Segment Information

6 Months Ended

Jun. 30, 2019

Segment Information

White Mountains has determined that its reportable segments are HG Global/BAM, NSM, Kudu, MediaAlpha and Other Operations. White Mountains has made its segment determination based on consideration of the following criteria: (i) the nature of the business activities of each of the Company’s subsidiaries and affiliates; (ii) the manner in which the Company’s subsidiaries and affiliates are organized; (iii) the existence of primary managers responsible for specific subsidiaries and affiliates; and (iv) the organization of information provided to the chief operating decision makers and the Board of Directors.

White Mountains deconsolidated MediaAlpha as of February 26, 2019, the date of the MediaAlpha Transaction. Kudu became a reportable segment as of April 4, 2019, the date of the Kudu Transaction. See Note 2 — “Significant Transactions”.

Significant intercompany transactions among White Mountains’s segments have been eliminated herein. The following table presents the financial information for White Mountains’s segments:



Millions	HG Global/ BAM		NSM		Kudu		Other Operations		Total
Three Months Ended June 30, 2019
Earned insurance premiums	$	4.3	$	—	$	—	$	—	$	4.3
Net investment income	5.4		—		4.0		11.6		21.0
Net realized and unrealized investment gains	11.5		—		.4		23.3		35.2
Advertising and commission revenues	—		54.9		—		1.3		56.2
Other revenue	.4		11.2		—		.7		12.3
Total revenues	21.6		66.1		4.4		36.9		129.0
Insurance acquisition expenses	1.4		—		—		—		1.4
Other underwriting expenses	.1		—		—		—		.1
Cost of sales	—		—		—		1.6		1.6
General and administrative expenses	12.3		32.7		2.2		30.1		77.3
Broker commission expense	—		18.2		—		—		18.2
Change in fair value of contingent consideration earnout liabilities	—		6.3		—		—		6.3
Amortization of other intangible assets	—		4.1		—		.1		4.2
Interest expense	—		4.1				—		4.1
Total expenses	13.8		65.4		2.2		31.8		113.2
Pre-tax income	$	7.8	$	.7	$	2.2	$	5.1	$	15.8



Millions	HG Global/ BAM		NSM			Kudu		MediaAlpha ⁽¹⁾			Other Operations		Total
Six Months Ended June 30, 2019
Earned insurance premiums	$	8.5	$	—		$	—	$	—		$	—	$	8.5
Net investment income	10.7		—			4.0		—			22.3		37.0
Net realized and unrealized investment gains	23.3		—			.4		—			142.4		166.1
Realized gain and unrealized investment gain from the MediaAlpha Transaction	—		—			—		—			182.2		182.2
Advertising and commission revenues	—		98.2			—		48.8			2.6		149.6
Other revenue	1.0		17.2			—		—			1.0		19.2
Total revenues	43.5		115.4			4.4		48.8			350.5		562.6
Insurance acquisition expenses	2.7		—			—		—			—		2.7
Other underwriting expenses	.2		—			—		—			—		.2
Cost of sales	—		—			—		40.6			2.7		43.3
General and administrative expenses	26.6		57.8			2.2		12.5			59.5		158.6
Broker commission expense	—		33.9			—		—			—		33.9
Change in fair value of contingent consideration earnout liabilities	—		7.6			—		—			—		7.6
Amortization of other intangible assets	—		9.1			—		1.6			.1		10.8
Interest expense	—		7.8					.2			—		8.0
Total expenses	29.5		116.2			2.2		54.9			62.3		265.1
Pre-tax income (loss)	$	14.0	$	(.8	)	$	2.2	$	(6.1	)	$	288.2	$	297.5



Millions	HG Global/BAM			NSM ⁽¹⁾		MediaAlpha		Other Operations			Total
Three Months Ended June 30, 2018
Earned insurance premiums	$	3.4		$	—	$	—	$	—		$	3.4
Net investment income	4.0			—		—		7.8			11.8
Net realized and unrealized investment (losses) gains	(2.4		)	—		—		12.9			10.5
Advertising and commission revenues ⁽²⁾	—			22.6		71.8		1.0			95.4
Other revenue	.4			.9		—		(.1		)	1.2
Total revenues	5.4			23.5		71.8		21.6			122.3
Insurance acquisition expenses	1.3			—		—		—			1.3
Other underwriting expenses	.1			—		—		—			.1
Cost of sales	—			—		59.9		1.1			61.0
General and administrative expenses	13.4			12.1		4.6		31.0			61.1
Broker commission expense	—			6.6		—		—			6.6
Amortization of other intangible assets	—			—		2.5		.1			2.6
Interest expense	—			1.6		.3		.1			2.0
Total expenses	14.8			20.3		67.3		32.3			134.7
Pre-tax (loss) gains	$	(9.4	)	$	3.2	$	4.5	$	(10.7	)	$	(12.4	)

⁽¹⁾NSM’s results are from May 11, 2018, the date of acquisition.

⁽²⁾Approximately 32% of MediaAlpha’s advertising revenue for the three months ended June 30, 2018 was associated with one customer.



Millions	HG Global/BAM			NSM ⁽¹⁾		MediaAlpha		Other Operations			Total
Six Months Ended June 30, 2018
Earned insurance premiums	$	6.4		$	—	$	—	$	—		$	6.4
Net investment income	7.7			—		—		23.8			31.5
Net realized and unrealized investment losses	(10.3		)	—		—		(32.9		)	(43.2		)
Advertising and commission revenues ⁽²⁾	—			22.6		141.9		1.9			166.4
Other revenue	.6			.9		1.6		.2			3.3
Total revenues	4.4			23.5		143.5		(7.0		)	164.4
Insurance acquisition expenses	2.7			—		—		—			2.7
Other underwriting expenses	.2			—		—		—			.2
Cost of sales	—			—		117.3		1.8			119.1
General and administrative expenses	25.2			12.1		15.8		53.0			106.1
Broker commission expense	—			6.6		—		—			6.6
Amortization of other intangible assets	—			—		5.4		.1			5.5
Interest expense	—			1.6		.7		.3			2.6
Total expenses	28.1			20.3		139.2		55.2			242.8
Pre-tax (loss) gains	$	(23.7	)	$	3.2	$	4.3	$	(62.2	)	$	(78.4	)


⁽¹⁾	NSM’s results are from May 11, 2018, the date of acquisition.

⁽²⁾

Approximately 32% of MediaAlpha’s advertising revenue for the six months ended June 30, 2018 was associated with one customer.