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bhf-20200511

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 11, 2020

Brighthouse Financial, Inc.

(Exact name of registrant as specified in its charter)

Delaware

001-37905

81-3846992

(State or other jurisdiction of incorporation)

(Commission File Number)

(IRS Employer Identification No.)


11225 North Community House Road
Charlotte,	North Carolina	28277
(Address of principal executive offices)			(Zip Code)

Registrant’s telephone number, including area code: (980) 365-7100

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	BHF	The Nasdaq Stock Market LLC
Depositary Shares, each representing a 1/1,000th interest in a share of 6.600% Non-Cumulative Preferred Stock, Series A	BHFAP	The Nasdaq Stock Market LLC
6.250% Junior Subordinated Debentures due 2058	BHFAL	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

☐

Item 2.02. Results of Operations and Financial Condition.

On May 11, 2020, Brighthouse Financial, Inc. (“Brighthouse Financial” or the “Company”) issued (i) a news release announcing its results for the quarter ended March 31, 2020, a copy of which is attached hereto as Exhibit 99.1 and is incorporated herein by reference, and (ii) a Financial Supplement for the quarter ended March 31, 2020, a copy of which is attached hereto as Exhibit 99.2 and is incorporated herein by reference.

In accordance with General Instruction B.2 of Form 8-K, the information in Items 2.02, 7.01 and Exhibits 99.1 and 99.2 listed in Item 9.01 of this Current Report on Form 8-K shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 7.01. Regulation FD Disclosure.

In connection with its earnings call for the quarter ended March 31, 2020, Brighthouse Financial has prepared a presentation for use with investors and other members of the investment community. This presentation is available on the Brighthouse Financial investor relations website at http://investor.brighthousefinancial.com.

Brighthouse Financial routinely uses its investor relations website to provide presentations, press releases and other information that may be deemed material to investors. Accordingly, the Company encourages investors and others interested in the Company to review the information that it shares at http://investor.brighthousefinancial.com.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits



Exhibit No.			Description
99.1**			News release of Brighthouse Financial, Inc., dated May 11, 2020, announcing its results for the quarter ended March 31, 2020
99.2**			Financial Supplement for the quarter ended March 31, 2020
104*			Cover Page Interactive Data File (embedded within the Inline XBRL document)

* Filed herewith.

** Furnished herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

BRIGHTHOUSE FINANCIAL, INC.

By:

/s/ Lynn A. Dumais

Name:

Lynn A. Dumais

Title:

Chief Accounting Officer

Date: May 11, 2020

Document


PUBLIC RELATIONS Brighthouse Financial, Inc. 11225 N. Community House Rd. Charlotte, NC 28277

Exhibit 99.1

FOR IMMEDIATE RELEASE

Brighthouse Financial Announces First Quarter 2020 Results

•First quarter 2020 net income available to shareholders of $4,950 million, or $47.11 per diluted share, driven primarily by net derivative mark-to-market gains

•First quarter 2020 adjusted earnings, less notable items*, of $273 million, or $2.60 per diluted share

•Annuity sales grew 15 percent over the first quarter of 2019

•Estimated combined risk-based capital ("RBC") ratio between 515 and 535 percent

•$300 million ordinary subsidiary dividend paid to the holding company in the first quarter of 2020; additional $500 million ordinary subsidiary dividend paid in April

•Company repurchased approximately $316 million of its common stock year-to-date through May 8, 2020, representing over 12% of shares outstanding relative to year-end 2019; repurchases temporarily suspended while the company continues to evaluate the impacts of the COVID-19 pandemic

CHARLOTTE, NC, May 11, 2020 — Brighthouse Financial, Inc. ("Brighthouse Financial" or the "company") (Nasdaq: BHF) announced today its financial results for the first quarter ended March 31, 2020.

First Quarter 2020 Results

The company reported net income available to shareholders of $4,950 million in the first quarter of 2020, or $47.11 per diluted share, compared with a net loss available to shareholders of $737 million in the first quarter of 2019. During the quarter, as a result of significantly lower equity markets and lower interest rates, the value of our hedges, which the company uses to protect its balance sheet against adverse market conditions, increased, as expected, while corresponding liabilities are not reflected at fair value under U.S. GAAP accounting, and thus are less sensitive to market movements. The company ended the first quarter of 2020 with common stockholders' equity ("book value") of $20.0 billion, or $198.62 per common share, and book value, excluding accumulated other comprehensive income ("AOCI") of $17.3 billion, or $172.28 per common share.

For the first quarter of 2020, the company reported adjusted earnings* of $211 million, or $2.01 per diluted share.

Adjusted earnings for the quarter reflected $62 million after tax of the following unfavorable notable items, or $0.59 per diluted share:

•$48 million unfavorable impact to the Run-off segment related to a reinsurance recapture and a one-time adjustment related to the transition to a new vendor, and

•$14 million unfavorable impact to Corporate & Other as a result of establishment costs related to planned technology and other expenses associated with the company's separation from its former parent company.

__________________

* Information regarding the non-GAAP and other financial measures included in this news release and a reconciliation of such non-GAAP financial measures to the most directly comparable GAAP measures are provided in the Non-GAAP and Other Financial Disclosures discussion below, as well as in the tables that accompany this news release and/or the First Quarter 2020 Brighthouse Financial, Inc. Financial Supplement and/or the First Quarter 2020 Brighthouse Financial, Inc. Earnings Call Presentation (which are available on the Brighthouse Financial Investor Relations web page at http://investor.brighthousefinancial.com). Additional information regarding notable items can be found on the last page of this news release.


PUBLIC RELATIONS Brighthouse Financial, Inc. 11225 N. Community House Rd. Charlotte, NC 28277

Corporate expenses in the first quarter of 2020 were $214 million, down from $283 million in the fourth quarter of 2019, both on a pre-tax basis.

Annuity sales increased 15 percent quarter-over-quarter and 5 percent sequentially. Life sales increased 33 percent sequentially.

The company repurchased approximately $316 million of its common stock year-to-date through May 8, 2020, representing over 12% of shares outstanding relative to year-end 2019. During the first quarter of 2020, the company repurchased approximately $142 million of its common stock, with an additional approximately $174 million of its common stock repurchased through May 8. Since the announcement of the company's first stock repurchase authorization in August 2018, the company has repurchased a total of approximately $864 million of its common stock through May 8, 2020. The company has temporarily suspended repurchases while it continues to evaluate the impacts of the COVID-19 pandemic.

"Brighthouse Financial’s top priority at this time remains the well-being and safety of our employees, their families, our partners and our customers," said Eric Steigerwalt, president and CEO, Brighthouse Financial. "In March, we promptly implemented our business continuity plans and transitioned to a fully remote-work environment. Due to our employees’ outstanding adaptability and commitment, we are able to continue to support our customers and financial professionals as usual. We entered the current climate from a position of strength and our balance sheet and liquidity remain strong, our investment portfolio is well-diversified and we believe that we are well-positioned to weather the current downturn."

“Regarding our results in the first quarter of 2020, our sales were very strong, we continued to make necessary investments in our technology infrastructure and in our businesses, and our hedging program performed well. I am particularly pleased with our life insurance sales in the quarter. While the immediate future may be more difficult from a sales perspective, I am proud of what we've been able to accomplish so far since our introduction last year of Brighthouse SmartCare, our first life insurance product launched as an independent, public company,” Steigerwalt continued. “Although it is not possible to estimate the severity or duration of the COVID-19 pandemic, we remain confident in our strategy and continue to believe it will generate long-term shareholder value.”

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


	As of or For the Three Months Ended
	March 31, 2020			March 31, 2019
	Total	Per share	Total	Per share
Net income (loss) available to shareholders (1)	$4,950	$47.11	$(737)	$(6.31)
Adjusted earnings (1)	$211	$2.01	$232	$1.98
Adjusted earnings, less notable items (1)	$273	$2.60	$259	$2.21
Weighted average common shares outstanding - diluted (1)	105,093,515	N/A	117,229,854	N/A

Book value	$19,962	$198.62	$14,587	$125.55
Book value, excluding AOCI	$17,315	$172.28	$12,917	$111.18
Ending common shares outstanding	100,502,488	N/A	116,182,687	N/A

(1) Per share amounts are on a diluted basis and may not recalculate due to rounding. For loss periods, dilutive shares were not included in the calculation as inclusion of such shares would have an anti-dilutive effect. See Non-GAAP and Other Financial Disclosures discussion in this news release.


PUBLIC RELATIONS Brighthouse Financial, Inc. 11225 N. Community House Rd. Charlotte, NC 28277

Results by Business Segment and Corporate & Other (Unaudited, in millions)


	For the Three Months Ended
ADJUSTED EARNINGS	March 31, 2020	December 31, 2019	March 31, 2019
Annuities	$316	$265	$295
Life	$11	$75	$25
Run-off (1)	$(70)	$6	$(36)
Corporate & Other (1)	$(46)	$(64)	$(52)

(1) The company uses the term “adjusted loss” throughout this news release to refer to negative adjusted earnings values.

