What changed in this filing

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Item 1. Financial Statements

2021-08-06 compared with 2021-05-10 · 350 added, 112 removed, 1379 unchanged (25% of the section changed)

2 unchanged sentences

Interim Condensed Consolidated Balance Sheets

March 31, 2021 (Unaudited) and December 31, 2020

June 30, 2021 (Unaudited) and December 31, 2020

(In millions, except share and per share data)

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Fixed maturity securities available-for-sale, at estimated fair value (amortized cost:

54 unchanged sentences

Interim Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

For the Three Months Ended March 31, 2021 and 2020 (Unaudited)

For the Three Months and Six Months Ended June 30, 2021 and 2020 (Unaudited)

(In millions, except per share data)

Three Months Ended

June 30, Six Months Ended

2021 2020 2021 2020

Premiums $ 162 $ 193 $ 346 $ 391

28 unchanged sentences

Interim Condensed Consolidated Statements of Equity

For the Three Months Ended March 31, 2021 and 2020 (Unaudited)

For the Three Months and Six Months Ended June 30, 2021 and 2020 (Unaudited)

(In millions)

16 unchanged sentences

Balance at March 31, 2021 — 1 13,858 ( 1,119 ) ( 1,112 ) 3,389 15,017 65 15,082

Treasury stock acquired in connection with share repurchases

( 124 ) ( 124 ) ( 124 )

Share-based compensation

Dividends on preferred stock

( 21 ) ( 21 ) ( 21 )

Change in noncontrolling interests

Net income (loss)

Other comprehensive income (loss), net of income tax

1,207 1,207 1,207

Balance at June 30, 2021 $ — $ 1 $ 13,842 $ ( 1,088 ) $ ( 1,236 ) $ 4,596 $ 16,115 $ 65 $ 16,180

Preferred Stock Common Stock Additional Paid-in Capital Retained Earnings (Deficit) Treasury Stock at Cost Accumulated

15 unchanged sentences

Balance at March 31, 2020 — 1 12,911 5,521 ( 706 ) 2,647 20,374 65 20,439

Preferred stock issuance

— 390 390 390

Treasury stock acquired in connection with share repurchases

( 180 ) ( 180 ) ( 180 )

Share-based compensation

— 6 ( 1 ) 5 5

Dividends on preferred stock

( 7 ) ( 7 ) ( 7 )

Change in noncontrolling interests

Net income (loss)

( 1,991 ) ( 1,991 ) — ( 1,991 )

Other comprehensive income (loss), net of income tax

2,318 2,318 2,318

Balance at June 30, 2020 $ — $ 1 $ 13,307 $ 3,523 $ ( 887 ) $ 4,965 $ 20,909 $ 65 $ 20,974

See accompanying notes to the interim condensed consolidated financial statements.

1 unchanged sentence

Interim Condensed Consolidated Statements of Cash Flows

For the Three Months Ended March 31, 2021 and 2020 (Unaudited)

For the Six Months Ended June 30, 2021 and 2020 (Unaudited)

(In millions)

Three Months Ended

Six Months Ended

Net cash provided by (used in) operating activities $ 69 $ 467

22 unchanged sentences

Net change in payables for collateral under securities loaned and other transactions ( 109 ) 3,485

Long-term debt issued — 614

Long-term debt repaid ( 1 ) ( 1,001 )

Preferred stock issued, net of issuance costs — 390

Dividends on preferred stock ( 46 ) ( 14 )

42 unchanged sentences

The Company considers the applicability and impact of all ASUs.

There were no ASUs adopted during the first quarter of 2021.

There were no ASUs adopted as of June 30, 2021.

Brighthouse Financial, Inc.

18 unchanged sentences

Corporate & Other contains the excess capital not allocated to the segments and interest expense related to the Company’s outstanding debt, as well as expenses associated with certain legal proceedings and income tax audit issues.

Corporate & Other also includes long-term care and workers’ compensation business reinsured through 100% quota share reinsurance agreements and term life insurance sold direct to consumers, which is no longer being offered for new sales.

Corporate & Other also includes long-term care and workers’ compensation business reinsured through 100% quota share reinsurance agreements, activities related to funding agreements associated with the Company’s institutional spread margin business, as well as direct-to-consumer life insurance that is no longer actively sold.

Financial Measures and Segment Accounting Policies

26 unchanged sentences

Operating results by segment, as well as Corporate & Other, were as follows:

Three Months Ended March 31, 2021

Three Months Ended June 30, 2021

Annuities Life Run-off Corporate & Other Total

17 unchanged sentences

Segment Information (continued)

Three Months Ended March 31, 2020

Three Months Ended June 30, 2020

Annuities Life Run-off Corporate & Other Total

14 unchanged sentences

Interest expense $ — $ — $ — $ 45

Six Months Ended June 30, 2021

Annuities Life Run-off Corporate & Other Total

(In millions)

Pre-tax adjusted earnings $ 831 $ 137 $ 225 $ ( 143 ) $ 1,050

Provision for income tax expense (benefit) 157 27 27 ( 29 ) 182

Post-tax adjusted earnings 674 110 198 ( 114 ) 868

Net income (loss) attributable to noncontrolling interests — — — 2 2

Preferred stock dividends — — — 46 46

Adjusted earnings $ 674 $ 110 $ 198 $ ( 162 ) 820

Adjustments for:

Net investment gains (losses) ( 20 )

Net derivative gains (losses) ( 2,188 )

Other adjustments to net income (loss) 411

Provision for income tax (expense) benefit 377

Net income (loss) available to Brighthouse Financial, Inc.’s common shareholders

Interest revenue $ 1,083 $ 334 $ 961 $ 31

Interest expense $ — $ — $ — $ 81

Brighthouse Financial, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued)

Segment Information (continued)

Six Months Ended June 30, 2020

Annuities Life Run-off Corporate & Other Total

(In millions)

Pre-tax adjusted earnings $ 594 $ 73 $ ( 236 ) $ ( 157 ) $ 274

Provision for income tax expense (benefit) 107 14 ( 51 ) ( 34 ) 36

Post-tax adjusted earnings 487 59 ( 185 ) ( 123 ) 238

Net income (loss) attributable to noncontrolling interests — — — 2 2

Preferred stock dividends — — — 14 14

Adjusted earnings $ 487 $ 59 $ ( 185 ) $ ( 139 ) 222

Adjustments for:

Net investment gains (losses) ( 53 )

Net derivative gains (losses) 4,249

Other adjustments to net income (loss) ( 740 )

