EX-99.3 4 bhffinancialsupplement-q119.htm EXHIBIT 99.3 Exhibit

 
 
 
 
 



Exhibit 99.3








Brighthouse Financial, Inc.
Financial Supplement

First Quarter 2019













bhflogorgb970pxa35.jpg




 
 
 
 
 



    
Table of Contents
 
 
Financial Results
Key Metrics
Condensed Statements of Operations
Balance Sheets
 
 
Earnings and Select Metrics from Business Segments and Corporate & Other
 
Statements of Adjusted Earnings by Segment and Corporate & Other
 
Annuities — Statements of Adjusted Earnings
 
Annuities — Select Operating Metrics
 
Life — Statements of Adjusted Earnings
 
Life — Select Operating Metrics
 
Run-off — Statements of Adjusted Earnings
 
Run-off — Select Operating Metrics
 
Corporate & Other — Statements of Adjusted Earnings
 
 
 
 
Other Information
 
DAC and VOBA and Net Derivative Gains (Losses)
 
Notable Items
 
Variable Annuity Separate Account Returns and Allocations
 
Summary of Investments
 
Select Actual and Preliminary Statutory Financial Results
 
 
 
 
Appendix
 
Note Regarding Forward-Looking Statements
 
Non-GAAP and Other Financial Disclosures
 
Acronyms
 
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
 
Reconciliation of Return on Equity to Adjusted Return on Equity
 
Reconciliation of Total Revenues to Adjusted Revenues and Reconciliation of Total Expenses to Adjusted Expenses
 
Investment Reconciliation Details

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

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



 
 
 
 
 









Financial Results



 
 
Financial Supplement
 
1




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

 
 
As of or For the Three Months Ended
Financial Results and Metrics
 
March 31,
2019
 
December 31,
2018
 
September 30,
2018
 
June 30,
2018
 
March 31,
2018
Net income (loss) available to shareholders
 
$(737)
 
$1,442
 
$(271)
 
$(239)
 
$(67)
Adjusted earnings (1)
 
$232
 
$186
 
$270
 
$153
 
$283
Total corporate expenses (2)
 
$225
 
$233
 
$242
 
$288
 
$230
 
 
 
 
 
 
 
 
 
 
 
Stockholders' Equity
 
 
 
 
 
 
 
 
 
 
Brighthouse Financial, Inc.’s stockholders’ equity (3)
 
$14,999
 
$14,418
 
$12,884
 
$13,435
 
$13,584
Less: Preferred stock
 
412
 
 
 
 
Less: AOCI (3)
 
1,670
 
716
 
552
 
815
 
737
Brighthouse Financial, Inc.’s stockholders’ equity, excluding preferred stock and AOCI
 
$12,917
 
$13,702
 
$12,332
 
$12,620
 
$12,847
 
 
 
 
 
 
 
 
 
 
 
Return on Equity
 
 
 
 
 
 
 
 
 
 
Return on equity
 
1.4%
 
6.3%
 
0.7%
 
(4.0)%
 
(0.7)%
Return on equity, excluding preferred stock and AOCI (1)
 
1.5%
 
6.7%
 
0.7%
 
(4.5)%
 
(0.7)%
Adjusted return on equity (1)
 
6.5%
 
6.9%
 
13.5%
 
5.8%
 
7.0%
 
 
 
 
 
 
 
 
 
 
 
Earnings Per Common Share, Diluted
 
 
 
 
 
 
 
 
 
 
Net income (loss) available to shareholders per common share (4)
 
$(6.31)
 
$12.14
 
$(2.26)
 
$(2.01)
 
$(0.56)
Adjusted earnings per common share (1)
 
$1.98
 
$1.56
 
$2.23
 
$1.27
 
$2.36
Weighted average common shares outstanding
 
117,229,854
 
118,685,082
 
120,641,572
 
120,200,149
 
119,773,106
 
 
 
 
 
 
 
 
 
 
 
Book Value Per Common Share
 
 
 
 
 
 
 
 
 
 
Book value per common share (1), (3)
 
$129.10
 
$122.67
 
$108.45
 
$112.17
 
$113.41
Book value per common share, excluding preferred stock and AOCI (1), (3)
 
