What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-11-07 compared with 2025-08-08 · 315 added, 224 removed, 1003 unchanged (35% of the section changed)

15 unchanged sentences

(iii) our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025 (the “First Quarter Form 10-Q”) filed with the SEC on May 9, 2025;

and (iv) our current reports on Form 8-K filed in 2025.

(iv) our Quarterly Report on Form 10-Q for the quarter ended June 30, 2025 (the “Second Quarter Form 10-Q” and, together with the First Quarter Form 10-Q, the “Quarterly Reports”) filed with the SEC on August 8, 2025;

and (v) our current reports on Form 8-K filed in 2025.

This Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to help the reader understand the results of operations, financial condition and cash flows of Brighthouse Financial for the periods indicated.

8 unchanged sentences

This section also refers to certain other terms used to describe our insurance business and financial and operating metrics but is not intended to be exhaustive.

Our Results of Operations discussion and analysis presents a review for the three months and six months ended June 30, 2025 and 2024 and period-over-period, as well as year-over-year, comparisons between these periods.

Our Results of Operations discussion and analysis presents a review for the three months and nine months ended September 30, 2025 and 2024 and period-over-period, as well as year-over-year, comparisons between these periods.

Executive Summary

6 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

11 unchanged sentences

(1) We use the term “net income (loss) available to shareholders” to refer to “net income (loss) available to Brighthouse Financial, Inc.’s common shareholders” and “adjusted loss” to refer to negative adjusted earnings values throughout the results of operations discussions.

For the three months ended June 30, 2025, we had net income available to shareholders of $60 million and adjusted earnings of $198 million compared to net income available to shareholders of $9 million and adjusted earnings of $346 million for the three months ended June 30, 2024.

Net income available to shareholders for the three months ended June 30, 2025 primarily reflects favorable pre-tax adjusted earnings and net favorable changes in the estimated fair value of our variable annuity guaranteed benefit riders due to market factors.

The favorable impacts were partially offset by an unfavorable change in the estimated fair value of freestanding interest rate derivatives we use to hedge our universal life with secondary guarantees (“ULSG”) business resulting from increasing long-term interest rates, the weakening of the U.S.

dollar unfavorably impacting foreign currency forwards and swaps, net investment losses on mortgage loans and net investment losses on sales of fixed maturity securities.

For the six months ended June 30, 2025, we had a net loss available to shareholders of $234 million and adjusted earnings of $433 million compared to a net loss available to shareholders of $510 million and adjusted earnings of $248 million for the six months ended June 30, 2024.

The net loss available to shareholders for the six months ended June 30, 2025 primarily reflects net unfavorable changes in the estimated fair value of our variable annuity guaranteed benefit riders due to market factors, an unfavorable change in the estimated fair value of freestanding interest rate derivatives we use to hedge our ULSG business, the weakening of the U.S.

dollar unfavorably impacting foreign currency forwards and swaps, net investment losses on mortgage loans and net investment losses on sales of fixed maturity securities.

These unfavorable impacts were partially offset by favorable pre-tax adjusted earnings.

For the three months ended September 30, 2025, we had net income available to shareholders of $453 million and adjusted earnings of $970 million compared to net income available to shareholders of $150 million and adjusted earnings of $767 million for the three months ended September 30, 2024.

Net income available to shareholders for the three months ended September 30, 2025 primarily reflects favorable pre-tax adjusted earnings and a net investment gain on the sale of a subsidiary which owned certain mineral rights across the U.S.

These favorable impacts were partially offset by net unfavorable changes in the estimated fair value of our variable annuity guaranteed benefit riders due to market factors.

For the nine months ended September 30, 2025, we had net income available to shareholders of $219 million and adjusted earnings of $1.4 billion compared to a net loss available to shareholders of $360 million and adjusted earnings of $1.0 billion for the nine months ended September 30, 2024.

Net income available to shareholders for the nine months ended September 30, 2025 primarily reflects favorable pre-tax adjusted earnings and a net investment gain on the sale of a subsidiary which owned certain mineral rights across the U.S.

These favorable impacts were partially offset by net unfavorable changes in the estimated fair value of our variable annuity guaranteed benefit riders due to market factors, an unfavorable change in the estimated fair value of freestanding interest rate derivatives we use to hedge our universal life with secondary guarantees (“ULSG”) business resulting from decreasing interest rates, net investment losses on mortgage loans, net investment losses on sales of fixed maturity securities and the weakening of the U.S.

dollar unfavorably impacting foreign currency forwards and swaps.

See “— Non-GAAP Financial Disclosures.” See “— Results of Operations” for a detailed discussion of our results.

Recent Developments

On November 6, 2025, BHF entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Aquarian Holdings VI L.P., a Delaware limited partnership (“Parent”), Aquarian Beacon Merger Sub Inc., a Delaware corporation and an indirect wholly-owned subsidiary of Parent (“Merger Sub”), and Aquarian Holdings LLC, a Delaware limited liability company (“Aquarian Holdings”), solely for the purpose of certain provisions, pursuant to which, at the closing of the transactions contemplated by the Merger Agreement, Merger Sub will merge with and into BHF, with BHF surviving as a wholly owned subsidiary of Parent (the “Merger”).

Pursuant to the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each share of our common stock issued and outstanding immediately prior to the Effective Time will be converted into the right to receive $70.00 per share, net in cash, without interest and less any amounts that are required to be deducted or withheld under applicable law.

The consummation of the Merger is subject to the satisfaction or waiver of customary closing conditions, including, among others, the adoption of the Merger Agreement by the affirmative vote of the holders of a majority of the outstanding shares of our common stock entitled to vote thereon at a meeting of our stockholders and the receipt of certain regulatory approvals, including from insurance regulators in Delaware, New York and Massachusetts.

Parent’s and Merger Sub’s obligations are also conditioned upon the absence of a Company Material Adverse Effect (as defined in the Merger Agreement) and the absence of a Burdensome Condition (as defined in the Merger Agreement).

The Merger Agreement also contains customary representations, warranties and covenants by each of Parent, Merger Sub, Aquarian Holdings and BHF, including, among others, covenants by BHF to use its reasonable best efforts to conduct its business in the ordinary course consistent with past practice and to refrain from taking certain actions prior to the Effective Time, in each case except with Parent’s consent.

Industry Trends and Uncertainties

1 unchanged sentence

Where these trends or uncertainties are specific to a particular aspect of our business, we often include such a discussion under the relevant caption of this Management’s Discussion and Analysis of Financial Condition and Results of Operations, as part of our broader analysis of that area of our business.

Refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Industry Trends and Uncertainties” included in our 2024 Annual Report, as amended or supplemented by our First Quarter Form 10-Q and herein, for a comprehensive discussion of some of the key general trends and uncertainties that have influenced the development of our business and our historical financial performance and that we believe will continue to influence our business and results of operations in the future.

Refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Industry Trends and Uncertainties” included in our 2024 Annual Report, as amended or supplemented by our subsequent Quarterly Reports and herein, for a comprehensive discussion of some of the key general trends and uncertainties that have influenced the development of our business and our historical financial performance and that we believe will continue to influence our business and results of operations in the future.

Financial and Economic Environment

2 unchanged sentences

Equity market performance can affect our profitability for variable annuities, Shield ® Level Annuities (“Shield” and “Shield Annuity”) and other separate account products as a result of the effects it has on product demand, revenues, expenses, reserves and our risk management effectiveness.

In September, November and December 2024, the Federal Reserve Board (the “Federal Reserve”) decreased the target range for the federal funds rate, and any additional future decrease may negatively impact our business in certain respects, including our investment portfolio, by lowering the level of long-term interest rates and changing the shape of the yield curve.

The Federal Reserve Board (the “Federal Reserve”) decreased the target range for the federal funds rate in September and October 2025, as well as in September, November and December 2024, and any additional future decrease may negatively impact our business in certain respects, including our investment portfolio, by lowering the level of long-term interest rates and changing the shape of the yield curve.

The level of long-term interest rates and the shape of the yield curve can have a negative effect on the profitability for variable annuities, as well as the demand for, and the profitability of, spread-based products such as fixed annuities, index-linked annuities and universal life insurance.

6 unchanged sentences

Prolonged and elevated inflation could adversely affect the financial markets and the economy generally and dispelling it may require governments to pursue restrictive fiscal and monetary policies, which could constrain overall economic activity and inhibit revenue growth.

Events involving limited liquidity, defaults, nonperformance or other adverse developments that affect financial institutions or the financial services industry generally, or concerns or rumors about events of these kinds or other similar risks, could adversely affect market-wide liquidity, which could increase the risk of a recession or an equity market downturn and negatively impact various portions of our business, including our investment portfolio.

