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BHF Brighthouse Financial

Filed: 5 Aug 21, 4:24pm



Exhibit 99.3








Brighthouse Financial, Inc.
Financial Supplement

Second Quarter 2021

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Table of ContentsFinancial Results
Earnings and Select Metrics from Business Segments and Corporate & Other
Other Information
Appendix
A-2
A-6
A-7
A-8
A-9
A-10

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.
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Financial Results
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Financial Supplement1



Key Metrics (Unaudited, dollars in millions except per share amounts)
As of or For the Three Months Ended
Financial Results and Metrics (1)June 30,
2021
March 31,
2021
December 31,
2020
September 30,
2020
June 30,
2020
Net income (loss) available to shareholders$10$(610)$(1,045)$(3,012)$(1,998)
Adjusted earnings$435$385$189$(689)$11
Adjusted earnings, less notable items (2)$458$428$272$388$39
Total corporate expenses (3)$218$203$236$204$210
Combined total adjusted capital (4)$9,400$9,421$8,617$8,432$7,724
Combined risk-based capital ratio (4), (5)480%-500%500%-520%487%525%-545%515%-535%
Stockholders' Equity
Brighthouse Financial, Inc.’s stockholders’ equity$16,115$15,017$18,023$18,266$20,909
Less: Preferred stock, net1,3601,3601,360802802
Brighthouse Financial, Inc.’s common stockholders’ equity, including AOCI$14,755$13,657$16,663$17,464$20,107
Less: AOCI4,5963,3895,7165,3814,965
Brighthouse Financial, Inc.’s common stockholders’ equity, excluding AOCI$10,159$10,268$10,947$12,083$15,142
Return on Common Equity (1)
Return on common equity(28.2)%(37.9)%(6.1)%(6.3)%14.3%
Return on common equity, excluding AOCI(39.7)%(50.7)%(8.1)%(8.0)%17.8%
Adjusted return on common equity2.7%(0.8)%(2.0)%(1.3)%2.3%
Earnings Per Common Share, Diluted (1), (6)
Net income (loss) available to shareholders per common share$0.11$(6.96)$(11.69)$(32.49)$(21.10)
Adjusted earnings per common share$5.05$4.36$2.10$(7.43)$0.11
Adjusted earnings, less notable items per common share$5.32$4.86$3.03$4.19$0.41
Weighted average common shares outstanding86,065,15088,124,03589,890,16292,693,18894,837,492
Book Value Per Common Share
Book value per common share (1)$175.19$157.26$188.90$191.58$216.25
Book value per common share, excluding AOCI (1)$120.62$118.24$124.10$132.55$162.85
Ending common shares outstanding84,223,66986,841,26088,211,61891,158,92792,979,854
(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 18.
(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 as of or for the three months ended June 30, 2021. See additional information on page 22.
(5) The RBC ratio is reported as a preliminary range on the quarters.
(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.

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Financial Supplement2



GAAP Statements of Operations (Unaudited, in millions)
For the Three Months EndedFor the Six Months Ended
RevenuesJune 30,
2021
March 31,
2021
December 31,
2020
September 30,
2020
June 30,
2020
June 30,
2021
June 30,
2020
Premiums$162$184$191$184$193$346$391
Universal life and investment-type product policy fees9199308688828271,8491,713
Net investment income1,2121,1871,0379966522,3991,568
Other revenues1011271199993228195
Revenues before NIGL and NDGL2,3942,4282,2152,1611,7654,8223,867
Net investment gains (losses)(34)143265(34)(20)(53)
Net derivative gains (losses)(684)(1,504)(2,410)(1,857)(2,653)(2,188)4,249
Total revenues$1,676$938$131$309$(922)$2,614$8,063
Expenses
Interest credited to policyholder account balances$287$297$276$281$276$584$535
Policyholder benefits and claims7527566383,0478391,5082,026
Amortization of DAC and VOBA891(156)244(92)99678
Interest expense on debt40414547458192
Other expenses5685216345335321,0891,002
Total expenses1,6551,7061,4374,1521,6003,3614,333
Income (loss) before provision for income tax21(768)(1,306)(3,843)(2,522)(747)3,730
Provision for income tax expense (benefit)(10)(185)(275)(850)(531)(195)762
Net income (loss)31(583)(1,031)(2,993)(1,991)(552)2,968
Less: Net income (loss) attributable to noncontrolling interests21222
Net income (loss) attributable to Brighthouse Financial, Inc.31(585)(1,032)(2,995)(1,991)(554)2,966
Less: Preferred stock dividends2125131774614
Net income (loss) available to Brighthouse Financial, Inc.’s common shareholders$10$(610)$(1,045)$(3,012)$(1,998)$(600)$2,952

