What changed in this filing

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Item 1. Financial Statements

2023-08-09 compared with 2023-05-09 · 348 added, 141 removed, 1827 unchanged (21% of the section changed)

2 unchanged sentences

Interim Condensed Consolidated Balance Sheets

March 31, 2023 (Unaudited) and December 31, 2022

June 30, 2023 (Unaudited) and December 31, 2022

(In millions, except share and per share data)

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

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

52 unchanged sentences

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

For the Three Months Ended March 31, 2023 and 2022 (Unaudited)

For the Three Months and Six Months Ended June 30, 2023 and 2022 (Unaudited)

(In millions, except per share data)

Three Months Ended

June 30, Six Months Ended

2023 2022 2023 2022

Premiums $ 211 $ 167 $ 408 $ 333

6 unchanged sentences

Policyholder benefits and claims (including liability remeasurement gains (losses) of $ 0 , $ 0 , $ 0 and $ 0 respectively)

689 717 1,376 1,392

Interest credited to policyholder account balances 452 284 874 532

21 unchanged sentences

Interim Condensed Consolidated Statements of Equity

For the Three Months Ended March 31, 2023 and 2022 (Unaudited)

For the Three Months and Six Months Ended June 30, 2023 and 2022 (Unaudited)

(In millions)

15 unchanged sentences

Balance at March 31, 2023 — 1 14,054 ( 894 ) ( 2,119 ) ( 5,288 ) 5,754 65 5,819

Treasury stock acquired in connection with share repurchases

( 64 ) ( 64 ) ( 64 )

Share-based compensation

Dividends on preferred stock

( 25 ) ( 25 ) ( 25 )

Change in noncontrolling interests

Net income (loss)

( 175 ) ( 175 ) — ( 175 )

Other comprehensive income (loss), net of income tax

( 593 ) ( 593 ) ( 593 )

Balance at June 30, 2023 $ — $ 1 $ 14,039 $ ( 1,069 ) $ ( 2,183 ) $ ( 5,881 ) $ 4,907 $ 65 $ 4,972

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

14 unchanged sentences

Balance at March 31, 2022 — 1 14,133 ( 2,689 ) ( 1,681 ) ( 2,541 ) 7,223 65 7,288

Treasury stock acquired in connection with share repurchases

( 132 ) ( 132 ) ( 132 )

Share-based compensation

Dividends on preferred stock

( 26 ) ( 26 ) ( 26 )

Change in noncontrolling interests

Net income (loss)

1,745 1,745 — 1,745

Other comprehensive income (loss), net of income tax

( 1,635 ) ( 1,635 ) ( 1,635 )

Balance at June 30, 2022 $ — $ 1 $ 14,113 $ ( 944 ) $ ( 1,813 ) $ ( 4,176 ) $ 7,181 $ 65 $ 7,246

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, 2023 and 2022 (Unaudited)

For the Six Months Ended June 30, 2023 and 2022 (Unaudited)

(In millions)

Three Months Ended

Six Months Ended

Net cash provided by (used in) operating activities $ ( 628 ) $ ( 40 )

84 unchanged sentences

The revised net premium ratio is calculated as of contract inception using both actual historical experience and updated future cash flow assumptions.

The recalculated net premium ratio is applied to derive a remeasurement gain or loss recognized in current period net income.

The recalculated net premium ratio is applied to derive a remeasurement gain or loss recognized in the current period net income.

For insurance policies in-force as of December 31, 2020, January 1, 2021 is considered the contract inception date.

76 unchanged sentences

If the modification does not substantially change the contract, the DAC or VOBA amortization on the original contract will continue and any acquisition costs associated with the related modification are expensed.

The Company also has intangible assets representing deferred sales inducements (“DSI”) included in other assets and unearned revenue liabilities included in other policy-related balances.

The Company also has intangible assets representing deferred sales inducements (“DSI”), which are included in other assets, and unearned revenue liabilities, which are included in other policy-related balances.

The Company defers sales inducements and unearned revenue and amortizes the balances using the same methodology and assumptions used to amortize DAC and VOBA.

5 unchanged sentences

The Company considers the applicability and impact of all ASUs.

Except as noted below, there were no significant ASUs adopted during the period ended March 31, 2023.

Except as noted below, there were no significant ASUs adopted during the period ended June 30, 2023.

In March 2022, the FASB issued new guidance on Troubled Debt Restructurings (“TDR”) (ASU 2022-02, Financial Instruments—Credit Losses (Topic 326):

11 unchanged sentences

MRBs are now measured at estimated fair value through net income and reported separately on the consolidated statements of operations, except for nonperformance risk changes, which will be recognized in OCI.

(2) Cash flow assumptions used to measure the liability for LFPBs on traditional long-duration contracts (including term and non-participating whole life insurance and immediate annuities) have been updated on an annual basis using a retrospective method.

(2) Cash flow assumptions used to measure LFPBs on traditional long-duration contracts (including term and non-participating whole life insurance and immediate annuities) have been updated on an annual basis using a retrospective method.

The resulting remeasurement gain or loss is now reported separately on the consolidated statements of operations along with the remeasurement gain or loss on universal life-type contract liabilities.

25 unchanged sentences

For MRBs, the transition adjustment to AOCI relates to the cumulative effect of changes in the nonperformance risk between contract issue date and transition date.

In aggregate, the additional spread applied to the risk-free rate decreased from contract inception to the transition date, which had a negative impact on equity.

The remaining difference between the estimated fair value and carrying amount of MRBs at transition, excluding the amounts recorded in AOCI, was recorded as an adjustment to retained earnings as of the transition date.

91 unchanged sentences

• Net investment gains (losses);

• Net derivative gains (losses), excluding 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.

The following are significant items excluded from total expenses in calculating adjusted earnings:

• Change in MRBs;

• Change in fair value of the crediting rate on experience-rated contracts.

