Slide 1: Fourth Quarter and Full Year 2023 Earnings Call Presentation
Brighthouse Financial, Inc. Fourth Quarter and Full Year 2023 Earnings Call Presentation
Slide 2: Note regarding forward-looking statements
Note regarding forward-looking statements This presentation 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-l
Slide 3: Executive summary
Executive summary Financial results and drivers • Estimated combined risk-based capital (RBC) ratio(1) of ~420%; holding company liquid assets of $1.3 billion • Statutory combined total adjusted capital (TAC)(1) of ~$6.3 billion • Full year normalized statutory loss(1) of $0.2 billion • Fourth quart
Slide 4: Impact of new statutory requirement
Impact of new statutory requirement • Implemented as of year-end 2023, reserves and required capital now reflect future hedges • We continue to manage to a statutory framework ◦ Includes a max loss tolerance ◦ Manage Shield and VA risk on a combined basis TAC Impact Reserves now include estimated fu
Slide 5: Net income (loss) available to shareholders; adjusted earnings; adjusted earnings, less notable items
Net income (loss) available to shareholders; adjusted earnings; adjusted earnings, less notable items For the Three Months Ended December 31, September 30, December 31, 2023 2023 2022 (1) ($ in millions, except per share) Total Per share Total Per share (1) Total Per share (1) Net income (loss) avai
Slide 6: Annuities
Annuities Adjusted earnings, less notable items(1) Highlights ($ in millions) • Sales decreased 15% versus 4Q 2022 • On a quarter-over-quarter basis, results were relatively flat • Sequential results reflect: ◦ Lower fees ◦ Higher expenses ◦ Lower underwriting margin $291 $245 $238 Key metrics For t
Slide 7: Life insurance
Life insurance Adjusted earnings, less notable items(1) Highlights ($ in millions) • 32% increase in sales versus 4Q 2022 • On a quarter-over-quarter basis, results reflect: $17 ◦ Lower underwriting margin ◦ Partially offset by higher net investment income and lower expenses • On a sequential basis,
Slide 8: Run-off segment and Corporate & Other
Run-off segment and Corporate & Other Run-off Adjusted earnings, less notable items(1) Highlights ($ in millions) • On a quarter-over-quarter basis, results reflect: ◦ Lower underwriting margin $1 ◦ Partially offset by higher net investment income • On a sequential basis, results reflect: ◦ Lower un
Slide 9: Statutory capital and liquidity position
Statutory capital and liquidity position Capital position as of December 31, 2023 • Estimated combined RBC ratio(1) of ~420% • TAC(1) of ~$6.3 billion • $350 million total subsidiary dividends paid in 4Q 2023 Common stock repurchases Holding company liquid assets ($ in millions) ($ in billions) $64
Slide 10: Appendix
Appendix 10
Slide 11: High quality, well-diversified investment portfolio
High quality, well-diversified investment portfolio Portfolio composition by asset class(1) Key highlights (1) • ~$122B in total investments (TI) Policy Loans 1% Short-Term Investments 1% • ~$87B in fixed maturity securities (FMS) Equity Securities Other Invested Assets 0% ◦ 97% Investment grade (65
Slide 12: High-quality commercial mortgage loan portfolio
High-quality commercial mortgage loan portfolio Property Type Diversification Key highlights (1) Hotel 6% • $13.2B, 11% of TI, solid credit metrics Retail ◦ 65% loan-to-value (LTV), 2.28x debt 13% service coverage ratio (DSCR) overall ◦ Substantially all loans revalued in 2023 Apartment 41% ◦ Over 8
Slide 13: Non-GAAP and Other Financial Disclosures
Non-GAAP and Other Financial Disclosures Our definitions of non-GAAP and other financial measures may differ from those used by other companies. Non-GAAP Financial Disclosures We present certain measures of our performance that are not calculated in accordance with GAAP. We believe that these non-GA
Slide 14: Non-GAAP and Other Financial Disclosures (Cont.)
Non-GAAP and Other Financial Disclosures (Cont.) Adjusted earnings reflects adjusted revenues less (i) adjusted expenses, (ii) provision for income tax expense (benefit), (iii) net income (loss) attributable to noncontrolling interests and (iv) preferred stock dividends. Provided below are the adjus
Slide 15: Non-GAAP and Other Financial Disclosures (Cont.)
Non-GAAP and Other Financial Disclosures (Cont.) Other Financial Disclosures Corporate Expenses Corporate expenses includes functional department expenses, public company expenses, certain investment expenses, retirement funding and incentive compensation; and excludes establishment costs. Notable i
Slide 16: Non-GAAP and Other Financial Disclosures (Cont.)
Non-GAAP and Other Financial Disclosures (Cont.) Other Financial Disclosures (cont.) Total Adjusted Capital Total adjusted capital primarily consists of statutory capital and surplus, as well as the statutory asset valuation reserve. When referred to as “combined,” represents that of our insurance s
Slide 17: Adjusted earnings by segment and Corporate & Other, less notable items
Adjusted earnings by segment and Corporate & Other, less notable items For the Three Months Ended December 31, September 30, December 31, ($ in millions, post-tax) 2023 2023 2022 Annuities $245 $319 $194 Life $4 $(73) $17 Run-off $(50) $95 $236 Corporate & Other $(22) $(15) $98 Adjusted earnings(1)
Slide 18: Reconciliation of net income (loss) to adjusted earnings, less notable items
Reconciliation of net income (loss) available to shareholders to adjusted earnings, less notable items, and net income (loss) available to shareholders per common share to adjusted earnings, less notable items per common share For the Three Months Ended December 31, September 30, December 31, ($ in