White Mountains Insurance(WTM) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION This section presents the unaudited consolidated financial statements and management's discussion and analysis for White Mountains Insurance Group, Ltd. for the period ended June 30, 2025 Item 1. Financial Statements (Unaudited) This section presents the unaudited consolidated financial statements of White Mountains Insurance Group, Ltd. for the period ended June 30, 2025, including balance sheets, statements of operations, comprehensive income, changes in equity, and cash flows, along with detailed notes explaining the basis of presentation, significant transactions, investment activities, debt, income taxes, and segment information Consolidated Balance Sheets The consolidated balance sheets show a significant increase in total assets and liabilities from December 31, 2024, to June 30, 2025, primarily driven by growth in P&C Insurance and Reinsurance assets and liabilities, as well as increases in P&C Insurance Distribution and Other Operations assets | Metric | June 30, 2025 (Millions) | December 31, 2024 (Millions) | Change (Millions) | % Change | | :--------------------------------- | :----------------------- | :--------------------------- | :---------------- | :------- | | Assets: | | | | | | Total assets | $11,822.9 | $9,925.6 | $1,897.3 | 19.1% | | P&C Insurance and Reinsurance assets | $6,905.5 | $5,299.0 | $1,606.5 | 30.3% | | Financial Guarantee assets | $1,244.5 | $1,179.4 | $65.1 | 5.5% | | Asset Management assets | $1,230.7 | $1,108.4 | $122.3 | 11.0% | | P&C Insurance Distribution assets | $619.5 | $584.6 | $34.9 | 6.0% | | Other Operations assets | $1,822.7 | $1,754.2 | $68.5 | 3.9% | | Liabilities: | | | | | | Total liabilities | $6,482.7 | $4,794.6 | $1,688.1 | 35.2% | | P&C Insurance and Reinsurance liabilities | $5,173.5 | $3,664.8 | $1,508.7 | 41.2% | | Financial Guarantee liabilities | $488.3 | $464.1 | $24.2 | 5.2% | | Asset Management liabilities | $329.2 | $316.7 | $12.5 | 3.9% | | P&C Insurance Distribution liabilities | $281.2 | $167.7 | $113.5 | 67.7% | | Other Operations liabilities | $210.5 | $181.3 | $29.2 | 16.1% | | Equity: | | | | | | Total equity | $5,340.2 | $5,131.0 | $209.2 | 4.1% | | White Mountains's common shareholders' equity | $4,644.5 | $4,483.7 | $160.8 | 3.6% | Consolidated Statements of Operations Total revenues significantly increased for both the three and six months ended June 30, 2025, compared to the same periods in 2024, primarily driven by strong performance in P&C Insurance and Reinsurance and a rebound in Other Operations, leading to a substantial improvement in pre-tax income and net income attributable to common shareholders | Metric (Millions) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | % Change (3 Months) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | % Change (6 Months) | | :------------------------------------------ | :--------------------------- | :--------------------------- | :------------------ | :--------------------------- | :--------------------------- | :------------------ | | Total revenues | $689.2 | $395.4 | 74.3% | $1,267.0 | $1,042.7 | 21.5% | | P&C Insurance and Reinsurance revenues | $447.9 | $363.3 | 23.3% | $861.1 | $700.1 | 23.0% | | Financial Guarantee revenues | $24.2 | $15.7 | 54.1% | $56.3 | $23.6 | 138.6% | | Asset Management revenues | $20.4 | $70.2 | -70.9% | $84.2 | $80.9 | 4.1% | | P&C Insurance Distribution revenues | $62.5 | $42.0 | 48.8% | $123.9 | $73.1 | 69.5% | | Other Operations revenues | $134.2 | $(95.8) | N/A | $141.5 | $165.0 | -14.3% | | Total expenses | $512.7 | $430.1 | 19.2% | $1,018.1 | $844.8 | 20.5% | | Pre-tax income (loss) | $176.5 | $(34.7) | N/A | $248.9 | $197.9 | 25.8% | | Net income (loss) attributable to White Mountains's common shareholders | $122.9 | $(54.6) | N/A | $156.8 | $181.8 | -13.7% | Consolidated Statements of Comprehensive Income (Loss) Comprehensive income attributable to White Mountains's common shareholders saw a significant positive shift in Q2 2025 compared to a loss in Q2 2024, while the six-month period showed a slight decrease, and basic and diluted EPS also improved substantially in Q2 2025 | Metric (Millions, except per share) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | % Change (3 Months) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | % Change (6 Months) | | :------------------------------------------ | :--------------------------- | :--------------------------- | :------------------ | :--------------------------- | :--------------------------- | :------------------ | | Comprehensive income (loss) attributable to White Mountains's common shareholders | $123.7 | $(54.6) | N/A | $158.8 | $181.6 | -12.5% | | Basic earnings (loss) per share | $47.75 | $(21.24) | N/A | $60.99 | $70.93 | -14.0% | | Diluted earnings (loss) per share | $47.75 | $(21.24) | N/A | $60.99 | $70.93 | -14.0% | Consolidated Statements of Changes in Equity Total equity increased by $209.2 million from January 1, 2025, to June 30, 2025, primarily due to net income and other comprehensive income, partially offset by dividends and net contributions/distributions from noncontrolling interests, with the acquisition of noncontrolling interests also contributing to the increase | Metric (Millions) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------ | :--------------------------- | :--------------------------- | | Total Equity (Beginning Balance) | $5,131.0 | $4,561.6 | | Net income (loss) | $226.4 | $180.6 | | Other comprehensive income (loss), net of tax | $3.1 | $(0.2) | | Dividends declared on common shares | $(2.6) | $(2.5) | | Dividends to noncontrolling interests | $(19.1) | $(9.3) | | Issuances of common shares | $2.6 | $2.9 | | Repurchases and retirements of common shares | $(9.9) | $(8.1) | | Amortization of restricted share awards | $8.7 | $7.5 | | Recognition of equity-based compensation expense of subsidiaries | $4.6 | $2.1 | | Net contributions (distributions) and dilution from other noncontrolling interests | $(35.3) | $0.5 | | Acquisition of noncontrolling interests | $30.7 | $111.1 | | Total Equity (Ending Balance) | $5,340.2 | $4,872.2 | Consolidated Statements of Cash Flows Net cash provided from operations decreased significantly in the first six months of 2025 compared to 2024, primarily due to changes in reinsurance recoverables and insurance premiums receivable, while investing activities shifted from providing cash to using cash, and financing activities provided cash in 2025, contrasting with cash usage in 2024 | Metric (Millions) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------ | :--------------------------- | :--------------------------- | | Net cash provided from (used for) operations | $137.3 | $253.3 | | Net cash provided from (used for) investing activities | $(156.5) | $(94.2) | | Net cash provided from (used for) financing activities | $90.6 | $(26.3) | | Net change in