The tax impact of the adjustments discussed above is calculated net of the statutory tax rate, which could differ from the Company’s effective tax rate.

• Change in fair value of the crediting rate on experience-rated contracts (“Market Value Adjustments”).

The provision for income tax related to adjusted earnings is calculated using the statutory tax rate of 21%, net of impacts related to the dividends received deduction, tax credits and current period non-recurring items.

The Company’s adjusted earnings definition and presentation has been updated for all periods presented to reflect the adoption of ASU 2018-12.

8 unchanged sentences

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

Three Months Ended March 31, 2023

Three Months Ended June 30, 2023

Annuities Life Run-off Corporate & Other Total

8 unchanged sentences

Net investment gains (losses) ( 64 )

Net derivative gains (losses) ( 575 )

Net derivative gains (losses), excluding investment hedge adjustments of $ 23

Change in market risk benefits 1,300

Other adjustments to net income (loss) ( 46 )

Market value adjustments 2

Provision for income tax (expense) benefit 125

5 unchanged sentences

Segment Information (continued)

Three Months Ended March 31, 2022

Three Months Ended June 30, 2022

Annuities Life Run-off Corporate & Other Total

8 unchanged sentences

Net investment gains (losses) ( 66 )

Net derivative gains (losses) ( 54 )

Net derivative gains (losses), excluding investment hedge adjustments of $ 9

Change in market risk benefits 62

Other adjustments to net income (loss) 32

Market value adjustments 32

Provision for income tax (expense) benefit ( 421 )

2 unchanged sentences

Interest expense $ — $ — $ — $ 38

Six Months Ended June 30, 2023

Annuities Life Run-off Corporate & Other Total

(In millions)

Pre-tax adjusted earnings $ 744 $ 18 $ ( 155 ) $ 10 $ 617

Provision for income tax expense (benefit) 139 2 ( 33 ) ( 10 ) 98

Post-tax adjusted earnings 605 16 ( 122 ) 20 519

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

Preferred stock dividends — — — 51 51

Adjusted earnings $ 605 $ 16 $ ( 122 ) $ ( 33 ) 466

Adjustments for:

Net investment gains (losses) ( 160 )

Net derivative gains (losses), excluding investment hedge adjustments of $ 61

Change in market risk benefits 1,106

Market value adjustments ( 6 )

Provision for income tax (expense) benefit 316

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

Interest revenue $ 1,227 $ 219 $ 570 $ 300

Interest expense $ — $ — $ — $ 76

Brighthouse Financial, Inc.

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

Segment Information (continued)

Six Months Ended June 30, 2022

Annuities Life Run-off Corporate & Other Total

(In millions)

Pre-tax adjusted earnings $ 832 $ 119 $ ( 169 ) $ ( 87 ) $ 695

Provision for income tax expense (benefit) 158 24 ( 36 ) ( 30 ) 116

Post-tax adjusted earnings 674 95 ( 133 ) ( 57 ) 579

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

Preferred stock dividends — — — 53 53

Adjusted earnings $ 674 $ 95 $ ( 133 ) $ ( 112 ) 524

Adjustments for:

Net investment gains (losses) ( 134 )

Net derivative gains (losses), excluding investment hedge adjustments of $ 15

Change in market risk benefits 1,641

Market value adjustments 70

Provision for income tax (expense) benefit ( 732 )

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

Interest revenue $ 1,101 $ 275 $ 751 $ 100

Interest expense $ — $ — $ — $ 76

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

Three Months Ended

June 30, Six Months Ended

2023 2022 2023 2022

(In millions)

Annuities $ 1,246 $ 1,129 $ 2,416 $ 2,331

Life 312 289 616 652

Run-off 448 487 828 1,022

3 unchanged sentences

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

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

(In millions)

8 unchanged sentences

Information regarding LFPBs for non-participating traditional and limited-payment contracts was as follows:

Three Months Ended March 31,

Six Months Ended June 30,

Term and Whole Life Insurance Income Annuities Structured Settlement and Pension Risk Transfer Annuities Term and Whole Life Insurance Income Annuities Structured Settlement and Pension Risk Transfer Annuities

40 unchanged sentences

Information regarding the additional insurance liabilities for universal life-type contracts with secondary guarantees was as follows:

Three Months Ended March 31,

Six Months Ended June 30,

(Dollars in millions)

28 unchanged sentences

(2) Participating whole life insurance uses an interest assumption based on the non-forfeiture interest rate, ranging from 3.5 % to 4.5 %, and mortality rates guaranteed in calculating the cash surrender values described in such contracts, and also includes a liability for terminal dividends.

Participating whole life insurance represented 3 % of the Company’s life insurance in-force at both March 31, 2023 and 2022, and 39 % and 34 % of gross traditional life insurance premiums for the three months ended March 31, 2023 and 2022, respectively.

Participating whole life insurance represented 3 % of the Company’s life insurance in-force at both June 30, 2023 and 2022, and 41 % of gross traditional life insurance premiums for both the six months ended June 30, 2023 and 2022.

Brighthouse Financial, Inc.

41 unchanged sentences

(Dollars in millions)

Three Months Ended March 31, 2023

Six Months Ended June 30, 2023

Balance, beginning of period $ 2,658 $ 4,908 $ 33,897 $ 14,274 $ 5,307 $ 641

8 unchanged sentences

Weighted-average crediting rate (2) 0.31 % 1.63 % 0.66 % 1.57 % 2.33 % 2.33 %

Three Months Ended March 31, 2022

Six Months Ended June 30, 2022

Balance, beginning of period $ 2,694 $ 4,743 $ 32,000 $ 11,849 $ 5,569 $ 646

23 unchanged sentences

(In millions)

March 31, 2023

June 30, 2023

Annuities (1) (3):

36 unchanged sentences

Information regarding MRB assets and liabilities associated with variable annuities was as follows:

Three Months Ended March 31, Years Ended

Six Months Ended

June 30, Years Ended

2023 2022 2022 2021

17 unchanged sentences

_______________

(1) Amounts represent the sum of MRB assets and MRB liabilities presented on the consolidated balance sheets at March 31, 2023 and 2022, with the exception of $ 4 million and $ 4 million, respectively, of index-linked annuities not included in this table, and at December 31, 2022 and 2021, with the exception of $ 3 million and $ 5 million, respectively, of index-linked annuities not included in this table.

