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Brighthouse Financial, Inc. – ‘10-Q’ for 6/30/22 – ‘R21’

On:  Friday, 8/5/22, at 4:17pm ET   ·   For:  6/30/22   ·   Accession #:  1685040-22-45   ·   File #:  1-37905

Previous ‘10-Q’:  ‘10-Q’ on 5/10/22 for 3/31/22   ·   Next:  ‘10-Q’ on 11/8/22 for 9/30/22   ·   Latest:  ‘10-Q’ on 5/8/24 for 3/31/24   ·   1 Reference:  To:  Brighthouse Financial, Inc. – ‘8-K’ on / for 4/19/22

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  As Of               Filer                 Filing    For·On·As Docs:Size

 8/05/22  Brighthouse Financial, Inc.       10-Q        6/30/22   92:20M

Quarterly Report   —   Form 10-Q

Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-Q        Quarterly Report                                    HTML   5.33M 
 2: EX-31.1     Certification -- §302 - SOA'02                      HTML     30K 
 3: EX-31.2     Certification -- §302 - SOA'02                      HTML     30K 
 4: EX-32.1     Certification -- §906 - SOA'02                      HTML     27K 
 5: EX-32.2     Certification -- §906 - SOA'02                      HTML     27K 
11: R1          Document and Entity Information                     HTML     95K 
12: R2          Consolidated Balance Sheets (Unaudited)             HTML    156K 
13: R3          Consolidated Balance Sheets (Unaudited)             HTML     55K 
                (Parenthetical)                                                  
14: R4          Consolidated Statements of Operations and           HTML    134K 
                Comprehensive Income (Unaudited)                                 
15: R5          Consolidated Statements of Equity (Unaudited)       HTML     97K 
16: R6          Consolidated Statements of Cash Flows (Unaudited)   HTML     96K 
17: R7          Business, Basis of Presentation and Summary of      HTML     40K 
                Significant Accounting Policies                                  
18: R8          Segment Information                                 HTML    191K 
19: R9          Insurance                                           HTML     57K 
20: R10         Investments                                         HTML    480K 
21: R11         Derivatives                                         HTML    258K 
22: R12         Fair Value                                          HTML    472K 
23: R13         Long-term Debt                                      HTML     32K 
24: R14         Equity                                              HTML    214K 
25: R15         Other Revenues and Other Expenses                   HTML     52K 
26: R16         Earnings Per Common Share                           HTML     49K 
27: R17         Contingencies, Commitments and Guarantees           HTML     48K 
28: R18         Business, Basis of Presentation and Summary of      HTML     67K 
                Significant Accounting Policies (Policies)                       
29: R19         Segment Information (Tables)                        HTML    181K 
30: R20         Insurance (Tables)                                  HTML     56K 
31: R21         Investments (Tables)                                HTML    481K 
32: R22         Derivatives (Tables)                                HTML    383K 
33: R23         Fair Value (Tables)                                 HTML    456K 
34: R24         Equity (Tables)                                     HTML    219K 
35: R25         Other Revenues and Other Expenses (Tables)          HTML     50K 
36: R26         Earnings Per Common Share (Tables)                  HTML     47K 
37: R27         Business, Basis of Presentation and Summary of      HTML     28K 
                Significant Accounting Policies (Narrative)                      
                (Details)                                                        
38: R28         Segment Information (Operating Results) (Details)   HTML    109K 
39: R29         Segment Information (Reconciliation of Operating    HTML     46K 
                Revenues to Total Revenues) (Details)                            
40: R30         Segment Information (Assets) (Details)              HTML     43K 
41: R31         Segment Information (Narrative) (Details)           HTML     27K 
42: R32         Insurance (Guarantees Related to Annuity            HTML     41K 
                Contracts) (Details)                                             
43: R33         Insurance (Guarantees Related to Universal and      HTML     38K 
                Variable Life Contracts) (Details)                               
44: R34         Investments (Fixed Maturity Securities by Sector)   HTML     69K 
                (Details)                                                        
45: R35         Investments (Maturities of Fixed Maturity           HTML     59K 
                Securities) (Details)                                            
46: R36         Investments (Continuous Gross Unrealized Losses     HTML     73K 
                for Fixed Maturity Securities by Sector) (Details)               
47: R37         Investments (Mortgage Loans by Portfolio Segment)   HTML     55K 
                (Details)                                                        
48: R38         Investments (Rollforward of the Allowance for       HTML     47K 
                Credit Losses for Mortgage Loans by Portfolio                    
                Segment) (Details)                                               
49: R39         Investments (Credit Quality of Mortgage Loans by    HTML    109K 
                Portfolio Segment) (Details)                                     
50: R40         Investments (Past Due Mortgage Loans by Portfolio   HTML     67K 
                Segment) (Details)                                               
51: R41         Investments (Mortgage Loans in Nonaccrual Status    HTML     37K 
                by Portfolio Segment) (Details)                                  
52: R42         Investments (Net Unrealized Investment Gains        HTML     45K 
                (Losses)) (Details)                                              
