ARCH CAPITAL GROUP LTD. AND SUBSIDIARIES

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

(U.S. dollars in thousands)

Balance Sheet

(Parent Company Only)


	December 31,
	2022		2021
Assets
Total investments	$	7,282	$	2,038
Cash	11,393		16,317
Investments in subsidiaries	14,191,188		14,822,024
Investment in operating affiliates	5,259		6,877
Due from subsidiaries and affiliates	1,554		11






Other assets	17,203		9,604
Total assets	$	14,233,879	$	14,856,871

Liabilities






Senior notes	$	1,286,567	$	1,286,208


Other liabilities	37,239		24,767
Total liabilities	1,323,806		1,310,975



Shareholders' Equity
Non-cumulative preferred shares	830,000		830,000

Common shares ($0.0011 par, shares issued: 588,250,762 and 583,289,850)	654		648
Additional paid-in capital	2,211,444		2,085,075
Retained earnings	15,892,065		14,455,868
Accumulated other comprehensive income (loss), net of deferred income tax	(1,646,170)		(64,600)
Common shares held in treasury, at cost (shares: 217,904,765 and 204,365,956)	(4,377,920)		(3,761,095)
Total shareholders' equity	$	12,910,073	$	13,545,896
Total liabilities and shareholders' equity	$	14,233,879	$	14,856,871

The financial information for the parent company (Arch Capital Group Ltd.) should be read in conjunction with the Consolidated Financial Statements and Notes thereto.

Statement of Income

(Parent Company Only)


	Year Ended
	December 31,
	2022		2021		2020

Revenues

Net investment income	$	2,058	$	1,524	$	53
Net realized gains (losses)	29		—		(2,110)




Total revenues	2,087		1,524		(2,057)

Expenses



Corporate expenses	85,997		71,818		65,566

Interest expense	58,759		58,741		40,445
Net foreign exchange (gains) losses	(1)		7		3
Total expenses	144,755		130,566		106,014

Income (loss) before income taxes and income (loss) from operating affiliates	(142,668)		(129,042)		(108,071)

Income (loss) from operating affiliates	(1,047)		(590)		(437)
Income (loss) before equity in net income of subsidiaries	(143,715)		(129,632)		(108,508)
Equity in net income of subsidiaries	1,592,929		2,286,481		1,514,029


Net income available to Arch	1,449,214		2,156,849		1,405,521
Preferred dividends	(40,736)		(48,343)		(41,612)
Loss on redemption of preferred shares	—		(15,101)		—
Net income available to Arch common shareholders	$	1,408,478	$	2,093,405	$	1,363,909

The financial information for the parent company (Arch Capital Group Ltd.) should be read in conjunction with the Consolidated Financial Statements and Notes thereto.

Statement of Cash Flows

(Parent Company Only)


	Year Ended
	December 31,
	2022		2021		2020

Operating Activities:








Net Cash Provided By Operating Activities	$	621,307	$	1,727,529	$	124,751

Investing Activities:
Net (purchases) sales of short-term investments	(4,838)		(1,866)		(130)
Capital contributed to subsidiaries	—		(487,161)		(988,975)
Purchase of fixed assets	(22)		(783)		(15)
Other	(1,462)		—		—
Net Cash Used For Investing Activities	(6,322)		(489,810)		(989,120)

Financing Activities:
Purchases of common shares under share repurchase program	(585,823)		(1,234,294)		(83,472)
Proceeds from common shares issued, net	6,660		6,418		1,876
Proceeds from issuance of preferred shares, net	—		485,821		—
Redemption of preferred shares	—		(450,000)		—
Proceeds from borrowings	—		—		988,393


Preferred dividends paid	(40,736)		(48,280)		(41,612)
Net Cash Used For Financing Activities	(619,899)		(1,240,335)		865,185

Increase (decrease) in cash and restricted cash	(4,914)		(2,616)		816
Cash and restricted cash, beginning of year	16,344		18,960		18,144
Cash and restricted cash, end of period	$	11,430	$	16,344	$	18,960

The financial information for the parent company (Arch Capital Group Ltd.) should be read in conjunction with the Consolidated Financial Statements and Notes thereto.