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 the previous year[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]. - Adjusted earnings for the three months ended September 30, 2025, were $970 million, an increase of $203 million compared to the same period in 2024[335]. Merger and Corporate Actions - The company entered into a Merger Agreement on November 6, 2025, with Aquarian Holdings VI L.P., which will result in shareholders receiving $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]. - BHF entered into a Merger Agreement on November 6, 2025, which restricts dividend payments and stock repurchases during the interim period[437]. - The company authorized a $750 million share repurchase program in November 2023, subject to various market and regulatory conditions[436]. Tax and Regulatory Environment - 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 affect its financial condition[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 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 and Portfolio Management - The Federal Reserve's recent rate cuts may negatively impact the company's investment portfolio and profitability for variable annuities[295]. - The company continues to monitor economic conditions, including inflation and geopolitical conflicts, which could affect market volatility and business operations[296]. - Adjusted net investment income is used to measure performance, representing GAAP net investment income plus Investment Hedge Adjustments less investment gains on trading securities[314]. - Adjusted net investment income yield is calculated as adjusted net investment income as a percentage of average quarterly asset carrying values[315]. - Investment income for the three months ended September 30, 2025, was $1,366 million with a yield of 4.54%, compared to $1,332 million and 4.40% for the same period in 2024[373]. - Adjusted net investment income for the nine months ended September 30, 2025, was $3,910 million, reflecting a yield of 4.31% compared to $3,877 million and 4.30% in 2024[373]. - The company has engaged external asset management firms to manage certain assets, indicating a diversified investment strategy[364]. Risk Management and Liquidity - The company has established a stand-alone hedging program for its variable annuity and first generation Shield Annuity contracts to manage associated risks[403]. - 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 company has a secured funding agreement program with the Federal Home Loan Bank, allowing for additional liquidity[450]. Segment Performance - Adjusted earnings for the Annuities segment for the nine months ended September 30, 2025, were $950 million, a decrease of $22 million compared to the same period in 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]. - Adjusted earnings for the Corporate & Other segment were a loss of $15 million for the three months ended September 30, 2025, a decrease of $17 million compared to the same period in 2024[356]. Market Conditions and Economic Impact - The company experienced lower net costs associated with insurance-related activities due to a net decrease in liability balances[338]. - The Federal Reserve decreased the target range for the federal funds rate from 4.25%-4.50% to 4.00%-4.25% on September 17, 2025, and further to 3.75%-4.00% on October 29, 2025[365]. - As of September 30, 2025, unrealized losses on fixed maturity securities exceeded unrealized gains due to interest rate increases[365]. - The company does not expect its general account investments in current sectors to materially adversely affect its financial condition or results of operations[371].

Merger Agreement - The merger agreement states that each issued and outstanding share will be converted into the right to receive $70.00 per share in cash[16]. - The Board of Directors of Brighthouse Financial has unanimously approved the merger agreement, determining it to be fair and in the best interests of the company and its stockholders[16]. - The merger will result in Brighthouse Financial becoming a wholly owned subsidiary of Aquarian Holdings[16]. - The merger is subject to the satisfaction of various conditions outlined in the agreement, including stockholder approval[16]. - The agreement includes provisions for the treatment of dissenting shares and the rights of stockholders[16]. - The merger is expected to enhance the financial position and operational capabilities of the combined entity[16]. - The agreement outlines the corporate governance structure of the surviving corporation post-merger[16]. - The merger is anticipated to close following the fulfillment of regulatory and stockholder approvals[16]. - The effective time of the merger will be when the Certificate of Merger is filed with the Secretary of State of Delaware[112]. - The Surviving Corporation will possess all property, rights, privileges, and powers of both the Company and Merger Sub[113]. - The closing of the merger is scheduled to occur on the sixth business day after the last condition is satisfied or waived[114]. - The certificate of incorporation of the Company will be amended and restated at the effective time[115]. - The bylaws of the Company will be amended to reflect the bylaws of Merger Sub at the effective time[116]. - The initial directors of the Surviving Corporation will be the directors of Merger Sub immediately prior to the effective time[117]. - Each outstanding share will be converted into the right to receive $70.00 per share in cash as part of the merger consideration[119]. - All shares converted into the right to receive the merger consideration will automatically be canceled and retired[120]. - The merger consideration will be adjusted for any changes in the outstanding shares prior to the effective time[121]. - Excluded shares owned by Parent, Merger Sub, or the Company will be canceled without consideration[122]. - Each stock option will be deemed fully vested and converted into a cash payment equal to the excess of the merger consideration over the exercise price[127]. - The Company ESPP will be suspended, and no new participants will be allowed after the agreement date[129]. - Payments for equity awards will be made without interest and less any required deductions within five business days after the effective time[130]. - Dissenting shares will not convert into the merger consideration unless appraisal rights are waived[132]. - The payment fund will be established to ensure sufficient cash is available for the aggregate merger consideration[135]. - Book-entry shares will automatically convert to the right to receive the merger consideration without requiring a share certificate[136]. Financial Performance - The company reported a revenue of $1.5 billion for Q3 2023, representing a 15% increase year-over-year[1]. - User data showed a growth of 20% in active users, reaching 10 million by the end of the quarter[2]. - The company provided guidance for Q4 2023, expecting revenue between $1.6 billion and $1.7 billion, which indicates a growth of 10-13% compared to Q4 2022[3]. - New product launches included a software update that improved user engagement by 25%[4]. - The company is expanding its market presence in Europe, targeting a 30% increase in market share by the end of 2024[5]. - Research and development expenses increased by 12% to $200 million, focusing on innovative technologies[6]. - The company completed a strategic acquisition of a smaller tech firm for $300 million to enhance its product offerings[7]. - The company announced a new partnership with a leading telecom provider to expand service availability[8]. - Cost-cutting measures implemented resulted in a 5% reduction in operational expenses[9]. - The company plans to invest $100 million in sustainability initiatives over the next three years[10]. Corporate Governance and Compliance - The Company Board has unanimously determined that the Agreement and Transactions are fair and in the best interests of the Company and its stockholders[147]. - The execution and performance of the Agreement require no action or consent from any Governmental Entity other than necessary filings and compliance with applicable laws[148]. - The Company is not in violation of any provision of its Charter or Bylaws, and all outstanding shares of capital stock are fully paid and nonassessable[144][150]. - The Company has made available true and accurate copies of its Certificate of Incorporation and Bylaws to Parent[144]. - The Company has no outstanding obligations to repurchase or redeem any Company Securities, except for Company Equity Awards[151]. - The Company has provided Parent with a complete list of holders of Company Stock Options, RSU Awards, and PSU Awards as of the Company Measurement Date[150]. - The Company is duly organized and in good standing under the laws of Delaware, with all corporate powers necessary to conduct its business[144]. - The Company has no voting trusts or agreements regarding the voting of its capital stock[152]. - The Company has timely filed all required SEC documents since January 1, 2023, with no ongoing SEC reviews or investigations[159]. - The audited financial statements comply with GAAP and fairly present the consolidated financial position of the Company and its Subsidiaries[160]. - There are no undisclosed material liabilities that would be required to be reflected on a consolidated balance sheet[171]. - The Company maintains a system of internal control over financial reporting that provides reasonable assurance regarding the reliability of financial reporting[165]. - There have been no significant deficiencies or material weaknesses in internal control over financial reporting since January 1, 2023[167]. - The Company has not engaged in illegal accounting or auditing practices, nor has it received complaints regarding its internal accounting controls[168]. - The Company is in compliance with all current listing and corporate governance requirements of Nasdaq[169]. - There are no ongoing litigations or investigations that would materially affect the Company and its Subsidiaries[172]. - The Company’s capital stock and ownership interests in its Subsidiaries are wholly owned and free of encumbrances[154]. - The Company has made available true and complete copies of its annual and quarterly statements filed with the applicable regulatory bodies[161]. - The Company has timely filed all required Tax Returns and paid all due Taxes, ensuring compliance with applicable laws[174]. - No Tax deficiencies have been asserted against the Company or its Subsidiaries that remain unpaid, settled, or withdrawn[175]. - The Company has not participated in any "listed transaction" as defined by Treasury Regulations, indicating a low risk of tax-related issues[175]. - There are no Encumbrances for Taxes on the Company's assets, ensuring clear ownership[175]. - The Company has complied with all applicable laws regarding employee benefit plans, with timely contributions made[178]. - No material liabilities related to employee benefit plans have been incurred that remain unsatisfied[181]. - The Company has not maintained any defined benefit pension plans or multiemployer plans in the last six years, reducing future liabilities[180]. - The consummation of the transactions will not trigger any additional payments or benefits to employees, maintaining cost control[186]. - Each Company Stock Option has been granted at an exercise price no less than the fair market value, ensuring compliance with valuation standards[189]. - Since January 1, 2023, the Company has not been involved in any collective bargaining agreements with labor unions[190]. - The Company and its Subsidiaries have complied with all applicable labor laws since January 1, 2023, with no material non-compliance issues reported[191]. - No allegations of sexual harassment or misconduct have been made against any managerial employees since January 1, 2023[192]. - The Company is not delinquent in payments to current or former employees, except for minor arrearages in the ordinary course of business[193]. - The Company has been in full compliance with the WARN Act since January 1, 2023, with no required notifications to employees[196]. - There have been no violations of applicable laws since January 1, 2023, that would be expected to be material to the Company[197]. - The Company has maintained compliance with Anti-Money Laundering Laws and anti-bribery laws since January 1, 2023[198]. - No disclosures or investigations related to non-compliance with Economic Sanctions or Anti-Money Laundering Laws have occurred since January 1, 2023[199]. - The Company has not received any notices alleging violations of Environmental Laws, and is in compliance with applicable Environmental Laws[200].