Sales (Unaudited, in millions)


	For the Three Months Ended
	March 31, 2020	December 31, 2019	March 31, 2019
Annuities (1)	$1,969	$1,871	$1,707
Life	$16	$12	$1

(1) Annuities sales include sales of a fixed indexed annuity product sold by Massachusetts Mutual Life Insurance Company, representing 90% of gross sales of that product. Sales of this product were $208 million for the first quarter of 2020, $261 million for the fourth quarter of 2019, and $281 million for the first quarter of 2019.

Annuities

Adjusted earnings in the Annuities segment were $316 million in the current quarter, compared with adjusted earnings of $295 million in the first quarter of 2019 and adjusted earnings of $265 million in the fourth quarter of 2019.

There were no notable items in the current quarter or in the first quarter of 2019. The fourth quarter of 2019 included $42 million of favorable notable items.

On a quarter-over-quarter basis, adjusted earnings, less notable items, reflect lower amortization of deferred acquisition costs ("DAC"), lower expenses, and higher net investment income, partially offset by higher reserves. On a sequential basis, adjusted earnings, less notable items, reflect lower DAC amortization and lower expenses, partially offset by higher reserves and lower fees.

As mentioned above, annuity sales increased 15 percent quarter-over-quarter and increased 5 percent sequentially.

Life

Adjusted earnings in the Life segment were $11 million in the current quarter, compared with adjusted earnings of $25 million in the first quarter of 2019 and adjusted earnings of $75 million in the fourth quarter of 2019.

There were no notable items in the current quarter or the comparison quarters.

On a quarter-over-quarter and sequential basis, adjusted earnings reflect higher DAC amortization and a lower underwriting margin, partially offset by lower expenses and higher net investment income.


PUBLIC RELATIONS Brighthouse Financial, Inc. 11225 N. Community House Rd. Charlotte, NC 28277

As mentioned above, life sales increased 33 percent sequentially.

Run-off

The Run-off segment had an adjusted loss of $70 million in the current quarter, compared with an adjusted loss of $36 million in the first quarter of 2019 and adjusted earnings of $6 million in the fourth quarter of 2019.

There was $48 million of unfavorable notable items in the current quarter. There were no notable items in the comparison quarters.

On a quarter-over-quarter basis, the adjusted loss, less notable items, reflects higher net investment income, partially offset by a lower underwriting margin and higher expenses. On a sequential basis, the adjusted loss, less notable items, reflects a lower underwriting margin, partially offset by higher alternative investment income.

Corporate & Other

Corporate & Other had an adjusted loss of $46 million in the current quarter, compared with an adjusted loss of $52 million in the first quarter of 2019 and an adjusted loss of $64 million in the fourth quarter of 2019.

The current quarter included a $14 million unfavorable notable item related to establishment costs, as described above. The first quarter of 2019 included a $27 million unfavorable notable item and the fourth quarter of 2019 included a $25 million unfavorable notable item, both also related to establishment costs.

On a quarter-over-quarter basis, the adjusted loss, less notable items, reflects the preferred stock dividends which the company began paying in the second quarter of 2019. On a sequential basis, the adjusted loss, less notable items, reflects lower expenses.

Net Investment Income and Adjusted Net Investment Income (Unaudited, in millions)


	For the Three Months Ended
	March 31, 2020	December 31, 2019	March 31, 2019
Net investment income	$916	$898	$811
Adjusted net investment income	$920	$904	$811

Net Investment Income

Net investment income was $916 million and adjusted net investment income* was $920 million for the first quarter of 2020. On a quarter-over-quarter basis, adjusted net investment income increased $109 million and on a sequential basis increased $16 million. The quarter-over-quarter and sequential results were primarily driven by higher alternative investment income and asset growth.

The net investment income yield was 4.30 percent during the quarter.


PUBLIC RELATIONS Brighthouse Financial, Inc. 11225 N. Community House Rd. Charlotte, NC 28277

Statutory Capital and Liquidity (Unaudited, in billions)

As of

March 31,
2020 (1)

December 31,
2019

March 31,
2019

Statutory combined total adjusted capital

$7.2

$9.7

$6.3

(1) Reflects preliminary statutory results as of March 31, 2020.

Capitalization

At March 31, 2020:

•Holding company liquid assets were approximately $1.0 billion

•Statutory combined total adjusted capital on a preliminary basis decreased to approximately $7.2 billion, driven primarily by equity market and interest rate declines, a $300 million ordinary subsidiary dividend paid to the holding company, and unfavorable non-variable annuity results

•Estimated combined RBC ratio between 515 and 535 percent, which includes the decline in statutory combined total adjusted capital noted above, mostly offset by a decline in required capital


PUBLIC RELATIONS Brighthouse Financial, Inc. 11225 N. Community House Rd. Charlotte, NC 28277

Earnings Conference Call

Brighthouse Financial will hold a conference call and audio webcast to discuss its financial results for the first quarter 2020 at 8:00 a.m. Eastern Time on Tuesday, May 12, 2020. In connection with this call, the company has prepared a presentation for use with investors and other members of the investment community. This presentation is available on the Brighthouse Financial Investor Relations web page at http://investor.brighthousefinancial.com.

To listen to the audio webcast via the internet and to access the related presentation, please visit the Brighthouse Financial Investor Relations web page at http://investor.brighthousefinancial.com. To join the conference call via telephone, please dial (844) 358-9117 (+1 (209) 905-5952 from outside the U.S.) and use conference ID 4360648.

A replay of the conference call will be made available until Friday, May 29, 2020, on the Brighthouse Financial Investor Relations web page at http://investor.brighthousefinancial.com.

About Brighthouse Financial, Inc.

Brighthouse Financial, Inc. (Brighthouse Financial) (Nasdaq: BHF) is on a mission to help people achieve financial security. As one of the largest providers of annuities and life insurance in the U.S., we specialize in products designed to help people protect what they've earned and ensure it lasts. Learn more at brighthousefinancial.com.

CONTACT


FOR INVESTORS David Rosenbaum (980) 949-3326 david.rosenbaum@brighthousefinancial.com			FOR MEDIA Deon Roberts (980) 949-3071 deon.roberts@brighthousefinancial.com


PUBLIC RELATIONS Brighthouse Financial, Inc. 11225 N. Community House Rd. Charlotte, NC 28277

Note Regarding Forward-Looking Statements

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

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

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


PUBLIC RELATIONS Brighthouse Financial, Inc. 11225 N. Community House Rd. Charlotte, NC 28277

revise any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events, except as otherwise may be required by law.

Non-GAAP and Other Financial Disclosures

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

Non-GAAP Financial Disclosures

We present certain measures of our performance that are not calculated in accordance with accounting principles generally accepted in the United States of America, also known as "GAAP." We believe that these non-GAAP financial measures highlight our results of operations and the underlying profitability drivers of our business, as well as enhance the understanding of our performance by the investor community.

The following non-GAAP financial measures, previously referred to as operating measures, should not be viewed as substitutes for the most directly comparable financial measures calculated in accordance with GAAP:



Non-GAAP financial measures:			Most directly comparable GAAP financial measures:
adjusted earnings			net income (loss) available to shareholders (1)
adjusted earnings, less notable items			net income (loss) available to shareholders (1)
adjusted revenues			revenues
adjusted expenses			expenses
adjusted earnings per common share			earnings per common share, diluted (1)
adjusted earnings per common share, less notable items			earnings per common share, diluted (1)
adjusted return on common equity			return on common equity (2)
adjusted return on common equity, less notable items			return on common equity (2)
adjusted net investment income			net investment income
__________________
(1) Brighthouse uses net income (loss) available to shareholders to refer to net income (loss) available to Brighthouse Financial, Inc.'s common shareholders, and earnings per common share, diluted to refer to net income (loss) available to shareholders per common share.
(2) Brighthouse uses return on common equity to refer to return on Brighthouse Financial, Inc.'s common stockholders' equity.

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

Adjusted Earnings, Adjusted Revenues and Adjusted Expenses

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

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


PUBLIC RELATIONS Brighthouse Financial, Inc. 11225 N. Community House Rd. Charlotte, NC 28277

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

•Net investment gains (losses);

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

•Certain variable annuity GMIB fees ("GMIB Fees").

