White Mountains Reports Fourth Quarter Results
Manning Rountree, CEO, commented, "ABVPS grew 1% for the quarter and 16% for the year. Satisfying results. BAM finished the year with strong volume and good pricing in the 4th quarter. Uncertainty over tax reform pulled forward issuance volume into the quarter, and we expect a slower start to 2018 for BAM as a result. In December, BAM made its first cash payment of principal and interest on its surplus notes. MediaAlpha took a big step forward in the quarter, with robust organic growth and a nice tuck-in acquisition. The investment portfolio returned 1.4% in the quarter, a good result and the primary driver of ABVPS growth. Tax reform had no impact on our ABVPS. For the year, we returned
Comprehensive income attributable to common shareholders was
HG Global/BAM
BAM insured municipal bonds with par value of
Seán McCarthy, CEO of BAM, said, "BAM had a strong quarter to close out a solid year. Claims-paying resources grew in every quarter of 2017, driven by increases in total premiums, improvements in risk-adjusted pricing, and larger average transaction size. Volatile market conditions in the fourth quarter highlighted the value of our guaranty to a wide range of retail and institutional investors. During the quarter, BAM paid
HG Global reported pre-tax income of
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.
MediaAlpha
MediaAlpha reported pre-tax income of
MediaAlpha's earnings before interest, taxes, depreciation and amortization ("EBITDA") was
On
Other Operations
White Mountains's Other Operations segment reported pre-tax income of
On
On
Share Repurchases
For the year ended
Investment Activities
The GAAP total return on invested assets was 1.4% and 5.6% for the fourth quarter and year ended
Additional Information
Beginning in the fourth quarter of 2017, White Mountains presents Financial Guarantee (HG Global/BAM), Insurance & Advertising Technology (MediaAlpha) and Other as separate industries in its balance sheet and statement of operations.
White Mountains is a
WHITE MOUNTAINS INSURANCE GROUP, LTD. |
||||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
||||||||||||
(millions) |
||||||||||||
(Unaudited) |
||||||||||||
December 31, |
September 30, |
December 31, |
||||||||||
Assets |
||||||||||||
Financial Guarantee (HG Global/BAM) |
||||||||||||
Fixed maturity investments |
$ |
623.6 |
$ |
631.4 |
$ |
585.2 |
||||||
Short-term investments |
69.8 |
75.8 |
44.5 |
|||||||||
Total investments |
693.4 |
707.2 |
629.7 |
|||||||||
Cash |
25.6 |
19.2 |
27.0 |
|||||||||
Insurance premiums receivable |
4.5 |
4.5 |
1.6 |
|||||||||
Deferred acquisition costs |
14.8 |
14.1 |
10.6 |
|||||||||
Accrued investment income |
3.4 |
3.3 |
2.9 |
|||||||||
Accounts receivable on unsettled investment sales |
.1 |
12.5 |
— |
|||||||||
Other assets |
5.6 |
5.0 |
5.8 |
|||||||||
Total Financial Guarantee assets
|
747.4 |
765.8 |
677.6 |
|||||||||
Insurance & Advertising Technology (MediaAlpha) |
||||||||||||
Cash |
9.1 |
5.3 |
1.7 |
|||||||||
Goodwill and other intangible assets |
53.7 |
29.3 |
36.6 |
|||||||||
Accounts receivable from publishers and advertisers |
32.4 |
21.6 |
18.4 |