cash during the period | $71.4 | $132.8 | | Cash balance at end of period | $337.8 | $255.2 | Note 1. Basis of Presentation and Significant Accounting Policies White Mountains Insurance Group, Ltd. operates through four reportable segments: Ark/WM Outrigger (specialty P&C insurance/reinsurance), HG Global (financial guarantee), Kudu (asset management), and Bamboo (P&C insurance distribution), with remaining operations in 'Other Operations', and its financial statements are prepared under GAAP, with certain prior period reclassifications - White Mountains operates through four reportable segments: Ark/WM Outrigger, HG Global, Kudu, and Bamboo, with other businesses grouped under 'Other Operations'[32] - Ark/WM Outrigger focuses on specialty property and casualty insurance and reinsurance, including Lloyd's Syndicates and a collateralized reinsurance vehicle (WM Outrigger Re)[32] - HG Global provides financial guarantee services and, prior to July 1, 2024, consolidated Build America Mutual Assurance Company (BAM)[33][35] - Kudu offers capital solutions for boutique asset and wealth managers through noncontrolling equity interests (Participation Contracts)[35] - Bamboo is a tech- and data-enabled P&C insurance distribution platform, primarily a managing general agent (MGA) for homeowners' insurance in California, and includes a captive reinsurer[36] - Other Operations include the parent company, investment management, interests in MediaAlpha, PassportCard/DavidShield, Elementum, and Enterprise Solutions (acquired April 1, 2025)[37] Note 2. Significant Transactions White Mountains completed several significant transactions, including the acquisition of a controlling interest in Bamboo in January 2024 for $296.7 million, the deconsolidation of BAM in July 2024, and the acquisition of a majority interest in Enterprise Solutions in April 2025 for $58.3 million, while WM Outrigger Re also renewed its reinsurance agreements for the 2024 and 2025 underwriting years with varying capital commitments - White Mountains acquired a controlling interest in Bamboo on January 2, 2024, investing $296.7 million of equity, including $36.0 million to retire legacy debt and $20.0 million of primary capital, resulting in the recognition of $371.4 million in goodwill and other intangible assets[40][41][42] - Effective July 1, 2024, White Mountains deconsolidated Build America Mutual Assurance Company (BAM) as it no longer held primary beneficiary status, with BAM Surplus Notes subsequently accounted for at fair value, resulting in an unrealized loss of $114.5 million on deconsolidation[44][45] - WM Outrigger Re renewed its collateralized reinsurance agreements for the 2024 and 2025 underwriting years, with White Mountains's capital commitment at $130.0 million for 2024 and $150.0 million for 2025[47][48] - On April 1, 2025, White Mountains acquired a majority interest in Enterprise Solutions for $58.3 million cash consideration, recognizing $95.4 million in goodwill and other intangible assets[51][52] Note 3. Investment Securities White Mountains's investment portfolio, primarily fixed maturity and short-term investments, common equity securities, and other long-term investments, generated increased net investment income and significant net realized and unrealized investment gains in the first six months of 2025, with the portfolio's fair value measurements categorized into Level 1, 2, and 3, and Level 3 investments, particularly Kudu's Participation Contracts, showing substantial carrying values and growth Net Investment Income (Pre-tax) | Metric (Millions) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | % Change (3 Months) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | % Change (6 Months) | | :------------------------ | :--------------------------- | :--------------------------- | :------------------ | :--------------------------- | :--------------------------- | :------------------ | | Fixed maturity investments | $26.8 | $23.2 | 15.5% | $53.8 | $43.9 | 22.6% | | Short-term investments | $12.0 | $16.0 | -25.0% | $22.6 | $32.0 | -29.4% | | Other long-term investments | $23.1 | $18.4 | 25.5% | $45.3 | $38.9 | 16.5% | | Total net investment income | $61.4 | $57.4 | 7.0% | $121.0 | $114.4 | 5.8% | Net Realized and Unrealized Investment Gains (Losses) | Metric (Millions) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | % Change (3 Months) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | % Change (6 Months) | | :------------------------------------------ | :--------------------------- | :--------------------------- | :------------------ | :--------------------------- | :--------------------------- | :------------------ | | Net realized investment gains (losses) | $37.8 | $120.9 | -68.8% | $78.1 | $115.2 | -32.2% | | Net unrealized investment gains (losses) | $79.5 | $(181.1) | N/A | $89.2 | $51.4 | 73.5% | | Total net realized and unrealized investment gains (losses) | $117.3 | $(60.2) | N/A | $167.3 | $166.6 | 0.4% | Total Investments by Fair Value Level (Millions) | Investment Type | June 30, 2025 | December 31, 2024 | | :------------------------ | :------------ | :---------------- | | Total fixed maturity investments | $2,635.9 | $2,511.6 | | Total short-term investments | $1,225.1 | $964.2 | | Total common equity securities | $435.0 | $650.0 | | Investment in MediaAlpha | $195.5 | $201.6 | | Total other long-term investments | $2,307.1 | $2,150.2 | | Total investments | $6,798.6 | $6,477.6 | | Level 1 | $1,870.8 | $1,838.6 | | Level 2 | $2,652.7 | $2,512.3 | | Level 3 | $1,392.8 | $1,262.7 | | NAV (practical expedient) | $882.3 | $864.0 | - Kudu's Participation Contracts, a significant component of other long-term investments, had a fair value of $1,121.1 million as of June 30, 2025, up from $1,008.4 million at December 31, 2024, with a weighted average discount rate of 19% and terminal cash flow exit multiple of 14x[74][87] Note 4. Goodwill and Other Intangible Assets Total goodwill and other intangible assets increased to $805.4 million as of June 30, 2025, from $720.3 million at December 31, 2024, primarily due to the acquisition of Enterprise Solutions, which added $95.4 million in goodwill, while amortization of other intangible assets totaled $10.3 million for the six months ended June 30, 2025 Goodwill and Other Intangible Assets (Millions) | Asset Type | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Total goodwill | $534.6 | $439.2 | | Total other intangible assets | $270.8 | $281.1 | | Total goodwill and other intangible assets | $805.4 | $720.3 | - The increase in goodwill for the six months ended June 30, 2025, was primarily due to the $95.4 million from the Enterprise Solutions Transaction, which was provisionally recorded entirely as goodwill[90] - Amortization of other intangible assets for the six months ended June 30, 2025, was $10.3 million[90] Note 5. Loss and Loss Adjustment Expense Reserves The Ark/WM