bhf-20200806
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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): August 6, 2020
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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 classTrading symbol(s)Name of each exchange on which registered
Common Stock, par value $0.01 per shareBHFThe Nasdaq Stock Market LLC
Depositary Shares, each representing a 1/1,000th interest in a share of 6.600% Non-Cumulative Preferred Stock, Series ABHFAPThe Nasdaq Stock Market LLC
Depositary Shares, each representing a 1/1,000th interest in a share of 6.750% Non-Cumulative Preferred Stock, Series BBHFAOThe Nasdaq Stock Market LLC
6.250% Junior Subordinated Debentures due 2058BHFALThe 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 August 6, 2020, Brighthouse Financial, Inc. (“Brighthouse Financial” or the “Company”) issued (i) a news release announcing its results for the quarter ended June 30, 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 June 30, 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 June 30, 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
104*Cover Page Interactive Data File (embedded within the Inline XBRL document)

* Filed herewith.
** Furnished herewith.




1


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: August 6, 2020




2
Document
PUBLIC RELATIONS

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

https://cdn.kscope.io/a7463054bbf22fc13c2e5fb617125853-bhf-20191104g11.jpg
Exhibit 99.1
FOR IMMEDIATE RELEASE
Brighthouse Financial Announces Second Quarter 2020 Results
Second quarter 2020 net loss available to shareholders of $1,998 million, or $21.10 per diluted share, driven primarily by net derivative mark-to-market losses
Second quarter 2020 adjusted earnings, less notable items*, of $39 million, or $0.41 per diluted share
Annuity sales decreased 3 percent and life sales increased 200 percent compared with the second quarter of 2019
Estimated combined risk-based capital ("RBC") ratio remained between 515 and 535 percent, consistent with the first quarter
$500 million subsidiary ordinary dividend paid to the holding company in the second quarter of 2020;$800 million subsidiary ordinary dividend paid year-to-date
$180 million of common stock repurchased in the second quarter of 2020; the temporary suspension of repurchases remains in effect while the company continues to assess market conditions and other factors
CHARLOTTE, NC, August 6, 2020 — Brighthouse Financial, Inc. ("Brighthouse Financial" or the "company") (Nasdaq: BHF) announced today its financial results for the second quarter ended June 30, 2020.
Second Quarter 2020 Results
The company reported a net loss available to shareholders of $1,998 million in the second quarter of 2020, or $21.10 per diluted share, compared with net income available to shareholders of $377 million in the second quarter of 2019. During the quarter, as a result of significantly higher equity markets, the value of our hedges, which the company uses to protect its balance sheet against adverse market conditions, decreased, as expected. The corresponding liabilities are not reflected at fair value under U.S. GAAP accounting and are, therefore, less sensitive to market movements. The company ended the second quarter of 2020 with common stockholders' equity ("book value") of $20.1 billion, or $216.25 per common share, and book value, excluding accumulated other comprehensive income ("AOCI") of $15.1 billion, or $162.85 per common share.

For the second quarter of 2020, the company reported adjusted earnings* of $11 million, or $0.11 per diluted share, compared with adjusted earnings of $254 million, or $2.19 per diluted share, in the second quarter of 2019, primarily driven by lower alternative investment income.

Adjusted earnings for the quarter reflected a $28 million after tax unfavorable notable item, or $0.30 per diluted share, for 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 Second Quarter 2020 Brighthouse Financial, Inc. Financial Supplement and/or the Second 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.
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PUBLIC RELATIONS

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

https://cdn.kscope.io/a7463054bbf22fc13c2e5fb617125853-bhf-20191104g11.jpg
Corporate expenses in the second quarter of 2020 were $210 million, down from $214 million in the first quarter of 2020, both on a pre-tax basis.
Annuity sales decreased 3 percent quarter-over-quarter and 7 percent sequentially. Life sales increased 200 percent quarter-over-quarter and decreased 25 percent sequentially.

The company repurchased $322 million of its common stock year-to-date through May 11, 2020, representing over 12 percent of shares outstanding relative to year-end 2019. During the second quarter of 2020, the company repurchased $180 million of its common stock. Since the announcement of the company's first stock repurchase authorization in August 2018, the company has repurchased a total of $870 million of its common stock through May 11, 2020. On that day, the company announced that it had temporarily suspended repurchases of its common stock. The temporary suspension remains in effect while the company continues to assess market conditions and other factors.

