Discontinued Operations

6 Months Ended

Jun. 30, 2015

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

Discontinued Operations

For the three months ended June 30, 2015, White Mountains recorded a net loss from sale of discontinued operations of $0.1 million, which was primarily related to a tax payment of $0.3 million to Allstate pursuant to the Esurance sale and post-closing expenses incurred in connection with the Runoff Business, offset by a $0.3 million gain related to an adjustment to the estimated loss on sale from the Runoff Transaction, which includes the final settlement of certain post-closing items. The six months ended June 30, 2015 also included a net gain from sale of discontinued operations of $8.0 million, which is primarily related to the favorable loss reserve development on loss reserves transferred in the sale of Esurance and Answer Financial. See “Esurance”in Note 18.

For both the three and six months ended June 30, 2014, White Mountains recorded a net gain from sale of discontinued operations of $2.7 million, primarily due to an interim payment on the favorable development on loss reserves transferred with the sale of Esurance and Answer Financial. The gain from sale of discontinued operations for both the three and six months ended June 30, 2014 also included two offsetting amounts at OneBeacon. First, OneBeacon reduced its estimate of the fair value of the surplus notes expected to be issued at the closing of the Runoff Transaction based on their internal valuation model which, as of June 30, 2014, was $8.2 million, pre-tax, ($5.3 million, after tax) less than par value of the surplus notes, resulting in a corresponding increase to the estimated loss on sale. Second, the stock purchase agreement was revised during the second quarter of 2014 in part to increase the cap on seller financing, which resulted in OneBeacon recording a $7.4 million reserve charge ($4.8 million after tax) as a reduction to the estimated loss on sale of discontinued operations.

Earnings Per Share

Basic earnings per share amounts are based on the weighted average number of common shares outstanding including unvested restricted shares that are considered participating securities.  Diluted earnings per share amounts are based on the weighted average number of common shares including unvested restricted shares and the net effect of potentially dilutive common shares outstanding. The following table outlines the computation of earnings per share for discontinued operations for the three and six months endedJune 30, 2015 and 2014:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2015			2014			2015			2014
Basic and diluted earnings per share numerators (in millions):
Net income attributable to White Mountains’s common shareholders	$	(.3	)	$	2.6		$	7.6		$	2.1
Allocation of income for participating unvested restricted common shares(1)	—			—			(.1		)	—
Net income attributable to White Mountains’s common shareholders,    net of restricted common share amounts (2)	$	(.3	)	$	2.6		$	7.5		$	2.1
Basic earnings per share denominators (in thousands):
Total average common shares outstanding during the period	5,985.7			6,162.2			5,982.1			6,166.0
Average unvested restricted common shares(3)	(71.4		)	(81.3		)	(65.2		)	(75.9		)
Basic earnings per share denominator	5,914.3			6,080.9			5,916.9			6,090.1
Diluted earnings per share denominator (in thousands):
Total average common shares outstanding during the period	5,985.7			6,162.2			5,982.1			6,166.0
Average unvested restricted common shares(3)	(71.4		)	(81.3		)	(65.2		)	(75.9		)
Average outstanding dilutive options to acquire common shares(4)	—			—			—			—
Diluted earnings per share denominator	5,914.3			6,080.9			5,916.9			6,090.1
Basic and diluted earnings per share (in dollars):	$	(.04	)	$	.43		$	1.27		$	.34

⁽¹⁾ Restricted shares issued by White Mountains contain dividend participation features, and therefore, are considered participating securities.

⁽²⁾ Net earnings attributable to White Mountains’s common shareholders, net of restricted share amounts, is equal to undistributed earnings for the three and six months endedJune 30, 2015 and 2014.

⁽³⁾ Restricted common shares outstanding vest either in equal annual installments or upon a stated date. (See Note 15 - “Employee Share-Based Compensation Plans”).

⁽⁴⁾ The diluted earnings per share denominator for the three and six months endedJune 30, 2015 and 2014 does not include the impact of 125,000 common shares issuable upon exercise of the non-qualified options outstanding as they are anti-dilutive to the calculation.