|
|
|
$
|
8.2
|
|
|
$
|
(10.5
|
)
|
|
$
|
14.8
|
|
|
$
|
2,129.7
|
|
|
|
March 31, 2018
|
||||||||||||||||||
Millions
|
|
Cost or
amortized
cost
|
|
Gross
unrealized
gains
|
|
Gross
unrealized
losses
|
|
Net foreign
currency losses |
|
Carrying
value
|
||||||||||
Common equity securities
|
|
$
|
835.9
|
|
|
$
|
111.7
|
|
|
$
|
(2.0
|
)
|
|
$
|
—
|
|
|
$
|
945.6
|
|
Other long-term investments
|
|
$
|
288.8
|
|
|
$
|
10.0
|
|
|
$
|
(44.8
|
)
|
|
$
|
(.9
|
)
|
|
$
|
253.1
|
|
|
|
December 31, 2017
|
||||||||||||||||||
Millions
|
|
Cost or
amortized cost |
|
Gross
unrealized gains |
|
Gross
unrealized losses |
|
Net foreign
currency losses |
|
Carrying
value
|
||||||||||
Common equity securities
|
|
$
|
739.7
|
|
|
$
|
129.4
|
|
|
$
|
(3.0
|
)
|
|
$
|
—
|
|
|
$
|
866.1
|
|
Other long-term investments
|
|
$
|
246.6
|
|
|
$
|
6.8
|
|
|
$
|
(39.7
|
)
|
|
$
|
(4.9
|
)
|
|
$
|
208.8
|
|
|
|
Carrying Value at
|
||||||
Millions
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
Hedge funds and private equity funds, at fair value
|
|
$
|
130.6
|
|
|
$
|
125.3
|
|
Private equity securities, at fair value
(1)(2)(3)
|
|
108.4
|
|
|
83.2
|
|
||
Foreign currency forward contracts
|
|
—
|
|
|
(3.7
|
)
|
||
Other
|
|
14.1
|
|
|
4.0
|
|
||
Total other long-term investments
|
|
$
|
253.1
|
|
|
$
|
208.8
|
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||||
Millions
|
|
Fair Value
|
|
Unfunded
Commitments
|
|
Fair Value
|
|
Unfunded
Commitments
|
||||||||
Hedge funds
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Long/short banks and financial
|
|
$
|
56.4
|
|
|
$
|
—
|
|
|
$
|
54.9
|
|
|
$
|
—
|
|
Total hedge funds
|
|
56.4
|
|
|
—
|
|
|
54.9
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Private equity funds
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Manufacturing/Industrial
|
|
44.5
|
|
|
10.4
|
|
|
43.3
|
|
|
10.4
|
|
||||
Aerospace/Defense/Government
|
|
17.0
|
|
|
12.9
|
|
|
15.8
|
|
|
12.9
|
|
||||
Direct lending
|
|
7.9
|
|
|
22.5
|
|
|
7.1
|
|
|
23.1
|
|
||||
Financial services
|
|
4.8
|
|
|
11.1
|
|
|
4.2
|
|
|
11.7
|
|
||||
Insurance
|
|
—
|
|
|
41.2
|
|
|
—
|
|
|
41.2
|
|
||||
Real estate
|
|
—
|
|
|
50.0
|
|
|
—
|
|
|
—
|
|
||||
Total private equity funds
|
|
74.2
|
|
|
148.1
|
|
|
70.4
|
|
|
99.3
|
|
||||
Total hedge funds and private equity funds
included in other long-term investments
|
|
$
|
130.6
|
|
|
$
|
148.1
|
|
|
$
|
125.3
|
|
|
$
|
99.3
|
|
Millions
|
|
1 – 3 years
|
|
3 – 5 years
|
|
5 – 10 years
|
|
>10 years
|
|
Total
|
Private equity funds — expected lock-up period remaining
|
|
$6.1
|
|
$6.2
|
|
$49.2
|
|
$12.7
|
|
$74.2
|
|
|
March 31, 2018
|
||||||||||||||
Millions
|
|
Fair Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Fixed maturity investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. Government and agency obligations
|
|
$
|
197.7
|
|
|
$
|
197.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||
Debt securities issued by corporations:
|
|
|
|
|
|
|
|
|
|
|||||||
Financials
|
|
151.0
|
|
|
—
|
|
|
151.0
|
|
|
—
|
|
||||
Consumer
|
|
144.8
|
|
|
—
|
|
|
144.8
|
|
|
—
|
|
||||
Technology
|
|
91.6
|
|
|
—
|
|
|
91.6
|
|
|
—
|
|
||||
Communications
|
|
84.9
|
|
|
—
|
|
|
84.9
|
|
|
—
|
|
||||
Health care
|
|
80.3
|
|
|
—
|
|
|
80.3
|
|
|
—
|
|
||||
Materials
|
|
76.1
|
|
|
—
|
|
|
76.1
|
|
|
—
|
|
||||
Energy
|
|
66.1
|
|
|
—
|
|
|
66.1
|
|
|
—
|
|
||||
Industrial
|
|
33.9
|
|
|
—
|
|
|
33.9
|
|
|
—
|
|
||||
Utilities
|
|
15.0
|
|
|
—
|
|
|
15.0
|
|
|
—
|
|
||||
Total debt securities issued by corporations:
|
|
743.7
|
|
|
—
|
|
|
743.7
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Mortgage and asset-backed securities
|
|
130.0
|
|
|
—
|
|
|
130.0
|
|
|
—
|
|
||||
Municipal obligations
|
|
262.4
|
|
|
—
|
|
|
262.4
|
|
|
—
|
|
||||
Total fixed maturity investments
|
|
1,333.8
|
|
|
197.7
|
|
|
1,136.1
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Short-term investments
(1)
|
|
763.0
|
|
|
737.3
|
|
|
25.7
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Common equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Exchange traded funds
(2)
|
|
653.2
|
|
|
592.2
|
|
|
61.0
|
|
|
—
|
|
||||
Technology
|
|
18.0
|
|
|
18.0
|
|
|
—
|
|
|
—
|
|
||||
Health care
|
|
16.9
|
|
|
16.9
|
|
|
—
|
|
|
—
|
|
||||
Financials
|
|
15.9
|
|
|
15.9
|
|
|
—
|
|
|
—
|
|
||||
Industrial
|
|
13.3
|
|
|
13.3
|
|
|
—
|
|
|
—
|
|
||||
Consumer
|
|
8.6
|
|
|
8.6
|
|
|
—
|
|
|
—
|
|
||||
Energy
|
|
6.5
|
|
|
6.5
|
|
|
—
|
|
|
—
|
|
||||
Communications
|
|
5.2
|
|
|
5.2
|
|
|
—
|
|
|
—
|
|
||||
Other
(3)
|
|
208.0
|
|
|
—
|
|
|
208.0
|
|
|
—
|
|
||||
Total common equity securities
|
|
945.6
|
|
|
676.6
|
|
|
269.0
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Other long-term investments
(4)
|
|
122.5
|
|
|
—
|
|
|
—
|
|
|
122.5
|
|
||||
Total investments
|
|
$
|
3,164.9
|
|
|
$
|
1,611.6
|
|
|
$
|
1,430.8
|
|
|
$
|
122.5
|
|
|
|
December 31, 2017
|
||||||||||||||
Millions
|
|
Fair Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Fixed maturity investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. Government and agency obligations
|
|
$
|
296.5
|
|
|
$
|
296.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||
Debt securities issued by corporations:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Consumer
|
|
185.1
|
|
|
—
|
|
|
185.1
|
|
|
—
|
|
||||
Communications
|
|
127.8
|
|
|
—
|
|
|
127.8
|
|
|
—
|
|
||||
Financials
|
|
114.8
|
|
|
—
|
|
|
114.8
|
|
|
—
|
|
||||
Utilities
|
|
108.9
|
|
|
—
|
|
|
108.9
|
|
|
—
|
|
||||
Materials
|
|
95.5
|
|
|
—
|
|
|
95.5
|
|
|
—
|
|
||||
Health care
|
|
94.3
|
|
|
—
|
|
|
94.3
|
|
|
—
|
|
||||
Technology
|
|
80.5
|
|
|
—
|
|
|
80.5
|
|
|
—
|
|
||||
Energy
|
|
48.1
|
|
|
—
|
|
|
48.1
|
|
|
—
|
|
||||
Industrial
|
|
25.9
|
|
|
—
|
|
|
25.9
|
|
|
—
|
|
||||
Total debt securities issued by corporations:
|
|
880.9
|
|
|
—
|
|
|
880.9
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Mortgage and asset-backed securities
|
|
694.7
|
|
|
—
|
|
|
694.7
|
|
|
—
|
|
||||
Municipal obligations
|
|
254.9
|
|
|
—
|
|
|
254.9
|
|
|
—
|
|
||||
Foreign government, agency and provincial obligations
|
|
2.7
|
|
|
—
|
|
|
2.7
|
|
|
—
|
|
||||
Total fixed maturity investments
|
|
2,129.7
|
|
|
296.5
|
|
|
1,833.2
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Short-term investments
(1)
|
|
176.1
|
|
|
151.0
|
|
|
25.1
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Common equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Exchange traded funds
(2)
|
|
569.7
|
|
|
508.1
|
|
|
61.6
|
|
|
—
|
|
||||
Health care
|
|
17.1
|
|
|
17.1
|
|
|
—
|
|
|
—
|
|
||||
Financials
|
|
16.3
|
|
|
16.3
|
|
|
—
|
|
|
—
|
|
||||
Technology
|
|
15.1
|
|
|
15.1
|
|
|
—
|
|
|
—
|
|
||||
Industrial
|
|
11.9
|
|
|
11.9
|
|
|
—
|
|
|
—
|
|
||||
Communications
|
|
10.9
|
|
|
10.9
|
|
|
—
|
|
|
—
|
|
||||
Consumer
|
|
10.7
|
|
|
10.7
|
|
|
—
|
|
|
—
|
|
||||
Energy
|
|
3.8
|
|
|
3.8
|
|
|
—
|
|
|
—
|
|
||||
Other
(3)
|
|
210.6
|
|
|
—
|
|
|
210.6
|
|
|
—
|
|
||||
Total common equity securities
|
|
866.1
|
|
|
593.9
|
|
|
272.2
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Other long-term investments
(4)(5)
|
|
87.2
|
|
|
—
|
|
|
—
|
|
|
87.2
|
|
||||
Total investments
|
|
$
|
3,259.1
|
|
|
$
|
1,041.4
|
|
|
$
|
2,130.5
|
|
|
$
|
87.2
|
|
|
|
Fair Value at
|
||||||
Millions
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
AAA
|
|
$
|
8.9
|
|
|
$
|
1.6
|
|
AA
|
|
79.1
|
|
|
42.6
|
|
||
A
|
|
274.6
|
|
|
192.5
|
|
||
BBB
|
|
211.5
|
|
|
465.2
|
|
||
BB
|
|
151.0
|
|
|
161.7
|
|
||
B
|
|
18.6
|
|
|
17.3
|
|
||
Debt securities issued by corporations
(1)
|
|
$
|
743.7
|
|
|
$
|
880.9
|
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
Millions
|
|
Fair Value