"As we continue to navigate this unprecedented market environment, we remain steadfastly focused on our mission and strategy," said Eric Steigerwalt, president and CEO, Brighthouse Financial. "I want to thank all of our employees for their tireless work and resiliency over the past several months. Their adaptability, focus and commitment have enabled us to continue to support our customers, partners and communities during these difficult times."

"Our balance sheet and liquidity remained strong in the second quarter of 2020. We grew our annuity sales 6 percent in the first six months of 2020 compared with the same period in 2019, which is a strong result despite the challenging environment. While our life insurance sales were down sequentially in the quarter, I am extremely pleased with the progress we have made as we continue to execute our life insurance strategy," Steigerwalt continued. "In addition, we are very excited about expanding our relationship with BlackRock as one of two selected insurers for LifePath Paycheck. This next-generation investment solution from BlackRock is designed to provide millions of American workers with simplified access to lifetime income throughout their retirement. During the quarter, we were also pleased to enhance our life insurance product portfolio and grow our digital footprint with the launch of a new term life insurance product, Brighthouse SimplySelect. Looking ahead, we remain confident in our focused strategy, which we continue to believe 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
June 30, 2020June 30, 2019
TotalPer shareTotalPer share
Net income (loss) available to shareholders (1)
$(1,998)$(21.10)$377$3.27
Adjusted earnings (1)$11$0.11$254$2.19
Adjusted earnings, less notable items (1)
$39$0.41$296$2.56
Weighted average common shares outstanding - diluted (1)
94,837,492N/A115,536,654N/A
Book value$20,107$216.25$15,864$140.83
Book value, excluding AOCI$15,142$162.85$13,162$116.85
Ending common shares outstanding92,979,854N/A112,644,952N/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.
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PUBLIC RELATIONS

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

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Results by Business Segment and Corporate & Other (Unaudited, in millions)
For the Three Months Ended
ADJUSTED EARNINGSJune 30,
2020
March 31,
2020
June 30,
2019
Annuities$171$316$265
Life $48$11$58
Run-off (1)$(115)$(70)$2
Corporate & Other (1)$(93)$(46)$(71)
(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
June 30,
2020
March 31,
2020
June 30,
2019
Annuities (1)$1,838$1,969$1,890
Life$12$16$4
(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 $309 million for the second quarter of 2020, $208 million for the first quarter of 2020, and $291 million for the second quarter of 2019.

Annuities
Adjusted earnings in the Annuities segment were $171 million in the current quarter, compared with adjusted earnings of $265 million in the second quarter of 2019 and adjusted earnings of $316 million in the first quarter of 2020.
There were no notable items in the current quarter or the comparison quarters.
On a quarter-over-quarter basis, adjusted earnings reflect lower net investment income, lower fees, and higher deferred acquisition costs ("DAC") amortization, partially offset by lower expenses. On a sequential basis, adjusted earnings reflect higher DAC amortization and lower net investment income.
As mentioned above, annuity sales decreased 3 percent quarter-over-quarter and 7 percent sequentially.
Life
Adjusted earnings in the Life segment were $48 million in the current quarter, compared with adjusted earnings of $58 million in the second quarter of 2019 and adjusted earnings of $11 million in the first quarter of 2020.
There were no notable items in the current quarter or the comparison quarters.
On a quarter-over-quarter basis, adjusted earnings reflect lower net investment income, partially offset by lower DAC amortization and a higher underwriting margin. On a sequential basis, adjusted earnings reflect lower DAC amortization and a higher underwriting margin, partially offset by lower net investment income.
As mentioned above, life sales increased 200 percent quarter-over-quarter and decreased 25 percent sequentially.
3



PUBLIC RELATIONS

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

https://cdn.kscope.io/a7463054bbf22fc13c2e5fb617125853-bhf-20191104g11.jpg
Run-off
The Run-off segment had an adjusted loss of $115 million in the current quarter, compared with adjusted earnings of $2 million in the second quarter of 2019 and an adjusted loss of $70 million in the first quarter of 2020.
There were no notable items in the current quarter. The second quarter of 2019 included a $12 million unfavorable notable item, and there was $48 million of unfavorable notable items in the first quarter of 2020.
On a quarter-over-quarter basis, the adjusted loss, less notable items, reflects lower net investment income. On a sequential basis, the adjusted loss, less notable items, reflects lower net investment income, partially offset by a higher underwriting margin.
Corporate & Other
Corporate & Other had an adjusted loss of $93 million in the current quarter, compared with an adjusted loss of $71 million in the second quarter of 2019 and an adjusted loss of $46 million in the first quarter of 2020.
The current quarter included a $28 million unfavorable notable item related to establishment costs, as described above. The second quarter of 2019 included a $30 million unfavorable notable item and the first quarter of 2020 included a $14 million unfavorable notable item, both also related to establishment costs.
On a quarter-over-quarter and sequential basis, the adjusted loss, less notable items, reflects higher expenses and higher taxes.

