Exhibit 99.1
 | CONTACT: Todd Pozefsky (203) 458-5807 | |||||||
WHITE MOUNTAINS REPORTS THIRD QUARTER RESULTS
HAMILTON, Bermuda (November 6, 2019) - White Mountains Insurance Group, Ltd. (NYSE: WTM) reported book value per share of $1,003 and adjusted book value per share of $1,005 as of September 30, 2019. Book value per share and adjusted book value per share both increased 2% in the third quarter of 2019. Book value per share and adjusted book value per share increased 12% and 13% in the first nine months of 2019, including dividends. The results for the first nine months of 2019 include the impact of the MediaAlpha transaction. Excluding the gain on the MediaAlpha transaction, book value per share and adjusted book value per share would have increased 6% and 7% in the first nine months of 2019, including dividends.(1)
Manning Rountree, CEO, commented, “We had a good quarter on all fronts. Despite challenging primary market conditions, BAM produced strong premium volume, including a significant assumed reinsurance transaction. NSM again produced solid growth on both the top and bottom line. Kudu added three new investments in the quarter and has nearly deployed all of our initial $250 million commitment. Our investment portfolio was up 3.1%, a strong result that includes an increase in the fair value of our investment in MediaAlpha, which produced another quarter of record results. We ended the quarter with $1.1 billion of undeployed capital.”
Comprehensive income attributable to common shareholders was $46 million and $348 million in the third quarter and first nine months of 2019, compared to comprehensive income (loss) attributable to common shareholders of $40 million and $(5) million in the third quarter and first nine months of 2018.
HG Global/BAM
BAM’s gross written premiums and member surplus contributions (MSC) collected were $44 million and $84 million in the third quarter and first nine months of 2019, compared to $16 million and $56 million in the third quarter and first nine months of 2018. BAM insured municipal bonds with par value of $4.1 billion and $8.9 billion in the third quarter and first nine months of 2019, compared to $2.2 billion and $6.6 billion in the third quarter and first nine months of 2018. In the third quarter of 2019, BAM completed an assumed reinsurance transaction to insure municipal bonds with a par value of $1.1 billion. Total pricing was 107 and 94 basis points in the third quarter and first nine months of 2019, compared to 75 and 91 basis points in the third quarter and first nine months of 2018. BAM’s total claims paying resources were $930 million at September 30, 2019, compared to $871 million at December 31, 2018 and $835 million at September 30, 2018.
Seán McCarthy, CEO of BAM, said, “BAM had a strong quarter. Overall new issue volume rose as issuers took advantage of lower interest rates to refinance outstanding bonds, and investor demand for insurance increased. However, lower interest rates and tighter credit spreads continued to impact pricing in the primary market. In the quarter, BAM insured $2.7 billion of municipal bonds in the primary market, up 31% year over year, and an additional $289 million in the secondary market, up almost 100% year over year. We also completed our second assumed reinsurance transaction, helping to bring total par in force to a new high of $59 billion.”
(1) See “Regulation G” on page 16.
1
HG Global reported pre-tax income of $14 million and $44 million in the third quarter and first nine months of 2019, compared to pre-tax income of $8 million and $21 million in the third quarter and first nine months of 2018. White Mountains reported pre-tax loss related to BAM of $10 million and $26 million in the third quarter and first nine months of 2019, compared to pre-tax loss of $17 million and $53 million in the third quarter and first nine months of 2018. The period over period changes were driven primarily by higher investment returns in the HG Global and BAM investment portfolios.
BAM is a mutual insurance company that is owned by its members. BAM’s results are consolidated into White Mountains’s GAAP financial statements and attributed to non-controlling interests.
NSM
In the third quarter of 2019, NSM reported pre-tax income of $5 million, adjusted EBITDA of $13 million, and commission and other revenues of $60 million. In the first nine months of 2019, NSM reported pre-tax income of $4 million, adjusted EBITDA of $39 million, and commission and other revenues of $175 million. Results for the third quarter and first nine months of 2019 include Embrace Pet Insurance, a nationwide provider of pet health insurance for dogs and cats, which NSM acquired on April 1, 2019, and KBK Insurance Group, a specialized MGU focused on the towing and transportation space, which NSM acquired on December 3, 2018.
Geof McKernan, CEO of NSM, said, “NSM had another solid quarter. Trailing 12 months pro forma controlled premiums grew to $883 million, and pro forma adjusted EBITDA reached $50 million for the first time ever. These results reflect strong growth in the specialty transportation and pet verticals. We continue to invest in technology and talent to drive organic growth while also pursuing attractive acquisition opportunities.”
Kudu
In the third quarter of 2019, Kudu deployed $77 million in three investment management firms. Kudu has now deployed a total of $222 million in eight investment management firms with combined assets under management of over $30 billion, spanning a range of asset classes, including real estate, real assets, wealth management, hedge funds and alternative credit strategies.
In the third quarter of 2019, Kudu reported total revenues of $8 million and pre-tax income of $3 million. For the period from April 4, 2019 through September 30, 2019, Kudu reported total revenues of $12 million and pre-tax income of $5 million.
