Financial Performance - For the three months ended September 30, 2025, net income available to shareholders was $453 million, an increase of 202% compared to $150 million for the same period in 2024[286]. - Adjusted earnings for the three months ended September 30, 2025, were $970 million, up 27% from $767 million in the prior year[287]. - For the nine months ended September 30, 2025, net income available to shareholders was $219 million, compared to a net loss of $360 million for the same period in 2024[288]. - Adjusted earnings for the nine months ended September 30, 2025, reached $1.4 billion, a 40% increase from $1.0 billion in 2024[288]. - Total revenues for the three months ended September 30, 2025, were $1,816 million, a decrease of 10% from $2,018 million in the prior year[322]. - The total expenses for the three months ended September 30, 2025, were $1,231 million, a decrease of 33% from $1,830 million in the prior year[322]. - For the nine months ended September 30, 2025, income available to shareholders before provision for income tax was $243 million, an increase of $736 million from a loss of $493 million in the same period of 2024[326]. - Adjusted earnings for the nine months ended September 30, 2025, were $1.4 billion, an increase of $388 million compared to the same period in 2024[337]. Merger and Regulatory Matters - The company entered into a Merger Agreement on November 6, 2025, with Aquarian Holdings VI L.P., which will result in each share of common stock being converted into $70.00 per share in cash[290][291]. - The Merger is subject to customary closing conditions, including regulatory approvals and the absence of a Company Material Adverse Effect[293]. - The Inflation Reduction Act established a 15% corporate alternative minimum tax for corporations with average annual adjusted financial statement income exceeding $1.0 billion[298]. - The company is assessing the impact of proposed regulations regarding the corporate alternative minimum tax, which may introduce significant uncertainties[299]. - The Company was not subject to the CAMT for the years ended December 31, 2023 and 2024, and does not expect to be subject to it for the year ended December 31, 2025[300]. - The OBBBA enacted on July 4, 2025, is not expected to have a material impact on the Company[301]. - The CCDAA requires companies with annual revenues exceeding $1.0 billion to report Scope 1 and 2 GHG emissions starting in 2026, and Scope 3 emissions starting in 2027[302]. Investment Portfolio and Economic Conditions - The Federal Reserve decreased the target range for the federal funds rate multiple times in 2024 and 2025, which may negatively impact the company's investment portfolio and profitability[295]. - The company continues to monitor economic conditions, including inflation and geopolitical conflicts, that could affect market volatility and its business operations[296]. - As of September 30, 2025, unrealized losses on fixed maturity securities exceeded unrealized gains due to interest rate increases, contributing to a net unrealized loss position in the investment portfolio[365]. - The company does not expect its general account investments in current sectors and asset classes to materially adversely affect its financial condition or results of operations[371]. - The company actively monitors and adjusts its investment exposure across sectors and asset classes to mitigate financial risks[371]. Tax and Regulatory Compliance - The effective tax rate for the three months ended September 30, 2025, was 18%, compared to 5% in the prior period[325]. - The effective tax rate for the nine months ended September 30, 2025, was 19%, up from 18% in the prior period[337]. - The effective tax rate for the Life segment was 18% for the three months ended September 30, 2025, down from 22% in the prior period[346]. - The effective tax rate for the Run-off segment remained stable at 21% for both the current and prior periods[351]. Segment Performance - Adjusted earnings for the Annuities segment for the nine months ended September 30, 2025, were $950 million, a decrease of $22 million from 2024[342]. - Adjusted earnings for the Life segment were $40 million for the three months ended September 30, 2025, an increase of $65 million compared to the same period in 2024[344]. - The Run-off segment achieved adjusted earnings of $641 million for the three months ended September 30, 2025, an increase of $178 million year-over-year[350]. - The Corporate & Other segment reported an adjusted loss of $64 million for the nine months ended September 30, 2025, an increase in loss of $34 million compared to the prior year[358]. Liquidity and Capital Management - The company maintained a substantial short-term liquidity position of $5.2 billion as of both September 30, 2025, and December 31, 2024[429]. - Liquid assets totaled $50.4 billion as of September 30, 2025, compared to $48.1 billion as of December 31, 2024[430]. - The company continuously monitors and adjusts its liquidity and capital plans in response to changing market conditions[428]. - The total outstanding amount under various funding agreements was $9,817 million as of September 30, 2025, with significant issuances and repayments reported[451]. - The company has established intercompany liquidity facilities but reported no borrowings or repayments under these facilities during the nine months ended September 30, 2025 and 2024[478]. Investment Income and Derivatives - Net investment income for the three months ended September 30, 2025, was $1,334 million, an increase of 4% from $1,288 million in the same period of 2024[322]. - Adjusted net investment income yield represents adjusted net investment income as a percentage of average quarterly asset carrying values[315]. - The company reported net derivative losses of $410 million for the three months ended September 30, 2025, compared to losses of $93 million in the prior year[322]. - The company established a stand-alone hedging program for variable annuity and Shield Annuity contracts to better manage associated risks[403]. Credit Quality and Risk Management - The credit quality of fixed maturity securities showed that 97.1% were rated investment grade as of September 30, 2025, with a total amortized cost of $84,000 million[381]. - The company manages credit risk related to derivatives through various strategies, including the use of master netting agreements[408]. - The average loan-to-value ratio for commercial mortgage loans was 68% as of September 30, 2025, while the average debt-service coverage ratio was 2.2x[397]. - The average loan-to-value ratio for agricultural mortgage loans was 46% as of September 30, 2025, indicating a lower risk profile compared to commercial loans[397].

Exhibit 2.1 EXECUTION VERSION AGREEMENT AND PLAN OF MERGER by and among AQUARIAN HOLDINGS VI L.P., AQUARIAN BEACON MERGER SUB INC., AQUARIAN HOLDINGS LLC (solely for purposes of Section 5.7, Section 6.18, Section 6.19 and Section 9.13) and BRIGHTHOUSE FINANCIAL, INC. Dated as of November 6, 2025 Article I DEFINITIONS 2 Article II THE MERGER 21 Section 2.1 The Merger 21 Section 2.2 Closing 21 Section 2.3 Certificate of Incorporation and Bylaws of the Surviving Corporation 21 Section 2.4 Directors and Officer ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___ to ___ Commission File Number: 001-37905 Brighthouse Financial, Inc. (Exact name of registrant as specified in its charter) Delaware 81-3846992 (State or other jurisd ...

