[Part I — Financial Information](index=4&type=section&id=Part%20I%20%E2%80%94%20Financial%20Information) Presents the company's consolidated financial statements and management's analysis of financial performance [Consolidated Financial Statements](index=4&type=section&id=Item%201.%20Consolidated%20Financial%20Statements) The unaudited interim condensed consolidated financial statements for Brighthouse Financial, Inc. as of March 31, 2025, and for the three months ended March 31, 2025 and 2024. For the first quarter of 2025, the company reported a net loss attributable to common shareholders of $294 million, an improvement from a net loss of $519 million in the prior-year period. Total assets decreased to $234.7 billion from $238.5 billion at year-end 2024, primarily due to changes in separate account assets and liabilities [Interim Condensed Consolidated Balance Sheets](index=4&type=section&id=Interim%20Condensed%20Consolidated%20Balance%20Sheets) Presents the company's financial position, including assets, liabilities, and equity, at specific dates | Balance Sheet Highlights | March 31, 2025 (in millions) | December 31, 2024 (in millions) | | :--- | :--- | :--- | | Total Investments | $117,257 | $117,387 | | Total Assets | $234,681 | $238,537 | | Total Liabilities | $229,377 | $233,513 | | Total Equity | $5,304 | $5,024 | - Total assets decreased from **$238.5 billion** at the end of 2024 to **$234.7 billion** as of March 31, 2025, while total equity increased from **$5.0 billion** to **$5.3 billion** over the same period[8](index=8&type=chunk) [Interim Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)](index=5&type=section&id=Interim%20Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)) Details the company's revenues, expenses, and net income or loss over a specific period | Income Statement Highlights | Three Months Ended Mar 31, 2025 (in millions) | Three Months Ended Mar 31, 2024 (in millions) | | :--- | :--- | :--- | | Total Revenues | $2,390 | $74 | | Total Expenses | $2,744 | $688 | | Net Income (Loss) | $(266) | $(491) | | Net Income (Loss) available to Common Shareholders | $(294) | $(519) | | Basic EPS | $(5.04) | $(8.22) | | Diluted EPS | $(5.04) | $(8.22) | - The significant increase in total revenues for Q1 2025 compared to Q1 2024 was primarily driven by a substantial positive swing in Net derivative gains (losses), which were **$311 million** in Q1 2025 versus **$(1,921) million** in Q1 2024[12](index=12&type=chunk) [Interim Condensed Consolidated Statements of Equity](index=6&type=section&id=Interim%20Condensed%20Consolidated%20Statements%20of%20Equity) Outlines changes in the company's equity, including net income, comprehensive income, and share repurchases - Total equity increased from **$5,024 million** at December 31, 2024, to **$5,304 million** at March 31, 2025. The increase was primarily driven by **$608 million** in other comprehensive income, partially offset by a net loss of **$266 million** and **$59 million** in share repurchases[16](index=16&type=chunk) [Interim Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Interim%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Summarizes cash inflows and outflows from operating, investing, and financing activities | Cash Flow Highlights | Three Months Ended Mar 31, 2025 (in millions) | Three Months Ended Mar 31, 2024 (in millions) | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $146 | $(530) | | Net cash provided by (used in) investing activities | $563 | $(625) | | Net cash provided by (used in) financing activities | $(1,087) | $1,127 | | Change in cash, cash equivalents and restricted cash | $(378) | $(28) | [Notes to the Interim Condensed Consolidated Financial Statements (Unaudited)](index=8&type=section&id=Notes%20to%20the%20Interim%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) Provides detailed explanations of accounting policies, estimates, and segment information - Brighthouse Financial is a major provider of annuity and life insurance products in the U.S., organized into **four reportable segments**: Annuities, Life, Run-off, and Corporate & Other[22](index=22&type=chunk) - The company's financial statements are prepared in conformity with U.S. GAAP, which requires management to make estimates and assumptions that can affect reported amounts[23](index=23&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=55&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's discussion provides an analysis of the company's financial performance for Q1 2025. The company reported a net loss available to shareholders of $294 million, an improvement from a $519 million loss in Q1 2024. However, on a non-GAAP basis, adjusted earnings were $235 million, a significant turnaround from an adjusted loss of $98 million in the prior-year period. The results were influenced by market factors impacting variable annuity guarantees, investment performance, and derivative hedging outcomes. The discussion also covers industry trends, liquidity, capital resources, and investment portfolio management [Executive Summary](index=56&type=section&id=Executive%20Summary) Provides a high-level overview of the company's financial performance and key drivers for the period | Metric | Q1 2025 (in millions) | Q1 2024 (in millions) | | :--- | :--- | :--- | | Net income (loss) available to shareholders | $(294) | $(519) | | Adjusted earnings (loss) (Non-GAAP) | $235 | $(98) | - The Q1 2025 net loss was primarily driven by unfavorable changes in the fair value of variable annuity guaranteed benefit riders due to market factors, and net investment losses. This was partially offset by favorable pre-tax adjusted earnings and gains on interest rate derivatives hedging the ULSG business[269](index=269&type=chunk) [Industry Trends and Uncertainties](index=57&type=section&id=Industry%20Trends%20and%20Uncertainties) Discusses external factors such as market conditions, interest rates, and geopolitical events affecting the business - The company's business is materially affected by capital markets and economic conditions, including equity market performance, interest rates, and inflation. The Federal Reserve's interest rate decreases in late 2024 may negatively impact the investment portfolio and profitability of spread-based