Rob Jakacki, CEO of Kudu, said, “Kudu remained active during the third quarter, adding three new investments to our portfolio. We have now deployed $222 million of capital into eight transactions with an average cash yield at inception of 10.2%. The Kudu business as a whole was profitable for the second consecutive quarter with higher revenues driven by both the steady growth in assets under management from the existing portfolio and the impact of the new transactions in the third quarter. We continue to see strong opportunities in the private capital and wealth management segments.”
2
Other Operations
White Mountains’s Other Operations segment reported pre-tax income of $40 million and $328 million in the third quarter and first nine months of 2019, compared to pre-tax income (loss) of $53 million and $(9) million in the third quarter and first nine months of 2018. Pre-tax income in the first nine months of 2019 included $182 million of realized and unrealized gains from the MediaAlpha transaction. Excluding the MediaAlpha transaction, net realized and unrealized investment gains were $57 million and $200 million in the third quarter and first nine months of 2019, compared to net realized and unrealized investment gains of $70 million and $37 million in the third quarter and first nine months of 2018.
Investments
The total return on invested assets was 3.1% in both the third quarter of 2019 and 2018. The total return on invested assets was 15.9% in the first nine months of 2019, which included $115 million of unrealized investment gains from the MediaAlpha transaction. Excluding the MediaAlpha transaction, the total return on invested assets was 11.3% in the first nine months of 2019 compared to 2.8% in the first nine months of 2018.
Mark Plourde, Managing Director of White Mountains Advisors, said, “The total portfolio was up 3.1% in the third quarter. This result includes the impact of a $35 million increase in the fair value of our investment in MediaAlpha, driven by continued topline and bottom line growth since the MediaAlpha transaction in February. Common stocks returned 1.0%, behind the S&P 500 return of 1.7% due to relative underperformance in our international positions. Fixed income returned 1.3%, essentially in-line with the BBIA Index return of 1.4%.”
Additional Information
White Mountains is a Bermuda-domiciled financial services holding company traded on the New York Stock Exchange and the Bermuda Stock Exchange under the symbol WTM. Additional financial information and other items of interest are available at the company’s website located at www.whitemountains.com. White Mountains expects to file its Form 10-Q today with the Securities and Exchange Commission and urges shareholders to refer to that document for more complete information concerning its financial results.
3
WHITE MOUNTAINS INSURANCE GROUP, LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(millions)
(Unaudited)
| September 30, 2019 | December 31, 2018 | September 30, 2018 | ||||||||||||||||||
| Assets | ||||||||||||||||||||
| Financial Guarantee (HG Global/BAM) | ||||||||||||||||||||
| Fixed maturity investments | $ | 794.5 | $ | 701.4 | $ | 677.7 | ||||||||||||||
| Short-term investments | 57.1 | 66.9 | 35.9 | |||||||||||||||||
| Total investments | 851.6 | 768.3 | 713.6 | |||||||||||||||||
| Cash | 11.3 | 12.5 | 17.9 | |||||||||||||||||
| Insurance premiums receivable | 6.7 | 6.4 | 6.3 | |||||||||||||||||
| Deferred acquisition costs | 21.4 | 19.0 | 17.6 | |||||||||||||||||
| Accrued investment income | 5.5 | 4.9 | 4.8 | |||||||||||||||||
| Accounts receivable on unsettled investment sales | — | — | .2 | |||||||||||||||||
| Other assets | 16.4 | 5.1 | 5.1 | |||||||||||||||||
| Total Financial Guarantee assets | 912.9 | 816.2 | 765.5 | |||||||||||||||||
| Specialty Insurance Distribution (NSM) | ||||||||||||||||||||
| Short-term investments | — | 1.7 | .9 | |||||||||||||||||
| Cash (restricted $67.0, $50.0 and $41.2) | 105.7 | 66.2 | 60.6 | |||||||||||||||||
| Premium and commission receivable | 53.6 | 44.0 | 29.1 | |||||||||||||||||
| Goodwill and other intangible assets | 630.6 | 486.2 | 431.0 | |||||||||||||||||
| Other assets | 36.8 | 28.9 | 18.8 | |||||||||||||||||
| Total Specialty Insurance Distribution assets | 826.7 | 627.0 | 540.4 | |||||||||||||||||
| Global Asset and Wealth Management (Kudu) | ||||||||||||||||||||
| Other long-term investments | 219.3 | — | — | |||||||||||||||||
| Short-term investments | .1 | — | — | |||||||||||||||||
| Cash | 4.9 | — | — | |||||||||||||||||
