EX-99.2 3 q32020bhffinancialsupp.htm EX-99.2 Document



Exhibit 99.2








Brighthouse Financial, Inc.
Financial Supplement

Third Quarter 2020

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Table of ContentsFinancial Results
Earnings and Select Metrics from Business Segments and Corporate & Other
Other Information
Appendix
A-2
A-6
A-7
A-8
A-9
A-10

Note: See the Appendix for non-GAAP financial information, definitions and reconciliations. Financial information, unless otherwise noted, is rounded to millions. Some financial information, therefore, may not sum to the corresponding total.

As used in this financial supplement, “Brighthouse Financial,” “Brighthouse,” the “Company,” “we,” “our” and “us” refer to Brighthouse Financial, Inc.
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Financial Results
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Financial Supplement
1



Key Metrics (Unaudited, dollars in millions except per share amounts)

As of or For the Three Months Ended
Financial Results and Metrics (1)September 30,
2020
June 30,
2020
March 31,
2020
December 31,
2019
September 30,
2019
Net income (loss) available to shareholders$(3,012)$(1,998)$4,950$(1,077)$676
Adjusted earnings$(689)$11$211$282$(169)
Adjusted earnings, less notable items (2)$388$39$273$265$260
Total corporate expenses (3)$204$210$214$283$248
Combined total adjusted capital (4)$8,400$7,724$7,217$9,694$8,406
Combined risk-based capital ratio (5)525%-545%515%-535%515%-535%552%N/A
Stockholders' Equity
Brighthouse Financial, Inc.’s stockholders’ equity$18,266$20,909$20,374$16,172$17,695
Less: Preferred stock, net802802412412412
Brighthouse Financial, Inc.’s common stockholders’ equity, including AOCI$17,464$20,107$19,962$15,760$17,283
Less: AOCI5,3814,9652,6473,2403,567
Brighthouse Financial, Inc.’s common stockholders’ equity, excluding AOCI $12,083$15,142$17,315$12,520$13,716
Return on Common Equity (1)
Return on common equity(6.3)%14.3%29.5%(4.9)%11.7%
Return on common equity, excluding AOCI(8.0)%17.8%35.4%(5.8)%13.4%
Adjusted return on common equity(1.3)%2.3%4.2%4.5%3.8%
Earnings Per Common Share, Diluted (1), (6)
Net income (loss) available to shareholders per common share$(32.49)$(21.10)$47.11$(10.02)$6.06
Adjusted earnings per common share$(7.43)$0.11$2.01$2.61$(1.52)
Adjusted earnings, less notable items per common share$4.19$0.41$2.60$2.46$2.33
Weighted average common shares outstanding92,693,18894,837,492105,093,515107,840,324111,527,480
Book Value Per Common Share
Book value per common share (1)$191.58$216.25$198.62$148.64$158.18
Book value per common share, excluding AOCI (1)$132.55$162.85$172.28$118.08$125.53
Ending common shares outstanding91,158,92792,979,854100,502,488106,027,301109,264,305
(1) See definitions for Non-GAAP and Other Financial Disclosures in the Appendix beginning on page A-2.
(2) See additional information regarding notable items on page 18.
(3) Includes functional department expenses, public company expenses, certain investment expenses, retirement funding and incentive compensation; and excludes establishment costs.
(4) Reflects preliminary statutory results for the three months ended September 30, 2020. See additional information on page 22.
(5) The RBC ratio is reported as a preliminary range on the quarters. RBC ratios prior to the implementation of variable annuity capital reform are not presented.
(6) For loss periods, dilutive shares were not included in the calculation of net income (loss) available to shareholders per common share or adjusted earnings per common share as inclusion of such shares would have an anti-dilutive effect.

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Financial Supplement
2



GAAP Statements of Operations (Unaudited, in millions)

For the Three Months EndedFor the Nine Months Ended
RevenuesSeptember 30,
2020
June 30,
2020
March 31,
2020
December 31,
2019
September 30,
2019
September 30,
2020
September 30,
2019
Premiums$184$193$198$209$214$575$673
Universal life and investment-type product policy fees8828278869508672,5952,630
Net investment income9966529168989282,5642,681
Other revenues999310210794294282
Revenues before NIGL and NDGL2,1611,7652,1022,1642,1036,0286,266
Net investment gains (losses)5(34)(19)3327(48)79
Net derivative gains (losses)(1,857)(2,653)6,902(1,891)1,0572,392(97)
Total revenues$309$(922)$8,985$306$3,187$8,372$6,248
Expenses
Interest credited to policyholder account balances$281$276$259$268$272$816$795
Policyholder benefits and claims3,0478391,1877341,3195,0732,936
Amortization of DAC and VOBA244(92)7709181922373
Interest expense on debt4745474749139144
Other expenses5335324706205621,5351,680
Total expenses4,1521,6002,7331,6782,3838,4855,928
Income (loss) before provision for income tax(3,843)(2,522)6,252(1,372)804(113)320
Provision for income tax expense (benefit)(850)(531)1,293(303)119(88)(14)
Net income (loss)(2,993)(1,991)4,959(1,069)685(25)334
Less: Net income (loss) attributable to noncontrolling interests221244
Net income (loss) attributable to Brighthouse Financial, Inc.(2,995)(1,991)4,957(1,070)683(29)330
Less: Preferred stock dividends1777773114
Net income (loss) available to Brighthouse Financial, Inc.’s common shareholders$(3,012)$(1,998)$4,950$(1,077)$676$(60)$316

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Financial Supplement
3



GAAP Balance Sheets (Unaudited, in millions)

As of
ASSETSSeptember 30,
2020
June 30,
2020
March 31,
2020
December 31,
2019
September 30,
2019
Investments:
Fixed maturity securities available-for-sale$79,338$76,796$71,302$71,036$70,723
Equity securities117129122147148
Mortgage loans15,74615,79115,54715,75315,359
Policy loans1,2891,2011,2501,2921,332
Limited partnerships and limited liability companies2,5622,3542,5052,3802,353
Short-term investments4,2394,5374,3481,9581,985
Other invested assets5,0386,3649,6583,2164,734
Total investments108,329107,172104,73295,78296,634
Cash and cash equivalents6,1897,3258,9302,8774,289
Accrued investment income781664868684732
Reinsurance recoverables15,05214,35914,22013,99013,412
Premiums and other receivables1,035859774770973
DAC and VOBA4,6644,8564,8625,4485,317
Current income tax recoverable191714
Other assets447532550584577
Separate account assets103,18499,59989,008107,107103,928
Total assets$239,681$235,367$223,953$227,259$225,876
LIABILITIES AND EQUITY
Liabilities
Future policy benefits$44,537$41,841$40,653$39,686$39,846
Policyholder account balances52,79850,33847,28845,77144,919
Other policy-related balances3,0883,1523,1693,1113,079
Payables for collateral under securities loaned and other transactions6,9897,87610,9884,3915,291
Long-term debt3,9793,9794,3654,3654,365
Current income tax payable72
Deferred income tax liability1,8162,5672,4821,3551,749
Other liabilities4,8875,0415,5615,2364,939
Separate account liabilities103,18499,59989,008107,107103,928
Total liabilities221,350214,393203,514211,022208,116
Equity
Preferred stock, at par value
Common stock, at par value11111
Additional paid-in capital13,31413,30712,91112,90812,897
Retained earnings (deficit)5113,5235,5215851,662
Treasury stock(941)(887)(706)(562)(432)
Accumulated other comprehensive income (loss)5,3814,9652,6473,2403,567
Total Brighthouse Financial, Inc.’s stockholders’ equity18,26620,90920,37416,17217,695
Noncontrolling interests6565656565
Total equity18,33120,97420,43916,23717,760
Total liabilities and equity$239,681$235,367$223,953$227,259$225,876