|||||||||
Other assets |
1.3 |
.9 |
.9 |
|||||||||
Total Insurance & Advertising Technology assets |
96.5 |
57.1 |
57.6 |
|||||||||
Other |
||||||||||||
Fixed maturity investments |
1,506.1 |
858.6 |
1,495.9 |
|||||||||
Short-term investments |
106.3 |
710.7 |
130.4 |
|||||||||
Common equity securities |
866.1 |
774.4 |
285.6 |
|||||||||
Other long-term investments |
208.8 |
229.6 |
172.8 |
|||||||||
Total investments |
2,687.3 |
2,573.3 |
2,084.7 |
|||||||||
Cash |
62.4 |
24.1 |
51.5 |
|||||||||
Accrued investment income |
13.9 |
12.1 |
11.9 |
|||||||||
Accounts receivable on unsettled investment sales |
20.9 |
177.6 |
4.8 |
|||||||||
Goodwill and other intangible assets |
8.4 |
8.5 |
8.6 |
|||||||||
Other assets |
19.1 |
11.7 |
17.1 |
|||||||||
Assets held for sale - OneBeacon |
— |
— |
3,589.4 |
|||||||||
Assets held for sale - Other |
3.3 |
6.9 |
17.0 |
|||||||||
Total Other assets |
2,815.3 |
2,814.2 |
5,785.0 |
|||||||||
Total assets |
$ |
3,659.2 |
$ |
3,637.1 |
$ |
6,520.2 |
WHITE MOUNTAINS INSURANCE GROUP, LTD. |
||||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED) |
||||||||||||
(millions) |
||||||||||||
(Unaudited) |
||||||||||||
December 31, |
September 30, |
December 31, |
||||||||||
Liabilities |
||||||||||||
Financial Guarantee (HG Global/BAM) |
||||||||||||
Unearned insurance premiums |
$ |
136.8 |
$ |
118.5 |
$ |
82.9 |
||||||
Accrued incentive compensation |
18.2 |
14.0 |
16.6 |
|||||||||
Accounts payable on unsettled investment purchases |
.6 |
44.1 |
— |
|||||||||
Other liabilities |
11.4 |
10.8 |
9.4 |
|||||||||
Total Financial Guarantee liabilities |
167.0 |
187.4 |
108.9 |
|||||||||
Insurance & Advertising Technology (MediaAlpha) |
||||||||||||
Debt |
23.8 |
9.4 |
12.7 |
|||||||||
Amounts due to publishers and advertisers |
31.6 |
21.4 |
13.0 |
|||||||||
Accrued incentive compensation |
2.0 |
1.0 |
— |
|||||||||
Other liabilities |
2.4 |
1.5 |
2.6 |
|||||||||
Total Insurance & Advertising Technology liabilities |
59.8 |
33.3 |
28.3 |
|||||||||
Other |
||||||||||||
Accrued incentive compensation |
60.6 |
61.9 |
79.1 |
|||||||||
Accounts payable on unsettled investment purchases |
— |
5.6 |
— |
|||||||||
Other liabilities |
11.0 |
11.7 |
18.6 |
|||||||||
Liabilities held for sale - OneBeacon |
— |
— |
2,564.2 |
|||||||||
Liabilities held for sale - Other |
— |
— |
5.1 |
|||||||||
Total Other liabilities |
71.6 |
79.2 |
2,667.0 |
|||||||||
Total liabilities |
298.4 |
299.9 |
2,804.2 |
|||||||||
Equity |
||||||||||||
White Mountains's common shareholder's equity |
||||||||||||
White Mountains's common shares and paid-in surplus |
670.6 |
669.3 |
810.7 |
|||||||||
Retained earnings |
2,823.2 |
2,800.8 |
2,776.6 |
|||||||||
Accumulated other comprehensive loss, after tax: |
||||||||||||
Net unrealized foreign currency translation losses |
(1.3) |
(1.3) |
(1.4) |
|||||||||
Accumulated other comprehensive loss from net change in benefit plan |
— |
— |
(3.2) |
|||||||||
Total White Mountains's common shareholders' equity |
3,492.5 |
3,468.8 |
3,582.7 |
|||||||||
Non-controlling interests |
(131.7) |
(131.6) |
133.3 |
|||||||||
Total equity |
3,360.8 |
3,337.2 |
3,716.0 |
|||||||||
Total liabilities and equity |
