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Share Name | Share Symbol | Market | Type |
---|---|---|---|
White Moutains Insurance Group Ltd | NYSE:WTM | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
45.60 | 2.56% | 1,823.74 | 1,826.68 | 1,773.51 | 1,773.51 | 9,583 | 01:00:00 |
HAMILTON, Bermuda, Aug. 7, 2020 /PRNewswire/ -- White Mountains Insurance Group, Ltd. (NYSE: WTM) reported book value per share of $1,021 and adjusted book value per share of $1,022 as of June 30, 2020. Book value per share and adjusted book value per share both increased approximately 4% in the second quarter of 2020. Book value per share decreased 0.2% and adjusted book value per share increased 0.4% in the first six months of 2020, including dividends.
Manning Rountree, CEO, commented, "We had a good second quarter. ABVPS increased 4% to $1,022, driven primarily by a 6.5% return on our investment portfolio. BAM wrote $43 million of direct premiums and member surplus contributions, its biggest quarter ever, driven by robust demand for insurance and higher pricing. NSM saw 2% organic growth in controlled premiums, quarter over quarter, and closed the Kingsbridge acquisition in April. Kudu enjoyed a strong quarter, benefiting from the rebound in investment markets and closing the Sequoia transaction in June. MediaAlpha had another excellent quarter, driven by strong performance in its insurance verticals. At PassportCard/DavidShield, the global slowdown in travel activity has caused a significant decline in premiums and revenues; in May we invested $15 million to support operations and to continue global expansion. During the quarter, we repurchased $31 million of shares at an average price of $887. We ended the quarter with $0.8 billion of undeployed capital and ample liquidity."
Comprehensive income (loss) attributable to common shareholders was $116 million and $(17) million in the second quarter and first six months of 2020, compared to comprehensive income attributable to common shareholders of $18 million and $302 million in the second quarter and first six months of 2019. The results in the first six months of 2019 include $182 million of realized and unrealized gains from MediaAlpha's sale of a significant minority stake to Insignia Capital Group on February 26, 2019 (the "MediaAlpha Transaction").
HG Global/BAM
BAM's gross written premiums and member surplus contributions (MSC) collected were $43 million and $63 million in the second quarter and first six months of 2020, compared to $25 million and $40 million in the second quarter and first six months of 2019. BAM insured municipal bonds with par value of $4.1 billion and $7.1 billion in the second quarter and first six months of 2020, compared to $2.9 billion and $4.8 billion in the second quarter and first six months of 2019. Total pricing was 105 and 89 basis points in the second quarter and first six months of 2020, compared to 84 and 83 basis points in the second quarter and first six months of 2019. BAM's total claims paying resources were $957 million at June 30, 2020, compared to $938 million at December 31, 2019 and $895 million at June 30, 2019.
Seán McCarthy, CEO of BAM, said, "BAM had a strong quarter. Institutional and retail investor concerns about credit volatility drove robust demand for insurance and expanded our opportunities to insure higher-quality bonds. This was evident in both the primary market, which reopened in April and experienced increased insured penetration, and the secondary market, which was highly active. The COVID-19 pandemic is negatively impacting the finances of municipalities to varying degrees, and, over time, financial stress could emerge. We continue to monitor the finances of our member issuers and are working proactively to make sure they are prepared for any pandemic-related revenue losses. BAM's existing credit portfolio is of high quality and structured to be resilient during economic slowdowns; all BAM-insured bond payments due through August 1 have been made by insureds. Also, in late June, S&P Global Ratings affirmed BAM's "AA/stable" rating."
HG Global reported pre-tax income of $20 million and $32 million in the second quarter and first six months of 2020, compared to pre-tax income of $15 million and $31 million and in the second quarter and first six months of 2019. The increases were driven primarily by higher investment returns. White Mountains reported pre-tax loss related to BAM of $9 million and $19 million in the second quarter and first six months of 2020, compared to pre-tax loss related to BAM of $7 million and $17 million in the second quarter and first six months of 2019.
BAM is a mutual insurance company that is owned by its members. BAM's results are consolidated into White Mountains's GAAP financial statements and attributed to non-controlling interests.
NSM
NSM reported pre-tax loss of $4 million, adjusted EBITDA of $18 million, and commission and other revenues of $76 million in the second quarter of 2020, compared to pre-tax income of $1 million, adjusted EBITDA of $16 million, and commission and other revenues of $66 million in the second quarter of 2019. Results for the second quarter of 2020 include the results of Kingsbridge Group Limited, a leading provider of commercial lines insurance and consulting services to the contingent workforce in the U.K. Kingsbridge was acquired on April 7, 2020. NSM reported pre-tax loss of $5 million, adjusted EBITDA of $29 million, and commission and other revenues of $141 million in the first six months of 2020, compared to pre-tax loss of $1 million, adjusted EBITDA of $26 million, and commission and other revenues of $115 million in the first six months of 2019.
Geof McKernan, CEO of NSM, said, "NSM had a sound second quarter despite the challenging environment. Trailing 12 months pro forma controlled premiums crossed the $1.0 billion threshold for the first time ever, reflecting both the Kingsbridge acquisition and 2% organic growth in our existing verticals. Pro forma adjusted EBITDA was $57 million, reflecting both the Kingsbridge acquisition and flat results in our existing verticals, as we continue to invest for growth. We saw significant growth in certain U.S. verticals, including pet and real estate, offset by a decline in the U.K. vertical."
Kudu
Kudu reported pre-tax income of $18 million and adjusted EBITDA of $4 million in the second quarter of 2020, compared to pre-tax income of $2 million and adjusted EBITDA of $3 million in the second quarter of 2019. Pre-tax income in the second quarter of 2020 included a $17 million unrealized gain on Kudu's participation contracts, reflecting the impact of the market rebound on Kudu's underlying asset management businesses. Kudu reported pre-tax loss of $4 million and adjusted EBITDA of $9 million in the first six months of 2020. Pre-tax loss in the first six months of 2020 included an $8 million unrealized loss on Kudu's participation contracts, reflecting the impact of the market dislocation from the COVID-19 pandemic in the first quarter of 2020 on Kudu's underlying asset management businesses.
