What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-08-08 compared with 2024-05-08 · 391 added, 169 removed, 1562 unchanged (26% of the section changed)

2 unchanged sentences

Interim Condensed Consolidated Balance Sheets

March 31, 2024 (Unaudited) and December 31, 2023

June 30, 2024 (Unaudited) and December 31, 2023

(In millions, except share and per share data)

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

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, 2024 and 2023 (Unaudited)

For the Three Months and Six Months Ended June 30, 2024 and 2023 (Unaudited)

(In millions, except per share data)

Three Months Ended

June 30, Six Months Ended June 30,

2024 2023 2024 2023

Premiums $ 181 $ 211 $ 383 $ 408

6 unchanged sentences

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

642 689 1,610 1,376

Interest credited to policyholder account balances 509 452 1,011 874

21 unchanged sentences

Interim Condensed Consolidated Statements of Equity

For the Three Months Ended March 31, 2024 and 2023 (Unaudited)

For the Three Months and Six Months Ended June 30, 2024 and 2023 (Unaudited)

(In millions)

16 unchanged sentences

Balance at March 31, 2024 — 1 13,989 ( 2,000 ) ( 2,382 ) ( 5,413 ) 4,195 65 4,260

Treasury stock acquired in connection with share repurchases

( 64 ) ( 64 ) ( 64 )

Share-based compensation

— 8 ( 1 ) 7 7

Dividends on preferred stock

( 25 ) ( 25 ) ( 25 )

Change in noncontrolling interests

Net income (loss)

Other comprehensive income (loss), net of income tax

( 6 ) ( 6 ) ( 6 )

Balance at June 30, 2024 $ — $ 1 $ 13,972 $ ( 1,966 ) $ ( 2,447 ) $ ( 5,419 ) $ 4,141 $ 65 $ 4,206

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

9 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 — 10 — 10 10

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

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, 2024 and 2023 (Unaudited)

For the Six Months Ended June 30, 2024 and 2023 (Unaudited)

(In millions)

Three Months Ended

Six Months Ended

Net cash provided by (used in) operating activities $ ( 196 ) $ ( 628 )

22 unchanged sentences

Net change in payables for collateral under securities loaned and other transactions 236 ( 427 )

Long-term debt repaid ( 1 ) ( 1 )

Dividends on preferred stock ( 51 ) ( 51 )

39 unchanged sentences

The Company considers the applicability and impact of all ASUs.

There were no significant ASUs adopted during the period ended March 31, 2024.

There were no significant ASUs adopted during the period ended June 30, 2024.

Future Adoption of New Accounting Pronouncements

47 unchanged sentences

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

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

Annuities Life Run-off Corporate & Other Total

21 unchanged sentences

Segment Information (continued)

Three Months Ended March 31, 2023

Three Months Ended June 30, 2023

Annuities Life Run-off Corporate & Other Total

18 unchanged sentences

Interest expense $ — $ — $ — $ 38

Six Months Ended June 30, 2024

Annuities Life Run-off Corporate & Other Total

(In millions)

Pre-tax adjusted earnings (loss)

$ 795 $ 6 $ ( 469 ) $ 29 $ 361

Provision for income tax expense (benefit) 150 — ( 98 ) 8 60

Post-tax adjusted earnings (loss)

645 6 ( 371 ) 21 301

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

Preferred stock dividends — — — 51 51

Adjusted earnings (loss)

$ 645 $ 6 $ ( 371 ) $ ( 32 ) 248

Adjustments for:

Net investment gains (losses) ( 162 )

Net derivative gains (losses), excluding investment hedge adjustments of $ 22

Change in market risk benefits 1,796

Market value adjustments 10

Provision for income tax (expense) benefit 203

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

Interest revenue $ 1,378 $ 228 $ 631 $ 346

Interest expense $ — $ — $ — $ 76

Brighthouse Financial, Inc.

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

Segment Information (continued)

Six Months Ended June 30, 2023

Annuities Life Run-off Corporate & Other Total

(In millions)

Pre-tax adjusted earnings (loss)

$ 744 $ 18 $ ( 155 ) $ 10 $ 617

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

Post-tax adjusted earnings (loss)

605 16 ( 122 ) 20 519

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

Preferred stock dividends — — — 51 51

Adjusted earnings (loss)

$ 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

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

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

(In millions)

Annuities $ 1,314 $ 1,246 $ 2,618 $ 2,416

Life 297 312 514 616

Run-off 429 448 785 828

3 unchanged sentences

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

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

(In millions)

9 unchanged sentences

Information regarding liability for future policy benefits (“LFPB”) 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

39 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)

14 unchanged sentences

Gross assessments recognized during period

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:

A reconciliation of the net LFPBs for non-participating 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:

(In millions)

9 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, 2024 and 2023, and 41 % and 39 % of gross traditional life insurance premiums for the three months ended March 31, 2024 and 2023, respectively.

