Brighthouse Financial, Inc. 10-Q

Item 1. Financial Statements Brighthouse Financial, Inc. Interim Condensed Consolidated Balance Sheets June 30, 2025 (Unaudited) and December 31, 2024 (In millions, except share and per share data) June 30, 2025 December 31, 2024 Assets Investments: Fixed maturity securities available-for-sale, at estimated fair value (amortized cost: $ 86,762 and $ 87,603 , respectively; allowance for credit losses of $ 67 and $ 81 , respectively) $ 80,835 $ 80,055 Trading securities, at estimated fair value 520 — Equity securities, at estimated fair value 74 77 Mortgage loans (net of allowance for credit losses of $ 209 and $ 178 , respectively) 22,993 23,286 Policy loans 1,425 2,024 Limited partnerships and limited liability companies 4,798 4,827 Short-term investments, principally at estimated fair value 1,170 1,868 Other invested assets, principally at estimated fair value (net of allowance for credit losses of $ 0 and $ 0 , respectively) 8,932 5,250 Total investments 120,747 117,387 Cash and cash equivalents 5,540 5,045 Accrued investment income 1,235 1,277 Premiums, reinsurance and other receivables (net of allowance for credit losses of $ 3 and $ 3 , respectively) 21,258 21,126 Deferred policy acquisition costs and value of business acquired 4,636 4,710 Current income tax recoverable 17 19 Deferred income tax asset 1,695 1,875 Market risk benefit assets 1,084 1,092 Other assets 348 370 Separate account assets 86,085 85,636 Total assets $ 242,645 $ 238,537 Liabilities and Equity Liabilities Future policy benefits $ 31,974 $ 31,475 Policyholder account balances 88,046 87,989 Market risk benefit liabilities 8,051 8,329 Other policy-related balances 3,977 3,878 Payables for collateral under securities loaned and other transactions 3,994 3,891 Long-term debt 3,155 3,155 Other liabilities 11,625 9,160 Separate account liabilities 86,085 85,636 Total liabilities 236,907 233,513 Contingencies, Commitments and Guarantees (Note 13) Equity Brighthouse Financial, Inc.’s stockholders’ equity: Preferred stock, par value $ 0.01 per share; $ 1,753 aggregate liquidation preference — — Common stock, par value $ 0.01 per share; 1,000,000,000 shares authorized; 124,019,538 and 123,480,326 shares issued, respectively; 57,122,494 and 58,629,049 shares outstanding, respectively 1 1 Additional paid-in capital 13,918 13,927 Retained earnings (deficit) ( 1,302 ) ( 1,119 ) Treasury stock, at cost; 66,897,044 and 64,851,277 shares, respectively ( 2,687 ) ( 2,572 ) Accumulated other comprehensive income (loss) ( 4,257 ) ( 5,278 ) Total Brighthouse Financial, Inc.’s stockholders’ equity 5,673 4,959 Noncontrolling interests 65 65 Total equity 5,738 5,024 Total liabilities and equity $ 242,645 $ 238,537 See accompanying notes to the interim condensed consolidated financial statements. 2 Table of Contents Brighthouse Financial, Inc. Interim Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) For the Three Months and Six Months Ended June 30, 2025 and 2024 (Unaudited) (In millions, except per share data) Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Revenues Premiums $ 166 $ 181 $ 352 $ 383 Universal life and investment-type product policy fees 553 580 1,096 1,016 Net investment income 1,285 1,307 2,582 2,561 Other revenues 143 141 279 286 Net investment gains (losses) ( 39 ) ( 120 ) ( 122 ) ( 162 ) Net derivative gains (losses) ( 1,237 ) ( 662 ) ( 926 ) ( 2,583 ) Total revenues 871 1,427 3,261 1,501 Expenses Policyholder benefits and claims (including liability remeasurement gains (losses) of $ 0 , $ 0 , $ 0 , and $ 0 , respectively) 711 642 1,360 1,610 Interest credited to policyholder account balances 537 509 1,098 1,011 Amortization of deferred policy acquisition costs and value of business acquired 149 150 297 301 Change in market risk benefits ( 1,101 ) ( 356 ) ( 208 ) ( 1,796 ) Other expenses 482 468 975 975 Total expenses 778 1,413 3,522 2,101 Income (loss) before provision for income tax 93 14 ( 261 ) ( 600 ) Provision for income tax expense (benefit) 8 ( 20 ) ( 80 ) ( 143 ) Net income (loss) 85 34 ( 181 ) ( 457 ) Less: Net income (loss) attributable to noncontrolling interests — — 2 2 Net income (loss) attributable to Brighthouse Financial, Inc. 85 34 ( 183 ) ( 459 ) Less: Preferred stock dividends 25 25 51 51 Net income (loss) available to Brighthouse Financial, Inc.’s common shareholders $ 60 $ 9 $ ( 234 ) $ ( 510 ) Comprehensive income (loss) $ 498 $ 28 $ 840 $ ( 630 ) Less: Comprehensive income (loss) attributable to noncontrolling interests — — 2 2 Comprehensive income (loss) attributable to Brighthouse Financial, Inc. $ 498 $ 28 $ 838 $ ( 632 ) Earnings per common share Basic $ 1.03 $ 0.12 $ ( 4.06 ) $ ( 8.17 ) Diluted $ 1.02 $ 0.12 $ ( 4.06 ) $ ( 8.17 ) See accompanying notes to the interim condensed consolidated financial statements. 3 Table of Contents Brighthouse Financial, Inc. Interim Condensed Consolidated Statements of Equity For the Three Months and Six Months Ended June 30, 2025 and 2024 (Unaudited) (In millions) Preferred Stock Common Stock Additional Paid-in Capital Retained Earnings (Deficit) Treasury Stock at Cost Accumulated Other Comprehensive Income (Loss) Brighthouse Financial, Inc.’s Stockholders’ Equity Noncontrolling Interests Total Equity Balance at December 31, 2024 $ — $ 1 $ 13,927 $ ( 1,119 ) $ ( 2,572 ) $ ( 5,278 ) $ 4,959 $ 65 $ 5,024 Treasury stock acquired in connection with share repurchases ( 59 ) ( 59 ) ( 59 ) Share-based compensation — 38 ( 13 ) 25 25 Dividends on preferred stock ( 26 ) ( 26 ) ( 26 ) Change in noncontrolling interests — ( 2 ) ( 2 ) Net income (loss) ( 268 ) ( 268 ) 2 ( 266 ) Other comprehensive income (loss), net of income tax 608 608 608 Balance at March 31, 2025 — 1 13,939 ( 1,387 ) ( 2,644 ) ( 4,670 ) 5,239 65 5,304 Treasury stock acquired in connection with share repurchases ( 43 ) ( 43 ) ( 43 ) Share-based compensation — 4 4 4 Dividends on preferred stock ( 25 ) ( 25 ) ( 25 ) Change in noncontrolling interests — — — Net income (loss) 85 85 — 85 Other comprehensive income (loss), net of income tax 413 413 413 Balance at June 30, 2025 $ — $ 1 $ 13,918 $ ( 1,302 ) $ ( 2,687 ) $ ( 4,257 ) $ 5,673 $ 65 $ 5,738 Preferred Stock Common Stock Additional Paid-in Capital Retained Earnings (Deficit) Treasury Stock at Cost Accumulated Other Comprehensive Income (Loss) Brighthouse Financial, Inc.’s Stockholders’ Equity Noncontrolling Interests Total Equity Balance at December 31, 2023 $ — $ 1 $ 14,004 $ ( 1,507 ) $ ( 2,309 ) $ ( 5,246 ) $ 4,943 $ 65 $ 5,008 Treasury stock acquired in connection with share repurchases ( 62 ) ( 62 ) ( 62 ) Share-based compensation — 11 ( 11 ) — — Dividends on preferred stock ( 26 ) ( 26 ) ( 26 ) Change in noncontrolling interests — ( 2 ) ( 2 ) Net income (loss) ( 493 ) ( 493 ) 2 ( 491 ) Other comprehensive income (loss), net of income tax ( 167 ) ( 167 ) ( 167 ) Balance at March 31, 2024 — 1 13,989 ( 2,000 ) ( 2,382 ) ( 5,413 ) 4,195 65 4,260 Treasury stock acquired in connection with share repurchases ( 64 ) ( 64 ) ( 64 ) Share-based compensation — 8 ( 1 ) 7 7 Dividends on preferred stock ( 25 ) ( 25 ) ( 25 ) Change in noncontrolling interests — — — Net income (loss) 34 34 — 34 Other comprehensive income (loss), net of income tax ( 6 ) ( 6 ) ( 6 ) Balance at June 30, 2024 $ — $ 1 $ 13,972 $ ( 1,966 ) $ ( 2,447 ) $ ( 5,419 ) $ 4,141 $ 65 $ 4,206 See accompanying notes to the interim condensed consolidated financial statements. 4 Table of Contents Brighthouse Financial, Inc. Interim Condensed Consolidated Statements of Cash Flows For the Six Months Ended June 30, 2025 and 2024 (Unaudited) (In millions) Six Months Ended June 30, 2025 2024 Net cash provided by (used in) operating activities $ 145 $ ( 196 ) Cash flows from investing activities Sales, maturities and repayments of: Fixed maturity securities 6,202 5,550 Trading securities 6 — Equity securities 30 32 Mortgage loans 1,129 685 Limited partnerships and limited liability companies 196 155 Purchases of: Fixed maturity securities ( 5,382 ) ( 6,423 ) Trading securities ( 178 ) — Equity securities ( 20 ) ( 2 ) Mortgage loans ( 896 ) ( 886 ) Limited partnerships and limited liability companies ( 118 ) ( 153 ) Cash received in connection with freestanding derivatives 5,332 5,627 Cash paid in connection with freestanding derivatives ( 6,966 ) ( 5,743 ) Net change in policy loans 599 ( 138 ) Net change in short-term investments 730 ( 220 ) Net change in other invested assets 11 ( 191 ) Net cash provided by (used in) investing activities 675 ( 1,707 ) Cash flows from financing activities Policyholder account balances: Deposits 9,834 20,632 Withdrawals ( 9,980 ) ( 18,009 ) Net change in payables for collateral under securities loaned and other transactions 103 236 Long-term debt repaid ( 1 ) ( 1 ) Dividends on preferred stock ( 51 ) ( 51 ) Treasury stock acquired in connection with share repurchases ( 102 ) ( 126 ) Financing element on certain derivative instruments and other derivative related transactions, net ( 114 ) ( 175 ) Other, net ( 14 ) ( 13 ) Net cash provided by (used in) financing activities ( 325 ) 2,493 Change in cash, cash equivalents and restricted cash 495 590 Cash, cash equivalents and restricted cash, beginning of period 5,045 3,851 Cash, cash equivalents and restricted cash, end of period $ 5,540 $ 4,441 Supplemental disclosures of cash flow information Net cash paid (received) for: Interest $ 75 $ 75 Income tax $ 10 $ 6 See accompanying notes to the interim condensed consolidated financial statements. 5 Table of Contents Brighthouse Financial, Inc. Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies Business Brighthouse Financial, Inc. (“BHF” and, together with its subsidiaries, “Brighthouse Financial” or the “Company”) is a holding company formed in 2016 to own the legal entities that historically operated a substantial portion of MetLife, Inc.’s former retail segment until becoming a separate, publicly-traded company in August 2017. Brighthouse Financial is one of the largest providers of annuity and life insurance products in the U.S. through multiple independent distribution channels and marketing arrangements with a diverse network of distribution partners. The Company is organized into the following reportable segments: Annuities; Life; Run-off; and Corporate & Other. Basis of Presentation The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to adopt accounting policies and make estimates and assumptions that affect amounts reported on the interim condensed consolidated financial statements. In applying these policies and estimates, management makes subjective and complex judgments that frequently require assumptions about matters that are inherently uncertain. Many of these policies, estimates and related judgments are common in the insurance and financial services industries; others are specific to the Company’s business and operations. Actual results could differ from these estimates. Consolidation The accompanying interim condensed consolidated financial statements include the accounts of Brighthouse Financial, as well as partnerships and limited liability companies (“LLC”) that the Company controls. Intercompany accounts and transactions have been eliminated. The Company uses the equity method of accounting for investments in limited partnerships and LLCs when it has more than a minor ownership interest or more than a minor influence over the investee’s operations. The Company generally recognizes its share of the investee’s earnings on a three-month lag in instances where the investee’s financial information is not sufficiently timely or when the investee’s reporting period differs from the Company’s reporting period. When the Company has virtually no influence over the investee’s operations, the investment is carried at fair value. The accompanying interim condensed consolidated financial statements are unaudited and reflect all adjustments (including normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented in conformity with GAAP. Interim results are not necessarily indicative of full year performance. The December 31, 2024 consolidated balance sheet data was derived from audited consolidated financial statements included in Brighthouse Financial, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Annual Report”), which include all disclosures required by GAAP. Therefore, these interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements of the Company included in the 2024 Annual Report. Summary of Significant Accounting Policies In connection with the establishment of a trading portfolio comprised of fixed income securities (classified as “trading securities” under GAAP), the Company updated its impacted accounting policies as described below. See Note 1 of the Notes to the Consolidated Financial Statements included in the 2024 Annual Report for a description of the Company’s accounting policies that did not change. Investments Trading Securities The Company’s trading securities consist primarily of fixed maturity securities and are reported at their estimated fair value. Realized and unrealized investment gains (losses) on trading securities are recorded in net investment income on the interim condensed consolidated statements of operations. Adoption of New Accounting Pronouncements Changes to GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of accounting standards updates (“ASU”) to the FASB Accounting Standards Codification. The Company considers the applicability and impact of all ASUs. There were no significant ASUs adopted during the period ended June 30, 2025. 6 Table of Contents Brighthouse Financial, Inc. Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) Future Adoption of New Accounting Pronouncements In November 2024, the FASB issued new guidance on income statement expense disclosures (ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) : Disaggregation of Income Statement Expenses). This ASU requires public companies to disclose additional disaggregated information about expenses in the notes to financial statements at each interim and annual reporting period. This ASU is effective for fiscal years starting January 1, 2027, and for interim periods starting January 1, 2028. This ASU is required to be adopted prospectively with the option of retrospective application. The Company is currently evaluating the impact of this guidance on its financial statements. In December 2023, the FASB issued new guidance on Income Tax Disclosures (ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures) . This ASU updates the required income tax disclosures to include disclosure of income taxes paid disaggregated by jurisdiction and greater disaggregation of information in the required rate reconciliation. This ASU is effective for annual periods starting with fiscal year 2025 and will be applied on a prospective basis with the option of retrospective application. This ASU has no impact on the Company’s consolidated financial statements but will result in expanded disclosures in the Notes to the Consolidated Financial Statements. 2. Segment Information The Company is organized into and provides its products and services through the following reportable segments: Annuities; Life; Run-off; and Corporate & Other. The Company’s chief operating decision maker (“CODM”) views and manages the business through these segments. Annuities The Annuities segment consists of a variety of variable, fixed, index-linked and income annuities designed to address contract holders’ needs for protected wealth accumulation on a tax-deferred basis, wealth transfer and income security. Life The Life segment consists of insurance products, including term, universal, whole and variable life products designed to address policyholders’ needs for financial security and protected wealth transfer, which may be on a tax-advantaged basis. Run-off The Run-off segment consists primarily of products that are no longer actively sold and are separately managed, including universal life with secondary guarantees (“ULSG”), structured settlements, pension risk transfer contracts, certain company-owned life insurance policies and certain funding agreements. Corporate & Other The Corporate & Other segment consists of activities related to funding agreements associated with the Company’s institutional spread margin business, excess capital not allocated to the other segments, interest expense related to the Company’s outstanding debt, and preferred stock dividends, as well as expenses associated with certain legal proceedings and income tax audit issues. The Corporate & Other segment also includes long-term care business reinsured through 100% quota share reinsurance agreements. Financial Measure and Segment Accounting Policies The Company’s CODM is its Chief Executive Officer (“CEO”). The CEO uses adjusted earnings to evaluate segment performance and facilitate comparisons to industry results. The Company believes the presentation of adjusted earnings, as the Company measures it for management purposes, enhances the understanding of its performance by the investor community by highlighting the results of operations and the underlying profitability drivers of the business. Adjusted earnings, which may be positive or negative, focuses on the Company’s primary businesses by excluding the impact of market volatility, which could distort trends. Adjusted earnings was updated during the first quarter of 2025 in connection with the establishment of a trading portfolio comprised of certain fixed income securities (classified as “trading securities” under GAAP). The Company did not have trading securities prior to the first quarter of 2025. 7 Table of Contents Brighthouse Financial, Inc. Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued) 2. Segment Information (continued) The following items are excluded from total revenues in calculating adjusted earnings: • Net investment gains (losses); • Investment gains (losses) on trading securities measured at estimated fair value through net investment income; and • Net derivative gains (losses), excluding earned income and amortization of premium on derivatives that are hedges of investments or that are used to replicate certain investments, but do not qualify for hedge accounting treatment (“Investment Hedge Adjustments”). The following items are excluded from total expenses in calculating adjusted earnings: • Change in market risk benefits (“MRB”); and • Change in fair value of the crediting rate on experience-rated contracts and market value adjustments on institutional group annuities that are economically offset by gains (losses) on the related trading securities (“Market Value Adjustments”). The provision for income tax related to adjusted earnings is calculated using the statutory tax rate of 21%, net of impacts related to the dividends received deduction, tax credits and current period non-recurring items. The segment accounting policies are the same as those used to prepare the Company’s interim condensed consolidated financial statements, except for the adjustments to calculate adjusted earnings described above. In addition, segment accounting policies include the methods of capital allocation described below. Segment investment and capitalization targets are based on statutory oriented risk principles and metrics. Segment invested assets backing liabilities are based on net statutory liabilities plus excess capital. For the variable annuity business, the excess capital held is based on the target statutory total asset requirement consistent with the Company’s variable annuity risk management strategy. For insurance businesses other than variable annuities, excess capital held is based on a percentage of required statutory risk-based capital. Assets in excess of those allocated to the Annuities, Life and Run-off segments, if any, are held in the Corporate & Other segment. Segment net investment income reflects the performance of each segment’s respective invested assets. 