Company Information [Filing Details](index=1&type=section&id=Filing%20Details) This report is Brighthouse Financial, Inc.'s quarterly report for the period ended June 30, 2025, filed under Section 13 or 15(d) of the Securities Exchange Act of 1934, with the company having filed all required reports and complying with electronic data submission regulations - Brighthouse Financial, Inc. filed its quarterly report for the period ended June 30, 2025, complying with all reporting and electronic data submission requirements[2](index=2&type=chunk)[3](index=3&type=chunk) [Securities Information](index=1&type=section&id=Securities%20Information) The company lists various securities on The Nasdaq Stock Market, including common stock, depositary shares representing interests in multiple series of non-cumulative preferred stock, and junior subordinated debentures due 2058 Registered Securities | Title of each class | Trading symbol(s) | Name of each exchange on which registered | | :------------------------------------------------------------------------------- | :---------------- | :---------------------------------------- | | Common Stock, par value $0.01 per share | BHF | The Nasdaq Stock Market LLC | | Depositary Shares, each representing a 1/1,000th interest in a share of 6.600% Non-Cumulative Preferred Stock, Series A | BHFAP | The Nasdaq Stock Market LLC | | Depositary Shares, each representing a 1/1,000th interest in a share of 6.750% Non-Cumulative Preferred Stock, Series B | BHFAO | The Nasdaq Stock Market LLC | | Depositary Shares, each representing a 1/1,000th interest in a share of 5.375% Non-Cumulative Preferred Stock, Series C | BHFAN | The Nasdaq Stock Market LLC | | Depositary Shares, each representing a 1/1,000th interest in a share of 4.625% Non-Cumulative Preferred Stock, Series D | BHFAM | The Nasdaq Stock Market LLC | | 6.250% Junior Subordinated Debentures due 2058 | BHFAL | The Nasdaq Stock Market LLC | [Filer Status & Outstanding Shares](index=1&type=section&id=Filer%20Status%20%26%20Outstanding%20Shares) The company is identified as a large accelerated filer, with 57,152,371 shares of common stock outstanding as of August 4, 2025 - The company is identified as a large accelerated filer[4](index=4&type=chunk) - As of August 4, 2025, the company had **57,152,371 shares** of common stock outstanding[4](index=4&type=chunk) Part I — Financial Information [Item 1. Consolidated Financial Statements](index=4&type=section&id=Item%201.%20Consolidated%20Financial%20Statements) This section presents Brighthouse Financial, Inc.'s unaudited condensed consolidated financial statements for the periods ended June 30, 2025, and December 31, 2024, including balance sheets, statements of operations and comprehensive income (loss), statements of equity, and cash flows, along with detailed notes [Interim Condensed Consolidated Balance Sheets](index=4&type=section&id=Interim%20Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, the company's total assets increased to **$242,645 million** from **$238,537 million** as of December 31, 2024, with total liabilities rising to **$236,907 million** and shareholders' equity increasing to **$5,673 million** Consolidated Balance Sheet Key Data (Million USD) | Metric | June 30, 2025 | December 31, 2024 | | :--------------- | :------------ | :------------- | | Total Assets | 242,645 | 238,537 | | Total Liabilities | 236,907 | 233,513 | | Shareholders' Equity | 5,673 | 4,959 | - Total investments increased from **$117,387 million** as of December 31, 2024, to **$120,747 million** as of June 30, 2025[8](index=8&type=chunk) - Cash and cash equivalents increased from **$5,045 million** as of December 31, 2024, to **$5,540 million** as of June 30, 2025[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)) For the three months ended June 30, 2025, the company reported net income of **$85 million**, up from **$34 million** in the prior-year period, while for the six months ended June 30, 2025, net loss narrowed to **$181 million** from **$457 million** Consolidated Statements of Operations and Comprehensive Income (Loss) Key Data (Million USD) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------------------------------------- | :-------------------- | :-------------------- | :-------------------- | :-------------------- | | Total Revenues | 871 | 1,427 | 3,261 | 1,501 | | Total Expenses | 778 | 1,413 | 3,522 | 2,101 | | Net Income (Loss) | 85 | 34 | (181) | (457) | | Net Income (Loss) Attributable to Brighthouse Financial, Inc. Common Shareholders | 60 | 9 | (234) | (510) | | Basic Earnings (Loss) Per Share | 1.03 | 0.12 | (4.06) | (8.17) | | Diluted Earnings (Loss) Per Share | 1.02 | 0.12 | (4.06) | (8.17) | - Net derivative gains (losses) for the three months ended June 30, 2025, were **($1,237 million)**, compared to **($662 million)** in the prior-year period, indicating a larger loss[12](index=12&type=chunk) - Changes in market risk benefits for the six months ended June 30, 2025, were **($208 million)**, a significant reduction from the **($1,796 million)** loss in the prior-year period[12](index=12&type=chunk) [Interim Condensed Consolidated Statements of Equity](index=6&type=section&id=Interim%20Condensed%20Consolidated%20Statements%20of%20Equity) As of June 30, 2025, Brighthouse Financial, Inc.'s shareholders' equity increased to **$5,673 million** from **$4,959 million** as of December 31, 2024, primarily due to an improvement in accumulated other comprehensive income (loss) Brighthouse Financial, Inc. Shareholders' Equity (Million USD) | Metric | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :------------ | :------------- | | Preferred Stock | — | — | | Common Stock | 1 | 1 | | Additional Paid-in Capital | 13,918 | 13,927 | | Retained Earnings (Deficit) | (1,302) | (1,119) | | Treasury Stock | (2,687) | (2,572) | | Accumulated Other Comprehensive Income (Loss) | (4,257) | (5,278) | | Brighthouse Financial, Inc. Shareholders' Equity | 5,673 | 4,959 | | Noncontrolling Interests | 65 | 65 | | Total Equity | 5,738 | 5,024 | - As of June 30, 2025, accumulated other comprehensive income (loss) improved to **($4,257 million)** from **($5,278 million)** as of December 31, 2024[8](index=8&type=chunk)[15](index=15&type=chunk) [Interim Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Interim%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash from operating activities was **$145 million**, a significant improvement from **($196 million)** in the prior-year period, while net cash from investing activities was **$675 million** and net cash used in financing activities was **($325 million)** Consolidated Cash Flow Key Data (Million USD) | Cash Flow Type | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------- | :-------------------- | :-------------------- | | Net Cash from Operating Activities | 145 | (196) | | Net Cash from Investing Activities | 675 | (1,707) | | Net Cash from Financing Activities | (325) | 2,493 | | Cash and Cash Equivalents, End of Period | 5,540 | 4,441 | - Policyholder account deposits significantly decreased to **$9,834 million** for the six months ended June 30, 2025, from **$20,632 million** in the prior-year period[18](index=18&type=chunk) - Net financing elements of derivative-related transactions improved to **($114 million)** for the six months ended June 30, 2025, from **($175 million)** in the prior-year period[18](index=18&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)) This section provides detailed notes on the company's business, accounting policies, segment information, insurance liabilities, market risk benefits, separate accounts, deferred policy acquisition costs, investments, derivatives, fair value, equity, other income and expenses, earnings per share, and contingencies, commitments, and guarantees [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, Inc. is a leading U.S. provider of annuity and life insurance products, operating through multiple independent distribution channels, and updated its accounting policies in Q1 2025 to include a trading securities portfolio - Brighthouse Financial