$111.18
 
$116.58
 
$103.80
 
$105.37
 
$107.26
Ending common shares outstanding
 
116,182,687
 
117,532,336
 
118,800,611
 
119,773,106
 
119,773,106
 
 
 
 
 
 
 
 
 
 
 
(1) See definitions for Non-GAAP and Other Financial Disclosures in the Appendix beginning on page A-2.
(2) Includes functional department expenses, public company expenses, certain investment expenses, retirement funding and incentive compensation; and excludes establishment costs.
(3) See Note (1) to the Balance Sheets on page 3 for information regarding changes to amounts originally reported for the first quarter of 2018.
(4) For loss periods, dilutive shares were not included in the calculation of net income (loss) available to shareholders per common share as inclusion of such shares would have an anti-dilutive effect.

croppedlogocopya04.jpg
 
 
 
 
 






 
 
Financial Supplement
 
2




Condensed Statements of Operations (Unaudited, in millions)

 
 
For the Three Months Ended
 
For the Three Months Ended
Revenues
 
March 31,
2019
 
December 31,
2018
 
September 30,
2018
 
June 30,
2018
 
March 31,
2018
 
March 31,
2019
 
March 31,
2018
Premiums
 
$227
 
$223
 
$225
 
$223
 
$229
 
$227
 
$229
Universal life and investment-type product policy fees
 
875
 
899
 
972
 
962
 
1,002
 
875
 
1,002
Net investment income
 
811
 
862
 
853
 
806
 
817
 
811
 
817
Other revenues
 
92
 
89
 
105
 
98
 
105
 
92
 
105
Revenues before NIGL and NDGL
 
2,005
 
2,073
 
2,155
 
2,089
 
2,153
 
2,005
 
2,153
Net investment gains (losses)
 
(11)
 
(86)
 
(42)
 
(75)
 
(4)
 
(11)
 
(4)
Net derivative gains (losses)
 
(1,303)
 
2,039
 
(691)
 
(312)
 
(334)
 
(1,303)
 
(334)
Total revenues
 
$691
 
$4,026
 
$1,422
 
$1,702
 
$1,815
 
$691
 
$1,815
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest credited to policyholder account balances
 
$258
 
$270
 
$273
 
$269
 
$267
 
$258
 
$267
Policyholder benefits and claims
 
772
 
899
 
822
 
813
 
738
 
772
 
738
Amortization of DAC and VOBA
 
22
 
469
 
30
 
246
 
305
 
22
 
305
Interest expense on debt
 
47
 
45
 
40
 
36
 
37
 
47
 
37
Other expenses
 
545
 
556
 
625
 
655
 
581
 
545
 
581
Total expenses
 
1,644
 
2,239
 
1,790
 
2,019
 
1,928
 
1,644
 
1,928
Income (loss) before provision for income tax
 
(953)
 
1,787
 
(368)
 
(317)
 
(113)
 
(953)
 
(113)
Provision for income tax expense (benefit)
 
(218)
 
345
 
(99)
 
(79)
 
(48)
 
(218)
 
(48)
Net income (loss)
 
(735)
 
1,442
 
(269)
 
(238)
 
(65)
 
(735)
 
(65)
Less: Net income (loss) attributable to noncontrolling interests
 
2
 
 
2
 
1
 
2
 
2
 
2
Net income (loss) available to Brighthouse Financial, Inc.’s common shareholders
 
$(737)
 
$1,442
 
$(271)
 
$(239)
 
$(67)
 
$(737)
 
$(67)
 

croppedlogocopya04.jpg
 
 
 
 
 






 
 
Financial Supplement
 
3




Balance Sheets (Unaudited, in millions)
 
 
As of
ASSETS
 
March 31,
2019
 
December 31,
2018
 
September 30,
2018
 
June 30,
2018
 
March 31,
2018
Investments:
 
 
 
 
 
 
 
 
 