8 Table of Contents Brighthouse Financial, Inc. Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued) 2. Segment Information (continued) The tables below provide information about the Company’s segments, including significant segment expenses, and reconciliations to Net income (loss) available to common shareholders. Three Months Ended June 30, 2025 Annuities Life Run-off Corporate & Other Total (In millions) Total revenues $ 202 $ 269 $ 209 $ 191 $ 871 Less: Revenues excluded from adjusted earnings (1) ( 1,129 ) ( 14 ) ( 173 ) 33 Less: Segment expenses: Policyholder benefits and claims 98 213 400 — Interest credited to policyholder account balances, excluding market value adjustments 354 28 58 103 Amortization of DAC and VOBA 127 22 — — Interest expense on debt — — — 38 Other expenses (2) 342 53 29 20 Less: Provision for income tax expense (benefit) 78 ( 7 ) ( 22 ) ( 3 ) Less: Net income (loss) attributable to noncontrolling interests — — — — Less: Preferred stock dividends — — — 25 Adjusted earnings (loss) $ 332 $ ( 26 ) $ ( 83 ) $ ( 25 ) 198 Adjustments for: Net investment gains (losses) ( 39 ) Investment gains (losses) on trading securities ( 6 ) Net derivative gains (losses), excluding investment hedge adjustments of $ 1 ( 1,238 ) Change in market risk benefits 1,101 Market value adjustments 6 Provision for income tax (expense) benefit 38 Net income (loss) available to Brighthouse Financial, Inc.’s common shareholders $ 60 Interest revenue $ 757 $ 97 $ 283 $ 155 9 Table of Contents Brighthouse Financial, Inc. Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued) 2. Segment Information (continued) Three Months Ended June 30, 2024 Annuities Life Run-off Corporate & Other Total (In millions) Total revenues $ 664 $ 293 $ 318 $ 152 $ 1,427 Less: Revenues excluded from adjusted earnings (1) ( 650 ) ( 4 ) ( 111 ) ( 26 ) Less: Segment expenses: Policyholder benefits and claims 109 155 378 — Interest credited to policyholder account balances, excluding market value adjustments 328 25 53 109 Amortization of DAC and VOBA 126 24 — — Interest expense on debt — — — 38 Other expenses (2) 341 41 35 13 Less: Provision for income tax expense (benefit) 78 10 ( 7 ) ( 9 ) Less: Net income (loss) attributable to noncontrolling interests — — — — Less: Preferred stock dividends — — — 25 Adjusted earnings (loss) $ 332 $ 42 $ ( 30 ) $ 2 346 Adjustments for: Net investment gains (losses) ( 120 ) Investment gains (losses) on trading securities — Net derivative gains (losses), excluding investment hedge adjustments of $ 9 ( 671 ) Change in market risk benefits 356 Market value adjustments 6 Provision for income tax (expense) benefit 92 Net income (loss) available to Brighthouse Financial, Inc.’s common shareholders $ 9 Interest revenue $ 702 $ 121 $ 315 $ 178 10 Table of Contents Brighthouse Financial, Inc. Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued) 2. Segment Information (continued) Six Months Ended June 30, 2025 Annuities Life Run-off Corporate & Other Total (In millions) Total revenues $ 1,792 $ 550 $ 577 $ 342 $ 3,261 Less: Revenues excluded from adjusted earnings (1) ( 883 ) ( 24 ) ( 172 ) 30 Less: Segment expenses: Policyholder benefits and claims 208 400 752 — Interest credited to policyholder account balances, excluding market value adjustments 712 55 118 209 Amortization of DAC and VOBA 253 44 — — Interest expense on debt — — — 76 Other expenses (2) 705 98 65 31 Less: Provision for income tax expense (benefit) 151 ( 6 ) ( 39 ) ( 8 ) Less: Net income (loss) attributable to noncontrolling interests — — — 2 Less: Preferred stock dividends — — — 51 Adjusted earnings (loss) $ 646 $ ( 17 ) $ ( 147 ) $ ( 49 ) 433 Adjustments for: Net investment gains (losses) ( 122 ) Investment gains (losses) on trading securities — Net derivative gains (losses), excluding investment hedge adjustments of $ 1 ( 927 ) Change in market risk benefits 208 Market value adjustments ( 4 ) Provision for income tax (expense) benefit 178 Net income (loss) available to Brighthouse Financial, Inc.’s common shareholders $ ( 234 ) Interest revenue $ 1,510 $ 204 $ 555 $ 314 11 Table of Contents Brighthouse Financial, Inc. Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued) 2. Segment Information (continued) Six Months Ended June 30, 2024 Annuities Life Run-off Corporate & Other Total (In millions) Total revenues $ 200 $ 500 $ 464 $ 337 $ 1,501 Less: Revenues excluded from adjusted earnings (1) ( 2,418 ) ( 14 ) ( 321 ) ( 14 ) Less: Segment expenses: Policyholder benefits and claims 254 305 1,051 — Interest credited to policyholder account balances, excluding market value adjustments 631 50 122 218 Amortization of DAC and VOBA 253 48 — — Interest expense on debt — — — 76 Other expenses (2) 685 105 81 28 Less: Provision for income tax expense (benefit) 150 — ( 98 ) 8 Less: Net income (loss) attributable to noncontrolling interests — — — 2 Less: Preferred stock dividends — — — 51 Adjusted earnings (loss) $ 645 $ 6 $ ( 371 ) $ ( 32 ) 248 Adjustments for: Net investment gains (losses) ( 162 ) Investment gains (losses) on trading securities — Net derivative gains (losses), excluding investment hedge adjustments of $ 22 ( 2,605 ) Change in market risk benefits 1,796 Market value adjustments 10 Provision for income tax (expense) benefit 203 Net income (loss) available to Brighthouse Financial, Inc.’s common shareholders $ ( 510 ) Interest revenue $ 1,378 $ 228 $ 631 $ 346 _______________ (1) For each reportable segment, certain revenues are excluded from adjusted earnings (loss), including net investment gains (losses), investment gains (losses) on trading securities and net derivative gains (losses), excluding investment hedge adjustments. (2) Other expenses include corporate expense allocations directly attributable to each of the segments. Total assets by segment were as follows at: June 30, 2025 December 31, 2024 (In millions) Annuities $ 168,101 $ 163,830 Life 26,810 26,261 Run-off 24,873 24,873 Corporate & Other 22,861 23,573 Total $ 242,645 $ 238,537 12 Table of Contents Brighthouse Financial, Inc. Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued) 2. Segment Information (continued) Total premiums, universal life and investment-type product policy fees and other revenues by major product group were as follows: Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 (In millions) Annuity products $ 577 $ 613 $ 1,168 $ 1,241 Life insurance products 280 287 556 435 Other products 5 2 3 9 Total $ 862 $ 902 $ 1,727 $ 1,685 Substantially all of the Company’s premiums, universal life and investment-type product policy fees and other revenues originated in the U.S. Revenues derived from any individual customer did not exceed 10% of premiums, universal life and investment-type product policy fees and other revenues for the three months and six months ended June 30, 2025 and 2024. 13 Table of Contents Brighthouse Financial, Inc. Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued) 3. Insurance Liabilities Liability for Future Policy Benefits Information regarding liability for future policy benefits (“LFPB”) for non-participating traditional and limited-payment contracts was as follows: Six Months Ended June 30, 2025 2024 Term and Whole Life Insurance Income Annuities Structured Settlement and Pension Risk Transfer Annuities Term and Whole Life Insurance Income Annuities Structured Settlement and Pension Risk Transfer Annuities (Dollars in millions) Present value of expected net premiums: Balance, beginning of period $ 2,808 $ — $ — $ 2,974 $ — $ — Beginning balance at original discount rate 3,161 — — 3,234 — — Effect of model refinements 3 — — 4 — — Effect of actual variances from expected experience ( 11 ) — — 19 — — Adjusted beginning of period balance 3,153 — — 3,257 — — Issuances 8 — — 41 — — Interest accrual 55 — — 57 — — Net premiums collected ( 186 ) — — ( 189 ) — — Ending balance at original discount rate 3,030 — — 3,166 — — Effect of changes in discount rate assumptions ( 302 ) — — ( 341 ) — — Balance, end of period $ 2,728 $ — $ — $ 2,825 $ — $ — Present value of expected future policy benefits: Balance, beginning of period $ 5,325 $ 3,763 $ 6,118 $ 5,507 $ 3,754 $ 6,697 Beginning balance at original discount rate 5,989 4,161 6,876 6,023 4,031 7,085 Effect of model refinements 2 — — 9 — — Effect of actual variances from expected experience ( 14 ) ( 27 ) ( 24 ) 28 ( 1 ) ( 3 ) Adjusted beginning of period balance 5,977 4,134 6,852 6,060 4,030 7,082 Issuances 9 185 — 43 197 — Interest accrual 109 80 148 110 76 152 Benefit payments ( 273 ) ( 206 ) ( 269 ) ( 311 ) ( 201 ) ( 288 ) Ending balance at original discount rate 5,822 4,193 6,731 5,902 4,102 6,946 Effect of changes in discount rate assumptions ( 555 ) ( 327 ) ( 678 ) ( 688 ) ( 404 ) ( 721 ) Balance, end of period $ 5,267 $ 3,866 $ 6,053 $ 5,214 $ 3,698 $ 6,225 Net liability for future policy benefits, end of period $ 2,539 $ 3,866 $ 6,053 $ 2,389 $ 3,698 $ 6,225 Less: Reinsurance recoverable, end of period 27 32 59 37 30 61 Net liability for future policy benefits, after reinsurance recoverable $ 2,512 $ 3,834 $ 5,994 $ 2,352 $ 3,668 $ 6,164 Weighted-average duration of liability 7.4 years 7.8 years 11.5 years 8.7 years 8.1 years 11.5 years Weighted-average interest accretion rate 3.92 % 4.08 % 4.46 % 3.95 % 4.00 % 4.46 % Current discount rate 5.15 % 5.25 % 5.54 % 5.46 % 5.46 % 5.56 % Gross premiums or assessments recognized during period $ 269 $ 235 $ — $ 284 $ 247 $ — Expected future gross premiums, undiscounted $ 5,663 $ — $ — $ 5,953 $ — $ — Expected future gross premiums, discounted $ 4,175 $ — $ — $ 4,477 $ — $ — Expected future benefit payments, undiscounted $ 7,896 $ 5,900 $ 13,031 $ 8,163 $ 5,809 $ 13,483 Expected future benefit payments, discounted $ 5,822 $ 4,193 $ 6,731 $ 5,902 $ 4,102 $ 6,946 14 Table of Contents Brighthouse Financial, Inc. Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued) 3. Insurance Liabilities (continued) Information regarding the additional insurance liabilities for universal life-type contracts with secondary guarantees was as follows: Six Months Ended June 30, 2025 2024 (Dollars in millions) Balance, beginning of period $ 8,986 $ 7,607 Beginning balance before the effect of unrealized gains and losses 9,277 7,784 Effect of actual variances from expected experience 83 67 Adjusted beginning of period balance 9,360 7,851 Interest accrual 228 190 Net assessments collected 236 215 Benefit payments ( 236 ) ( 201 ) Ending balance before the effect of unrealized gains and losses 9,588 8,055 Effect of unrealized gains and losses ( 252 ) ( 250 ) Balance, end of period 9,336 7,805 Less: Reinsurance recoverable, end of period 1,567 1,466 Net additional liability, after reinsurance recoverable $ 7,769 $ 6,339 Weighted-average duration of liability 6.6 years 6.6 years Weighted-average interest accretion rate 4.95 % 4.93 % Gross assessments recognized during period $ 533 $ 542 A reconciliation of the net LFPBs for non-participating traditional and limited-payment contracts and the additional insurance liabilities for universal life-type contracts with secondary guarantees reported in the preceding rollforward tables to LFPBs on the consolidated balance sheets was as follows at: June 30, 2025 2024 (In millions) Liabilities reported in the preceding rollforward tables $ 21,794 $ 20,117 Long-term care insurance (1) 5,153 5,224 ULSG liabilities, including liability for profits followed by losses 941 2,525 Participating whole life insurance (2) 3,254 3,161 Deferred profit liabilities 457 476 Other 375 383 Total liability for future policy benefits $ 31,974 $ 31,886 _______________ (1) Includes liabilities related to fully reinsured individual long-term care insurance. See Note 2. (2) Participating whole life insurance uses an interest assumption based on the non-forfeiture interest rate, ranging from 3.5 % to 4.5 %, and mortality rates guaranteed in calculating the cash surrender values described in such contracts, and also includes a liability for terminal dividends. Participating whole life insurance represented 3 % of the Company’s life insurance in-force at both June 30, 2025 and 2024, and 39 % and 41 % of gross traditional life insurance premiums for the six months ended June 30, 2025 and 2024, respectively. 15 Table of Contents Brighthouse Financial, Inc. Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued) 3. Insurance Liabilities (continued) Policyholder Account Balances Information regarding policyholder account balances was as follows: Universal Life Insurance Variable Annuities (1) Index-linked Annuities Fixed Rate Annuities ULSG Company-Owned Life Insurance (1) (Dollars in millions) Six Months Ended June 30, 2025 Balance, beginning of period $ 2,590 $ 3,833 $ 48,605 $ 14,665 $ 4,779 $ 1,166 Premiums and deposits 130 26 4,001 520 313 — Surrenders and withdrawals ( 52 ) ( 295 ) ( 3,547 ) ( 666 ) ( 13 ) — Benefit payments ( 35 ) ( 44 ) ( 173 ) ( 182 ) ( 49 ) ( 4 ) Net transfers from (to) separate account 15 66 — — — ( 525 ) Interest credited 53 50 378 282 77 12 Policy charges ( 96 ) ( 11 ) ( 17 ) — ( 488 ) ( 4 ) Changes related to embedded derivatives — — 990 — — — Balance, end of period $ 2,605 $ 3,625 $ 50,237 $ 14,619 $ 4,619 $ 645 Weighted-average crediting rate (2) 2.04 % 1.34 % 0.96 % 1.93 % 1.64 % 1.45 % Six Months Ended June 30, 2024 Balance, beginning of period $ 2,550 $ 4,307 $ 41,627 $ 14,672 $ 5,052 $ 653 Premiums and deposits 121 34 4,236 687 328 — Surrenders and withdrawals ( 49 ) ( 351 ) ( 2,510 ) ( 736 ) ( 10 ) — Benefit payments ( 27 ) ( 47 ) ( 151 ) ( 178 ) ( 39 ) ( 5 ) Net transfers from (to) separate account 31 59 — — — ( 1 ) Interest credited 48 54 291 281 82 18 Policy charges ( 108 ) ( 12 ) ( 9 ) — ( 499 ) ( 6 ) Changes related to embedded derivatives — — 2,605 — — — Balance, end of period $ 2,566 $ 4,044 $ 46,089 $ 14,726 $ 4,914 $ 659 Weighted-average crediting rate (2) 1.88 % 1.29 % 0.85 % 1.90 % 1.65 % 2.49 % _______________ (1) Includes liabilities related to separate account products where the contract holder elected a general account investment option. (2) Excludes the effects of embedded derivatives related to index-linked crediting rates. A reconciliation of policyholder account balances reported in the preceding rollforward table to the liability for policyholder account balances on the consolidated balance sheets was as follows at: June 30, 2025 2024 (In millions) Policyholder account balances reported in the preceding rollforward table $ 76,350 $ 72,998 Funding agreements classified as investment contracts 10,174 11,502 Institutional group annuities 566 343 Other investment contract liabilities 956 1,022 Total policyholder account balances $ 88,046 $ 85,865 16 Table of Contents Brighthouse Financial, Inc. Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued) 3. Insurance Liabilities (continued) The balance of account values by range of guaranteed minimum crediting rates and the related range of difference, in basis points, between rates being credited to policyholders and the respective guaranteed minimums was as follows at: Range of Guaranteed Minimum Crediting Rate At Guaranteed Minimum 1 to 50 Basis Points Above 51 to 150 Basis Points Above Greater than 150 Basis Points Above Total (In millions) June 30, 2025 Annuities (1): Less than 2.00 % $ 481 $ 113 $ 340 $ 9,015 $ 9,949 2.00 % to 3.99 % 6,606 505 592 332 8,035 Greater than 3.99 % 786 — — — 786 Total $ 7,873 $ 618 $ 932 $ 9,347 $ 18,770 Life insurance (2) (3): Less than 2.00 % $ — $ — $ — $ 361 $ 361 2.00 % to 3.99 % — 522 43 123 688 Greater than 3.99 % 1,504 — — — 1,504 Total $ 1,504 $ 522 $ 43 $ 484 $ 2,553 ULSG (3): Less than 2.00 % $ — $ — $ — $ — $ — 2.00 % to 3.99 % 1,008 1,332 1,560 231 4,131 Greater than 3.99 % 472 — — — 472 Total $ 1,480 $ 1,332 $ 1,560 $ 231 $ 4,603 December 31, 2024 Annuities (1): Less than 2.00 % $ 562 $ 126 $ 240 $ 8,769 $ 9,697 2.00 % to 3.99 % 7,160 462 492 385 8,499 Greater than 3.99 % 783 — — — 783 Total $ 8,505 $ 588 $ 732 $ 9,154 $ 18,979 Life insurance (2) (3): Less than 2.00 % $ — $ — $ — $ 317 $ 317 2.00 % to 3.99 % — 522 48 131 701 Greater than 3.99 % 1,530 — — — 1,530 Total $ 1,530 $ 522 $ 48 $ 448 $ 2,548 ULSG (3): Less than 2.00 % $ — $ — $ — $ — $ — 2.00 % to 3.99 % 1,052 1,386 1,602 238 4,278 Greater than 3.99 % 484 — — — 484 Total $ 1,536 $ 1,386 $ 1,602 $ 238 $ 4,762 _______________ (1) Includes policyholder account balances for fixed rate annuities and the fixed account portion of variable annuities. (2) Includes policyholder account balances for retained asset accounts, universal life policies and the fixed account portion of universal variable life insurance policies. (3) Amounts are gross of policy loans. See Note 5 for information regarding net amount at risk and cash surrender values. 17 Table of Contents Brighthouse Financial, Inc. Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued) 4. Market Risk Benefits Information regarding MRB assets and liabilities associated with variable annuities was as follows: Six Months Ended June 30, 2025 2024 (Dollars in millions) Balance, beginning of period $ 7,233 $ 9,701 Balance, beginning of period, before effect of changes in nonperformance risk 5,219 7,326 Decrements ( 61 ) ( 66 ) Effect of actual different from expected experience ( 28 ) 88 Effect of changes in interest rates 221 ( 1,547 ) Effect of changes in fund returns ( 799 ) ( 649 ) Issuances ( 2 ) — Effect of changes in risk margin ( 11 ) ( 53 ) Aging of the block and other 658 665 Balance, end of period, before effect of changes in nonperformance risk 5,197 5,764 Effect of changes in nonperformance risk 1,763 2,049 Balance, end of period 6,960 7,813 Less: Reinsurance recoverable, end of period 15 21 Balance, end of period, net of reinsurance (1) $ 6,945 $ 7,792 Weighted-average attained age of contract holder 74.2 years 73.4 years _______________ (1) Amounts represent the sum of MRB assets and MRB liabilities presented on the consolidated balance sheets at June 30, 2025 and 2024, with the exception of $ 22 million and $ 0 , respectively, of index-linked annuities not included in this table. 