EX-99.1 2 earningspressrelease.htm PRESS RELEASE earningspressrelease.htm
 
 
GREENLIGHT RE ANNOUNCES
THIRD QUARTER 2011 FINANCIAL RESULTS

GRAND CAYMAN, Cayman Islands (October 31, 2011) - Greenlight Capital Re, Ltd. (NASDAQ: GLRE) today announced financial results for the third quarter of 2011.  Greenlight Re reported a net loss of $4.5 million for the third quarter of 2011 compared to a net profit of $29.0 million for the same period in 2010.  The net loss per share was $0.12 for the third quarter of 2011, compared to net income per share of $0.78 on a fully diluted basis for the comparable period last year.

Fully diluted adjusted book value per share was $19.74 as of September 30, 2011, a 0.7% decrease from $19.87 per share as of September 30, 2010.

For the nine months ended September 30, 2011, Greenlight Re reported a net loss of $63.4 million compared to net income of $34.3 million for the same period in 2010.  The net loss per share was $1.75 for the nine months ended September 30, 2011, compared to net income per share of $0.92 on a fully diluted basis for the comparable period last year.

“We are pleased with the composition of our existing reinsurance portfolio, despite a nominal loss in the quarter and we continue to execute our strategy to develop long term reinsurance relationships,” said Bart Hedges, Chief Executive Officer of Greenlight Re.  “During the third quarter, we started to see signs of improving market conditions and we are encouraged that a more rational environment will develop in the foreseeable future.”

David Einhorn, Chairman of the Board of Directors stated: “The Company’s defensively positioned investment portfolio insulated us from loss during the quarter’s persistent challenging market conditions. In the third quarter, our investment portfolio generated a small gain. We have carefully built the Greenlight Re platform over the last five years, and our rating upgrade by A.M. Best to ‘A’ (Excellent) will help us to continue executing our strategy over the long term.”

Financial and operating highlights for Greenlight Re for the third quarter ended September 30, 2011 include:
 
·  
Gross written premiums in the third quarter of 2011 were $93.2 million compared to $151.2 million in the third quarter of 2010, while net earned premiums were $90.3 million, an increase from $79.4 million reported in the third quarter of last year.
 
·  
The combined ratio for the nine months ended September 30, 2011 was 103.3% compared to 101.4% for the nine months ended September 30, 2010.
 
·  
Net investment income of $1.1 million was reported for the third quarter of 2011, representing a gain of 0.1% to our investment portfolio.  This compares to investment income of $33.9 million in the third quarter of 2010, when we reported a 3.6% gain on our investment portfolio.  For the first nine months of 2011, the net investment loss was $54.6 million compared to net investment income of $39.7 million during the comparable period in 2010.

 
Conference Call Details

Greenlight Re will hold a live conference call to discuss its financial results for the third quarter of 2011 on Tuesday November 1, 2011 at 9:00 a.m. Eastern time.  The conference call title is Greenlight Capital Re, Ltd. Third Quarter 2011 Earnings Call.

To participate, please dial in to the conference call at:

U.S. toll free                                            1-877-317-6789
International                                           1-412-317-6789

The conference call can also be accessed via webcast at:

https://services.choruscall.com/links/glre111101.html 

A telephone replay of the call will be available from 11:00 a.m. Eastern time on November 1, 2011 until 9:00 a.m. Eastern time on November 16, 2011.  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 10002298. 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 a specialist property and casualty reinsurance company based in the Cayman Islands and Ireland.  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
 
September 30, 2011 and December 31, 2010
(expressed in thousands of U.S. dollars, except per share and share amounts)
 
 
 
   
September 30, 2011
(unaudited)
    
December 31, 2010
(audited)
  
