EX-99.1 2 pressrelease.htm PRESS RELEASE pressrelease.htm
 
 
 
GREENLIGHT RE ANNOUNCES
FOURTH QUARTER AND YEAR END 2009 FINANCIAL RESULTS

GRAND CAYMAN, Cayman Islands (February 24, 2010) - Greenlight Capital Re, Ltd. (NASDAQ: GLRE) today announced financial results for the fourth quarter and year ended December 31, 2009.  Greenlight Re reported net income of $57.3 million for the fourth quarter of 2009 compared to a net loss of $31.3 million for the same period in 2008.  The net income per share was $1.55, on a fully diluted basis, for the fourth quarter of 2009, compared to a net loss per share of $0.87 for the same period in 2008.

Fully diluted book value per share was $19.76 as of December 31, 2009, a 45.8% increase from $13.55 per share as of December 31, 2008.  The fully diluted adjusted book value per share as of December 31, 2009 was $18.95, a 41.5% increase from $13.39 per share as of December 31, 2008.

For the year ended December 31, 2009, net income was $209.5 million compared to a net loss of $120.9 million for the year ended December 31, 2008.  The net income per share for the year was $5.71, on a fully diluted basis, compared to a net loss per share of $3.36 for the same period in 2008.

“In 2009 we demonstrated the strength of our business model on both sides of the balance sheet; both our underwriting and investment portfolios performed well,” said David Einhorn, Chairman of the Board of Directors of Greenlight Re.  “While the reinsurance market remained soft, we continued to find select, attractive underwriting opportunities that generated solid profits and contributed additional assets for our investment strategy.”

Other financial and operating highlights for Greenlight Re in the fourth quarter and year ended December 31, 2009 include:
 
·  
Gross written premiums in the fourth quarter were $50.9 million compared to $28.6 million in the fourth quarter of 2008, while net earned premiums were $62.5 million, an increase from $34.2 million reported in the fourth quarter of last year.  For the full year 2009, gross written premiums were $258.8 million compared to $162.4 million in 2008, while net earned premiums were $214.7 million compared to $114.9 million in 2008.
 
·  
The combined ratio for 2009 was 96.5%, flat compared to 2008.
 
·  
Net investment income reported in the fourth quarter was $51.2 million, a gain of 6.4% on the investment portfolio, compared to a net investment loss of $33.3 million or 5.3% in the fourth quarter of 2008.  For the full year 2009, net investment income was $199.9 million, a 32.1% gain, compared to a net investment loss of $126.1 million or a 17.6% loss in 2008.

“In 2009, we continued to add to our talented team of underwriting professionals, and further expanded our frequency-oriented portfolio,” said Len Goldberg, Chief Executive Officer of Greenlight Re.  “We continued our development of a differentiated underwriting portfolio with clients with expertise in their respective markets.  Our approach to reinsurance has allowed us to develop deep relationships with our clients and a portfolio of risks that should hold up well in current market conditions.”

Starting with this reporting period, Greenlight Re has opted to report fully diluted adjusted book value per share, which is a non-GAAP measure.  The fully diluted adjusted book value per share excludes the non-controlling interest reported in shareholders’ equity resulting from the joint venture advisory agreement between Greenlight Re and DME Advisors, LP.  Greenlight Re believes that this adjusted book value is a more accurate and consistent presentation of financial performance.

Conference Call Details

Greenlight Re will hold a live conference call to discuss its financial results for the fourth quarter and year ended December 31, 2009 on Thursday, February 25, 2010 at 9:00 a.m. Eastern time.  The conference call title is Greenlight Capital Re, Ltd. Fourth Quarter and Year End 2009 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=129369

A telephone replay of the call will be available from 11:00 a.m. Eastern time on February 25, 2010 until 9:00 a.m. Eastern time on March 12, 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 437112. 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.
CONSOLIDATED BALANCE SHEETS
 
December 31, 2009 and 2008
(expressed in thousands of U.S. dollars, except per share and share amounts)
 
 
   