| Accrued investment income | 4.7 | — | — | |||||||||||||||||
| Goodwill and other intangible assets | 9.6 | — | — | |||||||||||||||||
| Other assets | 3.7 | — | — | |||||||||||||||||
| Total Global Asset and Wealth Management assets | 242.3 | — | — | |||||||||||||||||
| Marketing Technology (MediaAlpha) | ||||||||||||||||||||
| Cash | — | 5.7 | 13.0 | |||||||||||||||||
| Goodwill and other intangible assets | — | 43.4 | 45.9 | |||||||||||||||||
| Accounts receivable from publishers and advertisers | — | 37.0 | 35.9 | |||||||||||||||||
| Other assets | — | 2.3 | 2.2 | |||||||||||||||||
| Total Marketing Technology assets | — | 88.4 | 97.0 | |||||||||||||||||
| Other Operations | ||||||||||||||||||||
| Fixed maturity investments | 371.5 | 376.1 | 354.2 | |||||||||||||||||
| Short-term investments | 215.3 | 145.6 | 276.9 | |||||||||||||||||
| Common equity securities | 629.7 | 925.6 | 1,043.5 | |||||||||||||||||
| Other long-term investments | 554.4 | 325.6 | 289.7 | |||||||||||||||||
| Total investments | 1,770.9 | 1,772.9 | 1,964.3 | |||||||||||||||||
| Cash | 27.3 | 25.9 | 20.7 | |||||||||||||||||
| Accrued investment income | 5.1 | 5.5 | 5.7 | |||||||||||||||||
| Accounts receivable on unsettled investment sales | .3 | — | 3.3 | |||||||||||||||||
| Goodwill and other intangible assets | 20.7 | 7.9 | 8.3 | |||||||||||||||||
| Other assets | 27.3 | 15.5 | 14.3 | |||||||||||||||||
| Assets held for sale | 2.8 | 3.3 | 3.3 | |||||||||||||||||
| Total Other Operations assets | 1,854.4 | 1,831.0 | 2,019.9 | |||||||||||||||||
| Total assets | $ | 3,836.3 | $ | 3,362.6 | $ | 3,422.8 | ||||||||||||||
4
WHITE MOUNTAINS INSURANCE GROUP, LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)
(millions)
(Unaudited)
| September 30, 2019 | December 31, 2018 | September 30, 2018 | ||||||||||||||||||
| Liabilities | ||||||||||||||||||||
| Financial Guarantee (HG Global/BAM) | ||||||||||||||||||||
| Unearned insurance premiums | $ | 203.5 | $ | 176.0 | $ | 156.2 | ||||||||||||||
| Accrued incentive compensation | 19.0 | 20.4 | 16.5 | |||||||||||||||||
| Accounts payable on unsettled investment purchases | 3.6 | 2.2 | 6.5 | |||||||||||||||||
| Other liabilities | 27.4 | 13.9 | 13.5 | |||||||||||||||||
| Total Financial Guarantee liabilities | 253.5 | 212.5 | 192.7 | |||||||||||||||||
| Specialty Insurance Distribution (NSM) | ||||||||||||||||||||
| Debt | 219.4 | 178.5 | 149.3 | |||||||||||||||||
| Premiums payable | 92.6 | 77.2 | 56.6 | |||||||||||||||||
| Contingent consideration earnout liabilities | 28.7 | 20.2 | 20.1 | |||||||||||||||||
| Other liabilities | 60.1 | 38.9 | 27.7 | |||||||||||||||||
| Total Specialty Insurance Distribution liabilities | 400.8 | 314.8 | 253.7 | |||||||||||||||||
| Global Asset and Wealth Management (Kudu) | ||||||||||||||||||||
| Other liabilities | 5.3 | — | — | |||||||||||||||||
| Total Global Asset and Wealth Management liabilities | 5.3 | — | — | |||||||||||||||||
| Marketing Technology (MediaAlpha) | ||||||||||||||||||||
| Debt | — | 14.2 | 15.0 | |||||||||||||||||
| Amounts due to publishers and advertisers | — | 27.0 | 37.7 | |||||||||||||||||
| Other liabilities | — | 5.7 | 3.9 | |||||||||||||||||
| Total Marketing Technology liabilities | — | 46.9 | 56.6 | |||||||||||||||||
| Other Operations | ||||||||||||||||||||
| Debt | 10.8 | — | — | |||||||||||||||||
| Accrued incentive compensation | 44.9 | 38.9 | 40.3 | |||||||||||||||||
| Accounts payable on unsettled investment purchases | — | 5.0 | 14.2 | |||||||||||||||||
| Other liabilities | 50.1 | 26.3 | 25.7 | |||||||||||||||||
| Total Other Operations liabilities | 105.8 | 70.2 | 80.2 | |||||||||||||||||
| Total liabilities | 765.4 | 644.4 | 583.2 | |||||||||||||||||
| Equity | ||||||||||||||||||||
| White Mountains's common shareholder's equity | ||||||||||||||||||||
| White Mountains’s common shares and paid-in surplus | 593.2 | 584.0 | 579.5 | |||||||||||||||||
| Retained earnings | 2,611.5 | 2,264.9 | 2,407.3 | |||||||||||||||||
| Accumulated other comprehensive loss, after tax: | ||||||||||||||||||||
| Net unrealized foreign currency translation losses and interest rate swap | (11.3) | (5.8) | (2.8) | |||||||||||||||||
| Total White Mountains’s common shareholders’ equity | 3,193.4 | 2,843.1 | 2,984.0 | |||||||||||||||||
| Non-controlling interests | (122.5) | (124.9) | (144.4) | |||||||||||||||||
| Total equity | 3,070.9 | 2,718.2 | 2,839.6 | |||||||||||||||||
| Total liabilities and equity | $ | 3,836.3 | $ | 3,362.6 | $ | 3,422.8 | ||||||||||||||
5
WHITE MOUNTAINS INSURANCE GROUP, LTD.