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Earnings and Select
Metrics from
Business Segments and Corporate & Other

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Financial Supplement
5



Statements of Adjusted Earnings by Segment and Corporate & Other (Unaudited, in millions)
For the Three Months Ended September 30, 2020
Adjusted revenuesAnnuitiesLifeRun-offCorporate & OtherTotal
Premiums$34$129$—$21$184
Universal life and investment-type product policy fees56983163815
Net investment income469131383181,001
Other revenues857799
Total adjusted revenues$1,157$350$553$39$2,099
Adjusted expenses
Interest credited to policyholder account balances$169$27$82$1$279
Policyholder benefits and claims91321,870102,021
Amortization of DAC and VOBA12750(19)158
Interest expense on debt4747
Other operating costs373474432496
Total adjusted expenses6782561,996713,001
Adjusted earnings before provision for income tax47994(1,443)(32)(902)
Provision for income tax expense (benefit)9218(304)(38)(232)
Adjusted earnings after provision for income tax38776(1,139)6(670)
Less: Net income (loss) attributable to noncontrolling interests and preferred stock dividends1919
Adjusted earnings$387$76$(1,139)$(13)$(689)
For the Three Months Ended September 30, 2019
Adjusted revenuesAnnuitiesLifeRun-offCorporate & OtherTotal
Premiums$48$143$—$23$214
Universal life and investment-type product policy fees59653150799
Net investment income46111732723928
Other revenues7977194
Total adjusted revenues$1,184$320$484$47$2,035
Adjusted expenses
Interest credited to policyholder account balances$149$30$92$—$271
Policyholder benefits and claims152179885181,234
Amortization of DAC and VOBA211(31)3183
Interest expense on debt4949
Other operating costs417515044562
Total adjusted expenses9292291,0271142,299
Adjusted earnings before provision for income tax25591(543)(67)(264)
Provision for income tax expense (benefit)5218(117)(57)(104)
Adjusted earnings after provision for income tax20373(426)(10)(160)
Less: Net income (loss) attributable to noncontrolling interests and preferred stock dividends 99
Adjusted earnings$203$73$(426)$(19)$(169)

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Financial Supplement
6



Statements of Adjusted Earnings by Segment and Corporate & Other (Cont.) (Unaudited, in millions)
For the Nine Months Ended September 30, 2020
Adjusted revenuesAnnuitiesLifeRun-offCorporate & OtherTotal
Premiums$109$402$—$64$575
Universal life and investment-type product policy fees1,6622534842,399
Net investment income1,334316873542,577
Other revenues2551821294
Total adjusted revenues$3,360$989$1,378$118$5,845
Adjusted expenses
Interest credited to policyholder account balances$486$79$247$2$814
Policyholder benefits and claims3775172,673413,608
Amortization of DAC and VOBA322104(12)414
Interest expense on debt139139
Other operating costs1,1021221371371,498
Total adjusted expenses2,2878223,0573076,473
Adjusted earnings before provision for income tax1,073167(1,679)(189)(628)
Provision for income tax expense (benefit)19932(355)(72)(196)
Adjusted earnings after provision for income tax874135(1,324)(117)(432)
Less: Net income (loss) attributable to noncontrolling interests and preferred stock dividends3535
Adjusted earnings$874$135$(1,324)$(152)$(467)
For the Nine Months Ended September 30, 2019
Adjusted revenuesAnnuitiesLifeRun-offCorporate & OtherTotal
Premiums$166$438$1$68$673
Universal life and investment-type product policy fees1,741170525(5)2,431
Net investment income1,352330942572,681
Other revenues236151912282
Total adjusted revenues$3,495$953$1,487$132$6,067
Adjusted expenses
Interest credited to policyholder account balances$433$79$282$—$794
Policyholder benefits and claims4755291,645452,694
Amortization of DAC and VOBA421111433
Interest expense on debt144144
Other operating costs1,2271501471561,680
Total adjusted expenses2,5567592,0743565,745
Adjusted earnings before provision for income tax939194(587)(224)322
Provision for income tax expense (benefit)17638(127)(100)(13)
Adjusted earnings after provision for income tax763156(460)(124)335
Less: Net income (loss) attributable to noncontrolling interests and preferred stock dividends1818
Adjusted earnings$763$156$(460)$(142)$317

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Financial Supplement
7



Annuities — Statements of Adjusted Earnings (Unaudited, in millions)

For the Three Months EndedFor the Nine Months Ended
Adjusted revenuesSeptember 30,
2020
June 30,
2020
March 31,
2020
December 31,
2019
September 30,
2019
September 30,
2020
September 30,
2019
Premiums$34$40$35$32$48$109$166
Universal life and investment-type product policy fees5695275665855961,6621,741
Net investment income4694054604574611,3341,352
Other revenues8580907979255236
Total adjusted revenues$1,157$1,052$1,151$1,153$1,184$3,360$3,495
Adjusted expenses
Interest credited to policyholder account balances$169$162$155$151$149$486$433
Policyholder benefits and claims9164204134152377475
Amortization of DAC and VOBA1271573895211322421
Interest expense on debt
Other operating costs3733643654494171,1021,227
Total adjusted expenses6788477628299292,2872,556
Adjusted earnings before provision for income tax4792053893242551,073939
Provision for income tax expense (benefit)9234735952199176
Adjusted earnings$387$171$316$265$203$874$763

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Financial Supplement
8



Annuities — Select Operating Metrics (Unaudited, in millions)