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Financial Supplement3



GAAP Balance Sheets (Unaudited, in millions)
As of
ASSETSJune 30,
2021
March 31,
2021
December 31,
2020
September 30,
2020
June 30,
2020
Investments:
Fixed maturity securities available-for-sale$84,785$78,971$82,495$79,338$76,796
Equity securities91106138117129
Mortgage loans16,73215,69015,80815,74615,791
Policy loans1,2551,2451,2911,2891,201
Limited partnerships and limited liability companies3,5463,2192,8102,5622,354
Short-term investments1,2931,6733,2424,2394,537
Other invested assets2,8632,2673,7475,0386,364
Total investments110,565103,171109,531108,329107,172
Cash and cash equivalents4,8824,0254,1086,1897,325
Accrued investment income827734676781664
Reinsurance recoverables15,29015,25715,33815,05214,359
Premiums and other receivables8378728201,035859
DAC and VOBA5,1225,1484,9114,6644,856
Current income tax recoverable1
Other assets494506516447532
Separate account assets115,839112,224111,969103,18499,599
Total assets$253,856$241,937$247,869$239,681$235,367
LIABILITIES AND EQUITY
Liabilities
Future policy benefits$43,427$42,426$44,448$44,537$41,841
Policyholder account balances60,30055,15254,50852,79850,338
Other policy-related balances3,3563,3553,4113,0883,152
Payables for collateral under securities loaned and other transactions5,1434,2815,2526,9897,876
Long-term debt3,4363,4353,4363,9793,979
Current income tax payable15015212672
Deferred income tax liability1,1098121,6201,8162,567
Other liabilities4,9165,0185,0114,8875,041
Separate account liabilities115,839112,224111,969103,18499,599
Total liabilities237,676226,855229,781221,350214,393
Equity
Preferred stock, at par value
Common stock, at par value11111
Additional paid-in capital13,84213,85813,87813,31413,307
Retained earnings (deficit)(1,088)(1,119)(534)5113,523
Treasury stock(1,236)(1,112)(1,038)(941)(887)
Accumulated other comprehensive income (loss)4,5963,3895,7165,3814,965
Total Brighthouse Financial, Inc.’s stockholders’ equity16,11515,01718,02318,26620,909
Noncontrolling interests6565656565
Total equity16,18015,08218,08818,33120,974
Total liabilities and equity$253,856$241,937$247,869$239,681$235,367

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Earnings and Select
Metrics from
Business Segments and Corporate & Other

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Financial Supplement5



Statements of Adjusted Earnings by Segment and Corporate & Other (Unaudited, in millions)
For the Three Months Ended June 30, 2021
Adjusted revenuesAnnuitiesLifeRun-offCorporate & OtherTotal
Premiums$18$125$—$19$162
Universal life and investment-type product policy fees61883155856
Net investment income533168499171,217
Other revenues8878103
Total adjusted revenues$1,257$383$662$36$2,338
Adjusted expenses
Interest credited to policyholder account balances$182$24$77$3$286
Policyholder benefits and claims11821639915748
Amortization of DAC and VOBA123103136
Interest expense on debt4040
Other operating costs417484657568
Total adjusted expenses8402985221181,778
Adjusted earnings before provision for income tax41785140(82)560
Provision for income tax expense (benefit)791718(10)104
Adjusted earnings after provision for income tax33868122(72)456
Less: Net income (loss) attributable to noncontrolling interests and preferred stock dividends2121
Adjusted earnings$338$68$122$(93)$435
For the Three Months Ended June 30, 2020
Adjusted revenuesAnnuitiesLifeRun-offCorporate & OtherTotal
Premiums$40$132$—$21$193
Universal life and investment-type product policy fees52777159763
Net investment income4056916616656
Other revenues807794
Total adjusted revenues$1,052$285$332$37$1,706
Adjusted expenses
Interest credited to policyholder account balances$162$25$88$1$276
Policyholder benefits and claims16414834914675
Amortization of DAC and VOBA157(4)4157
Interest expense on debt4545
Other operating costs364564171532
Total adjusted expenses8472254781351,685
Adjusted earnings before provision for income tax20560(146)(98)21
Provision for income tax expense (benefit)3412(31)(12)3
Adjusted earnings after provision for income tax17148(115)(86)18
Less: Net income (loss) attributable to noncontrolling interests and preferred stock dividends77
Adjusted earnings$171$48$(115)$(93)$11

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Financial Supplement6


Statements of Adjusted Earnings by Segment and Corporate & Other (Cont.) (Unaudited, in millions)
For the Six Months Ended June 30, 2021
Adjusted revenuesAnnuitiesLifeRun-offCorporate & OtherTotal
Premiums$54$252$—$40$346
Universal life and investment-type product policy fees1,2211893141,724
Net investment income1,083334961312,409
Other revenues1971815230
Total adjusted revenues$2,555$793$1,290$71$4,709
Adjusted expenses
Interest credited to policyholder account balances$367$55$157$3$582
Policyholder benefits and claims291454818331,596
Amortization of DAC and VOBA250556311
Interest expense on debt8181
Other operating costs8169290911,089
Total adjusted expenses1,7246561,0652143,659
Adjusted earnings before provision for income tax831137225(143)1,050
Provision for income tax expense (benefit)1572727(29)182
Adjusted earnings after provision for income tax674110198(114)868
Less: Net income (loss) attributable to noncontrolling interests and preferred stock dividends4848
Adjusted earnings$674$110$198$(162)$820
For the Six Months Ended June 30, 2020
Adjusted revenuesAnnuitiesLifeRun-offCorporate & OtherTotal
Premiums$75$273$—$43$391
Universal life and investment-type product policy fees1,0931703211,584
Net investment income865185490361,576
Other revenues1701114195
Total adjusted revenues$2,203$639$825$79$3,746
Adjusted expenses
Interest credited to policyholder account balances$317$52$165$1$535
Policyholder benefits and claims368385803311,587
Amortization of DAC and VOBA195547256
Interest expense on debt9292
Other operating costs72975931051,002
Total adjusted expenses1,6095661,0612363,472
Adjusted earnings before provision for income tax59473(236)(157)274
Provision for income tax expense (benefit)10714(51)(34)36
Adjusted earnings after provision for income tax48759(185)(123)238
Less: Net income (loss) attributable to noncontrolling interests and preferred stock dividends1616
Adjusted earnings$487$59$(185)$(139)$222