|
|
Level 2
|
|
Level 3
|
|
Fair Value
|
|
Level 2
|
|
Level 3
|
||||||||||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Agency:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
GNMA
|
|
$
|
27.3
|
|
|
$
|
27.3
|
|
|
$
|
—
|
|
|
$
|
46.3
|
|
|
$
|
46.3
|
|
|
$
|
—
|
|
FNMA
|
|
53.9
|
|
|
53.9
|
|
|
—
|
|
|
84.5
|
|
|
84.5
|
|
|
—
|
|
||||||
FHLMC
|
|
36.1
|
|
|
36.1
|
|
|
—
|
|
|
62.0
|
|
|
62.0
|
|
|
—
|
|
||||||
Total agency
(1)
|
|
117.3
|
|
|
117.3
|
|
|
—
|
|
|
192.8
|
|
|
192.8
|
|
|
—
|
|
||||||
Non-agency:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Commercial
|
|
—
|
|
|
—
|
|
|
—
|
|
|
70.5
|
|
|
70.5
|
|
|
—
|
|
||||||
Total non-agency
|
|
—
|
|
|
—
|
|
|
—
|
|
|
70.5
|
|
|
70.5
|
|
|
—
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total mortgage-backed securities
|
|
117.3
|
|
|
117.3
|
|
|
—
|
|
|
263.3
|
|
|
263.3
|
|
|
—
|
|
||||||
Other asset-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Credit card receivables
|
|
8.9
|
|
|
8.9
|
|
|
—
|
|
|
206.0
|
|
|
206.0
|
|
|
—
|
|
||||||
Vehicle receivables
|
|
3.8
|
|
|
3.8
|
|
|
—
|
|
|
142.4
|
|
|
142.4
|
|
|
—
|
|
||||||
Other
|
|
—
|
|
|
—
|
|
|
—
|
|
|
83.0
|
|
|
83.0
|
|
|
—
|
|
||||||
Total other asset-backed securities
|
|
12.7
|
|
|
12.7
|
|
|
—
|
|
|
431.4
|
|
|
431.4
|
|
|
—
|
|
||||||
Total mortgage and asset-backed securities
|
|
$
|
130.0
|
|
|
$
|
130.0
|
|
|
$
|
—
|
|
|
$
|
694.7
|
|
|
$
|
694.7
|
|
|
$
|
—
|
|
|
|
|
Level 3 Investments
|
|
||||||||||||||||
Millions
|
Level 1 investments
|
Level 2
investments
|
Fixed
maturity investments
|
Other long-term
investments
|
Hedge Funds and Private Equity Funds measured at NAV
(3)
|
|
Total
|
|
||||||||||||
Balance at January 1, 2018
|
$
|
890.4
|
|
$
|
2,105.4
|
|
$
|
—
|
|
$
|
87.2
|
|
$
|
125.3
|
|
|
$
|
3,208.3
|
|
(1)(2)
|
Net realized and unrealized (losses) gains
|
(14.3
|
)
|
(26.0
|
)
|
—
|
|
(8.7
|
)
|
3.6
|
|
|
(45.4
|
)
|
(4)
|
||||||
Amortization/Accretion
|
—
|
|
(1.2
|
)
|
—
|
|
—
|
|
—
|
|
|
(1.2
|
)
|
|
||||||
Purchases
|
238.9
|
|
407.7
|
|
—
|
|
44.0
|
|
2.0
|
|
|
692.6
|
|
|
||||||
Sales
|
(240.7
|
)
|
(1,080.8
|
)
|
—
|
|
—
|
|
(.3
|
)
|
|
(1,321.8
|
)
|
|
||||||
Transfers in
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
||||||
Transfers out
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
||||||
Balance at March 31, 2018
|
$
|
874.3
|
|
$
|
1,405.1
|
|
$
|
—
|
|
$
|
122.5
|
|
$
|
130.6
|
|
|
$
|
2,532.5
|
|
(2)
|
|
|
|
Level 3 Investments
|
|
|
|
|||||||||||||
Millions
|
Level 1 investments
|
Level 2
investments
|
Fixed
maturity investments
|
Other long-term
investments
|
Hedge Funds and Private Equity Funds measured at NAV
(3)
|
Total
|
|
||||||||||||
Balance at January 1, 2017
|
$
|
279.5
|
|
$
|
2,093.8
|
|
$
|
—
|
|
$
|
91.4
|
|
$
|
82.6
|
|
$
|
2,547.3
|
|
(1)(2)(4)
|
Net realized and unrealized gains
|
13.1
|
|
18.4
|
|
.1
|
|
.2
|
|
7.3
|
|
39.1
|
|
(5)
|
||||||
Amortization/Accretion
|
—
|
|
(2.5
|
)
|
—
|
|
—
|
|
—
|
|
(2.5
|
)
|
|
||||||
Purchases
|
115.2
|
|
351.1
|
|
11.0
|
|
.2
|
|
21.4
|
|
498.9
|
|
|
||||||
Sales
|
(76.0
|
)
|
(387.6
|
)
|
—
|
|
(2.0
|
)
|
(1.2
|
)
|
(466.8
|
)
|
|
||||||
Deconsolidation of SSIE
|
—
|
|
(5.2
|
)
|
—
|
|
—
|
|
—
|
|
(5.2
|
)
|
|
||||||
Transfers in
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
||||||
Transfers out
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
||||||
Balance at March 31, 2017
|
$
|
331.8
|
|
$
|
2,068.0
|
|
$
|
11.1
|
|
$
|
89.8
|
|
$
|
110.1
|
|
$
|
2,610.8
|
|
(1)(2)
|
|
||||||||
$ in millions, except share price
|
|
March 31, 2018
|
||||||
Description
|
|
Valuation Technique(s)
|
|
Fair Value
(1)
|
|
Unobservable Input
|
||
Private equity security
|
|
Discounted cash flow
|
|
$21.0
|
|
Discount rate
|
-
|
25.0%
|
Private equity security
|
|
Discounted cash flow
|
|
$22.1
|
|
Implied share price
|
-
|
$.68
|
Private convertible preferred security
|
|
Discounted cash flow
|
|
$14.5
|
|
Implied share price
|
-
|
$2.06
|
Private equity security
|
|
Discounted cash flow/
Option pricing method
|
|
$11.6
|
|
Discount rate
|
-
|
21.0%
|
|
|
|
|
|
|
Time until expiration
|
-
|
4 years
|
|
|
|
|
Volatility/Standard deviation
|
-
|
50.0%
|
||
|
|
|
|
Risk free rate
|
-
|
1.77%
|
||
Private debt instrument
|
|
Discounted cash flow
|
|
$10.5
|
|
Discount rate
|
-
|
9.62%
|
|
||||||||
$ in millions, except share price
|
|
December 31, 2017
|
||||||
Description
|
|
Valuation Technique(s)
|
|
Fair Value
(1)
|
|
Unobservable Input
|
||
Private equity security
|
|
Share price of most recent transaction
|
|
$21.0
|
|
Share price
|
-
|
$1.00
|
Private equity security
|
|
Discounted cash flow
|
|
$22.1
|
|
Implied share price
|
-
|
$.68
|
Private convertible preferred security
|
|
Discounted cash flow
|
|
$14.5
|
|
Implied share price
|
-
|
$2.06
|
Private equity security
|
|
Discounted cash flow/
Option pricing method
|
|
$11.3
|
|
Discount rate
|
-
|
21.0%
|
|
|
|
|
|
|
Time until expiration
|
-
|
4 years
|
|
|
|
|
Volatility/Standard deviation
|
-
|
50.0%
|
||
|
|
|
|
Risk free rate
|
-
|
1.77%
|
||
Private equity security
|
|
Share price of most recent transaction
|
|
$3.6
|
|
Share price
|
-
|
$2.52
|
Private convertible preferred security
|
|
Multiple of EBITDA
|
|
$0.6
|
|
EBITDA multiple
|
-
|
6.00
|
|
|
Three Months Ended March 31,
|
||||||||||||||||||||||
|
|
2018
|
|
2017
|
||||||||||||||||||||
Millions
|
|
Goodwill
|
|
Other intangible assets
|
|
Total
|
|
Goodwill
|
|
Other intangible assets
|
|
Total
|
||||||||||||
Beginning balance
|
|
$
|
25.9
|
|
|
$
|
36.2
|
|
|
$
|
62.1
|
|
|
$
|
25.9
|
|
|
$
|
19.3
|
|
|
$
|
45.2
|
|
Amortization, including foreign currency translation
|
|
—
|
|
|
(2.9
|
)
|
|
(2.9
|
)
|
|
—
|
|
|
(2.3
|
)
|
|
(2.3
|
)
|
||||||
Ending balance
|
|
$
|
25.9
|
|
|
$
|
33.3
|
|
|
$
|
59.2
|
|
|
$
|
25.9
|
|
|
$
|
17.0
|
|
|
$
|
42.9
|
|
Millions
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
Goodwill
|
|
|
|
|
||||
MediaAlpha
|
|
$
|
18.3
|
|
|
$
|
18.3
|
|
Other
|
|
7.6
|
|
|
7.6
|
|
||
Total goodwill
|
|
25.9
|
|
|
25.9
|
|
||
Other intangible assets
|
|
|
|
|
||||
MediaAlpha
|
|
32.5
|
|
|
35.4
|
|
||
Other
|
|
.8
|
|
|
.8
|
|
||
Total other intangible assets
|
|
33.3
|
|
|
36.2
|
|
||
Total goodwill and other intangible assets
|
|
59.2
|
|
|
62.1
|
|
||
Goodwill and other intangible assets attributed to non-controlling interests
|
|
(21.1
|
)
|
|
(21.1
|
)
|
||
Goodwill and other intangible assets included in White Mountains’s
common shareholders’ equity |
|
$
|
38.1
|
|
|
$
|
41.0
|
|
Millions
|
|
March 31,
2018 |
|
Effective
Rate
(1)
|
|
December 31,
2017 |
|
Effective
Rate
(1)
|
||||
WTM Bank Facility
|
|
$
|
—
|
|
|
N/A
|
|
$
|
—
|
|
|
N/A
|
Unamortized issue costs
|
|
—
|
|
|
|
|
—
|
|
|
|
||
WTM Bank Facility, carrying value
|
|
—
|
|
|
|
|
—
|
|
|
|
||
MediaAlpha Bank Facility
|
|
21.6
|
|
|
6.2%
|
|
23.9
|
|
|
5.6%
|
||
Unamortized issuance cost
|
|
(.1
|
)
|
|
|
|
(.1
|
)
|
|
|
||
MediaAlpha Bank Facility, carrying value
|
|
21.5
|
|
|
|
|
23.8
|
|
|
|
||
Total debt
|
|
$
|
21.5
|
|
|
|
|
$
|
23.8
|
|
|
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
Contracts outstanding
|
|
6,541
|
|
|
6,371
|
|
||
Remaining weighted average contract period outstanding (in years)
|
|
10.8
|
|
|
10.9
|
|
||
Contractual debt service outstanding (in millions):
|
|
|
|
|
||||
Principal
|
|
$
|
43,139.2
|
|
|
$
|
42,090.6
|
|
Interest
|
|
21,420.6
|
|
|
21,057.1
|
|
||
Total debt service outstanding
|
|
$
|
64,559.8
|
|
|
$
|
63,147.7
|
|
|
|
|
|
|
||||
Gross unearned insurance premiums
|
|
$
|
140.2
|
|
|
$
|
136.8
|
|
Millions
|
|
March 31, 2018
|
||
April 1, 2018 - December 31, 2018
|
|
$
|
8.9
|
|
|
|
|
||
January 1, 2019 - March 31, 2019
|
|
2.9
|
|
|