Net Investment Income and Adjusted Net Investment Income (Unaudited, in millions)
For the Three Months Ended
June 30,
2020
March 31,
2020
June 30,
2019
Net investment income$652$916$942
Adjusted net investment income$656$920$942

Net Investment Income
Net investment income was $652 million and adjusted net investment income* was $656 million for the second quarter of 2020. On a quarter-over-quarter basis, adjusted net investment income decreased $286 million and on a sequential basis decreased $264 million. The quarter-over-quarter and sequential results were driven primarily by lower alternative investment income.
The net investment income yield was 2.98 percent during the quarter.

4



PUBLIC RELATIONS

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

https://cdn.kscope.io/a7463054bbf22fc13c2e5fb617125853-bhf-20191104g11.jpg
Statutory Capital and Liquidity (Unaudited, in billions)
As of
June 30,2020 (1)
March 31,
2020
June 30,
2019
Statutory combined total adjusted capital$7.7$7.2$6.9
(1) Reflects preliminary statutory results as of June 30, 2020.


Capitalization

At June 30, 2020:

Holding company liquid assets were approximately $1.3 billion

Statutory combined total adjusted capital on a preliminary basis increased to approximately $7.7 billion, driven primarily by the recovery in capital markets in the quarter, partially offset by a $500 million subsidiary ordinary dividend paid to the holding company

Estimated combined RBC ratio, including the subsidiary ordinary dividend mentioned above, remained between 515 and 535 percent, consistent with the first quarter

5



PUBLIC RELATIONS

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

https://cdn.kscope.io/a7463054bbf22fc13c2e5fb617125853-bhf-20191104g11.jpg
Earnings Conference Call

Brighthouse Financial will hold a conference call and audio webcast to discuss its financial results for the second quarter 2020 at 8:00 a.m. Eastern Time on Friday, August 7, 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 5628479.

A replay of the conference call will be made available until Friday, August 28, 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.,(1) we specialize in products designed to help people protect what they've earned and ensure it lasts. Learn more at brighthousefinancial.com.

(1) Ranked by 2019 admitted assets. Best's Review®: Top 200 U.S. Life/Health Insurers. A.M. Best, 2020.

CONTACT

FOR INVESTORS
David Rosenbaum
(980) 949-3326
david.rosenbaum@brighthousefinancial.com

FOR MEDIA
Deon Roberts
(980) 949-3071
deon.roberts@brighthousefinancial.com


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PUBLIC RELATIONS

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

https://cdn.kscope.io/a7463054bbf22fc13c2e5fb617125853-bhf-20191104g11.jpg
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
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PUBLIC RELATIONS

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

https://cdn.kscope.io/a7463054bbf22fc13c2e5fb617125853-bhf-20191104g11.jpg
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 earningsnet income (loss) available to shareholders (1)
adjusted earnings, less notable itemsnet income (loss) available to shareholders (1)
adjusted revenuesrevenues
adjusted expensesexpenses
adjusted earnings per common shareearnings per common share, diluted (1)
adjusted earnings per common share, less notable itemsearnings per common share, diluted (1)
adjusted return on common equityreturn on common equity (2)
adjusted return on common equity, less notable itemsreturn 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.
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PUBLIC RELATIONS

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

https://cdn.kscope.io/a7463054bbf22fc13c2e5fb617125853-bhf-20191104g11.jpg

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.

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PUBLIC RELATIONS

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

https://cdn.kscope.io/a7463054bbf22fc13c2e5fb617125853-bhf-20191104g11.jpg
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.

