EX-12 2 a2015ex12.htm EXHIBIT 12 Exhibit


Exhibit 12

Arch Capital Group Ltd. and Subsidiaries
Computation of Ratio of Earnings to Fixed Charges and Preference Dividends
(in thousands, except ratios)
 
 
 
 
 
 
 
 
 
 
 
Years Ended December 31,
 
2015
 
2014
 
2013
 
2012
 
2011
 
 
 
 
 
 
 
 
 
 
Income before income taxes
$
567,194

 
$
844,247

 
$
742,505

 
$
589,387

 
$
426,370

 
 
 
 
 
 
 
 
 
 
   Equity in net income or loss of investees
3,458

 
(947
)
 
52,238

 
(43,632
)
 
71,100

   Fixed charges
73,434

 
53,319

 
33,304

 
34,223

 
37,166

   Watford preference dividends (1)
(19,633
)
 
(14,728
)
 
—

 
—

 
—

 
 
 
 
 
 
 
 
 
 
Income available for fixed charges
$
624,453

 
$
881,891

 
$
828,047

 
$
579,978

 
$
534,636

 
 
 
 
 
 
 
 
 
 
Fixed charges:
 
 
 
 
 
 
 
 
 
   Interest and amortization on indebtedness
45,874

 
45,634

 
27,060

 
28,525

 
31,691

Watford preference dividends (1)
19,633

 
14,728

 
—

 
—

 
—

Estimate of interest component within rental expense, net of sublease income (2)
7,927

 
7,685

 
6,244

 
5,698

 
5,475

Total fixed charges
73,434

 
68,047

 
33,304

 
34,223

 
37,166

 
 
 
 
 
 
 
 
 
 
Preference dividends (3)
21,938

 
21,938

 
25,079

 
25,844

 
25,844

 
 
 
 
 
 
 
 
 
 
Total fixed charges and preference dividends
$
95,372

 
$
89,985

 
$
58,383

 
$
60,067

 
$
63,010

 
 
 
 
 
 
 
 
 
 
Ratio of earnings to fixed charges
8.5

 
13.0

 
24.9

 
16.9

 
14.4

 
 
 
 
 
 
 
 
 
 
Ratio of earnings to fixed charges and preference dividends
6.5

 
9.8

 
14.2

 
9.7

 
8.5


(1)
Dividends attributable to preference shares issued by Watford Holdings Ltd.
(2)
Represents a reasonable approximation of the interest cost component of rental expense, net of sublease income, incurred by the Company.
(3)
Dividends attributable to preference shares issued by ACGL.