For the Three Months Ended
VARIABLE & SHIELD LEVEL ANNUITIES ACCOUNT VALUE (1)September 30,
2020
June 30,
2020
March 31,
2020
December 31,
2019
September 30,
2019
Account value, beginning of period$110,993$100,691$116,426$112,707$114,041
Deposits1,4281,3191,6071,6081,490
Withdrawals, surrenders and contract benefits(1,958)(1,827)(2,656)(2,826)(2,667)
Net flows (2)(530)(508)(1,049)(1,218)(1,177)
Investment performance (3)5,40411,496(14,066)5,693650
Policy charges and other(756)(686)(620)(756)(807)
Account value, end of period$115,111$110,993$100,691$116,426$112,707
FIXED ANNUITIES ACCOUNT VALUE (4)
Account value, beginning of period$13,660$13,313$13,113$13,069$12,900
Deposits946548402314355
Withdrawals, surrenders and contract benefits(242)(291)(272)(332)(250)
Net flows (2)704257130(18)105
Interest credited9892898892
Other(19)(2)(19)(26)(28)
Account value, end of period$14,443$13,660$13,313$13,113$13,069
INCOME ANNUITIES (1)
Income annuity insurance liabilities$4,798$4,587$4,565$4,588$4,590
(1) Includes general account and separate account.
(2) Deposits and withdrawals include policy exchanges.
(3) Includes imputed interest on indexed annuities and the interest credited on the general account investment option of variable products.
(4) Includes fixed indexed annuities.
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Financial Supplement
9



Annuities — Select Operating Metrics (Cont.) (Unaudited, in millions)

For the Three Months EndedFor the Nine Months Ended
VARIABLE & SHIELD LEVEL ANNUITY SALESSeptember 30,
2020
June 30,
2020
March 31,
2020
December 31,
2019
September 30,
2019
September 30,
2020
September 30,
2019
Shield Level Annuities (1)$934$905$1,140$1,197$1,137$2,979$3,262
GMWB/GMAB350277322264223949648
GMDB only8782878072256230
GMIB19221917186067
Total variable & Shield Level annuity sales$1,390$1,286$1,568$1,558$1,450$4,244$4,207
FIXED ANNUITY SALES
Fixed indexed annuities (2)$234$309$208$261$296$751$868
Fixed deferred annuities70923919149551,139302
Single premium immediate annuities14135619
Other fixed annuities11229
Total fixed annuity sales$945$552$401$313$358$1,898$1,198
(1) Shield Level Annuities refers to our suite of structured annuities consisting of products marketed under various names.
(2) Represents 100% of gross sales on directly written business and the proportion of assumed gross sales under reinsurance agreements.

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Financial Supplement
10



Life — Statements of Adjusted Earnings (Unaudited, in millions)

For the Three Months EndedFor the Nine Months Ended
Adjusted revenuesSeptember 30,
2020
June 30,
2020
March 31,
2020
December 31,
2019
September 30,
2019
September 30,
2020
September 30,
2019
Premiums$129$132$141$154$143$402$438
Universal life and investment-type product policy fees83779310953253170
Net investment income13169116106117316330
Other revenues774671815
Total adjusted revenues$350$285$354$375$320$989$953
Adjusted expenses
Interest credited to policyholder account balances$27$25$27$26$30$79$79
Policyholder benefits and claims132148237190179517529
Amortization of DAC and VOBA50(4)584(31)1041
Interest expense on debt
Other operating costs4756196151122150
Total adjusted expenses256225341281229822759
Adjusted earnings before provision for income tax9460139491167194
Provision for income tax expense (benefit)1812219183238
Adjusted earnings$76$48$11$75$73$135$156

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Financial Supplement
11



Life — Select Operating Metrics (Unaudited, in millions)

For the Three Months Ended
LIFE ACCOUNT VALUE: GENERAL ACCOUNTSeptember 30,
2020
June 30,
2020
March 31,
2020
December 31,
2019
September 30,
2019
Variable universal and universal life account value, beginning of period$2,674$2,691$2,682$2,699$2,707
Premiums and deposits (1)6567746262
Surrenders and contract benefits(38)(43)(33)(37)(42)
Net flows2724412520
Net transfers from (to) separate account1611191217
Interest credited2625252626
Policy charges and other (73)(77)(76)(80)(71)
Variable universal and universal life account value, end of period$2,670$2,674$2,691$2,682$2,699
LIFE ACCOUNT VALUE: SEPARATE ACCOUNT
Variable universal life account value, beginning of period$5,261$4,478$5,493$5,200$5,269
Premiums and deposits5051525454
Surrenders and contract benefits(49)(44)(65)(60)(63)
Net flows17(13)(6)(9)
Investment performance390839(928)36615
Net transfers from (to) general account(16)(11)(19)(12)(17)
Policy charges and other(54)(52)(55)(55)(58)
Variable universal life account value, end of period$5,582$5,261$4,478$5,493$5,200
(1) Includes premiums and sales directed to the general account investment option of variable products.
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Financial Supplement
12



Life — Select Operating Metrics (Cont.) (Unaudited, in millions)

For the Three Months EndedFor the Nine Months Ended
LIFE SALESSeptember 30,
2020
June 30,
2020
March 31,
2020
December 31,
2019
September 30,
2019
September 30,
2020
September 30,
2019
Total life sales$13$12$16$12$8$41$13

As of
LIFE INSURANCE IN-FORCESeptember 30,
2020
June 30,
2020
March 31,
2020
December 31,
2019
September 30,
2019
Whole Life
Life Insurance in-force, before reinsurance$19,762$20,094$20,298$20,602$20,954
Life Insurance in-force, net of reinsurance$3,371$3,088$3,105$3,163$3,150
Term Life
Life Insurance in-force, before reinsurance$391,583$395,391$402,720$409,427$415,478
Life Insurance in-force, net of reinsurance$303,232$304,758$309,500$314,034$317,274
Universal and Variable Universal Life
Life Insurance in-force, before reinsurance$52,377$52,796$53,009$54,269$54,892
Life Insurance in-force, net of reinsurance$39,258$39,482$39,466$40,461$38,543

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Financial Supplement
13



Run-off — Statements of Adjusted Earnings (Unaudited, in millions)

For the Three Months EndedFor the Nine Months Ended
Adjusted revenuesSeptember 30,
2020
June 30,
2020
March 31,
2020
December 31,
2019
September 30,
2019
September 30,
2020
September 30,
2019
Premiums$—$—$—$1$—$—$1
Universal life and investment-type product policy fees163159162191150484525
Net investment income383166324323327873942
Other revenues777772119
Total adjusted revenues$553$332$493$522$484$1,378$1,487
Adjusted expenses
Interest credited to policyholder account balances$82$88$77$91$92$247$282
Policyholder benefits and claims1,8703494543718852,6731,645
Amortization of DAC and VOBA
Interest expense on debt
Other operating costs4441525350137147
Total adjusted expenses1,9964785835151,0273,0572,074
Adjusted earnings before provision for income tax(1,443)(146)(90)7(543)(1,679)(587)
Provision for income tax expense (benefit)(304)(31)(20)1(117)(355)(127)
Adjusted earnings$(1,139)$(115)$(70)$6$(426)$(1,324)$(460)

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Financial Supplement
14



Run-off — Select Operating Metrics (Unaudited, in millions)

For the Three Months Ended
UNIVERSAL LIFE WITH SECONDARY GUARANTEES ACCOUNT VALUESeptember 30,
2020
June 30,
2020
March 31,
2020
December 31,
2019
September 30,
2019
Account value, beginning of period$5,930$5,979$6,018$6,058$6,084
Premiums and deposits (1)176181180186184
Surrenders and contract benefits(40)(31)(24)(34)(18)
Net flows136150156152166
Interest credited5157575958
Policy charges and other(252)(256)(252)(251)(250)
Account value, end of period$5,865$5,930$5,979$6,018$6,058

As of
LIFE INSURANCE IN-FORCESeptember 30,
2020
June 30,
2020
March 31,
2020
December 31,
2019
September 30,
2019
Universal Life with Secondary Guarantees
Life Insurance in-force, before reinsurance$76,342$76,872$77,428$78,008$78,722
Life Insurance in-force, net of reinsurance$36,842$37,126$37,481$37,740$36,698
(1) Includes premiums and sales directed to the general account investment option of variable products.