Outrigger segment reported net favorable prior year loss reserve development of $69.9 million for the six months ended June 30, 2025, driven by property, marine & energy, and specialty lines, partially offset by aviation losses, while P&C Insurance Distribution and Other Operations also recorded loss and LAE reserves and incurred expenses Ark/WM Outrigger Loss and LAE Reserve Activity (Millions) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Gross beginning balance | $2,253.9 | $1,744.5 | $2,127.5 | $1,605.1 | | Net incurred loss and LAE | $164.0 | $175.7 | $397.5 | $355.7 | | Net paid loss and LAE | $(133.5) | $(83.1) | $(292.5) | $(183.8) | | Net favorable prior year loss reserve development | $(17.1) | $(6.9) | $(69.9) | $(7.2) | | Gross ending balance | $2,288.5 | $1,890.1 | $2,288.5 | $1,890.1 | - HG Re had no outstanding loss and LAE reserves or incurred loss and LAE for the periods presented[93] - The Bamboo Captive recorded $28.8 million in loss and LAE reserves as of June 30, 2025, and incurred $12.6 million for the six months ended June 30, 2025[94] - The Bamboo CRV recorded $14.2 million in loss and LAE reserves as of June 30, 2025, and incurred $18.2 million for the six months ended June 30, 2025[95] Note 6. Third-Party Reinsurance The Ark/WM Outrigger segment experienced increases in gross and net written premiums for the three and six months ended June 30, 2025, compared to 2024, while net loss and LAE decreased in Q2 2025 but increased for the six-month period, and reinsurance recoverables significantly increased, with a majority from highly-rated reinsurers Ark/WM Outrigger Premiums and Losses (Millions) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | % Change (3 Months) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | % Change (6 Months) | | :-------------------- | :--------------------------- | :--------------------------- | :------------------ | :--------------------------- | :--------------------------- | :------------------ | | Gross written premiums | $815.2 | $697.0 | 16.9% | $1,922.8 | $1,569.1 | 22.5% | | Net written premiums | $578.6 | $502.8 | 15.1% | $1,306.3 | $1,100.8 | 18.7% | | Net earned premiums | $364.2 | $318.3 | 14.4% | $722.2 | $621.1 | 16.3% | | Net loss and LAE | $164.0 | $175.7 | -6.8% | $397.5 | $355.7 | 11.7% | Ark/WM Outrigger Reinsurance Recoverables (Millions) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Reinsurance recoverables on unpaid losses | $468.5 | $434.4 | | Reinsurance recoverables on paid losses | $69.5 | $57.5 | | Ceded unearned premiums | $506.1 | $97.1 | | Total reinsurance recoverables | $1,044.1 | $589.0 | Ark/WM Outrigger Reinsurance Recoverables by A.M. Best Rating (June 30, 2025) | A.M. Best Rating | Gross (Millions) | Collateral (Millions) | Net (Millions) | % of Total | | :----------------- | :--------------- | :-------------------- | :------------- | :--------- | | A+ or better | $319.1 | $— | $319.1 | 70.6% | | A- to A | $113.0 | $— | $113.0 | 25.0% | | B++ or lower and not rated | $105.9 | $86.1 | $19.8 | 4.4% | | Total | $538.0 | $86.1 | $451.9 | 100.0% | Note 7. Debt White Mountains's total debt increased to $694.6 million as of June 30, 2025, from $562.5 million at December 31, 2024, primarily due to the new Bamboo Credit Facility and an increase in Other Operations debt, while Kudu also amended its credit facility to increase capacity and reduce borrowing costs, and all debt instruments were in compliance with covenants Debt Outstanding (Millions) | Debt Type | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Ark 2021 Subordinated Notes | $158.9 | $154.5 | | HG Global Senior Notes | $147.6 | $147.4 | | Kudu Credit Facility | $246.8 | $238.6 | | Bamboo Credit Facility | $104.6 | $— | | Other Operations debt | $36.7 | $22.0 | | Total debt | $694.6 | $562.5 | - The Bamboo Credit Facility was established on January 24, 2025, with a $110 million term loan and $10 million revolving credit, maturing in January 2031[125] - Kudu amended its Credit Facility on March 18, 2025, reducing the required interest reserve and lowering the minimum debt service coverage ratio to 2.5 times, which lowered borrowing costs and increased capacity[118] - The increase in Other Operations debt was primarily driven by the Enterprise Solutions Transaction[128] - White Mountains was in compliance with all debt covenants as of June 30, 2025[129] Note 8. Income Taxes White Mountains's effective tax rate for the three and six months ended June 30, 2025, was 7.3% and 9.0%, respectively, lower than the U.S. statutory rate due to forecasted income in lower-tax jurisdictions, and the company expects to be exempt from Bermuda's 15% corporate income tax until January 1, 2030, and recorded a net deferred tax asset of $73.0 million related to an economic transition adjustment - White Mountains's effective tax rate was 7.3% for Q2 2025 and 9.0% for H1 2025, lower than the U.S. statutory rate of 21.0% due to income in lower-tax jurisdictions[133] - The company expects to be exempt from Bermuda's 15% corporate income tax until January 1, 2030, and recognized a net deferred tax asset of $73.0 million related to an economic transition adjustment[131] - Certain subsidiaries are subject to the OECD Pillar Two initiative, with a forecasted top-up tax of $2.0 million for the twelve months ended December 31, 2025[132] Note 9. Derivatives White Mountains utilizes interest rate cap agreements for its HG Global Senior Notes, Kudu Credit Facility, and Bamboo Credit Facility to limit exposure to interest rate increases, and these derivatives are accounted for at fair value, with changes recognized in interest expense - HG Global has two interest rate cap agreements (2022 and 2024) for its $150.0 million Senior Notes, with the 2024 cap effective July 25, 2025, and a maximum interest rate of 10.76% per annum[139][140] - Kudu entered into an interest rate cap agreement for its $150.0 million Credit Facility, effective September 30, 2024, with a maximum interest rate of 8.95% per annum[144] - Bamboo entered into an interest rate cap agreement for its $80.0 million Credit Facility, effective March 31, 2025, with a maximum interest rate of 10.0% per annum[147] - For the six months ended June 30, 2025, White Mountains recognized net unrealized losses of $1.7 million for HG Global's caps, $0.7 million for Kudu's cap, and $0.2 million for Bamboo's cap[143][146][149] Note 10. Municipal Bond Guarantee Reinsurance HG Global provides first-loss reinsurance protection to BAM through the FLRT, with obligations secured by Collateral Trusts totaling $984.1 million as of June 30, 2025, and the BAM Surplus Notes, valued at $396.7 million, accrue 10.0% interest, with HG Global receiving a $22.2 million distribution from the Supplemental Trust in H1 2025 - HG Re provides first-loss reinsurance protection of up to 15%-of-par outstanding for each policy assumed from BAM under the FLRT[152] - HG Re's obligations are