$ |
3,659.2 |
$ |
3,637.1 |
$ |
6,520.2 |
WHITE MOUNTAINS INSURANCE GROUP, LTD. |
||||||||||||||||
BOOK VALUE AND ADJUSTED BOOK VALUE PER SHARE |
||||||||||||||||
(Unaudited) |
||||||||||||||||
December 31, |
September 30, |
December 31, |
September 30, |
|||||||||||||
Book value per share numerators (in millions): |
||||||||||||||||
White Mountains's common shareholders' equity - GAAP book value per share numerator |
$ |
3,492.5 |
$ |
3,468.8 |
$ |
3,582.7 |
$ |
3,637.0 |
||||||||
Future proceeds from options (1) |
— |
— |
29.7 |
89.0 |
||||||||||||
Time-value of money discount on expected future payments on the BAM Surplus Notes (2) |
(157.0) |
(161.8) |
N/A |
N/A |
||||||||||||
HG Global's unearned premium reserve (2) |
103.9 |
88.4 |
N/A |
N/A |
||||||||||||
HG Global's net deferred acquisition costs (2) |
(24.3) |
(19.6) |
N/A |
N/A |
||||||||||||
Adjusted book value per share numerator |
$ |
3,415.1 |
$ |
3,375.8 |
$ |
3,612.4 |
$ |
3,726.0 |
||||||||
Book value per share denominators (in thousands of shares): |
||||||||||||||||
Common shares outstanding - GAAP book value per share denominator |
3,750.2 |
3,750.0 |
4,563.8 |
4,578.7 |
||||||||||||
Unearned restricted common shares |
(16.8) |
(22.7) |
(25.9) |
(31.8) |
||||||||||||
Options assumed issued (1) |
— |
— |
40.0 |
120.0 |
||||||||||||
Adjusted book value per share denominator |
3,733.4 |
3,727.3 |
4,577.9 |
4,666.9 |
||||||||||||
GAAP book value per share |
$ |
931.30 |
$ |
925.04 |
$ |
785.01 |
$ |
794.33 |
||||||||
Adjusted book value per share |
$ |
914.75 |
$ |
905.72 |
$ |
789.08 |
$ |
798.40 |
||||||||
(1) Adjusted book value per share at December 31, 2016 and September 30, 2016 includes the impact of non-qualified stock options that were exercisable |
||||||||||||||||
(2) Amount reflects White Mountains's preferred share ownership in HG Global of 96.9%. |
||||||||||||||||
December 31, |
September 30, |
December 31, |
September 30, |
|||||||||||||
Quarter-to-date change in GAAP book value per share, including dividends: |
0.7 |
% |
16.9 |
% |
(1.2)% |
2.1 |
% |
|||||||||
Quarter-to-date change in adjusted book value per share, including dividends: |
1.0 |
% |
17.1 |
% |
(1.2)% |
2.1 |
% |
|||||||||
Year-to-date change in GAAP book value per share, including dividends: |
18.8 |
% |
18.0 |
% |
13.2 |
% |
14.6 |
% |
||||||||
Year-to-date change in adjusted book value per share, including dividends: |
16.1 |
% |
14.9 |
% |
13.3 |
% |
14.7 |
% |
||||||||
Year-to-date dividends per share |
$ |
1.00 |
$ |
1.00 |
$ |
1.00 |
$ |
1.00 |
||||||||
December 31, |
September 30, |
December 31, |
September 30, |
|||||||||||||
Summary of goodwill and other intangible assets (in millions): |
||||||||||||||||
Goodwill: |
||||||||||||||||
MediaAlpha |
$ |
18.3 |
$ |
18.3 |
$ |
18.3 |
$ |
18.3 |
||||||||
Buzzmove |
7.6 |
7.6 |
7.6 |
7.6 |
||||||||||||
Total goodwill |
25.9 |
25.9 |
25.9 |
25.9 |
||||||||||||
Other intangible assets: |
||||||||||||||||
MediaAlpha |
35.4 |
11.0 |
18.3 |
20.7 |
||||||||||||
Buzzmove |
.8 |
.9 |
1.0 |
1.1 |
||||||||||||
Total other intangible assets |
36.2 |
11.9 |
19.3 |
21.8 |
||||||||||||
Total goodwill and other intangible assets |