BOOK VALUE AND ADJUSTED BOOK VALUE PER SHARE
(Unaudited)
| September 30, 2019 | June 30, 2019 | December 31, 2018 | September 30, 2018 | ||||||||||||||||||||||||||
| Book value per share numerators (in millions): | |||||||||||||||||||||||||||||
| White Mountains’s common shareholders’ equity - GAAP book value per share numerator | $ | 3,193.4 | $ | 3,144.3 | $ | 2,843.1 | $ | 2,984.0 | |||||||||||||||||||||
Time value of money discount on expected future payments on the BAM Surplus Notes (1) | (132.8) | (135.7) | (141.2) | (146.3) | |||||||||||||||||||||||||
HG Global’s unearned premium reserve (1) | 160.4 | 147.2 | 136.9 | 120.2 | |||||||||||||||||||||||||
HG Global’s net deferred acquisition costs (1) | (42.0) | (37.9) | (34.6) | (29.4) | |||||||||||||||||||||||||
| Adjusted book value per share numerator | $ | 3,179.0 | $ | 3,117.9 | $ | 2,804.2 | $ | 2,928.5 | |||||||||||||||||||||
| Book value per share denominators (in thousands of shares): | |||||||||||||||||||||||||||||
| Common shares outstanding - GAAP book value per share denominator | 3,185.4 | 3,185.4 | 3,173.1 | 3,180.5 | |||||||||||||||||||||||||
| Unearned restricted common shares | (21.5) | (24.5) | (14.6) | (18.5) | |||||||||||||||||||||||||
| Adjusted book value per share denominator | 3,163.9 | 3,160.9 | 3,158.5 | 3,162.0 | |||||||||||||||||||||||||
| GAAP book value per share | $ | 1,002.53 | $ | 987.12 | $ | 896.00 | $ | 938.19 | |||||||||||||||||||||
| Adjusted book value per share | $ | 1,004.76 | $ | 986.39 | $ | 887.85 | $ | 926.14 | |||||||||||||||||||||
(1) Amount reflects White Mountains's preferred share ownership in HG Global of 96.9%. | |||||||||||||||||||||||||||||
| September 30, 2019 | June 30, 2019 | December 31, 2018 | September 30, 2018 | ||||||||||||||||||||||||||
| Quarter-to-date change in GAAP book value per share, including dividends: | 1.6 | % | 0.6 | % | (4.5) | % | 1.5 | % | |||||||||||||||||||||
| Quarter-to-date change in adjusted book value per share, including dividends: | 1.9 | % | 0.8 | % | (4.1) | % | 1.5 | % | |||||||||||||||||||||
| Year-to-date change in GAAP book value per share, including dividends: | 12.0 | % | 10.3 | % | (3.7) | % | 0.8 | % | |||||||||||||||||||||
| Year-to-date change in adjusted book value per share, including dividends: | 13.3 | % | 11.2 | % | (2.8) | % | 1.4 | % | |||||||||||||||||||||
| Year-to-date dividends per share | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||||||||
| September 30, 2019 | June 30, 2019 | December 31, 2018 | September 30, 2018 | ||||||||||||||||||||||||||
| Summary of goodwill and other intangible assets (in millions): | |||||||||||||||||||||||||||||
| Goodwill: | |||||||||||||||||||||||||||||
| NSM | $ | 397.0 | (1) | $ | 398.4 | (1) | $ | 354.3 | (2) | $ | 295.5 | ||||||||||||||||||
| Kudu | 7.6 | 9.8 | (3) | — | — | ||||||||||||||||||||||||
| MediaAlpha | — | — | 18.3 | 18.3 | |||||||||||||||||||||||||
| Other Operations | 20.2 | (1) | 20.4 | (1) | 7.3 | 7.6 | |||||||||||||||||||||||
| Total goodwill | 424.8 | 428.6 | 379.9 | 321.4 | |||||||||||||||||||||||||
| Other intangible assets: | |||||||||||||||||||||||||||||
| NSM | 233.6 | 238.4 | 131.9 | 135.5 | |||||||||||||||||||||||||
| Kudu | 2.0 | — | — | — | |||||||||||||||||||||||||
| MediaAlpha | — | — | 25.1 | 27.6 | |||||||||||||||||||||||||
| Other Operations | .5 | .6 | .6 | .7 | |||||||||||||||||||||||||
| Total other intangible assets | 236.1 | 239.0 | 157.6 | 163.8 | |||||||||||||||||||||||||
| Total goodwill and other intangible assets | 660.9 | 667.6 | 537.5 | 485.2 | |||||||||||||||||||||||||
| Goodwill and other intangible assets attributed to non-controlling interests | (25.0) | (25.4) | (40.6) | (40.6) | |||||||||||||||||||||||||
| Goodwill and other intangible assets included in White Mountains's common shareholders' equity | $ | 635.9 | $ | 642.2 | $ | 496.9 | $ | 444.6 | |||||||||||||||||||||
(1) The relative fair values of goodwill and of other intangible assets recognized in connection with the acquisition of Embrace and Other Operations had not yet been finalized at September 30, 2019 and June 30, 2019.