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

•Amounts associated with benefits related to GMIBs ("GMIB Costs");

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

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

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

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

Adjusted Earnings per Common Share and Adjusted Return on Common Equity

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

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

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


PUBLIC RELATIONS Brighthouse Financial, Inc. 11225 N. Community House Rd. Charlotte, NC 28277

Adjusted Net Investment Income

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

Other Financial Disclosures

Corporate Expenses

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

Notable items

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

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

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

CTE95

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

CTE98

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

Holding Company Liquid Assets

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


PUBLIC RELATIONS Brighthouse Financial, Inc. 11225 N. Community House Rd. Charlotte, NC 28277

Total Adjusted Capital

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

Sales

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

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

Net Investment Income Yield

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

Normalized Statutory Earnings (Loss)

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

Risk-Based Capital Ratio

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


PUBLIC RELATIONS Brighthouse Financial, Inc. 11225 N. Community House Rd. Charlotte, NC 28277

Condensed Statements of Operations (Unaudited, in millions)


	For the Three Months Ended
Revenues	March 31, 2020	December 31, 2019	March 31, 2019
Premiums	$198	$209	$227
Universal life and investment-type product policy fees	886	950	875
Net investment income	916	898	811
Other revenues	102	107	92
Revenues before NIGL and NDGL	2,102	2,164	2,005
Net investment gains (losses)	(19)	33	(11)
Net derivative gains (losses)	6,902	(1,891)	(1,303)
Total revenues	$8,985	$306	$691

Expenses
Interest credited to policyholder account balances	$259	$268	$258
Policyholder benefits and claims	1,187	734	772
Amortization of DAC and VOBA	770	9	22
Interest expense on debt	47	47	47
Other expenses	470	620	545
Total expenses	2,733	1,678	1,644
Income (loss) before provision for income tax	6,252	(1,372)	(953)
Provision for income tax expense (benefit)	1,293	(303)	(218)
Net income (loss)	4,959	(1,069)	(735)
Less: Net income (loss) attributable to noncontrolling interests	2	1	2
Net income (loss) attributable to Brighthouse Financial, Inc.	4,957	(1,070)	(737)
Less: Preferred stock dividends	7	7	—
Net income (loss) available to Brighthouse Financial, Inc.’s common shareholders	$4,950	$(1,077)	$(737)


PUBLIC RELATIONS Brighthouse Financial, Inc. 11225 N. Community House Rd. Charlotte, NC 28277

Condensed Balance Sheets (Unaudited, in millions)


	As of
ASSETS	March 31, 2020	December 31, 2019	March 31, 2019
Investments:
Fixed maturity securities available-for-sale	$71,302	$71,036	$64,847
Equity securities	122	147	150
Mortgage loans, net	15,547	15,753	14,504
Policy loans	1,250	1,292	1,385
Limited partnerships and limited liability companies	2,505	2,380	2,253
Short-term investments	4,348	1,958	799
Other invested assets	9,658	3,216	2,302
Total investments	104,732	95,782	86,240
Cash and cash equivalents	8,930	2,877	3,864
Accrued investment income	868	684	791
Reinsurance recoverables	14,220	13,990	13,098
Premiums and other receivables	774	770	928
DAC and VOBA	4,862	5,448	5,680
Current income tax recoverable	9	17	—
Other assets	550	584	618
Separate account assets	89,008	107,107	105,211
Total assets	$223,953	$227,259	$216,430
LIABILITIES AND EQUITY
Liabilities
Future policy benefits	$40,653	$39,686	$37,157
Policyholder account balances	47,288	45,771	41,177
Other policy-related balances	3,169	3,111	3,005
Payables for collateral under securities loaned and other transactions	10,988	4,391	3,990
Long-term debt	4,365	4,365	4,364
Current income tax payable	—	—	19
Deferred income tax liability	2,482	1,355	1,005
Other liabilities	5,561	5,236	5,438
Separate account liabilities	89,008	107,107	105,211
Total liabilities	203,514	211,022	201,366
Equity
Preferred Stock, at par value	—	—	—
Common stock, at par value	1	1	1
Additional paid-in capital	12,911	12,908	12,889
Retained earnings (deficit)	5,521	585	609
Treasury stock	(706)	(562)	(170)
Accumulated other comprehensive income (loss)	2,647	3,240	1,670
Total Brighthouse Financial, Inc.’s stockholders’ equity	20,374	16,172	14,999
Noncontrolling interests	65	65	65
Total equity	20,439	16,237	15,064
Total liabilities and equity	$223,953	$227,259	$216,430


PUBLIC RELATIONS Brighthouse Financial, Inc. 11225 N. Community House Rd. Charlotte, NC 28277

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


	For the Three Months Ended			For the Year Ended
ADJUSTED EARNINGS, LESS NOTABLE ITEMS	March 31, 2020	December 31, 2019	March 31, 2019
Net income (loss) available to shareholders	$4,950	$(1,077)	$(737)
Less: Net investment gains (losses)	(19)	33	(11)
Less: Net derivative gains (losses), excluding investment hedge adjustments	6,898	(1,897)	(1,303)
Less: GMIB Fees and GMIB Costs	(166)	34	35
Less: Amortization of DAC and VOBA	(671)	93	75
Less: Market value adjustments and other	(43)	17	(23)
Less: Provision for income tax (expense) benefit on reconciling adjustments	(1,260)	361	258
Adjusted earnings	211	282	232
Less: Notable items	(62)	17	(27)
Adjusted earnings, less notable items	$273	$265	$259

ADJUSTED EARNINGS, LESS NOTABLE ITEMS PER COMMON SHARE (1)
Net income (loss) available to shareholders per common share	$47.11	$(10.02)	$(6.31)
Less: Net investment gains (losses)	(0.18)	0.31	(0.09)
Less: Net derivative gains (losses), excluding investment hedge adjustments	65.64	(17.65)	(11.16)
Less: GMIB Fees and GMIB Costs	(1.58)	0.32	0.30
Less: Amortization of DAC and VOBA	(6.38)	0.87	0.64
Less: Market value adjustments and other	(0.41)	0.16	(0.20)
Less: Provision for income tax (expense) benefit on reconciling adjustments	(11.99)	3.36	2.21
Less: Impact of inclusion of dilutive shares	—	0.01	0.01
Adjusted earnings per common share	2.01	2.61	1.98
Less: Notable items	(0.59)	0.16	(0.23)
Adjusted earnings, less notable items per common share	$2.60	$2.46	$2.21

(1) Per share calculations are on a diluted basis and may not recalculate or foot due to rounding. For loss periods, dilutive shares were not included in the calculation as inclusion of such shares would have an anti-dilutive effect. See Non-GAAP and Other Financial Disclosures discussion in this news release.


PUBLIC RELATIONS Brighthouse Financial, Inc. 11225 N. Community House Rd. Charlotte, NC 28277

Reconciliation of Net Investment Income to Adjusted Net Investment Income (Unaudited, in millions)


	For the Three Months Ended			For the Three Months Ended
	March 31, 2020	December 31, 2019	March 31, 2019
Net investment income	$916	$898	$811
Less: Investment hedge adjustments	(4)	(6)	—
Adjusted net investment income	$920	$904	$811

Notable Items (Unaudited, in millions)


	For the Three Months Ended			For the Three Months Ended
NOTABLE ITEMS IMPACTING ADJUSTED EARNINGS	March 31, 2020	December 31, 2019	March 31, 2019
Actuarial items and other insurance adjustments	$48	$(42)	$—
Establishment costs	14	25	27

Total notable items (1)	$62	$(17)	$27

NOTABLE ITEMS BY SEGMENT AND CORPORATE & OTHER
Annuities	$—	$(42)	$—
Life	—	—	—
Run-off	48	—	—
Corporate & Other	14	25	27
Total notable items (1)	$62	$(17)	$27

(1) Notable items reflect the negative (positive) after-tax impact to adjusted earnings of certain unanticipated items and events, as well as certain items and events that were anticipated, such as establishment costs. The presentation of notable items is intended to help investors better understand our results and to evaluate and forecast those results.

Document

Exhibit 99.2

Brighthouse Financial, Inc.

Financial Supplement

First Quarter 2020

Table of Contents

Financial Results

Key Metrics

GAAP Condensed Statements of Operations

GAAP Balance Sheets

Earnings and Select Metrics from Business Segments and Corporate & Other

Statements of Adjusted Earnings by Segment and Corporate & Other

Annuities — Statements of Adjusted Earnings

Annuities — Select Operating Metrics

Life — Statements of Adjusted Earnings

Life — Select Operating Metrics

Run-off — Statements of Adjusted Earnings

Run-off — Select Operating Metrics

Corporate & Other — Statements of Adjusted Earnings

Other Information

DAC and VOBA and Net Derivative Gains (Losses)

Notable Items

Variable Annuity Separate Account Returns and Allocations

Summary of Investments

Statutory Statement of Operations Information

Statutory Balance Sheet and Surplus Information

Appendix

A-1

Note Regarding Forward-Looking Statements

A-2

Non-GAAP and Other Financial Disclosures

A-6

Acronyms

A-7

A-8

Reconciliation of Return on Common Equity to Adjusted Return on Common Equity

A-9

Reconciliation of Total Revenues to Adjusted Revenues and Reconciliation of Total Expenses to Adjusted Expenses

