To Our Stockholders, Thank you for your investment in Brighthouse Financial. I am proud of our performance in 2023, which was another strong year for our company. Throughout the year, we made significant progress as we continued to execute our strategic priorities. As you will read in this letter, in 2023, we maintained a strong balance sheet and robust liquidity; returned additional capital to our stockholders through the repurchase of more of our common stock; delivered strong sales results, including record sales of our flagship Shield® Level Annuities (“Shield”); further strengthened our suite of annuity and life insurance products; and prudently managed our expenses. Additional information about our 2023 accomplishments can be found below. Maintained a strong balance sheet and robust liquidity Balance sheet strength remains one of our key priorities. In 2023, we maintained the strength of our balance sheet, ending the year with a robust combined risk-based capital, or RBC, ratio of 428%. We also ended the year with liquid assets at the holding company of $1.3 billion, an increase from $1.0 billion at year-end 2022. Our statutory combined total adjusted capital was approximately $6.3 billion as of year-end 2023, reflecting the impact of a new statutory requirement that we implemented in the fourth quarter. It is important to note that this new requirement also led to a material decrease in our required capital and resulted in an insignificant impact on our combined RBC ratio, which remained robust at year-end 2023. Returned a meaningful amount of capital and announced a new repurchase authorization In 2023, we further delivered on our commitment to return capital to our stockholders. For the full year, we repurchased $250 million of our common stock, reducing shares outstanding relative to year-end 2022 by 7%. In addition, this past November, we announced a new share repurchase authorization of up to $750 million of our common stock. Delivered strong sales results and further strengthened our product suites We delivered a strong year of sales results. Our total annuity sales were $10.6 billion, and our total life insurance sales were $102 million, both of which exceeded our 2023 targets. Our full-year annuity sales results were driven by record sales of our Shield Level Annuities Product Suite, which totaled $6.9 billion, an increase of 17% over 2022. We intend to remain a leader in the index-linked annuity marketplace through continuing to identify ways to strengthen the Shield Level Annuities Product Suite and maintain its competitiveness. To that end, in May of last year, we introduced new enhancements to our Shield suite. These enhancements included the launch of Shield Options with Step Rate Edge, a strategy that is designed to help clients keep their plans for retirement on track by providing additional growth opportunities in certain down markets. We also expanded our annuity and life insurance product suites last year as we continue to leverage our deep expertise to develop products that are designed to help people achieve financial security. In November, we launched Brighthouse SecureKeySM Fixed Indexed Annuities, a suite of single premium deferred fixed indexed annuities that provide features and benefits designed to fill multiple needs in a portfolio. In July, we launched Brighthouse SmartGuard PlusSM, a registered index-linked universal life insurance policy that offers clients guaranteed distribution payments that can be used to supplement income in retirement and a guaranteed death benefit. The launch of these new enhancements and products also supports our ongoing focus on shifting our business mix to higher cash flow-generating, less capital-intensive products. We have made substantial progress toward evolving our business mix, which we expect will help us produce more consistent cash flows through a variety of market scenarios and increase stockholder value over time. We also remain very excited about being selected by BlackRock to help it deliver its LifePath PaycheckTM solution. Our participation in LifePath PaycheckTM expands our relationship with BlackRock and will enable Brighthouse Financial to assist more Americans with advancing their retirement readiness. Continued to prudently manage expenses We recognize that one way to achieve a sustainable, competitive advantage in our industry is by being a low-cost producer. Reflecting our ongoing focus on prudently managing our expenses, in 2023, our corporate expenses on a pre-tax basis were up only 2% for the full year despite an environment in which core inflation was approximately 4%. We plan to continue to maintain disciplined management of our expenses. Looking forward I am very pleased with our achievements in 2023, which I believe position Brighthouse Financial well for 2024 and beyond. Thank you again for choosing to invest in our company. I look forward to updating you on our progress. Sincerely, President and Chief Executive Officer Brighthouse Financial, Inc. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 __________________________ FORM 10-K ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 or ☐ TRANSRR ITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___ to ___ Commission File Number: 001-37905 Brighthouse Financial, Inc. EE (Exact name of ro egistrant as specifiei d in its charter) SS (State or othett r jurisdiction of io ncorpor Delaware r ation or organizaii tion) 81-3846992 (I.R.S. Emplm oyer Idendd tification No.)NN 11225 North Community House Road, Charlotte, North Carolina (Address of po rincipal executive offico s es) 28277 Zi(( p Ci ( )e odeCC (980) 365-7100 (Registrant’s telephone numbe e r, including area code) Securities registered pursuant to Section 12(b) of the Act: Title of each class ( ) Trading symbol(s) g y g Name of each exchange on which registered g Common Stock, par value $0.01 per share Depositary Shares, each representing a 1/1,000th interest in a share of 6.600% Non-Cumulative Preferre ff d Stock, Series A Depositary Shares, each representing a 1/1,000th interest in a share of 6.750% Non-Cumulative Preferre ff d Stock, Series B Depositary Shares, each representing a 1/1,000th interest in a share of 5.375% Non-Cumulative Preferre ff d Stock, Series C Depositary Shares, each representing a 1/1,000th interest in a share of 4.625% Non-Cumulative Preferre d Stock, Series D 6.250% Junior Subordinated Debentures due 2058 ff BHF BHFAP BHFAO BHFAN BHFAM BHFAL The Nasdaq Stock Market LLC The Nasdaq Stock Market LLC The Nasdaq Stock Market LLC The Nasdaq Stock Market LLC The Nasdaq Stock Market LLC The Nasdaq Stock Market LLC Indicate by check mark if the registrant is a well-known seasoned issuer, as definff ed in Rule 405 of the Securities Act. Yes þ No ¨ Indicate by check mark if the registrant is not required to fileff reports pursuant to Section 13 or 15(d) of the Act. Yes ¨ No þ Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark whether the registrant (1) has filed all reports required to be fileff d by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to fileff such reports), and (2) has been subject to such filing requirements forff the past 90 days. Yes þ No ¨ Indicate by check mark whether the registrant has submitted electronically every I chapter) during the preceding 12 months (or forff rr such shorter period that the registrant was required to submit such files). Yes þ No ¨ nteractive Data File required to be submitted pursuant to RulRR e 405 of Regulation S-T (§ 232.405 of this Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated fileff r,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. r,” “accelerated fileff Large accelerated filer þ Non-accelerated filer ¨ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period forff standards provided pursuant to Section 13(a) of the Exchange Act. ¨ Accelerated filer ¨ Smaller reporting company ☐ Emerging growth company ☐ complying with any new or revised finff ancial accounting ff Indicate by check mark whether the registrant has fileff d a report on and attestation to its management’s assessment of the effeff ctiveness of its internal control over finff ancial reporting under Section 404(b) of the Sarbane s-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firff m that prepared or issued its audit report. ☑ r If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing refleff ct the correction of an error to previously issued financial statements. ☐ Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive offiff cers durd ing the relevant recovery period pursuant to §240.10D-1(b). ☐ Indicate by check mark whether the registrant is a shell company (as defined in RulRR e 12b-2 of the Exchange Act). Yes ☐ No þ As of June 30, 2023, the last business day of the registrant’s most recently completed second fiscal quarter, the aggregate market value of the registrant’s common stock held by non-affiff liates of the registrant was approximately $3.1 billion. As of February 16, 2024, 62,882,143 shares of the registrant’s common stock were outstanding. Portions of the registrant’s proxy statement to be fileff d with the U.S. Securities and Exchange Commission in connection with the registrant’s 2024 annual meeting of stockholders (the “2024 Proxy Statement”) are incorporated by reference into Part III of this Annual Report on Form 10-K. Such 2024 Proxy Statement will be filed within 120 days of the registrant’s fisff cal year ended December 31, 2023. DOCUMENTS INCORPORATRR ED BY REFERENCE [THIS PAGE INTENTIONALLY LEFT BLANK] Table of Contents Part I omments Business Risk Factors Unresolved Staff Cff Cybersecurity Properties Legal Proceedings Mine Safety Disclosures Part II Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities [Reserved] Management’s Discussion and Analysis of Financial Condition and Results of Operations Quantitative and Qualitative Disclosures About Market Risk Financial Statements and Supplu Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Controls and Procedures Other Inforff mation Disclosure Regarding Foreign Jurisdictions that Prevent Inspections ementary Data Part III Directors, Executive Officers and Corporate Governance Executive Compensation Security Ownership of Certain Beneficff Stockholder Matters Certain Relationships, Related Person Transactions and Director Independence Principal Accountant Fees and Services ial Owners and Management and Related Exhibits and Financial Statement Scheduld es Form 10-K Summary Part IV Item 1. Item 1A. Item 1B. Item 1C. Item 2. Item 3. Item 4. Item 5. Item 6. Item 7. Item 7A. Item 8. Item 9. Item 9A. Item 9B. Item 9C. Item 10. Item 11. Item 12. Item 13. Item 14. Item 15. Item 16. Glossary Exhibit Index Signatures Page 4 34 57 58 59 59 59 60 61 62 105 109 206 206 208 208 208 208 208 208 208 208 208 209 213 217 i e gg t on ForFF m 10-K, “Brighthous e FinFF ancial, Inc. and its subsidiaries, and “BHFBB Throughout this Annual Repor Brighthous holding company for all of our subsidiaries, and not to any of its stt of a substantial portion of MetLife,ff well as certain portions of its former Corporate Benefitff Funding segme Brighthous herein, refer to “Glossary.” e FinFF ancial, which was completed on August 4, 2017. For defdd initio e FinFF ancial,” thett rr Inc.’s (together with its stt ” refers s gg ff ubsidiaries. TheTT ubsidiaries and affiliate ff “ComCC pany,” m i o Brighthous “we,” “our” and “us” refee r to timate e FinFF ancial, Inc., the ul term “SepSS aration” refee rs to the separation ent, as ent, into a separate, publicly-trat ded company, ns of selected financial and product terms used fei ”) former Retail segme s, “MetMM Litt tt ll olely t Note Regarding Forward-Looking Statements and Summary of Risk Factors u This report and other oral or written statements that we make froff m time to time may contain information that includes or forward-looking statements within the meaning of the Private Securities Litigation Reforff m Act of 1995. Such is based upon forward-looking statements involve subsu tantial risks and uncertainties. We have tried, wherever possible, to identify s uch statements using words such as “anticipate,” “estimate,” “expect,” “projeo ct,” “may,” “will,” “could,” “intend,” “goal,” “objective,” “continue,” “aim,” “plan,” “believe” and other words and terms “target,” “guidance,” “forecast,” “preliminary,”rr e periods, in connection with a discussion of future operating or finff ancial of similar meaning, or that are tied to futur e actions, prospective services or performance. In particular, these include, without limitation, statements relating to futur ff products, finff ancial projections, futur s, expenses, the outcome of contingencies such as legal proceedings, as well as trends in operating and financial results. The list f the material risks and uncertainties that could adversely affect our business, financial condition below is also a summary orr and results of operations. You should read this summary together with the more detailed description of the risks and uncertainties in “Risk Factors.” e performance or results of current and anticipated services or products, sales effort ff ff ff ff Any or all forward-looking statements may turt n out to be wrong. They can be affeff cted by inaccurate assumptions or by known or unknown risks and uncertainties. Many such factors will be important in determining the actuat e results of Brighthouse Financial. These statements are based on current expectations and the current economic environment and involve a number of risks and uncertainties that are difficult to predict. These statements are not guarantees of future performff ance. r materially from those expressed or implied in the forward-looking statements due to a variety of Actual results could diffeff known and unknown risks, uncertainties and other facff tors, tors. Although it is not possible to identify aff they include, among others: ll of these risks and facff ff l futur • • • ff differe nces between actuat l experience and actuat rial assumptions and the effeff ctiveness of our actuat rial models; higher risk management costs and exposure to increased market risk due to guarantees within certain of our products; the effeff ctiveness of our variable annuity exposure risk management strategy and the impacts of such strategy on volatility in our profitff ability measures and the negative effecff ts on our statutor apital; y crr t • material differe ff nces between actuat l outcomes and the sensitivities calculated under certain scenarios that we may • • • • • • • • utilize in connection with our variable annuity risk management strategies; the impact of interest rates on our future universal obligations and net income volatility; life wff ith secondary guarantees (“ULSG”) policyholder the potential material adverse effect of changes in accounting standards, practices or policies appl long-duration contracts; including changes in the accounting forff a icable to us, loss of business and other negative impacts resulting froff m a downgrade or a potential downgrade in our financial strength or credit ratings; the availabia lity of reinsurance and the abia lity of the counterpar arrangements to perform their obligations thereunder; rties to our reinsurance or indemnification heightened competition, including with respect to service, producd t feat strength, claims-paying ratings, credit ratings, e-business capabilities and name recognition; urt es, scale, price, actuat ff l or perceived finff ancial our ability to market and distribute our products through distribution channels; any failure of third parties to provide services we need, any failure of the practices and procedurd es of such third parties and any inability to obtain inforff mation or assistance we need from third parties; the ability of our subsu idiaries to pay dividends to us, and our ability to pay dividends to our shareholders and repurchase our common stock; 2 • • • • • • • • • • • the risks associated with climate change; the adverse impact of public health crises, extreme mortality events or similar occurrences on our business and the economy in general; the impact of adverse capital and credit market conditions, including with respect to our ability to meet liquidity needs and access capital; the impact of economic conditions in the capital markets and the U.S. and global economy, as well as geopolitical events, military actions or catastrophic events, on our profitff ability measures as well as our investment portfolff io, including on realized and unrealized losses and impairments, net investment spread and net investment income; the financial risks that our investment portfolff market valuation risk, liquidity risk, real estate risk, derivatives risk, and other fact ff io is subju ect to, including credit risk, interest rate risk, inflation risk, ors outside our control; the impact of changes in regulation and in supeu rvisory arr insurance business or other operations; nd enforcement policies or interprr etations thereof on our the potential material negative tax impact of potential future tax legislation that could make some of our producd ts less attractive to consumers or increase our tax liabia lity; the effeff ctiveness of our policies, procedurd es and processes in managing risk; the loss or disclosure of confidff ential inforff mation, damage to our reputation and impairment of our ability to conduct business effectively as a result of any faiff lure in cyber- or other information security systems; whether all or any portion of the tax consequences of the Separation are not as expected, leading to material additional taxes or material adverse consequences to tax attributes that impact us; and other factors described in this report and from time to time in documents that we file with the U.S. Securities and Exchange Commission (“SEC”). a For the reasons described above , we caution you against relying on any forff ward-looking statements, which should also be read in conjunction with the other cautionary statements included and the risks, uncertainties and other fact ors identifieff d in this Annual Report on Form 10-K, particularly in the sections entitled “Risk Factors” and “Quantitative and Qualitative Disclosures About Market Risk,” as well as in our other subsequent filings with the SEC. Further, any forward-looking te or revise any forff ward- statement speaks only as of the date on which it is made, and we undertake no obligation to upda looking statement to refleff ct events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events, except as otherwise may be required by law. u ff Corporate Itt nfII orff marr tion We routinely use our Investor Relations website to provide presentations, press releases, insurance subsu idiaries’ statutory filings, and other inforff mation that may be deemed important or material to investors. Accordingly, we encourage investors and others interested in the Company to review the information that we share at http://investor.brighthousefinff ancial.com. In addition, our Investor Relations website allows interested persons to sign up to automatically receive e-mail alerts when we make filings with the SEC. Inforff mation contained on or connected to any website referenced in this Annual Report on Form 10-K is not incorporated by reference in this Annual Report on Form 10-K or in any other report or document we fileff with the SEC, and any website references are intended to be inactive textual references only unless expressly noted. Note Regarding Reliance on Statements in Our Contracts See “Exhibit Index — Note Regarding Reliance on Statements in Our Contracts” for information regarding agreements included as exhibits to this Annual Report on Form 10-K. 3 Page 5 5 15 17 19 30 30 32 33 33 Item 1. Business Our Company PART I Index to Business Segments and Corpor r ate & Other Reinsurance Activity Sales Distribution Regulation Competition Human Capital Resources Information About Our Executive Officers Intellectuat l Property Availabla e Inforff mation and the Brighthouse Financial Website 4 Our Company We are one of the largest providers of annuity and life i nsurance products in the U.S. with over 2.3 million annuity contracts and insurance policies in forff ce at December 31, 2023. We deliver our products through multiple independent distribution channels and marketing arrangements with a diverse network of distribution partners. We primarily transact business through our insurance subsidiaries, Brighthouse Life I nsurance Company of nsurance Company, Brighthouse Life I nsurance Company (“NELICO”); however, NELICO does not currently write new NY (“BHNY”) and New England Life I business. ff ff ff ff We believe we are a financially disciplined company with an emphasis on independent distribution and that our strategy ng a targeted set of products to serve our customers and distribution partners will enhance our ability to invest in our ff of offeri business and distribute cash to our shareholders over time. We also believe that general demographic trends in the U.S. population, the increase in under-insured individuals, the potential risk to governmental social safety net programs and the shifting of responsibility forff retirement planning and finff ancial security from employers and other institutions to individuals will create opportunities to generate significant demand for our produc ts. ff Risk management of both our in-force book and our new business to enhance sustained, long-term shareholder value is fundamental to our strategy. In writing new business, we assess the value of new products by taking into account the amount and timing of cash floff ws, the use and cost of capital required to support our financial strength ratings, diversification to our in-force business and the cost of risk mitigation. We remain focused on maintaining our strong capital base and excess liquidity at the holding company, and we have established a risk management approa ch that seeks to mitigate the effeff cts of severe market disrupt ions and other economic events on our business. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Risk Management Strategies,” “Risk Factors — Risks Related to Our Business — Our variable annuity exposure risk management strategy may not be effeff ctive, may result in significant volatility in our profitaff bia lity measures or may negatively affecff apital” and “— Segments and Corporate & Other — t Annuities.” t our statutor y crr a rr Segments and Corporate & Other We are organized into three segments: Annuities; Life; and Run-off. In addition, we report certain of our results of operations in Corporate & Other. In addition to the discussion that follows, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Results of Operations — Segments and Corporate & Other Results for the Years Ended December 31, 2023 and 2022 - Adjusted Earnings” and Note 3 of the Notes to the Consolidated Financial Statements for additional inforff mation regarding each of our segments and Corporate & Other. Subsu tantially all of our premiums, universal life and investment-type product policy fees an d other revenues originated in the U.S. ff ff Assets under management (“AUM”) for each of our segments, as well as Corporate & Other, was as folff lows at: General Account Investments December 31, 2023 Separate Account Assets Total General Account Investments December 31, 2022 Separate Account Assets Total (In millions) $ $ 68,489 9,966 5,397 2 11,604 115,456 $ $ 80,169 5,921 2,181 — 88,271 $ $ 148,658 15,887 27,578 11,604 203,727 $ $ 61,279 10,427 25,302 11,584 108,592 $ $ 77,798 5,218 1,949 — 84,965 $ $ 139,077 15,645 27,251 11,584 193,557 Annuities Life ff Run-off Corporate & Other Total ii Annuities Our Annuities segment consists of a variety of variable, fixff ed, index-linked and income annuities designed to address d income security. In contract holders’ needs for protected wealth accumulation on a tax-deferred basis, wealth transfer an ff n our business mix towards fixff ed producd ts with lower guaranteed minimum crediting rates and 2013, we began a shift i variable annuity products with less risky lkk iving benefitff s while simultaneously increasing our emphasis on index-linked annuity products. Since 2014, our new sales have primarily consisted of Shield® Level Annuities (“Shield” and “Shield Annuities”) and variable annuities with simplifieff d living benefitsff . We have launched new products and refinff ed existing products as we continue to strive to innovate in response to customer and distributor needs and market conditions. ff 5 Insurance liabia lities of our annuity products were as follows at: General Account (1) December 31, 2023 Separate Account Total General Account (1) December 31, 2022 Separate Account (In millions) $ $ 4,307 19,794 28,850 4,279 57,230 $ $ 79,990 — — 179 80,169 $ $ 84,297 19,794 28,850 4,458 137,399 $ $ 4,907 25,516 19,177 4,037 53,637 $ $ 77,653 — — 145 77,798 $ $ Total 82,560 25,516 19,177 4,182 131,435 Variable Shield Annuities Fixed deferred Income Total _______________ (1) Excludes market risk benefitff (“MRB”) liabia lities for guaranteed minimum benefitsff (“GMxB”) and Shield embedded derivatives. a oach, product design capabilities and distribution relationships to permit us to offeff We seek to meet our risk-adjusted returt n objectives in our Annuities segment through a disciplined risk selection approach and innovative product design, balancing overall profitaff bia lity with sales growth. We believe we have the underwriting appr r new products that meet lities will enhance our ability to maintain market presence and our risk-adjusted returt n objectives and that such capabi relevance over the long-term. We intend to meet our risk management objectives by continuing to hedge significant market risks associated with our existing annuity products, as well as new business. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Risk Management Strategies — Variable Annuity Exposure Risk Management.” a Products Shield Al nnuities ff stated level, while offeri Our flaff gship suite of Shield Annuities provides forff accumulation of retirement savings or other long-term investments and combines certain feat urt es found in both variabla e and fixed annuities. Shield Annuities are deferred annuity contracts that provide the contract holder with the ability to participate in the appreciation of certain financial markets up to a ng protection from a portion of declines. Rather than allocating purchase u payments directly into the equity market, the contract holder has an opportunity to participate in the returns of a specified . A recent addition to our market index. Shield Annuities also offeff suite of Shield Annuities is an individual single premium deferred annuity contract, which provides forff the potential accumulation of retirement savings as well as an opportunity for lifetff ime income through a guaranteed lifetime withdrawal benefit rider. To protect us from premature withdrawals, we impose surrender charges, which are typically applicable during the early years of the annuity contract and decline over time. Surrender charges allow us to recoup amounts we expended to initially market and sell such annuities. r account value and return of premium death benefitsff ff Fixedii Defee rred Annuities f Fixed deferff th and to address red annuities are single premium deferred annuity contracts that are designed for grow asset accumulation needs. Purchase payments under fixff ed deferred annuity contracts are allocated to our general account and interest is credited based on rates we determine forff fixed rate annuities or the performance of an index or indices for fixed index annuities (“FIA”), subject to specified guaranteed minimums. Credited interest rates are guaranteed for at least one year. A new addition to our FIA offerings is an individual single premium deferred annuity contract, which provides forff ime income through an optional guaranteed lifetff ime withdrawal benefit rider. To protect us from premature withdrawals, we impose surrender charges, which are typically applicable during the early years of the annuity contract and decline over time. the potential accumulation of retirement savings as well as an opportunity for lifetff ff 6 Income Annuities Income annuities are annuity contracts under which the contract holder contributes a portion of their retirement assets in exchange for a steady stream of retirement income, lasting either for a specified period of time or the life off f the annuitant. We offer two types of income annuities: immediate income annuities, referred to as “single premium immediate annuities” (“SPIA”), and deferred income annuities (“DIA”). Both products provide guaranteed lifetime income that can be used to suppu lement other retirement income sources. SPIAs are single premium annuity producd ts that provide a guaranteed level of income, beginning within 12 months from the contract issuance date, to the contract holder for a specified number of years or the duration of the life off f the annuitant(s). DIAs differ froff m SPIAs in that DIAs require the contract holder to wait at least 15 months before income payments commence. SPIAs and DIAs are priced based on considerations consistent with the annuitant’s age, gender and, in the case of DIAs, the deferral period. DIAs provide a pension-like stream of income payments afteff r a specified deferral period. Variable Annuities ff ios. Unless the contract holder has elected to pay for gua We issue variabla e annuity contracts that offer contract holders a tax-deferred basis for wealth accumulation and rights to receive a futur e stream of payments. The contract holder can choose to invest purchase payments in the separate account or, if available, the general account investment options under the contract. For the separate account options, the contract holder can elect among several subaccounts that invest in internally and externally managed investment , as discussed portfolff below, the contract holder bears the entire risk and receives all of the net returns resulting froff m the investment option(s) chosen. For the general account options, we credit the contract’s account value with the net purchase payment and credit interest to the contract holder at rates declared periodically, subju ect to a guaranteed minimum crediting rate. The account value of most types of general account options is guaranteed and is not exposed to market risk, because the issuing insurance company (rather than the contract holder) directly bears the risk that the value of the underlying general account investments of the insurance companies may decline. ranteed minimum living or death benefitsff ff The majority of the variabla e annuities we issue have GMxBs, which we believe make these products attractive to our customers in periods of economic uncertainty. GMxBs provide the contract holder with protection against the possibility that a downturn in the markets will reduce the certain specifieff d benefits th at can be claimed under the contract. Variablea ypes of GMxBs are those that guarantee death benefitsff annuities may have more than one type of GMxB. The primary t , “GMDB”) and those that guarantee payable upon , “GMLB”). There benefits payabla e while the contract holder or annuitant is alive (guaranteed minimum living benefitsff are three primary types of GMLBs: guaranteed minimum income benefitsff (“GMIB”), guaranteed minimum withdrawal benefits (“GMWB”) and guaranteed minimum accumulation benefitsff the death of a contract holder (guaranteed minimum death benefitsff (“GMAB”). u ff rr The guaranteed benefitff amount known as the benefit base (“Benefitff Base”). The calculation of the Benefit Base varies by benefitff differ in value from the contract holder’s account value forff received by a contract holder pursuant to the GMxBs is calculated based on a notional type and may lowing reasons: the folff • • • The Benefit Base is definff ed to exclude the effect of a decline in the market value of the contract holder’s account value. By excluding market declines, actuat e to the contract holder will be determined without giving effeff ct to equity market declines; l claim payments to be made in the futur ff The terms of the Benefit Base may allow it to increase at a guaranteed rate irrespective of the rate of return on the contract holder’s account value; or r the initial purchase payment The Benefit Base may also increase with subsequent purchase payments, afteff made by the contract holder at the time of issuance of the contract, or at the contract holder’s election with an increase in the account value dued to market performance. Variable All y nnuityii Fees We earn various types of feeff revenue based on account value, fund assets and the guarantees for contracts that invest through a separate account. We earned fees an d charges on our variable annuity contracts that invest through a separate account of $2.6 billion and $2.8 billion, net of pass-through amounts, for the years ended December 31, 2023 and 2022, respectively. In addition to fee revenue, we also earn a spread on the portion of the account value allocated to the general account. ff 7 ii Mortality & ExpEE ense Fees and Admidd nistra s (“M&E Fees”), as well as tive Fees. We earn mortality and expense feeff s on our variable annuity contracts. M&E Fees are calculated based on the portion of the contract administrative feeff holder’s account value allocated to the separate accounts and are expressed as an annual percentage deducted daily. These fees are used to offset the insurance and operational expenses relating to our variable annuity contracts. Additionally, the s are charged either based on the daily average of the net asset values in the subau ccounts or when administrative feeff per contract. contracts falff l below minimum values based on a flaff t annual feeff ger Surrender CharCC s. Most, but not all, variable annuity contracts (depending on their share class) may also impose surrender charges on withdrawals forff a period of time after the purchase and in certain products for a period of time after each subsu equent deposit, also known as the surrender charge period. A surrender charge is a deduction of a percentage of the contract holder’s account value prior to distribution to him or her. Surrender charges generally decline gradually over the surrender charge period, which can range from zero to 10 years. Our variabla e annuity contracts typically permit contract holders to withdraw up to 10% of their account value each year without any surrender charge, however, their guarantees may be significantly impacted by such withdrawals. Contracts may also specify circumstances when no surrender charges apply, for example, upon paym ent of a death benefit.ff u ff MM Investment Manage ment Fees. We charge investment management fees for managing the proprietary funds managed by our subsu idiary, Brighthouse Investment Advisers, LLC (“Brighthouse Advisers”), that are offere d as investments under our variable annuities. Investment management fees are also paid on the non-proprietary funds managed by investment A portion advisors unaffiliated with us, to the unaffiliated investment advisors. Investment management fees differ by fund. of the investment management fees charged on proprietary funds managed by subadvisors unaffiliated with us are paid by us to such subadvi sors. Investment management fees reduce the net returns on the variabla e annuity investments. u ff ff t ff and Othett 12b-1 FeesFF s”). 12b-1 fees ar distributors (“12b-1 feeff based on the net assets of the funff ds allocated to our subau ccounts. These fees such funds. Additionally, mutual fund annuity subau ccounts pay us fees consistent with the terms of administrative service agreements. These fees are funde ff the fund information on 12b-1 feeff r Revenue. We earn monthly or quarterly fees for providing certain services to customers and e paid by the mutual funds selected by our contract holders and are calculated reduce the returns contract holders earn fromff which are availabla e to contract holders through the variablea d fromff additional ff companies’ net revenues. See Note 14 of the Notes to the Consolidated Financial Statements forff companies with funds s. ff ff ff rr enefitff Rider Fees. FF We may earn feeff eneration and rider type. For some death benefitsff s in addition to the base M&E fees for promising to pay GMDBs. The fees Death Btt , the fees are calculated based on account value, but for earned vary by g enhanced death benefitff s (“EDB”), the fees are normally calculated based on the Benefitff Base. In general, these fees were set at a level intended to be suffiff cient to cover anticipated expenses related to claim payments and hedge costs associated with these benefitff s. These feeff s are deducted froff m the account value. ff Living Benefie t Riderdd Fees. We earn these feeff omising to pay guaranteed benefits while the contract holder is s for pr eneration and alive, such as for any type of GMLB (including GMIBs, GMWBs and GMABs). The fees earned vary by g lated based on the Benefitff rider type and are typically calculated based on the Benefitff Base. In general, GMLB fees calcu Base are more stabla e in market downturns compared to fees based on the account value. These fees ar e set at a level intended to be suffiff cient to cover anticipated expenses related to claim payments and hedge costs associated with these benefits. These fees are deducd ted froff m the account value. ff rr ff ff Pricing and Riskii g Selectiontt Product pricing reflects our pricing standards and guidelines. Annuity pricing is based on the expected payout of account value or guarantees, which is calculated using our assumptions for mortality, sales mix, expenses, policyholder behavior and investment returns, as well as certain macroeconomic factors (e.g., inflation, volatility and interest rates). Our product pricing models consider additional fact ors, such as hedging costs, reinsurance premiums and capital requirements. ff Rates forff annuity products generally include pricing terms that are guaranteed for a certain period of time. Such products generally include surrender charges for early withdrawals and fees for guaranteed benefits. We periodically reevaluate the costs associated with such guarantees and may adjust pricing levels accordingly. We may also reevaluate the type and level of guarantee featurt es being offered froff m time to time. We continually review our pricing guidelines, models and assumptions in light of applicable regulations and experience to ensure that our policies remain competitive and aligned with our marketing strategies and profitaff bia lity goals. 