Participating whole life insurance represented 3 % of the Company’s life insurance in-force at both June 30, 2024 and 2023, and 41 % of gross traditional life insurance premiums for both the six months ended June 30, 2024 and 2023.

Brighthouse Financial, Inc.

5 unchanged sentences

(Dollars in millions)

Three Months Ended March 31, 2024

Six Months Ended June 30, 2024

Balance, beginning of period $ 2,550 $ 4,307 $ 41,627 $ 14,672 $ 5,052 $ 653

8 unchanged sentences

Weighted-average crediting rate (2) 1.88 % 1.29 % 0.85 % 1.90 % 1.65 % 2.49 %

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

15 unchanged sentences

Funding agreements classified as investment contracts 11,502 11,041

Institutional group annuities

Other investment contract liabilities 1,022 1,116

6 unchanged sentences

(In millions)

March 31, 2024

June 30, 2024

Annuities (1):

36 unchanged sentences

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

Three Months Ended March 31,

Six Months Ended June 30,

(Dollars in millions)

15 unchanged sentences

_______________

(1) Amounts represent the sum of MRB assets and MRB liabilities presented on the consolidated balance sheets at March 31, 2024 and 2023, with the exception of $ 8 million and $ 4 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, 2024 and 2023, with the exception of $ 0 and $ 3 million, respectively, of index-linked annuities not included in this table.

Separate Accounts

1 unchanged sentence

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, 2024 December 31, 2023

June 30, 2024 December 31, 2023

(In millions)

9 unchanged sentences

(In millions)

March 31, 2024

June 30, 2024

Account balances reported in the preceding rollforward tables:

4 unchanged sentences

Cash surrender value $ 8,224 $ 83,155 $ 43,846 $ 14,063 $ 4,414 $ 2,598

March 31, 2023

June 30, 2023

Account balances reported in the preceding rollforward tables:

13 unchanged sentences

(In millions)

Three Months Ended March 31, 2024

Six Months Ended June 30, 2024

Balance, beginning of period $ 2,301 $ 110 $ 1,331 $ 354 $ 360

7 unchanged sentences

Balance, end of period $ 2,500 $ 170 $ 1,402 $ 334 $ 385

Three Months Ended March 31, 2023

Six Months Ended June 30, 2023

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

9 unchanged sentences

Information regarding deferred sales inducements, included in other assets, was as follows:

Three Months Ended March 31,

Six Months Ended June 30,

Variable Annuities Fixed Rate Annuities Variable Annuities Fixed Rate Annuities

8 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,

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

8 unchanged sentences

Fixed maturity securities by sector were as follows at:

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Cost Allowance for Credit Losses Gross Unrealized Estimated

6 unchanged sentences

government and agency 7,750 — 97 621 7,226 8,656 — 286 523 8,419

RMBS 8,339 5 42 914 7,462 8,199 5 48 812 7,430

CMBS 7,005 3 4 552 6,454 7,023 1 2 614 6,410

ABS 6,547 — 27 109 6,465 6,514 — 23 131 6,406

Residential mortgage-backed securities

8,691 5 43 935 7,794 8,199 5 48 812 7,430

Commercial mortgage-backed securities

6,920 5 3 535 6,383 7,023 1 2 614 6,410

Asset-backed securities

6,532 — 28 98 6,462 6,514 — 23 131 6,406

State and political subdivision 3,814 — 100 355 3,559 4,019 — 159 304 3,874

1 unchanged sentence

Total fixed maturity securities $ 88,176 $ 45 $ 569 $ 8,119 $ 80,581 $ 87,131 $ 21 $ 1,037 $ 7,156 $ 80,991

The Company held non-income producing fixed maturity securities with an estimated fair value of $ 51 million and $ 52 million at March 31, 2024 and December 31, 2023, respectively.

The Company held non-income producing fixed maturity securities with an estimated fair value of $ 45 million and $ 52 million at June 30, 2024 and December 31, 2023, respectively.

Brighthouse Financial, Inc.

2 unchanged sentences

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, 2024:

The amortized cost and estimated fair value of fixed maturity securities, by contractual maturity date, were as follows at June 30, 2024:

Year or Less Due After One

14 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, 2024 December 31, 2023

June 30, 2024 December 31, 2023

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

29 unchanged sentences

If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss is deemed to exist and an allowance for credit losses is recorded, limited by the amount that the estimated fair value is less than the amortized cost basis, with a corresponding charge to net investment gains (losses).

Any unrealized losses that have not been recorded through an allowance for credit losses are recognized in OCI.

Any unrealized losses that have not been recorded through an allowance for credit losses are recognized in other comprehensive income (“OCI”).