A-10

Investment Reconciliation Details

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

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

Financial Results

Financial Supplement

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


	As of or For the Three Months Ended
Financial Results and Metrics (1)	March 31, 2020	December 31, 2019	September 30, 2019	June 30, 2019	March 31, 2019
Net income (loss) available to shareholders	$4,950	$(1,077)	$676	$377	$(737)
Adjusted earnings	$211	$282	$(169)	$254	$232
Adjusted earnings, less notable items (2)	$273	$265	$260	$296	$259
Total corporate expenses (3)	$214	$283	$248	$242	$225
Combined total adjusted capital (4)	$7,200	$9,694	$8,406	$6,897	$6,314
Combined risk-based capital ratio (4), (5)	515% - 535%	552%	N/A	N/A	N/A

Stockholders' Equity
Brighthouse Financial, Inc.’s stockholders’ equity	$20,374	$16,172	$17,695	$16,276	$14,999
Less: Preferred stock, net	412	412	412	412	412
Brighthouse Financial, Inc.’s common stockholders’ equity, including AOCI	$19,962	$15,760	$17,283	$15,864	$14,587
Less: AOCI	2,647	3,240	3,567	2,702	1,670
Brighthouse Financial, Inc.’s common stockholders’ equity, excluding AOCI	$17,315	$12,520	$13,716	$13,162	$12,917

Return on Common Equity (1)
Return on common equity	29.5%	(4.9)%	11.7%	5.7%	1.4%
Return on common equity, excluding AOCI	35.4%	(5.8)%	13.4%	6.3%	1.5%
Adjusted return on common equity	4.2%	4.5%	3.8%	7.3%	6.5%

Earnings Per Common Share, Diluted (1), (6)
Net income (loss) available to shareholders per common share	$47.11	$(10.02)	$6.06	$3.27	$(6.31)
Adjusted earnings per common share	$2.01	$2.61	$(1.52)	$2.19	$1.98
Adjusted earnings, less notable items per common share	$2.60	$2.46	$2.33	$2.56	$2.21
Weighted average common shares outstanding	105,093,515	107,840,324	111,527,480	115,536,654	117,229,854

Book Value Per Common Share
Book value per common share (1)	$198.62	$148.64	$158.18	$140.83	$125.55
Book value per common share, excluding AOCI (1)	$172.28	$118.08	$125.53	$116.85	$111.18
Ending common shares outstanding	100,502,488	106,027,301	109,264,305	112,644,952	116,182,687

(1) See definitions for Non-GAAP and Other Financial Disclosures in the Appendix beginning on page A-2.
(2) See additional information regarding notable items on page 17.
(3) Includes functional department expenses, public company expenses, certain investment expenses, retirement funding and incentive compensation; and excludes establishment costs.
(4) Reflects preliminary statutory results for the three months ended March 31, 2020. See additional information on page 5.
(5) RBC ratios prior to the implementation of variable annuity capital reform are not presented.
(6) For loss periods, dilutive shares were not included in the calculation of net income (loss) available to shareholders per common share or adjusted earnings per common share as inclusion of such shares would have an anti-dilutive effect.

Financial Supplement

GAAP Condensed Statements of Operations (Unaudited, in millions)


	For the Three Months Ended							For the Three Months Ended
Revenues	March 31, 2020	December 31, 2019	September 30, 2019	June 30, 2019	March 31, 2019	March 31, 2020	March 31, 2019
Premiums	$198	$209	$214	$232	$227	$198	$227
Universal life and investment-type product policy fees	886	950	867	888	875	886	875
Net investment income	916	898	928	942	811	916	811
Other revenues	102	107	94	96	92	102	92
Revenues before NIGL and NDGL	2,102	2,164	2,103	2,158	2,005	2,102	2,005
Net investment gains (losses)	(19)	33	27	63	(11)	(19)	(11)
Net derivative gains (losses)	6,902	(1,891)	1,057	149	(1,303)	6,902	(1,303)
Total revenues	$8,985	$306	$3,187	$2,370	$691	$8,985	$691

Expenses
Interest credited to policyholder account balances	$259	$268	$272	$265	$258	$259	$258
Policyholder benefits and claims	1,187	734	1,319	845	772	1,187	772
Amortization of DAC and VOBA	770	9	181	170	22	770	22
Interest expense on debt	47	47	49	48	47	47	47
Other expenses	470	620	562	573	545	470	545
Total expenses	2,733	1,678	2,383	1,901	1,644	2,733	1,644
Income (loss) before provision for income tax	6,252	(1,372)	804	469	(953)	6,252	(953)
Provision for income tax expense (benefit)	1,293	(303)	119	85	(218)	1,293	(218)
Net income (loss)	4,959	(1,069)	685	384	(735)	4,959	(735)
Less: Net income (loss) attributable to noncontrolling interests	2	1	2	—	2	2	2
Net income (loss) attributable to Brighthouse Financial, Inc.	4,957	(1,070)	683	384	(737)	4,957	(737)
Less: Preferred stock dividends	7	7	7	7	—	7	—
Net income (loss) available to Brighthouse Financial, Inc.’s common shareholders	$4,950	$(1,077)	$676	$377	$(737)	$4,950	$(737)

Financial Supplement

GAAP Balance Sheets (Unaudited, in millions)


	As of
ASSETS	March 31, 2020	December 31, 2019	September 30, 2019	June 30, 2019	March 31, 2019
Investments:
Fixed maturity securities available-for-sale	$71,302	$71,036	$70,723	$67,211	$64,847
Equity securities	122	147	148	153	150
Mortgage loans, net	15,547	15,753	15,359	15,078	14,504
Policy loans	1,250	1,292	1,332	1,342	1,385
Limited partnerships and limited liability companies	2,505	2,380	2,353	2,296	2,253
Short-term investments	4,348	1,958	1,985	793	799
Other invested assets	9,658	3,216	4,734	3,064	2,302
Total investments	104,732	95,782	96,634	89,937	86,240
Cash and cash equivalents	8,930	2,877	4,289	3,981	3,864
Accrued investment income	868	684	732	747	791
Reinsurance recoverables	14,220	13,990	13,412	13,366	13,098
Premiums and other receivables	774	770	973	865	928
DAC and VOBA	4,862	5,448	5,317	5,492	5,680
Current income tax recoverable	9	17	14	—	—
Other assets	550	584	577	610	618
Separate account assets	89,008	107,107	103,928	106,214	105,211
Total assets	$223,953	$227,259	$225,876	$221,212	$216,430
LIABILITIES AND EQUITY
Liabilities
Future policy benefits	$40,653	$39,686	$39,846	$38,280	$37,157
Policyholder account balances	47,288	45,771	44,919	42,941	41,177
Other policy-related balances	3,169	3,111	3,079	3,041	3,005
Payables for collateral under securities loaned and other transactions	10,988	4,391	5,291	4,094	3,990
Long-term debt	4,365	4,365	4,365	4,365	4,364
Current income tax payable	—	—	—	14	19
Deferred income tax liability	2,482	1,355	1,749	1,364	1,005
Other liabilities	5,561	5,236	4,939	4,558	5,438
Separate account liabilities	89,008	107,107	103,928	106,214	105,211
Total liabilities	203,514	211,022	208,116	204,871	201,366
Equity
Preferred Stock, at par value	—	—	—	—	—
Common stock, at par value	1	1	1	1	1
Additional paid-in capital	12,911	12,908	12,897	12,893	12,889
Retained earnings (deficit)	5,521	585	1,662	986	609
Treasury stock	(706)	(562)	(432)	(306)	(170)
Accumulated other comprehensive income (loss)	2,647	3,240	3,567	2,702	1,670
Total Brighthouse Financial, Inc.’s stockholders’ equity	20,374	16,172	17,695	16,276	14,999
Noncontrolling interests	65	65	65	65	65
Total equity	20,439	16,237	17,760	16,341	15,064
Total liabilities and equity	$223,953	$227,259	$225,876	$221,212	$216,430

Earnings and Select

Metrics from

Business Segments and Corporate & Other

Financial Supplement

Statements of Adjusted Earnings by Segment and Corporate & Other (Unaudited, in millions)


	For the Three Months Ended March 31, 2020
Adjusted revenues	Annuities	Life	Run-off	Corporate & Other	Total
Premiums	$35	$141	$—	$22	$198
Universal life and investment-type product policy fees	566	93	162	—	821
Net investment income	460	116	324	20	920
Other revenues	90	4	7	—	101
Total adjusted revenues	$1,151	$354	$493	$42	$2,040

Adjusted expenses
Interest credited to policyholder account balances	$155	$27	$77	$—	$259
Policyholder benefits and claims	204	237	454	17	912
Amortization of DAC and VOBA	38	58	—	3	99
Interest expense on debt	—	—	—	47	47
Other operating costs	365	19	52	34	470
Total adjusted expenses	762	341	583	101	1,787
Adjusted earnings before provision for income tax	389	13	(90)	(59)	253
Provision for income tax expense (benefit)	73	2	(20)	(22)	33
Adjusted earnings after provision for income tax	316	11	(70)	(37)	220
Less: Net income (loss) attributable to noncontrolling interests and preferred stock dividends	—	—	—	9	9
Adjusted earnings	$316	$11	$(70)	$(46)	$211