5. Separate Accounts Separate Accounts Information regarding separate account liabilities was as follows: Six Months Ended June 30, 2025 2024 Variable Annuities Universal Life Insurance Company-Owned Life Insurance Variable Annuities Universal Life Insurance Company-Owned Life Insurance (In millions) Balance, beginning of period $ 77,151 $ 6,419 $ 1,808 $ 79,990 $ 5,921 $ 2,162 Premiums and deposits 478 74 — 417 77 — Surrenders and withdrawals ( 3,843 ) ( 114 ) ( 4 ) ( 3,990 ) ( 112 ) ( 5 ) Benefit payments ( 848 ) ( 49 ) ( 17 ) ( 788 ) ( 31 ) ( 12 ) Investment performance 4,925 425 115 5,028 510 148 Policy charges ( 1,003 ) ( 108 ) ( 28 ) ( 1,060 ) ( 103 ) ( 26 ) Net transfers from (to) general account ( 66 ) ( 15 ) 525 ( 59 ) ( 31 ) 1 Other ( 12 ) — — ( 16 ) — ( 1 ) Balance, end of period $ 76,782 $ 6,632 $ 2,399 $ 79,522 $ 6,231 $ 2,267 18 Table of Contents Brighthouse Financial, Inc. Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued) 5. Separate Accounts (continued) A reconciliation of separate account liabilities reported in the preceding rollforward table to the separate account liabilities balance on the consolidated balance sheets was as follows at: June 30, 2025 2024 (In millions) Separate account liabilities reported in the preceding rollforward table $ 85,813 $ 88,020 Variable income annuities 248 218 Pension risk transfer annuities 24 22 Total separate account liabilities $ 86,085 $ 88,260 The aggregate estimated fair value of assets, by major investment asset category, supporting separate accounts was as follows at: June 30, 2025 December 31, 2024 (In millions) Equity securities $ 85,868 $ 85,423 Fixed maturity securities 209 207 Cash and cash equivalents 4 2 Other assets 4 4 Total aggregate estimated fair value of assets $ 86,085 $ 85,636 Net Amount at Risk and Cash Surrender Values Information regarding the net amount at risk and cash surrender value for insurance products was as follows at: Universal Life Insurance Variable Annuities Index-linked Annuities Fixed Rate Annuities ULSG Company-Owned Life Insurance (In millions) June 30, 2025 Account balances reported in the preceding rollforward tables: Policyholder account balances $ 2,605 $ 3,625 $ 50,237 $ 14,619 $ 4,619 $ 645 Separate account liabilities 6,632 76,782 — — — 2,399 Total account balances $ 9,237 $ 80,407 $ 50,237 $ 14,619 $ 4,619 $ 3,044 Net amount at risk $ 32,356 $ 12,287 N/A N/A $ 62,652 $ 2,642 Cash surrender value $ 8,642 $ 80,039 $ 49,450 $ 14,509 $ 4,195 $ 2,845 June 30, 2024 Account balances reported in the preceding rollforward tables: Policyholder account balances $ 2,566 $ 4,044 $ 46,089 $ 14,726 $ 4,914 $ 659 Separate account liabilities 6,231 79,522 — — — 2,267 Total account balances $ 8,797 $ 83,566 $ 46,089 $ 14,726 $ 4,914 $ 2,926 Net amount at risk $ 34,485 $ 12,642 N/A N/A $ 64,450 $ 2,675 Cash surrender value $ 8,224 $ 83,155 $ 43,846 $ 14,063 $ 4,414 $ 2,598 Products may contain both separate account and general account fund options; accordingly, net amount at risk and cash surrender value reported in the table above relate to the total account balance for each respective product grouping. 19 Table of Contents Brighthouse Financial, Inc. Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued) 6. Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles Deferred Policy Acquisition Costs and Value of Business Acquired Information regarding deferred policy acquisition costs (“DAC”) and value of business acquired (“VOBA”) was as follows: Variable Annuities Fixed Rate Annuities Index-linked Annuities Term and Whole Life Insurance Universal Life Insurance (In millions) Six Months Ended June 30, 2025 DAC: Balance, beginning of period $ 2,116 $ 115 $ 1,462 $ 310 $ 332 Capitalization 22 3 189 ( 1 ) 10 Amortization ( 108 ) — ( 129 ) ( 22 ) ( 19 ) Balance, end of period 2,030 118 1,522 287 323 VOBA: Balance, beginning of period 279 55 — 3 38 Amortization ( 14 ) ( 2 ) — — ( 3 ) Balance, end of period 265 53 — 3 35 Total DAC and VOBA: Balance, end of period $ 2,295 $ 171 $ 1,522 $ 290 $ 358 Six Months Ended June 30, 2024 DAC: Balance, beginning of period $ 2,301 $ 110 $ 1,331 $ 354 $ 360 Capitalization 19 4 190 1 6 Amortization ( 114 ) ( 2 ) ( 119 ) ( 25 ) ( 21 ) Balance, end of period 2,206 112 1,402 330 345 VOBA: Balance, beginning of period 309 60 — 4 43 Amortization ( 15 ) ( 2 ) — — ( 3 ) Balance, end of period 294 58 — 4 40 Total DAC and VOBA: Balance, end of period $ 2,500 $ 170 $ 1,402 $ 334 $ 385 Deferred Sales Inducements Information regarding deferred sales inducements, included in other assets, was as follows: Six Months Ended June 30, 2025 2024 Variable Annuities Fixed Rate Annuities Variable Annuities Fixed Rate Annuities (In millions) Balance, beginning of period $ 198 $ 6 $ 220 $ 8 Amortization ( 11 ) — ( 11 ) ( 1 ) Balance, end of period $ 187 $ 6 $ 209 $ 7 20 Table of Contents Brighthouse Financial, Inc. Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued) 6. Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles (continued) Unearned Revenue Information regarding unearned revenue, included in other policy-related balances, was as follows: Six Months Ended June 30, 2025 2024 Universal Life Insurance ULSG Variable Annuities Universal Life Insurance ULSG Variable Annuities (In millions) Balance, beginning of period $ 357 $ 715 $ 60 $ 356 $ 612 $ 67 Capitalization 18 79 — 18 84 — Amortization ( 18 ) ( 36 ) ( 3 ) ( 18 ) ( 29 ) ( 4 ) Balance, end of period $ 357 $ 758 $ 57 $ 356 $ 667 $ 63 7. Investments See Note 1 to the Interim Condensed Consolidated Financial Statements and Notes 1 and 10 of the Notes to the Consolidated Financial Statements included in the 2024 Annual Report for a description of the Company’s accounting policies for investments and the fair value hierarchy for investments and the related valuation methodologies. Fixed Maturity Securities Available-For-Sale Fixed Maturity Securities by Sector Fixed maturity securities by sector were as follows at: June 30, 2025 December 31, 2024 Amortized Cost Allowance for Credit Losses Gross Unrealized Estimated Fair Value Amortized Cost Allowance for Credit Losses Gross Unrealized Estimated Fair Value Gains Losses Gains Losses (In millions) U.S. corporate $ 40,690 $ 26 $ 349 $ 3,440 $ 37,573 $ 40,894 $ 47 $ 215 $ 3,939 $ 37,123 Foreign corporate 12,763 35 126 1,085 11,769 13,284 26 53 1,481 11,830 Residential mortgage-backed securities 8,482 3 63 707 7,835 8,120 4 46 875 7,287 U.S. government and agency 7,186 — 83 633 6,636 7,408 — 40 701 6,747 Commercial mortgage-backed securities 6,663 3 12 298 6,374 6,776 4 6 422 6,356 Asset-backed securities 6,215 — 36 65 6,186 6,354 — 33 75 6,312 State and political subdivision 3,776 — 86 341 3,521 3,731 — 81 371 3,441 Foreign government 987 — 31 77 941 1,036 — 24 101 959 Total fixed maturity securities $ 86,762 $ 67 $ 786 $ 6,646 $ 80,835 $ 87,603 $ 81 $ 498 $ 7,965 $ 80,055 The Company held non-income producing fixed maturity securities with an estimated fair value of $ 20 million and $ 30 million at June 30, 2025 and December 31, 2024, respectively. 21 Table of Contents Brighthouse Financial, Inc. Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued) 7. Investments (continued) Maturities of Fixed Maturity Securities The amortized cost and estimated fair value of fixed maturity securities, by contractual maturity date, were as follows at June 30, 2025: Due in One Year or Less Due After One Year Through Five Years Due After Five Years Through Ten Years Due After Ten Years Structured Securities (1) Total Fixed Maturity Securities (In millions) Amortized cost $ 4,365 $ 19,915 $ 12,556 $ 28,566 $ 21,360 $ 86,762 Estimated fair value $ 4,342 $ 19,598 $ 11,928 $ 24,572 $ 20,395 $ 80,835 _______________ (1) Structured securities include residential mortgage-backed securities (“RMBS”), commercial mortgage-backed securities (“CMBS”) and asset-backed securities (“ABS”) (collectively, “Structured Securities”). Actual maturities may differ from contractual maturities due to the exercise of call or prepayment options. Fixed maturity securities not due at a single maturity date have been presented in the year of final contractual maturity. Structured Securities are shown separately, as they are not due at a single maturity. Continuous Gross Unrealized Losses for Fixed Maturity Securities by Sector The estimated fair value and gross unrealized losses of fixed maturity securities in an unrealized loss position, by sector and by length of time that the securities have been in a continuous unrealized loss position, were as follows at: June 30, 2025 December 31, 2024 Less than 12 Months 12 Months or Greater Less than 12 Months 12 Months or Greater Estimated Fair Value Gross Unrealized Losses Estimated Fair Value Gross Unrealized Losses Estimated Fair Value Gross Unrealized Losses Estimated Fair Value Gross Unrealized Losses (Dollars in millions) U.S. corporate $ 7,641 $ 536 $ 17,381 $ 2,904 $ 10,764 $ 719 $ 17,660 $ 3,220 Foreign corporate 2,513 276 5,123 809 3,277 351 5,560 1,130 RMBS 999 55 4,578 652 1,223 81 4,647 794 U.S. government and agency 1,476 72 1,662 561 2,457 118 1,884 583 CMBS 1,276 65 3,987 233 1,326 90 4,402 332 ABS 578 5 867 60 717 10 1,081 65 State and political subdivision 638 47 1,582 294 882 64 1,447 307 Foreign government 227 22 389 55 272 30 431 71 Total fixed maturity securities $ 15,348 $ 1,078 $ 35,569 $ 5,568 $ 20,918 $ 1,463 $ 37,112 $ 6,502 Total number of securities in an unrealized loss position 2,598 4,962 3,362 5,272 22 Table of Contents Brighthouse Financial, Inc. Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued) 7. Investments (continued) Allowance for Credit Losses for Fixed Maturity Securities Evaluation and Measurement Methodologies For fixed maturity securities in an unrealized loss position, management first assesses whether the Company intends to sell, or whether it is more likely than not it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to estimated fair value through net investment gains (losses). For fixed maturity securities that do not meet the aforementioned criteria, management evaluates whether the decline in estimated fair value has resulted from credit losses or other factors. Inherent in management’s evaluation of the security are assumptions and estimates about the operations of the issuer and its future earnings potential. Considerations used in the allowance for credit loss evaluation process include, but are not limited to: (i) the extent to which estimated fair value is less than amortized cost; (ii) any changes to the rating of the security by a rating agency; (iii) adverse conditions specifically related to the security, industry or geographic area; and (iv) payment structure of the fixed maturity security and the likelihood of the issuer being able to make payments in the future or the issuer’s failure to make scheduled interest and principal payments. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss is deemed to exist and an allowance for credit losses is recorded, limited by the amount that the estimated fair value is less than the amortized cost basis, with a corresponding charge to net investment gains (losses). Any unrealized losses that have not been recorded through an allowance for credit losses are recognized in other comprehensive income (“OCI”). Once a security specific allowance for credit losses is established, the present value of cash flows expected to be collected from the security continues to be reassessed. Any changes in the security specific allowance for credit losses are recorded as a provision for (or reversal of) credit loss expense in net investment gains (losses). Fixed maturity securities are also evaluated to determine whether any amounts have become uncollectible. When all, or a portion, of a security is deemed uncollectible, the uncollectible portion is written-off with an adjustment to amortized cost and a corresponding reduction to the allowance for credit losses. Accrued interest receivables are presented separate from the amortized cost basis of fixed maturity securities. An allowance for credit losses is not estimated on an accrued interest receivable, rather receivable balances 90-days past due are deemed uncollectible and are written off with a corresponding reduction to net investment income. The accrued interest receivable on fixed maturity securities totaled $ 669 million and $ 672 million at June 30, 2025 and December 31, 2024, respectively, and is included in accrued investment income. Fixed maturity securities are also evaluated to determine if they qualify as purchased financial assets with credit deterioration (“PCD”). To determine if the credit deterioration experienced since origination is more than insignificant, both (i) the extent of the credit deterioration and (ii) any rating agency downgrades are evaluated. For securities categorized as PCD assets, the present value of cash flows expected to be collected from the security are compared to the par value of the security. If the present value of cash flows expected to be collected is less than the par value, credit losses are embedded in the purchase price of the PCD asset. In this situation, both an allowance for credit losses and amortized cost gross-up is recorded, limited by the amount that the estimated fair value is less than the grossed-up amortized cost basis. Any difference between the purchase price and the present value of cash flows is amortized or accreted into net investment income over the life of the PCD asset. Any subsequent PCD asset allowance for credit losses is evaluated in a manner similar to the process described above for fixed maturity securities. Current Period Evaluation Based on the Company’s current evaluation of its fixed maturity securities in an unrealized loss position and the current intent or requirement to sell, the Company recorded an allowance for credit losses of $ 67 million, relating to 19 securities, at June 30, 2025. Management concluded that for all other fixed maturity securities in an unrealized loss position, the unrealized loss was not due to issuer-specific credit-related factors and as a result was recognized in OCI. Where unrealized losses have not been recognized into income, it is primarily because the securities’ bond issuer(s) are of high credit quality, management does not intend to sell and it is likely that management will not be required to sell the securities prior to their anticipated recovery, and the decline in estimated fair value is largely due to changes in interest rates and non-issuer specific credit spreads. These issuers continued to make timely principal and interest payments and the estimated fair value is expected to recover as the securities approach maturity. 23 Table of Contents Brighthouse Financial, Inc. Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued) 7. Investments (continued) Rollforward of the Allowance for Credit Losses for Fixed Maturity Securities by Sector The changes in the allowance for credit losses for fixed maturity securities by sector were as follows: U.S. Corporate Foreign Corporate RMBS CMBS Total (In millions) Six Months Ended June 30, 2025 Balance, beginning of period $ 47 $ 26 $ 4 $ 4 $ 81 Allowance on securities where credit losses were not previously recorded — — — — — Reductions for securities sold ( 1 ) — — ( 1 ) ( 2 ) Change in allowance on securities with an allowance recorded in a previous period 7 9 ( 1 ) — 15 Write-offs charged against allowance (1) ( 27 ) — — — ( 27 ) Balance, end of period $ 26 $ 35 $ 3 $ 3 $ 67 Six Months Ended June 30, 2024 Balance, beginning of period $ 15 $ — $ 5 $ 1 $ 21 Allowance on securities where credit losses were not previously recorded 12 4 — 3 19 Reductions for securities sold — — — — — Change in allowance on securities with an allowance recorded in a previous period 4 — — 1 5 Write-offs charged against allowance (1) — — — — — Balance, end of period $ 31 $ 4 $ 5 $ 5 $ 45 _______________ (1) The Company recorded total write-offs of $ 33 million and $ 1 million for the six months ended June 30, 2025 and 2024, respectively. Mortgage Loans Mortgage Loans by Portfolio Segment Mortgage loans are summarized as follows at: June 30, 2025 December 31, 2024 Carrying Value % of Total Carrying Value % of Total (Dollars in millions) Commercial $ 12,916 56.2 % $ 13,330 57.2 % Agricultural 4,509 19.6 4,591 19.7 Residential 5,777 25.1 5,543 23.8 Total mortgage loans (1) 23,202 100.9 23,464 100.7 Allowance for credit losses ( 209 ) ( 0.9 ) ( 178 ) ( 0.7 ) Total mortgage loans, net $ 22,993 100.0 % $ 23,286 100.0 % _______________ (1) Purchases of mortgage loans from third parties were $ 379 million and $ 557 million for the three months and six months ended June 30, 2025, respectively, and $ 188 million and $ 349 million for the three months and six months ended June 30, 2024, respectively, and were primarily comprised of residential mortgage loans. 24 Table of Contents Brighthouse Financial, Inc. Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued) 7. Investments (continued) Allowance for Credit Losses for Mortgage Loans Evaluation and Measurement Methodologies The allowance for credit losses is a valuation account that is deducted from the mortgage loan’s amortized cost basis to present the net amount expected to be collected on the mortgage loan. The loan balance, or a portion of the loan balance, is written-off against the allowance when management believes this amount is uncollectible. Accrued interest receivables are presented separate from the amortized cost basis of mortgage loans. An allowance for credit losses is generally not estimated on an accrued interest receivable, rather when a loan is placed in nonaccrual status the associated accrued interest receivable balance is written off with a corresponding reduction to net investment income. The accrued interest receivable on mortgage loans is included in accrued investment income and totaled $ 130 million and $ 132 million at June 30, 2025 and December 31, 2024, respectively. The allowance for credit losses is estimated using relevant available information, from internal and external sources, relating to past events, current conditions, and a reasonable and supportable forecast. Historical credit loss experience provides the basis for estimating expected credit losses. Adjustments to historical loss information are made for differences in current loan-specific risk characteristics and environmental conditions. A reasonable and supportable forecast period of two years is used with an input reversion period of one year. Mortgage loans are evaluated in each of the three portfolio segments to determine the allowance for credit losses. The loan-level loss rates are determined using individual loan terms and characteristics, risk pools/internal ratings, national economic forecasts, prepayment speeds, and estimated default and loss severity. The resulting loss rates are applied to the mortgage loan’s amortized cost to generate an allowance for credit losses. In certain situations, the allowance for credit losses is measured as the difference between the loan’s amortized cost and liquidation value of the collateral. These situations include collateral dependent loans, modifications, foreclosure probable loans, and loans with dissimilar risk characteristics. Mortgage loans are also evaluated to determine if they qualify as PCD assets. To determine if the credit deterioration experienced since origination is more than insignificant, the extent of credit deterioration is evaluated. All re-performing/modified loan (“RPL”) pools purchased after December 31, 2019 are determined to have been acquired with evidence of more than insignificant credit deterioration since origination and are classified as PCD assets. RPLs are pools of residential mortgage loans acquired at a discount or premium which have both credit and non-credit components. For PCD mortgage loans, the allowance for credit losses is determined using a similar methodology described above, except the loss-rate is determined at the pool level instead of the individual loan level. The initial allowance for credit losses, determined on a collective basis, is then allocated to the individual loans. The initial amortized cost of the loan is grossed-up to reflect the sum of the loan’s purchase price and allowance for credit losses. The difference between the grossed-up amortized cost basis and the par value of the loan is a non-credit discount or premium, which is accreted or amortized into net investment income over the remaining life of the loan. Any subsequent PCD mortgage loan allowance for credit losses is evaluated in a manner similar to the process described above for each of the three portfolio segments. 25 Table of Contents Brighthouse Financial, Inc. Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued) 7. Investments (continued) Rollforward of the Allowance for Credit Losses for Mortgage Loans by Portfolio Segment The changes in the allowance for credit losses by portfolio segment were as follows: Commercial Agricultural Residential Total (In millions) Six Months Ended June 30, 2025 Balance, beginning of period $ 106 $ 30 $ 42 $ 178 Current period provision 64 4 ( 1 ) 67 Charge-offs, net of recoveries ( 24 ) ( 12 ) — ( 36 ) Balance, end of period $ 146 $ 22 $ 41 $ 209 Six Months Ended June 30, 2024 Balance, beginning of period $ 69 $ 19 $ 49 $ 137 Current period provision 38 ( 1 ) ( 11 ) 26 Charge-offs, net of recoveries ( 8 ) — — ( 8 ) Balance, end of period $ 99 $ 18 $ 38 $ 155 Credit Quality of Mortgage Loans by Portfolio Segment The amortized cost of mortgage loans by year of origination and credit quality indicator was as follows at: 2025 2024 2023 2022 2021 Prior Total (In millions) June 30, 2025 Commercial mortgage loans Loan-to-value ratios: Less than 65% $ 286 $ 639 $ 158 $ 288 $ 1,826 $ 2,684 $ 5,881 65% to 75% 73 208 — 973 701 1,068 3,023 76% to 80% — — — 117 165 881 1,163 Greater than 80% 31 — — 950 270 1,598 2,849 Total commercial mortgage loans 390 847 158 2,328 2,962 6,231 12,916 Agricultural mortgage loans Loan-to-value ratios: Less than 65% 126 359 200 579 1,051 1,955 4,270 65% to 75% — — 17 84 111 26 238 76% to 80% — — — — — 1 1 Greater than 80% — — — — — — — Total agricultural mortgage loans 126 359 217 663 1,162 1,982 4,509 Residential mortgage loans Performing 327 725 202 1,206 1,571 1,637 5,668 Nonperforming — — — 40 25 44 109 Total residential mortgage loans 327 725 202 1,246 1,596 1,681 5,777 Total $ 843 $ 1,931 $ 577 $ 4,237 $ 5,720 $ 9,894 $ 23,202 26 Table of Contents Brighthouse Financial, Inc. Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued) 7. Investments (continued) 2024 2023 2022 2021 2020 Prior Total (In millions) December 31, 2024 Commercial mortgage loans Loan-to-value ratios: Less than 65% $ 640 $ 199 $ 279 $ 1,850 $ 196 $ 2,846 $ 6,010 65% to 75% 208 — 1,022 713 62 1,171 3,176 76% to 80% — — 117 201 174 602 1,094 Greater than 80% — — 972 388 — 1,690 3,050 Total commercial mortgage loans 848 199 2,390 3,152 432 6,309 13,330 Agricultural mortgage loans Loan-to-value ratios: Less than 65% 410 203 594 1,073 402 1,655 4,337 65% to 75% — 18 80 113 6 20 237 76% to 80% — — — — 1 — 1 Greater than 80% — — — — — 16 16 Total agricultural mortgage loans 410 221 674 1,186 409 1,691 4,591 Residential mortgage loans Performing 586 222 1,268 1,640 146 1,563 5,425 Nonperforming 1 — 44 21 1 51 118 Total residential mortgage loans 587 222 1,312 1,661 147 1,614 5,543 Total $ 1,845 $ 642 $ 4,376 $ 5,999 $ 988 $ 9,614 $ 23,464 The loan-to-value ratio is a measure commonly used to assess the quality of commercial and agricultural mortgage loans. The loan-to-value ratio compares the amount of the loan to the estimated fair value of the underlying property collateralizing the loan and is commonly expressed as a percentage. A loan-to-value ratio less than 100% indicates an excess of collateral value over the loan amount. Loan-to-value ratios greater than 100% indicate that the loan amount exceeds the collateral value. Performing status is a measure commonly used to assess the quality of residential mortgage loans. A loan is considered performing when the borrower makes consistent and timely payments. The amortized cost of commercial mortgage loans by debt-service coverage ratio was as follows at: June 30, 2025 December 31, 2024 Amortized Cost % of Total Amortized Cost % of Total (Dollars in millions) Debt-service coverage ratios: Greater than 1.20x $ 11,314 87.6 % $ 12,033 90.3 % 1.00x - 1.20x 931 7.2 801 6.0 Less than 1.00x 671 5.2 496 3.7 Total $ 12,916 100.0 % $ 13,330 100.0 % The debt-service coverage ratio compares a property’s net operating income to its debt-service payments. Debt-service coverage ratios less than 1.00 times indicate that property operations do not generate enough income to cover the loan’s current debt payments. A debt-service coverage ratio greater than 1.00 times indicates an excess of net operating income over the debt-service payments. 27 Table of Contents Brighthouse Financial, Inc. Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued) 7. Investments (continued) Past Due Mortgage Loans by Portfolio Segment The Company has a high-quality, well-performing mortgage loan portfolio, with 99 % of all mortgage loans classified as performing at both June 30, 2025 and December 31, 2024. Delinquency is defined consistent with industry practice, when mortgage loans are past due as follows: commercial and residential mortgage loans — 60 days; and agricultural mortgage loans — 90 days. The aging of the amortized cost of past due mortgage loans by portfolio segment was as follows at: June 30, 2025 December 31, 2024 Commercial Agricultural Residential Total Commercial Agricultural Residential Total (In millions) Current $ 12,801 $ 4,491 $ 5,579 $ 22,871 $ 13,210 $ 4,566 $ 5,423 $ 23,199 30-59 days past due — 3 89 92 — — 2 2 60-89 days past due 24 — 28 52 — — 36 36 90-179 days past due 56 4 25 85 21 9 36 66 180+ days past due 35 11 56 102 99 16 46 161 Total $ 12,916 $ 4,509 $ 5,777 $ 23,202 $ 13,330 $ 4,591 $ 5,543 $ 23,464 Mortgage Loans in Nonaccrual Status by Portfolio Segment Mortgage loans are placed in a nonaccrual status if there are concerns regarding collectability of future payments or the loan is past due, unless the past due loan is well collateralized. The amortized cost of mortgage loans in a nonaccrual status by portfolio segment was as follows at: Commercial Agricultural Residential (1) Total (In millions) June 30, 2025 $ 162 $ 9 $ 109 $ 280 December 31, 2024 $ 120 $ 25 $ 118 $ 263 _______________ (1) The Company had $ 9 million and $ 3 million of mortgage loans in nonaccrual status for which there was no related allowance for credit losses at June 30, 2025 and December 31, 2024, respectively. Current period investment income on mortgage loans in nonaccrual status was $ 3 million and $ 1 million for the six months ended June 30, 2025 and 2024, respectively. Modified Mortgage Loans by Portfolio Segment Under certain circumstances, modifications are granted to mortgage loans. Generally, the types of concessions may include interest rate reduction, term extension, principal forgiveness, or a combination of all three. The Company did not have a significant amount of mortgage loans modified during both the six months ended June 30, 2025 and 2024. Other Invested Assets Over 75 % of other invested assets is comprised of freestanding derivatives with positive estimated fair values. See Note 8 for information about freestanding derivatives with positive estimated fair values. Other invested assets also includes the Company’s investment in company-owned life insurance, Federal Home Loan Bank (“FHLB”) stock, leveraged leases and tax credit and renewable energy partnerships. 28 Table of Contents Brighthouse Financial, Inc. Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued) 7. Investments (continued) Net Unrealized Investment Gains (Losses) Unrealized investment gains (losses) on fixed maturity securities, and the effect on future policy benefits that would result from the realization of the unrealized gains (losses), are included in net unrealized investment gains (losses) in accumulated other comprehensive income (loss) (“AOCI”). The components of net unrealized investment gains (losses), included in AOCI, were as follows at: June 30, 2025 December 31, 2024 (In millions) Fixed maturity securities $ ( 5,860 ) $ ( 7,467 ) Derivatives 189 469 Other ( 7 ) ( 12 ) Subtotal ( 5,678 ) ( 7,010 ) Amounts allocated from: Future policy benefits 844 977 Deferred income tax benefit (expense) 1,015 1,267 Net unrealized investment gains (losses) $ ( 3,819 ) $ ( 4,766 ) The changes in net unrealized investment gains (losses) were as follows: Six Months Ended June 30, 2025 (In millions) Balance at December 31, 2024 $ ( 4,766 ) Unrealized investment gains (losses) during the period 1,332 Unrealized investment gains (losses) relating to: Future policy benefits ( 133 ) Deferred income tax benefit (expense) ( 252 ) Balance at June 30, 2025 $ ( 3,819 ) Change in net unrealized investment gains (losses) $ 947 Concentrations of Credit Risk There were no investments in any counterparty that were greater than 10% of the Company’s equity, other than the U.S. government and its agencies, at both June 30, 2025 and December 31, 2024. Securities Lending Elements of the securities lending program are presented below at: June 30, 2025 December 31, 2024 (In millions) Securities on loan: (1) Amortized cost $ 3,636 $ 3,582 Estimated fair value $ 3,238 $ 3,127 Cash collateral received from counterparties (2) $ 3,301 $ 3,210 Reinvestment portfolio — estimated fair value $ 3,383 $ 3,217 _______________ (1) Included in fixed maturity securities. (2) Included in payables for collateral under securities loaned and other transactions. 29 Table of Contents Brighthouse Financial, Inc. Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued) 7. Investments (continued) The cash collateral liability by loaned security type and remaining tenor of the agreements were as follows at: June 30, 2025 December 31, 2024 Open (1) 1 Month or Less 1 to 6 Months Total Open (1) 1 Month or Less 1 to 6 Months Total (In millions) U.S. government and agency $ 449 $ 1,199 $ 1,286 $ 2,934 $ 490 $ 1,467 $ 886 $ 2,843 U.S. corporate — 248 — 248 — 248 — 248 Foreign corporate 4 106 — 110 — 105 — 105 Foreign government — 9 — 9 — 14 — 14 Total $ 453 $ 1,562 $ 1,286 $ 3,301 $ 490 $ 1,834 $ 886 $ 3,210 _______________ (1) The related loaned security could be returned to the Company on the next business day which would require the Company to immediately return the cash collateral. If the Company is required to return significant amounts of cash collateral on short notice and is forced to sell securities to meet the return obligation, it may have difficulty selling such collateral that is invested in securities in a timely manner, be forced to sell securities in a volatile or illiquid market for less than what otherwise would have been realized in normal market conditions, or both. The estimated fair value of the securities on loan related to the cash collateral on open at June 30, 2025 was $ 444 million, primarily comprised of U.S. government and agency securities which, if put back to the Company, could be immediately sold to satisfy the cash requirement. The reinvestment portfolio acquired with the cash collateral consisted principally of fixed maturity securities (including agency RMBS, ABS, U.S. government and agency securities, U.S. and foreign corporate securities, non-agency RMBS and CMBS) with 52 % invested in agency RMBS, U.S. government and agency securities and cash and cash equivalents at June 30, 2025. If the securities on loan or the reinvestment portfolio become less liquid, the Company has the liquidity resources of most of its general account available to meet any potential cash demands when securities on loan are put back to the Company. Invested Assets on Deposit, Held in Trust and Pledged as Collateral Invested assets on deposit, held in trust and pledged as collateral at estimated fair value were as follows at: June 30, 2025 December 31, 2024 (In millions) Invested assets on deposit (regulatory deposits) (1) $ 6,354 $ 6,249 Invested assets held in trust (reinsurance agreements) (2) 8,544 8,274 Invested assets pledged as collateral (3) 11,345 12,471 Total invested assets on deposit, held in trust and pledged as collateral $ 26,243 $ 26,994 _______________ (1) The Company has assets, primarily fixed maturity securities, on deposit with governmental authorities relating to certain policyholder liabilities, of which $ 76 million and $ 68 million of the assets on deposit represents restricted cash and cash equivalents at June 30, 2025 and December 31, 2024, respectively. (2) The Company has assets, primarily fixed maturity securities, held in trust relating to certain reinsurance transactions, of which $ 616 million and $ 334 million of the assets held in trust balance represents restricted cash and cash equivalents at June 30, 2025 and December 31, 2024, respectively. (3) The Company has pledged invested assets in connection with various agreements and transactions, including funding agreements (see Note 3 of the Notes to the Consolidated Financial Statements included in the 2024 Annual Report) and derivative transactions (see Note 8). See “— Securities Lending” for information regarding securities on loan. In addition, the Company’s investment in FHLB common stock, which is considered restricted until redeemed by the issuer, was $ 218 million and $ 222 million at redemption value at June 30, 2025 and December 31, 2024, respectively. 30 Table of Contents Brighthouse Financial, Inc. Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued) 7. Investments (continued) Variable Interest Entities A variable interest entity (“VIE”) is a legal entity that does not have sufficient equity at risk to finance its activities or is structured such that equity investors lack the ability to make significant decisions relating to the entity’s operations through voting rights or do not substantively participate in the gains and losses of the entity. The Company enters into various arrangements with VIEs in the normal course of business and has invested in legal entities that are VIEs. VIEs are consolidated when it is determined that the Company is the primary beneficiary. A primary beneficiary is the variable interest holder in a VIE with both (i) the power to direct the activities of the VIE that most significantly impact the economic performance of the VIE and (ii) the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. In addition, the evaluation of whether a legal entity is a VIE and if the Company is a primary beneficiary includes a review of the capital structure of the VIE, the related contractual relationships and terms, the nature of the operations and purpose of the VIE, the nature of the VIE interests issued and the Company’s involvement with the entity. There were no material VIEs for which the Company has concluded that it is the primary beneficiary at either June 30, 2025 or December 31, 2024. The carrying amount and maximum exposure to loss related to the VIEs for which the Company has concluded that it holds a variable interest, but is not the primary beneficiary, were as follows at: June 30, 2025 December 31, 2024 Carrying Amount Maximum Exposure to Loss Carrying Amount Maximum Exposure to Loss (In millions) Fixed maturity securities $ 14,208 $ 15,046 $ 14,375 $ 15,474 Limited partnerships and LLCs 4,266 5,243 4,236 5,278 Total $ 18,474 $ 20,289 $ 18,611 $ 20,752 The Company’s investments in unconsolidated VIEs are described below. Fixed Maturity Securities The Company invests in U.S. corporate bonds, foreign corporate bonds and Structured Securities issued by VIEs. The Company is not obligated to provide any financial or other support to these VIEs, other than the original investment. The Company’s involvement with these entities is limited to that of a passive investor. The Company has no unilateral right to appoint or remove the servicer, special servicer, or investment manager, which are generally viewed as having the power to direct the activities that most significantly impact the economic performance of the VIE, nor does the Company function in any of these roles. The Company does not have the obligation to absorb losses or the right to receive benefits from the entity that could potentially be significant to the entity; as a result, the Company has determined it is not the primary beneficiary, or consolidator, of the VIE. The Company’s maximum exposure to loss on these fixed maturity securities is limited to the amortized cost of these investments. See “— Fixed Maturity Securities Available-For-Sale” for information on these securities. Limited Partnerships and LLCs The Company holds investments in certain limited partnerships and LLCs which are VIEs. These ventures include limited partnerships, LLCs, private equity funds, and, to a lesser extent, tax credit and renewable energy partnerships. The Company is not considered the primary beneficiary, or consolidator, when its involvement takes the form of a limited partner interest and is restricted to a role of a passive investor, as a limited partner’s interest does not provide the Company with any substantive kick-out or participating rights, nor does it provide the Company with the power to direct the activities of the fund. The Company’s maximum exposure to loss on these investments is limited to: (i) the amount invested in debt or equity of the VIE and (ii) commitments to the VIE, as described in Note 13. 