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Financial Supplement7


Annuities — Statements of Adjusted Earnings (Unaudited, in millions)
For the Three Months EndedFor the Six Months Ended
Adjusted revenuesJune 30,
2021
March 31,
2021
December 31,
2020
September 30,
2020
June 30,
2020
June 30,
2021
June 30,
2020
Premiums$18$36$38$34$40$54$75
Universal life and investment-type product policy fees6186035885695271,2211,093
Net investment income5335504864694051,083865
Other revenues88109918580197170
Total adjusted revenues$1,257$1,298$1,203$1,157$1,052$2,555$2,203
Adjusted expenses
Interest credited to policyholder account balances$182$185$165$169$162$367$317
Policyholder benefits and claims1181731539164291368
Amortization of DAC and VOBA123127118127157250195
Interest expense on debt
Other operating costs417399407373364816729
Total adjusted expenses8408848436788471,7241,609
Adjusted earnings before provision for income tax417414360479205831594
Provision for income tax expense (benefit)7978679234157107
Adjusted earnings$338$336$293$387$171$674$487

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Financial Supplement8


Annuities — Select Operating Metrics (Unaudited, in millions)
For the Three Months Ended
VARIABLE AND SHIELD LEVEL ANNUITIES ACCOUNT VALUE (1)June 30,
2021
March 31,
2021
December 31,
2020
September 30,
2020
June 30,
2020
Account value, beginning of period$125,527$124,227$115,111$110,993$100,691
Deposits2,1731,9721,8381,4281,319
Withdrawals, surrenders and contract benefits(2,874)(2,748)(2,593)(1,958)(1,827)
Net flows (2)(701)(776)(755)(530)(508)
Investment performance (3)6,0262,86910,6635,40411,496
Policy charges and other(835)(793)(792)(756)(686)
Account value, end of period$130,017$125,527$124,227$115,111$110,993
FIXED ANNUITIES ACCOUNT VALUE (4)
Account value, beginning of period$15,404$15,358$14,443$13,660$13,313
Deposits1972311,159946548
Withdrawals, surrenders and contract benefits(231)(279)(332)(242)(291)
Net flows (2)(34)(48)827704257
Interest credited98107899892
Other(12)(13)(1)(19)(2)
Account value, end of period$15,456$15,404$15,358$14,443$13,660
INCOME ANNUITIES (1)
Income annuity insurance liabilities$4,665$4,624$4,817$4,798$4,587
(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 index annuities.
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Financial Supplement9


Annuities — Select Operating Metrics (Cont.) (Unaudited, in millions)
For the Three Months EndedFor the Six Months Ended
VARIABLE AND SHIELD LEVEL ANNUITY SALESJune 30,
2021
March 31,
2021
December 31,
2020
September 30,
2020
June 30,
2020
June 30,
2021
June 30,
2020
Shield Level Annuities (1)$1,593$1,423$1,359$934$905$3,016$2,045
GMWB/GMAB393366332350277759599
GMDB only10095818782195169
GMIB18232319224141
Total variable and Shield Level annuity sales$2,104$1,907$1,795$1,390$1,286$4,011$2,854
FIXED AND INCOME ANNUITY SALES
Fixed index annuities (2)$173$182$253$234$309$355$517
Fixed deferred annuities224290270923964430
Single premium immediate annuities11415
Other fixed and income annuities111
Total fixed and income annuity sales$195$225$1,156$945$552$420$953
(1) Shield Level Annuities refers to our suite of structured annuities consisting of products marketed under various names.
(2) Represents 100% of gross sales on directly written business and the proportion of assumed gross sales under reinsurance agreements.

