EX-99.2 3 q22023bhffinancialsuppleme.htm EX-99.2 Document

Exhibit 99.2






Brighthouse Financial, Inc.
Financial Supplement
Second Quarter 2023
(As updated August 9, 2023)
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Table of ContentsFinancial Results
Earnings and Select Metrics from 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,
2023
March 31,
2023
December 31,
2022
September 30,
2022
June 30,
2022
Net income (loss) available to shareholders$(200)$(525)$110$388$1,719
Adjusted earnings (2)$271$195$545$115$144
Adjusted earnings, less notable items (2)$271$195$282$74$353
Total corporate expenses (3)$221$210$243$217$201
Combined total adjusted capital (4)$7,600$8,153$8,052$8,003$8,188
Combined risk-based capital ratio (4), (5)430%-450%460%-480%441%450%-470%470%-490%
Stockholders' Equity
Brighthouse Financial, Inc.’s stockholders’ equity$4,907$5,754$5,533$4,600$7,180
Less: Preferred stock, net1,6991,6991,6991,6991,699
Brighthouse Financial, Inc.’s common stockholders’ equity, including AOCI$3,208$4,055$3,834$2,901$5,481
Less: AOCI(5,881)(5,288)(6,106)(7,015)(4,176)
Brighthouse Financial, Inc.’s common stockholders’ equity, excluding AOCI $9,089$9,343$9,940$9,916$9,657
Return on Common Equity (1), (6)
Return on common equity(5.8)%38.8%77.3%93.7%108.6%
Return on common equity, excluding AOCI(2.4)%18.0%42.7%56.6%79.4%
Adjusted return on common equity, excluding AOCI11.7%10.6%13.4%9.9%12.7%
Earnings Per Common Share, Diluted (1), (7)
Net income (loss) available to shareholders per common share$(3.01)$(7.72)$1.59$5.39$22.91
Adjusted earnings per common share$4.04$2.86$7.81$1.61$1.91
Adjusted earnings, less notable items per common share$4.04$2.86$4.04$1.03$4.71
Weighted average common shares outstanding66,967,18568,158,78069,765,11871,959,38074,971,658
Book Value Per Common Share
Book value per common share (1)$48.64$60.16$56.15$41.41$75.01
Book value per common share, excluding AOCI (1)$137.80$138.62$145.58$141.53$132.16
Ending common shares outstanding65,956,66067,401,61868,278,06870,060,56073,072,766
(1) Certain definitions have been updated due to the adoption of LDTI. 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, 2023. See additional information on page 22.
(5) The RBC ratio is reported as a preliminary range for all periods, except those ended December 31.
(6) Simplified averaging was applied to all periods presented for 2022.
(7) 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 Statements of Operations (Unaudited, in millions)
For the Three Months EndedFor the Six Months Ended
RevenuesJune 30,
2023
March 31,
2023
December 31,
2022
September 30,
2022
June 30,
2022
June 30,
2023
June 30,
2022
Premiums$211$197$167$162$167$408$333
Universal life and investment-type product policy fees6016065495976091,2071,289
Net investment income1,1961,0591,0498771,0612,2552,212
Other revenues13093100122118223256
Revenues before NIGL and NDGL2,1381,9551,8651,7581,9554,0934,090
Net investment gains (losses)(64)(96)(69)(45)(66)(160)(134)
Net derivative gains (losses)(1,811)(575)(1,923)(592)1,977(2,386)1,923
Total revenues$263$1,284$(127)$1,121$3,866$1,547$5,879
Expenses
Policyholder benefits and claims$689$687$267$534$717$1,376$1,392
Interest credited to policyholder account balances452422401405284874532
Amortization of DAC and VOBA157156155159158313315
Change in market risk benefits(1,300)194(1,479)(984)(62)(1,106)(1,641)
Interest expense on debt38383938387676
Other expenses4644404504575549041,025
Total expenses5001,937(167)6091,6892,4371,699
Income (loss) before provision for income tax(237)(653)405122,177(890)4,180
Provision for income tax expense (benefit)(62)(156)(97)97432(218)848
Net income (loss)(175)(497)1374151,745(672)3,332
Less: Net income (loss) attributable to noncontrolling interests21222
Net income (loss) attributable to Brighthouse Financial, Inc.(175)(499)1364131,745(674)3,330
Less: Preferred stock dividends25262625265153
Net income (loss) available to Brighthouse Financial, Inc.’s common shareholders$(200)$(525)$110$388$1,719$(725)$3,277