[Financial Results](index=3&type=section&id=Financial%20Results) [Key Metrics](index=4&type=section&id=Key%20Metrics) Q2 2025 net income was $60 million, adjusted earnings $198 million, with common stockholders' equity (ex-AOCI) at $8.23 billion and a 405%-425% RBC ratio Key Financial Metrics (Q2 2025 vs. Prior Periods) | Financial Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :--- | :--- | :--- | :--- | | Net income (loss) available to shareholders | $60M | $(294)M | $9M | | Adjusted earnings | $198M | $235M | $346M | | Adjusted earnings per common share | $3.43 | $4.01 | $5.57 | | Combined risk-based capital ratio | 405%-425% | 420%-440% | 380%-400% | | Common stockholders' equity, excluding AOCI | $8,231M | $8,210M | $7,861M | | Book value per common share, excluding AOCI | $144.09 | $141.87 | $128.36 | [GAAP Statements of Operations](index=5&type=section&id=GAAP%20Statements%20of%20Operations) Q2 2025 total revenues were $871 million and net income $85 million, significantly impacted by $1.24 billion net derivative losses compared to Q2 2024 GAAP Statement of Operations Highlights (Q2 2025 vs. Q2 2024) | Line Item | For the Three Months Ended June 30, 2025 | For the Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Total revenues | $871M | $1,427M | | Net derivative gains (losses) | $(1,237)M | $(662)M | | Total expenses | $778M | $1,413M | | Change in market risk benefits | $(1,101)M | $(356)M | | Net income (loss) | $85M | $34M | | Net income (loss) available to common shareholders | $60M | $9M | [GAAP Balance Sheets](index=6&type=section&id=GAAP%20Balance%20Sheets) As of June 30, 2025, total assets increased to $242.6 billion, liabilities to $236.9 billion, and stockholders' equity grew to $5.7 billion, primarily due to reduced AOCI Key Balance Sheet Items (As of June 30, 2025 vs. June 30, 2024) | Balance Sheet Item | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Total investments | $120,747M | $115,299M | | Total assets | $242,645M | $237,438M | | Total liabilities | $236,907M | $233,232M | | Accumulated other comprehensive income (loss) | $(4,257)M | $(5,419)M | | Total Brighthouse Financial, Inc.'s stockholders' equity | $5,673M | $4,141M | [Earnings and Select Metrics from Segments](index=7&type=section&id=Earnings%20and%20Select%20Metrics%20from%20Segments) [Statements of Adjusted Earnings by Segment](index=8&type=section&id=Statements%20of%20Adjusted%20Earnings%20by%20Segment) Q2 2025 total adjusted earnings were $198 million, primarily from Annuities ($332 million), while Life, Run-off, and Corporate & Other segments reported losses Adjusted Earnings by Segment (Q2 2025 vs. Q2 2024) | Segment | Adjusted Earnings (Q2 2025) | Adjusted Earnings (Q2 2024) | | :--- | :--- | :--- | | Annuities | $332M | $332M | | Life | $(26)M | $42M | | Run-off | $(83)M | $(30)M | | Corporate & Other | $(25)M | $2M | | **Total** | **$198M** | **$346M** | [Annuities](index=10&type=section&id=Annuities) Annuities segment adjusted earnings were $332 million in Q2 2025, with strong sales, negative net flows, and Variable and Shield Level Annuities account values growing to $127.2 billion [Annuities — Statements of Adjusted Earnings](index=10&type=section&id=Annuities%20%E2%80%94%20Statements%20of%20Adjusted%20Earnings) Annuities Adjusted Earnings (Q2 2025 vs. Q2 2024) | Line Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total adjusted revenues | $1,331M | $1,314M | | Total adjusted expenses | $921M | $904M | | **Adjusted earnings** | **$332M** | **$332M** | [Annuities — Select Operating Metrics](index=11&type=section&id=Annuities%20%E2%80%94%20Select%20Operating%20Metrics) - Variable and Shield Level Annuities account value increased to **$127.2 billion** at the end of Q2 2025, up from $124.5 billion a year ago, despite net outflows of $2.0 billion in the quarter[19](index=19&type=chunk) Annuity Sales (Q2 2025) | Annuity Type | Sales (Q2 2025) | | :--- | :--- | | Shield Level Annuities | $1,925M | | Other Variable Annuities | $180M | | **Total Variable & Shield** | **$2,105M** | | Fixed & Income Annuities | $505M | [Life](index=13&type=section&id=Life) The Life segment posted a **$26 million adjusted loss** in Q2 2025, a decline from $42 million earnings in Q2 2024, driven by higher policyholder benefits, though total life sales rose to $33 million [Life — Statements of Adjusted Earnings](index=13&type=section&id=Life%20%E2%80%94%20Statements%20of%20Adjusted%20Earnings) Life Adjusted Earnings (Q2 2025 vs. Q2 2024) | Line Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total adjusted revenues | $283M | $297M | | Policyholder benefits and claims | $213M | $155M | | Total adjusted expenses | $316M | $245M | | **Adjusted earnings (loss)** | **$(26)M** | **$42M** | [Life — Select Operating Metrics](index=14&type=section&id=Life%20%E2%80%94%20Select%20Operating%20Metrics) - Total life sales increased to **$33 million** in Q2 2025 from $28 million in Q2 2024[25](index=25&type=chunk) - Total life insurance in-force, net of reinsurance, was **$302.7 billion** as of June 30, 2025, with Term Life constituting the largest portion at **$267.8 billion**[25](index=25&type=chunk) [Run-off](index=16&type=section&id=Run-off) The Run-off segment posted an **adjusted loss of $83 million** in Q2 2025, compared to a $30 million loss in Q2 2024, with its Universal Life with Secondary Guarantees block holding a $4.6 billion account value [Run-off — Statements of Adjusted Earnings](index=16&type=section&id=Run-off%20%E2%80%94%20Statements%20of%20Adjusted%20Earnings) Run-off Adjusted Earnings (Q2 2025 vs. Q2 2024) | Line Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total adjusted revenues | $382M | $429M | | Total adjusted expenses | $487M | $466M | | **Adjusted earnings (loss)** | **$(83)M** | **$(30)M** | [Run-off — Select Operating Metrics](index=17&type=section&id=Run-off%20%E2%80%94%20Select%20Operating%20Metrics) - The account value for Universal Life with Secondary Guarantees (ULSG) was **$4.62 billion** as of June 30, 2025, down from $4.91 billion a year prior[27](index=27&type=chunk) - ULSG life insurance in-force, net of reinsurance, stood at **$32.9 billion** at the end of Q2 2025[27](index=27&type=chunk) [Corporate & Other](index=18&type=section&id=Corporate%20%26%20Other) The Corporate & Other segment recorded an **adjusted loss of $25 million** in Q2 2025, including preferred stock dividends, compared to $2 million adjusted earnings in Q2 2024, primarily driven by net investment income Corporate & Other Adjusted Earnings (Q2 2025 vs. Q2 2024) | Line Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total adjusted revenues | $158M | $178M | | Total adjusted expenses | $161M | $160M | | Adjusted earnings (loss) after tax & NCI | $0M | $27M | | Less: Preferred stock dividends | $25M | $25M | | **Adjusted earnings (loss)** | **$(25)M** | **$2M** | [Other Information](index=19&type=section&id=Other%20Information) [Change in Market Risk Benefits and Net Derivative Gains (Losses)](index=20&type=section&id=Change%20in%20Market%20Risk%20Benefits%20and%20Net%20Derivative%20Gains%20(Losses)) Q2 2025 experienced a favorable $1.1 billion change in market risk benefits, largely offset by $1.24 billion net derivative losses, driven by market movements and hedging programs for variable annuity and Shield products Market-Related Gains & Losses (Q2 2025) | Item | Amount (Q2 2025) | | :--- | :--- | | Change in market risk benefits | $1,101M | | Net derivative gains (losses) | $(1,237)M | | - Variable annuity hedges | $1,073M | | - Shield embedded derivatives | $(2,103)M | | - ULSG hedges | $(154)M | [Notable Items](index=21&type=section&id=Notable%20Items) No notable items impacted Q2 2025 adjusted earnings, contrasting with a $10 million actuarial adjustment in Q1 2025 - The company reported zero notable items impacting adjusted earnings for the three months ended June 30, 2025[31](index=31&type=chunk) [Variable Annuity Separate Account Returns and Allocations](index=22&type=section&id=Variable%20Annuity%20Separate%20Account%20Returns%20and%20Allocations) Q2 2025 variable annuity separate account gross return was 7.59%, with diversified asset allocation led by balanced (40.6%) and equity (32.5%) funds - Total quarterly VA separate account gross return was **7.59%** for Q2 2025, a strong rebound from (0.54)% in Q1 2025[32](index=32&type=chunk) - Asset allocation in VA separate accounts at the end of Q2 2025 was led by balanced funds (**40.61%**) and