Item 5. Market for Registrant’s Common Equity
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Market Information and number of holders
Our Class A ordinary shares began publicly trading on the Nasdaq Global Select Market on May 24, 2007 under the symbol “GLRE”.
As of March 5, 2021, the number of holders of record of our Class A ordinary shares was approximately 38, not including beneficial owners of shares registered in nominee or street name who represent approximately 95.7% of the Class A ordinary shares issued and outstanding.
Dividends
Since inception, we have not paid any cash dividends on our Class A ordinary shares or Class B ordinary shares, or collectively, our ordinary shares.
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Holders of ordinary shares are entitled to receive dividends when, as and if declared by the Board of Directors in accordance with the provisions of our Articles and the Companies Law. In the event of a liquidation, dissolution or winding-up of the Company, the holders of ordinary shares are entitled to share equally and ratably in our assets, if any remain after the payment of all of our debts and liabilities and the liquidation preference of any outstanding preferred shares.
We currently do not intend to declare and pay dividends on our ordinary shares in the foreseeable future. However, if we decide to pay dividends, we cannot provide assurance that sufficient cash will be available to pay such dividends. In addition, a letter of credit facility prohibits us from paying dividends during an event of default as defined in the letter of credit agreement. Our future dividend policy will also depend on the requirements of any future financing agreements to which we may be a party and other factors considered relevant by our Board of Directors, such as our results of operations and cash flows, our financial position and capital requirements, general business conditions, rating agency guidelines, legal, tax, regulatory and any contractual restrictions on the payment of dividends. Further, any future declaration and payment of dividends is discretionary and our Board of Directors may, at any time, modify or revoke our dividend policy on our ordinary shares. Finally, our ability to pay dividends also depends on the ability of our subsidiaries to pay dividends to us. Although Greenlight Capital Re is not subject to any significant legal prohibitions on the payment of dividends, Greenlight Re and GRIL are subject to regulatory constraints that affect their ability to pay dividends and include minimum net worth requirements. As of December 31, 2020, Greenlight Re and GRIL both exceeded the minimum statutory capital requirements. Any dividends we pay will be declared and paid in U.S. dollars.
Performance Graph
Presented below is a line graph comparing the yearly change in the cumulative total shareholder return on our Class A ordinary shares for the five year period commencing December 31, 2015 through December 31, 2020 against the total return index for the Russell 2000 Index, or RUT, and the S&P 500 Property & Casualty Insurance Index, or S&P Insurance Index, for the same period. The performance graph assumes $100 invested on December 31, 2015 in the ordinary shares of Greenlight Capital Re, the RUT and the S&P Insurance Index. The performance graph also assumes that all dividends are reinvested.
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The performance reflected in the graph above is not necessarily indicative of future performance.
This graph is not “soliciting material,” is not deemed filed with the SEC and is not to be incorporated by reference in any filing by us under the Securities Act or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
Our board of directors has adopted a share repurchase plan authorizing the Company to repurchase Class A ordinary shares. From time to time, the repurchase plan has been re-approved or modified at the election of our Board of Directors. On March 26, 2020, the Board of Directors extended the share repurchase plan to June 30, 2021, and increased the number of shares authorized to be repurchased to 5.0 million Class A ordinary shares or securities convertible into Class A ordinary shares in the open market, through privately negotiated transactions or Rule 10b5-1 stock trading plans. In addition, the Board of Directors also authorized the Company to repurchase up to $25.0 million aggregate face amount of the Company’s 4.00% Convertible Senior Notes due 2023 (the “Notes”) in privately negotiated transactions, in open market repurchases or pursuant to one more tender offers.
The Company is not required to repurchase any Class A ordinary shares and the repurchase plan may be modified, suspended or terminated at any time without prior notice.
The table below details the share repurchases that were made under the plan during the three months ended December 31, 2020:
Issuer Purchases of Equity Securities
Period Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (1)
October 1 - 31, 2020 176,025 $ 6.89 176,025 2,949,556
November 1 - 30, 2020 296,634 $ 7.85 296,634 2,652,922
December 1 - 31, 2020 200,019 $ 7.85 200,019 2,452,903
Total 672,678 $ 7.60 672,678 2,452,903
(1) Class A ordinary shares.
ITEM 6. SELECTED FINANCIAL DATA
The following table sets forth our selected historical consolidated statement of operations data for the fiscal years ended December 31, 2020, 2019, 2018, 2017, and 2016, as well as our selected historical consolidated balance sheet data as of December 31, 2020, 2019, 2018, 2017, and 2016, which are derived from our audited consolidated financial statements. The audited consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and have been audited by BDO USA, LLP, an independent registered public accounting firm.
These historical results presented below are not necessarily indicative of results for any future period and should be read in conjunction with our consolidated financial statements and related notes thereto contained in “Item 8. Financial Statements and Supplementary Data” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in this filing and all other information appearing elsewhere or incorporated into this filing by reference.
