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Form 8-K GREENLIGHT CAPITAL RE, For: Feb 22

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February 22, 2016 4:34 PM EST




UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 

FORM 8-K

 
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 
February 22, 2016
Date of report (Date of earliest event reported) 

GREENLIGHT CAPITAL RE, LTD.
(Exact name of registrant as specified in charter)
 
 
 
 
Cayman Islands
(State or other jurisdiction of incorporation)
001-33493
(Commission file number)
N/A
(IRS employer identification no.)
 
 
 
65 Market Street, Suite 1207,
Jasmine Court, Camana Bay,
P.O. Box 31110
Grand Cayman, Cayman Islands
(Address of principal executive offices)
 
KY1-1205
(Zip code)
 
(345) 943-4573
(Registrant’s telephone number, including area code)
 
Not Applicable
(Former name or former address, if changed since last report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
o
 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
 
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
 
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
 
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))







Item 2.02 Results of Operations and Financial Condition
 
On February 22, 2016, Greenlight Capital Re, Ltd. (the "Registrant") issued a press release announcing its financial results for the fourth quarter and year ended December 31, 2015. A copy of the press release is attached hereto as Exhibit 99.1 to this Form 8-K and incorporated herein by reference.
 
In accordance with general instruction B.2 to Form 8-K, the information set forth in this Item 2.02 (including Exhibit 99.1) shall be deemed “furnished” and not “filed” with the Securities and Exchange Commission for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended, (the "Exchange Act"), or otherwise subject to the liabilities of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing. 


Item 9.01 Financial Statements and Exhibits
 
(d) Exhibits
 
99.1 Earnings press release, "GREENLIGHT RE ANNOUNCES FOURTH QUARTER AND YEAR END 2015 FINANCIAL RESULTS", dated February 22, 2016, issued by the Registrant.




SIGNATURE
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 
 
GREENLIGHT CAPITAL RE, LTD.
 
(Registrant)
 
 
 
 
By:
/s/ Tim Courtis              
 
Name:
Tim Courtis
 
Title:
Chief Financial Officer
 
Date:
February 22, 2016




GREENLIGHT RE ANNOUNCES
FOURTH QUARTER AND YEAR END 2015 FINANCIAL RESULTS

GRAND CAYMAN, Cayman Islands - February 22, 2016 - Greenlight Capital Re, Ltd. (NASDAQ: GLRE) today announced financial results for the fourth quarter and year ended December 31, 2015. Greenlight Re reported a net loss of $43.1 million for the fourth quarter of 2015, compared to net income of $60.7 million for the same period in 2014. The net loss per share for the fourth quarter of 2015 was $1.17, compared to fully diluted net income per share of $1.60 for the same period in 2014.

Fully diluted adjusted book value per share was $22.17 as of December 31, 2015, a 27.9% decrease from $30.76 per share as of December 31, 2014.

"We are pleased with our fourth quarter underwriting results and our ability to grow our underwriting portfolio during 2015, with our premiums up 55% from the prior year," said Bart Hedges, Chief Executive Officer of Greenlight Re. "While reserving actions taken earlier in the year on certain legacy contracts negatively impacted our full year 2015 fiscal results, we are encouraged by our current underwriting portfolio and the strong and growing client relationships we continue to develop."

Financial and operating highlights for Greenlight Re for the fourth quarter ended December 31, 2015 include:

•
Gross written premiums of $144.9 million, compared to $74.3 million in the fourth quarter of 2014; net earned premiums were $119.9 million, an increase from $75.2 million reported in the prior-year period.

•
Underwriting income of $6.8 million, compared to an underwriting loss of $4.6 million in the fourth quarter of 2014.

•
The combined ratio for the fourth quarter 2015 was 98.5% compared to 115.0% for the fourth quarter 2014.

•
A net investment loss of 4.0% on Greenlight Re's investment portfolio managed by DME Advisors, LP compared to a net investment gain of 5.3% in the fourth quarter of 2014.

