EX-12 4 a20171231-exhibit12.htm EXHIBIT 12 Exhibit


Exhibit 12

VALIDUS HOLDINGS, LTD.
RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED SHARE DIVIDENDS

The following table sets forth our historical ratio of earnings to fixed charges for each of the periods indicated:
 
 
Years Ended December 31,
(Dollars in thousands)
 
2017
 
2016
 
2015
 
2014
 
2013
Net (loss) income (attributable) available to Validus
 
$
(47,622
)
 
$
363,839

 
$
374,893

 
$
479,963

 
$
532,666

Tax (benefit) expense
 
(7,580
)
 
(19,729
)
 
6,376

 
155

 
383

Pre-tax net (loss) income (attributable) available to Validus
 
(55,202
)
 
344,110

 
381,269

 
480,118

 
533,049

Distributed income from investment affiliates
 
21,312

 
11,089

 
—

 
—

 
—

Distributed (losses) from operating affiliate
 
—

 
(761
)
 
(9,505
)
 
—

 
—

(Income) loss from investment affiliates
 
(22,010
)
 
2,083

 
(4,281
)
 
(8,411
)
 
(4,790
)
Loss (income) from operating affiliate
 
—

 
23

 
3,949

 
4,340

 
(542
)
(Loss) earnings before fixed charges
 
(55,900
)
 
356,544

 
371,432

 
476,047

 
527,717

 
 
 
 
 
 
 
 
 
 
 
Estimated interest component of rent expense (a)
 
3,944

 
3,254

 
3,381

 
3,513

 
3,405

2006 Junior Subordinated Deferrable Debentures
 
8,868

 
8,893

 
8,868

 
8,868

 
8,868

2007 Junior Subordinated Deferrable Debentures
 
7,342

 
7,362

 
7,341

 
7,341

 
7,341

Flagstone 2006 Junior Subordinated Deferrable Debentures
 
9,012

 
9,028

 
8,989

 
9,001

 
8,259

Flagstone 2007 Junior Subordinated Deferrable Debentures
 
7,013

 
7,100

 
7,123

 
7,129

 
6,222

2010 Senior Notes due 2040
 
22,389

 
22,388

 
22,388

 
22,388

 
22,388

Other finance expenses (b)
 
3,922

 
3,749

 
20,033

 
13,597

 
14,929

Fixed charges
 
62,490

 
61,774

 
78,123

 
71,837

 
71,412

Earnings available for fixed charges
 
$
6,590

 
$
418,318

 
$
449,555

 
$
547,884

 
$
599,129

 
 
 
 
 
 
 
 
 
 
 
Ratio of earnings to fixed charges (c)
 
—
 
6.77
 
5.75
 
7.63
 
8.39
 
 
 
 
 
 
 
 
 
 
 
Fixed charges
 
$
62,490

 
$
61,774

 
$
78,123

 
$
71,837

 
$
71,412

Preferred share dividends (d)
 
15,861

 
4,455

 
—

 
—

 
—

Fixed charges and preferred share dividends
 
$
78,351

 
$
66,229

 
$
78,123

 
$
71,837

 
$
71,412

 
 
 
 
 
 
 
 
 
 
 
Ratio of earnings to fixed charges and preferred share dividends (e)
 
—
 
6.32
 
5.75
 
7.63
 
8.39
(a)
33.3% represents a reasonable approximation of the interest factor.
(b)
Other finance expenses consist of fees relating to credit facilities, bank charges, the Talbot FAL facility and other charges as well as fees incurred by AlphaCat Managers Ltd. in relation to fund raising for the AlphaCat sidecars, the AlphaCat ILS funds and AlphaCat direct.
(c)
Earnings for the year ended December 31, 2017 were inadequate to cover fixed charges, $55,900 represents the amount of the coverage deficiency.
(d)
Dividends have been tax effected at a 0% rate as it is presumed they will be funded from a Bermuda entity.
(e)
Earnings for the year ended December 31, 2017 were inadequate to cover fixed charges and preferred share dividends, $71,761 represents the amount of the coverage deficiency.