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Financial Supplement10


Life — Statements of Adjusted Earnings (Unaudited, in millions)
For the Three Months EndedFor the Six Months Ended
Adjusted revenuesJune 30,
2021
March 31,
2021
December 31,
2020
September 30,
2020
June 30,
2020
June 30,
2021
June 30,
2020
Premiums$125$127$131$129$132$252$273
Universal life and investment-type product policy fees83106628377189170
Net investment income16816614413169334185
Other revenues7118771811
Total adjusted revenues$383$410$345$350$285$793$639
Adjusted expenses
Interest credited to policyholder account balances$24$31$27$27$25$55$52
Policyholder benefits and claims216238246132148454385
Amortization of DAC and VOBA1045350(4)5554
Interest expense on debt
Other operating costs48445447569275
Total adjusted expenses298358330256225656566
Adjusted earnings before provision for income tax855215946013773
Provision for income tax expense (benefit)1710218122714
Adjusted earnings$68$42$13$76$48$110$59

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Financial Supplement11


Life — Select Operating Metrics (Unaudited, in millions)
For the Three Months Ended
LIFE ACCOUNT VALUE: GENERAL ACCOUNTJune 30,
2021
March 31,
2021
December 31,
2020
September 30,
2020
June 30,
2020
Universal and variable universal life account value, beginning of period$2,670$2,674$2,670$2,674$2,691
Premiums and deposits (1)7874696567
Surrenders and contract benefits(39)(46)(43)(38)(43)
Net flows3928262724
Net transfers from (to) separate account98251611
Interest credited2528262625
Policy charges and other(76)(68)(73)(73)(77)
Universal and variable universal life account value, end of period$2,667$2,670$2,674$2,670$2,674
LIFE ACCOUNT VALUE: SEPARATE ACCOUNT
Variable universal life account value, beginning of period$6,373$6,230$5,582$5,261$4,478
Premiums and deposits4749505051
Surrenders and contract benefits(64)(81)(54)(49)(44)
Net flows(17)(32)(4)17
Investment performance423237733390839
Net transfers from (to) general account(9)(8)(25)(16)(11)
Policy charges and other(49)(54)(56)(54)(52)
Variable universal life account value, end of period$6,721$6,373$6,230$5,582$5,261
(1) Includes premiums and sales directed to the general account investment option of variable products.
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Financial Supplement12


Life — Select Operating Metrics (Cont.) (Unaudited, in millions)
For the Three Months EndedFor the Six Months Ended
LIFE SALESJune 30,
2021
March 31,
2021
December 31,
2020
September 30,
2020
June 30,
2020
June 30,
2021
June 30,
2020
Total life sales$26$23$15$13$12$49$28
As of
LIFE INSURANCE IN-FORCEJune 30,
2021
March 31,
2021
December 31,
2020
September 30,
2020
June 30,
2020
Whole Life
Life Insurance in-force, before reinsurance$19,223$19,390$19,585$19,762$20,094
Life Insurance in-force, net of reinsurance$3,265$3,332$3,313$3,371$3,088
Term Life
Life Insurance in-force, before reinsurance$382,200$385,396$388,298$391,583$395,391
Life Insurance in-force, net of reinsurance$299,414$300,658$301,731$303,232$304,758
Universal and Variable Universal Life
Life Insurance in-force, before reinsurance$50,147$50,397$50,922$52,377$52,796
Life Insurance in-force, net of reinsurance$37,611$37,641$38,490$39,258$39,482

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Financial Supplement13


Run-off — Statements of Adjusted Earnings (Unaudited, in millions)
For the Three Months EndedFor the Six Months Ended
Adjusted revenuesJune 30,
2021
March 31,
2021
December 31,
2020
September 30,
2020
June 30,
2020
June 30,
2021
June 30,
2020
Premiums$—$—$2$—$—$—$—
Universal life and investment-type product policy fees155159155163159314321
Net investment income499462396383166961490
Other revenues877771514
Total adjusted revenues$662$628$560$553$332$1,290$825
Adjusted expenses
Interest credited to policyholder account balances$77$80$82$82$88$157$165
Policyholder benefits and claims3994194051,870349818803
Amortization of DAC and VOBA
Interest expense on debt
Other operating costs46444944419093
Total adjusted expenses5225435361,9964781,0651,061
Adjusted earnings before provision for income tax1408524(1,443)(146)225(236)
Provision for income tax expense (benefit)189(1)(304)(31)27(51)
Adjusted earnings$122$76$25$(1,139)$(115)$198$(185)

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Financial Supplement14


Run-off — Select Operating Metrics (Unaudited, in millions)
For the Three Months Ended
UNIVERSAL LIFE WITH SECONDARY GUARANTEES ACCOUNT VALUEJune 30,
2021
March 31,
2021
December 31,
2020
September 30,
2020
June 30,
2020
Account value, beginning of period$5,740$5,823$5,865$5,930$5,979
Premiums and deposits (1)174175181176181
Surrenders and contract benefits(27)(49)(23)(40)(31)
Net flows147126158136150
Interest credited5049515157
Policy charges and other(254)(258)(251)(252)(256)
Account value, end of period$5,683$5,740$5,823$5,865$5,930
As of
LIFE INSURANCE IN-FORCEJune 30,
2021
March 31,
2021
December 31,
2020
September 30,
2020
June 30,
2020
Universal Life with Secondary Guarantees
Life Insurance in-force, before reinsurance$75,487$76,050$76,745$76,342$76,872
Life Insurance in-force, net of reinsurance$37,133$36,690$37,044$36,842$37,126
(1) Includes premiums and sales directed to the general account investment option of variable products.

