Brighthouse Life Insurance Earnings 2020-06-30

Balance Sheet	Income Statement	Cash Flow
Assets, Equity	Rev, G Profit, Net Income	Ops, Inv, Fin

bhl-20200630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2020


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___ to ___

Commission File Number: 033-03094

Brighthouse Life Insurance Company

(Exact name of registrant as specified in its charter)

Delaware

06-0566090

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

11225 North Community House Road, Charlotte, North Carolina

28277

(Address of principal executive offices)

(Zip Code)

(980) 365-7100

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None


Title of each class	Trading symbol(s)	Name of each exchange on which registered

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No þ

As of August 10, 2020, 3,000 shares of the registrant’s common stock were outstanding, all of which were owned indirectly by Brighthouse Financial, Inc.

REDUCED DISCLOSURE FORMAT

The registrant meets the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and is, therefore, filing this Form 10-Q with the reduced disclosure format.

Table of Contents


			Page
Part I — Financial Information
Item 1.	Consolidated Financial Statements (at June 30, 2020 (Unaudited) and December 31, 2019 and for the Three Months and Six Months Ended June 30, 2020 and 2019 (Unaudited)):
	Interim Condensed Consolidated Balance Sheets	2
	Interim Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)	3
	Interim Condensed Consolidated Statements of Equity	4
	Interim Condensed Consolidated Statements of Cash Flows	5
	Notes to the Interim Condensed Consolidated Financial Statements (Unaudited):
	Note 1 — Business, Basis of Presentation and Summary of Significant Accounting Policies	6
	Note 2 — Segment Information	8
	Note 3 — Insurance	11
	Note 4 — Investments	12
	Note 5 — Derivatives	23
	Note 6 — Fair Value	29
	Note 7 — Long-term and Short-term Debt	38
	Note 8 — Equity	38
	Note 9 — Other Revenues and Other Expenses	40
	Note 10 — Contingencies, Commitments and Guarantees	41
	Note 11 — Related Party Transactions	43
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	46
Item 4.	Controls and Procedures	58

Part II — Other Information
Item 1.	Legal Proceedings	58
Item 1A.	Risk Factors	58
Item 6.	Exhibits	59

Signature			60

Table of Contents

Part I — Financial Information

Item 1. Financial Statements

Brighthouse Life Insurance Company

(An Indirect Wholly-Owned Subsidiary of Brighthouse Financial, Inc.)

Interim Condensed Consolidated Balance Sheets

June 30, 2020 (Unaudited) and December 31, 2019

(In millions, except share and per share data)


	June 30, 2020		December 31, 2019
Assets
Investments:
Fixed maturity securities available-for-sale, at estimated fair value (amortized cost: $65,424 and $63,083, respectively; allowance for credit losses of $4 and $0, respectively)	$	75,605	$	69,977
Equity securities, at estimated fair value	129		147
Mortgage loans (net of allowance for credit losses of $92 and $64, respectively)	15,703		15,664
Policy loans	791		875
Limited partnerships and limited liability companies	2,352		2,379

Short-term investments, principally at estimated fair value	3,592		1,482
Other invested assets, principally at estimated fair value (net of allowance for credit losses of $13 and $0, respectively)	6,365		3,224
Total investments	104,537		93,748
Cash and cash equivalents	6,918		2,493
Accrued investment income	643		663
Premiums, reinsurance and other receivables	14,779		14,287
Deferred policy acquisition costs and value of business acquired	4,277		4,809
Current income tax recoverable	18		21

Other assets	431		464
Separate account assets	92,698		99,668
Total assets	$	224,301	$	216,153
Liabilities and Equity
Liabilities
Future policy benefits	$	41,597	$	39,081
Policyholder account balances	49,837		45,121
Other policy-related balances	2,858		2,801
Payables for collateral under securities loaned and other transactions	7,853		4,374
Long-term and short-term debt	843		844