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Financial Supplement
3



GAAP Balance Sheets (Unaudited, in millions)
As of
ASSETSJune 30,
2023
March 31,
2023
December 31,
2022
September 30,
2022
June 30,
2022
Investments:
Fixed maturity securities available-for-sale$77,577$77,685$75,577$75,271$78,606
Equity securities91918910096
Mortgage loans22,61422,82322,93622,08921,508
Policy loans1,2881,2731,2821,2741,277
Limited partnerships and limited liability companies4,9144,8034,7754,6074,683
Short-term investments1,1251,3861,0811,130920
Other invested assets3,6773,2292,8524,0333,345
Total investments111,286111,290108,592108,504110,435
Cash and cash equivalents3,7373,6854,1154,7935,071
Accrued investment income1,027985885909852
Reinsurance recoverables18,65018,45118,01916,69415,698
Premiums and other receivables573516529544765
DAC and VOBA4,9685,0275,0845,1425,196
Current income tax recoverable3130381818
Deferred income tax asset1,8971,6731,7361,9421,272
Market risk benefit assets602510483400375
Other assets382395401414425
Separate account assets88,39287,44084,96581,83688,843
Total assets$231,545$230,002$224,847$221,196$228,950
LIABILITIES AND EQUITY
Liabilities
Future policy benefits$31,899$32,286$31,497$32,016$33,492
Policyholder account balances78,64376,12073,52769,74966,717
Market risk benefit liabilities9,78310,72910,38911,42512,304
Other policy-related balances3,7843,8164,0984,0513,944
Payables for collateral under securities loaned and other transactions4,1334,4014,5606,5326,675
Long-term debt3,1563,1573,1563,1563,157
Other liabilities6,7836,2347,0577,7666,573
Separate account liabilities88,39287,44084,96581,83688,843
Total liabilities226,573224,183219,249216,531221,705
Equity
Preferred stock, at par value
Common stock, at par value11111
Additional paid-in capital14,03914,05414,07514,09514,113
Retained earnings (deficit)(1,069)(894)(395)(532)(945)
Treasury stock(2,183)(2,119)(2,042)(1,949)(1,813)
Accumulated other comprehensive income (loss)(5,881)(5,288)(6,106)(7,015)(4,176)
Total Brighthouse Financial, Inc.’s stockholders’ equity4,9075,7545,5334,6007,180
Noncontrolling interests6565656565
Total equity4,9725,8195,5984,6657,245
Total liabilities and equity$231,545$230,002$224,847$221,196$228,950
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Earnings and
Select Metrics from
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, 2023
Adjusted revenuesAnnuitiesLifeRun-offCorporate & OtherTotal
Premiums$84$126$1$—$211
Universal life and investment-type product policy fees41463124601
Net investment income6331193161511,219
Other revenues115474130
Total adjusted revenues$1,246$312$448$155$2,161
Adjusted expenses
Policyholder benefits and claims$141$189$359$—$689
Interest credited to policyholder account balances266237095454
Amortization of DAC and VOBA13027157
Interest expense on debt3838
Other operating costs352554017464
Total adjusted expenses8892944691501,802
Adjusted earnings before provision for income tax35718(21)5359
Provision for income tax expense (benefit)663(5)(1)63
Adjusted earnings after provision for income tax29115(16)6296
Less: Net income (loss) attributable to noncontrolling interests
Less: Preferred stock dividends2525
Adjusted earnings$291$15$(16)$(19)$271
For the Three Months Ended June 30, 2022
Adjusted revenuesAnnuitiesLifeRun-offCorporate & OtherTotal
Premiums$29$138$—$—$167
Universal life and investment-type product policy fees44236131609
Net investment income546115350591,070
Other revenues1126118
Total adjusted revenues$1,129$289$487$59$1,964
Adjusted expenses
Policyholder benefits and claims$75$192$450$—$717
Interest credited to policyholder account balances192267127316
Amortization of DAC and VOBA12929158
Interest expense on debt3838
Other operating costs339616643554
Total adjusted expenses7352536871081,783
Adjusted earnings before provision for income tax39436(200)(49)181
Provision for income tax expense (benefit)747(43)(27)11
Adjusted earnings after provision for income tax32029(157)(22)170
Less: Net income (loss) attributable to noncontrolling interests
Less: Preferred stock dividends2626
Adjusted earnings$320$29$(157)$(48)$144

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Financial Supplement
6


Statements of Adjusted Earnings by Segment and Corporate & Other (Unaudited, in millions)
For the Six Months Ended June 30, 2023
Adjusted revenuesAnnuitiesLifeRun-offCorporate & OtherTotal
Premiums$150$257$1$—$408
Universal life and investment-type product policy fees8291352431,207
Net investment income1,2272195703002,316
Other revenues210514(6)223
Total adjusted revenues$2,416$616$828$294$4,154
Adjusted expenses
Policyholder benefits and claims$214$395$767$—$1,376
Interest credited to policyholder account balances50744136181868
Amortization of DAC and VOBA25954313
Interest expense on debt7676
Other operating costs6921058027904
Total adjusted expenses1,6725989832843,537
Adjusted earnings before provision for income tax74418(155)10617
Provision for income tax expense (benefit)1392(33)(10)98
Adjusted earnings after provision for income tax60516(122)20519
Less: Net income (loss) attributable to noncontrolling interests22
Less: Preferred stock dividends5151
Adjusted earnings$605$16$(122)$(33)$466
For the Six Months Ended June 30, 2022
Adjusted revenuesAnnuitiesLifeRun-offCorporate & OtherTotal
Premiums$54$279$—$—$333
Universal life and investment-type product policy fees940922571,289
Net investment income1,1012757511002,227
Other revenues236614256
Total adjusted revenues$2,331$652$1,022$100$4,105
Adjusted expenses
Policyholder benefits and claims$150$409$832$1$1,392
Interest credited to policyholder account balances3823014941602
Amortization of DAC and VOBA25659315
Interest expense on debt7676
Other operating costs71135210691,025
Total adjusted expenses1,4995331,1911873,410
Adjusted earnings before provision for income tax832119(169)(87)695
Provision for income tax expense (benefit)15824(36)(30)116
Adjusted earnings after provision for income tax67495(133)(57)579
Less: Net income (loss) attributable to noncontrolling interests22
Less: Preferred stock dividends5353
Adjusted earnings$674$95$(133)$(112)$524

