What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-11-08 compared with 2023-08-09 · 265 added, 182 removed, 1993 unchanged (18% of the section changed)

2 unchanged sentences

Interim Condensed Consolidated Balance Sheets

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

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

(In millions, except share and per share data)

June 30, 2023 December 31, 2022

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

For the Three Months and Nine Months Ended September 30, 2023 and 2022 (Unaudited)

(In millions, except per share data)

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

31 unchanged sentences

Interim Condensed Consolidated Statements of Equity

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

For the Three Months and Nine Months Ended September 30, 2023 and 2022 (Unaudited)

(In millions)

14 unchanged sentences

Other comprehensive income (loss), net of income tax

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

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

Treasury stock acquired in connection with share repurchases

1 unchanged sentence

Share-based compensation

— 9 ( 1 ) 8 8

Dividends on preferred stock

1 unchanged sentence

Change in noncontrolling interests

— ( 2 ) ( 2 )

Net income (loss)

2 unchanged sentences

( 1,235 ) ( 1,235 ) ( 1,235 )

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

Balance at September 30, 2023 $ — $ 1 $ 14,022 $ ( 590 ) $ ( 2,248 ) $ ( 7,116 ) $ 4,069 $ 65 $ 4,134

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

13 unchanged sentences

( 4,223 ) ( 4,223 ) ( 4,223 )

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

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

Treasury stock acquired in connection with share repurchases

4 unchanged sentences

Change in noncontrolling interests

— ( 2 ) ( 2 )

Net income (loss)

2 unchanged sentences

( 2,839 ) ( 2,839 ) ( 2,839 )

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

Balance at September 30, 2022 $ — $ 1 $ 14,095 $ ( 531 ) $ ( 1,949 ) $ ( 7,015 ) $ 4,601 $ 65 $ 4,666

See accompanying notes to the interim condensed consolidated financial statements.

1 unchanged sentence

Interim Condensed Consolidated Statements of Cash Flows

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

For the Nine Months Ended September 30, 2023 and 2022 (Unaudited)

(In millions)

Six Months Ended

Nine Months Ended

September 30,

Net cash provided by (used in) operating activities $ ( 289 ) $ ( 1,002 )

88 unchanged sentences

The net premium ratio is not updated for changes in discount rate assumptions, as changes in the discount rate are updated quarterly and the impacts are reflected in other comprehensive income (loss) (“OCI”).

The discount rate assumption is determined by developing a yield curve based on market observable yields for upper-medium fixed income instruments derived from an external index.

The discount rate assumption is determined by developing a yield curve based on market observable yields for upper-medium grade fixed income instruments derived from an external index.

The yield curve is applied to the expected future cash flows used in the measurement of LFPBs based on the duration characteristics of those liabilities.

80 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 June 30, 2023.

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

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

148 unchanged sentences

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

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

Annuities Life Run-off Corporate & Other Total

18 unchanged sentences

Segment Information (continued)

Three Months Ended June 30, 2022

Three Months Ended September 30, 2022

Annuities Life Run-off Corporate & Other Total

15 unchanged sentences

Interest expense $ — $ — $ — $ 38

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

Annuities Life Run-off Corporate & Other Total

18 unchanged sentences

Segment Information (continued)

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

Annuities Life Run-off Corporate & Other Total

17 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

7 unchanged sentences

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

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

(In millions)

8 unchanged sentences

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

Six Months Ended June 30,

Nine Months Ended September 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

31 unchanged sentences

Weighted-average interest accretion rate 3.95 % 3.94 % 4.45 % 3.98 % 3.89 % 4.44 %

Current discount rate 5.87 % 5.87 % 5.91 % 5.46 % 5.44 % 5.46 %

Gross premiums or assessments recognized during period $ 451 $ 353 $ — $ 485 $ 195 $ —

6 unchanged sentences

Insurance (continued)

The measurement of LFPBs can be significantly impacted by changes in assumptions for policyholder behavior.

As part of the 2023 and 2022 annual actuarial review (“AAR”), the Company updated assumptions regarding mortality and lapses for term and non-participating whole life insurance.

The impact from changes in assumptions is presented in effect of changes in cash flow assumptions in the table above.