53: R43         Investments (Changes in Net Unrealized Investment   HTML     38K 
                Gains (Losses)) (Details)                                        
54: R44         Investments (Securities Lending) (Details)          HTML     39K 
55: R45         Investments (Securities Lending Remaining Tenor)    HTML     58K 
                (Details)                                                        
56: R46         Investments (Invested Assets on Deposit, Held In    HTML     33K 
                Trust and Pledged as Collateral) (Details)                       
57: R47         Investments (Variable Interest Entities) (Details)  HTML     44K 
58: R48         Investments (Net Investment Income) (Details)       HTML     49K 
59: R49         Investments (Components of Net Investment Gains     HTML     37K 
                (Losses)) (Details)                                              
60: R50         Investments (Sales or Disposals of Fixed Maturity   HTML     35K 
                Securities) (Details)                                            
61: R51         Investments (Fixed Maturity Securities -            HTML     43K 
                Narrative) (Details)                                             
62: R52         Investments (Mortgage Loans - Narrative) (Details)  HTML     61K 
63: R53         Investments (Other Invested Assets - Narrative)     HTML     29K 
                (Details)                                                        
64: R54         Investments (Securities Lending - Narrative)        HTML     30K 
                (Details)                                                        
65: R55         Investments (Invested Assets on Deposit, Held in    HTML     35K 
                Trust and Pledged as Collateral - Narrative)                     
                (Details)                                                        
66: R56         Investments (Net Investment Income - Narrative)     HTML     31K 
                (Details)                                                        
67: R57         Investments (Components of Net Investment Gains     HTML     31K 
                (Losses) - Narrative) (Details)                                  
68: R58         Derivatives (Primary Risks Managed by Derivatives)  HTML     97K 
                (Details)                                                        
69: R59         Derivatives (Derivatives Pertaining to Hedged       HTML     86K 
                Items) (Details)                                                 
70: R60         Derivatives (Credit Derivatives) (Details)          HTML     46K 
71: R61         Derivatives (Estimated Fair Value of Derivatives    HTML     60K 
                Assets and Liabilities after Master Netting                      
                Agreements and Cash Collateral) (Details)                        
72: R62         Derivatives (Credit Risk on Freestanding            HTML     33K 
                Derivatives) (Details)                                           
73: R63         Derivatives (Derivatives - Narrative) (Details)     HTML     30K 
74: R64         Fair Value (Recurring Fair Value Measurements)      HTML    151K 
                (Details)                                                        
75: R65         Fair Value (Assets and Liabilities Measured -       HTML     51K 
                Quantitative Information) (Details)                              
76: R66         Fair Value (Unobservable Input Reconciliation)      HTML    136K 
                (Details)                                                        
77: R67         Fair Value (Financial Instruments Carried at Other  HTML     67K 
                Than Fair Value) (Details)                                       
78: R68         Long-term Debt (Details)                            HTML     37K 
79: R69         Equity (Preferred Stock Authorized, Issued and      HTML     50K 
                Outstanding) (Details)                                           
80: R70         Equity (Preferred Stock Dividends) (Details)        HTML     42K 
81: R71         Equity (Components of Accumulated Other             HTML     74K 
                Comprehensive Income (Loss)) (Details)                           
82: R72         Equity (Reclassifications Out of Accumulated Other  HTML     73K 
                Comprehensive Income (Loss)) (Details)                           
83: R73         Equity (Common Stock Repurchase Program -           HTML     36K 
                Narrative) (Details)                                             
84: R74         Other Revenues and Other Expenses (Other Expenses)  HTML     47K 
                (Details)                                                        
85: R75         Other Revenues and Other Expenses (Other Revenues   HTML     31K 
                - Narrative) (Details)                                           
86: R76         Earnings Per Common Share (Details)                 HTML     56K 
87: R77         Contingencies, Commitments and Guarantees           HTML     56K 
                (Contingencies, Commitments and Guarantees -                     
                Narrative) (Details)                                             
90: XML         IDEA XML File -- Filing Summary                      XML    179K 
88: XML         XBRL Instance -- bhf-20220630_htm                    XML   7.49M 
89: EXCEL       IDEA Workbook of Financial Reports                  XLSX    221K 
 7: EX-101.CAL  XBRL Calculations -- bhf-20220630_cal                XML    163K 
 8: EX-101.DEF  XBRL Definitions -- bhf-20220630_def                 XML    947K 
 9: EX-101.LAB  XBRL Labels -- bhf-20220630_lab                      XML   2.03M 
10: EX-101.PRE  XBRL Presentations -- bhf-20220630_pre               XML   1.32M 
 6: EX-101.SCH  XBRL Schema -- bhf-20220630                          XSD    185K 
91: JSON        XBRL Instance as JSON Data -- MetaLinks              499±   811K 
92: ZIP         XBRL Zipped Folder -- 0001685040-22-000045-xbrl      Zip    861K 