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Financial Supplement15


Corporate & Other — Statements of Adjusted Earnings (Unaudited, in millions)
For the Three Months EndedFor the Six Months Ended
Adjusted revenuesJune 30,
2021
March 31,
2021
December 31,
2020
September 30,
2020
June 30,
2020
June 30,
2021
June 30,
2020
Premiums$19$21$20$21$21$40$43
Universal life and investment-type product policy fees
Net investment income17141618163136
Other revenues2
Total adjusted revenues$36$35$38$39$37$71$79
Adjusted expenses
Interest credited to policyholder account balances$3$—$1$1$1$3$1
Policyholder benefits and claims15181610143331
Amortization of DAC and VOBA333(19)467
Interest expense on debt40414547458192
Other operating costs5734116327191105
Total adjusted expenses1189618171135214236
Adjusted earnings before provision for income tax(82)(61)(143)(32)(98)(143)(157)
Provision for income tax expense (benefit)(10)(19)(15)(38)(12)(29)(34)
Adjusted earnings after provision for income tax(72)(42)(128)6(86)(114)(123)
Less: Net income (loss) attributable to noncontrolling interests and preferred stock dividends2127141974816
Adjusted earnings$(93)$(69)$(142)$(13)$(93)$(162)$(139)

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Other
Information

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Financial Supplement17



DAC and VOBA and Net Derivative Gains (Losses) (Unaudited, in millions)
For the Three Months Ended
DAC AND VOBA ROLLFORWARDJune 30,
2021
March 31,
2021
December 31,
2020
September 30,
2020
June 30,
2020
Balance, beginning of period$5,148$4,911$4,664$4,856$4,862
Capitalization1201141289092
Amortization:
Included in adjusted earnings, excluding notable items(136)(155)(124)(121)(157)
Related to notable items, included in adjusted expenses(20)(37)
Related to items not included in adjusted expenses12884280(86)249
Total amortization(8)(91)156(244)92
Unrealized investment gains (losses)(138)214(37)(38)(190)
Balance, end of period$5,122$5,148$4,911$4,664$4,856
As of
DAC AND VOBA BY SEGMENT AND CORPORATE & OTHERJune 30,
2021
March 31,
2021
December 31,
2020
September 30,
2020
June 30,
2020
Annuities$4,103$4,117$3,829$3,574$3,733
Life9149239719761,027
Run-off45555
Corporate & Other10110310610991
Total DAC and VOBA$5,122$5,148$4,911$4,664$4,856
For the Three Months Ended
NET DERIVATIVE GAINS (LOSSES)June 30,
2021
March 31,
2021
December 31,
2020
September 30,
2020
June 30,
2020
Net derivative gains (losses):
Variable annuity hedges and embedded derivatives, net$(1,132)$(553)$(2,092)$(1,688)$(2,576)
ULSG hedges403(958)(291)(97)(64)
Other hedges and embedded derivatives402(32)(77)(17)
Subtotal(689)(1,509)(2,415)(1,862)(2,657)
Investment hedge adjustments55554
Total net derivative gains (losses)$(684)$(1,504)$(2,410)$(1,857)$(2,653)

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Financial Supplement18



Notable Items (Unaudited, in millions)
For the Three Months Ended
NOTABLE ITEMS IMPACTING ADJUSTED EARNINGSJune 30,
2021
March 31,
2021
December 31,
2020
September 30,
2020
June 30,
2020
Actuarial items and other insurance adjustments$—$29$17$1,062$—
Establishment costs2314321528
Debt repayment costs34
Total notable items (1)$23$43$83$1,077$28
NOTABLE ITEMS BY SEGMENT AND CORPORATE & OTHER
Annuities$—$—$—$(102)$—
Life1711
Run-off291,172���
Corporate & Other231466(4)28
Total notable items (1)$23$43$83$1,077$28
(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.

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Financial Supplement19



Variable Annuity Separate Account Returns and Allocations (Unaudited)
For the Three Months Ended
VARIABLE ANNUITY SEPARATE ACCOUNT RETURNSJune 30,
2021
March 31,
2021
December 31,
2020
September 30,
2020
June 30,
2020
Total Quarterly VA separate account gross returns5.91%2.93%11.48%6.04%14.11%
TOTAL VARIABLE ANNUITY SEPARATE ACCOUNT ALLOCATIONS
Percent allocated to equity funds28.62%29.28%27.88%26.85%26.31%
Percent allocated to bond funds/other funds8.40%8.44%8.43%8.82%8.73%
Percent allocated to target volatility funds21.14%20.15%21.69%22.38%22.85%
Percent allocated to balanced funds41.84%42.13%42.00%41.95%42.11%

