

		Validus Holdings, Ltd.
		Investor Financial Supplement – First Quarter 2018
		May 1, 2018

		29 Richmond Road
		Pembroke, HM 08 Bermuda
		Telephone: (441) 278-9000
		Facsimile: (441) 278-9090
		Website: www.validusholdings.com
		Mailing address: Suite 1790 48 Par-la-Ville Road
		Hamilton, HM 11 Bermuda

Validus Holdings, Ltd.

Table of Contents



Section		Page
Table of Contents		2
Explanatory Notes		3
Consolidated Financial Highlights		4
Summary Consolidated Balance Sheets		5
Computation of Book Value per Common Share, Book Value per Diluted Common Share and Tangible Book Value per Diluted Common Share		6
Consolidated Statements of Cash Flows		7
Consolidated Statements of (Loss) Income and Comprehensive Income (Loss)		8
Consolidated Statements of Operations - Underwriting Income Format		9
Computation of Earnings per Share		10
Underwriting Income Statement - Reinsurance Segment		11
Underwriting Results by Class of Business - Three Months Ended - Reinsurance Segment		12
Underwriting Income Statement - Insurance Segment		13
Underwriting Results by Class of Business - Three Months Ended - Insurance Segment		14
Asset Management Segment Information		15
Assets Under Management		16
Corporate and Investments		17
Segment Reconciliation - Three Months Ended		18
Non-GAAP Financial Measure Reconciliation		19
Gross Premiums Written by Segment by Class of Business		20
Consolidated Analysis of Reserves for Losses and Loss Expenses		21
Consolidated Losses and Loss Ratios by Segment		22
Losses and Loss Ratios by Class of Business - Reinsurance Segment		23
Losses and Loss Ratios by Class of Business - Insurance Segment		24
Analysis of Loss Ratios by Segment		25
Consolidated Reinsurance Recoverable Analysis		26
Consolidated Investment Portfolio Composition and Net Investment Income		27
Consolidated Fixed Maturity Portfolio Credit Quality and Maturity Profile		28
Top Ten Exposures to Fixed Income Corporate Issuers		29
Capitalization		30
Estimated Exposures to Peak Zone Property Catastrophe Losses - As of April 1, 2018		31
Estimated Exposures to Specified Loss Scenarios - As of January 1, 2018		32

Validus Holdings, Ltd.

Explanatory Notes

Table of Contents

Basis of Presentation


•	This document should be read in conjunction with other documents filed by Validus Holdings, Ltd. (“Validus” or the “Company”) with the U.S. Securities and Exchange Commission pursuant to the Exchange Act of 1934, as amended.


•	All financial information contained herein is unaudited; however, certain information contained herein relating to the years ended December 31, 2017 and 2016 is derived from or agrees to audited financial statements. Unless otherwise noted, dollar amounts are in thousands of U.S. dollars, except for share and per share amounts.


•	The general and administrative expense ratio includes share compensation expenses.

•

On May 1, 2017, the Company acquired all of the outstanding capital stock of Crop Risk Services, Inc. ("CRS"), a primary crop insurance managing general agent. For segmental reporting purposes, the results of CRS have been included in the results of the Insurance segment as of the date of acquisition. Transaction expenses incurred during the year ended December 31, 2017 were in relation to the acquisition of CRS and are primarily composed of legal, financial advisory and audit related services.

•

On January 21, 2018, the Company entered into a definitive agreement and plan of merger (the “Merger Agreement”) with American International Group, Inc. (“AIG”). The Merger Agreement provides that, subject to the satisfaction or waiver of certain conditions set forth therein, the Company and its related subsidiaries will merge with an existing AIG subsidiary in accordance with the Bermuda Companies Act (the “Merger”), with the Company surviving the Merger as a wholly–owned subsidiary of AIG. The Merger is expected to close in mid-2018, subject to regulatory approvals and other customary closing conditions. Transaction expenses incurred during the three months ended March 31, 2018 were in relation to the Merger and are primarily composed of legal and financial advisory services.

Non-GAAP Financial Measures

•

In presenting the Company’s results, management has included and discussed certain non-GAAP financial measures. The Company believes that these non-GAAP measures, which may be defined and calculated differently by other companies, better explain and enhance the understanding of the Company’s results of operations. However, these measures should not be viewed as a substitute for those determined in accordance with U.S. GAAP.

•

In addition to presenting book value per common share determined in accordance with U.S. GAAP, the Company believes that the following non-GAAP book value financial measures are key financial indicators for evaluating performance and measuring overall growth: book value per diluted common share, book value per diluted common share plus accumulated dividends and tangible book value per diluted common share. A reconciliation of book value per common share, a GAAP financial measure, to the non-GAAP book value financial measures has been included on page 6.