Events involving limited liquidity, defaults, nonperformance, fraud or other adverse developments that affect financial institutions or the financial services industry generally, or concerns or rumors about events of these kinds or other similar risks, could adversely affect market-wide liquidity, which could increase the risk of a recession or an equity market downturn and negatively impact various portions of our business, including our investment portfolio.

See “Risk Factors — Economic Environment and Capital Markets-Related Risks — If difficult conditions in the capital markets and the U.S.

2 unchanged sentences

The above factors affect our expectations regarding future margins.

We review our long-term assumptions about capital markets returns and interest rates, along with other assumptions such as contract holder behavior, as part of our annual actuarial review.

We review our long-term assumptions about capital markets returns and interest rates, along with other assumptions such as contract holder behavior, as part of our annual actuarial review (“AAR”).

As additional company specific or industry information on contract holder behavior becomes available, related assumptions may change and may potentially have a material impact on liability valuations and net income.

8 unchanged sentences

See “Business — Regulation,” as well as “Risk Factors — Regulatory and Legal Risks” included in our 2024 Annual Report, as amended or supplemented by our quarterly reports under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Industry Trends and Uncertainties — Regulatory Developments.”

Federal Tax Reform

On August 16, 2022, the Inflation Reduction Act was signed into law by President Biden.

The Inflation Reduction Act establishes a 15% corporate alternative minimum tax (the “CAMT”) for corporations whose average annual adjusted financial statement income for any consecutive three–tax year period ending after December 31, 2021 and preceding the tax year exceeds $1.0 billion.

In addition, the Inflation Reduction Act also establishes a one percent excise tax on stock repurchases made by publicly-traded U.S.

corporations.

On September 12, 2024, the Internal Revenue Service (“IRS”) and the U.S.

Department of Treasury (the “U.S.

Treasury”) issued proposed regulations with respect to the CAMT.

On September 30, 2025, the IRS issued Notice 2025-46 and Notice 2025-49 (collectively, the “Notices”) that provide interim guidance on certain matters and signal the Treasury’s intent to partially withdraw and amend the prior proposed regulations.

There remain significant uncertainties regarding the application of the CAMT, and there can be no assurance that final regulations, if adopted, will be adopted in a form consistent with the existing guidance.

The Company is currently assessing the impact of the proposed regulations and the Notices, including the impact on the applicability of the CAMT.

Based on guidance issued by the U.S.

Treasury and the IRS to date, the Company was not subject to the CAMT for the years ended December 31, 2023 and 2024 and does not currently expect to be subject to the CAMT for the year ended December 31, 2025.

However, the Company will continue to assess the applicability of the CAMT on an annual basis and may be subject to the CAMT in future years.

On July 4, 2025, the U.S.

enacted the One Big Beautiful Bill Act (the “OBBBA”), which includes certain changes to U.S.

corporate tax provisions and extends many of the provisions of the Tax Cuts and Jobs Act that were set to expire at the end of 2025.

The Company does not currently expect the OBBBA to have a material impact on the Company.

California Climate Disclosure

In October 2023, California enacted the Climate Corporate Data Accountability Act (“CCDAA”), or SB 253, and the Climate-Related Financial Risk Act (“CRFRA”), or SB 261.

The CCDAA requires companies with annual revenues exceeding $1.0 billion that conduct business in California to report their Scope 1 and 2 greenhouse gas (“GHG”) emissions annually starting in 2026;

and Scope 3 GHG emissions starting in 2027.

The CRFRA applies to companies with annual revenues over $500 million that conduct business in California and requires disclosure of climate-related financial risks and mitigation measures taken to address such risks, with the first report due on January 1, 2026, and biennially thereafter.

The Company intends to report under the CCDAA and under the CRFRA.

Summary of Critical Accounting Estimates

55 unchanged sentences

Results of Operations

Consolidated Results for the Three Months and Six Months Ended June 30, 2025 and 2024

Annual Actuarial Review

We conducted our GAAP AAR in the third quarter.

As part of the 2025 GAAP AAR, for our ULSG business, we updated assumptions regarding policyholder behavior, including mortality, premium persistency, lapses and withdrawals.

In addition, we increased the long-term general account earned rate, driven by an increase in the mean reversion rate, from 4.00% to 4.50%.

For our variable annuity business, we updated assumptions regarding annuitization, mortality, guaranteed principal option utilization, lapses and withdrawals, as well as separate account assumptions, including fund fees and allocations.

For the payout annuity business, we updated assumptions regarding mortality.

For term participating and non-participating whole life insurance, we updated assumptions regarding mortality and lapses.

As part of the 2024 GAAP AAR, for our ULSG business, we increased the long-term general account earned rate, driven by an increase in the mean reversion rate, from 3.75% to 4.00%.

Also, with respect to our ULSG business, we updated assumptions regarding policyholder behavior, including mortality, premium persistency, lapses and withdrawals.

For our variable annuity business, we updated assumptions regarding annuitization, mortality, lapses and withdrawals, as well as separate account assumptions, including fund fees and allocations.

For term participating and non-participating whole life insurance, we updated assumptions regarding mortality and lapses.

We are currently in the process of conducting our 2025 statutory AAR, the results of which will be included in our insurance subsidiaries’ 2025 annual statutory financial statements.

We anticipate that the 2025 statutory AAR will result in an increase to our statutory reserves;

however, we expect to remain within our target combined risk-based capital (“RBC”) ratio range of 400% to 450% in normal market conditions at the end of 2025, without contributing capital to our insurance subsidiaries.

See “Risk Factors — Risks Related to Our Business — Differences between actual experience and actuarial assumptions may adversely affect our financial results, capitalization and financial condition” included in our 2024 Annual Report.

The impact on income (loss) available to shareholders before provision for income tax was as follows:

Nine Months Ended

September 30,

(In millions)

Market risk benefits

Embedded derivatives

Total market risk benefits and embedded derivatives

Included in pre-tax adjusted earnings (loss):

Other annuity business (9) 26

Life business 14 (83)

Run-off 965 359

Total included in pre-tax adjusted earnings (loss)

Total impact on income (loss) available to shareholders before provision for income tax $ 400 $ 413

Consolidated Results for the Three Months and Nine Months Ended September 30, 2025 and 2024

Unless otherwise noted, all amounts in the following discussions of our results of operations are stated before income tax except for adjusted earnings, which are presented net of income tax.

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

26 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

11 unchanged sentences

$ 453 $ 150 $ 219 $ (360)

Three Months Ended June 30, 2025 Compared with the Three Months Ended June 30, 2024

Income available to shareholders before provision for income tax was $68 million ($60 million, net of income tax), an increase of $79 million ($51 million, net of income tax) from loss available to shareholders before provision for income tax of $11 million ($9 million, net of income tax) in the prior period.

Three Months Ended September 30, 2025 Compared with the Three Months Ended September 30, 2024

Income available to shareholders before provision for income tax was $557 million ($453 million, net of income tax), an increase of $397 million ($303 million, net of income tax) from income available to shareholders before provision for income tax of $160 million ($150 million, net of income tax) in the prior period.

The increase in income before provision for income tax was driven by the following favorable items:

• gains from variable annuity guaranteed benefit riders, see “— Annuity Guaranteed Benefits and Shield Annuity Liabilities for the Three Months and Six Months Ended June 30, 2025 and 2024”;

• net investment gains (losses) reflecting lower net losses on sales of fixed maturity securities.

The increase in income before provision for income taxes was partially offset by the following unfavorable items:

• lower pre-tax adjusted earnings, as discussed in greater detail below;

• the impact of long-term interest rates on interest rate derivatives used to manage interest rate exposure in our ULSG business, as the long-term interest rate increased in the current period, resulting in a loss of $154 million, and increased in the prior period, resulting in a loss of $97 million;

• the weakening of the U.S.

dollar more in the current period than the prior period, unfavorably impacting foreign currency forwards and swaps.

The provision for income tax, expressed as a percentage of income (loss) before provision for income tax, resulted in a higher effective tax rate in the current period compared to the prior period.

• higher pre-tax adjusted earnings, as discussed in greater detail below;

• net investment gains (losses) reflecting a gain on the sale of a subsidiary which owned certain mineral rights across the U.S., lower losses on sales of fixed maturity securities and a net decrease in impairments on fixed maturity securities;

• lower losses from variable annuity guaranteed benefit riders, see “— Annuity Guaranteed Benefits and Shield Annuity Liabilities for the Three Months and Nine Months Ended September 30, 2025 and 2024”;

• the strengthening of the U.S.

dollar in the current period and weakening in the prior period, favorably impacting foreign currency forwards and swaps.

The increase in income before provision for income taxes was partially offset by the impact of long-term interest rates on interest rate derivatives used to manage interest rate exposure in our ULSG business, as the long-term interest rate decreased less in the current period combined with lower rate volatility, resulting in a loss of $10 million, and decreased more in the prior period combined with higher rate volatility, resulting in a gain of $113 million.