8 Evolutiott n of oo ur Variable All f y nnuityii Busineii ss Our in-force variabla e annuity block refleff cts a wide variety of product offerings within each type of guarantee, reflecting the changing nature of these products over the past two decades. The changes in product feat urt es and terms over time are driven partially by customer demand and also refleff ct our continually refined evaluation of the guarantees, their expected long-term claims costs and the most effecff tive market risk management strategies. ff We introduced our first variabla e annuity producd t over 50 years ago and began offering GMIBs, which were our first riders, in 2001. Beginning in 2009, we reduced the minimum payments we guaranteed if the contract holder living benefitff percentage of the Benefitff were to annuitize; in 2012 we began to reducd e the guaranteed portion of account value up to a r firff st reducing the maximum equity allocation in separate accounts, in 2011 we introducd ed Base (“roll-up rates”); and, afteff managed volatility funds for all of our GMIBs. We ceased offerff ing GMABs and GMIBs for new purchases in 2016 and, to the extent permitted, we suspended subsequent premium payments on all but our final generation of GMIBs. While we from GMIBs to GMWBs in added GMWBs to our variable annuity product suite in 2003, we shifted our marketing focus 2015 with the release of FlexChoiceSM, a GMWB with lifetff ted version of FlexChoiceSM, “Flex Choice Access” to provide financial advisors and their clients more investment flexibility. ime payments. In 2018, we launched an upda u u ff to growing We introduced Shield Annuities in 2013 and expect to continue to increase sales of Shield Annuities dued consumer demand. In addition, we believe Shield Annuities provide us with risk offsff et to the GMxBs offere d in our ff traditional variabla e annuity producd ts. At December 31, 2023, we had $28.8 billion of policyholder account balances for Shield Annuities. We intend to focus on selling the following variable annuity products with the goal of continuing to diversify aff nd better manage our in-force block: • • • our suite of Shield Annuities; variabla e annuities with GMWBs; and variabla e annuities with GMDB only. Deposits for our Shield Annuities and variabla e annuities were as folff lows: Shield Annuities GMWB GMDB only GMIB Total Guaranteed Minimum Death Benefitsef Years Ended December 31, 2023 2022 2021 (In millions) 5,848 $ 852 286 49 7,035 $ $ $ 6,857 402 220 24 7,503 $ $ 6,201 1,548 376 76 8,201 Since 2001, we have offere ff d a variety of GMDBs to our contract holders, which include the folff lowing: • • • Account Value Death Benefite . The Account Value Death Benefit returt ns the account value at the time of the claim with no imposition of surrender charges. Return of Premium Death Benefite . The Return of Premium Death Benefit, also referred to as Principal Protection, pays the greater of (i) the account value at the time of the claim or (ii) the total purchase payments, adjud sted proportionately for any withdrawals. eath Benefite . The Annual Step-Up Death Benefitff , an election made forff an additional fee, Annual Step-Up DUU allows the contract holder the option to “step-up” or lock-in the high-water mark on their guaranteed death benefit on any contract anniversary.rr This benefit pays the greater of (i) the account value at the time of the claim, (ii) the total purchase payments or (iii) the highest anniversary “rr lue, adjud sted proportionately for any withdrawals. u step-up” va u ff 9 • • Combination Death Benefite . The Combination Death Benefit,ff which we no longer offerff , consists of the Compounded-Plus Death Benefitff and the Enhanced Death Benefit.ff The Compounded-Plus Death Benefitff pays lue or (iii) a the greater of (i) the account value at the time of the claim, (ii) the highest anniversary “rr roll-up Bu pays the greater of (i) the highest anniversary “rr enefitff which allows for dollar-for-dollar o the permitted amount for that contract year and proportional adjustments forff withdrawals in withdrawals up tu excess of the permitted amount. enefitff Base, adjusted proportionately for any withdrawals. The Enhanced Death Benefitff lue or (ii) a roll-up bu u step-up” va u step-up” va Interval Reset Death Benefite . The Interval Reset Death Benefit, which we no longer offerff , pays the greater of (i) the account value at the time of the claim, (ii) the total purchase payments or (iii) the interval reset value, a ate with this level of death benefitff being reset (either up or guaranteed death benefit on the interval anniversary drr down) on the next interval anniversary drr ate, adjud sted proportionately for any withdrawals. u In addition, we currently also offeff r an optional death benefitff availabla e at issue through age 65, which has a similar level of death benefitff protection as the Benefit Base forff benefit rider. However, the Benefit Base forff is adjud sted for all withdrawals. this death benefitff for an additional feeff with our FlexChoiceSM riders, the living Our variabla e annuity account values and Benefitff Base by type of GMDB were as follows at: Account value Return of premium Annual step-up Combination (2) Interval reset Total _______________ December 31, 2023 (1) December 31, 2022 (1) Account Value Benefitff Base Account Value Benefitff Base $ $ 3,039 37,826 17,269 20,847 5,316 84,297 $ $ (In millions) 2,483 38,194 18,485 32,084 5,562 96,808 $ $ 2,907 37,171 16,737 20,806 4,940 82,561 $ $ 2,431 37,921 20,020 32,695 5,327 98,394 (1) Many of our annuity contracts offer more than one type of guarantee and therefore certain death benefitff guarantee amounts included in this table may also be included in the GMLBs table below. (2) Includes Compounded-Plus Death Benefit,ff Enhanced Death Benefit,ff and FlexChoiceSM death benefit.ff Guaranteed Minimum Living Benefitsff g f Our in-force block of variable annuities consists of three varieties of GMLBs, including variable annuities with GMIBs, GMWBs and GMABs. Based on total account value, approximately 76% and 77% of our variable annuity block included living benefitff guarantees at December 31, 2023 and 2022, respectively. GMIBMM s. GMIBs are our largest block of living benefit guarantees based on in-force account value. Contract holders must wait for a defined period, usually 10 years, before they can elect to receive income through guaranteed annuity payments. Contract holder behavior around choosing a particular option cannot be predicted with certainty at the time of contract issuance or thereafter. The incidence and timing of benefit elections and the resulting benefitff payments may differ materially froff m those we anticipated at the time we issued a variabla e annuity contract with a GMIB. As we observe l contract holder behavior, we periodically update our assumptions with respect to contract holder behavior and take actuat appropriate action with respect to the amount of the reserves we establish forff e payment of such benefits. See “Risk Factors — Risks Related to Our Business — Guarantees within certain of our annuity products may decrease our earnings, decrease our capitalization, increase the volatility of our results, result in higher risk management costs and expose us to increased market risk” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Summary of Critical Accounting Estimates.” ff the futur We employed several risk exposure reducd tion strategies at the product level. These include reducing the interest rates used to determine annuity payout rates on GMIBs from 2.5% to 0.5% over time. In addition, we increased the setback period used to determine the annuity payout rates forff contract holders from seven years to 10 years. We also reduced the guaranteed roll-up rates froff m 6% to 4%. 10 ff Additionally, we introduced limitations on fund selections inside certain legacy variable annuity contracts. In 2005, we reduced the maximum equity allocation in the separate accounts. Further, in 2011 we introduced managed volatility funds to our fund offeri ngs in conjunction with the introducd tion of our last generation GMIB product “Max.” Approximately 29% and 30% of GMIB total account value at December 31, 2023 and 2022, respectively, was invested in managed volatility funds. The managers of these funds seek to reduce the risk of large, sudden declines in account value durd ing market downturns by managing the volatility or draw-down risk of the underlying fund holdings by rebalancing the fund holdings within certain guidelines or overlaying hedging strategies at the fund level. We believe that these risk mitigation actions at the fundff level reducd e the amount of hedging or reinsurance we require to manage our risks arising from guarantees we provide on the underlying variable annuity separate accounts. ff ff ff GMWBs. GMWBs have a Benefitff Base that contract holders may roll up fu to 10 years. If contract holders take withdrawals early, the roll-up mu ay be less than 10 years. This is in contrast to GMIBs, in which roll-ups may continue beyond 10 years. Thereforff e, the roll-up period for the Benefit Base on GMWBs is typically less uncertain and is shorter than those on GMIBs. Additionally, the contract holder may receive income only through withdrawal of their Benefitff r by the age when contract holders start to take Base. These withdrawal percentages are defined in the contract and diffeff withdrawals. Withdrawal rates may differ if they are offere . GMWBs primarily come in two versions depending on if they are period certain or if they are lifetff d on a single contract holder or a couple (join ime payments. t life)ff or up ff (( GMABsMM . GMABs guarantee a minimum amount of account value to the contract holder after a set period of time, which can also include locking in capital markets gains. This protects the value of the annuity from market fluff ctuat tions. Our variabla e annuity account value and Benefit Base by type of GMLB were as follows at: GMIB GMWB GMAB Total _______________ December 31, 2023 (1) December 31, 2022 (1) Account Value (2) Benefit Base Account Value (2) Benefit Base $ $ 44,028 19,961 431 64,420 $ $ (In millions) 67,086 21,241 343 88,670 $ $ 43,873 19,270 492 63,635 $ $ 69,100 22,602 435 92,137 (1) Many of our annuity contracts offer more than one type of guarantee and therefore certain living benefitff guarantee amounts included in this table may also be included in the GMDBs table above. (2) Total account value includes investments in the general account totaling $4.3 billion and $4.9 billion at December 31, 2023 and 2022, respectively. Net Amount at Risk The net amount at risk (“NAR”) for the GMIB is the amount (if any) that would be required to be added to the total account value to purchase a lifetime income stream, based on current annuity rates, equal to the minimum amount provided under the guaranteed benefitff . This amount represents our potential economic exposure to such guarantees in the event all contract holders were to annuitize on the balance sheet date, even though the guaranteed amount under the contract may not be annuitized until afteff r the waiting period of the contract. The NAR for the GMWB is the amount of guaranteed benefits in excess of the account values (if any) as of the balance sheet date and assumes utilization of benefitff s by all contract holders as of the balance sheet date. Only a small portion of the Benefit Base is availabla e forff withdrawal on an annual basis. The NAR for the GMAB is the amount of guaranteed benefits in excess of the account values (if any) as of the balance sheet date and assumes utilization of benefits by all contract holders as of the balance sheet. The NAR for the GMAB is not availabla e until the GMAB maturt ity date. The NAR for the GMDB is the amount of death benefitff in excess of the account value (if any) as of the balance sheet date. It represents the amount of the claim we would incur if death claims were made on all contracts on the balance sheet l claims associated with riders purchased to assist with covering income taxes date and includes any additional contractuat u payable upon de ath. 11 Our variabla e annuity account value and NAR by type of GMxB were as follows at: December 31, 2023 December 31, 2022 Death Benefit NAR (1) Living Benefit NAR (1) % of Account Value In-the- Money (2) Account Value Death Benefit NAR (1) Living Benefit NAR (1) % of Account Value In-the- Money (2) $ 4,089 6,092 133 541 4 1,056 1,325 $ 13,240 $ 3,600 470 107 249 4 — — $ 4,430 (Dollars in millions) 30.3 % $ 31,541 7,868 31.9 % 4,464 17.8 % 19,270 10.2 % 492 17.9 % 15,917 N/A 3,009 N/A $ 82,561 $ 5,517 6,013 196 1,584 18 1,737 1,439 $ 16,504 $ 4,484 415 92 662 18 — — $ 5,671 42.9 % 34.8 % 18.7 % 26.5 % 25.4 % N/A N/A Account Value $ 32,079 7,605 4,344 19,961 431 16,768 3,109 $ 84,297 GMIB GMIB Max with EDB GMIB Max without EDB GMWB GMAB GMDB only (other than EDB) EDB only Total _______________ (1) The “Death Benefitff NAR” and “Living Benefitff NAR” are not additive at the contract level. (2) In-the-money is definff ed as any contract with a living benefitff NAR in excess of zero. Reserves Under accounting principles generally accepted in the United States of America (“GAAP”), variabla e annuity guarantees are classified as MRBs, measured at estimated faiff assets and liabia lities on the consolidated balance sheets, with changes reported in change in market risk benefits on the consolidated changes related to nonperforff mance risk, which are reported in other comprehensive statements of operations, except forff the index protection and income on the consolidated statements of comprehensive income (loss). Additionally, tures of Shield Annuities are accounted for as embedded derivatives (“Shield liabia lities”), measured at accumulation feaff estimated faiff r 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. These liabia lities were valued at $7.7 billion at December 31, 2023. r value, and are reported in market risk benefitff Our variabla e annuity MRBs by type of GMxB were as follows at: GMIB GMWB GMDB Total December 31, 2023 2022 (In millions) 9,485 41 788 10,314 $ $ 9,457 209 720 10,386 $ $ The estimated faiff r value of these guarantees can change significantly due to changes in equity market performance, equity market volatility or interest rates. Fair values are also affected by our assumptions around mortality, separate account returns and policyholder behavior, including lapsa e, annuitization and withdrawal rates. See “Risk Factors — Risks Related to Our Business — Guarantees within certain of our annuity producd ts may decrease our earnings, decrease our capitalization, increase the volatility of our results, result in higher risk management costs and expose us to increased market risk.” 12 Lifei Our Life sff roducts with index-linked benefitsff egment consists of insurance products, including term, universal, whole and variable life pff roducts designed to , which may be on a tax-advantaged basis. address policyholders’ needs for finff ancial security and protected wealth transferff roducts and universal While our in-force book reflects a broad range of life producd ts, we are currently focused on term life pff life pff , consistent with our financial objectives, with a concentration on design and profitaff bia lity over volume. By managing our in-force book of business, we expect to generate future revenue and profits from premiums, investment margins, expense margins, mortality margins, morbidity margins and surrender fees . We aim to maximize our profitff s by focus ing on efficiency in order to continue to reduce the cost basis and underwriting expenses. Our life i ff nsurance in-force book provides naturt al diversificff ation to our Annuities segment. ff ff Insurance liabia lities of our life insurance products were as follows at: Term Whole Universal Variable Total General Account December 31, 2023 Separate Account Total General Account December 31, 2022 Separate Account Total $ $ 2,473 3,312 1,969 1,143 8,897 $ $ — $ — — 5,921 5,921 $ (In millions) 2,473 3,312 1,969 7,064 14,818 $ $ 2,348 3,163 2,048 1,163 8,722 $ $ — $ — — 5,218 5,218 $ 2,348 3,163 2,048 6,381 13,940 The in-force facff e amount and direct premiums received for our life i ff nsurance products were as follows: In-Force Face Amount December 31, Premiums Years Ended December 31, 2023 2022 2023 2022 2021 $ $ $ $ 351,824 17,561 10,171 33,916 $ $ $ $ 360,611 18,264 10,894 35,106 (In millions) 531 $ 388 $ 105 $ 161 $ $ $ $ $ 535 408 113 175 $ $ $ $ 577 418 176 187 Term Whole Universal Variable Products Term Lifeif ff Term life pff roducts are designed to provide a fixff ed death benefit in exchange for a guaranteed level premium to be paid over a specifieff d period of time. In 2019, we suspended sales of our 10- to 30-year level premium term producd ts and, in 2020, we launched a new term product with 10-, 20- or 30-year level premium term options. We also offer a one-year roducts do not include any cash value, accumulation or investment components. As a result, term option. Our term life pff they are our most basic life i s of life ff insurance. Term life products may allow the policyholder to continue coverage beyond the guaranteed level premium olicies allow the policyholder to convert the policy durd ing period, generally at an elevated cost. Some of our term life pff the conversion period to a permanent policy. Such conversion does not require additional medical or financial underwriting. Term life products allow us to spread expenses over a large number of policies while gaining mortality insights that come froff m high policy volumes. ing and generally have lower premiums than other formff nsurance product offerff Universarr l Lifef olicies and currently offeff We have a significant in-force book of universal life pff roducts with index-linked benefitff s. Universal life pff return for payment of specified annual roducts typically provide a death benefit in policy charges that are generally related to specific costs, which may change over time. To the extent that the policyholder chooses to pay more than the charges required in any given year to keep the policy in-force, the excess premium will be added to the cash value of the policy and credited with a stated interest rate. This structure gives policyholders flexibility in the amount and timing of premium payments, subject to tax guidelines. Consequently, olicies can be used in a variety of different ways. Brighthouse SmartCare®, our index-linked universal life universal life pff ff nsurance and long-term care policy, allows policyholders to product launched in 2019, which we market as a hybrid life i r two universal life pff ff 13 pay for qua lifieff d long-term care expenses by accelerating a significant portion of the face amount of the policy over a ff period of time. After that period of time, the policyholder may continue to receive benefits up to their maximum monthly additional years. Brighthouse SmartGuard Plus®, our index-linked universal life product launched amount for up to f ff in 2023, offers a guaranteed distribution rider that ensures a minimum amount of distribution payments will always be payable, regardless of policy performance, through policy loans. With positive policy performance, the amount of guaranteed distribution payments availabla e may increase over time. our u ff Whole Lifef We currently offeff olicies. Whole life pff roduct that is availabla e forff r a non-participating conversion whole life pff roducts provide a guaranteed death benefit in a specified period of time in order to maintain coverage for the life off term and group conversions l obligations. We have a significant in-force book of both participating and non- and to satisfy other contractuat exchange for a guaranteed ff participating whole life pff roducts f the insured. Whole life pff level premium forff also have guaranteed minimum cash surrender values. Our in-force whole life pff roducts provide for participation in the returns generated by the business, delivered to the policyholder in the form of non-guaranteed dividend payments. The olicy death benefitff or pay policyholder can elect to receive the dividends in cash or to use them to increase the paid-up pu the required premium. They can also be used for other purposes, including payment of loans and loan interest. The versatility of whole life aff es beyond just the primary purpose of death benefit protection. With our in-force policies, the policyholder can withdraw or borrow against the policy (sometimes on a tax favored basis). llows it to be used forff a variety of purpos r Variable Lifef ff e. Variable life pff roducts in the futur We have a significant in-force book of variable life policies, but do not currently offeff olicies. We may roducts operate similarly to universal life choose to issue additional variabla e life pff products, with the additional feaff ture that the excess amount paid over policy charges can be directed by the policyholder into a variety of separate account investment options. In certain separate account investment options, the policyholder bears the entire risk of the investment results. We collect specifieff d fees for the management of the investment options in addition to the base policy charges. In some instances, these investment options are managed by third-party asset management firms. The policyholder’s cash value reflects the investment return of the selected investment options, net of management fees and insurance-related charges. With some products, by maintaining a certain premium level, policyholders may also have the advantage of various guarantees designed to protect the death benefitff from adverse investment experience. r variabla e life pff ff g Pricing and Underwriting g ii Pricingg r Life insurance pricing at issuance is based on the expected payout of benefits calculated using our assumptions for ty, premium payment patterns, sales mix, expenses, persistency and investment returns, as well as mortality, morbidi certain macroeconomic factors, such as inflation. Our product pricing models consider additional fact ors, such as hedging costs, reinsurance programs, and capital requirements. Our product pricing reflects our pricing standards and guidelines. We continually review our pricing guidelines in light of applicable regulations and to ensure that our policies remain competitive and aligned with our marketing strategies and profitaff bia lity goals. ff We have establa ished important controls around management of underwriting and pricing processes, including l processes, periodic es to monitor assumptions against expectations, forff mal new product approva regular experience studi updates to product profitabia lity studies and the use of reinsurance to manage our exposures, as appropr iate. a a t Underwritingg Underwriting generally involves an evaluation of appl ries who determine the type and the amount of insurance risk that we are willing to accept. We employ detailed underwriting policies, guidelines and procedurd es designed to assist the underwriters to properly assess and quantify s uch risks before issuing policies to qualified applicants or groups. ications by a professional staff of underwriters and actuat a ff Insurance underwriting may consider not only an insured’s medical history, but also other fact ors such as the insured’s forff eign travel, vocation, alcohol, drug and tobacco use, and the policyholder’s financial profile. We generally perform our own underwriting; however, certain policies are reviewed by intermediaries under guidelines establa ished by us. Requests forff coverage are reviewed on their merits and a policy is not issued unless the particular risk has been a