Provision for income tax (expense) benefit ( 726 )

Net income (loss) available to Brighthouse Financial, Inc.’s common shareholders

Interest revenue $ 865 $ 185 $ 490 $ 36

Interest expense $ — $ — $ — $ 92

Total revenues by segment, as well as Corporate & Other, were as follows:

Three Months Ended

June 30, Six Months Ended

2021 2020 2021 2020

(In millions)

Annuities $ 1,257 $ 1,052 $ 2,555 $ 2,203

Life 383 285 793 639

Run-off 662 332 1,290 825

3 unchanged sentences

Total assets by segment, as well as Corporate & Other, were as follows at:

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

(In millions)

10 unchanged sentences

Information regarding the Company’s guarantee exposure was as follows at:

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Event of Death At

9 unchanged sentences

Average attained age of contract holders 71 years 70 years 70 years 70 years

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Secondary Guarantees

24 unchanged sentences

It represents the amount of the claim that the Company would incur if death claims were filed on all contracts on the balance sheet date.

See Note 1 of the Notes to the Consolidated Financial Statements included in the 2020 Annual Report for a description of the Company’s accounting policies for investments and Note 6 for information about the fair value hierarchy for investments and the related valuation methodologies.

See Notes 1 and 8 of the Notes to the Consolidated Financial Statements included in the 2020 Annual Report for a description of the Company’s accounting policies for investments and the fair value hierarchy for investments and the related valuation methodologies.

Fixed Maturity Securities Available-for-sale

1 unchanged sentence

Fixed maturity securities by sector were as follows at:

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Cost Allowance for Credit Losses Gross Unrealized Estimated

12 unchanged sentences

Total fixed maturity securities $ 75,454 $ 9 $ 9,698 $ 358 $ 84,785 $ 70,529 $ 2 $ 12,117 $ 149 $ 82,495

The Company held non-income producing fixed maturity securities with an estimated fair value of $ 2 million and $ 5 million at March 31, 2021 and December 31, 2020, respectively.

The Company held non-income producing fixed maturity securities with an estimated fair value of $ 5 million at both June 30, 2021 and December 31, 2020.

Maturities of Fixed Maturity Securities

The amortized cost and estimated fair value of fixed maturity securities, by contractual maturity date, were as follows at March 31, 2021:

The amortized cost and estimated fair value of fixed maturity securities, by contractual maturity date, were as follows at June 30, 2021:

Year or Less Due After One

Five Years Due After Five

Years Through Ten Years Due After Ten

Years Through

Ten Years Due After Ten

Years Structured

13 unchanged sentences

The estimated fair value and gross unrealized losses of fixed maturity securities in an unrealized loss position, by sector and by length of time that the securities have been in a continuous unrealized loss position, were as follows at:

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Less than 12 Months 12 Months or Greater Less than 12 Months 12 Months or Greater

12 unchanged sentences

Total fixed maturity securities $ 9,732 $ 304 $ 858 $ 54 $ 3,347 $ 84 $ 1,267 $ 65

$ 12,245 $ 735 $ 1,132 $ 59 $ 3,347 $ 84 $ 1,267 $ 65

Total number of securities in an unrealized loss position 1,327 260 667 244

22 unchanged sentences

An allowance for credit losses is not estimated on an accrued interest receivable, rather receivable balances 90-days past due are deemed uncollectible and are written off with a corresponding reduction to net investment income.

The accrued interest receivable on fixed maturity securities totaled $ 566 million and $ 514 million at March 31, 2021 and December 31, 2020, respectively, and is included in accrued investment income.

The accrued interest receivable on fixed maturity securities totaled $ 527 million and $ 514 million at June 30, 2021 and December 31, 2020, respectively, and is included in accrued investment income.

Fixed maturity securities are also evaluated to determine if they qualify as purchased financial assets with credit deterioration (“PCD”).

6 unchanged sentences

Current Period Evaluation

Based on the Company’s current evaluation of its fixed maturity securities in an unrealized loss position and the current intent or requirement to sell, the Company recorded an allowance for credit losses of $ 8 million, relating to five securities at March 31, 2021.

Based on the Company’s current evaluation of its fixed maturity securities in an unrealized loss position and the current intent or requirement to sell, the Company recorded an allowance for credit losses of $ 9 million, relating to five securities at June 30, 2021.

Management concluded that for all other fixed maturity securities in an unrealized loss position, the unrealized loss was not due to issuer-specific credit-related factors and as a result was recognized in OCI.

5 unchanged sentences

(In millions)

Three Months Ended March 31, 2021

Six Months Ended June 30, 2021

Balance, beginning of period $ 2 $ — $ — $ 2

3 unchanged sentences

Balance, end of period $ 1 $ 6 $ 2 $ 9

Three Months Ended March 31, 2020

Six Months Ended June 30, 2020

Balance, beginning of period $ 3 $ 1 $ — $ 4

4 unchanged sentences

_______________

(1) The Company did no t record any write-offs during the three months ended March 31, 2021.

The Company recorded total write-offs of $ 12 million during the three months ended March 31, 2020.

(1) The Company did no t record any write-offs during the six months ended June 30, 2021.

The Company recorded total write-offs of $ 13 million during the six months ended June 30, 2020.

Brighthouse Financial, Inc.

4 unchanged sentences

Mortgage loans are summarized as follows at:

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Total Carrying

7 unchanged sentences

_______________

(1) Purchases of mortgage loans from third parties were $ 178 million and $ 157 million for the three months ended March 31, 2021 and 2020, respectively, and were primarily comprised of residential mortgage loans.

(1) Purchases of mortgage loans from third parties were $ 621 million and $ 799 million for the three months and six months ended June 30, 2021, respectively, and $ 331 million and $ 488 million for the three months and six months ended June 30, 2020, respectively, and were primarily comprised of residential mortgage loans.

Allowance for Credit Losses for Mortgage Loans

5 unchanged sentences

For mortgage loans that are granted payment deferrals due to the impact of the ongoing worldwide pandemic sparked by the novel coronavirus (“COVID-19 pandemic”), interest continues to be accrued during the deferral period if the loan was less than 30 days past due at December 31, 2019 and performing at the onset of the pandemic.

Accrued interest on COVID-19 pandemic impacted loans was not significant at both March 31, 2021 and December 31, 2020.

The accrued interest receivable on mortgage loans is included in accrued investment income and totaled $ 83 million and $ 89 million at March 31, 2021 and December 31, 2020, respectively.