In the second quarter of 2020, Kudu deployed $37 million in Sequoia Financial Group, LLC, a registered investment advisor with $4.7 billion in client assets. As of June 30, 2020, Kudu has deployed a total of $324 million in 11 asset management firms with combined assets under management of approximately $38 billion, spanning a range of asset classes, including real estate, real assets, wealth management, hedge funds, private equity and alternative credit strategies.
Rob Jakacki, CEO of Kudu, said, "Kudu's diversified portfolio has proven resilient through a period of uncertainty in global markets. We were pleased to close our investment in Sequoia, a wealth manager with an impressive platform, and we are excited to partner with the firm to support its growth. We have now deployed $324 million across 11 firms with an average cash yield to Kudu at inception of 10.2%. Our model of providing tailored permanent capital solutions to asset and wealth managers has broad appeal, and our pipeline is strong."
Other Operations
White Mountains's Other Operations segment reported pre-tax income (loss) of $107 million and $(37) million in the second quarter and first six months of 2020, compared to pre-tax income of $5 million and $288 million in the second quarter first six months of 2019. Net realized and unrealized investment gains (losses) were $122 million and $(16) million in the second quarter and first six months of 2020, compared to net realized and unrealized investment gains of $23 million and $142 million in the second quarter and first six months of 2019. Pre-tax income for the first six months of 2019 also included $182 million of gains from the MediaAlpha Transaction, which consisted of $67 million of realized gains and $115 million of unrealized investment gains. General and administrative expenses were $25 million and $43 million in the second quarter and first six months of 2020, compared to $30 million and $60 million in the second quarter and first six months of 2019. The decreases were driven primarily by lower incentive compensation costs.
Share Repurchases
In the second quarter of 2020, White Mountains repurchased and retired 34,684 of its common shares for $31 million at an average share price of $886.70, or 87% of White Mountains's June 30, 2020 adjusted book value per share. In the first six months of 2020, White Mountains repurchased and retired 99,087 of its common shares for $85 million at an average share price of $858.81, or 84% of White Mountains's June 30, 2020 adjusted book value per share.
Investments
The total return on invested assets was 6.5% in the second quarter of 2020 compared to 2.0% in the second quarter of 2019. The total return on invested assets was 1.7% in the first six months of 2020 compared to 12.4% in the first six months of 2019, which included $115 million of unrealized investment gains from the MediaAlpha Transaction. Excluding the MediaAlpha Transaction, the total return on invested assets was 7.9% in the first six months of 2019.
Mark Plourde, Managing Director of White Mountains Advisors, said, "The total portfolio was up 6.5%; a strong result, driven by the rebound in equity markets during the quarter. Our portfolio of common stocks and ETFs returned 19.2%, just behind the S&P 500 return of 20.5%. Other long-term investments returned 4.0%, which included a $17 million increase in the fair value of Kudu's participation contracts and a $15 million increase in the fair value of our investment in MediaAlpha. Fixed income returned 2.8%, ahead of the BBIA Index return of 2.1%."
Additional Information
White Mountains is a Bermuda-domiciled financial services holding company traded on the New York Stock Exchange and the Bermuda Stock Exchange under the symbol WTM. Additional financial information and other items of interest are available at the company's website located at www.whitemountains.com. White Mountains expects to file its Form 10-Q today with the Securities and Exchange Commission and urges shareholders to refer to that document for more complete information concerning its financial results.
CONTACT: Todd Pozefsky
(203) 458-5807
WHITE MOUNTAINS INSURANCE GROUP, LTD. | ||||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||||||
(millions) | ||||||||||||
(Unaudited) | ||||||||||||
June 30, 2020 | December 31, 2019 | June 30, 2019 | ||||||||||
Assets | ||||||||||||
Financial Guarantee (HG Global/BAM) | ||||||||||||
Fixed maturity investments | $ | 821.7 | $ | 799.3 | $ | 762.9 | ||||||
Short-term investments | 54.7 | 46.3 | 34.8 | |||||||||
Total investments | 876.4 | 845.6 | 797.7 | |||||||||
Cash | 32.0 | 24.2 | 10.3 | |||||||||
Insurance premiums receivable | 7.3 | 6.7 | 6.6 | |||||||||
Deferred acquisition costs | 25.0 | 22.1 | 20.5 | |||||||||
Accrued investment income | 5.2 | 5.4 | 5.3 | |||||||||
Accounts receivable on unsettled investment sales | — | 3.9 | 8.0 | |||||||||
Other assets | 14.6 | 16.1 | 16.1 | |||||||||
Total Financial Guarantee assets | 960.5 | 924.0 | 864.5 | |||||||||
Specialty Insurance Distribution (NSM) | ||||||||||||
Short-term investments | — | — | .2 | |||||||||
Cash (restricted $96.3, $56.3 and $88.8) | 140.5 | 89.7 | 119.7 | |||||||||