"Our 2015 investment results were negatively impacted by losses on three of our largest holdings and the lack of other positive contributors," stated David Einhorn, Chairman of the Board of Directors. "It was a challenging investment environment for value investors. We continue to believe the Company is well positioned to grow book value per share from both underwriting and investment activities over the long term."

Financial and operating highlights for Greenlight Re for the year ended December 31, 2015 include:

•
Gross written premiums in 2015 of $502.1 million, compared to $324.0 million in 2014; net earned premiums were $408.4 million, an increase over $354.2 million reported for the prior year.



•
An underwriting loss of $24.9 million, compared to underwriting income of $11.6 million for 2014.

•
The combined ratio for the year ended December 31, 2015 was 111.8% compared to 103.6% for the year ended December 31, 2014.

•
A net investment loss of $281.9 million, representing a negative return of 20.2%, compared to net investment income of $122.6 million during 2014 when Greenlight Re reported an 8.7% return.
 
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, 2015 on Tuesday, February 23, 2016 at 9:00 a.m. Eastern time.  The conference call title is Greenlight Capital Re, Ltd. Fourth Quarter and Year End 2015 Earnings Call.

To participate in the Greenlight Capital Re, Ltd. Fourth Quarter and Year End 2015 Earnings Call, please dial in to the conference call at:
    
U.S. toll free             1-888-336-7152
International            1-412-902-4178

Telephone participants may avoid any delays by pre-registering for the call using the following link to receive a special dial-in number and PIN.
Conference Call registration link: http://dpregister.com/10079517

The conference call can also be accessed via webcast at:

http://services.choruscall.com/links/glre160223

A telephone replay of the call will be available from 11:00 a.m. Eastern time on February 23, 2016 until 9:00 a.m. Eastern time on March 1, 2016.  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 10079517. 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 and RSUs 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 NASDAQ listed company with specialist property and casualty reinsurance companies based in the Cayman Islands and Ireland.  Greenlight Re 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:
Garrett Edson
ICR
(203) 682-8331

Media:
Brian Ruby
ICR
(203) 682-8268





GREENLIGHT CAPITAL RE, LTD.
CONSOLIDATED BALANCE SHEETS
 
December 31, 2015 and 2014
(expressed in thousands of U.S. dollars, except per share and share amounts)
 
2015
 
2014
Assets
 
 
 
Investments
 
 
 
Debt instruments, trading, at fair value
$
39,087

 
$
49,212

Equity securities, trading, at fair value
905,994

 
1,266,175

Other investments, at fair value
119,083

 
115,591

Total investments
1,064,164

 
1,430,978

Cash and cash equivalents
112,162

 
12,030

Restricted cash and cash equivalents
1,236,589

 
1,296,914

Financial contracts receivable, at fair value
13,215

 
47,171

Reinsurance balances receivable
187,940

 
151,185

Loss and loss adjustment expenses recoverable
3,368

 
11,523

Deferred acquisition costs, net
59,823

 
34,420

Unearned premiums ceded
3,251

 
4,027

Notes receivable
25,146

 
1,566

Other assets
6,864

 
5,478

Total assets
$
2,712,522

 
$
2,995,292

Liabilities and equity
 
 
 
Liabilities
 
 
 
Securities sold, not yet purchased, at fair value
$
882,906

 
$
1,090,731

Financial contracts payable, at fair value
28,245

 
44,592

Due to prime brokers
396,453

 
211,070

Loss and loss adjustment expense reserves
305,997

 
264,243

Unearned premium reserves
211,954

 
128,736

Reinsurance balances payable
18,326

 
40,372

Funds withheld
7,143

 
6,558

Other liabilities
12,725

 
14,949

Performance compensation payable to related party
—

 
—

Total liabilities
1,863,749

 
1,801,251

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, 30,772,572 (2014: 31,129,648): Class B: par value $0.10; authorized, 25,000,000; issued and outstanding, 6,254,895 (2014: 6,254,895))
3,703

