_:SREEMIG pail 3, 2018, Dear Partner The Groenlight Capital funds (the “Partnerships”) retumed (13.6)%! net of fees and expenses inthe Fst quarter of2018. During the quater, the S&P 500 index returned (0.8). In our history, we've had five other quarters witha greater than 5% loss. In four of those, there were clear world or market evens that provided a simple explanation, and in one a Few positions in our portfolio went wrong at the same time. This period has not been like any of these. No events or individual positions stand out. Our losses were brad throughout ‘he portfolio, but generally shallow. We had nine positions (six longs and three shorts) that each cost more thin 0.5% and only one (Micron Techinology) that generated a gain of over 10.5%, despite ou portfolio having a decent earnings season, ‘We looked at our 20 largest longs and 20 largest shorts to see how many had positive and ‘negative earings reports announeed in the quarter. We defined postive and negative on 3 ‘ese by case bass, based om what the market seemed to care about. For example, Tempur Sealy Intemations| met EBITDA and earnings expectations, but missed on revenue. The ‘market eared more about the revenue mis so, forthe sake ofthis exereise, we called that a ‘miss Similarly, Netflix (NFLX) missed EPS expectations and guided to mach higher than expected future cesh bum, but exceeded revenue and subscriber targets, The market loved the release, so we counted NFLX as 4 beat. All told, of out 20 largest longs, we judged 13 to have beaten expectations, 4 to have met expectations and 3 to have disappointed. OF our 20 largest shorts, 9 beat expectations, met and 10 missed expectations, ‘We then looked on a weighted average basis at how the stock pres reacted on the first, trading day after earnings were announced. Not surprisingly, the longs that met or exceeded ‘expectations (representing 89% of eapital) advanced around 2% and those that missed (17% ‘of capital) fell about 8%. For the shorts, those that met or exceeded expectations (representing 29% of capital) rose 7% and those that disappointed (28% of capital) Fell almost 5%, While there is some asymmetry in the longs versus shorts, the reaction to eatnings announcements generally made sense, On the one day when investors received actual information about companies, more often than not the market prices followed the reported results, ‘The problem was. all the other days. For the quarter as a whole, the longs that met or exceeded expectations wound up losing 4%, and those that missed fell 17%, The story on the shorts was even worse. Shorts that exceeded expectations finished the quarter up 19% and stunningly, the shorts that missed expectations also finished up 5% 2 Grand Central Tower + 40 Bast 45% Stoet, 24° Floor + New York, NY 10017Page 2 The result is summarized in the table below an |e ee | La TS ccna ne CEE Sans | Ge | See 21% | Bet |B 1% Met 4 | 22% 07% Missed) 3 “81% | 29% Tota | 20 | 5.6% Beat | 9 Met 1 1% | Missed} 10 18% Total | 20 kis itficult to fally explain what caused the results above, Asan example, General Motors (GM) entered the year with consensus EPS estimates of $6.30, 85.80 and $5.75 for 2017, 2018 and 2019, respectively, andthe stock at $40.99 had an undemaning price to earings ‘multiple of 7x: GM reported actual 2017 EPS of $6.62, guided 2018 ta be similar, and forecast that 2019 earnings should be even better, The stock advanced 6% onthe day of the camings release, before rolling over and falling 18% fom ts peak to the end ofthe quarter. GM's fundamentals appear favorable. Employment is strong, tax cuts are helping GM’s ‘customers, used ccr values ae performing well versus expectations and industry scrappage fates are increasing. GM has len inventory anda product line-up that is gaining share with icing power. We ust don’ see what the market may be saying, and we believe that GM is ‘more likely to exceed near and intermediate-term forecasts than to