Exhibit 12.1
VALIDUS HOLDINGS, LTD.
RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED SHARE DIVIDENDS
The following table sets forth our historical ratio of earnings to fixed charges for each of the periods indicated:
| Six months ended June 30, | Years Ended December 31, | |||||||||||||||||||||||
| 2017 | 2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
| Net income available to Validus | $ | 200,062 | $ | 363,839 | $ | 374,893 | $ | 479,963 | $ | 532,666 | $ | 408,438 | ||||||||||||
| Tax (benefit) expense | (4,536 | ) | (19,729 | ) | 6,376 | 155 | 383 | 2,501 | ||||||||||||||||
| Pre-tax net income available to Validus | 195,526 | 344,110 | 381,269 | 480,118 | 533,049 | 410,939 | ||||||||||||||||||
| Distributed income from investment affiliates | 12,333 | 11,089 | — | — | — | — | ||||||||||||||||||
| Distributed losses from operating affiliate | — | (761 | ) | (9,505 | ) | — | — | — | ||||||||||||||||
| (Income) loss from investment affiliates | (14,654 | ) | 2,083 | (4,281 | ) | (8,411 | ) | (4,790 | ) | 964 | ||||||||||||||
| Loss (income) from operating affiliate | — | 23 | 3,949 | 4,340 | (542 | ) | 1,758 | |||||||||||||||||
| Earnings before fixed charges | 193,205 | 356,544 | 371,432 | 476,047 | 527,717 | 413,661 | ||||||||||||||||||
Estimated interest component of rent expense (a) | 1,902 | 3,254 | 3,381 | 3,513 | 3,405 | 2,557 | ||||||||||||||||||
| 2006 Junior Subordinated Deferrable Debentures | 4,398 | 8,893 | 8,868 | 8,868 | 8,868 | 6,964 | ||||||||||||||||||
| 2007 Junior Subordinated Deferrable Debentures | 3,641 | 7,362 | 7,341 | 7,341 | 7,341 | 8,922 | ||||||||||||||||||
| Flagstone 2006 Junior Subordinated Deferrable Debentures | 4,469 | 9,028 | 8,989 | 9,001 | 8,259 | 459 | ||||||||||||||||||
| Flagstone 2007 Junior Subordinated Deferrable Debentures | 3,474 | 7,100 | 7,123 | 7,129 | 6,222 | 327 | ||||||||||||||||||
| 2010 Senior Notes due 2040 | 11,195 | 22,388 | 22,388 | 22,388 | 22,388 | 22,388 | ||||||||||||||||||
Other finance expenses (b) | 975 | 3,749 | 20,033 | 13,597 | 14,929 | 20,650 | ||||||||||||||||||
| Fixed charges | 30,054 | 61,774 | 78,123 | 71,837 | 71,412 | 62,267 | ||||||||||||||||||
| Earnings available for fixed charges | $ | 223,259 | $ | 418,318 | $ | 449,555 | $ | 547,884 | $ | 599,129 | $ | 475,928 | ||||||||||||
| Ratio of earnings to fixed charges | 7.43 | 6.77 | 5.75 | 7.63 | 8.39 | 7.64 | ||||||||||||||||||
| Fixed charges | $ | 30,054 | $ | 61,774 | $ | 78,123 | $ | 71,837 | $ | 71,412 | $ | 62,267 | ||||||||||||
Preferred share dividends (c) | 4,406 | 4,455 | — | — | — | — | ||||||||||||||||||
| Fixed charges and preferred share dividends | $ | 34,460 | $ | 66,229 | 78,123 | $ | 71,837 | $ | 71,412 | $ | 62,267 | |||||||||||||
| Ratio of earnings to fixed charges and preferred share dividends | 6.48 | 6.32 | 5.75 | 7.63 | 8.39 | 7.64 | ||||||||||||||||||
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| (a) | 33.3% represents a reasonable approximation of the interest factor. |
| (b) | Other finance expenses consist of fees relating to credit facilities, bank charges and other charges as well as fees incurred by AlphaCat Managers Ltd. in relation to fund raising for the AlphaCat sidecars, the AlphaCat ILS funds and AlphaCat direct. |
| (d) | Dividends have been tax effected at a 0% rate as it is presumed they will be funded from a Bermuda entity. |