products[272](index=272&type=chunk) - The company continues to monitor geopolitical conflicts, supply chain disruptions, and uncertainty in asset classes like commercial real estate for their potential impact on business operations and the investment portfolio[276](index=276&type=chunk) [Non-GAAP Financial Disclosures](index=59&type=section&id=Non-GAAP%20Financial%20Disclosures) Explains the company's use of non-GAAP financial measures and their reconciliation to GAAP equivalents - Adjusted earnings is a non-GAAP measure used by management that excludes market volatility impacts such as net investment gains/losses, net derivative gains/losses (with certain exceptions), and changes in market risk benefits to highlight underlying business profitability[283](index=283&type=chunk)[284](index=284&type=chunk)[285](index=285&type=chunk) [Results of Operations](index=61&type=section&id=Results%20of%20Operations) Analyzes the company's revenue, expenses, and profitability across its business segments - The lower net loss in Q1 2025 compared to Q1 2024 was driven by higher pre-tax adjusted earnings and gains on interest rate derivatives. This was partially offset by higher losses from variable annuity guaranteed benefit riders and higher net investment losses on mortgage loans[293](index=293&type=chunk)[295](index=295&type=chunk) - Adjusted earnings increased by **$333 million** year-over-year to **$235 million**, primarily due to lower insurance-related costs and higher fee income, partially offset by a lower net investment spread[298](index=298&type=chunk) | Adjusted Earnings (Loss) by Segment | Q1 2025 (in millions) | Q1 2024 (in millions) | | :--- | :--- | :--- | | Annuities | $314 | $313 | | Life | $9 | $(36) | | Run-off | $(64) | $(341) | | Corporate & Other | $(24) | $(34) | | **Total** | **$235** | **$(98)** | [Investments](index=69&type=section&id=Investments) Details the composition, performance, and risk management of the company's investment portfolio - The company manages investment risk through asset allocation, diversification, and risk limits. The investment portfolio's adjusted net investment income yield was **4.25%** for Q1 2025, consistent with Q1 2024[318](index=318&type=chunk)[329](index=329&type=chunk) - As of March 31, 2025, **97.3%** of the fixed maturity securities portfolio was rated investment grade, with a total estimated fair value of **$80.6 billion**[337](index=337&type=chunk) - The company has direct exposure to commercial real estate through mortgage loans and CMBS. The office property sector, which represents **22.9%** of the commercial mortgage loan portfolio, is under continued market focus due to hybrid work arrangements[324](index=324&type=chunk)[350](index=350&type=chunk) [Derivatives](index=79&type=section&id=Derivatives) Describes the company's use of derivative instruments for risk management purposes - The company uses a variety of derivative instruments to manage interest rate, foreign currency, credit, and equity market risks. As of March 31, 2025, the total gross notional amount of derivatives was **$271.4 billion**[152](index=152&type=chunk)[358](index=358&type=chunk) [Policyholder Liabilities](index=80&type=section&id=Policyholder%20Liabilities) Explains the nature and valuation of liabilities related to insurance and annuity products - Variable annuity guaranteed benefits (MRBs) are measured at fair value. The total Net Amount at Risk (NAR) for variable annuities was **$13.3 billion** for death benefits and **$5.8 billion** for living benefits as of March 31, 2025[371](index=371&type=chunk)[376](index=376&type=chunk) [Liquidity and Capital Resources](index=82&type=section&id=Liquidity%20and%20Capital%20Resources) Assesses the company's ability to meet its financial obligations and maintain adequate capital levels - The company maintains a substantial short-term liquidity position of **$4.7 billion** and total liquid assets of **$48.0 billion** as of March 31, 2025[383](index=383&type=chunk)[384](index=384&type=chunk) - The company targets a combined risk-based capital (RBC) ratio of **400% to 450%** in normal market conditions[389](index=389&type=chunk) - During Q1 2025, the company repurchased **$59 million** of its common stock. As of March 31, 2025, **$484 million** remained under its repurchase authorization[224](index=224&type=chunk) - The parent holding company, BHF, is largely dependent on cash flows from its insurance subsidiaries to meet its obligations. BHF and its non-insurance subsidiaries held **$872 million** in short-term liquidity at the end of Q1 2025[422](index=422&type=chunk)[423](index=423&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=91&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risk from changes in interest rates, equity market prices, credit spreads, and foreign currency exchange rates through its insurance and investment activities. The company regularly analyzes these exposures. There have been no material changes to the market risk exposures disclosed in the 2024 Annual Report - The company's market risk exposures, primarily from interest rates and secondarily from equity prices and foreign currency rates, have not materially changed from those disclosed in the 2024 Annual Report on Form 10-K[436](index=436&type=chunk)[437](index=437&type=chunk) [Controls and Procedures](index=92&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of March 31, 2025. The company noted that ongoing changes in business processes, system implementations, and new third-party arrangements related to the transition services from MetLife are considered material changes in internal control over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of March 31, 2025[439](index=439&type=chunk) - Ongoing changes to business processes and systems related to the separation from MetLife are considered material changes to internal control over financial reporting[440](index=440&type=chunk) [Part II — Other Information](index=92&type=section&id=Part%20II%20%E2%80%94%20Other%20Information) Covers legal proceedings, risk factors, equity sales, and other relevant disclosures [Legal Proceedings](index=92&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various litigation matters. For contingencies where a loss is reasonably possible but not probable, the company estimates an aggregate range of reasonably possible losses up to approximately $10 million as of March 31, 2025. For other matters, an estimate cannot be made. (See Note 13 for details) - The company is a defendant in a number of litigation matters. For details, refer to Note 13 of the Notes to the Interim Condensed Consolidated Financial Statements[442](index=442&type=chunk)[239](index=239&type=chunk) [Risk Factors](index=92&type=page&id=Item%201A.