•

In addition to presenting net (loss) income (attributable) available to Validus common shareholders determined in accordance with U.S. GAAP, the Company believes that showing net operating income (loss) available (attributable) to Validus common shareholders, a non-GAAP financial measure, provides investors with a valuable measure of profitability and enables investors, analysts, rating agencies and other users of its financial information to more easily analyze the Company’s results in a manner similar to how management analyzes the Company’s underlying business performance.

•

Net operating income (loss) available (attributable) to Validus common shareholders, a non-GAAP financial measure, is calculated by the addition or subtraction of certain Consolidated Statement of (Loss) Income line items from net (loss) income (attributable) available to Validus common shareholders, the most directly comparable GAAP financial measure, and measures the performance of the Company’s operations without the influence of gains or losses on investments and foreign currencies and other items as noted in the reconciliation on page 19. The Company excludes these items from its calculation of net operating income (loss) available (attributable) to Validus common shareholders because the amount of these gains and losses is heavily influenced by, and fluctuates in part, according to availability of investment market opportunities and other factors. The Company believes these amounts are largely independent of its core underwriting activities and including them distorts the analysis of trends in its operations. The Company believes the reporting of net operating income (loss) available (attributable) to Validus common shareholders enhances the understanding of results by highlighting the underlying profitability of the Company’s core (re)insurance operations. This profitability is influenced significantly by earned premium growth, adequacy of the Company’s pricing, as well as loss frequency and severity. Over time it is also influenced by the Company’s underwriting discipline, which seeks to manage exposure to loss through favorable risk selection and diversification, its management of claims, its use of reinsurance and its ability to manage its expense ratio, which it accomplishes through its management of acquisition costs and other underwriting expenses.


•	Annualized return on average equity, a GAAP financial measure, and annualized net operating return on average equity, a non-GAAP financial measure, represents the returns generated on common shareholders’ equity during the year and are presented on page 19.

•

The Company also considers underwriting income (loss) to be a measure of profitability that takes into account net premiums earned and other insurance related income as revenue and losses and loss expenses, acquisition costs and underwriting related general and administrative and share compensation expenses as expenses. Underwriting income (loss) is the difference between these revenue and expense items. A reconciliation of underwriting income (loss) to net (loss) income (attributable) available to Validus common shareholders, the most comparable U.S. GAAP financial measure, is presented on page 9.

Validus Holdings, Ltd.

Consolidated Financial Highlights

Table of Contents



		Three Months Ended															Years Ended
		March 31, 2018			December 31, 2017			September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2017			December 31, 2016
Highlights	Net (loss) income (attributable) available to Validus common shareholders	$	(4,078	)	$	(8,693	)	$	(250,446	)	$	101,095		$	94,561		$	(63,483	)	$	359,384
	Net operating income (loss) available (attributable) to Validus common shareholders ^(a)	42,557			4,153			(254,459		)	88,466			76,834			(85,006		)	320,885
	Gross premiums written	1,832,456			443,323			523,856			792,902			1,190,857			2,950,938			2,648,705
	Net premiums earned	618,942			651,477			723,208			631,027			575,376			2,581,088			2,249,165
	Total assets	15,600,642			14,426,879			14,601,240			13,951,146			12,137,121			14,426,879			11,349,755
	Total shareholders' equity available to Validus common shareholders	3,501,232			3,495,072			3,536,287			3,811,431			3,761,876			3,495,072			3,688,291
	Total shareholders' equity available to Validus	3,901,232			3,895,072			3,936,287			4,211,431			3,911,876			3,895,072			3,838,291

Per share	(Loss) earnings per basic common share
	Net (loss) income (attributable) available to Validus common shareholders	$	(0.05	)	$	(0.11	)	$	(3.17	)	$	1.28		$	1.19		$	(0.80	)	$	4.43
	Net operating income (loss) available (attributable) to Validus common shareholders ^(a)	0.54			0.05			(3.22		)	1.12			0.97			(1.07		)	3.96

	(Loss) earnings per diluted common share
	Net (loss) income (attributable) available to Validus common shareholders	$	(0.05	)	$	(0.11	)	$	(3.17	)	$	1.25		$	1.17		$	(0.80	)	$	4.36
	Net operating income (loss) available (attributable) to Validus common shareholders^(a)	0.53			0.05			(3.22		)	1.09			0.95			(1.07		)	3.90

	Book value per common share	$	44.14		$	44.06		$	44.51		$	47.93		$	47.54		$	44.06		$	46.61
	Book value per diluted common share ^(a)	$	42.79		$	42.71		$	43.13		$	46.45		$	45.88		$	42.71		$	44.97
	Change in book value per diluted common share inclusive of dividends ^(a)	1.1		%	(0.1		)%	(6.3		)%	2.1		%	2.9		%	(1.6		)%	9.5		%

	Book value per diluted common share plus accumulated dividends ^(a)	$	56.25		$	55.79		$	55.83		$	58.77		$	57.82		$	55.79		$	56.53

Ratios	Losses and loss expense ratio	52.0		%	73.7		%	173.5		%	46.9		%	46.9		%	89.1		%	47.4		%