31 Table of Contents Brighthouse Financial, Inc. Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued) 7. Investments (continued) Net Investment Income The components of net investment income were as follows: Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 (In millions) Investment income: Fixed maturity securities $ 924 $ 937 $ 1,848 $ 1,856 Trading securities (1) ( 1 ) — 10 — Equity securities 1 — 1 2 Mortgage loans 255 250 512 495 Policy loans 19 19 37 33 Limited partnerships and LLCs (2) 80 99 151 173 Cash, cash equivalents and short-term investments 63 63 135 124 Other 25 26 52 51 Total investment income 1,366 1,394 2,746 2,734 Less: Investment expenses 81 87 164 173 Net investment income $ 1,285 $ 1,307 $ 2,582 $ 2,561 _______________ (1) Investment gains (losses) were ($ 6 ) million and less than $ 1 million related to trading securities still held for the three months and six months ended June 30, 2025, respectively. There were no investment gains (losses) related to trading securities still held for the three months and six months ended June 30, 2024. (2) Includes net investment income pertaining to other limited partnership interests of $ 63 million and $ 119 million for the three months and six months ended June 30, 2025, respectively, and $ 102 million and $ 195 million for the three months and six months ended June 30, 2024, respectively. Net Investment Gains (Losses) Components of Net Investment Gains (Losses) The components of net investment gains (losses) were as follows: Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 (In millions) Fixed maturity securities $ ( 23 ) $ ( 97 ) $ ( 57 ) $ ( 135 ) Equity securities 3 ( 1 ) — — Mortgage loans ( 24 ) ( 22 ) ( 67 ) ( 27 ) Limited partnerships and LLCs 1 ( 1 ) — ( 1 ) Other 4 1 2 1 Total net investment gains (losses) $ ( 39 ) $ ( 120 ) $ ( 122 ) $ ( 162 ) Gains (losses) from foreign currency transactions included within net investment gains (losses) were not significant for the three months and six months ended June 30, 2025 and 2024. 32 Table of Contents Brighthouse Financial, Inc. Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued) 7. Investments (continued) Sales or Disposals of Fixed Maturity Securities Investment gains and losses on sales of securities are determined on a specific identification basis. Proceeds from sales or disposals of fixed maturity securities and the components of fixed maturity securities net investment gains (losses) were as follows: Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 (In millions) Proceeds $ 286 $ 1,175 $ 973 $ 1,855 Gross investment gains $ 2 $ 8 $ 5 $ 10 Gross investment losses ( 15 ) ( 86 ) ( 43 ) ( 120 ) Net investment gains (losses) $ ( 13 ) $ ( 78 ) $ ( 38 ) $ ( 110 ) 8. Derivatives Accounting for Derivatives See Notes 1 and 10 of the Notes to the Consolidated Financial Statements included in the 2024 Annual Report for a description of the Company’s accounting policies for derivatives and the fair value hierarchy for derivatives. Types of Derivative Instruments and Derivative Strategies The Company maintains an overall risk management strategy that incorporates the use of derivative instruments to minimize its exposure to various market risks. Commonly used derivative instruments include, but are not necessarily limited to: • Interest rate derivatives: swaps, floors, caps, futures, options and forwards; • Foreign currency exchange rate derivatives: forwards and swaps; • Equity market derivatives: futures, options and total return swaps; and • Credit derivatives: index reference credit default swaps. For detailed information on these contracts and the related strategies, see Note 9 of the Notes to the Consolidated Financial Statements included in the 2024 Annual Report. 33 Table of Contents Brighthouse Financial, Inc. Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued) 8. Derivatives (continued) Primary Risks Managed by Derivatives The primary underlying risk exposure, gross notional amount and estimated fair value of derivatives, excluding embedded derivatives, held were as follows at: June 30, 2025 December 31, 2024 Primary Underlying Risk Exposure Gross Notional Amount Estimated Fair Value Gross Notional Amount Estimated Fair Value Assets Liabilities Assets Liabilities (In millions) Derivatives Designated as Hedging Instruments: Cash flow hedges: Interest rate swaps Interest rate $ 500 $ — $ 3 $ 500 $ 9 $ — Foreign currency swaps Foreign currency exchange rate 3,764 253 102 3,823 439 25 Total qualifying hedges 4,264 253 105 4,323 448 25 Derivatives Not Designated or Not Qualifying as Hedging Instruments: Interest rate swaps Interest rate 37,501 176 315 69,303 131 444 Interest rate floors Interest rate 8,000 4 19 8,000 1 30 Interest rate caps Interest rate 5,350 3 9 7,850 14 14 Interest rate futures Interest rate — — — 171 — — Interest rate options Interest rate 28,700 13 407 23,060 11 371 Interest rate forwards Interest rate 11,481 70 1,280 16,352 121 1,876 Foreign currency swaps Foreign currency exchange rate 594 72 5 685 113 — Foreign currency forwards Foreign currency exchange rate 422 1 7 386 12 — Credit default swaps — written Credit 1,230 28 — 780 19 — Equity futures Equity market 395 — 1 316 — 1 Equity index options Equity market 84,568 2,929 1,344 39,897 1,722 1,041 Equity total return swaps Equity market 107,041 4,254 3,906 106,301 1,543 1,446 Total non-designated or non-qualifying derivatives 285,282 7,550 7,293 273,101 3,687 5,223 Total $ 289,546 $ 7,803 $ 7,398 $ 277,424 $ 4,135 $ 5,248 Based on gross notional amounts, a substantial portion of the Company’s derivatives was not designated or did not qualify as part of a hedging relationship at both June 30, 2025 and December 31, 2024. The Company’s use of derivatives includes (i) derivatives that serve as hedges of the Company’s exposure to various risks and generally do not qualify for hedge accounting because they do not meet the criteria required under portfolio hedging rules; (ii) derivatives that economically hedge insurance liabilities and generally do not qualify for hedge accounting because they do not meet the criteria of being “highly effective” as outlined in Accounting Standards Codification 815 — Derivatives and Hedging; (iii) derivatives that economically hedge MRBs that do not qualify for hedge accounting because the changes in estimated fair value of the MRBs are already recorded in net income; and (iv) written credit default swaps that are used to create synthetic credit investments and that do not qualify for hedge accounting because they do not involve a hedging relationship. 34 Table of Contents Brighthouse Financial, Inc. Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued) 8. Derivatives (continued) The amount and location of gains (losses), including earned income, recognized for derivatives and gains (losses) pertaining to hedged items reported in net derivative gains (losses) were as follows: Net Derivative Gains (Losses) Recognized for Derivatives Net Derivative Gains (Losses) Recognized for Hedged Items Net Investment Income Policyholder Benefits and Claims Amount of Gains (Losses) Deferred in AOCI (In millions) Three Months Ended June 30, 2025 Derivatives Designated as Hedging Instruments: Cash flow hedges: Interest rate $ — $ — $ — $ 1 $ ( 5 ) Foreign currency exchange rate — — 8 — ( 251 ) Total cash flow hedges — — 8 1 ( 256 ) Derivatives Not Designated or Not Qualifying as Hedging Instruments: Interest rate ( 386 ) — — — — Foreign currency exchange rate ( 63 ) 13 — — — Credit 8 — — — — Equity market 1,352 — — — — Embedded ( 2,161 ) — — — — Total non-qualifying hedges ( 1,250 ) 13 — — — Total $ ( 1,250 ) $ 13 $ 8 $ 1 $ ( 256 ) Three Months Ended June 30, 2024 Derivatives Designated as Hedging Instruments: Cash flow hedges: Interest rate $ — $ — $ 1 $ 2 $ 3 Foreign currency exchange rate 1 ( 1 ) 13 — 41 Total cash flow hedges 1 ( 1 ) 14 2 44 Derivatives Not Designated or Not Qualifying as Hedging Instruments: Interest rate ( 319 ) — — — — Foreign currency exchange rate 14 ( 6 ) — — — Credit 1 — — — — Equity market 362 — — — — Embedded ( 714 ) — — — — Total non-qualifying hedges ( 656 ) ( 6 ) — — — Total $ ( 655 ) $ ( 7 ) $ 14 $ 2 $ 44 35 Table of Contents Brighthouse Financial, Inc. Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued) 8. Derivatives (continued) Net Derivative Gains (Losses) Recognized for Derivatives Net Derivative Gains (Losses) Recognized for Hedged Items Net Investment Income Policyholder Benefits and Claims Amount of Gains (Losses) Deferred in AOCI (In millions) Six Months Ended June 30, 2025 Derivatives Designated as Hedging Instruments: Cash flow hedges: Interest rate $ 3 $ — $ 1 $ 2 $ ( 12 ) Foreign currency exchange rate 3 ( 3 ) 21 — ( 261 ) Total cash flow hedges 6 ( 3 ) 22 2 ( 273 ) Derivatives Not Designated or Not Qualifying as Hedging Instruments: Interest rate 2 — — — — Foreign currency exchange rate ( 78 ) 14 — — — Credit 7 — — — — Equity market 110 — — — — Embedded ( 984 ) — — — — Total non-qualifying hedges ( 943 ) 14 — — — Total $ ( 937 ) $ 11 $ 22 $ 2 $ ( 273 ) Six Months Ended June 30, 2024 Derivatives Designated as Hedging Instruments: Cash flow hedges: Interest rate $ 3 $ — $ 1 $ 4 $ 12 Foreign currency exchange rate 1 ( 2 ) 26 — 85 Total cash flow hedges 4 ( 2 ) 27 4 97 Derivatives Not Designated or Not Qualifying as Hedging Instruments: Interest rate ( 1,101 ) — — — — Foreign currency exchange rate 45 ( 9 ) — — — Credit 7 — — — — Equity market 1,073 — — — — Embedded ( 2,600 ) — — — — Total non-qualifying hedges ( 2,576 ) ( 9 ) — — — Total $ ( 2,572 ) $ ( 11 ) $ 27 $ 4 $ 97 At June 30, 2025 and December 31, 2024, the Company held no qualified derivatives hedging exposure to future cash flows for forecasted asset purchases. At June 30, 2025 and December 31, 2024, the balance in AOCI associated with cash flow hedges was $ 189 million and $ 469 million, respectively. Credit Derivatives In connection with synthetically created credit investment transactions, the Company writes credit default swaps for which it receives a premium to insure credit risk. If a credit event occurs, as defined by the contract, the contract may be cash settled or it may be settled gross by the Company paying the counterparty the specified swap notional amount in exchange for the delivery of par quantities of the referenced credit obligation. 36 Table of Contents Brighthouse Financial, Inc. Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued) 8. Derivatives (continued) The estimated fair value, maximum amount of future payments and weighted average years to maturity of written credit default swaps were as follows at: June 30, 2025 December 31, 2024 Rating Agency Designation of Referenced Credit Obligations (1) Estimated Fair Value of Credit Default Swaps Maximum Amount of Future Payments under Credit Default Swaps Weighted Average Years to Maturity (2) Estimated Fair Value of Credit Default Swaps Maximum Amount of Future Payments under Credit Default Swaps Weighted Average Years to Maturity (2) (Dollars in millions) Aaa/Aa/A $ 2 $ 100 2.2 $ 2 $ 100 2.7 Baa 24 1,102 4.8 7 300 4.5 Ba 2 24 1.5 10 376 4.8 Caa and Lower — 4 0.5 — 4 1.0 Total $ 28 $ 1,230 4.5 $ 19 $ 780 4.4 _______________ (1) The Company has written credit protection on index references. The rating agency designations are based on availability and the midpoint of the applicable ratings among Moody’s, S&P and Fitch. If no rating is available from a rating agency, then an internally developed rating is used. (2) The weighted average years to maturity of the credit default swaps is calculated based on weighted average gross notional amounts. Counterparty Credit Risk The Company may be exposed to credit-related losses in the event of counterparty nonperformance on derivative instruments. Generally, the credit exposure is the fair value at the reporting date less any collateral received from the counterparty. The Company manages its credit risk by: (i) entering into derivative transactions with creditworthy counterparties governed by master netting agreements; (ii) trading through regulated exchanges and central clearing counterparties; (iii) obtaining collateral, such as cash and securities, when appropriate; and (iv) setting limits on single party credit exposures which are subject to periodic management review. See Note 9 for a description of the impact of credit risk on the valuation of derivatives. 37 Table of Contents Brighthouse Financial, Inc. Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued) 8. Derivatives (continued) The estimated fair values of net derivative assets and net derivative liabilities after the application of master netting agreements and collateral were as follows at: Gross Amounts Not Offset on the Consolidated Balance Sheets Gross Amount Recognized Financial Instruments (1) Collateral Received/Pledged (2) Net Amount Securities Collateral Received/Pledged (3) Net Amount After Securities Collateral (In millions) June 30, 2025 Derivative assets $ 7,458 $ ( 6,143 ) $ ( 613 ) $ 702 $ ( 684 ) $ 18 Derivative liabilities $ 7,265 $ ( 6,143 ) $ — $ 1,122 $ ( 1,121 ) $ 1 December 31, 2024 Derivative assets $ 4,140 $ ( 3,039 ) $ ( 540 ) $ 561 $ ( 559 ) $ 2 Derivative liabilities $ 5,353 $ ( 3,039 ) $ — $ 2,314 $ ( 2,306 ) $ 8 _______________ (1) Represents amounts subject to an enforceable master netting agreement or similar agreement. (2) The amount of cash collateral offset in the table above is limited to the net estimated fair value of derivatives after application of netting agreement. (3) Securities collateral received from counterparties is not reported on the consolidated balance sheets and may not be sold or re-pledged unless the counterparty is in default. Amounts do not include excess of collateral pledged or received. The Company’s collateral arrangements generally require the counterparty in a net liability position, after considering the effect of netting agreements, to pledge collateral when the amount owed by that counterparty reaches a minimum transfer amount. Certain of these arrangements also include credit-contingent provisions which permit the party with positive fair value to terminate the derivative at the current fair value or demand immediate full collateralization from the party in a net liability position, in the event that the financial strength or credit rating of the party in a net liability position falls below a certain level. The aggregate estimated fair values of derivatives in a net liability position containing such credit-contingent provisions and the aggregate estimated fair value of assets posted as collateral for such instruments were as follows at: June 30, 2025 December 31, 2024 (In millions) Estimated fair value of derivatives in a net liability position (1) $ 1,122 $ 2,314 Estimated fair value of collateral provided (2): Fixed maturity securities $ 3,873 $ 4,883 _______________ (1) After taking into consideration the existence of netting agreements. (2) Substantially all of the Company’s collateral arrangements provide for daily posting of collateral for the full value of the derivative contract. As a result, if the credit-contingent provisions of derivative contracts in a net liability position were triggered, minimal additional assets would be required to be posted as collateral or needed to settle the instruments immediately. Additionally, the Company is required to pledge initial margin for certain new over-the-counter (“OTC”) bilateral contracts between two counterparties (“OTC-bilateral”) derivative transactions to third-party custodians. 38 Table of Contents Brighthouse Financial, Inc. Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued) 9. Fair Value Considerable judgment is often required in interpreting market data to develop estimates of fair value, and the use of different assumptions or valuation methodologies may have a material effect on the estimated fair value amounts. Recurring Fair Value Measurements The assets and liabilities measured at estimated fair value on a recurring basis and their corresponding placement in the fair value hierarchy are presented in the tables below. Investments that do not have a readily determinable fair value and are measured at net asset value (or equivalent) as a practical expedient to estimated fair value are excluded from the fair value hierarchy. June 30, 2025 Fair Value Hierarchy Total Estimated Fair Value Level 1 Level 2 Level 3 (In millions) Assets Fixed maturity securities: U.S. corporate $ — $ 36,920 $ 653 $ 37,573 Foreign corporate — 11,654 115 11,769 RMBS — 7,821 14 7,835 U.S. government and agency 2,544 4,092 — 6,636 CMBS — 6,374 — 6,374 ABS — 5,794 392 6,186 State and political subdivision — 3,521 — 3,521 Foreign government — 917 24 941 Total fixed maturity securities 2,544 77,093 1,198 80,835 Trading securities 94 423 3 520 Equity securities 63 5 6 74 Short-term investments 905 265 — 1,170 Derivative assets: (1) Interest rate — 266 — 266 Foreign currency exchange rate — 320 6 326 Credit — 26 2 28 Equity market — 7,183 — 7,183 Total derivative assets — 7,795 8 7,803 Embedded derivatives on index-linked annuities (2) — — 80 80 Market risk benefit assets — — 1,084 1,084 Separate account assets 6 86,079 — 86,085 Total assets $ 3,612 $ 171,660 $ 2,379 $ 177,651 Liabilities Market risk benefit liabilities $ — $ — $ 8,051 $ 8,051 Derivative liabilities: (1) Interest rate — 2,033 — 2,033 Foreign currency exchange rate — 114 — 114 Equity market 1 5,250 — 5,251 Total derivative liabilities 1 7,397 — 7,398 Embedded derivatives on index-linked annuities (2) — — 11,646 11,646 Total liabilities $ 1 $ 7,397 $ 19,697 $ 27,095 39 Table of Contents Brighthouse Financial, Inc. Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued) 9. Fair Value (continued) December 31, 2024 Fair Value Hierarchy Total Estimated Fair Value Level 1 Level 2 Level 3 (In millions) Assets Fixed maturity securities: U.S. corporate $ — $ 36,427 $ 696 $ 37,123 Foreign corporate — 11,434 396 11,830 RMBS — 7,270 17 7,287 U.S. government and agency 2,731 4,016 — 6,747 CMBS — 6,330 26 6,356 ABS — 5,990 322 6,312 State and political subdivision — 3,441 — 3,441 Foreign government — 938 21 959 Total fixed maturity securities 2,731 75,846 1,478 80,055 Trading securities — — — — Equity securities 56 6 15 77 Short-term investments 1,414 452 2 1,868 Derivative assets: (1) Interest rate — 287 — 287 Foreign currency exchange rate — 557 7 564 Credit — 17 2 19 Equity market — 3,265 — 3,265 Total derivative assets — 4,126 9 4,135 Embedded derivatives on index-linked annuities (2) — — 47 47 Market risk benefit assets — — 1,092 1,092 Separate account assets 3 85,633 — 85,636 Total assets $ 4,204 $ 166,063 $ 2,643 $ 172,910 Liabilities Market risk benefit liabilities $ — $ — $ 8,329 $ 8,329 Derivative liabilities: (1) Interest rate — 2,735 — 2,735 Foreign currency exchange rate — 25 — 25 Equity market 1 2,487 — 2,488 Total derivative liabilities 1 5,247 — 5,248 Embedded derivatives on index-linked annuities (2) — — 11,540 11,540 Total liabilities $ 1 $ 5,247 $ 19,869 $ 25,117 _______________ (1) Derivative assets are reported in other invested assets and derivative liabilities are reported in other liabilities. The amounts are presented gross in the tables above to reflect the presentation on the consolidated balance sheets. (2) Embedded derivative assets on index-linked annuities are reported in premiums and other receivables. Embedded derivative liabilities on index-linked annuities are reported in policyholder account balances. 40 Table of Contents Brighthouse Financial, Inc. Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued) 9. Fair Value (continued) Valuation Controls and Procedures The Company monitors and provides oversight of valuation controls and policies for securities, mortgage loans and derivatives, which are primarily executed by its valuation service providers. The valuation methodologies used to determine fair values prioritize the use of observable market prices and market-based parameters and determines that judgmental valuation adjustments, when applied, are based upon established policies and are applied consistently over time. The valuation methodologies for securities, mortgage loans and derivatives are reviewed on an ongoing basis and revised when necessary. In addition, the Chief Accounting Officer periodically reports to the Audit Committee of BHF’s Board of Directors regarding compliance with fair value accounting standards. The fair value of financial assets and financial liabilities is based on quoted market prices, where available. Prices received are assessed to determine if they represent a reasonable estimate of fair value. Several controls are performed, including certain monthly controls, which include, but are not limited to, analysis of portfolio returns to corresponding benchmark returns, comparing a sample of executed prices of securities sold to the fair value estimates, reviewing the bid/ask spreads to assess activity, comparing prices from multiple independent pricing services and ongoing due diligence to confirm that independent pricing services use market-based parameters. The process includes a determination of the observability of inputs used in estimated fair values received from independent pricing services or brokers by assessing whether these inputs can be corroborated by observable market data. Independent non-binding broker quotes, also referred to herein as “consensus pricing,” are used for a non-significant portion of the portfolio. Prices received from independent brokers are assessed to determine if they represent a reasonable estimate of fair value by considering such pricing relative to the current market dynamics and current pricing for similar financial instruments. A formal process is also applied to challenge any prices received from independent pricing services that are not considered representative of estimated fair value. If prices received from independent pricing services are not considered reflective of market activity or representative of estimated fair value, independent non-binding broker quotations are obtained. If obtaining an independent non-binding broker quotation is unsuccessful, the last available price will be used. Additional controls are performed, such as balance sheet analytics to assess reasonableness of period-to-period pricing changes, including any price adjustments. Price adjustments are applied if prices or quotes received from independent pricing services or brokers are not considered reflective of market activity or representative of estimated fair value. The Company did not have significant price adjustments during the six months ended June 30, 2025. Determination of Fair Value Fixed Maturity Securities The fair values for actively traded marketable bonds designated as available-for-sale or trading securities, primarily U.S. government and agency securities, are determined using the quoted market prices and are classified as Level 1 assets. For securities classified as Level 2 assets, fair values are determined using either a market or income approach and are valued based on a variety of observable inputs as described below. U.S. corporate and foreign corporate securities: Fair value is determined using third-party commercial pricing services, with the primary inputs being quoted prices in markets that are not active, benchmark yields, spreads off benchmark yields, new issuances, issuer rating, trades of identical or comparable securities, or duration. Privately-placed securities are valued using the additional key inputs: market yield curve, call provisions, observable prices and spreads for similar public or private securities that incorporate the credit quality and industry sector of the issuer, and delta spread adjustments to reflect specific credit-related issues. U.S. government and agency, state and political subdivision and foreign government securities: Fair value is determined using third-party commercial pricing services, with the primary inputs being quoted prices in markets that are not active, benchmark U.S. Treasury yield or other yields, spread off the U.S. Treasury yield curve for the identical security, issuer ratings and issuer spreads, broker-dealer quotes, and comparable securities that are actively traded. 41 Table of Contents Brighthouse Financial, Inc. Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued) 9. Fair Value (continued) Structured Securities: Fair value is determined using third-party commercial pricing services, with the primary inputs being quoted prices in markets that are not active, spreads for actively traded securities, spreads off benchmark yields, expected prepayment speeds and volumes, current and forecasted loss severity, ratings, geographic region, weighted average coupon and weighted average maturity, average delinquency rates and debt-service coverage ratios. Other issuance-specific information is also used, including, but not limited to, collateral type, structure of the security, vintage of the loans, payment terms of the underlying asset, payment priority within tranche, and deal performance. Equity Securities and Short-term Investments The fair value for actively traded equity securities and short-term investments are determined using quoted market prices and are classified as Level 1 assets. For financial instruments classified as Level 2 assets, fair values are determined using a market approach and are valued based on a variety of observable inputs as described below. Equity securities and short-term investments: Fair value is determined using third-party commercial pricing services, with the primary input being quoted prices in markets that are not active. Derivatives Derivatives are financial instruments with values derived from interest rates, foreign currency exchange rates, credit spreads and/or other financial indices. Derivatives may be exchange-traded or contracted in the OTC market. Certain of the Company’s OTC derivatives are cleared and settled through central clearing counterparties (“OTC-cleared”), while others are OTC-bilateral. The fair values for exchange-traded derivatives are determined using the quoted market prices and are classified as Level 1 assets or liabilities. For OTC-bilateral derivatives and OTC-cleared derivatives classified as Level 2 assets or liabilities, fair values are determined using the income approach. Valuations of non-option-based derivatives utilize present value techniques, whereas valuations of option-based derivatives utilize option pricing models which are based on market standard valuation methodologies and a variety of observable inputs. The significant inputs to the pricing models for most OTC-bilateral and OTC-cleared derivatives are inputs that are observable in the market or can be derived principally from, or corroborated by, observable market data. Certain OTC-bilateral and OTC-cleared derivatives may rely on inputs that are significant to the estimated fair value that are not observable in the market or cannot be derived principally from, or corroborated by, observable market data. These unobservable inputs may involve significant management judgment or estimation. Even though unobservable, these inputs are based on assumptions deemed appropriate given the circumstances and management believes they are consistent with what other market participants would use when pricing such instruments. Most inputs for OTC-bilateral and OTC-cleared derivatives are mid-market inputs but, in certain cases, liquidity adjustments are made when they are deemed more representative of exit value. Market liquidity, as well as the use of different methodologies, assumptions and inputs, may have a material effect on the estimated fair values of the Company’s derivatives and could materially affect net income. The credit risk of both the counterparty and the Company are considered in determining the estimated fair value for all OTC-bilateral and OTC-cleared derivatives, and any potential credit adjustment is based on the net exposure by counterparty after taking into account the effects of netting agreements and collateral arrangements. The Company values its OTC-bilateral and OTC-cleared derivatives using standard swap curves which may include a spread to the risk-free rate, depending upon specific collateral arrangements. This credit spread is appropriate for those parties that execute trades at pricing levels consistent with similar collateral arrangements. As the Company and its significant derivative counterparties generally execute trades at such pricing levels and hold sufficient collateral, additional credit risk adjustments are not currently required in the valuation process. The Company’s ability to consistently execute at such pricing levels is in part due to the netting agreements and collateral arrangements that are in place with all of its significant derivative counterparties. An evaluation of the requirement to make additional credit risk adjustments is performed by the Company each reporting period. 42 Table of Contents Brighthouse Financial, Inc. Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued) 9. Fair Value (continued) Market Risk Benefits MRBs principally include guaranteed minimum benefits on variable annuity contracts including benefits reinsured related to these guarantees. The estimated fair value of variable annuity guarantees accounted for as MRBs is determined based on the present value of projected future benefits less the present value of projected future fees attributable to the guarantees. At policy inception, the Company determines an attributed fee ratio by solving for a percentage of projected future rider fees to be collected from the policyholder equal to the present value of projected future guaranteed benefits. To the extent the rider fees are insufficient, the Company may also include fees related to mortality and expense charges in the attributed fee ratio, provided the total fees included in the calculation do not exceed total contract fees and assessments collected from the contract holder. Any additional fees not included in the attributed fee ratio are considered revenue and reported in universal life and investment-type product policy fees. The attributed fee ratio is not updated in subsequent periods. The Company updates the estimated fair value of variable annuity guarantees in subsequent periods by projecting future benefits using capital markets inputs and actuarial assumptions including expectations of policyholder behavior. A risk neutral valuation methodology is used to project the cash flows from the guarantees under multiple capital markets scenarios. The reported estimated fair value is then determined by taking the present value of these cash flows using a discount rate that incorporates a spread over the risk-free rate to reflect the Company’s nonperformance risk and adding a risk margin. The valuation of MRBs includes an adjustment for the risk that the Company fails to satisfy its obligations, which is referred to as nonperformance risk. The nonperformance risk adjustment is captured as an additional spread applied to the risk-free rate in determining the rate to discount the cash flows of the liability. The spread over the risk-free rate is based on the Company’s creditworthiness taking into consideration publicly available information relating to spreads in the secondary market for Brighthouse Financial’s debt. These observable spreads are then adjusted, as necessary, to reflect the financial strength ratings of the issuing insurance subsidiaries as compared to the credit rating of Brighthouse Financial. Risk margins are established to capture the non-capital markets risks of the instrument which represent the additional compensation a market participant would require to assume the risks related to the uncertainties in certain actuarial assumptions. The establishment of risk margins requires the use of significant actuarial judgment, including assumptions of the amount needed to cover the guarantees. Actuarial assumptions are reviewed at least annually, and if they change significantly, the estimated fair value is adjusted through net income. Capital market inputs used in the measurement of variable annuity guarantees are updated quarterly through net income, except for the change attributable to the Company’s nonperformance risk, which is reported in OCI. Embedded Derivatives Embedded derivatives include crediting rates associated with index-linked annuity contracts. Embedded derivatives are recorded at estimated fair value with changes in estimated fair value reported in net income. The crediting rates associated with these features are embedded derivatives which are measured at estimated fair value separately from the host fixed annuity contract. These embedded derivatives are classified within policyholder account balances on the consolidated balance sheets. The estimated fair value of crediting rates associated with index-linked annuities is determined using a combination of an option pricing model and an option-budget approach. The valuation of these embedded derivatives also includes the establishment of a risk margin, as well as changes in nonperformance risk. Actuarial assumptions including policyholder behavior and expectations for renewals at the end of the term period are reviewed at least annually, and if they change significantly, the estimated fair value is adjusted through net income. Capital market inputs used in the measurement of crediting rate embedded derivatives are updated quarterly through net income. 43 Table of Contents Brighthouse Financial, Inc. Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued) 9. Fair Value (continued) Transfers Into or Out of Level 3: Assets and liabilities are transferred into Level 3 when a significant input cannot be corroborated with market observable data. This occurs when market activity decreases significantly and underlying inputs cannot be observed, current prices are not available, and/or when there are significant variances in quoted prices, thereby affecting transparency. Assets and liabilities are transferred out of Level 3 when circumstances change such that a significant input can be corroborated with market observable data. This may be due to a significant increase in market activity, a specific event, or one or more significant input(s) becoming observable. Assets and Liabilities Measured at Fair Value Using Significant Unobservable Inputs (Level 3) Certain quantitative information about the significant unobservable inputs used in the fair value measurement, and the sensitivity of the estimated fair value to changes in those inputs, for the more significant asset and liability classes measured at fair value on a recurring basis using significant unobservable inputs (Level 3) were as follows at: June 30, 2025 December 31, 2024 Impact of Increase in Input on Estimated Fair Value Valuation Techniques Significant Unobservable Inputs Range Range Market Risk Benefits Variable annuity guaranteed minimum benefits • Discounted cash flows • Mortality rates 0.04 % - 12.90 % 0.04 % - 12.90 % Decrease (1) • Lapse rates 1.00 % - 20.20 % 1.00 % - 20.20 % Decrease (2) • Utilization rates 0.00 % - 25.00 % 0.00 % - 25.00 % Increase (3) • Withdrawal rates 0.00 % - 10.00 % 0.00 % - 10.00 % (4) • Long-term equity volatilities 12.04 % - 28.30 % 12.22 % - 37.04 % Increase (5) • Nonperformance risk spread 0.40 % - 1.22 % 0.20 % - 1.19 % Decrease (6) Embedded Derivatives Registered index-linked annuity crediting rates • Option pricing techniques • Mortality rates 0.03 % - 7.86 % 0.03 % - 7.86 % Decrease (1) • Lapse rates 1.00 % - 62.30 % 1.00 % - 62.30 % Decrease (2) • Withdrawal rates 0.50 % - 13.00 % 0.50 % - 13.00 % (4) • Nonperformance risk spread 0.21 % - 1.64 % 0.30 % - 1.63 % Decrease (6) _______________ (1) Mortality rates vary by age and by demographic characteristics such as gender. The range shown reflects the mortality rate for policyholders between 35 and 90 years old. Mortality rate assumptions are set based on company experience and include an assumption for mortality improvement. (2) The lapse rate range reflects base lapse rates for major product categories for duration 1-20. Base lapse rates are adjusted at the contract level based on a comparison of the actuarially calculated guaranteed values and the current policyholder account value, as well as other factors, such as the applicability of any surrender charges. For variable annuity guarantees, a dynamic lapse function reduces the base lapse rate when the guaranteed amount is greater than the account value as in-the-money contracts are less likely to lapse. Lapse rates are also generally assumed to be lower in periods when a surrender charge applies. (3) The utilization rate assumption for variable annuity guarantees estimates the percentage of contract holders with a guaranteed minimum income benefit (“GMIB”) or lifetime withdrawal benefit who will elect to utilize the benefit upon becoming eligible in a given year. The range shown represents the floor and cap of the GMIB dynamic election rates across varying levels of in-the-money. For lifetime withdrawal guarantee riders, the assumption is that everyone will begin withdrawals once account value reaches zero which is equivalent to a 100% utilization rate. Utilization rates may vary by the type of guarantee, the amount by which the guaranteed amount is greater than the account value, the contract’s withdrawal history and by the age of the policyholder. 