[Financial Results](index=3&type=section&id=Financial%20Results) This section presents Brighthouse Financial's Q2 2025 financial performance, including key metrics, GAAP statements, and segment-level adjusted earnings [Key Metrics](index=4&type=section&id=1%20Key%20Metrics) Brighthouse Financial's key metrics for Q2 2025 show a significant increase in net income available to shareholders to $60 million, a rebound from a loss in the prior quarter. Adjusted earnings decreased QoQ but remained positive. The company maintained a strong capital position with combined total adjusted capital at $5,600 million and a robust risk-based capital ratio of 405%-425% | Metric | June 30, 2025 ($ millions) | March 31, 2025 ($ millions) | June 30, 2024 ($ millions) | | :------------------------------------------ | :------------ | :------------- | :------------ | | Net income (loss) available to shareholders | $60 | $(294) | $9 | | Adjusted earnings | $198 | $235 | $346 | | Adjusted earnings, less notable items | $198 | $245 | $346 | | Total corporate expenses | $202 | $239 | $200 | | Combined total adjusted capital | $5,600 | $5,549 | $5,397 | | Combined risk-based capital ratio | 405%-425% | 420%-440% | 380%-400% | | Brighthouse Financial, Inc.'s stockholders' equity | $5,673 | $5,239 | $4,141 | | Brighthouse Financial, Inc.'s common stockholders' equity, excluding AOCI | $8,231 | $8,210 | $7,861 | | Return on common equity | 16.5% | 16.4% | (36.3)% | | Adjusted return on common equity, excluding AOCI | 18.4% | 20.4% | 8.8% | | Net income (loss) available to shareholders per common share | $1.02 | $(5.04) | $0.12 | | Adjusted earnings per common share | $3.43 | $4.01 | $5.57 | | Book value per common share | $69.57 | $61.17 | $39.87 | | Book value per common share, excluding AOCI | $144.09 | $141.87 | $128.36 | - Net income available to shareholders significantly improved to **$60 million** in Q2 2025, compared to a loss of **$(294) million** in Q1 2025 and a gain of **$9 million** in Q2 2024[9](index=9&type=chunk) - Adjusted earnings decreased to **$198 million** in Q2 2025 from **$235 million** in Q1 2025 and **$346 million** in Q2 2024[9](index=9&type=chunk) - The combined risk-based capital ratio is reported as a preliminary range of **405%-425%** for Q2 2025, indicating a strong capital position[9](index=9&type=chunk)[11](index=11&type=chunk) [GAAP Statements of Operations](index=5&type=section&id=2%20GAAP%20Statements%20of%20Operations) For Q2 2025, Brighthouse Financial reported total revenues of $871 million, a decrease from $2,390 million in Q1 2025, primarily due to significant net derivative losses. Net income available to common shareholders was $60 million, a substantial improvement from a loss of $(294) million in the previous quarter | Metric | June 30, 2025 ($ millions) | March 31, 2025 ($ millions) | June 30, 2024 ($ millions) | | :------------------------------------------ | :------------ | :------------- | :------------ | | Premiums | $166 | $186 | $181 | | Universal life and investment-type product policy fees | $553 | $543 | $580 | | Net investment income | $1,285 | $1,297 | $1,307 | | Net investment gains (losses) | $(39) | $(83) | $(120) | | Net derivative gains (losses) | $(1,237) | $311 | $(662) | | Total revenues | $871 | $2,390 | $1,427 | | Policyholder benefits and claims | $711 | $649 | $642 | | Interest credited to policyholder account balances | $537 | $561 | $509 | | Change in market risk benefits | $(1,101) | $893 | $(356) | | Total expenses | $778 | $2,744 | $1,413 | | Net income (loss) available to Brighthouse Financial, Inc.'s common shareholders | $60 | $(294) | $9 | - Total revenues for Q2 2025 were **$871 million**, a decrease from **$2,390 million** in Q1 2025, largely driven by net derivative losses of **$(1,237) million**[13](index=13&type=chunk) - Net income available to common shareholders improved significantly to **$60 million** in Q2 2025 from a loss of **$(294) million** in Q1 2025[13](index=13&type=chunk) [GAAP Balance Sheets](index=6&type=section&id=3%20GAAP%20Balance%20Sheets) As of June 30, 2025, Brighthouse Financial reported total assets of $242,645 million, an increase from $234,681 million in the prior quarter. Total liabilities also increased to $236,907 million, while total equity rose to $5,738 million, reflecting an increase in stockholders' equity | Metric | June 30, 2025 ($ millions) | March 31, 2025 ($ millions) | December 31, 2024 ($ millions) | June 30, 2024 ($ millions) | | :------------------------------------------ | :------------ | :------------- | :---------------- | :------------ | | Total investments | $120,747 | $117,257 | $117,387 | $115,299 | | Cash and cash equivalents | $5,540 | $4,667 | $5,045 | $4,441 | | Separate account assets | $86,085 | $82,524 | $85,636 | $88,260 | | Total assets | $242,645 | $234,681 | $238,537 | $237,438 | | Future policy benefits | $31,974 | $31,834 | $31,475 | $31,886 | | Policyholder account balances | $88,046 | $85,618 | $87,989 | $85,865 | | Market risk benefit liabilities | $8,051 | $9,165 | $8,329 | $8,708 | | Long-term debt | $3,155 | $3,155 | $3,155 | $3,155 | | Separate account liabilities | $86,085 | $82,524 | $85,636 | $88,260 | | Total liabilities | $236,907 | $229,377 | $233,513 | $233,232 | | Total Brighthouse Financial, Inc.'s stockholders' equity | $5,673 | $5,239 | $4,959 | $4,141 | | Total equity | $5,738 | $5,304 | $5,024 | $4,206 | - Total assets increased by **$7,964 million** from March 31, 2025, to June 30, 2025, reaching **$242,645 million**[14](index=14&type=chunk) - Total equity grew to **$5,738 million** as of June 30, 2025, up from **$5,304 million** in the previous quarter[14](index=14&type=chunk) [Statements of Adjusted Earnings by Segment](index=8&type=section&id=5%20Statements%20of%20Adjusted%20Earnings%20by%20Segment) Brighthouse Financial's adjusted earnings by segment for Q2 2025 show Annuities as the primary contributor to positive adjusted earnings, while Life and Run-off segments reported losses. Corporate & Other also recorded a loss, reflecting ongoing operational costs and preferred stock dividends | Segment | Adjusted Earnings (Loss) (Q2 2025) ($ millions) | Adjusted Earnings (Loss) (Q2 2024) ($ millions) | Adjusted Earnings (Loss) (YTD Q2 2025) ($ millions) | Adjusted Earnings (Loss) (YTD Q2 2024) ($ millions) | | :---------------- | :--------------------------------- | :--------------------------------- | :------------------------------------- | :------------------------------------- | | Annuities | $332 | $332 | $646 | $645 | | Life | $(26) | $42 | $(17) | $6 | | Run-off | $(83) | $(30) | $(147) | $(371) | | Corporate & Other | $(25) | $2 | $(49) | $(32) | | Total | $198 | $346 | $433 | $248 | - The Annuities segment consistently generated positive adjusted earnings, reporting **$332 million** in Q2 2025, flat compared to Q2 2024[16](index=16&type=chunk) - The Life segment recorded an adjusted loss of **$(26) million** in Q2 2025, a decline from adjusted earnings of **$42 million** in Q2 2024[16](index=16&type=chunk) - The Run-off segment's adjusted loss widened to **$(83) million** in Q2 2025 from **$(30) million** in Q2 2024[16](index=16&type=chunk) [Annuities — Statements of Adjusted Earnings](index=10&type=section&id=7%20Annuities%20%E2%80%94%20Statements%20of%20Adjusted%20Earnings) The Annuities segment reported stable adjusted earnings of $332 million in Q2 2025, consistent with Q2 2024. Total adjusted revenues increased slightly year-over-year, driven by higher net investment income, while total adjusted expenses also saw a modest rise | Metric | June 30, 2025 ($ millions) | March 31, 2025 ($ millions) | June 30, 2024 ($ millions) | | :------------------------------------------ | :------------ | :------------- | :------------ | | Premiums | $60 | $65 | $63 | | Universal life and investment-type product policy fees | $385 | $396 | $419 | | Net investment income | $757 | $753 | $702 | | Total adjusted revenues | $1,331 | $1,344 | $1,314 | | Policyholder benefits and claims | $98 | $110 | $109 | | Interest credited to policyholder account balances | $354 | $358 | $328 | | Total adjusted expenses | $921 | $957 | $904 | | Adjusted earnings | $332 | $314 | $332 | - Annuities adjusted earnings remained flat at **$332 million** in Q2 2025 compared to Q2 2024[18](index=18&type=chunk) - Net investment income for Annuities increased to **$757 million** in Q2 2025 from **$702 million** in Q2 2024[18](index=18&type=chunk) [Annuities — Select Operating Metrics](index=11&type=section&id=8%20Annuities%20%E2%80%94%20Select%20Operating%20Metrics) The Annuities segment saw an increase in Variable and Shield Level Annuities account value to $127,180 million as of June 30, 2025, driven by strong investment performance despite negative net flows. Fixed Annuities account value remained stable, while total annuity sales decreased year-over-year | Metric | June 30, 2025 ($ millions) | March 31, 2025 ($ millions) | June 30, 2024 ($ millions) | | :------------------------------------------ | :------------ | :------------- | :------------ | | Variable and Shield Level Annuities Account Value, end of period | $127,180 | $120,963 | $124,488 | | Variable and Shield Level Annuities Net flows | $(2,002) | $(1,955) | $(1,616) | | Variable and Shield Level Annuities Investment performance | $8,758 | $(1,715) | $1,598 | | Fixed Annuities Account Value, end of period | $19,339 | $19,355 | $19,600 | | Total variable and Shield Level annuity sales | $2,105 | $2,122 | $2,183 | | Total fixed and income annuity sales | $505 | $137 | $225 | - Variable and Shield Level Annuities account value increased to **$127,180 million** at June 30, 2025, from **$120,963 million** at March 31, 2025, primarily due to **$8,758 million** in investment performance[19](index=19&type=chunk) - Total variable and Shield Level annuity sales decreased to **$2,105 million** in Q2 2025 from **$2,183 million** in Q2 2024[21](index=21&type=chunk) - Fixed and income annuity sales saw a significant increase to **$505 million** in Q2 2025 from **$137 million** in Q1 2025 and **$225 million** in Q2 2024, driven by fixed deferred annuities[21](index=21&type=chunk) [Life — Statements of Adjusted Earnings](index=13&type=section&id=10%20Life%20%E2%80%94%20Statements%20of%20Adjusted%20Earnings) The Life segment reported an adjusted loss of $(26) million in Q2 2025, a notable decline from adjusted earnings of $42 million in Q2 2024. This shift was primarily due to a significant increase in policyholder benefits and claims, which more than offset stable revenues | Metric | June 30, 2025 ($ millions) | March 31, 2025 ($ millions) | June 30, 2024 ($ millions) | | :------------------------------------------ | :------------ | :------------- | :------------ | | Premiums | $104 | $121 | $118 | | Universal life and investment-type product policy fees | $78 | $59 | $55 | | Net investment income | $97 | $107 | $121 | | Total adjusted revenues | $283 | $291 | $297 | | Policyholder benefits and claims | $213 | $187 | $155 | | Interest credited to policyholder account balances | $28 | $27 | $25 | | Total adjusted expenses | $316 | $281 | $245 | | Adjusted earnings (loss) | $(26) | $9 | $42 | - The Life segment's adjusted earnings turned to a loss of **$(26) million** in Q2 2025, compared to earnings of **$42 million** in Q2 2024[23](index=23&type=chunk) - Policyholder benefits and claims increased significantly to **$213 million** in Q2 2025 from **$155 million** in Q2 2024, contributing to the adjusted loss[23](index=23&type=chunk) [Life — Select Operating Metrics](index=14&type=section&id=11%20Life%20%E2%80%94%20Select%20Operating%20Metrics) Life insurance account values remained relatively stable, with Universal and Variable Universal Life general account value at $2,605 million and separate account value at $6,632 million as of June 30, 2025. Total life sales increased to $33 million in Q2 2025 from $28 million in Q2 2024, while life insurance in-force generally saw a slight decrease across all categories | Metric | June 30, 2025 ($ millions) | March 31, 2025 ($ millions) | June 30, 2024 ($ millions) | | :------------------------------------------ | :------------ | :------------- | :------------ | | Universal and variable universal life account value, end of period (General Account) | $2,605 | $2,597 | $2,566 | | Variable universal life account value, end of period (Separate Account) | $6,632 | $6,125 | $6,231 | | Total life sales | $33 | $36 | $28 | | Whole Life Insurance in-force, net of reinsurance | $2,818 | $2,855 | $2,915 | | Term Life Insurance in-force, net of reinsurance | $267,845 | $272,711 | $283,452 | | Universal and Variable Universal Life Insurance in-force, net of reinsurance | $32,026 | $31,926 | $33,029 | - Total life sales increased to **$33 million** in Q2 2025, up from **$28 million** in Q2 2024[25](index=25&type=chunk) - Life Insurance in-force, net of reinsurance, for Term Life decreased to **$267,845 million** as of June 30, 2025, from **$283,452 million** a year prior[25](index=25&type=chunk) [Run-off — Statements of Adjusted Earnings](index=16&type=section&id=13%20Run-off%20%E2%80%94%20Statements%20of%20Adjusted%20Earnings) The Run-off segment's adjusted loss widened to $(83) million in Q2 2025, compared to a loss of $(30) million in Q2 2024. This was primarily driven by an increase in policyholder benefits and claims, despite a slight decrease in total adjusted revenues | Metric | June 30, 2025 ($ millions) | March 31, 2025 ($ millions) | June 30, 2024 ($ millions) | | :------------------------------------------ | :------------ | :------------- | :------------ | | Premiums | $2 | $— | $— | | Universal life and investment-type product policy fees | $90 | $88 | $106 | | Net investment income | $283 | $272 | $315 | | Total adjusted revenues | $382 | $367 | $429 | | Policyholder benefits and claims | $400 | $352 | $378 | | Interest credited to policyholder account balances | $58 | $60 | $53 | | Total adjusted expenses | $487 | $448 | $466 | | Adjusted earnings (loss) | $(83) | $(64) | $(30) | - The Run-off segment reported an adjusted loss of **$(83) million** in Q2 2025, an increase from **$(30) million** in Q2 2024[26](index=26&type=chunk) - Policyholder benefits and claims increased to **$400 million** in Q2 2025 from **$378 million** in Q2 2024[26](index=26&type=chunk) [Run-off — Select Operating Metrics](index=17&type=section&id=14%20Run-off%20%E2%80%94%20Select%20Operating%20Metrics) The Universal Life with Secondary Guarantees (ULSG) account value in the Run-off segment decreased to $4,619 million as of June 30, 2025, from $4,914 million a year prior, primarily due to policy charges and other adjustments. Life insurance in-force for ULSG also saw a decline | Metric | June 30, 2025 ($ millions) | March 31, 2025 ($ millions) | June 30, 2024 ($ millions) | | :------------------------------------------ | :------------ | :------------- | :------------ | | Universal Life with Secondary Guarantees Account Value, end of period | $4,619 | $4,710 | $4,914 | | Universal Life with Secondary Guarantees Life Insurance in-force, net of reinsurance | $32,879 | $33,212 | $34,026 | - ULSG account value decreased by **$295 million** year-over-year, from **$4,914 million** in Q2 2024 to **$4,619 million** in Q2 2025[27](index=27&type=chunk) - Life Insurance in-force, net of reinsurance, for ULSG declined to **$32,879 million** as of June 30, 2025, from **$34,026 million** a year ago[27](index=27&type=chunk) [Corporate & Other — Statements of Adjusted Earnings and Select Operating Metrics](index=18&type=section&id=15%20Corporate%20%26%20Other%20%E2%80%94%20Statements%20of%20Adjusted%20Earnings%20and%20Select%20Operating%20Metrics) The Corporate & Other segment reported an adjusted loss of $(25) million in Q2 2025, a decrease from adjusted earnings of $2 million in Q2 2024. This was mainly due to a decline in net investment income