Accrued interest on COVID-19 pandemic impacted loans was not significant at both June 30, 2021 and December 31, 2020.

The accrued interest receivable on mortgage loans is included in accrued investment income and totaled $ 88 million and $ 89 million at June 30, 2021 and December 31, 2020, respectively.

The allowance for credit losses is estimated using relevant available information, from internal and external sources, relating to past events, current conditions, and a reasonable and supportable forecast.

23 unchanged sentences

(In millions)

Three Months Ended March 31, 2021

Six Months Ended June 30, 2021

Balance, beginning of period $ 44 $ 15 $ 35 $ 94

1 unchanged sentence

Balance, end of period $ 47 $ 13 $ 37 $ 97

Three Months Ended March 31, 2020

Six Months Ended June 30, 2020

Balance, beginning of period $ 27 $ 17 $ 22 $ 66

2 unchanged sentences

PCD Mortgage Loans

The Company did no t purchase any PCD mortgage loans during both the three months ended March 31, 2021 and 2020.

Purchases of PCD mortgage loans are summarized as follows:

Six Months Ended June 30,

(In millions)

Purchase price $ 229 $ 77

Allowance at acquisition date 1 2

Discount or premium attributable to other factors ( 16 ) 2

Par value $ 214 $ 81

Brighthouse Financial, Inc.

5 unchanged sentences

(In millions)

March 31, 2021

June 30, 2021

Commercial mortgage loans

45 unchanged sentences

The amortized cost of commercial mortgage loans by debt-service coverage ratio was as follows at:

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Amortized Cost % of

10 unchanged sentences

Past Due Mortgage Loans by Portfolio Segment

The Company has a high-quality, well-performing mortgage loan portfolio, with over 99 % of all mortgage loans classified as performing at both March 31, 2021 and December 31, 2020.

The Company has a high-quality, well-performing mortgage loan portfolio, with over 99 % of all mortgage loans classified as performing at both June 30, 2021 and December 31, 2020.

Delinquency is defined consistent with industry practice, when mortgage loans are past due as follows:

2 unchanged sentences

To the extent a payment deferral is agreed to with a borrower, in response to the COVID-19 pandemic, the past due status of the impacted loans during the forbearance period is locked-in as of March 1, 2020, which reflects the date on which the COVID-19 pandemic began to affect the borrower’s ability to make payments.

At March 31, 2021 and December 31, 2020, $ 41 million and $ 38 million, respectively, of the COVID-19 pandemic modified loans were classified as delinquent.

At June 30, 2021 and December 31, 2020, $ 33 million and $ 38 million, respectively, of the COVID-19 pandemic modified loans were classified as delinquent.

The aging of the amortized cost of past due mortgage loans by portfolio segment was as follows at:

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Commercial Agricultural Residential Total Commercial Agricultural Residential Total

13 unchanged sentences

A COVID-19 pandemic modified loan is only reported as a nonaccrual asset in the event a borrower declares bankruptcy, the borrower experiences significant credit deterioration such that the Company does not expect to collect all principal and interest due, or the loan was 90 days past due at the onset of the pandemic.

At March 31, 2021 and December 31, 2020, $ 41 million and $ 38 million, respectively, of the COVID-19 pandemic modified loans were in nonaccrual status.

At June 30, 2021 and December 31, 2020, $ 33 million and $ 38 million, respectively, of the COVID-19 pandemic modified loans were in nonaccrual status.

The amortized cost of mortgage loans in a nonaccrual status by portfolio segment were as follows at:

1 unchanged sentence

(In millions)

March 31, 2021

June 30, 2021

$ — $ 14 $ 58 $ 72

2 unchanged sentences

_______________

(1) The Company had $ 10 million and $ 7 million of residential mortgage loans in nonaccrual status for which there was no related allowance for credit losses at March 31, 2021 and December 31, 2020, respectively.

Current period investment income on mortgage loans in nonaccrual status was less than $ 1 million for both the three months ended March 31, 2021 and 2020.

(1) The Company had $ 9 million and $ 7 million of residential mortgage loans in nonaccrual status for which there was no related allowance for credit losses at June 30, 2021 and December 31, 2020, respectively.

Current period investment income on mortgage loans in nonaccrual status was less than $ 1 million for both the six months ended June 30, 2021 and 2020.

Modified Mortgage Loans by Portfolio Segment

3 unchanged sentences

Generally, the types of concessions may include reducing the amount of debt owed, reducing the contractual interest rate, extending the maturity date at an interest rate lower than current market interest rates and/or reducing accrued interest.

The Company did not have a significant amount of mortgage loans modified in a troubled debt restructuring during both the three months ended March 31, 2021 and 2020.

The Company did not have a significant amount of mortgage loans modified in a troubled debt restructuring during both the six months ended June 30, 2021 and 2020.

Short-term modifications made on a good faith basis to borrowers who were not more than 30 days past due at December 31, 2019 and in response to the COVID-19 pandemic are not considered TDRs.

2 unchanged sentences

See Note 5 for information about freestanding derivatives with positive estimated fair values.

Other invested assets also includes tax credit and renewable energy partnerships, leveraged leases and Federal Home Loan Bank stock.

Other invested assets also includes tax credit and renewable energy partnerships, leveraged leases and Federal Home Loan Bank (“FHLB”) stock.

Leveraged Leases

The carrying value of leveraged leases and the allowance for credit losses were $ 50 million and $ 13 million, respectively, at both March 31, 2021 and December 31, 2020.

The carrying value of leveraged leases was $ 49 million and $ 50 million at June 30, 2021 and December 31, 2020, respectively.

The allowance for credit losses was $ 13 million at both June 30, 2021 and December 31, 2020.

Rental receivables are generally due in periodic installments.

2 unchanged sentences

Nonperforming rental receivables are generally defined as those that are 90 days or more past due.

At both March 31, 2021 and December 31, 2020, all leveraged leases were performing.

At both June 30, 2021 and December 31, 2020, all leveraged leases were performing.

Net Unrealized Investment Gains (Losses)

4 unchanged sentences

The components of net unrealized investment gains (losses), included in AOCI, were as follows at:

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

(In millions)

10 unchanged sentences

The changes in net unrealized investment gains (losses) were as follows:

Three Months Ended March 31, 2021

Six Months Ended June 30, 2021

(In millions)

5 unchanged sentences

Deferred income tax benefit (expense) 296

Balance at March 31, 2021 $ 3,442

Balance at June 30, 2021 $ 4,648

Change in net unrealized investment gains (losses) $ ( 1,113 )

1 unchanged sentence

There were no investments in any counterparty that were greater than 10% of the Company’s equity, other than the U.S.

government and its agencies, at both March 31, 2021 and December 31, 2020.

government and its agencies, at both June 30, 2021 and December 31, 2020.