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Year ended December 31
2020 2019 2018 2017 2016
($ in thousands, except per share and share amounts)
Selected Consolidated Statement of Operations Data
Gross premiums written $ 479,791 $ 523,977 $ 567,531 $ 692,651 $ 536,072
Net premiums earned 455,411 483,580 508,363 626,004 513,118
Net investment income (loss) 25,532 52,267 (323,106) 20,231 76,183
Net loss and loss adjustment expenses incurred 337,833 388,487 363,873 502,404 380,815
Acquisition costs 109,288 117,084 145,475 161,740 134,534
General and administrative expenses 26,401 29,822 25,173 26,356 25,808
Net income (loss) attributable to Greenlight Capital Re, Ltd. $ 3,866 $ (3,986) $ (350,054) $ (44,952) $ 44,881
Earnings (Loss) Per Share Data (1)
Basic $ 0.11 $ (0.11) $ (9.74) $ (1.21) $ 1.20
Diluted 0.11 (0.11) (9.74) (1.21) 1.20
Weighted average number of ordinary shares used in the determination of earnings and loss per share
Basic 36,172,216 36,079,419 35,951,659 37,002,260 37,267,145
Diluted 36,278,028 36,079,419 35,951,659 37,002,260 37,340,018
Underwriting Income (Loss) and Selected Ratios
Underwriting income (loss) * $ (1,612) $ (33,480) $ (14,384) $ (53,628) $ (18,814)
Loss ratio 74.2 % 80.3 % 71.6 % 80.3 % 74.2 %
Acquisition cost ratio 24.0 % 24.2 % 28.6 % 25.8 % 26.2 %
Underwriting expense ratio 2.2 % 2.4 % 2.6 % 2.5 % 3.2 %
Combined ratio 100.4 % 106.9 % 102.8 % 108.6 % 103.6 %
(1)
The Company treats its unvested restricted stock awards, which contain non-forfeitable rights to dividends or dividend equivalents, whether paid or unpaid as “participating securities.” Basic earnings per share is calculated on the basis of the weighted average number of common shares and participating securities outstanding during the period.
Diluted earnings (or loss) per share includes the dilutive effect of the following: (i) RSUs issued that would convert to common shares upon vesting, (ii) additional potential common shares issuable when stock options are exercised, determined using the treasury stock method, and (iii) those common shares with the potential to be issued by virtue of convertible debt and other such convertible instruments, determined using the treasury stock method. Diluted earnings (or loss) per share contemplates the conversion to common shares of all convertible instruments only if they are dilutive to earnings per share. In the event of a net loss, all RSUs, stock options outstanding, convertible debt and participating securities are excluded from the calculation of both basic and diluted loss per share since their inclusion would be anti-dilutive.
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December 31
2020 2019 2018 2017 2016
($ in thousands, except per share and share amounts)
Selected Consolidated Balance Sheet Data
Total investments $ 196,153 $ 256,440 $ 283,928 $ 1,362,984 $ 1,022,537
Cash and cash equivalents 8,935 25,813 18,215 27,285 39,858
Restricted cash and cash equivalents 745,371 742,093 685,016 1,503,813 1,202,651
Reinsurance balances receivable (net of allowance for expected credit losses) 330,232 230,384 300,251 301,762 219,126
Total assets 1,357,650 1,355,193 1,435,445 3,357,393 2,664,693
Loss and loss adjustment expense reserves (1)
494,179 470,588 482,662 464,380 306,641
Unearned premium reserves 201,089 179,460 211,789 255,818 222,527
Total liabilities 892,793 878,010 955,981 2,505,967 1,773,006
Total shareholders' equity 464,857 477,183 477,772 844,257 885,803
Adjusted book value* (2)
$ 464,857 $ 477,183 $ 477,287 $ 831,324 $ 874,242
Diluted adjusted book value* (3)
464,857 477,183 477,287 845,183 876,362
Ordinary shares outstanding
Basic 34,514,790 36,994,110 36,384,929 37,359,545 37,366,327
Diluted (4)
34,631,512 37,057,692 36,431,327 38,039,229 37,489,647
Per Share Data
Basic adjusted book value per share* (5)
$ 13.47 $ 12.90 $ 13.12 $ 22.25 $ 23.40
Fully diluted adjusted book value per share* (6)
13.42 12.88 13.10 22.22 23.38
(1)
For a detailed discussion of the change in our loss and loss adjustment expenses, refer to “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Financial Condition” and Note 7 to the consolidated financial statements.
(2)
Adjusted book value equals total shareholders’ equity minus non-controlling interest in Joint Venture.
(3)
Diluted adjusted book value is the adjusted book value plus the proceeds from the exercise of in-the-money options issued and outstanding at year-end.
(4)
Diluted number of shares outstanding is the sum of basic shares outstanding and the in-the-money options and restricted stock units issued and outstanding at year-end.
(5)
Basic adjusted book value per share is calculated by dividing adjusted book value by the number of shares and share equivalents issued and outstanding at year-end.
(6)
Fully diluted adjusted book value per share is calculated by dividing the diluted adjusted book value by the diluted number of shares outstanding at year-end.
*
Adjusted book value, diluted adjusted book value, basic adjusted book value per share, fully diluted adjusted book value per share, and underwriting income (loss) are non-GAAP measures. For a reconciliation of the non-GAAP measures to the most comparable GAAP measures, refer to “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Results of Operations”.