(2) The relative fair values of goodwill and of other intangible assets recognized in connection with the acquisition of KBK had not yet been finalized at December 31, 2018.
(3) The relative fair values of goodwill and other intangible assets recognized in connection with the acquisition of Kudu had not yet been finalized as of June 30, 2019.
6
WHITE MOUNTAINS INSURANCE GROUP, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(millions)
(Unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||||
| Financial Guarantee (HG Global/BAM) | ||||||||||||||||||||||||||
| Earned insurance premiums | $ | 5.2 | $ | 3.3 | $ | 13.7 | $ | 9.7 | ||||||||||||||||||
| Net investment income | 5.4 | 4.8 | 16.1 | 12.5 | ||||||||||||||||||||||
| Net realized and unrealized investment gains (losses) | 7.1 | (4.1) | 30.4 | (14.4) | ||||||||||||||||||||||
| Other revenues | .3 | .2 | 1.3 | .8 | ||||||||||||||||||||||
| Total Financial Guarantee revenues | 18.0 | 4.2 | 61.5 | 8.6 | ||||||||||||||||||||||
| Specialty Insurance Distribution (NSM) | ||||||||||||||||||||||||||
| Commission revenues | 49.4 | 35.0 | 147.6 | 56.4 | ||||||||||||||||||||||
| Other revenues | 10.5 | 4.7 | 27.7 | 6.8 | ||||||||||||||||||||||
| Total Specialty Insurance Distribution revenues | 59.9 | 39.7 | 175.3 | 63.2 | ||||||||||||||||||||||
| Global Asset and Wealth Management (Kudu) | ||||||||||||||||||||||||||
| Net investment income | 4.6 | — | 8.6 | — | ||||||||||||||||||||||
| Net realized and unrealized investment gains | 2.7 | — | 3.1 | — | ||||||||||||||||||||||
| Other revenues | .2 | — | .2 | — | ||||||||||||||||||||||
| Total Global Asset and Wealth Management revenues | 7.5 | — | 11.9 | — | ||||||||||||||||||||||
| Marketing Technology (MediaAlpha) | ||||||||||||||||||||||||||
| Advertising and commission revenues | — | 74.5 | 48.8 | 216.4 | ||||||||||||||||||||||
| Other revenues | — | — | — | 1.6 | ||||||||||||||||||||||
| Total Marketing Technology revenues | — | 74.5 | 48.8 | 218.0 | ||||||||||||||||||||||
| Other Operations | ||||||||||||||||||||||||||
| Net investment income | 8.4 | 8.6 | 30.7 | 32.4 | ||||||||||||||||||||||
| Net realized and unrealized investment gains | 57.2 | 70.2 | 199.6 | 37.3 | ||||||||||||||||||||||
| Realized gain and unrealized investment gain from the MediaAlpha transaction | — | — | 182.2 | — | ||||||||||||||||||||||
| Advertising and commission revenues | 1.9 | 1.1 | 4.5 | 3.0 | ||||||||||||||||||||||
| Other revenues | 2.6 | .4 | 3.6 | .6 | ||||||||||||||||||||||
| Total Other Operations revenues | 70.1 | 80.3 | 420.6 | 73.3 | ||||||||||||||||||||||
| Total revenues | $ | 155.5 | $ | 198.7 | $ | 718.1 | $ | 363.1 | ||||||||||||||||||
7
WHITE MOUNTAINS INSURANCE GROUP, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED)
(millions)
(Unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||||||||||||
| Expenses: | ||||||||||||||||||||||||||
| Financial Guarantee (HG Global/BAM) | ||||||||||||||||||||||||||
| Insurance acquisition expenses | $ | 1.4 | $ | 1.2 | $ | 4.1 | $ | 3.9 | ||||||||||||||||||
Other underwriting expenses | .1 | .1 | .3 | .3 | ||||||||||||||||||||||
| General and administrative expenses | 12.5 | 11.3 | 39.1 | 36.5 | ||||||||||||||||||||||
| Total Financial Guarantee expenses | 14.0 | 12.6 | 43.5 | 40.7 | ||||||||||||||||||||||
| Specialty Insurance Distribution (NSM) | ||||||||||||||||||||||||||
| General and administrative expenses | 33.3 | 23.5 | 91.4 | 35.7 | ||||||||||||||||||||||
| Broker commission expenses | 15.3 | 10.6 | 48.9 | 17.1 | ||||||||||||||||||||||
| Change in fair value of contingent consideration earnout liabilities | (2.0) | 2.6 | 5.6 | 2.6 | ||||||||||||||||||||||
| Amortization of other intangible assets | 4.4 | 5.0 | 13.5 | 5.0 | ||||||||||||||||||||||
| Interest expense | 4.4 | 3.2 | 12.2 | 4.8 | ||||||||||||||||||||||
| Total Specialty Insurance Distribution expenses | 55.4 | 44.9 | 171.6 | 65.2 | ||||||||||||||||||||||