disappoint. Also, the ‘company plans to return about 10% ofits market capitalization to shareholders in dividends and buybacks in 2018. Time will tell whether the market is correctly” sniffing out ‘incrementally fougher prospects for GM to justify the multiple compression, Similar stories exist for a umber of eur other long positions. AerCap Holdings (AER) and Mylan (MYL) each trade at 8x earings. AER has bought back 32% of is shares inthe last, 35 months, and MYL has bought back nearly 5% ots shares in dhe past few months. In just ‘wo quarters since it was spun off from MetLife, Brighthouse Financial (BHF) has made significant progress towards achieving its objectives for capital return; it will ikely reach its capitalization targets wel in advance of the 2020 expectation set at the time of the spin off, BHF trades at 48% of book value and under 6x earnings, We believe our investment theses remain intact. Despite recent results, our portfolio should perform well overtime. To some extent, this quarter's result stems from the continued extreme outperfomance of growth over value. The Russell 1000 Pure Growih Index GREENLIGHT®Page 3 Followed a 38% 2017 advance with another 7% climb through the end of March. The Russell 1000 Pure Value Index has declined over 3% year-todate, retracing most of ts 2017 gain of 4%, 4 During the quate we proactively managed our gross exposure. As of January 1, we were 133% long and 82% short. Had we left th portfolio alone, the loses would have driven that to 148% long and 105% short, which would have been above our comfort one. Throughout the quarter we methodically reduced gross exposure, such that we ended the quarter at 111% Jong and 82% short. So far, the exposure reduction has been helpful, as our year-to-date trading has led usto avoid an additional 1.5% of losses, ‘We exited a numberof positions during the quarter: ‘We acquired our long investment in Chemours (CC) at an average price of $6.97 inthe fourth quarter of 2015 afer concerns regarding legacy cavironmental litigation exposure, elevated leverage, and a cyclical decline in titanium dioxide pricing ciused the shares to decline following the spinofT from DuPont. Ultimately, the litigation was settled at a manageable ‘cost, the TiO: eyele turned, and CC's next generation refrigerants gained share. We exited a S31,62 with a large profit, ‘We ist acquired shares in Uniper (Germany: UNO1) at €10.02 in the third quater of 2016 ‘when E ON spun cut the company. Over the next wo years, the management team executed ‘nits operational and strategie goals, and the market began to appreciate the earnings power ‘ve saw in the business, The value ofthe company's assets attracted a strategie suitor when Finnish peor Fortan launched a bid for UNOT late last year. We exited our stake at ©2285, a slight premium tthe fer price, with a lange profit We shorted Hexagon at 339 SEK in early 2016 because we believed the management team’s ‘behavior was suspect and the business was deteriorating. The business surprised us by accelerating, so we covered at 414 SEK fora small loss. ‘We shorted United Rentals at $76.66 in the third quarter of 2016 because we believed the ‘no-residental construction cycle was peaking, and that excess ental equipment would lead to lower pricing anf weaker earnings. This thesis proved incorrect, asthe economy improved and industry supply tightened, Fortunately, we only “rented” small number of shares, and exited at $149.39 with a medium loss. We had two departures during the quarter. Analyst Gaurav Sharma left to pursue a * © technology-related entrepreneurial opportunity. After 11 years asa eontoller, Jamie Tully retied from Greesight to spend more time with her family. We wish Gaurav and Jamic continued success! Also, analyst James Lin is taking a leave of absence. After 16 productive ‘years at Greenigh’ James i looking forward to some time off from the daily demands of ‘work. Congratulations to David Tepperman and his wife