Once a security specific allowance for credit losses is established, the present value of cash flows expected to be collected from the security continues to be reassessed.

4 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 $ 709 million and $ 655 million at March 31, 2024 and December 31, 2023, respectively, and is included in accrued investment income.

The accrued interest receivable on fixed maturity securities totaled $ 673 million and $ 655 million at June 30, 2024 and December 31, 2023, respectively, and is included in accrued investment income.

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

6 unchanged sentences

Current Period Evaluation

Based on the Company’s current evaluation of its fixed maturity securities in an unrealized loss position and the current intent or requirement to sell, the Company recorded an allowance for credit losses of $ 27 million, relating to 23 securities at March 31, 2024.

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 $ 45 million, relating to 27 securities, at June 30, 2024.

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.

4 unchanged sentences

Investments (continued)

Allowance for Credit Losses for Fixed Maturity Securities

The allowance for credit losses for fixed maturity securities was $ 27 million and $ 21 million at March 31, 2024 and December 31, 2023, respectively.

For both the three months ended March 31, 2024 and 2023, the change in the allowance for fixed maturity securities by sector was not significant.

The Company did no t record total write-offs for the three months ended March 31, 2024.

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

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

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

Corporate Foreign Corporate RMBS CMBS Total

(In millions)

Six Months Ended June 30, 2024

Balance, beginning of period $ 15 $ — $ 5 $ 1 $ 21

Allowance on securities where credit losses were not previously recorded 12 4 — 3 19

Reductions for securities sold — — — — —

Change in allowance on securities with an allowance recorded in a previous period 4 — — 1 5

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

Balance, end of period $ 31 $ 4 $ 5 $ 5 $ 45

Six Months Ended June 30, 2023

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

Allowance on securities where credit losses were not previously recorded 4 — 3 — 7

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

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 $ 4 $ — $ 5 $ 3 $ 12

_______________

(1) The Company recorded total write-offs of $ 1 million and $ 7 million for the six months ended June 30, 2024 and 2023, respectively.

Mortgage Loans

1 unchanged sentence

Mortgage loans are summarized as follows at:

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Total Carrying

7 unchanged sentences

_______________

(1) Purchases of mortgage loans from third parties were $ 161 million and $ 32 million for the three months ended March 31, 2024 and 2023, respectively, and were primarily comprised of residential mortgage loans.

(1) Purchases of mortgage loans from third parties were $ 188 million and $ 349 million for the three months and six months ended June 30, 2024, respectively, and $ 0 and $ 32 million for the three months and six months ended June 30, 2023, 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

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 $ 118 million and $ 123 million at March 31, 2024 and December 31, 2023, respectively.

The accrued interest receivable on mortgage loans is included in accrued investment income and totaled $ 122 million and $ 123 million at June 30, 2024 and December 31, 2023, 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)

Three Months Ended March 31, 2024

Six Months Ended June 30, 2024

Balance, beginning of period $ 69 $ 19 $ 49 $ 137

Current period provision 38 ( 1 ) ( 11 ) 26

Charge-offs, net of recoveries ( 8 ) — — ( 8 )

Balance, end of period $ 99 $ 18 $ 38 $ 155

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

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, 2024

June 30, 2024

Commercial mortgage loans

15 unchanged sentences

Total $ 516 $ 630 $ 4,452 $ 6,139 $ 1,003 $ 10,056 $ 22,796

Brighthouse Financial, Inc.

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

Investments (continued)

2023 2022 2021 2020 2019 Prior Total

18 unchanged sentences

Total $ 514 $ 4,423 $ 6,136 $ 1,044 $ 2,600 $ 7,928 $ 22,645

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, 2024 December 31, 2023

June 30, 2024 December 31, 2023

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, 2024 and December 31, 2023.

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, 2024 and December 31, 2023.

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, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Commercial Agricultural Residential Total Commercial Agricultural Residential Total

6 unchanged sentences

$ 13,130 $ 4,533 $ 5,133 $ 22,796 $ 13,193 $ 4,445 $ 5,007 $ 22,645

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, 2024

June 30, 2024

$ 99 $ 16 $ 95 $ 210

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 March 31, 2024 and December 31, 2023.

Current period investment income on mortgage loans in nonaccrual status was less than $ 1 million for both the three months ended March 31, 2024 and 2023.

(1) The Company had $ 30 million of mortgage loans in nonaccrual status for which there was no related allowance for credit losses at June 30, 2024.

The Company had no mortgage loans in nonaccrual status for which there was no related allowance for credit losses at December 31, 2023.

Current period investment income on mortgage loans in nonaccrual status was $ 1 million and less than $ 1 million for the six months ended June 30, 2024 and 2023, respectively.