Assets
            
Investments
            
Debt instruments, trading, at fair value
  
$
2,926
    
$
15,610
  
Equity securities, trading, at fair value
    
794,088
      
839,921
  
Other investments, at fair value
    
218,594
      
196,490
  
Total investments
    
1,015,608
      
1,052,021
  
Cash and cash equivalents
    
32,669
      
45,540
  
Restricted cash and cash equivalents
    
940,757
      
977,293
  
Financial contracts receivable, at fair value
    
16,015
      
28,701
  
Reinsurance balances receivable
    
131,419
      
109,567
  
Loss and loss adjustment expenses recoverable
    
21,683
      
11,976
  
Deferred acquisition costs, net
    
79,859
      
87,389
  
Unearned premiums ceded
    
19,954
      
7,424
  
Notes receivable
    
17,664
      
14,205
  
Other assets
    
3,602
      
3,886
  
Total assets
  
$
2,279,230
    
$
2,338,002
  
Liabilities and shareholders’ equity
                
Liabilities
                
Securities sold, not yet purchased, at fair value
  
$
652,012
    
$
726,737
  
Financial contracts payable, at fair value
    
7,593
      
22,746
  
Due to prime brokers
    
319,318
      
273,071
  
Loss and loss adjustment expense reserves
    
241,100
      
186,467
  
Unearned premium reserves
    
222,049
      
234,983
  
Reinsurance balances payable
    
35,731
      
20,164
  
Funds withheld
    
24,765
      
22,887
  
Other liabilities
    
10,704
      
11,786
  
Total liabilities
    
1,513,272
      
1,498,841
  
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, 30,254,087 (2010: 30,200,835): Class B: par value $0.10; authorized, 25,000,000; issued and outstanding, 6,254,949 (2010: 6,254,949))
    
3,651
      
 
3,646
  
Additional paid-in capital
    
487,671
      
485,555
  
Non-controlling interest in joint venture
    
33,866
      
45,758
  
Retained earnings
    
240,770
      
304,202
  
Total shareholders’ equity
    
765,958
      
839,161
  
Total liabilities and shareholders’ equity
  
$
2,279,230
    
$
2,338,002
  
 
 
 
 
 
 
 
 
 
 
 
GREENLIGHT CAPITAL RE, LTD.
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
 (UNAUDITED)
 
For the three and nine months ended September 30, 2011 and 2010
 (expressed in thousands of U.S. dollars, except per share and share amounts)
 
   
Three months ended September 30,
    
Nine months ended September 30,
   
2011
    
2010
    
2011
    
2010
Revenues
          
Gross premiums written
$
93,156
  
$ 
151,247
  
$ 
307,160
  
$ 
307,091
  
Gross premiums ceded
  
(9,308
)
  
(3,639
) 
  
(29,967
)
  
(8,228
)
Net premiums written
  
83,848
    
147,608
    
277,193
    
298,863
  
Change in net unearned premium reserves
  
6,500
    
(68,207
) 
  
25,462
    
(114,745
)
Net premiums earned
  
90,348
    
79,401
    
302,655
    
184,118
  
Net investment income (loss)
  
1,070
    
33,881
    
(54,574
)
  
39,682
  
Other income (expense), net
  
184
    
(474
) 
  
(163
)
  
(1,002
)
Total revenues
  
91,602
    
112,808
    
247,918
    
222,798
  
Expenses
                        
Loss and loss adjustment expenses incurred, net
  
62,399
    
50,257
    
184,994
    
114,936
  
Acquisition costs, net
  
31,847
    
28,807
    
116,792
    
60,183
  
General and administrative expenses
  
1,532
    
3,392
    
10,867
    
11,633
  
Total expenses
  
95,778
    
82,456
    
312,653
    
186,752
  
Net income (loss) before non-controlling interest and income tax expense
  
(4,176
)
  
30,352
    
(64,735
)
  
36,046
  
Non-controlling interest in (income) loss of joint venture
  
(156
)
  
(1,313
) 
  
1,492
    
(1,687
)
Net income (loss) before income tax expense
  
(4,332
)
  
29,039
    
(63,243
)
  
34,359
  
Income tax benefit (expense)
  
(148
)
  
(25
) 
  
(189
)
  
(84
)
Net income (loss)
$
(4,480
)
 $
29,014
  
$ 
(63,432
)
$ 
34,275
  
Earnings (loss) per share
                        
Basic
$
(0.12
)
$ 
0.80
  
$ 
(1.75
)
$ 
0.94
  
Diluted
$
(0.12
)
$ 
0.78
  
$ 
(1.75
)
$ 
0.92
  
Weighted average number of ordinary shares used in the determination of earnings (loss) per share
                        
Basic
  
36,153,743
    
36,452,224
    
36,153,743
    
36,408,859
  
Diluted
  
36,153,743
    
37,218,906
    
36,153,743
    
37,174,558
  
 
 

The following table provides the ratios for the nine months ended September 30, 2011 and 2010:
 
   
Nine months ended
September 30, 2011
    
Nine months ended
September 30, 2010
  
   
Frequency
    
Severity
    
Total
    
Frequency
    
Severity
    
Total
  
Loss ratio
    
62.2
%
    
39.0
%
    
61.1
%
    
68.7
%
    
18.5
%
    
62.4
%
Acquisition cost ratio
    
39.6
%
    
18.5
%
    
38.6
%
    
35.6
%
    
12.3
%
    
32.7
%
Composite ratio
    
101.8
%
    
57.5
%
    
99.7
%
    
104.3
%
    
30.8
%
    
95.1
%
Internal expense ratio
                    
3.6
%
                    
6.3
%
Combined ratio
                    
103.3
%
                    
101.4
%