Securities Lending

Elements of the securities lending program are presented below at:

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

(In millions)

3 unchanged sentences

Cash collateral received from counterparties (2) $ 4,025 $ 3,674

Securities collateral received from counterparties (3) $ 7 $ —

Reinvestment portfolio — estimated fair value $ 4,193 $ 3,830

5 unchanged sentences

Investments (continued)

(3) Securities collateral received from counterparties may not be sold or re-pledged, unless the counterparty is in default, and is not reported on the consolidated financial statements.

The cash collateral liability by loaned security type and remaining tenor of the agreements were as follows at:

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Open (1) 1 Month or Less 1 to 6 Months Total Open (1) 1 Month or Less 1 to 6 Months Total

6 unchanged sentences

If the Company is required to return significant amounts of cash collateral on short notice and is forced to sell securities to meet the return obligation, it may have difficulty selling such collateral that is invested in securities in a timely manner, be forced to sell securities in a volatile or illiquid market for less than what otherwise would have been realized in normal market conditions, or both.

The estimated fair value of the securities on loan related to the cash collateral on open at March 31, 2021 was $ 879 million, primarily comprised of U.S.

The estimated fair value of the securities on loan related to the cash collateral on open at June 30, 2021 was $ 1.2 billion, primarily comprised of U.S.

government and agency securities which, if put back to the Company, could be immediately sold to satisfy the cash requirement.

The reinvestment portfolio acquired with the cash collateral consisted principally of fixed maturity securities (including agency RMBS, ABS, U.S.

government and agency securities, U.S.

and foreign corporate securities and non-agency RMBS) with 56 % invested in agency RMBS, U.S.

government and agency securities and cash and cash equivalents at March 31, 2021.

government and agency securities, non-agency RMBS and U.S.

and foreign corporate securities) with 61 % invested in agency RMBS, cash and cash equivalents and U.S.

government and agency securities at June 30, 2021.

If the securities on loan or the reinvestment portfolio become less liquid, the Company has the liquidity resources of most of its general account available to meet any potential cash demands when securities on loan are put back to the Company.

1 unchanged sentence

Invested assets on deposit, held in trust and pledged as collateral at estimated fair value were as follows at:

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

(In millions)

4 unchanged sentences

_______________

(1) The Company has assets, primarily fixed maturity securities, on deposit with governmental authorities relating to certain policyholder liabilities, of which $ 61 million and $ 60 million of the assets on deposit represents restricted cash and cash equivalents at March 31, 2021 and December 31, 2020, respectively.

(2) The Company has assets, primarily fixed maturity securities, held in trust relating to certain reinsurance transactions, of which $ 74 million and $ 101 million of the assets held in trust balance represents restricted cash and cash equivalents at March 31, 2021 and December 31, 2020, respectively.

(1) The Company has assets, primarily fixed maturity securities, on deposit with governmental authorities relating to certain policyholder liabilities, of which $ 112 million and $ 60 million of the assets on deposit represents restricted cash and cash equivalents at June 30, 2021 and December 31, 2020, respectively.

(2) The Company has assets, primarily fixed maturity securities, held in trust relating to certain reinsurance transactions, of which $ 120 million and $ 101 million of the assets held in trust balance represents restricted cash and cash equivalents at June 30, 2021 and December 31, 2020, respectively.

(3) The Company has pledged invested assets in connection with various agreements and transactions, including funding agreements (see Note 3 of the Notes to the Consolidated Financial Statements included in the 2020 Annual Report) and derivative transactions (see Note 5).

See “— Securities Lending” for information regarding securities on loan.

In addition, the Company’s investment in FHLB common stock, which is considered restricted until redeemed by the issuer, was $ 63 million and $ 39 million at redemption value at June 30, 2021 and December 31, 2020, respectively.

Brighthouse Financial, Inc.

2 unchanged sentences

Variable Interest Entities

The Company has invested in legal entities that are variable interest entities (“VIE”).

VIEs are consolidated when the investor is the primary beneficiary.

A primary beneficiary is the variable interest holder in a VIE with both the power to (i) direct the activities of the VIE that most significantly impact the economic performance of the VIE and (ii) the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE.

There were no material VIEs for which the Company has concluded that it is the primary beneficiary at either March 31, 2021 or December 31, 2020.

A variable interest entity (“VIE”) is a legal entity that does not have sufficient equity at risk to finance its activities or is structured such that equity investors lack the ability to make significant decisions relating to the entity’s operations through voting rights or do not substantively participate in the gains and losses of the entity.

The Company enters into various arrangements with VIEs in the normal course of business and has invested in legal entities that are VIEs.

VIEs are consolidated when it is determined that the Company is the primary beneficiary.

A primary beneficiary is the variable interest holder in a VIE with both (i) the power to direct the activities of the VIE that most significantly impact the economic performance of the VIE and (ii) the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE.

In addition, the evaluation of whether a legal entity is a VIE and if the Company is a primary beneficiary includes a review of the capital structure of the VIE, the related contractual relationships and terms, the nature of the operations and purpose of the VIE, the nature of the VIE interests issued and the Company’s involvement with the entity.

There were no material VIEs for which the Company has concluded that it is the primary beneficiary at either June 30, 2021 or December 31, 2020.

The carrying amount and maximum exposure to loss related to the VIEs for which the Company has concluded that it holds a variable interest, but is not the primary beneficiary, were as follows at:

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Amount Maximum

28 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2021 2020 2021 2020

(In millions)

6 unchanged sentences

Cash, cash equivalents and short-term investments 1 14 3 37

Other 9 11 19 25

Total investment income 1,247 692 2,469 1,660

2 unchanged sentences

_______________

(1) Includes net investment income pertaining to other limited partnership interests of $ 331 million and $ 73 million for the three months ended March 31, 2021 and 2020, respectively.

(1) Includes net investment income pertaining to other limited partnership interests of $ 339 million and $ 670 million for the three months and six months ended June 30, 2021, respectively, and ($ 192 ) million and ($ 119 ) million for the three months and six months ended June 30, 2020, respectively.