Modified Mortgage Loans by Portfolio Segment

1 unchanged sentence

Generally, the types of concessions may include interest rate reduction, term extension, principal forgiveness, or a combination of all three.

The Company did not have a significant amount of mortgage loans modified during both the three months ended March 31, 2024 and 2023.

The Company did not have a significant amount of mortgage loans modified during both the six months ended June 30, 2024 and 2023.

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 accumulated other comprehensive income (loss) (“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, 2024 December 31, 2023

June 30, 2024 December 31, 2023

(In millions)

7 unchanged sentences

Net unrealized investment gains (losses) $ ( 4,895 ) $ ( 4,040 )

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, 2024

Six Months Ended June 30, 2024

(In millions)

4 unchanged sentences

Deferred income tax benefit (expense) 227

Balance at March 31, 2024 $ ( 4,620 )

Balance at June 30, 2024 $ ( 4,895 )

Change in net unrealized investment gains (losses) $ ( 855 )

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, 2024 and December 31, 2023.

government and its agencies, at both June 30, 2024 and December 31, 2023.

Securities Lending

Elements of the securities lending program are presented below at:

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

(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, 2024 December 31, 2023

June 30, 2024 December 31, 2023

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, 2024 was $ 568 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, 2024 was $ 606 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 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 March 31, 2024.

and foreign corporate securities, U.S.

government and agency securities, non-agency RMBS and CMBS) with 53 % invested in agency RMBS, U.S.

government and agency securities and cash and cash equivalents at June 30, 2024.

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, 2024 December 31, 2023

June 30, 2024 December 31, 2023

(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 $ 37 million and $ 102 million of the assets on deposit represents restricted cash and cash equivalents at March 31, 2024 and December 31, 2023, respectively.

(2) The Company has assets, primarily fixed maturity securities, held in trust relating to certain reinsurance transactions, of which $ 99 million and $ 120 million of the assets held in trust balance represents restricted cash and cash equivalents at March 31, 2024 and December 31, 2023, respectively.

(1) The Company has assets, primarily fixed maturity securities, on deposit with governmental authorities relating to certain policyholder liabilities, of which $ 50 million and $ 102 million of the assets on deposit represents restricted cash and cash equivalents at June 30, 2024 and December 31, 2023, respectively.

(2) The Company has assets, primarily fixed maturity securities, held in trust relating to certain reinsurance transactions, of which $ 199 million and $ 120 million of the assets held in trust balance represents restricted cash and cash equivalents at June 30, 2024 and December 31, 2023, respectively.

(3) The Company has pledged invested assets in connection with various agreements and transactions, including funding agreements (see Note 4 of the Notes to the Consolidated Financial Statements included in the 2023 Annual Report) and derivative transactions (see Note 8).

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 $ 245 million at redemption value at both March 31, 2024 and December 31, 2023 .

In addition, the Company’s investment in FHLB common stock, which is considered restricted until redeemed by the issuer, was $ 238 million and $ 245 million at redemption value at June 30, 2024 and December 31, 2023 , 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, 2024 or December 31, 2023.

There were no material VIEs for which the Company has concluded that it is the primary beneficiary at either June 30, 2024 or December 31, 2023.

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, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Amount Maximum

28 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

(In millions)

6 unchanged sentences

Cash, cash equivalents and short-term investments 63 55 124 105

Other 26 20 51 42

Total investment income 1,394 1,288 2,734 2,438

2 unchanged sentences

_______________

(1) Includes net investment income pertaining to other limited partnership interests of $ 93 million and ($ 1 ) million for the three months ended March 31, 2024 and 2023, respectively.

(1) Includes net investment income pertaining to other limited partnership interests of $ 102 million and $ 195 million for the three months and six months ended June 30, 2024, respectively, and $ 93 million and $ 92 million for the three months and six months ended June 30, 2023, respectively.

Net Investment Gains (Losses)

2 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

(In millions)

2 unchanged sentences

Mortgage loans ( 22 ) ( 10 ) ( 27 ) ( 27 )

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

Other 1 ( 1 ) 1 ( 1 )

Total net investment gains (losses) $ ( 120 ) $ ( 64 ) $ ( 162 ) $ ( 160 )

Gains (losses) from foreign currency transactions included within net investment gains (losses) were not significant for both the three months ended March 31, 2024 and 2023.

Gains (losses) from foreign currency transactions included within net investment gains (losses) were not significant for the three months and six months ended June 30, 2024 and 2023.

Brighthouse Financial, Inc.

5 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

(In millions)

9 unchanged sentences

• Interest rate derivatives:

swaps, floors, caps, swaptions and forwards;

swaps, floors, caps, futures, swaptions and forwards;

• Foreign currency exchange rate derivatives:

3 unchanged sentences

• Credit derivatives:

single and index reference credit default swaps and swaptions.

single and index reference credit default swaps.