62.1 |
37.8 |
45.2 |
47.7 |
||||||||||||
Goodwill and other intangible assets held for sale |
— |
— |
1.2 |
6.7 |
||||||||||||
Goodwill and other intangible assets attributed to non-controlling interests |
(21.1) |
(13.7) |
(17.1) |
(18.2) |
||||||||||||
Goodwill and other intangible assets included in White Mountains's |
$ |
41.0 |
$ |
24.1 |
$ |
29.3 |
$ |
36.2 |
WHITE MOUNTAINS INSURANCE GROUP, LTD. |
||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME |
||||||||||||||||
(millions) |
||||||||||||||||
(Unaudited) |
||||||||||||||||
Three Months Ended |
Twelve Months Ended |
|||||||||||||||
December 31, |
December 31, |
|||||||||||||||
2017 |
2016 |
2017 |
2016 |
|||||||||||||
Revenues: |
||||||||||||||||
Financial Guarantee (HG Global/BAM) |
||||||||||||||||
Earned insurance premiums |
$ |
2.8 |
$ |
1.8 |
$ |
9.4 |
$ |
5.9 |
||||||||
Net investment income |
3.4 |
2.3 |
12.3 |
9.0 |
||||||||||||
Net realized and unrealized (losses) gains |
(2.6) |
(8.1) |
.6 |
.7 |
||||||||||||
Other revenues |
.2 |
.3 |
1.0 |
1.1 |
||||||||||||
Total Financial Guarantee revenues |
3.8 |
(3.7) |
23.3 |
16.7 |
||||||||||||
Insurance & Advertising Technology (MediaAlpha) |
||||||||||||||||
Advertising & commission revenues |
62.0 |
28.1 |
163.2 |
116.5 |
||||||||||||
Total Insurance & Advertising Technology revenues |
62.0 |
28.1 |
163.2 |
116.5 |
||||||||||||
Other |
||||||||||||||||
Earned insurance premiums |
— |
1.4 |
1.0 |
7.5 |
||||||||||||
Net investment income |
12.9 |
11.6 |
43.7 |
23.1 |
||||||||||||
Net realized and unrealized gains (losses) |
33.4 |
(46.5) |
132.7 |
(28.1) |
||||||||||||
Advertising & commission revenues |
1.1 |
.6 |
3.8 |
1.8 |
||||||||||||
Other revenues |
.8 |
3.0 |
6.1 |
20.2 |
||||||||||||
Total Other revenues |
48.2 |
(29.9) |
187.3 |
24.5 |
||||||||||||
Total revenues |
114.0 |
(5.5) |
373.8 |
157.7 |
||||||||||||
Expenses: |
||||||||||||||||
Financial Guarantee (HG Global/BAM) |
||||||||||||||||
Insurance acquisition expenses |
1.0 |
.9 |
4.0 |
3.4 |
||||||||||||
Other underwriting expenses |
.1 |
.1 |
.4 |
.4 |
||||||||||||
General and administrative expenses |
11.4 |
10.1 |
42.9 |
39.6 |
||||||||||||
Total Financial Guarantee expenses |
12.5 |
11.1 |
47.3 |
43.4 |
||||||||||||
Insurance & Advertising Technology (MediaAlpha) |
||||||||||||||||
Cost of sales |
49.9 |
23.8 |
135.9 |
97.8 |
||||||||||||
General and administrative expenses |
5.5 |
3.1 |
16.2 |
11.8 |
||||||||||||
Amortization of other intangible assets |
3.3 |
2.5 |
10.5 |
10.1 |
||||||||||||
Interest expense |
.4 |
.2 |
1.0 |
.9 |
||||||||||||
Total Insurance & Advertising Technology expenses |
59.1 |
29.6 |
163.6 |
120.6 |
||||||||||||
Other |
||||||||||||||||
Loss and loss adjustment expenses |
— |
1.2 |
1.1 |
8.0 |
||||||||||||
Insurance acquisition expenses |
— |
.3 |
.1 |
2.2 |
||||||||||||
Cost of sales |
.8 |
1.3 |
3.5 |
4.2 |
||||||||||||
General and administrative expenses |
36.2 |
25.2 |
148.9 |
124.1 |
||||||||||||
Amortization of other intangible assets |
.1 |
.1 |
.2 |
.4 |
||||||||||||
Interest expense |
.1 |
.2 |
1.3 |
2.1 |
||||||||||||
Total Other expenses |
37.2 |
28.3 |
155.1 |
141.0 |
||||||||||||
Total expenses |