April 1, 2019 - June 30, 2019
|
|
2.9
|
|
|
July 1, 2019 - September 30, 2019
|
|
2.9
|
|
|
October 1, 2019 - December 31, 2019
|
|
2.9
|
|
|
|
|
11.6
|
|
|
|
|
|
||
2020
|
|
11.1
|
|
|
2021
|
|
10.6
|
|
|
2022
|
|
10.1
|
|
|
2023 and thereafter
|
|
87.9
|
|
|
Total gross unearned insurance premiums
|
|
$
|
140.2
|
|
|
|
Three Months Ended March 31,
|
||||||
Millions
|
|
2018
|
|
2017
|
||||
Gross written premiums
|
|
$
|
6.4
|
|
|
$
|
18.7
|
|
Assumed (ceded) written premiums
|
|
—
|
|
|
—
|
|
||
Net written premiums
|
|
$
|
6.4
|
|
|
$
|
18.7
|
|
|
|
Three Months Ended
|
||||||
|
|
March 31,
|
||||||
|
|
2018
|
|
2017
|
||||
Basic and diluted earnings per share numerators (in millions):
|
|
|
|
|
||||
Net (loss) income attributable to White Mountains’s common shareholders
|
|
$
|
(48.0
|
)
|
|
$
|
29.0
|
|
Less: total income from discontinued operations, net of tax
|
|
.1
|
|
|
31.3
|
|
||
Net loss from continuing operations attributable to
White Mountains’s common shareholders
|
|
$
|
(48.1
|
)
|
|
$
|
(2.3
|
)
|
Allocation of earnings to participating restricted common shares
(1)
|
|
.4
|
|
|
—
|
|
||
Basic and diluted earnings per share numerators
|
|
$
|
(47.7
|
)
|
|
$
|
(2.3
|
)
|
Basic earnings per share denominators (in thousands):
|
|
|
|
|
||||
Total average common shares outstanding during the period
|
|
3,746.1
|
|
|
4,564.6
|
|
||
Average unvested restricted common shares
(2)
|
|
(35.9
|
)
|
|
(52.5
|
)
|
||
Basic earnings per share denominator
|
|
3,710.2
|
|
|
4,512.1
|
|
||
Diluted earnings per share denominator (in thousands):
|
|
|
|
|
||||
Total average common shares outstanding during the period
|
|
3,746.1
|
|
|
4,564.6
|
|
||
Average unvested restricted common shares
(2)
|
|
(35.9
|
)
|
|
(52.5
|
)
|
||
Diluted earnings per share denominator
|
|
3,710.2
|
|
|
4,512.1
|
|
||
Basic and diluted earnings per share (in dollars) - continuing operations:
|
|
|
|
|
||||
Distributed earnings - dividends declared and paid
|
|
$
|
1.00
|
|
|
$
|
1.00
|
|
Undistributed earnings (losses)
|
|
(13.85
|
)
|
|
(1.52
|
)
|
||
Basic and diluted earnings per share
|
|
$
|
(12.85
|
)
|
|
$
|
(.52
|
)
|
|
|
Three Months Ended
|
||||||
|
|
March 31,
|
||||||
Millions
|
|
2018
|
|
2017
|
||||
Undistributed net losses - continuing operations:
|
|
|
|
|
||||
Net loss attributable to White Mountains’s common shareholders,
net of restricted common share amounts
|
|
$
|
(47.7
|
)
|
|
$
|
(2.3
|
)
|
Dividends declared net of restricted common share amounts
(1)
|
|
(3.7
|
)
|
|
(4.5
|
)
|
||
Total undistributed net losses, net of restricted common
share amounts
|
|
$
|
(51.4
|
)
|
|
$
|
(6.8
|
)
|
|
|
Three Months Ended March 31,
|
||||||||||||
|
|
2018
|
|
2017
|
||||||||||
Millions, except share amounts
|
|
Target Performance
Shares Outstanding |
|
Accrued
Expense
|
|
Target Performance
Shares Outstanding |
|
Accrued
Expense
|
||||||
Beginning of period
|
|
50,515
|
|
|
$
|
45.8
|
|
|
80,353
|
|
|
$
|
42.4
|
|
Shares paid
(1)
|
|
(23,186
|
)
|
|
(28.4
|
)
|
|
(30,167
|
)
|
|
(20.8
|
)
|
||
New grants
|
|
14,105
|
|
|
—
|
|
|
16,460
|
|
|
—
|
|
||
Forfeitures and cancellations
(2)
|
|
(818
|
)
|
|
.3
|
|
|
(9,841
|
)
|
|
(5.7
|
)
|
||
Expense recognized
|
|
—
|
|
|
3.3
|
|
|
—
|
|
|
8.1
|
|
||
End of period
(3)
|
|
40,616
|
|
|
$
|
21.0
|
|
|
56,805
|
|
|
$
|
24.0
|
|
|
|
Three Months Ended March 31, 2018
|
|||||
Millions, except share amounts
|
|
Target Performance
Shares Outstanding
|
|
Accrued
Expense
|
|||
Performance cycle:
|
|
|
|
|
|
|
|
2016 – 2018
|
|
13,715
|
|
|
$
|
12.7
|
|
2017 – 2019
|
|
14,070
|
|
|
7.7
|
|
|
2018 – 2020
|
|
13,450
|
|
|
.9
|
|
|
Sub-total
|
|
41,235
|
|
|
21.3
|
|
|
Assumed forfeitures
|
|
(619
|
)
|
|
(.3
|
)
|
|
March 31, 2018
|
|
40,616
|
|
|
$
|
21.0
|
|
|
|
Three Months Ended March 31,
|
||||||||||||
|
|
2018
|
|
2017
|
||||||||||
Millions, except share amounts
|
|
Restricted
Shares |
|
Unamortized
Issue Date Fair Value |
|
Restricted
Shares |
|
Unamortized
Issue Date Fair Value |
||||||
Non-vested,
|
|
|
|
|
|
|
|
|
||||||
Beginning of period
|
|
53,755
|
|
|
$
|
14.3
|
|
|
70,620
|
|
|
$
|
19.7
|
|
Issued
|
|
14,105
|
|
|
11.4
|
|
|
16,735
|
|
|
15.8
|
|
||
Vested
|
|
(25,381
|
)
|
|
—
|
|
|
(22,015
|
)
|
|
—
|
|
||
Forfeited
|
|
(969
|
)
|
|
(.2
|
)
|
|
(5,200
|
)
|
|
(2.8
|
)
|
||
Expense recognized
|
|
—
|
|
|
(3.3
|
)
|
|
—
|
|
|
(3.6
|
)
|
||
End of period
(1)
|
|
41,510
|
|
|
$
|
22.2
|
|
|
60,140
|
|
|
$
|
29.1
|
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||
$ in millions
|
|
Non-controlling Percentage
|
|
Non-controlling Equity
|
|
Non-controlling Percentage
|
|
Non-controlling Equity
|
||||||
Other, excluding mutuals
|
|
|
|
|
|
|
|
|
||||||
HG Global
|
|
3.1
|
%
|
|
$
|
15.7
|
|
|
3.1
|
%
|
|
$
|
15.9
|
|
MediaAlpha
|
|
37.7
|
|
|
16.2
|
|
|
35.7
|
|
|
13.1
|
|
||
Buzzmove
|
|
22.9
|
|
|
2.4
|
|
|
22.9
|
|
|
2.5
|
|
||
Total other, excluding mutuals
|
|
|
|
34.3
|
|
|
|
|
31.5
|
|
||||
Mutuals
|
|
|
|
|
|
|
|
|
||||||
BAM
|
|
100.0
|
|
|
(177.5
|
)
|
|
100.0
|
|
|
(163.2
|
)
|
||
Total non-controlling interests
|
|
|
|
|
$
|
(143.2
|
)
|
|
|
|
$
|
(131.7
|
)
|
Millions
|
|
HG Global/BAM
|
|
MediaAlpha
|
|
Other Operations
|
|
Total
|
||||||||
Three Months Ended March 31, 2018
|
|
|
|
|
|
|
|
|
||||||||
Earned insurance premiums
|
|
$
|
3.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3.0
|
|
Net investment income
|
|
3.7
|
|
|
—
|
|
|
16.0
|
|
|
19.7
|
|
||||
Net realized and unrealized investment losses
|
|
(7.9
|
)
|
|
—
|
|
|
(45.8
|
)
|
|
(53.7
|
)
|
||||
Advertising and commission revenues
(1)
|
|
—
|
|
|
70.1
|
|
|
.9
|
|
|
71.0
|
|
||||
Other revenue
|
|
.2
|
|
|
1.6
|
|
|
.3
|
|
|
2.1
|
|
||||
Total revenues
|
|
(1.0
|
)
|
|
71.7
|
|
|
(28.6
|
)
|
|
42.1
|
|
||||
Insurance acquisition expenses
|
|
1.4
|
|
|
—
|
|
|
—
|
|
|
1.4
|
|
||||
Other underwriting expenses
|
|
.1
|
|
|
—
|
|
|
—
|
|
|
.1
|
|
||||
Cost of sales
|
|
—
|
|
|
57.4
|
|
|
.7
|
|
|
58.1
|
|
||||
General and administrative expenses
|
|
11.8
|
|
|
14.1
|
|
|
22.0
|
|
|
47.9
|
|
||||
Interest expense
|
|
—
|
|
|
.4
|
|
|
.2
|
|
|
.6
|
|
||||
Total expenses
|
|
13.3
|
|
|
71.9
|
|
|
22.9
|
|
|
108.1
|
|
||||
Pre-tax loss
|
|
$
|
(14.3
|
)
|
|
$
|
(.2
|
)
|
|
$
|
(51.5
|
)
|
|
$
|
(66.0
|
)
|
(1)
|
Approximately
31%
of MediaAlpha’s advertising revenue was associated with one customer for the three months ended March 31, 2018.
|
Millions
|
|
HG Global/BAM
|
|
MediaAlpha
|
|
Other Operations
|
|
Total
|
||||||||
Three Months Ended March 31, 2017
|
|
|
|
|
|
|
|
|
||||||||
Earned insurance premiums
|
|
$
|
2.0
|
|
|
$
|
—
|
|
|
$
|
1.0
|
|
|
$
|
3.0
|
|
Net investment income
|
|
2.6
|
|
|
—
|
|
|
10.2
|
|
|
12.8
|
|
||||
Net realized and unrealized investment gains
|
|
1.3
|
|
|
—
|
|
|
35.0
|
|
|
36.3
|
|
||||
Advertising and commission revenues
(1)
|
|
—
|
|
|
32.5
|
|
|
1.3
|
|
|
33.8
|
|
||||
Other revenue
|
|
.4
|
|
|
—
|
|
|
2.5
|
|
|
2.9
|
|
||||
Total revenues
|
|
6.3
|
|
|
32.5
|
|
|
50.0
|
|
|
88.8
|
|
||||
Losses and loss adjustment expenses
|
|
—
|
|
|
—
|
|
|
1.1
|
|
|
1.1
|
|
||||
Insurance acquisition expenses
|
|
1.2
|
|
|
—
|
|
|
.1
|
|
|
1.3
|
|
||||
Other underwriting expenses
|
|
.1
|
|
|
—
|
|
|
—
|
|
|
.1
|
|
||||
Cost of sales
|
|
—
|
|
|
27.7
|
|
|
1.1
|
|
|
28.8
|
|
||||
General and administrative expenses
|
|
10.6
|
|
|
5.6
|
|
|
44.5
|
|
|
60.7
|
|
||||
Interest expense
|
|
—
|
|
|
.2
|
|
|
.2
|
|
|
.4
|
|
||||
Total expenses
|
|
11.9
|
|
|
33.5
|
|
|
47.0
|
|
|
92.4
|
|
||||
Pre-tax (loss) income
|
|
$
|
(5.6
|
)
|
|
$
|
(1.0
|
)
|
|
$
|
3.0
|
|
|
$
|
(3.6
|
)
|
(1)
|
Approximately
27%
of MediaAlpha’s advertising revenue was associated with one customer for the three months ended March 31, 2017.
