EX-12.1 2 y77000a2exv12w1.htm EX-12.1: COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES EX-12.1
Exhibit 12.1
Validus Holdings, Ltd.
Ratio of Earnings to Fixed Charges
                                     
    Three Months   Year Ended   Year Ended   Year Ended   Period Ended
    Ended March 31,   December 31,   December 31,   December 31,   December 31,
    2009   2008   2007   2006   2005 (1)(2)
     
Earnings
                                        
 
                                        
Pre-tax income from continuing operations
   $ 94,381     $ 63,899     $ 404,501     $ 183,097     $ (49,708 )
 
                                        
Validus:
                                        
Imputed interest on operating leases
     150       562       657       39       —  
9.069% Junior Subordinated Deferrable Debentures
     3,588       14,354       14,398       7,824       —  
8.480% Junior Subordinated Deferrable Debentures
     3,348       14,704       8,938       —       —  
Credit facilities
     364       910       2,332       965       —  
Talbot letter of credit facilities
     62       255       658       —       —  
Talbot other interest
     —       (186 )     620       —       —  
Talbot third party funds at Lloyd’s facility
     361       27,281       24,808       —       —  
     
 
                                        
Fixed Charges
     7,873       57,880       52,411       8,828       —  
 
                                        
     
Earnings
     102,254       121,779       456,912       191,925       (49,708 )
 
                                        
Fixed Charges
     7,873       57,880       52,411       8,828       —  
 
                                        
 
Ratio of Earnings to Fixed Charges
     12.99       2.10       8.72       21.74     NM
 
 
                                        
Earnings
                                        
 
                                        
Pre-tax income from continuing operations
   $ 94,381     $ 63,899     $ 404,501     $ 183,097     $ (49,708 )
 
                                        
Validus:
                                        
Imputed interest on operating leases
     150       562       657       39       —  
9.069% Junior Subordinated Deferrable Debentures
     3,588       14,354       14,398       7,824       —  
8.480% Junior Subordinated Deferrable Debentures
     3,348       14,704       8,938       —       —  
Credit facilities
     364       910       2,332       965       —  
Talbot letter of credit facilities
     62       255       658       —       —  
Talbot other interest
     —       (186 )     620       —       —  
     
 
                                        
Fixed Charges Excluding FAL Costs (3)
     7,512       30,599       27,603       8,828       —  
 
                                        
     
Earnings
     101,893       94,498       432,104       191,925       (49,708 )
 
                                        
Fixed Charges Excluding FAL Costs (3)
     7,512       30,599       27,603       8,828       —  
 
                                        
 
Ratio of Earnings to Fixed Charges Excluding FAL Costs (3)
     13.56       3.09       15.65       21.74     NM
 
(1)   The initial premiums written by the Validus began January 1, 2006. There were no earnings during the period ended December 31, 2005.
 
(2)   NM — not meaningful
 
(3)   FAL Costs represent both fixed and variable costs paid for financing Validus’ operations at Lloyd’s. The ratio of earnings to fixed charges excluding FAL Costs demonstrates the degree to which the ratio changes if FAL Costs are treated as variable rather than fixed costs.

 

 

Unaudited Pro forma Condensed Combined Consolidated Ratio of Earnings to Fixed Charges
for Validus Holdings, Ltd. and IPC Holdings, Ltd. for the Year Ended December 31, 2008
                         
    Pro forma        
    Combined   Elimination   IPC
     
    Year Ended   Year Ended   Year Ended
    December 31,   December 31,   December 31,
    2008   2008   2008
     
Earnings
                        
 
                        
Pre-tax income from continuing operations
   $ 144,615     $ (9,731 )   $ 90,447  
 
                        
Validus:
                        
Imputed interest on operating leases (1)
     562       —       —  
9.069% Junior Subordinated Deferrable Debentures
     14,354       —       —  
8.480% Junior Subordinated Deferrable Debentures
     14,704       —       —  
Credit facilities
     910       —       —  
Talbot letter of credit facilities
     255       —       —  
Talbot other interest
     (186 )     —       —  
Talbot third party funds at Lloyd’s facility
     27,281       —       —  
IPC:
                        
Interest expense
     2,659       —       2,659  
Dividend on preferred shares (2)
     —       (14,939 )     14,939  
     
 
                        
Fixed Charges
     60,539       (14,939 )     17,598  
 
                        
     