 
Fixed maturity securities available-for-sale
 
$64,847
 
$62,608
 
$62,279
 
$62,343
 
$63,178
Equity securities
 
150
 
140
 
150
 
153
 
160
Mortgage loans, net
 
14,504
 
13,694
 
13,033
 
12,337
 
11,308
Policy loans
 
1,385
 
1,421
 
1,443
 
1,458
 
1,517
Real estate limited partnerships and limited liability companies
 
453
 
451
 
444
 
449
 
441
Other limited partnership interests
 
1,800
 
1,840
 
1,765
 
1,706
 
1,700
Short-term investments
 
799
 
 
116
 
177
 
293
Other invested assets
 
2,302
 
3,027
 
2,099
 
2,305
 
2,452
Total investments
 
86,240
 
83,181
 
81,329
 
80,928
 
81,049
Cash and cash equivalents
 
3,864
 
4,145
 
2,144
 
2,135
 
1,888
Accrued investment income
 
791
 
724
 
675
 
607
 
640
Reinsurance recoverables
 
13,098
 
12,929
 
12,683
 
12,745
 
12,746
Premiums and other receivables
 
928
 
768
 
868
 
848
 
781
DAC and VOBA
 
5,680
 
5,717
 
6,050
 
5,968
 
6,083
Current income tax recoverable
 
 
1
 
878
 
814
 
832
Other assets
 
618
 
573
 
583
 
580
 
593
Separate account assets
 
105,211
 
98,256
 
111,736
 
111,587
 
114,385
Total assets
 
$216,430
 
$206,294
 
$216,946
 
$216,212
 
$218,997
LIABILITIES AND EQUITY
 
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
 
Future policy benefits
 
$37,157
 
$36,209
 
$35,748
 
$35,816
 
$36,223
Policyholder account balances
 
41,177
 
40,054
 
39,446
 
38,407
 
37,940
Other policy-related balances
 
3,005
 
3,000
 
2,907
 
2,941
 
2,991
Payables for collateral under securities loaned and other transactions
 
3,990
 
5,057
 
4,043
 
4,265
 
4,244
Long-term debt
 
4,364
 
3,963
 
3,966
 
3,607
 
3,609
Current income tax payable
 
19
 
15
 
 
 
Deferred income tax liability (1)
 
1,005
 
972
 
576
 
684
 
730
Other liabilities (1)
 
5,438
 
4,285
 
5,575
 
5,405
 
5,226
Separate account liabilities
 
105,211
 
98,256
 
111,736
 
111,587
 
114,385
Total liabilities
 
201,366
 
191,811
 
203,997
 
202,712
 
205,348
Equity
 
 
 
 
 
 
 
 
 
 
Preferred Stock, at par value
 
 
 
 
 
Common stock, at par value
 
1
 
1
 
1
 
1
 
1
Additional paid-in capital
 
12,889
 
12,473
 
12,469
 
12,444
 
12,432
Retained earnings (deficit) (1)
 
609
 
1,346
 
(96)
 
175
 
414
Treasury stock
 
(170)
 
(118)
 
(42)
 
 
Accumulated other comprehensive income (loss) (1)
 
1,670
 
716
 
552
 
815
 
737
Total Brighthouse Financial, Inc.’s stockholders’ equity
 
14,999
 
14,418
 
12,884
 
13,435
 
13,584
Noncontrolling interests
 
65
 
65
 
65
 
65
 
65
Total equity
 
15,064
 
14,483
 
12,949
 
13,500
 
13,649
Total liabilities and equity
 
$216,430
 
$206,294
 
$216,946
 
$216,212
 
$218,997
 
 
 
 
 
 
 
 
 
 
 
(1) During the second quarter of 2018, and effective January 1, 2018, the Company recorded adjustments related to accretion of certain investments in equity securities. As a result, amounts originally reported as of March 31, 2018 have been revised to conform to such changes. Additionally, certain key metrics for the first quarter of 2018, as well as amounts affecting the adjusted return on equity for certain periods, have also been revised for such impact.

croppedlogocopya04.jpg
 
 
 
 
 






 
 
 
 
 








Earnings and Select
Metrics from
Business Segments and Corporate & Other




 
 
Financial Supplement
 
5




Statements of Adjusted Earnings by Segment and Corporate & Other (Unaudited, in millions)
  