For detailed information on these contracts and the related strategies, see Note 7 of the Notes to the Consolidated Financial Statements included in the 2023 Annual Report.

In the second quarter of 2024, the Company utilized interest rate futures to manage risk related to policyholder liabilities for institutional group annuities.

These interest rate futures are non-qualified hedges.

In the first quarter of 2024, the Company entered into interest rate swaps to manage the interest rate risk in funding agreement liabilities.

5 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, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Primary Underlying Risk Exposure Gross

13 unchanged sentences

Interest rate caps Interest rate 6,800 12 2 7,050 19 1

Interest rate futures Interest rate 80 — — — — —

Interest rate options Interest rate 23,050 38 222 33,680 47 167

3 unchanged sentences

Credit default swaps — written Credit 1,096 20 — 1,405 27 —

Credit default swaptions Credit 300 — 1 — — —

Equity index options Equity market 20,883 1,234 940 20,099 757 687

3 unchanged sentences

Total $ 197,677 $ 3,306 $ 4,129 $ 173,236 $ 3,714 $ 5,088

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, 2024 and December 31, 2023.

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, 2024 and December 31, 2023.

The Company’s use of derivatives includes (i) derivatives that serve as 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, 2024

Three Months Ended June 30, 2024

Derivatives Designated as Hedging Instruments:

11 unchanged sentences

Total $ ( 655 ) $ ( 7 ) $ 14 $ 2 $ 44

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 )

At March 31, 2024 and December 31, 2023, the Company held no qualified derivatives hedging exposure to future cash flows for forecasted asset purchases.

At March 31, 2024 and December 31, 2023, the balance in AOCI associated with cash flow hedges was $ 401 million and $ 351 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 Policyholder Benefits and Claims Amount of Gains (Losses) Deferred in AOCI

(In millions)

Six Months Ended June 30, 2024

Derivatives Designated as Hedging Instruments:

Cash flow hedges:

Interest rate $ 3 $ — $ 1 $ 4 $ 12

Foreign currency exchange rate 1 ( 2 ) 26 — 85

Total cash flow hedges 4 ( 2 ) 27 4 97

Derivatives Not Designated or Not Qualifying as Hedging Instruments:

Interest rate ( 1,101 ) — — — —

Foreign currency exchange rate 45 ( 9 ) — — —

Credit 7 — — — —

Equity market 1,073 — — — —

Embedded ( 2,600 ) — — — —

Total non-qualifying hedges ( 2,576 ) ( 9 ) — — —

Total $ ( 2,572 ) $ ( 11 ) $ 27 $ 4 $ 97

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 )

At June 30, 2024 and December 31, 2023, the Company held no qualified derivatives hedging exposure to future cash flows for forecasted asset purchases.

At June 30, 2024 and December 31, 2023, the balance in AOCI associated with cash flow hedges was $ 443 million and $ 351 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, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Rating Agency Designation of Referenced Credit Obligations (1) Estimated

32 unchanged sentences

(In millions)

March 31, 2024

June 30, 2024

Derivative assets $ 3,105 $ ( 2,480 ) $ ( 453 ) $ 172 $ ( 107 ) $ 65

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, 2024 December 31, 2023

June 30, 2024 December 31, 2023

(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, 2024

June 30, 2024

Fair Value Hierarchy Total Estimated

27 unchanged sentences

Foreign currency exchange rate — 23 — 23

Credit — 1 — 1

Equity market — 2,050 — 2,050

35 unchanged sentences

Foreign currency exchange rate — 55 — 55

Credit — — — —

Equity market — 2,824 — 2,824

14 unchanged sentences

The valuation methodologies for securities, mortgage loans and derivatives are reviewed on an ongoing basis and revised when necessary.

In addition, the Chief Accounting Officer periodically reports to the Audit Committee of Brighthouse Financial’s Board of Directors regarding compliance with fair value accounting standards.

In addition, the Chief Accounting Officer periodically reports to the Audit Committee of Brighthouse Financial, Inc.’s Board of Directors regarding compliance with fair value accounting standards.

The fair value of financial assets and financial liabilities is based on quoted market prices, where available.

9 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, 2024.

The Company did not have significant price adjustments during the six months ended June 30, 2024.

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, 2024 December 31, 2023 Impact of

June 30, 2024 December 31, 2023 Impact of

Increase in Input

21 unchanged sentences

Lapse rates are also generally assumed to be lower in periods when a surrender charge applies.

Brighthouse Financial, Inc.

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

Fair Value (continued)

(3) The utilization rate assumption for variable annuity guarantees estimates the percentage of contract holders with a guaranteed minimum income benefit (“GMIB”) or lifetime withdrawal benefit who will elect to utilize the benefit upon becoming eligible in a given year.