examined and appr oved in accordance with our underwriting guidelines. ff 14 The underwriting conducted by our corporate underwriting offiff ce and intermediaries is subject to periodic quality assurance reviews to maintain high standards of underwriting and consistency. The office is also subju ect to periodic external audits by reinsurers with whom we do business. We have establa ished oversight of the underwriting process that faci litates quality sales and serves the needs of our customers, while suppor ting our financial strength and business objectives. Our goal is to achieve the underwriting, ty levels reflected in the assumptions in our product pricing. This is accomplished by determining mortality and morbidi and establishing underwriting policies, guidelines, philosophies and strategies that are competitive and suitable for the customer, the agent and us. u r ff We continually review our underwriting guidelines (i) in light of applicable regulations and (ii) to ensure that our rends and profitabia lity goals. practices remain competitive and aligned with our marketing strategies, emerging industry t rr Run-off Our Run-RR off sff structurt ed settlements, pension risk transfer contracts, certain company-owned life i agreements. egment consists of products that are no longer actively sold and are separately managed, including ULSG, nsurance policies and certain funding ff Insurance liabia lities of our annuity contracts and life i ff nsurance policies reported in our Run-off sff egment were as follows at: ULSG Structurt ed settlements Pension risk transfer Other Total Corporate &tt tt Other General Account December 31, 2023 Separate Account Total General Account December 31, 2022 Separate Account Total $ $ 17,487 4,997 2,423 1,191 26,098 $ $ — $ — — 2,181 2,181 $ (In millions) 17,487 4,997 2,423 3,372 28,279 $ $ 16,999 4,933 2,510 1,179 25,621 $ $ — $ — — 1,949 1,949 $ 16,999 4,933 2,510 3,128 27,570 Corporate & Other contains the excess capital not allocated to the segments, interest expense related to our outstanding debt, and preferred stock dividends, as well as expenses associated with certain legal proceedings and income tax audit issues. Corpor ate & Other also includes long-term care business reinsured through 100% quota share reinsurance agreements and activities related to funding agreements associated with our institutional spread margin business. r Reinsurance Activity ii Unaffiff liate d ThiTT rdii -Pdd arPP ty Reinsurance ff In connection with our risk management effort s and in order to provide opportunities for grow th and capital management, we enter into reinsurance arrangements pursuant to which we cede certain insurance risks to unaffiliated third- party reinsurers. We cede risks to third parties in order to limit losses, minimize exposure to significant risks and provide capacity for futff urt e growth. We enter into various agreements with reinsurers that cover groups of risks, as well as individual risks. Our ceded reinsurance to third parties is primarily structurt ed on a treaty basis as coinsurance, yearly renewabla e term, excess or catastrophe excess of retention insurance. These reinsurance arrangements are an important part of our risk management strategy because they permit us to spread risk and minimize the effeff ct of losses. The extent of each risk retained by us depends on our evaluation of the specific risk, subju ect, in certain circumstances, to maximum retention limits based on the characteristics and relative cost of reinsurance. We also cede firff st dollar mortality risk under certain contracts. In addition to reinsuring mortality risk, we cede other risks, as well as specific coverages. ff Under the terms of the reinsurance agreements, the reinsurer agrees to reimburse us for the ceded amount in the event that we pay a claim. Cessions under reinsurance agreements do not discharge our obligations as the primary insurer. In the event the reinsurers do not meet their obligations under the terms of the reinsurance agreements, reinsurance recoverablea rties to our balances could become uncollectible. See “Risk Factors — Risks Related to Our Business — If the counterparr reinsurance or indemnificff ation arrangements or to the derivatives we use to hedge our business risks default or faiff l to perform, we may be exposed to risks we had sought to mitigate, which could materially adversely affect our finff ancial condition and results of operations.” 15 lly specifieff d amount and the reinsurer is responsible for indemnifying us We have historically reinsured the mortality risk on our life insurance policies primarily on an excess of retention basis or on a quota share basis. When we cede risks to a reinsurer on an excess of retention basis we retain the liabia lity up to a contractuat for amounts in excess of the liability we retain, which may be subject to a cap. When we cede risks on a quota share basis, we share a portion of the risk within a lly specifieff d layer of reinsurance coverage. We reinsure on a facultative basis for risks with specifiedff contractuat nd reinsure 100% of the risk in excess of characteristics. On a case-by-case basis, we may retain up to $20 million per life aff the amount we retain. We also reinsure portions of the risk associated with certain whole life pff olicies to a former affiff liate, and we assume certain term life pff olicies with secondary death benefitff guarantees issued by a olicies and universal life pff former affiff liate. We routinely evaluate our reinsurance program and may increase or decrease our retention at any time. ff tration Our reinsurance is diversifieff d with a group of primarily highly rated reinsurers. We analyze recent trends in arbir and litigation outcomes in disputes, if any, with our reinsurers and monitor ratings and the financial strength of our reinsurers. In addition, the reinsurance recoverabla e balance due from each reinsurer and the recoverabia lity of such balance is evaluated as part of this overall monitoring process. We generally secure large reinsurance recoverabla e balances with various forms of collateral, including secured trusts, funds withheld accounts and irrevocable letters of credit. We reinsure, through 100% quota share reinsurance agreements, certain run-off l compensation business that we originally wrote. For products in our Run-off sff engaged in reinsurance activities on an opportunistic basis. ong-term care and workers’ egment other than ULSG, we have periodically ff Our ordinary crr ourse net reinsurance recoverabla es from unaffiliated third-party reinsurers at December 31, 2023 were as follows: Reinsurance Recoverables (In millions) A.M. Best Financial Strength Rating (1) $ $ A+ A+ A++ A+ A+ A+ A NR 3,427 496 470 450 394 355 126 99 336 (3) 6,150 Inc. MetLife,ff Munich American Reassurance Company The Travelers Indemnity Company (2) RGA Reinsurance Company Swiss Re Life &ff SCOR Aegon NV General Re Life Cff Other Allowance forff Health America Inc. credit losses rr orpor ation Total _______________ (1) These financial strength ratings are the most currently availabla e for our ff of the ultimate parent companies of such counterparr listed parent. rties, as there may be numerous subsu idiary counterpar reinsurance counterpar rties and reflect the ratings rties to each (2) Relates to a block of workers’ compensation insurance policies reinsured in connection with a forff mer affiliate’s acquisition of The Travelers Indemnity Company (“Travelers”) from Citigroup, Inc. (“Citigroup”). NR = Not rated ff In addition, a block of long-term care insurance business with reserves of $5.8 billion at December 31, 2023 is reinsured nsurance Company of New York (collectively, the “Genworth to Genworth Life Insurance Company and Genworth Life I reinsurers”) who furff ther retroceded this business to Union Fidelity Life Insurance Company (“UFLIC”), an indirect subsu idiary of General Electric Company (“GE”). We acquired this block of long-term care insurance business in 2005 when our former parent acquired Travelers from Citigroup. Prior to the acquisition, Travelers agreed to reinsure a 90% quota share ecame part of Genworth, and of its long-term care business to certain affiff liates of GE, which following a spin-off bff subsu equently agreed to reinsure the remaining 10% quota share of such long-term care insurance business. The Genworth nefit to secure their obligations under such arrangements requiring that they reinsurers establa ished trust accounts for our be r market value equal to at least 102% of the statutory reserves attributable maintain qualifying losses and certain other payment to the long-term care business. Additionally, Citigroup agreed to indemnify u obligations we might incur with respect to this block of reinsured long-term care insurance business. The most currently collateral with an aggregate faiff s forff ff ff ff 16 availabla e finff ancial strength rating forff are A3 froff m Moody’s and BBB+ froff m S&P. In February 2rr reinsurers seeking authorization to withdraw certain amounts froff m the trusr ruled that the trusrr trusrr each of the Genworth reinsurers is C++ from A.M. Best, and Citigroup’s credit ratings tration froff m the Genworth t accounts. In March 2023, the arbitration panel ts were funded in excess of the amount required and that such excess amounts were to be released from the ts. We have complied with the arbir 021, we received a demand forff tration panel’s ruling. arbir rties to our reinsurance or indemnificff ation See “Risk Factors — Risks Related to Our Business — If the counterpar l to perform, we may be exposed to risks arrangements or to the derivatives we use to hedge our business risks default or faiff t our financial condition and results of operations.” Further, we had sought to mitigate, which could materially adversely affecff as disclosed in Genworth’s filinff the Genworth reinsurers’ benefit to secure UFLIC’s obligations under its arrangements with them concerning this block of long-term care insurance business, and GE has also agreed, under a capital maintenance agreement, to keep sufficient capital in UFLIC to maintain UFLIC’s risk-based capital (“RBC”) above a specified minimum level. gs with the SEC, UFLIC has established trust accounts forff ii Affiff liate d Reinsuii rance Affiff liated reinsurance companies are affiff liated insurance companies licensed under specific provisions of insurance law se Financial Captive law adopted by several states, including of their respective jurisdictions, such as the Special Purporr Delaware. ff Brighthouse Reinsurance Company of Delaware (“BRCD”), our reinsurance subsidiary, was formed to manage our capital and risk exposures and to support our term life i nsurance and ULSG businesses through the use of affiff liated reinsurance arrangements and related reinsurance financing. BRCD is capitalized with cash and invested assets, including funds withheld, at a level we believe to be sufficff ient to satisfy its future cash obligations under a variety of scenarios, including a permanent level yield curve and interest rates at lower levels, consistent with National Association of Insurance Commissioners (“NAIC”) cash floff w testing scenarios. BRCD utilizes reinsurance finff ancing to cover the difference between the sum of the fulff nsurance Policies Model Regulation (“Regulation rial Guideline 38 (“Guideline AXXX”) reserves) and the target margins less cash, invested assets XXX”) and NAIC Actuat tatements. BRCD’s admitted deferred tax asset could also serve to reduce the ff and funds amount of funding required on a statutor asis under BRCD’s reinsurance financing. See Notes 12 and 13 of the Notes to the Consolidated Financial Statements forff rr withheld, on BRCD’s statutor y s y brr additional inforff mation regarding BRCD’s reinsurance finff ancing. ly required statutory assets (i.e., NAIC Valuation of Life I ff t t BRCD provides certain benefits to Brighthouse Financial, including (i) enhancing our ability to hedge the interest rate io and (iii) risk of our reinsurance liabia lities, (ii) allowing increased allocation fleff xibility in managing our investment portfolff improving operating flexibility and administrative cost efficiency, however there can be no assurance that such benefitff s will continue to materialize. See “Risk Factors — Risks Related to Our Business — We may not be able to take credit for reinsurance, our statutor nsurance reinsurance finff ancings may be subject to cost increases and new financings may be rr subju ect to limited market capacity” and “— Regulation — Insurance Regulation.” ff ife i y l t Catastropho e CovCC erage We have exposure to catastrophes which could contribute to significant fluff ctuat tions in our results of operations. We use excess of retention and quota share reinsurance agreements to provide greater diversification of risk and minimize exposure to larger risks. See “Risk Factors — Risks Related to Our Business — Publu ic health crises, extreme mortality events or similar occurrences may adversely impact our business, financial condition, or results of operations, as well as the economy in general.” Sales Distribution We distribute our annuity and life i arrangements with a geographically diverse network of over 400 distribution partners. We have successfulff independent distribution relationships since 2001. nsurance products through multiple independent distribution channels and marketing ly built ff Our annuity products are distributed through national and regional broker-dealers, banks, independent financial planners, independent marketing organizations and other financial institutions and finff ancial planners. Our life i nsurance products are distributed through national and regional broker-dealers, general agencies, finff ancial advisors, brokerage general agencies, banks, finff ancial intermediaries and online marketplaces. We believe this strategy permits us to maximize penetration of our target markets and distribution partners without incurring the fixed costs of maintaining a proprietary distribution channel and will facilitate our ability to quickly comply with evolving regulatory r icable to the sale of our products. equirements appl a ff rr In furtherance of our strategy, we provide certain key distributors with focused product, sales and technology support u through our strategic relationship managers (“SRM”) and internal and external wholesalers. 17 Stratt tegie c Relatll g iott nship Mii anMM agers p g Our SRMs serve as the principal contact for our largest annuity and life i nsurance distributors and coordinate the relationship between Brighthouse Financial and the distributor. SRMs provide an enhanced level of service to partners that require more resources to suppor t their larger distribution network. SRMs are responsible for tracking and providing certain key distributors with sales and activity data. They participate in business planning sessions with our distributors and are critical to providing us with insights into the producd t design, educd ation and other support requirements of our principal distributors. They are also responsible for proactively addressing relationship issues with our distributors. u ff Wholesll alers ll Our wholesalers are licensed sales representatives responsible for providing our distributors with product support and facilitating business between our distributors and the clients they serve. Our wholesalers are organized into internal wholesalers and external wholesalers. Our internal wholesalers support our distributors by providing telephonic and online sales support func tions. Our field sales representatives, whom we refer to as external wholesalers, are responsible for providing on-site face-to-face product and sales support to our distributors. The external wholesalers generally have responsibility for a specificff geographic region. ff ii Principal ii Distri bui tion Channels and Relatll edtt Data The relative percentage of our annuity sales by our principal distribution channels were as follows: Distribution Channel Independent financial planners Banks/financial institutions Regional broker-dealers National broker-dealers Other Variable 6 % — % — % — % — % Year Ended December 31, 2023 Shield Annuities Fixed Index Annuity Fixed 6 % 10 % 6 % 4 % — % 38 % 17 % 4 % 2 % 4 % 2 % — % — % — % 1 % Total 52 % 27 % 10 % 6 % 5 % Our top five distributors of annuity products produced 15%, 10%, 8%, 6% and 6% of our deposits of annuity products for the year ended December 31, 2023. The relative percentage of our life i ff nsurance sales by our principal distribution channels were as follows: Distribution Channel Financial intermediaries Brokerage general agencies Year Ended December 31, 2023 83 % 17 % Our top five distributors of life i ff nsurance policies produced 26%, 21%, 17%, 12% and 11% of our life insurance sales for the year ended December 31, 2023. 18 Page 20 20 25 26 26 26 27 29 29 30 30 Regulation Index to Regulation Overview Insurance Regulation Privacy and Cybersecurity Regulation Regulation of the Use of Artificia ff l Intelligence Securities, Broker-Dealer and Investment Advisor Regulation Department of Labor a and ERISA Considerations Standard of Conduct Regulation Federal Tax Reform Regulation of Over-the-Counter Derivatives Environmental Considerations Unclaimed Property 19 Overview Our insurance subsu idiaries and BRCD are primarily regulated at the state level, with some products and services also subju ect to federal regulation. In addition, BHF and its insurance subsu idiaries are subject to regulation under the insurance holding company laws of various U.S. jurisdictions. Furthermore, some of our operations, products and services are subject to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), consumer protection laws, securities, broker-dealer and investment advisor regulations, and environmental and unclaimed property laws and regulations. See “Risk Factors — Regulatory arr nd Legal Risks.” Insurance Regulatll iontt State insurance regulation generally aims at supeu rvising and regulating insurers, with the goal of protecting policyholders and ensuring that insurance companies remain solvent. Insurance regulators have increasingly sought information about the potential impact of activities in holding company systems as a whole and have adopted laws and regulations enhancing “group-wide” supervision. See “— Holding Company Regulation” for information regarding an enterprise risk report. a ff Each of our insurance subsidiaries is licensed and regulated in each U.S. jurisdiction where it conducts insurance business. Brighthouse Life I nsurance Company is licensed to issue insurance products in all U.S. states (except New York), the District of Columbia, the Bahamas, Guam, Puerto Rico, the British Virgin Islands and the U.S. Virgin Islands. BHNY is only licensed to issue insurance products in New York, and NELICO is licensed to issue insurance products in all U.S. states and the District of Columbia. The primary regulator of an insurance company, however, is the insurance regulator in its state of domicile. Our insurance subsidiaries, Brighthouse Life I nsurance Company, BHNY and NELICO, are domiciled in Delaware, New York and Massachusetts, respectively, and regulated by the Delaware Department of Insurance (the “Delaware DOI”), the New York State Department of Financial Services (“NYDFS”) and the Massachusetts Division of Insurance, respectively. In addition, BRCD, which provides reinsurance to our insurance subsidiaries, is domiciled in Delaware and regulated by the Delaware DOI. ff The extent of such regulation varies, but most jurisdictions have laws and regulations governing certain financial aspects of insurers and the administration and design of their respective products, as well as the business conduct of insurers and distributors. State laws in the U.S. grant insurance regulatory arr uthorities broad administrative powers with respect to, among other things: • • licensing companies and agents to transact business; calculating the value of assets to determine compliance with statutory requirements; • mandating certain insurance benefits; • • • • • • • • • • • regulating certain premium rates; reviewing and appr a oving certain policy forff ms and rates; regulating unfaiff practices, distribution arrangements and payment of inducements, and identifying and other property that are not claimed by the owners; r trade and claims practices, including through the imposition of restrictions on marketing and sales and paying to the states benefits ff regulating underwriting, advertising and marketing of insurance products, including the use of external data and information, as well as the use of certain emerging technologies; protecting privacy and cybersecurity; establishing statutor y arr t ccounting and