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Financial Supplement
7
Annuities — Statements of Adjusted Earnings (Unaudited, in millions)
For the Three Months EndedFor the Six Months Ended
Adjusted revenuesJune 30,
2023
March 31,
2023
December 31,
2022
September 30,
2022
June 30,
2022
June 30,
2023
June 30,
2022
Premiums$84$66$39$30$29$150$54
Universal life and investment-type product policy fees414415367401442829940
Net investment income6335946135475461,2271,101
Other revenues1159585113112210236
Total adjusted revenues$1,246$1,170$1,104$1,091$1,129$2,416$2,331
Adjusted expenses
Policyholder benefits and claims$141$73$144$86$75$214$150
Interest credited to policyholder account balances266241232283192507382
Amortization of DAC and VOBA130129129130129259256
Interest expense on debt
Other operating costs352340360346339692711
Total adjusted expenses8897838658457351,6721,499
Adjusted earnings before provision for income tax357387239246394744832
Provision for income tax expense (benefit)6673454474139158
Adjusted earnings$291$314$194$202$320$605$674

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Financial Supplement
8
Annuities — Select Operating Metrics (Unaudited, in millions)
For the Three Months Ended
VARIABLE AND SHIELD LEVEL ANNUITIES ACCOUNT VALUE (1)June 30,
2023
March 31,
2023
December 31,
2022
September 30,
2022
June 30,
2022
Account value, beginning of period$115,090$110,851$105,392$112,139$128,397
Premiums and deposits (2)1,8241,7981,5951,7022,035
Withdrawals, surrenders and contract benefits(2,894)(2,878)(2,717)(2,504)(2,500)
Net flows (3)(1,070)(1,080)(1,122)(802)(465)
Investment performance (4)4,5275,8387,121(5,363)(15,219)
Policy charges and other(572)(519)(540)(582)(574)
Account value, end of period$117,975$115,090$110,851$105,392$112,139
FIXED ANNUITIES ACCOUNT VALUE (5)
Account value, beginning of period$19,240$18,752$17,938$16,028$15,671
Premiums and deposits (2)6641,0351,6562,055503
Withdrawals, surrenders and contract benefits(513)(657)(587)(283)(237)
Net flows (3)1513781,0691,772266
Interest credited141123(228)10996
Other(12)(13)(27)29(5)
Account value, end of period$19,520$19,240$18,752$17,938$16,028
INCOME ANNUITIES (1)
Income annuity insurance liabilities$4,266$4,266$4,569$4,576$4,587
(1) Includes general account and separate account.
(2) Includes premiums and deposits directed to the general account investment option of variable products.
(3) Deposits and withdrawals include policy exchanges.
(4) Includes the interest credited on the general account option of variable products.
(5) Includes fixed index annuities.

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Financial Supplement
9
Annuities — Select Operating Metrics (Cont.) (Unaudited, in millions)
For the Three Months EndedFor the Six Months Ended
VARIABLE AND SHIELD LEVEL ANNUITY SALESJune 30,
2023
March 31,
2023
December 31,
2022
September 30,
2022
June 30,
2022
June 30,
2023
June 30,
2022
Shield Level Annuities (1)$1,615$1,554$1,389$1,436$1,629$3,169$3,023
GMWB101125101149268226602
GMDB only5267556975119162
GMIB57910131230
Total variable and Shield Level annuity sales$1,773$1,753$1,554$1,664$1,985$3,526$3,817
FIXED AND INCOME ANNUITY SALES
Fixed index annuities (2)$98$122$161$213$206$220$402
Fixed deferred annuities5659091,4931,8412931,474334
Single premium immediate annuities289322373
Other fixed and income annuities96115
Total fixed and income annuity sales$700$1,046$1,657$2,057$501$1,746$739
(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 Supplement
10
Life — Statements of Adjusted Earnings (Unaudited, in millions)
For the Three Months EndedFor the Six Months Ended
Adjusted revenuesJune 30,
2023
March 31,
2023
December 31,
2022
September 30,
2022
June 30,
2022
June 30,
2023
June 30,
2022
Premiums$126$131$128$130$138$257$279
Universal life and investment-type product policy fees637266613613592
Net investment income1191009077115219275
Other revenues417256
Total adjusted revenues$312$304$291$270$289$616$652
Adjusted expenses
Policyholder benefits and claims$189$206$168$223$192$395$409
Interest credited to policyholder account balances23212223264430
Amortization of DAC and VOBA27272629295459
Interest expense on debt
Other operating costs55505639610535
Total adjusted expenses294304272314253598533
Adjusted earnings before provision for income tax1819(44)3618119
Provision for income tax expense (benefit)3(1)2(10)7224
Adjusted earnings$15$1$17$(34)$29$16$95

