Brighthouse Financial, Inc. · NASDAQ:BHF
Brighthouse Financial — Q1 2018 Earnings Presentation
15 slides from Brighthouse Financial's earnings presentation, May 7, 2018
Slide 1: First Quarter 2018 Earnings Call Presentation
May 7, 2018 Brighthouse Financial, Inc. First Quarter 2018 Earnings Call Presentation
Slide 2: Note regarding forward-looking statements
Note regarding forward-looking statements This presentation and other written or oral 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: Update to select financial metrics – base case scenario
Update to select financial metrics – base case scenario Highlights Adjusted EPS, • $8.50 - $9.00 expected adjusted earnings per share (“EPS”), less notable items1 in 2018 less notable items • Mid-to-high single digit growth annually • ~8% expected adjusted return on equity (“ROE”), less notable item
Slide 4: Key outcomes of sensitivity update
Key outcomes of sensitivity update • Improved variable annuity (VA) cash flow profile driven by lower hedge costs • Lower variability of cash flows across the five VA scenarios • Protecting statutory balance sheet for VA & Universal Life with Secondary Guarantees (ULSG) exposures with manageable GAA
Slide 5: Meaningful improvement in VA statutory distributable cash flow
Meaningful improvement in VA statutory distributable cash flow Lower hedge gains/losses driven by: ($ in billions) Years 1-31 2.0 1.8 • Successful transition to the Brighthouse 1.5 1.1 1.1 Financial VA hedging strategy 1.0 0.4 0.5 0.2 0.0 0.1 0.0 0.1 0.0 0.0 • Benefits from tax elections made as of
Slide 6: VA in-force lifetime present value of cash flows
VA in-force lifetime present value of cash flows Form 10 2017 10-K PV of Cash PV of Cash Flows as of Flows as of Scenario Assumptions 1 1 Year End 2016 Year End 2017 Change in PV of cash ($ billions) ($ billions) flows driven by: Separate Account Returns: 6.5%2 Base Case Interest Rate Yields: mean r
Slide 7: Net income (loss) available to shareholders and adjusted earnings
Net income (loss) available to shareholders and adjusted earnings For the Three Months Ended March 31, 2018 December 31, 2017 March 31, 2017 (post-tax) $ millions Per share $ millions Per share $ millions Per share Net income (loss), available to ($67) ($0.56) $668 $5.58 ($349) N/A shareholders Adju
Slide 8: 1Q 2018 adjusted earnings per share drivers
1Q 2018 adjusted earnings per share drivers For the Three Months Ended March 31, 2018 1Q 2018 adjusted EPS, less notable items1 $2.40 Adjusted earnings drivers Lower corporate expenses vs. expected run-rate in first year post- $0.21 separation Higher alternative investment income vs. 2017 quarterly
Slide 9: Appendix
Appendix
Slide 10: Non-GAAP and Other Financial Disclosures
Non-GAAP and Other Financial Disclosures Our definitions of the non-GAAP and other financial measures may differ from those used by other companies. Non-GAAP Financial Disclosures We present certain measures of our performance that are not calculated in accordance with GAAP. We believe that these no
Slide 11: Non-GAAP and Other Financial Disclosures (Cont.)
Non-GAAP and Other Financial Disclosures (Cont.) The following are significant items excluded from total revenues, net of income tax, in calculating the adjusted revenues component of adjusted earnings: • Net investment gains (losses); • Net derivative gains (losses), except earned income on derivat
Slide 12: Non-GAAP and Other Financial Disclosures (Cont.)
Non-GAAP and Other Financial Disclosures (Cont.) Other Financial Disclosures Corporate Expenses Corporate expenses includes functional department expenses, public company expenses, certain investment expenses, retirement funding and incentive compensation; and excludes establishment costs. Notable i
Slide 13: Non-GAAP and Other Financial Disclosures (Cont.)
Non-GAAP and Other Financial Disclosures (Cont.) Other Financial Disclosures (cont.) Net Investment Income Yield Similar to adjusted net investment income, we present net investment income yields as a performance measure we believe enhances the understanding of our investment portfolio results. Net
Slide 14: Adjusted earnings by segment and Corporate & Other, less notable items
Adjusted earnings by segment and Corporate & Other, less notable items For the Three Months Ended March 31, December ($ in millions, post-tax) 2018 31, 2017 Annuities $226 $208 Life 66 5 Run-off 50 (80) Corporate & other (59) 859 Adjusted earnings1 $283 $992 Notable items by segment1 Annuities $- $-
Slide 15: Reconciliation of net income (loss) to adjusted earnings and per share
Reconciliation of net income (loss) to adjusted earnings and net income (loss) per share to adjusted earnings per share ($ in millions, except per share) 1Q 2018 4Q 2017 1Q 2017 Net income (loss) available to shareholders ($67) $668 ($349) Less: Net investment gains (losses) (4) 6 (55) Less: Net der
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