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PUBLIC RELATIONS

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

https://cdn.kscope.io/a7463054bbf22fc13c2e5fb617125853-bhf-20191104g11.jpg
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 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 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.
11



PUBLIC RELATIONS

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

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Condensed Statements of Operations (Unaudited, in millions)
For the Three Months Ended
RevenuesJune 30,
2020
March 31,
2020
June 30,
2019
Premiums$193$198$232
Universal life and investment-type product policy fees827886888
Net investment income652916942
Other revenues9310296
Revenues before NIGL and NDGL1,7652,1022,158
Net investment gains (losses)(34)(19)63
Net derivative gains (losses)(2,653)6,902149
Total revenues$(922)$8,985$2,370
Expenses
Interest credited to policyholder account balances$276$259$265
Policyholder benefits and claims8391,187845
Amortization of DAC and VOBA(92)770170
Interest expense on debt454748
Other expenses532470573
Total expenses1,6002,7331,901
Income (loss) before provision for income tax(2,522)6,252469
Provision for income tax expense (benefit)(531)1,29385
Net income (loss)(1,991)4,959384
Less: Net income (loss) attributable to noncontrolling interests2
Net income (loss) attributable to Brighthouse Financial, Inc.(1,991)4,957384
Less: Preferred stock dividends777
Net income (loss) available to Brighthouse Financial, Inc.’s common shareholders$(1,998)$4,950$377




12



PUBLIC RELATIONS

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

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Condensed Balance Sheets (Unaudited, in millions)
As of
ASSETSJune 30,
2020
March 31,
2020
June 30,
2019
Investments:
Fixed maturity securities available-for-sale$76,796$71,302$67,211
Equity securities129122153
Mortgage loans15,79115,54715,078
Policy loans1,2011,2501,342
Limited partnerships and limited liability companies2,3542,5052,296
Short-term investments4,5374,348793
Other invested assets6,3649,6583,064
Total investments107,172104,73289,937
Cash and cash equivalents7,3258,9303,981
Accrued investment income664868747
Reinsurance recoverables14,35914,22013,366
Premiums and other receivables859774865
DAC and VOBA4,8564,8625,492
Current income tax recoverable19
Other assets532550610
Separate account assets99,59989,008106,214
Total assets$235,367$223,953$221,212
LIABILITIES AND EQUITY
Liabilities
Future policy benefits$41,841$40,653$38,280
Policyholder account balances50,33847,28842,941
Other policy-related balances3,1523,1693,041
Payables for collateral under securities loaned and other transactions7,87610,9884,094
Long-term debt3,9794,3654,365
Current income tax payable14
Deferred income tax liability2,5672,4821,364
Other liabilities5,0415,5614,558
Separate account liabilities99,59989,008106,214
Total liabilities214,393203,514204,871
Equity
Preferred stock, at par value
Common stock, at par value111
Additional paid-in capital13,30712,91112,893
Retained earnings (deficit)3,5235,521986
Treasury stock(887)(706)(306)
Accumulated other comprehensive income (loss)4,9652,6472,702
Total Brighthouse Financial, Inc.’s stockholders’ equity20,90920,37416,276
Noncontrolling interests656565
Total equity20,97420,43916,341
Total liabilities and equity$235,367$223,953$221,212
13



PUBLIC RELATIONS

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

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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 EndedFor the Year Ended
ADJUSTED EARNINGS, LESS NOTABLE ITEMS
June 30,
2020
March 31,
2020
June 30,
2019
Net income (loss) available to shareholders$(1,998)$4,950$377
Less: Net investment gains (losses)(34)(19)63
Less: Net derivative gains (losses), excluding investment hedge adjustments
(2,657)6,898149
Less: GMIB Fees and GMIB Costs(125)(166)(22)
Less: Amortization of DAC and VOBA249(671)(17)
Less: Market value adjustments and other24(43)(16)
Less: Provision for income tax (expense) benefit on reconciling adjustments
534(1,260)(34)
Adjusted earnings11211254
Less: Notable items(28)(62)(42)
Adjusted earnings, less notable items$39$273$296
ADJUSTED EARNINGS, LESS NOTABLE ITEMS PER COMMON SHARE (1)
Net income (loss) available to shareholders per common share$(21.10)$47.11$3.27
Less: Net investment gains (losses)(0.36)(0.18)0.55
Less: Net derivative gains (losses), excluding investment hedge adjustments
(28.06)65.641.29
Less: GMIB Fees and GMIB Costs(1.32)(1.58)(0.19)
Less: Amortization of DAC and VOBA2.63(6.38)(0.15)
Less: Market value adjustments and other0.25(0.41)(0.14)
Less: Provision for income tax (expense) benefit on reconciling adjustments
5.64(11.99)(0.29)
Adjusted earnings per common share0.112.012.19
Less: Notable items(0.30)(0.59)(0.36)
Adjusted earnings, less notable items per common share$0.41$2.60$2.56
(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.
Reconciliation of Net Investment Income to Adjusted Net Investment Income (Unaudited, in millions)

