Arch Capital (ACGL) 10-K 2015 FY Annual report

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,
	2015			2014			2013		2012			2011
Income before income taxes	$	567,194		$	844,247		$	742,505	$	589,387		$	426,370
Equity in net income or loss of investees	3,458			(947		)	52,238		(43,632		)	71,100
Fixed charges	73,434			53,319			33,304		34,223			37,166
Watford preference dividends (1)	(19,633		)	(14,728		)	—		—			—
Income available for fixed charges	$	624,453		$	881,891		$	828,047	$	579,978		$	534,636
Fixed charges:
Interest and amortization on indebtedness	45,874			45,634			27,060		28,525			31,691
Watford preference dividends (1)	19,633			14,728			—		—			—
Estimate of interest component within rental expense, net of sublease income (2)	7,927			7,685			6,244		5,698			5,475
Total fixed charges	73,434			68,047			33,304		34,223			37,166
Preference dividends (3)	21,938			21,938			25,079		25,844			25,844
Total fixed charges and preference dividends	$	95,372		$	89,985		$	58,383	$	60,067		$	63,010
Ratio of earnings to fixed charges	8.5			13.0			24.9		16.9			14.4
Ratio of earnings to fixed charges and preference dividends	6.5			9.8			14.2		9.7			8.5

(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 ACGL.