|
Millions
|
|
March 31, 2018
|
|
December31, 2017
|
||||
Equity method eligible private equity securities, at fair value
|
|
$
|
84.7
|
|
|
$
|
58.0
|
|
Investments, accounted for under the equity method
|
|
5.7
|
|
|
4.6
|
|
||
Total investments in equity method eligible unconsolidated entities
|
|
90.4
|
|
|
62.6
|
|
||
Other unconsolidated investments
(1)
|
|
162.7
|
|
|
146.2
|
|
||
Total other long-term investments
|
|
$
|
253.1
|
|
|
$
|
208.8
|
|
Investee
|
|
Ownership Interest
|
|
Instrument Held
|
||
|
|
March 31, 2018
|
|
December 31, 2017
|
|
|
Compare.com
|
|
22%
|
|
22%
|
|
Common shares
|
DavidShield
(1)
|
|
50%
|
|
—
|
|
Common shares
|
durchblicker
|
|
45%
|
|
45%
|
|
Common shares
|
Kudu
|
|
50%
|
|
—
|
|
Units
|
OneTitle
|
|
20%
|
|
20%
|
|
Common shares
|
PassportCard
(1)
|
|
50%
|
|
50%
|
|
Common shares
|
Tuckerman Capital Fund III
|
|
21%
|
|
21%
|
|
Units
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||||
Millions
|
|
Fair
Value
|
|
Carrying
Value
|
|
Fair
Value
|
|
Carrying
Value
|
||||||||
MediaAlpha Bank Facility
|
|
$
|
21.8
|
|
|
$
|
21.6
|
|
|
$
|
23.9
|
|
|
$
|
23.8
|
|
|
|
Three Months Ended
|
|
Three Months Ended
|
||||||||||||||||
|
|
March 31, 2018
|
|
March 31, 2017
|
||||||||||||||||
Millions
|
|
Sirius Group
|
|
Total
|
|
OneBeacon
|
|
Tranzact
|
|
Total
|
||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earned insurance premiums
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
261.8
|
|
|
$
|
—
|
|
|
$
|
261.8
|
|
Net investment income
|
|
—
|
|
|
—
|
|
|
12.2
|
|
|
—
|
|
|
12.2
|
|
|||||
Net realized and unrealized gains
|
|
—
|
|
|
—
|
|
|
15.0
|
|
|
—
|
|
|
15.0
|
|
|||||
Other revenue
|
|
—
|
|
|
—
|
|
|
3.4
|
|
|
—
|
|
|
3.4
|
|
|||||
Total revenues
|
|
—
|
|
|
—
|
|
|
292.4
|
|
|
—
|
|
|
292.4
|
|
|||||
Expenses
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Loss and loss adjustment expenses
|
|
—
|
|
|
—
|
|
|
150.6
|
|
|
—
|
|
|
150.6
|
|
|||||
Insurance and reinsurance acquisition expenses
|
|
—
|
|
|
—
|
|
|
45.3
|
|
|
—
|
|
|
45.3
|
|
|||||
Other underwriting expenses
|
|
—
|
|
|
—
|
|
|
51.7
|
|
|
—
|
|
|
51.7
|
|
|||||
General and administrative expenses
|
|
—
|
|
|
—
|
|
|
5.0
|
|
|
—
|
|
|
5.0
|
|
|||||
Interest expense
|
|
—
|
|
|
—
|
|
|
3.3
|
|
|
—
|
|
|
3.3
|
|
|||||
Total expenses
|
|
—
|
|
|
—
|
|
|
255.9
|
|
|
—
|
|
|
255.9
|
|
|||||
Pre-tax income
|
|
—
|
|
|
—
|
|
|
36.5
|
|
|
—
|
|
|
36.5
|
|
|||||
Income tax expense
|
|
—
|
|
|
—
|
|
|
(4.2
|
)
|
|
—
|
|
|
(4.2
|
)
|
|||||
Net income from discontinued operations
|
|
—
|
|
|
—
|
|
|
32.3
|
|
|
—
|
|
|
32.3
|
|
|||||
Net gain (loss) from sale of discontinued operations
|
|
.1
|
|
|
.1
|
|
|
—
|
|
|
(1.0
|
)
|
|
(1.0
|
)
|
|||||
Total income (loss) from discontinued operations
|
|
.1
|
|
|
.1
|
|
|
32.3
|
|
|
(1.0
|
)
|
|
31.3
|
|
|||||
Change in foreign currency translation and
other from discontinued operations
|
|
—
|
|
|
—
|
|
|
(.1
|
)
|
|
—
|
|
|
(.1
|
)
|
|||||
Comprehensive income (loss) from discontinued operations
|
|
$
|
.1
|
|
|
$
|
.1
|
|
|
$
|
32.2
|
|
|
$
|
(1.0
|
)
|
|
$
|
31.2
|
|
|
|
Three Months Ended
|
||||||
|
|
March 31,
|
||||||
Millions
|
|
2018
|
|
2017
|
||||
Net cash provided from (used for) operations
|
|
$
|
.1
|
|
|
$
|
(1.3
|
)
|
Net cash (used for) provided from investing activities
|
|
(.1
|
)
|
|
32.3
|
|
||
Net cash used for financing activities
|
|
—
|
|
|
(21.0
|
)
|
||
Net change in cash during the period
|
|
—
|
|
|
10.0
|
|
||
Cash balances at beginning of period
|
|
—
|
|
|
70.5
|
|
||
Net change in cash held for sale, excluding discontinued operations
|
|
—
|
|
|
(.9
|
)
|
||
Cash balances at end of period
|
|
$
|
—
|
|
|
$
|
79.6
|
|
Supplemental cash flows information:
|
|
|
|
|
||||
Interest paid
|
|
$
|
—
|
|
|
$
|
—
|
|
Net income tax payment to national governments
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Three Months Ended
|
||||||
|
|
March 31,
|
||||||
|
|
2018
|
|
2017
|
||||
Basic and diluted earnings per share numerators (in millions):
|
|
|
|
|
||||
Net income attributable to White Mountains’s common shareholders
|
|
$
|
(48.0
|
)
|
|
$
|
29.0
|
|
Less total loss from continuing operations, net of tax
|
|
48.1
|
|
|
2.3
|
|
||
Net income from discontinued operations attributable to
White Mountains’s common shareholders
|
|
$
|
.1
|
|
|
$
|
31.3
|
|
Allocation of earnings to participating restricted common shares
(1)
|
|
—
|
|
|
(.4
|
)
|
||
Basic and diluted earnings per share numerators
|
|
$
|
.1
|
|
|
$
|
30.9
|
|
Basic earnings per share denominators (in thousands):
|
|
|
|
|
||||
Total average common shares outstanding during the period
|
|
3,746.1
|
|
|
4,564.6
|
|
||
Average unvested restricted common shares
(3)
|
|
(35.9
|
)
|
|
(52.5
|
)
|
||
Basic earnings per share denominator
|
|
3,710.2
|
|
|
4,512.1
|
|
||
Diluted earnings per share denominator (in thousands):
|
|
|
|
|
||||
Total average common shares outstanding during the period
|
|
3,746.1
|
|
|
4,564.6
|
|
||
Average unvested restricted common shares
(3)
|
|
(35.9
|
)
|
|
(52.5
|
)
|
||
Diluted earnings per share denominator
|
|
3,710.2
|
|
|
4,512.1
|
|
||
Basic earnings per share (in dollars) - discontinued operations:
|
|
$
|
.03
|
|
|
$
|
6.86
|
|
Diluted earnings per share (in dollars) - discontinued operations:
|
|
$
|
.03
|
|
|
$
|
6.86
|
|
|
|
Three months ended March 31, 2017
|
||||||||||
Millions, except for per share amounts
|
|
As previously reported
|
|
Adjustments
|
|
As revised
|
||||||
Revenues:
|
|
|
|
|
|
|
||||||
Financial Guarantee (HG Global/BAM)
|
|
|
|
|
|
|
||||||
Financial Guarantee revenues
|
|
$
|
6.3
|
|
|
$
|
—
|
|
|
$
|
6.3
|
|
Marketing Technology (MediaAlpha)
|
|
|
|
|
|
|
||||||
Marketing Technology revenues
|
|
32.5
|
|
|
—
|
|
|
32.5
|
|
|||
Other
|
|
|
|
|
|
|
||||||
Advertising & commission revenues
|
|
6.0
|
|
|
(4.7
|
)
|
|
1.3
|
|
|||
Other revenues
(1)
|
|
48.7
|
|
|
—
|
|
|
48.7
|
|
|||
Total revenues
|
|
93.5
|
|
|
(4.7
|
)
|
|
88.8
|
|
|||
|
|
|
|
|
|
|
||||||
Expenses:
|
|
|
|
|
|
|
||||||
Financial Guarantee (HG Global/BAM)
|
|
|
|
|
|
|
||||||
Financial Guarantee expenses
|
|
11.9
|
|
|
—
|
|
|
11.9
|
|
|||
Marketing Technology (MediaAlpha)
|
|
|
|
|
|
|
||||||
Marketing Technology expenses
|
|
33.5
|
|
|
—
|
|
|
33.5
|
|
|||
Other
|
|
|
|
|
|
|
||||||
Other expenses
(2)(3)
|
|
46.8
|
|
|
.2
|
|
|
47.0
|
|
|||
Total expenses
|
|
92.2
|
|
|
.2
|
|
|
92.4
|
|
|||
Pre-tax income (loss)
|
|
1.3
|
|
|
(4.9
|
)
|
|
(3.6
|
)
|
|||
Income tax benefit
|
|
.3
|
|
|
—
|
|
|
.3
|
|
|||
Net income (loss) from continuing operations
|
|
1.6
|
|
|
(4.9
|
)
|
|
(3.3
|
)
|
|||
Loss on sale of discontinued operations
|
|
(1.0
|
)
|
|
—
|
|
|
(1.0
|
)
|
|||
Net income from discontinued operations
|
|
32.3
|
|
|
—
|
|
|
32.3
|
|
|||
Net income (loss)
(4)
|
|
32.9
|
|
|
(4.9
|
)
|
|
28.0
|
|
|||
Net loss (income) attributable to non-controlling interests
|
|
1.3
|
|
|
(.3
|
)
|
|
1.0
|
|
|||
Net income (loss) attributable to White Mountains’s common shareholders
|
|
34.2
|
|
|
(5.2
|
)
|
|
29.0
|
|
|||
Other comprehensive income (loss), net of tax
|
|
.9
|
|
|
(.7
|
)
|
|
.2
|
|
|||
Comprehensive income (loss)
|
|
35.1
|
|
|
(5.9
|
)
|
|
29.2
|
|
|||
Comprehensive loss attributable to non-controlling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Comprehensive income (loss) attributable to White Mountains’s common shareholders
|
|
