Attached files
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| 8-K - FORM 8-K - GREENLIGHT CAPITAL RE, LTD. | form8k.htm |
FOURTH QUARTER AND YEAR END 2011 FINANCIAL RESULTS
GRAND CAYMAN, Cayman Islands (February 21, 2012) - Greenlight Capital Re, Ltd. (NASDAQ: GLRE) today announced financial results for the fourth quarter and year ended December 31, 2011. Greenlight Re reported net income of $70.2 million for the fourth quarter of 2011 compared to net income of $56.4 million for the same period in 2010. Net income per share was $1.89 on a fully diluted basis compared to $1.51 for the same fourth quarter period in 2010.
Fully diluted adjusted book value per share as of December 31, 2011 was $21.61, a 1.0% increase from $21.39 per share as of December 31, 2010.
For the year ended December 31, 2011, net income was $6.8 million compared to net income of $90.6 million for the year ended December 31, 2010. The net income per share for 2011 was $0.18, on a fully diluted basis, compared to net income per share of $2.44 for 2010.
“Our disciplined approach allowed us to preserve capital and make continued progress in executing our strategy during 2011, which proved to be a challenging year for both underwriting and investing,” said Bart Hedges, Chief Executive Officer of Greenlight Re. “We experienced significant competitive head winds on the underwriting side including a difficult pricing environment and a large number of natural catastrophes. Even so, we found some attractive new opportunities and achieved a rating upgrade from A.M. Best.”
”In a difficult environment, Greenlight Re improved its market recognition and continued to build the platform,” stated David Einhorn, Chairman of the Board of Directors. “We believe we are well positioned for 2012 and beyond as we continue to pursue our strategy of developing productive, long term reinsurance partnerships and investing assets prudently.”
Financial and operating highlights for Greenlight Re in the fourth quarter and year ended December 31, 2011 include:
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·
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Gross written premiums in the fourth quarter of 2011 were $90.5 million compared to $107.8 million in the fourth quarter of 2010, while net earned premiums were $77.1million, a decrease from $103.6 million reported in the fourth quarter of last year. For the full year 2011, gross written premiums were $397.7 million compared to $414.9 million in 2010, while net earned premiums were $379.8 million compared to $287.7 million in the prior year.
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·
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The combined ratio for 2011 was 103.8%, up from 102.8% in 2010.
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·
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Net investment income reported in the fourth quarter 2011 was $77.7 million, a gain of 7.6%, compared to $64.3 million, or a 6.5% gain, in the fourth quarter of 2010. For the full year 2011, net investment income was $23.1 million, a 2.1% gain, compared to $104.0 million in 2010, an 11.0% gain.
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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, 2011 on Wednesday, February 22, 2012 at 9:00 a.m. Eastern time. The conference call title is Greenlight Capital Re, Ltd. Fourth Quarter and Year End 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:
http://services.choruscall.com/links/glre120222.html
A telephone replay of the call will be available from 12:00 p.m. Eastern time on February 22, 2012 until 9:00 a.m. Eastern time on March 1, 2012. 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 10009959. 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.
CONSOLIDATED BALANCE SHEETS
December 31, 2011 and 2010
(expressed in thousands of U.S. dollars, except per share and share amounts)
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2011
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2010
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||||||||||
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Assets
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|||||||||||
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Investments
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|||||||||||
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Debt instruments, trading, at fair value
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$
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10,639
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$
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15,610
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|||||||
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Equity securities, trading, at fair value
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890,822
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839,921
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|||||||||
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Other investments, at fair value
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128,685
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179,023
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|||||||||
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Total investments
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1,030,146
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1,034,554
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|||||||||
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Cash and cash equivalents
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42,284
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45,540
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|||||||||
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Restricted cash and cash equivalents
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957,462
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977,293
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|||||||||
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Financial contracts receivable, at fair value
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23,673
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46,168
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|||||||||
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Reinsurance balances receivable
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141,278
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109,567
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|||||||||
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Loss and loss adjustment expenses recoverable
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29,758
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11,976
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|||||||||
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Deferred acquisition costs, net
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68,725
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87,389
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|||||||||
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Unearned premiums ceded
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27,233
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7,424
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|||||||||
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Notes receivable
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17,437
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14,205
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|||||||||
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Other assets
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5,492
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3,886
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|||||||||
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Total assets
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$
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2,343,488
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$
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2,338,002
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Liabilities and shareholders’ equity
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|||||||||||
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Liabilities
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|||||||||||
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Securities sold, not yet purchased, at fair value
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$
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683,816
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$
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725,990
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|||||||
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Financial contracts payable, at fair value
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6,324
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23,493
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Due to prime brokers
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260,359
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273,071
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Loss and loss adjustment expense reserves
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241,279
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186,467
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Unearned premium reserves
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225,735
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234,983
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Reinsurance balances payable
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38,379
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20,164
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Funds withheld
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31,844
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22,887
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Other liabilities
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10,054
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11,786
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Total liabilities
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1,497,790
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1,498,841
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Shareholders’ equity
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|||||||||||
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Preferred share capital (par value $0.10; authorized, 50,000,000; none issued)
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—
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—
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|||||||||
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Ordinary share capital (Class A: par value $0.10; authorized, 100,000,000; issued and outstanding, 30,283,200 (2010: 30,200,835): Class B: par value $0.10; authorized, 25,000,000; issued and outstanding, 6,254,949 (2010: 6,254,949)
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3,654
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3,646
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Additional paid-in capital
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488,478
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485,555
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Retained earnings
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310,971
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304,202
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Shareholders’ equity attributable to shareholders
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803,103
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793,403
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|||||||||
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Non-controlling interest in joint venture
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42,595