	For the Three Months Ended March 31, 2019
Adjusted revenues	Annuities	Life	Run-off	Corporate & Other	Total
Premiums	$58	$145	$1	$23	$227
Universal life and investment-type product policy fees	561	58	193	(3)	809
Net investment income	421	97	276	17	811
Other revenues	77	3	6	6	92
Total adjusted revenues	$1,117	$303	$476	$43	$1,939

Adjusted expenses
Interest credited to policyholder account balances	$137	$25	$96	$—	$258
Policyholder benefits and claims	143	181	380	14	718
Amortization of DAC and VOBA	82	11	—	4	97
Interest expense on debt	—	—	—	47	47
Other operating costs	394	55	46	50	545
Total adjusted expenses	756	272	522	115	1,665
Adjusted earnings before provision for income tax	361	31	(46)	(72)	274
Provision for income tax expense (benefit)	66	6	(10)	(22)	40
Adjusted earnings after provision for income tax	295	25	(36)	(50)	234
Less: Net income (loss) attributable to noncontrolling interests and preferred stock dividends	—	—	—	2	2
Adjusted earnings	$295	$25	$(36)	$(52)	$232

Financial Supplement

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


	For the Three Months Ended							For the Three Months Ended
Adjusted revenues	March 31, 2020	December 31, 2019	September 30, 2019	June 30, 2019	March 31, 2019	March 31, 2020	March 31, 2019
Premiums	$35	$32	$48	$60	$58	$35	$58
Universal life and investment-type product policy fees	566	585	596	584	561	566	561
Net investment income	460	457	461	470	421	460	421
Other revenues	90	79	79	80	77	90	77
Total adjusted revenues	$1,151	$1,153	$1,184	$1,194	$1,117	$1,151	$1,117

Adjusted expenses
Interest credited to policyholder account balances	$155	$151	$149	$147	$137	$155	$137
Policyholder benefits and claims	204	134	152	180	143	204	143
Amortization of DAC and VOBA	38	95	211	128	82	38	82
Interest expense on debt	—	—	—	—	—	—	—
Other operating costs	365	449	417	416	394	365	394
Total adjusted expenses	762	829	929	871	756	762	756
Adjusted earnings before provision for income tax	389	324	255	323	361	389	361
Provision for income tax expense (benefit)	73	59	52	58	66	73	66
Adjusted earnings	$316	$265	$203	$265	$295	$316	$295

Financial Supplement

Annuities — Select Operating Metrics (Unaudited, in millions)


	For the Three Months Ended
VARIABLE & SHIELD LEVEL ANNUITIES ACCOUNT VALUE (1)	March 31, 2020	December 31, 2019	September 30, 2019	June 30, 2019	March 31, 2019
Account value, beginning of period	$116,426	$112,707	$114,041	$112,247	$105,089
Deposits	1,607	1,608	1,490	1,511	1,327
Withdrawals, surrenders and contract benefits	(2,656)	(2,826)	(2,667)	(2,716)	(2,479)
Net flows (2)	(1,049)	(1,218)	(1,177)	(1,205)	(1,152)
Investment performance (3)	(14,066)	5,693	650	3,687	8,971
Policy charges and other	(620)	(756)	(807)	(688)	(661)
Account value, end of period	$100,691	$116,426	$112,707	$114,041	$112,247

FIXED ANNUITIES ACCOUNT VALUE (4)
Account value, beginning of period	$13,113	$13,069	$12,900	$12,734	$12,770
Deposits	402	314	355	410	416
Withdrawals, surrenders and contract benefits	(272)	(332)	(250)	(312)	(521)
Net flows (2)	130	(18)	105	98	(105)
Interest credited	89	88	92	87	90
Other	(19)	(26)	(28)	(19)	(21)
Account value, end of period	$13,313	$13,113	$13,069	$12,900	$12,734

INCOME ANNUITIES (1)
Income annuity insurance liabilities	$4,565	$4,588	$4,590	$4,515	$4,541

(1) Includes general account and separate account.
(2) Deposits and withdrawals include policy exchanges.
(3) Includes imputed interest on indexed annuities and the interest credited on the general account investment option of variable products.
(4) Includes fixed indexed annuities.

Financial Supplement

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


	For the Three Months Ended							For the Three Months Ended
VARIABLE & SHIELD LEVEL ANNUITY SALES	March 31, 2020	December 31, 2019	September 30, 2019	June 30, 2019	March 31, 2019	March 31, 2020	March 31, 2019
Shield Level Annuities (1)	$1,140	$1,197	$1,137	$1,140	$985	$1,140	$985
GMWB/GMAB	322	264	223	227	198	322	198
GMDB only	87	80	72	80	78	87	78
GMIB	19	17	18	26	23	19	23
Total variable & Shield Level annuity sales	$1,568	$1,558	$1,450	$1,473	$1,284	$1,568	$1,284

FIXED ANNUITY SALES
Fixed indexed annuities (2)	$208	$261	$296	$291	$281	$208	$281
Fixed deferred annuities	191	49	55	114	133	191	133
Single premium immediate annuities	1	3	5	8	6	1	6
Other fixed annuities	1	—	2	4	3	1	3
Total fixed annuity sales	$401	$313	$358	$417	$423	$401	$423

(1) Shield Level Annuities refers to our suite of structured annuities consisting of products marketed under various names.
(2) Represents 90% of gross sales assumed via reinsurance agreements.

Financial Supplement

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


	For the Three Months Ended							For the Three Months Ended
Adjusted revenues	March 31, 2020	December 31, 2019	September 30, 2019	June 30, 2019	March 31, 2019	March 31, 2020	March 31, 2019
Premiums	$141	$154	$143	$150	$145	$141	$145
Universal life and investment-type product policy fees	93	109	53	59	58	93	58
Net investment income	116	106	117	116	97	116	97
Other revenues	4	6	7	5	3	4	3
Total adjusted revenues	$354	$375	$320	$330	$303	$354	$303

Adjusted expenses
Interest credited to policyholder account balances	$27	$26	$30	$24	$25	$27	$25
Policyholder benefits and claims	237	190	179	169	181	237	181
Amortization of DAC and VOBA	58	4	(31)	21	11	58	11
Interest expense on debt	—	—	—	—	—	—	—
Other operating costs	19	61	51	44	55	19	55
Total adjusted expenses	341	281	229	258	272	341	272
Adjusted earnings before provision for income tax	13	94	91	72	31	13	31
Provision for income tax expense (benefit)	2	19	18	14	6	2	6
Adjusted earnings	$11	$75	$73	$58	$25	$11	$25

Financial Supplement

Life — Select Operating Metrics (Unaudited, in millions)


	For the Three Months Ended
LIFE ACCOUNT VALUE: GENERAL ACCOUNT	March 31, 2020	December 31, 2019	September 30, 2019	June 30, 2019	March 31, 2019
Variable universal and universal life account value, beginning of period	$2,682	$2,699	$2,707	$2,727	$2,747
Premiums and deposits (1)	74	62	62	58	65
Surrenders and contract benefits	(33)	(37)	(42)	(49)	(52)
Net flows	41	25	20	9	13
Net transfers from (to) separate account	19	12	17	18	13
Interest credited	25	26	26	26	25
Policy charges and other	(76)	(80)	(71)	(73)	(71)
Variable universal and universal life account value, end of period	$2,691	$2,682	$2,699	$2,707	$2,727

LIFE ACCOUNT VALUE: SEPARATE ACCOUNT
Variable universal life account value, beginning of period	$5,493	$5,200	$5,269	$5,138	$4,679
Premiums and deposits	52	54	54	55	59
Surrenders and contract benefits	(65)	(60)	(63)	(63)	(69)
Net flows	(13)	(6)	(9)	(8)	(10)
Investment performance	(928)	366	15	212	539
Net transfers from (to) general account	(19)	(12)	(17)	(18)	(15)
Policy charges and other	(55)	(55)	(58)	(55)	(55)
Variable universal life account value, end of period	$4,478	$5,493	$5,200	$5,269	$5,138

(1) Includes premiums and sales directed to the general account investment option of variable products.