 
For the Three Months Ended March 31, 2019
Adjusted revenues
 
Annuities
 
Life
 
Run-off
 
Corporate & Other
 
Total
Premiums
 
$58
 
$145
 
$1
 
$23
 
$227
Universal life and investment-type product policy fees
 
561
 
58
 
193
 
(3)
 
809
Net investment income
 
421
 
97
 
276
 
17
 
811
Other revenues
 
77
 
3
 
6
 
6
 
92
Total adjusted revenues
 
$1,117
 
$303
 
$476
 
$43
 
$1,939
 
 
 
 
 
 
 
 
 
 
 
Adjusted expenses
 
 
 
 
 
 
 
 
 
 
Interest credited to policyholder account balances
 
$137
 
$25
 
$96
 
$—
 
$258
Policyholder benefits and claims
 
143
 
181
 
380
 
14
 
718
Amortization of DAC and VOBA
 
82
 
11
 
 
4
 
97
Interest expense on debt
 
 
 
 
47
 
47
Other operating costs
 
394
 
55
 
46
 
50
 
545
Total adjusted expenses
 
756
 
272
 
522
 
115
 
1,665
Adjusted earnings before provision for income tax
 
361
 
31
 
(46)
 
(72)
 
274
Provision for income tax expense (benefit)
 
66
 
6
 
(10)
 
(22)
 
40
Adjusted earnings after provision for income tax
 
295
 
25
 
(36)
 
(50)
 
234
Less: Net income (loss) attributable to noncontrolling interests
 
 
 
 
2
 
2
Adjusted earnings
 
$295
 
$25
 
$(36)
 
$(52)
 
$232
 
 
 
 
 
 
 
 
 
 
 
  
 
For the Three Months Ended March 31, 2018
Adjusted revenues
 
Annuities
 
Life
 
Run-off
 
Corporate & Other
 
Total
Premiums
 
$45
 
$158
 
$—
 
$26
 
$229
Universal life and investment-type product policy fees
 
640
 
103
 
199
 
(3)
 
939
Net investment income
 
363
 
108
 
343
 
11
 
825
Other revenues
 
99
 
 
6
 
 
105
Total adjusted revenues
 
$1,147
 
$369
 
$548
 
$34
 
$2,098
 
 
 
 
 
 
 
 
 
 
 
Adjusted expenses
 
 
 
 
 
 
 
 
 
 
Interest credited to policyholder account balances
 
$146
 
$31
 
$90
 
$—
 
$267
Policyholder benefits and claims
 
180
 
165
 
347
 
14
 
706
Amortization of DAC and VOBA
 
143
 
29
 
 
5
 
177
Interest expense on debt
 
 
 
 
37
 
37
Other operating costs
 
406
 
63
 
48
 
64
 
581
Total adjusted expenses
 
875
 
288
 
485
 
120
 
1,768
Adjusted earnings before provision for income tax
 
272
 
81
 
63
 
(86)
 
330
Provision for income tax expense (benefit)
 
46
 
15
 
13
 
(29)
 
45
Adjusted earnings after provision for income tax
 
226
 
66
 
50
 
(57)
 
285
Less: Net income (loss) attributable to noncontrolling interests
 
 
 
 
2
 
2
Adjusted earnings
 
$226
 
$66
 
$50
 
$(59)
 
$283

croppedlogocopya04.jpg
 
 
 
 
 






 
 
Financial Supplement
 
6




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

  
 
For the Three Months Ended
 
For the Three Months Ended
Adjusted revenues
 
March 31,
2019
 
December 31,
2018
 
September 30,
2018
 
June 30,
2018
 
March 31,
2018
 
March 31,
2019
 
March 31,
2018
Premiums
 
$58
 
$44
 
$48
 
$48
 
$45
 
$58
 
$45
Universal life and investment-type product policy fees
 
561
 
594
 
625
 
632
 
640
 
561
 
640
Net investment income
 
421
 
398
 
399
 
376
 
363
 
421
 
363
Other revenues
 
77
 
78
 
88
 
90
 
99
 
77
 
99
Total adjusted revenues
 
$1,117
 
$1,114
 
$1,160
 
$1,146
 
$1,147
 
$1,117
 
$1,147
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest credited to policyholder account balances
 