equity funds (**32.54%**)[32](index=32&type=chunk) [Summary of Investments](index=23&type=section&id=Summary%20of%20Investments) As of June 30, 2025, the $126.3 billion investment portfolio was mainly fixed maturity securities ($80.8 billion) and mortgage loans ($23.0 billion), yielding an adjusted net investment income of 4.28% Investment Portfolio Composition (June 30, 2025) | Investment Type | Amount | % of Total | | :--- | :--- | :--- | | Fixed maturity securities | $80,835M | 64.01% | | Mortgage loans, net | $22,993M | 18.21% | | Limited partnerships/LLCs | $4,798M | 3.80% | | Cash, cash equivalents & short-term | $6,710M | 5.31% | | Other invested assets | $8,932M | 7.07% | | **Total** | **$126,287M** | **100.00%** | - The adjusted net investment income yield was **4.28%** for Q2 2025, slightly up from 4.25% in Q1 2025 but down from 4.39% in Q2 2024[33](index=33&type=chunk) [Statutory Financial Information](index=24&type=section&id=Statutory%20Financial%20Information) Q2 2025 preliminary statutory results show a $1.6 billion combined net loss, with total adjusted capital at $5.6 billion and a strong 405%-425% risk-based capital ratio [Statutory Statement of Operations Information](index=24&type=section&id=Statutory%20Statement%20of%20Operations%20Information) Preliminary Statutory Results (Q2 2025) | Statutory Item | Q2 2025 (Preliminary) | | :--- | :--- | | Total revenues | $1,500M | | Total benefits and expenses | $2,400M | | Net income (loss) | $(1,600)M | [Statutory Balance Sheet and Surplus Information](index=25&type=section&id=Statutory%20Balance%20Sheet%20and%20Surplus%20Information) Statutory Capital Position (June 30, 2025 Preliminary) | Capital Metric | As of June 30, 2025 | | :--- | :--- | | Total capital and surplus | $4,000M | | Combined total adjusted capital | $5,600M | | Combined risk-based capital ratio | 405%-425% | [Appendix](index=26&type=section&id=Appendix) [Note Regarding Forward-Looking Statements](index=27&type=section&id=Note%20Regarding%20Forward-Looking%20Statements) This section cautions that forward-looking statements involve risks and uncertainties, and actual results may differ materially from projections, with no obligation for updates - The report includes forward-looking statements involving risks and uncertainties, which are not guarantees of future performance[40](index=40&type=chunk)[41](index=41&type=chunk) - Readers are cautioned against relying on these statements and are directed to the company's SEC filings for a more detailed discussion of risk factors[42](index=42&type=chunk) [Non-GAAP and Other Financial Disclosures](index=28&type=section&id=Non-GAAP%20and%20Other%20Financial%20Disclosures) This section defines non-GAAP financial measures, including 'Adjusted Earnings,' used by management to assess performance by excluding market volatility and other distorting items - The company uses non-GAAP measures like 'Adjusted Earnings' to enhance understanding of performance by excluding market volatility[44](index=44&type=chunk)[48](index=48&type=chunk) - Adjusted earnings excludes net investment gains/losses, net derivative gains/losses (with certain adjustments), and changes in market risk benefits from the GAAP calculation[52](index=52&type=chunk) [Reconciliations](index=33&type=section&id=Reconciliations) This section provides detailed tables reconciling non-GAAP financial measures, including adjusted earnings and adjusted return on equity, to their directly comparable GAAP counterparts [Reconciliation of Net Income (Loss) to Adjusted Earnings (Loss)](index=33&type=section&id=Reconciliation%20of%20Net%20Income%20(Loss)%20to%20Adjusted%20Earnings%20(Loss)) - For Q2 2025, Net Income of **$60 million** is reconciled to Adjusted Earnings of **$198 million** primarily by excluding a **$1.1 billion** favorable change in market risk benefits and a **$1.24 billion** unfavorable net derivative loss[73](index=73&type=chunk) [Reconciliation of Return on Common Equity to Adjusted Return on Common Equity, Excluding AOCI](index=34&type=section&id=Reconciliation%20of%20Return%20on%20Common%20Equity%20to%20Adjusted%20Return%20on%20Common%20Equity%2C%20Excluding%20AOCI) - The GAAP Return on Common Equity of **16.5%** for the four quarters ending June 30, 2025, is reconciled to an Adjusted Return on Common Equity, excluding AOCI, of **18.4%** by adjusting for market-related volatility and the impact of AOCI[75](index=75&type=chunk) [Reconciliation of Total Revenues to Adjusted Revenues and Reconciliation of Total Expenses to Adjusted Expenses](index=35&type=section&id=Reconciliation%20of%20Total%20Revenues%20to%20Adjusted%20Revenues%20and%20Reconciliation%20of%20Total%20Expenses%20to%20Adjusted%20Expenses) - For Q2 2025, GAAP Total Revenues of **$871 million** are adjusted to **$2,154 million** by excluding items like net derivative losses. GAAP Total Expenses of **$778 million** are adjusted to **$1,885 million** by excluding the change in market risk benefits[76](index=76&type=chunk) [Investment Reconciliation Details](index=36&type=section&id=Investment%20Reconciliation%20Details) - Provides a breakdown of net investment gains and losses, showing that for Q2 2025, the **$(39) million** total was composed of **$(5) million** in portfolio gains/losses and **$(34) million** in credit loss provisions[77](index=77&type=chunk)

Part I [Consolidated Financial Statements](index=4&type=section&id=Item%201.%20Consolidated%20Financial%20Statements) The consolidated financial statements present Brighthouse Financial's financial position and performance, showing a net loss of **$266 million** in Q1 2025, an improvement from **$491 million** in Q1 2024, with total assets at **$234.7 billion** Consolidated Balance Sheet Highlights (in millions) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Investments** | $117,257 | $117,387 | | **Total Assets** | $234,681 | $238,537 | | **Total Liabilities** | $229,377 | $233,513 | | **Total Equity** | $5,304 | $5,024 | Consolidated Statements of Operations Highlights (in millions) | Account | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | **Total Revenues** | $2,390 | $74 | | **Total Expenses** | $2,744 | $688 | | **Income (loss) before income tax** | $(354) | $(614) | | **Net income (loss)** | $(266) | $(491) | | **Net income (loss) available to common shareholders** | $(294) | $(519) | | **Basic EPS** | $(5.04) | $(8.22) | Consolidated Statements of Cash Flows Highlights (in millions) | Cash Flow Category | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | **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) | [Note 1 — Business, Basis of Presentation and Summary of Significant Accounting Policies](index=8&type=section&id=Note%201%20%E2%80%94%20Business%2C%20Basis%20of%20Presentation%20and%20Summary%20of%20Significant%20Accounting%20Policies) Brighthouse Financial operates through four segments, with Q1 2025 seeing a key accounting policy update for a new fixed income trading portfolio where gains and losses are now reported in net investment income - The company is organized into four reportable segments: Annuities, Life, Run-off, and Corporate & Other[22](index=22&type=chunk) - In Q1 2025, the company established a trading portfolio of fixed maturity securities. Realized and unrealized gains/losses on these securities are now reported in net investment income[27](index=27&type=chunk)[28](index=28&type=chunk) [Note 2 — Segment Information](index=9&type=section&id=Note%202%20%E2%80%94%20Segment%20Information) Segment performance is evaluated using adjusted earnings, which improved to **$235 million** in Q1 2025 from a **$98 million** loss in Q1 2024, with the Annuities segment contributing most to earnings and holding **$160.7 billion** in assets Adjusted Earnings (Loss) by Segment (in millions) | Segment | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Annuities | $314 | $313 | | Life | $9 | $(36) | | Run-off | $(64) | $(341) | | Corporate & Other | $(24) | $(34) | | **Total** | **$235** | **$(98)** | Total Assets by Segment (in millions) | Segment | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Annuities | $160,690 | $163,830 | | Life | $26,147 | $26,261 | | Run-off | $25,034 | $24,873 | | Corporate & Other | $22,810 | $23,573 | | **Total** | **$234,681** | **$238,537** | [Note 3 — Insurance Liabilities](index=14&type=section&id=Note%203%20%E2%80%94%20Insurance%20Liabilities) This note details insurance liabilities, with future policy