is one of the largest providers of annuity and life insurance products in the U.S., operating through multiple independent distribution channels and a network of distribution partners[21](index=21&type=chunk) - The company is organized into four reportable segments: Annuities, Life, Run-off, and Corporate & Other[21](index=21&type=chunk) - The company updated its accounting policies in the first quarter of 2025 to include a trading securities portfolio, with gains and losses recognized in net investment income[26](index=26&type=chunk)[27](index=27&type=chunk)[38](index=38&type=chunk) [Note 2 — Segment Information](index=9&type=section&id=Note%202%20%E2%80%94%20Segment%20Information) The company offers products and services through its Annuities, Life, Run-off, and Corporate & Other segments, with the CEO using Adjusted Earnings, a non-GAAP measure excluding market volatility, to assess segment performance, updated in Q1 2025 to reflect trading securities - The company's Chief Operating Decision Maker (CEO) uses Adjusted Earnings, a non-GAAP measure, to evaluate segment performance, which excludes the impact of market volatility[37](index=37&type=chunk)[38](index=38&type=chunk) Adjusted Earnings (Loss) by Segment for the Three Months Ended June 30, 2025 (Million USD) | Segment | Adjusted Earnings (Loss) | | :--------------- | :----------------- | | Annuities | 332 | | Life | (26) | | Run-off | (83) | | Corporate & Other | (25) | | **Total** | **198** | Adjusted Earnings (Loss) by Segment for the Six Months Ended June 30, 2025 (Million USD) | Segment | Adjusted Earnings (Loss) | | :--------------- | :----------------- | | Annuities | 646 | | Life | (17) | | Run-off | (147) | | Corporate & Other | (49) | | **Total** | **433** | Total Assets by Segment as of June 30, 2025, and December 31, 2024 (Million USD) | Segment | June 30, 2025 | December 31, 2024 | | :--------------- | :------------ | :------------- | | Annuities | 168,101 | 163,830 | | Life | 26,810 | 26,261 | | Run-off | 24,873 | 24,873 | | Corporate & Other | 22,861 | 23,573 | | **Total** | **242,645** | **238,537** | [Note 3 — Insurance Liabilities](index=16&type=section&id=Note%203%20%E2%80%94%20Insurance%20Liabilities) This note details future policy benefits liabilities and policyholder account balances, with total future policy benefits at **$31,974 million** and total policyholder account balances at **$88,046 million** as of June 30, 2025 Net Future Policy Benefits Liabilities (Million USD) | Metric | June 30, 2025 | June 30, 2024 | | :--------------------------------- | :------------ | :------------- | | Term and Universal Life Insurance | 2,539 | 2,389 | | Income Annuities | 3,866 | 3,698 | | Structured and Pension Risk Transfer Annuities | 6,053 | 6,225 | | **Net Future Policy Benefits Liabilities, End of Period** | **12,458** | **12,312** | Policyholder Account Balances (Million USD) | Product Type | Balance as of Six Months Ended June 30, 2025 | | :----------------- | :---------------------------- | | Universal Life | 2,605 | | Variable Annuities | 3,625 | | Indexed Annuities | 50,237 | | Fixed Annuities | 14,619 | | ULSG | 4,619 | | Company-Owned Life Insurance | 645 | | **Total** | **76,350** | - Net additional insurance liabilities for universal life-type contracts (net of reinsurance recoverables) were **$7,769 million** as of June 30, 2025, compared to **$6,339 million** in the prior-year period[64](index=64&type=chunk) [Note 4 — Market Risk Benefits](index=20&type=section&id=Note%204%20%E2%80%94%20Market%20Risk%20Benefits) This note provides information on market risk benefits (MRB) assets and liabilities related to variable annuities, with net MRB (after reinsurance) decreasing to **$6,945 million** as of June 30, 2025, from **$7,792 million** in the prior-year period Net Market Risk Benefits (After Reinsurance) (Million USD) | Metric | June 30, 2025 | June 30, 2024 | | :--------------------------------- | :------------ | :------------- | | Beginning Balance | 7,233 | 9,701 | | Ending Balance, Net of Reinsurance | 6,945 | 7,792 | - As of June 30, 2025, the weighted average age of contract holders was **74.2 years**, compared to **73.4 years** in the prior-year period[76](index=76&type=chunk) [Note 5 — Separate Accounts](index=20&type=section&id=Note%205%20%E2%80%94%20Separate%20Accounts) This note provides information on separate account liabilities and assets supporting separate accounts, with total separate account liabilities and total fair value of assets supporting separate accounts both at **$86,085 million** as of June 30, 2025 Separate Account Liabilities (Million USD) | Product Type | Balance as of Six Months Ended June 30, 2025 | | :----------------- | :---------------------------- | | Variable Annuities | 76,782 | | Universal Life | 6,632 | | Company-Owned Life Insurance | 2,399 | | **Total** | **85,813** | Total Fair Value of Assets Supporting Separate Accounts (Million USD) | Asset Class | June 30, 2025 | December 31, 2024 | | :----------------- | :------------ | :------------- | | Equity Securities | 85,868 | 85,423 | | Fixed Maturity Securities | 209 | 207 | | Cash and Cash Equivalents | 4 | 2 | | Other Assets | 4 | 4 | | **Total** | **86,085** | **85,636** | Net Amount at Risk and Cash Surrender Value of Insurance Products (Million USD) | Product Type | Net Amount at Risk as of June 30, 2025 | Cash Surrender Value as of June 30, 2025 | | :----------------- | :---------------------- | :------------------------ | | Universal Life | 32,356 | 8,642 | | Variable Annuities | 12,287 | 80,039 | | ULSG | 62,652 | 4,195 | | Company-Owned Life Insurance | 2,642 | 2,845 | [Note 6 — Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles](index=22&type=section&id=Note%206%20%E2%80%94%20Deferred%20Policy%20Acquisition%20Costs%2C%20Value%20of%20Business%20Acquired%20and%20Other%20Intangibles) This note provides information on deferred policy acquisition costs (DAC) and value of business acquired (VOBA), with total DAC and VOBA decreasing slightly to **$4,636 million** as of June 30, 2025, from **$4,710 million** as of December 31, 2024 Total DAC and VOBA (Million USD) | Product Type | Ending Balance as of June 30, 2025 | | :----------------- | :-------------------- | | Variable Annuities | 2,295 | | Fixed Annuities | 171 | | Indexed Annuities | 1,522 | | Term and Universal Life Insurance | 290 | | Universal Life | 358 | | **Total** | **4,636** | Deferred Sales Inducements (Million USD) | Product Type | Ending Balance as of June 30, 2025 | | :----------------- | :-------------------- | | Variable Annuities | 6 | | Fixed Annuities | 187 | Unearned Revenue (Million USD) | Product Type | Ending Balance as of June 30, 2025 | | :----------------- | :-------------------- | | Universal Life | 357 | | ULSG | 758 | | Variable Annuities | 57 | [Note 7 — Investments](index=23&type=section&id=Note%207%20%E2%80%94%20Investments) This note provides detailed information on the company's investment portfolio, including fixed maturity securities, mortgage loans, other investment assets, and net unrealized investment gains (losses), with total investments at **$120,747 million** as of June 30, 2025, of which fixed maturity securities account for **$80,835 million** Fixed Maturity Securities by Industry (Million USD) | Industry Category | Estimated Fair Value as of June 30, 2025 | | :----------------- | :------------------------ | | U.S. Corporate Bonds | 37,573 | | Foreign Corporate Bonds | 11,769 | | Residential Mortgage-Backed Securities | 7,835 | | U.S. Government and Agency Bonds | 6,636 | | Commercial Mortgage-Backed Securities | 6,374 | | Asset-Backed Securities | 6,186 | | State and Local Government Bonds | 3,521 | | Foreign Government Bonds | 941 | | **Total** | **80,835** | Mortgage Loans by Portfolio Segment (Million USD) | Portfolio Segment | Carrying Value as of June 30, 2025 | | :----------------- | :-------------------- | | Commercial | 12,916 | | Agricultural | 4,509 | | Residential | 5,777 | | **Total** | **23,202** | Components of Net Unrealized Investment Gains (Losses) (Million USD) | Component | June 30, 2025 | | :----------------- | :------------ | | Fixed Maturity Securities | (5,860) | | Derivatives | 189 | | Other | (7) | | **Subtotal** | **(5,678)** | - As of June 30, 2025, the estimated fair value of the company's non-income-producing fixed maturity securities was **$20 million**, down from **$30 million** as of December 31, 2024[88](index=88&type=chunk) - As of June 30, 2025, the allowance for credit losses on mortgage loans was **$209 million**, up from **$178 million** as of December 31, 2024[103](index=103&type=chunk) [Note 8 — Derivatives](index=35&type=section&id=Note%208%20%E2%80%94%20Derivatives) This note details the company's derivative instruments and strategies used to manage interest rate, foreign currency, credit, and equity market risks, with total notional amount of **$289,546 million** and estimated fair value assets of **$7,803 million** and liabilities of **$7,398 million** as of June 30, 2025 Derivatives by Primary Risk Exposure, Notional Amount, and Estimated Fair Value (Million USD) | Primary Risk Exposure | Total Notional Amount as of June 30, 2025 | Estimated Fair Value Assets as of June 30, 2025 | Estimated Fair Value Liabilities as of June 30, 2025 | | :----------------- | :---------------------- | :---------------------------- | :---------------------------- | | Interest Rate | 91,031 | 266 | 2,014 | | Foreign Currency Exchange Rate | 4,358 | 326 | 114 | | Credit | 1,230 | 28 | — | | Equity Market | 191,994 | 7,183 | 5,247 | | **Total** | **289,546** | **7,803** | **7,398** | - The vast majority of the company's derivatives, by total notional amount, were not designated or did not qualify for hedge accounting relationships as of June 30, 2025[156](index=156&type=chunk) Estimated Fair Value and Maximum Future Payments for Credit Default Swaps (Million USD) | Credit Rating | Maximum Future Payments as of June 30, 2025 | Estimated Fair Value of Credit Default Swaps as of June 30, 2025 | | :----------------- | :---------------------------- | :------------------------------------ | | Aaa/Aa/A | 100 | 2 | | Baa | 1,102 | 24 | | Ba | 24 | 2 | | Caa and Below | 4 | 0.5 | | **Total** | **1,230** | **28** | [Note 9 — Fair Value](index=41&type=section&id=Note%209%20%E2%80%94%20Fair%20Value) This note provides fair value measurement information for assets and liabilities by fair value hierarchy levels (Level 1, Level 2, Level 3), along with valuation controls and procedures, with total estimated fair value of assets at **$177,651 million** and liabilities at **$27,095 million** as of June 30, 2025 Assets Measured at Fair Value by Level (Million USD) | Asset Class | Level 1 | Level 2 | Level 3 | Total Estimated Fair Value | | :----------------- | :------ | :------ | :------ | :------------- | | Fixed Maturity Securities | 2,544 | 77,093 | 1,198 | 80,835 | | Trading Securities | 94 | 423 | 3 | 520 | | Equity Securities | 63 | 5 | 6 | 74 | | Short-Term Investments | 905 | 265 | — | 1,170 | | Derivative Assets | — | 7,795 | 8 | 7,803 | | Indexed Annuity Embedded Derivatives | — | — | 80 | 80 | | Market Risk Benefit Assets | — | — | 1,084 | 1,084 | | Separate Account Assets | 6 | 86,079 | — | 86,085 | | **Total Assets** | **3,612** | **171,660** | **2,379** | **177,651** | Liabilities Measured at Fair Value by Level (Million USD) | Liability Class | Level 1 | Level 2 | Level 3 | Total Estimated Fair Value | | :----------------- | :------ | :------ | :------ | :------------- | | Market Risk Benefit Liabilities | — | — | 8,051 | 8,051 | | Derivative Liabilities | 1 | 7,397 | — | 7,398 | | Indexed Annuity Embedded Derivatives | — | — | 11,646 | 11,646 | | **Total Liabilities** | **1** | **7,397** | **19,697** | **27,095** | - The company monitors and oversees valuation controls and policies for securities, mortgage loans, and derivatives performed by valuation service providers, reporting compliance to the Audit Committee regularly[183](index=183&type=chunk) [Note 10 — Equity](index=51&type=section&id=Note%2010%20%E2%80%94%20Equity) This note provides information on preferred stock, common stock repurchase programs, and accumulated other comprehensive income (loss) (AOCI), with the company having repurchased **1,844,396 shares** of common stock for **$102 million** as of June 30, 2025, with **$441 million** remaining under the repurchase program Preferred Stock Issued, Outstanding, and Authorized Shares | Series | Authorized Shares | Shares Issued | Shares Outstanding | | :--------------------------------- | :----------- | :--------- | :------- | | 6.600% Non-Cumulative Preferred Stock, Series A | 17,000 | 17,000 | 17,000 | | 6.750% Non-Cumulative Preferred Stock, Series B | 16,100 | 16,100 | 16,100 | | 5.375% Non-Cumulative Preferred Stock, Series C | 23,000 | 23,000 | 23,000 | | 4.625% Non-Cumulative Preferred Stock, Series D | 14,000 | 14,000 | 14,000 | | Undesignated | 99,929,900 | — | — | | **Total** | **100,000,000** | **70,100** | **70,100** | Preferred Stock Dividends (Million USD) | Series | Total for Three Months Ended June 30, 2025 | Total for Three Months Ended June 30, 2024 | Total for Six Months Ended June 30, 2025 | Total for Six Months Ended June 30, 2024 | | :--- | :------------------------ | :------------------------ | :------------------------ | :------------------------ | | A | 7 | 7 | 14 | 14 | | B | 7 | 7 | 14 | 14 | | C | 7 | 7 | 15 | 15 | | D | 4 | 4 | 8 | 8 | | **Total** | **25** | **25** | **51** | **51** | - For the six months ended June 30, 2025, the company repurchased **1,844,396 shares** of common stock for **$102 million**, compared to **2,634,041 shares** for **$126 million** in the prior-year period[232](index=232&type=chunk) - As of June 30, 2025, **$441 million** remained under the company's common stock repurchase program[232](index=232&type=chunk) [Note 11 — Other Revenues and Other Expenses](index=54&type=section&id=Note%2011%20%E2%80%94%20Other%20Revenues%20and%20Other%20Expenses) This note provides detailed information on other revenues and expenses, with other revenues totaling **$143 million** for the three months ended June 30, 2025, including **$64 million** in 12b-1 fees, and total other expenses at **$482 million** - For the three months ended June 30, 2025, other revenues totaled **$143 million**, including **$64 million** in 12b-1 fees, primarily from the Annuities segment[242](index=242&type=chunk) Other Expenses (Million USD) | Expense Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------- | :-------------------- | :-------------------- | :-------------------- | :-------------------- | | Compensation | 103 | 101 | 233 | 212 | | Contracted Services and Other Personnel Costs | 76 | 70 | 148 | 133 | | Transition Services Agreements | 4 | 5 | 7 | 12 | | Premium and Other Taxes, Licenses and Fees | 10 | 13 | 26 | 24 | | Separate Account Fees | 80 | 91 | 163 | 183 | | Sales-Related Costs | 153 | 138 | 285 | 285 | | Interest Expense on Debt | 38 | 38 | 76 | 76 | | Other | 18 | 12 | 37 | 50 | | **Total Other Expenses** | **482** | **468** | **975** | **975** | [Note 12 — Earnings Per Common Share](index=55&type=section&id=Note%2012%20%E2%80%94%20Earnings%20Per%20Common%20Share) For the three months ended June 30, 2025, basic earnings per share were **$1.03** and diluted earnings per share were **$1.02**, a significant increase from **$0.12** in the prior-year period, while for the six months, basic and diluted loss per share both narrowed to **$4.06** from **$8.17** Earnings (Loss) Per Common Share | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------------------------------------- | :-------------------- | :-------------------- | :-------------------- | :-------------------- | | Net Income (Loss) Attributable to Brighthouse Financial, Inc. Common Shareholders | 60 | 9 | (234) | (510) | | Basic Earnings (Loss) Per Share | 1.03 | 0.12 | (4.06) | (8.17) | | Diluted Earnings (Loss) Per Share | 1.02 | 0.12 | (4.06) | (8.17) | - For the three months ended June 30, 2025, the weighted average common shares used to calculate diluted earnings per share included **322,881 dilutive stock options**[246](index=246&type=chunk) [Note 13 — Contingencies, Commitments and Guarantees](index=55&type=section&id=Note%2013%20%E2%80%94%20Contingencies%2C%20Commitments%20and%20Guarantees) This note discusses the company's litigation, regulatory investigations, commitments, and guarantees, with an estimated aggregate range of reasonably possible losses up to approximately **$10 million** and an additional range of **$0 to $100 million** for certain tax matters as of June 30, 2025 - As of June 30, 2025, the company estimated an aggregate range of reasonably possible losses up to approximately **$10 million**[253](index=253&type=chunk) - As of June 30, 2025, the company estimated a range of reasonably possible losses related to certain tax matters between **$0 and $100 million**[263](index=263&type=chunk) Commitment Amounts (Million USD) | Commitment Type | June 30, 2025 | December 31, 2024 | | :----------------- | :------------ | :------------- | | Mortgage Loan Commitments | 182 | 271 | | Commitments to Fund Partnership Investments, Bank Credit Facilities, and Private Corporate Bond Investments | 1,600 | 1,700 | - The company has provided certain indemnifications, guarantees, and commitments to third parties, some with potential maximum amounts contractually limited to an aggregate of up to **$82 million**[268](index=268&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=59&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides a detailed discussion and analysis of the company's financial condition, results of operations, and cash flows, including an executive summary, industry trends, key accounting estimates, non-GAAP financial disclosures, segment performance, investments, derivatives, policyholder liabilities, and liquidity and capital resources [Introduction](index=60&type=section&id=Introduction) This introduction aims to help readers understand Brighthouse Financial's results of operations, financial condition, and cash flows for the periods presented, recommending sequential reading of key information sections - This Management's Discussion and Analysis should be read in conjunction with the interim condensed consolidated financial statements and notes thereto, the 2024 Annual Report, the first quarter 10-Q report, and 8-K filings in 2025[272](index=272&type=chunk) [Executive Summary](index=60&type=section&id=Executive%20Summary) Brighthouse Financial, a leading U.S. provider of annuity and life insurance products, reported net income of **$60 million** and adjusted earnings of **$198 million** for the three months ended June 30, 2025, and a net loss of **$234 million** with adjusted earnings of **$433 million** for the six months ended June 30, 2025 - For the three months ended June 30, 2025, the company reported net income of **$60 million** and adjusted earnings of **$198 million**[278](index=278&type=chunk) - For the six months ended June 30, 2025, the company reported a net loss of **$234 million** and adjusted earnings of **$433 million**[279](index=279&type=chunk) - The increase in net income for the second quarter of 2025 was primarily driven by favorable performance in pre-tax adjusted earnings and favorable market-driven changes in the estimated fair value of variable annuity guaranteed benefit riders[278](index=278&type=chunk) [Industry Trends and Uncertainties](index=61&type=section&id=Industry%20Trends%20and%20Uncertainties) The company's business and operating results are significantly influenced by capital markets and overall economic conditions, including interest rates, inflation, equity market performance, and geopolitical conflicts, which are continuously monitored for their impact on operations and the investment portfolio - Capital markets and economic conditions, particularly interest rate levels and the shape of the yield curve, significantly impact the company's profitability and product demand[283](index=283&type=chunk) - The Federal Reserve lowered the target range for the federal funds rate three times in 2024, and any further adjustments could affect pricing levels for risk investments and product sales[341](index=341&type=chunk) - The company continuously monitors factors such as global inflation, tariffs, uncertainties in certain asset classes (including commercial real estate), and geopolitical conflicts for their impact on business operations, investment portfolio, and derivatives[284](index=284&type=chunk) [Summary of Critical Accounting Estimates](index=63&type=section&id=Summary%20of%20Critical%20Accounting%20Estimates) The preparation of the company's financial statements involves management's adoption of accounting policies and use of estimates and assumptions, with critical estimates including future policy benefits liabilities, estimated fair value of market risk benefits, estimated fair value of derivatives and embedded derivatives, and the measurement of income taxes and valuation of deferred tax assets - Critical accounting estimates include future policy benefits liabilities, the estimated fair value of market risk benefits, the estimated fair value of freestanding and embedded derivatives, and the measurement of income taxes and valuation of deferred tax assets[293](index=293&type=chunk) [Non-GAAP Financial Disclosures](index=63&type=section&id=Non-GAAP%20Financial%20Disclosures) The company uses non-GAAP financial measures like Adjusted Earnings and Adjusted Net Investment Income to assess performance and facilitate comparisons with industry results, with Adjusted Earnings excluding market volatility and updated in Q1 2025 to reflect trading securities - Adjusted Earnings is a non-GAAP financial measure used by management to assess performance and facilitate comparisons with industry results, excluding the impact of market volatility[290](index=290&type=chunk)[291](index=291&type=chunk) - Adjusted Earnings was updated in the first quarter of 2025 to incorporate the trading securities portfolio[291](index=291&type=chunk) - Adjusted Net Investment Income is a measure used by management to gauge investment portfolio performance, representing GAAP net investment income plus investment hedge adjustments less investment gains (losses) from trading securities[297](index=297&type=chunk) [Results of Operations](index=65&type=section&id=Results%20of%20Operations) For the three months ended June 30, 2025, the company reported net income of **$60 million** and adjusted earnings of **$198 million**, a decrease from the prior-year period, while for the six months, net loss narrowed to **$234 million** and adjusted earnings increased to **$433 million** Net Income (Loss) Attributable to Shareholders and Adjusted Earnings (Loss) (Million USD) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------------------------------------- | :-------------------- | :-------------------- | :-------------------- | :-------------------- | | Net Income (Loss) Attributable to Shareholders | 60 | 9 | (234) | (510) | | Adjusted Earnings (Loss) | 198 | 346 | 433 | 248 | - For the three months ended June 30, 2025, Adjusted Earnings decreased by **$148 million**, primarily due to increased net costs of insurance-related activities, lower net investment spread, and decreased net fee income[309](index=309&type=chunk) - For the six months ended June 30, 2025, Adjusted Earnings increased by **$185 million**, favorably impacted by lower net costs of insurance-related activities, increased net fee income, and decreased other expenses[311](index=311&type=chunk) [Investments](index=77&type=section&id=Investments) The company manages investment portfolio risk through asset type allocation, industry and issuer diversification, and risk limits, with net unrealized loss positions in the investment portfolio increasing as of June 30, 2025, primarily due to rising interest rates - The company manages investment portfolio risk through asset type allocation, industry and issuer diversification, and risk limits, utilizing derivatives to manage credit, interest rate, equity market, and foreign currency risks[339](index=339&type=chunk) - Rising interest rates have resulted in unrealized losses exceeding unrealized gains on fixed maturity securities in the company's investment portfolio[341](index=341&type=chunk) Investment Portfolio Yield and Adjusted Net Investment Income (Million USD) | Metric | Yield for Three Months Ended June 30, 2025 | Amount for Three Months Ended June 30, 2025 | Yield for Six Months Ended June 30, 2025 | Amount for Six Months Ended June 30, 2025 | | :----------------------- | :-------------------------- | :------------------------ | :-------------------------- | :------------------------ | | Investment Income | 4.41% | 1,329 | 4.40% | 2,659 | | Investment Expenses and Other | (0.13)% | (37) | (0.13)% | (76) | | **Adjusted Net Investment Income** | **4.28%** | **1,292** | **4.27%** | **2,583** | Mortgage Loans by Portfolio Segment (Million USD) | Portfolio Segment | Amortized Cost as of June 30, 2025 | Allowance for Credit Losses as of June 30, 2025 | Allowance for Credit Losses as a Percentage of Amortized Cost as of June 30, 2025 | | :----------- | :-------------------- | :-------------------------- | :---------------------------------------- | | Commercial | 12,916 | 146 | 1.1% | | Agricultural | 4,509 | 22 | 0.5% | | Residential | 5,777 | 41 | 0.7% | | **Total** | **23,202** | **209** | **0.9%** | [Derivatives](index=86&type=section&id=Derivatives) The company uses derivatives to manage interest rate, foreign currency, credit, and equity market risks, with a total notional amount of **$289,546 million** as of June 30, 2025, most of which are not designated as hedging instruments, and Level 3 derivatives valuation involves significant unobservable inputs - The company uses derivatives to manage interest rate, foreign currency exchange rate, credit, and equity market risks[377](index=377&type=chunk) - The vast majority of the company's derivatives, by total notional amount, were not designated or did not qualify for hedge accounting relationships as of June 30, 2025[156](index=156&type=chunk) - The valuation of Level 3 derivatives involves the use of significant unobservable inputs, requiring a higher degree of management judgment or estimation[379](index=379&type=chunk) [Policyholder Liabilities](index=87&type=section&id=Policyholder%20Liabilities) The company establishes and holds actuarially determined liabilities to meet policy obligations or provide future annuity and life insurance benefit payments, with guaranteed minimum benefits (GMxB) on variable annuities classified as market risk benefits (MRB) and measured at fair value - The company establishes and holds actuarially determined liabilities to meet policy obligations or provide future annuity and life insurance benefit payments[387](index=387&type=chunk) - Guaranteed minimum benefits (GMxB) on variable annuities are classified as market risk benefits (MRB) and measured at fair value[390](index=390&type=chunk) Variable Annuity Account Value and Net Amount at Risk (NAR) by GMxB Type (Million USD) | GMxB Type | Account Value as of June 30, 2025 | Death Benefit NAR as of June 30, 2025 | Living Benefit NAR as of June 30, 2025 | | :----------------- | :-------------------- | :----------------------- | :----------------------- | | GMIB | 29,952 | 3,352 | 3,644 | | GMIB Max with EDB | 6,871 | 6,485 | 857 | | GMIB Max without EDB | 3,878 | 81 | 236 | | GMWB | 19,242 | 163 | 197 | | GMAB | 219 | — | — | | GMDB only | 17,113 | 939 | — | | EDB only | 3,132 | 1,267 | — | | **Total** | **80,407** | **12,287** | **4,934** | [Liquidity and Capital Resources](index=89&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains ample liquidity to meet business needs and a strong capital position to support its financial strength and credit ratings, with short-term liquidity of **$4.6 billion** and liquid assets of **$48.9 billion** as of June 30, 2025 - As of June 30, 2025, the company had short-term liquidity of **$4.6 billion** and liquid assets of **$48.9 billion**[401](index=401&type=chunk)[402](index=402&type=chunk) - The company targets a consolidated Risk-Based Capital (RBC) ratio of **400% to 450%** under normal market conditions[407](index=407&type=chunk) - The company authorized a **$750 million** share repurchase program in November 2023, with **$441 million** remaining as of June 30, 2025[408](index=408&type=chunk)[99](index=99&type=chunk) Sources and Uses of Liquidity and Capital (Million USD) | Category | Sources for Six Months Ended June 30, 2025 | Uses for Six Months Ended June 30, 2025 | | :--------------- | :------------------------ | :------------------------ | | Net from Operating Activities | 145 | — | | Net from Investing Activities | 675 | — | | Net Change in Policyholder Account Balances | — | 146 | | Net Change in Securities Lending and Other Trading Collateral Payables | 103 | — | | Long-Term Debt Repayments | — | 1 | | Preferred Stock Dividends | — | 51 | | Treasury Stock Repurchases | — | 102 | | Net Financing Elements of Certain Derivative Instruments and Other Derivative-Related Transactions | — | 114 | | Other, Net | — | 14 | | **Total** | **923** | **428** | [Note Regarding Forward-Looking Statements](index=97&type=section&id=Note%20Regarding%20Forward-Looking%20Statements) This report contains forward-looking statements involving significant risks and uncertainties, based on current expectations and economic conditions, where actual results may differ materially due to known or unknown risks, uncertainties, and other factors - Forward-looking statements involve significant risks and uncertainties, and actual results may differ materially from expectations[450](index=450&type=chunk)[451](index=451&type=chunk) - Investors are cautioned not to place undue reliance on any forward-looking statements and should read them in conjunction with the 'Risk Factors' and 'Quantitative and Qualitative Disclosures About Market Risk' sections in the 2024 Annual Report[452](index=452&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=98&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risk through its insurance operations and general account investment activities, primarily from changes in interest rates, equity market prices, credit spreads, and foreign currency exchange rates, with no material changes in market risk exposure since the 2024 Annual Report - The company faces market risk through its insurance operations and general account investment activities, primarily from changes in interest rates, equity market prices, credit spreads, and foreign currency exchange rates[454](index=454&type=chunk) - There have been no material changes in the company's market risk exposure since the disclosures in the 2024 Annual Report[455](index=455&type=chunk) [Item 4. Controls and Procedures](index=99&type=section&id=Item%204.%20Controls%20and%20Procedures) As of June 30, 2025, management assessed and determined the company's disclosure controls and procedures to be effective, with ongoing changes to business processes, system implementations, and new third-party arrangements considered material changes to internal control over financial reporting - As of June 30, 2025, the company's disclosure controls and procedures were determined to be effective[457](index=457&type=chunk) - The company is changing business processes, implementing systems, and establishing new third-party arrangements, which are considered material changes to internal control over financial reporting[458](index=458&type=chunk) Part II — Other Information [Item 1. Legal Proceedings](index=99&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to the detailed disclosures regarding legal proceedings in Note 13 to the financial statements - Detailed information on legal proceedings can be found in Note 13 to the interim condensed consolidated financial statements[460](index=460&type=chunk) [Item 1A. Risk Factors](index=99&type=section&id=Item%201A.%20Risk%20Factors) Various risk factors that could materially affect the company's business are discussed in this report, with no material changes to risk factors since the 2024 Annual Report disclosures - Various risk factors that could materially affect the company's business are discussed in this report[461](index=461&type=chunk) - There have been no material changes to risk factors since the disclosures in the 2024 Annual Report[461](index=461&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=99&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) For the three months ended June 30, 2025, the company repurchased **781,800 shares** of common stock at average prices ranging from **$51.65 to $59.34** per share, with **$441 million** remaining under the repurchase program Issuer Purchases of Equity Securities (Million USD) | Period | Total Number of Shares Repurchased | Average Price Paid Per Share | Total Number of Shares Repurchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plan or Program | | :------------------- | :----------- | :--------------- | :----------------------------- | :----------------------------------- | | April 1, 2025—April 30, 2025 | 410,200 | 51.65 | 410,200 | 463 | | May 1, 2025—May 31, 2025 | 356,400 | 59.14 | 356,400 | 442 | | June 1, 2025—June 30, 2025 | 15,200 | 59.34 | 15,200 | 441 | | **Total** | **781,800** | | **781,800** | | - The company authorized a repurchase program for up to **$750 million** of its common stock on November 16, 2023, with no expiration date[462](index=462&type=chunk) [Item 5. Other Information](index=99&type=section&id=Item%205.%20Other%20Information) For the three months ended June 30, 2025, no directors or officers adopted or terminated Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements - For the three months ended June 30, 2025, no directors or officers adopted or terminated Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements[463](index=463&type=chunk) [Item 6. Exhibits](index=100&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the report, including management certifications and XBRL data files - Exhibits include certifications by the Chief Executive Officer and Chief Financial Officer pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act[465](index=465&type=chunk) - Exhibits also include XBRL Instance Document, Taxonomy Extension Schema Document, Calculation Linkbase Document, Label Linkbase Document, Presentation Linkbase Document, and Definition Linkbase Document[465](index=465&type=chunk) Signature [Signature Details](index=101&type=section&id=Signature%20Details) This report was formally signed by Edward A. Spehar, Executive Vice President and Chief Financial Officer of Brighthouse Financial, Inc., on August 8, 2025 - This report was signed on behalf of Brighthouse Financial, Inc. by Edward A. Spehar, Executive Vice President and Chief Financial Officer, on August 8, 2025[470](index=470&type=chunk)[471](index=471&type=chunk)

Financial Performance - Net income available to shareholders for Q2 2025 was $60 million, a significant recovery from a loss of $294 million in Q1 2025[9] - Adjusted earnings for Q2 2025 were $198 million, down from $235 million in Q1 2025, reflecting a decrease of approximately 15.7%[9] - Total revenues for Q2 2025 were $871 million, a decrease from $2.39 billion in Q1 2025, primarily due to net derivative losses[13] - Total adjusted revenues for Q2 2025 reached $2,154 million, a decrease from $2,218 million in Q2 2024, representing a decline of 2.9% year-over-year[16] - Adjusted earnings after provision for income tax for Q2 2025 were $223 million, down from $346 million in Q2 2024, reflecting a decrease of 35.5%[16] - Total revenues for the three months ended June 30, 2025, were $1,500 million, compared to $3,656 million for the same period in 2024, reflecting a significant decrease[34] - The combined net income (loss) for the three months ended June 30, 2025, was $(1,600) million, compared to $(961) million for the same period in 2024[34] Expenses and Claims - Total corporate expenses decreased to $202 million in Q2 2025 from $239 million in Q1 2025, a reduction of about 15.5%[9] - Total adjusted expenses for Q2 2025 were $1,885 million, an increase from $1,775 million in Q2 2024, marking an increase of 6.2%[16] - Total expenses for Q2 2025 were $778 million, a decrease from $2,744 million in Q1 2025, indicating a reduction of 71.6%[76] - Policyholder benefits and claims increased to $711 million in Q2 2025 from $649 million in Q1 2025, indicating a rise of approximately 9.5%[13] - Policyholder benefits and claims increased to $213 million in Q2 2025, up 13.9% from $187 million in Q1 2025[23] Capital and Assets - Combined total adjusted capital increased to $5.6 billion as of June 30, 2025, compared to $5.5 billion at the end of Q1 2025[9] - Total assets as of June 30, 2025, were $242.65 billion, an increase from $234.68 billion at the end of Q1 2025[14] - The total assets as of June 30, 2025, were $202,900 million, an increase from $198,413 million as of June 30, 2024[37] - The total capital and surplus as of June 30, 2025, was $4,000 million, compared to $3,874 million as of June 30, 2024[37] - The combined risk-based capital ratio was reported at 405%-425% for Q2 2025, slightly down from 420%-440% in Q1 2025[9] - The combined risk-based capital ratio was reported at 405%-425% as of June 30, 2025, indicating a stable capital position[37] Investment Performance - Net investment income for Q2 2025 was $1,292 million, compared to $1,316 million in Q2 2024, indicating a slight decline of 1.8%[16] - Net investment income for the corporate segment was $155 million in Q2 2025, down from $159 million in Q1 2025[28] - Net investment losses for Q2 2025 were $39 million, compared to losses of $83 million in Q1 2025, showing a 53.01% improvement[77] - The investment income yield for Q2 2025 was 4.41%, a slight increase from 4.39% in Q1 2025[77] Sales and Premiums - Premiums for annuities in Q2 2025 were $60 million, down from $63 million in Q2 2024, a decrease of 4.8%[18] - Total variable and Shield Level annuity sales for Q2 2025 were $2,105 million, a slight decrease from $2,183 million in Q2 2024, representing a decline of 3.6%[21] - Life sales for Q2 2025 reached $33 million, a decrease of 8.3% from $36 million in Q1 2025[25] Book Value and Equity - The book value per common share rose to $69.57 in Q2 2025, up from $61.17 in Q1 2025, reflecting an increase of about 25.5%[9] - The adjusted return on common equity, excluding AOCI, improved to 6.9% in Q2 2025 from 6.3% in Q1 2025[75] - Adjusted earnings per common share for Q2 2025 were $3.43, down from $4.01 in Q1 2025, reflecting a decrease of 14.45%[73] Forward-Looking Statements and Risks - Brighthouse Financial's forward-looking statements are subject to various risks and uncertainties that could lead to actual results differing materially from expectations[41] - The company emphasizes the importance of non-GAAP financial measures to enhance understanding of performance, including adjusted earnings and adjusted revenues[44] - Adjusted earnings reflect adjusted revenues less adjusted expenses, provision for income tax, net income attributable to noncontrolling interests, and preferred stock dividends[49] - The risk-based capital ratio is used to measure the capital of the insurance company relative to its size and risk profile, ensuring compliance with regulatory capital requirements[71]

