Goodwill and Other Intangible Assets

6 Months Ended

Jun. 30, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

White Mountains has recognized goodwill and other intangible assets at the acquisition date fair values in connection with its purchases of subsidiaries.

On May 11, 2018, White Mountains completed its acquisition of NSM, recognizing $383.0 million of goodwill and other intangible assets, reflecting acquisition date fair values.

On May 18, 2018, NSM completed its acquisition of Fresh Insurance, recognizing $54.6 million of goodwill and other intangible assets, reflecting acquisition date fair values.

On December 3, 2018, NSM acquired all the net assets of KBK, recognizing $59.4 million of goodwill and other intangible assets, reflecting acquisition date fair values.

On April 1, 2019, NSM completed its acquisition of Embrace, recognizing $70.6 million of goodwill and other intangible assets, reflecting acquisition date fair values, for which the relative fair values of goodwill and other intangible assets had not yet been finalized as of June 30, 2019.

On April 4, 2019, White Mountains completed the Kudu Transaction, recognizing $9.8 million of goodwill and other intangible assets, reflecting acquisition date fair values, for which the relative fair values of goodwill and other intangible assets had not yet been finalized as of June 30, 2019.

On June 28, 2019, NSM completed its acquisition of the Renewal Rights from AIG and recognized $82.5 million of other intangible assets, reflecting acquisition date fair values. The Renewal Rights are being amortized over an estimated economic life of 12 years.

As a result of the MediaAlpha Transaction, White Mountains reduced its ownership interest in MediaAlpha to 48.3% of the basic units outstanding (42.0% on a fully diluted, fully converted basis). White Mountains’s remaining ownership interest in MediaAlpha no longer meets the criteria for a controlling ownership interest and accordingly, White Mountains deconsolidated MediaAlpha on February 26, 2019.

During the second quarter of 2019, White Mountains performed a periodic review of NSM’s goodwill for potential impairment. An impairment of goodwill or other intangible assets occurs when the carrying value of the asset exceeds its fair value. As a result of the review, White Mountains concluded that goodwill was not impaired as of June 30, 2019.

The following tables presents the change in goodwill and other intangible assets:



	Three Months Ended June 30,
	2019										2018
Millions	Goodwill				Other Intangible Assets			Total Goodwill and Other Intangible Assets			Goodwill			Other Intangible Assets				Total Goodwill and Other Intangible Assets
Beginning balance	$	349.7			$	160.5		$	510.2		$	25.9		$	33.3			$	59.2
Acquisitions of businesses	80.4			⁽¹⁾	—			80.4			436.2		⁽²⁾	—				436.2
Acquisition of collector car renewal rights	—				82.5			82.5			—			—				—
Foreign currency translation	(1.2		)		.2			(1.0		)	—			—			—	—
Adjustments to reflect acquisition date fair value	(.3		)		—			(.3		)	—			—			—	—
Amortization	—				(4.2		)	(4.2		)	—			(2.6		)		(2.6		)
Ending balance	$	428.6			$	239.0		$	667.6		$	462.1		$	30.7			$	492.8

⁽¹⁾ The relative fair values of goodwill and other intangible assets recognized in connection with the acquisition of Embrace and the Kudu Transaction had not yet been finalized at June 30, 2019.

⁽²⁾ The relative fair values of goodwill and other intangible assets recognized in connection with the acquisition of NSM had not yet been finalized at June 30, 2018.



	Six Months Ended June 30,
	2019										2018
Millions	Goodwill				Other Intangible Assets			Total Goodwill and Other Intangible Assets			Goodwill			Other Intangible Assets				Total Goodwill and Other Intangible Assets
Beginning balance	$	379.9			$	157.6		$	537.5		$	25.9		$	36.2			$	62.1
Deconsolidation of MediaAlpha	(18.3		)		(23.5		)	(41.8		)	—			—				—
Attribution of acquisition date fair value estimates between goodwill and other intangible assets	(26.8		)		26.8			—			—			—				—
Acquisitions of businesses	93.8			⁽¹⁾	—			93.8			436.2		⁽²⁾	—				436.2
Acquisition of collector car renewal rights	—				82.5			82.5
Foreign currency translation	—				.5			.5			—			—			—	—
Adjustments to reflect acquisition date fair value	—				5.9			5.9			—			—			—	—
Amortization	—				(10.8		)	(10.8		)	—			(5.5		)		(5.5		)
Ending balance	$	428.6			$	239.0		$	667.6		$	462.1		$	30.7			$	492.8

⁽¹⁾ The relative fair values of goodwill and other intangible assets recognized in connection with the acquisitions of Embrace, Other Operations and the Kudu Transaction had not yet been finalized at June 30, 2019.

⁽²⁾ The relative fair values of goodwill and other intangible assets recognized in connection with the acquisition of NSM had not yet been finalized at June 30, 2018.

The following table presents the acquisition date fair values, accumulated amortization and net carrying values for other intangible assets and goodwill, by company as of June 30, 2019 and December 31, 2018:



$ in Millions	June 30, 2019							December 31, 2018
	Acquisition Date Fair Value		Accumulated Amortization		Net Carrying Value			Acquisition Date Fair Value		Accumulated Amortization		Net Carrying Value
Goodwill:
NSM ⁽¹⁾	$	398.4	$	—	$	398.4		$	354.3	$	—	$	354.3
Kudu	9.8		—		9.8			—		—		—
MediaAlpha	—		—		—			18.3		—		18.3
Other Operations ⁽²⁾	20.4		—		20.4			7.3		—		7.3
Total goodwill	428.6		—		428.6			379.9		—		379.9

Other intangible assets:
NSM ⁽¹⁾
Customer relationships	110.7		12.4		98.3			85.3		6.0		79.3
Trade names	57.1		3.5		53.6			51.2		1.8		49.4
Information technology	3.7		.9		2.8			3.7		.5		3.2
Renewal rights	82.5		—		82.5			—		—		—
Other	1.8		.6		1.2			—		—		—
Subtotal	255.8		17.4		238.4			140.2		8.3		131.9

MediaAlpha
Customer relationships	—		—		—			26.8		4.9		21.9
Information technology	—		—		—			33.3		30.9		2.4
Other	—		—		—			9.8		9.0		0.8
Subtotal	—		—		—			69.9		44.8		25.1

Other Operations
Trade names	.6		.2		.4			.6		.2		.4
Information technology	.5		.3		.2			.5		.3		.2
Subtotal	1.1		.5		.6			1.1		.5		.6

Total other intangible assets	256.9		17.9		239.0			211.2		53.6		157.6

Total goodwill and other intangible assets	$	685.5	$	17.9	667.6			$	591.1	$	53.6	537.5

Goodwill and other intangible assets attributed to non-controlling interests					(25.4		)					(40.6		)

Goodwill and other intangible assets included in White Mountains’s common shareholders’ equity					$	642.2						$	496.9

⁽¹⁾As of June 30, 2019 and December 31, 2018, NSM’s goodwill included $(0.1) and $(2.2) and intangible assets included $0.4 and $(0.7) of the effect of foreign currency translation.

⁽²⁾As of December 31, 2018, Other Operations’ goodwill included $(0.3) of the effect of foreign currency translation.