108.8 |
69.0 |
366.0 |
305.0 |
||||||||||||
Pre-tax income (loss) from continuing operations |
5.2 |
(74.5) |
7.8 |
(147.3) |
||||||||||||
Income tax benefit |
2.5 |
10.2 |
7.8 |
32.9 |
||||||||||||
Net income (loss) from continuing operations |
7.7 |
(64.3) |
15.6 |
(114.4) |
||||||||||||
Gain from sale of OneBeacon |
— |
— |
554.5 |
— |
||||||||||||
Gain from sale of other discontinued operations, net of tax |
4.3 |
.6 |
2.5 |
415.1 |
||||||||||||
Net income from discontinued operations, net of tax |
— |
7.4 |
20.5 |
108.3 |
||||||||||||
Net income (loss) |
12.0 |
(56.3) |
593.1 |
409.0 |
||||||||||||
Net loss (income) attributable to non-controlling interests |
10.5 |
17.4 |
34.1 |
(7.2) |
||||||||||||
Net income (loss) attributable to White Mountains's common shareholders |
22.5 |
(38.9) |
627.2 |
401.8 |
||||||||||||
Other comprehensive income (loss), net of tax |
.1 |
(.3) |
.3 |
(.7) |
||||||||||||
Comprehensive income from discontinued operations, net of tax |
— |
.5 |
3.2 |
146.3 |
||||||||||||
Comprehensive income (loss) |
22.6 |
(38.7) |
630.7 |
547.4 |
||||||||||||
Other comprehensive income attributable to non-controlling interests |
(.1) |
(.4) |
(.2) |
(.3) |
||||||||||||
Comprehensive income (loss) attributable to White Mountains's common shareholders |
$ |
22.5 |
$ |
(39.1) |
$ |
630.5 |
$ |
547.1 |
WHITE MOUNTAINS INSURANCE GROUP, LTD. |
||||||||||||||||||||
QTD SEGMENT STATEMENTS OF PRE-TAX INCOME (LOSS) |
||||||||||||||||||||
(millions) |
||||||||||||||||||||
(Unaudited) |
||||||||||||||||||||
For the Three Months Ended December 31, 2017 |
HG Global/BAM |
|||||||||||||||||||
HG Global |
BAM |
MediaAlpha |
Other |
Total |
||||||||||||||||
Revenues: |
||||||||||||||||||||
Earned insurance premiums |
$ |
2.1 |
$ |
.7 |
$ |
— |
$ |
— |
$ |
2.8 |
||||||||||
Net investment income |
.9 |
2.5 |
— |
12.9 |
16.3 |
|||||||||||||||
Net investment income (loss) - BAM surplus note interest |
4.7 |
(4.7) |
— |
— |
— |
|||||||||||||||
Net realized and unrealized investment (losses) gains |
(1.6) |
(1.0) |
— |
33.4 |
30.8 |
|||||||||||||||
Advertising and commission revenues |
— |
— |
62.0 |
1.1 |
63.1 |
|||||||||||||||
Other revenue |
— |
.2 |
— |
.8 |
1.0 |
|||||||||||||||
Total revenues |
6.1 |
(2.3) |
62.0 |
48.2 |
114.0 |
|||||||||||||||
Expenses: |
||||||||||||||||||||
Insurance acquisition expenses |
.5 |
.5 |
— |
— |
1.0 |
|||||||||||||||
Other underwriting expenses |
— |
.1 |
— |
— |
.1 |
|||||||||||||||
Cost of sales |
— |
— |
49.9 |
.8 |
50.7 |
|||||||||||||||
General and administrative expenses |
.2 |
11.2 |
5.5 |
36.2 |
53.1 |
|||||||||||||||
Amortization of other intangible assets |
— |
— |
3.3 |
.1 |
3.4 |
|||||||||||||||
Interest expense |
— |
— |
.4 |
.1 |
.5 |
|||||||||||||||
Total expenses |
.7 |
11.8 |
59.1 |
37.2 |
108.8 |
|||||||||||||||
Pre-tax income (loss) |
$ |
5.4 |
$ |
(14.1) |
$ |
2.9 |
$ |
11.0 |
$ |
5.2 |
||||||||||
For the Three Months Ended December 31, 2016 |
HG Global/BAM |
|||||||||||||||||||
HG Global |
BAM |
MediaAlpha |
Other |
Total |
||||||||||||||||
Revenues: |
||||||||||||||||||||
Earned insurance premiums |
$ |
1.3 |
$ |
.5 |
$ |
— |
$ |
1.4 |
$ |
3.2 |
||||||||||