2 unchanged sentences

Utilization rates may vary by the type of guarantee, the amount by which the guaranteed amount is greater than the account value, the contract’s withdrawal history and by the age of the policyholder.

Brighthouse Financial, Inc.

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

Fair Value (continued)

(4) The withdrawal rate represents the percentage of account balance that any given policyholder will elect to withdraw from the contract each year.

10 unchanged sentences

The other Level 3 assets and liabilities primarily included fixed maturity securities and derivatives.

For fixed maturity securities valued based on non-binding broker quotes, an increase (decrease) in credit spreads would result in a higher (lower) fair value.

For derivatives valued based on third-party pricing models, an increase (decrease) in credit spreads would generally result in a higher (lower) fair value.

For fixed maturity securities valued based on non-binding broker quotes, an increase (decrease) in credit spreads would result in a (lower) higher fair value.

For derivatives valued based on third-party pricing models, an increase (decrease) in credit spreads would generally result in a (lower) higher fair value.

Brighthouse Financial, Inc.

9 unchanged sentences

(In millions)

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

Balance, beginning of period

9 unchanged sentences

Settlements (5)

Transfers into Level 3 (6)

Transfers out of Level 3 (6)

( 82 ) ( 81 ) — — — —

Balance, end of period $ 1,365 $ 506 $ 21 $ 24 $ 10 $ ( 10,583 )

Three Months Ended June 30, 2023

Balance, beginning of period

$ 1,936 $ 350 $ 39 $ 25 $ 33 $ ( 5,164 )

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

( 4 ) — — ( 1 ) ( 5 ) ( 1,703 )

Total realized/unrealized gains (losses) included in AOCI

( 22 ) ( 1 ) — — — —

Purchases (5)

68 36 — 1 9 —

( 42 ) ( 3 ) ( 1 ) — — —

Issuances (5)

Settlements (5)

— — — — — ( 19 )

Transfers into Level 3 (6)

2 unchanged sentences

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

Three Months Ended March 31, 2023

Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at June 30, 2024 (7)

$ ( 15 ) $ — $ — $ ( 2 ) $ ( 1 ) $ ( 881 )

Changes in unrealized gains (losses) included in OCI for the instruments still held as of June 30, 2024 (7)

$ ( 2 ) $ 1 $ — $ — $ — $ —

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

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

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

$ ( 24 ) $ ( 1 ) $ — $ — $ — $ —

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 Net

Derivatives (2) Embedded Derivatives on Index-Linked Annuities

(In millions)

Six Months Ended June 30, 2024

Balance, beginning of period

14 unchanged sentences

Balance, end of period $ 1,365 $ 506 $ 21 $ 24 $ 10 $ ( 10,583 )

Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at March 31, 2024 (7)

Six Months Ended June 30, 2023

Balance, beginning of period

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

Changes in unrealized gains (losses) included in OCI for the instruments still held as of March 31, 2024 (7)

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

( 3 ) — — ( 3 ) ( 5 ) ( 2,793 )

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

Total realized/unrealized gains (losses) included in AOCI

Purchases (5)

210 52 — 1 9 —

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

( 73 ) ( 7 ) ( 1 ) — — —

Issuances (5)

Settlements (5)

— — — — — ( 161 )

Transfers into Level 3 (6)

Transfers out of Level 3 (6)

( 53 ) ( 42 ) — — ( 12 ) —

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

Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at June 30, 2024 (7)

$ ( 18 ) $ — $ — $ ( 2 ) $ ( 3 ) $ ( 2,921 )

Changes in unrealized gains (losses) included in OCI for the instruments still held as of June 30, 2024 (7)

$ ( 19 ) $ — $ — $ — $ — $ —

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

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

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

$ 1 $ — $ 1 $ — $ — $ —

_______________

(1) Comprised of U.S.

6 unchanged sentences

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

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

Fees attributed to embedded derivatives are included in settlements.

Brighthouse Financial, Inc.

1 unchanged sentence

Fair Value (continued)

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

Fees attributed to embedded derivatives are included in settlements.

(6) 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.

9 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, 2024

June 30, 2024

Fair Value Hierarchy

25 unchanged sentences

Preferred Stock

Preferred stock shares authorized, issued and outstanding were as follows at both March 31, 2024 and December 31, 2023:

Preferred stock shares authorized, issued and outstanding were as follows at both June 30, 2024 and December 31, 2023:

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

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

2024 2023 2024 2023

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

(In millions, except per share data)

5 unchanged sentences

Common Stock Repurchase Program

During the three months ended March 31, 2024 and 2023, BHF repurchased 1,247,311 and 1,200,124 shares, respectively, of its common stock through open market purchases pursuant to 10b5-1 plans for $ 62 million for both periods.