For the Three Months EndedFor the Six Months Ended
June 30,
2020
March 31,
2020
June 30,
2019
Net investment income$652$916$942
Less: Investment hedge adjustments(4)(4)
Adjusted net investment income$656$920$942
14



PUBLIC RELATIONS

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

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Notable Items (Unaudited, in millions)

For the Three Months EndedFor the Six Months Ended
NOTABLE ITEMS IMPACTING ADJUSTED EARNINGS
June 30,
2020
March 31,
2020
June 30,
2019
Actuarial items and other insurance adjustments$—$48$12
Establishment costs281430
Total notable items (1)$28$62$42
NOTABLE ITEMS BY SEGMENT AND CORPORATE & OTHER
Annuities$—$—$—
Life
Run-off4812
Corporate & Other281430
Total notable items (1)$28$62$42
(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.

15


Document



Exhibit 99.2








Brighthouse Financial, Inc.
Financial Supplement

Second Quarter 2020

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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 Supplement
1



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,
2020
March 31,
2020
December 31,
2019
September 30,
2019
June 30,
2019
Net income (loss) available to shareholders$(1,998)$4,950$(1,077)$676$377
Adjusted earnings$11$211$282$(169)$254
Adjusted earnings, less notable items (2)$39$273$265$260$296
Total corporate expenses (3)$210$214$283$248$242
Combined total adjusted capital (4)$7,700$7,217$9,694$8,406$6,897
Combined risk-based capital ratio (5)515%-535%515%-535%552%N/AN/A
Stockholders' Equity
Brighthouse Financial, Inc.’s stockholders’ equity$20,909$20,374$16,172$17,695$16,276
Less: Preferred stock, net802412412412412
Brighthouse Financial, Inc.’s common stockholders’ equity, including AOCI$20,107$19,962$15,760$17,283$15,864
Less: AOCI4,9652,6473,2403,5672,702
Brighthouse Financial, Inc.’s common stockholders’ equity, excluding AOCI $15,142$17,315$12,520$13,716$13,162
Return on Common Equity (1)
Return on common equity14.3%29.5%(4.9)%11.7%5.7%
Return on common equity, excluding AOCI17.8%35.4%(5.8)%13.4%6.3%
Adjusted return on common equity2.3%4.2%4.5%3.8%7.3%
Earnings Per Common Share, Diluted (1), (6)
Net income (loss) available to shareholders per common share$(21.10)$47.11$(10.02)$6.06$3.27
Adjusted earnings per common share$0.11$2.01$2.61$(1.52)$2.19
Adjusted earnings, less notable items per common share$0.41$2.60$2.46$2.33$2.56
Weighted average common shares outstanding94,837,492105,093,515107,840,324111,527,480115,536,654
Book Value Per Common Share
Book value per common share (1)$216.25$198.62$148.64$158.18$140.83
Book value per common share, excluding AOCI (1)$162.85$172.28$118.08$125.53$116.85
Ending common shares outstanding92,979,854100,502,488106,027,301109,264,305112,644,952
(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 for the three months ended June 30, 2020. See additional information on page 22.
(5) The RBC ratio is reported as a preliminary range on the quarters. 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.

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Financial Supplement
2



GAAP Condensed Statements of Operations (Unaudited, in millions)

For the Three Months EndedFor the Six Months Ended
RevenuesJune 30,
2020
March 31,
2020
December 31,
2019
September 30,
2019
June 30,
2019
June 30,
2020
June 30,
2019
Premiums$193$198$209$214$232$391$459
Universal life and investment-type product policy fees8278869508678881,7131,763
Net investment income6529168989289421,5681,753
Other revenues931021079496195188
Revenues before NIGL and NDGL1,7652,1022,1642,1032,1583,8674,163
Net investment gains (losses)(34)(19)332763(53)52
Net derivative gains (losses)(2,653)6,902(1,891)1,0571494,249(1,154)
Total revenues$(922)$8,985$306$3,187$2,370$8,063$3,061
Expenses
Interest credited to policyholder account balances$276$259$268$272$265$535$523
Policyholder benefits and claims8391,1877341,3198452,0261,617
Amortization of DAC and VOBA(92)7709181170678192
Interest expense on debt45474749489295
Other expenses5324706205625731,0021,118
Total expenses1,6002,7331,6782,3831,9014,3333,545
Income (loss) before provision for income tax(2,522)6,252(1,372)8044693,730(484)
Provision for income tax expense (benefit)(531)1,293(303)11985762(133)
Net income (loss)(1,991)4,959(1,069)6853842,968(351)
Less: Net income (loss) attributable to noncontrolling interests21222
Net income (loss) attributable to Brighthouse Financial, Inc.(1,991)4,957(1,070)6833842,966(353)
Less: Preferred stock dividends77777147
Net income (loss) available to Brighthouse Financial, Inc.’s common shareholders$(1,998)$4,950$(1,077)$676$377$2,952$(360)