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Financial Supplement20



Summary of Investments (Unaudited, dollars in millions)
June 30, 2021December 31, 2020
Amount% of TotalAmount% of Total
Fixed maturity securities:
U.S. corporate securities$37,91732.84%$37,90633.36%
Foreign corporate securities11,82910.25%11,51110.13%
U.S. government and agency securities9,2588.02%8,6387.60%
Residential mortgage-backed securities8,7237.55%8,2947.30%
Commercial mortgage-backed securities6,9986.06%6,7905.98%
State and political subdivision securities4,8354.19%4,6404.08%
Asset-backed securities3,3562.91%2,8842.54%
Foreign government securities1,8691.62%1,8321.60%
Total fixed maturity securities84,78573.44%82,49572.59%
Equity securities910.08%1380.12%
Mortgage loans:
Commercial mortgage loans10,2528.88%9,7148.55%
Agricultural mortgage loans3,7913.28%3,5383.11%
Residential mortgage loans2,7862.41%2,6502.33%
Allowance for credit losses(97)(0.08)%(94)(0.08)%
Total mortgage loans, net16,73214.49%15,80813.91%
Policy loans1,2551.09%1,2911.14%
Limited partnerships and limited liability companies3,5463.07%2,8102.47%
Cash, cash equivalents and short-term investments6,1755.35%7,3506.47%
Other invested assets:
Derivatives:
Interest rate9480.82%2,0941.84%
Equity market1,4561.26%1,2271.08%
Foreign currency exchange rate2360.20%2200.19%
Credit410.04%410.04%
Total derivatives2,6812.32%3,5823.15%
FHLB common stock630.05%390.04%
Other1190.11%1260.11%
Total other invested assets2,8632.48%3,7473.30%
Total investments and cash and cash equivalents$115,447100.00%$113,639100.00%
For the Three Months Ended
June 30,
2021
March 31,
2021
December 31,
2020
September 30,
2020
June 30,
2020
Net investment income yield (1), (2)5.08%5.12%4.56%4.42%2.98%
(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-2 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.

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Financial Supplement21



Statutory Statement of Operations Information (Unaudited, in millions except Normalized Statutory Earnings (Loss))
For the Three Months EndedFor the Six Months Ended
COMBINED REVENUES AND EXPENSES (1)PRELIMINARY
June 30,
2021 (2)
March 31,
2021
December 31,
2020
September 30,
2020
June 30,
2020
PRELIMINARY
June 30,
2021 (2)
June 30,
2020
Total revenues (Line 9)$3,500$3,551$3,503$2,904$1,421$7,051$7,161
Total benefits and expenses before dividends to policyholders (Line 28)$3,700$1,824$1,445$1,351$(1,401)$5,524$11,644
COMBINED NET INCOME (LOSS) (1)
Gain (loss) from operations net of taxes and dividends to policyholders (Line 33)$(200)$1,737$2,187$1,519$2,817$1,537$(4,488)
Net realized capital gains (losses), net of taxes and certain transfers to interest maintenance reserve (Line 34)(400)(812)(453)(1,253)741(1,212)1,224
Net income (loss) (Line 35)$(600)$925$1,734$266$3,558$325$(3,264)
For the Six Months Ended
NORMALIZED STATUTORY EARNINGS (LOSS) (3), (4)PRELIMINARY
June 30,
2021 (2)
June 30,
2020
(In billions)
Statutory net gain (loss) from operations, pre-tax$1.8$(4.3)
Add: net realized capital gains (losses)(1.3)1.2
Add: change in total asset requirement at CTE95, net of the change in VA reserves(0.6)0.5
Add: unrealized gains (losses) on VA hedging program0.12.3
Add: other adjustments, net0.1
Normalized statutory earnings (loss)$—$(0.2)
(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 and six months ended June 30, 2021.
(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.


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Financial Supplement22



Statutory Balance Sheet and Surplus Information (Unaudited, in millions)
As of
COMBINED ASSETS, LIABILITIES, AND CAPITAL AND SURPLUS (1)                                                    PRELIMINARY
June 30,
2021 (2)
March 31,
2021
December 31,
2020
September 30,
2020
June 30,
2020
Total assets (Line 28)$205,000$197,181$197,847$192,215$189,871
Total liabilities (Line 28)$197,000$189,012$190,287$184,709$182,938
Total capital and surplus (Line 38)$8,000$8,169$7,560$7,506$6,933
COMBINED TAC AND RBC RATIO (1), (3)
Combined total adjusted capital$9,400$9,421$8,617$8,432$7,724
Combined risk-based capital ratio (4)480%-500%500%-520%487%525%-545%515%-535%
As of
COMBINED ORDINARY DIVIDEND CAPACITY (1)June 30,
2021
March 31,
2021
December 31,
2020
September 30,
2020
June 30,
2020
Dividends paid to Holding Company$250$—$511$—$500
Remaining ordinary dividend capacity (5)$588$838$816$1,327$1,327
(1) Combined statutory results are for Brighthouse Life Insurance Company and New England Life Insurance Company.
(2) Reflects preliminary statutory results as of June 30, 2021.
(3) See definitions for Non-GAAP and Other Financial Disclosures in the Appendix beginning on page A-2.
(4) The RBC ratio is reported as a preliminary range on the quarters.
(5) Reflects remaining dividend amounts that may be paid at one or more points in time during the respective calendar year without prior regulatory approval.

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Appendix

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Financial SupplementA-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.