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Financial Supplement
15



Corporate & Other — Statements of Adjusted Earnings (Unaudited, in millions)

For the Three Months EndedFor the Nine Months Ended
Adjusted revenuesSeptember 30,
2020
June 30,
2020
March 31,
2020
December 31,
2019
September 30,
2019
September 30,
2020
September 30,
2019
Premiums$21$21$22$22$23$64$68
Universal life and investment-type product policy fees(5)
Net investment income18162018235457
Other revenues4112
Total adjusted revenues$39$37$42$44$47$118$132
Adjusted expenses
Interest credited to policyholder account balances$1$1$—$—$—$2$—
Policyholder benefits and claims10141714184145
Amortization of DAC and VOBA(19)4333(12)11
Interest expense on debt4745474749139144
Other operating costs3271345744137156
Total adjusted expenses71135101121114307356
Adjusted earnings before provision for income tax(32)(98)(59)(77)(67)(189)(224)
Provision for income tax expense (benefit)(38)(12)(22)(21)(57)(72)(100)
Adjusted earnings after provision for income tax6(86)(37)(56)(10)(117)(124)
Less: Net income (loss) attributable to noncontrolling interests and preferred stock dividends
1979893518
Adjusted earnings$(13)$(93)$(46)$(64)$(19)$(152)$(142)

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Other
Information

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Financial Supplement
17



DAC and VOBA and Net Derivative Gains (Losses) (Unaudited, in millions)

For the Three Months Ended
DAC AND VOBA ROLLFORWARDSeptember 30,
2020
June 30,
2020
March 31,
2020
December 31,
2019
September 30,
2019
Balance, beginning of period$4,856$4,862$5,448$5,317$5,492
Capitalization9092989593
Amortization:
Included in adjusted earnings, excluding notable items(121)(157)(99)(137)(162)
Related to notable items, included in adjusted expenses(37)35(21)
Related to items not included in adjusted expenses(86)249(671)932
Total amortization(244)92(770)(9)(181)
Unrealized investment gains (losses)(38)(190)8645(87)
Balance, end of period$4,664$4,856$4,862$5,448$5,317
As of
DAC AND VOBA BY SEGMENT AND CORPORATE & OTHERSeptember 30,
2020
June 30,
2020
March 31,
2020
December 31,
2019
September 30,
2019
Annuities$3,574$3,733$3,745$4,327$4,191
Life9761,0271,0181,0191,021
Run-off55555
Corporate & Other109919497100
Total DAC and VOBA$4,664$4,856$4,862$5,448$5,317

For the Three Months Ended
NET DERIVATIVE GAINS (LOSSES)September 30,
2020
June 30,
2020
March 31,
2020
December 31,
2019
September 30,
2019
Net derivative gains (losses):
Variable annuity hedges and embedded derivatives, net$(1,688)$(2,576)$5,181$(1,419)$418
ULSG hedges(97)(64)1,583(446)656
Other hedges and embedded derivatives(77)(17)134(32)(17)
Subtotal(1,862)(2,657)6,898(1,897)1,057
Investment hedge adjustments5446
Total net derivative gains (losses)$(1,857)$(2,653)$6,902$(1,891)$1,057

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18



Notable Items (Unaudited, in millions)

For the Three Months Ended
NOTABLE ITEMS IMPACTING ADJUSTED EARNINGSSeptember 30,
2020
June 30,
2020
March 31,
2020
December 31,
2019
September 30,
2019
Actuarial items and other insurance adjustments$1,062$—$48$(42)$442
Establishment costs1528142510
Separation-related transactions(23)
Total notable items (1)$1,077$28$62$(17)$429
NOTABLE ITEMS BY SEGMENT AND CORPORATE & OTHER
Annuities$(102)$—$—$(42)$30
Life11(19)
Run-off1,17248431
Corporate & Other(4)281425(13)
Total notable items (1)$1,077$28$62$(17)$429
(1) Notable items reflect the negative (positive) after-tax impact to adjusted earnings of certain unanticipated items and events, as well as certain items and events that were anticipated, such as establishment costs. The presentation of notable items is intended to help investors better understand our results and to evaluate and forecast those results.

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Variable Annuity Separate Account Returns and Allocations (Unaudited)

For the Three Months Ended
VARIABLE ANNUITY SEPARATE ACCOUNT RETURNSSeptember 30,
2020
June 30,
2020
March 31,
2020
December 31,
2019
September 30,
2019
Total Quarterly VA separate account gross returns6.04%14.11%(14.31)%6.14%0.83%
TOTAL VARIABLE ANNUITY SEPARATE ACCOUNT ALLOCATIONS
Percent allocated to equity funds26.85%26.31%24.11%26.19%25.52%
Percent allocated to bond funds/other funds8.82%8.73%9.59%8.23%8.50%
Percent allocated to target volatility funds22.38%22.85%24.41%23.10%23.51%
Percent allocated to balanced funds41.95%42.11%41.89%42.48%42.47%

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20



Summary of Investments (Unaudited, dollars in millions)
September 30, 2020December 31, 2019
Amount% of TotalAmount% of Total
Fixed maturity securities:
U.S. corporate securities$35,90631.35%$31,16031.58%
Foreign corporate securities10,6609.31%9,8449.98%
Residential mortgage-backed securities8,4497.38%9,1189.24%
U.S. government and agency securities8,9357.80%7,3967.50%
Commercial mortgage-backed securities6,4255.61%5,7555.83%
State and political subdivision securities4,4293.87%4,0574.11%
Asset-backed securities2,7142.37%1,9551.98%
Foreign government securities1,8201.59%1,7511.78%
Total fixed maturity securities79,33869.28%71,03672.00%
Equity securities1170.10%1470.15%
Mortgage loans:
Commercial mortgage loans9,8308.58%9,7219.85%
Agricultural mortgage loans3,3802.95%3,3883.44%
Residential mortgage loans2,6262.29%2,7082.74%
Allowance for credit losses(90)(0.08)%(64)(0.06)%
Total mortgage loans, net15,74613.74%15,75315.97%
Policy loans1,2891.13%1,2921.31%
Limited partnerships and limited liability companies2,5622.24%2,3802.41%
Cash, cash equivalents and short-term investments10,4289.11%4,8354.90%
Other invested assets:
Derivatives:
Interest rate3,4583.02%1,7781.80%
Equity market8910.78%9210.93%
Foreign currency exchange rate4550.40%2860.29%
Credit270.02%360.04%
Total derivatives4,8314.22%3,0213.06%
FHLB common stock810.07%390.04%
Other1260.11%1560.16%
Total other invested assets5,0384.40%3,2163.26%
Total investments and cash and cash equivalents$114,518100.00%$98,659100.00%