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Financial Supplement
11
Life — Select Operating Metrics (Unaudited, in millions)
For the Three Months Ended
LIFE ACCOUNT VALUE: GENERAL ACCOUNTJune 30,
2023
March 31,
2023
December 31,
2022
September 30,
2022
June 30,
2022
Universal and variable universal life account value, beginning of period$2,594$2,658$2,663$2,678$2,671
Premiums and deposits (1)5855545454
Withdrawals, surrenders and contract benefits(36)(95)(33)(44)(34)
Net flows22(40)211020
Net transfers from (to) separate account10117917
Interest credited2321242424
Policy charges and other (90)(56)(57)(58)(54)
Universal and variable universal life account value, end of period$2,559$2,594$2,658$2,663$2,678
LIFE ACCOUNT VALUE: SEPARATE ACCOUNT
Variable universal life account value, beginning of period$5,483$5,215$4,912$5,251$6,262
Premiums and deposits4042444443
Withdrawals, surrenders and contract benefits(68)(55)(43)(64)(52)
Net flows(28)(13)1(20)(9)
Investment performance312341364(263)(929)
Net transfers from (to) general account(10)(12)(10)(9)(16)
Policy charges and other(51)(48)(52)(47)(57)
Variable universal life account value, end of period$5,706$5,483$5,215$4,912$5,251
(1) Includes premiums and deposits directed to the general account investment option of variable products.

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Financial Supplement
12
Life — Select Operating Metrics (Cont.) (Unaudited, in millions)
For the Three Months EndedFor the Six Months Ended
LIFE SALESJune 30,
2023
March 31,
2023
December 31,
2022
September 30,
2022
June 30,
2022
June 30,
2023
June 30,
2022
Total life sales$25$23$22$19$19$48$39
As of
LIFE INSURANCE IN-FORCEJune 30,
2023
March 31,
2023
December 31,
2022
September 30,
2022
June 30,
2022
Whole Life
Life Insurance in-force, before reinsurance$17,915$18,063$18,264$18,422$18,490
Life Insurance in-force, net of reinsurance$3,017$3,035$3,069$3,156$3,113
Term Life
Life Insurance in-force, before reinsurance$356,596$358,592$360,611$364,251$368,082
Life Insurance in-force, net of reinsurance$286,928$287,628$288,522$290,746$292,839
Universal and Variable Universal Life
Life Insurance in-force, before reinsurance$45,039$45,474$46,000$46,336$46,876
Life Insurance in-force, net of reinsurance$33,793$34,008$34,463$34,597$34,981

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Financial Supplement
13
Run-off — Statements of Adjusted Earnings (Unaudited, in millions)
For the Three Months EndedFor the Six Months Ended
Adjusted revenuesJune 30,
2023
March 31,
2023
December 31,
2022
September 30,
2022
June 30,
2022
June 30,
2023
June 30,
2022
Premiums$1$—$—$2$—$1$—
Universal life and investment-type product policy fees124119116135131243257
Net investment income316254247168350570751
Other revenues778761414
Total adjusted revenues$448$380$371$312$487$828$1,022
Adjusted expenses
Policyholder benefits and claims$359$408$(44)$225$450$767$832
Interest credited to policyholder account balances7066726971136149
Amortization of DAC and VOBA
Interest expense on debt
Other operating costs4040453816680210
Total adjusted expenses469514733326879831,191
Adjusted earnings before provision for income tax(21)(134)298(20)(200)(155)(169)
Provision for income tax expense (benefit)(5)(28)62(4)(43)(33)(36)
Adjusted earnings$(16)$(106)$236$(16)$(157)$(122)$(133)

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Financial Supplement
14
Run-off — Select Operating Metrics (Unaudited, in millions)
For the Three Months Ended
UNIVERSAL LIFE WITH SECONDARY GUARANTEES ACCOUNT VALUEJune 30,
2023
March 31,
2023
December 31,
2022
September 30,
2022
June 30,
2022
Account value, beginning of period$5,218$5,307$5,380$5,454$5,512
Premiums and deposits (1)168171167173180
Withdrawals, surrenders and contract benefits(22)(44)(32)(32)(21)
Net flows146127135141159
Interest credited4344464645
Policy charges and other(219)(260)(254)(261)(262)
Account value, end of period$5,188$5,218$5,307$5,380$5,454
As of
LIFE INSURANCE IN-FORCEJune 30,
2023
March 31,
2023
December 31,
2022
September 30,
2022
June 30,
2022
Universal Life with Secondary Guarantees
Life Insurance in-force, before reinsurance$71,157$71,652$72,276$72,847$73,393
Life Insurance in-force, net of reinsurance$34,808$34,655$35,980$36,308$36,611
(1) Includes premiums and deposits directed to the general account investment option of variable products.