$
|
35.1
|
|
|
$
|
(5.9
|
)
|
|
$
|
29.2
|
|
|
|
|
|
|
|
|
||||||
Basic and diluted earnings per share - continuing operations
|
|
$
|
7.49
|
|
|
$
|
(1.15
|
)
|
|
$
|
6.34
|
|
|
|
Three months ended March 31, 2017
|
||||||||||
Millions
|
|
As previously reported
|
|
Adjustments
|
|
As revised
|
||||||
|
|
|
|
|
|
|
||||||
Common shares and paid-in surplus
|
|
$
|
807.1
|
|
|
$
|
.7
|
|
|
$
|
807.8
|
|
|
|
|
|
|
|
|
||||||
Retained earnings, beginning of year
|
|
2,797.2
|
|
|
(20.6
|
)
|
|
2,776.6
|
|
|||
Share repurchases
|
|
(5.1
|
)
|
|
—
|
|
|
(5.1
|
)
|
|||
Net income (loss)
|
|
34.2
|
|
|
(5.2
|
)
|
|
29.0
|
|
|||
Dividends
|
|
(4.6
|
)
|
|
—
|
|
|
(4.6
|
)
|
|||
Retained earnings, end of period
|
|
2,821.7
|
|
|
(25.8
|
)
|
|
2,795.9
|
|
|||
|
|
|
|
|
|
|
||||||
Accumulated other comprehensive loss, after tax, beginning of year
|
|
(4.6
|
)
|
|
—
|
|
|
(4.6
|
)
|
|||
Net change in foreign currency translation
|
|
.9
|
|
|
(.7
|
)
|
|
.2
|
|
|||
Accumulated other comprehensive income, after tax, end of period
|
|
(3.7
|
)
|
|
(.7
|
)
|
|
(4.4
|
)
|
|||
|
|
|
|
|
|
|
||||||
White Mountains’s common shareholders’ equity
|
|
3,625.1
|
|
|
(25.8
|
)
|
|
3,599.3
|
|
|||
|
|
|
|
|
|
|
||||||
Non-controlling interests, beginning of year
|
|
133.9
|
|
|
(.6
|
)
|
|
133.3
|
|
|||
Net loss
|
|
(1.3
|
)
|
|
.3
|
|
|
(1.0
|
)
|
|||
Other changes in non-controlling interests
|
|
(.2
|
)
|
|
(.6
|
)
|
|
(.8
|
)
|
|||
Non-controlling interests, end of period
|
|
132.4
|
|
|
(.9
|
)
|
|
131.5
|
|
|||
Total equity
|
|
$
|
3,757.5
|
|
|
$
|
(26.7
|
)
|
|
$
|
3,730.8
|
|
|
|
March 31, 2017
|
||||||||||
Millions
|
|
As previously reported
|
|
Adjustments
|
|
As revised
|
||||||
Assets
|
|
|
|
|
|
|
||||||
Financial Guarantee (HG Global/BAM)
|
|
|
|
|
|
|
||||||
Financial Guarantee assets
|
|
$
|
699.1
|
|
|
$
|
—
|
|
|
$
|
699.1
|
|
Marketing Technology (MediaAlpha)
|
|
|
|
|
|
|
||||||
Marketing Technology assets
|
|
53.2
|
|
|
—
|
|
|
53.2
|
|
|||
Other
|
|
|
|
|
|
|
||||||
Goodwill
|
|
13.4
|
|
|
(5.8
|
)
|
|
7.6
|
|
|||
Other intangible assets
|
|
4.5
|
|
|
(3.4
|
)
|
|
1.1
|
|
|||
Other assets
—
commissions receivable
|
|
21.4
|
|
|
(17.2
|
)
|
|
4.2
|
|
|||
Other assets
|
|
2,146.3
|
|
|
—
|
|
|
2,146.3
|
|
|||
Assets held for sale
|
|
3,578.9
|
|
|
—
|
|
|
3,578.9
|
|
|||
Total assets
|
|
$
|
6,516.8
|
|
|
$
|
(26.4
|
)
|
|
$
|
6,490.4
|
|
Liabilities
|
|
|
|
|
|
|
||||||
Financial Guarantee (HG Global/BAM)
|
|
|
|
|
|
|
||||||
Financial Guarantee liabilities
|
|
$
|
126.4
|
|
|
$
|
—
|
|
|
$
|
126.4
|
|
Marketing Technology (MediaAlpha)
|
|
|
|
|
|
|
||||||
Marketing Technology liabilities
|
|
25.6
|
|
|
—
|
|
|
25.6
|
|
|||
Other
|
|
|
|
|
|
|
||||||
Liabilities held for sale
|
|
2,535.2
|
|
|
—
|
|
|
2,535.2
|
|
|||
Other liabilities
|
|
72.1
|
|
|
.3
|
|
|
72.4
|
|
|||
Total liabilities
|
|
2,759.3
|
|
|
.3
|
|
|
2,759.6
|
|
|||
|
|
|
|
|
|
|
||||||
Equity
|
|
|
|
|
|
|
||||||
White Mountains’s common shares
|
|
4.6
|
|
|
—
|
|
|
4.6
|
|
|||
Paid in surplus
|
|
802.5
|
|
|
.7
|
|
|
803.2
|
|
|||
Retained earnings
|
|
2,821.7
|
|
|
(25.8
|
)
|
|
2,795.9
|
|
|||
Accumulated other comprehensive income, net of tax
|
|
(3.7
|
)
|
|
(.7
|
)
|
|
(4.4
|
)
|
|||
White Mountains’s common shareholders’ equity
|
|
3,625.1
|
|
|
(25.8
|
)
|
|
3,599.3
|
|
|||
Non-controlling interests
|
|
132.4
|
|
|
(.9
|
)
|
|
131.5
|
|
|||
Total equity
|
|
3,757.5
|
|
|
(26.7
|
)
|
|
3,730.8
|
|
|||
Total liabilities and equity
|
|
$
|
6,516.8
|
|
|
$
|
(26.4
|
)
|
|
$
|
6,490.4
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
|
|
March 31, 2018
|
|
December 31, 2017
|
|
March 31, 2017
|
||||||
Book value per share numerators (in millions):
|
|
|
|
|
|
|
||||||
White Mountains’s common shareholders’ equity
|
|
$
|
3,439.0
|
|
|
$
|
3,492.5
|
|
|
$
|
3,599.3
|
|
Time-value of money discount on expected future payments
on the BAM Surplus Notes
(1)
|
|
(154.1
|
)
|
|
(157.0
|
)
|
|
N/A
|
||||
HG Global’s unearned premium reserve
(1)
|
|
106.8
|
|
|
103.9
|
|
|
N/A
|
||||
HG Global’s net deferred acquisition costs
(1)
|
|
(25.2
|
)
|
|
(24.3
|
)
|
|
N/A
|
||||
Adjusted book value per share numerator
|
|
$
|
3,366.5
|
|
|
$
|
3,415.1
|
|
|
$
|
3,599.3
|
|
Book value per share denominators (in thousands of shares):
|
|
|
|
|
|
|
||||||
Common shares outstanding
|
|
3,753.4
|
|
|
3,750.2
|
|
|
4,572.8
|
|
|||
Unearned restricted shares
|
|
(26.2
|
)
|
|
(16.8
|
)
|
|
(34.7
|
)
|
|||
Adjusted book value per share denominator
|
|
3,727.2
|
|
|
3,733.4
|
|
|
4,538.1
|
|
|||
GAAP book value per share
|
|
$
|
916.24
|
|
|
$
|
931.30
|
|
|
$
|
787.13
|
|
Adjusted book value per share
|
|
$
|
903.22
|
|
|
$
|
914.75
|
|
|
$
|
793.15
|
|
Year-to-date dividends paid per share
|
|
$
|
1.00
|
|
|
$
|
1.00
|
|
|
$
|
1.00
|
|
Millions
|
|
March 31, 2018
|
|
December 31, 2017
|
|
March 31, 2017
|
||||||
Goodwill
|
|
|
|
|
|
|
||||||
MediaAlpha
|
|
$
|
18.3
|
|
|
$
|
18.3
|
|
|
$
|
18.3
|
|
Other
|
|
7.6
|
|
|
7.6
|
|
|
7.6
|
|
|||
Total goodwill
|
|
25.9
|
|
|
25.9
|
|
|
25.9
|
|
|||
Other intangible assets
|
|
|
|
|
|
|
||||||
MediaAlpha
|
|
32.5
|
|
|
35.4
|
|
|
15.9
|
|
|||
Other
|
|
.8
|
|
|
.8
|
|
|
1.1
|
|
|||
Total other intangible assets
|
|
33.3
|
|
|
36.2
|
|
|
17.0
|
|
|||
Total goodwill and other intangible assets
(1)
|
|
59.2
|
|
|
62.1
|
|
|
42.9
|
|
|||
Goodwill and other intangible assets held for sale
|
|
—
|
|
|
—
|
|
|
.9
|
|
|||
Goodwill and other intangible assets attributed to non-controlling interests
|
|
(21.1
|
)
|
|
(21.1
|
)
|
|
(16.2
|
)
|
|||
Goodwill and other intangible assets included in White Mountains's
common shareholders' equity |
|
$
|
38.1
|
|
|
$
|
41.0
|
|
|
$
|
27.6
|
|
|
|
Three Months Ended
|
||||||
|
|
March 31,
|
||||||
Millions
|
|
2018
|
|
2017
|
||||
Revenues
|
|
|
|
|
||||
Financial Guarantee revenues
|
|
$
|
(1.0
|
)
|
|
$
|
6.3
|
|
Marketing Technology revenues
|
|
71.7
|
|
|
32.5
|
|
||
Other revenues
|
|
(28.6
|
)
|
|
50.0
|
|
||
Total revenues
|
|
42.1
|
|
|
88.8
|
|
||
Expenses
|
|
|
|
|
||||
Financial Guarantee expenses
|
|
13.3
|
|
|
11.9
|
|
||
Marketing Technology expenses
|
|
71.9
|
|
|
33.5
|
|
||
Other expenses
|
|
22.9
|
|
|
47.0
|
|
||
Total expenses
|
|
108.1
|
|
|
92.4
|
|
||
Pre-tax (loss) income
|
|
|
|
|
||||
Financial Guarantee pre-tax loss
|
|
(14.3
|
)
|
|
(5.6
|
)
|
||
Marketing Technology pre-tax loss
|
|
(.2
|
)
|
|
(1.0
|
)
|
||
Other pre-tax (loss) income
|
|
(51.5
|
)
|
|
3.0
|
|
||
Total pre-tax loss
|
|
(66.0
|
)
|
|
(3.6
|
)
|
||
Income tax (expense) benefit
|
|
(.7
|
)
|
|
.3
|
|
||
Net loss from continuing operations
|
|
(66.7
|
)
|
|
(3.3
|
)
|
||
Gain (loss) on sale of discontinued operations, net of tax
|
|
.1
|
|
|
(1.0
|
)
|
||
Net income from discontinued operations, net of tax
|
|
—
|
|
|
32.3
|
|
||
Net (loss) income
|
|
(66.6
|
)
|
|
28.0
|
|
||
Net loss attributable to non-controlling interests
|
|
18.6
|
|
|
1.0
|
|
||
Net (loss) income attributable to White Mountains’s common shareholders
|
|
(48.0
|
)
|
|
29.0
|
|
||
Other comprehensive income, net of tax
|
|
—
|
|
|
.1
|
|
||
Other comprehensive income from discontinued operations, net of tax
|
|
—
|
|
|
.1
|
|
||
Comprehensive (loss) income
|
|
(48.0
|
)
|
|
29.2
|
|
||
Comprehensive income attributable to non-controlling interests
|
|
—
|
|
|
—
|
|
||
Comprehensive (loss) income attributable to White Mountains’s common shareholders