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

Six Months Ended June 30,

Nine Months Ended September 30,

(Dollars in millions)

15 unchanged sentences

Weighted-average interest accretion rate 4.92 % 4.90 %

Gross premiums or assessments recognized during period $ — $ —

Gross assessments recognized during period

The measurement of liabilities for secondary guarantees can be significantly impacted by changes in the expected general account rate of return, which is driven by the Company’s assumption for long-term treasury yields.

The Company’s practice of projecting treasury yields uses a mean reversion approach that assumes that long-term interest rates are less influenced by short-term fluctuations and are only changed when sustained interim deviations are expected.

As part of the 2023 AAR, the Company increased the long-term general account earned rate, driven by an increase in the mean reversion rate from 3.50 % to 3.75 %.

The Company also updated assumptions regarding policyholder behavior, including mortality, premium persistency, lapses, withdrawals and maintenance expenses.

As part of the 2022 AAR, the Company increased the long-term general account earned rate, driven by an increase in the mean reversion rate from 3.00 % to 3.50 %.

Both period assumption updates are reflected in the table above.

Brighthouse Financial, Inc.

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

Insurance (continued)

A reconciliation of the net LFPBs for nonparticipating traditional and limited-payment contracts and the additional insurance liabilities for universal life-type contracts with secondary guarantees reported in the preceding rollforward tables to LFPBs on the consolidated balance sheets was as follows at:

September 30,

(In millions)

1 unchanged sentence

Long-term care insurance (1) 5,276 5,632

ULSG liability for profits followed by losses 2,565 2,911

ULSG liabilities, including liability for profits followed by losses

Participating whole life insurance (2) 3,054 2,900

5 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 June 30, 2023 and 2022, and 41 % of gross traditional life insurance premiums for both the six months ended June 30, 2023 and 2022.

Participating whole life insurance represented 3 % of the Company’s life insurance in-force at both September 30, 2023 and 2022, and 40 % and 41 % of gross traditional life insurance premiums for the nine months ended September 30, 2023 and 2022, respectively.

Brighthouse Financial, Inc.

41 unchanged sentences

(Dollars in millions)

Six Months Ended June 30, 2023

Nine Months Ended September 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) 1.27 % 2.09 % 1.02 % 2.43 % 3.17 % 3.41 %

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

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

12 unchanged sentences

A reconciliation of policyholder account balances reported in the preceding rollforward table to the liability for policyholder account balances on the consolidated balance sheets was as follows at:

September 30,

(In millions)

9 unchanged sentences

(In millions)

June 30, 2023

September 30, 2023

Annuities (1):

30 unchanged sentences

(2) Includes policyholder account balances for retained asset accounts, universal life policies and the fixed account portion of universal variable life insurance policies.

(3) Amounts are gross of policy loans and net of excess interest reserves.

(3) Amounts are gross of policy loans.

Brighthouse Financial, Inc.

3 unchanged sentences

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

Six Months Ended

June 30, Years Ended

Nine Months Ended

September 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 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.

(1) Amounts represent the sum of MRB assets and MRB liabilities presented on the consolidated balance sheets at September 30, 2023 and 2022, with the exception of ($ 7 ) million and $ 2 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.

Market conditions, including, but not limited to, changes in interest rates, equity indices, market volatility and variations in actuarial assumptions, including policyholder behavior, mortality and risk margins related to non-capital markets inputs, as well as changes in nonperformance risk, may result in significant fluctuations in the estimated fair value of the guarantees.

As part of the AAR in 2023 and 2022, the Company updated assumptions regarding policyholder behavior, mortality, separate account fund allocations and volatility, which are reflected in the table above.

Brighthouse Financial, Inc.

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

Insurance (continued)

Separate Accounts

Information regarding separate account liabilities was as follows:

Six Months Ended June 30,

Nine Months Ended September 30,

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

9 unchanged sentences

Balance, end of period $ 75,072 $ 5,397 $ 2,036 $ 74,917 $ 4,914 $ 1,855

Brighthouse Financial, Inc.