Premium and commission receivable | 76.7 | 70.8 | 57.6 | |||||||||
Goodwill and other intangible assets | 728.6 | 623.0 | 636.8 | |||||||||
Other assets | 55.1 | 41.7 | 36.8 | |||||||||
Total Specialty Insurance Distribution assets | 1,000.9 | 825.2 | 851.1 | |||||||||
Asset Management (Kudu) | ||||||||||||
Short-term investments | .1 | .1 | .1 | |||||||||
Other long-term investments | 315.6 | 266.5 | 142.2 | |||||||||
Total investments | 315.7 | 266.6 | 142.3 | |||||||||
Cash | 5.9 | 5.8 | 2.7 | |||||||||
Accrued investment income | 5.6 | 5.8 | 2.7 | |||||||||
Goodwill and other intangible assets | 9.4 | 9.6 | 9.8 | |||||||||
Other assets | 2.7 | 2.7 | 2.9 | |||||||||
Total Asset Management assets | 339.3 | 290.5 | 160.4 | |||||||||
Other Operations | ||||||||||||
Fixed maturity investments | 369.9 | 406.5 | 346.5 | |||||||||
Short-term investments | 62.8 | 154.8 | 152.0 | |||||||||
Common equity securities | 567.2 | 683.9 | 709.2 | |||||||||
Other long-term investments | 582.5 | 589.8 | 522.2 | |||||||||
Total investments | 1,582.4 | 1,835.0 | 1,729.9 | |||||||||
Cash | 32.9 | 41.3 | 17.6 | |||||||||
Accrued investment income | 4.0 | 5.7 | 5.4 | |||||||||
Accounts receivable on unsettled investment sales | 23.4 | 5.1 | 72.8 | |||||||||
Goodwill and other intangible assets | 21.9 | 22.1 | 21.0 | |||||||||
Other assets | 32.0 | 31.3 | 26.7 | |||||||||
Assets held for sale | 3.0 | 3.0 | 2.8 | |||||||||
Total Other Operations assets | 1,699.6 | 1,943.5 | 1,876.2 | |||||||||
Total assets | $ | 4,000.3 | $ | 3,983.2 | $ | 3,752.2 |
WHITE MOUNTAINS INSURANCE GROUP, LTD. | ||||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED) | ||||||||||||
(millions) | ||||||||||||
(Unaudited) | ||||||||||||
June 30, 2020 | December 31, 2019 | June 30, 2019 | ||||||||||
Liabilities | ||||||||||||
Financial Guarantee (HG Global/BAM) | ||||||||||||
Unearned insurance premiums | $ | 218.6 | $ | 198.4 | $ | 187.8 | ||||||
Accrued incentive compensation | 14.1 | 21.7 | 14.5 | |||||||||
Accounts payable on unsettled investment purchases | 3.0 | — | — | |||||||||
Other liabilities | 27.3 | 26.7 | 27.4 | |||||||||
Total Financial Guarantee liabilities | 263.0 | 246.8 | 229.7 | |||||||||
Specialty Insurance Distribution (NSM) | ||||||||||||
Debt | 268.4 | 219.2 | 219.7 | |||||||||
Premiums payable | 139.7 | 102.3 | 118.7 | |||||||||
Contingent consideration earnout liabilities | 11.7 | 20.6 | 30.9 | |||||||||
Other liabilities | 81.1 | 59.0 | 56.1 | |||||||||
Total Specialty Insurance Distribution liabilities | 500.9 | 401.1 | 425.4 | |||||||||
Asset Management (Kudu) | ||||||||||||
Debt | 70.8 | 53.6 | — | |||||||||
Other liabilities | 6.5 | 3.4 | 3.5 | |||||||||
Total Asset Management liabilities | 77.3 | 57.0 | 3.5 | |||||||||
Other Operations | ||||||||||||
Debt | 10.6 | 10.7 | 10.8 | |||||||||
Accrued incentive compensation | 18.9 | 55.1 | 36.8 | |||||||||
Other liabilities | 66.3 | 67.8 | 38.1 | |||||||||
Total Other Operations liabilities | 95.8 | 133.6 | 85.7 | |||||||||
Total liabilities | 937.0 | 838.5 | 744.3 | |||||||||
Equity | ||||||||||||
White Mountains's common shareholder's equity | ||||||||||||
White Mountains's common shares and paid-in surplus | 587.0 | 596.3 | 590.5 | |||||||||
Retained earnings | 2,589.3 | 2,672.4 | 2,562.8 | |||||||||
Accumulated other comprehensive loss, after tax: | ||||||||||||
Net unrealized foreign currency translation losses and interest rate swap | (10.3) | (7.2) | (9.0) | |||||||||
Total White Mountains's common shareholders' equity | 3,166.0 | 3,261.5 | 3,144.3 | |||||||||
Non-controlling interests | (102.7) | (116.8) | (136.4) | |||||||||
Total equity | 3,063.3 | 3,144.7 | 3,007.9 | |||||||||
Total liabilities and equity | $ | 4,000.3 | $ | 3,983.2 | $ | 3,752.2 |
WHITE MOUNTAINS INSURANCE GROUP, LTD. | |||||||||||||||||
BOOK VALUE AND ADJUSTED BOOK VALUE PER SHARE | |||||||||||||||||
(Unaudited) | |||||||||||||||||
June 30, 2020 | March 31, 2020 | December 31, 2019 | June 30, 2019 | ||||||||||||||
Book value per share numerators (in millions): | |||||||||||||||||
White Mountains's common shareholders' equity - GAAP book value per share numerator | $ | 3,166.0 | $ | 3,076.7 | $ | 3,261.5 | $ | 3,144.3 | |||||||||
Time value of money discount on expected future payments on the BAM Surplus Notes (1) | (146.7) | (149.2) | (151.6) | (135.7) | |||||||||||||
HG Global's unearned premium reserve (1) | 173.8 | 160.5 | 156.7 | 147.2 | |||||||||||||
HG Global's net deferred acquisition costs (1) | (47.0) | (42.9) | (41.5) | (37.9) | |||||||||||||
Adjusted book value per share numerator | $ | 3,146.1 | $ | 3,045.1 | $ | 3,225.1 | $ | 3,117.9 | |||||||||
Book value per share denominators (in thousands of shares): | |||||||||||||||||
Common shares outstanding - GAAP book value per share denominator | 3,101.8 | 3,135.0 | 3,185.4 | 3,185.4 | |||||||||||||
Unearned restricted common shares | (23.1) | (26.9) | (18.5) | (24.5) | |||||||||||||
Adjusted book value per share denominator | 3,078.7 | 3,108.1 | 3,166.9 | 3,160.9 | |||||||||||||
GAAP book value per share | $ | 1,020.71 | $ | 981.39 | $ | 1,023.91 | $ | 987.12 | |||||||||
Adjusted book value per share | $ | 1,021.91 | $ | 979.74 | $ | 1,018.41 | $ | 986.39 | |||||||||