|
|
$
|
(48.0
|
)
|
|
$
|
29.2
|
|
|
|
Three Months Ended March 31, 2018
|
||||||||||||||
Millions
|
|
HG Global
|
|
BAM
|
|
Eliminations
|
|
Total
|
||||||||
Gross written premiums
|
|
$
|
—
|
|
|
$
|
6.4
|
|
|
$
|
—
|
|
|
$
|
6.4
|
|
Assumed (ceded) written premiums
|
|
5.3
|
|
|
(5.3
|
)
|
|
—
|
|
|
—
|
|
||||
Net written premiums
|
|
$
|
5.3
|
|
|
$
|
1.1
|
|
|
$
|
—
|
|
|
$
|
6.4
|
|
|
|
|
|
|
|
|
|
|
||||||||
Earned insurance premiums
|
|
$
|
2.3
|
|
|
$
|
.7
|
|
|
$
|
—
|
|
|
$
|
3.0
|
|
Net investment income
|
|
1.2
|
|
|
2.5
|
|
|
—
|
|
|
3.7
|
|
||||
Net investment income - BAM Surplus Notes
|
|
5.7
|
|
|
—
|
|
|
(5.7
|
)
|
|
—
|
|
||||
Net realized and unrealized investment loss
|
|
(3.6
|
)
|
|
(4.3
|
)
|
|
—
|
|
|
(7.9
|
)
|
||||
Other revenue
|
|
—
|
|
|
.2
|
|
|
—
|
|
|
.2
|
|
||||
Total revenues
|
|
5.6
|
|
|
(.9
|
)
|
|
(5.7
|
)
|
|
(1.0
|
)
|
||||
Insurance acquisition expenses
|
|
.5
|
|
|
.9
|
|
|
—
|
|
|
1.4
|
|
||||
Other underwriting expenses
|
|
—
|
|
|
.1
|
|
|
—
|
|
|
.1
|
|
||||
General and administrative expenses
|
|
.4
|
|
|
11.4
|
|
|
—
|
|
|
11.8
|
|
||||
Interest expense - BAM Surplus Notes
|
|
—
|
|
|
5.7
|
|
|
(5.7
|
)
|
|
—
|
|
||||
Total expenses
|
|
.9
|
|
|
18.1
|
|
|
(5.7
|
)
|
|
13.3
|
|
||||
Pre-tax income (loss)
|
|
$
|
4.7
|
|
|
$
|
(19.0
|
)
|
|
$
|
—
|
|
|
$
|
(14.3
|
)
|
Supplemental information:
|
|
|
|
|
|
|
|
|
||||||||
Member Surplus Contributions collected
(1)
|
|
$
|
—
|
|
|
$
|
4.9
|
|
|
$
|
—
|
|
|
$
|
4.9
|
|
|
|
Three Months Ended March 31, 2017
|
||||||||||||||
Millions
|
|
HG Global
|
|
BAM
|
|
Eliminations
|
|
Total
|
||||||||
Gross written premiums
|
|
$
|
—
|
|
|
$
|
18.7
|
|
|
$
|
—
|
|
|
$
|
18.7
|
|
Assumed (ceded) written premiums
|
|
12.6
|
|
|
(12.6
|
)
|
|
—
|
|
|
—
|
|
||||
Net written premiums
|
|
$
|
12.6
|
|
|
$
|
6.1
|
|
|
$
|
—
|
|
|
$
|
18.7
|
|
|
|
|
|
|
|
|
|
|
||||||||
Earned insurance premiums
|
|
$
|
1.5
|
|
|
$
|
.5
|
|
|
$
|
—
|
|
|
$
|
2.0
|
|
Net investment income
|
|
.6
|
|
|
2.0
|
|
|
—
|
|
|
2.6
|
|
||||
Net investment income - BAM Surplus Notes
|
|
4.8
|
|
|
—
|
|
|
(4.8
|
)
|
|
—
|
|
||||
Net realized and unrealized investment gains
|
|
.3
|
|
|
1.0
|
|
|
—
|
|
|
1.3
|
|
||||
Other revenue
|
|
—
|
|
|
.4
|
|
|
—
|
|
|
.4
|
|
||||
Total revenues
|
|
7.2
|
|
|
3.9
|
|
|
(4.8
|
)
|
|
6.3
|
|
||||
Insurance acquisition expenses
|
|
.3
|
|
|
.9
|
|
|
—
|
|
|
1.2
|
|
||||
Other underwriting expenses
|
|
—
|
|
|
.1
|
|
|
—
|
|
|
.1
|
|
||||
General and administrative expenses
|
|
.3
|
|
|
10.3
|
|
|
—
|
|
|
10.6
|
|
||||
Interest expense - BAM Surplus Notes
|
|
—
|
|
|
4.8
|
|
|
(4.8
|
)
|
|
—
|
|
||||
Total expenses
|
|
.6
|
|
|
16.1
|
|
|
(4.8
|
)
|
|
11.9
|
|
||||
Pre-tax income (loss)
|
|
$
|
6.6
|
|
|
$
|
(12.2
|
)
|
|
$
|
—
|
|
|
$
|
(5.6
|
)
|
Supplemental information:
|
|
|
|
|
|
|
|
|
||||||||
Member Surplus Contributions collected
(1)
|
|
$
|
—
|
|
|
$
|
9.6
|
|
|
$
|
—
|
|
|
$
|
9.6
|
|
|
|
Three Months Ended March 31,
|
||||||
$ in millions
|
|
2018
|
|
2017
|
||||
Gross par value of primary market policies issued
|
|
$
|
1,149.5
|
|
|
$
|
2,041.0
|
|
Gross par value of secondary market policies issued
|
|
148.6
|
|
|
338.1
|
|
||
Total gross par value of market policies issued
|
|
$
|
1,298.1
|
|
|
$
|
2,379.1
|
|
Gross written premiums
|
|
$
|
6.4
|
|
|
$
|
18.7
|
|
MSC collected
|
|
4.9
|
|
|
9.6
|
|
||
Total gross written premiums and MSC
|
|
$
|
11.3
|
|
|
$
|
28.3
|
|
Total pricing
(1)
|
|
96 bps
|
|
|
119 bps
|
|
Millions
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
Policyholders’ surplus
|
|
$
|
420.9
|
|
|
$
|
427.3
|
|
Contingency reserve
|
|
37.9
|
|
|
34.8
|
|
||
Qualified statutory capital
|
|
458.8
|
|
|
462.1
|
|
||
Net unearned premiums
|
|
31.0
|
|
|
30.5
|
|
||
Present value of future installment premiums and MSC
|
|
10.9
|
|
|
9.0
|
|
||
Collateral trusts at statutory value
|
|
208.2
|
|
|
206.8
|
|
||
Claims paying resources
|
|
$
|
708.9
|
|
|
$
|
708.4
|
|
Millions
|
|
March 31, 2017
|
|
December 31, 2016
|
||||
Policyholders’ surplus
|
|
$
|
429.2
|
|
|
$
|
431.5
|
|
Contingency reserve
|
|
25.5
|
|
|
22.7
|
|
||
Qualified statutory capital
|
|
454.7
|
|
|
454.2
|
|
||
Net unearned statutory premiums
|
|
29.2
|
|
|
23.2
|
|
||
Present value of future installment premiums and MSC
|
|
3.3
|
|
|
3.3
|
|
||
Collateral trusts at statutory value
|
|
175.0
|
|
|
163.0
|
|
||
Claims paying resources
|
|
$
|
662.2
|
|
|
$
|
643.7
|
|
|
|
March 31, 2018
|
||||||||||||||
Millions
|
|
HG Global
|
|
BAM
|
|
Eliminations and Segment Adjustment
|
|
Total
|
||||||||
Assets
|
|
|
|
|
|
|
|
|
||||||||
Fixed maturity investments
|
|
$
|
167.5
|
|
|
$
|
454.6
|
|
|
$
|
—
|
|
|
$
|
622.1
|
|
Short-term investments
|
|
39.2
|
|
|
48.8
|
|
|
—
|
|
|
88.0
|
|
||||
Total investments
|
|
206.7
|
|
|
503.4
|
|
|
—
|
|
|
710.1
|
|
||||
Cash
|
|
1.2
|
|
|
8.2
|
|
|
—
|
|
|
9.4
|
|
||||
BAM Surplus Notes
|
|
499.0
|
|
|
—
|
|
|
(499.0
|
)
|
|
—
|
|
||||
Accrued interest receivable on BAM Surplus Notes
|
|
131.7
|
|
|
—
|
|
|
(131.7
|
)
|
|
—
|
|
||||
Deferred acquisition costs
|
|
26.0
|
|
|
15.9
|
|
|
(26.0
|
)
|
|
15.9
|
|
||||
Insurance premiums receivable
|
|
3.1
|
|
|
5.4
|
|
|
(3.3
|
)
|
|
5.2
|
|
||||
Accounts receivable on unsettled investment sales
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Other assets
|
|
1.2
|
|
|
8.3
|
|
|
—
|
|
|
9.5
|
|
||||
Total assets
|
|
$
|
868.9
|
|
|
$
|
541.2
|
|
|
$
|
(660.0
|
)
|
|
$
|
750.1
|
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities
|
|
|
|
|
|
|
|
|
||||||||
BAM Surplus Notes
(1)
|
|
$
|
—
|
|
|
$
|
499.0
|
|
|
$
|
(499.0
|
)
|
|
$
|
—
|
|
Accrued interest payable on BAM Surplus Notes
(2)
|
|
—
|
|
|
131.7
|
|
|
(131.7
|
)
|
|
—
|
|
||||
Preferred dividends payable to White Mountains’s subsidiaries
(3)
|
|
240.3
|
|
|
—
|
|
|
—
|
|
|
240.3
|
|
||||
Preferred dividends payable to non-controlling interests
|
|
8.2
|
|
|
—
|
|
|
—
|
|
|
8.2
|
|
||||
Unearned insurance premiums
|
|
110.2
|
|
|
30.0
|
|
|
—
|
|
|
140.2
|
|
||||
Accounts payable on unsettled investment purchases
|
|
2.2
|
|
|
16.6
|
|
|
—
|
|
|
18.8
|
|
||||
Other liabilities
|
|
.3
|
|
|
41.4
|
|
|
(29.3
|
)
|
|
12.4
|
|
||||
Total liabilities
|
|
361.2
|
|
|
718.7
|
|
|
(660.0
|
)
|
|
419.9
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Equity
|
|
|
|
|
|
|
|
|
||||||||
White Mountains’s common shareholders’ equity
|
|
492.0
|
|
|
—
|
|
|
—
|
|
|
492.0
|
|
||||
Non-controlling interests
|
|
15.7
|
|
|
(177.5
|
)
|
|
—
|
|
|
(161.8
|
)
|
||||
Total equity
|
|
507.7
|
|
|
(177.5
|
)
|
|
—
|
|
|
330.2
|
|
||||
Total liabilities and equity
|
|
$
|
868.9
|
|
|
$
|
541.2
|
|
|
$
|
(660.0
|
)
|
|
$
|
750.1
|
|
(1)
|
Under GAAP, the BAM Surplus Notes are classified as debt by the issuer. Under U.S. Statutory accounting, they are classified as policyholders’ surplus.
|
(2)
|
Under GAAP, interest accrues daily on the BAM Surplus Notes. Under U.S. Statutory accounting, interest is not accrued on the BAM Surplus Notes until it has been approved for payment by insurance regulators.
|
(3)
|
For segment reporting, the HG Global preferred dividend receivable at White Mountains is reclassified from the Other Operations segment to the HG Global/BAM segment. Dividends on HG Global preferred shares payable to White Mountains’s subsidiaries are eliminated in White Mountains’s consolidated financial statements.