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

Insurance (continued)

A reconciliation of separate account liabilities reported in the preceding rollforward table to the separate account liabilities balance on the consolidated balance sheets was as follows at:

September 30,

(In millions)

4 unchanged sentences

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

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

(In millions)

5 unchanged sentences

Total aggregate estimated fair value of assets $ 82,675 $ 84,965

Brighthouse Financial, Inc.

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

Insurance (continued)

Net Amount at Risk and Cash Surrender Values

2 unchanged sentences

(In millions)

June 30, 2023

September 30, 2023

Account balances reported in the preceding rollforward tables:

4 unchanged sentences

Cash surrender value $ 7,346 $ 79,155 $ 36,164 $ 14,189 $ 6,121 $ 2,469

June 30, 2022

September 30, 2022

Account balances reported in the preceding rollforward tables:

13 unchanged sentences

(In millions)

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

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

7 unchanged sentences

Balance, end of period $ 2,669 $ 169 $ 1,301 $ 370 $ 410

Six Months Ended June 30, 2022

Nine Months Ended September 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:

Six Months Ended June 30, 2023

Nine Months Ended September 30,

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:

Six Months Ended June 30, 2023

Nine Months Ended September 30,

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

10 unchanged sentences

Fixed maturity securities by sector were as follows at:

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Cost Allowance for Credit Losses Gross Unrealized Estimated

12 unchanged sentences

Total fixed maturity securities $ 86,373 $ 22 $ 266 $ 11,184 $ 75,433 $ 84,344 $ 7 $ 752 $ 9,512 $ 75,577

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

The Company held non-income producing fixed maturity securities with an estimated fair value of $ 12 million at September 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 June 30, 2023:

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

June 30, 2023 December 31, 2022

September 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 $ 626 million and $ 602 million at June 30, 2023 and December 31, 2022, respectively, and is included in accrued investment income.

The accrued interest receivable on fixed maturity securities totaled $ 689 million and $ 602 million at September 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 $ 12 million, relating to 19 securities at June 30, 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 $ 22 million, relating to 24 securities at September 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.

1 unchanged sentence

These issuers continued to make timely principal and interest payments and the estimated fair value is expected to recover as the securities approach maturity.

Allowance for Credit Losses for Fixed Maturity Securities

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.

Rollforward of the Allowance for Credit Losses for Fixed Maturity Securities by Sector

The changes in the allowance for credit losses by sector were as follows:

Corporate RMBS Foreign Corporate CMBS Total

(In millions)

Nine Months Ended September 30, 2023

Balance, beginning of period $ 1 $ 2 $ 1 $ 3 $ 7

Allowance on securities where credit losses were not previously recorded 14 4 — — 18

Reductions for securities sold ( 1 ) — — ( 1 ) ( 2 )

Change in allowance on securities with an allowance recorded in a previous period — — — — —

Write-offs charged against allowance (1) — — ( 1 ) — ( 1 )

Balance, end of period $ 14 $ 6 $ — $ 2 $ 22

Nine Months Ended September 30, 2022

Balance, beginning of period $ 2 $ — $ 7 $ 2 $ 11

Allowance on securities where credit losses were not previously recorded — 1 — — 1

Reductions for securities sold ( 1 ) — — — ( 1 )

Change in allowance on securities with an allowance recorded in a previous period — 1 — — 1

Write-offs charged against allowance (1) — — ( 7 ) — ( 7 )

Balance, end of period $ 1 $ 2 $ — $ 2 $ 5

_______________

(1) The Company recorded total write-offs of $ 8 million and $ 10 million for the nine months ended September 30, 2023 and 2022, respectively.

Brighthouse Financial, Inc.

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

Investments (continued)

Mortgage Loans

1 unchanged sentence

Mortgage loans are summarized as follows at:

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Total Carrying

7 unchanged sentences

_______________

(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)

(1) Purchases of mortgage loans from third parties were $ 224 million and $ 255 million for the three months and nine months ended September 30, 2023, respectively, and $ 387 million and $ 1.6 billion for the three months and nine months ended September 30, 2022, respectively, and were primarily comprised of residential mortgage loans.

Allowance for Credit Losses for Mortgage Loans

4 unchanged sentences

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 $ 114 million and $ 115 million at June 30, 2023 and December 31, 2022, respectively.