(1) Amount reflects White Mountains's preferred share ownership in HG Global of 96.9%. | |||||||||||||||||
June 30, 2020 | March 31, 2020 | December 31, 2019 | June 30, 2019 | ||||||||||||||
Quarter-to-date change in GAAP book value per share, including dividends: | 4.0 | % | (4.1) | % | 2.1 | % | 0.6 | % | |||||||||
Quarter-to-date change in adjusted book value per share, including dividends: | 4.3 | % | (3.7) | % | 1.4 | % | 0.8 | % | |||||||||
Year-to-date change in GAAP book value per share, including dividends: | (0.2) | % | (4.1) | % | 14.4 | % | 10.3 | % | |||||||||
Year-to-date change in adjusted book value per share, including dividends: | 0.4 | % | (3.7) | % | 14.8 | % | 11.2 | % | |||||||||
Year-to-date dividends per share | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||
June 30, 2020 | March 31, 2020 | December 31, 2019 | June 30, 2019 | ||||||||||||||
Summary of goodwill and other intangible assets (in millions): | |||||||||||||||||
Goodwill: | |||||||||||||||||
NSM | $ | 504.9 | (1) | $ | 379.1 | $ | 381.6 | $ | 398.4 | (2) | |||||||
Kudu | 7.6 | 7.6 | 7.6 | 9.8 | (2) | ||||||||||||
Other Operations | 5.7 | 5.7 | 5.5 | 20.4 | |||||||||||||
Total goodwill | 518.2 | 392.4 | 394.7 | 428.6 | |||||||||||||
Other intangible assets: | |||||||||||||||||
NSM | 223.7 | 236.1 | 241.4 | 238.4 | |||||||||||||
Kudu | 1.8 | 1.9 | 2.0 | — | |||||||||||||
Other Operations | 16.2 | 16.4 | 16.6 | .6 | |||||||||||||
Total other intangible assets | 241.7 | 254.4 | 260.0 | 239.0 | |||||||||||||
Total goodwill and other intangible assets | 759.9 | 646.8 | 654.7 | 667.6 | |||||||||||||
Goodwill and other intangible assets attributed to non-controlling interests | (25.9) | (23.5) | (23.4) | (25.4) | |||||||||||||
Goodwill and other intangible assets included in White Mountains's common shareholders' equity | $ | 734.0 | $ | 623.3 | $ | 631.3 | $ | 642.2 |
(1) | The relative fair values of goodwill and of other intangible assets recognized in connection with the acquisition of Kingsbridge had not yet been finalized at June 30, 2020. |
(2) | The relative fair values of goodwill and of other intangible assets recognized in connection with the acquisition of Embrace and the Kudu transaction had not yet been finalized at June 30, 2019. |
WHITE MOUNTAINS INSURANCE GROUP, LTD. | |||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||
(millions) | |||||||||||||||||
(Unaudited) | |||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||
Revenues: | |||||||||||||||||
Financial Guarantee (HG Global/BAM) | |||||||||||||||||
Earned insurance premiums | $ | 5.6 | $ | 4.3 | $ | 11.0 | $ | 8.5 | |||||||||
Net investment income | 4.9 | 5.4 | 10.4 | 10.7 | |||||||||||||
Net realized and unrealized investment gains | 14.4 | 11.5 | 20.5 | 23.3 | |||||||||||||
Other revenues | 1.2 | .4 | 1.7 | 1.0 | |||||||||||||
Total Financial Guarantee revenues | 26.1 | 21.6 | 43.6 | 43.5 | |||||||||||||
Specialty Insurance Distribution (NSM) | |||||||||||||||||
Commission revenues | 63.0 | 54.9 | 116.0 | 98.2 | |||||||||||||
Other revenues | 13.1 | 11.2 | 25.1 | 17.2 | |||||||||||||
Total Specialty Insurance Distribution revenues | 76.1 | 66.1 | 141.1 | 115.4 | |||||||||||||
Asset Management (Kudu) | |||||||||||||||||
Net investment income | 5.6 | 4.0 | 12.9 | 4.0 | |||||||||||||
Net realized and unrealized investment gains (losses) | 16.5 | .4 | (8.3) | .4 | |||||||||||||
Other revenues | — | — | .1 | — | |||||||||||||
Total Asset Management revenues | 22.1 | 4.4 | 4.7 | 4.4 | (1) | ||||||||||||
Marketing Technology (MediaAlpha) | |||||||||||||||||
Advertising and commission revenues | — | — | — | 48.8 | |||||||||||||
Total Marketing Technology revenues | — | — | — | 48.8 | (2) | ||||||||||||
Other Operations | |||||||||||||||||
Net investment income | 9.1 | 11.6 | 19.2 | 22.3 | |||||||||||||
Net realized and unrealized investment gains (losses) | 122.0 | 23.3 | (16.0) | 142.4 | |||||||||||||
Realized gain and unrealized investment gain from the MediaAlpha Transaction | — | — | — | 182.2 | |||||||||||||
Advertising and commission revenues | 1.9 | 1.3 | 4.0 | 2.6 | |||||||||||||
Other revenues | 2.3 | .7 | 3.8 | 1.0 | |||||||||||||
Total Other Operations revenues | 135.3 | 36.9 | 11.0 | 350.5 | |||||||||||||
Total revenues | $ | 259.6 | $ | 129.0 | $ | 200.4 | $ | 562.6 |
(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. |
WHITE MOUNTAINS INSURANCE GROUP, LTD. | |||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED) | |||||||||||||||||
(millions) | |||||||||||||||||
(Unaudited) | |||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||
Expenses: | |||||||||||||||||
Financial Guarantee (HG Global/BAM) | |||||||||||||||||
Insurance acquisition expenses | $ | 2.1 | $ | 1.4 | $ | 3.8 | $ | 2.7 | |||||||||
Other underwriting expenses | .2 | .1 | .2 | .2 | |||||||||||||
General and administrative expenses | 12.5 | 12.3 | 27.2 | 26.6 | |||||||||||||
Total Financial Guarantee expenses | 14.8 | 13.8 | 31.2 | 29.5 | |||||||||||||
Specialty Insurance Distribution (NSM) | |||||||||||||||||
General and administrative expenses | 48.5 | 32.8 | 88.1 | 58.1 | |||||||||||||
Broker commission expenses | 21.0 | 18.1 | 39.3 | 33.6 | |||||||||||||