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Financial Supplement
15
Corporate & Other — Statements of Adjusted Earnings (Unaudited, in millions)
For the Three Months EndedFor the Six Months Ended
Adjusted revenuesJune 30,
2023
March 31,
2023
December 31,
2022
September 30,
2022
June 30,
2022
June 30,
2023
June 30,
2022
Premiums$—$—$—$—$—$—$—
Universal life and investment-type product policy fees
Net investment income15114913210859300100
Other revenues4(10)(6)
Total adjusted revenues$155$139$132$108$59$294$100
Adjusted expenses
Policyholder benefits and claims$—$—$(1)$—$—$—$1
Interest credited to policyholder account balances958672502718141
Amortization of DAC and VOBA
Interest expense on debt38383938387676
Other operating costs1710(11)34432769
Total adjusted expenses15013499122108284187
Adjusted earnings before provision for income tax5533(14)(49)10(87)
Provision for income tax expense (benefit)(1)(9)(92)(4)(27)(10)(30)
Adjusted earnings after provision for income tax614125(10)(22)20(57)
Less: Net income (loss) attributable to noncontrolling interests21222
Less: Preferred stock dividends25262625265153
Adjusted earnings$(19)$(14)$98$(37)$(48)$(33)$(112)

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Other Information

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Financial Supplement
17



Change in Market Risk Benefits and Net Derivative Gains (Losses) (Unaudited, in millions)
For the Three Months EndedFor the Six Months Ended
CHANGE IN MARKET RISK BENEFITSJune 30,
2023
March 31,
2023
December 31,
2022
September 30,
2022
June 30,
2022
June 30,
2023
June 30,
2022
Market risk benefits mark-to-market$1,173$(304)$1,290$786$(122)$869$1,306
Market risk benefits fees, net of claims148112195211189260367
Ceded reinsurance(21)(2)(6)(13)(5)(23)(32)
Total change in market risk benefits$1,300$(194)$1,479$984$62$1,106$1,641

For the Three Months EndedFor the Six Months Ended
NET DERIVATIVE GAINS (LOSSES)June 30,
2023
March 31,
2023
December 31,
2022
September 30,
2022
June 30,
2022
June 30,
2023
June 30,
2022
Net derivative gains (losses):
Variable annuity hedges$(73)$365$(274)$(772)$(188)$292$(505)
Shield embedded derivatives(1,693)(1,073)(1,323)5492,752(2,766)3,453
ULSG hedges(84)141(192)(483)(659)57(1,199)
Other hedges and embedded derivatives16(46)(167)9163(30)159
Subtotal(1,834)(613)(1,956)(615)1,968(2,447)1,908
Investment hedge adjustments2338332396115
Total net derivative gains (losses)$(1,811)$(575)$(1,923)$(592)$1,977$(2,386)$1,923

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Financial Supplement
18



Notable Items (Unaudited, in millions)
For the Three Months EndedFor the Six Months Ended
NOTABLE ITEMS IMPACTING ADJUSTED EARNINGSJune 30,
2023
March 31,
2023
December 31,
2022
September 30,
2022
June 30,
2022
June 30,
2023
June 30,
2022
Actuarial items and other insurance adjustments$—$—$(227)$(57)$200$—$219
Establishment costs1516921
Prior year tax matters(51)
Total notable items (1)$—$—$(263)$(41)$209$—$240
NOTABLE ITEMS BY SEGMENT AND CORPORATE & OTHER
Annuities$—$—$44$55$—$—$—
Life1619
Run-off(271)(128)200200
Corporate & Other(36)16921
Total notable items (1)$—$—$(263)$(41)$209$—$240
(1) See definitions for Non-GAAP and Other Financial Disclosures in the Appendix beginning on page A-2.

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Financial Supplement
19



Variable Annuity Separate Account Returns and Allocations (Unaudited)
For the Three Months Ended
VARIABLE ANNUITY SEPARATE ACCOUNT RETURNSJune 30,
2023
March 31,
2023
December 31,
2022
September 30,
2022
June 30,
2022
Total Quarterly VA separate account gross returns3.86%5.80%6.82%(5.41)%(12.58)%
TOTAL VARIABLE ANNUITY SEPARATE ACCOUNT ALLOCATIONS
Percent allocated to equity funds30.04%29.05%27.40%27.97%27.60%
Percent allocated to bond funds/other funds8.88%9.10%8.82%9.48%9.29%
Percent allocated to target volatility funds19.58%20.08%20.28%20.56%21.01%
Percent allocated to balanced funds41.50%41.77%43.50%41.99%42.10%