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Financial Supplement
3



GAAP Balance Sheets (Unaudited, in millions)

As of
ASSETSJune 30,
2020
March 31,
2020
December 31,
2019
September 30,
2019
June 30,
2019
Investments:
Fixed maturity securities available-for-sale$76,796$71,302$71,036$70,723$67,211
Equity securities129122147148153
Mortgage loans15,79115,54715,75315,35915,078
Policy loans1,2011,2501,2921,3321,342
Limited partnerships and limited liability companies2,3542,5052,3802,3532,296
Short-term investments4,5374,3481,9581,985793
Other invested assets6,3649,6583,2164,7343,064
Total investments107,172104,73295,78296,63489,937
Cash and cash equivalents7,3258,9302,8774,2893,981
Accrued investment income664868684732747
Reinsurance recoverables14,35914,22013,99013,41213,366
Premiums and other receivables859774770973865
DAC and VOBA4,8564,8625,4485,3175,492
Current income tax recoverable191714
Other assets532550584577610
Separate account assets99,59989,008107,107103,928106,214
Total assets$235,367$223,953$227,259$225,876$221,212
LIABILITIES AND EQUITY
Liabilities
Future policy benefits$41,841$40,653$39,686$39,846$38,280
Policyholder account balances50,33847,28845,77144,91942,941
Other policy-related balances3,1523,1693,1113,0793,041
Payables for collateral under securities loaned and other transactions7,87610,9884,3915,2914,094
Long-term debt3,9794,3654,3654,3654,365
Current income tax payable14
Deferred income tax liability2,5672,4821,3551,7491,364
Other liabilities5,0415,5615,2364,9394,558
Separate account liabilities99,59989,008107,107103,928106,214
Total liabilities214,393203,514211,022208,116204,871
Equity
Preferred stock, at par value
Common stock, at par value11111
Additional paid-in capital13,30712,91112,90812,89712,893
Retained earnings (deficit)3,5235,5215851,662986
Treasury stock(887)(706)(562)(432)(306)
Accumulated other comprehensive income (loss)4,9652,6473,2403,5672,702
Total Brighthouse Financial, Inc.’s stockholders’ equity20,90920,37416,17217,69516,276
Noncontrolling interests6565656565
Total equity20,97420,43916,23717,76016,341
Total liabilities and equity$235,367$223,953$227,259$225,876$221,212

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Earnings and Select
Metrics from
Business Segments and Corporate & Other

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Financial Supplement
5



Statements of Adjusted Earnings by Segment and Corporate & Other (Unaudited, in millions)
  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
  For the Three Months Ended June 30, 2019
Adjusted revenuesAnnuitiesLifeRun-offCorporate & OtherTotal
Premiums$60$150$—$22$232
Universal life and investment-type product policy fees58459182(2)823
Net investment income47011633917942
Other revenues8056596
Total adjusted revenues$1,194$330$527$42$2,093
Adjusted expenses
Interest credited to policyholder account balances$147$24$94$—$265
Policyholder benefits and claims18016938013742
Amortization of DAC and VOBA128214153
Interest expense on debt4848
Other operating costs416445162573
Total adjusted expenses8712585251271,781
Adjusted earnings before provision for income tax323722(85)312
Provision for income tax expense (benefit)5814(21)51
Adjusted earnings after provision for income tax265582(64)261
Less: Net income (loss) attributable to noncontrolling interests and preferred stock dividends 77
Adjusted earnings$265$58$2$(71)$254

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Financial Supplement
6



Statements of Adjusted Earnings by Segment and Corporate & Other (Cont.) (Unaudited, in millions)
  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
  For the Six Months Ended June 30, 2019
Adjusted revenuesAnnuitiesLifeRun-offCorporate & OtherTotal
Premiums$118$295$1$45$459
Universal life and investment-type product policy fees1,145117375(5)1,632
Net investment income891213615341,753
Other revenues15781211188
Total adjusted revenues$2,311$633$1,003$85$4,032
Adjusted expenses
Interest credited to policyholder account balances$284$49$190$—$523
Policyholder benefits and claims