Change in fair value of contingent consideration earnout liabilities | (1.7) | 6.3 | (2.3) | 7.6 | |||||||||||||
Amortization of other intangible assets | 6.3 | 4.1 | 11.1 | 9.1 | |||||||||||||
Interest expense | 5.7 | 4.1 | 10.0 | 7.8 | |||||||||||||
Total Specialty Insurance Distribution expenses | 79.8 | 65.4 | 146.2 | 116.2 | |||||||||||||
Asset Management (Kudu) | |||||||||||||||||
General and administrative expenses | 2.8 | 2.2 | 5.3 | 2.2 | |||||||||||||
Amortization of other intangible assets | .1 | — | .2 | — | |||||||||||||
Interest expense | 1.5 | — | 2.9 | — | |||||||||||||
Total Asset Management expenses | 4.4 | 2.2 | 8.4 | 2.2 | (1) | ||||||||||||
Marketing Technology (MediaAlpha) | |||||||||||||||||
Cost of sales | — | — | — | 40.6 | |||||||||||||
General and administrative expenses | — | — | — | 12.5 | |||||||||||||
Amortization of other intangible assets | — | — | — | 1.6 | |||||||||||||
Interest expense | — | — | — | .2 | |||||||||||||
Total Marketing Technology expenses | — | — | — | 54.9 | (2) | ||||||||||||
Other Operations | |||||||||||||||||
Cost of sales | 2.2 | 1.6 | 4.2 | 2.7 | |||||||||||||
General and administrative expenses | 25.3 | 30.1 | 42.8 | 59.5 | |||||||||||||
Amortization of other intangible assets | .2 | .1 | .4 | .1 | |||||||||||||
Interest expense | .2 | — | .5 | — | |||||||||||||
Total Other Operations expenses | 27.9 | 31.8 | 47.9 | 62.3 | |||||||||||||
Total expenses | 126.9 | 113.2 | 233.7 | 265.1 | |||||||||||||
Pre-tax income (loss) from continuing operations | 132.7 | 15.8 | (33.3) | 297.5 | |||||||||||||
Income tax (expense) benefit | (24.1) | .1 | 1.4 | (10.1) | |||||||||||||
Net income (loss) from continuing operations | 108.6 | 15.9 | (31.9) | 287.4 | |||||||||||||
Net (loss) income from sale of discontinued operations, net of tax | (1.0) | — | (.1) | .7 | |||||||||||||
Net income (loss) | 107.6 | 15.9 | (32.0) | 288.1 | |||||||||||||
Net loss attributable to non-controlling interests | 7.8 | 4.6 | 18.6 | 16.8 | |||||||||||||
Net income (loss) attributable to White Mountains's common shareholders | $ | 115.4 | $ | 20.5 | $ | (13.4) | $ | 304.9 |
(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. |
WHITE MOUNTAINS INSURANCE GROUP, LTD. | ||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||||||||||||||
(millions) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
Net income (loss) attributable to White Mountains's common shareholders | $ | 115.4 | $ | 20.5 | $ | (13.4) | $ | 304.9 | ||||||||
Other comprehensive income (loss), net of tax | .5 | (3.1) | (2.9) | (3.4) | ||||||||||||
Comprehensive income (loss) | 115.9 | 17.4 | (16.3) | 301.5 | ||||||||||||
Other comprehensive (income) loss attributable to non-controlling interests | (.2) | .2 | (.2) | .2 | ||||||||||||
Comprehensive income (loss) attributable to White Mountains's common shareholders | $ | 115.7 | $ | 17.6 | $ | (16.5) | $ | 301.7 |
WHITE MOUNTAINS INSURANCE GROUP, LTD. | ||||||||||||||||
EARNINGS PER SHARE | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Income (loss) per share attributable to White Mountains's common shareholders | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
Basic earnings (loss) per share | ||||||||||||||||
Continuing operations | $ | 37.46 | $ | 6.44 | $ | (4.25) | $ | 95.71 | ||||||||
Discontinued operations | (.32) | — | (.03) | .22 | ||||||||||||
Total consolidated operations | $ | 37.14 | $ | 6.44 | $ | (4.28) | $ | 95.93 | ||||||||
Diluted earnings (loss) per share | ||||||||||||||||
Continuing operations | $ | 37.46 | $ | 6.44 | $ | (4.25) | $ | 95.71 | ||||||||
Discontinued operations | (.32) | — | (.03) | .22 | ||||||||||||
Total consolidated operations | $ | 37.14 | $ | 6.44 | $ | (4.28) | $ | 95.93 | ||||||||
Dividends declared per White Mountains's common share | $ | — | $ | — | $ | 1.00 | $ | 1.00 |
WHITE MOUNTAINS INSURANCE GROUP, LTD. | ||||||||||||||||||||||||
QTD SEGMENT STATEMENTS OF PRE-TAX INCOME (LOSS) | ||||||||||||||||||||||||
(millions) | ||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
For the Three Months Ended June 30, 2020 | HG Global/BAM | |||||||||||||||||||||||
HG Global | BAM | NSM | Kudu | Other | Total | |||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Earned insurance premiums | $ | 4.6 | $ | 1.0 | $ | — | $ | — | $ | — | $ | 5.6 | ||||||||||||
Net investment income | 2.0 | 2.9 | — | 5.6 | 9.1 | 19.6 | ||||||||||||||||||
Net investment income (expense) - BAM surplus note interest | 4.7 | (4.7) | — | — | — | — | ||||||||||||||||||
Net realized and unrealized investment gains | 10.7 | 3.7 | — | 16.5 | 122.0 | 152.9 | ||||||||||||||||||
Advertising and commission revenues | — | — | 63.0 | — | 1.9 | 64.9 | ||||||||||||||||||
Other revenues | .1 | 1.1 | 13.1 | — | 2.3 | 16.6 | ||||||||||||||||||
Total revenues | 22.1 | 4.0 | 76.1 | 22.1 | 135.3 | 259.6 | ||||||||||||||||||
Expenses: | ||||||||||||||||||||||||
Insurance acquisition expenses | 1.2 | .9 | — | — | — | 2.1 | ||||||||||||||||||
Other underwriting expenses | — | .2 | — | — | — | .2 | ||||||||||||||||||
Cost of sales | — | — | — | — | 2.2 | 2.2 | ||||||||||||||||||
General and administrative expenses | .5 | 12.0 | 48.5 | 2.8 | 25.3 | 89.1 | ||||||||||||||||||