$137
 
$147
 
$152
 
$148
 
$146
 
$137
 
$146
Policyholder benefits and claims
 
143
 
174
 
72
 
181
 
180
 
143
 
180
Amortization of DAC and VOBA
 
82
 
198
 
40
 
124
 
143
 
82
 
143
Interest expense on debt
 
 
 
 
 
 
 
Other operating costs
 
394
 
387
 
409
 
427
 
406
 
394
 
406
Total adjusted expenses
 
756
 
906
 
673
 
880
 
875
 
756
 
875
Adjusted earnings before provision for income tax
 
361
 
208
 
487
 
266
 
272
 
361
 
272
Provision for income tax expense (benefit)
 
66
 
33
 
86
 
45
 
46
 
66
 
46
Adjusted earnings
 
$295
 
$175
 
$401
 
$221
 
$226
 
$295
 
$226


croppedlogocopya04.jpg
 
 
 
 
 






 
 
Financial Supplement
 
7




Annuities — Select Operating Metrics (Unaudited, in millions)

  
 
For the Three Months Ended
VARIABLE & SHIELD ANNUITIES ACCOUNT VALUE (1)
 
March 31,
2019
 
December 31,
2018
 
September 30,
2018
 
June 30,
2018
 
March 31,
2018
Account value, beginning of period
 
$105,089
 
$116,985
 
$116,283
 
$117,178
 
$120,333
Deposits
 
1,327
 
1,295
 
1,243
 
1,129
 
1,074
Withdrawals, surrenders and contract benefits
 
(2,479)
 
(2,789)
 
(2,754)
 
(2,877)
 
(2,853)
Net flows (2)
 
(1,152)
 
(1,494)
 
(1,511)
 
(1,748)
 
(1,779)
Investment performance (3)
 
8,971
 
(9,711)
 
2,953
 
1,568
 
(695)
Policy charges and other
 
(661)
 
(691)
 
(740)
 
(715)
 
(681)
Account value, end of period
 
$112,247
 
$105,089
 
$116,985
 
$116,283
 
$117,178
 
 
 
 
 
 
 
 
 
 
 
FIXED ANNUITIES ACCOUNT VALUE (4)
 
 
 
 
 
 
 
 
 
 
Account value, beginning of period
 
$12,770
 
$13,225
 
$13,112
 
$13,036
 
$13,062
Deposits
 
416
 
439
 
330
 
305
 
205
Withdrawals, surrenders and contract benefits
 
(521)
 
(963)
 
(296)
 
(308)
 
(320)
Net flows (2)
 
(105)
 
(524)
 
34
 
(3)
 
(115)
Interest credited
 
90
 
94
 
105
 
105
 
105
Other
 
(21)
 
(25)
 
(26)
 
(26)
 
(16)
Account value, end of period
 
$12,734
 
$12,770
 
$13,225
 
$13,112
 
$13,036
 
 
 
 
 
 
 
 
 
 
 
INCOME ANNUITIES (1)
 
 
 
 
 
 
 
 
 
 
Income annuity insurance liabilities
 
$4,541
 
$4,517
 
$4,561
 
$4,547
 
$4,541
 
 
 
 
 
 
 
 
 
 
 
(1) Includes general account and separate account.
(2) Deposits and withdrawals include policy exchanges.
(3) Includes imputed interest on indexed annuities and the interest credited on the general account investment option of variable products.
(4) Includes fixed income annuities.

croppedlogocopya04.jpg
 
 
 
 
 






 
 
Financial Supplement
 
8




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

 
 
For the Three Months Ended
 
For the Three Months Ended
VARIABLE & INDEXED ANNUITY SALES
 
March 31,
2019
 
December 31,
2018
 
September 30,
2018
 
June 30,
2018
 
March 31,
2018
 
March 31,
2019
 
March 31,
2018
Shield Annuities (1)
 
