EX-99.1 2 earningsrelease_q2.htm EARNINGS RELEASE earningsrelease_q2.htm
 
 
GREENLIGHT RE ANNOUNCES
SECOND QUARTER 2010 FINANCIAL RESULTS

GRAND CAYMAN, Cayman Islands (August 2, 2010) - Greenlight Capital Re, Ltd. (NASDAQ: GLRE) today announced financial results for the second quarter ending June 30, 2010.  Greenlight Re reported a net profit of $17.7 million for the second quarter of 2010 compared to net income of $92.2 million for the same period in 2009.  The fully diluted earnings per share were $0.47 for the second quarter of 2010, compared to fully diluted earnings per share of $2.51 for the same period in 2009.
 
Fully diluted adjusted book value per share was $19.07 as of June 30, 2010, a 15.4% increase from $16.53 per share as of June 30, 2009.
 
For the six months ended June 30, 2010, net income was $5.3 million compared to $120.0 million for the same period in 2009.  On a fully diluted basis, net income per share was $0.14 for the six months ended June 30, 2010 compared to $3.29 for the same period in 2009.
 
“We are pleased with the discipline and focus our underwriting team has shown in a challenging pricing environment in the second quarter,” said David Einhorn, Chairman of the Board of Directors of Greenlight Re.  “Our conservative investment portfolio generated a small profit during a quarter when the major equity indices were down significantly.”
 
Other financial and operating highlights for Greenlight Re for the second quarter and six months ended June 30, 2010 include:
 
●  
Gross written premiums in the second quarter of 2010 were $89.0 million compared to $70.0 million in the second quarter of 2009, while net earned premiums were $49.4 million during the second quarter of 2010 compared to $49.3 million reported in the second quarter of 2009.
 
●  
The combined ratio for the six months ended June 30, 2010 was 99.6% compared to 96.7% for the six months ended June 30, 2009.
 
●  
Net investment income in the second quarter was $22.6 million, a return of 2.6% on our investment portfolio.  This compares to $88.3 million in the second quarter of 2009, when we reported a 13.9% return on our investment portfolio.  For the first six months of 2010, net investment income was $5.8 million compared to $116.0 million during the comparable period in 2009.
 
“At this point in the market cycle, we are focused not only on where to grow the book, but also on where to reduce or discontinue our underwriting,” said Len Goldberg, Chief Executive Officer of Greenlight Re. “We increased our loss estimates on a small number of discontinued contracts in the quarter, while our growth comes from the business lines where we are focused, and which continue to perform well.  This bodes well for our strategy and the quality of our underwriting portfolio.”


 
 
 

Conference Call Details
Greenlight Re will hold a live conference call to discuss its financial results for the second quarter of 2010 on Tuesday, August 3, 2010 at 9:00 a.m. Eastern time.  The conference call title is Greenlight Capital Re, Ltd. Second Quarter 2010 Earnings Call.
 
To participate, please dial in to the conference call at:
U.S. toll free                                          1-800-860-2442
International                                           1-412-858-4600
 
The conference call can also be accessed via webcast at:
 
http://www.talkpoint.com/viewer/starthere.asp?Pres=131525
 
A telephone replay of the call will be available from 11:00 a.m. Eastern time on August 3, 2010 until 9:00 a.m. Eastern time on August 18, 2010.  The replay of the call may be accessed by dialing 1-877-344-7529 (U.S. toll free) or 1-412-317-0088 (international), access code 442168. An audio file of the call will also be available on the Company’s website, www.greenlightre.ky.

###
Regulation G
Fully diluted adjusted book value per share is a non-GAAP measure and represents basic adjusted book value per share combined with the impact from dilution of share based compensation including in-the-money stock options as of any period end.  Book value is adjusted by subtracting the amount of the non-controlling interest in joint venture from total shareholders’ equity to calculate adjusted book value.  We believe that long term growth in fully diluted adjusted book value per share is the most relevant measure of our financial performance.  In addition, fully diluted adjusted book value per share may be of benefit to our investors, shareholders and other interested parties to form a basis of comparison with other companies within the reinsurance industry.
 
Forward-Looking Statements
This news release contains forward-looking statements within the meaning of the U.S. federal securities laws. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements in the U.S. Federal securities laws. These statements involve risks and uncertainties that could cause actual results to differ materially from those contained in forward-looking statements made on behalf of the Company. These risks and uncertainties include the impact of general economic conditions and conditions affecting the insurance and reinsurance industry, the adequacy of our reserves, our ability to assess underwriting risk, trends in rates for property and casualty insurance and reinsurance, competition, investment market fluctuations, trends in insured and paid losses, catastrophes, regulatory and legal uncertainties and other factors described in our annual report on Form 10-K filed with the Securities Exchange Commission.  The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
 
About Greenlight Capital Re, Ltd.
Greenlight Re (www.greenlightre.ky) is an AM Best "A-" (Excellent) rated specialist property and casualty reinsurance company based in the Cayman Islands.  The Company provides a variety of custom-tailored reinsurance solutions to the insurance, risk retention group, captive and financial marketplaces.  Established in 2004, Greenlight Re selectively offers customized reinsurance solutions in markets where capacity and alternatives are limited.  With a focus on deriving superior returns from both sides of the balance sheet, Greenlight Re's assets are managed according to a value-oriented equity-focused strategy that complements the Company's business goal of long-term growth in book value per share.