‘R21’   —   Investments (Tables)


This is an IDEA Financial Report.  [ Alternative Formats ]



 
v3.22.2
Investments (Tables)
6 Months Ended
Investments, Debt and Equity Securities [Abstract]  
Fixed Maturity Securities by Sector
Fixed maturity securities by sector were as follows at:
June 30, 2022December 31, 2021
Amortized
Cost
Allowance for Credit LossesGross UnrealizedEstimated
Fair
Value
Amortized
Cost
Allowance for Credit LossesGross UnrealizedEstimated
Fair
Value
GainsLossesGainsLosses
(In millions)
U.S. corporate$36,384 $$425 $3,336 $33,472 $35,326 $$3,946 $189 $39,081 
Foreign corporate11,922 — 66 1,441 10,547 10,916 906 109 11,706 
U.S. government and agency9,208 — 788 389 9,607 7,301 — 2,066 60 9,307 
RMBS8,791 94 541 8,343 8,878 — 432 51 9,259 
CMBS7,138 424 6,714 6,976 333 25 7,282 
State and political subdivision4,037 — 247 235 4,049 3,995 — 846 4,835 
ABS4,911 — 229 4,684 4,261 — 33 14 4,280 
Foreign government1,222 — 58 90 1,190 1,593 — 244 1,832 
Total fixed maturity securities$83,613 $$1,682 $6,685 $78,606 $79,246 $11 $8,806 $459 $87,582 
Maturities of Fixed Maturity Securities
The amortized cost and estimated fair value of fixed maturity securities, by contractual maturity date, were as follows at June 30, 2022:
Due in One
Year or Less
Due After One
Year Through
Five Years
Due After Five
Years Through
Ten Years
Due After Ten
Years
Structured
Securities (1)
Total Fixed
Maturity
Securities
(In millions)
Amortized cost$1,025 $13,020 $17,522 $31,206 $20,840 $83,613 
Estimated fair value$1,018 $12,583 $15,976 $29,288 $19,741 $78,606 
_______________
(1)Structured securities include residential mortgage-backed securities (“RMBS”), commercial mortgage-backed securities (“CMBS”) and asset-backed securities (“ABS”) (collectively, “Structured Securities”).
Continuous Gross Unrealized Losses for Fixed Maturity Securities by Sector
The estimated fair value and gross unrealized losses of fixed maturity securities in an unrealized loss position, by sector and by length of time that the securities have been in a continuous unrealized loss position, were as follows at:
June 30, 2022December 31, 2021
Less than 12 Months12 Months or GreaterLess than 12 Months12 Months or Greater
Estimated
Fair
Value
Gross
Unrealized
Losses
Estimated
Fair
Value
Gross
Unrealized
Losses
Estimated
Fair
Value
Gross
Unrealized
Losses
Estimated
Fair
Value
Gross
Unrealized
Losses
(Dollars in millions)
U.S. corporate$25,059 $2,840 $1,780 $496 $5,131 $113 $888 $76 
Foreign corporate8,455 1,256 608 185 2,044 62 326 47 
U.S. government and agency4,069 188 497 201 1,716 40 222 20 
RMBS6,128 470 490 71 3,488 51 32 — 
CMBS6,082 354 406 70 1,401 21 95 
State and political subdivision1,765 229 19 356 — 
ABS4,096 213 286 16 2,459 13 93 
Foreign government739 90 — — 278 18 
Total fixed maturity securities$56,393 $5,640 $4,086 $1,045 $16,873 $310 $1,681 $149 
Total number of securities in an unrealized loss position7,569 781 2,454 369 
Mortgage Loans by Portfolio Segment
Mortgage loans are summarized as follows at:
June 30, 2022December 31, 2021
Carrying
Value
% of
Total
Carrying
Value
% of
Total
(Dollars in millions)
Commercial$13,046 60.7 %$12,187 61.4 %
Agricultural4,144 19.3 4,163 21.0 
Residential4,421 20.5 3,623 18.2 
Total mortgage loans (1)21,611 100.5 19,973 100.6 
Allowance for credit losses(103)(0.5)(123)(0.6)
Total mortgage loans, net$21,508 100.0 %$19,850 100.0 %