(1) Amounts represent the sum of MRB assets and MRB liabilities presented on the consolidated balance sheets at June 30, 2023 and 2022, with the exception of $ 3 million and $ 3 million, respectively, of index-linked annuities not included in this table, and at December 31, 2022 and 2021, with the exception of $ 3 million and $ 5 million, respectively, of index-linked annuities not included in this table.

Separate Accounts

Information regarding separate account liabilities was as follows:

Three Months Ended March 31,

Six Months Ended June 30,

Variable Annuities Universal Life Insurance Company-Owned Life Insurance Variable Annuities Universal Life Insurance Company-Owned Life Insurance

19 unchanged sentences

The aggregate estimated fair value of assets, by major investment asset category, supporting separate accounts was as follows at:

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

(In millions)

6 unchanged sentences

Net Amount at Risk and Cash Surrender Values

Information regarding the net amount at risk (“NAR”) and cash surrender value (“CSV”) for insurance products was as follows at:

Information regarding the net amount at risk and cash surrender value for insurance products was as follows at:

Universal Life Insurance Variable Annuities Index-linked Annuities Fixed Rate Annuities ULSG Company-Owned Life Insurance

(In millions)

March 31, 2023

June 30, 2023

Account balances reported in the preceding rollforward tables:

4 unchanged sentences

Cash surrender value $ 7,676 $ 84,644 $ 35,860 $ 14,281 $ 6,160 $ 2,539

March 31, 2022

June 30, 2022

Account balances reported in the preceding rollforward tables:

13 unchanged sentences

(In millions)

Three Months Ended March 31, 2023

Six Months Ended June 30, 2023

Balance, beginning of period $ 2,508 $ 107 $ 1,213 $ 405 $ 392

7 unchanged sentences

Balance, end of period $ 2,727 $ 172 $ 1,267 $ 382 $ 420

Three Months Ended March 31, 2022

Six Months Ended June 30, 2022

Balance, beginning of period $ 2,718 $ 89 $ 1,081 $ 462 $ 431

31 unchanged sentences

Information regarding DSI, included in other assets, was as follows:

Three Months Ended March 31,

Six Months Ended June 30, 2023

Variable Annuities Fixed Rate Annuities Variable Annuities Fixed Rate Annuities

5 unchanged sentences

Information regarding unearned revenue, included in other policy-related balances, was as follows:

Three Months Ended March 31,

Six Months Ended June 30, 2023

Universal Life Insurance ULSG Variable Annuities Universal Life Insurance ULSG Variable Annuities

10 unchanged sentences

Fixed maturity securities by sector were as follows at:

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

Cost Allowance for Credit Losses Gross Unrealized Estimated

12 unchanged sentences

Total fixed maturity securities $ 85,570 $ 12 $ 860 $ 8,841 $ 77,577 $ 84,344 $ 7 $ 752 $ 9,512 $ 75,577

The Company held non-income producing fixed maturity securities with an estimated fair value of $ 13 million at March 31, 2023.

The Company held non-income producing fixed maturity securities with an estimated fair value of $ 14 million at June 30, 2023.

The Company did no t hold non-income producing fixed maturity securities at December 31, 2022.

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, 2023:

The amortized cost and estimated fair value of fixed maturity securities, by contractual maturity date, were as follows at June 30, 2023:

Year or Less Due After One

17 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, 2023 December 31, 2022

June 30, 2023 December 31, 2022

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

33 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 $ 656 million and $ 602 million at March 31, 2023 and December 31, 2022, respectively, and is included in accrued investment income.

The accrued interest receivable on fixed maturity securities totaled $ 626 million and $ 602 million at June 30, 2023 and December 31, 2022, respectively, and is included in accrued investment income.

Brighthouse Financial, Inc.

9 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 $ 5 million, relating to fifteen securities at March 31, 2023.

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 $ 12 million, relating to 19 securities at June 30, 2023.

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.

2 unchanged sentences

Allowance for Credit Losses for Fixed Maturity Securities

The allowance for credit losses for fixed maturity securities was $ 5 million and $ 7 million at March 31, 2023 and December 31, 2022, respectively.

For both the three months ended March 31, 2023 and 2022, the change in the allowance for fixed maturity securities by sector was not significant.

The Company recorded total write-offs of $ 7 million and $ 2 million for the three months ended March 31, 2023 and 2022, respectively.

The allowance for credit losses for fixed maturity securities was $ 12 million and $ 7 million at June 30, 2023 and December 31, 2022, respectively.

For both the six months ended June 30, 2023 and 2022, the change in the allowance for fixed maturity securities by sector was not significant.

The Company recorded total write-offs of $ 7 million and $ 10 million for the six months ended June 30, 2023 and 2022, respectively.

Mortgage Loans

1 unchanged sentence

Mortgage loans are summarized as follows at:

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

Total Carrying

7 unchanged sentences

_______________

(1) Purchases of mortgage loans from third parties were $ 32 million and $ 840 million for the three months ended March 31, 2023 and 2022, respectively, and were primarily comprised of residential mortgage loans.

(1) Purchases of mortgage loans from third parties were $ 0 and $ 32 million for the three months and six months ended June 30, 2023, respectively, and $ 415 million and $ 1.3 billion for the three months and six months ended June 30, 2022, respectively, and were primarily comprised of residential mortgage loans.