and an increase in other operating costs, alongside consistent interest expense on debt and preferred stock dividends | Metric | June 30, 2025 ($ millions) | March 31, 2025 ($ millions) | June 30, 2024 ($ millions) | | :------------------------------------------ | :------------ | :------------- | :------------ | | Net investment income | $155 | $159 | $178 | | Total adjusted revenues | $158 | $154 | $178 | | Interest credited to policyholder account balances | $103 | $106 | $109 | | Interest expense on debt | $38 | $38 | $38 | | Other operating costs | $20 | $11 | $13 | | Total adjusted expenses | $161 | $155 | $160 | | Adjusted earnings (loss) | $(25) | $(24) | $2 | | Institutional spread margin business account balance, end of period | $10,149 | $10,092 | $10,974 | - The Corporate & Other segment's adjusted earnings shifted to a loss of **$(25) million** in Q2 2025, from earnings of **$2 million** in Q2 2024[28](index=28&type=chunk) - Net investment income decreased to **$155 million** in Q2 2025 from **$178 million** in Q2 2024[28](index=28&type=chunk) - Institutional spread margin business account balance decreased to **$10,149 million** as of June 30, 2025, from **$10,974 million** a year prior[28](index=28&type=chunk) [Other Information](index=19&type=section&id=Other%20Information) This section provides additional financial details, including market risk benefits, notable items, variable annuity performance, investment summaries, and statutory financial information [Change in Market Risk Benefits and Net Derivative Gains (Losses)](index=20&type=section&id=17%20Change%20in%20Market%20Risk%20Benefits%20and%20Net%20Derivative%20Gains%20(Losses)) In Q2 2025, the total change in market risk benefits was a gain of $1,101 million, a significant positive reversal from a loss of $(893) million in Q1 2025. Concurrently, net derivative gains (losses) showed a substantial loss of $(1,237) million, primarily driven by Shield embedded derivatives | Metric | June 30, 2025 ($ millions) | March 31, 2025 ($ millions) | June 30, 2024 ($ millions) | | :------------------------------------------ | :------------ | :------------- | :------------ | | Market risk benefits mark-to-market | $1,020 | $(999) | $228 | | Total change in market risk benefits | $1,101 | $(893) | $356 | | Variable annuity hedges | $1,073 | $(877) | $137 | | Shield embedded derivatives | $(2,103) | $1,171 | $(697) | | Total net derivative gains (losses) | $(1,237) | $311 | $(662) | - The total change in market risk benefits was a positive **$1,101 million** in Q2 2025, a significant improvement from **$(893) million** in Q1 2025[30](index=30&type=chunk) - Net derivative gains (losses) resulted in a loss of **$(1,237) million** in Q2 2025, largely due to **$(2,103) million** from Shield embedded derivatives[30](index=30&type=chunk) [Notable Items](index=21&type=section&id=18%20Notable%20Items) For Q2 2025, there were no notable items impacting adjusted earnings. In Q1 2025, a $10 million positive impact was recorded, primarily within the Annuities segment | Metric | June 30, 2025 ($ millions) | March 31, 2025 ($ millions) | December 31, 2024 ($ millions) | September 30, 2024 ($ millions) | June 30, 2024 ($ millions) | | :------------------------------------------ | :------------ | :------------- | :---------------- | :----------------- | :------------ | | Actuarial items and other insurance adjustments | $— | $10 | $48 | $(524) | $— | | Total notable items | $— | $10 | $48 | $(524) | $— | | Notable Items by Segment: | | | | | | | Annuities | $— | $10 | $48 | $(20) | $— | | Life | $— | $— | $— | $66 | $— | | Run-off | $— | $— | $— | $(570) | $— | | Corporate & Other | $— | $— | $— | $— | $— | - No notable items impacted adjusted earnings in Q2 2025. In Q1 2025, there was a **$10 million** positive impact from actuarial items and other insurance adjustments, entirely within the Annuities segment[31](index=31&type=chunk) [Variable Annuity Separate Account Returns and Allocations](index=22&type=section&id=19%20Variable%20Annuity%20Separate%20Account%20Returns%20and%20Allocations) Variable Annuity (VA) separate accounts achieved strong gross returns of 7.59% in Q2 2025, a significant rebound from negative returns in the prior two quarters. Asset allocations remained diversified, with balanced funds holding the largest share at 40.61% | Metric | June 30, 2025 (%) | March 31, 2025 (%) | December 31, 2024 (%) | September 30, 2024 (%) | June 30, 2024 (%) | | :------------------------------------------ | :------------ | :------------- | :---------------- | :----------------- | :------------ | | Total Quarterly VA separate account gross returns | 7.59% | (0.54)% | (1.23)% | 6.14% | 0.91% | | Percent allocated to equity funds | 32.54% | 31.28% | 32.36% | 31.69% | 31.60% | | Percent allocated to bond funds/other funds | 9.04% | 9.58% | 9.21% | 9.02% | 9.02% | | Percent allocated to target volatility funds | 17.81% | 18.41% | 18.03% | 18.60% | 18.59% | | Percent allocated to balanced funds | 40.61% | 40.73% | 40.40% | 40.69% | 40.79% | - Total Quarterly VA separate account gross returns were **7.59%** in Q2 2025, a strong recovery from **(0.54)%** in Q1 2025[32](index=32&type=chunk) - Balanced funds continued to represent the largest allocation at **40.61%** of total VA separate account allocations as of June 30, 2025[32](index=32&type=chunk) [Summary of Investments](index=23&type=section&id=20%20Summary%20of%20Investments) As of June 30, 2025, Brighthouse Financial's investment portfolio totaled $126,287 million, with fixed maturity securities comprising the largest portion at 64.01%. Equity market derivatives saw a significant increase, reflecting active risk management strategies. The adjusted net investment income yield was 4.28% for Q2 2025 | Investment Category | June 30, 2025 Amount ($ millions) | June 30, 2025 % of Total (%) | December 31, 2024 Amount ($ millions) | December 31, 2024 % of Total (%) | | :------------------------------------------ | :------------------- | :----------------------- | :----------------------- | :--------------------------- | | Total fixed maturity securities | $80,835 | 64.01% | $80,055 | 65.39% | | Total mortgage loans, net | $22,993 | 18.21% | $23,286 | 19.02% | | Limited partnerships and limited liability companies | $4,798 | 3.80% | $4,827 | 3.94% | | Cash, cash equivalents and short-term investments | $6,710 | 5.31% | $6,913 | 5.65% | | Total other invested assets (incl. derivatives) | $8,932 | 7.07% | $5,250 | 4.29% | | Total investments and cash and cash equivalents | $126,287 | 100.00% | $122,432 | 100.00% | | Adjusted net investment income yield (Q2 2025) | 4.28% | | | | - Total investments and cash and cash equivalents increased to **$126,287 million** as of June 30, 2025, from **$122,432 million** at December 31, 2024[33](index=33&type=chunk) - Equity market derivatives within other invested assets significantly increased to **$7,183 million** from **$3,265 million** at December 31, 2024[33](index=33&type=chunk) - The adjusted net investment income yield for Q2 2025 was **4.28%**, slightly higher than **4.25%** in Q1 2025[33](index=33&type=chunk) [Statutory Statement of Operations Information](index=24&type=section&id=21%20Statutory%20Statement%20of%20Operations%20Information) Preliminary statutory results for Q2 2025 show a combined net loss of $(1,600) million, a significant decline from a gain of $441 million in Q1 2025, primarily due to net realized capital losses. Normalized statutory earnings also remained negative at $(0.1) billion for the six months ended June 30, 2025 | Metric | June 30, 2025 (Preliminary) ($ millions) | March 31, 2025 ($ millions) | June 30, 2024 ($ millions) | | :------------------------------------------ | :-------------------------- | :------------- | :------------ | | Total revenues | $1,500 | $4,809 | $3,656 | | Total benefits and expenses before dividends to policyholders | $2,400 | $3,584 | $4,027 | | Gain (loss) from operations