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Financial Supplement
20



Summary of Investments (Unaudited, dollars in millions)
June 30, 2023December 31, 2022
Amount% of TotalAmount% of Total
Fixed maturity securities:
U.S. corporate securities$33,71429.31%$32,60728.93%
Foreign corporate securities10,9059.48%10,5769.38%
U.S. government and agency securities8,1637.10%8,0167.11%
Residential mortgage-backed securities7,4536.48%7,5286.68%
Commercial mortgage-backed securities6,4585.61%6,6115.87%
Asset-backed securities6,0265.24%5,3594.75%
State and political subdivision securities3,8353.33%3,7993.37%
Foreign government securities1,0230.89%1,0810.96%
Total fixed maturity securities77,57767.44%75,57767.05%
Equity securities910.08%890.08%
Mortgage loans:
Commercial mortgage loans13,39211.64%13,57412.04%
Residential mortgage loans4,9354.29%5,1164.54%
Agricultural mortgage loans4,4323.85%4,3653.87%
Allowance for credit losses(145)(0.12)%(119)(0.10)%
Total mortgage loans, net22,61419.66%22,93620.35%
Policy loans1,2881.12%1,2821.14%
Limited partnerships and limited liability companies4,9144.27%4,7754.24%
Cash, cash equivalents and short-term investments4,8624.23%5,1964.61%
Other invested assets:
Derivatives:
Interest rate2780.24%3040.27%
Equity market2,0681.80%1,2171.08%
Foreign currency exchange rate6470.56%7450.66%
Credit240.02%180.02%
Total derivatives3,0172.62%2,2842.03%
ICOLI3320.29%2500.22%
FHLB common stock2160.19%2010.18%
Other1120.10%1170.10%
Total other invested assets3,6773.20%2,8522.53%
Total investments and cash and cash equivalents$115,023100.00%$112,707100.00%

For the Three Months Ended
June 30,
2023
March 31,
2023
December 31,
2022
September 30,
2022
June 30,
2022
Net investment income yield (1)4.21%3.81%3.79%3.20%3.92%
(1) See definitions for Non-GAAP and Other Financial Disclosures in the Appendix beginning on page A-2.
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Financial Supplement
21



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,
2023 (2)
March 31,
2023
December 31,
2022
September 30,
2022
June 30,
2022
PRELIMINARY
June 30,
2023 (2)
June 30,
2022
Total revenues (Line 9)$2,300$2,397$2,120$5,089$7,081$4,697$11,246
Total benefits and expenses before dividends to policyholders (Line 28)
$2,900$2,654$1,542$4,165$6,920$5,554$11,539
COMBINED NET INCOME (LOSS) (1)
Gain (loss) from operations net of taxes and dividends to policyholders (Line 33)
$(500)$(264)$673$869$154$(764)$(270)
Net realized capital gains (losses), net of taxes and certain transfers to interest maintenance reserve (Line 34)
(858)(394)(76)460(858)502
Net income (loss) (Line 35)$(500)$(1,122)$279$793$614$(1,622)$232
For the Six Months Ended
NORMALIZED STATUTORY EARNINGS (LOSS) (3), (4)PRELIMINARY
June 30,
2023 (2)
June 30,
2022
(In billions)
Statutory net gain (loss) from operations, pre-tax$(0.2)$(0.8)
Add: net realized capital gains (losses)(1.1)0.8
Add: change in total asset requirement at CTE98, net of the change in VA reserves0.20.9
Add: unrealized gains (losses) on VA & Shield hedging program and other equity risk management strategies
1.0(0.6)
Add: impact of actuarial items and other insurance adjustments0.1
Normalized statutory earnings (loss)$(0.1)$0.4
(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, 2023.
(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 Supplement
22



Statutory Balance Sheet and Surplus Information (Unaudited, in millions)
As of
COMBINED ASSETS, LIABILITIES, AND CAPITAL AND SURPLUS (1)                                                    PRELIMINARY
June 30,
2023 (2)
March 31,
2023
December 31,
2022
September 30,
2022
June 30,
2022
Total assets (Line 28)$193,100$191,801$188,585$187,747$192,672
Total liabilities (Line 28)$187,000$185,143$182,044$181,264$186,053
Total capital and surplus (Line 38)$6,100$6,658$6,541$6,483$6,619
COMBINED TAC AND RBC RATIO (1), (3)
Combined total adjusted capital$7,600$8,153$8,052$8,003$8,188
Combined risk-based capital ratio (4)430%-450%460%-480%441%450%-470%470%-490%
COMBINED ORDINARY DIVIDEND CAPACITY (1)
Dividends paid to Holding Company$—$—$38$—$—
Remaining ordinary dividend capacity (5)$611$611$1,474$1,512$1,512
(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, 2023.
(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 for all periods, except those ended December 31.
(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 Supplement
A-1