Brighthouse Financial, Inc.

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

Investments (continued)

Allowance for Credit Losses for Mortgage Loans

2 unchanged sentences

The loan balance, or a portion of the loan balance, is written-off against the allowance when management believes this amount is uncollectible.

Brighthouse Financial, Inc.

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

Investments (continued)

Accrued interest receivables are presented separate from the amortized cost basis of mortgage loans.

An allowance for credit losses is generally not estimated on an accrued interest receivable, rather when a loan is placed in nonaccrual status the associated accrued interest receivable balance is written off with a corresponding reduction to net investment income.

The accrued interest receivable on mortgage loans is included in accrued investment income and totaled $ 109 million and $ 115 million at March 31, 2023 and December 31, 2022, respectively.

The accrued interest receivable on mortgage loans is included in accrued investment income and totaled $ 114 million and $ 115 million at June 30, 2023 and December 31, 2022, 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.

16 unchanged sentences

Any subsequent PCD mortgage loan allowance for credit losses is evaluated in a manner similar to the process described above for each of the three portfolio segments.

Brighthouse Financial, Inc.

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

Investments (continued)

Rollforward of the Allowance for Credit Losses for Mortgage Loans by Portfolio Segment

2 unchanged sentences

(In millions)

Three Months Ended March 31, 2023

Six Months Ended June 30, 2023

Balance, beginning of period $ 49 $ 15 $ 55 $ 119

Current period provision 26 — 1 27

Charge-offs, net of recoveries — ( 1 ) — ( 1 )

Balance, end of period $ 75 $ 14 $ 56 $ 145

Three Months Ended March 31, 2022

Six Months Ended June 30, 2022

Balance, beginning of period $ 67 $ 12 $ 44 $ 123

Current period provision — 3 — 3

Charge-offs, net of recoveries ( 23 ) — — ( 23 )

Balance, end of period $ 44 $ 15 $ 44 $ 103

Brighthouse Financial, Inc.

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

Investments (continued)

Credit Quality of Mortgage Loans by Portfolio Segment

2 unchanged sentences

(In millions)

March 31, 2023

June 30, 2023

Commercial mortgage loans

16 unchanged sentences

Total $ 239 $ 4,322 $ 6,194 $ 1,063 $ 2,621 $ 8,320 $ 22,759

Brighthouse Financial, Inc.

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

Investments (continued)

2022 2021 2020 2019 2018 Prior Total

19 unchanged sentences

Total $ 4,369 $ 6,197 $ 1,091 $ 2,648 $ 2,191 $ 6,559 $ 23,055

Brighthouse Financial, Inc.

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

Investments (continued)

The loan-to-value ratio is a measure commonly used to assess the quality of commercial and agricultural mortgage loans.

5 unchanged sentences

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

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

Amortized Cost % of

9 unchanged sentences

A debt-service coverage ratio greater than 1.00 times indicates an excess of net operating income over the debt-service payments.

Brighthouse Financial, Inc.

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

Investments (continued)

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, 2023 and December 31, 2022.

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, 2023 and December 31, 2022.

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

2 unchanged sentences

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

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

Commercial Agricultural Residential Total Commercial Agricultural Residential Total

6 unchanged sentences

$ 13,392 $ 4,432 $ 4,935 $ 22,759 $ 13,574 $ 4,365 $ 5,116 $ 23,055

Brighthouse Financial, Inc.

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

Investments (continued)

Mortgage Loans in Nonaccrual Status by Portfolio Segment

3 unchanged sentences

(In millions)

March 31, 2023

June 30, 2023

$ 29 $ — $ 78 $ 107

2 unchanged sentences

_______________

(1) The Company had $ 2 million of mortgage loans in nonaccrual status for which there was no related allowance for credit losses at March 31, 2023.

All mortgage loans in nonaccrual status had an allowance for credit losses at December 31, 2022.

Mortgage loans in nonaccrual status for which there was no related allowance for credit losses pertains to collateral dependent loans where the collateral value exceeds amortized cost.

Current period investment income on mortgage loans in nonaccrual status was less than $ 1 million for both the three months ended March 31, 2023 and 2022 .

(1) The Company had no mortgage loans in nonaccrual status for which there was no related allowance for credit losses at both June 30, 2023 and December 31, 2022.

Current period investment income on mortgage loans in nonaccrual status was less than $ 1 million for both the six months ended June 30, 2023 and 2022 .

Other Invested Assets

4 unchanged sentences

Unrealized investment gains (losses) on fixed maturity securities and the effect on future policy benefits, that would result from the realization of the unrealized gains (losses), are included in net unrealized investment gains (losses) in AOCI.

Brighthouse Financial, Inc.

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

Investments (continued)

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

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

(In millions)

7 unchanged sentences

Net unrealized investment gains (losses) $ ( 5,259 ) $ ( 5,690 )

Brighthouse Financial, Inc.

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

Investments (continued)

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

Three Months Ended March 31, 2023

Six Months Ended June 30, 2023

(In millions)

4 unchanged sentences

Deferred income tax benefit (expense) ( 114 )

Balance at March 31, 2023 $ ( 4,556 )

Balance at June 30, 2023 $ ( 5,259 )

Change in net unrealized investment gains (losses) $ 431

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, 2023 and December 31, 2022.

government and its agencies, at both June 30, 2023 and December 31, 2022.

Securities Lending

Elements of the securities lending program are presented below at:

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

(In millions)

7 unchanged sentences

(2) Included in payables for collateral under securities loaned and other transactions.

Brighthouse Financial, Inc.

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

Investments (continued)

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

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

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

7 unchanged sentences

(1) The related loaned security could be returned to the Company on the next business day which would require the Company to immediately return the cash collateral.

Brighthouse Financial, Inc.