net of taxes and dividends to policyholders | $(900) | $1,225 | $(373) | | Net realized capital gains (losses), net of taxes and certain transfers to interest maintenance reserve | $(700) | $(784) | $(588) | | Net income (loss) | $(1,600) | $441 | $(961) | | Normalized statutory earnings (loss) (Six Months Ended) | $(0.1) billion | | $(0.8) billion | - Combined statutory net income (loss) for Q2 2025 was a preliminary loss of **$(1,600) million**, a sharp decrease from a gain of **$441 million** in Q1 2025[34](index=34&type=chunk) - Net realized capital losses contributed significantly to the Q2 2025 statutory loss, totaling **$(700) million**[34](index=34&type=chunk) - Normalized statutory earnings (loss) for the six months ended June 30, 2025, was a loss of **$(0.1) billion**[35](index=35&type=chunk) [Statutory Balance Sheet and Surplus Information](index=25&type=section&id=22%20Statutory%20Balance%20Sheet%20and%20Surplus%20Information) Preliminary statutory results as of June 30, 2025, show combined total assets of $202,900 million and total liabilities of $198,900 million. Total capital and surplus stood at $4,000 million, while the combined total adjusted capital was $5,600 million, supporting a strong risk-based capital ratio of 405%-425% | Metric | June 30, 2025 (Preliminary) ($ millions) | March 31, 2025 ($ millions) | December 31, 2024 ($ millions) | June 30, 2024 ($ millions) | | :------------------------------------------ | :-------------------------- | :------------- | :---------------- | :------------ | | Total assets | $202,900 | $193,978 | $198,370 | $198,413 | | Total liabilities | $198,900 | $189,859 | $194,491 | $194,539 | | Total capital and surplus | $4,000 | $4,119 | $3,879 | $3,874 | | Combined total adjusted capital | $5,600 | $5,549 | $5,373 | $5,397 | | Combined risk-based capital ratio | 405%-425% | 420%-440% | 402% | 380%-400% | | Total dividends paid | $— | $— | $— | $— | - Combined total adjusted capital increased to **$5,600 million** as of June 30, 2025, from **$5,549 million** in the prior quarter[37](index=37&type=chunk) - The preliminary combined risk-based capital ratio for Q2 2025 is estimated between **405%-425%**, indicating strong regulatory capital adequacy[37](index=37&type=chunk)[38](index=38&type=chunk) - No dividends were paid to the holding company in Q2 2025 or the preceding quarters shown[37](index=37&type=chunk) [Appendix](index=26&type=section&id=Appendix) This section contains important disclosures, definitions of non-GAAP financial measures, acronyms, and detailed reconciliations of GAAP to adjusted financial metrics [Note Regarding Forward-Looking Statements](index=27&type=section&id=A-1%20Note%20Regarding%20Forward-Looking%20Statements) This section provides a cautionary note regarding forward-looking statements, emphasizing that they involve substantial risks and uncertainties and are not guarantees of future performance. Actual results may differ materially due to various known and unknown factors, including actuarial assumptions, market risk, regulatory changes, and economic conditions - Forward-looking statements are subject to **substantial risks and uncertainties** and are not guarantees of future performance[40](index=40&type=chunk)[41](index=41&type=chunk) - Key risk factors include differences between actual experience and actuarial assumptions, market risk management costs, effectiveness of risk management strategies, interest rate impacts, changes in accounting standards, and regulatory changes[41](index=41&type=chunk) - Readers are cautioned against relying on forward-looking statements and should review risk factors detailed in the company's SEC filings, including the Annual Report on Form 10-K[42](index=42&type=chunk) [Non-GAAP and Other Financial Disclosures](index=28&type=section&id=A-2%20Non-GAAP%20and%20Other%20Financial%20Disclosures) This section defines the non-GAAP financial measures used by Brighthouse Financial, such as Adjusted Earnings, Adjusted Revenues, and Adjusted Expenses, which are intended to provide a clearer view of underlying business performance by excluding market volatility. It also outlines other key financial disclosures and metrics used by management - Non-GAAP financial measures are presented to enhance understanding of performance by highlighting operational results and underlying profitability drivers, excluding market volatility[44](index=44&type=chunk)[48](index=48&type=chunk) - Reconciliations to GAAP measures are provided for historical data, but not for forward-looking statements due to the unpredictable nature of net investment and derivative gains/losses[47](index=47&type=chunk) [Non-GAAP Financial Disclosures](index=28&type=section&id=Non-GAAP%20Financial%20Disclosures) This sub-section details the definitions and calculation methodologies for key non-GAAP financial measures, including Adjusted Earnings, Adjusted Revenues, Adjusted Expenses, Adjusted Earnings per Common Share, Adjusted Return on Common Equity, and Adjusted Net Investment Income, emphasizing their role in evaluating core business performance - Adjusted earnings is a key management metric that excludes the impact of market volatility to focus on primary business performance[48](index=48&type=chunk) - Adjusted revenues exclude net investment gains/losses, investment gains/losses on trading securities, and net derivative gains/losses (excluding Investment Hedge Adjustments)[52](index=52&type=chunk)[58](index=58&type=chunk) - Adjusted expenses exclude change in market risk benefits and market value adjustments[52](index=52&type=chunk)[58](index=58&type=chunk) - Adjusted return on common equity is calculated using total annual adjusted earnings on a four-quarter trailing basis, divided by the simple average of the most recent five quarters of common stockholders' equity, excluding AOCI[56](index=56&type=chunk) [Other Financial Disclosures](index=30&type=section&id=Other%20Financial%20Disclosures) This sub-section provides definitions for various other financial and operational metrics, including Corporate Expenses, Notable Items, Book Value per Common Share, CTE70, CTE98, Holding Company Liquid Assets, Total Adjusted Capital, Sales, Normalized Statutory Earnings (Loss), and Risk-Based Capital Ratio, clarifying their meaning and application within the company's reporting - Notable items reflect the after-tax impact of certain unanticipated or anticipated items and events on results, presented to aid investor understanding and forecasting[61](index=61&type=chunk) - Total adjusted capital primarily consists of statutory capital and surplus, plus the statutory asset valuation reserve[67](index=67&type=chunk) - Normalized statutory earnings (loss) measures insurance companies' ability to pay future distributions, incorporating hedging program effectiveness and other business factors[70](index=70&type=chunk) - The risk-based capital ratio assesses an insurance company's capital relative to its size and risk profile, ensuring compliance with minimum regulatory capital requirements[71](index=71&type=chunk) [Acronyms](index=32&type=section&id=A-6%20Acronyms) This section provides a comprehensive list of acronyms used throughout the financial supplement, aiding readers in understanding the specialized terminology - The section lists common acronyms such as **AOCI** (Accumulated other comprehensive income (loss)), **DAC** (Deferred policy acquisition costs), **GAAP** (Accounting principles generally accepted in the United States of America), **RBC** (Risk-based capital), and **VA** (Variable annuity)[72](index=72&type=chunk) [Reconciliation of Net Income (Loss) Available to Shareholders to Adjusted Earnings (Loss) and Adjusted Earnings, Less Notable Items, and Reconciliation of Net Income (Loss) Available to Shareholders per Common Share to Adjusted Earnings (Loss) per Common Share and Adjusted Earnings, Less Notable Items per Common