Earnings
     205,154       (24,670 )     108,045  
 
                        
Fixed Charges
     60,539       (14,939 )     17,598  
 
                        
 
Ratio of Earnings to Fixed Charges
     3.39       1.65       6.14  
 
 
                        
Earnings
                        
 
                        
Pre-tax income from continuing operations
   $ 144,615     $ (9,731 )   $ 90,447  
 
                        
Validus:
                        
Imputed interest on operating leases (1)
     562       —       —  
9.069% Junior Subordinated Deferrable Debentures
     14,354       —       —  
8.480% Junior Subordinated Deferrable Debentures
     14,704       —       —  
Credit facilities
     910       —       —  
Talbot letter of credit facilities
     255       —       —  
Talbot other interest
     (186 )     —       —  
IPC:
                        
Interest expense
     2,659       —       2,659  
Dividend on preferred shares (2)
     —       (14,939 )     14,939  
     
 
                        
Fixed Charges Excluding FAL Costs (3)
     33,258       (14,939 )     17,598  
     
 
                        
Earnings
     177,873       (24,670 )     108,045  
 
                        
Fixed Charges Excluding FAL Costs (3)
     33,258       (14,939 )     17,598  
 
                        
 
Ratio of Earnings to Fixed Charges Excluding FAL Costs (3)
     5.35       1.65       6.14  
 
(1)   No imputed interest on IPC’s operating leases as any estimates would be unreliable without access to lease agreements.
 
(2)   Dividend on preferred shares of $14.9 million was excluded from fixed changes as the related preferred shares do not exist on a pro forma basis.
 
(3)   FAL Costs represent both fixed and variable costs paid for financing Validus’ operations at Lloyd’s. The ratio of earnings to fixed charges excluding FAL Costs demonstrates the degree to which the ratio changes if FAL Costs are treated as variable rather than fixed costs.

 

 

Unaudited Pro forma Condensed Combined Consolidated Ratio of Earnings to Fixed Charges
for Validus Holdings, Ltd. and IPC Holdings, Ltd. for the Three Months Ended March 31, 2009
                         
    Pro forma        
    Combined   Elimination   IPC
     
    March 31,   March 31,   March 31,
    2009   2009   2009
     
Earnings
                        
 
                        
Pre-tax income from continuing operations
   $ 114,480     $ 11,847     $ 8,252  
 
                        
Validus:
                        
Imputed interest on operating leases (1)
     150       —       —  
9.069% Junior Subordinated Deferrable Debentures
     3,588       —       —  
8.480% Junior Subordinated Deferrable Debentures
     3,348       —       —  
Credit facilities
     364       —       —  
Talbot letter of credit facilities
     62       —       —  
Talbot other interest
     0       —       —  
Talbot third party funds at Lloyd’s facility
     361       —       —  
IPC:
                        
Interest expense
     383       —       383  
     
 
                        
Fixed Charges
     8,256       0       383  
 
                        
     
Earnings
     122,736       11,847       8,635  
 
                        
Fixed Charges
     8,256       0       383  
 
                        
 
Ratio of Earnings to Fixed Charges
     14.87       —       22.55  
 
 
                        
Earnings
                        
 
                        
Pre-tax income from continuing operations
   $ 114,480     $ 11,847   $ 8,252  
 
                        
Validus:
                        
Imputed interest on operating leases (1)
     150       —       —  
9.069% Junior Subordinated Deferrable Debentures
     3,588       —       —  
8.480% Junior Subordinated Deferrable Debentures
     3,348       —       —  
Credit facilities
     364       —       —  
Talbot letter of credit facilities
     62       —       —  
Talbot other interest
     0     —       —  
IPC:
                        
Interest expense
     383       —       383  
     
 
                        
Fixed Charges Excluding FAL Costs (2)
     7,895       0     383  
     
 
                        
Earnings
     122,375       (11,847 )     8,635  
 
                        
Fixed Charges Excluding FAL Costs (2)
     7,895       0     383  
 
                        
 
Ratio of Earnings to Fixed Charges Excluding FAL Costs (2)
     15.50       —       22.55  
 
(1)   No imputed interest on IPC’s operating leases as any estimates would be unreliable without access to lease agreements.
 
(2)   FAL Costs represent both fixed and variable costs paid for financing Validus’ operations at Lloyd’s. The ratio of earnings to fixed charges excluding FAL Costs demonstrates the degree to which the ratio changes if FAL Costs are treated as variable rather than fixed costs.