At March 31, 2024, BHF had $ 731 million remaining under its common stock repurchase program.

During the six months ended June 30, 2024 and 2023, BHF repurchased 2,634,041 and 2,684,792 shares, respectively, of its common stock through open market purchases pursuant to Rule 10b5-1 plans for $ 126 million for both periods.

At June 30, 2024, BHF had $ 667 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, 2024

Three Months Ended June 30, 2024

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

2 unchanged sentences

(In millions)

Balance at December 31, 2023

Balance at March 31, 2024

$ ( 4,937 ) $ 317 $ ( 1,711 ) $ 969 $ ( 51 ) $ ( 5,413 )

5 unchanged sentences

Amounts reclassified from AOCI, net of income tax 67 ( 2 ) — — — 65

Balance at June 30, 2024

$ ( 5,245 ) $ 350 $ ( 1,624 ) $ 1,153 $ ( 53 ) $ ( 5,419 )

Three 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 March 31, 2023

$ ( 5,028 ) $ 472 $ ( 1,383 ) $ 706 $ ( 55 ) $ ( 5,288 )

Three Months Ended March 31, 2023

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 )

Six Months Ended June 30, 2024

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

10 unchanged sentences

Amounts reclassified from AOCI, net of income tax 96 ( 4 ) — — 1 93

Balance at March 31, 2023

Balance at June 30, 2024

$ ( 5,245 ) $ 350 $ ( 1,624 ) $ 1,153 $ ( 53 ) $ ( 5,419 )

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

$ ( 6,194 ) $ 504 $ ( 1,378 ) $ 1,020 $ ( 58 ) $ ( 6,106 )

OCI before reclassifications 519 ( 90 ) ( 123 ) ( 146 ) 3 163

Deferred income tax benefit (expense) (3) ( 109 ) 19 26 31 ( 1 ) ( 34 )

AOCI before reclassifications, net of income tax ( 5,784 ) 433 ( 1,475 ) 905 ( 56 ) ( 5,977 )

Amounts reclassified from AOCI 120 ( 4 ) — — 5 121

Deferred income tax benefit (expense) (3) ( 25 ) 1 — — ( 1 ) ( 25 )

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

Balance at June 30, 2023

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

__________________

(1) See Note 7 for information on offsets to investments related to future policy benefits.

2 unchanged sentences

These income tax effects are released from AOCI when the related activity is reclassified into results from operations.

Brighthouse Financial, Inc.

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

Equity (continued)

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

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

(In millions)

6 unchanged sentences

Unrealized gains (losses) on derivatives - cash flow hedges:

Interest rate swaps — ( 2 ) 3 ( 2 ) Net derivative gains (losses)

Interest rate swaps 1 1 1 2 Net investment income

9 unchanged sentences

Total reclassifications, net of income tax $ ( 65 ) $ ( 46 ) $ ( 93 ) $ ( 96 )

Brighthouse Financial, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited)

Other Revenues and Other Expenses

6 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 for both the three months ended March 31, 2024 and 2023, of which substantially all were reported in the Annuities segment.

Brighthouse Financial, Inc.

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

Other Revenues and Other Expenses (continued)

Other revenues consisted primarily of 12b-1 fees of $ 69 million and $ 136 million for the three months and six months ended June 30, 2024, respectively, and $ 66 million and $ 133 million for the three months and six months ended June 30, 2023, respectively, of which substantially all were reported in the Annuities segment.

Other Expenses

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

(In millions)

6 unchanged sentences

Interest expense on debt 38 38 76 76

Other 12 16 50 35

Total other expenses $ 468 $ 502 $ 975 $ 980

1 unchanged sentence

See Note 6 for additional information on the capitalization of DAC.

Brighthouse Financial, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited)

Earnings Per Common Share

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

(In millions, except share and per share data)

6 unchanged sentences

Diluted $ 0.12 $ ( 3.01 ) $ ( 8.17 ) $ ( 10.77 )

For the three months ended March 31, 2023 and 2024, basic loss per common share equaled diluted loss per common share.

For the three months ended June 30, 2024, weighted average shares used for calculating diluted earnings per common share excludes 187,371 shares underlying out-of-the-money stock options, as the inclusion of such shares would be antidilutive under the treasury stock method to the earnings per common share calculation due to the average share price for the three months ended June 30, 2024.

For the six months ended June 30, 2024 and 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.

Brighthouse Financial, Inc.

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

Contingencies, Commitments and Guarantees

13 unchanged sentences

Disposition valuations are also subject to the uncertainty of how opposing parties and their counsel will themselves view the relevant evidence and applicable law.

Brighthouse Financial, Inc.

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

Contingencies, Commitments and Guarantees (continued)

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, 2024.

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, 2024.

