What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-06 compared with 2026-05-07 · 247 added, 120 removed, 866 unchanged (30% of the section changed)

15 unchanged sentences

Securities and Exchange Commission (“SEC”) on February 24, 2026;

and (iii) our current reports on Form 8-K filed in 2026.

(iii) our Quarterly Report on Form 10-Q for the quarter ended March 31, 2026 (the “First Quarter Form 10-Q”) filed with the SEC on May 7, 2026;

and (iv) our current reports on Form 8-K filed in 2026.

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.

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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 ended March 31, 2026 and 2025 and period-over-period comparisons between these periods.

Our Results of Operations discussion and analysis presents a review for the three months and six months ended June 30, 2026 and 2025 and period-over-period, as well as year-over-year, comparisons between these periods.

Executive Summary

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Three Months Ended

Six Months Ended

(In millions)

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(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 March 31, 2026, we had a net loss available to shareholders of $792 million and adjusted earnings of $239 million compared to a net loss available to shareholders of $294 million and adjusted earnings of $235 million for the three months ended March 31, 2025.

The net loss available to shareholders for the three months ended March 31, 2026 primarily reflects unfavorable changes in our variable annuity and Shield hedges, as well as the estimated fair value of our variable annuity guaranteed benefit riders net of Shield embedded derivatives due to market factors, 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 June 30, 2026, we had net income available to shareholders of $956 million and adjusted earnings of $258 million compared to net income available to shareholders of $60 million and adjusted earnings of $198 million for the three months ended June 30, 2025.

Net income available to shareholders for the three months ended June 30, 2026 primarily reflects net favorable changes in our variable annuity and Shield hedges, as well as the estimated fair value of variable annuity guaranteed benefit riders net of Shield embedded derivatives due to market factors, and favorable pre-tax adjusted earnings.

For the six months ended June 30, 2026, we had net income available to shareholders of $164 million and adjusted earnings of $497 million compared to a net loss available to shareholders of $234 million and adjusted earnings of $433 million for the six months ended June 30, 2025.

Net income available to shareholders for the six months ended June 30, 2026 primarily reflects favorable pre-tax adjusted earnings.

These favorable impacts were partially offset by unfavorable changes in our Shield embedded derivatives net of variable annuity and Shield hedges, as well as the estimated fair value of our variable annuity guaranteed benefit riders due to market factors, net investment losses on sales of fixed maturity securities and net investment losses on mortgage loans.

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

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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 Merger Agreement was adopted by stockholders at the special meeting held on February 12, 2026, and the applicable waiting period under the Hart-Scott Rodino Antitrust Improvement Act of 1976, as amended, has expired.

The Merger Agreement was adopted by stockholders at the special meeting held on February 12, 2026, and the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, has expired.

On May 19, 2026, the Financial Industry Regulatory Authority (“FINRA”) approved the change of control of Brighthouse Securities, LLC.

In addition, on June 18, 2026, the Committee on Foreign Investment in the United States (“CFIUS”) informed the parties that it had concluded its review and that there were no unresolved national security concerns.

However, the completion of the Merger remains subject to the receipt of insurance regulatory approvals in Delaware, New York and Massachusetts.

All other conditions to the closing of the Merger have been satisfied or waived (other than those conditions that, by their terms, are to be satisfied at the closing and are capable of being satisfied at the closing).

Accordingly, if the Merger has not closed by September 6, 2026, because the remaining insurance regulatory approvals have not yet been obtained, the Merger Agreement will be automatically extended to December 6, 2026.

The Merger is expected to close in 2026.

However, the completion of the Merger remains subject to the satisfaction or waiver of certain other customary conditions, including receipt of insurance regulatory approvals.

See “Risks Related to the Merger — The completion of the Merger is subject to a number of conditions, many of which are largely outside the parties’ control, and, if these conditions are not satisfied or waived, the Merger may not be completed within the expected timeframe or at all” included in our 2025 Annual Report.

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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 2025 Annual Report, as amended or supplemented 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 2025 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.

Financial and Economic Environment

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or foreign governments, higher fuel and energy costs, uncertainty and instability in certain asset classes (including commercial real estate and private credit), supply chain disruptions and recent geopolitical conflicts, including in Europe and the Middle East, as well as the risk of further escalation or expansion of such conflicts.

