EXHIBIT 12.1
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, |
| |||||||||||||
|
| 2008 |
| 2007 |
| 2006 |
| 2005 |
| 2004 |
| |||||
Income before income taxes |
| $ | 304,505 |
| $ | 873,544 |
| $ | 739,893 |
| $ | 285,435 |
| $ | 343,127 |
|
Equity in net loss (income) of investees |
| 166,326 |
| (8,877 | ) | (3,102 | ) | 0 |
| (1,211 | ) | |||||
Fixed charges |
| 29,673 |
| 27,032 |
| 26,386 |
| 26,204 |
| 22,103 |
| |||||
Income available for fixed charges |
| $ | 500,504 |
| $ | 891,699 |
| $ | 763,177 |
| $ | 311,639 |
| $ | 364,019 |
|
Fixed charges: |
|
|
|
|
|
|
|
|
|
|
| |||||
Interest and amortization on indebtedness |
| 23,838 |
| 22,093 |
| 22,090 |
| 22,504 |
| 17,970 |
| |||||
Estimate of interest component within rental expense net of sublease (income) (1) |
| 5,835 |
| 4,939 |
| 4,296 |
| 3,700 |
| 4,133 |
| |||||
Total fixed charges |
| 29,673 |
| 27,032 |
| 26,386 |
| 26,204 |
| 22,103 |
| |||||
Preference dividends |
| 25,844 |
| 25,844 |
| 20,655 |
| — |
| — |
| |||||
Total fixed charges and preference dividends |
| 55,517 |
| 52,876 |
| 47,041 |
| 26,204 |
| 22,103 |
| |||||
Ratio of earnings to fixed charges |
| 16.9 |
| 33.0 |
| 28.9 |
| 11.9 |
| 16.5 |
| |||||
Ratio of earnings to fixed charges and preference dividends |
| 9.0 |
| 16.9 |
| 16.2 |
| 11.9 |
| 16.5 |
|
(1) Represents a reasonable approximation of the interest cost component of rental expense net of sublease (income) incurred by the Company.