Net Investment Gains (Losses)

2 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2021 2020 2021 2020

(In millions)

3 unchanged sentences

Limited partnerships and LLCs 1 ( 2 ) 1 ( 3 )

Other — 4 — 10

Total net investment gains (losses) $ ( 34 ) $ ( 34 ) $ ( 20 ) $ ( 53 )

6 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2021 2020 2021 2020

(In millions)

4 unchanged sentences

Accounting for Derivatives

See Note 1 of the Notes to the Consolidated Financial Statements included in the 2020 Annual Report for a description of the Company’s accounting policies for derivatives and Note 8 for information about the fair value hierarchy for derivatives.

See Notes 1 and 8 of the Notes to the Consolidated Financial Statements included in the 2020 Annual Report for a description of the Company’s accounting policies for derivatives and the fair value hierarchy for derivatives.

Derivative Strategies

16 unchanged sentences

The primary underlying risk exposure, gross notional amount and estimated fair value of derivatives held were as follows at:

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Primary Underlying Risk Exposure Gross

29 unchanged sentences

Total $ 106,998 $ 2,900 $ 9,815 $ 92,617 $ 3,865 $ 9,181

Based on gross notional amounts, a substantial portion of the Company’s derivatives was not designated or did not qualify as part of a hedging relationship at both March 31, 2021 and December 31, 2020.

Based on gross notional amounts, a substantial portion of the Company’s derivatives was not designated or did not qualify as part of a hedging relationship at both June 30, 2021 and December 31, 2020.

The Company’s use of derivatives includes (i) derivatives that serve as macro hedges of the Company’s exposure to various risks and generally do not qualify for hedge accounting because they do not meet the criteria required under portfolio hedging rules;

8 unchanged sentences

(In millions)

Three Months Ended March 31, 2021

Three Months Ended June 30, 2021

Derivatives Designated as Hedging Instruments:

11 unchanged sentences

Total $ ( 682 ) $ ( 2 ) $ 9 $ 114

Three Months Ended March 31, 2020

Three Months Ended June 30, 2020

Derivatives Designated as Hedging Instruments:

11 unchanged sentences

Total $ ( 2,648 ) $ ( 5 ) $ 10 $ ( 140 )

At both March 31, 2021 and December 31, 2020, the maximum length of time over which the Company was hedging its exposure to variability in future cash flows for forecasted transactions was three years.

At March 31, 2021 and December 31, 2020, the balance in AOCI associated with cash flow hedges was $ 98 million and $ 173 million, respectively.

Brighthouse Financial, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued)

Derivatives (continued)

Net Derivative Gains (Losses) Recognized for Derivatives Net Derivative Gains (Losses) Recognized for Hedged Items Net Investment Income Amount of Gains (Losses) Deferred in AOCI

(In millions)

Six Months Ended June 30, 2021

Derivatives Designated as Hedging Instruments:

Cash flow hedges:

Interest rate derivatives $ 1 $ — $ 2 $ ( 33 )

Foreign currency exchange rate derivatives 8 ( 3 ) 16 79

Total cash flow hedges 9 ( 3 ) 18 46

Derivatives Not Designated or Not Qualifying as Hedging Instruments:

Interest rate derivatives ( 1,190 ) — — —

Foreign currency exchange rate derivatives 11 1 — —

Credit derivatives 11 — — —

Equity derivatives ( 448 ) — — —

Embedded derivatives ( 579 ) — — —

Total non-qualifying hedges ( 2,195 ) 1 — —

Total $ ( 2,186 ) $ ( 2 ) $ 18 $ 46

Six Months Ended June 30, 2020

Derivatives Designated as Hedging Instruments:

Cash flow hedges:

Interest rate derivatives $ 1 $ — $ 1 $ 93

Foreign currency exchange rate derivatives 3 ( 3 ) 21 327

Total cash flow hedges 4 ( 3 ) 22 420

Derivatives Not Designated or Not Qualifying as Hedging Instruments:

Interest rate derivatives 4,756 — — —

Foreign currency exchange rate derivatives 107 ( 9 ) — —

Credit derivatives ( 3 ) — — —

Equity derivatives 359 — — —

Embedded derivatives ( 962 ) — — —

Total non-qualifying hedges 4,257 ( 9 ) — —

Total $ 4,261 $ ( 12 ) $ 22 $ 420

At June 30, 2021 and December 31, 2020, the maximum length of time over which the Company was hedging its exposure to variability in future cash flows for forecasted transactions was two years and three years, respectively.

At June 30, 2021 and December 31, 2020, the balance in AOCI associated with cash flow hedges was $ 208 million and $ 173 million, respectively.

Credit Derivatives

In connection with synthetically created credit investment transactions, the Company writes credit default swaps for which it receives a premium to insure credit risk.

4 unchanged sentences

The estimated fair value, maximum amount of future payments and weighted average years to maturity of written credit default swaps were as follows at:

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Rating Agency Designation of Referenced Credit Obligations (1) Estimated

11 unchanged sentences

Baa 27 1,081 5.2 26 1,072 5.2

Ba — 6 4.5 — — —

Caa and Lower ( 1 ) 4 4.5 — — —

Total $ 40 $ 1,774 4.1 $ 41 $ 1,755 4.3

17 unchanged sentences

(In millions)

March 31, 2021

June 30, 2021

Derivative assets $ 2,685 $ ( 1,326 ) $ ( 1,004 ) $ 355 $ ( 305 ) $ 50

5 unchanged sentences

(1) Represents amounts subject to an enforceable master netting agreement or similar agreement.

(2) The amount of cash collateral offset in the table above is limited to the net estimated fair value of derivatives after application of netting agreement.

Brighthouse Financial, Inc.

1 unchanged sentence

Derivatives (continued)

(2) The amount of cash collateral offset in the table above is limited to the net estimated fair value of derivatives after application of netting agreement.

(3) Securities collateral received from counterparties is not reported on the consolidated balance sheets and may not be sold or re-pledged unless the counterparty is in default.

3 unchanged sentences

The aggregate estimated fair values of derivatives in a net liability position containing such credit-contingent provisions and the aggregate estimated fair value of assets posted as collateral for such instruments were as follows at:

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

(In millions)

12 unchanged sentences

Investments that do not have a readily determinable fair value and are measured at net asset value (or equivalent) as a practical expedient to estimated fair value are excluded from the fair value hierarchy.

March 31, 2021

June 30, 2021

Fair Value Hierarchy Total Estimated

89 unchanged sentences

Price adjustments are applied if prices or quotes received from independent pricing services or brokers are not considered reflective of market activity or representative of estimated fair value.

The Company did not have significant price adjustments during the three months ended March 31, 2021.

