Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

Schedule of total income tax benefit (expense)

The following table presents the total income tax (expense) benefit for the years ended December 31, 2020, 2019 and 2018:

	Year Ended December 31,
Millions	2020		2019		2018
Current income tax (expense):
U.S. federal	$	(10.4)	$	.9	$	(.1)
State	(4.2)		(3.7)		(1.4)
Non-U.S.	(1.1)		(1.7)		(2.9)
Total current income tax (expense)	(15.7)		(4.5)		(4.4)
Deferred income tax benefit (expense):
U.S. federal	23.2		(14.9)		8.3
State	10.3		(10.4)		—
Non-U.S.	2.7		.5		.1
Total deferred income tax benefit (expense)	36.2		(24.8)		8.4
Total income tax benefit (expense)	$	20.5	$	(29.3)	$	4.0

Schedule of U.S. federal statutory income tax rate and actual effective tax rate on pre-tax income

The following table presents a reconciliation of taxes calculated for 2020, 2019 and 2018 using the 21% U.S. federal statutory rate U.S. federal statutory rate (the tax rate at which the majority of White Mountains’s worldwide operations are taxed) to the income tax (expense) benefit on pre-tax income (loss):

	Year Ended December 31,
Millions	2020		2019		2018
Tax (expense) benefit at the U.S. statutory rate	$	(135.5)	$	(85.1)	$	37.4
Differences in taxes resulting from:
Reorganization	130.5		—		—
Non-U.S. earnings, net of foreign taxes	78.4		27.1		(2.9)
Change in valuation allowance	(29.2)		63.6		(31.0)
State taxes	(8.5)		(17.5)		4.0
Withholding tax	(5.0)		(1.6)		(2.7)
Member’s surplus contributions	(4.8)		(3.6)		(2.6)
Tax rate changes	2.7		(5.7)		1.7
Tax reserve adjustments	1.9		(.7)		(.8)
Officer compensation	(1.1)		—		—
Tax exempt interest and dividends	.8		1.1		.6
Other, net	(9.7)		(6.9)		.3
Total income tax benefit (expense) on pre-tax income (loss)	$	20.5	$	(29.3)	$	4.0

Schedule of components of deferred income tax assets and liabilities

The following table presents an outline of the significant components of White Mountains’s U.S. federal, state and non-U.S. deferred tax assets and liabilities:

	December 31,
Millions	2020		2019
Deferred tax assets related to:
U.S. federal and state net operating and capital loss carryforwards	$	79.6	$	92.3
Non-U.S. net operating loss carryforwards	50.5		41.7
Incentive compensation	17.5		15.0
Accrued interest	7.9		5.1
Deferred acquisition costs	5.5		4.3
Tax credit carryforwards	5.5		4.2
Other items	1.3		3.4
Total gross deferred tax assets	167.8		166.0
Less: valuation allowances	97.4		77.9
Total net deferred tax assets	70.4		88.1
Deferred tax liabilities related to:
Member’s surplus contributions	52.9		43.2
Investment basis difference	11.8		6.6
Purchase accounting	5.1		3.1
Net unrealized investment gains	.3		66.3
Other items	2.8		1.5
Total deferred tax liabilities	72.9		120.7
Net deferred tax (liability)	$	(2.5)	$	(32.6)

Schedule of net operating and capital loss carryforwards

The following table presents net operating loss and capital loss carryforwards as of December 31, 2020, the expiration dates and the deferred tax assets thereon:

	December 31, 2020
Millions	United States		Luxembourg		United Kingdom		Israel		Total
2020-2024	$	—	$	—	$	—	$	—	$	—
2025-2029	—		—		—		—		—
2030-2039	250.7		73.2		—		—		323.9
No expiration date	118.4		31.0		25.9		85.2		260.5
Total	$	369.1	$	104.2	$	25.9	$	85.2	$	584.4
Gross deferred tax asset	$	77.5	$	26.0	$	4.9	$	19.6	$	128.0
Valuation allowance	(66.8)		(25.9)		(3.3)		(19.6)		(115.6)
Net deferred tax asset	$	10.7	$	.1	$	1.6	$	—	$	12.4

Schedule of changes in amount of unrecognized tax benefits

The following table presents a reconciliation of the beginning and ending amount of unrecognized tax benefits from 2018 to 2020:

Millions	Permanent Differences (1)		Temporary Differences (2)		Interest and Penalties (3)		Total
Balance at December 31, 2017	$	.3	$	—	$	—	$	.3
Changes in prior year tax positions	.8		—		—		.8
Balance at December 31, 2018	1.1		—		—		1.1
Changes in prior year tax positions	1.3		—		—		1.3
Balance at December 31, 2019	2.4		—		—		2.4
Changes in prior year tax positions	.1		—		—		.1
Tax positions taken during the current year	.1		—		—		.1
Reorganization	(2.6)		—		—		(2.6)
Balance at December 31, 2020	$	—	$	—	$	—	$	—

(1)Represents the amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate.

(2)Represents the amount of unrecognized tax benefits that, if recognized, would create a temporary difference between the reported amount of an item in White Mountains’s Consolidated Balance Sheet and its tax basis.

(3)Net of tax benefit.