%20Risk%20Factors) There have been no material changes to the company's risk factors from those previously disclosed in the 2024 Annual Report on Form 10-K - No material changes to the company's risk factors have occurred since the filing of the 2024 Annual Report[443](index=443&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=92&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the first quarter of 2025, Brighthouse Financial repurchased 1,062,596 shares of its common stock for a total of approximately $59 million. As of March 31, 2025, $484 million remained available for future repurchases under the authorized program | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | Jan 2025 | 374,009 | $50.56 | | Feb 2025 | 317,600 | $60.10 | | Mar 2025 | 370,987 | $56.52 | | **Total Q1 2025** | **1,062,596** | **N/A** | - As of March 31, 2025, approximately **$484 million** remained available for repurchase under the company's publicly announced stock repurchase program[444](index=444&type=chunk) [Other Information](index=92&type=section&id=Item%205.%20Other%20Information) During the first quarter of 2025, none of the company's directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement - No directors or officers adopted or terminated Rule 10b5-1 trading plans during the first quarter of 2025[445](index=445&type=chunk) [Exhibits](index=93&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications pursuant to the Sarbanes-Oxley Act of 2002 and XBRL data files

Core Viewpoint - Brighthouse Financial, Inc. (BHF) reported a first-quarter 2025 adjusted net income of $4.17 per share, missing the Zacks Consensus Estimate by 11.6%, with a year-over-year decline of 1.8% in the bottom line, attributed to lower premiums and rising expenses, although offset by improved adjusted net investment income [1][2] Financial Performance - Total operating revenues reached $2.2 billion, reflecting a 6.1% increase year over year, driven by higher universal life and investment-type product policy fees and net investment income [1] - Premiums amounted to $186 million, down 7.9% year over year, compared to an estimate of $218.3 million [2] - Adjusted net investment income was $1.3 billion, up 2% year over year, primarily due to asset growth, with an investment income yield of 4.25% [2] - Total expenses were $2.7 billion, nearly four times higher year over year, exceeding the estimate of $995.5 million [2] Segment Performance - Annuities segment reported adjusted operating income of $314 million, a slight increase of 0.3% year over year, while annuity sales decreased by 21% to $2.3 billion, mainly due to lower fixed annuity sales [3] - Life insurance segment achieved adjusted operating earnings of $9 million, recovering from a loss of $36 million in the previous year, with life insurance sales increasing by 24% quarter over quarter to $36 million [4] - Run-off segment recorded an adjusted operating loss of $64 million, wider than the previous year's loss of $34 million, attributed to lower net investment income [4] - Corporate & Other segment incurred an adjusted operating loss of $24 million, an improvement from a loss of $34 million in the prior year [5] Financial Position - Cash and cash equivalents stood at $4.7 billion, a 22% increase year over year [6] - Shareholders' equity reached $5.2 billion, up 25% year over year [6] - Book value per share, excluding accumulated other comprehensive income, was $141.87 as of March 31, 2025, reflecting a 12.3% increase year over year [6] - Statutory combined total adjusted capital was $5.5 billion, down 8.3% year over year, with an estimated combined risk-based capital ratio of 420-440% [6] Share Buyback Activity - Brighthouse Financial repurchased shares worth $59 million in the first quarter of 2025, with an additional $26 million on a trade date basis through May 6, 2025 [7]

Financial Data and Key Metrics Changes - Brighthouse Financial reported a statutory combined total adjusted capital (TAC) of approximately $5,500 million at March 31, compared to approximately $5,400 million at December 31 [17] - The estimated combined risk-based capital (RBC) ratio was between 420% and 440%, within the target range of 400% to 450% in normal market conditions [17][19] - Adjusted earnings for the quarter were $235 million, including an unfavorable notable item of $10 million, compared to $352 million in the fourth quarter of 2024 and $268 million in the first quarter of 2024 [19][20] Business Line Data and Key Metrics Changes - Total annuity sales were approximately $2,300 million, including $2,000 million in Shield sales, which increased 3% sequentially and 5% year-over-year [11] - Life insurance sales totaled $36 million, representing a 24% increase compared to the first quarter of 2024 and a 9% increase sequentially [12] - The Annuities segment reported adjusted earnings of $324 million, relatively flat sequentially, while the Life segment reported adjusted earnings of $9 million, reflecting lower underwriting margins and higher expenses [21] Market Data and Key Metrics Changes - The company experienced modestly lower outflows compared to the fourth quarter, driven by variable annuities (VA) and Shield outflows, particularly full surrenders [30] - The company expects flows in 2025 to be at or above 2024 levels, with a substantial amount of fixed-rate annuities coming out of surrender in the second half of 2025 [31][101] Company Strategy and Development Direction - The company is focused on capital efficiency and has made progress on capital-focused strategic initiatives, including simplifying its variable annuity hedging strategy [9][18] - Brighthouse Financial aims to protect its statutory balance sheet under adverse market scenarios while continuing to drive sales growth in both annuities and life insurance [10][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the