Share](index=33&type=section&id=A-7%20Reconciliation%20of%20Net%20Income%20(Loss)%20Available%20to%20Shareholders%20to%20Adjusted%20Earnings%20(Loss)%20and%20Adjusted%20Earnings,%20Less%20Notable%20Items,%20and%20Reconciliation%20of%20Net%20Income%20(Loss)%20Available%20to%20Shareholders%20per%20Common%20Share%20to%20Adjusted%20Earnings%20(Loss)%20per%20Common%20Share%20and%20Adjusted%20Earnings,%20Less%20Notable%20Items%20per%20Common%20Share) This reconciliation details the adjustments from GAAP net income (loss) available to shareholders to adjusted earnings and adjusted earnings, less notable items, both in total and on a per common share basis. For Q2 2025, net income of $60 million was adjusted to $198 million in adjusted earnings, with no notable items | Metric | June 30, 2025 ($ millions) | March 31, 2025 ($ millions) | June 30, 2024 ($ millions) | | :------------------------------------------ | :------------ | :------------- | :------------ | | Net income (loss) available to shareholders | $60 | $(294) | $9 | | Less: Net investment gains (losses) | $(39) | $(83) | $(120) | | Less: Net derivative gains (losses), excluding investment hedge adjustments | $(1,238) | $311 | $(671) | | Less: Change in market risk benefits | $1,101 | $(893) | $356 | | Adjusted earnings (loss) | $198 | $235 | $346 | | Less: Notable items | $— | $(10) | $— | | Adjusted earnings, less notable items | $198 | $245 | $346 | | Net income (loss) available to shareholders per common share | $1.02 | $(5.04) | $0.12 | | Adjusted earnings per common share | $3.43 | $4.01 | $5.57 | | Adjusted earnings, less notable items per common share | $3.43 | $4.17 | $5.57 | - Net income available to shareholders of **$60 million** in Q2 2025 reconciles to adjusted earnings of **$198 million**, primarily by excluding net derivative losses and including positive changes in market risk benefits[73](index=73&type=chunk) - Adjusted earnings per common share was **$3.43** in Q2 2025, compared to **$4.01** in Q1 2025 and **$5.57** in Q2 2024[73](index=73&type=chunk) [Reconciliation of Return on Common Equity to Adjusted Return on Common Equity, Excluding AOCI](index=34&type=section&id=A-8%20Reconciliation%20of%20Return%20on%20Common%20Equity%20to%20Adjusted%20Return%20on%20Common%20Equity,%20Excluding%20AOCI) This reconciliation shows the adjustment from GAAP return on common equity to adjusted return on common equity, excluding Accumulated Other Comprehensive Income (AOCI). For the four quarters ended June 30, 2025, the adjusted return on common equity, excluding AOCI, was 18.4%, significantly higher than the GAAP return on common equity of 16.5% | Metric (Four Quarters Cumulative Trailing Basis) | June 30, 2025 ($ millions) | March 31, 2025 ($ millions) | June 30, 2024 ($ millions) | | :------------------------------------------ | :------------ | :------------- | :------------ | | Net income (loss) available to shareholders | $562 | $511 | $(999) | | Adjusted earnings | $1,504 | $1,652 | $751 | | Brighthouse Financial, Inc.'s common stockholders' equity, excluding AOCI (Five Quarters Average) | $8,158 | $8,094 | $8,567 | | Return on common equity | 16.5% | 16.4% | (36.3)% | | Return on common equity, excluding AOCI | 6.9% | 6.3% | (11.7)% | | Adjusted return on common equity, excluding AOCI | 18.4% | 20.4% | 8.8% | - Adjusted return on common equity, excluding AOCI, was **18.4%** for the four quarters ended June 30, 2025, demonstrating strong underlying profitability[75](index=75&type=chunk) - The exclusion of net derivative gains (losses) and change in market risk benefits significantly impacts the reconciliation from GAAP to adjusted return on common equity[75](index=75&type=chunk) [Reconciliation of Total Revenues to Adjusted Revenues and Reconciliation of Total Expenses to Adjusted Expenses](index=35&type=section&id=A-9%20Reconciliation%20of%20Total%20Revenues%20to%20Adjusted%20Revenues%20and%20Reconciliation%20of%20Total%20Expenses%20to%20Adjusted%20Expenses) This section reconciles GAAP total revenues and total expenses to their adjusted counterparts. For Q2 2025, total revenues of $871 million were adjusted to $2,154 million, primarily by adding back net derivative losses. Total expenses of $778 million were adjusted to $1,885 million, mainly by adding back the positive change in market risk benefits | Metric | June 30, 2025 ($ millions) | March 31, 2025 ($ millions) | June 30, 2024 ($ millions) | | :------------------------------------------ | :------------ | :------------- | :------------ | | Total revenues | $871 | $2,390 | $1,427 | | Less: Net investment gains (losses) | $(39) | $(83) | $(120) | | Less: Net derivative gains (losses) | $(1,237) | $311 | $(662) | | Total adjusted revenues | $2,154 | $2,156 | $2,218 | | Total expenses | $778 | $2,744 | $1,413 | | Less: Change in market risk benefits | $(1,101) | $893 | $(356) | | Total adjusted expenses | $1,885 | $1,841 | $1,775 | - Total adjusted revenues for Q2 2025 were **$2,154 million**, significantly higher than GAAP total revenues of **$871 million**, mainly due to the exclusion of net derivative losses[76](index=76&type=chunk) - Total adjusted expenses for Q2 2025 were **$1,885 million**, higher than GAAP total expenses of **$778 million**, primarily due to the exclusion of the positive change in market risk benefits[76](index=76&type=chunk) [Investment Reconciliation Details](index=36&type=section&id=A-10%20Investment%20Reconciliation%20Details) This section provides detailed reconciliation for net investment gains (losses) and the adjusted net investment income yield. For Q2 2025, net investment losses were $(39) million, and the adjusted net investment income yield was 4.28% | Metric | June 30, 2025 ($ millions) | March 31, 2025 ($ millions) | June 30, 2024 ($ millions) | | :------------------------------------------ | :------------ | :------------- | :------------ | | Investment portfolio gains (losses) | $(5) | $(31) | $(80) | | Investment portfolio credit loss (provision) release and (writedowns) | $(34) | $(52) | $(40) | | Net investment gains (losses) | $(39) | $(83) | $(120) | | Adjusted net investment income yield | 4.28% | 4.25% | 4.39% | - Net investment losses for Q2 2025 were **$(39) million**, an improvement from **$(83) million** in Q1 2025 and **$(120) million** in Q2 2024[77](index=77&type=chunk) - The adjusted net investment income yield slightly increased to **4.28%** in Q2 2025 from **4.25%** in Q1 2025[77](index=77&type=chunk)

Core Viewpoint - The market anticipates a year-over-year decline in Brighthouse Financial's earnings due to lower revenues, with a focus on how actual results compare to estimates [1][2]. Earnings Expectations - Brighthouse Financial is expected to report quarterly earnings of $4.70 per share, reflecting a year-over-year decrease of 15.6% [3]. - Revenues are projected to be $2.2 billion, down 0.8% from the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has been revised 1.12% higher in the last 30 days, indicating a reassessment by analysts [4]. - The Most Accurate Estimate for Brighthouse Financial is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -0.80% [12]. Earnings Surprise Prediction - A positive Earnings ESP is a strong predictor of an earnings beat, especially when combined with a Zacks Rank of 1, 2, or 3 [10]. - Brighthouse Financial currently holds a Zacks Rank of 3, making it challenging to predict an earnings beat [12]. Historical Performance - In the last reported quarter, Brighthouse Financial was expected to post earnings of $4.72 per share but delivered only $4.17, resulting in a surprise of -11.65% [13]. - Over the past four quarters, the company has beaten consensus EPS estimates two times [14]. Industry Comparison - Primerica, another player in the life insurance industry, is expected to report earnings of $5.17 per share, indicating a year-over-year increase of 9.8% [18]. - Primerica's revenues are expected to be $787.18 million, up 4.5% from the previous year, with a positive Earnings ESP of +0.14% [19].

