Shareholders' Equity

12 Months Ended

Dec. 31, 2014

Stockholders' Equity Note [Abstract]

Shareholders' Equity

Shareholders’ Equity

Authorized and Issued

The authorized share capital of the Company consists of 600 million Common Shares, par value of $0.0033 per share, and 50 million Preferred Shares, par value of $0.01 per share.

Common Shares

The following table presents a roll-forward of changes in the Company’s issued and outstanding Common Shares:

	Year Ended December 31,
	2014		2013		2012
Common Shares:
Shares issued and outstanding, beginning of year	169,560,591		168,255,572		164,636,338
Shares issued (1)	1,493,524		811,732		2,066,065
Restricted shares issued, net of cancellations	618,293		493,287		1,553,169
Shares issued, end of year	171,672,408		169,560,591		168,255,572
Common shares in treasury, end of year	(44,304,474	)	(35,885,707	)	(34,412,959	)
Shares issued and outstanding, end of year	127,367,934		133,674,884		133,842,613

(1) Includes shares issued from the exercise of stock options and stock appreciation rights, and shares issued from the employee share purchase plan.

Share Repurchases

The board of directors of ACGL has authorized the investment in ACGL’s common shares through a share repurchase program. Authorizations have consisted of a $1.0 billion authorization in February 2007, a $500.0 million authorization in May 2008, a $1.0 billion authorization in November 2009, a $1.0 billion authorization in February 2011 and a $629.2 million authorization in November 2014. Since the inception of the share repurchase program through December 31, 2014, ACGL has repurchased approximately 118.1 million common shares for an aggregate purchase price of $3.24 billion. During 2014, ACGL repurchased 8.2 million common shares for an aggregate purchase price of $454.1 million, compared to 1.3 million common shares for an aggregate purchase price of $57.8 million during 2013 and 3.9 million common shares for an aggregate purchase price of $172.1 million during 2012. Weighted average shares outstanding for 2014 were reduced by 111.9 million shares, compared to 109.6 million shares for 2013 and 105.0 million shares for 2012. At December 31, 2014, approximately $887.1 million of share repurchases were available under the program. Repurchases under the program may be effected from time to time in open market or privately negotiated transactions. The timing and amount of the repurchase transactions under this program will depend on a variety of factors, including market conditions and corporate and regulatory considerations.

Treasury Shares

In May 2010, ACGL’s shareholders approved amendments to the bye-laws to permit ACGL to hold its own acquired shares as treasury shares in lieu of cancellation, as determined by ACGL’s board of directors. From May 5, 2010 to December 31, 2014, all repurchases of ACGL’s common shares in connection with the share repurchase plan noted above and other share-based transactions were held in the treasury under the cost method, and the cost of the common shares acquired is included in ‘Common shares held in treasury, at cost.’ At December 31, 2014, the Company held 44.3 million shares for an aggregate cost of $1.56 billion in treasury, at cost.

Preferred Shares

On April 2, 2012, the Company completed the underwritten public offering of $325.0 million of its 6.75% Series C non-cumulative preferred shares (“Preferred Shares”). Except in specified circumstances relating to certain tax or corporate events, the Preferred Shares are not redeemable prior to April 2, 2017. The net proceeds from the offering of $315.8 million and other available funds were used to redeem all of the Company’s $200.0 million of 8.0% Series A preferred shares and $125.0 million of 7.875% Series B preferred shares on May 2, 2012. The Series A preferred shares and Series B preferred shares were redeemed at a redemption price equal to $25.00 per share, plus all declared and unpaid dividends to (but excluding) the redemption date.

Dividends on the Preferred Shares are non-cumulative. Consequently, in the event dividends are not declared on the Preferred Shares for any dividend period, holders of Preferred Shares will not be entitled to receive a dividend for such period, and such undeclared dividend will not accrue and will not be payable. Holders of Preferred Shares will be entitled to receive dividend payments only when, as and if declared by ACGL’s board of directors or a duly authorized committee of the board of directors. Any such dividends will be payable from the date of original issue on a non-cumulative basis, quarterly in arrears. To the extent declared, these dividends will accumulate, with respect to each dividend period, in an amount per share equal to 6.75% of the $25.00 liquidation preference per annum. The Company paid dividends of $21.9 million in 2014, compared to $21.9 million in 2013 and $28.4 million in 2012 to holders of the Company’s preferred shares.