Contact:
Alex Stanton
Stanton Public Relations & Marketing
(212) 780-0701
astanton@stantonprm.com



 
 
 


GREENLIGHT CAPITAL RE, LTD.
 CONDENSED CONSOLIDATED BALANCE SHEETS
 
June 30, 2010 and December 31, 2009
(expressed in thousands of U.S. dollars, except per share and share amounts)

 
   
June 30,
 2010
 (unaudited)
    
December 31,
2009
    
Assets
              
Investments
              
Debt instruments, trading, at fair value
$
     55,294
      
$
95,838
    
Equity securities, trading, at fair value
  
  649,431
        
593,201
    
Other investments, at fair value
  
  169,665
        
141,561
    
Total investments
  
  874,390
        
830,600
    
Cash and cash equivalents
  
  16,033
        
31,717
    
Restricted cash and cash equivalents
  
  523,986
        
590,871
    
Financial contracts receivable, at fair value
  
  17,504
        
30,117
    
Reinsurance balances receivable
  
  137,920
        
82,748
    
Loss and loss adjustment expense recoverables
  
  8,950
        
7,270
    
Deferred acquisition costs, net
  
  45,338
        
34,401
    
Unearned premiums ceded
  
  5,510
        
6,478
    
Notes receivable
  
  15,434
        
15,424
    
Other assets
  
  6,537
        
4,754
    
Total assets
$
 1,651,602
      
$
1,634,380
    
Liabilities and shareholders’ equity
                  
Liabilities
                  
Securities sold, not yet purchased, at fair value
$
488,366
      
$
570,875
    
Financial contracts payable, at fair value
  
  15,624
        
16,200
    
Due to prime brokers
  
21,013
        
—
    
Loss and loss adjustment expense reserves
  
  164,747
        
137,360
    
Unearned premium reserves
  
  164,469
        
118,899
    
Reinsurance balances payable
  
  32,028
        
34,301
    
Funds withheld
  
  17,787
        
14,711
    
Other liabilities
  
11,786
        
12,796
    
Performance compensation payable to related party
  
  518
        
—
    
Total liabilities
  
  916,338
        
905,142
    
Shareholders’ equity
                  
Preferred share capital (par value $0.10; authorized, 50,000,000; none issued)
  
— 
        
—
    
Ordinary share capital (Class A: par value $0.10; authorized, 100,000,000; issued and outstanding, 30,196,835 (2009: 30,063,893); Class B: par value $0.10; authorized, 25,000,000; issued and outstanding, 6,254,949 (2009: 6,254,949)
  
  3,645
        
3,632
    
Additional paid-in capital
  
  483,327
        
    481,449
    
Non-controlling interest in joint venture
  
  29,471
        
      30,597
    
Retained earnings
  
  218,821
        
213,560
    
Total shareholders’ equity
  
  735,264
        
729,238
    
Total liabilities and shareholders’ equity
$ 
$1,651,602
      
$
1,634,380
    




 
 
 
 

GREENLIGHT CAPITAL RE, LTD.
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
 (UNAUDITED)
 
For the three and six months ended June 30, 2010 and 2009
 (expressed in thousands of U.S. dollars, except per share and share amounts)


   
Three months ended June 30,
  
Six months ended June 30,
   
2010
  
2009
  
2010
  
2009
Revenues
        
Gross premiums written
$
88,956
$
70,047
$
155,843
$
141,918
  
Gross premiums ceded
  
(4,011
) 
(6,611
) 
(4,589
)
(7,831
) 
Net premiums written
  
84,945
  
63,436
  
151,254
  
134,087
  
Change in net unearned premium reserves
  
(35,544
) 
(14,089
) 
(46,537
)
(38,547
) 
Net premiums earned
  
49,401
  
 49,347
  
104,717
  
95,540
  
Net investment  income
  
22,632
  
 88,323
  
5,801
  
116,040
  
Other income (expense), net
  
(374
) 
 (70
)
(528)
  
2,054
  
Total revenues
  
71,659
  
 137,600
  
109,990
  
213,634
  
Expenses
                  
Loss and loss adjustment expenses incurred, net
  
35,544
  
 23,547
  
64,679
  
53,743
  
Acquisition costs, net
  
14,465
  
 15,578
  
31,376
  
28,823
  
General and administrative expenses
  
3,094
  
 5,330
  
8,241
  
9,708
  
Total expenses
  
53,103
  
 44,455
  
104,296
  
92,274
  
Net income before non-controlling interest and income tax expense
  
18,556
  
93,145
  
5,694
  
121,360
  
Non-controlling interest in income of joint venture
  
(854
) 
 (1,006
) 
(375)
  
(1,337
) 
Net income before income tax expense
  
17,702
  
 92,139
  
5,319
  
120,023
  
Income tax benefit (expense)
  
(50
) 
 57
  
(58
)
(18
) 
Net income
$
17,652
$
 92,196
    $
5,261
$
120,005
  
Earnings per share
                  
Basic
$
0.48
$
 2.54
 $
0.14
$
3.32
  
Diluted
$
0.47
$
 2.51
 $
0.14
$
3.29
  
Weighted average number of ordinary shares used in the determination of
                  
Basic
  
36,436,903
  
36,252,925 
  
36,386,697
  
36,160,160
  
Diluted
  
37,218,783
  
36,689,711 
  
37,155,475
  
36,503,890
  



The following table provides the ratios for the six months ended June 30, 2010 and 2009:

   
Six months ended
June 30, 2010
    
Six months ended
June 30, 2009
  
   
Frequency
    
Severity
    
Total
    
Frequency
    
Severity
    
Total
  
Loss ratio
    
69.0
%
    
22.1
%
    
61.7
%
    
58.2
%
    
50.8
%
    
56.3
%
Acquisition cost ratio
    
33.4
%
    
11.2
%
    
30.0
%
    
39.4
%
    
4.7
%
    
30.2
%
Composite ratio
    
102.4
%
    
33.3
%
    
91.7
%
    
97.6
%
    
55.5
%
    
86.5
%
Internal expense ratio
                    
7.9
%
                    
10.2
%
Combined ratio
                    
99.6
%
                    
96.7
%