44 Table of Contents Brighthouse Financial, Inc. Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued) 9. Fair Value (continued) (4) The withdrawal rate represents the percentage of account balance that any given policyholder will elect to withdraw from the contract each year. The withdrawal rate assumption varies by age and duration of the contract, and also by other factors such as benefit type. For any given contract, withdrawal rates vary throughout the period over which cash flows are projected for purposes of valuing the embedded derivative. For variable annuity guaranteed minimum withdrawal benefits, any increase (decrease) in withdrawal rates results in an increase (decrease) in the estimated fair value of the guarantees. For variable annuity guaranteed minimum accumulation benefits and GMIBs, any increase (decrease) in withdrawal rates results in a decrease (increase) in the estimated fair value. (5) Long-term equity volatilities represent equity volatility beyond the period for which observable equity volatilities are available. For any given contract, long-term equity volatility rates vary throughout the period over which cash flows are projected for purposes of valuing MRBs. (6) Nonperformance risk spread varies by duration. For any given contract, multiple nonperformance risk spreads will apply, depending on the duration of the cash flow being discounted for purposes of valuing the MRB or embedded derivative. The Company does not develop unobservable inputs used in measuring fair value for all other assets and liabilities classified within Level 3; therefore, these are not included in the table above. The other Level 3 assets and liabilities primarily included fixed maturity securities and derivatives. For fixed maturity securities valued based on non-binding broker quotes, an increase (decrease) in credit spreads would result in a (lower) higher fair value. For derivatives valued based on third-party pricing models, an increase (decrease) in credit spreads would generally result in a (lower) higher fair value. 45 Table of Contents Brighthouse Financial, Inc. Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued) 9. Fair Value (continued) The changes in assets and (liabilities) measured at estimated fair value on a recurring basis using significant unobservable inputs (excluding MRBs disclosed in Note 4) were summarized as follows: Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Fixed Maturity Securities Corporate (1) Structured Securities Foreign Government Trading Securities Equity Securities Short-term Investments Net Derivatives (2) Embedded Derivatives on Index-Linked Annuities (In millions) Three Months Ended June 30, 2025 Balance, beginning of period $ 666 $ 340 $ 22 $ — $ 14 $ 2 $ 9 $ ( 9,925 ) Total realized/unrealized gains (losses) included in net income (loss) (3) (4) ( 38 ) — — — — — ( 1 ) ( 2,161 ) Total realized/unrealized gains (losses) included in AOCI 37 ( 3 ) 2 — — — — — Purchases (5) 63 127 — 3 — — — — Sales (5) ( 10 ) ( 10 ) — — ( 8 ) ( 2 ) — — Issuances (5) — — — — — — — — Settlements (5) — — — — — — — 520 Transfers into Level 3 (6) 54 — — — — — — — Transfers out of Level 3 (6) ( 4 ) ( 48 ) — — — — — — Balance, end of period $ 768 $ 406 $ 24 $ 3 $ 6 $ — $ 8 $ ( 11,566 ) Three Months Ended June 30, 2024 Balance, beginning of period $ 1,267 $ 482 $ 21 $ — $ 25 $ — $ 11 $ ( 9,941 ) Total realized/unrealized gains (losses) included in net income (loss) (3) (4) ( 15 ) — — — ( 1 ) — ( 1 ) ( 714 ) Total realized/unrealized gains (losses) included in AOCI ( 2 ) 2 — — — — — — Purchases (5) 199 129 — — — — — — Sales (5) ( 43 ) ( 26 ) — — — — — — Issuances (5) — — — — — — — — Settlements (5) — — — — — — — 72 Transfers into Level 3 (6) 41 — — — — — — — Transfers out of Level 3 (6) ( 82 ) ( 81 ) — — — — — — Balance, end of period $ 1,365 $ 506 $ 21 $ — $ 24 $ — $ 10 $ ( 10,583 ) Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at June 30, 2025 (7) $ ( 5 ) $ — $ — $ — $ — $ — $ ( 1 ) $ ( 2,430 ) Changes in unrealized gains (losses) included in OCI for the instruments still held as of June 30, 2025 (7) $ 4 $ 7 $ 2 $ — $ — $ — $ ( 1 ) $ — Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at June 30, 2024 (7) $ ( 15 ) $ — $ — $ — $ ( 2 ) $ — $ ( 1 ) $ ( 881 ) Changes in unrealized gains (losses) included in OCI for the instruments still held as of June 30, 2024 (7) $ ( 2 ) $ 1 $ — $ — $ — $ — $ — $ — 46 Table of Contents Brighthouse Financial, Inc. Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued) 9. Fair Value (continued) Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Fixed Maturity Securities Corporate (1) Structured Securities Foreign Government Trading Securities Equity Securities Short-term Investments Net Derivatives (2) Embedded Derivatives on Index-Linked Annuities (In millions) Six Months Ended June 30, 2025 Balance, beginning of period $ 1,092 $ 365 $ 21 $ — $ 15 $ 2 $ 9 $ ( 11,493 ) Total realized/unrealized gains (losses) included in net income (loss) (3) (4) ( 13 ) — — — ( 1 ) — ( 1 ) ( 984 ) Total realized/unrealized gains (losses) included in AOCI 12 ( 5 ) 3 — — — — — Purchases (5) 106 148 — 3 — — — — Sales (5) ( 60 ) ( 42 ) — — ( 8 ) ( 2 ) — — Issuances (5) — — — — — — — — Settlements (5) — — — — — — — 911 Transfers into Level 3 (6) 24 — — — — — — — Transfers out of Level 3 (6) ( 393 ) ( 60 ) — — — — — — Balance, end of period $ 768 $ 406 $ 24 $ 3 $ 6 $ — $ 8 $ ( 11,566 ) Six Months Ended June 30, 2024 Balance, beginning of period $ 1,320 $ 380 $ 36 $ — $ 25 $ — $ 18 $ ( 8,186 ) Total realized/unrealized gains (losses) included in net income (loss) (3) (4) ( 19 ) 1 — — ( 1 ) — ( 3 ) ( 2,600 ) Total realized/unrealized gains (losses) included in AOCI ( 9 ) 2 — — — — — — Purchases (5) 238 207 — — — — 1 — Sales (5) ( 84 ) ( 31 ) — — — — — — Issuances (5) — — — — — — — — Settlements (5) — — — — — — — 203 Transfers into Level 3 (6) 55 — — — — — — — Transfers out of Level 3 (6) ( 136 ) ( 53 ) ( 15 ) — — — ( 6 ) — Balance, end of period $ 1,365 $ 506 $ 21 $ — $ 24 $ — $ 10 $ ( 10,583 ) Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at June 30, 2025 (7) $ ( 7 ) $ — $ — $ — $ — $ — $ ( 1 ) $ ( 1,480 ) Changes in unrealized gains (losses) included in OCI for the instruments still held as of June 30, 2025 (7) $ 11 $ ( 5 ) $ 3 $ — $ — $ — $ — $ — Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at June 30, 2024 (7) $ ( 18 ) $ — $ — $ — $ ( 2 ) $ — $ ( 3 ) $ ( 2,921 ) Changes in unrealized gains (losses) included in OCI for the instruments still held as of June 30, 2024 (7) $ ( 19 ) $ — $ — $ — $ — $ — $ — $ — _______________ (1) Comprised of U.S. and foreign corporate securities. (2) Freestanding derivative assets and liabilities are reported net for purposes of the rollforward. (3) Amortization of premium/accretion of discount is included in net investment income. Changes in the allowance for credit losses and direct write-offs are charged to net income (loss) on securities are included in net investment gains (losses). Lapses associated with net embedded derivatives are included in net derivative gains (losses). Substantially all realized/unrealized gains (losses) included in net income (loss) for net derivatives and net embedded derivatives are reported in net derivative gains (losses). 47 Table of Contents Brighthouse Financial, Inc. Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued) 9. Fair Value (continued) (4) Interest and dividend accruals, as well as cash interest coupons and dividends received, are excluded from the rollforward. (5) Items purchased/issued and then sold/settled in the same period are excluded from the rollforward. Fees attributed to embedded derivatives are included in settlements. (6) Gains and losses, in net income (loss) and OCI, are calculated assuming transfers into and/or out of Level 3 occurred at the beginning of the period. Items transferred into and out of Level 3 in the same period are excluded from the rollforward. (7) Changes in unrealized gains (losses) included in net income (loss) for fixed maturities are reported in either net investment income or net investment gains (losses). Substantially all changes in unrealized gains (losses) included in net income (loss) for net derivatives and net embedded derivatives are reported in net derivative gains (losses). Fair Value of Financial Instruments Carried at Other Than Fair Value The following tables provide fair value information for financial instruments that are carried on the balance sheet at amounts other than fair value. These tables exclude the following financial instruments: cash and cash equivalents, accrued investment income and payables for collateral under securities loaned and other transactions. The estimated fair value of the excluded financial instruments, which are primarily classified in Level 2, approximates carrying value as they are short-term in nature such that the Company believes there is minimal risk of material changes in interest rates or credit quality. All remaining balance sheet amounts excluded from the tables below are not considered financial instruments subject to this disclosure. The carrying values and estimated fair values for such financial instruments, and their corresponding placement in the fair value hierarchy, are summarized as follows at: June 30, 2025 Fair Value Hierarchy Carrying Value Level 1 Level 2 Level 3 Total Estimated Fair Value (In millions) Assets Mortgage loans $ 22,993 $ — $ — $ 21,587 $ 21,587 Policy loans $ 1,425 $ — $ 543 $ 994 $ 1,537 Other invested assets $ 228 $ — $ 217 $ 11 $ 228 Premiums, reinsurance and other receivables $ 8,781 $ — $ 68 $ 9,800 $ 9,868 Liabilities Policyholder account balances $ 31,034 $ — $ — $ 30,763 $ 30,763 Long-term debt $ 3,155 $ — $ 2,726 $ — $ 2,726 Other liabilities $ 1,670 $ — $ 1,041 $ 629 $ 1,670 Separate account liabilities $ 1,243 $ — $ 1,243 $ — $ 1,243 48 Table of Contents Brighthouse Financial, Inc. Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued) 9. Fair Value (continued) December 31, 2024 Fair Value Hierarchy Carrying Value Level 1 Level 2 Level 3 Total Estimated Fair Value (In millions) Assets Mortgage loans $ 23,286 $ — $ — $ 21,373 $ 21,373 Policy loans $ 2,024 $ — $ 1,161 $ 943 $ 2,104 Other invested assets $ 233 $ — $ 222 $ 11 $ 233 Premiums, reinsurance and other receivables $ 8,527 $ — $ 55 $ 9,222 $ 9,277 Liabilities Policyholder account balances $ 31,928 $ — $ — $ 31,563 $ 31,563 Long-term debt $ 3,155 $ — $ 2,787 $ — $ 2,787 Other liabilities $ 1,338 $ — $ 691 $ 647 $ 1,338 Separate account liabilities $ 1,246 $ — $ 1,246 $ — $ 1,246 10. Equity Preferred Stock Preferred stock shares authorized, issued and outstanding were as follows at both June 30, 2025 and December 31, 2024: Shares Authorized Shares Issued Shares Outstanding 6.600 % Non-Cumulative Preferred Stock, Series A 17,000 17,000 17,000 6.750 % Non-Cumulative Preferred Stock, Series B 16,100 16,100 16,100 5.375 % Non-Cumulative Preferred Stock, Series C 23,000 23,000 23,000 4.625 % Non-Cumulative Preferred Stock, Series D 14,000 14,000 14,000 Not designated 99,929,900 — — Total 100,000,000 70,100 70,100 The per share and aggregate dividends declared for BHF’s preferred stock by series were as follows: Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Series Per Share Aggregate Per Share Aggregate Per Share Aggregate Per Share Aggregate (In millions, except per share data) A $ 412.50 $ 7 $ 412.50 $ 7 $ 825.00 $ 14 $ 825.00 $ 14 B $ 421.88 7 $ 421.88 7 $ 843.76 14 $ 843.76 14 C $ 335.94 7 $ 335.94 7 $ 671.88 15 $ 671.88 15 D $ 289.06 4 $ 289.06 4 $ 578.12 8 $ 578.12 8 Total $ 25 $ 25 $ 51 $ 51 Common Stock Repurchase Program During the six months ended June 30, 2025 and 2024, BHF repurchased 1,844,396 and 2,634,041 shares, respectively, of its common stock through open market purchases, pursuant to Rule 10b5-1 plans, for $ 102 million and $ 126 million, respectively. At June 30, 2025, BHF had $ 441 million remaining under its common stock repurchase program. 49 Table of Contents Brighthouse Financial, Inc. Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued) 10. Equity (continued) Accumulated Other Comprehensive Income (Loss) Information regarding changes in the balances of each component of AOCI was as follows: Three Months Ended June 30, 2025 Unrealized Investment Gains (Losses), Net of Related Offsets (1) Unrealized Gains (Losses) on Derivatives Changes in Nonperformance Risk on Market Risk Benefits Changes in Discount Rates on the Liability for Future Policy Benefits Other (2) Total (In millions) Balance at March 31, 2025 $ ( 4,379 ) $ 352 $ ( 1,625 ) $ 1,027 $ ( 45 ) $ ( 4,670 ) OCI before reclassifications 512 ( 256 ) 279 ( 51 ) 31 515 Deferred income tax benefit (expense) (3) ( 108 ) 53 ( 58 ) 10 ( 6 ) ( 109 ) AOCI before reclassifications, net of income tax ( 3,975 ) 149 ( 1,404 ) 986 ( 20 ) ( 4,264 ) Amounts reclassified from AOCI 8 — — — 1 9 Deferred income tax benefit (expense) (3) ( 1 ) — — — ( 1 ) ( 2 ) Amounts reclassified from AOCI, net of income tax 7 — — — — 7 Balance at June 30, 2025 $ ( 3,968 ) $ 149 $ ( 1,404 ) $ 986 $ ( 20 ) $ ( 4,257 ) Three Months Ended June 30, 2024 Unrealized Investment Gains (Losses), Net of Related Offsets (1) Unrealized Gains (Losses) on Derivatives Changes in Nonperformance Risk on Market Risk Benefits Changes in Discount Rates on the Liability for Future Policy Benefits Other (2) Total (In millions) Balance at March 31, 2024 $ ( 4,937 ) $ 317 $ ( 1,711 ) $ 969 $ ( 51 ) $ ( 5,413 ) OCI before reclassifications ( 475 ) 44 110 233 ( 2 ) ( 90 ) Deferred income tax benefit (expense) (3) 100 ( 9 ) ( 23 ) ( 49 ) — 19 AOCI before reclassifications, net of income tax ( 5,312 ) 352 ( 1,624 ) 1,153 ( 53 ) ( 5,484 ) Amounts reclassified from AOCI 85 ( 2 ) — — 1 84 Deferred income tax benefit (expense) (3) ( 18 ) — — — ( 1 ) ( 19 ) Amounts reclassified from AOCI, net of income tax 67 ( 2 ) — — — 65 Balance at June 30, 2024 $ ( 5,245 ) $ 350 $ ( 1,624 ) $ 1,153 $ ( 53 ) $ ( 5,419 ) Six Months Ended June 30, 2025 Unrealized Investment Gains (Losses), Net of Related Offsets (1) Unrealized Gains (Losses) on Derivatives Changes in Nonperformance Risk on Market Risk Benefits Changes in Discount Rates on the Liability for Future Policy Benefits Other (2) Total (In millions) Balance at December 31, 2024 $ ( 5,137 ) $ 371 $ ( 1,603 ) $ 1,149 $ ( 58 ) $ ( 5,278 ) OCI before reclassifications 1,440 ( 273 ) 252 ( 206 ) 46 1,259 Deferred income tax benefit (expense) (3) ( 302 ) 57 ( 53 ) 43 ( 10 ) ( 265 ) AOCI before reclassifications, net of income tax ( 3,999 ) 155 ( 1,404 ) 986 ( 22 ) ( 4,284 ) Amounts reclassified from AOCI 39 ( 7 ) — — 3 35 Deferred income tax benefit (expense) (3) ( 8 ) 1 — — ( 1 ) ( 8 ) Amounts reclassified from AOCI, net of income tax 31 ( 6 ) — — 2 27 Balance at June 30, 2025 $ ( 3,968 ) $ 149 $ ( 1,404 ) $ 986 $ ( 20 ) $ ( 4,257 ) 50 Table of Contents Brighthouse Financial, Inc. Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued) 10. Equity (continued) Six Months Ended June 30, 2024 Unrealized Investment Gains (Losses), Net of Related Offsets (1) Unrealized Gains (Losses) on Derivatives Changes in Nonperformance Risk on Market Risk Benefits Changes in Discount Rates on the Liability for Future Policy Benefits Other (2) Total (In millions) Balance at December 31, 2023 $ ( 4,317 ) $ 277 $ ( 1,881 ) $ 720 $ ( 45 ) $ ( 5,246 ) OCI before reclassifications ( 1,295 ) 97 325 548 ( 11 ) ( 336 ) Deferred income tax benefit (expense) (3) 271 ( 20 ) ( 68 ) ( 115 ) 2 70 AOCI before reclassifications, net of income tax ( 5,341 ) 354 ( 1,624 ) 1,153 ( 54 ) ( 5,512 ) Amounts reclassified from AOCI 121 ( 5 ) — — 2 118 Deferred income tax benefit (expense) (3) ( 25 ) 1 — — ( 1 ) ( 25 ) Amounts reclassified from AOCI, net of income tax 96 ( 4 ) — — 1 93 Balance at June 30, 2024 $ ( 5,245 ) $ 350 $ ( 1,624 ) $ 1,153 $ ( 53 ) $ ( 5,419 ) __________________ (1) See Note 7 for information on offsets to investments related to future policy benefits. (2) Includes OCI related to foreign currency translation and defined benefit plan gains and losses. (3) The effects of income taxes on amounts recorded to AOCI are also recognized in AOCI. These income tax effects are released from AOCI when the related activity is reclassified into results from operations. Information regarding amounts reclassified out of each component of AOCI was as follows: AOCI Components Amounts Reclassified from AOCI Consolidated Statements of Operations and Comprehensive Income (Loss) Locations Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 (In millions) Net unrealized investment gains (losses): Net unrealized investment gains (losses) $ ( 12 ) $ ( 78 ) $ ( 37 ) $ ( 112 ) Net investment gains (losses) Net unrealized investment gains (losses) 4 ( 7 ) ( 2 ) ( 9 ) Net derivative gains (losses) Net unrealized investment gains (losses), before income tax ( 8 ) ( 85 ) ( 39 ) ( 121 ) Income tax (expense) benefit 1 18 8 25 Net unrealized investment gains (losses), net of income tax ( 7 ) ( 67 ) ( 31 ) ( 96 ) Unrealized gains (losses) on derivatives - cash flow hedges: Interest rate swaps — — 3 3 Net derivative gains (losses) Interest rate swaps — 1 1 1 Net investment income Foreign currency swaps — 1 3 1 Net derivative gains (losses) Gains (losses) on cash flow hedges, before income tax — 2 7 5 Income tax (expense) benefit — — ( 1 ) ( 1 ) Gains (losses) on cash flow hedges, net of income tax — 2 6 4 Defined benefit plans adjustment: Amortization of net actuarial gains (losses) ( 1 ) ( 1 ) ( 3 ) ( 2 ) Amortization of defined benefit plans, before income tax ( 1 ) ( 1 ) ( 3 ) ( 2 ) Income tax (expense) benefit 1 1 1 1 Amortization of defined benefit plans, net of income tax — — ( 2 ) ( 1 ) Total reclassifications, net of income tax $ ( 7 ) $ ( 65 ) $ ( 27 ) $ ( 93 ) 51 Table of Contents Brighthouse Financial, Inc. Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued) 11. Other Revenues and Other Expenses Other Revenues The Company has entered into contracts with mutual funds, fund managers, and their affiliates (collectively, the “Funds”) whereby the Company is paid monthly or quarterly fees (“12b-1 fees”) for providing certain services to customers and distributors of the Funds. The 12b-1 fees, which are included in other revenues, are generally equal to a fixed percentage of the average daily balance of the customer’s investment in a fund. The percentage is specified in the contract between the Company and the Funds. Payments are generally collected when due and are neither refundable nor able to offset future fees. To earn these fees, the Company performs services such as responding to phone inquiries, maintaining records, providing information to distributors and shareholders about fund performance and providing training to account managers and sales agents. The passage of time reflects the satisfaction of the Company’s performance obligations to the Funds and is used to recognize revenue associated with 12b-1 fees. Other revenues included 12b-1 fees of $ 64 million and $ 129 million for the three months and six months ended June 30, 2025, respectively, and $ 69 million and $ 136 million for the three months and six months ended June 30, 2024, respectively, of which substantially all were reported in the Annuities segment. Other Expenses Information on other expenses was as follows: Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 (In millions) Compensation $ 103 $ 101 $ 233 $ 212 Contracted services and other labor costs 76 70 148 133 Transition services agreements 4 5 7 12 Premium and other taxes, licenses and fees 10 13 26 24 Separate account fees 80 91 163 183 Volume related costs, excluding compensation, net of DAC capitalization 153 138 285 285 Interest expense on debt 38 38 76 76 Other 18 12 37 50 Total other expenses $ 482 $ 468 $ 975 $ 975 Capitalization of DAC See Note 6 for additional information on the capitalization of DAC. 52 Table of Contents Brighthouse Financial, Inc. Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued) 12. Earnings Per Common Share The calculation of earnings per common share was as follows: Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 (In millions, except share and per share data) Net income (loss) available to Brighthouse Financial, Inc.’s common shareholders $ 60 $ 9 $ ( 234 ) $ ( 510 ) Weighted average common shares outstanding — basic 57,411,289 61,956,829 57,832,368 62,496,801 Dilutive effect of share-based awards 322,881 298,501 — — Weighted average common shares outstanding — diluted 57,734,170 62,255,330 57,832,368 62,496,801 Earnings per common share: Basic $ 1.03 $ 0.12 $ ( 4.06 ) $ ( 8.17 ) Diluted $ 1.02 $ 0.12 $ ( 4.06 ) $ ( 8.17 ) For the three months ended June 30, 2025, weighted average shares used for calculating diluted earnings per common share includes 166,769 shares underlying in-the-money stock options. For the three months ended June 30, 2024, weighted average shares used for calculating diluted earnings per common share excludes 187,371 shares underlying out-of-the-money stock options, as the inclusion of such shares would be antidilutive under the treasury stock method to the earnings per common share calculation due to the average share price for the three months ended June 30, 2024. For both the six months ended June 30, 2025 and 2024, basic loss per common share equaled diluted loss per common share. The diluted shares were not included in the per share calculation for these periods as the inclusion of such shares would have an antidilutive effect. 13. Contingencies, Commitments and Guarantees Contingencies Litigation The Company is a defendant in a number of litigation matters. In some of the matters, large or indeterminate amounts, including punitive and treble damages, are sought. Modern pleading practice in the U.S. permits considerable variation in the assertion of monetary damages or other relief. Jurisdictions may permit claimants not to specify the monetary damages sought or may permit claimants to state only that the amount sought is sufficient to invoke the jurisdiction of the trial court. In addition, jurisdictions may permit plaintiffs to allege monetary damages in amounts well exceeding reasonably possible verdicts in the jurisdiction for similar matters. This variability in pleadings, together with the actual experience of the Company in litigating or resolving through settlement numerous claims over an extended period of time, demonstrates to management that the monetary relief which may be specified in a lawsuit or claim bears little relevance to its merits or disposition value. The Company also receives and responds to subpoenas or other inquiries seeking a broad range of information from various state and federal regulators, agencies and officials. The issues involved in information requests and regulatory matters vary widely and can include inquiries or investigations concerning the Company’s compliance with applicable insurance and other laws and regulations. The Company cooperates in these inquiries. Due to the vagaries of litigation, the outcome of a litigation matter and the amount or range of potential loss at particular points in time may normally be difficult to ascertain. Uncertainties can include how fact finders will evaluate documentary evidence and the credibility and effectiveness of witness testimony, and how trial and appellate courts will apply the law in the context of the pleadings or evidence presented, whether by motion practice, or at trial or on appeal. Disposition valuations are also subject to the uncertainty of how opposing parties and their counsel will themselves view the relevant evidence and applicable law. 53 Table of Contents Brighthouse Financial, Inc. Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued) 13. Contingencies, Commitments and Guarantees (continued) The Company establishes liabilities for litigation and regulatory loss contingencies when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. It is possible that some matters could require the Company to pay damages or make other expenditures or establish accruals in amounts that could not be estimated at June 30, 2025. Matters as to Which an Estimate Can Be Made For some loss contingency matters, the Company is able to estimate a reasonably possible range of loss. For such matters where a loss is believed to be reasonably possible, but not probable, no accrual has been made. In addition to amounts accrued for probable and reasonably estimable losses, as of June 30, 2025, the Company estimates the aggregate range of reasonably possible losses to be up to approximately $ 10 million. Matters as to Which an Estimate Cannot Be Made For other matters, the Company is not currently able to estimate the reasonably possible loss or range of loss. The Company is often unable to estimate the possible loss or range of loss until developments in such matters have provided sufficient information to support an assessment of the range of possible loss, such as quantification of a damage demand from plaintiffs, discovery from other parties and investigation of factual allegations, rulings by the court on motions or appeals, analysis by experts, and the progress of settlement negotiations. On a quarterly and annual basis, the Company reviews relevant information with respect to litigation contingencies and updates its accruals, disclosures and estimates of reasonably possible losses or ranges of loss based on such reviews. Sales Practices Claims Over the past several years, the Company has faced claims and regulatory inquiries and investigations, alleging improper marketing or sales of individual life insurance policies, annuities or other products. The Company continues to defend vigorously against the claims in these matters. The Company believes adequate provision has been made in its consolidated financial statements for all probable and reasonably estimable losses for sales practices matters. Cost of Insurance Class Actions Richard A. Newton v. Brighthouse Life Insurance Company (U.S. District Court, Northern District of Georgia, Atlanta Division, filed May 8, 2020). Plaintiff has filed a purported class action lawsuit against Brighthouse Life Insurance Company. Plaintiff was the owner of a universal life insurance policy issued by Travelers Insurance Company, a predecessor to Brighthouse Life Insurance Company. Plaintiff seeks to certify a class of all persons who own or owned life insurance policies issued where the terms of the life insurance policy provide or provided, among other things, a guarantee that the cost of insurance rates would not be increased by more than a specified percentage in any contract year. Plaintiff also alleges that cost of insurance charges were based on improper factors and should have decreased over time due to improving mortality but did not. Plaintiff alleges, among other things, causes of action for breach of contract, fraud, suppression and concealment, and violation of the Georgia Racketeer Influenced and Corrupt Organizations Act. Plaintiff seeks to recover damages, including punitive damages, interest and treble damages, attorneys’ fees, and injunctive and declaratory relief. Brighthouse Life Insurance Company filed a motion to dismiss in June 2020, which was granted in part and denied in part in March 2021. Plaintiff was granted leave to amend the complaint. On January 18, 2023, plaintiff filed a motion on consent to amend the second amended class action complaint to narrow the scope of the class sought to those who own or owned policies issued in Georgia. The motion was granted on January 23, 2023, and the third amended class action complaint was filed on January 23, 2023. The Company intends to vigorously defend this matter. Lawrence Martin v. Brighthouse Life Insurance Company (U.S. District Court, Southern District of New York, filed April 6, 2021). Plaintiff has filed a purported class action lawsuit against Brighthouse Life Insurance Company. Plaintiff is the owner of a universal life insurance policy issued by Travelers Insurance Company, a predecessor to Brighthouse Life Insurance Company. Plaintiff seeks to certify a class of similarly situated owners of universal life insurance policies issued or administered by defendants and alleges that cost of insurance charges were based on improper factors and should have decreased over time due to improving mortality but did not. Plaintiff alleges, among other things, causes of action for breach of contract, breach of the covenant of good faith and fair dealing, and unjust enrichment. Plaintiff seeks to recover compensatory damages, attorney’s fees, interest, and equitable relief including a constructive trust. Brighthouse Life Insurance Company filed a motion to dismiss in June 2021, which was denied in February 2022. Brighthouse Life Insurance Company of NY, was initially named as a defendant when the lawsuit was filed, but was dismissed as a defendant, without prejudice, in April 2022. The Company intends to vigorously defend this matter. 54 Table of Contents Brighthouse Financial, Inc. Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued) 13. Contingencies, Commitments and Guarantees (continued) MOVEit Data Security Incident Litigation Kennedy v. Progress Software Corporation, et al . (U.S. District Court, District of Massachusetts, filed October 3, 2023). BHF has been named as a defendant in a purported class action lawsuit. The action relates to a data security incident at an alleged third-party vendor, PBI Research Services (“PBI”), and allegedly involves the MOVEit file transfer system that PBI uses in its provision of services (“MOVEit Incident”). As it relates to BHF, plaintiff seeks to certify a subclass of persons whose private information was allegedly maintained by BHF and accessed or acquired in relation to the MOVEit Incident. Plaintiff alleges, among other things, that BHF negligently chose to utilize PBI to store and transfer plaintiff’s and purported class members’ private information despite PBI’s use of the MOVEit software which plaintiff contends contained security vulnerabilities. The complaint asserts claims against BHF for negligence, negligence per se, and unjust enrichment, and plaintiff seeks declaratory and injunctive relief, damages, attorneys’ fees and prejudgment interest. The court dismissed claims for injunctive relief against BHF, but denied the remainder of a motion to dismiss based on plaintiff’s lack of standing. BHF intends to vigorously defend this matter. Summary Various litigations, claims and assessments against the Company, in addition to those discussed previously and those otherwise provided for in the Company’s consolidated financial statements, have arisen in the course of the Company’s business, including, but not limited to, in connection with its activities as an insurer, investor and taxpayer. Further, state insurance regulatory authorities and other federal and state authorities regularly make inquiries and conduct investigations concerning the Company’s compliance with applicable insurance and other laws and regulations. It is not possible to predict the ultimate outcome of all pending investigations and legal proceedings. In some of the matters referred to previously, large or indeterminate amounts, including punitive and treble damages, are sought. Although, in light of these considerations, it is possible that an adverse outcome in certain cases could have a material effect upon the Company’s financial position, based on information currently known by the Company’s management, in its opinion, the outcomes of such pending investigations and legal proceedings are not likely to have such an effect. However, given the large or indeterminate amounts sought in certain of these matters and the inherent unpredictability of litigation, it is possible that an adverse outcome in certain matters could, from time to time, have a material effect on the Company’s consolidated net income or cash flows in particular quarterly or annual periods. Other Loss Contingencies As with litigation and regulatory loss contingencies, the Company considers establishing liabilities for loss contingencies associated with disputes or other matters involving third parties, including counterparties to contractual arrangements entered into by the Company (e.g., third-party vendors and reinsurers), as well as with tax or other authorities (“other loss contingencies”). The Company establishes liabilities for such other loss contingencies when it is probable that a loss will be incurred and the amount of the loss can be reasonably estimated. In matters where it is not probable, but is reasonably possible that a loss will be incurred and the amount of loss can be reasonably estimated, such losses or range of losses are disclosed, and no accrual is made. In the absence of sufficient information to support an assessment of the reasonably possible loss or range of loss, no accrual is made and no loss or range of loss is disclosed. On a quarterly basis, the Company reviews relevant information with respect to other loss contingencies and, when applicable, updates its accruals, disclosures and estimates of reasonably possible losses or estimated ranges of loss based on such reviews. The Company’s tax-related matters have involved disputes with taxing authorities, ongoing audits, evaluation of filing positions and any potential assessments related thereto. In the matters where the Company’s subsidiaries are acting as the reinsured or the reinsurer, such reinsurance matters have involved assertions by third parties primarily related to rates, fees or reinsured benefit calculations, and certain of such reinsurance matters have resulted in arbitration. As of June 30, 2025, the Company estimates the range of reasonably possible losses in excess of the amounts accrued for certain other loss contingencies to be from zero up to approximately $ 100 million relating to certain tax matters, as described above. For certain other matters, the Company may not currently be able to estimate the reasonably possible loss or estimated range of loss until developments in such matters have provided sufficient information to support an assessment of such loss. During the first quarter of 2024, an arbitration panel ruled in favor of a reinsurer seeking a premium rate increase retroactive to September 2019 resulting in a $ 187 million loss, of which $ 167 million was reported in universal life and investment product-type policy fees and $ 20 million was reported in other expenses. 55 Table of Contents Brighthouse Financial, Inc. Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued) 13. Contingencies, Commitments and Guarantees (continued) Commitments Mortgage Loan Commitments The Company commits to lend funds under mortgage loan commitments. The amounts of these mortgage loan commitments were $ 182 million and $ 271 million at June 30, 2025 and December 31, 2024, respectively. Commitments to Fund Partnership Investments, Bank Credit Facilities and Private Corporate Bond Investments The Company commits to fund partnership investments and to lend funds under bank credit facilities and private corporate bond investments. The amounts of these unfunded commitments were $ 1.6 billion and $ 1.7 billion at June 30, 2025 and December 31, 2024, respectively. Guarantees In the normal course of its business, the Company has provided certain indemnities, guarantees and commitments to third parties such that it may be required to make payments now or in the future. In the context of reinsurance, acquisition, disposition, investment and other transactions, the Company has provided indemnities and guarantees, including those related to tax, environmental and other specific liabilities and other indemnities and guarantees that are triggered by, among other things, breaches of representations, warranties or covenants provided by the Company. In addition, in the normal course of business, the Company provides indemnifications to counterparties in contracts with triggers similar to the foregoing, as well as for certain other liabilities, such as third-party lawsuits. These obligations are often subject to time limitations that vary in duration, including contractual limitations and those that arise by operation of law, such as applicable statutes of limitation. In some cases, the maximum potential obligation under the indemnities and guarantees is subject to a contractual limitation with a cumulative maximum of $ 82 million, while in other cases such limitations are not specified or applicable. Since certain of these obligations are not subject to limitations, the Company does not believe that it is possible to determine the maximum potential amount that could become due under these guarantees in the future. Management believes that it is unlikely the Company will have to make any material payments under these indemnities, guarantees, or commitments. In addition, the Company indemnifies its directors and officers as provided in its charters and bylaws. Also, the Company indemnifies its agents for liabilities incurred as a result of their representation of the Company’s interests. Since these indemnities are generally not subject to limitation with respect to duration or amount, the Company does not believe that it is possible to determine the maximum potential amount that could become due under these indemnities in the future. The Company did no t have any liabilities recorded for indemnities, guarantees and commitments at both June 30, 2025 and December 31, 2024 . 56 Table of Contents