The accrued interest receivable on mortgage loans is included in accrued investment income and totaled $ 118 million and $ 115 million at September 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.

7 unchanged sentences

These situations include collateral dependent loans, modifications, foreclosure probable loans, and loans with dissimilar risk characteristics.

Brighthouse Financial, Inc.

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

Investments (continued)

Mortgage loans are also evaluated to determine if they qualify as PCD assets.

7 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)

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

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

2 unchanged sentences

Balance, end of period $ 67 $ 15 $ 55 $ 137

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

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

2 unchanged sentences

Balance, end of period $ 45 $ 15 $ 39 $ 99

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)

June 30, 2023

September 30, 2023

Commercial mortgage loans

16 unchanged sentences

Total $ 420 $ 4,412 $ 6,173 $ 1,055 $ 2,610 $ 8,149 $ 22,819

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:

June 30, 2023 December 31, 2022

September 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 June 30, 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 September 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:

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Commercial Agricultural Residential Total Commercial Agricultural Residential Total

6 unchanged sentences

$ 13,307 $ 4,461 $ 5,051 $ 22,819 $ 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)

June 30, 2023

September 30, 2023

$ 17 $ — $ 85 $ 102

2 unchanged sentences

_______________

(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 .

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

Current period investment income on mortgage loans in nonaccrual status was $ 1 million for both the nine months ended September 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:

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

(In millions)

7 unchanged sentences

Net unrealized investment gains (losses) $ ( 7,210 ) $ ( 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:

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

(In millions)

4 unchanged sentences

Deferred income tax benefit (expense) 405

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

Balance at September 30, 2023 $ ( 7,210 )

Change in net unrealized investment gains (losses) $ ( 1,520 )

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 June 30, 2023 and December 31, 2022.

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

Securities Lending

Elements of the securities lending program are presented below at:

June 30, 2023 December 31, 2022

September 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:

June 30, 2023 December 31, 2022

September 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 June 30, 2023 was $ 666 million, primarily comprised of U.S.

The estimated fair value of the securities on loan related to the cash collateral on open at September 30, 2023 was $ 699 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.

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

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, 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.

and foreign corporate securities, non-agency RMBS and CMBS) with 58 % invested in U.S.

government and agency securities, agency RMBS and cash and cash equivalents at September 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:

June 30, 2023 December 31, 2022

September 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 $ 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.

(1) The Company has assets, primarily fixed maturity securities, on deposit with governmental authorities relating to certain policyholder liabilities, of which $ 94 million and $ 21 million of the assets on deposit represents restricted cash and cash equivalents at September 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 $ 228 million and $ 240 million of the assets held in trust balance represents restricted cash and cash equivalents at September 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 $ 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)

In addition, the Company’s investment in FHLB common stock, which is considered restricted until redeemed by the issuer, was $ 247 million and $ 201 million at redemption value at September 30, 2023 and December 31, 2022, respectively.

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.

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.

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 September 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:

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Amount Maximum

28 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

12 unchanged sentences

_______________

(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.

(1) Includes net investment income pertaining to other limited partnership interests of $ 64 million and $ 156 million for the three months and nine months ended September 30, 2023, respectively, and ($ 127 ) million and $ 178 million for the three months and nine months ended September 30, 2022, respectively.

Net Investment Gains (Losses)

2 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

6 unchanged sentences

Total net investment gains (losses) $ ( 53 ) $ ( 45 ) $ ( 213 ) $ ( 179 )

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.

Gains (losses) from foreign currency transactions included within net investment gains (losses) were ($ 2 ) million for both the three months and nine months ended September 30, 2023, and ($ 1 ) million and ($ 22 ) million for the three months and nine months ended September 30, 2022, respectively.

Brighthouse Financial, Inc.

