BRIGHTHOUSE FIN(US:BHFAM)2024-11-08 21:17Financial Performance - For the three months ended September 30, 2024, net income available to shareholders was $150 million, a decrease of 66.9% from $453 million in the same period of 2023[268]. - Adjusted earnings for the three months ended September 30, 2024, were $767 million, an increase of 134.0% compared to $326 million for the same period in 2023[269]. - For the nine months ended September 30, 2024, the net loss available to shareholders was $360 million, compared to a net loss of $272 million for the same period in 2023[270]. - Adjusted earnings for the nine months ended September 30, 2024, were $1.0 billion, up 27.8% from $792 million in the same period of 2023[270]. - Total revenues for the three months ended September 30, 2024, were $2,018 million, an increase from $1,170 million in the same period of 2023[295]. - Adjusted earnings for the three months ended September 30, 2024, were $767 million, an increase of $441 million compared to the same period in 2023[306]. - For the nine months ended September 30, 2024, adjusted earnings were $1.0 billion, reflecting an increase of $223 million year-over-year[308]. Investment and Market Conditions - The company experienced unfavorable changes in the estimated fair value of variable annuity guaranteed benefit riders due to market factors, impacting profitability[270]. - The financial and economic environment, including capital market conditions and inflation, significantly affects the company's operations and profitability[274]. - The Federal Reserve decreased the target range for the federal funds rate in September and November 2024, which may negatively impact the company's investment portfolio[274]. - The company closely monitors political and economic conditions that could contribute to market volatility, including global inflation and geopolitical conflicts[275]. - The company utilizes adjusted earnings as a non-GAAP financial measure to evaluate performance, which excludes the impact of market volatility[281]. Tax and Regulatory Environment - The effective tax rate for the three months ended September 30, 2024, was 5%, down from 18% in the prior period[297]. - The company is subject to various regulatory developments at both state and federal levels, affecting its operations and products[276]. Segment Performance - Adjusted earnings for the Annuities segment were $327 million for Q3 2024, an increase of $8 million compared to Q3 2023[313]. - Fee income in the Annuities segment rose to $523 million in Q3 2024, up from $494 million in Q3 2023, driven by higher asset-based fees[312]. - Adjusted earnings for the Life segment were a loss of $25 million in Q3 2024, an improvement of $48 million compared to a loss of $73 million in Q3 2023[321]. - Adjusted earnings for the Run-off segment increased to $463 million in Q3 2024, a significant rise of $368 million from $95 million in Q3 2023[326]. - For the nine months ended September 30, 2024, adjusted earnings for the Annuities segment were $972 million, an increase of $48 million from $924 million in the same period of 2023[317]. - The Run-off segment's adjusted earnings for the nine months ended September 30, 2024, were $92 million, an increase of $119 million compared to a loss of $27 million in the same period of 2023[327]. Investment Portfolio and Risk Management - The company has engaged external asset management firms to manage its general account portfolio and certain separate account assets, while managing derivatives trading in-house[340]. - The company monitors direct and indirect investment exposure across sectors and asset classes, adjusting investment levels as appropriate, and does not expect material adverse effects on its financial condition from current exposures[347]. - The company’s investment portfolio is subject to significant financial risks, including credit risk, interest rate risk, and market valuation risk, which could materially affect its financial condition and results of operations[383]. Liquidity and Capital Management - The company maintained a substantial short-term liquidity position of $5.7 billion as of September 30, 2024, up from $3.8 billion at December 31, 2023[407]. - Liquid assets totaled $51.5 billion at September 30, 2024, compared to $45.2 billion at December 31, 2023[408]. - The company aims to maintain a target combined risk-based capital (RBC) ratio of 400% to 450% under normal market conditions[414]. - The company has established a funding agreement-backed commercial paper program with a maximum aggregate principal amount of $5.0 billion[425]. - The company has a share repurchase program, with repurchases dependent on capital position, liquidity, and market conditions[415]. Risks and Uncertainties - Brighthouse Financial cautions that forward-looking statements may be affected by various risks and uncertainties, which could lead to actual results differing materially from expectations[459]. - Key risks include differences between actual experience and actuarial assumptions, higher risk management costs, and the impact of interest rates on future policyholder obligations[459]. - The company highlights potential adverse effects from changes in accounting standards and the availability of reinsurance, which could impact financial strength and credit ratings[459]. - Competition in the market is heightened, affecting service, product features, and distribution channels[459]. - The company emphasizes the risks associated with climate change and public health crises on its business operations and the economy[459].