Deferred income tax liability	2,392		1,301
Other liabilities	4,322		4,484
Separate account liabilities	92,698		99,668
Total liabilities	202,400		197,674
Contingencies, Commitments and Guarantees (Note 10)
Equity
Brighthouse Life Insurance Company’s stockholder’s equity:
Common stock, par value $25,000 per share; 4,000 shares authorized; 3,000 shares issued and outstanding	75		75
Additional paid-in capital	18,773		19,073
Retained earnings (deficit)	(1,572)		(3,899)
Accumulated other comprehensive income (loss)	4,610		3,215
Total Brighthouse Life Insurance Company’s stockholder’s equity	21,886		18,464
Noncontrolling interests	15		15
Total equity	21,901		18,479
Total liabilities and equity	$	224,301	$	216,153

See accompanying notes to the interim condensed consolidated financial statements.

Table of Contents

Brighthouse Life Insurance Company

(An Indirect Wholly-Owned Subsidiary of Brighthouse Financial, Inc.)

Interim Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

For the Three Months and Six Months Ended June 30, 2020 and 2019 (Unaudited)

(In millions)


	Three Months Ended June 30,						Six Months Ended June 30,
	2020		2019		2020		2019
Revenues
Premiums	$	185	$	226	$	376	$	443
Universal life and investment-type product policy fees	697		735		1,398		1,465
Net investment income	635		918		1,531		1,706
Other revenues	67		69		151		131
Net investment gains (losses)	(33)		56		(52)		46
Net derivative gains (losses)	(2,650)		108		4,097		(1,202)
Total revenues	(1,099)		2,112		7,501		2,589
Expenses
Policyholder benefits and claims	811		810		1,944		1,554
Interest credited to policyholder account balances	269		258		520		508
Amortization of deferred policy acquisition costs and value of business acquired	(77)		150		625		174
Other expenses	447		455		857		889
Total expenses	1,450		1,673		3,946		3,125
Income (loss) before provision for income tax	(2,549)		439		3,555		(536)
Provision for income tax expense (benefit)	(552)		76		713		(145)
Net income (loss)	(1,997)		363		2,842		(391)
Less: Net income (loss) attributable to noncontrolling interests	1		1		1		1
Net income (loss) attributable to Brighthouse Life Insurance Company	$	(1,998)	$	362	$	2,841	$	(392)
Comprehensive income (loss)	$	168	$	1,379	$	4,237	$	1,565
Less: Comprehensive income (loss) attributable to noncontrolling interests	1		1		1		1
Comprehensive income (loss) attributable to Brighthouse Life Insurance Company	$	167	$	1,378	$	4,236	$	1,564

See accompanying notes to the interim condensed consolidated financial statements.

Table of Contents

Brighthouse Life Insurance Company

(An Indirect Wholly-Owned Subsidiary of Brighthouse Financial, Inc.)

Interim Condensed Consolidated Statements of Equity

For the Three Months and Six Months Ended June 30, 2020 and 2019 (Unaudited)

(In millions)


	Common Stock		Additional Paid-in Capital		Retained Earnings (Deficit)		Accumulated Other Comprehensive Income (Loss)		Brighthouse Life Insurance Company’s Stockholder’s Equity		Noncontrolling Interests		Total Equity
Balance at December 31, 2019	$	75	$	19,073	$	(3,899)	$	3,215	$	18,464	$	15	$	18,479
Cumulative effect of change in accounting principle, net of income tax (Note 1)					(14)		3		(11)				(11)
Balance at January 1, 2020	75		19,073		(3,913)		3,218		18,453		15		18,468
Dividends paid to parent			(300)						(300)				(300)
Net income (loss)					4,839				4,839				4,839
Other comprehensive income (loss), net of income tax							(773)		(773)				(773)
Balance at March 31, 2020	75		18,773		926		2,445		22,219		15		22,234
Dividends paid to parent					(500)				(500)				(500)
Change in noncontrolling interests									—		(1)		(1)
Net income (loss)					(1,998)				(1,998)		1		(1,997)
Other comprehensive income (loss), net of income tax							2,165		2,165				2,165
Balance at June 30, 2020	$	75	$	18,773	$	(1,572)	$	4,610	$	21,886	$	15	$	21,901


