Brighthouse Financial(US:BHF)2025-11-07 22:31Financial Performance - For the three months ended September 30, 2025, net income available to shareholders was $453 million, an increase from $150 million in the same period of 2024, while adjusted earnings rose to $970 million from $767 million[286][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 in 2024, with adjusted earnings increasing to $1.4 billion from $1.0 billion[286][288]. - The increase in net income for both periods was primarily driven by favorable pre-tax adjusted earnings and a net investment gain from the sale of a subsidiary, despite some unfavorable market impacts[287][288]. - 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, compared to $767 million in the same period of 2024[331]. - 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 impact on income available to shareholders before provision for income tax was $400 million for the nine months ended September 30, 2025[320]. - 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]. Merger and Regulatory Matters - On November 6, 2025, Brighthouse Financial entered into a Merger Agreement with Aquarian Holdings VI L.P., with each share of common stock to be converted into $70.00 per share in cash at the effective time of the merger[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 related to the corporate alternative minimum tax, which may introduce 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 and Market Conditions - The company continues to monitor economic conditions that may affect market volatility, including inflation, interest rates, and geopolitical conflicts[296]. - The Federal Reserve's recent rate cuts may negatively impact the company's investment portfolio and profitability for variable annuities[295]. - As of September 30, 2025, unrealized losses on fixed maturity securities exceeded unrealized gains due to interest rate increases[365]. - The company is subject to significant financial risks including credit risk, interest rate risk, and market valuation risk, which could adversely affect its financial condition[366]. - The company does not expect its general account investments in current sectors to have a material adverse effect on its financial condition[371]. 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]. - Insurance-related activities reported a loss of $499 million for the nine months ended September 30, 2025, compared to a loss of $984 million in 2024[334]. - 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]. 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 at September 30, 2025, up from $48.1 billion at December 31, 2024[430]. - The company continuously monitors and adjusts its liquidity and capital plans in response to changing market conditions[428]. - The company aims to maintain a capital and risk management strategy targeting a combined RBC ratio of 400% to 450% under normal market conditions[435]. - The company established a stand-alone hedging program for its variable annuity and first generation Shield Annuity contracts in Q3 2025[403]. Credit and Investment Quality - The credit quality of fixed maturity securities showed that 97.1% were rated investment grade as of September 30, 2025[381]. - The company maintains no exposure to any single issuer exceeding 1% of total investments, with the top ten holdings comprising 1% of total investments as of both September 30, 2025, and December 31, 2024[383]. - The estimated fair value of embedded derivative liabilities related to Shield Annuities was $11.4 billion at September 30, 2025[425]. 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 company is subject to regulatory approval for any dividend payments by Brighthouse Life Insurance Company in 2025[473].