	Policy acquisition cost ratio	18.8		%	19.5		%	16.0		%	18.6		%	19.4		%	18.3		%	20.0		%
	General and administration expense ratio	20.1		%	16.5		%	11.0		%	17.0		%	16.9		%	15.2		%	16.8		%
	Expense ratio	38.9		%	36.0		%	27.0		%	35.6		%	36.3		%	33.5		%	36.8		%
	Combined ratio	90.9		%	109.7		%	200.5		%	82.5		%	83.2		%	122.6		%	84.2		%

	Annualized return on average equity	(0.5		)%	(1.0		)%	(27.3		)%	10.7		%	10.2		%	(1.7		)%	9.7		%
	Annualized net operating return on average equity ^(a)	4.9		%	0.5		%	(27.7		)%	9.3		%	8.3		%	(2.3		)%	8.7		%

Notes:


(a)	Non-GAAP financial measure. Refer to the Explanatory Notes on page 3 for further information.

Validus Holdings, Ltd.

Summary Consolidated Balance Sheets

Table of Contents



	March 31, 2018			December 31, 2017			September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016			June 30, 2016			March 31, 2016
Assets
Fixed maturity investments trading, at fair value	$	5,803,022		$	5,858,348		$	5,419,966		$	5,418,643		$	5,365,216		$	5,543,030		$	5,576,341		$	5,551,586		$	5,481,304
Short-term investments trading, at fair value	3,638,940			3,381,757			2,993,246			2,871,353			2,785,226			2,796,170			2,481,406			2,369,654			2,108,199
Other investments, at fair value	357,246			355,218			471,300			448,618			443,004			405,712			394,695			359,526			344,151
Investments in investment affiliates, equity method	113,471			100,137			92,079			103,377			94,697			100,431			99,731			99,278			84,135
Cash and cash equivalents	672,173			754,990			965,630			800,405			623,937			419,976			443,992			568,798			569,774
Restricted cash	302,277			394,663			89,403			195,039			92,547			70,956			113,048			96,022			108,395
Total investments and cash	10,887,129			10,845,113			10,031,624			9,837,435			9,404,627			9,336,275			9,109,213			9,044,864			8,695,958
Investments in operating affiliate, equity method	—			—			—			—			—			—			—			—			369
Premiums receivable	1,865,460			939,487			1,569,374			1,940,637			1,214,745			725,390			939,127			1,372,000			1,176,684
Deferred acquisition costs	309,825			213,816			258,078			302,857			292,180			209,227			249,922			283,213			262,675
Prepaid reinsurance premiums	390,900			132,938			207,618			335,837			199,046			77,996			119,805			145,567			181,255
Securities lending collateral	4,210			2,717			2,115			2,514			10,386			9,779			10,629			10,224			9,721
Loss reserves recoverable	979,944			1,233,997			1,335,016			600,207			451,856			430,421			444,609			442,987			370,689
Paid losses recoverable	59,892			46,873			77,730			35,675			37,837			35,247			36,069			27,648			25,001
Income taxes recoverable	7,705			9,044			9,704			4,763			6,757			4,870			6,879			8,526			7,146
Deferred tax asset	56,739			52,467			52,228			52,655			45,995			43,529			26,015			23,745			27,771
Receivable for investments sold	31,512			12,182			37,493			20,519			9,302			3,901			21,854			13,736			16,278
Intangible assets	169,168			171,411			173,398			175,518			114,176			115,592			117,010			118,426			119,842
Goodwill	229,573			229,573			227,701			227,701			196,758			196,758			196,758			196,758			196,758
Accrued investment income	29,621			29,096			27,976			26,968			25,962			26,488			24,906			24,925			22,298
Other assets	578,964			508,165			591,185			387,860			127,494			134,282			183,357			105,625			92,076
Total assets	$	15,600,642		$	14,426,879		$	14,601,240		$	13,951,146		$	12,137,121		$	11,349,755		$	11,486,153		$	11,818,244		$	11,204,521
Liabilities
Reserve for losses and loss expenses	$	4,632,629		$	4,831,390		$	4,935,637		$	3,305,191		$	3,052,745		$	2,995,195		$	3,035,987		$	3,122,717		$	2,980,300
Unearned premiums	2,242,368			1,147,186			1,526,465			1,970,896			1,612,474			1,076,049			1,359,438			1,621,563			1,503,161
Reinsurance balances payable	398,861			331,645			527,881			461,261			118,119			54,781			76,429			92,488			96,685
Securities lending payable	4,210			2,717			2,581			2,980			10,852			10,245			11,095			10,690			10,187
Deferred tax liability	3,633			4,600			4,198			4,012			3,818			3,331			3,278			3,552			3,618
Payable for investments purchased	85,946			74,496			84,431			92,077			38,486			29,447			49,435			52,718			76,116
Accounts payable and accrued expenses	520,916			1,225,875			478,892			385,958			171,134			587,648			144,086			149,593			136,712
Notes payable to AlphaCat investors	1,268,194			1,108,364			1,107,618			1,066,159			446,576			278,202			372,730			370,982			323,510
Senior notes payable	245,614			245,564			245,513			245,463			245,412			245,362			245,311			245,261			245,211
Debentures payable	539,572			539,158			538,910			538,400			537,402			537,226			538,168			537,987			538,335
Total liabilities	9,941,943			9,510,995			9,452,126			8,072,397			6,237,018			5,817,486			5,835,957			6,207,551			5,913,835
Redeemable noncontrolling interests	1,423,110			1,004,094			1,133,880			1,251,660			1,657,630			1,528,001			1,559,580			1,532,283			1,409,037
Shareholders' equity
Preferred shares	$	400,000		$	400,000		$	400,000		$	400,000		$	150,000		$	150,000		$	150,000		$	150,000		$	—
Common shares	28,351			28,349			28,342			28,339			28,225			28,224			28,223			28,219			28,102
Treasury shares	(14,468		)	(14,468		)	(14,437		)	(14,423		)	(14,376		)	(14,376		)	(14,320		)	(14,084		)	(13,830		)
Additional paid-in capital	824,356			814,641			812,266			807,321			830,346			821,023			827,256			883,701			954,485
Accumulated other comprehensive income (loss)	9,405			(22,192		)	(18,430		)	(19,924		)	(22,453		)	(23,216		)	(21,092		)	(18,182		)	(15,438		)
Retained earnings	2,653,588			2,688,742			2,728,546			3,010,118			2,940,134			2,876,636			2,897,553			2,836,602			2,771,107
Total shareholders' equity available to Validus	3,901,232			3,895,072			3,936,287			4,211,431			3,911,876			3,838,291			3,867,620			3,866,256			3,724,426
Noncontrolling interests	334,357			16,718			78,947			415,658			330,597			165,977			222,996			212,154			157,223
Total shareholders' equity	4,235,589			3,911,790			4,015,234			4,627,089			4,242,473			4,004,268			4,090,616			4,078,410			3,881,649
Total liabilities, noncontrolling interests and shareholders' equity	$	15,600,642		$	14,426,879		$	14,601,240		$	13,951,146		$	12,137,121		$	11,349,755		$	11,486,153		$	11,818,244		$	11,204,521