| Global Asset and Wealth Management (Kudu) | ||||||||||||||||||||||||||
| General and administrative expenses | 4.5 | — | 6.7 | — | ||||||||||||||||||||||
| Amortization of other intangible assets | .2 | — | .2 | — | ||||||||||||||||||||||
| Total Global Asset and Wealth Management expenses | 4.7 | — | 6.9 | — | ||||||||||||||||||||||
| Marketing Technology (MediaAlpha) | ||||||||||||||||||||||||||
| Cost of sales | — | 61.8 | 40.6 | 179.1 | ||||||||||||||||||||||
| General and administrative expenses | — | 5.4 | 12.5 | 21.2 | ||||||||||||||||||||||
| Amortization of other intangible assets | — | 2.4 | 1.6 | 7.8 | ||||||||||||||||||||||
| Interest expense | — | .2 | .2 | .9 | ||||||||||||||||||||||
| Total Marketing Technology expenses | — | 69.8 | 54.9 | 209.0 | ||||||||||||||||||||||
| Other Operations | ||||||||||||||||||||||||||
| Cost of sales | 2.3 | 1.1 | 5.0 | 2.9 | ||||||||||||||||||||||
| General and administrative expenses | 27.7 | 26.0 | 87.2 | 79.0 | ||||||||||||||||||||||
| Amortization of other intangible assets | — | — | .1 | .1 | ||||||||||||||||||||||
| Interest expense | .3 | — | .3 | .3 | ||||||||||||||||||||||
| Total Other Operations expenses | 30.3 | 27.1 | 92.6 | 82.3 | ||||||||||||||||||||||
| Total expenses | 104.4 | 154.4 | 369.5 | 397.2 | ||||||||||||||||||||||
| Pre-tax income (loss) from continuing operations | 51.1 | 44.3 | 348.6 | (34.1) | ||||||||||||||||||||||
| Income tax (expense) benefit | (8.8) | 3.6 | (18.9) | .4 | ||||||||||||||||||||||
| Net income (loss) from continuing operations | 42.3 | 47.9 | 329.7 | (33.7) | ||||||||||||||||||||||
| Net gain (loss) from sale of discontinued operations, net of tax | .9 | (17.3) | 1.6 | (17.2) | ||||||||||||||||||||||
| Net income (loss) | 43.2 | 30.6 | 331.3 | (50.9) | ||||||||||||||||||||||
| Net loss attributable to non-controlling interests | 5.5 | 10.2 | 22.3 | 47.2 | ||||||||||||||||||||||
| Net income (loss) attributable to White Mountains’s common shareholders | $ | 48.7 | $ | 40.8 | $ | 353.6 | $ | (3.7) | ||||||||||||||||||
8
WHITE MOUNTAINS INSURANCE GROUP, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(millions)
(Unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||||||||||||
| Net income (loss) attributable to White Mountains’s common shareholders | $ | 48.7 | $ | 40.8 | $ | 353.6 | $ | (3.7) | ||||||||||||||||||
| Other comprehensive loss, net of tax | (2.4) | (.8) | (5.8) | (1.7) | ||||||||||||||||||||||
| Comprehensive income (loss) | 46.3 | 40.0 | 347.8 | (5.4) | ||||||||||||||||||||||
| Other comprehensive income attributable to non-controlling interests | .1 | .2 | .3 | .2 | ||||||||||||||||||||||
| Comprehensive income (loss) attributable to White Mountains’s common shareholders | $ | 46.4 | $ | 40.2 | $ | 348.1 | $ | (5.2) | ||||||||||||||||||
WHITE MOUNTAINS INSURANCE GROUP, LTD.
EARNINGS PER SHARE
(Unaudited)
| Income (loss) per share attributable to White Mountains’s common shareholders | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||||||||||||
| Basic earnings (loss) per share | ||||||||||||||||||||||||||
| Continuing operations | $ | 15.01 | $ | 18.27 | $ | 110.67 | $ | 3.90 | ||||||||||||||||||
| Discontinued operations | .28 | (5.44) | .50 | (4.98) | ||||||||||||||||||||||
| Total consolidated operations | $ | 15.29 | $ | 12.83 | $ | 111.17 | $ | (1.08) | ||||||||||||||||||
| Diluted earnings (loss) per share | ||||||||||||||||||||||||||
| Continuing operations | $ | 15.01 | $ | 18.27 | $ | 110.67 | $ | 3.90 | ||||||||||||||||||
| Discontinued operations | .28 | (5.44) | .50 | (4.98) | ||||||||||||||||||||||
| Total consolidated operations | $ | 15.29 | $ | 12.83 | $ | 111.17 | $ | (1.08) | ||||||||||||||||||
| Dividends declared per White Mountains’s common share | $ | — | $ | — | $ | 1.00 | $ | 1.00 | ||||||||||||||||||
9
WHITE MOUNTAINS INSURANCE GROUP, LTD.