5 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

23 unchanged sentences

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

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Primary Underlying Risk Exposure Gross

23 unchanged sentences

Total $ 166,748 $ 2,516 $ 4,991 $ 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 June 30, 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 September 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 June 30, 2023

Three Months Ended September 30, 2023

Derivatives Designated as Hedging Instruments:

11 unchanged sentences

Total $ ( 823 ) $ ( 17 ) $ 14 $ ( 33 )

Three Months Ended June 30, 2022

Three Months Ended September 30, 2022

Derivatives Designated as Hedging Instruments:

16 unchanged sentences

(In millions)

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

Derivatives Designated as Hedging Instruments:

11 unchanged sentences

Total $ ( 3,208 ) $ ( 18 ) $ 43 $ ( 123 )

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

Derivatives Designated as Hedging Instruments:

11 unchanged sentences

Total $ 1,401 $ ( 70 ) $ 45 $ 617

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.

At September 30, 2023, the Company held no qualified derivatives hedging exposure to future cash flows for forecasted asset purchases.

At 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 September 30, 2023 and December 31, 2022, the balance in AOCI associated with cash flow hedges was $ 509 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:

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Rating Agency Designation of Referenced Credit Obligations (1) Estimated

32 unchanged sentences

(In millions)

June 30, 2023

September 30, 2023

Derivative assets $ 2,735 $ ( 2,028 ) $ ( 688 ) $ 19 $ ( 6 ) $ 13

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:

June 30, 2023 December 31, 2022

September 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.

June 30, 2023

September 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 six months ended June 30, 2023.

The Company did not have significant price adjustments during the nine months ended September 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:

June 30, 2023 December 31, 2022 Impact of

September 30, 2023 December 31, 2022 Impact of

Increase in Input

52 unchanged sentences

Investments Net

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

Account Assets (3)

Derivatives (2) Embedded Derivatives on Index-Linked Annuities

(In millions)

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

Balance, beginning of period

1 unchanged sentence

Total realized/unrealized gains (losses) included in net income (loss) (3) (4)

( 9 ) — — — — 2 913

Total realized/unrealized gains (losses) included in AOCI

1 unchanged sentence

Purchases (5)

Sales (6) ( 42 ) ( 3 ) ( 1 ) — — — — —

32 17 — — — — —

( 56 ) ( 11 ) ( 1 ) — — — —

Issuances (5)

— — — — — — —

Settlements (5)

— — — — — — ( 58 )

Transfers into Level 3 (6)

45 12 — — — — —

Transfers out of Level 3 (6)

( 784 ) ( 42 ) ( 3 ) — — — —

Balance, end of period $ 1,140 $ 345 $ 33 $ 25 $ — $ 26 $ ( 6,031 )

Three Months Ended June 30, 2022

Three Months Ended September 30, 2022

Balance, beginning of period

1 unchanged sentence

Total realized/unrealized gains (losses) included in net income (loss) (3) (4)

— — — 1 — 3 518

Total realized/unrealized gains (losses) included in AOCI

1 unchanged sentence

Purchases (5)

Sales (6) ( 56 ) ( 11 ) — — — — — —

278 125 — — — — —

( 22 ) ( 1 ) ( 1 ) — — — —

Issuances (5)

— — — — — — —

Settlements (5)

— — — — — — ( 29 )

Transfers into Level 3 (6)

16 19 — — — — —

Transfers out of Level 3 (6)

( 319 ) ( 138 ) — — — — —

Balance, end of period $ 1,555 $ 339 $ 35 $ 28 $ — $ 62 $ ( 2,342 )

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

Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at September 30, 2023 (7)

$ ( 9 ) $ — $ — $ 1 $ — $ 3 $ 785

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

Changes in unrealized gains (losses) included in OCI for the instruments still held as of September 30, 2023 (7)

$ ( 25 ) $ ( 3 ) $ ( 1 ) $ — $ — $ ( 3 ) $ —

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

Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at September 30, 2022 (7)

$ — $ — $ — $ 1 $ — $ 3 $ 461

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

Changes in unrealized gains (losses) included in OCI for the instruments still held as of September 30, 2022 (7)

$ ( 109 ) $ ( 11 ) $ ( 4 ) $ — $ — $ 21 $ —

8 unchanged sentences

Investments Net

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

Account Assets (3)

Derivatives (2) Embedded Derivatives on Index-Linked Annuities

(In millions)

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

Balance, beginning of period

1 unchanged sentence

Total realized/unrealized gains (losses) included in net income (loss) (3) (4)