Financial Supplement

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

For the Three Months Ended

LIFE SALES

March 31,
2020

December 31,
2019

September 30,
2019

June 30,
2019

March 31,
2019

March 31,
2020

March 31,
2019

Total life sales

$16

$12

$16


	As of
LIFE INSURANCE IN-FORCE	March 31, 2020	December 31, 2019	September 30, 2019	June 30, 2019	March 31, 2019
Whole Life
Life Insurance in-force, before reinsurance	$20,298	$20,602	$20,954	$21,212	$21,518
Life Insurance in-force, net of reinsurance	$3,105	$3,163	$3,150	$3,172	$3,638

Term Life
Life Insurance in-force, before reinsurance	$402,720	$409,427	$415,478	$421,507	$427,239
Life Insurance in-force, net of reinsurance	$309,500	$314,034	$317,274	$321,285	$324,941

Universal and Variable Universal Life
Life Insurance in-force, before reinsurance	$53,009	$54,269	$54,892	$55,628	$56,378
Life Insurance in-force, net of reinsurance	$39,466	$40,461	$38,543	$39,139	$39,844

Financial Supplement

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


	For the Three Months Ended							For the Three Months Ended
Adjusted revenues	March 31, 2020	December 31, 2019	September 30, 2019	June 30, 2019	March 31, 2019	March 31, 2020	March 31, 2019
Premiums	$—	$1	$—	$—	$1	$—	$1
Universal life and investment-type product policy fees	162	191	150	182	193	162	193
Net investment income	324	323	327	339	276	324	276
Other revenues	7	7	7	6	6	7	6
Total adjusted revenues	$493	$522	$484	$527	$476	$493	$476

Adjusted expenses
Interest credited to policyholder account balances	$77	$91	$92	$94	$96	$77	$96
Policyholder benefits and claims	454	371	885	380	380	454	380
Amortization of DAC and VOBA	—	—	—	—	—	—	—
Interest expense on debt	—	—	—	—	—	—	—
Other operating costs	52	53	50	51	46	52	46
Total adjusted expenses	583	515	1,027	525	522	583	522
Adjusted earnings before provision for income tax	(90)	7	(543)	2	(46)	(90)	(46)
Provision for income tax expense (benefit)	(20)	1	(117)	—	(10)	(20)	(10)
Adjusted earnings	$(70)	$6	$(426)	$2	$(36)	$(70)	$(36)

Financial Supplement

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


	For the Three Months Ended
UNIVERSAL LIFE WITH SECONDARY GUARANTEES ACCOUNT VALUE	March 31, 2020	December 31, 2019	September 30, 2019	June 30, 2019	March 31, 2019
Account value, beginning of period	$6,018	$6,058	$6,084	$6,110	$6,154
Premiums and deposits (1)	180	186	184	191	187
Surrenders and contract benefits	(24)	(34)	(18)	(27)	(39)
Net flows	156	152	166	164	148
Interest credited	57	59	58	58	57
Policy charges and other	(252)	(251)	(250)	(248)	(249)
Account value, end of period	$5,979	$6,018	$6,058	$6,084	$6,110


	As of
LIFE INSURANCE IN-FORCE	March 31, 2020	December 31, 2019	September 30, 2019	June 30, 2019	March 31, 2019
Universal Life with Secondary Guarantees
Life Insurance in-force, before reinsurance	$77,428	$78,008	$78,722	$79,243	$79,817
Life Insurance in-force, net of reinsurance	$37,481	$37,740	$36,698	$36,945	$37,233

(1) Includes premiums and sales directed to the general account investment option of variable products.

Financial Supplement

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


	For the Three Months Ended							For the Three Months Ended
Adjusted revenues	March 31, 2020	December 31, 2019	September 30, 2019	June 30, 2019	March 31, 2019	March 31, 2020	March 31, 2019
Premiums	$22	$22	$23	$22	$23	$22	$23
Universal life and investment-type product policy fees	—	—	—	(2)	(3)	—	(3)
Net investment income	20	18	23	17	17	20	17
Other revenues	—	4	1	5	6	—	6
Total adjusted revenues	$42	$44	$47	$42	$43	$42	$43

Adjusted expenses
Interest credited to policyholder account balances	$—	$—	$—	$—	$—	$—	$—
Policyholder benefits and claims	17	14	18	13	14	17	14
Amortization of DAC and VOBA	3	3	3	4	4	3	4
Interest expense on debt	47	47	49	48	47	47	47
Other operating costs	34	57	44	62	50	34	50
Total adjusted expenses	101	121	114	127	115	101	115
Adjusted earnings before provision for income tax	(59)	(77)	(67)	(85)	(72)	(59)	(72)
Provision for income tax expense (benefit)	(22)	(21)	(57)	(21)	(22)	(22)	(22)
Adjusted earnings after provision for income tax	(37)	(56)	(10)	(64)	(50)	(37)	(50)
Less: Net income (loss) attributable to noncontrolling interests and preferred stock dividends	9	8	9	7	2	9	2
Adjusted earnings	$(46)	$(64)	$(19)	$(71)	$(52)	$(46)	$(52)

Other

Information

Financial Supplement

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


	For the Three Months Ended
DAC AND VOBA ROLLFORWARD	March 31, 2020	December 31, 2019	September 30, 2019	June 30, 2019	March 31, 2019
Balance, beginning of period	$5,448	$5,317	$5,492	$5,680	$5,717
Capitalization	98	95	93	96	86
Amortization:
Included in adjusted earnings, excluding notable items	(99)	(137)	(162)	(153)	(97)
Related to notable items, included in adjusted expenses	—	35	(21)	—	—
Related to items not included in adjusted expenses	(671)	93	2	(17)	75
Total amortization	(770)	(9)	(181)	(170)	(22)
Unrealized investment gains (losses)	86	45	(87)	(114)	(101)

Balance, end of period	$4,862	$5,448	$5,317	$5,492	$5,680
	As of
DAC AND VOBA BY SEGMENT AND CORPORATE & OTHER	March 31, 2020	December 31, 2019	September 30, 2019	June 30, 2019	March 31, 2019
Annuities	$3,745	$4,327	$4,191	$4,382	$4,534
Life	1,018	1,019	1,021	1,001	1,034
Run-off	5	5	5	5	5
Corporate & Other	94	97	100	104	107
Total DAC and VOBA	$4,862	$5,448	$5,317	$5,492	$5,680


	For the Three Months Ended
NET DERIVATIVE GAINS (LOSSES)	March 31, 2020	December 31, 2019	September 30, 2019	June 30, 2019	March 31, 2019
Net derivative gains (losses):
Variable annuity hedges and embedded derivatives, net	$5,181	$(1,419)	$418	$(194)	$(1,439)
ULSG hedges	1,583	(446)	656	312	122
Other hedges and embedded derivatives	134	(32)	(17)	31	14
Subtotal	6,898	(1,897)	1,057	149	(1,303)
Investment hedge adjustments	4	6	—	—	—
Total net derivative gains (losses)	$6,902	$(1,891)	$1,057	$149	$(1,303)

Financial Supplement

Notable Items (Unaudited, in millions)


	For the Three Months Ended
NOTABLE ITEMS IMPACTING ADJUSTED EARNINGS	March 31, 2020	December 31, 2019	September 30, 2019	June 30, 2019	March 31, 2019
Actuarial items and other insurance adjustments	$48	$(42)	$442	$12	$—
Establishment costs	14	25	10	30	27
Separation-related transactions	—	—	(23)	—	—
Total notable items (1)	$62	$(17)	$429	$42	$27

NOTABLE ITEMS BY SEGMENT AND CORPORATE & OTHER
Annuities	$—	$(42)	$30	$—	$—
Life	—	—	(19)	—	—
Run-off	48	—	431	12	—
Corporate & Other	14	25	(13)	30	27
Total notable items (1)	$62	$(17)	$429	$42	$27

(1) Notable items reflect the negative (positive) after-tax impact to adjusted earnings of certain unanticipated items and events, as well as certain items and events that were anticipated, such as establishment costs. The presentation of notable items is intended to help investors better understand our results and to evaluate and forecast those results.

Financial Supplement

Variable Annuity Separate Account Returns and Allocations (Unaudited)


	For the Three Months Ended
VARIABLE ANNUITY SEPARATE ACCOUNT RETURNS	March 31, 2020	December 31, 2019	September 30, 2019	June 30, 2019	March 31, 2019
Total Quarterly VA separate account gross returns	(14.31)%	6.14%	0.83%	3.84%	10.02%

TOTAL VARIABLE ANNUITY SEPARATE ACCOUNT ALLOCATIONS
Percent allocated to equity funds	24.11%	26.19%	25.52%	25.04%	25.72%
Percent allocated to bond funds/other funds	9.59%	8.23%	8.50%	8.23%	8.30%
Percent allocated to target volatility funds	24.41%	23.10%	23.51%	24.11%	22.97%
Percent allocated to balanced funds	41.89%	42.48%	42.47%	42.62%	43.01%

Financial Supplement

Summary of Investments (Unaudited, dollars in millions)