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, 2024, 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, 2024, 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

6 unchanged sentences

The Company believes adequate provision has been made in its consolidated financial statements for all probable and reasonably estimable losses for sales practices matters.

Brighthouse Financial, Inc.

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

Contingencies, Commitments and Guarantees (continued)

Cost of Insurance Class Actions

1 unchanged sentence

District Court, Northern District of Georgia, Atlanta Division, filed May 8, 2020).

Plaintiff has filed a purported class action lawsuit against Brighthouse Life Insurance Company.

Plaintiff has filed a purported class action lawsuit against Brighthouse Life Insurance Company, a subsidiary of Brighthouse Financial, Inc.

Plaintiff was the owner of a universal life insurance policy issued by Travelers Insurance Company, a predecessor to Brighthouse Life Insurance Company.

5 unchanged sentences

Plaintiff was granted leave to amend the complaint.

On January 18, 2023, the plaintiff filed a motion on consent to amend the second amended class action complaint to narrow the scope of the class sought to those persons who own or owned life insurance policies issued in Georgia.

On January 18, 2023, plaintiff filed a motion on consent to amend the second amended class action complaint to narrow the scope of the class sought to those persons who own or owned life insurance policies issued in Georgia.

The motion was granted on January 23, 2023, and the third amended class action complaint was filed on January 23, 2023.

The Company intends to vigorously defend this matter.

Brighthouse Financial, Inc.

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

Contingencies, Commitments and Guarantees (continued)

Lawrence Martin v.

7 unchanged sentences

Brighthouse Life Insurance Company filed a motion to dismiss in June 2021, which was denied in February 2022.

Brighthouse Life Insurance Company of NY was initially named as a defendant when the lawsuit was filed, but was dismissed as a defendant, without prejudice, in April 2022.

Brighthouse Life Insurance Company of NY, a subsidiary of Brighthouse Life Insurance Company, was initially named as a defendant when the lawsuit was filed, but was dismissed as a defendant, without prejudice, in April 2022.

The Company intends to vigorously defend this matter.

7 unchanged sentences

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.

The Company 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.

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.

Brighthouse Financial, Inc.

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

Contingencies, Commitments and Guarantees (continued)

The Company’s tax-related matters have involved disputes with taxing authorities, ongoing audits, evaluation of filing positions and any potential assessments related thereto.

In the matters where the Company’s subsidiaries are acting as the reinsured or the reinsurer, such reinsurance matters have involved assertions by third parties primarily related to rates, fees or reinsured benefit calculations, and certain of such reinsurance matters have resulted in arbitration.

In March 2024, an arbitration panel ruled in favor of a reinsurer seeking a premium rate increase retroactive to September 2019 resulting in a $ 187 million loss, of which $ 167 million is reported in universal life and investment product-type policy fees and $ 20 million is reported in other expenses.

As of March 31, 2024, 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 $ 75 million for the aforementioned tax matters.

The reduction in the estimated range of reasonably possible losses reflects the conclusion of the reinsurance arbitration 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.

As of June 30, 2024, 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 $ 75 million relating to certain tax matters, as described above.

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

During the first quarter of 2024, an arbitration panel ruled in favor of a reinsurer seeking a premium rate increase retroactive to September 2019 resulting in a $ 187 million loss, of which $ 167 million was reported in universal life and investment product-type policy fees and $ 20 million was 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 $ 387 million and $ 377 million at March 31, 2024 and December 31, 2023, respectively.

The amounts of these mortgage loan commitments were $ 307 million and $ 377 million at June 30, 2024 and December 31, 2023, 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 $ 1.4 billion at both March 31, 2024 and December 31, 2023.

Brighthouse Financial, Inc.

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

Contingencies, Commitments and Guarantees (continued)

The amounts of these unfunded commitments were $ 1.4 billion at both June 30, 2024 and December 31, 2023.

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.

2 unchanged sentences

These obligations are often subject to time limitations that vary in duration, including contractual limitations and those that arise by operation of law, such as applicable statutes of limitation.

In some cases, the maximum potential obligation under the indemnities and guarantees is subject to a contractual limitation ranging from less than $ 1 million to $ 92 million, with a cumulative maximum of $ 98 million, while in other cases such limitations are not specified or applicable.

In some cases, the maximum potential obligation under the indemnities and guarantees is subject to a contractual limitation with a cumulative maximum of up to $ 87 million, while in other cases such limitations are not specified or applicable.

Since certain of these obligations are not subject to limitations, the Company does not believe that it is possible to determine the maximum potential amount that could become due under these guarantees in the future.

3 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, 2024 and December 31, 2023 for indemnities, guarantees and commitments.

The Company’s recorded liabilities were $ 1 million at both June 30, 2024 and December 31, 2023 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