_______________
(1)Purchases of mortgage loans from third parties were $415 million and $1.3 billion for the three months and six months ended June 30, 2022, respectively, and $621 million and $799 million for the three months and six months ended June 30, 2021, respectively, and were primarily comprised of residential mortgage loans.
Rollforward of the Allowance for Credit Losses for Mortgage Loans by Portfolio Segment
The changes in the allowance for credit losses by portfolio segment were as follows:
CommercialAgriculturalResidentialTotal
(In millions)
Six Months Ended June 30, 2022
Balance, beginning of period$67 $12 $44 $123 
Current period provision— — 
Charge-offs, net of recoveries(23)— — (23)
Balance, end of period$44 $15 $44 $103 
Six Months Ended June 30, 2021
Balance, beginning of period$44 $15 $35 $94 
Current period provision(2)
Balance, end of period$47 $13 $37 $97 
Credit Quality of Mortgage Loans by Portfolio Segment
The amortized cost of mortgage loans by year of origination and credit quality indicator was as follows at:
20222021202020192018PriorTotal
(In millions)
June 30, 2022
Commercial mortgage loans
Loan-to-value ratios:
Less than 65%$1,021 $2,634 $375 $1,437 $974 $3,855 $10,296 
65% to 75%426 631 91 383 405 420 2,356 
76% to 80%— — — 55 29 65 149 
Greater than 80%— — — 29 215 245 
Total commercial mortgage loans1,448 3,265 466 1,875 1,437 4,555 13,046 
Agricultural mortgage loans
Loan-to-value ratios:
Less than 65%306 1,158 410 496 652 809 3,831 
65% to 75%60 97 76 61 17 312 
Greater than 80%— — — — — 
Total agricultural mortgage loans366 1,255 486 557 654 826 4,144 
Residential mortgage loans
Performing541 1,712 170 226 179 1,535 4,363 
Nonperforming49 58 
Total residential mortgage loans542 1,715 171 228 181 1,584 4,421 
Total$2,356 $6,235 $1,123 $2,660 $2,272 $6,965 $21,611 
20212020201920182017PriorTotal
(In millions)
December 31, 2021
Commercial mortgage loans
Loan-to-value ratios:
Less than 65%$2,771 $437 $1,539 $986 $554 $3,303 $9,590 
65% to 75%633 92 383 406 128 481 2,123 
76% to 80%— — 55 29 59 31 174 
Greater than 80%— — — 30 — 270 300 
Total commercial mortgage loans3,404 529 1,977 1,451 741 4,085 12,187 
Agricultural mortgage loans
Loan-to-value ratios:
Less than 65%1,150 541 510 674 292 633 3,800 
65% to 75%114 77 61 26 33 52 363 
Total agricultural mortgage loans1,264 618 571 700 325 685 4,163 
Residential mortgage loans
Performing1,124 202 270 230 132 1,606 3,564 
Nonperforming— 51 59 
Total residential mortgage loans1,125 202 273 233 133 1,657 3,623 
Total$5,793 $1,349 $2,821 $2,384 $1,199 $6,427 $19,973 
The amortized cost of commercial mortgage loans by debt-service coverage ratio was as follows at:
June 30, 2022December 31, 2021
Amortized Cost% of
Total
Amortized Cost% of
Total
(Dollars in millions)
Debt-service coverage ratios:
Greater than 1.20x$11,502 88.1 %$10,289 84.4 %
1.00x - 1.20x270 2.1 596 4.9 
Less than 1.00x1,274 9.8 1,302 10.7 
Total$13,046 100.0 %$12,187 100.0 %
Past Due Mortgage Loans by Portfolio Segment
The aging of the amortized cost of past due mortgage loans by portfolio segment was as follows at:
June 30, 2022December 31, 2021
CommercialAgriculturalResidentialTotalCommercialAgriculturalResidentialTotal
(In millions)
Current$13,046 $4,128 $4,302 $21,476 $12,187 $4,163 $3,550 $19,900 
30-59 days past due— — 61 61 — — 14 14 
60-89 days past due— — 14 14 — — 14 14 
