Bermuda (State or other jurisdiction of incorporation or organization) | 1-8993 (Commission file number) | 94-2708455 (I.R.S. Employer Identification No.) |
• | 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. |
• | In the second quarter of 2017, MediaAlpha became a reportable segment, and White Mountains has included MediaAlpha’s EBITDA calculation as a non-GAAP financial measure. EBITDA is defined as net income (loss) excluding interest expense on debt, income tax benefit (expense), depreciation and amortization. White Mountains believes that this non-GAAP financial measure is useful to management and investors in analyzing MediaAlpha’s economic performance without the effects of interest rates, levels of debt, effective tax rates, or depreciation and amortization primarily resulting from purchase accounting. In addition, White Mountains believes that investors use EBITDA as a supplemental measurement to evaluate the overall operating performance of companies within the same industry. A schedule is included on page 11 of Exhibit 99.1 to this Form 8-K that reconciles MediaAlpha’s GAAP net loss to EBITDA. |
WHITE MOUNTAINS INSURANCE GROUP, LTD. | ||||
DATED: February 7, 2018 | By: | /s/ J. BRIAN PALMER J. Brian Palmer Managing Director and Chief Accounting Officer |
CONTACT: Todd Pozefsky (203) 458-5807 |
December 31, 2017 | September 30, 2017 | December 31, 2016 | ||||||||||
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 |
December 31, 2017 | September 30, 2017 | December 31, 2016 | ||||||||||
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 assets and obligations | — | — | (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 |
December 31, 2017 | September 30, 2017 | December 31, 2016 | September 30, 2016 | |||||||||||||
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 for $742 per common share. All non-qualified options were exercised prior to their expiration date of January 20, 2017. | ||||||||||||||||
(2) Amount reflects White Mountains's preferred share ownership in HG Global of 96.9%. | ||||||||||||||||
December 31, 2017 | September 30, 2017 | December 31, 2016 | September 30, 2016 | |||||||||||||
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, 2017 | September 30, 2017 | December 31, 2016 | September 30, 2016 | |||||||||||||
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 common shareholders' equity | $ | 41.0 | $ | 24.1 | $ | 29.3 | $ | 36.2 |
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 |
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 | ) |
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 | ) |
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 surplus contributions | $ | 32.9 | $ | 23.5 | $ | 100.6 | $ | 76.6 | ||||||||
Total pricing (1) | 99 bps | 84 bps | 99 bps | 68 bps |
As of December 31, 2017 | 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 December 31, 2017 | As of December 31, 2016 | |||||||
Unearned premiums | $ | 107.2 | $ | 60.7 | ||||
Deferred acquisition costs | $ | 25.1 | $ | 11.0 |
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 |
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 |
• | 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. |
• | In the second quarter of 2017, MediaAlpha became a reportable segment, and White Mountains has included MediaAlpha’s EBITDA calculation as a non-GAAP financial measure. EBITDA is defined as net income (loss) excluding interest expense on debt, income tax benefit (expense), depreciation and amortization. White Mountains believes that this non-GAAP financial measure is useful to management and investors in analyzing MediaAlpha’s economic performance without the effects of interest rates, levels of debt, effective tax rates, or depreciation and amortization primarily resulting from purchase accounting. In addition, White Mountains believes that investors use EBITDA as a supplemental measurement to evaluate the overall operating performance of companies within the same industry. See page 11 for the reconciliation of MediaAlpha’s GAAP net loss to EBITDA. |
• | change 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, 2016 filed February 27, 2017; |
• | claims arising from catastrophic events, such as hurricanes, earthquakes, floods, fires, terrorist attacks or severe winter weather; |
• | the continued availability of capital and financing; |
• | general economic, market or business conditions; |
• | business opportunities (or lack thereof) that may be presented to it and pursued; |
• | competitive forces, including the conduct of other property and casualty insurers and reinsurers; |
• | 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; |
• | recorded loss reserves subsequently proving to have been inadequate; |
• | actions taken by ratings agencies from time to time, such as financial strength or credit ratings downgrades or placing ratings on negative watch; and |
• | other factors, most of which are beyond White Mountains’s control. |