Book value per common share	$	44.14		$	44.06		$	44.51		$	47.93		$	47.54		$	46.61		$	46.80		$	46.01		$	45.67
Book value per diluted common share ^(a)	$	42.79		$	42.71		$	43.13		$	46.45		$	45.88		$	44.97		$	45.16		$	44.41		$	44.00
Book value per diluted common share plus accumulated dividends ^(a)	$	56.25		$	55.79		$	55.83		$	58.77		$	57.82		$	56.53		$	56.37		$	55.27		$	54.51

Notes:


(a)	Non-GAAP financial measure. Refer to the Explanatory Notes on page 3 for further information.

Validus Holdings, Ltd.

Computation of Book Value per Common Share, Book Value per Diluted Common Share and Tangible Book Value per Diluted Common Share

Table of Contents



	March 31, 2018						December 31, 2017
	Equity Amount			Common Shares	Per Share Amount ^(a)		Equity Amount			Common Shares	Per Share Amount ^(a)
Book value per common share ^(b)	$	3,501,232		79,329,028	$	44.14	$	3,495,072		79,319,550	$	44.06
Non-GAAP Adjustments:
Unvested restricted shares	—			2,489,888			—			2,503,859
Book value per diluted common share ^(c)	3,501,232			81,818,916	$	42.79	3,495,072			81,823,409	$	42.71
Goodwill	(229,573		)	—			(229,573		)	—
Intangible assets	(169,168		)	—			(171,411		)	—
Tangible book value per diluted common share ^(c)	$	3,102,491		81,818,916	$	37.92	$	3,094,088		81,823,409	$	37.81

Book value per diluted common share ^(c)					$	42.79					$	42.71
Accumulated dividends					13.46						13.08
Book value per diluted common share plus accumulated dividends ^(c)					$	56.25					$	55.79

Notes:


(a)	Per share amounts are calculated by dividing the equity amount by the common shares.


(b)	The equity amount used in the calculation of book value per common share represents total shareholders' equity available to Validus excluding the liquidation value of the preferred shares.


(c)	Non-GAAP financial measure. Refer to the Explanatory Notes on page 3 for further information.

Validus Holdings, Ltd.