secured by two Collateral Trusts (Supplemental Trust and Regulation 114 Trust), which held total assets of $984.1 million as of June 30, 2025[158][162] - The BAM Surplus Notes, held by HG Global, were valued at $396.7 million as of June 30, 2025, and accrue interest at 10.0% effective July 1, 2024[163][168] - For the six months ended June 30, 2025, HG Re received a $22.2 million distribution from the Supplemental Trust, including $15.2 million in assigned accrued interest on BAM Surplus Notes and $7.0 million in cash[160] HG Global Insured Obligations (Millions) | Metric | June 30, 2025 | December 31, 2024 | | :------------------------------------------ | :------------ | :---------------- | | Contracts outstanding | 16,449 | 15,884 | | Remaining weighted average contract period (in years) | 11.4 | 11.2 | | Outstanding par value of policies assumed | $19,391.0 | $18,503.3 | | Gross unearned insurance premiums | $307.9 | $297.3 | Note 11. Earnings Per Share Basic and diluted earnings per share for White Mountains's common shareholders significantly improved to $47.75 in Q2 2025 from a loss of $(21.24) in Q2 2024, while for the six-month period, EPS decreased to $60.99 in 2025 from $70.93 in 2024 Earnings Per Share Attributable to White Mountains's Common Shareholders | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net income (loss) attributable to White Mountains's common shareholders (Millions) | $122.9 | $(54.6) | $156.8 | $181.8 | | Basic earnings (loss) per share | $47.75 | $(21.24) | $60.99 | $70.93 | | Diluted earnings (loss) per share | $47.75 | $(21.24) | $60.99 | $70.93 | Note 12. Employee Share-Based Incentive Compensation Plans White Mountains's share-based incentive compensation plans, including performance shares and restricted shares, are designed to align employee interests with shareholder value, with performance shares tied to CVPS growth and typically paid in cash, while restricted shares vest over a 34-month service period, and the company granted 10,645 performance shares and restricted shares for the 2025-2027 cycle - Performance shares are conditional grants tied to company-wide performance targets, specifically the growth in compensation value per share (CVPS), and are typically paid in cash[180][181] - Restricted shares are grants of common shares that generally vest at the end of a 34-month service period[186] Performance Share Activity (Target Shares Outstanding) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Beginning of period | 32,392 | 34,007 | 34,859 | 37,031 | | New grants | — | 1,000 | 10,645 | 11,405 | | Shares paid or expired | — | — | (13,150) | (13,475) | | End of period | 32,392 | 34,992 | 32,392 | 34,992 | - For the 2022-2024 performance cycle, WTM performance share payments were made in March 2025 at 200% of target[182] Note 13. Noncontrolling Interests Noncontrolling interests in consolidated entities totaled $695.7 million as of June 30, 2025, an increase from $647.3 million at December 31, 2024, with Ark representing the largest portion of noncontrolling interests at $447.4 million, followed by Kudu and Bamboo Noncontrolling Interests (Millions) | Segment | June 30, 2025 Equity | June 30, 2025 Percentage | December 31, 2024 Equity | December 31, 2024 Percentage | | :---------------- | :------------------- | :----------------------- | :----------------------- | :--------------------------- | | Ark | $447.4 | 27.9% | $410.4 | 27.9% | | HG Global | $(12.4) | 3.1% | $(13.4) | 3.1% | | Kudu | $127.6 | 8.8% | $127.6 | 9.6% | | Bamboo | $93.1 | 27.2% | $113.6 | 27.2% | | Other | $40.0 | various | $9.1 | various | | Total | $695.7 | | $647.3 | | Note 14. Segment Information White Mountains's segments reported varied pre-tax financial results for the three and six months ended June 30, 2025, with Ark/WM Outrigger and Financial Guarantee showing strong pre-tax income growth, Asset Management maintaining consistent performance, P&C Insurance Distribution significantly improving, and Other Operations rebounding from a prior-year loss, and the majority of revenues from external customers originated in the United Kingdom and Bermuda Pre-tax Income (Loss) by Segment (Millions) | Segment | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | % Change (3 Months) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | % Change (6 Months) | | :-------------------------- | :--------------------------- | :--------------------------- | :------------------ | :--------------------------- | :--------------------------- | :------------------ | | Ark/WM Outrigger | $97.5 | $58.5 | 66.7% | $143.9 | $101.4 | 41.9% | | Financial Guarantee | $16.7 | $(7.8) | N/A | $41.7 | $(22.9) | N/A | | Asset Management | $10.7 | $61.3 | -82.5% | $64.1 | $63.0 | 1.7% | | P&C Insurance Distribution | $16.1 | $6.4 | 151.6% | $22.4 | $7.3 | 206.8% | | Other Operations | $35.5 | $(153.1) | N/A | $(23.2) | $49.1 | N/A | | Total pre-tax income (loss) | $176.5 | $(34.7) | N/A | $248.9 | $197.9 | 25.8% | Revenues from External Customers by Country (Millions) | Country | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | United States | $117.0 | $48.1 | $189.7 | $85.6 | | United Kingdom | $229.0 | $193.7 | $444.5 | $371.1 | | Bermuda | $144.6 | $148.7 | $309.2 | $289.0 | | Other | $4.2 | $3.4 | $8.1 | $7.0 | | Total | $494.8 | $393.9 | $951.5 | $752.7 | Note 15. Variable Interest Entities White Mountains consolidates WM Outrigger Re and Bamboo CRV as Variable Interest Entities (VIEs) where it is the primary beneficiary, but it does not consolidate BAM (deconsolidated July 1, 2024), PassportCard/DavidShield, Elementum, or other limited partnerships, as it is not deemed the primary beneficiary for these entities, despite holding significant influence or variable interests - White Mountains consolidates WM Outrigger Re and Bamboo CRV because it is the primary beneficiary, holding both the power to direct significant activities and the obligation to absorb losses or right to receive returns[198][206] - BAM was deconsolidated effective July 1, 2024, as White Mountains concluded it no longer had the power to direct BAM's activities that most significantly impact its economic performance[201] - White Mountains does not consolidate PassportCard/DavidShield (53.8% ownership) or Elementum (26.6% ownership) as it does not have unilateral power to direct their operations, but accounts for them under the equity method with a fair value option[204][205] - Investments in limited partnerships are generally considered VIEs but are not consolidated as White Mountains does not have unilateral power to direct their operations; they are accounted for at fair value using NAV[207] Note 16. Equity Method Eligible Investments White Mountains's equity method eligible investments, including Kudu's Participation Contracts, MediaAlpha, PassportCard/DavidShield, and Elementum, totaled $1,768.6 million as of June 30, 2025, and these investments generated $36.9 