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

Investments (continued)

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, 2023 was $ 775 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, 2023 was $ 666 million, 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.

1 unchanged sentence

government and agency securities, U.S.

and foreign corporate securities, non-agency RMBS and CMBS) with 54 % invested in U.S.

government and agency securities, agency RMBS and cash and cash equivalents at March 31, 2023.

and foreign corporate securities, non-agency RMBS and CMBS) with 54 % invested in agency RMBS, U.S.

government and agency securities and cash and cash equivalents at June 30, 2023.

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, 2023 December 31, 2022

June 30, 2023 December 31, 2022

(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 $ 58 million and $ 21 million of the assets on deposit represents restricted cash and cash equivalents at March 31, 2023 and December 31, 2022, respectively.

(2) The Company has assets, primarily fixed maturity securities, held in trust relating to certain reinsurance transactions, of which $ 266 million and $ 240 million of the assets held in trust balance represents restricted cash and cash equivalents at March 31, 2023 and December 31, 2022, respectively.

(1) The Company has assets, primarily fixed maturity securities, on deposit with governmental authorities relating to certain policyholder liabilities, of which $ 60 million and $ 21 million of the assets on deposit represents restricted cash and cash equivalents at June 30, 2023 and December 31, 2022, respectively.

(2) The Company has assets, primarily fixed maturity securities, held in trust relating to certain reinsurance transactions, of which $ 185 million and $ 240 million of the assets held in trust balance represents restricted cash and cash equivalents at June 30, 2023 and December 31, 2022, 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 2022 Annual Report) and derivative transactions (see Note 7).

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 $ 220 million and $ 201 million at redemption value at March 31, 2023 and December 31, 2022, respectively.

In addition, the Company’s investment in FHLB common stock, which is considered restricted until redeemed by the issuer, was $ 216 million and $ 201 million at redemption value at June 30, 2023 and December 31, 2022, respectively.

Brighthouse Financial, Inc.

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

Investments (continued)

Variable Interest Entities

4 unchanged sentences

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.

Brighthouse Financial, Inc.

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

Investments (continued)

There were no material VIEs for which the Company has concluded that it is the primary beneficiary at either March 31, 2023 or December 31, 2022.

There were no material VIEs for which the Company has concluded that it is the primary beneficiary at either June 30, 2023 or December 31, 2022.

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, 2023 December 31, 2022

June 30, 2023 December 31, 2022

Amount Maximum

28 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2023 2022 2023 2022

(In millions)

1 unchanged sentence

Fixed maturity securities $ 868 $ 742 $ 1,705 $ 1,460

Equity securities 1 1 1 1

Mortgage loans 237 205 476 408

2 unchanged sentences

Cash, cash equivalents and short-term investments 55 6 105 7

Other 20 18 42 32

Total investment income 1,288 1,111 2,438 2,303

2 unchanged sentences

_______________

(1) Includes net investment income pertaining to other limited partnership interests of ($ 1 ) million and $ 212 million for the three months ended March 31, 2023 and 2022, respectively.

(1) Includes net investment income pertaining to other limited partnership interests of $ 93 million and $ 92 million for the three months and six months ended June 30, 2023, respectively, and $ 93 million and $ 305 million for the three months and six months ended June 30, 2022, respectively.

Net Investment Gains (Losses)

2 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2023 2022 2023 2022

(In millions)

3 unchanged sentences

Limited partnerships and LLCs — ( 1 ) — ( 17 )

Other ( 1 ) — ( 1 ) —

Total net investment gains (losses) $ ( 64 ) $ ( 66 ) $ ( 160 ) $ ( 134 )

Gains (losses) from foreign currency transactions included within net investment gains (losses) were $ 2 million and ($ 16 ) million for the three months ended March 31, 2023 and 2022, respectively.

Gains (losses) from foreign currency transactions included within net investment gains (losses) were ($ 2 ) million and less than ($ 1 ) million for the three months and six months ended June 30, 2023, respectively, and ($ 5 ) million and ($ 21 ) million for the three months and six months ended June 30, 2022, respectively.

Brighthouse Financial, Inc.

5 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2023 2022 2023 2022

(In millions)

13 unchanged sentences

• Equity market derivatives:

options and total return swaps;

options, total return swaps and hybrid options;

• Credit derivatives:

6 unchanged sentences

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

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

Primary Underlying Risk Exposure Gross

20 unchanged sentences

Equity total return swaps Equity market 46,739 1,438 1,113 32,909 520 747

Hybrid options Equity market 630 4 — — — —

Total non-designated or non-qualifying derivatives 138,967 2,509 3,864 112,905 1,688 3,900

Total $ 142,941 $ 3,017 $ 3,887 $ 116,991 $ 2,284 $ 3,920

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, 2023 and December 31, 2022.

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, 2023 and December 31, 2022.

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, 2023

Three Months Ended June 30, 2023

Derivatives Designated as Hedging Instruments:

11 unchanged sentences

Total $ ( 1,800 ) $ ( 11 ) $ 14 $ ( 50 )

Three Months Ended March 31, 2022

Three Months Ended June 30, 2022

Derivatives Designated as Hedging Instruments:

11 unchanged sentences

Total $ 2,011 $ ( 34 ) $ 15 $ 265

At March 31, 2023 and December 31, 2022, the maximum length of time over which the Company was hedging its exposure to variability in future cash flows for forecasted transactions was less than one year and one year , respectively.

