Condensed Financial Information (Parent Company)

12 Months Ended

Dec. 31, 2020

Condensed Financial Information Disclosure [Abstract]

Condensed Financial Information of Parent Company Only Disclosure [Text Block]

Brighthouse Financial, Inc.

Schedule II

Condensed Financial Information

(Parent Company Only)

December 31, 2020 and 2019

(In millions, except share and per share data)

	2020		2019
Condensed Balance Sheets
Assets
Investments:
Fixed maturity securities available-for-sale, at estimated fair value (amortized cost: $45 and $44, respectively; allowance for credit losses of $0 and $0, respectively)	$	47	$	44
Short-term investments, principally at estimated fair value	1,333		459
Investment in subsidiary	20,326		20,222
Total investments	21,706		20,725
Cash and cash equivalents	262		212
Premiums and other receivables	197		199
Current income tax recoverable	62		36
Deferred income tax receivable	1		8
Other assets	4		7
Total assets	$	22,232	$	21,187
Liabilities and Stockholders’ Equity
Liabilities
Long-term and short-term debt	$	3,858	$	4,676
Other liabilities	351		339
Total liabilities	4,209		5,015
Stockholders’ Equity
Preferred stock, par value $0.01 per share; $1,403 and $425, respectively, aggregate liquidation preference	—		—
Common stock, par value $0.01 per share; 1,000,000,000 shares authorized; 121,002,523 and 120,647,871 shares issued, respectively; 88,211,618 and 106,027,301 shares outstanding, respectively	1		1
Additional paid-in capital	13,878		12,908
Retained earnings (deficit)	(534)		585
Treasury stock, at cost; 32,790,905 and 14,620,570 shares, respectively	(1,038)		(562)
Accumulated other comprehensive income (loss)	5,716		3,240
Total stockholders’ equity	18,023		16,172
Total liabilities and stockholders’ equity	$	22,232	$	21,187

See accompanying notes to the condensed financial information.

Brighthouse Financial, Inc.

Schedule II

Condensed Financial Information (continued)

(Parent Company Only)

For the Years Ended December 31, 2020, 2019 and 2018

(In millions)

	2020		2019		2018
Condensed Statements of Operations
Revenues
Net investment income	$	7	$	20	$	10
Other revenues	19		24		5
Net derivative gains (losses)	8		—		—
Total revenues	34		44		15
Expenses
Debt repayment costs	43		—		—
Other expenses	211		219		183
Total expenses	254		219		183
Income (loss) before provision for income tax and equity in earnings (losses) of subsidiaries	(220)		(175)		(168)
Provision for income tax expense (benefit)	(45)		(37)		(30)
Income (loss) before equity in earnings (losses) of subsidiaries	(175)		(138)		(138)
Equity in earnings (losses) of subsidiaries	(886)		(602)		1,003
Net income (loss)	(1,061)		(740)		865
Less: Preferred stock dividends	44		21		—
Net income (loss) available to common shareholders	$	(1,105)	$	(761)	$	865
Comprehensive income (loss)	$	1,415	$	1,784	$	(16)

See accompanying notes to the condensed financial information.

Brighthouse Financial, Inc.

Schedule II

Condensed Financial Information (continued)

(Parent Company Only)

For the Years Ended December 31, 2020, 2019 and 2018

(In millions)

	2020		2019		2018
Condensed Statements of Cash Flows
Cash flows from operating activities
Net income (loss)	$	(1,061)	$	(740)	$	865
Equity in (earnings) losses of subsidiaries	886		602		(1,003)
Distributions from subsidiary	1,468		195		52
Other, net	68		(16)		7
Net cash provided by (used in) operating activities	1,361		41		(79)
Cash flows from investing activities
Sales, maturities and repayments of fixed maturity securities	11		194		3
Purchases of fixed maturity securities	(12)		(4)		—
Capital contributions to subsidiary	—		(412)		(208)
Net change in short-term investments	(873)		(455)		—
Net cash provided by (used in) investing activities	(874)		(677)		(205)
Cash flows from financing activities
Long-term and short-term debt issued	1,764		2,156		893
Long-term and short-term debt repaid	(2,590)		(1,716)		(351)
Treasury stock acquired in connection with share repurchases	(473)		(442)		(105)
Preferred stock issued, net of issuance costs	948		412		—
Dividends on preferred stock	(44)		(21)		—
Other, net	(42)		(2)		(18)
Net cash provided by (used in) financing activities	(437)		387		419
Change in cash and cash equivalents	50		(249)		135
Cash and cash equivalents, beginning of year	212		461		326
Cash and cash equivalents, end of year	$	262	$	212	$	461
Supplemental disclosures of cash flow information
Net cash paid (received) for:
Interest	$	184	$	187	$	158
Income tax:
Cash received from MetLife, Inc. for income tax	$	—	$	—	$	(7)
Income tax paid (received) by Brighthouse Financial, Inc.	(25)		(4)		1
Net cash paid (received) for income tax	$	(25)	$	(4)	$	(6)

1. Basis of Presentation

The condensed financial information of Brighthouse Financial, Inc. (the “Parent Company”) should be read in conjunction with the consolidated financial statements of Brighthouse Financial, Inc. and its subsidiaries and the notes thereto (the “Consolidated Financial Statements”). These condensed unconsolidated financial statements reflect the results of operations, financial position and cash flows for Brighthouse Financial, Inc. Investments in subsidiaries are accounted for using the equity method of accounting.