Net investment income |
.6 |
1.7 |
— |
11.6 |
13.9 |
|||||||||||||||
Net investment income (loss) - BAM surplus note interest |
4.4 |
(4.4) |
— |
— |
— |
|||||||||||||||
Net realized and unrealized investment losses |
(2.2) |
(5.9) |
— |
(46.5) |
(54.6) |
|||||||||||||||
Advertising and commission revenues |
— |
— |
28.1 |
.6 |
28.7 |
|||||||||||||||
Other revenue |
— |
.3 |
— |
3.0 |
3.3 |
|||||||||||||||
Total revenues |
4.1 |
(7.8) |
28.1 |
(29.9) |
(5.5) |
|||||||||||||||
Expenses: |
||||||||||||||||||||
Loss and loss adjustment expenses |
— |
— |
— |
1.2 |
1.2 |
|||||||||||||||
Insurance acquisition expenses |
.3 |
.6 |
— |
.3 |
1.2 |
|||||||||||||||
Other underwriting expenses |
— |
.1 |
— |
— |
.1 |
|||||||||||||||
Cost of sales |
— |
— |
23.8 |
1.3 |
25.1 |
|||||||||||||||
General and administrative expenses |
— |
10.1 |
3.1 |
25.2 |
38.4 |
|||||||||||||||
Amortization of other intangible assets |
— |
— |
2.5 |
.1 |
2.6 |
|||||||||||||||
Interest expense |
— |
— |
.2 |
.2 |
.4 |
|||||||||||||||
Total expenses |
.3 |
10.8 |
29.6 |
28.3 |
69.0 |
|||||||||||||||
Pre-tax income (loss) |
$ |
3.8 |
$ |
(18.6) |
$ |
(1.5) |
$ |
(58.2) |
$ |
(74.5) |
WHITE MOUNTAINS INSURANCE GROUP, LTD. |
||||||||||||||||||||
YTD SEGMENT STATEMENTS OF PRE-TAX INCOME (LOSS) |
||||||||||||||||||||
(millions) |
||||||||||||||||||||
(Unaudited) |
||||||||||||||||||||
For the Twelve Months Ended December 31, 2017 |
HG Global/BAM |
|||||||||||||||||||
HG Global |
BAM |
MediaAlpha |
Other |
Total |
||||||||||||||||
Revenues: |
||||||||||||||||||||
Earned insurance premiums |
$ |
7.1 |
$ |
2.3 |
$ |
— |
$ |
1.0 |
$ |
10.4 |
||||||||||
Net investment income |
3.3 |
9.0 |
— |
43.7 |
56.0 |
|||||||||||||||
Net investment income (loss) - BAM surplus note interest |
19.0 |
(19.0) |
— |
— |
— |
|||||||||||||||
Net realized and unrealized investment (losses) gains |
(1.2) |
1.8 |
— |
132.7 |
133.3 |
|||||||||||||||
Advertising and commission revenues |
— |
— |
163.2 |
3.8 |
167.0 |
|||||||||||||||
Other revenue |
— |
1.0 |
— |
6.1 |
7.1 |
|||||||||||||||
Total revenues |
28.2 |
(4.9) |
163.2 |
187.3 |
373.8 |
|||||||||||||||
Expenses: |
||||||||||||||||||||
Loss and loss adjustment expenses |
— |
— |
— |
1.1 |
1.1 |
|||||||||||||||
Insurance acquisition expenses |
1.5 |
2.5 |
— |
.1 |
4.1 |
|||||||||||||||
Other underwriting expenses |
— |
.4 |
— |
— |
.4 |
|||||||||||||||
Cost of sales |
— |
— |
135.9 |
3.5 |
139.4 |
|||||||||||||||
General and administrative expenses |
1.0 |
41.9 |
16.2 |
148.9 |
208.0 |
|||||||||||||||
Amortization of other intangible assets |
— |
— |
10.5 |
.2 |
10.7 |
|||||||||||||||
Interest expense |
— |
— |
1.0 |
1.3 |
2.3 |
|||||||||||||||
Total expenses |
2.5 |
44.8 |
163.6 |
155.1 |
366.0 |
|||||||||||||||
Pre-tax income (loss) |
$ |
25.7 |
$ |
(49.7) |
$ |
(.4) |
$ |
32.2 |
$ |
7.8 |
||||||||||
For the Twelve Months Ended December 31, 2016 |
HG Global/BAM |
|||||||||||||||||||
HG Global |
BAM |
MediaAlpha |
Other |
Total |
||||||||||||||||
Revenues: |
||||||||||||||||||||
Earned insurance premiums |
$ |
4.4 |
$ |
1.5 |
$ |
— |
$ |
7.5 |
$ |
13.4 |
||||||||||
Net investment income |
2.2 |
6.8 |
— |
23.1 |
32.1 |
|||||||||||||||