reserve requirements and solvency standards (including RBC); specifying the conditions under which a ceding company can take credit for reinsurance in its statutt ory f statements (i.e., reduce its reserves by the amount of reserves ceded to a reinsurer); rr inff ancial g maximum interest rates on insurance policy loans and minimum rates for guaranteed crediting rates on life fixin ff insurance policies and annuity contracts; adopting and enforcing replacement, best interest, or suitability standards with respect to the sale of annuities and other insurance products; a appr oving changes in control of insurance companies; restricting the payment of dividends to affiff liates, as well as certain other transactions between affiff liates; and 20 • regulating the types, amounts and valuation of investments. Each of our insurance subsidiaries and BRCD are required to fileff reports, generally including detailed annual finff ancial statements, with insurance regulatory arr uthorities in each of the jurisdictions in which it does business, and its operations and accounts are subju ect to periodic examination by such authorities. Our insurance subsu idiaries must also file, and in many jurisdictions and forff , rulr es, rates and forff ms relating to the insurance written in the jurisdictions in which they operate. a some lines of insurance obtain regulatory arr pprova l forff State and federal insurance and securities regulatory arr uthorities and other state law enforcement agencies and attorneys general froff m time to time may make inquiries regarding our compliance with insurance, securities and other laws and regulations regarding the conduct of our insurance and securities businesses. We cooperate with such inquiries and take corrective action when warranted. See Note 18 of the Notes to the Consolidated Financial Statements. Stattt utortt y y Ar ccountintt g, Reserves and Risk-Ba- g, sed CapiCC tal p ii oals of its members, the state insurance regulatory orr versight. The NAIC provides standardized insurance industry arr The NAIC is an organization whose mission is to assist state insurance regulatory arr uthorities in serving the public fficials. Through the interest and achieving the insurance regulatory grr NAIC, state insurance regulators establish standards and best practices, conduct peer reviews, and coordinate their ccounting and reporting guidance through its regulatory orr Accounting Practices and Procedures Manual. The NAIC also provides guidance forff the computation of reserves through ccounting principles and rr its Valuation Manual, which states have largely adopted by regulation. However, statutor y a reserve requirements continue to be establa ished by individual state laws, regulations and permitted practices, which may differ froff m the guidance provided by the NAIC. Changes to accounting, reporting or reserve guidance, or modifications to any laws, regulations or permitted practices by the various states, may impact our statutor apital and surplus. y crr t t t u an insurance company to suppor The NAIC has establa ished RBC requirements that are used by regulators to assess the minimum amount of statutory t its operations, based on its size and risk profile (referred to capital and surplus needed forff as “company action level RBC”). Insurers are required to maintain their capital and surplus at or above minimum levels. Companies below 100% of the company action level RBC are subju ect to corrective action. Regulators have discretionary authority, in connection with the continued licensing of an insurer, to limit or prohibit the insurer’s sales to policyholders heir judgment, the regulators determine that such insurer has not maintained the minimum surplus or capital or that if, in t ff ther transaction of business will be hazardous to policyholders. Each of our insurance subsidiaries is subju ect to RBC the furff apital and surplr us requirements imposed under the laws of its respective requirements and other minimum statutor rr y c t factors to various asset, premium, claim, jurisdiction of domicile. RBC is based on a formula calculated by applying expense and statutor eserve items. The forff mula takes into account the risk characteristics of the insurer and is calculated rr y r for NAIC reporting purposes on an annual basis. The major categories of risk involved are asset risk, insurance risk, interest rate risk, market risk and business risk, including equity, interest rate and expense recovery risks associated with . The RBC ratio is a method of measuring an variable annuities that contain guaranteed minimum death and living benefitsff insurance company’s capital and is based on statutor inff ancial statements. The RBC ratio, which is the basis for rr y f determining regulatory crr ompliance, is equal to total adjud sted capital (“TAC”) divided by the applicable company action level RBC. a a t t rr rr ool to identify pff es of initiating regulatory arr The RBC framework is used as an early warning regulatory t ossible inadequately capitalized insurers for purpos ction, and not as a means to rank insurers generally. State insurance laws provide insurance regulators the authority to require various actions by, or take various actions against, insurers whose TAC does not meet or exceed certain RBC levels. See “Risk Factors — Regulatory arr nd Legal Risks — A decrease in the RBC ratio of our insurance subsidiaries (as a result of a reducd tion in statutory capital and surplus or an increase in the required RBC capital charges), or a change in the rating agency proprietary capia tal models for our insurance subsidiaries, could result in increased scrutiny by insurance regulators and rating agencies and could have a material adverse effect on our financial condition and results of operations,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources” and Note 13 of the Notes to the Consolidated Financial Statements. In August 2022, the NAIC adopted changes to the RBC fact ff ors forff ff life i nsurance contracts. These changes became effeff ctive on December 31, 2022, and, upon adoption, they did not have a material impact on our combined RBC ratio. In June 2021, the NAIC adopted changes to the RBC facff longevity risk. These changes became effecff tors for bonds and real estate and created a new set of RBC tive on December 31, 2021, and, upon adoption, they did not have a charges forff material impact on our combined RBC ratio. 21 t r urplus and capital requirements, were designed to mitigate the incentive forff In August 2018, the NAIC adopted the fraff mework for variabla e annuity reserve and capital reforff m (“VA Reforff m”), which was adopted by Brighthouse Financial effeff ctive December 31, 2019. The revisions, which resulted in substantial insurers to changes in reserves, statutor rr y s engage in capta ive reinsurance transactions by making improvements to Actuat isk Based Capia tal C3 Market Risk (“RBC C3 Market Risk”) capia tal requirements. VA Reform is intended to (i) mitigate the asset ents and statutory liabia lities, (ii) remove the rr liabia lity accounting mismatch between hedge instruments and statutor y i non-economic volatility in statutor apital charges and the resulting solvency ratios and (iii) facilitate greater rr y c harmonization across insurers and their products for greater comparability. In August 2022, the NAIC adopted amendments reflecting hedge instruments in variabla e annuity reserves and to the Valuation Manual that changed the requirements forff apital RBC C3 Market Risk. The changes became effecff r and surplus and an insignificant change to our combined RBC ratio as of such date. tive on December 31, 2023, resulting in a decrease to our statutor rial Guideline 43 and the Life Rff nstrumr y crr t t t Further changes to VA Reforff m, including changes resulting from work currently underway by the NAIC to finff d a ries, could the Economic Scenario Generators developed by the American Academy of Actuat suitabla e replacement forff negatively impact our statutor t y srr r urplus and required capital. See “Risk Factors — Regulatory a rr nd Legal Risks — Our insurance business is highly regulated, and changes in nd enforcement policies or interprr etations thereof may materially impact our capitalization regulation and in supeu rvisory arr or cash floff ws, reducd e our profitff ability and limit our growth.” Holding ComCC pam ny Regue g p g y lation rr Insurance holding company laws and regulations vary from jurisdiction to jurisdiction, but generally require a controlled insurance company (i.e., insurers that are subsu idiaries of insurance holding companies) to register with state uthorities and to file with those authorities certain reports, including information concerning its capital regulatory a structurt e, ownership, financial condition, certain intercompany transactions and general business operations. Most states have adopted subsu tantially similar versions of the NAIC Insurance Holding Company System Model Act and the Insurance Holding Company System Model Regulation. Other states, including New York and Massachusetts, have adopted modified versions, although their supporting regulation is substantially similar to the model regulation. a Insurance holding company regulations generally provide that no person, corporation or other entity may acquire control of an insurance company, or a controlling interest in any parent company of an insurance company, without the prior appr oval of such insurance company’s domiciliary state insurance regulator. Under the laws of each of the domiciliary states of our insurance subsidiaries, any person acquiring, directly or indirectly, 10% or more of the voting securities of an insurance company (or any holding company of the insurance company) is presumed to have acquired “control” of the company. This statutor resumption of control may be rebutted by a showing that control does not exist, in fact. The state insurance regulators, however, may find that “control” exists in circumstances in which a person owns or controls less than 10% of an insurance company’s voting securities. The laws and regulations regarding acquisition of control transactions may discourage potential acquisition proposals and may delay, deter or prevent a change of control involving us, including through unsolicited transactions that some of our shareholders might consider desirabla e. y prr t an annual enterprrr The insurance holding company laws and regulations include a requirement that the ultimate controlling person of a ise risk report with the lead state of the insurance holding company system identifying U.S. insurer fileff risks likely to have a material adverse effect upon the finff ancial condition or liquidity of the insurer or its insurance holding company system as a whole. All of the states where Brighthouse Financial has domestic insurers have enacted this enterprise risk reporting requirement. ff State insurance statutt es also typically place restrictions and limitations on the amount of dividends or other distributions payable by insurance subsu idiaries to their parent companies, as well as on transactions between an insurer and its affiff liates. Dividends in excess of prescribed limits and transactions above a specified size between an insurer and its affiff liates require the prior approval of the insurance regulator in the insurer’s state of domicile. The Delaware Insurance Commissioner (the “Delaware Commissioner”), the Massachusetts Commissioner of Insurance and the New York Supeu rintendent of Financial Services have broad discretion in determining whether the financial condition of a stock life i ff nsurance company would support the payment of such dividends to its stockholders. See Note 13 of the Notes to the Consolidated Financial Statements forff a discussion of dividend restrictions under the insurance laws of Delaware, New York and Massachusetts, as well as the dividend restrictions under BRCD’s plan of operations. See “Risk Factors — Risks Related to Our Business — As a holding company, BHF depends on the abia lity of its subsu idiaries to pay dividends.” 22 Group Cu p apiCC taii p l ConCC tributiontt The NAIC adopted a group capital calculation tool, implemented by Brighthouse Financial in 2022, that uses an RBC aggregation methodology for all entities within an insurance holding company system. The NAIC has stated that the calculation is a tool to assist regulators in assessing group risks and capital adequacy and does not constitute a minimum capital requirement or standard; however, there is no guarantee that will be the case in the future. It is unclear how the group capital calculation will interact with existing capia tal requirements forff insurance companies in the U.S. y Own Risk and Solvency Assessment ModeMM l Act In 2012, the NAIC adopted the Risk Management and Own Risk and Solvency Assessment Model Act (“ORSA”), which has been enacted by our insurance subsidiaries’ domiciliary states. ORSA requires that insurers maintain a risk management framework and conduct an internal own risk and solvency assessment of the insurer’s material risks in normal and stressed environments. The assessment must be documented in a confidff ential annual summary report, a copy of which request. must be made availabla e to regulators as required or upon u Capta ivtt e Reinsur p ii er Regue g lation rr a oved a regulatory f During 2014, the NAIC appr raff mework applicable to the use of captive insurers in connection with Regulation XXX and Guideline AXXX transactions. Among other things, the framework called forff more disclosure of an inff ancial statements and narrows the types of assets permitted to back statutory rr insurer’s use of captives in its statutor y f reserves that are required to support the insurer’s future obligations. In 2014, the NAIC implemented the fraff mework through an actuat ry to opine on the insurer’s reserves and to issue a qualifieff d opinion if the fraff mework is not followed. The requirements of AG 48 are effeff ctive in all U.S. states, y to policies issued and new reinsurance transactions entered into on or after January 1, 2015. In and such requirements appl 2016, the NAIC adopted a model regulation containing similar subsu tantive requirements to AG 48. rial guideline (“AG 48”), which requires the ceding insurer’s actuat a t t ii Federal IniII tiativ es Although the insurance business in the U.S. is primarily regulated by the states, federal initiatives ofteff n have an impact on our business in a variety of ways. Federal regulation of finff ancial services, securities, derivatives and pensions, as well as legislation affecting cybersecurity, privacy, tort reforff m and taxation, may significantly and adversely affect the insurance business. In addition, various forms of direct and indirect federal regulation of insurance have been proposed from time to ff time, including proposals forff the establishment of an optional feder insurance companies. al charter forff Guaranty Associatiott ns and SimSS ilar Arrangements g y nsurers doing business within the All of the jurisdictions in which we are admitted to transact business require life i owed pursuant to jurisdiction to participate in guaranty associations, which are organized to pay contractuat l, for insurance policies issued by impaired, insolvent or faiff led insurers, or those that may become impaired, insolvent or faiff example, following the occurrence of one or more catastrophic events. These associations levy assessments, up to u prescribed limits, on all member insurers in a particular state on the basis of the proportionate share of the premiums written by member insurers in the lines of business in which the impaired, insolvent or faiff led insurer is engaged. Some states permit member insurers to recover assessments paid through full or partial premium tax offsff ets. l benefitsff ff Over the past several years, the aggregate assessments levied against us have not been material. We have established liabia lities for guaranty fund ff assessments that we consider adequate. y Insurance Regulator y Er xamEE g ll inatiott ns and Other Activitiestt As part of their regulatory orr versight process, state insurance departments conduct periodic detailed examinations of the books, records, accounts, and business practices of insurers domiciled in their states, including periodic finff ancial examinations and market conduct examinations, some of which are currently in process. State insurance departments also nsurers that are licensed in their states, and such states have the authority to conduct examinations of non-domiciliary i routinely conduct examinations of us. Over the past several years, there have been no material adverse finff dings in connection with any examinations of us conducted by state insurance departments, although there can be no assurance that there will not be any material adverse finff dings in the futur e. rr ff 23 Regulatory arr uthorities in a small number of states, the Financial Industry Rrr uthority, Inc. (“FINRA”) and, occasionally, the SEC, have conducted investigations or inquiries relating to sales or administration of individual life insurance policies, annuities or other products by our insurance subsidiaries. These investigations have focused on the conduct of particular finff ancial services representatives, the sale of unregistered or unsuitabla e products, the misuse of client assets, and sales and replacements of annuities and certain riders on such annuities. Over the past several years, these and a uthorities were resolved forff monetary payments number of investigations of our insurance subsidiaries by other regulatory arr and certain other relief, including restitution payments. We may continue to receive, and may resolve, furff ther investigations and actions on these matters in a similar manner. In addition, insurance companies’ claims payment, abandoned property and escheatment practices have received increased scrutiny from regulators. egulatory Arr Policy ac y nd Contratt ct Reserve Adequacy Ac q y y nalysis ry must submu Annually, our insurance subsidiaries and BRCD are required to conduct an analysis of the adequacy of all statutory eserves make adequate reserves. In each case, a qualified actuat provision, according to accepted actuat rial standards of practice, for the anticipated cash floff ws required by the contractual obligations and related expenses of the insurance company. The adequacy of the statutory reserves is considered in light of the assets held by the insurer with respect to such reserves and related actuat rial items, including, but not limited to, the investment earnings on such assets, and the consideration anticipated to be received and retained under the related policies and contracts. An insurance company may increase reserves in order to submu it an opinion without qualificff ation. Our insurance subsidiaries and BRCD, which are required by their respective states of domicile to provide these opinions, have provided such opinions without qualifications. rr it an opinion which states that the statutor y r t t g Regue lation of Io nvII f estments Each of our insurance subsidiaries is subju ect to state laws and regulations that require diversification of investment portfolff ios and limit the amount of investments that an insurer may have in certain asset categories, such as below investment grade fixff ed income securities, real estate equity, other equity investments, and derivatives, and we have internal procedurd es designed to ensure that the investments made by each of our insurance subsidiaries comply with such laws and imitations to regulations. Failure to comply with these laws and regulations would cause investments exceeding regulatory l be treated as non-admitted assets for purpos es of measuring surplus and, in some instances, would require divestiture of such non-qualifying investments. The NAIC periodically reviews the statutory accounting and RBC requirements forff investments and makes changes froff m time to time. For example, the NAIC is currently examining the risks associated with tured securities including Collateralized Loan Obligations and is considering modifications to the certain types of strucr methodology used to assess credit risk and determine RBC requirements. rr ff rr NYDFS IFF nsur II ance Regue g lation 47 In August 2022, the NYDFS amended Insurance Regulation 47 (as amended, “Regulation 47”), which implemented new requirements forff certain annuity products. Certain sections of Regulation 47 became effective as of January 1, 2023, and the remainder became effeff ctive on January 1, 2024. The regulation is likely to open the New York market to new competitors and has impacted some components of our current product designs. We continue to assess the impact of