QTD SEGMENT STATEMENTS OF PRE-TAX INCOME (LOSS)
(millions)
(Unaudited)
| For the Three Months Ended September 30, 2019 | HG Global/BAM | |||||||||||||||||||||||||||||||||||||
| HG Global | BAM | NSM | Kudu | Other Operations | Total | |||||||||||||||||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||||||||||||||||
| Earned insurance premiums | $ | 4.2 | $ | 1.0 | $ | — | $ | — | $ | — | $ | 5.2 | ||||||||||||||||||||||||||
| Net investment income | 1.8 | 3.6 | — | 4.6 | 8.4 | 18.4 | ||||||||||||||||||||||||||||||||
| Net investment income (loss) - BAM surplus note interest | 6.9 | (6.9) | — | — | — | — | ||||||||||||||||||||||||||||||||
| Net realized and unrealized investment gains | 2.0 | 5.1 | — | 2.7 | 57.2 | 67.0 | ||||||||||||||||||||||||||||||||
| Advertising and commission revenues | — | — | 49.4 | — | 1.9 | 51.3 | ||||||||||||||||||||||||||||||||
| Other revenues | — | .3 | 10.5 | .2 | 2.6 | 13.6 | ||||||||||||||||||||||||||||||||
| Total revenues | 14.9 | 3.1 | 59.9 | 7.5 | 70.1 | 155.5 | ||||||||||||||||||||||||||||||||
| Expenses: | ||||||||||||||||||||||||||||||||||||||
| Insurance acquisition expenses | 1.1 | .3 | — | — | — | 1.4 | ||||||||||||||||||||||||||||||||
| Other underwriting expenses | — | .1 | — | — | — | .1 | ||||||||||||||||||||||||||||||||
| Cost of sales | — | — | — | — | 2.3 | 2.3 | ||||||||||||||||||||||||||||||||
| General and administrative expenses | .3 | 12.2 | 33.3 | 4.5 | 27.7 | 78.0 | ||||||||||||||||||||||||||||||||
| Broker commission expenses | — | — | 15.3 | — | — | 15.3 | ||||||||||||||||||||||||||||||||
| Change in fair value of contingent consideration earnout liabilities | — | — | (2.0) | — | — | (2.0) | ||||||||||||||||||||||||||||||||
| Amortization of other intangible assets | — | — | 4.4 | .2 | — | 4.6 | ||||||||||||||||||||||||||||||||
| Interest expense | — | — | 4.4 | — | .3 | 4.7 | ||||||||||||||||||||||||||||||||
| Total expenses | 1.4 | 12.6 | 55.4 | 4.7 | 30.3 | 104.4 | ||||||||||||||||||||||||||||||||
| Pre-tax income (loss) | $ | 13.5 | $ | (9.5) | $ | 4.5 | $ | 2.8 | $ | 39.8 | $ | 51.1 | ||||||||||||||||||||||||||
10
WHITE MOUNTAINS INSURANCE GROUP, LTD.