The Company did not have significant price adjustments during the six months ended June 30, 2021.

Determination of Fair Value

16 unchanged sentences

Fair value is determined using third-party commercial pricing services, with the primary inputs being quoted prices in markets that are not active, spreads for actively traded securities, spreads off benchmark yields, expected prepayment speeds and volumes, current and forecasted loss severity, ratings, geographic region, weighted average coupon and weighted average maturity, average delinquency rates and debt-service coverage ratios.

Other issuance-specific information is also used, including, but not limited to;

collateral type, structure of the security, vintage of the loans, payment terms of the underlying asset, payment priority within tranche, and deal performance.

Other issuance-specific information is also used, including, but not limited to, collateral type, structure of the security, vintage of the loans, payment terms of the underlying asset, payment priority within tranche, and deal performance.

Equity Securities and Short-term Investments

56 unchanged sentences

Certain quantitative information about the significant unobservable inputs used in the fair value measurement, and the sensitivity of the estimated fair value to changes in those inputs, for the more significant asset and liability classes measured at fair value on a recurring basis using significant unobservable inputs (Level 3) were as follows at:

March 31, 2021 December 31, 2020 Impact of

June 30, 2021 December 31, 2020 Impact of

Increase in Input

50 unchanged sentences

(In millions)

Three Months Ended March 31, 2021

Three Months Ended June 30, 2021

Balance, beginning of period

11 unchanged sentences

Balance, end of period $ 889 $ 217 $ — $ 12 $ 3 $ — $ 20 $ ( 7,715 ) $ —

Three Months Ended March 31, 2020

Three Months Ended June 30, 2020

Balance, beginning of period

11 unchanged sentences

Balance, end of period $ 894 $ 173 $ — $ — $ 4 $ — $ 20 $ ( 5,326 ) $ 3

Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at March 31, 2021 (9)

Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at June 30, 2021 (9)

$ — $ — $ — $ — $ — $ — $ 3 $ ( 1,104 ) $ —

Changes in unrealized gains (losses) included in other comprehensive income for the instruments still held at March 31, 2021 (9)

Changes in unrealized gains (losses) included in other comprehensive income for the instruments still held at June 30, 2021 (9)

$ 21 $ 1 $ — $ — $ — $ — $ 10 $ — $ —

Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at March 31, 2020 (9)

Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at June 30, 2020 (9)

$ — $ — $ — $ — $ — $ — $ 3 $ ( 928 ) $ —

Changes in unrealized gains (losses) included in other comprehensive income for the instruments still held at March 31, 2020 (9)

Changes in unrealized gains (losses) included in other comprehensive income for the instruments still held at June 30, 2020 (9)

$ 58 $ 3 $ — $ — $ — $ — $ ( 10 ) $ — $ —

2 unchanged sentences

Fair Value (continued)

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)

Fixed Maturity Securities

Corporate (1) Structured Securities State and

Subdivision Foreign

Government Equity

Securities Short-term

Investments Net

Derivatives (2) Net Embedded

Derivatives (3) Separate

Account Assets (4)

(In millions)

Six Months Ended June 30, 2021

Balance, beginning of period

$ 688 $ 67 $ — $ — $ 3 $ — $ 2 $ ( 6,874 ) $ 3

Total realized/unrealized gains (losses) included in net income (loss) (5) (6)

( 1 ) — — — — — 16 ( 579 ) —

Total realized/unrealized gains (losses) included in AOCI

— 1 — — — — 9 — —

Purchases (7) 327 181 — 12 — — ( 1 ) — —

Sales (7) ( 10 ) ( 14 ) — — — — ( 6 ) — —

Issuances (7) — — — — — — — — —

Settlements (7) — — — — — — — ( 262 ) —

Transfers into Level 3 (8) 66 — — — — — — — —

Transfers out of Level 3 (8) ( 181 ) ( 18 ) — — — — — — ( 3 )

Balance, end of period $ 889 $ 217 $ — $ 12 $ 3 $ — $ 20 $ ( 7,715 ) $ —

Six Months Ended June 30, 2020

Balance, beginning of period

$ 461 $ 117 $ 73 $ — $ 8 $ 5 $ 16 $ ( 4,031 ) $ 3

Total realized/unrealized gains (losses) included in net income (loss) (5) (6)

( 4 ) — — — — — ( 2 ) ( 962 ) —

Total realized/unrealized gains (losses) included in AOCI

15 — — — — — 20 — —

Purchases (7) 433 104 — — — — — — —

Sales (7) ( 51 ) ( 5 ) — — — ( 5 ) ( 14 ) — —

Issuances (7) — — — — — — — — —

Settlements (7) — — — — — — — ( 333 ) —

Transfers into Level 3 (8) 153 30 — — — — — — —

Transfers out of Level 3 (8) ( 113 ) ( 73 ) ( 73 ) — ( 4 ) — — — —

Balance, end of period $ 894 $ 173 $ — $ — $ 4 $ — $ 20 $ ( 5,326 ) $ 3

Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at June 30, 2021 (9)

$ ( 1 ) $ — $ — $ — $ — $ — $ 2 $ ( 560 ) $ —

Changes in unrealized gains (losses) included in other comprehensive income for the instruments still held at June 30, 2021 (9)

$ — $ 1 $ — $ — $ — $ — $ 9 $ — $ —

Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at June 30, 2020 (9)

$ ( 1 ) $ — $ — $ — $ — $ — $ ( 17 ) $ ( 1,019 ) $ —

Changes in unrealized gains (losses) included in other comprehensive income for the instruments still held at June 30, 2020 (9)

$ 16 $ — $ — $ — $ — $ — $ 20 $ — $ —

_______________

(1) Comprised of U.S.

2 unchanged sentences

(3) Embedded derivative assets and liabilities are presented net for purposes of the rollforward.

Brighthouse Financial, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued)

Fair Value (continued)

(4) Investment performance related to separate account assets is fully offset by corresponding amounts credited to contract holders within separate account liabilities.

18 unchanged sentences

All remaining balance sheet amounts excluded from the tables below are not considered financial instruments subject to this disclosure.

