Segment Information

6 Months Ended

Jun. 30, 2020

Segment Information

As of June 30, 2020, White Mountains conducted its operations through four segments: (1) HG Global/BAM, (2) NSM, (3) Kudu and (4) Other Operations. In addition, MediaAlpha was consolidated as a reportable segment until the date of the MediaAlpha Transaction.

As a result of the Kudu Transaction, White Mountains began consolidating Kudu in its financial statements in the second quarter of 2019. See Note 2 — “Significant Transactions”.

As a result of the MediaAlpha Transaction, White Mountains no longer consolidated MediaAlpha, and consequently it was no longer a reportable segment. White Mountains’s segment disclosures for the three months ended March 31, 2019 include MediaAlpha’s results of operations for the period from January 1, 2019 to February 26, 2019, the date of the MediaAlpha Transaction. See Note 2 — “Significant Transactions”.

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.

Significant intercompany transactions among White Mountains’s segments have been eliminated herein. The following tables present the financial information for White Mountains’s segments for the three and six months ended June 30, 2020 and 2019:



Millions	HG Global/ BAM		NSM			Kudu		Other Operations		Total
Three Months Ended June 30, 2020
Earned insurance premiums	$	5.6	$	—		$	—	$	—	$	5.6
Net investment income	4.9		—			5.6		9.1		19.6
Net realized and unrealized investment gains	14.4		—			16.5		122.0		152.9
Advertising and commission revenues	—		63.0			—		1.9		64.9
Other revenue	1.2		13.1			—		2.3		16.6
Total revenues	26.1		76.1			22.1		135.3		259.6
Insurance acquisition expenses	2.1		—			—		—		2.1
Other underwriting expenses	.2		—			—		—		.2
Cost of sales	—		—			—		2.2		2.2
General and administrative expenses	12.5		48.5			2.8		25.3		89.1
Broker commission expense	—		21.0			—		—		21.0
Change in fair value of contingent consideration earnout liabilities	—		(1.7		)	—		—		(1.7		)
Amortization of other intangible assets	—		6.3			.1		.2		6.6
Interest expense	—		5.7			1.5		.2		7.4
Total expenses	14.8		79.8			4.4		27.9		126.9
Pre-tax income (loss)	$	11.3	$	(3.7	)	$	17.7	$	107.4	$	132.7



Millions	HG Global/ BAM		NSM			Kudu			Other Operations			Total
Six Months Ended June 30, 2020
Earned insurance premiums	$	11.0	$	—		$	—		$	—		$	11.0
Net investment income	10.4		—			12.9			19.2			42.5
Net realized and unrealized investment gains (loss)	20.5		—			(8.3		)	(16.0		)	(3.8		)
Advertising and commission revenues	—		116.0			—			4.0			120.0
Other revenue	1.7		25.1			.1			3.8			30.7
Total revenues	43.6		141.1			4.7			11.0			200.4
Insurance acquisition expenses	3.8		—			—			—			3.8
Other underwriting expenses	.2		—			—			—			.2
Cost of sales	—		—			—			4.2			4.2
General and administrative expenses	27.2		88.1			5.3			42.8			163.4
Broker commission expense	—		39.3			—			—			39.3
Change in fair value of contingent consideration earnout liabilities	—		(2.3		)	—			—			(2.3		)
Amortization of other intangible assets	—		11.1			.2			.4			11.7
Interest expense	—		10.0			2.9			.5			13.4
Total expenses	31.2		146.2			8.4			47.9			233.7
Pre-tax income (loss)	$	12.4	$	(5.1	)	$	(3.7	)	$	(36.9	)	$	(33.3	)



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		32.8		2.2		30.1		77.4
Broker commission expense	—		18.1		—		—		18.1
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 ⁽¹⁾		MediaAlpha ⁽²⁾			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		58.1			2.2		12.5			59.5		158.9
Broker commission expense	—		33.6			—		—			—		33.6
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

⁽¹⁾ Kudu's results are from April 4, 2019, the date White Mountains began consolidating Kudu, to June 30, 2019.

⁽²⁾ MediaAlpha’s results are from January 1, 2019 to February 26, 2019, the date of the MediaAlpha Transaction.