See “— Investments — Current Environment” herein, as well as “Risk Factors — Economic Environment and Capital Markets-Related Risks,” “Risk Factors — Risks Related to Our Investment Portfolio,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Risk Management Strategies,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Industry Trends and Uncertainties” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Investments” included in our 2025 Annual Report for a detailed

discussion of financial and economic impacts on our business, including the potential impacts of interest rate risk and inflation risk on our investments and overall business.

Regulatory Developments

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Results of Operations

Consolidated Results for the Three Months Ended March 31, 2026 and 2025

Consolidated Results for the Three Months and Six Months Ended June 30, 2026 and 2025

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

Six Months Ended

(In millions)

9 unchanged sentences

Change in market risk benefits

(1,370) (1,101) (622)

Interest expense on debt

10 unchanged sentences

Three Months Ended

Six Months Ended

(In millions)

8 unchanged sentences

Net income (loss) available to shareholders

Three Months Ended March 31, 2026 Compared with the Three Months Ended March 31, 2025

The loss available to shareholders before provision for income tax was $1.0 billion ($792 million, net of income tax), a higher loss of $632 million ($498 million, net of income tax) from loss available to shareholders before provision for income tax of $382 million ($294 million, net of income tax) in the prior period.

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

• higher losses from variable annuity guaranteed benefit riders, see “— Annuity Guaranteed Benefits and Shield Annuity Liabilities for the Three Months Ended March 31, 2026 and 2025”;

• losses from the impact of interest rates on derivatives used to manage interest rate exposure in our universal life with secondary guarantees (“ULSG”) business, as long-term rates increased in the current period and decreased in the prior period.

The increase in loss before provision for income tax was partially offset by the following favorable items:

Three Months Ended June 30, 2026 Compared with the Three Months Ended June 30, 2025

Income available to shareholders before provision for income tax was $1.2 billion ($956 million, net of income tax), an increase of $1.1 billion ($896 million, net of income tax) from income available to shareholders before provision for income tax of $68 million ($60 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 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, 2026 and 2025”;

• gains on derivatives used to manage interest rate exposure in our universal life with secondary guarantees (“ULSG”) business from the favorable impact of interest rate movements in the current period compared to the unfavorable impact in the prior period;

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

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

• net investment gains (losses) reflecting lower net losses on mortgage loans due to a smaller increase in the allowance for credit losses.

• net investment gains (losses) reflecting lower net losses on sales of fixed maturity securities and lower net losses on mortgage loans due to a smaller increase in the allowance for credit losses.

The provision for income tax, calculated as a percentage of income (loss) before provision for income tax, resulted in an effective tax rate of 20% in the current period compared to 9% 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, 2026 Compared with the Six Months Ended June 30, 2025

Income available to shareholders before provision for income tax was $187 million ($164 million, net of income tax), an increase of $501 million ($398 million, net of income tax) from loss available to shareholders before provision for income tax of $314 million ($234 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:

• lower 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, 2026 and 2025”;

• gains on derivatives used to manage interest rate exposure in our ULSG business from the favorable impact of interest rate movements in the current period compared to the unfavorable impact in the prior period;

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

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

• net investment gains (losses) reflecting lower net losses on mortgage loans due to a smaller increase in the allowance for credit losses and lower net losses on sales of fixed maturity securities.

The provision for income tax, calculated as a percentage of income (loss) before provision for income tax, resulted in an effective tax rate of 10% in the current period compared to 31% 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.

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

Three Months Ended March 31, 2026

Three Months Ended June 30, 2026

Corporate & Other

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Adjusted earnings (loss)

Three Months Ended March 31, 2025

Three Months Ended June 30, 2025

Corporate & Other

11 unchanged sentences

Adjusted earnings (loss)

Consolidated Results for the Three Months Ended March 31, 2026 and 2025 — Adjusted Earnings (Loss)

Six Months Ended June 30, 2026

Corporate & Other

(In millions)

Net income (loss) available to shareholders

Provision for income tax expense (benefit)

Income (loss) available to shareholders before provision for income tax 383

Net investment gains (losses)

Investment gains (losses) on trading securities (8)

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

Change in market risk benefits

Market value adjustments

Pre-tax adjusted earnings (loss), less net income (loss) attributable to noncontrolling interests and preferred stock dividends 831

Provision for income tax expense (benefit)

Adjusted earnings (loss) $

Six Months Ended June 30, 2025

Corporate & Other

(In millions)

Net income (loss) available to shareholders

Provision for income tax expense (benefit)