	Common Stock		Additional Paid-in Capital		Retained Earnings (Deficit)		Accumulated Other Comprehensive Income (Loss)		Brighthouse Life Insurance Company’s Stockholder’s Equity		Noncontrolling Interests		Total Equity
Balance at December 31, 2018	$	75	$	19,073	$	(3,090)	$	718	$	16,776	$	15	$	16,791
Net income (loss)					(754)				(754)				(754)
Other comprehensive income (loss), net of income tax							940		940				940
Balance at March 31, 2019	75		19,073		(3,844)		1,658		16,962		15		16,977
Change in noncontrolling interests									—		(1)		(1)
Net income (loss)					362				362		1		363
Other comprehensive income (loss), net of income tax							1,016		1,016				1,016
Balance at June 30, 2019	$	75	$

Price	9.87	EPS	72,667
Shares	0	P/E	0
MCap	0	P/FCF	0
Net Debt	-2,875	EBIT	392
TEV	-2,875	TEV/EBIT	-7
TTM 2019-09-30, in MM, except price, ratios

10-Q	2020-06-30	Filed 2020-08-10
10-Q	2020-03-31	Filed 2020-05-12
10-K	2019-12-31	Filed 2020-03-05
10-Q	2019-09-30	Filed 2019-11-06
10-Q	2019-06-30	Filed 2019-08-07
10-Q	2019-03-31	Filed 2019-05-08
10-K	2018-12-31	Filed 2019-03-05
10-Q	2018-09-30	Filed 2018-11-07
10-Q	2018-06-30	Filed 2018-08-08
10-Q	2018-03-31	Filed 2018-05-10
10-K	2017-12-31	Filed 2018-03-22
10-Q	2017-09-30	Filed 2017-11-13
10-Q	2017-06-30	Filed 2017-08-11
10-Q	2017-03-31	Filed 2017-05-11
10-K	2016-12-31	Filed 2017-03-28
10-Q	2016-09-30	Filed 2016-11-09
10-Q	2016-06-30	Filed 2016-08-12
10-Q	2016-03-31	Filed 2016-05-12
10-K	2015-12-31	Filed 2016-03-25
10-Q	2015-09-30	Filed 2015-11-12
10-Q	2015-06-30	Filed 2015-08-12
10-Q	2015-03-31	Filed 2015-05-13
10-K	2014-12-31	Filed 2015-03-30
10-Q	2014-09-30	Filed 2014-11-12
10-Q	2014-06-30	Filed 2014-08-13
10-Q	2014-03-31	Filed 2014-05-14
10-K	2013-12-31	Filed 2014-03-31
10-Q	2013-09-30	Filed 2013-11-13
10-Q	2013-06-30	Filed 2013-08-12
10-Q	2013-03-31	Filed 2013-05-10
10-K	2012-12-31	Filed 2013-03-22
10-Q	2012-09-30	Filed 2012-11-13
10-Q	2012-06-30	Filed 2012-08-10
10-Q	2012-03-31	Filed 2012-05-10
10-K	2011-12-31	Filed 2012-03-22
10-Q	2011-09-30	Filed 2011-11-10
10-Q	2011-06-30	Filed 2011-08-12
10-Q	2011-03-31	Filed 2011-05-12
10-K	2010-12-31	Filed 2011-03-23
10-Q	2010-09-30	Filed 2010-11-12
10-Q	2010-06-30	Filed 2010-08-13
10-Q	2010-03-31	Filed 2010-05-12
10-K	2009-12-31	Filed 2010-03-24

EX-31.1	bhinsurance-20200630xe.htm
EX-31.2	bhinsurance-20200630xe3.htm
EX-32.1	bhinsurance-20200630xe2.htm
EX-32.2	bhinsurance-20200630xe1.htm

BHL 10Q Quarterly Report

Brighthouse Life Insurance Earnings 2020-06-30