Brighthouse Financial(BHF) - 2019 Q2 - Quarterly Report

Part I Financial Statements This section presents the unaudited interim condensed consolidated financial statements, detailing the company's financial performance and position Interim Condensed Consolidated Financial Statements This section details the company's financial position and performance, including total assets of $221.2 billion and a Q2 2019 net income of $377 million Consolidated Balance Sheet Highlights (in millions) | Metric | June 30, 2019 | December 31, 2018 | | :--- | :--- | :--- | | Total Investments | $89,937 | $83,181 | | Total Assets | $221,212 | $206,294 | | Total Liabilities | $204,871 | $191,811 | | Total Equity | $16,341 | $14,483 | Consolidated Statement of Operations Highlights (in millions, except EPS) | Metric | Q2 2019 | Q2 2018 | H1 2019 | H1 2018 | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $2,370 | $1,702 | $3,061 | $3,517 | | Net Income (Loss) Available to Common Shareholders | $377 | $(239) | $(360) | $(306) | | Diluted EPS | $3.27 | $(2.01) | $(3.10) | $(2.56) | Consolidated Statement of Cash Flows Highlights (in millions) | Metric | Six Months Ended June 30, 2019 | Six Months Ended June 30, 2018 | | :--- | :--- | :--- | | Net cash provided by operating activities | $809 | $1,017 | | Net cash used in investing activities | $(2,932) | $(2,023) | | Net cash provided by financing activities | $1,959 | $1,284 | Notes to the Interim Condensed Consolidated Financial Statements These notes provide detailed information on the company's business segments, accounting policies, investment portfolio, and capital activities - The company is organized into three segments: Annuities, Life, and Run-off, with Annuities being the largest segment by total assets[14][22] Total Assets by Segment (in millions) | Segment | June 30, 2019 | December 31, 2018 | | :--- | :--- | :--- | | Annuities | $152,948 | $141,489 | | Life | $20,854 | $20,449 | | Run-off | $34,245 | $32,393 | | Corporate & Other | $13,165 | $11,963 | | Total | $221,212 | $206,294 | - In March 2019, Brighthouse Financial issued $425 million of 6.600% Series A non-cumulative preferred stock, receiving net proceeds of $412 million[128] - During the first six months of 2019, the company repurchased 4.99 million shares of its common stock for $188 million, with $307 million remaining under the stock repurchase program as of June 30, 2019[130] Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) Management analyzes the company's financial condition and operational results, focusing on net income, adjusted earnings, segment performance, and liquidity Net Income vs. Adjusted Earnings (in millions) | Metric | Q2 2019 | Q2 2018 | H1 2019 | H1 2018 | | :--- | :--- | :--- | :--- | :--- | | Net Income (Loss) Available to Shareholders | $377 | $(239) | $(360) | $(306) | | Adjusted Earnings | $254 | $153 | $486 | $436 | - Annuity sales increased by 35% in the first six months of 2019 compared to the same period in 2018, driven by higher sales of Shield Annuities, fixed indexed annuities, and fixed annuities[176] - The company maintains a substantial short-term liquidity position, which increased to $3.0 billion at June 30, 2019, from $2.2 billion at December 31, 2018[265] - The parent holding company, BHF, held liquid assets of $904 million as of June 30, 2019, and is largely dependent on cash flows from its insurance subsidiaries to meet its obligations[289][290] Quantitative and Qualitative Disclosures About Market Risk This section confirms no material changes to the company's market risk exposures, including interest rates and equity prices, from prior disclosures - There have been no material changes to the company's market risk exposures from those previously disclosed in the 2018 Annual Report[308] Controls and Procedures Management concluded disclosure controls were effective as of June 30, 2019, noting material changes in internal controls due to ongoing business transitions - The CEO and Interim CFO concluded that the company's disclosure controls and procedures were effective as of June 30, 2019[310] - The company identified material changes in its internal control over financial reporting related to the ongoing transition of services from MetLife, implementation of new systems, and establishment of new third-party arrangements[311] Part II Legal Proceedings The company reports no new material legal proceedings or developments in previously disclosed proceedings since the 2018 Annual Report - There have been no new material legal proceedings or material developments in previously disclosed proceedings[314] Risk Factors The company reports no material changes to its risk factors from those disclosed in the 2018 Annual Report and subsequent quarterly reports - There have been no material changes to the company's risk factors since the 2018 Annual Report[315] Unregistered Sales of Equity Securities and Use of Proceeds During Q2 2019, Brighthouse Financial repurchased approximately 3.6 million shares of common stock at an average price of $37.93 per share Issuer Purchases of Equity Securities (Q2 2019) | Period | Total Shares Purchased | Average Price Paid per Share | Approx. Value Remaining for Repurchase (End of Period, in millions) | | :--- | :--- | :--- | :--- | | April 2019 | 354,806 | $38.88 | $29 | | May 2019 | 1,435,198 | $38.26 | $374 | | June 2019 | 1,788,630 | $37.50 | $307 | | Total Q2 | 3,578,634 | - | $307 | - In May 2019, the company authorized an additional $400 million for its common stock repurchase program[316] Exhibits This section lists the exhibits filed with the Form 10-Q, including amendments to agreements, policies, and required certifications