Note Regarding Forward-Looking Statements

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

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 between actual outcomes and the sensitivities calculated under certain scenarios 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 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 risks associated with climate change; the adverse impact of public health crises, extreme mortality events or similar occurrences on our business and the economy in general; 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 geopolitical events, military actions or catastrophic events, on our profitability measures as well as our investment portfolio, including on realized and unrealized losses and impairments, net investment spread and net investment income; the financial risks that our investment portfolio is subject to, including credit risk, interest rate risk, inflation risk, market valuation risk, liquidity risk, real estate risk, derivatives risk, and other factors outside our control; the impact of changes in regulation and in supervisory and enforcement policies or interpretations thereof 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 or increase our tax liability; the effectiveness of our policies, procedures and processes 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. are not as expected, leading to material additional taxes or material adverse consequences to tax attributes that impact us; 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, 2022, 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 Supplement
A-2



Non-GAAP and Other Financial Disclosures

Our definitions of 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 enhance the understanding of our performance by the investor community by highlighting the results of operations and the underlying profitability drivers of our business.

The following non-GAAP financial 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 is a financial measure used by management to evaluate performance and facilitate comparisons to industry results. This financial measure, which may be positive or negative, focuses on our primary businesses by excluding the impact of market volatility, which could distort trends.

Adjusted earnings reflects adjusted revenues less (i) adjusted expenses, (ii) provision for income tax expense (benefit), (iii) net income (loss) attributable to noncontrolling interests and (iv) 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 Supplement
A-3



Non-GAAP and Other Financial Disclosures (Cont.)


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

Net investment gains (losses); and

Net derivative gains (losses), excluding 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”).

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

Change in market risk benefits; and

Change in fair value of the crediting rate on experience-rated contracts (“Market Value Adjustments”).

The tax impact of the adjustments discussed above 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 GAAP net investment income plus Investment Hedge Adjustments.

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Financial Supplement
A-4



Non-GAAP and Other Financial Disclosures (Cont.)


Other Financial Disclosures

Corporate Expenses

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

Notable items

Certain of the non-GAAP measures described above may be presented further adjusted to exclude notable items. Notable items reflect the unfavorable (favorable) after-tax 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.

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 Supplement
A-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, which represents 100 percent of gross sales on directly written business and the proportion of assumed gross sales under reinsurance agreements. 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 percentage 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 a percentage 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 (loss) from operations adjusted for the favorable or unfavorable impacts of (i) net realized capital gains (losses), (ii) the change in total asset requirement at CTE98, net of the change in our variable annuity reserves, and (iii) unrealized gains (losses) associated with our variable annuities and Shield hedging programs and other equity risk management strategies. Normalized statutory earnings (loss) may be further adjusted for certain unanticipated items that impact 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 Supplement
A-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
GMDBGuaranteed minimum death benefits
GMIBGuaranteed minimum income benefits
GMWBGuaranteed minimum withdrawal benefits
ICOLIInsurance company-owned life insurance
LDTITargeted Improvements to the Accounting for Long-Duration Contracts
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 Supplement
A-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 EndedFor the Six Months Ended
ADJUSTED EARNINGS, LESS NOTABLE ITEMS (1)June 30,
2023
March 31,
2023
December 31,
2022
September 30,
2022
June 30,
2022
June 30,
2023
June 30,
2022
Net income (loss) available to shareholders$(200)$(525)$110$388$1,719$(725)$3,277
Less: Net investment gains (losses)(64)(96)(69)(45)(66)(160)(134)
Less: Net derivative gains (losses), excluding investment hedge adjustments(1,834)(613)(1,956)(615)1,968(2,447)1,908
Less: Change in market risk benefits1,300(194)1,479984621,1061,641
Less: Market value adjustments2(8)(3)2032(6)70
Less: Provision for income tax (expense) benefit on reconciling adjustments125191114(71)(421)316(732)
Adjusted earnings271195545115144466524
Less: Notable items26341(209)(240)
Adjusted earnings, less notable items$271$195$282$74$353$466$764
ADJUSTED EARNINGS, LESS NOTABLE ITEMS PER COMMON SHARE (1), (2)
Net income (loss) available to shareholders per common share$(3.01)$(7.72)$1.59$5.39$22.91$(10.77)$43.01
Less: Net investment gains (losses)(0.96)(1.41)(0.99)(0.63)(0.88)(2.38)(1.76)
Less: Net derivative gains (losses), excluding investment hedge adjustments(27.49)(9.03)(28.04)(8.55)26.25(36.36)25.05
Less: Change in market risk benefits19.48(2.86)21.2013.670.8316.4421.55
Less: Market value adjustments0.03(0.12)(0.04)0.280.43(0.09)0.92
Less: Provision for income tax (expense) benefit on reconciling adjustments1.872.811.63(0.99)(5.62)4.70(9.61)
Less: Impact of inclusion of dilutive shares0.010.020.03
Adjusted earnings per common share4.042.867.811.611.916.896.87
Less: Notable items3.770.57(2.79)(3.15)
Adjusted earnings, less notable items per common share$4.04$2.86$4.04$1.03$4.71$6.89$10.03
(1) Certain definitions have been updated due to the adoption of LDTI. 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 Supplement
A-8