	March 31, 2020			December 31, 2019
	Amount	% of Total	Amount	% of Total
Fixed maturity securities:
U.S. corporate securities	$30,670	26.98%	$31,160	31.58%
Foreign corporate securities	9,244	8.13%	9,844	9.98%
Residential mortgage-backed securities	8,900	7.83%	9,118	9.24%
U.S. government and agency securities	8,926	7.85%	7,396	7.50%
Commercial mortgage-backed securities	5,745	5.06%	5,755	5.83%
State and political subdivision securities	4,143	3.65%	4,057	4.11%
Asset-backed securities	2,027	1.78%	1,955	1.98%
Foreign government securities	1,647	1.45%	1,751	1.78%
Total fixed maturity securities	71,302	62.73%	71,036	72.00%
Equity securities	122	0.11%	147	0.15%
Mortgage loans:
Commercial mortgage loans	9,512	8.37%	9,721	9.85%
Agricultural mortgage loans	3,403	2.99%	3,388	3.44%
Residential mortgage loans	2,701	2.38%	2,708	2.74%
Allowance for credit losses	(69)	(0.06)%	(64)	(0.06)%
Total mortgage loans, net	15,547	13.68%	15,753	15.97%
Policy loans	1,250	1.10%	1,292	1.31%
Limited partnerships and limited liability companies	2,505	2.20%	2,380	2.41%
Cash, cash equivalents and short-term investments	13,278	11.68%	4,835	4.90%
Other invested assets:
Derivatives:
Interest rate	5,950	5.23%	1,778	1.80%
Equity market	2,677	2.35%	921	0.93%
Foreign currency exchange rate	850	0.75%	286	0.29%
Credit	7	0.01%	36	0.04%
Total derivatives	9,484	8.34%	3,021	3.06%
FHLB common stock	39	0.04%	39	0.04%
Other	135	0.12%	156	0.16%
Total other invested assets	9,658	8.50%	3,216	3.26%
Total investments and cash and cash equivalents	$113,662	100.00%	$98,659	100.00%

For the Three Months Ended

March 31,
2020

December 31,
2019

September 30,
2019

June 30,
2019

March 31,
2019

Net investment income yield (1), (2)

4.30%

4.32%

4.52%

4.67%

4.10%

(1) Yields are calculated on investment income as a percent of average quarterly asset carrying values. Investment income includes investment hedge adjustments, excludes realized gains and losses and reflects the GAAP adjustments described beginning on page A-1 of the Appendix hereto. Asset carrying values exclude unrealized gains (losses), collateral received in connection with our securities lending program, freestanding derivative assets and collateral received from derivative counterparties.

(2) Investment fee and expense yields are calculated as investment fees and expenses as a percent of average quarterly asset estimated fair values. Asset estimated fair values exclude collateral received in connection with our securities lending program, freestanding derivative assets and collateral received from derivative counterparties.

Financial Supplement

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


	For the Three Months Ended							For the Three Months Ended
COMBINED REVENUES AND EXPENSES (1)	PRELIMINARY March 31, 2020 (2)	December 31, 2019	September 30, 2019	June 30, 2019	March 31, 2019	PRELIMINARY March 31, 2020 (2)	March 31, 2019
Total revenues (Line 9)	$5,700	$2,086	$3,443	$3,436	$2,393	$5,700	$2,393
Total benefits and expenses before dividends to policyholders (Line 28)	$13,000	$1,008	$3,047	$2,839	$2,429	$13,000	$2,429

COMBINED NET INCOME (LOSS) (1)
Gain (loss) from operations net of taxes and dividends to policyholders (Line 33)	$(7,300)	$1,089	$314	$597	$(43)	$(7,300)	$(43)
Net realized capital gains (losses), net of taxes and certain transfers to interest maintenance reserve (Line 34)	500	(297)	185	(701)	(147)	500	(147)
Net income (loss) (Line 35)	$(6,800)	$792	$499	$(104)	$(190)	$(6,800)	$(190)

						For the Three Months Ended
NORMALIZED STATUTORY EARNINGS (LOSS) (3), (4)						PRELIMINARY March 31, 2020 (2)	March 31, 2019
						(In billions)
Statutory net gain (loss) from operations, pre-tax						$(7.4)	$—
Add: net realized capital gains (losses)						0.5	(0.1)
Add: change in CTE95 capital requirements, net of the change in VA reserves						1.1	1.6
Add: unrealized gains (losses) on VA hedging program						5.0	(1.2)


Normalized statutory earnings (loss)						$(0.8)	$0.3

(1) Combined statutory results are for Brighthouse Life Insurance Company, Brighthouse Life Insurance Company of NY and New England Life Insurance Company.
(2) Reflects preliminary statutory results for the three months ended March 31, 2020.
(3) See definitions for Non-GAAP and Other Financial Disclosures in the Appendix beginning on page A-2.
(4) Normalized statutory earnings (loss), presented in billions, is for Brighthouse Life Insurance Company and New England Life Insurance Company.

Financial Supplement

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


	As of
COMBINED ASSETS, LIABILITIES, AND CAPITAL AND SURPLUS (1)	PRELIMINARY March 31, 2020 (2)	December 31, 2019	September 30, 2019	June 30, 2019	March 31, 2019
Total assets (Line 28)	$185,000	$186,564	$185,743	$181,989	$178,745
Total liabilities (Line 28)	$178,700	$177,702	$178,103	$175,788	$172,788
Total capital and surplus (Line 38)	$6,300	$8,862	$7,640	$6,201	$5,957

COMBINED TAC AND RBC RATIO (1), (3)
Combined total adjusted capital	$7,200	$9,694	$8,406	$6,897	$6,314
Combined risk-based capital ratio (4)	515% - 535%	552%	N/A	N/A	N/A

	As of
COMBINED ORDINARY DIVIDEND CAPACITY (1)	March 31, 2020	December 31, 2019	September 30, 2019	June 30, 2019	March 31, 2019
Dividends paid to Holding Company	$300	$131	$—	$—	$—
Remaining ordinary dividend capacity (5)	$1,827	$798	$929	$929	$929

(1) Combined statutory results are for Brighthouse Life Insurance Company and New England Life Insurance Company.
(2) Reflects preliminary statutory results as of March 31, 2020.
(3) See definitions for Non-GAAP and Other Financial Disclosures in the Appendix beginning on page A-2.
(4) RBC ratios prior to the implementation of variable annuity capital reform are not presented.
(5) Reflects remaining dividend amounts that may be paid during the respective calendar year without prior regulatory approval. However, because dividend tests may be based on dividends previously paid over rolling 12-month periods, if paid before a specified date during such calendar year, some or all of such dividends may require regulatory approval.

Appendix

Financial Supplement

A-1

Note Regarding Forward-Looking Statements

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

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

Financial Supplement

A-2

Non-GAAP and Other Financial Disclosures

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

Non-GAAP Financial Disclosures

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

Non-GAAP financial measures:

Most directly comparable GAAP financial measures:

(i)

adjusted earnings

(i)

net income (loss) available to shareholders (1)

(ii)

adjusted earnings, less notable items

(ii)

net income (loss) available to shareholders (1)

(iii)

adjusted revenues

(iii)

revenues

(iv)

adjusted expenses

(iv)

expenses

(v)

adjusted earnings per common share

(v)

earnings per common share, diluted (1)

(vi)

adjusted earnings per common share, less notable items

(vi)

earnings per common share, diluted (1)

(vii)

adjusted return on common equity

(vii)

return on common equity (2)

(viii)

adjusted return on common equity, less notable items

(viii)

return on common equity (2)

(ix)

adjusted net investment income

(ix)

net investment income

__________________

(1) Brighthouse uses net income (loss) available to shareholders to refer to net income (loss) available to Brighthouse Financial, Inc.'s common shareholders, and earnings per common share, diluted to refer to net income (loss) available to shareholders per common share.

(2) Brighthouse uses return on common equity to refer to return on Brighthouse Financial, Inc.'s common stockholders' equity.

Adjusted Earnings, Adjusted Revenues and Adjusted Expenses

Financial Supplement

A-3

Non-GAAP and Other Financial Disclosures (Cont.)

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

•Net investment gains (losses);

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

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

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

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

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

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

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

Adjusted Earnings per Common Share and Adjusted Return on Common Equity

Adjusted Net Investment Income

Financial Supplement

A-4

Non-GAAP and Other Financial Disclosures (Cont.)

Other Financial Disclosures

Corporate Expenses

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

Notable items

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

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

CTE95

CTE98

Holding Company Liquid Assets

Total Adjusted Capital

Financial Supplement

A-5

Non-GAAP and Other Financial Disclosures (Cont.)

Other Financial Disclosures (cont.)