Net investment income (loss) - BAM surplus note interest |
17.8 |
(17.8) |
— |
— |
— |
|||||||||||||||
Net realized and unrealized investment gains |
.1 |
.6 |
— |
(28.1) |
(27.4) |
|||||||||||||||
Advertising and commission revenues |
— |
— |
116.5 |
1.8 |
118.3 |
|||||||||||||||
Other revenue |
— |
1.1 |
— |
20.2 |
21.3 |
|||||||||||||||
Total revenues |
24.5 |
(7.8) |
116.5 |
24.5 |
157.7 |
|||||||||||||||
Expenses: |
||||||||||||||||||||
Loss and loss adjustment expenses |
— |
— |
— |
8.0 |
8.0 |
|||||||||||||||
Insurance acquisition expenses |
.9 |
2.5 |
— |
2.2 |
5.6 |
|||||||||||||||
Other underwriting expenses |
— |
.4 |
— |
— |
.4 |
|||||||||||||||
Cost of sales |
— |
— |
97.8 |
4.2 |
102.0 |
|||||||||||||||
General and administrative expenses |
1.4 |
38.2 |
11.8 |
124.1 |
175.5 |
|||||||||||||||
Amortization of other intangible assets |
— |
— |
10.1 |
.4 |
10.5 |
|||||||||||||||
Interest expense |
— |
— |
.9 |
2.1 |
3.0 |
|||||||||||||||
Total expenses |
2.3 |
41.1 |
120.6 |
141.0 |
305.0 |
|||||||||||||||
Pre-tax income (loss) |
$ |
22.2 |
$ |
(48.9) |
$ |
(4.1) |
$ |
(116.5) |
$ |
(147.3) |
WHITE MOUNTAINS INSURANCE GROUP, LTD. |
||||||||||||||||
SELECTED FINANCIAL DATA |
||||||||||||||||
(millions) |
||||||||||||||||
(Unaudited) |
||||||||||||||||
Three Months Ended December 31, |
Twelve Months Ended December 31, |
|||||||||||||||
BAM |
2017 |
2016 |
2017 |
2016 |
||||||||||||
Gross par value of primary market policies issued |
$ |
3,145.7 |
$ |
2,419.1 |
$ |
9,633.5 |
$ |
10,336.1 |
||||||||
Gross par value of secondary market policies issued |
165.6 |
393.0 |
793.2 |
967.2 |
||||||||||||
Total gross par value of market policies issued |
$ |
3,311.3 |
$ |
2,812.1 |
$ |
10,426.7 |
$ |
11,303.3 |
||||||||
Gross written premiums |
$ |
21.2 |
$ |
13.7 |
$ |
63.2 |
$ |
38.6 |
||||||||
Member surplus contributions collected |
11.7 |
9.8 |
37.4 |
38.0 |
||||||||||||
Total gross written premiums and member |
$ |
32.9 |
$ |
23.5 |
$ |
100.6 |
$ |
76.6 |
||||||||
Total pricing (1) |
99 bps |
84 bps |
99 bps |
68 bps |
||||||||||||
(1) Total pricing also includes the present value of future installment member surplus contributions not yet collected of $2.8 for the twelve |
||||||||||||||||
As of |
As of December 31, 2016 |
|||||||||||||||
Policyholders' surplus |
$ |
427.3 |
$ |
431.5 |
||||||||||||
Contingency reserve |
34.8 |
22.7 |
||||||||||||||
Qualified statutory capital |
462.1 |
454.2 |
||||||||||||||
Statutory net unearned premiums |
30.5 |
23.2 |
||||||||||||||
Present value of future installment premiums and member surplus contributions |
9.0 |
3.3 |
||||||||||||||
Collateral trusts |
206.8 |
163.0 |
||||||||||||||
Claims paying resources |
$ |
708.4 |
$ |
643.7 |
||||||||||||
Three Months Ended December 31, |
Twelve Months Ended December 31, |
|||||||||||||||
HG Global |
2017 |
2016 |
2017 |
2016 |
||||||||||||
Net written premiums |
$ |
18.2 |
$ |
9.2 |
$ |
53.6 |
$ |
27.2 |
||||||||
Earned premiums |
$ |
2.1 |
$ |
1.3 |
$ |
7.1 |
$ |
4.4 |
||||||||
As of |
As of |
|||||||||||||||
Unearned premiums |
$ |
107.2 |
$ |
60.7 |
||||||||||||
Deferred acquisition costs |
$ |
25.1 |
$ |
11.0 |
WHITE MOUNTAINS INSURANCE GROUP, LTD. |
