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# White Mountains Insurance Group, Ltd. Message Board

• snogreen snogreen Apr 27, 2012 8:26 AM Flag

## Weird math here?

I don't get it. The numbers don't add up in my eyes. Weird. On dec 31 the book value was \$542 But on MArch 31 the book value was \$565. An increase of \$23 a share. However?? WTM repurchaed and retired 970,000 shares of stock. That is a 13% reduction in shares outstanding to divide into book value. In theory (?) With a 13% reduction in shares, the BV should go up by the same 13%(?) automatically?? If trus, a 13% increase in BV from \$542 on 12/31.....13% of \$542 is \$70 share. Add \$70 to \$542 and you get \$612. However, WTM says the BV is \$565, The increase in BV from \$542 is \$23..but that means BV increased by only 4%. HOW is it possible in a 13% reduction in shares outstanding that BV thus only rose by 3%. The math doesn't add up. They are 10% OFF on shat should have been a large increase of BV due to repurchasing 970,000 shares, or 13% of all outstanding what am I missing here?

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• I think the difference is the amount spent on acquiring the ~970K shares (484M) is deducted from 12/31 book value (4087.7M) and that is the new starting BV 3603.7M. The new lower share countis 6579.5. Add Q1 comprehensive earnings of \$116.1M to the to the new starting BV of 3603.7M and you get 3720M. Divide that by the new share count of 6579.5 and you get \$565.38 of ending BVPS.

• YEah I see that logic. But it still bugs me. WTM said that the \$484 MILLION spent to buy back shares added \$7 per share in book value. So if I call it 6.6 million shares, and it added \$7 in per share book value.......6.6 million shares times \$7 per share added..that is \$46 million added. So why spent \$484 million, if it only added (as stated) \$7 per share in book value..times 6.6 million shares out...or TOTAL \$46 million. Spend \$484 million to add \$46 mill in book???

I see what you say but still is muddy to me.

I wonder if WTM is taking a WEIGHTED AVERAGE number of shares out in Q1. That is??? From January 1 to March 21, there were 7.6 million shares out. from March 22 to March 31 (only 8 days)... there were 6.6 million shares out. But if you do an AVERAGING out of number of shares for ALL Q!.....for over 92% of Q1 there was 7.7 million shares out. The reduction of 984, 000 only happened in the last 8 days of Q1. SO? if WTM uses an AVERAGE of shares out in Q1.....the shares out are far closer to 7.6 million than 6.6......which means more shares out, a lesser BV. But that will change in Q2, because Q2 starts with ONLY 6.6 million, and book may soar on a non averaged reduction now evident??

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