Income (loss) available to shareholders before provision for income tax

Net investment gains (losses)

Investment gains (losses) on trading securities

Net derivative gains (losses), excluding investment hedge adjustments of $ 1

Change in market risk benefits

Market value adjustments

Pre-tax adjusted earnings (loss), less net income (loss) attributable to noncontrolling interests and preferred stock dividends

Provision for income tax expense (benefit)

Adjusted earnings (loss)

Consolidated Results for the Three Months and Six Months Ended June 30, 2026 and 2025 — Adjusted Earnings (Loss)

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

Three Months Ended

Six Months Ended

(In millions)

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Adjusted earnings (loss)

Three Months Ended March 31, 2026 Compared with the Three Months Ended March 31, 2025

Three Months Ended June 30, 2026 Compared with the Three Months Ended June 30, 2025

Adjusted earnings were $258 million in the current period, an increase of $60 million.

Key net favorable impacts were:

• higher net investment spread due to:

◦ lower interest credited to policyholders due to lower account balances and prior period actuarial modeling improvements in our Annuities segment;

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

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

partially offset by

◦ lower average invested long-term assets and yields on our institutional spread margin business;

◦ a decrease in income annuity underwriting margins;

• higher net fee income due to:

◦ lower ceded cost of insurance (“COI”) fees consistent with favorable equity market returns in our Life segment, a portion of which are offset in other expenses;

partially offset by

◦ lower reinsurance fees on our fixed annuity business resulting from lower account balances.

Key net unfavorable impacts were:

• lower net investment spread due to:

◦ lower returns on other limited partnerships;

partially offset by

◦ higher yields on long-term assets;

◦ lower interest credited to policyholders in our fixed annuity business resulting from lower account balances;

• higher amortization of DAC and VOBA resulting primarily from changes in policyholder behavior in our Annuities segment;

• higher other expenses due to:

◦ lower ceded COI expenses consistent with favorable equity market returns in our Life segment, which are offset in fee income;

◦ higher deferred compensation expenses.

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.

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.

Six Months Ended June 30, 2026 Compared with the Six Months Ended June 30, 2025

Adjusted earnings were $497 million in the current period, an increase of $64 million.

Key net favorable impacts were:

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

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

partially offset by

◦ a net increase in liability balances resulting from actuarial modeling improvements in our Run-off and Life segments;

◦ a decrease in income annuity underwriting margins;

• lower other expenses due to:

◦ lower operational expenses;

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

partially offset by

◦ lower ceded COI expenses consistent with favorable equity market returns in our Life segment, which are offset in fee income;

◦ higher deferred compensation expenses.

Key net unfavorable impacts were:

• higher amortization of DAC and VOBA resulting primarily from changes in policyholder behavior in our Annuities segment;

• lower net investment spread due to:

◦ lower returns on other limited partnerships;

◦ lower average invested long-term assets and yields on our institutional spread margin business;

partially offset by

◦ higher yields on long-term assets;

◦ lower interest credited to policyholders in our fixed annuity business resulting from lower account balances, as well as prior period actuarial modeling improvements in our Annuities segment;

• lower fee income due to:

◦ lower reinsurance fees on our fixed annuity business resulting from lower account balances;

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

• higher amortization of DAC and VOBA resulting primarily from changes in policyholder behavior in our Annuities segment;

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

◦ a net increase in liability balances resulting from actuarial modeling improvements in our Run-off and Life segments;

partially offset by

◦ lower claims, net of reinsurance, in our Run-off segment.

◦ lower ceded COI fees consistent with favorable equity market returns in our Life segment, a portion of which are offset in other expenses.

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.

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 Ended March 31, 2026 and 2025 — Adjusted Earnings (Loss)

Segment Results for the Three Months and Six Months Ended June 30, 2026 and 2025 — Adjusted Earnings (Loss)

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

Three Months Ended

Six Months Ended

(In millions)

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Provision for income tax expense (benefit)

82 78 158 151

Adjusted earnings $

1 unchanged sentence

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 March 31, 2026 Compared with the Three Months Ended March 31, 2025

Three Months Ended June 30, 2026 Compared with the Three Months Ended June 30, 2025

Adjusted earnings were $349 million in the current period, an increase of $17 million.

Key net favorable impacts were:

• higher net investment spread due to:

◦ lower interest credited to policyholders due to actuarial modeling improvements in the prior period and lower account balances;

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

• 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;

• lower other expenses due to:

◦ lower operational expenses;

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

• lower interest credited to policyholders in our fixed annuity business resulting from lower account balances.