Consolidated Statements of Cash Flows

Table of Contents



	Three Months Ended															Years Ended
	March 31, 2018			December 31, 2017			September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2017			December 31, 2016
Cash flows provided by (used in) operating activities
Net income (loss)	$	66,462		$	(70,001	)	$	(621,185	)	$	146,948		$	139,336		$	(404,902	)	$	487,202
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities:
Share compensation expenses	9,729			10,031			9,443			11,146			9,491			40,111			42,907
Loss on redemption of AlphaCat ILS fund	—			—			—			402			—			402			—
Amortization of discount on senior notes	27			27			27			27			27			108			108
(Income) loss from investment and operating affiliates	(13,068		)	(6,345		)	(1,011		)	(9,466		)	(5,188		)	(22,010		)	2,106
Net realized and change in net unrealized losses (gains) on investments	55,181			15,650			4,291			(18,595		)	(12,184		)	(10,838		)	(32,628		)
Amortization of intangible assets	2,243			2,146			2,120			2,579			1,416			8,261			5,666
Foreign exchange (gains) losses included in net income	(9,885		)	(540		)	(4,493		)	(4,748		)	(4,938		)	(14,719		)	3,043
Amortization of premium on fixed maturity investments	3,899			4,732			4,166			3,476			3,536			15,910			17,961
Change in operational balance sheet items, net	(68,646		)	130,152			857,839			(96,883		)	(113,697		)	777,411			(116,162		)
Net cash provided by operating activities	$	45,942		$	85,852		$	251,197		$	34,886		$	17,799		$	389,734		$	410,203
Cash flows provided by (used in) investing activities
(Purchases) sales of investments	$	(270,028	)	$	(717,157	)	$	(174,373	)	$	(92,623	)	$	167,286		$	(816,867	)	$	(974,719	)
(Increase) decrease in securities lending collateral	(1,493		)	(602		)	399			7,872			(607		)	7,062			(4,916		)
(Investments in) distributions from investment & operating affiliates, net	(266		)	(1,713		)	12,309			786			10,922			22,304			(14,472		)
Purchase of subsidiary, net of cash acquired	—			—			—			(183,923		)	—			(183,923		)	—
Net cash (used in) provided by investing activities	$	(271,787	)	$	(719,472	)	$	(161,665	)	$	(267,888	)	$	177,601		$	(971,424	)	$	(994,107	)
Cash flows provided by (used in) financing activities
Net proceeds on issuance of notes payable to AlphaCat investors	$	155,966		$	506		$	40,903		$	196,597		$	73,048		$	311,054		$	296,325
Proceeds drawn on credit facilities	—			206,000			—			—			—			206,000			—
Net proceeds on issuance of preferred shares	—			—			—			241,686			—			241,686			144,852
(Redemption) issuance of common shares, net	(12		)	545			(162		)	(11,794		)	(167		)	(11,578		)	(7,701		)
Purchases of common shares under share repurchase program	—			(8,225		)	(4,347		)	(13,996		)	—			(26,568		)	(212,675		)
Dividends paid on common and preferred shares	(36,860		)	(36,072		)	(35,956		)	(35,397		)	(32,295		)	(139,720		)	(120,080		)
Increase (decrease) in securities lending payable	1,493			136			(399		)	(7,872		)	607			(7,528		)	4,916
Third party investments in (redemptions of) redeemable noncontrolling interest, net	211,314			58,665			(51,201		)	95,463			35,403			138,330			376,165
Third party investments in (redemptions of) noncontrolling interest, net	281,300			(3,440		)	(101,125		)	69,965			92,210			57,610			44,571
Third party subscriptions (deployed) received on funds and sidecars, net	(578,666		)	516,333			114,500			(27,500		)	(144,452		)	458,881			(225,284		)
Net cash provided by (used in) financing activities	$	34,535		$	734,448		$	(37,787	)	$	507,152		$	24,354		$	1,228,167		$	301,089
Effect of foreign currency rate changes on cash and cash equivalents and restricted cash	16,107			(6,208		)	7,844			4,810			5,798			12,244			(22,632		)
Net (decrease) increase in cash and cash equivalents and restricted cash	(175,203		)	94,620			59,589			278,960			225,552			658,721			(305,447		)
Cash and cash equivalents and restricted cash - beginning of period	1,149,653			1,055,033			995,444			716,484			490,932			490,932			796,379
Cash and cash equivalents and restricted cash - end of period	$	974,450		$	1,149,653		$	1,055,033		$	995,444		$	716,484		$	1,149,653		$	490,932

Supplemental information:
Taxes paid during the period	$	460		$	1,511		$	2,242		$	552		$	16		$	4,321		$	6,034
Interest paid during the period	$	19,068		$	8,045		$	19,202		$	8,113		$	19,073		$	54,433		$	54,638
Losses paid during the period	$	281,880		$	485,913		$	372,706		$	236,023		$	245,787		$	1,340,429		$	1,114,402

Validus Holdings, Ltd.