The provision for income tax, calculated as a percentage of income (loss) before provision for income tax, resulted in an effective tax rate of 18% in the current period compared to 5% in the prior period.

Our effective tax rate differs from the statutory tax rate primarily due to the impacts of the dividends received deduction and tax credits.

Six Months Ended June 30, 2025 Compared with the Six Months Ended June 30, 2024

The loss available to shareholders before provision for income tax was $314 million ($234 million, net of income tax), a lower loss of $339 million ($276 million, net of income tax) from loss available to shareholders before provision for income tax of $653 million ($510 million, net of income tax) in the prior period.

The lower loss before provision for income tax was driven by the following favorable items:

Nine Months Ended September 30, 2025 Compared with the Nine Months Ended September 30, 2024

Income available to shareholders before provision for income tax was $243 million ($219 million, net of income tax), an increase of $736 million ($579 million, net of income tax) from loss available to shareholders before provision for income tax of $493 million ($360 million, net of income tax) in the prior period.

The increase in income before provision for income tax was driven by the following favorable items:

• higher pre-tax adjusted earnings, as discussed in greater detail below;

• the impact of long-term interest rates on interest rate derivatives used to manage interest rate exposure in our ULSG business, as the long-term interest rate decreased in the current period, resulting in a loss of $132 million, and increased in the prior period, resulting in a loss of $309 million;

• net investment gains (losses) reflecting lower net losses on sales of fixed maturity securities, partially offset by higher net losses on mortgage loans due to an increase in the allowance for credit losses.

The lower loss before provision for income tax was partially offset by the following unfavorable items:

• the weakening of the U.S.

dollar in the current period and strengthening in the prior period, unfavorably impacting foreign currency forwards and swaps;

• higher losses from variable annuity guaranteed benefit riders, see “— Annuity Guaranteed Benefits and Shield Annuity Liabilities for the Three Months and Six Months Ended June 30, 2025 and 2024.”

• net investment gains (losses) reflecting lower net losses on sales of fixed maturity securities, a net decrease in impairments on fixed maturity securities, and a gain on the sale of a subsidiary which owned certain mineral rights across the U.S., partially offset by higher losses on mortgage loans due to an increase in the allowance for credit losses;

• the impact of long-term interest rates on interest rate derivatives used to manage interest rate exposure in our ULSG business, as interest rates decreased more in the current period combined with lower rate volatility, resulting in a loss of $142 million, and decreased less in the prior period, resulting in a loss of $196 million.

The increase in income before provision for income taxes was partially offset by the U.S.

dollar weakening more in the current period than the prior period, unfavorably impacting foreign currency forwards and swaps.

The provision for income tax, calculated as a percentage of income (loss) before provision for income tax, resulted in an effective tax rate of 7% in the current period compared to 32% in the prior period.

2 unchanged sentences

The reconciliation of net income (loss) available to shareholders to adjusted earnings (loss) was as follows:

Three Months Ended June 30, 2025

Three Months Ended September 30, 2025

Annuities Life Run-off Corporate & Other Total

6 unchanged sentences

Investment gains (losses) on trading securities

(6) — — — (6)

Net derivative gains (losses), excluding investment hedge adjustments of $ 0

7 unchanged sentences

$ 304 $ 40 $ 641 $ (15) $ 970

Three Months Ended June 30, 2024

Three Months Ended September 30, 2024

Annuities Life Run-off Corporate & Other Total

15 unchanged sentences

$ 327 $ (25) $ 463 $ 2 $ 767

Six Months Ended June 30, 2025

Nine Months Ended September 30, 2025

Annuities Life Run-off Corporate & Other Total

12 unchanged sentences

Adjusted earnings (loss) $ 950 $ 23 $ 494 $ (64) $ 1,403

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

Annuities Life Run-off Corporate & Other Total

15 unchanged sentences

$ 972 $ (19) $ 92 $ (30) $ 1,015

Consolidated Results for the Three Months and Six Months Ended June 30, 2025 and 2024 — Adjusted Earnings (Loss)

Consolidated Results for the Three Months and Nine Months Ended September 30, 2025 and 2024 — Adjusted Earnings (Loss)

The components of adjusted earnings (loss) were as follows:

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

11 unchanged sentences

$ 970 $ 767 $ 1,403 $ 1,015

Three Months Ended June 30, 2025 Compared with the Three Months Ended June 30, 2024

Adjusted earnings were $198 million in the current period, a decrease of $148 million.

Key net unfavorable impacts were:

• higher net costs associated with insurance-related activities due to:

◦ higher claims, net of reinsurance in our Life and Run-off segments;

Three Months Ended September 30, 2025 Compared with the Three Months Ended September 30, 2024

Adjusted earnings were $970 million in the current period, an increase of $203 million.

Key net favorable impacts were:

• lower net costs associated with insurance-related activities due to:

◦ a net decrease in liability balances resulting from year-over-year changes made in connection with the AAR in our Run-off, Life and Annuities segments and other refinements;

partially offset by

◦ an increase in income annuity underwriting margins;

• lower net investment spread due to:

◦ higher interest credited to policyholders due to higher account balances;

◦ lower returns on other limited partnerships;

◦ an increase in liability balances in our Run-off segment resulting from a premium rate increase on an existing reinsurance agreement;

◦ higher claims, net of reinsurance in our Life and Run-off segments;

◦ a decrease in income annuity underwriting margins;

• higher net investment spread due to:

◦ higher returns on other limited partnerships;

partially offset by

◦ higher returns on real estate limited partnerships and limited liability companies (“LLC”);

◦ higher average invested assets resulting from positive net flows in the general account;

• lower net fee income due to:

◦ higher interest credited to policyholders due to prior period changes made in connection with the AAR in our Annuities segment;

• lower other expenses due to lower asset-based variable annuity expenses resulting from lower average separate account balances, a portion of which is offset in fee income.

The key unfavorable impact was lower fee income due to:

◦ lower asset-based fees resulting from lower average separate account balances, a portion of which is offset in other expenses;

◦ a decline in the net cost of insurance fees driven by the aging in-force business in our Run-off segment;

partially offset by

◦ lower ceded cost of insurance fees consistent with favorable equity market returns in our Life segment, which is offset in other expenses;

• higher other expenses due to:

◦ lower ceded cost of insurance expenses consistent with favorable equity market returns in our Life segment, which is offset in fee income;

◦ higher deferred compensation and operational expenses;

partially offset by

◦ lower asset-based variable annuity expenses resulting from lower average separate account balances, a portion of which is offset in fee income.

The provision for income tax, expressed as a percentage of pre-tax adjusted earnings (loss), resulted in an effective tax rate of 17% in the current period compared to 16% in the prior period.

◦ a decline in the net cost of insurance (“COI”) fees driven by the aging in-force business in our Run-off segment.

The provision for income tax, calculated as a percentage of pre-tax adjusted earnings (loss), resulted in an effective tax rate of 19% in the current period compared to 18% in the prior period.

Our effective tax rate differs from the statutory tax rate primarily due to the impacts of the dividends received deduction and tax credits.

Six Months Ended June 30, 2025 Compared with the Six Months Ended June 30, 2024

Adjusted earnings were $433 million in the current period, an increase of $185 million.

Nine Months Ended September 30, 2025 Compared with the Nine Months Ended September 30, 2024

Adjusted earnings were $1.4 billion in the current period, an increase of $388 million.

Key net favorable impacts were:

• lower net costs associated with insurance-related activities due to:

◦ a net decrease in liability balances resulting from year-over-year changes made in connection with the AAR in our Run-off, Life and Annuities segments and other refinements;

◦ a decrease in liability balances in our Run-off segment resulting from a reinsurance premium rate increase associated with the conclusion of a reinsurance arbitration in the prior period;

2 unchanged sentences

◦ higher claims, net of reinsurance, in our Life segment;

◦ an increase in liability balances in our Run-off segment resulting from a premium rate increase on an existing reinsurance agreement;

• higher net fee income due to:

◦ lower ceded cost of insurance fees in our Life and Run-off segments related to the conclusion of the aforementioned reinsurance arbitration in the prior period;

◦ lower ceded COI fees in our Life and Run-off segments related to the conclusion of the aforementioned reinsurance arbitration in the prior period;

partially offset by

◦ lower asset-based fees resulting from lower average separate account balances, a portion of which is offset in other expenses;

◦ a decline in the net cost of insurance fees driven by the aging in-force business in our Run-off segment;

◦ a decline in the net COI fees driven by the aging in-force business in our Run-off segment;

• lower other expenses due to:

◦ the conclusion of the aforementioned reinsurance arbitration in our Life and Run-off segments in the prior period;

◦ lower asset-based variable annuity expenses resulting from lower average separate account balances, a portion of which is offset in fee income;

◦ the conclusion of the aforementioned reinsurance arbitration in our Life and Run-off segments in the prior period;

◦ lower transition services agreement expenses;

1 unchanged sentence

◦ higher operational expenses.