|||||||||||||||
SELECTED FINANCIAL DATA (continued) |
|||||||||||||||
(millions) |
|||||||||||||||
(Unaudited) |
|||||||||||||||
Three Months Ended December 31, |
Twelve Months Ended December 31, |
||||||||||||||
MediaAlpha |
2017 |
2016 |
2017 |
2016 |
|||||||||||
Advertising and commission revenues |
$ |
62.0 |
$ |
28.1 |
$ |
163.2 |
$ |
116.5 |
|||||||
Cost of sales |
49.9 |
23.8 |
135.9 |
97.8 |
|||||||||||
Gross profit |
12.1 |
4.3 |
27.3 |
18.7 |
|||||||||||
General and administrative expenses |
5.5 |
3.1 |
16.2 |
11.8 |
|||||||||||
Amortization of other intangible assets |
3.3 |
2.5 |
10.5 |
10.1 |
|||||||||||
Interest expense |
.4 |
.2 |
1.0 |
.9 |
|||||||||||
GAAP pre-tax income (loss) |
2.9 |
(1.5) |
(.4) |
(4.1) |
|||||||||||
Income tax expense |
— |
— |
— |
— |
|||||||||||
GAAP net income (loss) |
2.9 |
(1.5) |
(.4) |
(4.1) |
|||||||||||
Add back: |
|||||||||||||||
Interest expense |
.4 |
.2 |
1.0 |
.9 |
|||||||||||
Income tax expense |
— |
— |
— |
— |
|||||||||||
General and administrative expenses - depreciation |
.1 |
— |
.2 |
.1 |
|||||||||||
Amortization of other intangible assets |
3.3 |
2.5 |
10.5 |
10.1 |
|||||||||||
EBITDA |
$ |
6.7 |
$ |
1.2 |
$ |
11.3 |
$ |
7.0 |
WHITE MOUNTAINS INSURANCE GROUP, LTD. |
||||||||||||||||
EARNINGS PER SHARE |
||||||||||||||||
(Unaudited) |
||||||||||||||||
Income per share attributable to White Mountains's common shareholders |
Three Months Ended December 31, |
Twelve Months Ended December 31, |
||||||||||||||
2017 |
2016 |
2017 |
2016 |
|||||||||||||
Basic income (loss) per share |
||||||||||||||||
Continuing operations |
$ |
4.85 |
$ |
(10.27) |
$ |
11.56 |
$ |
(24.26) |
||||||||
Discontinued operations |
1.15 |
1.75 |
134.50 |
104.37 |
||||||||||||
Total consolidated operations |
$ |
6.00 |
$ |
(8.52) |
$ |
146.06 |
$ |
80.11 |
||||||||
Diluted income (loss) per share |
||||||||||||||||
Continuing operations |
$ |
4.85 |
$ |
(10.27) |
$ |
11.56 |
$ |
(24.26) |
||||||||
Discontinued operations |
1.15 |
1.75 |
134.50 |
104.32 |
||||||||||||
Total consolidated operations |
$ |
6.00 |
$ |
(8.52) |
$ |
146.06 |
$ |
80.06 |
||||||||
Dividends declared per White Mountains's common share |
$ |
— |
$ |
— |
$ |
1.00 |
$ |
1.00 |
Regulation G
This earnings release includes two non-GAAP financial measures that have been reconciled to their most comparable GAAP financial measures.
- Adjusted book value per share is a non-GAAP financial measure which is derived by adjusting (i) the GAAP book value per share numerator and (ii) the common shares outstanding denominator, as described below.
The GAAP book value per share numerator is adjusted (i) to include a discount for the time value of money arising from the expected timing of cash payments of principal and interest on the BAM surplus notes and (ii) to add back the unearned premium reserve, net of deferred acquisition costs, at HG Global.
Under GAAP, White Mountains is required to carry the BAM surplus notes, including accrued interest, at nominal value with no consideration for time value of money. Based on a debt service model that forecasts operating results for BAM through maturity of the surplus notes, the present va