$985
 
$924
 
$867
 
$723
 
$729
 
$985
 
$729
GMWB/GMAB
 
198
 
220
 
218
 
237
 
183
 
198
 
183
GMDB only
 
78
 
81
 
84
 
96
 
92
 
78
 
92
GMIB
 
23
 
20
 
22
 
33
 
32
 
23
 
32
Total variable & indexed annuity sales
 
$1,284
 
$1,245
 
$1,191
 
$1,089
 
$1,036
 
$1,284
 
$1,036
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FIXED ANNUITY SALES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed indexed annuities (2)
 
$281
 
$368
 
$302
 
$272
 
$173
 
$281
 
$173
Fixed deferred annuities
 
133
 
73
 
28
 
36
 
34
 
133
 
34
Single premium immediate annuities
 
6
 
8
 
16
 
13
 
9
 
6
 
9
Other fixed annuities
 
3
 
4
 
4
 
2
 
4
 
3
 
4
Total fixed annuity sales
 
$423
 
$453
 
$350
 
$323
 
$220
 
$423
 
$220
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Shield Annuities refers to our suite of structured annuities consisting of products marketed under various names.
(2) Represents 90% of gross sales assumed via reinsurance agreements.


croppedlogocopya04.jpg
 
 
 
 
 






 
 
Financial Supplement
 
9




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

 
 
For the Three Months Ended
 
For the Three Months Ended
Adjusted revenues
 
March 31,
2019
 
December 31,
2018
 
September 30,
2018
 
June 30,
2018
 
March 31,
2018
 
March 31,
2019
 
March 31,
2018
Premiums
 
$145
 
$155
 
$152
 
$151
 
$158
 
$145
 
$158
Universal life and investment-type product policy fees
 
58
 
61
 
77
 
76
 
103
 
58
 
103
Net investment income
 
97
 
115
 
115
 
111
 
108
 
97
 
108
Other revenues
 
3
 
4
 
2
 
1
 
 
3
 
Total adjusted revenues
 
$303
 
$335
 
$346
 
$339
 
$369
 
$303
 
$369
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest credited to policyholder account balances
 
$25
 
$25
 
$29
 
$28
 
$31
 
$25
 
$31
Policyholder benefits and claims
 
181
 
153
 
169
 
168
 
165
 
181
 
165
Amortization of DAC and VOBA
 
11
 
35
 
8
 
23
 
29
 
11
 
29
Interest expense on debt
 
 
 
 
 
 
 
Other operating costs
 
55
 
42
 
62
 
74
 
63
 
55
 
63
Total adjusted expenses
 
272
 
255
 
268
 
293
 
288
 
272
 
288
Adjusted earnings before provision for income tax
 
31
 
80
 
78
 
46
 
81
 
31
 
81
Provision for income tax expense (benefit)
 
6
 
16
 
17
 
9
 
15
 
6
 
15
Adjusted earnings
 
$25
 
$64
 
$61
 
$37
 
$66
 
$25
 
$66

croppedlogocopya04.jpg
 
 
 
 
 






 
 
Financial Supplement
 
10




Life — Select Operating Metrics (Unaudited, in millions)

  
 
For the Three Months Ended
LIFE ACCOUNT VALUE: GENERAL ACCOUNT
 
March 31,
2019
 
December 31,
2018
 
September 30,
2018
 
June 30,
2018
 
March 31,
2018
Variable universal and universal life account value, beginning of period
 
$2,747
 
$2,753
 
$2,758
 
$2,763
 
$2,775
Premiums and deposits (1)
 
65
 
64
 
58
 
62
 
66
Surrenders and contract benefits
 
(52)
 
(31)
 
(29)
 
(44)
 
(43)
Net flows
 
13
 
33
 
29
 
18
 
23
Net transfers from (to) separate account
 
13
 
8
 
12
 
17
 
14
Interest credited
 
25
 
27
 
28
 
29
 
26
Policy charges and other
 
(71)
 
(74)
 
(74)
 
(69)
 
(75)
Variable universal and universal life account value, end of period
 
$2,727
 
$2,747
 
$2,753
 
$2,758
 
$2,763
 
 
 
 
 
 
 
 
 
 
 
LIFE ACCOUNT VALUE: SEPARATE ACCOUNT
 
 
 