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: 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; material differences from actual outcomes compared to the sensitivities calculated under certain scenarios and sensitivities that we may utilize in connection with our variable annuity risk management strategies; the impact of interest rates on our future ULSG policyholder obligations and net income volatility; the impact of the ongoing worldwide COVID-19 pandemic; the potential material adverse effect of changes in accounting standards, practices or policies applicable to us, including changes in the accounting for long-duration contracts; loss of business and other negative impacts resulting from a downgrade or a potential downgrade in our financial strength or credit ratings; the availability of reinsurance and the ability of the counterparties to our reinsurance or indemnification arrangements to perform their obligations thereunder; 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; our ability to market and distribute our products through distribution channels; 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 subsidiaries to pay dividends to us, and our ability to pay dividends to our shareholders and repurchase our common stock; the adverse impact on liabilities for policyholder claims as a result of extreme mortality events; 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 economic conditions in the capital markets and the U.S. and global economy, as well as geo-political or catastrophic events, on our investment portfolio, including on realized and unrealized losses and impairments, net investment spread and net investment income; the impact of events that adversely affect issuers, guarantors or collateral relating to our investments or our derivatives counterparties, on impairments, valuation allowances, reserves, net investment income and changes in unrealized gain or loss positions; the impact of changes in regulation and in supervisory and enforcement policies on our insurance business or other operations; the potential material negative tax impact of potential future tax legislation that could make some of our products less attractive to consumers; the effectiveness of our policies and procedures in managing risk; the loss or disclosure of confidential information, damage to our reputation and impairment of our ability to conduct business effectively as a result of any failure in cyber- or other information security systems; 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; 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, 2020, 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.

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Financial SupplementA-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.

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:
(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.

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.

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Financial SupplementA-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”);

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 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.

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.

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Financial SupplementA-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

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 are comprised of 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 assets held in trust.

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.
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Financial SupplementA-5



Non-GAAP and Other Financial Disclosures (Cont.)


Other Financial Disclosures (cont.)

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 index annuity sales distributed through MassMutual that consist of 90 percent of gross sales. Annuity sales exclude certain 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 total asset requirement at CTE95, 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.



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Financial SupplementA-6



Acronyms
AOCIAccumulated other comprehensive income (loss)
CTEConditional tail expectations
DACDeferred policy acquisition costs
FHLBFederal Home Loan Bank
GAAPAccounting principles generally accepted in the United States of America
GMABGuaranteed minimum accumulation benefits
GMDBGuaranteed minimum death benefits
GMIBGuaranteed minimum income benefits
GMWBGuaranteed minimum withdrawal benefits
LIMRALife Insurance Marketing and Research Association
NDGLNet derivative gains (losses)
NIGLNet investment gains (losses)
RBCRisk-based capital
TACTotal adjusted capital
ULSGUniversal life insurance with secondary guarantees
VAVariable annuity
VOBAValue of business acquired

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Financial SupplementA-7



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
ADJUSTED EARNINGS, LESS NOTABLE ITEMSJune 30,
2021
March 31,
2021
December 31,
2020
September 30,
2020
June 30,
2020
Net income (loss) available to shareholders$10$(610)$(1,045)$(3,012)$(1,998)
Less: Net investment gains (losses)(34)143265(34)
Less: Net derivative gains (losses), excluding investment hedge adjustments(689)(1,509)(2,415)(1,862)(2,657)
Less: GMIB Fees and GMIB Costs75122236(957)(125)
Less: Amortization of DAC and VOBA12884280(86)249
Less: Market value adjustments and other(19)3111(41)24
Less: Provision for income tax (expense) benefit on reconciling adjustments114263328618534
Adjusted earnings435385189(689)11
Less: Notable items(23)(43)(83)(1,077)(28)
Adjusted earnings, less notable items$458$428$272$388$39
ADJUSTED EARNINGS, LESS NOTABLE ITEMS PER COMMON SHARE (1), (2)
Net income (loss) available to shareholders per common share$0.11$(6.96)$(11.69)$(32.49)$(21.10)
Less: Net investment gains (losses)(0.40)0.163.650.05(0.36)
Less: Net derivative gains (losses), excluding investment hedge adjustments(8.01)(17.23)(27.03)(20.09)(28.06)
Less: GMIB Fees and GMIB Costs0.871.392.64(10.32)(1.32)
Less: Amortization of DAC and VOBA1.490.963.13(0.93)2.63
Less: Market value adjustments and other(0.22)0.350.12(0.44)0.25
Less: Provision for income tax (expense) benefit on reconciling adjustments1.323.003.676.675.64
Less: Impact of inclusion of dilutive shares0.030.02
Adjusted earnings per common share5.054.362.10(7.43)0.11
Less: Notable items(0.27)(0.49)(0.92)(11.62)(0.30)
Adjusted earnings, less notable items per common share$5.32$4.86$3.03$4.19$0.41
(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.