Company Overview - Brighthouse Financial (BHF) shares increased by 6.2% to close at $50.27, following a significant volume of trading, contrasting with an 18.5% loss over the past four weeks [1][2] - The company is reportedly close to being acquired by Aquarian Holdings, which has likely contributed to the recent price appreciation [2] - Brighthouse is revamping its life insurance business to enhance annuity sales and is focusing on transitioning to less capital-intensive products [2][3] Financial Performance - The upcoming quarterly earnings are expected to be $4.70 per share, reflecting a year-over-year decline of 15.6%, with revenues projected at $2.2 billion, down 0.7% from the previous year [4] - The consensus EPS estimate has been revised 1.1% higher over the last 30 days, indicating a positive trend that may lead to further price appreciation [5] Market Position - Brighthouse Financial aims to become a premier player in the life and annuity products market, leveraging its strong market presence and product suite [3] - The company is committed to returning capital to shareholders and plans to maintain an opportunistic share repurchase program [3] Industry Context - Brighthouse Financial is part of the Zacks Insurance - Life Insurance industry, which includes other companies like Primerica (PRI) [6] - Primerica's consensus EPS estimate has increased by 0.4% to $5.18, representing a 10% year-over-year change, and it also holds a Zacks Rank of 3 (Hold) [7]

Brighthouse Financial shares took off Wednesday following a report that private equity firm Aquarian Holdings could be close to striking a deal to buy the insurer. https://t.co/iHCsMu0Z5P ...

Core Viewpoint - Brighthouse Financial, Inc. (BHF) is trading at a significant discount compared to its peers in the life insurance industry, with a price-to-book value of 0.51X versus the industry average of 1.91X, indicating potential undervaluation [1]. Financial Performance - BHF has a market capitalization of $2.72 billion and has experienced a year-to-date share price decline of 1.5%, underperforming the industry, Finance sector, and the Zacks S&P 500 Composite [1][3]. - The Zacks Consensus Estimate for 2025 revenues is projected at $8.8 billion, reflecting a year-over-year increase of 1.1%. However, the current-year earnings estimate is $18.44 per share, down 6.3% from the previous year [5]. - The trailing 12-month return on equity for BHF is 25.6%, significantly higher than the industry average of 15.37%, indicating effective utilization of shareholders' equity [11]. Strategic Initiatives - BHF is expanding its life and annuity offerings to enhance growth and market presence, focusing on less capital-intensive products and broader distribution channels [7][12]. - The company aims to capitalize on the growing individual insurance market by increasing life insurance sales and enhancing annuity solutions [12]. Investment Income - BHF's net investment income has shown consistent improvement, with adjusted net investment income rising 2% year-over-year to $1.3 billion in Q1 2025, supported by asset growth [14]. - The yield on adjusted net investment income reached 4.25% in the first quarter, indicating a strengthening investment income profile [14]. Financial Challenges - Total expenses for BHF nearly quadrupled to $2.7 billion in Q1 2025, with corporate expenses increasing by 15.4% year-over-year to $239 million, leading to a negative net margin of 11% [15]. - The company's long-term debt stands at $3.2 billion, resulting in a high debt-to-equity ratio of 59.5%, significantly above the industry average of 16.8% [16]. Analyst Sentiment - The average price target for BHF, based on short-term estimates from 10 analysts, is $59.60 per share, suggesting a potential upside of 21.3% from the last closing price [8]. - Mixed analyst sentiment is reflected in the slight downward adjustment of the 2025 earnings estimate by 0.2% over the past week, while the 2026 estimate increased by 0.5% [10].

Core Insights - LVMH's liquidity contract with Oddo BHF SCA shows significant trading activity in the first half of 2025, with a total of 3,203 purchases and 3,240 sales of shares, indicating active management of liquidity [1][2][8] Summary by Category Transactions Overview - Total purchases amounted to 234,460 shares for a total of €135,447,405.90, while total sales reached 203,460 shares for €117,943,246.10 [2][8] - The liquidity account showed a cash balance of €9,887,574.90 and 52,000 shares remaining at the end of the reporting period [2][8] Monthly Breakdown - In January 2025, notable transactions included 3,000 shares purchased on January 2 for €1,875,000 and 5,000 shares sold on January 15 for €3,214,000 [1][3] - February 2025 saw 7,000 shares purchased on January 29 for €4,994,755.20 and 3,000 shares sold on February 12 for €2,062,000 [3][4] - March 2025 included significant purchases such as 8,500 shares on March 4 for €5,714,191.90 and sales of 4,000 shares on March 14 for €2,458,700 [4][5] Key Dates and Amounts - On April 3, 2025, 6,000 shares were purchased for €3,320,800, while on April 10, 2025, 3,000 shares were sold for €1,621,800 [5][6] - May 2025 transactions included 5,000 shares sold on May 12 for €3,102,486.40 and 3,000 shares purchased on May 22 for €1,451,150 [6][7] - In June 2025, the last recorded transaction was a purchase of 1,000 shares for €444,600 on June 30 [7][8]

Core Insights - Brighthouse Financial, Inc. (BHF) has seen a share price increase of 37.7% over the past year, outperforming its industry, the Finance sector, and the Zacks S&P 500 composite, which grew by 17.3%, 19.6%, and 10.8% respectively [1] - The company has a market capitalization of $3.31 billion and an average trading volume of 0.8 million shares over the last three months [1] Valuation and Performance - BHF shares are trading at a forward price-to-book value of 0.63X, significantly lower than the industry average of 1.97X, the Finance sector's 4.16X, and the Zacks S&P 500 Composite's 8.09X, indicating attractive valuation [3] - The trailing 12-month return on equity for BHF is 25.6%, surpassing the industry average of 15.37%, reflecting effective utilization of shareholder equity [15] Market Position and Growth Drivers - BHF is positioned to benefit from a growing individual insurance market and an expanding distribution network, with a focus on enhancing its product portfolio through new offerings like Shield Level Pay Plus and SecureKey [8][16] - The Zacks Consensus Estimate for BHF's 2025 revenues is projected at $8.84 billion, representing a year-over-year increase of 1.4%, with further growth expected in 2026 [9] Sales and Earnings Trends - Earnings for BHF have grown by 16.5% over the past five years, outperforming the industry average of 7.8%, with the company beating earnings estimates in two of the last four quarters [10] - Recent sales growth has been driven by strong performance in annuity products, particularly from the Shield Level Annuity and SecureKey offerings, alongside improved underwriting margins and net investment income [17][18] Analyst Sentiment and Price Targets - The average price target from analysts for BHF is $58.50 per share, suggesting a potential downside of 0.66% from the last closing price [11] - There has been a bearish sentiment among analysts, with three out of six lowering their estimates for 2025 and one for 2026 in the past 30 days [13] Financial Strategy and Capital Management - BHF maintains a well-diversified investment portfolio, which supports stable earnings and capital strength, and is committed to returning capital to shareholders through an opportunistic share repurchase program [20] - The company’s focus on enhancing its balance sheet strength and financial flexibility positions it well for future growth [21]

Core Viewpoint - Brighthouse Financial reported mixed financial results for the quarter ended March 2025, with revenue growth but earnings per share (EPS) falling short of expectations [1][3]. Financial Performance - Revenue for the quarter was $2.16 billion, reflecting a year-over-year increase of 5.2%, but was below the Zacks Consensus Estimate of $2.3 billion, resulting in a surprise of -6.20% [1]. - EPS was reported at $4.17, down from $4.25 in the same quarter last year, and below the consensus estimate of $4.72, leading to an EPS surprise of -11.65% [1]. Key Metrics - Net flows for variable and shield level annuities were -$1.96 billion, worse than the average estimate of -$1.56 billion [4]. - The account value for variable and shield level annuities at the end of the period was $120.96 billion, slightly above the estimated $120.82 billion [4]. - Net flows for fixed annuities were -$431 million, significantly worse than the average estimate of -$21.07 million [4]. - The account value for fixed annuities was $19.36 billion, below the average estimate of $19.71 billion [4]. Revenue Breakdown - Net investment income was $1.29 billion, below the average estimate of $1.39 billion, but represented a year-over-year increase of 3% [4]. - Other revenues were reported at $136 million, below the average estimate of $146.63 million, reflecting a year-over-year decline of 6.2% [4]. - Premiums collected were $186 million, below the estimated $202.46 million, marking a year-over-year decrease of 7.9% [4]. - Universal life and investment-type product policy fees were $543 million, below the average estimate of $586.28 million, but showed a year-over-year increase of 24.5% [4]. - Total adjusted revenues for life insurance were $291 million, below the average estimate of $306.66 million, representing a year-over-year increase of 34.1% [4]. - Total adjusted revenues for annuities were $1.34 billion, slightly below the average estimate of $1.39 billion, with a year-over-year increase of 3.1% [4]. - Total adjusted revenues from run-off were $367 million, below the average estimate of $418.81 million, with a year-over-year increase of 3.1% [4]. - Total adjusted revenues from corporate and other segments were $154 million, below the average estimate of $181.42 million, reflecting an 11% year-over-year decline [4]. Stock Performance - Brighthouse Financial shares have returned +22.8% over the past month, outperforming the Zacks S&P 500 composite, which saw a +3.8% change [3]. - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3].

[Part I — Financial Information](index=4&type=section&id=Part%20I%20%E2%80%94%20Financial%20Information) Presents the company's consolidated financial statements and management's analysis of financial performance [Consolidated Financial Statements](index=4&type=section&id=Item%201.%20Consolidated%20Financial%20Statements) The unaudited interim condensed consolidated financial statements for Brighthouse Financial, Inc. as of March 31, 2025, and for the three months ended March 31, 2025 and 2024. For the first quarter of 2025, the company reported a net loss attributable to common shareholders of $294 million, an improvement from a net loss of $519 million in the prior-year period. Total assets decreased to $234.7 billion from $238.5 billion at year-end 2024, primarily due to changes in separate account assets and liabilities [Interim Condensed Consolidated Balance Sheets](index=4&type=section&id=Interim%20Condensed%20Consolidated%20Balance%20Sheets) Presents the company's financial position, including assets, liabilities, and equity, at specific dates | Balance Sheet Highlights | March 31, 2025 (in millions) | December 31, 2024 (in millions) | | :--- | :--- | :--- | | Total Investments | $117,257 | $117,387 | | Total Assets | $234,681 | $238,537 | | Total Liabilities | $229,377 | $233,513 | | Total Equity | $5,304 | $5,024 | - Total assets decreased from **$238.5 billion** at the end of 2024 to **$234.7 billion** as of March 31, 2025, while total equity increased from **$5.0 billion** to **$5.3 billion** over the same period[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)) Details the company's revenues, expenses, and net income or loss over a specific period | Income Statement Highlights | Three Months Ended Mar 31, 2025 (in millions) | Three Months Ended Mar 31, 2024 (in millions) | | :--- | :--- | :--- | | Total Revenues | $2,390 | $74 | | Total Expenses | $2,744 | $688 | | Net Income (Loss) | $(266) | $(491) | | Net Income (Loss) available to Common Shareholders | $(294) | $(519) | | Basic EPS | $(5.04) | $(8.22) | | Diluted EPS | $(5.04) | $(8.22) | - The significant increase in total revenues for Q1 2025 compared to Q1 2024 was primarily driven by a substantial positive swing in Net derivative gains (losses), which were **$311 million** in Q1 2025 versus **$(1,921) million** in Q1 2024[12](index=12&type=chunk) [Interim Condensed Consolidated Statements of Equity](index=6&type=section&id=Interim%20Condensed%20Consolidated%20Statements%20of%20Equity) Outlines changes in the company's equity, including net income, comprehensive income, and share repurchases - Total equity increased from **$5,024 million** at December 31, 2024, to **$5,304 million** at March 31, 2025. The increase was primarily driven by **$608 million** in other comprehensive income, partially offset by a net loss of **$266 million** and **$59 million** in share repurchases[16](index=16&type=chunk) [Interim Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Interim%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Summarizes cash inflows and outflows from operating, investing, and financing activities | Cash Flow Highlights | Three Months Ended Mar 31, 2025 (in millions) | Three Months Ended Mar 31, 2024 (in millions) | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $146 | $(530) | | Net cash provided by (used in) investing activities | $563 | $(625) | | Net cash provided by (used in) financing activities | $(1,087) | $1,127 | | Change in cash, cash equivalents and restricted cash | $(378) | $(28) | [Notes to the Interim Condensed Consolidated Financial Statements (Unaudited)](index=8&type=section&id=Notes%20to%20the%20Interim%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) Provides detailed explanations of accounting policies, estimates, and segment information - Brighthouse Financial is a major provider of annuity and life insurance products in the U.S., organized into **four reportable segments**: Annuities, Life, Run-off, and Corporate & Other[22](index=22&type=chunk) - The company's financial statements are prepared in conformity with U.S. GAAP, which requires management to make estimates and assumptions that can affect reported amounts[23](index=23&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=55&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's discussion provides an analysis of the company's financial performance for Q1 2025. The company reported a net loss available to shareholders of $294 million, an improvement from a $519 million loss in Q1 2024. However, on a non-GAAP basis, adjusted earnings were $235 million, a significant turnaround from an adjusted loss of $98 million in the prior-year period. The results were influenced by market factors impacting variable annuity guarantees, investment performance, and derivative hedging outcomes. The discussion also covers industry trends, liquidity, capital resources, and investment portfolio management [Executive Summary](index=56&type=section&id=Executive%20Summary) Provides a high-level overview of the company's financial performance and key drivers for the period | Metric | Q1 2025 (in millions) | Q1 2024 (in millions) | | :--- | :--- | :--- | | Net income (loss) available to shareholders | $(294) | $(519) | | Adjusted earnings (loss) (Non-GAAP) | $235 | $(98) | - The Q1 2025 net loss was primarily driven by unfavorable changes in the fair value of variable annuity guaranteed benefit riders due to market factors, and net investment losses. This was partially offset by favorable pre-tax adjusted earnings and gains on interest rate derivatives hedging the ULSG business[269](index=269&type=chunk) [Industry Trends and Uncertainties](index=57&type=section&id=Industry%20Trends%20and%20Uncertainties) Discusses external factors such as market conditions, interest rates, and geopolitical events affecting the business - The company's business is materially affected by capital markets and economic conditions, including equity market performance, interest rates, and inflation. The Federal Reserve's interest rate decreases in late 2024 may negatively impact the investment portfolio and profitability of spread-based products[272](index=272&type=chunk) - The company continues to monitor geopolitical conflicts, supply chain disruptions, and uncertainty in asset classes like commercial real estate for their potential impact on business operations and the investment portfolio[276](index=276&type=chunk) [Non-GAAP Financial Disclosures](index=59&type=section&id=Non-GAAP%20Financial%20Disclosures) Explains the company's use of non-GAAP financial measures and their reconciliation to GAAP equivalents - Adjusted earnings is a non-GAAP measure used by management that excludes market volatility impacts such as net investment gains/losses, net derivative gains/losses (with certain exceptions), and changes in market risk benefits to highlight underlying business profitability[283](index=283&type=chunk)[284](index=284&type=chunk)[285](index=285&type=chunk) [Results of Operations](index=61&type=section&id=Results%20of%20Operations) Analyzes the company's revenue, expenses, and profitability across its business segments - The lower net loss in Q1 2025 compared to Q1 2024 was driven by higher pre-tax adjusted earnings and gains on interest rate derivatives. This was partially offset by higher losses from variable annuity guaranteed benefit riders and higher net investment losses on mortgage loans[293](index=293&type=chunk)[295](index=295&type=chunk) - Adjusted earnings increased by **$333 million** year-over-year to **$235 million**, primarily due to lower insurance-related costs and higher fee income, partially offset by a lower net investment spread[298](index=298&type=chunk) | Adjusted Earnings (Loss) by Segment | Q1 2025 (in millions) | Q1 2024 (in millions) | | :--- | :--- | :--- | | Annuities | $314 | $313 | | Life | $9 | $(36) | | Run-off | $(64) | $(341) | | Corporate & Other | $(24) | $(34) | | **Total** | **$235** | **$(98)** | [Investments](index=69&type=section&id=Investments) Details the composition, performance, and risk management of the company's investment portfolio - The company manages investment risk through asset allocation, diversification, and risk limits. The investment portfolio's adjusted net investment income yield was **4.25%** for Q1 2025, consistent with Q1 2024[318](index=318&type=chunk)[329](index=329&type=chunk) - As of March 31, 2025, **97.3%** of the fixed maturity securities portfolio was rated investment grade, with a total estimated fair value of **$80.6 billion**[337](index=337&type=chunk) - The company has direct exposure to commercial real estate through mortgage loans and CMBS. The office property sector, which represents **22.9%** of the commercial mortgage loan portfolio, is under continued market focus due to hybrid work arrangements[324](index=324&type=chunk)[350](index=350&type=chunk) [Derivatives](index=79&type=section&id=Derivatives) Describes the company's use of derivative instruments for risk management purposes - The company uses a variety of derivative instruments to manage interest rate, foreign currency, credit, and equity market risks. As of March 31, 2025, the total gross notional amount of derivatives was **$271.4 billion**[152](index=152&type=chunk)[358](index=358&type=chunk) [Policyholder Liabilities](index=80&type=section&id=Policyholder%20Liabilities) Explains the nature and valuation of liabilities related to insurance and annuity products - Variable annuity guaranteed benefits (MRBs) are measured at fair value. The total Net Amount at Risk (NAR) for variable annuities was **$13.3 billion** for death benefits and **$5.8 billion** for living benefits as of March 31, 2025[371](index=371&type=chunk)[376](index=376&type=chunk) [Liquidity and Capital Resources](index=82&type=section&id=Liquidity%20and%20Capital%20Resources) Assesses the company's ability to meet its financial obligations and maintain adequate capital levels - The company maintains a substantial short-term liquidity position of **$4.7 billion** and total liquid assets of **$48.0 billion** as of March 31, 2025[383](index=383&type=chunk)[384](index=384&type=chunk) - The company targets a combined risk-based capital (RBC) ratio of **400% to 450%** in normal market conditions[389](index=389&type=chunk) - During Q1 2025, the company repurchased **$59 million** of its common stock. As of March 31, 2025, **$484 million** remained under its repurchase authorization[224](index=224&type=chunk) - The parent holding company, BHF, is largely dependent on cash flows from its insurance subsidiaries to meet its obligations. BHF and its non-insurance subsidiaries held **$872 million** in short-term liquidity at the end of Q1 2025[422](index=422&type=chunk)[423](index=423&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=91&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risk from changes in interest rates, equity market prices, credit spreads, and foreign currency exchange rates through its insurance and investment activities. The company regularly analyzes these exposures. There have been no material changes to the market risk exposures disclosed in the 2024 Annual Report - The company's market risk exposures, primarily from interest rates and secondarily from equity prices and foreign currency rates, have not materially changed from those disclosed in the 2024 Annual Report on Form 10-K[436](index=436&type=chunk)[437](index=437&type=chunk) [Controls and Procedures](index=92&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of March 31, 2025. The company noted that ongoing changes in business processes, system implementations, and new third-party arrangements related to the transition services from MetLife are considered material changes in internal control over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of March 31, 2025[439](index=439&type=chunk) - Ongoing changes to business processes and systems related to the separation from MetLife are considered material changes to internal control over financial reporting[440](index=440&type=chunk) [Part II — Other Information](index=92&type=section&id=Part%20II%20%E2%80%94%20Other%20Information) Covers legal proceedings, risk factors, equity sales, and other relevant disclosures [Legal Proceedings](index=92&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various litigation matters. For contingencies where a loss is reasonably possible but not probable, the company estimates an aggregate range of reasonably possible losses up to approximately $10 million as of March 31, 2025. For other matters, an estimate cannot be made. (See Note 13 for details) - The company is a defendant in a number of litigation matters. For details, refer to Note 13 of the Notes to the Interim Condensed Consolidated Financial Statements[442](index=442&type=chunk)[239](index=239&type=chunk) [Risk Factors](index=92&type=page&id=Item%201A.%20Risk%20Factors) There have been no material changes to the company's risk factors from those previously disclosed in the 2024 Annual Report on Form 10-K - No material changes to the company's risk factors have occurred since the filing of the 2024 Annual Report[443](index=443&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=92&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the first quarter of 2025, Brighthouse Financial repurchased 1,062,596 shares of its common stock for a total of approximately $59 million. As of March 31, 2025, $484 million remained available for future repurchases under the authorized program | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | Jan 2025 | 374,009 | $50.56 | | Feb 2025 | 317,600 | $60.10 | | Mar 2025 | 370,987 | $56.52 | | **Total Q1 2025** | **1,062,596** | **N/A** | - As of March 31, 2025, approximately **$484 million** remained available for repurchase under the company's publicly announced stock repurchase program[444](index=444&type=chunk) [Other Information](index=92&type=section&id=Item%205.%20Other%20Information) During the first quarter of 2025, none of the company's directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement - No directors or officers adopted or terminated Rule 10b5-1 trading plans during the first quarter of 2025[445](index=445&type=chunk) [Exhibits](index=93&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications pursuant to the Sarbanes-Oxley Act of 2002 and XBRL data files

Core Viewpoint - Brighthouse Financial, Inc. (BHF) reported a first-quarter 2025 adjusted net income of $4.17 per share, missing the Zacks Consensus Estimate by 11.6%, with a year-over-year decline of 1.8% in the bottom line, attributed to lower premiums and rising expenses, although offset by improved adjusted net investment income [1][2] Financial Performance - Total operating revenues reached $2.2 billion, reflecting a 6.1% increase year over year, driven by higher universal life and investment-type product policy fees and net investment income [1] - Premiums amounted to $186 million, down 7.9% year over year, compared to an estimate of $218.3 million [2] - Adjusted net investment income was $1.3 billion, up 2% year over year, primarily due to asset growth, with an investment income yield of 4.25% [2] - Total expenses were $2.7 billion, nearly four times higher year over year, exceeding the estimate of $995.5 million [2] Segment Performance - Annuities segment reported adjusted operating income of $314 million, a slight increase of 0.3% year over year, while annuity sales decreased by 21% to $2.3 billion, mainly due to lower fixed annuity sales [3] - Life insurance segment achieved adjusted operating earnings of $9 million, recovering from a loss of $36 million in the previous year, with life insurance sales increasing by 24% quarter over quarter to $36 million [4] - Run-off segment recorded an adjusted operating loss of $64 million, wider than the previous year's loss of $34 million, attributed to lower net investment income [4] - Corporate & Other segment incurred an adjusted operating loss of $24 million, an improvement from a loss of $34 million in the prior year [5] Financial Position - Cash and cash equivalents stood at $4.7 billion, a 22% increase year over year [6] - Shareholders' equity reached $5.2 billion, up 25% year over year [6] - Book value per share, excluding accumulated other comprehensive income, was $141.87 as of March 31, 2025, reflecting a 12.3% increase year over year [6] - Statutory combined total adjusted capital was $5.5 billion, down 8.3% year over year, with an estimated combined risk-based capital ratio of 420-440% [6] Share Buyback Activity - Brighthouse Financial repurchased shares worth $59 million in the first quarter of 2025, with an additional $26 million on a trade date basis through May 6, 2025 [7]