Reconciliation of Return on Common Equity to Adjusted Return on Common Equity, Excluding AOCI (Unaudited, dollars in millions)
Four Quarters Cumulative Trailing Basis
ADJUSTED EARNINGS (1)June 30,
2023
March 31,
2023
December 31,
2022
September 30,
2022
June 30,
2022
Net income (loss) available to shareholders$(227)$1,692$3,775$4,887$6,554
Less: Net investment gains (losses)(274)(276)(248)(239)(268)
Less: Net derivative gains (losses), excluding investment hedge adjustments(5,018)(1,216)(663)1,7243,816
Less: Change in market risk benefits3,5692,3314,1043,5003,282
Less: Market value adjustments114187120140
Less: Provision for income tax (expense) benefit on reconciling adjustments359(187)(689)(1,071)(1,464)
Adjusted earnings$1,126$999$1,184$853$1,048
Five Quarters Average Stockholders' Equity Basis
BRIGHTHOUSE FINANCIAL, INC.’S COMMON STOCKHOLDERS’ EQUITY, EXCLUDING AOCI (1)June 30,
2023
March 31,
2023
December 31,
2022
September 30,
2022
June 30,
2022
Brighthouse Financial, Inc.’s stockholders’ equity$5,595$6,058$6,584$6,847$7,596
Less: Preferred stock, net1,6991,6991,6991,6311,563
Brighthouse Financial, Inc.’s common stockholders’ equity3,8964,3594,8855,2166,033
Less: AOCI(5,693)(5,025)(3,958)(3,421)(2,223)
Brighthouse Financial, Inc.’s common stockholders’ equity, excluding AOCI$9,589$9,384$8,843$8,637$8,256
Five Quarters Average Common Stockholders' Equity Basis
ADJUSTED RETURN ON COMMON EQUITY, EXCLUDING AOCI (1)June 30,
2023
March 31,
2023
December 31,
2022
September 30,
2022
June 30,
2022
Return on common equity(5.8)%38.8%77.3%93.7%108.6%
Return on AOCI4.0%(33.7)%(95.4)%(142.9)%(294.8)%
Return on common equity, excluding AOCI(2.4)%18.0%42.7%56.6%79.4%
Less: Return on net investment gains (losses)(2.9)%(2.9)%(2.8)%(2.8)%(3.2)%
Less: Return on net derivative gains (losses), excluding investment hedge adjustments(52.3)%(13.0)%(7.5)%20.0%46.2%
Less: Return on change in market risk benefits37.2%24.8%46.4%40.5%39.7%
Less: Return on market value adjustments0.1%0.5%1.0%1.4%1.7%
Less: Return on provision for income tax (expense) benefit on reconciling adjustments3.8%(2.0)%(7.8)%(12.4)%(17.7)%
Adjusted return on common equity, excluding AOCI11.7%10.6%13.4%9.9%12.7%
(1) Simplified averaging was applied to all periods presented for 2022.

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Financial Supplement
A-9



Reconciliation of Total Revenues to Adjusted Revenues and Reconciliation of Total Expenses to Adjusted Expenses (Unaudited, in millions)
For the Three Months EndedFor the Six Months Ended
June 30,
2023
March 31,
2023
December 31,
2022
September 30,
2022
June 30,
2022
June 30,
2023
June 30,
2022
Total revenues$263$1,284$(127)$1,121$3,866$1,547$5,879
Less: Net investment gains (losses)(64)(96)(69)(45)(66)(160)(134)
Less: Net derivative gains (losses)(1,811)(575)(1,923)(592)1,977(2,386)1,923
Less: Investment hedge adjustments(23)(38)(33)(23)(9)(61)(15)
Total adjusted revenues$2,161$1,993$1,898$1,781$1,964$4,154$4,105
Total expenses$500$1,937$(167)$609$1,689$2,437$1,699
Less: Change in market risk benefits(1,300)194(1,479)(984)(62)(1,106)(1,641)
Less: Market value adjustments(2)83(20)(32)6(70)
Total adjusted expenses$1,802$1,735$1,309$1,613$1,783$3,537$3,410

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Financial Supplement
A-10



Investment Reconciliation Details (Unaudited, dollars in millions)
For the Three Months EndedFor the Six Months Ended
NET INVESTMENT GAINS (LOSSES)June 30,
2023
March 31,
2023
December 31,
2022
September 30,
2022
June 30,
2022
June 30,
2023
June 30,
2022
Investment portfolio gains (losses)$(47)$(72)$(47)$(47)$(66)$(119)$(127)
Investment portfolio credit loss (provision) release and (writedowns)(17)(24)(22)2(41)(7)
Net investment gains (losses)$(64)$(96)$(69)$(45)$(66)$(160)$(134)

For the Three Months Ended
NET INVESTMENT INCOME YIELD (1)June 30,
2023
March 31,
2023
December 31,
2022
September 30,
2022
June 30,
2022
Investment income yield4.35%3.96%3.94%3.35%</