Lauren who welcomed baby Hazel Jane into the world. Although it doesn't shyme with her name, we say Mazel! GREENLIGHT®Page 4 At quartered, the largest disclosed Tong positions inthe Partnerships were AerCap, Bayer, Brighthouse Financial, General Motors and gold, The Partnerships had an average exposure of 111% long and 82% short Taday is she oldest vou've ever boon, and the youngest you'll ever be again ~Bleanor Roosevelt Best Regards, rewwheatt Cepelnt Greenlight Capita, ne GREENLIGHT®Page S ‘Te nfmaton comin harcn reel the opinions and projections of Graig Capit In and is tats (ole ve} "Greig of the date of publeaton, which ae sje change witht noice ‘any tne absoqut othe dat fie Greenlight des rat repesct hat any opinion poeton wl Be ‘eliza Al norton provides fo infomatonal paper oly an shld tbe dese ys incotment ‘dice ea recommenation to prcase or sll any sei securty. Creagh hasan scone mete ‘he pice movant he seus cncsod nh presettion, but sels extnmmc nests aoe {change without nice. Wie teifomatonpcsd heen beloved fo be able me presenta foram iad concerming the acc of any dt reset CGREENLIGHT® ard GREENLIGHT CAPITAL, INC. wih the sr logo are registred trademarks of ‘Grech Capita, he. orate company i the Une Sty, Euepean Union a ter counts world, Al ter tae names, adem, ad svi rks Bec ae the propery the spective ‘ents who resin a proprictry vgs oer ier ae Thi communica concn a as nt Be ‘pouced without br wen prison fm Gs Unless otherwise nt, prance reteset the dol weighd average otal rtm, net of fs and expen fran PO le parr or Greenlight Capel, LP, Crselight Cap Qualified LP, Creeligh {pital Oashor, Lid, Greenlight Capital Ofshore Quali Li andthe dlr rest retro Grenlgh {Cpt (Go), 1. and Greight Capi Ohare (Goi), Lid eaetvly,the“Paraesips Each Parris tans we net fhe mode high watermark nent alacaton of Pexfonnance seus ne estimated pening the yearend aul. ast ertermane snot indive offre ‘ests, Acta etn may ier fom the ret prsesed. Each parmer wil seve ind stents ‘owing eta om the Partners admit Reeonc i aman doesnt inp tat the nds wl ‘hve retums volattyo other sus salar he index. The ol eu forthe dee do nol elt he Seduction of ay Teesr expense wick woul ee rete ‘Altesposurinfrmaton i caleuted on a detail basis and ec rt aa swaps inet te ‘orp soverin det cine, commodities volatility inden tnd baskets and Servatvs on ay of ese ‘nsrment Weighting, exposre,atbton nd prtrmance contrition sfrmaton cts sate the weighted average af sah igus for investnents by Geel Capita P, Greig Capital uae. EP, Gecligt Cpia Osho La, Growl Capa Ohare Qualified Laelia Capt (a), [Lb sn Gresligh opt Osore (Gol), La. (eeuding the god aking hei bythe ol ress) and sscthe ren of cassieatons and asumpons made nthe sol amon of Greeight Positions inca in “Bear MeuMissd abl” were set and lassie at Greclight's discretion. The tabi exlnes certain postions at Greenligh's discretion Siig wa asa un the elt postin size the beponing ofthe cure, nd poston zg may ave ben mie rit utr ed. Whe most ‘oso within th ale were el forthe entire gan, ome were Upon ofr a qarerend. Weigel "Sverage ric change fle the change m price om th ft yo th ura fo east dy othe quater. Greelph Ream ret the gos of oe retr and was casa wing wethed terepe o ach igs {or investments by Grenlght Capita, LP, Grenight Capital Quali, LP Greelgt Capital Ofer, id, Greeiphe Capi Ofibore Qulie, Li, Greig Capa (Gl LPs and Crcelight Capel Onshore (Go), Li Poston reed ins te da no represent al th postions eld pacha or slain ibe area, ‘hs intnmation ay represent sal presage fatty. The information presented inca opie !nsgbt mothe notewery evens, nthe sole opnon of Grech acu he Parc, ‘Tiis SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER-TO:HUY ANY INTERESTS IN WV FUND MANAGED BY GREENLIGHTOR ANY OF 1S AFFILIATES. SUCH AN (OFFER TO SELL OR SOLICITATION OF AN OFFER TO HUY INTERESTS MAY ONLY BE MADE PORSUANT TO DEFIMIIVE SUBSCRIPTION DOCUMENTS BETWHTN A FUND AND AN INVESTOR GREENLIGHT®