GREENLIGHT CAPITAL RE, LTD. - FORM 8-K - EX-99.1 - PRESS RELEASE - July 29, 2013

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GREENLIGHT RE ANNOUNCES
SECOND QUARTER 2013 FINANCIAL RESULTS

GRAND CAYMAN, Cayman Islands - July 29, 2013 - Greenlight Capital Re, Ltd. (NASDAQ: GLRE) today announced financial results for the second quarter ended June 30, 2013. Greenlight Re reported net income of $28.5 million for the second quarter of 2013 compared to a net loss of $36.1 million for the same period in 2012. Fully diluted net income per share was $0.76 compared to a net loss per share of $0.98 for the same period in 2012.

Fully diluted adjusted book value per share was $24.20 as of June 30, 2013, an 8.3% increase from $22.34 per share as of June 30, 2012.

“We are pleased to report positive performance from both our underwriting and investing operations during the quarter,” said Bart Hedges, Chief Executive Officer of Greenlight Re. “While the reinsurance environment remains quite competitive, we continue to provide superior service and maintain strong relationships with our existing clients."

Financial and operating highlights for Greenlight Re for the second quarter ended June 30, 2013 include:

•
Gross written premiums in the second quarter of 2013 were $135.2 million, compared to $84.0 million in the second quarter of 2012; net earned premiums were $133.0 million, an increase from $130.0 million reported in the prior-year period.

•
Underwriting income of $11.7 million was reported for the second quarter of 2013, compared to underwriting income of $4.8 million in the second quarter of 2012.

•
The combined ratio for the six months ended June 30, 2013 was 98.3% compared to 100.8% for the six months ended June 30, 2012.

•
A net investment gain of 2.0% on Greenlight Re's investment portfolio managed by DME Advisors, LP was reported for the second quarter 2013. This compares to a net investment loss of 3.3% in the second quarter of 2012. For the first six months of 2013, net investment income was $85.4 million, representing a gain of 7.9%, compared to net investment income of $34.7 million during the comparable period in 2012 when Greenlight Re reported a 3.0% return.


“Our investment portfolio performed adequately during the quarter and side-stepped most of the June turbulence.” stated David Einhorn, Chairman of the Board of Directors. “Our underwriting team is actively engaged in providing excellent service to our existing clients and remains focused on identifying new profitable opportunities.”










Conference Call Details

Greenlight Re will hold a live conference call to discuss its financial results for the second quarter of 2013 on Tuesday, July 30, 2013 at 9:00 a.m. Eastern time.  The conference call title is Greenlight Capital Re, Ltd. Second Quarter 2013 Earnings Call.

To participate, please dial in to the conference call at:
    
U.S. toll free             1-888-317-6016
International            1-412-317-6016

The conference call can also be accessed via webcast at:

http://services.choruscall.com/links/glre130730.html

A telephone replay of the call will be available from 11:00 a.m. Eastern time on July 30, 2013 until 9:00 a.m. Eastern time on August 7, 2013.  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 10030522. 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
IR@greenlightre.ky

Media:
Brian Ruby
ICR
(203) 682-8268
Brian.ruby@icrinc.com





GREENLIGHT CAPITAL RE, LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
 
June 30, 2013 and December 31, 2012
(expressed in thousands of U.S. dollars, except per share and share amounts)
 
June 30, 2013
 
December 31, 2012
 
(unaudited)
 
(audited)
Assets
 
 
 
Investments
 
 
 
Debt instruments, trading, at fair value
$
8,506

 
$
1,763

Equity securities, trading, at fair value
912,202

 
1,042,715

Other investments, at fair value
93,741

 
133,450

Total investments
1,014,449

 
1,177,928

Cash and cash equivalents
177,838

 
21,890

Restricted cash and cash equivalents
1,226,080

 
1,206,837

Financial contracts receivable, at fair value
56,117

 
22,744

Reinsurance balances receivable
171,849

 
173,221

Loss and loss adjustment expenses recoverable
20,136

 
34,451

Deferred acquisition costs, net
63,712

 
59,177

Unearned premiums ceded
2,901

 
3,616

Notes receivable
15,919

 
19,330

Other assets
6,269

 
3,559

Total assets
$
2,755,270

 
$
2,722,753

Liabilities and equity
 
 
 
Liabilities
 
 
 