The key unfavorable impact was a lower net investment spread due to higher interest credited to policyholders due to higher account balances and actuarial modeling improvements in our Annuities segment.

The provision for income tax, calculated as a percentage of pre-tax adjusted earnings (loss), resulted in an effective tax rate of 17% in both the current period and the prior period.

The key unfavorable impact was a lower net investment spread due to:

◦ higher interest credited to policyholders due to higher account balances, prior period changes made in connection with the AAR and current period actuarial modeling improvements in our Annuities segment;

◦ lower returns on other limited partnerships;

partially offset by

◦ higher returns on real estate limited partnerships and limited liability companies (“LLC”).

The provision for income tax, calculated as a percentage of pre-tax adjusted earnings (loss), resulted in an effective tax rate of 19% in the current period compared to 18% in the prior period.

Our effective tax rate differs from the statutory tax rate primarily due to the impacts of the dividends received deduction, tax credits and current period non-recurring items.

Segment Results for the Three Months and Six Months Ended June 30, 2025 and 2024 — Adjusted Earnings (Loss)

Segment Results for the Three Months and Nine Months Ended September 30, 2025 and 2024 — Adjusted Earnings (Loss)

The components of adjusted earnings for our Annuities segment were as follows:

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

10 unchanged sentences

The changes in our variable annuities separate account balances are presented in Note 5 of the Notes to the Interim Condensed Consolidated Financial Statements.

Three Months Ended June 30, 2025 Compared with the Three Months Ended June 30, 2024

Adjusted earnings were $332 million in the current and prior period.

Key net favorable impacts were:

• higher net investment spread due to:

◦ higher average invested assets resulting from positive net flows in the general account;

◦ higher returns on real estate limited partnerships and LLCs;

◦ higher investment yields on our fixed income portfolio, as proceeds from maturing investments and the growth in the investment portfolio were invested at higher yields than the portfolio average;

partially offset by

◦ higher interest credited to policyholders due to higher account balances;

• lower net costs associated with insurance-related activities due to an increase in income annuity underwriting margins.

Three Months Ended September 30, 2025 Compared with the Three Months Ended September 30, 2024

Adjusted earnings were $304 million in the current period, a decrease of $23 million.

Key net unfavorable impacts were:

• higher net costs associated with insurance-related activities due to:

◦ a decrease in income annuity underwriting margins;

◦ a net increase in liability balances resulting from year-over-year changes made in connection with the AAR;

• lower fee income due to lower asset-based fees resulting from lower average separate account balances, a portion of which is offset in other expenses.

• higher other expenses due to:

◦ higher deferred compensation and operational expenses;

partially offset by

◦ lower asset-based variable annuity expenses resulting from lower average separate account balances, a portion of which is offset in fee income.

The provision for income tax, calculated as a percentage of pre-tax adjusted earnings, resulted in an effective tax rate of 19% in both the current period and the prior period.

Our effective tax rate differs from the statutory tax rate primarily due to the impacts of the dividends received deduction.

Six Months Ended June 30, 2025 Compared with the Six Months Ended June 30, 2024

Adjusted earnings were $646 million in the current period, an increase of $1 million.

Key net favorable impacts were:

• higher net investment spread due to:

◦ higher average invested assets resulting from positive net flows in the general account;

◦ higher returns on real estate limited partnerships and LLCs;

◦ higher average invested long-term assets;

◦ higher investment yields on our fixed income portfolio, as proceeds from maturing investments and the growth in the investment portfolio were invested at higher yields than the portfolio average;

partially offset by

◦ higher interest credited to policyholders due to higher account balances and actuarial modeling improvements;

• lower net costs associated with insurance-related activities due to an increase in income annuity underwriting margins.

◦ higher interest credited to policyholders due to changes made in connection with the AAR in the prior period;

• lower other expenses due to lower asset-based variable annuity expenses resulting from lower average separate account balances, a portion of which is offset in fee income.

The provision for income tax, calculated as a percentage of pre-tax adjusted earnings, resulted in an effective tax rate of 19% in both the current period and the prior period.

Our effective tax rate differs from the statutory tax rate primarily due to the impacts of the dividends received deduction.

Nine Months Ended September 30, 2025 Compared with the Nine Months Ended September 30, 2024

Adjusted earnings were $950 million in the current period, a decrease of $22 million.

Key net unfavorable impacts were:

5 unchanged sentences

◦ lower transition services agreement expenses;

• higher net costs associated with insurance-related activities due:

◦ a net increase in liability balances resulting from year-over-year changes made in connection with the AAR;

partially offset by

◦ an increase in income annuity underwriting margins.

The key favorable impact was a higher net investment spread due to:

◦ higher average invested assets resulting from positive net flows in the general account;

◦ higher investment yields on our fixed income portfolio, as proceeds from maturing investments and the growth in the investment portfolio were invested at higher yields than the portfolio average;

◦ higher returns on real estate limited partnerships and LLCs;

partially offset by

◦ higher interest credited to policyholders due to higher account balances, prior period changes made in connection with the AAR and current period actuarial modeling improvements.

The provision for income tax, calculated as a percentage of pre-tax adjusted earnings, resulted in an effective tax rate of 19% in both the current period and the prior period.

2 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

10 unchanged sentences

$ 40 $ (25) $ 23 $ (19)

Three Months Ended June 30, 2025 Compared with the Three Months Ended June 30, 2024

Adjusted loss was $26 million in the current period, a decrease of $68 million.

Key net unfavorable impacts were:

• higher costs associated with insurance-related activities due to higher claims, net of reinsurance;

• lower net investment spread due to lower returns on other limited partnerships;

• higher other expenses due to:

◦ lower ceded cost of insurance expenses consistent with favorable equity market returns, which is offset in fee income;

◦ higher operational expenses.

The key favorable impact was higher fee income due to lower ceded cost of insurance fees consistent with favorable equity market returns, which is offset in other expenses.

Three Months Ended September 30, 2025 Compared with the Three Months Ended September 30, 2024

Adjusted earnings were $40 million in the current period, an increase of $65 million.

The key favorable impact was lower net costs associated with insurance-related activities due to:

◦ a net decrease in liability balances resulting from year-over-year changes made in connection with the AAR;

partially offset by

◦ higher claims, net of reinsurance.

The provision for income tax, calculated as a percentage of pre-tax adjusted earnings (loss), resulted in an effective tax rate of 18% in the current period compared to 22% in the prior period.

Our effective tax rate may differ from the statutory tax rate primarily due to the impact of the dividends received deduction.

Six Months Ended June 30, 2025 Compared with the Six Months Ended June 30, 2024

Adjusted loss was $17 million in the current period, a decrease of $23 million.

Nine Months Ended September 30, 2025 Compared with the Nine Months Ended September 30, 2024

Adjusted earnings were $23 million in the current period, an increase of $42 million.

The key favorable impact was higher fee income due to lower ceded COI fees related to the conclusion of the aforementioned reinsurance arbitration in the prior period.

Key net unfavorable impacts were:

• higher net costs associated with insurance-related activities due to higher claims, net of reinsurance;

• lower net investment spread due to lower returns on other limited partnerships.

Key net favorable impacts were:

• higher fee income due to lower ceded cost of insurance fees related to the conclusion of the aforementioned reinsurance arbitration in the prior period;

• lower other expenses due to:

◦ the conclusion of the aforementioned reinsurance arbitration in the prior period;

• lower net investment spread due to:

◦ lower average invested long-term assets;

◦ lower returns on other limited partnerships;

• higher net costs associated with insurance-related activities due to:

◦ higher claims, net of reinsurance;

partially offset by

◦ a net decrease in liability balances resulting from year-over-year changes made in connection with the AAR;

• higher other expenses due to:

◦ higher operational expenses;

The provision for income tax, calculated as a percentage of pre-tax adjusted earnings (loss), resulted in a higher effective tax rate in the current period compared to the prior period.

partially offset by

◦ the conclusion of the aforementioned reinsurance arbitration in the prior period.

The provision for income tax, calculated as a percentage of pre-tax adjusted earnings (loss), resulted in an effective tax rate of 12% in the current period compared to 27% in the prior period.

Our effective tax rate differs from the statutory tax rate primarily due to the impact of the dividends received deduction.

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

10 unchanged sentences

$ 641 $ 463 $ 494 $ 92

Three Months Ended June 30, 2025 Compared with the Three Months Ended June 30, 2024

Adjusted loss was $83 million in the current period, a higher loss of $53 million.