( 12 ) — — ( 3 ) — ( 3 ) ( 1,880 )

Total realized/unrealized gains (losses) included in AOCI

1 unchanged sentence

Purchases (5)

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

119 45 — 1 — 9 —

( 126 ) ( 17 ) ( 2 ) — — — —

Issuances (5)

— — — — — — —

Settlements (5)

— — — — — — ( 219 )

Transfers into Level 3 (6)

101 10 — — — — —

Transfers out of Level 3 (6)

( 718 ) ( 56 ) ( 3 ) — — ( 12 ) —

Balance, end of period $ 1,140 $ 345 $ 33 $ 25 $ — $ 26 $ ( 6,031 )

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

Balance, beginning of period

1 unchanged sentence

Total realized/unrealized gains (losses) included in net income (loss) (3) (4)

( 6 ) — — 1 — ( 11 ) 4,106

Total realized/unrealized gains (losses) included in AOCI

1 unchanged sentence

Purchases (5)

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

760 230 5 14 — 1 —

( 159 ) ( 12 ) ( 2 ) — ( 2 ) — —

Issuances (5)

— — — — — — —

Settlements (5)

— — — — — — 193

Transfers into Level 3 (6)

31 25 19 — — — —

Transfers out of Level 3 (6)

( 184 ) ( 101 ) — — — — —

Balance, end of period $ 1,555 $ 339 $ 35 $ 28 $ — $ 62 $ ( 2,342 )

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

Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at September 30, 2023 (7)

$ ( 11 ) $ — $ — $ ( 2 ) $ — $ ( 2 ) $ ( 2,183 )

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

Changes in unrealized gains (losses) included in OCI for the instruments still held as of September 30, 2023 (7)

$ ( 20 ) $ ( 3 ) $ — $ — $ — $ ( 3 ) $ —

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

Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at September 30, 2022 (7)

$ — $ — $ — $ 1 $ — $ ( 4 ) $ 3,904

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

Changes in unrealized gains (losses) included in OCI for the instruments still held as of September 30, 2022 (7)

$ ( 288 ) $ ( 23 ) $ ( 13 ) $ — $ — $ 36 $ —

3 unchanged sentences

(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).

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

19 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:

June 30, 2023

September 30, 2023

Fair Value Hierarchy

24 unchanged sentences

Separate account liabilities $ 1,024 $ — $ 1,024 $ — $ 1,024

Long-term Debt

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 Brighthouse Life Insurance 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.

At September 30, 2023, there were no borrowings under the Repurchase Facility.

Preferred Stock

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

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

Shares Authorized Shares Issued Shares Outstanding

9 unchanged sentences

Total 100,000,000 70,100 70,100

Brighthouse Financial, Inc.

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

Equity (continued)

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

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

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

7 unchanged sentences

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.

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

Equity (continued)

During the nine months ended September 30, 2023 and 2022, BHF repurchased 3,968,138 and 8,194,191 shares, respectively, of its common stock through open market purchases pursuant to 10b5-1 plans for $ 190 million and $ 395 million, respectively.

At September 30, 2023, BHF had $ 104 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 June 30, 2023

Three Months Ended September 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 )

Balance at June 30, 2023 $ ( 5,689 ) $ 430 $ ( 1,475 ) $ 905 $ ( 52 ) $ ( 5,881 )

OCI before reclassifications ( 2,490 ) ( 33 ) 174 744 ( 8 ) ( 1,613 )

4 unchanged sentences

Amounts reclassified from AOCI, net of income tax 43 ( 2 ) — — ( 2 ) 39

Balance at June 30, 2023

Balance at September 30, 2023

$ ( 7,613 ) $ 403 $ ( 1,338 ) $ 1,492 $ ( 60 ) $ ( 7,116 )

Three Months Ended June 30, 2022

Three Months Ended September 30, 2022

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

2 unchanged sentences

(In millions)

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

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

OCI before reclassifications ( 5,130 ) 333 130 1,045 ( 23 ) ( 3,645 )

4 unchanged sentences

Amounts reclassified from AOCI, net of income tax 47 ( 7 ) — — — 40

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

Balance at September 30, 2022 $ ( 7,601 ) $ 658 $ ( 1,247 ) $ 1,267 $ ( 92 ) $ ( 7,015 )

Brighthouse Financial, Inc.

