ARCH CAPITAL GROUP LTD. AND SUBSIDIARIES

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

(U.S. dollars in thousands)

Balance Sheet

(Parent Company Only)


	December 31,
	2021		2020
Assets
Total investments	$	2,038	$	172
Cash	16,317		18,932
Investments in subsidiaries	14,822,024		14,377,529
Investment in operating affiliates	6,877		7,731
Due from subsidiaries and affiliates	11		—






Other assets	9,604		10,659
Total assets	$	14,856,871	$	14,415,023

Liabilities






Senior notes	$	1,286,208	$	1,285,867

Due to subsidiaries and affiliates	—		—
Other liabilities	24,767		23,270
Total liabilities	1,310,975		1,309,137



Shareholders' Equity
Non-cumulative preferred shares	830,000		780,000

Common shares ($0.0011 par, shares issued: 583,289,850 and 579,000,841)	648		643
Additional paid-in capital	2,085,075		1,977,794
Retained earnings	14,455,868		12,362,463
Accumulated other comprehensive income (loss), net of deferred income tax	(64,600)		488,895
Common shares held in treasury, at cost (shares: 204,365,956 and 172,280,199)	(3,761,095)		(2,503,909)
Total shareholders' equity	$	13,545,896	$	13,105,886
Total liabilities and shareholders' equity	$	14,856,871	$	14,415,023

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,
	2021		2020		2019

Revenues

Net investment income	$	1,524	$	53	$	212
Net realized gains (losses)	—		(2,110)		—




Total revenues	1,524		(2,057)		212

Expenses



Corporate expenses	71,818		65,566		62,701

Interest expense	58,741		40,445		22,154
Net foreign exchange (gains) losses	7		3		1
Total expenses	130,566		106,014		84,856

Income (loss) before income taxes and income (loss) from operating affiliates	(129,042)		(108,071)		(84,644)

Income (loss) from operating affiliates	(590)		(437)		(762)
Income (loss) before equity in net income of subsidiaries	(129,632)		(108,508)		(85,406)
Equity in net income of subsidiaries	2,286,481		1,514,029		1,721,725


Net income available to Arch	2,156,849		1,405,521		1,636,319
Preferred dividends	(48,343)		(41,612)		(41,612)
Loss on redemption of preferred shares	(15,101)		—		—
Net income available to Arch common shareholders	$	2,093,405	$	1,363,909	$	1,594,707

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,
	2021		2020		2019

Operating Activities:








Net Cash Provided By Operating Activities	$	1,727,529	$	124,751	$	52,487

Investing Activities:
Net (purchases) sales of short-term investments	(1,866)		(130)		61
Capital contributed to subsidiaries	(487,161)		(988,975)		(2,121)
Purchase of fixed assets	(783)		(15)		(162)

Net Cash Used For Investing Activities	(489,810)		(989,120)		(2,222)

Financing Activities:
Purchases of common shares under share repurchase program	(1,234,294)		(83,472)		(2,871)
Proceeds from common shares issued, net	6,418		1,876		6,203
Proceeds from issuance of preferred shares, net	485,821		—		—
Redemption of preferred shares	(450,000)		—		—
Proceeds from borrowings	—		988,393		—


Preferred dividends paid	(48,280)		(41,612)		(41,612)
Net Cash Used For Financing Activities	(1,240,335)		865,185		(38,280)

Increase (decrease) in cash and restricted cash	(2,616)		816		11,985
Cash and restricted cash, beginning of year	18,960		18,144		6,159
Cash and restricted cash, end of period	$	16,344	$	18,960	$	18,144

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