Financial Performance - For the three months ended March 31, 2025, Brighthouse Financial reported a net loss available to shareholders of $294 million, an improvement from a net loss of $519 million in the same period of 2024, reflecting a 43.5% reduction in losses [269]. - Adjusted earnings for the same period were $235 million, compared to an adjusted loss of $98 million in 2024, indicating a significant turnaround in performance [269]. - Total revenues for Q1 2025 were $2,390 million, significantly up from $74 million in Q1 2024, indicating a substantial recovery [292]. - Net income attributable to Brighthouse Financial, Inc. for Q1 2025 was a loss of $268 million, an improvement from a loss of $493 million in Q1 2024 [292]. - Adjusted earnings for Q1 2025 were $235 million, a notable increase of $333 million compared to a loss of $98 million in Q1 2024 [298]. - The Annuities segment reported adjusted earnings of $314 million in Q1 2025, slightly up from $313 million in Q1 2024 [301]. - The Life segment reported adjusted earnings of $9 million, an increase of $45 million from a loss of $36 million in the prior year [306]. - The Run-off segment showed an adjusted loss of $64 million, a reduction of $277 million from a loss of $341 million in the previous year [311]. - The Corporate & Other segment recorded an adjusted loss of $24 million, a decrease of $10 million from a loss of $34 million in the prior period [314]. Investment Performance - Adjusted net investment income for Q1 2025 was $1,297 million, compared to $1,254 million in Q1 2024, reflecting a year-over-year increase of 3.4% [291]. - The net investment spread for Q1 2025 was $711 million, down from $733 million in Q1 2024, indicating a decline in investment performance [297]. - The company experienced a significant net derivative gain of $311 million in Q1 2025, compared to a loss of $1,921 million in Q1 2024, highlighting a turnaround in derivative performance [292]. - The investment income yield remained stable at 4.39% for both the first quarter of 2025 and 2024 [329]. - The company manages investment risks through asset-type allocation and diversification strategies to mitigate credit and interest rate risks [318]. Market Conditions - The financial results were impacted by market conditions, including decreasing long-term interest rates, which affected the profitability of variable annuities and other products [272]. - Brighthouse Financial's business is influenced by capital market conditions, with potential adverse effects from volatility and disruptions in financial asset classes [272]. - The Federal Reserve decreased the target range for the federal funds rate three times in 2024, affecting the pricing levels of risk-bearing investments [321]. Economic Factors - The company continues to monitor economic factors such as inflation, which could increase expenses and affect profitability if costs cannot be passed to policyholders [274]. - The company emphasizes the importance of long-term assumptions about capital market returns and interest rates in its annual actuarial review [275]. Liquidity and Capital Management - The company maintained a substantial short-term liquidity position of $4.7 billion as of March 31, 2025, down from $5.2 billion at December 31, 2024 [383]. - Liquid assets totaled $48.0 billion at March 31, 2025, slightly decreasing from $48.1 billion at December 31, 2024 [384]. - The company expects to maintain a target combined risk-based capital (RBC) ratio of 400% to 450% under normal market conditions [389]. - The company has a share repurchase program, with repurchases dependent on capital position, liquidity, and market conditions [390]. - There are currently no plans to declare and pay dividends on common stock, with future declarations subject to the Board's discretion [391]. Debt and Obligations - As of March 31, 2025, the total outstanding debt amounted to $10,074 million, a decrease from $10,962 million as of December 31, 2024, representing a reduction of approximately 8.1% [404]. - The FABCP Program showed a decrease in outstanding debt from $2,962 million in December 2024 to $2,799 million in March 2025, a decline of about 5.5% [404]. - The total obligations outstanding under short-term intercompany loan agreements were $540 million as of March 31, 2025, down from $582 million at December 31, 2024, a decrease of about 7.2% [430]. Risk Management - The company closely monitors investment risks through a comprehensive investment risk management process [394]. - The diversity of funding sources enhances funding flexibility and lowers the cost of funds [396]. - The company manages risk in its mortgage loan portfolio by generally lending up to 75% of the estimated fair value of the underlying real estate collateral [347].

Financial Performance - Net income available to shareholders for Q1 2025 was $(294) million, compared to $646 million in Q4 2024 and $(519) million in Q1 2024[9] - Adjusted earnings for Q1 2025 were $235 million, down from $304 million in Q4 2024 and up from $(98) million in Q1 2024[9] - Total revenues for Q1 2025 increased to $2,390 million, compared to $1,205 million in Q4 2024 and $74 million in Q1 2024[13] - Total adjusted revenues for Q1 2025 reached $2,156 million, a 5.2% increase from $2,050 million in Q1 2024[16] - The company reported a net income of $400 million for the three months ended March 31, 2025, compared to a net loss of $18 million in the same period last year[34] - Total revenues for the three months ended March 31, 2025, reached $4,800 million, a significant increase from $2,229 million in the same period last year, representing a growth of 115.4%[34] Capital and Assets - Combined total adjusted capital as of March 31, 2025, was $5,500 million, compared to $5,373 million as of December 31, 2024[9] - Total assets decreased to $234,681 million as of March 31, 2025, from $238,537 million as of December 31, 2024[14] - The total capital and surplus as of March 31, 2025, was $4,100 million, an increase from $4,503 million as of March 31, 2024[38] - The company’s common stockholders' equity, excluding AOCI, was $8,094 million as of March 31, 2025, compared to $8,864 million a year earlier[76] Liabilities and Expenses - Total liabilities decreased to $229,377 million as of March 31, 2025, from $233,513 million as of December 31, 2024[14] - The company reported total corporate expenses of $239 million for Q1 2025, an increase from $210 million in Q4 2024[9] - Total adjusted expenses for Q1 2025 were $1,841 million, a decrease from $2,132 million in Q1 2024, indicating a 13.6% reduction[16] Investment Performance - Net investment income for the Annuities segment increased to $753 million in Q1 2025, up from $676 million in Q1 2024, representing an 11.4% growth[17] - The investment portfolio reported net investment losses of $(83) million for the three months ended March 31, 2025, compared to $(42) million in the same period last year[78] - The adjusted net investment income yield for the three months ended March 31, 2025, was 4.25%, consistent with the yield reported in the same period last year[33] Risk and Capital Ratios - The combined risk-based capital ratio was reported at 420%-440% for Q1 2025, up from 402% in Q4 2024[9] - The combined risk-based capital ratio improved to a preliminary range of 420%-440% as of March 31, 2025, compared to 415%-435% in the same period last year[38] - The risk-based capital ratio is used to measure the company's capital relative to its size and risk profile, ensuring compliance with regulatory capital requirements[72] Segment Performance - Adjusted earnings for the Life segment in Q1 2025 were $9 million, recovering from a loss of $36 million in Q1 2024[22] - Policyholder benefits and claims in the Life segment increased to $187 million in Q1 2025 from $150 million in Q1 2024, a 24.7% rise[22] - Premiums in the Annuities segment decreased to $65 million in Q1 2025 from $83 million in Q1 2024, reflecting a 21.7% decline[17] - Total life sales reached $36 million for the three months ended March 31, 2025, up from $29 million in the same period last year, representing a 24.1% increase[24] Notable Items and Adjustments - The company experienced a total notable item impact of $10 million for the three months ended March 31, 2025, compared to $366 million in the same period last year[31] - Adjusted earnings (loss) for Corporate & Other segment were $(24) million for the three months ended March 31, 2025, compared to a loss of $(34) million in the same period last year, showing improvement[27] - Adjusted earnings reflect revenues less adjusted expenses, provision for income tax, net income attributable to noncontrolling interests, and preferred stock dividends[50] Forward-Looking Statements - Brighthouse Financial's forward-looking statements are subject to various risks and uncertainties that could materially affect actual results[42] - The company emphasizes the importance of non-GAAP financial measures to enhance understanding of performance, including adjusted earnings and adjusted return on common equity[45][55]