 
 
 
 
 
 
 
Variable universal life account value, beginning of period
 
$4,679
 
$5,351
 
$5,222
 
$5,174
 
$5,250
Premiums and deposits
 
59
 
59
 
57
 
59
 
62
Surrenders and contract benefits
 
(69)
 
(63)
 
(67)
 
(67)
 
(68)
Net flows
 
(10)
 
(4)
 
(10)
 
(8)
 
(6)
Investment performance
 
539
 
(603)
 
207
 
133
 
(2)
Net transfers from (to) general account
 
(15)
 
(8)
 
(12)
 
(17)
 
(14)
Policy charges and other
 
(55)
 
(57)
 
(56)
 
(60)
 
(54)
Variable universal life account value, end of period
 
$5,138
 
$4,679
 
$5,351
 
$5,222
 
$5,174
 
 
 
 
 
 
 
 
 
 
 
(1) Includes premiums and sales directed to the general account investment option of variable products.

croppedlogocopya04.jpg
 
 
 
 
 






 
 
Financial Supplement
 
11




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

 
 
For the Three Months Ended
 
For the Three Months Ended
LIFE SALES
 
March 31,
2019
 
December 31,
2018
 
September 30,
2018
 
June 30,
2018
 
March 31,
2018
 
March 31,
2019
 
March 31,
2018
Total life sales
 
$1
 
$1
 
$2
 
$2
 
$2
 
$1
 
$2

 
 
As of
LIFE INSURANCE IN-FORCE
 
March 31,
2019
 
December 31,
2018
 
September 30,
2018
 
June 30,
2018
 
March 31,
2018
Whole Life
 
 
 
 
 
 
 
 
 
 
Life Insurance in-force, before reinsurance
 
$21,518
 
$21,804
 
$22,127
 
$22,467
 
$22,890
Life Insurance in-force, net of reinsurance
 
$3,638
 
$3,648
 
$3,690
 
$3,713
 
$3,764
 
 
 
 
 
 
 
 
 
 
 
Term Life
 
 
 
 
 
 
 
 
 
 
Life Insurance in-force, before reinsurance
 
$427,239
 
$433,058
 
$438,564
 
$443,532
 
$448,431
Life Insurance in-force, net of reinsurance
 
$324,941
 
$328,876
 
$332,204
 
$335,524
 
$338,841
 
 
 
 
 
 
 
 
 
 
 
Universal and Variable Universal Life
 
 
 
 
 
 
 
 
 
 
Life Insurance in-force, before reinsurance
 
$56,378
 
$56,882
 
$58,108
 
$58,837
 
$59,625
Life Insurance in-force, net of reinsurance
 
$39,844
 
$40,052
 
$41,279
 
$41,146
 
$41,601
 
 
 
 
 
 
 
 
 
 
 


croppedlogocopya04.jpg
 
 
 
 
 






 
 
Financial Supplement
 
12




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

  
 
For the Three Months Ended
 
For the Three Months Ended
Adjusted revenues
 
March 31,
2019
 
December 31,
2018
 
September 30,
2018
 
June 30,
2018
 
March 31,
2018
 
March 31,
2019
 
March 31,
2018
Premiums
 
$1
 
$1
 
$—
 
$—
 
$—
 
$1
 
$—
Universal life and investment-type product policy fees
 
193
 
180
 
208
 
189
 
199
 
193
 
199
Net investment income
 
276
 
331
 
322
 
314
 
343
 
276
 
343
Other revenues
 
6
 
6
 
6
 
7
 
6
 
6
 
6
Total adjusted revenues
 
$476
 
$518
 
$536
 
$510
 
$548
 
$476
 
$548
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest credited to policyholder account balances
 
$96
 
$98
 
$92
 
$92
 
$90
 
$96
 
$90
Policyholder benefits and claims
 
380
 
351
 
532
 
365
 
347
 
380
 
347
Amortization of DAC and VOBA
 
 
 
 
 
 
 
Interest expense on debt
 
 
 
 
 
 
 