Securities sold, not yet purchased, at fair value
$
950,076

 
$
908,368

Financial contracts payable, at fair value
27,345

 
19,637

Due to prime brokers
249,728

 
326,488

Loss and loss adjustment expense reserves
301,859

 
356,470

Unearned premium reserves
207,726

 
188,185

Reinsurance balances payable
35,307

 
35,292

Funds withheld
10,184

 
17,415

Other liabilities
9,906

 
10,488

Performance compensation payable to related party
21,923

 
—

Total liabilities
1,814,054

 
1,862,343

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, 30,617,161 (2012: 30,447,179): Class B: par value $0.10; authorized, 25,000,000; issued and outstanding, 6,254,949 (2012: 6,254,949))
3,687

 
3,670

Additional paid-in capital
494,509

 
492,469

Retained earnings
410,802

 
325,569

Shareholders’ equity attributable to shareholders
908,998

 
821,708

Non-controlling interest in joint venture
32,218

 
38,702

Total equity
941,216

 
860,410

Total liabilities and equity
$
2,755,270

 
$
2,722,753







GREENLIGHT CAPITAL RE, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME

For the three and six months ended June 30, 2013 and 2012
(expressed in thousands of U.S. dollars, except per share and share amounts)

 
Three months ended June 30
 
Six months ended June 30
 
2013
 
2012
 
2013
 
2012
Revenues
 
 
 
 
 
 
 
Gross premiums written
$
135,198

 
$
83,986

 
$
262,162

 
$
236,206

Gross premiums ceded
(2,514
)
 
4,602

 
1,464

 
(6,393
)
Net premiums written
132,684

 
88,588

 
263,626

 
229,813

Change in net unearned premium reserves
316

 
41,426

 
(21,155
)
 
1,789

Net premiums earned
133,000

 
130,014

 
242,471

 
231,602

Net investment income (loss)
24,247

 
(36,896
)
 
85,386

 
34,711

Other income (expense), net
(488
)
 
(236
)
 
(100
)
 
(448
)
Total revenues
156,759

 
92,882

 
327,757

 
265,865

Expenses
 
 
 
 
 
 
 
Loss and loss adjustment expenses incurred, net
78,345

 
87,337

 
144,623

 
150,644

Acquisition costs, net
42,936

 
37,905

 
84,232

 
73,930

General and administrative expenses
5,943

 
4,359

 
9,703

 
8,982

Total expenses
127,224

 
129,601

 
238,558

 
233,556

Income (loss) before income tax expense
29,535

 
(36,719
)
 
89,199

 
32,309

Income tax benefit (expense)
(142
)
 
201

 
(450
)
 
(62
)
Net income (loss) including non-controlling interest
29,393

 
(36,518
)
 
88,749

 
32,247

Income (loss) attributable to non-controlling interest in joint venture
(893
)
 
449

 
(3,516
)
 
(3,183
)
Net income (loss)
$
28,500

 
$
(36,069
)
 
$
85,233

 
$
29,064

Earnings (loss) per share
 
 
 
 
 
 
 
Basic
$
0.77

 
$
(0.98
)
 
$
2.32

 
$
0.80

Diluted
$
0.76

 
$
(0.98
)
 
$
2.27

 
$
0.78

Weighted average number of ordinary shares used in the determination of earnings (loss) per share
 
 
 
 
 
 
 
Basic
36,830,046

 
36,660,267

 
36,780,438

 
36,605,610

Diluted
37,537,500

 
36,660,267

 
37,481,162

 
37,338,484



The following table provides the ratios for the six months ended June 30, 2013 and 2012:
 
Six months ended June 30
 
Six months ended June 30
 
 
 
2013
 
 
 
 
 
2012
 
 
 
Frequency
 
Severity
 
Total
 
Frequency
 
Severity
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
Loss ratio
65.4
%
 
(144.2
)%
 
59.6
%
 
67.5
%
 
7.9
%
 
65.0
%
Acquisition cost ratio
35.2
%
 
19.6
 %
 
34.7
%
 
32.6
%
 
15.9
%
 
31.9
%
Composite ratio
100.6
%
 
(124.6
)%
 
94.3
%
 
100.1
%
 
23.8
%
 
96.9
%
Internal expense ratio
 
 
 
 
3.3
%
 
 
 
 
 
3.0
%
Corporate expense ratio
 
 
 
 
0.7
%
 
 
 
 
 
0.9
%
Combined ratio
 
 
 
 
98.3
%
 
 
 
 
 
100.8
%
 

GREENLIGHT CAPITAL RE, LTD. Reports