At March 31, 2023 and December 31, 2022, the balance in AOCI associated with cash flow hedges was $ 598 million and $ 638 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, 2023

Derivatives Designated as Hedging Instruments:

Cash flow hedges:

Interest rate $ ( 2 ) $ — $ 2 $ 1

Foreign currency exchange rate 4 ( 5 ) 27 ( 91 )

Total cash flow hedges 2 ( 5 ) 29 ( 90 )

Derivatives Not Designated or Not Qualifying as Hedging Instruments:

Interest rate 59 — — —

Foreign currency exchange rate 4 4 — —

Credit 19 — — —

Equity market 324 — — —

Embedded ( 2,793 ) — — —

Total non-qualifying hedges ( 2,387 ) 4 — —

Total $ ( 2,385 ) $ ( 1 ) $ 29 $ ( 90 )

Six Months Ended June 30, 2022

Derivatives Designated as Hedging Instruments:

Cash flow hedges:

Interest rate $ 4 $ — $ 2 $ ( 41 )

Foreign currency exchange rate 1 ( 2 ) 25 325

Total cash flow hedges 5 ( 2 ) 27 284

Derivatives Not Designated or Not Qualifying as Hedging Instruments:

Interest rate ( 2,438 ) — — —

Foreign currency exchange rate 113 ( 39 ) — —

Credit ( 32 ) — — —

Equity market 728 — — —

Embedded 3,588 — — —

Total non-qualifying hedges 1,959 ( 39 ) — —

Total $ 1,964 $ ( 41 ) $ 27 $ 284

At both June 30, 2023 and December 31, 2022, the maximum length of time over which the Company was hedging its exposure to variability in future cash flows for forecasted transactions was less than one year .

At June 30, 2023 and December 31, 2022, the balance in AOCI associated with cash flow hedges was $ 544 million and $ 638 million, respectively.

Credit Derivatives

5 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, 2023 December 31, 2022

June 30, 2023 December 31, 2022

Rating Agency Designation of Referenced Credit Obligations (1) Estimated

32 unchanged sentences

(In millions)

March 31, 2023

June 30, 2023

Derivative assets $ 2,873 $ ( 2,106 ) $ ( 516 ) $ 251 $ ( 231 ) $ 20

14 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, 2023 December 31, 2022

June 30, 2023 December 31, 2022

(In millions)

13 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, 2023

June 30, 2023

Fair Value Hierarchy Total Estimated

91 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, 2023.

The Company did not have significant price adjustments during the six months ended June 30, 2023.

Determination of Fair Value

80 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, 2023 December 31, 2022 Impact of

June 30, 2023 December 31, 2022 Impact of

Increase in Input

52 unchanged sentences

Investments Net

Derivatives (2) Embedded Derivatives on Index-Linked Annuities

Derivatives (2) Embedded Derivatives on Index-Linked Annuities Separate

Account Assets (3)

(In millions)

Three Months Ended March 31, 2023

Three Months Ended June 30, 2023

Balance, beginning of period

10 unchanged sentences

Balance, end of period $ 1,931 $ 371 $ 38 $ 25 $ — $ 27 $ ( 6,886 ) $ —

Three Months Ended March 31, 2022

Three Months Ended June 30, 2022

Balance, beginning of period

10 unchanged sentences

Balance, end of period $ 1,710 $ 345 $ 40 $ 27 $ — $ 38 $ ( 2,831 ) $ —

Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at March 31, 2023 (7)

Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at June 30, 2023 (8)

$ ( 3 ) $ — $ — $ ( 2 ) $ — $ ( 5 ) $ ( 1,802 ) $ —

Changes in unrealized gains (losses) included in OCI for the instruments still held at March 31, 2023 (7)

Changes in unrealized gains (losses) included in OCI for the instruments still held at June 30, 2023 (8)

$ ( 24 ) $ ( 1 ) $ — $ — $ — $ — $ — $ —

Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at March 31, 2022 (7)

Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at June 30, 2022 (8)

$ — $ — $ — $ 1 $ — $ ( 5 ) $ 2,756 $ —

Changes in unrealized gains (losses) included in OCI for the instruments still held at March 31, 2022 (7)

Changes in unrealized gains (losses) included in OCI for the instruments still held at June 30, 2022 (8)

$ ( 117 ) $ 2 $ ( 5 ) $ — $ — $ 12 $ — $ —

Brighthouse Financial, Inc.

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

Fair Value (continued)

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)

Fixed Maturity Securities

Corporate (1) Structured Securities Foreign

Government Equity

Securities Short-term

Investments Net

Derivatives (2) Embedded Derivatives on Index-Linked Annuities Separate

Account Assets (3)

(In millions)

Six Months Ended June 30, 2023

Balance, beginning of period

$ 1,787 $ 365 $ 38 $ 27 $ — $ 35 $ ( 3,932 ) $ —

Total realized/unrealized gains (losses) included in net income (loss) (4) (5) ( 3 ) — — ( 3 ) — ( 5 ) ( 2,793 ) —

Total realized/unrealized gains (losses) included in AOCI

7 1 1 — — — — —

Purchases (6) 210 52 — 1 — 9 — —

Sales (6) ( 73 ) ( 7 ) ( 1 ) — — — — —

Issuances (6) — — — — — — — —

Settlements (6) — — — — — — ( 161 ) —

Transfers into Level 3 (7) 56 2 — — — — — —

Transfers out of Level 3 (7) ( 53 ) ( 42 ) — — — ( 12 ) — —

Balance, end of period $ 1,931 $ 371 $ 38 $ 25 $ — $ 27 $ ( 6,886 ) $ —

Six Months Ended June 30, 2022

Balance, beginning of period

$ 1,399 $ 220 $ 26 $ 13 $ 2 $ 36 $ ( 6,641 ) $ —

Total realized/unrealized gains (losses) included in net income (loss) (4) (5) ( 6 ) — — 1 — ( 15 ) 3,588 ( 1 )