million in dividend and income distributions for the six months ended June 30, 2025 Equity Method Eligible Investments (Millions) | Investment | Ownership Interest (June 30, 2025) | Carrying Value (June 30, 2025) | Ownership Interest (December 31, 2024) | Carrying Value (December 31, 2024) | | :-------------------------- | :--------------------------------- | :----------------------------- | :------------------------------------- | :----------------------------------- | | Kudu's Participation Contracts | 4.1% - 30.0% | $1,121.1 | 4.1% - 30.0% | $1,008.4 | | Investment in MediaAlpha | 26.3% | $195.5 | 26.6% | $201.6 | | PassportCard/DavidShield | 53.8% | $155.0 | 53.8% | $150.0 | | Elementum | 26.6% | $35.0 | 26.6% | $35.0 | | Other equity method eligible investments | Under 50.0% | $257.0 | Under 50.0% | $243.7 | | Total | | $1,763.6 | | $1,638.7 | - White Mountains received $36.9 million in dividend and income distributions from equity method eligible investments for the six months ended June 30, 2025[209] Note 17. Fair Value of Financial Instruments White Mountains records most financial instruments at fair value, except for debt obligations, which are recorded at face value less unamortized costs, and the fair value of debt obligations, determined using discounted cash flow analyses, increased to $694.6 million as of June 30, 2025, from $562.5 million at December 31, 2024 Fair Value and Carrying Value of Debt Obligations (Millions) | Debt Type | Fair Value (June 30, 2025) | Carrying Value (June 30, 2025) | Fair Value (December 31, 2024) | Carrying Value (December 31, 2024) | | :-------------------------- | :------------------------- | :----------------------------- | :----------------------------- | :--------------------------------- | | Ark 2021 Subordinated Notes | $179.8 | $158.9 | $173.9 | $154.5 | | HG Global Senior Notes | $154.9 | $147.6 | $157.2 | $147.4 | | Kudu Credit Facility | $260.8 | $246.8 | $253.3 | $238.6 | | Bamboo Credit Facility | $106.8 | $104.6 | $— | $— | | Other Operations debt | $37.9 | $36.7 | $23.1 | $22.0 | | Total Debt | $740.2 | $694.6 | $607.5 | $562.5 | - Fair value estimates for debt obligations are based on Level 3 measurements using discounted cash flow analyses[210] Note 18. Commitments and Contingencies White Mountains is routinely involved in claims-related litigation and arbitration, with costs reflected in loss and LAE reserves, and the company has no current non-claims related litigation expected to materially impact its financial condition, results of operations, or cash flows - White Mountains is subject to routine claims-related litigation and arbitration, with estimated costs reflected in loss and LAE reserves[212] - No current non-claims related litigation is expected to have a material adverse effect on White Mountains's financial condition, results of operations, or cash flows[212] Note 19. Subsequent events Subsequent to June 30, 2025, White Mountains entered into an agreement to acquire a 51.0% controlling interest in Distinguished Programs, a specialty P&C MGA, for approximately $230.0 million in cash, expected to close in Q3 2025, and additionally, White Mountains invested $150 million into BroadStreet Partners, Inc. on July 18, 2025 - On July 4, 2025, White Mountains agreed to acquire a 51.0% controlling interest in Distinguished Programs, a full-service MGA and program administrator, for approximately $230.0 million in cash, with closing expected in Q3 2025[213][214] - On July 18, 2025, White Mountains invested $150 million into BroadStreet Partners, Inc., an insurance brokerage company[224] - Following these deployments, White Mountains's undeployed capital stands at approximately $300 million[224] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations White Mountains reported a 3% increase in book value per share for both Q2 and H1 2025, driven by strong operating results and investment returns, with key activities including the acquisition of Enterprise Solutions and agreements to acquire Distinguished Programs and invest in BroadStreet, and segment performance was robust, with Ark/WM Outrigger and P&C Insurance Distribution showing significant growth, while overall investment returns were positive, excluding MediaAlpha's impact Overview White Mountains's book value per share increased by 3% in both Q2 and H1 2025, reaching $1,804, driven by sound operating results and good investment returns, with significant transactions including the acquisition of Enterprise Solutions, an agreement to acquire Distinguished Programs, and an investment in BroadStreet Partners, Inc., leaving approximately $300 million in undeployed capital - Book value per share increased by 3% in both the second quarter and first six months of 2025, reaching $1,804 as of June 30, 2025[219] - Comprehensive income attributable to common shareholders was $124 million in Q2 2025 (vs. $(55) million in Q2 2024) and $159 million in H1 2025 (vs. $182 million in H1 2024)[221] - Acquisitions include Enterprise Solutions (April 1, 2025), an agreement to acquire Distinguished Programs (July 4, 2025), and an investment in BroadStreet Partners, Inc. (July 18, 2025)[222][223][224] - Undeployed capital stands at approximately $300 million after recent deployments[224] - Total consolidated portfolio return on invested assets was 2.7% in Q2 2025 (excluding MediaAlpha: 2.3%) and 4.5% in H1 2025 (excluding MediaAlpha: 4.7%)[234][235] Book Value Per Share White Mountains's book value per share increased to $1,803.57 as of June 30, 2025, from $1,745.87 at December 31, 2024, reflecting a 3.3% growth year-to-date, including dividends Book Value Per Share | Metric | June 30, 2025 | March 31, 2025 | December 31, 2024 | June 30, 2024 | | :------------------------------------------ | :------------ | :------------- | :---------------- | :------------ | | White Mountains's common shareholders' equity (Millions) | $4,644.5 | $4,509.6 | $4,483.7 | $4,422.6 | | Common shares outstanding (Thousands) | 2,575.1 | 2,573.7 | 2,568.1 | 2,568.3 | | Book value per share | $1,803.57 | $1,752.17 | $1,745.87 | $1,722.02 | | Year-to-date dividends paid per share | $1.00 | $1.00 | $1.00 | $1.00 | Goodwill and Other Intangible Assets Goodwill and other intangible assets included in White Mountains's common shareholders' equity increased to $585.5 million as of June 30, 2025, from $529.8 million at December 31, 2024, primarily due to the acquisition of Enterprise Solutions Goodwill and Other Intangible Assets (Millions) | Asset Type | June 30, 2025 | March 31, 2025 | December 31, 2024 | June 30, 2024 | | :------------------------------------------ | :------------ | :------------- | :---------------- | :------------ | | Total goodwill | $534.6 | $439.2 | $439.2 | $439.2 | | Total other intangible assets | $270.8 | $275.9 | $281.1 | $291.8 | | Total goodwill and other intangible assets | $805.4 | $715.1 | $720.3 | $731.0 | | Goodwill and other