Brighthouse Financial, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued)

Fair Value (continued)

The carrying values and estimated fair values for such financial instruments, and their corresponding placement in the fair value hierarchy, are summarized as follows at:

March 31, 2021

June 30, 2021

Fair Value Hierarchy

9 unchanged sentences

Separate account liabilities $ 1,416 $ — $ 1,416 $ — $ 1,416

Brighthouse Financial, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued)

Fair Value (continued)

December 31, 2020

10 unchanged sentences

Separate account liabilities $ 1,334 $ — $ 1,334 $ — $ 1,334

Brighthouse Financial, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued)

Preferred Stock

Preferred stock shares authorized, issued and outstanding were as follows at both March 31, 2021 and December 31, 2020:

Preferred stock shares authorized, issued and outstanding were as follows at both June 30, 2021 and December 31, 2020:

Shares Authorized Shares Issued Shares Outstanding

7 unchanged sentences

Total 100,000,000 56,100 56,100

The declaration, record and payment dates, as well as per share and aggregate dividend amounts for BHF’s preferred stock by series for the three months ended March 31, 2021 and 2020 were as follows:

The declaration, record and payment dates, as well as per share and aggregate dividend amounts for BHF’s preferred stock by series for the six months ended June 30, 2021 and 2020 were as follows:

Series A Series B Series C

1 unchanged sentence

(In millions, except per share data)

May 17, 2021 June 10, 2021 June 25, 2021 $ 412.50 $ 7 $ 421.88 $ 7 $ 335.94 $ 7

February 16, 2021 March 10, 2021 March 25, 2021 412.50 7 421.88 7 466.58 11

$ 825.00 $ 14 $ 843.76 $ 14 $ 802.52 $ 18

May 15, 2020 June 10, 2020 June 25, 2020 $ 412.50 $ 7 $ — $ — $ — $ —

February 14, 2020 March 10, 2020 March 25, 2020 412.50 7 — — — —

$ 825.00 $ 14 $ — $ — $ — $ —

Brighthouse Financial, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued)

Common Stock Repurchase Program

1 unchanged sentence

Repurchases under this authorization may be made through open market purchases, including pursuant to 10b5-1 plans or pursuant to accelerated stock repurchase plans, or through privately negotiated transactions, from time to time at management’s discretion in accordance with applicable legal requirements.

During the three months ended March 31, 2021 and 2020, BHF repurchased 1,659,872 and 5,674,387 shares, respectively, of its common stock through open market purchases pursuant to 10b5-1 plans for $ 68 million and $ 142 million, respectively.

At March 31, 2021, BHF had $ 212 million remaining under its common stock repurchase program.

See Note 11 for information relating to the authorization of share repurchases subsequent to June 30, 2021.

During the six months ended June 30, 2021 and 2020, BHF repurchased 4,312,267 and 13,250,927 shares, respectively, of its common stock through open market purchases pursuant to 10b5-1 plans for $ 192 million and $ 322 million, respectively.

At June 30, 2021, BHF had $ 87 million remaining under its common stock repurchase program.

Accumulated Other Comprehensive Income (Loss)

Information regarding changes in the balances of each component of AOCI was as follows:

Three Months Ended March 31, 2021

Three Months Ended June 30, 2021

Investment Gains

5 unchanged sentences

(In millions)

Balance at December 31, 2020

$ 5,646 $ 115 $ ( 8 ) $ ( 37 ) $ 5,716

Balance at March 31, 2021 $ 3,387 $ 55 $ ( 14 ) $ ( 39 ) $ 3,389

OCI before reclassifications 1,385 114 1 — 1,500

4 unchanged sentences

Amounts reclassified from AOCI, net of income tax 25 ( 3 ) — ( 1 ) 21

Balance at March 31, 2021

Balance at June 30, 2021

$ 4,506 $ 142 $ ( 13 ) $ ( 39 ) $ 4,596

Three Months Ended June 30, 2020

Investment Gains

(Losses), Net of

Related Offsets (1) Unrealized

Gains (Losses)

on Derivatives Foreign

Adjustments Defined Benefit Plans Adjustment Total

(In millions)

Balance at March 31, 2020 $ 2,083 $ 612 $ ( 19 ) $ ( 29 ) $ 2,647

OCI before reclassifications 3,059 ( 140 ) 5 1 2,925

Deferred income tax benefit (expense) ( 643 ) 30 ( 10 ) — ( 623 )

AOCI before reclassifications, net of income tax 4,499 502 ( 24 ) ( 28 ) 4,949

Amounts reclassified from AOCI 23 ( 3 ) — — 20

Deferred income tax benefit (expense) ( 5 ) 1 — — ( 4 )

Amounts reclassified from AOCI, net of income tax 18 ( 2 ) — — 16

Balance at June 30, 2020 $ 4,517 $ 500 $ ( 24 ) $ ( 28 ) $ 4,965

Brighthouse Financial, Inc.

1 unchanged sentence

Equity (continued)

Three Months Ended March 31, 2020

Six Months Ended June 30, 2021

Investment Gains

13 unchanged sentences

Amounts reclassified from AOCI, net of income tax 15 ( 9 ) — ( 1 ) 5

Balance at March 31, 2020

Balance at June 30, 2021

$ 4,506 $ 142 $ ( 13 ) $ ( 39 ) $ 4,596

Six Months Ended June 30, 2020

Investment Gains

(Losses), Net of

Related Offsets (1) Unrealized

Gains (Losses)

on Derivatives Foreign

Adjustments Defined Benefit Plans Adjustment Total

(In millions)

Balance at December 31, 2019

$ 3,111 $ 172 $ ( 15 ) $ ( 28 ) $ 3,240

OCI before reclassifications (2) 1,768 420 — — 2,188

Deferred income tax benefit (expense) ( 371 ) ( 88 ) ( 9 ) — ( 468 )

AOCI before reclassifications, net of income tax 4,508 504 ( 24 ) ( 28 ) 4,960

Amounts reclassified from AOCI 12 ( 5 ) — — 7

Deferred income tax benefit (expense) ( 3 ) 1 — — ( 2 )

Amounts reclassified from AOCI, net of income tax 9 ( 4 ) — — 5

Balance at June 30, 2020

$ 4,517 $ 500 $ ( 24 ) $ ( 28 ) $ 4,965

__________________

(1) See Note 4 for information on offsets to investments related to future policy benefits, DAC, VOBA and DSI.

(2) Includes $ 3 million related to the adoption of the allowance for credit losses guidance.