2009
    
2008
  
Assets
            
Investments
            
Debt instruments, trading, at fair value
  
$
95,838
    
$
70,214
  
Equity securities, trading, at fair value
    
593,201
      
409,329
  
Other investments, at fair value
    
141,561
      
14,423
  
Total investments
    
830,600
      
493,966
  
Cash and cash equivalents
    
31,717
      
94,144
  
Restricted cash and cash equivalents
    
590,871
      
248,330
  
Financial contracts receivable, at fair value
    
30,117
      
21,419
  
Reinsurance balances receivable
    
72,584
      
59,573
  
Loss and loss adjustment expense recoverables
    
7,270
      
11,662
  
Deferred acquisition costs, net
    
34,401
      
17,629
  
Unearned premiums ceded
    
6,478
      
7,367
  
Notes receivable
    
15,424
      
1,769
  
Other assets
    
4,754
      
2,146
  
Total assets
  
$
1,624,216
    
$
958,005
  
Liabilities and shareholders’ equity
                
Liabilities
                
Securities sold, not yet purchased, at fair value
  
$
570,875
    
$
234,301
  
Financial contracts payable, at fair value
    
16,200
      
17,140
  
Loss and loss adjustment expense reserves
    
137,360
      
81,425
  
Unearned premium reserves
    
118,899
      
88,926
  
Reinsurance balances payable
    
32,013
      
34,963
  
Funds withheld
    
6,835
      
3,581
  
Other liabilities
    
12,796
      
6,229
  
Total liabilities
    
894,978
      
466,565
  
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, 30,063,893 (2008: 29,781,736): Class B: par value $0.10; authorized, 25,000,000; issued and outstanding, 6,254,949 (2008: 6,254,949))
    
3,632
      
3,604
  
Additional paid-in capital
    
481,449
      
477,571
  
Non-controlling interest in joint venture
    
30,597
      
6,058
  
Retained earnings
    
213,560
      
4,207
  
Total shareholders’ equity
    
729,238
      
491,440
  
Total liabilities and shareholders’ equity
  
$
1,624,216
    
$
958,005
  
 
 
 
 
 
 
 
 
GREENLIGHT CAPITAL RE, LTD.
CONSOLIDATED STATEMENTS OF INCOME
 
Years ended December 31, 2009, 2008 and 2007
(expressed in thousands of U.S. dollars, except per share and share amounts)
 
 
   
2009
    
2008
    
2007
  
Revenues
                  
Gross premiums written
  
$
258,818
    
$
162,395
    
$
127,131
  
Gross premiums ceded
    
(13,276
)
    
(16,396
)
    
(26,150
)
Net premiums written
    
245,542
      
145,999
      
100,981
  
Change in net unearned premium reserves
    
(30,862
)
    
(31,050
)
    
(2,934
)
Net premiums earned
    
214,680
      
114,949
      
98,047
  
Net investment income (loss)
    
199,861
      
(126,126
)
    
27,642
  
Other income, net
    
4,538
      
—
      
—
  
Total revenues
    
419,079
      
(11,177
)
    
125,689
  
Expenses
                        
Loss and loss adjustment expenses incurred, net
    
119,045
      
55,485
      
39,507
  
Acquisition costs, net
    
69,232
      
41,649
      
38,939
  
General and administrative expenses
    
18,994
      
13,756
      
11,918
  
Total expenses
    
207,271
      
110,890
      
90,364
  
Net income (loss) before non-controlling interest and income tax benefit
    
211,808
      
(122,067
)
    
35,325
  
Non-controlling interest in (income) loss of joint venture
    
(2,312
)
    
1,163
      
—
  
Net income (loss) before income tax benefit
    
209,496
      
(120,904
)
    
35,325
  
Income tax benefit
    
49
      
—
      
—
  
Net income (loss)
  
$
209,545
    
$
(120,904
)
  
$
35,325
  
Earnings (loss) per share
                        
Basic
  
$
5.78
    
$
(3.36
)
  
$
1.16
  
Diluted
    
5.71
      
(3.36
)
    
1.14
  
Weighted average number of ordinary shares used in the determination of
                        
Basic
    
36,230,501
      
35,970,479
      
30,405,007
  
Diluted
    
36,723,552
      
35,970,479
      
30,866,016
  
 
 
 
    The following table provides the ratios for the years ended December 31, 2009, 2008 and 2007:
 
   
2009
    
2008
    
2007
  
   
Frequency
    
Severity
    
Total
    
Frequency
    
Severity
    
Total
    
Frequency
    
Severity
    
Total
  
Loss ratio
    
56.6
%
    
51.2
%
    
55.4
%
    
44.4
%
    
57.7
%
    
48.3
%
  
47.9
%
  
19.9
%
  
40.3
%
Acquisition cost ratio
    
38.6
%
    
8.3
%
    
32.3
%
    
46.8
%
    
10.8
%
    
36.2
%
  
46.3
%
  
21.8
%
  
39.7
%
Composite ratio
    
95.2
%
    
59.5
%
    
87.7
%
    
91.2
%
    
68.5
%
    
84.5
%
  
94.2
%
  
41.7
%
  
80.0
%
Internal expense ratio
                    
8.8
%
                    
12.0
%
              
12.2
%
Combined ratio
                    
96.5
%
                    
96.5
%
              
92.2
%