 
3,738

Additional paid-in capital
496,401

 
500,553

Retained earnings
325,287

 
660,860

Shareholders’ equity attributable to shareholders
825,391

 
1,165,151

Non-controlling interest in joint venture
23,382

 
28,890

Total equity
848,773

 
1,194,041

Total liabilities and equity
$
2,712,522

 
$
2,995,292







GREENLIGHT CAPITAL RE, LTD.
CONSOLIDATED STATEMENTS OF INCOME
 
Years ended December 31, 2015, 2014 and 2013
(expressed in thousands of U.S. dollars, except per share and share amounts)
 
2015
 
2014
 
2013
Revenues
 
 
 
 
 
Gross premiums written
$
502,124

 
$
324,023

 
$
535,702

Gross premiums ceded
(9,001
)
 
(13,493
)
 
(2,780
)
Net premiums written
493,123

 
310,530

 
532,922

Change in net unearned premium reserves
(84,736
)
 
43,710

 
14,977

Net premiums earned
408,387

 
354,240

 
547,899

Net investment income (loss)
(281,924
)
 
122,575

 
218,140

Other income (expense), net
(3,413
)
 
2,987

 
(1,710
)
Total revenues
123,050

 
479,802

 
764,329

Expenses

 

 
 
Loss and loss adjustment expenses incurred, net
317,097

 
234,986

 
338,493

Acquisition costs, net
116,207

 
107,665

 
171,872

General and administrative expenses
23,434

 
24,500

 
20,958

Total expenses
456,738

 
367,151

 
531,323

Income (loss) before income tax expense
(333,688
)
 
112,651

 
233,006

Income tax (expense) benefit
1,755

 
624

 
(538
)
Net income (loss) including non-controlling interest
(331,933
)
 
113,275

 
232,468

Loss (income) attributable to non-controlling interest in joint venture
5,508

 
(3,683
)
 
(6,769
)
Net income (loss)
$
(326,425
)
 
$
109,592

 
$
225,699

Earnings (loss) per share
 
 
 
 
 
Basic
$
(8.90
)
 
$
2.94

 
$
6.13

Diluted
$
(8.90
)
 
$
2.89

 
$
6.01

Weighted average number of ordinary shares used in the determination of earnings and loss per share
 
 
 
 
 
Basic
36,670,466

 
37,242,687

 
36,838,128

Diluted
36,670,466

 
37,874,387

 
37,585,167




The following table provides the ratios for the years ended December 31, 2015, 2014 and 2013:
 
Year ended December 31
 
 
 
2015
 
 
 
 
 
2014
 
 
 
 
 
2013
 
 
 
Frequency
 
Severity
 
Total
 
Frequency
 
Severity
 
Total
 
Frequency
 
Severity
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loss ratio
82.6
%
 
9.5
%
 
77.6
%
 
69.9
%
 
16.1
%
 
66.3
%
 
65.5
%
 
(48.1
)%
 
61.8
%
Acquisition cost ratio
28.0
%
 
35.2
%
 
28.5
%
 
31.2
%
 
19.7
%
 
30.4
%
 
31.7
%
 
20.8
 %
 
31.4
%
Composite ratio
110.6
%
 
44.7
%
 
106.1
%
 
101.1
%
 
35.8
%
 
96.7
%
 
97.2
%
 
(27.3
)%
 
93.2
%
Internal expense ratio
 
 
 
 
4.5
%
 
 
 
 
 
6.0
%
 
 
 
 
 
3.2
%
Corporate expense ratio
 
 
 
 
1.2
%
 
 
 
 
 
0.9
%
 
 
 
 
 
0.6
%
Combined ratio
 
 
 
 
111.8
%
 
 
 
 
 
103.6
%
 
 
 
 
 
97.0
%


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