Consolidated Statements of (Loss) Income and Comprehensive Income (Loss)

Table of Contents



	Three Months Ended															Years Ended
	March 31, 2018			December 31, 2017			September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2017			December 31, 2016
Revenues
Gross premiums written	$	1,832,456		$	443,323		$	523,856		$	792,902		$	1,190,857		$	2,950,938		$	2,648,705
Reinsurance premiums ceded	(376,294		)	(96,445		)	(116,860		)	(56,222		)	(200,106		)	(469,633		)	(289,705		)
Net premiums written	1,456,162			346,878			406,996			736,680			990,751			2,481,305			2,359,000
Change in unearned premiums	(837,220		)	304,599			316,212			(105,653		)	(415,375		)	99,783			(109,835		)
Net premiums earned	618,942			651,477			723,208			631,027			575,376			2,581,088			2,249,165
Net investment income	52,072			48,960			44,458			44,241			40,214			177,873			150,385
Net realized gains (losses) on investments	2,200			5,607			906			2,274			(1,164		)	7,623			15,757
Change in net unrealized (losses) gains on investments	(57,381		)	(21,257		)	(5,197		)	16,321			13,348			3,215			16,871
Income (loss) from investment affiliates	13,068			6,345			1,011			9,466			5,188			22,010			(2,083		)
Other insurance related income and other income	25,540			6,939			3,571			1,339			1,330			13,179			2,195
Foreign exchange gains (losses)	525			(283		)	(1,404		)	(7,329		)	1,569			(7,447		)	10,864
Total revenues	654,966			697,788			766,553			697,339			635,861			2,797,541			2,443,154
Expenses
Losses and loss expenses	321,545			479,842			1,254,602			296,149			269,585			2,300,178			1,065,097
Policy acquisition costs	116,456			127,067			115,590			117,268			111,628			471,553			449,482
General and administrative expenses	114,726			97,522			70,342			96,349			87,924			352,137			336,294
Share compensation expenses	9,729			10,031			9,443			11,146			9,491			40,111			42,907
Finance expenses	14,263			15,871			14,523			14,209			13,943			58,546			58,520
Transaction expenses	7,756			—			—			4,427			—			4,427			—
Total expenses	584,475			730,333			1,464,500			539,548			492,571			3,226,952			1,952,300
Income (loss) before taxes, (loss) from operating affiliate and (income) loss attributable to AlphaCat investors	70,491			(32,545		)	(697,947		)	157,791			143,290			(429,411		)	490,854
Tax benefit	6,833			412			2,632			987			3,549			7,580			19,729
(Loss) from operating affiliate	—			—			—			—			—			—			(23		)
(Income) loss attributable to AlphaCat investors	(10,862		)	(37,868		)	74,130			(11,830		)	(7,503		)	16,929			(23,358		)
Net income (loss)	66,462			(70,001		)	(621,185		)	146,948			139,336			(404,902		)	487,202
Net (income) loss attributable to noncontrolling interests	(64,712		)	67,136			376,366			(43,650		)	(42,572		)	357,280			(123,363		)
Net income (loss) available (attributable) to Validus	1,750			(2,865		)	(244,819		)	103,298			96,764			(47,622		)	363,839
Dividends on preferred shares	(5,828		)	(5,828		)	(5,627		)	(2,203		)	(2,203		)	(15,861		)	(4,455		)
Net (loss) income (attributable) available to Validus common shareholders	$	(4,078	)	$	(8,693	)	$	(250,446	)	$	101,095		$	94,561		$	(63,483	)	$	359,384

Comprehensive income (loss)
Net income (loss)	$	66,462		$	(70,001	)	$	(621,185	)	$	146,948		$	139,336		$	(404,902	)	$	487,202
Other comprehensive income (loss), net of tax:
Change in foreign currency translation adjustments	1,837			490			1,481			1,489			597			4,057			(10,440		)
Change in minimum pension liability	(38		)	1,617			—			1,184			68			2,869			(484		)
Change in fair value of cash flow hedges	28,763			(6,319		)	13			(144		)	98			(6,352		)	277
Other comprehensive income (loss), net of tax	$	30,562		$	(4,212	)	$	1,494		$	2,529		$	763		$	574		$	(10,647	)
Comprehensive (income) loss attributable to noncontrolling interests	(64,712		)	67,136			376,366			(43,650		)	(42,572		)	357,280			(123,363		)
Comprehensive income (loss) available (attributable) to Validus	$	32,312		$	(7,077	)	$	(243,325	)	$	105,827		$	97,527		$	(47,048	)	$	353,192
(Loss) earnings per share
Weighted average number of common shares and common share equivalents outstanding
Basic	79,325,688			78,966,938			78,994,335			79,270,561			79,133,671			79,091,376			81,041,974
Diluted	79,325,688			78,966,938			78,994,335			80,872,451			80,739,142			79,091,376			82,359,460
Basic (loss) earnings per share (attributable) available to Validus common shareholders	$	(0.05	)	$	(0.11	)	$	(3.17	)	$	1.28		$	1.19		$	(0.80	)	$	4.43
(Loss) earnings per diluted share (attributable) available to Validus common shareholders	$	(0.05	)	$	(0.11	)	$	(3.17	)	$	1.25		$	1.17		$	(0.80	)	$	4.36
Cash dividends declared per common share	$	0.38		$	0.38		$	0.38		$	0.38		$	0.38		$	1.52		$	1.40

Validus Holdings, Ltd.