Other operating costs
 
46
 
47
 
46
 
61
 
48
 
46
 
48
Total adjusted expenses
 
522
 
496
 
670
 
518
 
485
 
522
 
485
Adjusted earnings before provision for income tax
 
(46)
 
22
 
(134)
 
(8)
 
63
 
(46)
 
63
Provision for income tax expense (benefit)
 
(10)
 
4
 
(29)
 
(2)
 
13
 
(10)
 
13
Adjusted earnings
 
$(36)
 
$18
 
$(105)
 
$(6)
 
$50
 
$(36)
 
$50

croppedlogocopya04.jpg
 
 
 
 
 






 
 
Financial Supplement
 
13




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

  
 
For the Three Months Ended
UNIVERSAL LIFE WITH SECONDARY GUARANTEES ACCOUNT VALUE
 
March 31,
2019
 
December 31,
2018
 
September 30,
2018
 
June 30,
2018
 
March 31,
2018
Account value, beginning of period
 
$6,154
 
$6,185
 
$6,204
 
$6,235
 
$6,285
Premiums and deposits (1)
 
187
 
190
 
189
 
202
 
197
Surrenders and contract benefits
 
(39)
 
(38)
 
(26)
 
(44)
 
(69)
Net flows
 
148
 
152
 
163
 
158
 
128
Interest credited
 
57
 
60
 
60
 
58
 
59
Policy charges and other
 
(249)
 
(243)
 
(242)
 
(247)
 
(237)
Account value, end of period
 
$6,110
 
$6,154
 
$6,185
 
$6,204
 
$6,235

 
 
As of
LIFE INSURANCE IN-FORCE
 
March 31,
2019
 
December 31,
2018
 
September 30,
2018
 
June 30,
2018
 
March 31,
2018
Universal Life with Secondary Guarantees
 
 
 
 
 
 
 
 
 
 
Life Insurance in-force, before reinsurance
 
$79,817
 
$80,356
 
$80,963
 
$81,479
 
$82,126
Life Insurance in-force, net of reinsurance
 
$37,233
 
$37,601
 
$37,029
 
$36,619
 
$36,870
 
 
 
 
 
 
 
 
 
 
 
(1) Includes premiums and sales directed to the general account investment option of variable products.

croppedlogocopya04.jpg
 
 
 
 
 






 
 
Financial Supplement
 
14




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

  
 
For the Three Months Ended
 
For the Three Months Ended
Adjusted revenues
 
March 31,
2019
 
December 31,
2018
 
September 30,
2018
 
June 30,
2018
 
March 31,
2018
 
March 31,
2019
 
March 31,
2018
Premiums
 
$23
 
$23
 
$25
 
$24
 
$26
 
$23
 
$26
Universal life and investment-type product policy fees
 
(3)
 
(3)
 
(3)
 
(4)
 
(3)
 
(3)
 
(3)
Net investment income
 
17
 
19
 
16
 
11
 
11
 
17
 
11
Other revenues
 
6
 
1
 
9
 
 
 
6
 
Total adjusted revenues
 
$43
 
$40
 
$47
 
$31
 
$34
 
$43
 
$34
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest credited to policyholder account balances
 
$—
 
$—
 
$—
 
$—
 
$—
 
$—
 
$—
Policyholder benefits and claims
 
14
 
16
 
15
 
19
 
14
 
14
 
14
Amortization of DAC and VOBA
 
4
 
3
 
5
 
3
 
5
 
4
 
5
Interest expense on debt
 
47
 
45
 
39
 
37
 
37
 
47
 
37
Other operating costs
 
50
 
80
 
105
 
96
 
64
 
50
 
64
Total adjusted expenses
 
115
 
144
 
164
 
155
 
120
 
115
 
120
Adjusted earnings before provision for income tax
 
(72)
 
(104)
 
(117)
 
(124)
 
(86)
 
(72)
 
(86)
Provision for income tax expense (benefit)
 
(22)
 
(33)
 
(32)
 
(26)
 
(29)
 
(22)
 
(29)
Adjusted earnings after provision for income tax
 
(50)
 
(71)
 
(85)
 
(98)
 
(57)
 
(50)
 
(57)
Less: Net income (loss) attributable to noncontrolling interests
 
2