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Financial SupplementA-8



Reconciliation of Return on Common Equity to Adjusted Return on Common Equity (Unaudited, dollars in millions)
Four Quarters Cumulative Trailing Basis
ADJUSTED EARNINGSJune 30,
2021
March 31,
2021
December 31,
2020
September 30,
2020
June 30,
2020
Net income (loss) available to shareholders$(4,657)$(6,665)$(1,105)$(1,137)$2,551
Less: Net investment gains (losses)311311278(15)7
Less: Net derivative gains (losses), excluding investment hedge adjustments(6,475)(8,443)(36)4823,401
Less: GMIB Fees and GMIB Costs(524)(724)(1,012)(1,214)(261)
Less: Amortization of DAC and VOBA406527(228)(415)(327)
Less: Market value adjustments and other(18)25(49)(43)(16)
Less: Provision for income tax (expense) benefit on reconciling adjustments1,3231,743220253(588)
Adjusted earnings$320$(104)$(278)$(185)$335
Five Quarters Average Stockholders' Equity Basis
BRIGHTHOUSE FINANCIAL, INC.’S COMMON STOCKHOLDERS’ EQUITY, EXCLUDING AOCIJune 30,
2021
March 31,
2021
December 31,
2020
September 30,
2020
June 30,
2020
Brighthouse Financial, Inc.’s stockholders’ equity$17,666$18,518$18,749$18,683$18,285
Less: Preferred stock, net1,137947758568490
Brighthouse Financial, Inc.’s common stockholders’ equity16,52917,57117,99118,11517,795
Less: AOCI4,8094,4204,3903,9603,424
Brighthouse Financial, Inc.’s common stockholders’ equity, excluding AOCI$11,720$13,151$13,601$14,155$14,371
Five Quarters Average Common Stockholders' Equity Basis
ADJUSTED RETURN ON COMMON EQUITYJune 30,
2021
March 31,
2021
December 31,
2020
September 30,
2020
June 30,
2020
Return on common equity(28.2)%(37.9)%(6.1)%(6.3)%14.3%
Return on AOCI(96.8)%(150.8)%(25.2)%(28.7)%74.5%
Return on common equity, excluding AOCI(39.7)%(50.7)%(8.1)%(8.0)%17.8%
Less: Return on net investment gains (losses)2.7%2.4%2.1%(0.1)%—%
Less: Return on net derivative gains (losses), excluding investment hedge adjustments(55.2)%(64.2)%(0.3)%3.4%23.7%
Less: Return on GMIB Fees and GMIB Costs(4.5)%(5.5)%(7.4)%(8.6)%(1.8)%
Less: Return on amortization of DAC and VOBA3.5%4.0%(1.7)%(2.9)%(2.3)%
Less: Return on market value adjustments and other(0.2)%0.1%(0.4)%(0.3)%—%
Less: Return on provision for income tax (expense) benefit on reconciling adjustments11.3%13.3%1.6%1.8%(4.1)%
Adjusted return on common equity2.7%(0.8)%(2.0)%(1.3)%2.3%

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Financial SupplementA-9



Reconciliation of Total Revenues to Adjusted Revenues and Reconciliation of Total Expenses to Adjusted Expenses (Unaudited, in millions)
For the Three Months EndedFor the Six Months Ended
June 30,
2021
March 31,
2021
December 31,
2020
September 30,
2020
June 30,
2020
June 30,
2021
June 30,
2020
Total revenues$1,676$938$131$309$(922)$2,614$8,063
Less: Net investment gains (losses)(34)143265(34)(20)(53)
Less: Net derivative gains (losses)(684)(1,504)(2,410)(1,857)(2,653)(2,188)4,249
Less: GMIB Fees6362636863125128
Less: Investment hedge adjustments(5)(5)(5)(5)(4)(10)(8)
Less: Other(2)11(1)(2)1
Total adjusted revenues$2,338$2,371$2,146$2,099$1,706$4,709$3,746
Total expenses$1,655$1,706$1,437$4,152$1,600$3,361$4,333
Less: Amortization of DAC and VOBA(128)(84)(280)86(249)(212)422
Less: GMIB Costs(12)(60)(173)1,025188(72)419
Less: Other17(31)40(24)(14)20
Total adjusted expenses$1,778$1,881$1,890$3,001$1,685$3,659$3,472

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Financial SupplementA-10



Investment Reconciliation Details (Unaudited, dollars in millions)
For the Three Months EndedFor the Six Months Ended
NET INVESTMENT GAINS (LOSSES)June 30,
2021
March 31,
2021
December 31,
2020
September 30,
2020
June 30,
2020
June 30,
2021
June 30,
2020
Investment portfolio gains (losses)$(28)$16$329$2$(13)$(12)$(11)
Investment portfolio writedowns(6)(2)(3)3(21)(8)(42)
Net investment gains (losses)$(34)$14$326$5$(34)$(20)$(53)

For the Three Months Ended
NET INVESTMENT INCOME YIELDJune 30,
2021
March 31,
2021
December 31,
2020
September 30,
2020
June 30,
2020
Investment income yield (1)5.21%5.25%4.70%4.56%3.11%
Investment fees and expenses (2)(0.13)%(0.13)%(0.14)%(0.14)%(0.13)%
Net investment income yield5.08%5.12%4.56%4.42%2.98%
(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-2 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.

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