Consolidated Statements of Operations - Underwriting Income Format

Table of Contents



	Three Months Ended															Years Ended
	March 31, 2018			December 31, 2017			September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2017			December 31, 2016
Underwriting revenues
Gross premiums written	$	1,832,456		$	443,323		$	523,856		$	792,902		$	1,190,857		$	2,950,938		$	2,648,705
Reinsurance premiums ceded	(376,294		)	(96,445		)	(116,860		)	(56,222		)	(200,106		)	(469,633		)	(289,705		)
Net premiums written	1,456,162			346,878			406,996			736,680			990,751			2,481,305			2,359,000
Change in unearned premiums	(837,220		)	304,599			316,212			(105,653		)	(415,375		)	99,783			(109,835		)
Net premiums earned	618,942			651,477			723,208			631,027			575,376			2,581,088			2,249,165
Other insurance related income	25,496			6,939			3,536			1,165			1,236			12,876			2,961
Total underwriting revenues	644,438			658,416			726,744			632,192			576,612			2,593,964			2,252,126
Underwriting deductions
Losses and loss expenses	321,545			479,842			1,254,602			296,149			269,585			2,300,178			1,065,097
Policy acquisition costs	116,456			127,067			115,590			117,268			111,628			471,553			449,482
General and administrative expenses	114,726			97,522			70,342			96,349			87,924			352,137			336,294
Share compensation expenses	9,729			10,031			9,443			11,146			9,491			40,111			42,907
Total underwriting deductions	562,456			714,462			1,449,977			520,912			478,628			3,163,979			1,893,780
Underwriting income (loss) ^(a)	$	81,982		$	(56,046	)	$	(723,233	)	$	111,280		$	97,984		$	(570,015	)	$	358,346
Net investment income	52,072			48,960			44,458			44,241			40,214			177,873			150,385
Finance expenses	(14,263		)	(15,871		)	(14,523		)	(14,209		)	(13,943		)	(58,546		)	(58,520		)
Dividends on preferred shares	(5,828		)	(5,828		)	(5,627		)	(2,203		)	(2,203		)	(15,861		)	(4,455		)
Tax benefit (expense)	3,739			(927		)	2,164			2,735			4,129			8,101			21,416
(Loss) from operating affiliate	—			—			—			—			—			—			(23		)
(Income) loss attributable to AlphaCat investors	(10,862		)	(37,868		)	74,130			(11,830		)	(7,503		)	16,929			(23,358		)
Net operating (income) loss attributable to noncontrolling interests	(64,283		)	71,733			368,172			(41,548		)	(41,844		)	356,513			(122,906		)
Net operating income (loss) available (attributable) to Validus common shareholders ^(a)	$	42,557		$	4,153		$	(254,459	)	$	88,466		$	76,834		$	(85,006	)	$	320,885
Net realized gains (losses) on investments	2,200			5,607			906			2,274			(1,164		)	7,623			15,757
Change in net unrealized (losses) gains on investments	(57,381		)	(21,257		)	(5,197		)	16,321			13,348			3,215			16,871
Income (loss) from investment affiliates	13,068			6,345			1,011			9,466			5,188			22,010			(2,083		)
Foreign exchange gains (losses)	525			(283		)	(1,404		)	(7,329		)	1,569			(7,447		)	10,864
Other income (loss)	44			—			35			174			94			303			(766		)
Transaction expenses	(7,756		)	—			—			(4,427		)	—			(4,427		)	—
Net (income) loss attributable to noncontrolling interests	(429		)	(4,597		)	8,194			(2,102		)	(728		)	767			(457		)
Tax benefit (expense)	3,094			1,339			468			(1,748		)	(580		)	(521		)	(1,687		)
Net (loss) income (attributable) available to Validus common shareholders	$	(4,078	)	$	(8,693	)	$	(250,446	)	$	101,095		$	94,561		(63,483		)	359,384

Selected ratios:
Ratio of net to gross premiums written	79.5		%	78.2		%	77.7		%	92.9		%	83.2		%	84.1		%	89.1		%

Losses and loss expense ratio	52.0		%	73.7		%	173.5		%	46.9		%	46.9		%	89.1		%	47.4		%

Policy acquisition cost ratio	18.8		%	19.5		%	16.0		%	18.6		%	19.4		%	18.3		%	20.0		%
General and administrative expense ratio	20.1		%	16.5		%	11.0		%	17.0		%	16.9		%	15.2		%	16.8		%
Expense ratio	38.9		%	36.0		%	27.0		%	35.6		%	36.3		%	33.5		%	36.8		%
Combined ratio	90.9		%	109.7		%	200.5		%	82.5		%	83.2		%	122.6		%	84.2		%

Notes:


(a)	Non-GAAP financial measure. Refer to the Explanatory Notes on page 3 for further information.

Validus Holdings, Ltd.