current macro environment, emphasizing a strong balance sheet and robust liquidity position [14][15] - The company remains optimistic about growth opportunities, particularly in the RILA market and through the LifePath Paycheck product [94] Other Important Information - Corporate expenses for the quarter were $239 million, higher than expected, but management anticipates normalization for the remainder of 2025 [13] - The company repurchased $59 million of common stock in the quarter, with an additional $26 million repurchased through May 6 [14] Q&A Session Summary Question: Benefit of the 25 basis point increase in mean reversion point to normalized statutory earnings - Management indicated it was around $200 million [25] Question: Outlook for sales and fixed annuities - Management noted that sales have fluctuated and are dependent on competitive rates, with plans to build momentum for fixed sales [26][27] Question: Trends in flows and surrender activity - Management expects flows to be at 2024 levels or higher, with significant fixed-rate annuities coming out of surrender in 2025 [30][31] Question: RBC movements and other pushes and pulls - Management confirmed that the mean reversion change was closer to 15 percentage points, with additional factors affecting RBC [37][39] Question: Actions to increase value and reinsurance options - Management is considering flow reinsurance and focusing on simplifying the hedging strategy for in-force business [41][42] Question: Distributable earnings from BLIC in 2025 - Management did not provide specifics but indicated a three-year plan for dividends from operating companies [48] Question: Industry transactions and market dynamics - Management is monitoring industry transactions and their implications for Brighthouse's strategy [110][112] Question: RBC ratio and potential drops in Q2 - Management refrained from providing quarterly RBC forecasts but acknowledged potential fluctuations [119] Question: Strategic initiatives and capital constraints - Management emphasized the importance of unlocking capital while remaining unconstrained for growth [120]

Financial Data and Key Metrics Changes - Brighthouse Financial reported adjusted earnings of approximately $235 million for Q1 2025, which includes an unfavorable notable item of $10 million related to an actuarial model refinement [16] - The estimated combined risk-based capital (RBC) ratio was between 420% and 440%, within the target range of 400% to 450% in normal market conditions [14][19] - Statutory combined total adjusted capital (TAC) was approximately $5.5 billion at March 31, compared to approximately $5.4 billion at December 31 [14] Business Line Data and Key Metrics Changes - Total annuity sales were approximately $2.3 billion, including $2 billion in Shield sales, which increased 3% sequentially and 5% year-over-year [9] - Life insurance sales totaled $36 million, representing a 24% increase compared to Q1 2024 and a 9% increase sequentially [10] - The Annuities segment reported adjusted earnings of $324 million, relatively flat sequentially, while the Life segment reported adjusted earnings of $9 million, reflecting lower underwriting margins and higher expenses [18] Market Data and Key Metrics Changes - The company experienced strong sales growth in both annuities and life insurance, with a notable increase in the Shield annuity product suite [6][9] - The company is positioned as one of the top annuity providers in the United States, leveraging strong distribution relationships [9] Company Strategy and Development Direction - The company continues to focus on capital efficiency and has made progress on strategic initiatives aimed at simplifying its hedging strategy for variable annuities and Shield products [7][15] - The company is committed to protecting its statutory balance sheet under adverse market scenarios while navigating a competitive environment [8][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the current macro environment and emphasized the importance of maintaining a robust liquidity position [12] - The company expects flows to be at or above 2024 levels, driven by a substantial amount of fixed-rate annuities coming out of surrender in the second half of 2025 [28][98] Other Important Information - Corporate expenses for the quarter were $239 million, higher than expected, but management anticipates normalization for the remainder of 2025 [11] - The company repurchased $59 million of common stock in the quarter, with an additional $26 million repurchased through May 6 [12][66] Q&A Session Summary Question: Clarification on the benefit of the 25 basis point increase in mean reversion point - Management indicated that the benefit to normalized statutory earnings was around $200 million [21] Question: Outlook on sales and fixed annuities - Management acknowledged softer sales in fixed annuities but noted efforts to build momentum and maintain competitive rates [24] Question: Trends in flows and surrender activity - Management expects flows to be at 2024 levels or higher, with a substantial amount of fixed-rate annuities coming out of surrender in 2025 [28][98] Question: RBC ratio and seasonal impacts - Management confirmed that the RBC ratio was stable, with seasonal impacts from capital charges expected to be modest in the first quarter [112] Question: Strategic initiatives and capital generation - Management emphasized ongoing efforts to unlock capital while remaining unconstrained from growth opportunities [117] Question: Industry transactions and market dynamics - Management is closely monitoring recent industry transactions and their potential implications for Brighthouse [104][106] Question: Share repurchase program details - Management provided details on the share repurchase program, indicating active buybacks in response to market conditions [66]

Core Insights - Brighthouse Financial (BHF) reported quarterly earnings of $4.17 per share, missing the Zacks Consensus Estimate of $4.72 per share, and showing a decrease from $4.25 per share a year ago, resulting in an earnings surprise of -11.65% [1] - The company posted revenues of $2.16 billion for the quarter ended March 2025, which was 6.20% below the Zacks Consensus Estimate, but an increase from $2.05 billion year-over-year [2] - Brighthouse Financial shares have increased by approximately 21.6% since the beginning of the year, contrasting with a -4.3% decline in the S&P 500 [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $5.06 on revenues of $2.29 billion, and for the current fiscal year, it is $19.82 on revenues of $9.16 billion [7] - The estimate revisions trend for Brighthouse Financial is mixed, leading to a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Insurance - Life Insurance industry, to which Brighthouse Financial belongs, is currently ranked in the bottom 32% of over 250 Zacks industries, suggesting potential challenges ahead [8]

Financial Performance - The company's estimated combined risk-based capital (RBC) ratio is between 420% and 440%[9, 30] - Holding company liquid assets stand at $1.0 billion[9, 29, 30] - Statutory combined total adjusted capital (TAC) is $5.5 billion[9] - Normalized statutory earnings are $0.3 billion[9] - Adjusted earnings, less notable items, were $245 million, $15 million below expectations due to lower alternative investment income yield of 1.4%[9] Share Repurchases - The company repurchased $59 million of common stock in 1Q 2025[9, 29] - An additional $26 million of common stock was repurchased through May 6, 2025[9] Segment Performance - Annuities adjusted earnings, less notable items, were $324 million in 1Q 2025[12] - Life Insurance adjusted earnings, less notable items, were $9 million in 1Q 2025[14] - Run-off segment had adjusted earnings (loss), less notable items, of $(64) million in 1Q 2025[19] - Corporate & Other segment had adjusted earnings (loss), less notable items, of $(24) million in 1Q 2025[23] Investment Portfolio - Total investments amount to $124 billion[40] - Fixed maturity securities (FMS) total $87 billion, with 97% being investment grade[40]

Financial Results [Key Metrics](index=4&type=section&id=Key%20Metrics) For Q1 2025, Brighthouse Financial reported a net loss of $294 million, adjusted earnings of $235 million ($4.01 per share), and maintained a strong capital position with a combined risk-based capital ratio estimated between 420% and 440% Q1 2025 Key Financial Metrics (in millions) | Financial Metric | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Net income (loss) available to shareholders | $(294)M | $646M | $(519)M | | Adjusted earnings (loss) | $235M | $304M | $(98)M | | Adjusted earnings, less notable items | $245M | $352M | $268M | | Net income (loss) per common share | $(5.04) | $10.79 | $(8.22) | | Adjusted earnings (loss) per common share | $4.01 | $5.07 | $(1.56) | | Combined risk-based capital ratio | 420%-440% | 402% | 415%-435% | | Combined total adjusted capital | $5,500M | $5,373M | $6,030M | - Book value per common share, excluding AOCI, increased to **$141.87** as of March 31, 2025, compared to **$126.35** as of March 31, 2024[9](index=9&type=chunk) [GAAP Statements of Operations](index=5&type=section&id=GAAP%20Statements%20of%20Operations) In Q1 2025, the company reported total revenues of $2.39 billion and total expenses of $2.74 billion, leading to a net loss of $294 million, significantly impacted by net derivative gains and unfavorable market risk benefit changes GAAP Statement of Operations Highlights (in millions) | Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total revenues | $2,390 | $74 | | Net derivative gains (losses) | $311 | $(1,921) | | Total expenses | $2,744 | $688 | | Change in market risk benefits | $893 | $(1,440) | | Net income (loss) available to common shareholders | $(294) | $(519) | [GAAP Balance Sheets](index=6&type=section&id=GAAP%20Balance%20Sheets) As of March 31, 2025, total assets were $234.7 billion and total liabilities $229.4 billion, with stockholders' equity increasing to $5.24 billion due to a reduction in AOCI loss Balance Sheet Summary (in millions) | Item | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Total investments | $117,257 | $115,894 | | Total assets | $234,681 | $239,688 | | Total liabilities | $229,377 | $235,428 | | Total Brighthouse Financial, Inc.'s stockholders' equity | $5,239 | $4,195 | | Accumulated other comprehensive income (loss) | $(4,670) | $(5,413) | [Statements of Adjusted Earnings by Segment](index=8&type=section&id=Statements%20of%20Adjusted%20Earnings%20by%20Segment) Total adjusted earnings for Q1 2025 reached $235 million, a turnaround from Q1 2024, primarily driven by the Annuities segment's $314 million contribution Adjusted Earnings by Segment (in millions) | Segment | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Annuities | $314 | $313 | | Life | $9 | $(36) | | Run-off | $(64) | $(341) | | Corporate & Other | $(24) | $(34) | | **Total Adjusted Earnings** | **$235** | **$(98)** | [Annuities](index=9&type=section&id=Annuities) The Annuities segment reported stable adjusted earnings of $314 million in Q1 2025, with increased sales of Shield Level Annuities offset by $2.0 billion in net outflows from variable and Shield Level products [Annuities — Statements of Adjusted Earnings](index=9&type=section&id=Annuities%20%E2%80%94%20Statements%20of%20Adjusted%20Earnings) The Annuities segment's adjusted earnings remained stable at $314 million in Q1 2025, as increased adjusted revenues were largely offset by higher adjusted expenses Annuities Adjusted Earnings (in millions) | Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total adjusted revenues | $1,344 | $1,304 | | Total adjusted expenses | $957 | $919 | | **Adjusted earnings** | **$314** | **$313** | [Annuities — Select Operating Metrics](index=10&type=section&id=Annuities%20%E2%80%94%20Select%20Operating%20Metrics) Q1 2025 saw total variable and Shield Level annuity sales rise to $2.12 billion, yet the segment experienced $1.96 billion in net outflows, while fixed and income annuity sales significantly declined - Variable and Shield Level Annuities experienced net outflows of **$1,955 million** in Q1 2025, compared to net outflows of **$1,755 million** in Q1 2024[18](index=18&type=chunk) Annuity Sales (in millions) | Product | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Shield Level Annuities | $1,957 | $1,861 | | Total variable and Shield Level annuity sales | $2,122 | $2,017 | | Total fixed and income annuity sales | $137 | $856 | [Life](index=12&type=section&id=Life) The Life segment achieved adjusted earnings of $9 million in Q1 2025, a positive shift from a prior-year loss, driven by higher revenues and increased sales, despite a slight decline in total life insurance in-force [Life — Statements of Adjusted Earnings](index=12&type=section&id=Life%20%E2%80%94%20Statements%20of%20Adjusted%20Earnings) The Life segment's adjusted earnings turned positive to $9 million in Q1 2025, primarily due to a significant increase in adjusted revenues from universal life and investment-type product policy fees Life Adjusted Earnings (in millions) | Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total adjusted revenues | $291 | $217 | | Total adjusted expenses | $281 | $263 | | **Adjusted earnings (loss)** | **$9** | **$(36)** | [Life — Select Operating Metrics](index=13&type=section&id=Life%20%E2%80%94%20Select%20Operating%20Metrics) Total life sales increased to $36 million in Q1 2025, while universal and variable universal life account values remained stable, and total life insurance in-force, net of reinsurance, slightly decreased to $307.5 billion - Total life sales increased by **24%** year-over-year to **$36 million** in Q1 2025[24](index=24&type=chunk) Life Insurance In-Force, Net of Reinsurance (in millions) | Product Type | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Whole Life | $2,855 | $2,936 | | Term Life | $272,711 | $284,862 | | Universal and Variable Universal Life | $31,926 | $33,391 | [Run-off](index=15&type=section&id=Run-off) The Run-off segment's adjusted loss significantly narrowed to $64 million in Q1 2025, driven by lower policyholder benefits and claims, as the ULSG account value continued its gradual decline [Run-off — Statements of Adjusted Earnings](index=15&type=section&id=Run-off%20%E2%80%94%20Statements%20of%20Adjusted%20Earnings) The Run-off segment's adjusted loss improved to $64 million in Q1 2025, primarily due to a sharp decrease in policyholder benefits and claims Run-off Adjusted Earnings (in millions) | Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Policyholder benefits and claims | $352 | $673 | | **Adjusted earnings (loss)** | **$(64)** | **$(341)** | [Run-off — Select Operating Metrics](index=16&type=section&id=Run-off%20%E2%80%94%20Select%20Operating%20Metrics) The account value for Universal Life with Secondary Guarantees (ULSG) decreased to $4.71 billion in Q1 2025, with life insurance in-force also declining to $33.2 billion - The account value for Universal Life with Secondary Guarantees (ULSG) declined by **5.4%** year-over-year[26](index=26&type=chunk) [Corporate & Other](index=17&type=section&id=Corporate%20%26%20Other) The Corporate & Other segment's adjusted loss improved to $24 million in Q1 2025, despite a decrease in the institutional spread margin business account balance to $10.1 billion [Corporate & Other — Statements of Adjusted Earnings and Select Operating Metrics](index=17&type=section&id=Corporate%20%26%20Other%20%E2%80%94%20Statements%20of%20Adjusted%20Earnings%20and%20Select%20Operating%20Metrics) The Corporate & Other segment's adjusted loss narrowed to $24 million in Q1 2025, driven by lower adjusted expenses offsetting reduced adjusted revenues, with the institutional spread margin business account balance at $10.09 billion Corporate & Other Adjusted Earnings (in millions) | Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total adjusted revenues | $154 | $173 | | Total adjusted expenses | $155 | $162 | | **Adjusted earnings (loss)** | **$(24)** | **$(34)** | - The institutional spread margin business account balance was **$10,092 million** at the end of Q1 2025, down from **$10,718 million** at the end of Q1 2024[28](index=28&type=chunk) Other Information [Change in Market Risk Benefits and Net Derivative Gains (Losses)](index=19&type=section&id=Change%20in%20Market%20Risk%20Benefits%20and%20Net%20Derivative%20Gains%20(Losses)) Q1 2025 saw an $893 million negative change in market risk benefits, contrasting with $311 million in net derivative gains, largely driven by Shield embedded derivatives Key Drivers of GAAP Volatility (in millions) | Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Change in market risk benefits | $(893) | $1,440 | | Net derivative gains (losses) | $311 | $(1,921) | - Gains on Shield embedded derivatives were **$1,171 million** in Q1 2025, reversing a loss of **$1,817 million** in Q1 2024[30](index=30&type=chunk) [Notable Items](index=20&type=section&id=Notable%20Items) Notable items impacting adjusted earnings totaled $10 million in Q1 2025, solely from Annuities segment actuarial adjustments, a significant decrease from $366 million in Q1 2024 Notable Items by Segment (in millions) | Segment | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Annuities | $10 | $— | | Life | — | $73 | | Run-off | — | $293 | | **Total notable items** | **$10** | **$366** | [Variable Annuity Separate Account Returns and Allocations](index=21&type=section&id=Variable%20Annuity%20Separate%20Account%20Returns%20and%20Allocations) The Variable Annuity separate account reported a -0.54% gross return in Q1 2025, a decline from the prior year, with balanced funds and equity funds remaining the largest asset allocations - Total quarterly VA separate account gross returns were **-0.54%** for Q1 2025, compared to **5.96%** for Q1 2024[32](index=32&type=chunk) - As of March 31, 2025, the largest allocation in the VA separate account was to balanced funds (**40.73%**), followed by equity funds (**31.28%**)[32](index=32&type=chunk) [Summary of Investments](index=22&type=section&id=Summary%20of%20Investments) Total investments and cash equivalents were $121.9 billion as of March 31, 2025, primarily in fixed maturity securities, with the adjusted net investment income yield remaining at 4.25% Investment Portfolio Composition (March 31, 2025) | Asset Class | Amount (in millions) | % of Total | | :--- | :--- | :--- | | Fixed maturity securities | $80,640 | 66.14% | | Mortgage loans, net | $23,051 | 18.91% | | Limited partnerships and LLCs | $4,839 | 3.97% | | Cash, cash equivalents and short-term investments | $6,236 | 5.11% | | Other invested assets | $5,284 | 4.33% | | **Total** | **$121,924** | **100.00%** | - The adjusted net investment income yield was **4.25%** for Q1 