Total realized/unrealized gains (losses) included in AOCI

( 216 ) ( 12 ) ( 9 ) — — 16 — —

Purchases (6) 648 229 5 13 — 1 — —

Sales (6) ( 140 ) ( 14 ) ( 1 ) — ( 2 ) — — —

Issuances (6) — — — — — — — —

Settlements (6) — — — — — — 222 —

Transfers into Level 3 (7) 148 23 19 — — — — 1

Transfers out of Level 3 (7) ( 123 ) ( 101 ) — — — — — —

Balance, end of period $ 1,710 $ 345 $ 40 $ 27 $ — $ 38 $ ( 2,831 ) $ —

Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at June 30, 2023 (8)

$ ( 2 ) $ ( 1 ) $ — $ ( 3 ) $ — $ ( 5 ) $ ( 2,968 ) $ —

Changes in unrealized gains (losses) included in OCI for the instruments still held at June 30, 2023 (8)

$ 1 $ — $ 1 $ — $ — $ — $ — $ —

Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at June 30, 2022 (8)

$ — $ — $ — $ 1 $ — $ ( 15 ) $ 3,443 $ —

Changes in unrealized gains (losses) included in OCI for the instruments still held at June 30, 2022 (8)

$ ( 218 ) $ ( 12 ) $ ( 9 ) $ — $ — $ 16 $ — $ —

_______________

(1) Comprised of U.S.

1 unchanged sentence

(2) Freestanding derivative assets and liabilities are reported net for purposes of the rollforward.

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

Therefore, such changes in estimated fair value are recorded in net investment gains (losses) and not net income (loss).

(4) Amortization of premium/accretion of discount is included in net investment income.

2 unchanged sentences

Substantially all realized/unrealized gains (losses) included in net income (loss) for net derivatives and net embedded derivatives are reported in net derivative gains (losses).

(4) Interest and dividend accruals, as well as cash interest coupons and dividends received, are excluded from the rollforward.

Brighthouse Financial, Inc.

1 unchanged sentence

Fair Value (continued)

(5) Interest and dividend accruals, as well as cash interest coupons and dividends received, are excluded from the rollforward.

(6) Items purchased/issued and then sold/settled in the same period are excluded from the rollforward.

1 unchanged sentence

(7) Gains and losses, in net income (loss) and OCI, are calculated assuming transfers into and/or out of Level 3 occurred at the beginning of the period.

Items transferred into and then out of Level 3 in the same period are excluded from the rollforward.

Items transferred into and out of Level 3 in the same period are excluded from the rollforward.

(8) Changes in unrealized gains (losses) included in net income (loss) for fixed maturities are reported in either net investment income or net investment gains (losses).

7 unchanged sentences

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, 2023

June 30, 2023

Fair Value Hierarchy

25 unchanged sentences

Preferred Stock

Preferred stock shares authorized, issued and outstanding were as follows at both March 31, 2023 and December 31, 2022:

Preferred stock shares authorized, issued and outstanding were as follows at both June 30, 2023 and December 31, 2022:

Shares Authorized Shares Issued Shares Outstanding

10 unchanged sentences

The per share and aggregate dividends declared for BHF’s preferred stock by series were as follows:

Three Months Ended March 31,

Series Per Share Aggregate Per Share Aggregate

(In millions, except per share data)

Three Months Ended June 30, Six Months Ended June 30,

2023 2022 2023 2022

Series Per Share Aggregate Per Share Aggregate Per Share Aggregate Per Share Aggregate

(In millions, except per share data) (In millions, except per share data)

A $ 412.50 $ 7 $ 412.50 $ 7 $ 825.00 $ 14 $ 825.00 $ 14

4 unchanged sentences

Common Stock Repurchase Program

During the three months ended March 31, 2023 and 2022, BHF repurchased 1,200,124 and 2,398,636 shares, respectively, of its common stock through open market purchases pursuant to 10b5-1 plans for $ 62 million and $ 127 million, respectively.

At March 31, 2023, BHF had $ 231 million remaining under its common stock repurchase program.

During the six months ended June 30, 2023 and 2022, BHF repurchased 2,684,792 and 5,152,415 shares, respectively, of its common stock through open market purchases pursuant to 10b5-1 plans for $ 126 million and $ 259 million, respectively.

At June 30, 2023, BHF had $ 167 million remaining under its common stock repurchase program.

Brighthouse Financial, Inc.

3 unchanged sentences

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

Three Months Ended March 31, 2023

Three Months Ended June 30, 2023

Unrealized Investment Gains (Losses), Net of Related Offsets (1) Unrealized

2 unchanged sentences

(In millions)

Balance at March 31, 2023 $ ( 5,028 ) $ 472 $ ( 1,383 ) $ 706 $ ( 55 ) $ ( 5,288 )

OCI before reclassifications ( 895 ) ( 50 ) ( 116 ) 251 1 ( 809 )

Deferred income tax benefit (expense) (3) 187 11 24 ( 52 ) — 170

AOCI before reclassifications, net of income tax ( 5,736 ) 433 ( 1,475 ) 905 ( 54 ) ( 5,927 )

Amounts reclassified from AOCI 59 ( 4 ) — — 2 57

Deferred income tax benefit (expense) (3) ( 12 ) 1 — — — ( 11 )

Amounts reclassified from AOCI, net of income tax 47 ( 3 ) — — 2 46

Balance at June 30, 2023

$ ( 5,689 ) $ 430 $ ( 1,475 ) $ 905 $ ( 52 ) $ ( 5,881 )

Three Months Ended June 30, 2022

Unrealized Investment Gains (Losses), Net of Related Offsets (1) Unrealized

Gains (Losses)

on Derivatives Changes in Nonperformance Risk on Market Risk Benefits Changes in Discount Rates on the Liability for Future Policy Benefits Other (2) Total

(In millions)

Balance at March 31, 2022 $ 459 $ 329 $ ( 2,496 ) $ ( 776 ) $ ( 57 ) $ ( 2,541 )

OCI before reclassifications ( 5,380 ) 265 1,451 1,542 ( 25 ) ( 2,147 )

Deferred income tax benefit (expense) (3) 1,130 ( 55 ) ( 305 ) ( 325 ) 6 451

AOCI before reclassifications, net of income tax ( 3,791 ) 539 ( 1,350 ) 441 ( 76 ) ( 4,237 )

Amounts reclassified from AOCI 81 ( 5 ) — — 2 78

Deferred income tax benefit (expense) (3) ( 17 ) — — — — ( 17 )

Amounts reclassified from AOCI, net of income tax 64 ( 5 ) — — 2 61

Balance at June 30, 2022 $ ( 3,727 ) $ 534 $ ( 1,350 ) $ 441 $ ( 74 ) $ ( 4,176 )

Brighthouse Financial, Inc.