Computation of Earnings per Share

Table of Contents



	Three Months Ended ^(a)
	March 31, 2018							March 31, 2017
	Net (Loss)			Net Operating Income		Comprehensive Income		Net Income		Net Operating Income		Comprehensive Income
Basic (loss) earnings per share ^(b)
(Loss) income (attributable) available to Validus common shareholders	$	(4,078	)	$	42,557	$	26,484	$	94,561	$	76,834	$	95,324
Weighted average number of common shares outstanding	79,325,688			79,325,688		79,325,688		79,133,671		79,133,671		79,133,671
Basic (loss) earnings per share (attributable) available to Validus common shareholders	$	(0.05	)	$	0.54	$	0.33	$	1.19	$	0.97	$	1.20

(Loss) earnings per diluted share^(c)
(Loss) income (attributable) available to Validus common shareholders	$	(4,078	)	$	42,557	$	26,484	$	94,561	$	76,834	$	95,324
Weighted average number of common shares outstanding	79,325,688			79,325,688		79,325,688		79,133,671		79,133,671		79,133,671
Share equivalents:
Stock options	—			—		—		15,379		15,379		15,379
Unvested restricted shares	—			1,650,434		1,650,434		1,590,092		1,590,092		1,590,092
Weighted average number of diluted common shares outstanding	79,325,688			80,976,122		80,976,122		80,739,142		80,739,142		80,739,142
(Loss) earnings per diluted share (attributable) available to Validus common shareholders	$	(0.05	)	$	0.53	$	0.33	$	1.17	$	0.95	$	1.18

Notes:


(a)	ASC 718 requires that any unrecognized stock based compensation expense that will be recorded in future periods be included as proceeds for purposes of treasury stock repurchases, which is applied against the unvested restricted shares balance.


(b)	(Loss) earnings per basic common share is based on weighted average common shares and excludes any dilutive effects of options and restricted stock.


(c)	(Loss) earnings per diluted common share assumes the exercise of all dilutive stock options and restricted stock grants. Due to the net (loss) incurred during the three months ended March 31, 2018 share equivalents were not included in the computation of (loss) per diluted common share due to their anti-dilutive effect.

Validus Holdings, Ltd.

Underwriting Income Statement - Reinsurance Segment

Table of Contents



	Three Months Ended															Years Ended
	March 31, 2018			December 31, 2017			September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2017			December 31, 2016
Underwriting revenues
Gross premiums written	$	765,573		$	51,960		$	169,572		$	330,534		$	643,141		$	1,195,207		$	1,184,912
Reinsurance premiums ceded	(190,194		)	(40,716		)	(43,849		)	(10,278		)	(114,446		)	(209,289		)	(121,331		)
Net premiums written	575,379			11,244			125,723			320,256			528,695			985,918			1,063,581
Change in unearned premiums	(350,627		)	239,320			156,754			(61,948		)	(297,040		)	37,086			(67,432		)
Net premiums earned	224,752			250,564			282,477			258,308			231,655			1,023,004			996,149
Other insurance related income	2			15			49			1			2			67			25
Total underwriting revenues	224,754			250,579			282,526			258,309			231,657			1,023,071			996,174
Underwriting deductions
Losses and loss expenses	103,473			135,804			361,693			114,341			80,881			692,719			415,505
Policy acquisition costs	48,340			58,107			47,822			49,966			43,535			199,430			189,797
General and administrative expenses	28,915			23,604			14,400			22,204			19,969			80,177			85,000
Share compensation expenses	2,663			2,331			3,083			2,725			2,623			10,762			11,668
Total underwriting deductions	183,391			219,846			426,998			189,236			147,008			983,088			701,970
Underwriting income (loss)	$	41,363		$	30,733		$	(144,472	)	$	69,073		$	84,649		$	39,983		$	294,204

Supplemental information:
Losses and loss expenses:
Current period excluding items below	$	121,311		$	132,919		$	123,095		$	124,268		$	106,932		$	487,214		$	459,249
Current period—notable loss events	—			14,738			283,027			—			—			297,765			45,164
Current period—non-notable loss events	—			9,392			796			5,781			5,073			21,042			46,718
Change in prior accident years	(17,838		)	(21,245		)	(45,225		)	(15,708		)	(31,124		)	(113,302		)	(135,626		)
Total losses and loss expenses	$	103,473		$	135,804		$	361,693		$	114,341		$	80,881		$	692,719		$	415,505
Selected ratios:
Ratio of net to gross premiums written	75.2		%	21.6		%	74.1		%	96.9		%	82.2		%	82.5		%	89.8		%
Losses and loss expense ratio:
Current period excluding items below	53.9		%	53.1		%	43.5		%	48.2		%	46.1		%	47.6		%	46.1		%
Current period—notable loss events	—		%	5.9		%	100.2		%	—		%	—		%	29.1		%	4.5		%
Current period—non-notable loss events	—		%	3.7		%	0.3

VALIDUS HOLDINGS LTD 8-K