Key net unfavorable impacts were:

• lower net investment spread due to:

◦ lower returns on other limited partnerships;

Three Months Ended September 30, 2025 Compared with the Three Months Ended September 30, 2024

Adjusted earnings were $641 million in the current period, an increase of $178 million.

Key net favorable impacts were:

• lower net costs associated with insurance-related activities due to:

◦ a net decrease in liability balances resulting from year-over-year changes made in connection with the AAR and other refinements;

partially offset by

◦ an increase in liability balances resulting from a premium rate increase on an existing reinsurance agreement;

◦ higher claims, net of reinsurance;

• higher net investment spread due to:

◦ higher returns on other limited partnerships;

partially offset by

◦ lower average invested long-term assets.

• higher net costs associated with insurance-related activities due to higher claims, net of reinsurance;

• lower fee income due to a decline in the net cost of insurance fees driven by the aging in-force business.

The provision for income tax, calculated as a percentage of pre-tax adjusted earnings (loss), resulted in an effective tax rate of 21% in the current period compared to 19% in the prior period.

Our effective tax rate differs from the statutory tax rate primarily due to the impact of the dividends received deduction.

Six Months Ended June 30, 2025 Compared with the Six Months Ended June 30, 2024

Adjusted loss was $147 million in the current period, a lower loss of $224 million.

The key unfavorable impact was lower fee income due to a decline in the net COI fees driven by the aging in-force business.

The provision for income tax, calculated as a percentage of pre-tax adjusted earnings (loss), resulted in an effective tax rate of 21% in both the current period and the prior period.

Nine Months Ended September 30, 2025 Compared with the Nine Months Ended September 30, 2024

Adjusted earnings were $494 million in the current period, an increase of $402 million.

Key net favorable impacts were:

• lower costs associated with insurance-related activities due to:

• lower net costs associated with insurance-related activities due to:

◦ a decrease in liability balances resulting from a reinsurance premium rate increase associated with the conclusion of the aforementioned reinsurance arbitration in the prior period;

◦ lower claims, net of reinsurance;

• higher net fee income due to:

◦ lower ceded cost of insurance fees related to the conclusion of the aforementioned reinsurance arbitration in the prior period;

◦ a net decrease in liability balances resulting from year-over-year changes made in connection with the AAR and other refinements;

partially offset by

◦ a decline in the net cost of insurance fees driven by the aging in-force business;

◦ an increase in liability balances resulting from a premium rate increase on an existing reinsurance agreement;

• lower other expenses due to:

2 unchanged sentences

◦ higher operational expenses;

• higher net fee income due to:

◦ lower ceded COI fees related to the conclusion of the aforementioned reinsurance arbitration in the prior period;

partially offset by

◦ a decline in the net COI fees driven by the aging in-force business.

The key unfavorable impact was a lower net investment spread due to:

◦ lower returns on other limited partnerships;

◦ lower average invested long-term assets;

The provision for income tax, calculated as a percentage of pre-tax adjusted earnings (loss), resulted in an effective tax rate of 21% in both the current period and the prior period.

◦ lower returns on other limited partnerships.

The provision for income tax, calculated as a percentage of pre-tax adjusted earnings (loss), resulted in an effective tax rate of 21% in the current period compared to 20% in the prior period.

Corporate & Other

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

11 unchanged sentences

$ (15) $ 2 $ (64) $ (30)

Three Months Ended June 30, 2025 Compared with the Three Months Ended June 30, 2024

Three Months Ended September 30, 2025 Compared with the Three Months Ended September 30, 2024

Adjusted loss was $15 million in the current period, a decrease of $17 million.

The key unfavorable impact was a lower net investment spread due to lower average invested long-term assets on our institutional spread margin business.

The key unfavorable impact was a lower net investment spread due to lower yields and lower average invested long-term assets on our institutional spread margin business.

The provision for income tax, calculated as a percentage of pre-tax adjusted earnings (loss), resulted in a lower effective tax rate in the current period compared to the prior period.

1 unchanged sentence

We believe the effective tax rate for the Corporate & Other segment is not generally meaningful, neither on a standalone basis nor for comparison to prior periods, since taxes for the Corporate & Other segment are derived from the difference between the overall consolidated effective tax rate and total taxes for the combined operating segments.

Six Months Ended June 30, 2025 Compared with the Six Months Ended June 30, 2024

Nine Months Ended September 30, 2025 Compared with the Nine Months Ended September 30, 2024

Adjusted loss was $64 million in the current period, a higher loss of $34 million.

The key unfavorable impact was a lower net investment spread due to lower average invested long-term assets on our institutional spread margin business.

The key unfavorable impact was a lower net investment spread due to lower yields and lower average invested long-term assets on our institutional spread margin business.

The provision for income tax, calculated as a percentage of pre-tax adjusted earnings (loss), resulted in a higher effective tax rate in the current period compared to the prior period.

1 unchanged sentence

Annuity Guaranteed Benefits and Shield Annuity Liabilities for the Three Months and Six Months Ended June 30, 2025 and 2024

Annuity Guaranteed Benefits and Shield Annuity Liabilities for the Three Months and Nine Months Ended September 30, 2025 and 2024

The overall impact on income (loss) available to shareholders before provision for income tax from the performance of annuity guaranteed benefits and Shield Annuity liabilities, which includes (i) changes in the fair value of liabilities and related reinsurance, (ii) fees net of claims and (iii) the mark-to-market of hedges, was as follows:

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

5 unchanged sentences

(289) (610) (81) 1,186

Variable annuity hedges 1,073 137 196 204

Variable annuity and Shield hedges

1,310 835 1,506 1,039

Shield embedded derivatives (1,694) (976) (2,626) (3,490)

$ (673) $ (751) $ (1,201) $ (1,265)

Three Months Ended June 30, 2025

Annuity guaranteed benefits and Shield Annuity liabilities performance was favorable for the three months ended June 30, 2025, primarily driven by:

• favorable decreases in annuity guaranteed benefits liabilities due to increasing equity markets and interest rates;

• favorable changes in variable annuity hedges due to increasing equity markets, partially offset by increasing long-term interest rates;

• unfavorable changes in Shield embedded derivatives due to increasing equity markets.

Three Months Ended June 30, 2024

Annuity guaranteed benefits and Shield Annuity liabilities performance was unfavorable for the three months ended June 30, 2024, primarily driven by:

• favorable decreases in annuity guaranteed benefits liabilities due to increasing interest rates;

• favorable changes in variable annuity hedges due to increasing equity markets, partially offset by increasing long-term interest rates;

• unfavorable changes in Shield embedded derivatives due to increasing equity markets.

Six Months Ended June 30, 2025

Annuity guaranteed benefits and Shield Annuity liabilities performance was unfavorable for the six months ended June 30, 2025, primarily driven by:

• favorable decreases in annuity guaranteed benefits liabilities due to increasing equity markets, partially offset by decreasing interest rates;

• favorable changes in variable annuity hedges due to decreasing long-term interest rates and increasing equity markets;

• unfavorable changes in Shield embedded derivatives due to increasing equity markets.

Six Months Ended June 30, 2024

Annuity guaranteed benefits and Shield Annuity liabilities performance was unfavorable for the six months ended June 30, 2024, primarily driven by:

• favorable decreases in annuity guaranteed benefits liabilities due to increasing interest rates and equity markets;

• favorable changes in variable annuity hedges due to increasing equity markets, partially offset by increasing long-term interest rates;

• unfavorable changes in Shield embedded derivatives due to increasing equity markets.

Three Months Ended September 30, 2025

Annuity guaranteed benefits and Shield Annuity liabilities performance was unfavorable for the three months ended September 30, 2025, primarily driven by:

• unfavorable increases in annuity guaranteed benefits liabilities due to changes made in connection with the AAR and decreasing interest rates, partially offset by increasing equity markets;

• favorable changes in variable annuity and Shield hedges due to increasing equity markets;

• unfavorable changes in Shield embedded derivatives due to increasing equity markets and changes made in connection with the AAR.

Three Months Ended September 30, 2024

Annuity guaranteed benefits and Shield Annuity liabilities performance was unfavorable for the three months ended September 30, 2024, primarily driven by:

• unfavorable increases in annuity guaranteed benefits liabilities due to decreasing interest rates, partially offset by increasing equity markets and changes made in connection with the AAR;

• favorable changes in variable annuity and Shield hedges due to decreasing long-term interest rates and increasing equity markets;

• unfavorable changes in Shield embedded derivatives due to increasing equity markets and decreasing interest rates, partially offset by changes made in connection with the AAR.