Key unfavorable impacts were:

• lower fee income due to:

◦ lower reinsurance fees on our fixed annuity business resulting from lower account balances;

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

• higher net costs associated with insurance-related activities due to a decrease in income annuity underwriting margins;

• higher amortization of DAC and VOBA resulting primarily from changes in policyholder behavior;

• lower fee income due to lower reinsurance fees on our fixed annuity business resulting from lower account balances.

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, 2026 Compared with the Six Months Ended June 30, 2025

Adjusted earnings were $673 million in the current period, an increase of $27 million.

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

• 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;

• lower interest credited to policyholders in our fixed annuity business resulting from lower account balances, as well as actuarial modeling improvements in the prior period.

Key unfavorable impacts were:

• lower fee income due to lower reinsurance fees on our fixed annuity business resulting from lower account balances;

• higher amortization of DAC and VOBA resulting primarily from changes in policyholder behavior;

• higher net costs associated with insurance-related activities due to a decrease in income annuity underwriting margins.

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 impact of the dividends received deduction.

1 unchanged sentence

Three Months Ended

Six Months Ended

(In millions)

6 unchanged sentences

Adjusted earnings (loss)

Three Months Ended March 31, 2026 Compared with the Three Months Ended March 31, 2025

Adjusted loss was $6 million in the current period, a decrease of $15 million.

Key net unfavorable impacts were:

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

◦ higher non-traditional life claims, net of reinsurance;

partially offset by

Three Months Ended June 30, 2026 Compared with the Three Months Ended June 30, 2025

Adjusted loss was $4 million in the current period, a lower loss of $22 million.

Key favorable impacts were:

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

• higher fee income due to lower ceded COI fees consistent with favorable equity market returns, a portion of which are offset in other expenses.

Key unfavorable impacts were:

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

• higher other expenses due to lower ceded COI expenses consistent with favorable equity market returns, which are offset in fee income.

The provision for income tax, calculated as a percentage of pre-tax adjusted earnings (loss), resulted in an effective tax rate of 43% in the current period compared to 21% 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, 2026 Compared with the Six Months Ended June 30, 2025

Adjusted loss was $10 million in the current period, a lower loss of $7 million.

Key favorable impacts were:

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

◦ lower claims, net of reinsurance;

◦ a decrease in liability balances resulting from actuarial modeling improvements;

• lower net investment spread due to lower average invested long-term assets.

The key favorable impact was lower other expenses due to lower operational expenses.

• higher fee income due to lower ceded COI fees consistent with favorable equity market returns, a portion of which are offset in other expenses.

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

• lower returns on other limited partnerships;

• lower average invested long-term assets and lower yields.

The provision for income tax, calculated as a percentage of pre-tax adjusted earnings (loss), resulted in an effective tax rate of 33% in the current period compared to 26% in the prior period.

2 unchanged sentences

Three Months Ended

Six Months Ended

(In millions)

5 unchanged sentences

Provision for income tax expense (benefit)

(14) (22) (27) (39)

Adjusted earnings (loss)

Three Months Ended March 31, 2026 Compared with the Three Months Ended March 31, 2025

Three Months Ended June 30, 2026 Compared with the Three Months Ended June 30, 2025

Adjusted loss was $56 million in the current period, a lower loss of $27 million.

The key favorable impact was lower net costs associated with insurance-related activities due to lower claims, net of reinsurance.

The key unfavorable impact was a lower net investment spread due to 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 20% in the current period compared to 21% in the prior period.

Six Months Ended June 30, 2026 Compared with the Six Months Ended June 30, 2025

Adjusted loss was $104 million in the current period, a lower loss of $43 million.

Key net favorable impacts were:

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• lower other expenses due to lower operational expenses.

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.

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

Corporate & Other

1 unchanged sentence

Three Months Ended

Six Months Ended

(In millions)

7 unchanged sentences

Adjusted earnings (loss)

Three Months Ended March 31, 2026 Compared with the Three Months Ended March 31, 2025

Three Months Ended June 30, 2026 Compared with the Three Months Ended June 30, 2025

Adjusted loss was $31 million in the current period, a higher loss of $6 million.

2 unchanged sentences

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.

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, 2026 Compared with the Six Months Ended June 30, 2025

Adjusted loss was $62 million in the current period, a higher loss of $13 million.

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

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.

Annuity Guaranteed Benefits and Shield Annuity Liabilities for the Three Months Ended March 31, 2026 and 2025

Annuity Guaranteed Benefits and Shield Annuity Liabilities for the Three Months and Six Months Ended June 30, 2026 and 2025

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

Six Months Ended

(In millions)

5 unchanged sentences

Shield embedded derivatives

Three Months Ended March 31, 2026

Annuity guaranteed benefits and Shield Annuity liabilities performance was unfavorable for the three months ended March 31, 2026, primarily driven by:

• unfavorable increases in annuity guaranteed benefits liabilities due to decreasing equity markets;

• unfavorable changes in variable annuity and Shield hedges due to decreasing equity markets;

• favorable changes in Shield embedded derivatives due to decreasing equity markets.

Three Months Ended March 31, 2025

Annuity guaranteed benefits and Shield Annuity liabilities performance was unfavorable for the three months ended March 31, 2025, primarily driven by:

• unfavorable increases in annuity guaranteed benefits liabilities due to decreasing interest rates and equity markets;

• unfavorable changes in variable annuity and Shield hedges due to decreasing equity markets, partially offset by decreasing long-term interest rates;

• favorable changes in Shield embedded derivatives due to decreasing equity markets.

Three Months Ended June 30, 2026

Annuity guaranteed benefits and Shield Annuity liabilities performance was favorable for the three months ended June 30, 2026, primarily driven by:

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

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

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

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 and Shield 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, 2026

Annuity guaranteed benefits and Shield Annuity liabilities performance was unfavorable for the six months ended June 30, 2026, primarily driven by:

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

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

• 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 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.

Investment Risk Management Strategy

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Prior period 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 March 31, 2026.

As a result of increases in interest rates, the unrealized losses on our fixed maturity securities exceeded the unrealized gains as of June 30, 2026.

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

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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

(Dollars in millions)

10 unchanged sentences

Three Months Ended

Six Months Ended

(In millions)

3 unchanged sentences

Adjusted net investment income — in the above yield table

See “— Results of Operations — Consolidated Results for the Three Months Ended March 31, 2026 and 2025” for an analysis of the period-over-period changes in net investment income.

See “— Results of Operations — Consolidated Results for the Three Months and Six Months Ended June 30, 2026 and 2025” 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:

March 31, 2026

June 30, 2026

December 31, 2025

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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:

March 31, 2026

June 30, 2026

December 31, 2025

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(In millions)

March 31, 2026

June 30, 2026

Foreign corporate

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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% of total investments at both March 31, 2026 and December 31, 2025.

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% of total investments at both June 30, 2026 and December 31, 2025.

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

March 31, 2026

June 30, 2026

December 31, 2025

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Structured Securities

We held $20.8 billion and $20.5 billion of Structured Securities, at estimated fair value, at March 31, 2026 and December 31, 2025, respectively, as presented in the RMBS, CMBS and ABS sections below.

We held $20.5 billion of Structured Securities, at estimated fair value, at both June 30, 2026 and December 31, 2025, 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:

March 31, 2026

June 30, 2026

December 31, 2025

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

March 31, 2026

June 30, 2026

December 31, 2025

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2026 286 285 — —

The estimated fair value of CMBS rated Aaa using rating agency ratings was $4.0 billion, or 68.6% of total CMBS, and designated NAIC 1 was $5.6 billion, or 95.1% of total CMBS, at March 31, 2026.

The estimated fair value of CMBS rated Aaa using rating agency ratings was $4.0 billion, or 69.7% of total CMBS, and designated NAIC 1 was $5.5 billion, or 95.2% of total CMBS, at June 30, 2026.

The estimated fair value of CMBS rated Aaa using rating agency ratings was $3.9 billion, or 67.2% of total CMBS, and designated NAIC 1 was $5.6 billion, or 94.8% of total CMBS, at December 31, 2025.

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

March 31, 2026

June 30, 2026

December 31, 2025

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

March 31, 2026

June 30, 2026

December 31, 2025

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

was 99% at both March 31, 2026 and December 31, 2025.

was 99% at both June 30, 2026 and December 31, 2025.

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

At March 31, 2026, 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, 12% for Texas and 7% for New York.

At June 30, 2026, 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, 12% for Texas and 7% for Florida.

Additionally, we manage risk when originating commercial and agricultural mortgage loans by generally lending up to 75% of the estimated fair value of the underlying real estate collateral.

