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. |