Beginning in 2020, the Parent Company elected to change the presentation of equity in earnings (losses) of subsidiaries, including it as a separate component on net income in the Condensed Statement of Operations. This presentation was applied to all periods presented in the condensed financial information of the Parent Company. Previously, this activity was presented as a component of total revenues.

The preparation of these condensed unconsolidated financial statements in conformity with GAAP requires management to adopt accounting policies and make certain estimates and assumptions. The most important of these estimates and assumptions relate to the fair value measurements, identifiable intangible assets and the provision for potential losses that may arise from litigation and regulatory proceedings and tax audits, which may affect the amounts reported in the condensed unconsolidated financial statements and accompanying notes. Actual results could differ from these estimates.

2. Investment in SubsidiaryDuring the years ended December 31, 2020, 2019 and 2018, BHF made cash capital contributions of $0, $412 million and $208 million, respectively, to BH Holdings and received cash distributions of $1.5 billion, $195 million and $52 million, respectively, from BH Holdings. Distributions received during the year ended December 31, 2020 primarily relate to $1.3 billion of ordinary cash dividends paid by Brighthouse Life Insurance Company to BH Holdings.3. Long-term and Short-term Debt

Long-term and short-term debt outstanding was as follows at:

			December 31,
	Stated Interest Rate	Maturity	2020		2019
			(In millions)
Senior notes — unaffiliated	3.700%	2027	$	1,294	$	1,492
Senior notes — unaffiliated	5.625%	2030	614		—
Senior notes — unaffiliated	4.700%	2047	1,134		1,478
Term loan — unaffiliated	LIBOR plus 1.5%	2024	—		1,000
Junior subordinated debentures — unaffiliated	6.250%	2058	363		363
Total long-term debt (1)			3,405		4,333
Short-term intercompany loans			453		343
Total long-term and short-term debt (1)			$	3,858	$	4,676

_______________

(1)Includes unamortized debt issuance costs, discounts and premiums, as applicable, totaling net $35 million and $42 million for the senior notes and junior subordinated debentures on a combined basis at December 31, 2020 and 2019, respectively.

The aggregate maturities of long-term and short-term debt at December 31, 2020 were $453 million in 2021, $0 in each of 2022, 2023, 2024 and 2025 and $3.4 billion thereafter.

Interest expense related to long-term and short-term debt of $183 million, $191 million and $157 million for the years ended December 31, 2020, 2019 and 2018, respectively, is included in other expenses.

Senior Notes and Junior Subordinated Debentures

See Note 9 of the Notes to the Consolidated Financial Statements for information regarding the unaffiliated senior notes and junior subordinated debentures.

Credit Facilities

See Note 9 of the Notes to the Consolidated Financial Statements for information regarding BHF’s credit facilities, including the unaffiliated term loan.

Short-term Intercompany Loans

BHF, as borrower, has a short-term intercompany loan agreement with certain of its non-insurance subsidiaries, as lenders, for the purposes of facilitating the management of the available cash of the borrower and the lenders on a short-term and consolidated basis. Such intercompany loan agreement allows management to optimize the efficient use of and maximize the yield on cash between BHF and its subsidiary lenders. Each loan entered into under this intercompany loan agreement has a term not more than 364 days and bears interest on the unpaid principal amount at a variable rate, payable monthly. During the years ended December 31, 2020, 2019 and 2018, BHF borrowed $1.2 billion, $1.2 billion and $478 million, respectively, from certain of its non-insurance subsidiaries and repaid $1.0 billion, $1.1 billion and $311 million of such borrowings during the years ended December 31, 2020, 2019 and 2018, respectively. The weighted average interest rate on short-term intercompany loans outstanding at December 31, 2020, 2019 and 2018 was 0.05%, 0.95% and 1.80%, respectively.

Intercompany Liquidity Facilities

BHF has established intercompany liquidity facilities with certain of its insurance and non-insurance subsidiaries to provide short-term liquidity within and across the combined group of companies. Under these facilities, which are comprised of a series of revolving loan agreements among BHF and its participating subsidiaries, each company may lend to or borrow from each other, subject to certain maximum limits for a term not more than 364 days. During the years ended December 31, 2020 and 2019, there were no borrowings or repayments by BHF under these facilities. In the second quarter of 2018, BHF borrowed $40 million from NELICO under this facility and repaid such borrowing in the third quarter of 2018.