|
|
|
December 31, 2017
|
||||||||||||||
Millions
|
|
HG Global
|
|
BAM
|
|
Eliminations and Segment Adjustment
|
|
Total Segment
|
||||||||
Assets
|
|
|
|
|
|
|
|
|
||||||||
Fixed maturity investments
|
|
$
|
175.5
|
|
|
$
|
448.1
|
|
|
$
|
—
|
|
|
$
|
623.6
|
|
Short-term investments
|
|
28.5
|
|
|
41.3
|
|
|
—
|
|
|
69.8
|
|
||||
Total investments
|
|
204.0
|
|
|
489.4
|
|
|
—
|
|
|
693.4
|
|
||||
Cash
|
|
1.9
|
|
|
23.7
|
|
|
—
|
|
|
25.6
|
|
||||
BAM Surplus Notes
|
|
499.0
|
|
|
—
|
|
|
(499.0
|
)
|
|
—
|
|
||||
Accrued interest receivable on BAM Surplus Notes
|
|
126.0
|
|
|
—
|
|
|
(126.0
|
)
|
|
—
|
|
||||
Deferred acquisition costs
|
|
25.1
|
|
|
14.9
|
|
|
(25.2
|
)
|
|
14.8
|
|
||||
Insurance premiums receivable
|
|
2.7
|
|
|
4.7
|
|
|
(2.9
|
)
|
|
4.5
|
|
||||
Accounts receivable on unsettled investment sales
|
|
—
|
|
|
.1
|
|
|
—
|
|
|
.1
|
|
||||
Other assets
|
|
.8
|
|
|
8.2
|
|
|
—
|
|
|
9.0
|
|
||||
Total assets
|
|
$
|
859.5
|
|
|
$
|
541.0
|
|
|
$
|
(653.1
|
)
|
|
$
|
747.4
|
|
Liabilities
|
|
|
|
|
|
|
|
|
||||||||
BAM Surplus Notes
(1)
|
|
$
|
—
|
|
|
$
|
499.0
|
|
|
$
|
(499.0
|
)
|
|
$
|
—
|
|
Accrued interest payable on BAM Surplus Notes
(2)
|
|
—
|
|
|
126.0
|
|
|
(126.0
|
)
|
|
—
|
|
||||
Preferred dividends payable to White Mountains’s subsidiaries
(3)
|
|
227.9
|
|
|
—
|
|
|
—
|
|
|
227.9
|
|
||||
Preferred dividends payable to non-controlling interests
|
|
7.7
|
|
|
—
|
|
|
—
|
|
|
7.7
|
|
||||
Unearned insurance premiums
|
|
107.2
|
|
|
29.6
|
|
|
—
|
|
|
136.8
|
|
||||
Accounts payable on unsettled investment purchases
|
|
—
|
|
|
.6
|
|
|
—
|
|
|
.6
|
|
||||
Other liabilities
|
|
1.0
|
|
|
49.0
|
|
|
(28.1
|
)
|
|
21.9
|
|
||||
Total liabilities
|
|
343.8
|
|
|
704.2
|
|
|
(653.1
|
)
|
|
394.9
|
|
||||
Equity
|
|
|
|
|
|
|
|
|
||||||||
White Mountains’s common shareholders’ equity
|
|
499.8
|
|
|
—
|
|
|
—
|
|
|
499.8
|
|
||||
Non-controlling interests
|
|
15.9
|
|
|
(163.2
|
)
|
|
—
|
|
|
(147.3
|
)
|
||||
Total equity
|
|
515.7
|
|
|
(163.2
|
)
|
|
—
|
|
|
352.5
|
|
||||
Total liabilities and equity
|
|
$
|
859.5
|
|
|
$
|
541.0
|
|
|
$
|
(653.1
|
)
|
|
$
|
747.4
|
|
(1)
|
Under GAAP, the BAM Surplus Notes are classified as debt by the issuer. Under U.S. Statutory accounting, they are classified as policyholders’ surplus.
|
(2)
|
Under GAAP, interest accrues daily on the BAM Surplus Notes. Under U.S. Statutory accounting, interest is not accrued on the BAM Surplus Notes until it has been approved for payment by insurance regulators.
|
(3)
|
For segment reporting, the HG Global preferred dividend receivable at White Mountains is reclassified from the Other Operations segment to the HG Global/BAM segment. Dividends on HG Global preferred shares payable to White Mountains’s subsidiaries are eliminated in White Mountains’s consolidated financial statements.
|
|
|
Three Months Ended March 31,
|
||||||
Millions
|
|
2018
|
|
2017
|
||||
Gross par value of primary market policies issued
|
|
$
|
1,149.5
|
|
|
$
|
2,041.0
|
|
Gross par value of secondary market policies issued
|
|
148.6
|
|
|
338.1
|
|
||
Total gross par value of policies issued
|
|
1,298.1
|
|
|
2,379.1
|
|
||
|
|
|
|
|
||||
Gross par value of policies priced yet to close
|
|
366.4
|
|
|
328.3
|
|
||
Less: Gross par value of policies closed that were previously priced
|
|
(114.4
|
)
|
|
(353.3
|
)
|
||
Total gross par value of policies priced
|
|
$
|
1,550.1
|
|
|
$
|
2,354.1
|
|
|
|
Three Months Ended March 31,
|
||||||
Millions
|
|
2018
|
|
2017
|
||||
Advertising and commission revenues
|
|
$
|
70.1
|
|
|
$
|
32.5
|
|
Cost of sales
|
|
57.4
|
|
|
27.7
|
|
||
Gross profit
|
|
12.7
|
|
|
4.8
|
|
||
Other revenue
|
|
1.6
|
|
|
—
|
|
||
General and administrative expenses
|
|
11.2
|
|
|
3.2
|
|
||
Amortization of other intangible assets
|
|
2.9
|
|
|
2.4
|
|
||
Interest expense
|
|
.4
|
|
|
.2
|
|
||
GAAP pre-tax loss
|
|
(.2
|
)
|
|
(1.0
|
)
|
||
Income tax expense
|
|
—
|
|
|
—
|
|
||
GAAP net loss
|
|
(.2
|
)
|
|
(1.0
|
)
|
||
|
|
|
|
|
||||
Add back:
|
|
|
|
|
||||
Non-cash equity-based compensation expense
|
|
6.4
|
|
|
—
|
|
||
Interest expense
|
|
.4
|
|
|
.2
|
|
||
Income tax expense
|
|
—
|
|
|
—
|
|
||
General and administrative expenses —depreciation
|
|
—
|
|
|
—
|
|
||
Amortization of other intangible assets
|
|
2.9
|
|
|
2.4
|
|
||
Adjusted EBITDA
(1)
|
|
$
|
9.5
|
|
|
$
|
1.6
|
|
|
|
Three Months Ended
|
||||||
|
|
March 31,
|
||||||
Millions
|
|
2018
|
|
2017
|
||||
Earned insurance premiums
|
|
$
|
—
|
|
|
$
|
1.0
|
|
Net investment income
|
|
16.0
|
|
|
10.2
|
|
||
Net realized and unrealized investment (losses) gains
|
|
(45.8
|
)
|
|
35.0
|
|
||
Advertising and commission revenues
|
|
.9
|
|
|
1.3
|
|
||
Other revenues
|
|
.3
|
|
|
2.5
|
|
||
Total revenues
|
|
(28.6
|
)
|
|
50.0
|
|
||
Loss and loss adjustment expenses
|
|
—
|
|
|
1.1
|
|
||
Insurance acquisition expenses
|
|
—
|
|
|
.1
|
|
||
Cost of sales
|
|
.7
|
|
|
1.1
|
|
||
General and administrative expenses
|
|
22.0
|
|
|
44.5
|
|
||
Interest expense
|
|
.2
|
|
|
.2
|
|
||
Total expenses
|
|
22.9
|
|
|
47.0
|
|
||
Pre-tax income (loss)
|
|
$
|
(51.5
|
)
|
|
$
|
3.0
|
|
|
|
Three Months Ended
|
||||
|
|
March 31,
|
||||
|
|
2018
|
|
2017
|
||
Total fixed income investments
|
|
(0.7
|
)%
|
|
0.9
|
%
|
Bloomberg Barclays U.S. Intermediate Aggregate Index
|
|
(1.1
|
)%
|
|
0.7
|
%
|
|
|
|
|
|
||
Common equity securities
|
|
(0.9
|
)%
|
|
6.1
|
%
|
Other long-term investments
|
|
(2.8
|
)%
|
|
1.0
|
%
|
Total common equity securities and other long-term investments
|
|
(1.2
|
)%
|
|
4.2
|
%
|
S&P 500 Index (total return)
|
|
(0.8
|
)%
|
|
6.1
|
%
|
|
|
|
|
|
||
Total consolidated portfolio
|
|
(1.0
|
)%
|
|
1.5
|
%
|
Currency
(1)
$ in millions
|
|
Fair Value
|
|
% of Common Shareholders
’
Equity
|
|||
JPY
|
|
$
|
66.4
|
|
|
1.9
|
%
|
EUR
|
|
53.3
|
|
|
1.6
|
|
|
GBP
|
|
48.8
|
|
|
1.4
|
|
|
All other
|
|
64.7
|
|
|
1.9
|
|
|
Total
|
|
$
|
233.2
|
|
|
6.8
|
%
|
($ in millions)
|
|
March 31,
2018 |
|
December 31,
2017 |
||||
WTM Bank Facility
|
|
$
|
—
|
|
|
$
|
—
|
|
MediaAlpha Bank Facility, carrying value
|
|
21.5
|
|
|
23.8
|
|
||
Total debt
|
|
21.5
|
|
|
23.8
|
|
||
Non-controlling interests—other, excluding BAM
|
|
34.3
|
|
|
31.5
|
|
||
Total White Mountains’s common shareholders’ equity
|
|
3,439.0
|
|
|
3,492.5
|
|
||
Total capital
|
|
3,494.8
|
|
|
3,547.8
|
|
||
Time-value discount on expected future payments on the BAM Surplus Notes
(1)
|
|
(154.1
|
)
|
|
(157.0
|
)
|
||
HG Global’s unearned premium reserve
(1)
|
|
106.8
|
|
|
103.9
|
|
||
HG Global’s net deferred acquisition costs
(1)
|
|
(25.2
|
)
|
|
(24.3
|
)
|
||
Total adjusted capital
|
|
$
|
3,422.3
|
|
|
$
|
3,470.4
|
|
|
|
|
|
|
||||
Total debt to total adjusted capital
|
|
0.6
|
%
|
|
0.7
|
%
|
Dates
|
|
Shares Repurchased
|
|
Cost (millions)
|
|
Average price per share
|
|
Adjusted book value per share
(1)
|
||||||
|
|
|
|
|
|
|
|
|
||||||
1st quarter 2018
(2)
|
|
9,965
|
|
|
$
|
8.4
|
|
|
$
|
840.63
|
|
|
93
|
%
|
April 2018
|
|
—
|
|
|
—
|
|
|
—
|
|
|
N/A
|
|
||
Year-to-date April 30, 2018
|
|
9,965
|
|
|
$
|
8.4
|
|
|
$
|
840.63
|
|
|
93
|
%
|
|
|
|
|
|
|
|
|
|
||||||
1st quarter 2017
(2)
|
|
7,699
|
|
|
$
|
6.5
|
|
|
$
|
836.05
|
|
|
105
|
%
|
April 2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
||
Year-to-date April 30, 2017
|
|
7,699
|
|
|
$
|
6.5
|
|
|
$
|
836.05
|
|
|
105
|
%
|
•
|
changes in adjusted book value per share or return on equity;
|
•
|
business strategy;
|
•
|
financial and operating targets or plans;
|
•
|
incurred loss and loss adjustment expenses and the adequacy of its loss and loss adjustment expense reserves and related reinsurance;
|
•
|
projections of revenues, income (or loss), earnings (or loss) per share, dividends, market share or other financial forecasts;
|
•
|
expansion and growth of its business and operations; and
|
•
|
future capital expenditures.
|
•
|
the risks that are described from time to time in White Mountains’s filings with the Securities and Exchange Commission, including but not limited to White Mountains’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017;
|
•
|
business opportunities (or lack thereof) that may be presented to it and pursued;
|
•
|
actions taken by ratings agencies from time to time, such as financial strength or credit ratings downgrades or placing ratings on negative watch;
|
•
|
the continued availability of capital and financing;
|
•
|
general economic, market or business conditions;
|
•
|
competitive forces, including the conduct of other insurers;
|
•
|
changes in domestic or foreign laws or regulations, or their interpretation, applicable to White Mountains, its competitors or its customers;
|
•
|
an economic downturn or other economic conditions adversely affecting its financial position; and
|
•
|
other factors, most of which are beyond White Mountains’s control.