these new fact ors on our sales in New York. See “Risk Factors — Risks Related to Our Business — Factors affecting our ff competitiveness may adversely affect our market share and profitaff bia lity” and “Risk Factors — Risks Related to Our Business — We may experience difficulty in marketing and distributing products through our distribution channels.” NYDFS IFF nsur II ance Regue g lation 210 In March 2018, NYDFS Insurance Regulation 210: Life Insurance and Annuity Non-Guaranteed Elements took effeff ct. the determination and readjud stment of non-guaranteed elements (“NGE”) that may The regulation establishes standards forff vary at the insurer’s discretion for life i ew nsurance policies and annuity contracts delivered or issued for delivery in N York. In addition, the regulation establishes guidelines for related disclosure to the NYDFS and policy owners prior to any nsurance policies, individual annuity contracts and adverse change in NGEs. The regulation appl certain group life i nsurance and group annuity certificates that contain NGEs. NGEs include premiums, expense charges, cost of insurance rates and interest credits. ies to all individual life i a ff ff rr ff 24 Privacy ac nd Cybersecurityii Regue lation In the course of our business, we and our distributors collect and maintain customer data, including personally identifiabla e nonpublic financial and health information. We also collect and handle the personal information of our associates and certain third parties who distribute our producd ts. As a result, we and the third parties who distribute our producd ts are subju ect to U.S. federal and state privacy laws and regulations, including the Health Insurance Portabia lity and Accountability Act as well as additional regulation, including those described below. These laws and regulations require that we implement and maintain certain policies and procedurd es to safeguard this information froff m improper use or disclosure and that we provide notice of our practices related to the collection and disclosure of such information. Other laws and regulations require us to notify aff ffected individuals and regulators of security breaches. Congress and many states have enacted privacy and inforff mation security laws and regulations that impose compliance obligations applicable to our business, including obligations to protect sensitive personal and creditworthiness informff ation, as well as limitations on the use and sharing of such information. For example, the NYDFS’s Part 500 – Cybersecurity Regulation (the “NYDFS Cybersecurity Regulation”), which became effective in March 2017, requires companies to establa ish a cybersecurity program. In November 2023, the NYDFS announced amendments to the NYDFS Cybersecurity Regulation. The amended NYDFS Cybersecurity Regulation went into effect in phases beginning November 1, 2023 and continuing through December 2025, and it includes additional and new requirements regarding certification, governance, audit requirements, technology and business continuity, security control and training requirements, and notificff ation obligations. ff In addition, the Califorff nia Consumer Privacy Act of 2018 (the “CCPA”), which became effective in January 2020, s Califorff nia residents expanded privacy protections and control over the collection, use and sharing of their personal afford ff a consumers regarding personal information. The CCPA requires companies to make certain disclosures to Californi n of “personal information” is more expansive information, among other privacy protective measures. The CCPA’s definitio icable to us. Failure to comply with the CCPA risks regulatory than those found in other privacy laws in the United States appl fines, and the CCPA grants a private right of action and statutor amages for an unauthorized access and exfiltration, theft,ff y drr or disclosure of certain types of personal inforff mation resulting from the Company’s violation of a duty to maintain reasonable a Privacy Rights Act (the “CPRA”RR ), effeff ctive as of security procedurd es and practices. The CCPA, amended by the Californi January 1, 2023, and the implementing regulations require additional investment in compliance programs and potential modifications to business processes. Further, the CCPA, as amended, creates the Californi a Privacy Protection Agency to enforce the statutt e as well as its regulations, and it imposes new requirements relating to additional consumer rights, data minimization, and other obligations. The Califorff nia legislature did not extend certain exemptions under the amended CCPA, specifically information collected in employment or business-to-business contexts, and such information therefore is now covered by the CCPA. Enforff cement of the CCPA, as amended by the CPRA, began on July 1, 2023. a t ff ff ff ff In 2017, the NAIC adopted the Insurance Data Security Model Law, which establa ished standards for da ta security and for the investigation and notificff ation of insurance commissioners of cybersecurity events involving unauthorized access to, or the misuse of, certain nonpublic information. More than 20 U.S. states have enacted the Insurance Data Security Model Law or similar laws, and we expect more states to follow. ff In July 2023, the SEC adopted the Risk Management, Strategy, Governance, and Incident Disclosure Final Rule (the “Cybersecurity Final RulRR e”) that enhances the disclosure requirements forff registered companies covering cybersecurity risk and management. The Cybersecurity Final RulRR e requires registrants to disclose material cybersecurity incidents on Form 8-K. The Cybersecurity Final RulRR e also requires periodic disclosures of the Company’s cybersecurity risk management processes, a discussion of our governance, and management’s role in overseeing such a compliance program. See “Cybersecurity” forff cybersecurity risk management and governance framework. All U.S. states, the District of Columbia, and U.S. territories also require entities to provide notification to affected residents and, in certain instances, state regulators, such as state attorneys general or state insurance commissioners, in the event of certain security breaches affeff cting personal inforff mation. Also, as noted above, state governments, Congress, and agencies may consider and enact additional legislation or promulgate regulations governing privacy, cybersecurity, and data breach reporting requirements. We cannot predict whether such legislation will be enacted, or what impact, if any, such legislation may have on our business practices, results of operations or financial condition. 25 Regue lation of to hett Use of Ao rtiftt icff ial IntII eltt ligll ence ff a State legislatures and insurance regulators have shown increasing concern about the use of artificial intelligence (“AI”) and the potential for di scrimination and bias in insurance practices. For example, on September 21, 2023, the Colorado Division of Insurance released its Final Governance and Risk Management Framework Requirements forff Life Insurers’ Use of External Consumer Data and Inforff mation Sources (“ECDIS”), Algorithms, and Predictive Models, which requires life insurers authorized to do business in Colorado to implement AI governance and risk management measures that are r discrimination in the use of ECDIS, algorithms and predictive models. Additionally, on reasonably designed to prevent unfaiff egulation on Quantitative Testing forff Unfairly September 28, 2023, the Colorado Department of Insurance released its draft rff nsurance Underwriting, which would require Discriminatory Orr ff r the insurers to estimate the race and ethnicity of proposed insureds that have applied forff insurer’s initial adoption of the use of ECDIS, or algorithms and predictive models that used ECDIS. While we currently do not expect any of the existing regulations to have a material impact on our business, there can be no assurance that there will not be any material impacts in the future. utcomes forff Algorithms and Predictive Models Used for Life I nsurance coverage on or afteff ff life i Other state legislaturt es and insurance regulators, as well as U.S. federal agencies, may also adopt regulations that govern the use of AI. Securitieii s, Broker-De- alerll and InvII estment Advidd soii r Regulatll iontt ff Some of our activities in offeri ng and selling variabla e insurance products, as well as certain fixed interest rate or index- linked contracts, are subject to extensive regulation under the federal securities laws administered by the SEC or state securities laws. Federal and state securities laws and regulations treat variable insurance products and certain fixed interest rate or index-linked contracts as securities that must be registered with the SEC under the Securities Act of 1933, as amended (the “Securities Act”), and distributed through broker-dealers registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These registered broker-dealers are also FINRA mRR embers; therefore, sales of these registered products are also subjeb ct to the requirements of FINRA rules. Our subsidiary, Brighthouse Securities, LLC (“Brighthouse Securities”) is registered with the SEC as a broker-dealer and is approved as a member of, aff nd subju ect to regulation by, FINRA. Brighthouse Securities is also registered as a broker-dealer icable U.S. states. Its business is to serve as the principal underwriter and exclusive distributor of the registered in all appl products issued by its affiliates, and as the principal underwriter forff advised by its affiff liated investment advisor, Brighthouse Advisers, and used to fund variable insurance products. the registered funds a ff We issue variabla e insurance products through separate accounts that are registered with the SEC as investment companies under the Investment Company Act of 1940, as amended (the “Investment Company Act”). Each registered separate account is generally divided into subaccounts, each of which invests in an underlying fund which is itself a registered investment company under the Investment Company Act. Our subsu idiary, Brighthouse Advisers is registered as an investment advisor with the SEC under the Investment Advisers Act of 1940, and its primary business is to serve as investment advisor to certain of the registered funds nsurance policies. Certain variabla e contract separate accounts sponsored by our insurance subsidiaries are exempt froff m registration under the Securities Act and the Investment Company Act but may be subject to other provisions of the feder al securities laws. that underlie our variable annuity contracts and variable life i ff ff ff Federal, state and other securities regulatory arr uthorities, including the SEC and FINRA, may from time to time make inquiries and conduct examinations regarding our compliance with securities and other laws and regulations. We will cooperate with such inquiries and examinations and take corrective action when warranted. See “— Insurance Regulation — Insurance Regulatory Err xaminations and Other Activities.” Federal and state securities laws and regulations are primarily intended to ensure the integrity of the finff ancial markets, to protect investors in the securities markets, and to protect investment advisory or brokerage clients, and generally grant gencies broad rulemaking and enforff cement powers, including the power to limit or restrict the conduct of regulatory a failure to comply with such laws and regulations. business forff rr ee Depar tment of Labor and ERIEE SAII Considerdd atiott ns ff third parties to sell to individuals. Also, a portion of our in-force life i urt e individual retirement annuities that are subju ect to the Internal Revenue Code of 1986, as amended (the We manufact “Tax Code”), forff nsurance products and annuity products are held by tax-qualified pension and retirement plans that are subject to ERISA or the Tax Code. While we currently believe manufacff turers do not have as much exposure to ERISA and the Tax Code as distributors, certain activities are subject to the restrictions imposed by ERISA and the Tax Code, including restrictions on the provision of investment advice to ERISA qualified plans, plan participants and individual retirement annuity and individual retirement account ff 26 (collectively, “IRAs”) owners if the investment recommendation results in fees paid to an individual advisor, the firff m that (“DOL”) issued guidance that expands the employs the advisor or their affilff iates. In June 2020, the Department of Labor definition of “investment advice.” In October 2023, the DOL issued a new proposed regulation that would furff ther update the definition of “investment advice.” See “— Standard of Conduct Regulation — Department of Labor Fiduciary Advice Rule.” a The DOL has issued a number of regulations that increase the level of disclosure that must be provided to plan sponsors and participants. The participant disclosure regulations and the regulations which require service providers to disclose fee and other inforff mation to plan sponsors took effeff ct in 2012. Our insurance subsu idiaries have taken and continue to take steps designed to ensure compliance with these regulations as they apply to service providers. m MM Lifei Insurance ComCC pany In John Hancock Mutual ruTT st and Savings Bank (1993), the U.S. Supru eme Court v. Harris Tii held that certain assets in excess of amounts necessary to satisfy guaranteed obligations under a participating group annuity general account contract are “plan assets.” Thereforff e, these assets are subject to certain fiduciary obligations under ERISA, which requires fidff ucd iaries to perform their dutd ies solely in the interest of participants and beneficia ries of a plan subject to Title I of ERISA (an “ERISA Plan”). DOL regulations issued thereafteff r provide that, if an insurer satisfieff s certain ting a policy backed by the insurer’s general account and issued before 1999 will not constitute requirements, assets suppor “plan assets.” We have taken and continue to take steps designed to ensure compliance with these regulations. An insurer issuing a new policy that is backed by its general account and is issued to or for an employee benefitff plan afteff r December 31, 1998 is generally subju ect to fidff ucd iary obligations under ERISA, unless the policy is an insurance policy or contract that provides for bene fits the amount of which is guaranteed by the insurer (a “guaranteed benefit policy”), in which case, the ff assets would not be considered “plan assets.” We have taken and continue to take steps designed to ensure that policies issued to ERISA Plans afteff r 1998 qualify as guaranteed benefit policies. u ff Stantt dard of Co onCC duct Regue lation ff As a result of overlapping effort s by the DOL, the NAIC, individual states and the SEC to impose fidff ucd iary-like requirements in connection with the sale of annuities, life i ff nsurance policies and securities, which are each discussed in more detail below, there have been a number of proposed or adopted changes to the laws and regulations that govern the conduct of nsurance products, we do not our business and the firms directly distribute our products to consumers. However, regulations establa ishing standards of conduct in connection with the distribution and sale of these products could affect our business by imposing greater compliance, oversight, disclosure and notification requirements on our distributors or us, which may in either case increase our costs or limit distribution of our products. We cannot predict what other proposals may be made, what legislation or regulations may be introduced or enacted, or what impact any futur e legislation or regulations may have on our business, financial condition and results of operations. that distribute our producd ts. As a manufact urt er of annuity and life i ff ff ff ff p Depar ee tment of Labor Fiduciary Ar y f dvice Rule rr A regulatory a ction by the DOL (the “Fiducd iary Advice Rule”), which became effective on February 1rr 6, 2021, reinstated the text of the DOL’s 1975 investment advice regulation definin g what constitutes fidff ucd iary “investment advice” to ERISA Plans and IRAs and provides guidance interprrr eting such regulation. The guidance provided by the DOL broadens the circumstances under which financial institutions, including insurance companies, could be considered fiduciaries under ERISA or the Tax Code. In particular, the DOL states that a recommendation to “roll over” assets from a qualified retirement plan to an IRA or from an IRA to another IRA, can be considered fiduciary investment advice if provided by someone with an existing relationship with the ERISA Plan or an IRA owner (or in anticipation of establishing such a relationship). This guidance reverses an earlier DOL interpretation suggesting that roll over advice does not constitutt e investment advice giving rise to a fidff ucd iary relationship. ff Under the Fiduciary Advice Rule, individuals or entities providing investment advice would be considered fiduciaries icable, and would therefore be required to act solely in the interest of ERISA Plan ther be iaries, or risk exposure to fidff ucd iary liabia lity with respect to their advice. They would furff under ERISA or the Tax Code, as appl participants or IRA bRR prohibited froff m receiving compensation forff eneficff a this advice, unless an exemption appl a ied. In connection with the Fiducd iary Advice Rule, the DOL also issued an exemption, Prohibited Transaction Exemption (“PTE”) 2020-02, that allows fidff ucd iaries to receive compensation in connection with providing investment advice, including advice with respect to roll overs, that would otherwise be prohibited as a result of their fidff ucd iary relationship to the ERISA Plan or IRA.RR In order to be eligible for the exemption, among other conditions, the investment advice fiduciary is required to acknowledge its fidff ucd iary statust iaries’ interests or making material misleading statements, act in accordance with ERISA’s “prudent person” standard of care and receive no more than reasonable compensation forff in from putting its own interests ahead of the plan beneficff the advice. , refraff 27 Because we do not engage in direct distribution of retail products, including IRA pRR roducts and retail annuities sold to wners, we believe that we have limited exposure to the Fiduciary Advice Rule. ERISA Plan participants and to IRA oRR However, while we cannot predict the rule’s impact, the DOL’s interpretation of the ERISA fidff ucd iary investment advice regulation could have an adverse effect on sales of annuity products through our independent distribution partners, as a significant portion of our annuity sales are as IRAsRR . The Fiduciary Advice Rule may also lead to changes to our our compensation practices and product offeri financial condition and results of operations. We may also need to take certain additional actions in order to comply with, or assist our distributors in their compliance with, the Fiduciary Advice Rule. ngs as well as increase our litigation risk, any of which could adversely affect ff ff On October 31, 2023, the DOL announced a proposed regulation that would upda n of an “investment advice fiduciary” under ERISA and amend related administrative PTEs, including PTE 2020-02. The proposed regulation would broaden the circumstances under which financial institutt ions, including insurance companies, could be considered fiduciaries to ERISA plans and IRA investors. While we cannot predict whether the proposed regulation will be adopted or enacted in its proposed form, it could have furff ther adverse effects on sales of our products through our independent distribution partners and may also lead to further changes to our product offerings and compensation practices, as well as increase our litigation risk, any of which could adversely affecff t our financial condition and results of operations. We may also need to take certain additional actions to comply with, or assist our distributors in their compliance with, the regulation. We are assessing the potential impact of the proposed regulation and PTE amendments on our annuity and life insurance businesses and will continue to monitor developments regarding the proposal. te the definitio u ff Stattt e Ltt aw Stantt dard of Co onCC duct Rules and Regue g f lations The NAIC adopted a Suitabia lity in Annuity Transactions Regulation (the “NAIC SAT”) that includes a best interest to promote harmonization across various regulators, including the SEC standard on Februarr Regulation Best Interest. The NAIC SAT model standard requires producers to act in the best interest of the consumer when recommending annuities. Several states have