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

Equity (continued)

Six Months Ended June 30, 2023

Unrealized Investment Gains (Losses), Net of Related Offsets (1) Unrealized

Gains (Losses)

on Derivatives Changes in Nonperformance Risk on Market Risk Benefits Changes in Discount Rates on the Liability for Future Policy Benefits Other (2) Total

(In millions)

Balance at December 31, 2022

6 unchanged sentences

Amounts reclassified from AOCI, net of income tax 95 ( 3 ) — — 4 96

Balance at March 31, 2023

Balance at June 30, 2023

$ ( 5,689 ) $ 430 $ ( 1,475 ) $ 905 $ ( 52 ) $ ( 5,881 )

Three Months Ended March 31, 2022

Six Months Ended June 30, 2022

Unrealized Investment Gains (Losses), Net of Related Offsets (1) Unrealized

10 unchanged sentences

Amounts reclassified from AOCI, net of income tax 98 ( 6 ) — — 2 94

Balance at March 31, 2022

Balance at June 30, 2022

$ ( 3,727 ) $ 534 $ ( 1,350 ) $ 441 $ ( 74 ) $ ( 4,176 )

10 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2023 2022 2023 2022

(In millions)

26 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 $ 67 million and $ 82 million for the three months ended March 31, 2023 and 2022, respectively, of which substantially all were reported in the Annuities segment.

Other revenues consisted primarily of 12b-1 fees of $ 66 million and $ 133 million for the three months and six months ended June 30, 2023, respectively, and $ 74 million and $ 156 million for the three months and six months ended June 30, 2022, respectively, of which substantially all were reported in the Annuities segment.

Brighthouse Financial, Inc.

4 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2023 2022 2023 2022

(In millions)

7 unchanged sentences

Interest expense on debt 38 38 76 76

Other 16 178 35 192

Total other expenses $ 502 $ 592 $ 980 $ 1,101

4 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2023 2022 2023 2022

(In millions, except share and per share data)

6 unchanged sentences

Diluted $ ( 3.01 ) $ 22.91 $ ( 10.77 ) $ 43.01

For the three months ended March 31, 2023, basic loss per common share equaled diluted loss per common share.

The diluted shares were not included 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, 2022, 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 such shares would be antidilutive to the earnings per common share calculation due to the average share price for the three months ended March 31, 2022.

For both the three months and six months ended June 30, 2023, basic loss per common share equaled diluted loss per common share.

The diluted shares were not included in the per share calculation for these periods as the inclusion of such shares would have an antidilutive effect.

For both the three months and six months ended June 30, 2022, 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 such shares would be antidilutive to the earnings per common share calculation due to the average share price for the three months and six months ended June 30, 2022.

Brighthouse Financial, Inc.

16 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, 2023.

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, 2023.

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, 2023, 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, 2023, 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

50 unchanged sentences

On a quarterly basis, the Company reviews relevant information with respect to other loss contingencies and, when applicable, updates its accruals, disclosures and estimates of reasonably possible losses or ranges of loss based on such reviews.

As of March 31, 2023, the Company estimates the range of reasonably possible losses in excess of the amounts accrued for certain other loss contingencies to be from zero up to approximately $ 125 million, which are primarily associated with the reinsurance-related matters described above.

As of June 30, 2023, the Company estimates the range of reasonably possible losses in excess of the amounts accrued for certain other loss contingencies to be from zero up to approximately $ 125 million, which are primarily associated with the reinsurance-related matters described above.

For certain other matters, the Company may not currently be 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.

During the second quarter of 2022, the Company settled a reinsurance-related matter with a third party for $ 140 million, which is reported in other expenses.

Mortgage Loan Commitments

The Company commits to lend funds under mortgage loan commitments.

The amounts of these mortgage loan commitments were $ 318 million and $ 247 million at March 31, 2023 and December 31, 2022, respectively.

The amounts of these mortgage loan commitments were $ 294 million and $ 247 million at June 30, 2023 and December 31, 2022, 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 $ 1.6 billion and $ 1.9 billion at March 31, 2023 and December 31, 2022, respectively.

The amounts of these unfunded commitments were $ 1.5 billion and $ 1.9 billion at June 30, 2023 and December 31, 2022, 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, 2023 and December 31, 2022 for indemnities, guarantees and commitments.

The Company’s recorded liabilities were $ 1 million at both June 30, 2023 and December 31, 2022 for indemnities, guarantees and commitments.

Brighthouse Financial, Inc.

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

Subsequent Events

Subsequent Event

Repurchase Facility

In July 2023, Brighthouse Life Insurance Company entered into an additional secured committed repurchase facility (the “Repurchase Facility”) under which Brighthouse Life Insurance Company may enter into repurchase transactions in an aggregate amount up to $ 500 million for a term of up to two years , which is available to the Company under certain market conditions.

Under the Repurchase Facility, Brighthouse Life Insurance Company may sell certain eligible securities at a purchase price based on the market value of the securities less an applicable margin based on the types of securities sold, with a concurrent agreement to repurchase such securities at a predetermined future date (up to three months) and at a price which represents the original purchase price plus interest.

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