QTD SEGMENT STATEMENTS OF PRE-TAX INCOME (LOSS) (CONTINUED)
(millions)
(Unaudited)
| For the Three Months Ended September 30, 2018 | HG Global/BAM | |||||||||||||||||||||||||||||||||||||
| HG Global | BAM | NSM | MediaAlpha | Other Operations | Total | |||||||||||||||||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||||||||||||||||
| Earned insurance premiums | $ | 2.6 | $ | .7 | $ | — | $ | — | $ | — | $ | 3.3 | ||||||||||||||||||||||||||
| Net investment income | 1.6 | 3.2 | — | — | 8.6 | 13.4 | ||||||||||||||||||||||||||||||||
| Net investment income (loss) - BAM surplus note interest | 5.7 | (5.7) | — | — | — | — | ||||||||||||||||||||||||||||||||
| Net realized and unrealized investment (losses) gains | (.7) | (3.4) | — | — | 70.2 | 66.1 | ||||||||||||||||||||||||||||||||
| Advertising and commission revenues | — | — | 35.0 | 74.5 | 1.1 | 110.6 | ||||||||||||||||||||||||||||||||
| Other revenues | — | .2 | 4.7 | — | .4 | 5.3 | ||||||||||||||||||||||||||||||||
| Total revenues | 9.2 | (5.0) | 39.7 | 74.5 | 80.3 | 198.7 | ||||||||||||||||||||||||||||||||
| Expenses: | ||||||||||||||||||||||||||||||||||||||
| Insurance acquisition expenses | .6 | .6 | — | — | — | 1.2 | ||||||||||||||||||||||||||||||||
| Other underwriting expenses | — | .1 | — | — | — | .1 | ||||||||||||||||||||||||||||||||
| Cost of sales | — | — | — | 61.8 | 1.1 | 62.9 | ||||||||||||||||||||||||||||||||
| General and administrative expenses | .2 | 11.1 | 23.5 | 5.4 | 26.0 | 66.2 | ||||||||||||||||||||||||||||||||
| Broker commission expenses | — | — | 10.6 | — | — | 10.6 | ||||||||||||||||||||||||||||||||
| Change in fair value of contingent consideration earnout liabilities | — | — | 2.6 | — | — | 2.6 | ||||||||||||||||||||||||||||||||
| Amortization of other intangible assets | — | — | 5.0 | 2.4 | — | 7.4 | ||||||||||||||||||||||||||||||||
| Interest expense | — | — | 3.2 | .2 | — | 3.4 | ||||||||||||||||||||||||||||||||
| Total expenses | .8 | 11.8 | 44.9 | 69.8 | 27.1 | 154.4 | ||||||||||||||||||||||||||||||||
| Pre-tax income (loss) | $ | 8.4 | $ | (16.8) | $ | (5.2) | $ | 4.7 | $ | 53.2 | $ | 44.3 | ||||||||||||||||||||||||||
11
WHITE MOUNTAINS INSURANCE GROUP, LTD.
YTD SEGMENT STATEMENTS OF PRE-TAX INCOME (LOSS)
(millions)
(Unaudited)
| For the Nine Months Ended September 30, 2019 | HG Global/BAM | |||||||||||||||||||||||||||||||||||||||||||
| HG Global | BAM | NSM | Kudu (1) | MediaAlpha (2) | Other Operations | Total | ||||||||||||||||||||||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||||||||||||||||||||||
| Earned insurance premiums | $ | 11.0 | $ | 2.7 | $ | — | $ | — | $ | — | $ | — | $ | 13.7 | ||||||||||||||||||||||||||||||
| Net investment income | 5.6 | 10.5 | — | 8.6 | — | 30.7 | 55.4 | |||||||||||||||||||||||||||||||||||||
| Net investment income (loss) - BAM surplus note interest | 20.6 | (20.6) | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Net realized and unrealized investment gains | 11.1 | 19.3 | — | 3.1 | — | 199.6 | 233.1 | |||||||||||||||||||||||||||||||||||||
| Realized and unrealized gains from MediaAlpha transaction | — | — | — | — | — | 182.2 | 182.2 | |||||||||||||||||||||||||||||||||||||
| Advertising and commission revenues | — | — | 147.6 | — | 48.8 | 4.5 | 200.9 | |||||||||||||||||||||||||||||||||||||
| Other revenue | — | 1.3 | 27.7 | .2 | — | 3.6 | 32.8 | |||||||||||||||||||||||||||||||||||||
| Total revenues | 48.3 | 13.2 | 175.3 | 11.9 | 48.8 | 420.6 | 718.1 | |||||||||||||||||||||||||||||||||||||
| Expenses: | ||||||||||||||||||||||||||||||||||||||||||||
| Insurance acquisition expenses | 2.8 | 1.3 | — | — | — | — | 4.1 | |||||||||||||||||||||||||||||||||||||
| Other underwriting expenses | — | .3 | — | — | — | — | .3 | |||||||||||||||||||||||||||||||||||||
| Cost of sales | — | — | — | — | 40.6 | 5.0 | 45.6 | |||||||||||||||||||||||||||||||||||||
| General and administrative expenses | 1.2 | 37.9 | 91.4 | 6.7 | 5.7 | 87.2 | 230.1 | |||||||||||||||||||||||||||||||||||||
| General and administrative expenses - MediaAlpha transaction related costs | — | — | — | — | 6.8 | — | 6.8 | |||||||||||||||||||||||||||||||||||||
| Broker commission expenses | — | — | 48.9 | — | — | — | 48.9 | |||||||||||||||||||||||||||||||||||||
| Change in fair value of contingent consideration earnout liabilities | — | — | 5.6 | — | — | — | 5.6 | |||||||||||||||||||||||||||||||||||||
| Amortization of other intangible assets | — | — | 13.5 | .2 | 1.6 | .1 | 15.4 | |||||||||||||||||||||||||||||||||||||
| Interest expense | — | — | 12.2 | — | .2 | .3 | 12.7 | |||||||||||||||||||||||||||||||||||||
| Total expenses | 4.0 | 39.5 | 171.6 | 6.9 | 54.9 | 92.6 | 369.5 | |||||||||||||||||||||||||||||||||||||
| Pre-tax income (loss) | $ | 44.3 | $ | (26.3) | $ | 3.7 | $ | 5.0 | $ | (6.1) | ||||||||||||||||||||||||||||||||||