Nine Months Ended September 30, 2025

Annuity guaranteed benefits and Shield Annuity liabilities performance was unfavorable for the nine months ended September 30, 2025, primarily driven by:

• unfavorable increases in annuity guaranteed benefits liabilities due to changes made in connection with the AAR and decreasing interest rates, partially offset by increasing equity markets;

• favorable changes in variable annuity and Shield hedges due to increasing equity markets and decreasing long-term interest rates;

• unfavorable changes in Shield embedded derivatives due to increasing equity markets and changes made in connection with the AAR.

Nine Months Ended September 30, 2024

Annuity guaranteed benefits and Shield Annuity liabilities performance was unfavorable for the nine months ended September 30, 2024, primarily driven by:

• favorable decreases in annuity guaranteed benefits liabilities due to increasing equity markets and interest rates, as well as changes made in connection with the AAR;

• favorable changes in variable annuity and Shield hedges due to increasing equity markets;

• unfavorable changes in Shield embedded derivatives due to increasing equity markets, partially offset by changes made in connection with the AAR.

Investment Risk Management Strategy

12 unchanged sentences

insurance company, we are affected by the monetary policy of the Federal Reserve in the U.S.

On September 17, 2025, the Federal Reserve decreased the target range for the federal funds rate from between 4.25% and 4.50% to between 4.00% and 4.25%.

On October 29, 2025, the Federal Reserve further decreased the target range for the federal funds rate to between 3.75% and 4.00%.

In 2024, the Federal Reserve decreased the target range for the federal funds rate three times — from between 5.25% and 5.50% to between 4.25% and 4.50%.

3 unchanged sentences

Interest rate increases have contributed to the net unrealized loss position in our investment portfolio.

As a result of increases in interest rates, the unrealized losses on our fixed maturity securities exceeded the unrealized gains as of June 30, 2025.

As a result of increases in interest rates, the unrealized losses on our fixed maturity securities exceeded the unrealized gains as of September 30, 2025.

See “Risk Factors — Risks Related to Our Investment Portfolio — Our investment portfolio is subject to significant financial risks both in the U.S.

3 unchanged sentences

See “Risk Factors — Risks Related to Our Investment Portfolio — Our investment portfolio is subject to significant financial risks both in the U.S.

and global financial markets, including credit risk, interest rate risk, inflation risk, market valuation risk, liquidity risk, real estate risk, derivatives risk, and other factors outside our control, the occurrence of any of which could have a material adverse effect on our financial condition and results of operations,” and “Risk Factors — Risks Related to Our Investment Portfolio — Ongoing military actions, the continued threat of terrorism, climate change as well as other catastrophic events may adversely affect the value of our investment portfolio and the level of claim losses we incur” included in our 2024 Annual Report.

adversely affect the value of our investment portfolio and the level of claim losses we incur” included in our 2024 Annual Report.

There has been a continued market focus on commercial real estate, including office properties, as a result of hybrid work arrangements and the resulting impact on the demand for office space.

2 unchanged sentences

See “— Investments — Mortgage Loans” and Note 7 of the Notes to the Interim Condensed Consolidated Financial Statements for information on mortgage loans, including credit quality by portfolio segment and commercial mortgage loans by property type.

Additionally, see “— Investments — Fixed Maturity Securities Available-For-Sale — Structured Securities” for information on Structured Securities, including

security type, risk profile and ratings profile as well as “— Investments — Fixed Maturity Securities Available-For-Sale — U.S.

Additionally, see “— Investments — Fixed Maturity Securities Available-For-Sale — Structured Securities” for information on Structured Securities, including security type, risk profile and ratings profile as well as “— Investments — Fixed Maturity Securities Available-For-Sale — U.S.

and Foreign Corporate Fixed Maturity Securities” for our exposure to the finance industry.

6 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

12 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

4 unchanged sentences

Adjusted net investment income — in the above yield table $ 1,327 $ 1,294 $ 3,910 $ 3,877

See “— Results of Operations — Consolidated Results for the Three Months and Six Months Ended June 30, 2025 and 2024” for an analysis of the period-over-period changes in net investment income.

See “— Results of Operations — Consolidated Results for the Three Months and Nine Months Ended September 30, 2025 and 2024” for an analysis of the period-over-period changes in net investment income.

Fixed Maturity Securities Available-For-Sale

Fixed maturity securities held by type (public or private) were as follows at:

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Estimated Fair Value % of

10 unchanged sentences

The following table presents total fixed maturity securities by NRSRO rating and the applicable NAIC designation from the NAIC published comparison of NRSRO ratings to NAIC designations, except for certain Structured Securities, which are presented using the NAIC methodologies, as well as the percentage, based on estimated fair value that each NAIC designation is comprised of at:

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

NAIC Designation

18 unchanged sentences

(In millions)

June 30, 2025

September 30, 2025

corporate $ 18,444 $ 18,031 $ 1,550 $ 240 $ 49 $ 15 $ 38,329

19 unchanged sentences

We maintain a diversified portfolio of corporate fixed maturity securities across industries and issuers.

Our portfolio does not have any exposure to any single issuer in excess of 1% of total investments and the top ten holdings in aggregate comprise 1% total investments at both June 30, 2025 and December 31, 2024.

Our portfolio does not have any exposure to any single issuer in excess of 1% of total investments and the top ten holdings in aggregate comprise 1% total investments at both September 30, 2025 and December 31, 2024.

and foreign corporate fixed maturity securities holdings by industry were as follows at:

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

(Dollars in millions)

6 unchanged sentences

Structured Securities

We held $20.4 billion and $20.0 billion of Structured Securities, at estimated fair value, at June 30, 2025 and December 31, 2024, respectively, as presented in the RMBS, CMBS and ABS sections below.

We held $20.4 billion and $20.0 billion of Structured Securities, at estimated fair value, at September 30, 2025 and December 31, 2024, respectively, as presented in the RMBS, CMBS and ABS sections below.

Our RMBS holdings are diversified by security type, risk profile and ratings profile, which were as follows at:

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Estimated Fair Value % of

19 unchanged sentences

Our CMBS holdings are diversified by vintage year, which were as follows at:

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Amortized Cost Estimated Fair Value Amortized Cost Estimated Fair Value

15 unchanged sentences

Total $ 6,336 $ 6,096 $ 6,776 $ 6,356

The estimated fair value of CMBS rated Aaa using rating agency ratings was $4.2 billion, or 66.2% of total CMBS, and designated NAIC 1 was $6.0 billion, or 94.0% of total CMBS, at June 30, 2025.

The estimated fair value of CMBS rated Aaa using rating agency ratings was $4.1 billion, or 66.8% of total CMBS, and designated NAIC 1 was $5.7 billion, or 93.8% of total CMBS, at September 30, 2025.

The estimated fair value of CMBS rated Aaa using rating agency ratings was $4.3 billion, or 67.7% of total CMBS, and designated NAIC 1 was $6.0 billion, or 94.2% of total CMBS, at December 31, 2024.

1 unchanged sentence

Our ABS holdings by collateral type and ratings profile were as follows at:

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Estimated Fair Value % of

28 unchanged sentences

Information regarding mortgage loans by portfolio segment is summarized as follows at:

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Amortized Cost % of

4 unchanged sentences

Agricultural 4,566 19.8 21 0.5 % 4,591 19.6 30 0.7 %

4,591 19.6 30 0.7 %

Residential 5,867 25.4 41 0.7 % 5,543 23.6 42 0.8 %

2 unchanged sentences

The percentage of our commercial and agricultural mortgage loan portfolios collateralized by properties located in the U.S.

was 98% at both June 30, 2025 and December 31, 2024.

was 98% at both September 30, 2025 and December 31, 2024.

The remainder was collateralized by properties located outside of the U.S.

At June 30, 2025, the carrying value as a percentage of total commercial and agricultural mortgage loans for the top three states in the U.S.

At September 30, 2025, the carrying value as a percentage of total commercial and agricultural mortgage loans for the top three states in the U.S.

was 17% for California, 11% for Texas and 8% for New York.

2 unchanged sentences

All residential mortgage loans were collateralized by properties located in the U.S.

at both June 30, 2025 and December 31, 2024.

At June 30, 2025, the carrying value as a percentage of total residential mortgage loans for the top three states in the U.S.

at both September 30, 2025 and December 31, 2024.

At September 30, 2025, the carrying value as a percentage of total residential mortgage loans for the top three states in the U.S.

was 37% for California, 10% for Florida and 6% for New York.

2 unchanged sentences

The diversification across geographic regions and property types of commercial mortgage loans was as follows at:

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Amount % of Total

48 unchanged sentences

Generally, the lower the debt-service coverage ratio, the higher the risk of experiencing a credit loss.

For our commercial mortgage loans, our average loan-to-value ratio was 68% and 69% at June 30, 2025 and December 31, 2024, respectively, and our average debt-service coverage ratio was 2.2x and 2.3x at June 30, 2025 and December 31, 2024, respectively.

