Brighthouse Financial — Third Quarter 2026 Earnings Summary

Financial Performance

• Net income available to shareholders was $302 million ($5.21 per diluted share), a decrease from $453 million ($7.89 per diluted share) in the third quarter of 2025.
• Adjusted earnings were $527 million ($9.12 per diluted share), down from $970 million ($16.87 per diluted share) in the third quarter of 2025.
• Adjusted earnings, less notable items, were $213 million ($3.68 per diluted share), compared to $261 million ($4.54 per diluted share) in the third quarter of 2025.
• A net favorable impact of $278 million from the GAAP annual actuarial review contributed to net income in the third quarter of 2026.
• Common stockholders' equity (book value) ended at $3.3 billion ($57.59 per share), compared to $4.66 billion ($81.60 per share) in the prior year period.
• Book value, excluding accumulated other comprehensive income (AOCI), was $9.3 billion ($161.36 per share), up from $8.68 billion ($151.94 per share) in the prior year period.
• Net investment income was $1,257 million, compared to $1,334 million in the third quarter of 2025.
• Adjusted net investment income was $1,310 million, with an adjusted net investment income yield of 4.41%.
• Corporate expenses were $204 million, flat compared to the third quarter of 2025 and the second quarter of 2026 on a pre-tax basis.
• Statutory combined total adjusted capital was $4.8 billion as of September 30, 2026.

Guidance and Future Outlook

• The company anticipates volatility in net income due to differences between hedge targets and GAAP reserves, which are impacted by market performance.
• The estimated combined risk-based capital (RBC) ratio is projected between 415% and 435%, within the target range of 400% to 450%.
• The company and Aquarian Capital are in discussions to amend the merger agreement to extend the Outside Date, as regulatory approvals are not expected to be received in time to complete the merger by the current December 6, 2026 deadline.

Business Segments and Product Lines

• Annuity sales totaled $2.4 billion, flat sequentially, down 12% year-over-year and 8% year-to-date, driven by lower fixed annuity sales but offset by $2.1 billion in Shield Level Annuity sales.
• Life sales totaled $36 million, an 8% decrease sequentially and 5% decrease year-over-year, with sales flat on a year-to-date basis; sales were primarily driven by SmartCare.
• Annuities segment adjusted earnings were $301 million, down from $304 million in the third quarter of 2025.
• Life segment adjusted earnings were $91 million, up from an adjusted loss of $4 million in the second quarter of 2026 and $40 million in the third quarter of 2025.
• Run-off segment adjusted earnings were $166 million, compared to $641 million in the third quarter of 2025 and an adjusted loss of $56 million in the second quarter of 2026.
• Corporate & Other segment adjusted loss was $31 million, flat sequentially and compared to a $15 million loss in the third quarter of 2025.
• Notable items in the quarter included a $248 million favorable impact in Run-off, a $67 million favorable impact in Life, and a $1 million unfavorable impact in Annuities, all related to the annual actuarial review.

Market and Competitive Landscape

• The company is one of the largest providers of annuities and life insurance in the U.S., ranked by 2025 admitted assets.
• The rise in interest rates in the quarter negatively impacted the RBC ratio, alongside basis risk fluctuations.
• The company implemented the NAIC's new Generator of Economic Scenarios (GOES) framework for variable annuity and Shield products, contributing to reserve increases.

Risks and Challenges

• Completion of the pending merger with Aquarian Capital is subject to insurance regulatory approvals in Delaware, New York, and Massachusetts, with no assurance of agreement on an extension or completion by any new outside date.
• Net income volatility is expected due to the difference between hedge targets and GAAP reserves.
• The RBC ratio is subject to negative impacts from core results, non-trendable items, and the significant rise in interest rates.

Management Commentary and Tone

• Management noted that annuity sales were flat sequentially despite a 12% year-over-year decrease, driven by strong Shield Level Annuity sales.
• Adjusted earnings, less notable items, reflected lower income annuity underwriting margins and higher amortization of deferred acquisition costs in the Annuities segment.
• In the Life segment, adjusted earnings, less notable items, reflected lower underwriting margins and net investment income, partially offset by lower expenses.
• Corporate expenses remained flat, with certain costs related to the pending acquisition no longer categorized as corporate expenses beginning in 2026.

Other Key Points

• On November 6, 2025, Brighthouse Financial and Aquarian Capital announced a definitive merger agreement for an all-cash transaction valued at approximately $4.1 billion ($70.00 per share).
• The merger agreement was automatically extended to December 6, 2026, on September 6, 2026.
• Brighthouse Reinsurance Company of Delaware paid a $600 million extraordinary dividend to Brighthouse Life Insurance Company in the third quarter of 2026, benefiting statutory capital.
• Holding company liquid assets were $1.0 billion as of September 30, 2026.
• The company completed its GAAP annual actuarial review in the third quarter of 2026, resulting in significant favorable notable items across segments.