Broker commission expenses | — | — | 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 | 1.7 | 13.1 | 79.8 | 4.4 | 27.9 | 126.9 | ||||||||||||||||||
Pre-tax income (loss) | $ | 20.4 | $ | (9.1) | $ | (3.7) | $ | 17.7 | $ | 107.4 | $ | 132.7 |
WHITE MOUNTAINS INSURANCE GROUP, LTD. | ||||||||||||||||||||||||
QTD SEGMENT STATEMENTS OF PRE-TAX INCOME (LOSS) (CONTINUED) | ||||||||||||||||||||||||
(millions) | ||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
For the Three Months Ended June 30, 2019 | HG Global/BAM | |||||||||||||||||||||||
HG Global | BAM | NSM | Kudu | Other | Total | |||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Earned insurance premiums | $ | 3.4 | $ | .9 | $ | — | $ | — | $ | — | $ | 4.3 | ||||||||||||
Net investment income | 1.9 | 3.5 | — | 4.0 | 11.6 | 21.0 | ||||||||||||||||||
Net investment income (expense) - BAM surplus note interest | 6.8 | (6.8) | — | — | — | — | ||||||||||||||||||
Net realized and unrealized investment gains | 4.0 | 7.5 | — | .4 | 23.3 | 35.2 | ||||||||||||||||||
Advertising and commission revenues | — | — | 54.9 | — | 1.3 | 56.2 | ||||||||||||||||||
Other revenues | — | .4 | 11.2 | — | .7 | 12.3 | ||||||||||||||||||
Total revenues | 16.1 | 5.5 | 66.1 | 4.4 | 36.9 | 129.0 | ||||||||||||||||||
Expenses: | ||||||||||||||||||||||||
Insurance acquisition expenses | .9 | .5 | — | — | — | 1.4 | ||||||||||||||||||
Other underwriting expenses | — | .1 | — | — | — | .1 | ||||||||||||||||||
Cost of sales | — | — | — | — | 1.6 | 1.6 | ||||||||||||||||||
General and administrative expenses | .4 | 11.9 | 32.8 | 2.2 | 30.1 | 77.4 | ||||||||||||||||||
Broker commission expenses | — | — | 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 | 1.3 | 12.5 | 65.4 | 2.2 | 31.8 | 113.2 | ||||||||||||||||||
Pre-tax income (loss) | $ | 14.8 | $ | (7.0) | $ | .7 | $ | 2.2 | $ | 5.1 | $ | 15.8 |
WHITE MOUNTAINS INSURANCE GROUP, LTD. | ||||||||||||||||||||||||
YTD SEGMENT STATEMENTS OF PRE-TAX INCOME (LOSS) | ||||||||||||||||||||||||
(millions) | ||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
For the Six Months Ended June 30, 2020 | HG Global/BAM | |||||||||||||||||||||||
HG Global | BAM | NSM | Kudu | Other | Total | |||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Earned insurance premiums | $ | 9.0 | $ | 2.0 | $ | — | $ | — | $ | — | $ | 11.0 | ||||||||||||
Net investment income | 4.3 | 6.1 | — | 12.9 | 19.2 | 42.5 | ||||||||||||||||||
Net investment income (expense) - BAM surplus note interest | 9.5 | (9.5) | — | — | — | — | ||||||||||||||||||
Net realized and unrealized investment gains (loss) | 12.1 | 8.4 | — | (8.3) | (16.0) | (3.8) | ||||||||||||||||||
Advertising and commission revenues | — | — | 116.0 | — | 4.0 | 120.0 | ||||||||||||||||||
Other revenue | .1 | 1.6 | 25.1 | .1 | 3.8 | 30.7 | ||||||||||||||||||
Total revenues | 35.0 | 8.6 | 141.1 | 4.7 | 11.0 | 200.4 | ||||||||||||||||||
Expenses: | ||||||||||||||||||||||||
Insurance acquisition expenses | 2.2 | 1.6 | — | — | — | 3.8 | ||||||||||||||||||
Other underwriting expenses | — | .2 | — | — | — | .2 | ||||||||||||||||||
Cost of sales | — | — | — | — | 4.2 | 4.2 | ||||||||||||||||||
General and administrative expenses | 1.0 | 26.2 | 88.1 | 5.3 | 42.8 | 163.4 | ||||||||||||||||||
Broker commission expenses | — | — | 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 | 3.2 | 28.0 | 146.2 | 8.4 | 47.9 | 233.7 | ||||||||||||||||||
Pre-tax income (loss) | $ | 31.8 | $ | (19.4) | $ | (5.1) | $ | (3.7) | $ | (36.9) | $ | (33.3) |
WHITE MOUNTAINS INSURANCE GROUP, LTD. | ||||||||||||||||||||||||||||
YTD SEGMENT STATEMENTS OF PRE-TAX INCOME (LOSS) (CONTINUED) | ||||||||||||||||||||||||||||
(millions) | ||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||
For the Six Months Ended June 30, 2019 | HG Global/BAM | |||||||||||||||||||||||||||
HG Global | BAM | NSM | Kudu (1) | MediaAlpha (2) | Other | Total | ||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||
Earned insurance premiums | $ | 6.8 | $ | 1.7 | $ | — | $ | — | $ | — | $ | — | $ | 8.5 | ||||||||||||||
Net investment income | 3.8 | 6.9 | — | 4.0 | — | 22.3 | 37.0 | |||||||||||||||||||||
Net investment income (expense) - | 13.7 | (13.7) | — | — | — | — | — | |||||||||||||||||||||
Net realized and unrealized | 9.1 | 14.2 | — | .4 | — | 142.4 | 166.1 | |||||||||||||||||||||
Realized gain and unrealized | — | — | — | — | — | 182.2 | 182.2 | |||||||||||||||||||||
Advertising and commission | — | — | 98.2 | — | 48.8 | 2.6 | 149.6 | |||||||||||||||||||||
Other revenue | — | 1.0 | 17.2 | — | — | 1.0 | 19.2 | |||||||||||||||||||||
Total revenues | 33.4 | 10.1 | 115.4 | 4.4 | 48.8 | 350.5 | 562.6 | |||||||||||||||||||||
Expenses: | ||||||||||||||||||||||||||||
Insurance acquisition expenses | 1.7 | 1.0 | — | — | — | — | 2.7 | |||||||||||||||||||||
Other underwriting expenses | — | .2 | — | — | — | — | .2 | |||||||||||||||||||||
Cost of sales | — | — | — | — | 40.6 | 2.7 | 43.3 | |||||||||||||||||||||
General and administrative expenses | .9 | 25.7 | 58.1 | 2.2 | 5.7 | 59.5 | 152.1 | |||||||||||||||||||||
General and administrative expenses | — | — | — | — | 6.8 | — | 6.8 | |||||||||||||||||||||
Broker commission expense | — | — | 33.6 | — | — | — | 33.6 | |||||||||||||||||||||