For our commercial mortgage loans, our average loan-to-value ratio was 68% and 69% at September 30, 2025 and December 31, 2024, respectively, and our average debt-service coverage ratio was 2.2x and 2.3x at September 30, 2025 and December 31, 2024, respectively.

The debt-service coverage ratio, as well as the values utilized in calculating the ratio, is updated annually on a rolling basis, with a portion of the portfolio updated each quarter.

In addition, the loan-to-value ratio is routinely updated for all but the lowest risk loans as part of our ongoing review of our commercial mortgage loan portfolio.

For our agricultural mortgage loans, our average loan-to-value ratio was 46% and 48% at June 30, 2025 and December 31, 2024, respectively.

For our agricultural mortgage loans, our average loan-to-value ratio was 46% and 48% at September 30, 2025 and December 31, 2024, respectively.

The values utilized in calculating the agricultural mortgage loan loan-to-value ratio are developed in connection with the ongoing review of the agricultural loan portfolio and are routinely updated.

Mortgage Loan Allowance for Credit Losses .

See Note 7 of the Notes to the Interim Condensed Consolidated Financial Statements for information about how the allowance for credit losses is established and monitored, as well as activity in and balances of the allowance for credit losses for the six months ended June 30, 2025 and 2024.

Limited Partnerships and Limited Liability Companies

The carrying values of our limited partnerships and LLCs were as follows at:

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

(In millions)

3 unchanged sentences

__________________

(1) The estimated fair value of real estate limited partnerships and LLCs was $746 million and $836 million at June 30, 2025 and December 31, 2024, respectively.

(1) The estimated fair value of real estate limited partnerships and LLCs was $661 million and $836 million at September 30, 2025 and December 31, 2024, respectively.

Cash distributions on these investments are generated from investment gains, operating income from the underlying investments of the funds and liquidation of the underlying investments of the funds.

2 unchanged sentences

The carrying value of our other invested assets by type was as follows at:

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Carrying Value

15 unchanged sentences

We use a variety of strategies to manage these risks, including the use of derivatives.

We have historically managed the risks related to our variable annuity and first generation Shield Annuity contracts on a combined basis.

In the third quarter of 2025, we completed an initiative that established a stand-alone hedging program for each product allowing us to separately manage the risks related to these two products.

See Note 8 of the Notes to the Interim Condensed Consolidated Financial Statements for:

• information about the gross notional amount, estimated fair value, and primary underlying risk exposure of our derivatives by type of hedge designation, excluding embedded derivatives held at June 30, 2025 and December 31, 2024;

• the effects of derivatives in cash flow, fair value, or non-qualifying hedge relationships on the statements of operations for the six months ended June 30, 2025 and 2024.

• information about the gross notional amount, estimated fair value and primary underlying risk exposure of our derivatives by type of hedge designation, excluding embedded derivatives held at September 30, 2025 and December 31, 2024;

• the effects of derivatives in cash flow, fair value or non-qualifying hedge relationships on the statements of operations for the nine months ended September 30, 2025 and 2024.

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Risk Management Strategies” included in our 2024 Annual Report for more information about our hedging strategies.

6 unchanged sentences

The use of different inputs or methodologies could have a material effect on the estimated fair value of Level 3 derivatives and could materially affect net income.

Derivatives categorized as Level 3 at June 30, 2025 include:

Derivatives categorized as Level 3 at September 30, 2025 include:

credit default swaps priced using unobservable credit spreads, or that are priced through independent broker quotations;

7 unchanged sentences

The gross notional amount and estimated fair value of credit default swaps were as follows at:

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Gross Notional Amount

41 unchanged sentences

Our variable annuity account value and NAR by type of GMxB were as follows at:

June 30, 2025

September 30, 2025

December 31, 2024

7 unchanged sentences

GMDB only (other than EDB) (3) 17,368 931 — N/A

17,076 964 — N/A

EDB only (3) 3,190 1,205 — N/A

3,084 1,343 — N/A

Total $ 81,044 $ 11,853 $ 4,921 $ 80,984 $ 12,817 $ 5,484

5 unchanged sentences

Additionally, the index protection and accumulation features of Shield Annuities are accounted for as embedded derivatives, measured at estimated fair value, and are reported in policyholder account balances on the consolidated balance sheets, with changes reported in net derivative gains (losses) on the consolidated statements of operations.

The Shield embedded derivative liabilities were valued at $10.5 billion at June 30, 2025.

The Shield embedded derivative liabilities were valued at $11.4 billion at September 30, 2025.

Our variable annuity MRBs by type of GMxB were as follows at:

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

(In millions)

12 unchanged sentences

We continuously monitor and adjust our liquidity and capital plans in light of market conditions, as well as changing needs and opportunities.

We maintain a substantial short-term liquidity position, which was $4.6 billion and $5.2 billion at June 30, 2025 and December 31, 2024, respectively.

We maintain a substantial short-term liquidity position, which was $5.2 billion at both September 30, 2025 and December 31, 2024.

Short-term liquidity is comprised of cash and cash equivalents and short-term investments, excluding assets that are pledged or otherwise committed.

Assets pledged or otherwise committed include amounts received in connection with securities lending, derivatives and assets held on deposit or in trust.

An integral part of our liquidity management includes managing our level of liquid assets, which was $48.9 billion and $48.1 billion at June 30, 2025 and December 31, 2024, respectively.

An integral part of our liquidity management includes managing our level of liquid assets, which was $50.4 billion and $48.1 billion at September 30, 2025 and December 31, 2024, respectively.

Liquid assets are comprised of cash and cash equivalents, short-term investments and publicly-traded securities, excluding assets that are pledged or otherwise committed.

15 unchanged sentences

There can be no assurance that we will be able to complete any such financing transactions on terms and conditions favorable to us or at all.

In support of our target combined risk-based capital (“RBC”) ratio of 400% to 450% in normal market conditions, we expect to continue to maintain a capital and risk management strategy that targets total assets supporting our variable annuity and Shield Annuity contracts at or above the average of the worst two percent of a set of capital markets scenarios over the life of the contracts level in normal market conditions.

In support of our target combined RBC ratio of 400% to 450% in normal market conditions, we expect to continue to maintain a capital and risk management strategy that targets total assets supporting our variable annuity and Shield Annuity contracts at or above the average of the worst two percent of a set of capital markets scenarios over the life of the contracts level in normal market conditions.

With our risk management focus on the core drivers of our combined RBC ratio, we believe we can better manage our RBC in stressed market scenarios.

1 unchanged sentence

Common stock repurchases are dependent upon several factors, including our capital position, liquidity, financial strength and credit ratings, general market conditions, the market price of our common stock compared to management’s assessment of the stock’s underlying value and applicable regulatory approvals, as well as other legal and accounting factors.

We currently have no plans to declare and pay dividends on our common stock.

Any future declaration and payment of dividends or other distributions or returns of capital will be at the discretion of BHF’s Board of Directors and will depend on and be subject to our financial condition, results of operations, cash needs, regulatory and other constraints, capital requirements (including capital requirements of our insurance subsidiaries), contractual restrictions and any other factors that BHF’s Board of Directors deems relevant in making such a determination.

Therefore, there can be no assurance that we will pay any dividends or make other distributions or returns of capital on our common stock, or as to the amount of any such dividends, distributions or returns of capital.

On November 6, 2025, BHF entered into the Merger Agreement.

Pursuant to the Merger Agreement, we have agreed that during the period beginning the date of the Merger Agreement through the earlier of the closing of the Merger and the termination of the Merger Agreement, we will not, without the written consent of Parent, pay any dividend or other distribution payable in cash, stock or property with respect to our common stock, or subject to certain exceptions, purchase directly or indirectly any of BHF’s or its subsidiaries’ capital stock or other equity or voting interests of BHF or any of its subsidiaries.

Further, the Merger Agreement permits us to pay periodic cash dividends on our preferred stock not in excess of $412.50 per share on the 6.600% Non-Cumulative Preferred Stock, Series A (the “Series A Preferred Stock”), $421.875 per share on the 6.750% Non-Cumulative Preferred Stock, Series B (the “Series B Preferred Stock”), $335.9375 per share on the 5.375% Non-Cumulative Preferred Stock, Series C (the “Series C Preferred Stock”);

and $289.0625 per share on the 4.625% Non-Cumulative Preferred Stock, Series D (the “Series D Preferred Stock” and;

together with the Series A Preferred Stock, the Series B Preferred Stock and the Series C Preferred Stock, the “Company Preferred Stock”), in each case, per quarter during the interim period, consistent with the per-quarter dividends due under each applicable Certificate of Designations.

Rating Agencies

Rating agencies may continue to review and adjust our ratings.