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

at both March 31, 2026 and December 31, 2025.

At March 31, 2026, the carrying value as a percentage of total residential mortgage loans for the top three states in the U.S.

was 36% for California, 9% for Florida and 6% for Texas.

at both June 30, 2026 and December 31, 2025.

At June 30, 2026, the carrying value as a percentage of total residential mortgage loans for the top three states in the U.S.

was 36% for California, 9% for Florida and 6% for New York.

Commercial Mortgage Loans by Geographic Region and Property Type .

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

March 31, 2026

June 30, 2026

December 31, 2025

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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 67% at March 31, 2026 and December 31, 2025, respectively, and our average debt-service coverage ratio was 2.2x at both March 31, 2026 and December 31, 2025.

For our commercial mortgage loans, our average loan-to-value ratio was 68% and 67% at June 30, 2026 and December 31, 2025, respectively, and our average debt-service coverage ratio was 2.2x at both June 30, 2026 and December 31, 2025.

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% at both March 31, 2026 and December 31, 2025.

For our agricultural mortgage loans, our average loan-to-value ratio was 46% at both June 30, 2026 and December 31, 2025.

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 three months ended March 31, 2026 and 2025.

Limited Partnerships and Limited Liability Companies

The carrying values of our limited partnerships and limited liability companies (“LLC”) were as follows at:

March 31, 2026

June 30, 2026

December 31, 2025

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__________________

(1) The estimated fair value of real estate limited partnerships and LLCs was $600 million and $599 million at March 31, 2026 and December 31, 2025, respectively.

(1) The estimated fair value of real estate limited partnerships and LLCs was $601 million and $599 million at June 30, 2026 and December 31, 2025, 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.

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

March 31, 2026

June 30, 2026

December 31, 2025

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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 March 31, 2026 and December 31, 2025;

• the effects of derivatives in cash flow, fair value or non-qualifying hedge relationships on the statements of operations for the three months ended March 31, 2026 and 2025.

• 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, 2026 and 2025.

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Risk Management Strategies” included in our 2025 Annual Report for more information about our hedging strategies.

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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 March 31, 2026 include:

Derivatives categorized as Level 3 at June 30, 2026 include:

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

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

March 31, 2026

June 30, 2026

December 31, 2025

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

March 31, 2026

June 30, 2026

December 31, 2025

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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 $9.4 billion at March 31, 2026.

The Shield embedded derivative liabilities were valued at $11.4 billion at June 30, 2026.

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

March 31, 2026

June 30, 2026

December 31, 2025

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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 $3.9 billion and $4.3 billion at March 31, 2026 and December 31, 2025, respectively.

We maintain a substantial short-term liquidity position, which was $3.8 billion and $4.3 billion at June 30, 2026 and December 31, 2025, 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 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 $48.2 billion and $50.1 billion at March 31, 2026 and December 31, 2025, respectively.

Assets pledged or otherwise committed include amounts received in connection with securities lending, funding agreements, 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 $49.0 billion and $50.1 billion at June 30, 2026 and December 31, 2025, 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.

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

Three Months Ended

Six Months Ended

(In millions)

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Changes in policyholder account balances, net

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

Long-term debt repaid

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Aggregate Principal Amount

Three Months Ended March 31,

March 31, 2026

Six Months Ended June 30,

June 30, 2026

December 31, 2025

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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 March 31, 2026, we were in compliance with these financial covenants.

At June 30, 2026, we were in compliance with these financial covenants.

Primary Uses of Liquidity and Capital

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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 March 31, 2026.

See also “Risk Factors — Risks Related to Our Securities — We are not currently permitted to declare and pay dividends on our common stock, and legal restrictions could limit our ability to pay dividends on our capital stock and our ability to repurchase our common stock at the level we wish in the future” included in our 2025 Annual Report.

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

At March 31, 2026 and December 31, 2025, we pledged $23 million and $34 million, respectively, of cash collateral to counterparties.

At both March 31, 2026 and December 31, 2025, we were obligated to return cash collateral pledged to us by counterparties of $1.5 billion.

At June 30, 2026 and December 31, 2025, we pledged $36 million and $34 million, respectively, of cash collateral to counterparties.

At June 30, 2026 and December 31, 2025, we were obligated to return cash collateral pledged to us by counterparties of $3.5 billion and $1.5 billion, respectively.

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

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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 $2.6 billion and $3.2 billion at March 31, 2026 and December 31, 2025, respectively.