benefits totaling **$12.4 billion**, policyholder account balances at **$85.6 billion**, and universal life-type contracts with secondary guarantees showing a net liability of **$7.6 billion** Net Liability for Future Policy Benefits (in millions) | Product Type | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Term and Whole Life Insurance | $2,497 | $2,408 | | Income Annuities | $3,779 | $3,687 | | Structured Settlement and Pension Risk Transfer | $6,050 | $6,375 | Policyholder Account Balances (in millions) | Product Type | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Universal Life Insurance | $2,597 | $2,561 | | Variable Annuities | $3,730 | $4,170 | | Index-linked Annuities | $47,896 | $44,350 | | Fixed Rate Annuities | $14,516 | $14,923 | | ULSG | $4,710 | $4,984 | | Company-Owned Life Insurance | $673 | $856 | | **Total in Rollforward** | **$74,122** | **$71,844** | [Note 4 — Market Risk Benefits](index=18&type=section&id=Note%204%20%E2%80%94%20Market%20Risk%20Benefits) Market Risk Benefits, primarily from variable annuities, had a net balance of **$8.22 billion** at Q1 2025, with changes driven by interest rates, fund returns, and nonperformance risk Market Risk Benefits Rollforward (in millions) | Description | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Balance, beginning of period | $7,233 | $9,701 | | Effect of changes in interest rates | $676 | $(988) | | Effect of changes in fund returns | $87 | $(630) | | **Balance, end of period, net of reinsurance** | **$8,221** | **$8,117** | [Note 5 — Separate Accounts](index=18&type=section&id=Note%205%20%E2%80%94%20Separate%20Accounts) Separate account liabilities decreased to **$82.5 billion** at March 31, 2025, primarily due to investment performance and net withdrawals, with variable annuities being the largest component and a net amount at risk of **$13.3 billion** Separate Account Liabilities by Product (in millions) | Product | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Variable Annuities | $73,889 | $81,792 | | Universal Life Insurance | $6,125 | $6,259 | | Company Owned Life Insurance | $2,249 | $2,054 | | **Total in Rollforward** | **$82,263** | **$90,105** | [Note 6 — Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles](index=20&type=section&id=Note%206%20%E2%80%94%20Deferred%20Policy%20Acquisition%20Costs%2C%20Value%20of%20Business%20Acquired%20and%20Other%20Intangibles) The total DAC and VOBA balance was **$4.67 billion** at March 31, 2025, with variable annuities comprising **$2.34 billion**, and Q1 2025 amortization at **$148 million** Total DAC and VOBA by Product (in millions) | Product | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Variable Annuities | $2,344 | $2,554 | | Fixed Rate Annuities | $170 | $171 | | Index-linked Annuities | $1,492 | $1,363 | | Term and Whole Life Insurance | $302 | $347 | | Universal Life Insurance | $364 | $394 | | **Total DAC and VOBA** | **$4,672** | **$4,829** | [Note 7 — Investments](index=21&type=section&id=Note%207%20%E2%80%94%20Investments) The investment portfolio totaled **$117.3 billion** at March 31, 2025, with fixed maturity securities at **$80.6 billion** and net investment income for Q1 2025 at **$1.3 billion**, up from **$1.25 billion** Fixed Maturity Securities by Sector (Fair Value, in millions) | Sector | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | U.S. corporate | $37,543 | $37,123 | | Foreign corporate | $11,629 | $11,830 | | Residential mortgage-backed | $7,588 | $7,287 | | U.S. government and agency | $6,831 | $6,747 | | Commercial mortgage-backed | $6,417 | $6,356 | | **Total Fixed Maturity Securities** | **$80,640** | **$80,055** | Mortgage Loans by Portfolio Segment (Carrying Value, in millions) | Segment | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Commercial | $13,134 | $13,330 | | Agricultural | $4,543 | $4,591 | | Residential | $5,583 | $5,543 | | **Total Mortgage Loans (Gross)** | **$23,260** | **$23,464** | Net Investment Income Components (in millions) | Source | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Fixed maturity securities | $924 | $919 | | Mortgage loans | $257 | $245 | | Limited partnerships and LLCs | $71 | $74 | | **Total Net Investment Income** | **$1,297** | **$1,254** | [Note 8 — Derivatives](index=33&type=section&id=Note%208%20%E2%80%94%20Derivatives) The company uses derivatives to manage market risks, with a total gross notional amount of **$271.4 billion** at March 31, 2025, primarily for economic hedging and not designated as accounting hedges Derivatives by Primary Risk Exposure (Notional Amount, in millions) | Risk Exposure | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Interest rate | $93,169 | $116,736 | | Foreign currency exchange rate | $4,849 | $4,894 | | Credit | $780 | $780 | | Equity market | $164,081 | $146,514 | | **Total** | **$262,879** | **$268,924** | - A substantial portion of the company's derivatives were not designated or did not qualify as part of a formal hedging relationship for accounting purposes[152](index=152&type=chunk) [Note 9 — Fair Value](index=38&type=section&id=Note%209%20%E2%80%94%20Fair%20Value) Total assets measured at fair value on a recurring basis were **$170.3 billion** at March 31, 2025, with **$164.3 billion** in Level 2 and **$2.0 billion** in Level 3, while Level 3 liabilities included **$9.2 billion** in Market Risk Benefits and **$10.0 billion** in embedded derivatives Assets and Liabilities Measured at Fair Value (Recurring, in millions) - March 31, 2025 | Category | Level 1 | Level 2 | Level 3 | Total | | :--- | :--- | :--- | :--- | :--- | | **Assets** | | | | | | Fixed maturity securities | $2,702 | $76,910 | $1,028 | $80,640 | | Derivative assets | $1 | $4,147 | $9 | $4,157 | | Market risk benefit assets | $— | $— | $914 | $914 | | Separate account assets | $3 | $82,521 | $— | $82,524 | | **Total Assets** | **$4,023** | **$164,252** | **$2,005** | **$170,280** | | **Liabilities** | | | | | | Market risk benefit liabilities | $— | $— | $9,165 | $9,165 | | Derivative liabilities | $— | $5,287 | $— | $5,287 | | Embedded derivatives on index-linked annuities | $— | $— | $9,963 | $9,963 | | **Total Liabilities** | **$—** | **$5,287** | **$19,128** | **$24,415** | [Note 10 — Equity](index=47&type=section&id=Note%2010%20%E2%80%94%20Equity) The company's equity includes **$1.75 billion** in preferred stock, and in Q1 2025, **1.06 million** common shares were repurchased for **$59 million**, with **$484 million** remaining under the repurchase authorization - During Q1 2025, BHF repurchased **1,062,596** shares of its common stock for **$59 million**[224](index=224&type=chunk) - At March 31, 2025, **$484 million** remained available under the company's common stock repurchase program[224](index=224&type=chunk) - Quarterly dividends declared on preferred stock totaled **$26 million** for both Q1 2025 and Q1 2024[223](index=223&type=chunk) [Note 11 — Other Revenues and Other Expenses](index=49&type=section&id=Note%2011%20%E2%80%94%20Other%20Revenues%20and%20Other%20Expenses) Other revenues for Q1 2025 were **$136 million**, primarily from **$65 million** in 12b-1 fees, while total other expenses were **$493 million**, driven by volume-related costs, compensation, and separate account fees - 12b-1 fees, included in other revenues, were **$65 million** for Q1 2025, compared to **$67 million** for Q1 2024[233](index=233&type=chunk) Other Expenses Breakdown (in millions) | Expense Category | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Compensation | $130 | $111 | | Contracted services and other labor costs | $72 | $63 | | Separate account fees | $83 | $92 | | Volume related costs, net of DAC | $132 | $147 | | Interest expense on debt | $38 | $38 | | **Total other expenses** | **$493** | **$507** | [Note 12 — Earnings Per Common Share](index=50&type=section&id=Note%2012%20%E2%80%94%20Earnings%20Per%20Common%20Share) Brighthouse Financial reported a basic and diluted loss per common share of **$5.04** for Q1 2025, an improvement from **$8.22** in Q1 2024, based on a net loss of **$294 million** and **58.3 million** weighted average shares Earnings Per Common Share Calculation | Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net loss available to common shareholders (millions) | $(294) | $(519) | | Weighted average common shares outstanding (millions) | 58.3 | 63.0 | | **Basic and Diluted EPS** | **$(5.04)** | **$(8.22)** | [Note 13 — Contingencies, Commitments and Guarantees](index=51&type=section&id=Note%2013%20%E2%80%94%20Contingencies%2C%20Commitments%20and%20Guarantees) The company faces litigation with possible losses up to **$10 million** and tax-related contingencies up to **$100 million**, alongside **$1.8 billion** in commitments to lend funds and fund partnerships - The company estimates the aggregate range of reasonably possible losses for certain litigation matters to be up to approximately **$10 million** as of March 31, 2025[243](index=243&type=chunk) - For certain tax matters, the company estimates the range of reasonably possible losses in excess of accrued amounts to be from zero up to approximately **$100 million**[254](index=254&type=chunk) - Commitments to fund partnership investments, bank credit facilities, and private corporate bond investments totaled **$1.6 billion**, and mortgage loan commitments were **$249 million** at March 31, 2025[256](index=256&type=chunk)[257](index=257&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=55&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's discussion highlights a Q1 2025 net loss of **$294 million** but positive adjusted earnings of **$235 million**, detailing operational results, investment performance, derivative strategies, policyholder liabilities, and the company's strong liquidity and capital position [Executive Summary](index=56&type=section&id=Executive%20Summary) Brighthouse Financial reported a Q1 2025 net loss of **$294 million**, an improvement from **$519 million** in Q1 2024, while generating positive adjusted earnings of **$235 million**, a significant turnaround from a **$98 million** adjusted loss Q1 2025 vs Q1 2024 Performance (in millions) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income (loss) available to shareholders | $(294) | $(519) | | Adjusted earnings (loss) | $235 | $(98) | [Industry Trends and Uncertainties](index=57&type=section&id=Industry%20Trends%20and%20Uncertainties) The company's performance is significantly influenced by capital markets, interest rates, and economic conditions, with ongoing monitoring of inflation, geopolitical conflicts, and commercial real estate market stress - The business is materially affected by equity market performance, interest rates, and the general health of the U.S. economy[272](index=272&type=chunk) - The Federal Reserve's rate decreases in late 2024 may negatively impact the investment portfolio by lowering long-term interest rates[272](index=272&type=chunk) - The company continues to monitor risks from global inflation, geopolitical conflicts, and instability in asset classes like commercial real estate[276](index=276&type=chunk) [Non-GAAP Financial Disclosures](index=59&type=section&id=Non-GAAP%20Financial%20Disclosures) This section defines 'Adjusted Earnings' as a non-GAAP measure, excluding market volatility impacts like net investment gains/losses and changes in Market Risk Benefits, to highlight core business profitability - Adjusted earnings excludes the impact of market volatility to focus on the primary business drivers[284](index=284&type=chunk) - Items excluded from adjusted earnings include: Net investment gains/losses, most net derivative gains/losses, and changes in market risk benefits[285](index=285&type=chunk) [Results of Operations](index=61&type=section&id=Results%20of%20Operations) Net loss available to shareholders improved to **$294 million** in Q1 2025 from **$519 million** in Q1 2024, driven by increased pre-tax adjusted earnings of **$287 million** and favorable derivative movements, with segment performance showing Annuities at **$314 million** and Run-off loss narrowing to **$64 million** Reconciliation of Net Income (Loss) to Adjusted Earnings (Loss) (in millions) | Description | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Net income (loss) available to shareholders** | **$(294)** | **$(519)** | | Add: Provision for income tax expense (benefit) | (88) | (123) | | Less: Net investment gains (losses) | (83) | (42) | | Less: Net derivative gains (losses), excluding investment hedge adjustments | 311 | (1,934) | | Less: Change in market risk benefits | (893) | 1,440 | | Less: Other adjustments | (4) | 4 | | **Pre-tax adjusted earnings (loss), adjusted** | **287** | **(110)** | | Less: Provision for income tax expense (benefit) | 52 | (12) | | **Adjusted earnings (loss)** | **$235** | **$(98)** | - The improvement in results was driven by higher pre-tax adjusted earnings and favorable impacts from interest rate derivatives hedging the ULSG business[295](index=295&type=chunk) - The Run-off segment's adjusted loss narrowed significantly to **$64 million** from **$341 million**, primarily due to lower insurance-related costs following a reinsurance arbitration conclusion in the prior period[311](index=311&type=chunk)[312](index=312&type=chunk) [Investments](index=69&type=section&id=Investments) The investment portfolio's adjusted net investment income yield remained stable at **4.25%**, with the **$80.6 billion** fixed maturity securities portfolio being **97.3%** investment grade, and the **$13.1 billion** commercial mortgage loan portfolio diversified across property types Adjusted Net Investment Income and Yield | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Adjusted Net Investment Income (millions) | $1,291 | $1,267 | | Yield % | 4.25% | 4.25% | - At March 31, 2025, **97.3%** of the fixed maturity securities portfolio was rated investment grade (NAIC 1 or 2), consistent with year-end 2024[337](index=337&type=chunk) - The commercial mortgage loan portfolio's largest property type exposures are Apartment (**38.3%**) and Office (**22.9%**) as of March 31, 2025[350](index=350&type=chunk) [Derivatives](index=79&type=section&id=Derivatives) Brighthouse uses various derivative instruments to manage interest rate, foreign currency, credit, and equity market risks, primarily for economic hedging of insurance liabilities and market risk benefits, with counterparty risk managed through netting and collateral arrangements - The company uses derivatives to manage interest rate, foreign currency exchange rate, credit, and equity market risks[358](index=358&type=chunk) - The company writes credit default swaps in replication transactions to synthetically create corporate bond exposures, which is an important tool for managing overall corporate credit risk and ALM needs[365](index=365&type=chunk) [Policyholder Liabilities](index=80&type=section&id=Policyholder%20Liabilities) This section details major policyholder liabilities, including future policy benefits, policyholder account balances, and Market Risk Benefits (MRBs), with the Net Amount at Risk for living benefits at **$5.8 billion** as of March 31, 2025 Variable Annuity Net Amount at Risk (NAR) by Benefit Type (in millions) | Benefit Type | Account Value | Death Benefit NAR | Living Benefit NAR | | :--- | :--- | :--- | :--- | | GMIB | $29,023 | $3,857 | $4,267 | | GMWB | $18,379 | $320 | $319 | | GMAB | $255 | $1 | $1 | | **Total (Selected)** | **$47,657** | **$4,178** | **$4,587** | Variable Annuity MRB Liabilities by Benefit Type (in millions) | Benefit Type | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | GMIB | $8,322 | $7,560 | | GMWB | $13 | $7 | | GMDB | $800 | $740 | | **Total** | **$9,135** | **$8,307** | [Liquidity and Capital Resources](index=82&type=section&id=Liquidity%20and%20Capital%20Resources) Brighthouse maintains a strong liquidity position with **$4.7 billion** in short-term liquidity and **$48.0 billion** in total liquid assets, targeting a combined RBC ratio of **400% to 450%**, and utilized capital for **$59 million** in share repurchases and **$26 million** in preferred stock dividends in Q1 2025 - The company maintained a short-term liquidity position of **$4.7 billion** and total liquid assets of **$48.0 billion** at March 31, 2025[383](index=383&type=chunk)[384](index=384&type=chunk) - The parent company, BHF, held short-term liquidity of **$872 million** at March 31, 2025[423](index=423&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) - In Q1 2025, the company used **$59 million** to repurchase common stock and paid **$26 million** in preferred stock dividends[392](index=392&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 risks from interest rates, equity prices, credit spreads, and foreign currency, with no material changes to these exposures from the 2024 Annual Report - There have been no material changes to the company's market risk exposures from those previously disclosed in the 2024 Annual Report[437](index=437&type=chunk) [Controls and Procedures](index=92&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of March 31, 2025, noting ongoing changes related to the MetLife transition as material to internal control over financial reporting - The CEO and CFO concluded that disclosure controls and procedures were effective as of March 31, 2025[439](index=439&type=chunk) - Ongoing changes related to the separation from MetLife, including process changes and new systems, are considered material changes to internal control over financial reporting[440](index=440&type=chunk) Part II — Other Information [Legal Proceedings](index=92&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 13 for details on legal proceedings, including class actions and a data security incident, with estimated possible losses up to **$10 million** for certain matters - For detailed information on legal proceedings, refer to Note 13 of the Notes to the Interim Condensed Consolidated Financial Statements[442](index=442&type=chunk) [Risk Factors](index=92&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the company's risk factors from those disclosed in its 2024 Annual Report - There have been no material changes to the risk factors previously disclosed in the company's 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) In Q1 2025, Brighthouse Financial repurchased **1,062,596** common shares, with approximately **$484 million** remaining under the stock repurchase authorization as of March 31, 2025 Issuer Purchases of Equity Securities (Q1 2025) | 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** | **1,062,596** | **-** | - As of March 31, 2025, approximately **$484 million** remained available for repurchase under the company's stock buyback program[444](index=444&type=chunk) [Other Information](index=92&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q1 2025 - No directors or officers adopted or terminated a Rule 10b5-1 trading plan during Q1 2025[445](index=445&type=chunk) [Exhibits](index=93&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications and Inline XBRL documents - Exhibits filed include CEO/CFO certifications and XBRL data files[447](index=447&type=chunk)

Exhibit 99.2 Brighthouse Financial, Inc. Financial Supplement First Quarter 2025 Financial Results Earnings and Select Metrics from Segments Other Information Appendix Note: See the Appendix for non-GAAP financial information, definitions and reconciliations. Financial information, unless otherwise noted, is rounded to millions. Some financial information, therefore, may not sum to the corresponding total. As used in this financial supplement, "Brighthouse Financial," "Brighthouse," the "Company," "we," "ou ...

Exhibit 99.2 Brighthouse Financial, Inc. Financial Supplement Fourth Quarter 2024 Financial Results Earnings and Select Metrics from Segments Other Information Appendix Note: See the Appendix for non-GAAP financial information, definitions and reconciliations. Financial information, unless otherwise noted, is rounded to millions. Some financial information, therefore, may not sum to the corresponding total. As used in this financial supplement, "Brighthouse Financial," "Brighthouse," the "Company," "we," "o ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2024 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___ to ___ Commission File Number: 001-37905 Brighthouse Financial, Inc. (Exact name of registrant as specified in its charter) Delaware 81-3846992 (State or other j ...

[Financial Results](index=3&type=section&id=Financial%20Results) [Key Metrics](index=4&type=section&id=Key%20Metrics) Brighthouse Financial reported a net income of $150 million in Q3 2024, a significant improvement from prior losses, with robust adjusted earnings of $767 million including notable items, and a strong risk-based capital ratio | Financial Metric | Q3 2024 | Q2 2024 | Q3 2023 | | :--- | :--- | :--- | :--- | | Net income (loss) available to shareholders | $150M | $9M | $453M | | Adjusted earnings (loss) | $767M | $346M | $326M | | Adjusted earnings, less notable items | $243M | $346M | $275M | | Net income (loss) per common share | $2.47 | $0.12 | $6.89 | | Adjusted earnings (loss) per common share | $12.58 | $5.57 | $4.97 | | Book value per common share, excluding AOCI | $132.91 | $128.36 | $146.61 | | Combined risk-based capital ratio | 365%-385% | 380%-400% | 400%-420% | [GAAP Statements of Operations](index=5&type=section&id=GAAP%20Statements%20of%20Operations) Total revenues for Q3 2024 increased to $2.0 billion from $1.2 billion in Q3 2023, primarily due to reduced net derivative losses and a positive change in market risk benefits, resulting in a net income of $178 million | (in millions) | Q3 2024 | Q3 2023 | | :--- | :--- | :--- | | Total revenues | $2,018 | $1,170 | | Premiums | $180 | $194 | | Net investment income | $1,288 | $1,202 | | Net derivative gains (losses) | $(93) | $(840) | | Total expenses | $1,830 | $580 | | Change in market risk benefits | $(610) | $1,064 | | Income (loss) before income tax | $188 | $590 | | Net income (loss) | $178 | $481 | | Net income (loss) available to common shareholders | $150 | $453 | [GAAP Balance Sheets](index=6&type=section&id=GAAP%20Balance%20Sheets) As of September 30, 2024, total assets increased to $245.2 billion, with total investments reaching $118.9 billion, while total stockholders' equity grew to $5.5 billion due to a significant reduction in accumulated other comprehensive loss | (in millions) | Sept 30, 2024 | Sept 30, 2023 | | :--- | :--- | :--- | | Total investments | $118,854 | $108,660 | | Total assets | $245,156 | $223,516 | | Total liabilities | $239,566 | $219,382 | | Total Brighthouse Financial, Inc.'s stockholders' equity | $5,525 | $4,069 | | Accumulated other comprehensive income (loss) | $(4,127) | $(7,116) | [Earnings and Select Metrics from Segments and Corporate & Other](index=7&type=section&id=Earnings%20and%20Select%20Metrics%20from%20Segments%20and%20Corporate%20%26%20Other) [Statements of Adjusted Earnings by Segment and Corporate & Other](index=8&type=section&id=Statements%20of%20Adjusted%20Earnings%20by%20Segment%20and%20Corporate%20%26%20Other) Total adjusted earnings for Q3 2024 reached $767 million, primarily driven by a $463 million contribution from the Run-off segment due to favorable actuarial adjustments, while Annuities provided $327 million | Adjusted Earnings (in millions) | Q3 2024 | Q3 2023 | | :--- | :--- | :--- | | Annuities | $327 | $319 | | Life | $(25) | $(73) | | Run-off | $463 | $95 | | Corporate & Other | $2 | $(15) | | **Total** | **$767** | **$326** | [Annuities](index=10&type=section&id=Annuities) The Annuities segment reported adjusted earnings of $327 million in Q3 2024, a slight increase from the prior year, supported by higher net investment income and strong total annuity sales exceeding $2.5 billion, despite net outflows in variable and Shield Level annuities | Annuities - Key Metrics (in millions) | Q3 2024 | Q3 2023 | | :--- | :--- | :--- | | Adjusted earnings | $327 | $319 | | Total adjusted revenues | $1,314 | $1,214 | | Variable & Shield Annuities Net Flows | $(1,980) | $(1,052) | | Fixed Annuities Net Flows | $57 | $(213) | | Total Variable & Shield Annuity Sales | $2,031 | $2,018 | - Variable and Shield Level Annuities account value grew to **$128.2 billion** at the end of Q3 2024, up from $112.8 billion a year ago, primarily due to positive investment performance[21](index=21&type=chunk) [Life](index=13&type=section&id=Life) The Life segment's adjusted loss significantly improved to $25 million in Q3 2024 from $73 million in Q3 2023, driven by lower policyholder benefits and claims, while total life sales increased to $30 million | Life - Key Metrics (in millions) | Q3 2024 | Q3 2023 | | :--- | :--- | :--- | | Adjusted earnings (loss) | $(25) | $(73) | | Total adjusted revenues | $303 | $299 | | Policyholder benefits and claims | $247 | $302 | | Total life sales | $30 | $25 | - Term Life insurance in-force, net of reinsurance, decreased to **$280.7 billion** as of September 30, 2024, from $286.4 billion a year prior, reflecting the run-off nature of this block[27](index=27&type=chunk) [Run-off](index=16&type=section&id=Run-off) The Run-off segment reported substantial adjusted earnings of $463 million in Q3 2024, a significant increase from $95 million in Q3 2023, primarily due to a large favorable actuarial adjustment in policyholder benefits and claims | Run-off - Key Metrics (in millions) | Q3 2024 | Q3 2023 | | :--- | :--- | :--- | | Adjusted earnings (loss) | $463 | $95 | | Total adjusted revenues | $377 | $413 | | Policyholder benefits and claims | $(313) | $183 | | ULSG Account Value, end of period | $4,848 | $5,125 | [Corporate & Other](index=18&type=section&id=Corporate%20%26%20Other) The Corporate & Other segment achieved adjusted earnings of $2 million in Q3 2024, improving from a $15 million loss in the prior year, driven by higher net investment income and stable expenses, with institutional spread margin business account balance growing to $11.0 billion | Corporate & Other - Key Metrics (in millions) | Q3 2024 | Q3 2023 | | :--- | :--- | :--- | | Adjusted earnings (loss) | $2 | $(15) | | Net investment income | $178 | $160 | | Total adjusted expenses | $170 | $153 | | Institutional spread margin business account balance | $11,033 | $10,525 | [Other Information](index=19&type=section&id=Other%20Information) [Change in Market Risk Benefits and Net Derivative Gains (Losses)](index=20&type=section&id=Change%20in%20Market%20Risk%20Benefits%20and%20Net%20Derivative%20Gains%20(Losses)) In Q3 2024, the company recorded a $610 million favorable change in market risk benefits and a net derivative loss of $93 million, reflecting market impacts on liabilities and hedging activities | (in millions) | Q3 2024 | Q3 2023 | | :--- | :--- | :--- | | Total change in market risk benefits | $(610) | $1,064 | | Total net derivative gains (losses) | $(93) | $(840) | [Notable Items](index=21&type=section&id=Notable%20Items) Adjusted earnings for Q3 2024 included a net favorable impact of $524 million from notable items, primarily driven by a $570 million favorable actuarial adjustment in the Run-off segment | Notable Items by Segment (in millions) | Q3 2024 | | :--- | :--- | | Annuities | $(20) | | Life | $66 | | Run-off | $(570) | | Corporate & Other | $— | | **Total notable items** | **$(524)** | [Summary of Investments](index=23&type=section&id=Summary%20of%20Investments) As of September 30, 2024, the total investment portfolio, including cash, was $124.5 billion, predominantly comprising fixed maturity securities and mortgage loans, with an adjusted net investment income yield of 4.26% - The investment portfolio is primarily composed of **fixed maturity securities (66.9%)** and **mortgage loans (18.4%)**[35](index=35&type=chunk) - The adjusted net investment income yield was **4.26%** for Q3 2024, slightly higher than the 4.20% in Q3 2023[35](index=35&type=chunk) [Statutory Information](index=24&type=section&id=Statutory%20Information) On a preliminary statutory basis for Q3 2024, the combined entities reported a net loss of $300 million, with total adjusted capital of $5.7 billion and a strong combined risk-based capital ratio estimated between 365%-385% | Statutory Metric | As of Sept 30, 2024 (Preliminary) | | :--- | :--- | | Combined net income (loss) (Q3) | $(300)M | | Combined total adjusted capital | $5,700M | | Combined risk-based capital ratio | 365%-385% | | Dividends paid to holding company (Q3) | $— | [Appendix](index=26&type=section&id=Appendix) [Non-GAAP and Other Financial Disclosures](index=28&type=section&id=Non-GAAP%20and%20Other%20Financial%20Disclosures) This section defines non-GAAP financial measures like adjusted earnings, adjusted revenues, and adjusted expenses, explaining how they enhance understanding by excluding market volatility and other items to highlight underlying business profitability - Adjusted earnings is a key non-GAAP measure that excludes the impact of market volatility by removing net investment gains/losses, net derivative gains/losses (with certain adjustments), and changes in market risk benefits from GAAP results[51](index=51&type=chunk)[62](index=62&type=chunk) - Notable items are also presented, which reflect the after-tax impact of certain unanticipated or significant events to help investors better evaluate and forecast results[64](index=64&type=chunk) [Reconciliations](index=33&type=section&id=Reconciliations) This section provides detailed tables reconciling GAAP financial measures to non-GAAP measures, including Net Income to Adjusted Earnings, Return on Common Equity to Adjusted Return on Common Equity, and Total Revenues and Expenses to their adjusted counterparts | Reconciliation to Adjusted Earnings (Q3 2024, in millions) | Amount | | :--- | :--- | | **Net income (loss) available to shareholders** | **$150** | | Less: Net investment gains (losses) | $(60) | | Less: Net derivative gains (losses), excluding investment hedge adjustments | $(99) | | Less: Change in market risk benefits | $(610) | | Less: Market value adjustments | $(11) | | Less: Provision for income tax (expense) benefit on reconciling adjustments | $163 | | **Adjusted earnings (loss)** | **$767** |

Part I — Financial Information This section presents the company's consolidated financial statements and management's analysis of its financial condition and operations [Item 1. Consolidated Financial Statements](index=4&type=section&id=Item%201.%20Consolidated%20Financial%20Statements) This section presents Brighthouse Financial, Inc.'s unaudited interim consolidated financial statements and explanatory notes [Interim Condensed Consolidated Balance Sheets](index=4&type=section&id=Interim%20Condensed%20Consolidated%20Balance%20Sheets) Consolidated Balance Sheet Summary (in millions) | Account | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | **Total Assets** | **$237,438** | **$236,340** | | Total Investments | $115,299 | $115,456 | | Separate Account Assets | $88,260 | $88,271 | | **Total Liabilities** | **$233,232** | **$231,332** | | Policyholder Account Balances | $85,865 | $81,068 | | Separate Account Liabilities | $88,260 | $88,271 | | **Total Equity** | **$4,206** | **$5,008** | - Total assets increased slightly to **$237.4 billion** as of June 30, 2024, from **$236.3 billion** at year-end 2023. However, total equity decreased significantly to **$4.2 billion** from **$5.0 billion**, primarily due to a retained deficit increase and treasury stock purchases[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)) Consolidated Statements of Operations Summary (in millions, except per share data) | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $1,427 | $263 | $1,501 | $1,547 | | Total Expenses | $1,413 | $500 | $2,101 | $2,437 | | Net Income (Loss) | $34 | $(175) | $(457) | $(672) | | Net Income (Loss) Available to Common Shareholders | $9 | $(200) | $(510) | $(725) | | Diluted EPS | $0.12 | $(3.01) | $(8.17) | $(10.77) | - The company reported net income available to common shareholders of **$9 million** for Q2 2024, a significant improvement from a net loss of **$200 million** in Q2 2023. The improvement was largely driven by lower net derivative losses and a positive change in market risk benefits[11](index=11&type=chunk) [Interim Condensed Consolidated Statements of Equity](index=6&type=section&id=Interim%20Condensed%20Consolidated%20Statements%20of%20Equity) - Total equity decreased from **$5,008 million** at December 31, 2023, to **$4,206 million** at June 30, 2024. The decrease was primarily driven by a net loss of **$459 million** and treasury stock repurchases totaling **$126 million** during the six-month period[15](index=15&type=chunk) [Interim Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Interim%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Consolidated Statements of Cash Flows Summary (in millions) | Cash Flow Activity | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $(196) | $(628) | | Net cash provided by (used in) investing activities | $(1,707) | $(1,659) | | Net cash provided by (used in) financing activities | $2,493 | $1,909 | | **Change in cash, cash equivalents and restricted cash** | **$590** | **$(378)** | - For the first six months of 2024, the company saw a net increase in cash of **$590 million**, a reversal from a **$378 million** decrease in the same period of 2023. This was driven by strong net cash from financing activities, which included **$20.6 billion** in policyholder deposits, offsetting cash used in operating and investing activities[17](index=17&type=chunk) [Notes to the Interim Condensed Consolidated Financial Statements (Unaudited)](index=8&type=section&id=Notes%20to%20the%20Interim%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) - Brighthouse Financial is a major U.S. provider of annuity and life insurance products, organized into three segments: Annuities, Life, and Run-off, in addition to a Corporate & Other category[21](index=21&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[22](index=22&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=56&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations [Executive Summary](index=57&type=section&id=Executive%20Summary) Financial Highlights (in millions) | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | :--- | :--- | | Net Income (Loss) Available to Shareholders | $9 | $(200) | $(510) | $(725) | | Adjusted Earnings (Loss) | $346 | $271 | $248 | $466 | - For Q2 2024, the company reported net income of **$9 million** and adjusted earnings of **$346 million**. The net income for the quarter was primarily driven by favorable pre-tax adjusted earnings, which was partially offset by unfavorable market impacts on variable annuity guarantees and derivatives[264](index=264&type=chunk) [Industry Trends and Uncertainties](index=58&type=section&id=Industry%20Trends%20and%20Uncertainties) - 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 policy has contributed to unrealized losses in the investment portfolio[269](index=269&type=chunk)[270](index=270&type=chunk) - Regulatory developments, particularly the Department of Labor's (DOL) Fiduciary Advice Rule issued in April 2024, are being monitored. The implementation of this rule has been stayed by federal court decisions in July 2024, but these rulings are subject to appeal[273](index=273&type=chunk)[274](index=274&type=chunk) [Results of Operations](index=61&type=section&id=Results%20of%20Operations) Adjusted Earnings by Segment (in millions) | Segment | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | :--- | :--- | | Annuities | $332 | $291 | $645 | $605 | | Life | $42 | $15 | $6 | $16 | | Run-off | $(30) | $(16) | $(371) | $(122) | | Corporate & Other | $2 | $(19) | $(32) | $(33) | | **Total Adjusted Earnings** | **$346** | **$271** | **$248** | **$466** | - Consolidated adjusted earnings increased by **$75 million** in Q2 2024 compared to Q2 2023, driven by higher net investment spread and lower other expenses. For the first six months of 2024, adjusted earnings decreased by **$218 million**, primarily due to higher costs in the Run-off segment related to a reinsurance arbitration[296](index=296&type=chunk)[298](index=298&type=chunk) [Investments](index=74&type=section&id=Investments) - The company manages investment risk through diversification by asset type, industry, and issuer. The investment portfolio is primarily managed by external asset managers[328](index=328&type=chunk)[329](index=329&type=chunk) Fixed Maturity Securities Credit Quality (by NAIC Designation, Estimated Fair Value) | NAIC Designation | June 30, 2024 | % of Total | December 31, 2023 | % of Total | | :--- | :--- | :--- | :--- | :--- | | 1 (Highest Quality) | $53,131M | 65.9% | $53,353M | 65.8% | | 2 (High Quality) | $25,179M | 31.2% | $25,236M | 31.2% | | **Subtotal Investment Grade** | **$78,310M** | **97.1%** | **$78,589M** | **97.0%** | | Below Investment Grade | $2,271M | 2.9% | $2,402M | 3.0% | - The commercial mortgage loan portfolio, totaling **$13.1 billion**, is diversified by property type, with Apartment (**40.0%**) and Office (**23.6%**) being the largest exposures[360](index=360&type=chunk) [Derivatives](index=83&type=section&id=Derivatives) - The company uses a variety of derivative instruments to manage interest rate, foreign currency, credit, and equity market risks. At June 30, 2024, the total gross notional amount of derivatives was **$197.7 billion**[368](index=368&type=chunk)[143](index=143&type=chunk) - The company writes credit default swaps as part of replication transactions to synthetically create corporate bond exposures, which helps in managing overall corporate credit risk and matching long-dated insurance liabilities[375](index=375&type=chunk) [Policyholder Liabilities](index=84&type=section&id=Policyholder%20Liabilities) Variable Annuity Net Amount at Risk (NAR) by Benefit Type (in millions) | Benefit Type | Account Value (June 30, 2024) | Death Benefit NAR (June 30, 2024) | Living Benefit NAR (June 30, 2024) | | :--- | :--- | :--- | :--- | | GMIB | $31,522 | $3,727 | $3,718 | | GMWB | $19,749 | $314 | $234 | | GMDB only | $17,172 | $973 | N/A | | **Total (All Types)** | **$83,566** | **$12,642** | **$4,703** | - Variable annuity guaranteed benefits are classified as Market Risk Benefits (MRBs) and measured at fair value. The total liability for these benefits was **$8.7 billion** as of June 30, 2024, down from **$10.3 billion** at year-end 2023[389](index=389&type=chunk) [Liquidity and Capital Resources](index=87&type=section&id=Liquidity%20and%20Capital%20Resources) - The company maintains a substantial short-term liquidity position of **$4.3 billion** and total liquid assets of **$48.5 billion** as of June 30, 2024[396](index=396&type=chunk)[397](index=397&type=chunk) - The parent holding company, BHF, is largely dependent on cash flows from its insurance subsidiaries. BHF held **$1.2 billion** in short-term liquidity and liquid assets as of June 30, 2024[436](index=436&type=chunk)[437](index=437&type=chunk)[438](index=438&type=chunk) - During the first six months of 2024, the company repurchased **$126 million** of its common stock. As of June 30, 2024, **$667 million** remained under the common stock repurchase authorization[216](index=216&type=chunk)[404](index=404&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=96&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section addresses the company's exposure to market risks, including changes in interest rates, equity market prices, credit spreads, and foreign currency exchange rates - The company has determined that there have been no material changes to its market risk exposures from those previously disclosed in its 2023 Annual Report on Form 10-K[451](index=451&type=chunk) [Item 4. Controls and Procedures](index=97&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 June 30, 2024 - Based on an evaluation as of the end of the period, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2024[453](index=453&type=chunk) - The company identified ongoing changes in business processes, system implementations, and new third-party arrangements related to transitional services from MetLife as material changes in its internal control over financial reporting[454](index=454&type=chunk) Part II — Other Information This section covers legal proceedings, risk factors, equity sales, and other key disclosures [Item 1. Legal Proceedings](index=97&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 13 of the financial statements for details on legal proceedings - For information regarding legal proceedings, the report refers to Note 13 of the Notes to the Interim Condensed Consolidated Financial Statements[456](index=456&type=chunk) [Item 1A. Risk Factors](index=97&type=section&id=Item%201A.%20Risk%20Factors) The company states that there have been no material changes to its risk factors from those disclosed in its 2023 Annual Report on Form 10-K - There have been no material changes to the company's risk factors from those previously disclosed in the 2023 Annual Report[457](index=457&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=97&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's common stock repurchases during the second quarter of 2024 Issuer Purchases of Equity Securities (Q2 2024) | Period | Total Shares Purchased | Average Price Paid per Share | Dollar Value Remaining for Purchase (End of Period) | | :--- | :--- | :--- | :--- | | April 2024 | 444,121 | $49.51 | $709M | | May 2024 | 515,699 | $46.08 | $686M | | June 2024 | 426,910 | $42.76 | $667M | | **Total Q2** | **1,386,730** | **N/A** | **$667M** | [Item 5. Other Information](index=97&type=section&id=Item%205.%20Other%20Information) This section reports on director and officer trading plans - During the three months ended June 30, 2024, 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[459](index=459&type=chunk) [Item 6. Exhibits](index=98&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications and XBRL data files - The exhibits filed with this report include CEO and CFO certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002, and Inline XBRL documents[461](index=461&type=chunk)