For example, in July 2025, S&P revised the long-term issuer credit ratings for BHF and Brighthouse Holdings, LLC (“BH Holdings”) to BBB from BBB+.

In addition, S&P revised the financial strength ratings for certain of its subsidiaries to A from A+, among other revisions.

Rating agencies continue to review and adjust our ratings.

In July 2025, S&P revised the long-term issuer credit ratings for BHF and Brighthouse Holdings, LLC (“BH Holdings”) to BBB from BBB+.

In addition, S&P revised the financial strength ratings for certain of our insurance subsidiaries to A from A+, among other revisions.

Following the announcement that BHF has entered into the Merger Agreement, S&P and Moody’s have revised their outlook on our credit ratings.

On November 6, 2025, S&P placed BHF, BH Holdings and certain of our insurance subsidiaries on CreditWatch Negative.

On November 7, 2025, Moody’s placed BHF, BH Holdings and certain of our insurance subsidiaries on review for a downgrade and changed the long-term issuer credit rating and financial strength rating outlooks for those entities to rating under review.

See “Risk Factors — Risks Related to Our Business — A downgrade or a potential downgrade in our financial strength or credit ratings could result in a loss of business and materially adversely affect our financial condition and results of operations” included in our 2024 Annual Report for a description of the potential impact of a ratings downgrade.

1 unchanged sentence

Our primary sources and uses of liquidity and capital were as follows at:

Six Months Ended

Nine Months Ended

September 30,

(In millions)

3 unchanged sentences

Changes in payables for collateral under securities loaned and other transactions, net

Financing element on certain derivative instruments and other derivative related transactions, net

Total sources 2,765 4,071

54 unchanged sentences

Outstanding Issuances Repayments

Six Months Ended June 30,

June 30, 2025 December 31, 2024 2025 2024 2025 2024

Nine Months Ended September 30,

September 30, 2025 December 31, 2024 2025 2024 2025 2024

(In millions)

12 unchanged sentences

Our Revolving Credit Facility contains financial covenants, including requirements to maintain a specified minimum adjusted consolidated net worth, to maintain a ratio of total indebtedness to total capitalization not in excess of a specified percentage and that place limitations on the dollar amount of indebtedness that may be incurred by our subsidiaries, which could restrict our operations and use of funds.

At June 30, 2025, we were in compliance with these financial covenants.

At September 30, 2025, we were in compliance with these financial covenants.

Primary Uses of Liquidity and Capital

1 unchanged sentence

Common Stock Repurchases

See Note 10 of the Notes to the Interim Condensed Consolidated Financial Statements for information relating to authorizations to repurchase BHF common stock, amounts of common stock repurchased pursuant to such authorizations and the amount remaining under such authorizations at June 30, 2025.

Preferred Stock Dividends

16 unchanged sentences

We pledge collateral to, and have collateral pledged to us by, counterparties in connection with our derivatives.

At June 30, 2025, we pledged less than $1 million of cash collateral to counterparties.

At September 30, 2025, we pledged $8 million of cash collateral to counterparties.

At December 31, 2024, we did not pledge any cash collateral to counterparties.

At June 30, 2025 and December 31, 2024, we were obligated to return cash collateral pledged to us by counterparties of $907 million and $812 million, respectively.

At September 30, 2025 and December 31, 2024, we were obligated to return cash collateral pledged to us by counterparties of $1.1 billion and $812 million, respectively.

The timing of the return of the derivatives collateral is uncertain.

1 unchanged sentence

We receive non-cash collateral from counterparties for derivatives, which can be sold or re-pledged subject to certain constraints, and which is not recorded on our consolidated balance sheets.

The amount of this non-cash collateral at estimated fair value was $1.8 billion and $2.3 billion at June 30, 2025 and December 31, 2024, respectively.

The amount of this non-cash collateral at estimated fair value was $2.9 billion and $2.3 billion at September 30, 2025 and December 31, 2024, respectively.

See Note 8 of the Notes to the Interim Condensed Consolidated Financial Statements for additional information regarding pledged collateral.

3 unchanged sentences

Generally, our securities lending contracts expire within twelve months of issuance.

We were liable for cash collateral under our control of $3.3 billion and $3.2 billion at June 30, 2025 and December 31, 2024, respectively.

We were liable for cash collateral under our control

of $3.3 billion and $3.2 billion at September 30, 2025 and December 31, 2024, respectively.

We receive non-cash collateral for securities lending from counterparties, which cannot be sold or re-pledged, and which is not recorded on our consolidated balance sheets.

There was no non-cash collateral at both June 30, 2025 and December 31, 2024.

There was no non-cash collateral at both September 30, 2025 and December 31, 2024.

See Note 7 of the Notes to the Interim Condensed Consolidated Financial Statements for further discussion of our securities lending program.

13 unchanged sentences

Short-term Liquidity and Liquid Assets

At June 30, 2025 and December 31, 2024, BHF and certain of its non-insurance subsidiaries had short-term liquidity of $803 million and $912 million, respectively.

At September 30, 2025 and December 31, 2024, BHF and certain of its non-insurance subsidiaries had short-term liquidity of $865 million and $912 million, respectively.

Short-term liquidity is comprised of cash and cash equivalents and short-term investments, excluding assets that are pledged or otherwise committed.

Assets pledged or otherwise committed include assets held in trust.

At June 30, 2025 and December 31, 2024, BHF and certain of its non-insurance subsidiaries had liquid assets of $941 million and $1.1 billion, respectively, of which $901 million and $1.1 billion, respectively, was held by BHF.

At September 30, 2025 and December 31, 2024, BHF and certain of its non-insurance subsidiaries had liquid assets of $970 million and $1.1 billion, respectively, of which $911 million and $1.1 billion, respectively, was held by BHF.

Liquid assets are comprised of cash and cash equivalents, short-term investments and publicly-traded securities, excluding assets that are pledged or otherwise committed.

23 unchanged sentences

Distributions from and Capital Contributions to BH Holdings

During both the six months ended June 30, 2025 and 2024, BHF did not receive any cash distributions from BH Holdings and did not make any cash capital contributions to BH Holdings.

During both the nine months ended September 30, 2025 and 2024, BHF did not receive any cash distributions from BH Holdings and did not make any cash capital contributions to BH Holdings.

Short-term Intercompany Loans

2 unchanged sentences

Each loan entered into under this intercompany loan agreement has a term not more than 364 days and bears interest on the unpaid principal amount at a variable rate, payable monthly.

During the six months ended June 30, 2025 and 2024, BHF borrowed $398 million and $290 million, respectively, from certain of its non-insurance subsidiaries and repaid $386 million and $85 million of such borrowings during the six months ended June 30, 2025 and 2024, respectively.

At June 30, 2025 and December 31, 2024, BHF had total obligations outstanding of $594 million and $582 million, respectively, under such agreements.

During the nine months ended September 30, 2025 and 2024, BHF borrowed $587 million and $420 million, respectively, from certain of its non-insurance subsidiaries and repaid $512 million and $180 million of such borrowings during the nine months ended September 30, 2025 and 2024, respectively.

At September 30, 2025 and December 31, 2024, BHF had total obligations outstanding of $657 million and $582 million, respectively, under such agreements.

Intercompany Liquidity Facilities

1 unchanged sentence

Under these facilities, which are comprised of a series of revolving loan agreements among BHF and its participating subsidiaries, each company may lend to or borrow from each other, subject to certain maximum limits for a term of up to 364 days, depending on the agreement.

During both the six months ended June 30, 2025 and 2024, there were no borrowings or repayments by BHF under these facilities and, at both June 30, 2025 and December 31, 2024, BHF had no obligations outstanding under such facilities.

During both the nine months ended September 30, 2025 and 2024, there were no borrowings or repayments by BHF under these facilities and, at both September 30, 2025 and December 31, 2024, BHF had no obligations outstanding under such facilities.

Note Regarding Forward-Looking Statements

10 unchanged sentences

Although it is not possible to identify all of these risks and factors, they include, among others:

• our ability to complete the Merger in the timeframe or manner currently anticipated or at all, including due to a failure to obtain the regulatory approvals required for the closing of the Merger or the occurrence of any event, change or other circumstance that could give rise to the right of one or both of the parties to terminate the Merger Agreement;

• the effect of the pendency of the Merger on our ongoing business and operations, including disruption to our business relationships, the diversion of management’s attention from ongoing business operations and opportunities, or the outcome of any legal proceedings that may be instituted against Parent or BHF following announcement of the Merger;

• restrictions on the conduct of our business prior to the closing of the Merger and on our ability to pursue alternatives to the Merger;

• the possibility that the Merger may be more expensive to complete than anticipated, including as a result of unexpected factors or events;

• differences between actual experience and actuarial assumptions and the effectiveness of our actuarial models;

32 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis