EX-12 5 a2017ex12.htm EX 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,
 
2017
 
2016
 
2015
 
2014
 
2013
 
 
 
 
 
 
 
 
 
 
Income before income taxes
$
757,277

 
$
855,552

 
$
567,194

 
$
844,247

 
$
734,770

 
 
 
 
 
 
 
 
 
 
   Equity in net income or loss of investees
(82,113
)
 
4,844

 
3,458

 
(947
)
 
52,238

   Fixed charges
147,046

 
93,573

 
73,065

 
67,767

 
33,304

   Watford preference dividends (1)
(19,264
)
 
(19,264
)
 
(19,264
)
 
(14,448
)
 
—

 
 
 
 
 
 
 
 
 
 
Income available for fixed charges
$
802,946

 
$
934,705

 
$
624,453

 
$
896,619

 
$
820,312

 
 
 
 
 
 
 
 
 
 
Fixed charges:
 
 
 
 
 
 
 
 
 
   Interest and amortization on indebtedness
117,431

 
66,252

 
45,874

 
45,634

 
27,060

Watford preference dividends (1)
19,264

 
19,264

 
19,264

 
14,448

 
—

Estimate of interest component within rental expense, net of sublease income (2)
10,351

 
8,057

 
7,927

 
7,685

 
6,244

Total fixed charges
147,046

 
93,573

 
73,065

 
67,767

 
33,304

 
 
 
 
 
 
 
 
 
 
Preference dividends (3)
46,041

 
28,070

 
21,938

 
21,938

 
21,938

 
 
 
 
 
 
 
 
 
 
Total fixed charges and preference dividends
$
193,087

 
$
121,643

 
$
95,003

 
$
89,705

 
$
55,242

 
 
 
 
 
 
 
 
 
 
Ratio of earnings to fixed charges
5.5

 
10.0

 
8.5

 
13.2

 
24.6

 
 
 
 
 
 
 
 
 
 
Ratio of earnings to fixed charges and preference dividends
4.2

 
7.7

 
6.6

 
10.0

 
14.8


(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 Arch Capital.