Sales

Net Investment Income Yield

Normalized Statutory Earnings (Loss)

Risk-Based Capital Ratio

Financial Supplement

A-6

Acronyms


AOCI			Accumulated other comprehensive income (loss)
CTE			Conditional tail expectations
DAC			Deferred policy acquisition costs
FHLB			Federal Home Loan Bank
GAAP			Accounting principles generally accepted in the United States of America
GMAB			Guaranteed minimum accumulation benefits
GMDB			Guaranteed minimum death benefits
GMIB			Guaranteed minimum income benefits
GMWB			Guaranteed minimum withdrawal benefits
LIMRA			Life Insurance Marketing and Research Association
NDGL			Net derivative gains (losses)
NIGL			Net investment gains (losses)
RBC			Risk-based capital
TAC			Total adjusted capital
ULSG			Universal life insurance with secondary guarantees
VA			Variable annuity
VOBA			Value of business acquired

Financial Supplement

A-7


	For the Three Months Ended
ADJUSTED EARNINGS, LESS NOTABLE ITEMS	March 31, 2020	December 31, 2019	September 30, 2019	June 30, 2019	March 31, 2019
Net income (loss) available to shareholders	$4,950	$(1,077)	$676	$377	$(737)
Less: Net investment gains (losses)	(19)	33	27	63	(11)
Less: Net derivative gains (losses), excluding investment hedge adjustments	6,898	(1,897)	1,057	149	(1,303)
Less: GMIB Fees and GMIB Costs	(166)	34	(4)	(22)	35
Less: Amortization of DAC and VOBA	(671)	93	2	(17)	75
Less: Market value adjustments and other	(43)	17	(14)	(16)	(23)
Less: Provision for income tax (expense) benefit on reconciling adjustments	(1,260)	361	(223)	(34)	258
Adjusted earnings	211	282	(169)	254	232
Less: Notable items	(62)	17	(429)	(42)	(27)
Adjusted earnings, less notable items	$273	$265	$260	$296	$259

ADJUSTED EARNINGS, LESS NOTABLE ITEMS PER COMMON SHARE (1), (2)
Net income (loss) available to shareholders per common share	$47.11	$(10.02)	$6.06	$3.27	$(6.31)
Less: Net investment gains (losses)	(0.18)	0.31	0.24	0.55	(0.09)
Less: Net derivative gains (losses), excluding investment hedge adjustments	65.64	(17.65)	9.48	1.29	(11.16)
Less: GMIB Fees and GMIB Costs	(1.58)	0.32	(0.04)	(0.19)	0.30
Less: Amortization of DAC and VOBA	(6.38)	0.87	0.02	(0.15)	0.64
Less: Market value adjustments and other	(0.41)	0.16	(0.13)	(0.14)	(0.20)
Less: Provision for income tax (expense) benefit on reconciling adjustments	(11.99)	3.36	(2.00)	(0.29)	2.21
Less: Impact of inclusion of dilutive shares	—	0.01	—	—	0.01
Adjusted earnings per common share	2.01	2.61	(1.52)	2.19	1.98
Less: Notable items	(0.59)	0.16	(3.85)	(0.36)	(0.23)
Adjusted earnings, less notable items per common share	$2.60	$2.46	$2.33	$2.56	$2.21

(1) See definitions for Non-GAAP and Other Financial Disclosures in this Appendix.
(2) Per share calculations are on a diluted basis and may not recalculate or foot due to rounding. For loss periods, dilutive shares were not included in the calculation as inclusion of such shares would have an anti-dilutive effect.

Financial Supplement

A-8

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


	Four Quarters Cumulative Trailing Basis
ADJUSTED EARNINGS	March 31, 2020	December 31, 2019	September 30, 2019	June 30, 2019	March 31, 2019
Net income (loss) available to shareholders	$4,926	$(761)	$1,758	$811	$195
Less: Net investment gains (losses)	104	112	(7)	(76)	(214)
Less: Net derivative gains (losses), excluding investment hedge adjustments	6,207	(1,994)	1,941	191	(274)
Less: GMIB Fees and GMIB Costs	(158)	43	(128)	(96)	(93)
Less: Amortization of DAC and VOBA	(593)	153	(173)	(153)	(232)
Less: Market value adjustments and other	(56)	(36)	(54)	(37)	(12)
Less: Provision for income tax (expense) benefit on reconciling adjustments	(1,156)	362	(324)	40	179
Adjusted earnings	$578	$599	$503	$942	$841
	Five Quarters Average Stockholders' Equity Basis
BRIGHTHOUSE FINANCIAL, INC.’S COMMON STOCKHOLDERS’ EQUITY, EXCLUDING AOCI	March 31, 2020	December 31, 2019	September 30, 2019	June 30, 2019	March 31, 2019
Brighthouse Financial, Inc.’s stockholders’ equity	$17,103	$15,912	$15,254	$14,402	$13,864
Less: Preferred stock, net	412	330	247	165	82
Brighthouse Financial, Inc.’s common stockholders’ equity	16,691	15,582	15,007	14,237	13,782
Less: AOCI	2,765	2,379	1,841	1,291	898
Brighthouse Financial, Inc.’s common stockholders’ equity, excluding AOCI	$13,926	$13,203	$13,166	$12,946	$12,884
	Five Quarters Average Common Stockholders' Equity Basis
ADJUSTED RETURN ON COMMON EQUITY	March 31, 2020	December 31, 2019	September 30, 2019	June 30, 2019	March 31, 2019
Return on common equity	29.5%	(4.9)%	11.7%	5.7%	1.4%
Return on AOCI	178.2%	(32.0)%	95.5%	62.8%	21.7%
Return on common equity, excluding AOCI	35.4%	(5.8)%	13.4%	6.3%	1.5%
Less: Return on net investment gains (losses)	0.7%	0.8%	—%	(0.6)%	(1.7)%
Less: Return on net derivative gains (losses), excluding investment hedge adjustments	44.6%	(15.1)%	14.7%	1.5%	(2.1)%
Less: Return on GMIB Fees and GMIB Costs	(1.1)%	0.3%	(0.9)%	(0.7)%	(0.7)%
Less: Return on amortization of DAC and VOBA	(4.3)%	1.2%	(1.3)%	(1.2)%	(1.8)%
Less: Return on market value adjustments and other	(0.4)%	(0.2)%	(0.4)%	(0.3)%	(0.1)%
Less: Return on provision for income tax (expense) benefit on reconciling adjustments	(8.3)%	2.7%	(2.5)%	0.3%	1.4%
Adjusted return on common equity	4.2%	4.5%	3.8%	7.3%	6.5%

Financial Supplement

A-9

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


	For the Three Months Ended							For the Three Months Ended
	March 31, 2020	December 31, 2019	September 30, 2019	June 30, 2019	March 31, 2019	March 31, 2020	March 31, 2019
Total revenues	$8,985	$306	$3,187	$2,370	$691	$8,985	$691
Less: Net investment gains (losses)	(19)	33	27	63	(11)	(19)	(11)
Less: Net derivative gains (losses)	6,902	(1,891)	1,057	149	(1,303)	6,902	(1,303)
Less: GMIB Fees	65	66	67	65	66	65	66
Less: Investment hedge adjustments	(4)	(6)	—	—	—	(4)	—
Less: Other	1	10	1	—	—	1	—
Total adjusted revenues	$2,040	$2,094	$2,035	$2,093	$1,939	$2,040	$1,939

Total expenses	$2,733	$1,678	$2,383	$1,901	$1,644	$2,733	$1,644
Less: Amortization of DAC and VOBA	671	(93)	(2)	17	(75)	671	(75)
Less: GMIB Costs	231	32	71	87	31	231	31
Less: Other	44	(7)	15	16	23	44	23
Total adjusted expenses	$1,787	$1,746	$2,299	$1,781	$1,665	$1,787	$1,665

Financial Supplement

A-10

Investment Reconciliation Details (Unaudited, dollars in millions)


	For the Three Months Ended							For the Three Months Ended
NET INVESTMENT GAINS (LOSSES)	March 31, 2020	December 31, 2019	September 30, 2019	June 30, 2019	March 31, 2019	March 31, 2020	March 31, 2019
Investment portfolio gains (losses)	$2	$43	$30	$68	$(8)	$2	$(8)
Investment portfolio writedowns	(21)	(10)	(3)	(5)	(3)	(21)	(3)
Total net investment portfolio gains (losses)	(19)	33	27	63	(11)	(19)	(11)
Other incremental net investment income	—	—	—	—	—	—	—
Net investment gains (losses)	$(19)	$33	$27	$63	$(11)	$(19)	$(11)


	For the Three Months Ended
NET INVESTMENT INCOME YIELD	March 31, 2020	December 31, 2019	September 30, 2019	June 30, 2019	March 31, 2019
Investment income yield (1)	4.44%	4.43%	4.62%	4.79%	4.24%
Investment fees and expenses (2)	(0.14)%	(0.11)%	(0.10)%	(0.12)%	(0.14)%
Net investment income yield	4.30%	4.32%	4.52%	4.67%	4.10%

(1) Yields are calculated on investment income as a percent of average quarterly asset carrying values. Investment income includes investment hedge adjustments, excludes realized gains and losses and reflects the GAAP adjustments described beginning on page A-1 of this Appendix. Asset carrying values exclude unrealized gains (losses), collateral received in connection with our securities lending program, freestanding derivative assets and collateral received from derivative counterparties.
(2) Investment fee and expense yields are calculated as investment fees and expenses as a percent of average quarterly asset estimated fair values. Asset estimated fair values exclude collateral received in connection with our securities lending program, freestanding derivative assets and collateral received from derivative counterparties.