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45,758
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Total equity
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845,698
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839,161
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Total liabilities and equity
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$
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2,343,488
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$
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2,338,002
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|||||||
GREENLIGHT CAPITAL RE, LTD.
CONSOLIDATED STATEMENTS OF INCOME
Years ended December 31, 2011, 2010 and 2009
(expressed in thousands of U.S. dollars, except per share and share amounts)
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2011
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2010
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2009
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Revenues
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Gross premiums written
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$
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397,659
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$
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414,850
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$
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258,818
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|||
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Gross premiums ceded
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(46,920
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)
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(12,011
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)
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(13,276
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)
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|||
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Net premiums written
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350,739
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402,839
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245,542
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Change in net unearned premium reserves
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29,036
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(115,138
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)
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(30,862
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)
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Net premiums earned
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379,775
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287,701
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214,680
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Net investment income
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23,118
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104,006
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199,861
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Other income (expense), net
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253
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(1,079
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)
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4,538
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Total revenues
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403,146
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390,628
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419,079
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Expenses
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Loss and loss adjustment expenses incurred, net
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241,690
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177,018
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119,045
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Acquisition costs, net
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138,751
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102,645
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69,232
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General and administrative expenses
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13,892
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16,187
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18,994
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||||||
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Total expenses
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394,333
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295,850
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207,271
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||||||
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Income from continuing operations before income tax expense
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8,813
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94,778
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211,808
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||||||
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Income tax (expense) benefit
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(247
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)
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(396
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)
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49
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||||
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Net income including non-controlling interest
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8,566
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94,382
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211,857
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||||||
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Income attributable to non-controlling interest in joint venture
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(1,797
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)
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(3,740
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)
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(2,312
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)
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Net income
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$
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6,769
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$
|
90,642
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$
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209,545
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|||
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Earnings per share
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|||||||||
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Basic
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$
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0.19
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$
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2.49
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$
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5.78
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|||
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Diluted
|
0.18
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2.44
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5.71
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Weighted average number of ordinary shares used in the determination of earnings per share:
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|||||||||
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Basic
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36,548,466
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36,420,719
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36,230,501
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||||||
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Diluted
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37,286,454
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37,224,173
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36,723,552
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||||||
The following table provides the ratios for the years ended December 31, 2011, 2010 and 2009.
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2011
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2010
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2009
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Frequency
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Severity
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Total
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Frequency
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Severity
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Total
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Frequency
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Severity
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Total
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Loss ratio
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65.7
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%
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25.4
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%
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63.6
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%
|
68.9
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%
|
(4.3
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)%
|
61.5
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%
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56.6
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%
|
51.2
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%
|
55.4
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%
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||
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Acquisition cost ratio
|
37.4
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%
|
20.9
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%
|
36.5
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%
|
36.7
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%
|
26.3
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%
|
35.7
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%
|
38.6
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%
|
8.3
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%
|
32.3
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%
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||
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Composite ratio
|
103.1
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%
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46.3
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%
|
100.1
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%
|
105.6
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%
|
22.0
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%
|
97.2
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%
|
95.2
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%
|
59.5
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%
|
87.7
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%
|
||
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Internal expense ratio
|
3.7
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%
|
5.6
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%
|
8.8
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%
|
||||||||||||||
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Combined ratio
|
103.8
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%
|
102.8
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%
|
96.5
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%
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