Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

White Mountains has recognized goodwill and other identifiable intangible assets at the acquisition date fair values in connection with its purchases of subsidiaries. The following table shows the economic lives, acquisition date values, accumulated amortization and net carrying values for other intangible assets and goodwill, for each company acquired:



Millions	Weighted Average Economic life (in years)	December 31, 2014						December 31, 2013
		Acquisition date fair value		Accumulated amortization		Net carrying value		Acquisition date fair value		Accumulated amortization		Net carrying value
Tranzact:
Domain and trade names	6	$	25.6	$	.9	$	24.7	$	—	$	—	$	—
Customer relationships	10	107.5		2.1		105.4		—		—		—
Information technology	5	12.7		.5		12.2		—		—		—
Other	7	.5		—		.5		—		—		—
Subtotal		146.3		3.5		142.8		—		—		—

QuoteLab:
Customer relationships	4	6.5		1.2		5.3		—		—		—
Information technology	5	32.0		4.8		27.2		—		—		—
Subtotal		38.5		6.0		32.5		—		—		—

Wobi:
Trademark	8	2.1		.2		1.9		—		—		—
Information technology	3	.8		.2		.6		—		—		—
Subtotal		2.9		.4		2.5		—		—		—

Star & Shield:
Customer relationship	3	1.2		.4		.8		—		—		—

OneBeacon (EBI)	10	9.4		5.7		3.7		9.4		4.3		5.1

Sirius (WM Solutions) - Licenses	Indefinite	15.2		—		15.2		15.6		—		15.6

Total other intangible assets		213.5		16.0		197.5		25.0		4.3		20.7

Goodwill:
Tranzact	N/A	145.1		—		145.1		—		—		—
Quote Lab	N/A	18.3		—		18.3		—		—		—
Wobi	N/A	5.5		—		5.5		—		—		—
Total goodwill		168.9		—		168.9		—		—		—

Total goodwill and other intangible assets		$	382.4	$	16.0	$	366.4	$	25.0	$	4.3	$	20.7

The goodwill recognized for the above acquisitions is attributed to expected future cash flows. The acquisition date fair values of other intangible assets with finite lives are estimated using income approach techniques, which use future expected cash flows to develop a discounted present value amount.

The multiperiod-excess-earnings method estimates fair value using the present value of the incremental after-tax cash flows attributable solely to the intangible asset over its remaining life. This approach was used to estimate the fair value of intangible assets associated with trademarks, brand names, customer relationships and contracts and information technology.

The relief-from-royalty method was used to estimate fair value for intangible assets that relate to rights that could be obtained via a license from a third-party owner. Under this method, the fair value is estimated using the present value of license fees avoided by owning rather than leasing the asset. This technique was used to estimate the fair value of domain names.

The with-or-without method estimates the fair value of an intangible asset that provides an incremental benefit. Under this method, the fair value of the intangible asset is calculated by comparing the value of the entity with and without the intangible asset. This approach was used to estimate the fair value of favorable lease terms, which is included in other.

The following table shows the change in goodwill and other intangible assets:



	December 31,
Millions	2014					2013
	Goodwill		Other intangible assets			Goodwill		Other intangible assets
Beginning balance	$	—	$	20.7		$	—	$	16.9
Acquisitions of businesses	168.9		188.9			—		5.2
Dispositions of businesses	—		(.4		)	—		—
Amortization, including foreign currency translation	—		(11.7		)	—		(1.4		)
Ending balance	$	168.9	$	197.5		$	—	$	20.7

Amortization expense was $11.7 million, $1.4 million and $1.2 million for the years ended December 31, 2014, 2013 and 2012, respectively.

White Mountains expects to recognize amortization expense in each of the next five years as follows:



Millions	Amortization expense
2015	$	27.1
2016	27.0
2017	26.4
2018	24.6
2019	16.5
Total	$	121.6

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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