Change in fair value of contingent | — | — | 7.6 | — | — | — | 7.6 | |||||||||||||||||||||
Amortization of other intangible | — | — | 9.1 | — | 1.6 | .1 | 10.8 | |||||||||||||||||||||
Interest expense | — | — | 7.8 | — | .2 | — | 8.0 | |||||||||||||||||||||
Total expenses | 2.6 | 26.9 | 116.2 | 2.2 | 54.9 | 62.3 | 265.1 | |||||||||||||||||||||
Pre-tax income (loss) | $ | 30.8 | $ | (16.8) | $ | (.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. |
WHITE MOUNTAINS INSURANCE GROUP, LTD. | ||||||||||||||||
SELECTED FINANCIAL DATA | ||||||||||||||||
(millions) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
BAM | 2020 | 2019 | 2020 | 2019 | ||||||||||||
Gross par value of primary market policies issued | $ | 3,196.1 | $ | 2,624.2 | $ | 5,704.2 | $ | 4,010.0 | ||||||||
Gross par value of secondary market policies issued | 878.5 | 293.2 | 1,347.0 | 832.4 | ||||||||||||
Gross par value of assumed reinsurance | 36.9 | — | 36.9 | — | ||||||||||||
Total gross par value of market policies issued | $ | 4,111.5 | $ | 2,917.4 | $ | 7,088.1 | $ | 4,842.4 | ||||||||
Gross written premiums | $ | 21.5 | $ | 12.5 | $ | 31.2 | $ | 20.4 | ||||||||
MSC collected | 21.5 | 12.0 | 31.5 | 19.9 | ||||||||||||
Total gross written premiums and MSC collected | $ | 43.0 | $ | 24.5 | $ | 62.7 | $ | 40.3 | ||||||||
Present value of future installment MSC collections | .3 | — | .3 | .2 | ||||||||||||
Gross written premium adjustments on existing installment policies | — | — | — | (.1) | ||||||||||||
Gross written premiums and MSC from new business | $ | 43.3 | $ | 24.5 | $ | 63.0 | $ | 40.4 | ||||||||
Total pricing | 105 bps | 84 bps | 89 bps | 83 bps |
As of June 30, 2020 | As of December 31, 2019 | |||||||
Policyholders' surplus | $ | 345.1 | $ | 402.4 | ||||
Contingency reserve | 76.9 | 68.2 | ||||||
Qualified statutory capital | 422.0 | 470.6 | ||||||
Statutory net unearned premiums | 42.4 | 39.3 | ||||||
Present value of future installment premiums and MSC | 14.6 | 13.7 | ||||||
HG Re, Ltd collateral trusts at statutory value | 378.1 | 314.0 | ||||||
Fidus Re, Ltd collateral trust at statutory value | 100.0 | 100.0 | ||||||
Claims paying resources | $ | 957.1 | $ | 937.6 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
HG Global | 2020 | 2019 | 2020 | 2019 | |||||||||||
Net written premiums | $ | 18.3 | $ | 10.7 | $ | 26.6 | $ | 17.4 | |||||||
Earned premiums | $ | 4.6 | $ | 3.4 | $ | 9.0 | $ | 6.8 |
As of June 30, 2020 | As of December 31, 2019 | ||||||
Unearned premiums | $ | 179.4 | $ | 161.7 | |||
Deferred acquisition costs | $ | 48.5 | $ | 42.8 |
WHITE MOUNTAINS INSURANCE GROUP, LTD. | ||||||||||||||||||||
SELECTED FINANCIAL DATA (CONTINUED) | ||||||||||||||||||||
(millions) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
NSM | Three Months June 30, 2019 | Three Months June 30, 2020 | Six Months Ended June 30, 2019 | Six Months Ended June 30, 2020 | Twelve Months July 1, 2019 to June 30, 2020 | |||||||||||||||
Commission revenues | $ | 54.9 | $ | 63.0 | $ | 98.2 | $ | 116.0 | $ | 211.2 | ||||||||||
Broker commission expenses | 18.1 | 21.0 | 33.6 | 39.3 | 70.5 | |||||||||||||||
Gross profit | 36.8 | 42.0 | 64.6 | 76.7 | 140.7 | |||||||||||||||
Other revenues | 11.2 | 13.1 | 17.2 | 25.1 | 47.6 | |||||||||||||||
General and administrative expenses | 32.8 | 48.5 | 58.1 | 88.1 | 162.2 | |||||||||||||||
Change in fair value of contingent consideration earnout liabilities | 6.3 | (1.7) | 7.6 | (2.3) | (7.8) | |||||||||||||||
Amortization of other intangible assets | 4.1 | 6.3 | 9.1 | 11.1 | 21.4 | |||||||||||||||
Interest expense | 4.1 | 5.7 | 7.8 | 10.0 | 18.9 | |||||||||||||||
GAAP pre-tax income (loss) | .7 | (3.7) | (.8) | (5.1) | (6.4) | |||||||||||||||
Income tax expense (benefit) | .3 | (2.2) | — | (2.9) | (3.5) | |||||||||||||||
GAAP net income (loss) | .4 | (1.5) | (.8) | (2.2) | (2.9) | |||||||||||||||
Add back: | ||||||||||||||||||||
Interest expense | 4.1 | 5.7 | 7.8 | 10.0 | 18.9 | |||||||||||||||
Income tax expense (benefit) | .3 | (2.2) | — | (2.9) | (3.5) | |||||||||||||||
General and administrative expenses – depreciation | .7 | .8 | 1.2 | 1.7 | 3.3 | |||||||||||||||
Amortization of other intangible assets | 4.1 | 6.3 | 9.1 | 11.1 | 21.4 | |||||||||||||||
EBITDA | 9.6 | 9.1 | 17.3 | 17.7 | 37.2 | |||||||||||||||
Add back: | ||||||||||||||||||||
Change in fair value of contingent consideration earnout liabilities | 6.3 | (1.7) | 7.6 | (2.3) | (7.8) | |||||||||||||||
Impairments of intangible assets | — | 6.2 | — | 6.2 | 8.6 | |||||||||||||||
Acquisition-related transaction expenses | .6 | 3.3 | 1.1 | 5.0 | 7.1 | |||||||||||||||
Fair value purchase accounting adjustment for deferred revenue | — | — | — | — | .9 | |||||||||||||||
Investments made in the development of new business lines | (.1) | .4 | .1 | .4 | .5 | |||||||||||||||
Restructuring expenses | — | .7 | .1 | 1.5 | 3.7 | |||||||||||||||
Adjusted EBITDA | $ | 16.4 | $ | 18.0 | $ | 26.2 | $ | 28.5 | 50.2 | |||||||||||
Add: | ||||||||||||||||||||
Kingsbridge's Adjusted EBITDA from July 1, 2019 to April 7, 2020 | 6.6 | |||||||||||||||||||
Pro forma adjusted EBITDA | $ | 56.8 |
WHITE MOUNTAINS INSURANCE GROUP, LTD. | |||||||||||||||