2025, unchanged from Q1 2024[33](index=33&type=chunk) [Statutory Statement of Operations Information](index=23&type=section&id=Statutory%20Statement%20of%20Operations%20Information) Preliminary statutory results for Q1 2025 show a combined net income of $400 million and normalized statutory earnings of $0.3 billion, a significant improvement from the prior-year loss Preliminary Statutory Results (in millions) | Item | Q1 2025 (Preliminary) | Q1 2024 | | :--- | :--- | :--- | | Total revenues | $4,800 | $2,229 | | Net income (loss) | $400 | $(18) | | Normalized statutory earnings (loss) | $0.3B | $(0.2)B | [Statutory Balance Sheet and Surplus Information](index=24&type=section&id=Statutory%20Balance%20Sheet%20and%20Surplus%20Information) As of March 31, 2025, preliminary combined statutory total adjusted capital was $5.5 billion, with a strong combined risk-based capital ratio estimated between 420%-440%, and no dividends paid to the holding company Statutory Capital Position (Preliminary) (in millions) | Metric | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Combined total adjusted capital | $5,500M | $6,030M | | Combined risk-based capital ratio | 420%-440% | 415%-435% | - No dividends were paid to the holding company in Q1 2025, consistent with the prior year[38](index=38&type=chunk) Appendix [Note Regarding Forward-Looking Statements](index=26&type=section&id=Note%20Regarding%20Forward-Looking%20Statements) This section provides a standard safe harbor statement, cautioning that forward-looking statements are subject to substantial risks and uncertainties, including market volatility, interest rate changes, and regulatory shifts - The company identifies forward-looking statements with words like "anticipate," "expect," "project," "believe," and similar terms[41](index=41&type=chunk) - Key risks include differences between actual experience and actuarial models, the effectiveness of risk management, interest rate impacts, regulatory changes, and competition[42](index=42&type=chunk) [Non-GAAP and Other Financial Disclosures](index=27&type=section&id=Non-GAAP%20and%20Other%20Financial%20Disclosures) This section defines non-GAAP financial measures like Adjusted Earnings, used to evaluate underlying business profitability by excluding market volatility, and clarifies terms such as Total Adjusted Capital and Risk-Based Capital Ratio - Adjusted earnings is a key non-GAAP measure that excludes net investment gains/losses, net derivative gains/losses, and changes in market risk benefits from GAAP net income to focus on primary business performance[49](index=49&type=chunk)[53](index=53&type=chunk)[59](index=59&type=chunk) - Notable items are defined as certain unanticipated or anticipated events whose exclusion from non-GAAP measures helps investors better understand and forecast results[62](index=62&type=chunk) - The Risk-Based Capital (RBC) Ratio is a regulatory measure of an insurance company's capital adequacy relative to its risk profile[72](index=72&type=chunk) [Acronyms](index=31&type=section&id=Acronyms) This section provides a comprehensive list of acronyms and their definitions used throughout the financial supplement, including AOCI, GAAP, RBC, and ULSG - Provides definitions for key acronyms including DAC, GMDB, NIGL, NDGL, TAC, and VA[73](index=73&type=chunk) [Reconciliations](index=32&type=section&id=Reconciliations) This section provides detailed reconciliations of non-GAAP financial measures, including Net Income to Adjusted Earnings and Return on Common Equity, to their GAAP counterparts, ensuring transparency of adjustments [Reconciliation of Net Income to Adjusted Earnings](index=32&type=section&id=Reconciliation%20of%20Net%20Income%20(Loss)%20Available%20to%20Shareholders%20to%20Adjusted%20Earnings%20(Loss)) This table reconciles the Q1 2025 GAAP net loss of $294 million to adjusted earnings of $235 million, primarily by excluding market risk benefit changes and including net derivative gains Q1 2025 Reconciliation of Net Income to Adjusted Earnings (in millions) | Item | Amount | | :--- | :--- | | Net income (loss) available to shareholders | $(294) | | Less: Reconciling items (net) | $(539) | | **Adjusted earnings (loss)** | **$235** | | Less: Notable items | $(10) | | **Adjusted earnings, less notable items** | **$245** | [Reconciliation of Return on Common Equity to Adjusted Return on Common Equity](index=33&type=section&id=Reconciliation%20of%20Return%20on%20Common%20Equity%20to%20Adjusted%20Return%20on%20Common%20Equity,%20Excluding%20AOCI) This reconciliation details the calculation of the adjusted return on common equity, excluding AOCI, which was 20.4% for the trailing four quarters ending March 31, 2025, after adjusting for non-GAAP items - For the four quarters ended March 31, 2025, the adjusted return on common equity, excluding AOCI, was **20.4%**, compared to the GAAP return on common equity of **16.4%**[76](index=76&type=chunk) [Reconciliation of Total Revenues and Expenses to Adjusted](index=34&type=section&id=Reconciliation%20of%20Total%20Revenues%20to%20Adjusted%20Revenues%20and%20Reconciliation%20of%20Total%20Expenses%20to%20Adjusted%20Expenses) Q1 2025 GAAP total revenues of $2.39 billion were reconciled to adjusted revenues of $2.16 billion, and GAAP total expenses of $2.74 billion to adjusted expenses of $1.84 billion, by excluding specific items Q1 2025 Revenue and Expense Reconciliation (in millions) | Item | GAAP | Adjustments | Adjusted (Non-GAAP) | | :--- | :--- | :--- | :--- | | Total revenues | $2,390 | $(234) | $2,156 | | Total expenses | $2,744 | $(903) | $1,841 | [Investment Reconciliation Details](index=35&type=section&id=Investment%20Reconciliation%20Details) This section details the Q1 2025 net investment loss of $83 million, comprising portfolio losses and credit loss provisions, and confirms the adjusted net investment income yield of 4.25% - The adjusted net investment income yield for Q1 2025 was **4.25%**, derived from a **4.39%** investment income yield less **0.14%** for investment fees and expenses[78](index=78&type=chunk)