The amount of this non-cash collateral at estimated fair value was $3.3 billion and $3.2 billion at June 30, 2026 and December 31, 2025, respectively.

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

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

We were liable for cash collateral under our control of $3.2 billion at both March 31, 2026 and December 31, 2025.

We were liable for cash collateral under our control of $3.3 billion and $3.2 billion at June 30, 2026 and December 31, 2025, 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 March 31, 2026 and December 31, 2025.

There was no non-cash collateral at both June 30, 2026 and December 31, 2025.

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

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Short-term Liquidity and Liquid Assets

At March 31, 2026 and December 31, 2025, BHF and certain of its non-insurance subsidiaries had short-term liquidity of $659 million and $763 million, respectively.

At June 30, 2026 and December 31, 2025, BHF and certain of its non-insurance subsidiaries had short-term liquidity of $737 million and $763 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 March 31, 2026 and December 31, 2025, BHF and certain of its non-insurance subsidiaries had liquid assets of $862 million and $911 million, respectively, of which $827 million and $868 million, respectively, was held by BHF.

At June 30, 2026 and December 31, 2025, BHF and certain of its non-insurance subsidiaries had liquid assets of $938 million and $911 million, respectively, of which $794 million and $868 million, 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.

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(together with its subsidiaries and affiliates, “MetLife”), the Company entered into a tax receivables agreement (the “Tax Receivables Agreement”) with MetLife.

In connection with the Tax Receivables Agreement, the Company has a payable to MetLife of $328 million at both March 31, 2026 and December 31, 2025 reported in other liabilities, which would be accelerated upon closing of the Merger.

In connection with the Tax Receivables Agreement, the Company has a payable to MetLife of $328 million at both June 30, 2026 and December 31, 2025 reported in other liabilities, which would be accelerated upon closing of the Merger.

See Note 15 of the Notes to the Consolidated Financial Statements included in our 2025 Annual Report for additional information regarding income tax agreements.

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Distributions from and Capital Contributions to BH Holdings

During both the three months ended March 31, 2026 and 2025, BHF did not receive any cash distributions from BH Holdings and did not make any cash capital contributions to BH Holdings.

During both the six months ended June 30, 2026 and 2025, 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

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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 three months ended March 31, 2026 and 2025, BHF borrowed $108 million and $185 million, respectively, from certain of its non-insurance subsidiaries and repaid $117 million and $227 million of such borrowings during the three months ended March 31, 2026 and 2025, respectively.

At March 31, 2026 and December 31, 2025, BHF had total obligations outstanding of $436 million and $445 million, respectively, under such agreements.

During the six months ended June 30, 2026 and 2025, BHF borrowed $272 million and $398 million, respectively, from certain of its non-insurance subsidiaries and repaid $227 million and $386 million of such borrowings during the six months ended June 30, 2026 and 2025, respectively.

At June 30, 2026 and December 31, 2025, BHF had total obligations outstanding of $490 million and $445 million, respectively, under such agreements.

Intercompany Liquidity Facilities

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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 three months ended March 31, 2026 and 2025, there were no borrowings or repayments by BHF under these facilities and, at both March 31, 2026 and December 31, 2025, BHF had no obligations outstanding under such facilities.

During both the six months ended June 30, 2026 and 2025, there were no borrowings or repayments by BHF under these facilities and, at both June 30, 2026 and December 31, 2025, BHF had no obligations outstanding under such facilities.

Note Regarding Forward-Looking Statements

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We have tried, wherever possible, to identify such statements using words such as “anticipate,” “estimate,” “expect,” “project,” “may,” “will,” “could,” “intend,” “goal,” “target,” “guidance,” “forecast,” “preliminary,” “objective,” “continue,” “aim,” “plan,” “believe” and other words and terms of similar meaning, or that are tied to future periods, in connection with a discussion of future operating or financial performance.

In particular, these include, without limitation, statements relating to future actions, prospective services or products, financial projections, future performance or results of current and anticipated services or products, sales efforts, expenses, the outcome of contingencies such as legal proceedings, as well as trends in operating and financial results.

In particular, these include, without limitation, statements relating to the completion of the pending Merger, future actions, prospective services or products, financial projections, future performance or results of current and anticipated services or products, sales efforts, expenses, the outcome of contingencies such as legal proceedings, as well as trends in operating and financial results.

Any or all forward-looking statements may turn out to be wrong.

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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