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk.
|
Item 4.
|
Controls and Procedures
.
|
Part II.
|
OTHER INFORMATION
|
Item 1.
|
Legal Proceedings
.
|
Item 2.
|
Issuer Purchases of Equity Securities.
|
Months
|
|
Total Number of
Shares Purchased
|
|
Average Price
Paid per Share
|
|
Total Number of Shares
Purchased as Part of
Publicly Announced Plan
(1)
|
|
Maximum Number
of Shares that May
Yet Be Purchased
Under the Plan
(1)
|
|||||
January 1-January 31, 2018
|
|
7,763
|
|
|
$
|
851.28
|
|
|
—
|
|
|
643,130
|
|
February 1-February 28, 2018
|
|
2,202
|
|
|
$
|
803.10
|
|
|
—
|
|
|
643,130
|
|
March 1-March 31, 2018
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
643,130
|
|
Total
|
|
9,965
|
|
|
$
|
840.63
|
|
|
—
|
|
|
643,130
|
|
Item 4.
|
Mine Safety Disclosures.
|
Item 5.
|
Other Information
.
|
Item 6.
|
Exhibits
.
|
(a)
|
|
Exhibit number
|
|
|
|
Name
|
|
|
|
|
|
|
|
|
|
|
|
10
|
|
—
|
|
|
|
|
|
11
|
|
—
|
|
|
|
|
|
31.1
|
|
—
|
|
|
|
|
|
31.2
|
|
—
|
|
|
|
|
|
32.1
|
|
—
|
|
|
|
|
|
32.2
|
|
—
|
|
|
|
|
|
101
|
|
—
|
|
|
The following financial information from White Mountains’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2018 formatted in XBRL: (i) Consolidated Balance Sheets, March 31, 2018 and December 31, 2017; (ii) Consolidated Statements of Operations and Comprehensive Income, Three Months Ended March 31, 2018 and 2017; (iii) Consolidated Statements of Changes in Equity, Three Months Ended March 31, 2018 and 2017; (iv) Consolidated Statements of Cash Flows, Three Months Ended March 31, 2018 and 2017; and (v) Notes to Consolidated Financial Statements. *
|
*
|
Included herein
|
**
|
Not included as an exhibit as the information is contained elsewhere within this report. See
Note 9 — “Earnings Per Share”
of the Notes to Consolidated Financial Statements.
|
|
|
|
|
|
WHITE MOUNTAINS INSURANCE GROUP, LTD.
|
|
|
|
|
(Registrant)
|
|
|
|
|
|
|
Date:
|
May 2, 2018
|
|
|
By: /s/ J. Brian Palmer
|
|
|
|
|
J. Brian Palmer
|
|
|
|
|
Managing Director and Chief Accounting Officer
|
Section 1.1
|
Definitions..................................................................................................2
|
Section 2.1
|
Purchase and Sale of the Purchased Units...............................................17
|
Section 2.2
|
Closing of the Transactions Contemplated by this Agreement................17
|
Section 2.3
|
Deliveries at the Closing..........................................................................17
|
Section 2.4
|
Purchase Price..........................................................................................19
|
Section 2.5
|
Withholding..............................................................................................21
|
Section 3.1
|
Organization and Qualification; Subsidiaries..........................................22
|
Section 3.2
|
Capitalization of the Group Companies..................................................22
|
Section 3.3
|
Authority..................................................................................................23
|
Section 3.4
|
Financial Information..............................................................................24
|
Section 3.5
|
Consents and Requisite Governmental Approvals; No Violations
...........
25
|
Section 3.6
|
Permits.....................................................................................................25
|
Section 3.7
|
Material Contracts...................................................................................26
|
Section 3.8
|
Absence of Changes................................................................................28
|
Section 3.9
|
Litigation.................................................................................................28
|
Section 3.10
|
Compliance with Applicable Law...........................................................28
|
Section 3.11
|
Employee Plans.......................................................................................29
|
Section 3.12
|
Environmental Matters............................................................................31
|
Section 3.13
|
Intellectual Property; IT Systems............................................................31
|
Section 3.14
|
Labor Matters..........................................................................................32
|
Section 3.15
|
Insurance.................................................................................................33
|
Section 3.16
|
Tax Matters
................................................................................................................
34
|
Section 3.17
|
Brokers....................................................................................................35
|
Section 3.18
|
Real and Personal Property.....................................................................35
|
Section 3.19
|
Transactions with Affiliates....................................................................36
|
Section 3.20
|
Customers, Carriers and Vendors...........................................................37
|
Section 3.21
|
Employee Agents; Third-Party Agents; Sales Practices.........................37
|
Section 3.22
|
Program Agreement Breaches................................................................38
|
Section 3.23
|
Contingent and Incentive-Based Commissions......................................38
|
Section 3.24
|
No Undisclosed Liabilities.....................................................................38
|
Section 3.25
|
EXCLUSIVITY OF REPRESENTATIONS AND WARRANTIES......39
|
Section 4.1
|
Organization.............................................................................................39
|
Section 4.2
|
Authority..................................................................................................39
|
Section 4.3
|
Consents and Approvals; No Violations..................................................40
|
Section 4.4
|
Title to the Units......................................................................................40
|
Section 4.5
|
Litigation.................................................................................................41
|
Section 4.6
|
Brokers....................................................................................................41
|
Section 4.7
|
EXCLUSIVITY OF REPRESENTATIONS AND WARRANTIES.......41
|
Section 5.1
|
Organization............................................................................................42
|
Section 5.2
|
Authority..................................................................................................42
|
Section 5.3
|
Consents and Approvals; No Violations..................................................42
|
Section 5.4
|
Brokers.....................................................................................................43
|
Section 5.5
|
Availability of Funds................................................................................43
|
Section 5.6
|
No Competitor..........................................................................................43
|
Section 5.7
|
Investigations; No Representations..........................................................43
|
Section 6.1
|
Conduct of Business of the Company......................................................44
|
Section 6.2
|
Access to Information..............................................................................47
|
Section 6.3
|
Efforts to Consummate............................................................................47
|
Section 6.4
|
Public Announcements............................................................................49
|
Section 6.5
|
Employee Matters....................................................................................50
|
Section 6.6
|
Indemnification and Exculpation of Directors, Officers and Employees;
|
Section 6.7
|
Exclusive Dealing....................................................................................53
|
Section 6.8
|
Documents and Information....................................................................53
|
Section 6.9
|
Contact with Customers, Suppliers and Other Business Relations.........54
|
Section 6.10
|
Notification
...............................................................................................................
54
|
Section 6.11
|
Affiliate Agreements...............................................................................54
|
Section 6.12
|
Non-Solicitation......................................................................................55
|
Section 6.13
|
Tax Matters
...............................................................................................................
56
|
Section 6.14
|
Residency Forms.....................................................................................58
|
Section 7.1
|
Conditions to the Obligations of the Company, Buyer and the Sellers...58
|
Section 7.2
|
Other Conditions to the Obligations of Buyer.........................................58
|
Section 7.3
|
Other Conditions to the Obligations of the Company and the Sellers.....60
|
Section 7.4
|
Frustration of Closing Conditions............................................................61
|
Section 8.1
|
Termination..............................................................................................61
|
Section 8.2
|
Effect of Termination...............................................................................62
|
Section 8.3
|
Amendment..............................................................................................63
|
Section 8.4
|
Extension; Waiver....................................................................................64
|
Section 9.1
|
Survival of Representations; Covenants..................................................64
|
Section 9.2
|
General Indemnification...........................................................................65
|
Section 9.3
|
Third Party Claims...................................................................................66
|
Section 9.4
|
Other Claims............................................................................................68
|
Section 9.5
|
Limitations on Indemnification Obligations............................................68
|
Section 9.6
|
Tax Treatment of Indemnification............................................................70
|
Section 9.7
|
Duty to Mitigate.......................................................................................70
|
Section 9.8
|
Exclusive Remedy....................................................................................70
|
Section 9.9
|
Representation and Warranty Insurance Policy........................................71
|
Section 9.10
|
Manner of Payment; Escrow....................................................................71
|
Section 9.11
|
Materiality................................................................................................72
|
Section 10.1
|
Guarantee.................................................................................................72
|
Section 10.2
|
Nature of Guarantee.................................................................................72
|
Section 10.3
|
Representations and Warranties of Parent................................................72
|
Section 10.4
|
Sole Obligation of Parent.........................................................................73
|
Section 11.1
|
Entire Agreement; Assignment.................................................................73
|
Section 11.2
|
Notices......................................................................................................74
|
Section 11.3
|
Governing Law.........................................................................................75
|
Section 11.4
|
Fees and Expenses....................................................................................75
|
Section 11.5
|
Construction; Interpretation.....................................................................75
|
Section 11.6
|
Exhibits and Schedules.............................................................................76
|
Section 11.7
|
Parties in Interest......................................................................................76
|
Section 11.8
|
Severability
.................................................................................................................
76
|
Section 11.9
|
Seller Representative................................................................................76
|
Section 11.10
|
Counterparts; Electronic Signatures.........................................................79
|
Section 11.11
|
Knowledge of the Company.....................................................................79
|
Section 11.12
|
No Recourse.............................................................................................79
|
Section 11.13
|
Waiver of Jury Trial..................................................................................79
|
Section 11.14
|
Jurisdiction and Venue.............................................................................79
|
Section 11.15
|
Remedies..................................................................................................80
|
Section 11.16
|
Waiver of Conflicts..................................................................................81
|
Section 11.17
|
Currency...................................................................................................81
|
Section 11.18
|
Time of Essence.......................................................................................81
|
1.1
|
—
|
Acquisition Entities
|
2.1(a)
|
—
|
Purchased Units
|
2.1(b)
|
—
|
Retained Units
|
6.1
|
—
|
Conduct of Business of the Company
|
6.11
|
—
|
Affiliate Agreements
|
6.12
|
—
|
Covered Employees
|
A
|
—
|
Net Working Capital and Accounting Principles
|
B
|
—
|
Form of Escrow Agreement
|
C
|
—
|
Pro Rata Percentages; Percentage Allocations; Holdback Allocations
|
D
|
—
|
Allocation of Purchase Price
|
E
F
|
—
—
|
Residency Form
Key Employees
|
G
|
—
|
Form of Second Amended and Restated Limited Liability Company Agreement of the Company
|
H
|
—
|
Euclid R&W Insurance Policy
|
I
|
—
|
Great American R&W Insurance Policy
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
•
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and,
|
•
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the periods presented in the Report.
|
/s/ G. Manning Rountree
|
|
Chief Executive Officer
(Principal Executive Officer)
|
|
|
|
May 2, 2018
|
|
•
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and,
|
•
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the periods presented in the Report.
|
/s/ Reid T. Campbell
|
|
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
|
|
|
|
May 2, 2018
|
|