intangible assets included in White Mountains's common shareholders' equity | $585.5 | $525.9 | $529.8 | $537.8 | - The increase in goodwill for Other Operations to $139.8 million as of June 30, 2025, from $44.4 million at December 31, 2024, was due to the Enterprise Solutions Transaction[237] Summary of Consolidated Results White Mountains's consolidated results for Q2 and H1 2025 show significant revenue growth and a strong rebound in pre-tax income compared to 2024, with P&C Insurance and Reinsurance, Financial Guarantee, and P&C Insurance Distribution segments being key drivers of this improvement, while Other Operations also returned to profitability in Q2 2025 Consolidated Financial Results by Industry (Millions) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | % Change (3 Months) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | % Change (6 Months) | | :------------------------------------------ | :--------------------------- | :--------------------------- | :------------------ | :--------------------------- | :--------------------------- | :------------------ | | Total revenues | $689.2 | $395.4 | 74.3% | $1,267.0 | $1,042.7 | 21.5% | | Total expenses | $512.7 | $430.1 | 19.2% | $1,018.1 | $844.8 | 20.5% | | Total pre-tax income (loss) | $176.5 | $(34.7) | N/A | $248.9 | $197.9 | 25.8% | | Net income (loss) attributable to White Mountains's common shareholders | $122.9 | $(54.6) | N/A | $156.8 | $181.8 | -13.7% | | Comprehensive income (loss) attributable to White Mountains's common shareholders | $123.7 | $(54.6) | N/A | $158.8 | $181.6 | -12.5% | I. SUMMARY OF OPERATIONS BY SEGMENT This section provides a detailed breakdown of the financial performance for each of White Mountains's reportable segments: Ark/WM Outrigger, HG Global, Kudu, Bamboo, and Other Operations, highlighting key revenue drivers, expense trends, and pre-tax income contributions for the three and six months ended June 30, 2025 and 2024 Ark/WM Outrigger The Ark/WM Outrigger segment reported strong performance with combined ratios of 84% (Q2 2025) and 90% (H1 2025), driven by favorable prior year loss reserve development and premium growth, with gross written premiums increasing by 17% in Q2 2025 and 23% in H1 2025, primarily from new underwriting teams in property and specialty lines, and pre-tax income significantly increased to $97.5 million in Q2 2025 and $143.9 million in H1 2025 Ark/WM Outrigger Key Financials (Millions) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | % Change (3 Months) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | % Change (6 Months) | | :-------------------- | :--------------------------- | :--------------------------- | :------------------ | :--------------------------- | :--------------------------- | :------------------ | | Gross written premiums | $815.2 | $697.0 | 16.9% | $1,922.8 | $1,569.1 | 22.5% | | Net earned premiums | $364.2 | $318.3 | 14.4% | $722.2 | $621.1 | 16.3% | | Pre-tax income (loss) | $97.5 | $58.5 | 66.7% | $143.9 | $101.4 | 41.9% | | Combined Ratio | 84.4% | 87.0% | -3.0% | 90.4% | 89.2% | 1.3% | - Ark's combined ratio included five points of net favorable prior year loss reserve development in Q2 2025 and nine points in H1 2025, primarily from property, marine & energy, and specialty lines, partially offset by aviation losses from the conflict in Ukraine[248][258] - WM Outrigger Re's combined ratio was 44% in Q2 2025 and 120% in H1 2025, with H1 2025 including $19 million of catastrophe losses related to California wildfires[250][261] - Ark's results for H1 2025 included a $38 million expense related to the increase in fair value of White Mountains's contingent consideration liability[260] HG Global HG Global reported significant growth in gross written premiums and pre-tax income for both Q2 and H1 2025, with total par value of policies assumed increasing and gross pricing improving, especially in the primary market, and the fair value of BAM Surplus Notes increased, while HG Re received a $22 million distribution from the Supplemental Trust in H1 2025 HG Global Key Financials (Millions) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | % Change (3 Months) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | % Change (6 Months) | | :-------------------- | :--------------------------- | :--------------------------- | :------------------ | :--------------------------- | :--------------------------- | :------------------ | | Gross written premiums | $19.2 | $11.6 | 65.5% | $25.9 | $20.5 | 26.3% | | Earned premiums | $7.1 | $7.5 | -5.3% | $15.3 | $14.0 | 9.3% | | Pre-tax income (loss) | $16.7 | $11.1 | 50.5% | $41.7 | $16.4 | 154.3% | | Total par value of policies assumed | $930.5 | $785.9 | 18.4% | $1,357.8 | $1,323.9 | 2.6% | | Total gross pricing | 206 bps | 148 bps | 39.2% | 191 bps | 155 bps | 23.2% | - The fair value of the BAM Surplus Notes increased to $397 million as of June 30, 2025, from $389 million as of March 31, 2025, due to accrued interest[279] - HG Re received a $22 million distribution from the Supplemental Trust in H1 2025, comprising $15 million in assigned accrued interest on BAM Surplus Notes and $7 million in cash[286] Kudu Kudu reported total revenues of $20 million (Q2 2025) and $84 million (H1 2025), with pre-tax income of $11 million (Q2 2025) and $64 million (H1 2025), and adjusted EBITDA increased to $16 million (Q2 2025) and $32 million (H1 2025), driven by higher net investment income from new deployments and AUM growth, while Kudu deployed $69 million into one new asset management firm in 2025, bringing total deployments to $1.06 billion across 28 firms Kudu Key Financials (Millions) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | % Change (3 Months) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | % Change (6 Months) | | :-------------------- | :--------------------------- | :--------------------------- | :------------------ | :--------------------------- | :--------------------------- | :------------------ | | Total revenues | $20.4 | $70.2 | -70.9% | $84.2 | $80.9 | 4.1% | | Pre-tax income (loss) | $10.7 | $61.3 | -82.5% | $64.1 | $63.0 | 1.7% | | Adjusted EBITDA | $16.2 | $12.4 | 30.6% | $32.0 | $26.3 | 21.7% | | Net investment income | $19.3 | $15.7 | 22.9% | $38.7 | $32.9 | 17.6% | - Kudu deployed $69 million into one new asset management firm in 2025, bringing total deployments to $1.06 billion across 28 firms globally[292][231] - The increase in net investment income was primarily due to higher dividends from existing participation contracts and amounts earned from $171 million of new deployments made subsequent to June 30, 2024[295][296] Bamboo Bamboo reported significant growth in commission and fee revenues and pre-tax income for both Q2 and H1 2025, with MGA adjusted EBITDA more than doubling in both periods, and managed premiums increased by 59% in Q2 2025 and 61% in H1 2025, driven by renewal book growth and new business volume