For the Three Months Ended
September 30,
2020
June 30,
2020
March 31,
2020
December 31,
2019
September 30,
2019
Net investment income yield (1), (2)4.42%2.98%4.30%4.32%4.52%
(1) Yields are calculated on investment income as a percent of average quarterly asset carrying values. Investment income includes investment hedge adjustments, excludes realized gains and losses and reflects the GAAP adjustments described beginning on page A-1 of the Appendix hereto. Asset carrying values exclude unrealized gains (losses), collateral received in connection with our securities lending program, freestanding derivative assets and collateral received from derivative counterparties.
(2) Investment fee and expense yields are calculated as investment fees and expenses as a percent of average quarterly asset estimated fair values. Asset estimated fair values exclude collateral received in connection with our securities lending program, freestanding derivative assets and collateral received from derivative counterparties.

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21



Statutory Statement of Operations Information (Unaudited, in millions except Normalized Statutory Earnings (Loss))

For the Three Months EndedFor the Nine Months Ended
COMBINED REVENUES AND EXPENSES (1)PRELIMINARY
September 30,
2020 (2)
June 30,
2020
March 31,
2020
December 31,
2019
September 30,
2019
PRELIMINARY
September 30,
2020 (2)
September 30,
2019
Total revenues (Line 9)$2,900$1,421$5,740$2,086$3,443$10,061$9,272
Total benefits and expenses before dividends to policyholders (Line 28)
$1,400$(1,401)$13,045$1,008$3,047$13,044$8,315
COMBINED NET INCOME (LOSS) (1)
Gain (loss) from operations net of taxes and dividends to policyholders (Line 33)
$1,500$2,817$(7,305)$1,089$314$(2,988)$868
Net realized capital gains (losses), net of taxes and certain transfers to interest maintenance reserve (Line 34)
(1,200)741483(297)18524(663)
Net income (loss) (Line 35)$300$3,558$(6,822)$792$499$(2,964)$205
For the Nine Months Ended
NORMALIZED STATUTORY EARNINGS (LOSS) (3), (4)PRELIMINARY
September 30,
2020 (2)
September 30,
2019
(In billions)
Statutory net gain (loss) from operations, pre-tax$(2.8)$1.1
Add: net realized capital gains (losses)(0.1)(0.6)
Add: change in CTE95 capital requirements, net of the change in VA reserves0.2(0.1)
Add: unrealized gains (losses) on VA hedging program2.70.4
Add: impact of NAIC VA capital reform and actuarial assumption update
(0.6)0.4
Add: other adjustments, net0.20.1
Normalized statutory earnings (loss)$(0.4)$1.3
(1) Combined statutory results are for Brighthouse Life Insurance Company, Brighthouse Life Insurance Company of NY and New England Life Insurance Company.
(2) Reflects preliminary statutory results for the three months and nine months ended September 30, 2020.
(3) See definitions for Non-GAAP and Other Financial Disclosures in the Appendix beginning on page A-2.
(4) Normalized statutory earnings (loss), presented in billions, is for Brighthouse Life Insurance Company and New England Life Insurance Company.


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22



Statutory Balance Sheet and Surplus Information (Unaudited, in millions)

As of
COMBINED ASSETS, LIABILITIES, AND CAPITAL AND SURPLUS (1)                                                    PRELIMINARY
September 30,
2020 (2)
June 30,
2020
March 31,
2020
December 31,
2019
September 30,
2019
Total assets (Line 28)$192,200$189,871$184,996$186,564$185,743
Total liabilities (Line 28)$184,700$182,938$178,673$177,702$178,103
Total capital and surplus (Line 38)$7,500$6,933$6,323$8,862$7,640
COMBINED TAC AND RBC RATIO (1), (3)
Combined total adjusted capital$8,400$7,724$7,217$9,694$8,406
Combined risk-based capital ratio (4)525%-545%515%-535%515%-535%552%N/A
As of
COMBINED ORDINARY DIVIDEND CAPACITY (1)September 30,
2020
June 30,
2020
March 31,
2020
December 31,
2019
September 30,
2019
Dividends paid to Holding Company$—$500$300$131$—
Remaining ordinary dividend capacity (5)$1,327$1,327$1,827$798$929
(1) Combined statutory results are for Brighthouse Life Insurance Company and New England Life Insurance Company.
(2) Reflects preliminary statutory results as of September 30, 2020.
(3) See definitions for Non-GAAP and Other Financial Disclosures in the Appendix beginning on page A-2.
(4) The RBC ratio is reported as a preliminary range on the quarters. RBC ratios prior to the implementation of variable annuity capital reform are not presented.
(5) Reflects remaining dividend amounts that may be paid during the respective calendar year without prior regulatory approval. However, because dividend tests may be based on dividends previously paid over rolling 12-month periods, if paid before a specified date during such calendar year, some or all of such dividends may require regulatory approval.

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Appendix

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Financial Supplement
A-1



Note Regarding Forward-Looking Statements

This financial supplement and other oral or written statements that we make from time to time may contain information that includes or is based upon forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve substantial risks and uncertainties. We have tried, wherever possible, to identify such statements using words such as “anticipate,” “estimate,” “expect,” “project,” “may,” “will,” “could,” “intend,” “goal,” “target,” “guidance,” “forecast,” “preliminary,” “objective,” “continue,” “aim,” “plan,” “believe” and other words and terms of similar meaning, or that are tied to future periods, in connection with a discussion of future operating or financial performance. In particular, these include, without limitation, statements relating to future actions, prospective services or products, financial projections, future performance or results of current and anticipated services or products, sales efforts, expenses, the outcome of contingencies such as legal proceedings, as well as trends in operating and financial results.