In compliance with ASC 606, Revenues from Contracts with Customers, the following tables present White Mountains’s total revenues by revenue source for the three months ended June 30, 2020 and 2019:



Millions	HG Global/BAM		NSM		Kudu		Other Operations		Total
Three Months Ended June 30, 2020
Commission and other revenue
Specialty Transportation	$	—	$	23.8	$	—	$	—	$	23.8
Real Estate	—		15.4		—		—		15.4
Social Services	—		7.3		—		—		7.3
Pet	—		13.2		—		—		13.2
United Kingdom	—		12.4		—		—		12.4
Other	—		4.0		—		1.8		5.8
Total commission and other revenue	—		76.1		—		1.8		77.9
Product revenues	—		—		—		2.3		—
Revenues from contracts with customers	—		76.1		—		4.1		80.2
Other revenues⁽¹⁾	26.1		—		22.1		131.2		179.4
Total revenues	$	26.1	$	76.1	$	22.1	$	135.3	$	259.6


⁽¹⁾	Other revenues consist of premiums, investment income, investment gains and losses and other revenues outside the scope of ASC 606, Revenues from Contracts with Customers.



Millions	HG Global/BAM		NSM		Kudu		Other Operations		Total
Six Months Ended June 30, 2020
Commission and other revenue
Specialty Transportation	$	—	$	44.2	$	—	$	—	$	44.2
Real Estate	—		26.7		—		—		26.7
Social Services	—		13.6		—		—		13.6
Pet	—		25.1		—		—		25.1
United Kingdom ⁽²⁾	—		22.4		—		—		22.4
Other	—		9.1		—		4.0		13.1
Total commission and other revenue	—		141.1		—		4.0		145.1
Product revenues	—		—		—		4.4		4.4
Revenues from contracts with customers	—		141.1		—		8.4		149.5
Other revenues⁽¹⁾	43.6		—		4.7		2.6		50.9
Total revenues	$	43.6	$	141.1	$	4.7	$	11.0	$	200.4


⁽¹⁾	Other revenues consist of premiums, investment income, investment gains and losses and other revenues outside the scope of ASC 606, Revenues from Contracts with Customers.

⁽²⁾ Includes the results of Kingsbridge from April 7, 2020, the date of the Kingsbridge transaction.



Millions	HG Global/BAM		NSM		Kudu		Other Operations		Total
Three Months Ended June 30, 2019
Commission and other revenue
Specialty Transportation	$	—	$	21.7	$	—	$	—	$	21.7
Real Estate	—		11.5		—		—		11.5
Social Services	—		6.5		—		—		6.5
Pet	—		9.5		—		—		9.5
United Kingdom	—		12.2		—		—		12.2
Other	—		4.7		—		1.3		6.0
Total commission and other revenue	—		66.1		—		1.3		67.4
Products	—		—		—		.6		.6
Total revenues from contracts with customers	—		66.1		—		1.9		68.0
Other revenues⁽¹⁾	21.6		—		4.4		35.0		61.0
Total revenues	$	21.6	$	66.1	$	4.4	$	36.9	$	129.0


⁽¹⁾	Other revenues consist of premiums, investment income, investment gains and losses and other revenues outside the scope of ASC 606, Revenues from Contracts with Customers.



Millions	HG Global/BAM		NSM		Kudu		MediaAlpha		Other Operations		Total
Six Months Ended June 30, 2019
Commission and other revenue
Specialty Transportation	$	—	$	39.6	$	—	$	—	$	—	$	39.6
Real Estate	—		20.5		—		—		—		20.5
Social Services	—		12.3		—		—		—		12.3
Pet	—		9.5		—		—		—		9.5
United Kingdom	—		24.3		—		—		—		24.3
Other	—		9.2		—		—		2.6		11.8
Total commission and other revenue	—		115.4		—		—		2.6		118.0
Advertising revenues	—		—		—		48.8		—		48.8
Revenues from contracts with customers	—		115.4		—		48.8		2.6		166.8
Products	—		—		—		—		.6		0.6
Total revenues from contracts with customers	—		115.4		—		48.8		3.2		167.4
Other revenues⁽¹⁾	43.5		—		4.4		—		347.3		395.2
Total revenues	$	43.5	$	115.4	$	4.4	$	48.8	$	350.5	$	562.6

⁽¹⁾

Other revenues consist of premiums, investment income, investment gains and losses and other revenues outside the scope of ASC 606, Revenues from Contracts with Customers.