SELECTED FINANCIAL DATA (CONTINUED) | |||||||||||||||
(millions) | |||||||||||||||
(Unaudited) | |||||||||||||||
Kudu | Three Months June 30, 2019 (1) | Three Months June 30, 2020 | Six Months Ended June 30, 2020 | Twelve Months July 1, 2019 to June 30, 2020 | |||||||||||
GAAP pre-tax income (loss) | $ 2.2 | $ | 17.7 | $ | (3.7) | $ | 4.9 | ||||||||
Income tax expense (benefit) | .6 | 4.8 | (.6) | 1.9 | |||||||||||
GAAP net income (loss) | 1.6 | 12.9 | (3.1) | 3.0 | |||||||||||
Add back: | |||||||||||||||
Interest expense | — | 1.5 | 2.9 | 3.0 | |||||||||||
Income tax expense (benefit) | .6 | 4.8 | (.6) | 1.9 | |||||||||||
Amortization of other intangible assets | — | .1 | .2 | .4 | |||||||||||
EBITDA | 2.2 | 19.3 | (.6) | 8.3 | |||||||||||
Add back: | |||||||||||||||
Net unrealized investment (gains) losses | (.4) | (16.5) | 8.3 | 2.4 | |||||||||||
Non-cash equity-based compensation expense | .4 | — | — | .9 | |||||||||||
Acquisition-related transaction expenses | .3 | .9 | 1.5 | 4.1 | |||||||||||
Adjusted EBITDA | $ | 2.5 | $ | 3.7 | $ | 9.2 | 15.7 | ||||||||
Adjust to annualize partial year revenues | 3.1 | ||||||||||||||
Annualized Adjusted EBITDA | $ | 18.8 | |||||||||||||
(1) | Kudu's results are from April 4, 2019, the date White Mountains began consolidating Kudu, to June 30, 2019. |
Regulation G
This earnings release includes non-GAAP financial measures that have been reconciled to their most comparable GAAP financial measures.
Pro forma adjusted EBITDA is a non-GAAP financial measure that starts with adjusted EBITDA and also includes the earnings of acquired businesses for the period of time over the previous twelve months that the businesses were not owned by White Mountains.
White Mountains believes that these non-GAAP financial measures are useful to management and investors in evaluating NSM's performance. White Mountains also believes that pro forma adjusted EBITDA is useful to management and investors to demonstrate the earnings profile of NSM's business as of the end of the period for a full 12 month period. See page 15 for the reconciliation of NSM's GAAP net income (loss) to EBITDA, adjusted EBITDA and pro forma adjusted EBITDA.
Annualized adjusted EBITDA is a non-GAAP financial measure that annualizes revenues related to Kudu's earnings and revenue participation contracts that were in place as of the end of the 12 month period but were not in effect for the full 12 month period. The amount added was calculated on a contract-by-contract basis by annualizing the revenues received for the partial 12 month period. For example, if a participation contract was in effect for four months, the amount added equals twice that amount.
White Mountains believes that these non-GAAP financial measures are useful to management and investors in evaluating Kudu's performance. White Mountains also believes that annualized adjusted EBITDA is useful to management and investors to demonstrate the earnings profile of Kudu's business as of the end of the period for a full 12 month period. See page 16 for the reconciliation of Kudu's GAAP net income (loss) to EBITDA, adjusted EBITDA and annualized adjusted EBITDA.
For the Six Months Ended June 30, 2019 | |||||||||
GAAP Return | Remove | Return - | |||||||
Total consolidated portfolio returns | 12.4 | % | (4.5) | % | 7.9 | % | |||
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
This earnings release may contain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included or referenced in this release which address activities, events or developments which White Mountains expects or anticipates will or may occur in the future are forward-looking statements. The words "could", "will", "believe", "intend", "expect", "anticipate", "project", "estimate", "predict" and similar expressions are also intended to identify forward-looking statements. These forward-looking statements include, among others, statements with respect to White Mountains's:
These statements are based on certain assumptions and analyses made by White Mountains in light of its experience and perception of historical trends, current conditions and expected future developments, as well as other factors believed to be appropriate in the circumstances. However, whether actual results and developments will conform to its expectations and predictions is subject to risks and uncertainties that could cause actual results to differ materially from expectations, including:
Consequently, all of the forward-looking statements made in this earnings release are qualified by these cautionary statements, and there can be no assurance that the actual results or developments anticipated by White Mountains will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, White Mountains or its business or operations. White Mountains assumes no obligation to publicly update any such forward-looking statements, whether as a result of new information, future events or otherwise.
View original content:http://www.prnewswire.com/news-releases/white-mountains-reports-second-quarter-results-301108317.html
SOURCE White Mountains Insurance Group, Ltd.
Copyright 2020 PR Newswire
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