adopted the NAIC SAT model, effeff ctive in 2021, and we expect that other states will also consider adopting the NAIC SAT model. ry 13, 2020 in an effort ff Additionally, certain regulators have issued proposals to impose a fidff ucd iary duty on some investment profesff sionals, and other states may be considering similar regulations. We continue to assess the impact of these issued and proposed standards on our business, and we expect that we and our third-party distributors will need to implement additional compliance measures that could ultimately impact sales of our products. NYDFS IFF nsur II ance Regue g lation 187 In July 2018, the NYDFS amended Insurance Regulation 187 (as amended, “Regulation 187”), adopting a “best interest” standard for the sale of annuities and life i ff nsurance products in New York. Regulation 187 generally requires that an insurance producer or insurer consider only a consumer’s best interest, and not the finff ancial interests of the producer or insurer, in making a recommendation as to which life insurance or annuity product a consumer should purchase. In addition, Regulation 187 imposes a best interest standard on consumer in-force transactions. We have assessed the impact to our annuity and life i nsurance businesses and have adopted certain changes to promote compliance with the provisions by their respective effective dates. In April 2021, the Appellate Division of the New York State Supru eme Court overturned al to the New York the amendment to Regulation 187 for being unconstitutionally vague, and the NYDFS fileff d an appe Court of Appeals in May 2021. On October 20, 2022, the New York Court of Appeals held that the amendment to Regulation 187 is constitutional, which leaves Regulation 187 in effeff ct. a ff t SEC Rulesll Addrdd essing S f taSS ndards of dd g ii Conduct forff Broker-De- f ll alers On June 5, 2019, the SEC adopted a comprehensive set of rulrr es and interprrr etations for broker-dealers and investment advisers, including Regulation Best Interest. Among other things, this regulatory prr ackage: • • • sionals to act in the best interest of retail customers when making requires broker-dealers and their finff ancial profesff recommendations to such customers without placing their own interests ahead of the customers’ interests, including by satisfying obl of interest, and compliance igations relating to disclosure, care, mitigation of conflicts policies and procedurd es; ff ff clarifies the naturt e of the fiduciary obligations owed by registered investment advisers to their clients; imposes new requirements on broker-dealers and investment advisers to deliver Form CRS relationship summaries designed to assist customers in understanding key fact s regarding their relationships with their investment profesff nces between the broker-dealer and investment adviser business models; and sionals and differe ff ff 28 • restricts broker-dealers and their finff ancial profesff “adviser” or “advisor.” sionals from using certain compensation practices and the terms The intent of Regulation Best Interest is to impose an enhanced standard of care on broker-dealers and their finff ancial sionals which is more similar to that of an investment adviser. Among other things, this would require broker-dealers profesff to mitigate confliff cts of interest arising from transaction-based finff ancial arrangements forff their employees. Regulation Best Interest may change the way broker-dealers sell securities such as variabla e annuities to their retail customers as well as their associated costs. Moreover, it may impact broker-dealer sales of other annuity products that are not securities because it could be diffiff cult for broker-dealers to differentiate their sales practices by product. Broker-dealers were required to comply with the requirements of Regulation Best Interest beginning June 30, 2020. In addition, individual states and their securities regulators may adopt their own enhanced conduct standards for broke r-dealers that may further impact their practices, and it is uncertain to what extent they would be preempted by Regulation Best Interest. ff Federal TaxTT Refoe rm On August 16, 2022, the Inflaff establa ishes a 15% corporate alternative minimum tax (the “CAMT”) forff financial statement income for any consecutive three–tax year period ending afteff year exceeds $1.0 billion. Based on limited guidance issued by the U.S. Department of Treasury to d not currently expect to be subju ect to the CAMT forff a the appl tion Reduction Act was signed into law by President Biden. The Inflation Reducd tion Act corporations whose average annual adjusted r December 31, 2021 and preceding the tax ate, the Company does the year ended December 31, 2023. However, the Company will assess icability of the CAMT on an annual basis and may be subju ect to the CAMT in futur e years. ff rr In addition, the Inflaff tion Reduction Act also establa ishes a one percent excise tax on stock repurchases made by publicly- traded U.S. corporations. Both provisions are effective forff tax years beginning afteff r December 31, 2022. Regue lation of Oo ver-the-Countertt Derivatives The Dodd-Frank Wall Street Reforff m and Consumer Protection Act (“Dodd-Frank”) includes a framework of regulation of the over-the-counter (“OTC”) derivatives markets which requires clearing of certain types of derivatives and imposes additional costs, including new reporting and margin requirements. We use derivatives to mitigate a wide range of risks in connection with our businesses, including the impact of increased benefitff exposures from certain of our annuity products that r guaranteed benefits. Our costs of risk mitigation have increased under Dodd-Frank. For example, Dodd-Frank imposes offeff (i) the mandatory clearing of certain OTC derivatives transactions that must be cleared and settled through requirements forff rties (“OTC-cleared”), and (ii) the mandatory exchange of margin for OTC in-scope derivatives central clearing counterpar transactions that are bilateral contracts between two counterpar rties (“OTC-bilateral” or “uncleared”) entered into after the applicable phase-in period. The initial margin requirements forff OTC-bilateral derivatives transactions, which requires the icable to us in September collecting and posting of collateral to reduce futur rties and central 2021. The increased margin requirements, combined with increased capital charges for our counterparr clearinghouses with respect to non-cash collateral, will likely require increased holdings of cash and highly liquid securities with lower yields causing a reducd tion in income and less favorable pricing forff cleared and OTC-bilateral derivatives transactions. Centralized clearing of certain derivatives also exposes us to the risk of a default by a clearing member or clearinghouse with respect to our cleared derivatives transactions. We could be subject to higher costs of entering into derivatives transactions (including customized derivatives) and the reduced availabia lity of customized derivatives that might result from the implementation of Dodd-Frank and comparable international derivatives regulations. e exposure to a given counterparr rty, became appl a ff a Federal banking regulators adopted rules that appl y to certain qualified finff ancial contracts, including many derivatives contracts, securities lending agreements and repurchase agreements, with certain banking institutions and certain of their affiff liates. These rulr es, which became effective on January 1, 2019, generally require the banking institutions and their l provisions in their qualified finff ancial contracts that limit or delay certain rights of applicable affiff liates to include contractuat their counterpar icable affiff liate becoming subject to a bankruptcy, insolvency, resolution or similar proceeding. Certain of our derivatives, securities lending agreements and repurchase agreements are subju ect to these rulr es, and as a result, we are subject to greater risk and more limited recovery in the event of a defauff rties arising in connection with the banking institution or an appl lt by such banking institutions or their appl icable affiff liates. a a 29 Enviroii nmental ConCC siderations We hold equity interests in companies that may be subject to extensive federal , state and local environmental laws and liabia lities. Our properties routinely have regulations and, accordingly, could potentially be subju ect environmental assessments performed with respect to real estate being acquired forff investment and real property to be acquired through foreclosure. We cannot provide assurance that unexpected environmental liabia lities will not arise. However, based on inforff mation currently availabla e to us, we believe that any costs associated with compliance with environmental laws t on our and regulations or any remediation of properties in our investment portfolff results of operations or financial condition. See Note 9 of the Notes to the Consolidated Financial Statements forff a discussion on certain limitations and interests regarding our arrangements in or with variable interest entities. io will not have a material adverse effecff to environmental ff Unclaill meii d ProPP peo rty We are subject to the laws and regulations of states and other jurisdictions concerning identification, reporting and compliance with these f one or more entities, and interest. The claimant or claimants also may allege entitlement to other escheatment of unclaimed or abandoned funds requirements, which may result in fines or penalties. Litigation may be brought by, or on behalf, off seeking to recover unclaimed or abandone damages or penalties, including for alleged falff se claims. , and are subject to audit and examination forff d funds a ff ff Competition ff ff nsurance industry i Both the annuities and the life i nsurance markets are very competitive, with many participants and no one company nsurers Fact Book 2023), dominating the market for all products. According to the American Council of Life Insurers (Life I f 727 companies with sales and operations across the country and U.S. territories. the U.S. life i nsurance companies and non-insurance finff ancial services ff We compete with majoa r, well-established stock and mutual life i companies (e.g., banks, broker-dealers and asset managers) in all of our product offerings, including certain of our distributors that currently manufact urt e competing products in the futff urt e. Our Annuities segment also faces competition froff m other financial service providers that focus on retirement products and advice. Our competitive positioning overall is focused on access to distribution channels, product feat urt e competing products or may manufact urt es and finff ancial strength. s made up ou rr ff ff ff ff Principal competitive factors in the annuities business include producd t feat urt es, distribution channel relationships, ease of s, investment performance, speed to market, brand recognition, technology and the financial doing business, annual feeff strength ratings of the insurance company. In particular for the variable annuity business, our living benefitff rider product featurt es and the quality of our relationship management and wholesaling support are key drivers in our competitive position. In the fixff ed annuity business, the crediting rates and guaranteed payout product feat urt es are the primary competitive factors, while for index-linked annuities the competitiveness of the crediting methodology is the primary driver. For income annuities, the competitiveness of the lifetff ime income payment amount is generally the principal factor. ff ff Principal competitive factors in the life insurance business include producd t and underwriting featurt es, customer service and distribution channel relationships, price, the finff ancial strength ratings of the insurance company, technology and finff ancial urt es, long-term care benefitff s and our stability. For our hybrid indexed universal life wff income product are its guaranteed underwriting process are the primary competitive facff distributions, crediting strategies and underwriting process. ith long-term care product, product feat ff ors for our tors. The principal fact ff ff Human Capital Resources At Brighthouse Financial, our employees are one of our most valuable assets. Our ability to successfulff ly execute our business strategy and deliver on our mission to help people achieve financial security starts with our culture and values, which are brought to life every drr ay by our employees. At December 31, 2023, we had approximately 1,500 employees. The Company’s Board of Directors and its Compensation and Human Capital Committee oversee our human capia tal matters, including pay equity; talent and leadership development; the Company’s efforts to attract, engage and retain talent; culture; and the development and execution of the Company’s strategy to advance its diversity, equity and inclusion (“DEI”) objectives. Such objectives include increasing representation of underrepresented populations across the Company, by n positions and through other efforts, strengthening our inclusive culture, seeking a diverse slate of candidates for ope ting the communities we promoting the development of an inclusive pipeline forff serve and working with educd ational institutions and other organizations to help create more opportunities forff individuals from underrepresented groups. ier and vendor opportunities, suppor supplu u ff 30 Our CulCC tull re, Ve alVV ues and Ethitt cs Our culture is rooted in three core values — collaboration, adaptabia lity and passion. We believe these values help us build an organization where talented people froff m all backgrounds can make meaningful contributions to our success while growing their careers. We are committed to continually enhancing our culture through a variety of programs, policies and initiatives. We place a high value on employee feeff dback, which we believe is critical to our effort s to continue to strengthen bad ck on an ongoing basis in multiple ways, including through periodic surveys, our culture. We collect employee feedff coaching and feedbad ck discussions, exit surveys and interviews, employee network groups (discussed below), listening and learning sessions and leader-led offiff ce hours. ff Our culture is also built on our deep commitment to ethics and integrity, and we recognize that the continued success of the Company is dependent upon the trust of our employees, distribution partners, customers and stockholders. We strive to adhere to the highest standards of business conduct at all times and put honesty, fairness and trustworthiness at the center of nd productive workplk ace, we establa ish and oversee programs to build awareness and all that we do. To help maintain a safe aff icable regulations, Company policy or train employees on important standards, policies and procedurd es, as required by appl a ompliance best practices. As part of our commitment to ethics and integrity, we require all employees to review and certify cff with our code of conduct forff employees on an annual basis, as well as complete more extensive training on the code of conduct on a biennial basis. In addition, we help to ensure that employees are well informed of the Company’s reporting and escalation process, including options for anonymous whistleblower reporting, through regular communications. Attrtt acting,n Engagingii , Dgg ll evelopi ngii and Retaitt niii ngii Talent talent in our industry,rr We believe that our success depends, in large part, on our ability to attract and retain highly skilled employees. There is market dynamics may further increase the challenge of a strong competition forff environment and adapt, as needed, our attracting and retaining employees. We continue to monitor the current U.S. labor activities, policies and practices to attract, engage, develop and retain employees and to ensure that Brighthouse Financial remains a great place to work. These efforts include, among other things, seeking to support our employees with competitive and equitabla e pay and benefitff s and to provide our employees with training and other learning and development opportunities. ting In addition, we continue to operate under a flexible, hybrid work model, which has enabled us to expand our recruirr strategy. and current U.S. labor a We offeff r all of our employees benefits programs that are designed to help meet their finff ancial, physical and mental needs. All employees are eligible to participate in our 401(k) savings plan, to which we make matching and annual nondiscretionary contributions, and in our Employee Stock Purchase Plan, through which employees can purchase BHF stock r competitive health care benefits options for medical, dental and vision coverage, as well as at a discounted price. We offeff r all employees paid time off,ff holidays and volunteer and health care and dependent care fleff xible spending accounts. We offeff time off tff o help promote healthier work-life balance and other well-being benefitsff studyt ily w parents. In addition, we conduct annual pay equity reviews to help ensure that individual compensation is ff leave for ne determined exclusively based on performance, experience, job level and other neutral fact , including paid parental and famff ors. ff Our talent management and development strategies are built on continuous coaching and feedbad ck, learning, training, ation and inclusivity. We provide employees with many opportunities and resources to learn and develop, including a collabor a r all curated set of courses designed to help employees achieve their personal and profesff employees access to optional monthly learning sessions designed to furff ther enhance their understanding of our corporate strategy and culture, as well as to provide the opportunity to build and enhance skills. We also offer a mentorship program sional development opportunities through engagement with leaders across the Company. As noted designed to provide profesff s to understand and optimize our above, we collect employee feeff dback on an ongoing basis, which faci employees’ experiences at the Company and assists us in attracting, engaging, developing and retaining talent. To furff ther help our employees remain engaged and well connected to the Company and each other, we hold a variety of events and issue a wide range of communications throughout the year, including town hall meetings, podcasts from our CEO, companywide discussions with members of our leadership team, intranet articles and a weekly newsletter highlighting events and news from around the Company. sional goals. In addition, we offeff litates our effort ff ff 31 Diversirr tyii , Eyy quity and IncII lusion We are committed to providing an inclusive workplace where employees can trusr t that their unique backgrounds and perspectives will be recognized, respected and celebrated. We believe that by building such a workplk ace, we are better abla e to attract and retain talent and provide valuable products that meet the needs of our distribution partners and the finff ancial sionals who sell our products, as well as their clients. We seek to attract and retain talent that refleff cts the diversity of profesff ed on maintaining strong representation of underrepresented groups across the our communities, and we remain focus Company. Our varied appr ting talent includes efforts to diversify candidate slates for open positions, diversify interview teams to reducd e bias and build partnerships with diverse professional organizations and universities. In recognition of the importance of DEI to Brighthouse Financial, in 2021, the Compensation and Human Capia tal Committee began to incorporate into its assessment of our senior leaders’ individual performance, in connection with oval of their short-term incentive awards, their efforts with respect to advancing the Company’s DEI strategy. a the appr oach to attracting and recruirr a ff We employ a multifaceted approach to advancing DEI across the Company that includes various programs and initiatives. One such initiative is our DEI Council which is comprised of representatives from across Brighthouse Financial. The DEI Council creates and sponsors programs and development opportunities with the aim of further embedding DEI within the Company and continuously enhancing our Company’s culture. In 2022, we launched our Company’s employee for employees across various dimensions of diversity network groups, which are open to all employees and provide a forumff to discuss relevant professional and personal topics, learn froff m one another, find suppor t and allyship, expand their networks and deepen their level of compassion and understanding. In