Income Taxes (Tables)

12 Months Ended

Dec. 31, 2022

Schedule of total income tax benefit (expense)

The following table presents the total income tax (expense) benefit for the years ended December 31, 2022, 2021 and 2020:


	Year Ended December 31,
Millions	2022		2021		2020
Current income tax (expense) benefit:
U.S. federal	$	(16.9)	$	(4.8)	$	(10.7)
State	(4.5)		(2.1)		(4.2)
Non-U.S.	(7.1)		(2.8)		(.8)
Total current income tax (expense) benefit	(28.5)		(9.7)		(15.7)
Deferred income tax (expense) benefit:
U.S. federal	(7.3)		(13.9)		21.0
State	(1.8)		(7.0)		10.1
Non-U.S.	(3.8)		(13.8)		(.6)
Total deferred income tax (expense) benefit	(12.9)		(34.7)		30.5
Total income tax (expense) benefit	$	(41.4)	$	(44.4)	$	14.8

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 2022, 2021 and 2020 using the 21% 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	2022		2021		2020
Tax (expense) benefit at the U.S. statutory rate	$	31.4	$	57.5	$	(138.7)
Differences in taxes resulting from:
Non-U.S. earnings, net of foreign taxes	(41.2)		(78.2)		74.3
Change in valuation allowance	(19.6)		(2.0)		(26.6)
Member’s surplus contributions	(6.2)		(5.6)		(4.8)
Withholding tax	(3.1)		(.3)		(5.0)
State taxes	(2.8)		(7.3)		(8.9)
Officer compensation	(1.0)		(1.5)		(1.1)
Tax rate changes	(.4)		(10.9)		3.1



Tax exempt interest and dividends	.2		.2		.8
Reorganization	—		—		130.5
Tax reserve adjustments	—		—		1.9

Other, net	1.3		3.7		(10.7)


Total income tax (expense) benefit on pre-tax income (loss)	$	(41.4)	$	(44.4)	$	14.8

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	2022		2021
Deferred tax assets related to:
U.S. federal and state net operating and capital loss carryforwards	$	85.4	$	85.7
Non-U.S. net operating loss carryforwards	36.1		46.1
Incentive compensation	21.4		14.5

Accrued interest	8.8		7.8
Deferred acquisition costs	8.0		6.4
Net unrealized investment losses	4.7		—
Tax credit carryforwards	1.8		.2







Other items	.5		.4
Total gross deferred tax assets	166.7		161.1
Less: valuation allowances	94.3		85.6
Total net deferred tax assets	72.4		75.5
Deferred tax liabilities related to:

Member’s surplus contributions	71.3		60.4
Purchase accounting	43.9		43.9
Investment basis difference	33.9		26.8


Deferred underwriting	9.7		4.1
Net unrealized investment gains (losses)	—		10.7
Other items	1.4		1.8
Total deferred tax liabilities	160.2		147.7
Net deferred tax asset (liability)	$	(87.8)	$	(72.2)

Schedule of net operating and capital loss carryforwards

The following table presents net operating loss and capital loss carryforwards as of December 31, 2022, the expiration dates and the deferred tax assets thereon:


	December 31, 2022
Millions	United States		Luxembourg		United Kingdom		Israel		Total

2022-2026	$	—	$	—	$	—	$	—	$	—
2027-2031	.2		—		—		—		.2
2032-2041	250.8		59.5		—		—		310.3
No expiration date	148.5		—		4.9		87.2		240.6
Total	$	399.5	$	59.5	$	4.9	$	87.2	$	551.1
Gross deferred tax asset	$	85.4	$	14.8	$	1.2	$	20.1	$	121.5
Valuation allowance	(85.4)		(14.8)		(1.2)		(20.1)		(121.5)
Net deferred tax asset	$	—	$	—	$	—	$	—	$	—