Market Overview - The S&P 500 index experienced volatility in the first quarter, falling approximately 4.6% due to high valuations and tariff concerns, preceding a significant sell-off in April [1] Greenlight Capital Management - Greenlight Capital, now DME Capital Management, achieved an 8.2% return in the first quarter, with a bearish outlook initiated in February due to concerns over the Trump administration's policies [2][3] - The fund shifted its focus to gold and took short positions against undisclosed consumer companies, holding 36 stocks valued at nearly $1.95 billion by the end of 2024 [3] Green Brick Partners - Green Brick Partners constitutes 28% of Greenlight's portfolio and is the fund's largest position, founded by David Einhorn during the Great Recession [4] - The company owns or controls over 37,800 lots and operates in growing housing markets such as Texas, Florida, and Georgia [5] - Green Brick has shown strong performance, closing a record 1,019 units in Q4, with earnings growing at a compound annual growth rate of 39% since 2020 [6] - The stock has increased over 700% in the last five years and trades at 7 times forward earnings, despite potential risks from tariffs affecting costs [7] CONSOL Energy - CONSOL Energy, making up 7.7% of the portfolio, is a coal producer with significant operations in the Northern Appalachian Basin, particularly the Pennsylvania Mining Complex [8] - The company merged with Arch Resources to form Core Natural Resources, which operates 11 mines producing both metallurgical and thermal coal [9] - In 2024, Core Natural Resources generated over 10% of its revenue from customers in China and India, facing challenges from tariffs and a shift away from coal [10][11] Brighthouse Financial - Brighthouse Financial represents 7% of the portfolio and has performed well, with its stock up about 9% [12] - The company struggled to maintain its risk-based capital (RBC) ratio within the preferred range of 400% to 450% [13] - There are reports of management considering a sale or partial sale, with analysts suggesting that such actions could unlock significant shareholder value [14] - The investment thesis hinges on potential acquisition strategies, which could yield substantial gains if successful [15]

Company Overview - Brighthouse Financial (BHF) shares increased by 13.8% to $53.88 in the last trading session, following a broader market rally after President Trump announced a 90-day pause on reciprocal tariffs for most countries [1] - The stock had previously experienced an 11.3% loss over the past four weeks [1] Earnings Expectations - BHF is expected to report quarterly earnings of $4.79 per share, reflecting a year-over-year increase of 12.7% [2] - Revenue projections stand at $2.29 billion, which is an 11.9% increase compared to the same quarter last year [2] Earnings Estimate Revisions - The consensus EPS estimate for BHF has been revised slightly higher over the last 30 days, indicating a positive trend that typically correlates with stock price appreciation [3] - The stock currently holds a Zacks Rank of 3 (Hold), suggesting a neutral outlook [3] Industry Context - Brighthouse Financial operates within the Zacks Insurance - Life Insurance industry, which includes other companies like GoHealth (GOCO) [3] - GoHealth's consensus EPS estimate has increased by 10.6% over the past month to -$0.26, representing a year-over-year change of 70.8% [4] - GoHealth currently has a Zacks Rank of 1 (Strong Buy), contrasting with BHF's neutral rating [4]

Core Viewpoint - Brighthouse Financial, Inc. (BHF) is experiencing a short-term bullish trend as it trades above its 50-day simple moving average, despite a recent decline in share price from its 52-week high [1][3]. Company Performance - As of April 2, 2025, BHF's share price was $59.78, down 6.7% from its 52-week high of $64.12 [1]. - The company has a market capitalization of $3.47 billion, with an average trading volume of 0.7 million shares over the last three months [4]. - Year-to-date, BHF shares have gained 24.5%, outperforming the Zacks S&P 500 composite, which has declined by 4.7%, and the finance sector's return of 2.4% [5][7]. Growth Projections - The Zacks Consensus Estimate for BHF's 2025 earnings per share indicates a year-over-year increase of 3.8%, with revenues projected at $9.15 billion, reflecting a 4.9% improvement [8]. - For 2026, earnings per share and revenues are expected to increase by 12.1% and 2.4%, respectively, compared to 2024 estimates [8]. Earnings and Analyst Sentiment - BHF's earnings have grown by 16.5% over the past five years, surpassing the industry average of 7.8% [9]. - The company has an impressive Growth Score of B and has beaten earnings estimates in three of the past four quarters, with an average surprise of 14.04% [9]. - Mixed analyst sentiment exists, with four of six analysts raising estimates for 2025, while the Zacks Consensus Estimate for 2025 and 2026 earnings has increased by 0.5% and 0.3%, respectively, over the past 60 days [10]. Valuation and Profitability - BHF's shares are trading at a price-to-earnings multiple of 2.84, significantly lower than the industry average of 7.96, indicating attractive valuation [11]. - The company's trailing 12-month return on equity is 26.94%, well above the industry average of 15.35%, reflecting effective utilization of shareholder capital [12]. Strategic Focus - BHF is one of the largest providers of life insurance products in the U.S. and aims to benefit from the growing individual insurance market by enhancing its product portfolio and expanding its distribution network [13][15]. - The company has launched new products, such as Shield Level Pay Plus and SecureKey, which have contributed to increased annuity sales [14][15]. - Improved underwriting margins and net investment income are expected to drive higher life insurance sales [14][16]. Financial Strength and Capital Deployment - BHF is focused on maintaining a strong balance sheet and has committed to returning capital to shareholders through an opportunistic share repurchase program [17]. - The company anticipates continued improvement in net investment income due to a well-diversified portfolio and a conservative investment strategy [16]. Conclusion - Higher annuity and life insurance sales, a high-quality portfolio, financial flexibility, and effective capital deployment position BHF well for future growth [18]. - The stock has a VGM Score of A, indicating attractive value, growth, and momentum [18].