Brighthouse Financial, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued)

Equity (continued)

Information regarding amounts reclassified out of each component of AOCI was as follows:

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

2021 2020 2021 2020

(In millions)

12 unchanged sentences

Gains (losses) on cash flow hedges, net of income tax 3 2 9 4

Defined benefit plans adjustment:

Amortization of net actuarial gains (losses) 1 — 1 —

Amortization of defined benefit plans, before income tax 1 — 1 —

Income tax (expense) benefit — — — —

Amortization of defined benefit plans, net of income tax 1 — 1 —

Total reclassifications, net of income tax $ ( 21 ) $ ( 16 ) $ ( 5 ) $ ( 5 )

7 unchanged sentences

The passage of time reflects the satisfaction of the Company’s performance obligations to the Funds and is used to recognize revenue associated with 12b-1 fees.

Other revenues consisted primarily of 12b-1 fees of $ 91 million and $ 179 million for the three months and six months ended June 30, 2021, respectively, and $ 76 million and $ 157 million for the three months and six months ended June 30, 2020, respectively, of which substantially all were reported in the Annuities segment.

Brighthouse Financial, Inc.

1 unchanged sentence

Other Revenues and Other Expenses (continued)

Other revenues consisted primarily of 12b-1 fees of $ 88 million and $ 81 million for the three months ended March 31, 2021 and 2020, respectively, of which substantially all were reported in the Annuities segment.

Other Expenses

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

2021 2020 2021 2020

(In millions)

7 unchanged sentences

Interest expense on debt 40 45 81 92

Other 25 27 42 47

Total other expenses $ 608 $ 577 $ 1,170 $ 1,094

2 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2021 2020 2021 2020

(In millions, except share and per share data)

6 unchanged sentences

Diluted $ 0.11 $ ( 21.10 ) $ ( 6.93 ) $ 29.56

For the three months ended March 31, 2021, basic loss per common share equaled diluted loss per common share.

For both the six months ended June 30, 2021 and the three months ended June 30, 2020, basic loss per common share equaled diluted loss per common share.

The diluted shares were not utilized in the per share calculation for this period as the inclusion of such shares would have an antidilutive effect.

For the three months ended March 31, 2020, weighted average shares used for calculating diluted earnings per common share excludes 196,492 of out-of-the-money stock options, as the inclusion of these shares would be antidilutive to the earnings per common share calculation due to the average share price for the three months ended March 31, 2020.

For both the three months ended June 30, 2021 and the six months ended June 30, 2020, weighted average shares used for calculating diluted earnings per common share excludes 187,371 of out-of-the-money stock options, as the inclusion of these shares would be antidilutive to the earnings per common share calculation due to the average share price for the three months ended June 30, 2021 and the six months ended June 30, 2020.

Brighthouse Financial, Inc.

13 unchanged sentences

The Company establishes liabilities for litigation and regulatory loss contingencies when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated.

It is possible that some matters could require the Company to pay damages or make other expenditures or establish accruals in amounts that could not be estimated at March 31, 2021.

It is possible that some matters could require the Company to pay damages or make other expenditures or establish accruals in amounts that could not be estimated at June 30, 2021.

Matters as to Which an Estimate Can Be Made

1 unchanged sentence

For such matters where a loss is believed to be reasonably possible, but not probable, no accrual has been made.

In addition to amounts accrued for probable and reasonably estimable losses, as of March 31, 2021, the Company estimates the aggregate range of reasonably possible losses to be up to approximately $ 10 million.

In addition to amounts accrued for probable and reasonably estimable losses, as of June 30, 2021, the Company estimates the aggregate range of reasonably possible losses to be up to approximately $ 10 million .

Matters as to Which an Estimate Cannot Be Made

28 unchanged sentences

Plaintiff seeks to recover compensatory damages, attorney’s fees, interest, and equitable relief including a constructive trust.

Brighthouse Life Insurance Company and Brighthouse Life Insurance Company of NY filed a motion to dismiss in June 2021.

The Company intends to vigorously defend this matter.

15 unchanged sentences

Contingencies, Commitments and Guarantees (continued)

As of March 31, 2021, the Company estimates the amount of reasonably possible losses in excess of the amounts accrued for certain non-litigation loss contingencies to be up to approximately $ 125 million, which are primarily associated with reinsurance-related matters.

As of June 30, 2021, the Company estimates the amount of reasonably possible losses in excess of the amounts accrued for certain non-litigation loss contingencies to be up to approximately $ 125 million , which are primarily associated with reinsurance-related matters.

For certain other reinsurance-related matters, the Company is not currently able to estimate the reasonably possible loss or range of loss until developments in such matters have provided sufficient information to support an assessment of such loss.

2 unchanged sentences

The Company commits to lend funds under mortgage loan commitments.

The amounts of these mortgage loan commitments were $ 279 million and $ 210 million at March 31, 2021 and December 31, 2020, respectively.

The amounts of these mortgage loan commitments were $ 646 million and $ 210 million at June 30, 2021 and December 31, 2020, respectively.

Commitments to Fund Partnership Investments, Bank Credit Facilities and Private Corporate Bond Investments

The Company commits to fund partnership investments and to lend funds under bank credit facilities and private corporate bond investments.

The amounts of these unfunded commitments were $ 2.0 billion and $ 1.7 billion at March 31, 2021 and December 31, 2020, respectively.

The amounts of these unfunded commitments were $ 2.2 billion and $ 1.7 billion at June 30, 2021 and December 31, 2020, respectively.

In the normal course of its business, the Company has provided certain indemnities, guarantees and commitments to third parties such that it may be required to make payments now or in the future.

8 unchanged sentences

Since these indemnities are generally not subject to limitation with respect to duration or amount, the Company does not believe that it is possible to determine the maximum potential amount that could become due under these indemnities in the future.

The Company’s recorded liabilities were $ 1 million at both March 31, 2021 and December 31, 2020 for indemnities, guarantees and commitments.

The Company’s recorded liabilities were $ 1 million at both June 30, 2021 and December 31, 2020 for indemnities, guarantees and commitments.

Subsequent Events

Common Stock Repurchase Authorization

On August 2, 2021, the Company authorized the repurchase of up to an additional $ 1.0 billion of common stock.

No common stock repurchases have been made under the August 2, 2021 authorization as of August 6, 2021.

Future repurchases may be made through open market purchases, including pursuant to 10b5-1 plans or pursuant to accelerated stock repurchase plans, or through privately negotiated transactions, from time to time at management’s discretion in accordance with applicable legal requirements.

Brighthouse Financial, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

Subsequent Events (continued)

Dividend Transaction

On July 26, 2021, Brighthouse Reinsurance Company of Delaware received approval from the Delaware Department of Insurance for the payment of a $ 600 million extraordinary dividend to Brighthouse Life Insurance Company.

Such dividend has not been paid as of August 6, 2021 .

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements