BRIGHTHOUSE FINA(US:BHFAP)2025-11-07 22:31Financial 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].