Held for Sale and Discontinued Operations

6 Months Ended

Jun. 30, 2023

Discontinued Operations and Disposal Groups [Abstract]

Held for Sale and Discontinued Operations

NSM

On August 1, 2022, White Mountains closed the NSM Transaction. See Note 2 — “Significant Transactions.” As a result of the NSM Transaction, the assets and liabilities of NSM Group have been presented in the balance sheet as held for sale for periods prior to the closing of the transaction, and the results of operations for NSM Group have been classified as discontinued operations in the statements of operations and comprehensive income through the closing of the transaction. Prior period amounts have been reclassified to conform to the current period’s presentation.

Net Income (Loss) from Discontinued Operations

The following table summarizes the results of operations, including related income taxes associated with the businesses classified as discontinued operations for the three and six months ended June 30, 2022:


Millions	Three Months Ended June 30, 2022		Six Months Ended June 30, 2022
Revenues
Commission revenues	$	80.2	$	150.3
Other revenues	22.7		41.1
Total revenues	102.9		191.4
Expenses
General and administrative expenses	57.1		111.1
Broker commission expenses	24.1		44.7
Change in fair value of contingent consideration	—		.1
Amortization of other intangible assets	—		9.1

Interest expense	8.4		10.5
Total expenses	89.6		175.5
Pre-tax income (loss) from discontinued operations	13.3		15.9
Income tax (expense) benefit	(6.9)		(5.8)
Net income (loss) from discontinued operations, net of tax	6.4		10.1



Net (income) loss from discontinued operations attributable to noncontrolling interests	(.5)		(.6)
Total income (loss) from discontinued operations attributable to White Mountains’s common shareholders	5.9		9.5
Other comprehensive income (loss) from discontinued operations, net of tax	(4.0)		(5.9)

Comprehensive income (loss) from discontinued operations	1.9		3.6
Other comprehensive (income) loss from discontinued operations attributable to noncontrolling interests	.2		.3
Comprehensive income (loss) from discontinued operations attributable to White Mountains’s common shareholders	$	2.1	$	3.9

Net Change in Cash from Discontinued Operations

The following table summarizes the net change in cash associated with the businesses classified as discontinued operations for the six months ended June 30, 2022:


Millions	Six Months Ended June 30, 2022
Net cash provided from (used for) operations	$	36.7
Net cash provided from (used for) investing activities	7.1
Net cash used from (used for) financing activities	(16.9)
Effect of exchange rate changes on cash	4.2
Net change in cash during the period	31.1
Cash balances at beginning of period (includes restricted cash of $89.2)	111.6

Cash balances at end of period (includes restricted cash of $108.9)	142.7
Supplemental cash flows information:
Interest paid	$	10.4
Net income tax payments	$	—

Earnings Per Share from Discontinued Operations

White Mountains calculates earnings per share using the two-class method, which allocates earnings between common and unvested restricted common shares. Both classes of shares participate equally in earnings on a per share basis. Basic earnings per share amounts are based on the weighted average number of common shares outstanding adjusted for unvested restricted common shares. Diluted earnings per share amounts are also impacted by the net effect of potentially dilutive common shares outstanding. The following table presents the Company’s computation of earnings per share for discontinued operations for the three and six months ended June 30, 2022:



	Three Months Ended June 30, 2022		Six Months Ended June 30, 2022
Basic and diluted earnings per share numerators (in millions):
Net income (loss) attributable to White Mountains’s common shareholders	$	(169.2)	$	(135.8)
Less: net income (loss) from continuing operations	(216.6)		(228.7)
Less: net (income) loss from continuing operations attributable to noncontrolling interests	41.5		83.4
Total gain (loss) from discontinued operations attributable to White Mountains’s common shareholders (1)	5.9		9.5
Allocation of earnings to participating restricted common shares (2)	(.1)		(.1)
Basic and diluted earnings per share numerators (3)	$	5.8	$	9.4
Basic earnings per share denominators (in thousands):
Total average common shares outstanding during the period	2,979.0		2,992.5
Average unvested restricted common shares (4)	(38.3)		(33.9)
Basic earnings per share denominator	2,940.7		2,958.6
Diluted earnings per share denominator (in thousands):
Total average common shares outstanding during the period	2,979.0		2,992.5
Average unvested restricted common shares (4)	(38.3)		(33.9)

Diluted earnings per share denominator	2,940.7		2,958.6

Basic and diluted earnings (losses) per share (in dollars) - discontinued operations	$	1.98	$	3.17

(1) Includes net income (loss) from discontinued operations, net of tax - NSM Group

(2) Restricted shares issued by White Mountains receive dividends, and therefore, are considered participating securities.

(3) Net earnings attributable to White Mountains’s common shareholders, net of restricted share amounts, is equal to undistributed earnings for the three and six months ended June 30, 2022.

(4) Restricted shares outstanding vest upon a stated date. See Note 12 — “Employee Share-Based Incentive Compensation Plans.”