1 unchanged sentence

Equity (continued)

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

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

10 unchanged sentences

Amounts reclassified from AOCI, net of income tax 138 ( 5 ) — — 2 135

Balance at June 30, 2023

Balance at September 30, 2023

$ ( 7,613 ) $ 403 $ ( 1,338 ) $ 1,492 $ ( 60 ) $ ( 7,116 )

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

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

10 unchanged sentences

Amounts reclassified from AOCI, net of income tax 145 ( 13 ) — — 2 134

Balance at June 30, 2022

Balance at September 30, 2022

$ ( 7,601 ) $ 658 $ ( 1,247 ) $ 1,267 $ ( 92 ) $ ( 7,015 )

10 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

27 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 $ 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.

Other revenues consisted primarily of 12b-1 fees of $ 68 million and $ 201 million for the three months and nine months ended September 30, 2023, respectively, and $ 70 million and $ 226 million for the three months and nine months ended September 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

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

15 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

7 unchanged sentences

Diluted $ 6.89 $ 5.39 $ ( 4.08 ) $ 49.00

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

For the three months ended September 30, 2023 and 2022 and the nine months ended September 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 ended September 30, 2023 and 2022 and the nine months ended September 30, 2022.

For the nine months ended September 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 June 30, 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 September 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 June 30, 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 September 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

34 unchanged sentences

The Company intends to vigorously defend this matter.

MOVEit Data Security Incident Litigation

Progress Software Corporation, et al .

District Court, District of Massachusetts, filed October 3, 2023).

BHF has been named as a defendant in a purported class action lawsuit.

The action relates to a data security incident at an alleged third-party vendor, PBI Research Services (“PBI”), and allegedly involves the MOVEit file transfer system that PBI uses in its provision of services (“MOVEit Incident”).

As it relates to BHF, plaintiff seeks to certify a subclass of persons whose private information was allegedly maintained by BHF and accessed or acquired in connection with the MOVEit Incident.

Plaintiff alleges, among other things, that BHF negligently chose to utilize PBI to store and transfer plaintiff’s and purported class members’ private information despite PBI’s use of the MOVEit software which plaintiff contends contained security vulnerabilities.

The complaint asserts claims against BHF for negligence, negligence per se, and unjust enrichment, and plaintiff seeks declaratory and injunctive relief, damages, attorneys’ fees and prejudgment interest.

BHF intends to vigorously defend this matter.

Various litigations, claims and assessments against the Company, in addition to those discussed previously and those otherwise provided for in the Company’s consolidated financial statements, have arisen in the course of the Company’s business, including, but not limited to, in connection with its activities as an insurer, investor and taxpayer.

Further, state insurance regulatory authorities and other federal and state authorities regularly make inquiries and conduct investigations concerning the Company’s compliance with applicable insurance and other laws and regulations.

Brighthouse Financial, Inc.

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

Contingencies, Commitments and Guarantees (continued)

It is not possible to predict the ultimate outcome of all pending investigations and legal proceedings.

7 unchanged sentences

In the absence of sufficient information to support an assessment of the reasonably possible loss or range of loss, no accrual is made and no loss or range of loss is disclosed.

Brighthouse Financial, Inc.

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

Contingencies, Commitments and Guarantees (continued)

In the matters where the Company’s subsidiaries are acting as the reinsured or the reinsurer, such matters involve assertions by third parties primarily related to rates, fees or reinsured benefit calculations, and in certain of such matters, the counterparty has made a request to arbitrate.

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 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.

As of September 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.

2 unchanged sentences

The Company commits to lend funds under mortgage loan commitments.

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

The amounts of these mortgage loan commitments were $ 294 million and $ 247 million at September 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 $ 1.5 billion and $ 1.9 billion at June 30, 2023 and December 31, 2022, respectively.

The amounts of these unfunded commitments were $ 1.4 billion and $ 1.9 billion at September 30, 2023 and December 31, 2022, respectively.

Brighthouse Financial, Inc.

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

Contingencies, Commitments and Guarantees (continued)

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 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

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

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