90-179 days past due— 16 27 43 — — 29 29 
180+ days past due— — 17 17 — — 16 16 
Total
$13,046 $4,144 $4,421 $21,611 $12,187 $4,163 $3,623 $19,973 
Mortgage Loans in Nonaccrual Status by Portfolio Segment
The amortized cost of mortgage loans in a nonaccrual status by portfolio segment was as follows at:
CommercialAgriculturalResidentialTotal
(In millions)
$23 $— $58 $81 
$— $— $59 $59 
Net Unrealized Investment Gains (Losses)
The components of net unrealized investment gains (losses), included in AOCI, were as follows at:
June 30, 2022December 31, 2021
(In millions)
Fixed maturity securities$(5,003)$8,347 
Derivatives606 329 
Other(16)(29)
Subtotal(4,413)8,647 
Amounts allocated from:
Future policy benefits371 (2,903)
DAC, VOBA and DSI223 (403)
Subtotal594 (3,306)
Deferred income tax benefit (expense)802 (1,121)
Net unrealized investment gains (losses)$(3,017)$4,220 
The changes in net unrealized investment gains (losses) were as follows:
Six Months Ended June 30, 2022
(In millions)
Balance at December 31, 2021$4,220 
Unrealized investment gains (losses) during the period(13,060)
Unrealized investment gains (losses) relating to:
Future policy benefits3,274 
DAC, VOBA and DSI626 
Deferred income tax benefit (expense)1,923 
Balance at June 30, 2022$(3,017)
Change in net unrealized investment gains (losses)$(7,237)
Securities Lending
Elements of the securities lending program are presented below at:
June 30, 2022December 31, 2021
(In millions)
Securities on loan: (1)
Amortized cost$5,243 $3,573 
Estimated fair value$5,320 $4,539 
Cash collateral received from counterparties (2)$5,391 $4,611 
Securities collateral received from counterparties (3)$— $
Reinvestment portfolio — estimated fair value$5,304 $4,730 
_______________
(1)Included within fixed maturity securities.
(2)Included within payables for collateral under securities loaned and other transactions.
(3)Securities collateral received from counterparties may not be sold or re-pledged, unless the counterparty is in default, and is not reported on the interim condensed consolidated financial statements.
The cash collateral liability by loaned security type and remaining tenor of the agreements were as follows at:
June 30, 2022December 31, 2021
Open (1)1 Month or Less1 to 6 MonthsTotalOpen (1)1 Month or Less1 to 6 MonthsTotal
(In millions)
U.S. government and agency$1,429 $2,253 $1,080 $4,762 $1,094 $2,125 $1,391 $4,610 
U.S. corporate— 453 — 453 — — 
Foreign corporate— 157 — 157 — — — — 
Foreign government— 19 — 19 — — — — 
Total$1,429 $2,882 $1,080 $5,391 $1,095 $2,125 $1,391 $4,611 
_______________
(1)The related loaned security could be returned to the Company on the next business day which would require the Company to immediately return the cash collateral.
Invested Assets on Deposit, Held in Trust and Pledged as Collateral
Invested assets on deposit, held in trust and pledged as collateral at estimated fair value were as follows at:
June 30, 2022December 31, 2021
(In millions)
Invested assets on deposit (regulatory deposits) (1)$8,378 $10,000 
Invested assets held in trust (reinsurance agreements) (2)5,494 6,029 
Invested assets pledged as collateral (3)8,779 5,116 
Total invested assets on deposit, held in trust and pledged as collateral$22,651 $21,145 