Any or all forward-looking statements may turn out to be wrong. They can be affected by inaccurate assumptions or by known or unknown risks and uncertainties. Many such factors will be important in determining the actual future results of Brighthouse Financial. These statements are based on current expectations and the current economic environment and involve a number of risks and uncertainties that are difficult to predict. These statements are not guarantees of future performance. Actual results could differ materially from those expressed or implied in the forward-looking statements due to a variety of known and unknown risks, uncertainties and other factors. Although it is not possible to identify all of these risks and factors, they include, among others: the impact of the ongoing COVID-19 pandemic; differences between actual experience and actuarial assumptions and the effectiveness of our actuarial models; higher risk management costs and exposure to increased market risk due to guarantees within certain of our products; the effectiveness of our variable annuity exposure risk management strategy and the impact of such strategy on volatility in our profitability measures and negative effects on our statutory capital; the reserves we are required to hold against our variable annuities as a result of actuarial guidelines; the potential material adverse effect of changes in accounting standards, practices and/or policies applicable to us, including changes in the accounting for long-duration contracts; our degree of leverage due to indebtedness; the impact of adverse capital and credit market conditions, including with respect to our ability to meet liquidity needs and access capital; the impact of changes in regulation and in supervisory and enforcement policies on our insurance business or other operations; the availability of reinsurance and the ability of the counterparties to our reinsurance or indemnification arrangements to perform their obligations thereunder; the adverse impact to liabilities for policyholder claims as a result of extreme mortality events; heightened competition, including with respect to service, product features, scale, price, actual or perceived financial strength, claims-paying ratings, credit ratings, e-business capabilities and name recognition; any failure of third parties to provide services we need, any failure of the practices and procedures of such third parties and any inability to obtain information or assistance we need from third parties; the ability of our insurance subsidiaries to pay dividends to us, and our ability to pay dividends to our shareholders and repurchase our common stock; the effectiveness of our policies and procedures in managing risk; our ability to market and distribute our products through distribution channels; whether all or any portion of the tax consequences of our separation from MetLife, Inc. (“MetLife”) are not as expected, leading to material additional taxes or material adverse consequences to tax attributes that impact us; the uncertainty of the outcome of any disputes with MetLife over tax-related or other matters and agreements or disagreements regarding MetLife’s or our obligations under our other agreements; the potential material negative tax impact of potential future tax legislation that could make some of our products less attractive to consumers; and other factors described from time to time in documents that we file with the U.S. Securities and Exchange Commission (the “SEC”).

For the reasons described above, we caution you against relying on any forward-looking statements, which should also be read in conjunction with the other cautionary statements included and the risks, uncertainties and other factors identified in our Annual Report on Form 10-K for the year ended December 31, 2019, particularly in the sections entitled “Risk Factors” and “Quantitative and Qualitative Disclosures About Market Risk,” as well as in our other subsequent filings with the SEC. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update or revise any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events, except as otherwise may be required by law.

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Financial Supplement
A-2



Non-GAAP and Other Financial Disclosures

Our definitions of the non-GAAP and other financial measures may differ from those used by other companies.

Non-GAAP Financial Disclosures

We present certain measures of our performance that are not calculated in accordance with GAAP. We believe that these non-GAAP financial measures highlight our results of operations and the underlying profitability drivers of our business, as well as enhance the understanding of our performance by the investor community.

The following non-GAAP financial measures, previously referred to as operating measures, should not be viewed as substitutes for the most directly comparable financial measures calculated in accordance with GAAP:
Non-GAAP financial measures:Most directly comparable GAAP financial measures:
(i)adjusted earnings(i)net income (loss) available to shareholders (1)
(ii)adjusted earnings, less notable items(ii)net income (loss) available to shareholders (1)
(iii)adjusted revenues(iii)revenues
(iv)adjusted expenses(iv)expenses
(v)adjusted earnings per common share(v)earnings per common share, diluted (1)
(vi)adjusted earnings per common share, less notable items(vi)earnings per common share, diluted (1)
(vii)adjusted return on common equity(vii)return on common equity (2)
(viii)adjusted return on common equity, less notable items(viii)return on common equity (2)
(ix)adjusted net investment income (ix)net investment income
__________________
(1) Brighthouse uses net income (loss) available to shareholders to refer to net income (loss) available to Brighthouse Financial, Inc.’s common shareholders, and earnings per common share, diluted to refer to net income (loss) available to shareholders per common share.
(2) Brighthouse uses return on common equity to refer to return on Brighthouse Financial, Inc.’s common stockholders' equity.

Reconciliations to the most directly comparable historical GAAP measures are included for those measures which are presented herein. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are not accessible on a forward-looking basis because we believe it is not possible without unreasonable efforts to provide other than a range of net investment gains and losses and net derivative gains and losses, which can fluctuate significantly within or outside the range and from period to period and may have a material impact on net income (loss) available to shareholders.

Adjusted Earnings, Adjusted Revenues and Adjusted Expenses

Adjusted earnings, which may be positive or negative, is used by management to evaluate performance, allocate resources and facilitate comparisons to industry results. This financial measure focuses on our primary businesses principally by excluding the impact of market volatility, which could distort trends.

Adjusted earnings reflects adjusted revenues less adjusted expenses, both net of income tax, and excludes net income (loss) attributable to noncontrolling interests and preferred stock dividends. Provided below are the adjustments to GAAP revenues and GAAP expenses used to calculate adjusted revenues and adjusted expenses, respectively.

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A-3



Non-GAAP and Other Financial Disclosures (Cont.)


The following are significant items excluded from total revenues, net of income tax, in calculating the adjusted revenues component of adjusted earnings:

Net investment gains (losses);

Net derivative gains (losses), except earned income and amortization of premium on derivatives that are hedges of investments or that are used to replicate certain investments, but do not qualify for hedge accounting treatment (“Investment Hedge Adjustments”); and

Certain variable annuity GMIB fees (“GMIB Fees”).

The following are significant items excluded from total expenses, net of income tax, in calculating the adjusted expenses component of adjusted earnings:

Amounts associated with benefits related to GMIBs (“GMIB Costs”);

Amounts associated with periodic crediting rate adjustments based on the total return of a contractually referenced pool of assets and market value adjustments associated with surrenders or terminations of contracts (“Market Value Adjustments”); and

Amortization of DAC and VOBA related to (i) net investment gains (losses), (ii) net derivative gains (losses), (iii) GMIB Fees and GMIB Costs and (iv) Market Value Adjustments.

The tax impact of the adjustments mentioned is calculated net of the statutory tax rate, which could differ from our effective tax rate.

Consistent with GAAP guidance for segment reporting, adjusted earnings is also our GAAP measure of segment performance.


Adjusted Earnings per Common Share and Adjusted Return on Common Equity

Adjusted earnings per common share and adjusted return on common equity are measures used by management to evaluate the execution of our business strategy and align such strategy with our shareholders’ interests.

Adjusted earnings per common share is defined as adjusted earnings for the period divided by the weighted average number of fully diluted shares of common stock outstanding for the period. The weighted average common shares outstanding used to calculate adjusted earnings per share will differ from such shares used to calculate diluted net income (loss) available to shareholders per common share when the inclusion of dilutive shares has an anti-dilutive effect for one calculation but not for the other.

Adjusted return on common equity is defined as total annual adjusted earnings on a four quarter trailing basis, divided by the simple average of the most recent five quarters of total Brighthouse Financial, Inc.’s common stockholders’ equity, excluding AOCI.