from additional fronted programs, while estimates for January 2025 California wildfires losses remain at $160 million Bamboo Key Financials (Millions) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | % Change (3 Months) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | % Change (6 Months) | | :-------------------------- | :--------------------------- | :--------------------------- | :------------------ | :--------------------------- | :--------------------------- | :------------------ | | Commission and fee revenues | $59.1 | $32.7 | 80.7% | $103.3 | $54.6 | 89.2% | | Pre-tax income (loss) | $16.1 | $6.4 | 151.6% | $22.4 | $7.3 | 206.8% | | MGA adjusted EBITDA | $25.6 | $11.5 | 122.6% | $45.5 | $17.9 | 154.2% | | Managed premiums | $190.8 | $119.8 | 59.3% | $337.8 | $209.3 | 61.4% | - Bamboo's estimates for losses from the January 2025 California wildfires remain unchanged at approximately $160 million as of June 30, 2025[300] - Managed premiums increased due to strong client policy retention rates, approved rate increases, and the launch of additional fronted programs[302] Other Operations White Mountains's Other Operations reported a pre-tax income of $35.5 million in Q2 2025, a significant rebound from a $(153.1) million loss in Q2 2024, primarily due to unrealized investment gains from MediaAlpha and the acquisition of Enterprise Solutions, and for H1 2025, a pre-tax loss of $(23.2) million was reported, an improvement from the prior year's loss when excluding MediaAlpha's impact Other Operations Key Financials (Millions) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | % Change (3 Months) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | % Change (6 Months) | | :------------------------------------------ | :--------------------------- | :--------------------------- | :------------------ | :--------------------------- | :--------------------------- | :------------------ | | Total revenues | $134.2 | $(95.8) | N/A | $141.5 | $165.0 | -14.3% | | Pre-tax income (loss) | $35.5 | $(153.1) | N/A | $(23.2) | $49.1 | N/A | | Unrealized investment gains (losses) from investment in MediaAlpha | $30.5 | $(139.2) | N/A | $(6.1) | $71.5 | N/A | | Other revenues | $56.8 | $14.5 | 291.7% | $70.4 | $28.9 | 143.6% | | Cost of sales | $42.4 | $7.0 | 505.7% | $49.9 | $14.6 | 241.8% | - The increases in other revenues and cost of sales were primarily driven by the acquisition of Enterprise Solutions by WTM Partners in Q2 2025[307][311] - General and administrative expenses decreased in H1 2025 due to lower long-term incentive compensation costs, partially offset by parent company transaction costs and the Enterprise Solutions acquisition[312] - The Bamboo CRV reported a $7 million pre-tax loss in H1 2025, including approximately $12 million related to the January 2025 California wildfires[313] II. Summary of Investment Results White Mountains's total consolidated portfolio returned 2.7% in Q2 2025 and 4.5% in H1 2025, excluding MediaAlpha, returns were 2.3% and 4.7%, respectively, driven by fixed income and other long-term investments, and the fixed income portfolio outperformed its benchmark in Q2 2025, while common equity securities underperformed the S&P 500, and foreign currency exposure on net assets totaled $316 million as of June 30, 2025 Pre-tax Time-Weighted Investment Returns | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Fixed income investments | 1.5% | 1.0% | 3.3% | 1.7% | | Bloomberg U.S. Intermediate Aggregate Index | 1.5% | 0.5% | 4.2% | 0.0% | | Common equity securities | 4.5% | 3.3% | 6.4% | 7.8% | | Investment in MediaAlpha | 18.5% | -36.7% | -3.0% | 15.6% | | Other long-term investments | 3.0% | 4.1% | 6.4% | 5.6% | | Total consolidated portfolio | 2.7% | -0.1% | 4.5% | 4.5% | | Total consolidated portfolio - excluding MediaAlpha | 2.3% | 2.2% | 4.7% | 3.5% | - The fixed income portfolio, including short-term investments, totaled $3.9 billion as of June 30, 2025, with a duration of 1.6 years[317] - The decrease in common equity securities in H1 2025 was due to the sale of White Mountains's ETF portfolio in preparation for near-term capital deployments[321] Foreign Denominated Net Assets (Liabilities) by Segment (Millions) as of June 30, 2025 | Currency | Ark/WM Outrigger | Kudu | Other Operations | Total Fair Value | % of Total Shareholders' Equity | | :--------- | :--------------- | :--- | :--------------- | :--------------- | :------------------------------ | | CAD | $95.3 | $57.1 | $— | $152.4 | 2.9% | | AUD | $48.1 | $69.6 | $— | $117.7 | 2.2% | | GBP | $48.8 | $— | $— | $48.8 | 0.9% | | EUR | $(35.7) | $32.0 | $— | $(3.7) | -0.1% | | All other | $— | $— | $0.9 | $0.9 | — | | Total | $156.5 | $158.7 | $0.9 | $316.1 | 5.9% | III. Income Taxes White Mountains's effective tax rate for Q2 and H1 2025 was 7% and 9%, respectively, lower than the U.S. statutory rate due to income in lower-tax jurisdictions, and the company expects to be exempt from Bermuda's 15% corporate income tax until January 1, 2030, and from Luxembourg and U.K. Pillar Two UTPR until January 1, 2029, and January 1, 2030, respectively, and a net deferred tax asset of $73 million related to Bermuda's economic transition adjustment is maintained, though its future impact is uncertain due to OECD guidance - Effective tax rates were 7% for Q2 2025 and 9% for H1 2025, lower than the U.S. statutory rate of 21.0% due to forecasted income in lower-tax jurisdictions[335] - White Mountains expects to be exempt from Bermuda's 15% corporate income tax until January 1, 2030[329] - A net deferred tax asset of $73 million related to Bermuda's economic transition adjustment is maintained, but its future impact is uncertain due to January 2025 OECD Administrative Guidance[329][333] - The company expects deferrals from Luxembourg and U.K. Pillar Two UTPR until January 1, 2029, and January 1, 2030, respectively[331][332] LIQUIDITY AND CAPITAL RESOURCES White Mountains maintains adequate liquidity through cash balances, operating cash flows, and investment sales, with dividend capacity varying by subsidiary, and Ark paying $30 million to White Mountains in H1 2025, while total debt increased to $694.6 million, with a debt-to-total capital ratio of 11.5%, and the company has authorized share repurchases and recently established a new $250 million revolving credit facility - Management believes cash balances, operating cash flows, and routine investment sales/maturities are adequate to meet expected cash requirements[342] - Ark paid $30 million in dividends to White Mountains during the six months ended June 30, 2025[344] Capital Structure (Millions) | Metric | June 30, 2025 | December 31, 2024 | | :------------------------------------------ | :------------ | :---------------- | | Total debt | $694.6 | $562.5 | | Noncontrolling interests | $695.7 | $647.3 | | Total White Mountains's common shareholders' equity | $4,644.5 | $4,483.7 | | Total capital | $6,034.8 | $5,693.5 | | Total debt to total capital | 11.5% | 9.9% | - A new $250 million senior unsecured revolving credit facility was established on July 16, 2025, currently undrawn[353] - White Mountains repurchased and retired 5,097 common shares for $10 million in H1 2025, primarily to satisfy employee income tax withholding[359] NON-GAAP FINANCIAL MEASURES This section defines and reconciles eight non-GAAP financial measures used by White Mountains to evaluate performance: Ark's tangible book value, Kudu's EBITDA and adjusted EBITDA, Bamboo's MGA pre-tax income (loss), MGA net income (loss), MGA EBITDA, MGA adjusted EBITDA, and total consolidated portfolio returns excluding MediaAlpha, and these measures provide insights into underlying business performance by adjusting for specific GAAP items - Ark's tangible book value adjusts GAAP book value by excluding goodwill, other intangible assets, related deferred tax liability, and contingent consideration liability[368] - Kudu's EBITDA and adjusted EBITDA are non-GAAP measures that add back interest, taxes, depreciation, and amortization, with adjusted EBITDA further excluding net realized/unrealized investment gains/losses, non-cash equity-based compensation, and transaction expenses[369][370][372] - Bamboo's MGA pre-tax income (loss), MGA net income (loss), MGA EBITDA, and MGA adjusted EBITDA exclude the results of the Bamboo Captive and other specific non-cash or restructuring expenses to focus on MGA performance[371][373] - Total consolidated portfolio return excluding MediaAlpha removes the investment income and gains/losses from MediaAlpha to show underlying portfolio performance[374] CRITICAL ACCOUNTING ESTIMATES For a complete discussion of White Mountains's critical accounting estimates, refer to the Company's 2024 Annual Report on Form 10-K - Refer to the Company's 2024 Annual Report on Form 10-K for a complete discussion regarding White Mountains's critical accounting estimates[376] FORWARD-LOOKING STATEMENTS This section contains forward-looking statements regarding White Mountains's future expectations, including financial targets, business strategy, and operational plans, and these statements are based on management's assumptions but are subject to various risks and uncertainties that could cause actual results to differ materially, such as catastrophic events, market value fluctuations, regulatory changes, and competitive forces - Forward-looking statements include expectations regarding book value per share, business strategy, financial targets, incurred losses, and business expansion[378][381] - Actual results may differ materially due to risks such as catastrophic events, inadequate loss reserves, market value of MediaAlpha, rating agency actions, and changes in laws or regulations[381] - White Mountains assumes no obligation to publicly update any forward-looking statements[380] Item 3. Quantitative and Qualitative Disclosures About Market Risk For detailed quantitative and qualitative disclosures about market risk, refer to White Mountains's 2024 Annual Report on Form 10-K, specifically Item 7A - Refer to White Mountains's 2024 Annual Report on Form 10-K, Item 7A, for detailed disclosures about market risk[382] Item 4. Controls and Procedures White Mountains's Principal Executive Officer and Principal Financial Officer evaluated the effectiveness of its disclosure controls and procedures as of June 30, 2025, concluding they are adequate and effective, and no material changes to internal control over financial reporting occurred during Q2 2025 - The PEO and PFO concluded that White Mountains's disclosure controls and procedures were adequate and effective as of June 30, 2025[382] - No material changes to internal control over financial reporting occurred during the second quarter of 2025[383] PART II. OTHER INFORMATION This section covers legal proceedings, risk factors, issuer purchases of equity securities, defaults upon senior securities, other information, and a list of exhibits Items 1 through 6. This section addresses legal proceedings, risk factors, equity security purchases, senior security defaults, other information, and exhibits, noting no material changes or share repurchases in Q2 2025 Item 1. Legal Proceedings There are no legal proceedings to report - No legal proceedings to report[384] Item 1A. Risk Factors There have been no material changes to the risk factors previously disclosed in the Registrant's 2024 Annual Report on Form 10-K - No material changes to risk factors previously disclosed in the 2024 Annual Report on Form 10-K[385] Item 2. Issuer Purchases of Equity Securities White Mountains did not repurchase any common shares under its publicly announced plans during the second quarter of 2025, and as of June 30, 2025, the company may repurchase an additional 301,014 shares under existing Board authorizations Issuer Purchases of Equity Securities (Q2 2025) | Months | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans | Maximum Number of Shares that May Yet Be Purchased Under the Plans | | :----------------------- | :----------------------------- | :--------------------------- | :----------------------------------------------------------------- | :--------------------------------------------------------------- | | April 1 - April 30, 2025 | — | $— | — | 301,014 | | May 1 - May 31, 2025 | — | $— | — | 301,014 | | June 1 - June 30, 2025 | — | $— | — | 301,014 | | Total | — | $— | — | 301,014 | - The Board of Directors' repurchase authorizations do not have a stated expiration date[386] Item 3. Defaults Upon Senior Securities There were no defaults upon senior securities to report - No defaults upon senior securities[387] Item 4. Mine Safety Disclosures There are no mine safety disclosures to report - No mine safety disclosures[388] Item 5. Other Information White Mountains has an Insider Trading Policy designed to ensure compliance with relevant laws and regulations, and no trading plans under Rule 10b5-1(c) were adopted or terminated by directors or officers during Q2 2025 - The Company has an Insider Trading Policy to promote compliance with insider trading laws[389] - No Rule 10b5-1(c) trading plans were adopted or terminated by directors or officers during the second quarter of 2025[390] Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including credit agreements, amendments to incentive plans, a unit purchase agreement, and officer certifications - Exhibits include the Credit Agreement dated July 16, 2025, amendments to the Long-Term Incentive Plan, the Unit Purchase Agreement for AQ Phoenix Parent, L.P., and officer certifications[391] SIGNATURES The report is duly signed on behalf of White Mountains Insurance Group, Ltd. by Michaela J. Hildreth, Managing Director and Chief Accounting Officer, on August 7, 2025 - The report was signed by Michaela J. Hildreth, Managing Director and Chief Accounting Officer, on August 7, 2025[394]