BRIGHTHSE(US:BHFAO)2025-08-08 20:10Financial Performance - For the three months ended June 30, 2025, net income available to shareholders was $60 million, compared to $9 million for the same period in 2024, reflecting a significant improvement [278]. - Adjusted earnings for the three months ended June 30, 2025, were $198 million, down from $346 million in the same period of 2024 [278]. - For the six months ended June 30, 2025, the net loss available to shareholders was $234 million, an improvement from a net loss of $510 million for the same period in 2024 [279]. - Adjusted earnings for the six months ended June 30, 2025, were $433 million, compared to $248 million for the same period in 2024 [279]. - Total revenues for Q2 2025 were $871 million, a decrease of 39% from $1,427 million in Q2 2024 [300]. - Net income available to shareholders for Q2 2025 was $60 million, compared to $9 million in Q2 2024, reflecting an increase of 566% [301]. - Adjusted earnings for the three months ended June 30, 2025, were $198 million, a decrease of $148 million compared to the same period in 2024 [309]. - For the six months ended June 30, 2025, adjusted earnings increased to $433 million, up by $185 million from the prior year [311]. Investment Performance - The company experienced unfavorable changes in the estimated fair value of variable annuity guaranteed benefit riders and freestanding interest rate derivatives due to market factors [279]. - The financial results were impacted by net investment losses on mortgage loans and sales of fixed maturity securities [278]. - The total net investment gains (losses) for the three months ended June 30, 2025, were $(39) million, compared to $(120) million in the same period of 2024 [308]. - The investment income yield for the three months ended June 30, 2025, was 4.41%, generating $1,329 million, slightly down from 4.52% and $1,353 million in the same period of 2024 [349]. - The company experienced a net unrealized loss position in its investment portfolio due to interest rate increases, with unrealized losses on fixed maturity securities exceeding unrealized gains as of June 30, 2025 [341]. - The company manages investment risks through asset-type allocation and diversification, employing risk limits to avoid concentrations in any single issuer [339]. Regulatory and Economic Environment - The company is subject to various regulatory frameworks at both state and federal levels, impacting its operations and financial reporting [285]. - The company closely monitors economic conditions, including inflation and interest rates, which could materially affect its financial performance [283]. - The Federal Reserve decreased the target range for the federal funds rate three times in 2024, which may impact the pricing levels of risk-bearing investments and product sales [341]. Segment Performance - The company is one of the largest providers of annuity and life insurance products in the U.S., organized into segments: Annuities, Life, Run-off, and Corporate & Other [275]. - Adjusted earnings for the Annuities segment were $332 million for the three months ended June 30, 2025, unchanged from the prior period, with a pre-tax adjusted earnings of $410 million [314]. - The Life segment reported an adjusted loss of $26 million for the three months ended June 30, 2025, a decrease of $68 million compared to the prior period, primarily due to higher costs associated with insurance-related activities [319]. - The Run-off segment experienced an adjusted loss of $83 million for the three months ended June 30, 2025, an increase of $53 million in losses compared to the prior period, driven by higher net costs associated with insurance-related activities [326]. - The Corporate & Other segment reported an adjusted loss of $25 million for the three months ended June 30, 2025, a decrease of $27 million from the prior period, mainly due to a lower net investment spread [331]. Tax and Expenses - The effective tax rate for Q2 2025 was higher at 31% compared to 24% in Q2 2024, primarily due to the impacts of dividends received deduction and tax credits [302]. - The effective tax rate for the three months ended June 30, 2025, was 17%, slightly up from 16% in the prior year [310]. - The total expenses for Q2 2025 were $778 million, a decrease of 45% from $1,413 million in Q2 2024 [301]. Liquidity and Capital Management - The company maintained a short-term liquidity position of $4.6 billion as of June 30, 2025, compared to $5.2 billion at December 31, 2024 [401]. - Liquid assets totaled $48.9 billion as of June 30, 2025, an increase from $48.1 billion at December 31, 2024 [402]. - The company has established internal liquidity facilities to support its businesses, providing liquidity within and across its regulated and non-regulated entities [445]. - The company’s liquidity management includes conducting cash flow and stress testing to assess potential liquidity needs under various scenarios [403]. - The company authorized a $750 million share repurchase program, which may be executed through various methods at management's discretion [408]. - The company maintains a debt-to-capital ratio aligned with its financial strength and credit ratings, with plans for opportunistic financing [406]. Derivative and Risk Management - The company’s policy is not to offset the fair value amounts recognized for derivatives executed with the same counterparty under the same master netting agreement [382]. - The company’s securities lending program involves obtaining collateral generally equal to 102% of the estimated fair value of the securities loaned, ensuring a robust risk management strategy [365]. - The maximum amount at risk related to written credit default swaps is equal to the corresponding gross notional amount, which is a key strategy for managing corporate credit risk [384].