_______________
(1)The Company has assets, primarily fixed maturity securities, on deposit with governmental authorities relating to certain policyholder liabilities, of which $42 million and $25 million of the assets on deposit represents restricted cash and cash equivalents at June 30, 2022 and December 31, 2021, respectively.
(2)The Company has assets, primarily fixed maturity securities, held in trust relating to certain reinsurance transactions, of which $131 million and $119 million of the assets held in trust balance represents restricted cash and cash equivalents at June 30, 2022 and December 31, 2021, respectively.
(3)The Company has pledged invested assets in connection with various agreements and transactions, including funding agreements (see Note 3 of the Notes to the Consolidated Financial Statements included in the 2021 Annual Report) and derivative transactions (see Note 5).
Variable Interest Entities
The carrying amount and maximum exposure to loss related to the VIEs for which the Company has concluded that it holds a variable interest, but is not the primary beneficiary, were as follows at:
 June 30, 2022December 31, 2021
 Carrying
Amount
Maximum
Exposure
to Loss
Carrying
Amount
Maximum
Exposure
to Loss
 (In millions)
Fixed maturity securities$15,206 $16,042 $16,472 $15,802 
Limited partnerships and LLCs4,020 5,429 3,679 5,115 
Total$19,226 $21,471 $20,151 $20,917 
Components of Net Investment Income
The components of net investment income were as follows:
Three Months Ended
June 30,
Six Months Ended
June 30,
2022202120222021
(In millions)
Investment income:
Fixed maturity securities$742 $703 $1,460 $1,393 
Equity securities
Mortgage loans205 167 408 331 
Policy loans17 16 32 33 
Limited partnerships and LLCs (1)122 350 363 688 
Cash, cash equivalents and short-term investments
Other18 32 19 
Total investment income1,111 1,247 2,303 2,469 
Less: Investment expenses50 35 91 70 
Net investment income$1,061 $1,212 $2,212 $2,399 
_______________
(1)Includes net investment income pertaining to other limited partnership interests of $93 million and $305 million for the three months and six months ended June 30, 2022, respectively, and $339 million and $670 million for the three months and six months ended June 30, 2021, respectively.
Components of Net Investment Gains (Losses)
The components of net investment gains (losses) were as follows:
Three Months Ended
June 30,
Six Months Ended
June 30,
2022202120222021
(In millions)
Fixed maturity securities $(60)$(33)$(102)$(23)
Equity securities(6)(12)
Mortgage loans(5)(3)(1)
Limited partnerships and LLCs(1)(17)
Total net investment gains (losses)$(66)$(34)$(134)$(20)
Sales or Disposals of Fixed Maturity Securities Proceeds from sales or disposals of fixed maturity securities and the components of fixed maturity securities net investment gains (losses) were as follows:
Three Months Ended
June 30,
Six Months Ended
June 30,
2022202120222021
(In millions)
Proceeds$1,576 $977 $4,115 $2,239 
Gross investment gains$$$46 $41 
Gross investment losses(60)(40)(143)(57)
Net investment gains (losses)$(58)$(32)$(97)$(16)

Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘10-Q’ Filing    Date    Other Filings
Filed on:8/5/22
For Period end:6/30/22
12/31/2110-K
6/30/2110-Q
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1 Previous Filing that this Filing References

  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 4/19/22  Brighthouse Financial, Inc.       8-K:1,2,9   4/19/22   12:1.6M
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