Adjusted Net Investment Income

We present adjusted net investment income to measure our performance for management purposes, and we believe it enhances the understanding of our investment portfolio results. Adjusted net investment income represents net investment income including investment hedge adjustments.

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A-4



Non-GAAP and Other Financial Disclosures (Cont.)


Other Financial Disclosures

Corporate Expenses

Corporate expenses includes functional department expenses, public company expenses, certain investment expenses, retirement funding and incentive compensation; and excludes establishment costs.

Notable items

Certain of the non-GAAP measures described above may be presented further adjusted to exclude notable items. Notable items reflect the impact on our results of certain unanticipated items and events, as well as certain items and events that were anticipated, such as establishment costs. The presentation of notable items and non-GAAP measures, less notable items is intended to help investors better understand our results and to evaluate and forecast those results.

Book Value per Common Share and Book Value per Common Share, excluding AOCI

Brighthouse uses the term “book value” to refer to “Brighthouse Financial, Inc.’s common stockholders’ equity, including AOCI.” Book value per common share is defined as ending Brighthouse Financial, Inc.’s common stockholders’ equity, including AOCI, divided by ending common shares outstanding. Book value per common share, excluding AOCI, is defined as ending Brighthouse Financial, Inc.’s common stockholders’ equity, excluding AOCI, divided by ending common shares outstanding.

CTE95

CTE95 is defined as the amount of assets required to satisfy contract holder obligations across market environments in the average of the worst five percent of a set of capital market scenarios over the life of the contracts.

CTE98

CTE98 is defined as the amount of assets required to satisfy contract holder obligations across market environments in the average of the worst two percent of a set of capital market scenarios over the life of the contracts.

Holding Company Liquid Assets

Holding company liquid assets include liquid assets in Brighthouse Financial, Inc., Brighthouse Holdings, LLC, and Brighthouse Services, LLC. Liquid assets include cash and cash equivalents, short-term investments and publicly traded securities excluding assets that are pledged or otherwise committed. Assets pledged or otherwise committed include amounts received in connection with derivatives and collateral financing arrangements.

Total Adjusted Capital

Total adjusted capital primarily consists of statutory capital and surplus, as well as the statutory asset valuation reserve. When referred to as “combined,” represents that of our insurance subsidiaries as a whole.
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Financial Supplement
A-5



Non-GAAP and Other Financial Disclosures (Cont.)


Other Financial Disclosures (cont.)

Sales

Life insurance sales consist of 100 percent of annualized new premium for term life, first-year paid premium for whole life, universal life, and variable universal life, and total paid premium for indexed universal life. We exclude company-sponsored internal exchanges, corporate-owned life insurance, bank-owned life insurance, and private placement variable universal life.

Annuity sales consist of 100 percent of direct statutory premiums, except for fixed indexed annuity sales distributed through MassMutual that consist of 90 percent of gross sales. Annuity sales exclude certain internal exchanges. These sales statistics do not correspond to revenues under GAAP, but are used as relevant measures of business activity.

Net Investment Income Yield

Similar to adjusted net investment income, we present net investment income yields as a performance measure we believe enhances the understanding of our investment portfolio results. Net investment income yields are calculated on adjusted net investment income as a percent of average quarterly asset carrying values. Asset carrying values exclude unrealized gains (losses), collateral received in connection with our securities lending program, freestanding derivative assets and collateral received from derivative counterparties. Investment fee and expense yields are calculated as investment fees and expenses as a percent of average quarterly asset estimated fair values. Asset estimated fair values exclude collateral received in connection with our securities lending program, freestanding derivative assets and collateral received from derivative counterparties.

Normalized Statutory Earnings (Loss)

Normalized statutory earnings (loss) is used by management to measure our insurance companies’ ability to pay future distributions and is reflective of whether our hedging program functions as intended. Normalized statutory earnings (loss) is calculated as statutory pre-tax net gain from operations adjusted for the favorable or unfavorable impacts of (i) net realized capital gains (losses), (ii) the change in both the reserve-based and capital methodology-based CTE95 calculation, net of the change in our variable annuity reserves, and (iii) unrealized gains (losses) associated with our variable annuities risk management strategy. Normalized statutory earnings (loss) may be further adjusted for certain unanticipated items that impacted our results in order to help management and investors better understand, evaluate and forecast those results.

Risk-Based Capital Ratio

The risk-based capital ratio is a method of measuring an insurance company’s capital, taking into consideration its relative size and risk profile, in order to ensure compliance with minimum regulatory capital requirements set by the National Association of Insurance Commissioners. When referred to as “combined,” represents that of our insurance subsidiaries as a whole. The reporting of our combined risk-based capital ratio is not intended for the purpose of ranking any insurance company or for use in connection with any marketing, advertising or promotional activities.



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Financial Supplement
A-6



Acronyms

AOCIAccumulated other comprehensive income (loss)
CTEConditional tail expectations
DACDeferred policy acquisition costs
FHLBFederal Home Loan Bank
GAAPAccounting principles generally accepted in the United States of America
GMABGuaranteed minimum accumulation benefits
GMDBGuaranteed minimum death benefits
GMIBGuaranteed minimum income benefits
GMWBGuaranteed minimum withdrawal benefits
LIMRALife Insurance Marketing and Research Association
NDGLNet derivative gains (losses)
NIGLNet investment gains (losses)
RBCRisk-based capital
TACTotal adjusted capital
ULSGUniversal life insurance with secondary guarantees
VAVariable annuity
VOBAValue of business acquired

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Financial Supplement
A-7



Reconciliation of Net Income (Loss) Available to Shareholders to Adjusted Earnings and Adjusted Earnings, Less Notable Items, and Reconciliation of Net Income (Loss) Available to Shareholders per Common Share to Adjusted Earnings per Common Share and Adjusted Earnings, Less Notable Items per Common Share (Unaudited, in millions except per share data)

For the Three Months Ended
ADJUSTED EARNINGS, LESS NOTABLE ITEMSSeptember 30,
2020
June 30,
2020
March 31,
2020
December 31,
2019
September 30,
2019
Net income (loss) available to shareholders$(3,012)$(1,998)$4,950$(1,077)$676
Less: Net investment gains (losses)5(34)(19)3327
Less: Net derivative gains (losses), excluding investment hedge adjustments(1,862)(2,657)6,898(1,897)1,057
Less: GMIB Fees and GMIB Costs(957)(125)(166)34(4)
Less: Amortization of DAC and VOBA(86)249(671)932
Less: Market value adjustments and other(41)24(43)17(14)
Less: Provision for income tax (expense) benefit on reconciling adjustments618534(1,260)361(223)
Adjusted earnings(689)11211282(169)
Less: Notable items(1,077)(28)(62)17(429)
Adjusted earnings, less notable items$388$39$273$265$260
ADJUSTED EARNINGS, LESS NOTABLE ITEMS PER COMMON SHARE (1), (2)
Net income (loss) available to shareholders per common share$(32.49)$(21.10)$47.11$(10.02)$6.06
Less: Net investment gains (losses)0.05(0.36)(0.18)0.310.24
Less: Net derivative gains (losses), excluding investment hedge adjustments(20.09)(28.06)65.64(17.65)9.48
Less: GMIB Fees and GMIB Costs(10.32)(1.32)(1.58)0.32(0.04)
Less: Amortization of DAC and VOBA(0.93)2.63(6.38)0.870.02
Less: Market value adjustments and other(0.44)0.25(0.41)0.16(0.13)
Less: Provision for income tax (expense) benefit on reconciling adjustments6.675.64(11.99)3.36(2.00)
Less: Impact of inclusion of dilutive shares0.01
Adjusted earnings per common share(7.43)0.112.012.61(1.52)
Less: Notable items(11.62)(0.30)(0.59)0.16(3.85)
Adjusted earnings, less notable items per common share$4.19$0.41$2.60$2.46$2.33
(1) See definitions for Non-GAAP and Other Financial Disclosures in this Appendix.
(2) Per share calculations are on a diluted basis and may not recalculate or foot due to rounding. For loss periods, dilutive shares were not included in the calculation as inclusion of such shares would have an anti-dilutive effect.

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Financial Supplement
A-8



Reconciliation of Return on Common Equity to Adjusted Return on Common Equity (Unaudited, dollars in millions)

Four Quarters Cumulative Trailing Basis
ADJUSTED EARNINGSSeptember 30,
2020
June 30,
2020
March 31,
2020
December 31,
2019
September 30,
2019
Net income (loss) available to shareholders$(1,137)$2,551$4,926$(761)$1,758
Less: Net investment gains (losses)(15)7104112(7)
Less: Net derivative gains (losses), excluding investment hedge adjustments4823,4016,207(1,994)1,941
Less: GMIB Fees and GMIB Costs(1,214)(261)(158)43(128)
Less: Amortization of DAC and VOBA(415)(327)(593)153(173)
Less: Market value adjustments and other(43)(16)(56)(36)(54)
Less: Provision for income tax (expense) benefit on reconciling adjustments253(588)(1,156)362(324)
Adjusted earnings$(185)$335$578$599$503
Five Quarters Average Stockholders' Equity Basis
BRIGHTHOUSE FINANCIAL, INC.’S COMMON STOCKHOLDERS’ EQUITY, EXCLUDING AOCISeptember 30,
2020
June 30,
2020
March 31,
2020
December 31,
2019
September 30,
2019
Brighthouse Financial, Inc.’s stockholders’ equity$18,683$18,285$17,103$15,912$15,254
Less: Preferred stock, net568490412330247
Brighthouse Financial, Inc.’s common stockholders’ equity18,11517,79516,69115,58215,007
Less: AOCI3,9603,4242,7652,3791,841
Brighthouse Financial, Inc.’s common stockholders’ equity, excluding AOCI$14,155$14,371$13,926$13,203$13,166
Five Quarters Average Common Stockholders' Equity Basis
ADJUSTED RETURN ON COMMON EQUITYSeptember 30,
2020
June 30,
2020
March 31,
2020
December 31,
2019
September 30,
2019
Return on common equity(6.3)%14.3%29.5%(4.9)%11.7%
Return on AOCI(28.7)%74.5%178.2%(32.0)%95.5%
Return on common equity, excluding AOCI(8.0)%17.8%35.4%(5.8)%13.4%
Less: Return on net investment gains (losses)(0.1)%—%0.7%0.8%—%
Less: Return on net derivative gains (losses), excluding investment hedge adjustments3.4%23.7%44.6%(15.1)%14.7%
Less: Return on GMIB Fees and GMIB Costs(8.6)%(1.8)%(1.1)%0.3%(0.9)%
Less: Return on amortization of DAC and VOBA(2.9)%(2.3)%(4.3)%1.2%(1.3)%
Less: Return on market value adjustments and other(0.3)%—%(0.4)%(0.2)%(0.4)%
Less: Return on provision for income tax (expense) benefit on reconciling adjustments1.8%(4.1)%(8.3)%2.7%(2.5)%
Adjusted return on common equity(1.3)%2.3%4.2%4.5%3.8%

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Financial Supplement
A-9



Reconciliation of Total Revenues to Adjusted Revenues and Reconciliation of Total Expenses to Adjusted Expenses (Unaudited, in millions)

For the Three Months EndedFor the Nine Months Ended
September 30,
2020
June 30,
2020
March 31,
2020
December 31,
2019
September 30,
2019
September 30,
2020
September 30,
2019
Total revenues$309$(922)$8,985$306$3,187$8,372$6,248
Less: Net investment gains (losses)5(34)(19)3327(48)79
Less: Net derivative gains (losses)(1,857)(2,653)6,902(1,891)1,0572,392(97)
Less: GMIB Fees6863656667196198
Less: Investment hedge adjustments(5)(4)(4)(6)(13)
Less: Other(1)11011
Total adjusted revenues$2,099$1,706$2,040$2,094$2,035$5,845$6,067
Total expenses$4,152$1,600$2,733$1,678$2,383$8,485$5,928
Less: Amortization of DAC and VOBA86(249)671(93)(2)508(60)
Less: GMIB Costs1,02518823132711,444189
Less: Other40(24)44(7)156054
Total adjusted expenses$3,001$1,685$1,787$1,746$2,299$6,473$5,745

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Financial Supplement
A-10



Investment Reconciliation Details (Unaudited, dollars in millions)

For the Three Months EndedFor the Nine Months Ended
NET INVESTMENT GAINS (LOSSES)September 30,
2020
June 30,
2020
March 31,
2020
December 31,
2019
September 30,
2019
September 30,
2020
September 30,
2019
Investment portfolio gains (losses)$2$(13)$2$43$30$(9)$90
Investment portfolio writedowns3(21)(21)(10)(3)(39)(11)
Net investment gains (losses)$5$(34)$(19)$33$27$(48)$79


For the Three Months Ended
NET INVESTMENT INCOME YIELDSeptember 30,
2020
June 30,
2020
March 31,
2020
December 31,
2019
September 30,
2019
Investment income yield (1)4.56%3.11%4.44%4.43%4.62%
Investment fees and expenses (2)(0.14)%(0.13)%(0.14)%(0.11)%(0.10)%
Net investment income yield4.42%2.98%4.30%4.32%4.52%
(1) Yields are calculated on investment income as a percent of average quarterly asset carrying values. Investment income includes investment hedge adjustments, excludes realized gains and losses and reflects the GAAP adjustments described beginning on page A-1 of this Appendix. Asset carrying values exclude unrealized gains (losses), collateral received in connection with our securities lending program, freestanding derivative assets and collateral received from derivative counterparties.
(2) Investment fee and expense yields are calculated as investment fees and expenses as a percent of average quarterly asset estimated fair values. Asset estimated fair values exclude collateral received in connection with our securities lending program, freestanding derivative assets and collateral received from derivative counterparties.

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