addition, to continue fostering our inclusive workplace, the Company requires all employees to complete annual DEI training. The Company also has developed a supplu ier diversity program designed to advance the building of an inclusive pipeline of talent for supplier and vendor opportunities. u The Company further seeks to deliver on its commitment to DEI through its own charitabla e organizations and through strategic partnerships with community organizations, educational institutions and industry prr eers. The Brighthouse Financial Foundation (the “Foundation”), a non-profitff organization, was established in 2017 with the mission to improve the finff ancial ed to communities in which the Company’s employees live and work by providing security, culture and opportunities afford resources and support to other tax-exempt organizations which furff ther that mission. In addition, through Brighthouse Scholar organization established in 2022, scholarships are provided to expand educd ational Connections, Inc., a non-profitff s who are members of historically underrepresented or disadvantaged populations due to race, opportunities forff t student ethnicity, socioeconomic status or othe ors. Brighthouse Financial employees have the opportunity to serve as mentors for students who have been awarded scholarships by this organization. ff r fact ff t Information About Our Executive Offiff cers The folff lowing tabla e presents certain information regarding our executive officers as of February 2rr 2, 2024. Name Age Position with Brighthouse Financial and Certain Other Business Experience Eric T. Steigerwalt Edward A. Spehar Vonda R. Huss 62 58 57 Myles J. Lambert 49 Allie Lin 46 John L. Rosenthal 63 019) Brighthouse Financial: President and Chief Executive Officff er (August 2017 – present) MetLife:ff President and Chief Executive Officff er, Brighthouse Financial, Inc. (August 2016 – August 2017); Executive Vice President, U.S. Retail (September 2012 – August 2017) Brighthouse Financial: Executive Vice President and Chief Financial Officer (August 2019 – present) MetLife:ff Executive Vice President and Treasurer (August 2018 – July 2019); Chief Financial Officer of Europe, Middle East and Afriff ca Region (July 2016 – February 2r Brighthouse Financial: Executive Vice President and Chief Human Resources Offiff cer (November 2017 – present) Wells Fargo, a finff ancial services company: Executive Vice President, Co-Head of Human Resources (September 2015 – November 2017) Brighthouse Financial: Executive Vice President and Chief Marketing and Distribution Officer (August 2017 – present) MetLife:ff Executive Vice President and Chief Marketing and Distribution Offiff cer, Brighthouse Financial, Inc. (August 2016 – August 2017); Senior Vice President, U.S. Retail Distribution and Marketing (April 2016 – August 2017) Brighthouse Financial: Executive Vice President and General Counsel (December 2022 – present); Head of 021 – December 2022); Lead Litigation and Employment Litigation and Employment Law (February 2rr Attorney (September 2019 – February 2r rate Counsel, Litigation Attorney (March 2018 – September 2019) AXA Equitabla e Life I Brighthouse Financial: Executive Vice President and Chief Investment Offiff cer (August 2017 – present) MetLife:ff Executive Vice President and Chief Investment Offiff cer, Brighthouse Financial, Inc. (August 2016 – August 2017); Senior Managing Director, Head of Global Portfolio Management (2011 – August 2017) nsurance Company: Senior Director and Counsel (October 2013 – March 2018) 021); Corporr ff 32 Intellectual Property We rely on a combination of contractuat l rights with third parties and copyright, trademark, patent and trade secret laws to establa ish and protect our intellectuat io of trademarks in the U.S. that we consider important in the marketing of our products and services, including for our name, “Brighthouse Financial,” our logo design and taglines. l property. We have establa ished a portfolff Available Inforff mation and the Brighthouse Financial Website y f iliff ngs and corporate governance information. We post filinff Our website is located at www.brighthousefinff ancial.com. We use our website as a routine channel for di stribution of information that may be deemed material for investors, including news releases, presentations, finff ancial information, statutor r they are rr t electronically filed with, or furnished to, the SEC, including our annual and quarterly reports on Forms 10-K and 10-Q and current reports on Form 8-K; our proxy statements; and any amendments to those reports or statements. All such postings and filings are availabla e on the “Investor Relations” portion of our website free of charge. In addition, our Investor Relations website allows interested persons to sign up to automatically receive e-mail alerts when we make filings with the SEC. The SEC’s website, www.sec.gov, contains reports, proxy and inforff mation statements, and other information regarding issuers that file electronically with the SEC. gs on our website as soon as practicable afteff ff We may use our website as a means of disclosing material information and for complying with our disclosure obligations under Regulation Fair Disclosure promulgated by the SEC. These disclosures are included on our website in the “Investor Relations” or “Newsroom” sections. Accordingly, investors should monitor these portions of our website, in addition to following Brighthouse Financial’s news releases, SEC filings, public conference cal ls and webcasts. ff Information contained on or connected to any website referenced in this Annual Report on Form 10-K is not incorporated by reference in this Annual Report on Form 10-K or in any other report or document we fileff with the SEC, and any website references are intended to be inactive textual references only, unless expressly noted. 33 Item 1A. Risk Factors Index to Risk Factors Overview Risks Related to Our Business Economic Environment and Capia tal Markets-Related Risks Risks Related to Our Investment Portfolio nd Legal Risks Regulatory arr Operational Risks Risks Related to Our Separation froff m, and Continuing Relationship with, MetLife Risks Related to Our Securities Page 35 35 45 47 51 53 56 57 34 Overview You should carefulff ly consider the fact ff ors described below, in addition to the other information set forth in this Annual ors are important to understanding the contents of this Annual Report on Form 10-K Report on Form 10-K. These risk fact and our other filinff lowing events occur, our business, financial condition and results of operations could be materially adversely affected. In that event, the trading price of our securities could decline, and you he factors described below can be found in “Note Regarding could lose all or part of your investment. A summary of t Forward-Looking Statements and Summary of Risk Factors.” gs with the SEC. If any of the folff ff rr The materialization of any risks and uncertainties set forth below or identified in “Note Regarding Forward-Looking Statements and Summary of Risk Factors” contained in this Annual Report on Form 10-K and “Note Regarding Forward- gs with the SEC or those that are presently unforeseen or that we currently believe to Looking Statements” in our other filinff be immaterial could result in significant adverse effecff ts on our business, financial condition, results of operations and cash flows. See “Note Regarding Forward-Looking Statements and Summary of Risk Factors.” Risks Related to Our Business rences between actual expexx rience and actuarial assumptions may aa dverserr ly affeff ct our finff ancial results, cs apitali zaii ii Diffei and finff ancial conditdd iontt tion ff Our earnings significantly depend upon the extent to which our actuat l claims experience and benefitff payments on our products are consistent with the assumptions we use in setting prices for our products and establishing liabia lities for future rial estimates of how much we will need to pay forff and claims. Such liabia lities are establa ished based on actuat policy benefitsff future benefits and claims. To the extent that actuat experience differs from the underlying assumptions l claims and benefitsff we used in establa ishing such liabilities, we could be required to increase our liabia lities. We make assumptions regarding policyholder behavior at the time of pricing, including regarding the selection and utilization of the guaranteed options inherent within certain of our products, based in part on expected persistency of the products, which change the probability that a policy or contract will remain in-force froff m one period to the next. Persistency could be adversely affected by a number of factors, including adverse economic conditions, as well as by developments affeff cting policyholder perception of us, including perceptions arising froff m any potential adverse publicity or negative rating agency actions. The pricing of certain of our variable annuity products that contain certain living benefit guarantees is also based on assumptions about utilization rates (i.e., the percentage of contracts that will utilize the benefitff during the contract duration), including the timing of the l and expected benefit utilization. A material first withdrawal. Our earnings may vary brr increase in the valuation of the liabia lity could result to the extent that emerging and actuat l experience deviates from these policyholder option utilization assumptions; in certain circumstances this deviation may impair our solvency. We conduct an rial models that rely on management judgment and annual actuat ata or other relevant sources to ensure update any models where we have credible evidence froff m actuat our price-setting criteria and reserve valuation practices continue to be appropriate. rial review (the “AAR”) of the key inputs into our actuat ased on differences between actuat l experience, industry drr Due to the nature of the underlying risks and the uncertainty associated with the determination of liabia lities forff futuret and claims, we cannot precisely determine the amounts which we will ultimately pay to settle these liabia lities. aterially from the estimated amounts, particularly when those payments may not occur until well e. We evaluate our liabia lities periodically based on accounting requirements (which change from time to time), l experience. If the liabia lities originally policy benefitsff Such amounts may vary mrr into the futur the assumptions and models used to establa ish the liabilities, as well as our actuat establa ished forff future benefit payments and claims prove inadequate, we will be required to increase them. ff An increase in our reserves for any of the above reasons, individually or in the aggregate, could have a material adverse effeff ct on our financial condition and results of operations and our profitaff bia lity measures, as well as materially impact our capitalization, our statutor reff e cash floff w, our ability to receive dividends from our insurance subsidiaries and BRCD, as rr y f well as our liquidity. This could in turt n impact our RBC ratios and our financial strength ratings, which are necessary to u suppor t our product sales, and, in certain circumstances, ultimately impact our solvency. a t See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Policyholder Liabilities.” 35 Guarantees withinii volatility of our resultsll certaitt n oii , rs f oo esult ill n hii ur annuityii products mtt ighegg r risk management costs att ay decrease our earnings,gg decrease our capitaliz ii atiott n, increase the xx nd expos e us to i tt ncii reased market risk Certain of the variable annuity products we offeff r include guaranteed benefits designed to protect contract holders against significant changes in equity markets and interest rates, including GMDBs and GMWBs. While we have GMABs and GMIBs in-force with respect to which we are obligated to perform, we no longer sell new products that include GMABs or GMIBs. We hold liabia lities based on the value of the benefitsff we expect to be payable under such guarantees in excess of the contract holders’ projeo cted account balances. As a result, any periods of significant and sustained negative or low separate account returns, increased equity volatility, or reducd ed interest rates could result in an increase in the valuation of our liabia lities associated with variable annuity guarantees. Additionally, we make assumptions regarding policyholder behavior at the time of pricing, including the selection and utilization of the guaranteed options inherent within our producd ts (e.g., utilization of option to annuitize within a GMIB l experience deviates from product). An increase in the valuation of the liabia lity could result to the extent emerging and actuat these policyholder persistency and option utilization assumptions. We review key actuat rial assumptions used to record our variable annuity liabilities on an annual basis, including the assumptions regarding policyholder behavior. Changes to assumptions based on our AAR in future years could result in an increase in the liabia lities we record for these guarantees. Furthermore, our Shield Annuities are index-linked annuities with guarantees for a defined amount of equity loss protection and upside participation. If the separate account assets consisting of fixff ed income securities are insufficient to t the increased liabia lities resulting froff m a period of sustained growth in the equity index on which the product is based, suppor u we may be required to fund such separate accounts with additional assets from our general account, where we manage the equity risk as part of our overall variable annuity exposure risk management strategy. To the extent policyholder persistency is different from what we anticipate in a sustained period of equity index growth, it could have a negative impact on our liquidity. ff An increase in our variable annuity guarantee liabilities for any of the above reasons, individually or in the aggregate, could have a material adverse effect on our financial condition and results of operations and our profitaff bia lity measures, as reff e cash floff w, our ability to receive dividends from our insurance rr well as materially impact our capitalization, our statutor subsu idiaries and our liquidity. This could in turt n impact our RBC ratios and our financial strength ratings, which are necessary to suppor t our product sales, and, in certain circumstances, ultimately impact our solvency. y f u a t See “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 — Results of Operations — Annual Actuat rial Review” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Industry Trr rends and Uncertainties — Financial and Economic Environment.” Our variable all ii bility me profitaff nnuity ett ee xpos asures or may na ure risk management strategtt ffea egativtt ely all ct our statutory capia tal ii y mgg ay not be effee ctivtt e, may ra ii esult i ll n s ignigg fii cant volatilitll y i tt n oii ur Our variabla e annuity exposure risk management strategy seeks to mitigate the potential adverse effects of changes in capital markets, specifically equity markets and interest rates. The strategy primarily relies on a hedging strategy using ents and, to a lesser extent, reinsurance. We utilize a combination of short-term and longer-term derivative derivative instrumr instruments to have a laddered maturt ion or higher volatility. ity of protection and reduce roll-over risk durd ing periods of market disrupt r a icable regulatory a However, our hedging strategy may not be fully effeff ctive. In connection with our exposure risk management program, uthorities to permit us to increase our hedge limits we may determine to seek the approval of appl consistent with those contemplated by the program. No assurance can be given that any of our requested approvals will be obtained, and, even if obtained, any such appr ovals may be subject to qualifications, limitations or conditions. If our capia tal is depleted in the event of persistent market downturns, we may need to replenish it by contributing additional capital, which we r uses, or purchase additional or more expensive hedging protection. Under our hedging strategy, may have allocated for othe period-to-period changes in the valuation of our hedges relative to the guarantee liabia lities may result in significant volatility in certain of our profitff ability measures, which in certain circumstances could be more significant than has been the case historically. a ff rr In addition, hedging instruments we enter into may not effeff ctively offset the costs of the guarantees within certain of our annuity products or may otherwise be insufficient in relation to our obligations. For example, in the event that derivative counterpar the guaranteed benefits. Furthermore, we are subject to the risk that changes in policyholder behavior or mortality, combined with adverse market events, could produce economic losses not addressed by the risk management techniques employed. rties or central clearinghouses are unable or unwilling to pay, we remain liabla e forff 36 Finally, the cost of our hedging program may be greater than anticipated because adverse market conditions can limit the availabia lity, and increase the costs of, tff he derivatives we intend to employ, and such costs may not be recovered in the pricing of the underlying products we offer. ff e facff The abova tors, individually or in the aggregate, could have a material adverse effect on our financial condition and results of operations and our profitff ability measures, as well as materially impact our capitalization, our statutor reff e cash rr y f flow, our ability to receive dividends from our insurance subsidiaries and BRCD as well as our liquidity. This could in turnt impact our RBC ratios and our financial strength ratings, which are necessary to suppor t our product sales, and, in certain circumstances, ultimately impact our solvency. See “Business — Segments and Corporate & Other — Annuities — Products — Variabla e Annuities” for furff ther consideration of the risks associated with guaranteed benefits, as well as “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Risk Management Strategies — Variable Annuity Exposure Risk Management.” u t Our analyses of so strategie es may ia between actual outcomes and thett nvii olvell signi cenarios and sensitivitie ii ificff ant estimate tt sensitivities calcull lated underdd such scenarios s thatt t we may utilitt zeii in connectiott n with our variable all s based on assumptions and may, tyy hett refoe re, re esult i nnuityii ll n mii risk managea ment ial difdd feff rences atertt As part of our variabla e annuity exposure risk management program, we estimate the impact of various market factors reff e cash floff w, our reserves, or our capital (collectively, the “market under certain scenarios on our variable annuity statutor rr y f sensitivities”). t t l results. Any such estimates, or the absa related to equity or fixed income indices; (ii) actuat Any such market sensitivities may use inputs that are difficff ult to approxi mate and could include estimates that may differff ence thereof, may, among other things, be associated with: (i) materially from actuat basis returns rial assumptions related to policyholder behavior and life expectancy; and (iii) management actions that may occur in response to developing facts, circumstances and experience for which no estimates are made in any market sensitivities. Any such estimates, or the absa ence thereof, may produced sensitivities that could diffeff l outcomes and may, thereforff e, influence our actions in connection with our exposure risk management program. r materially from actuat a u The actuat l effect of changes in equity markets and interest rates on the assets suppor ting our variable annuity contracts tors which and corresponding liabia lities may vary materially from the estimated market sensitivities dued l policyholder behavior being different from may include, but are not limited to: (i) changes in our hedging program; (ii) actuat our assumptions; and (iii) underlying fund performance being differe nt from our assumptions. In addition, any market sensitivities are valid only as of a particular date and may not factor in the possibility of simultaneous shocks to equity markets, interest rates and market volatility. Furthermore, any market sensitivities could illustrate the estimated impact of the indicated shocks occurring instantaneously, and, thereforff e, may not give effeff ct to rebalancing over the course of the shock event. The estimates of equity market shocks may refleff ct a shock of the same magnitude to both domestic and global equity markets, while the estimates of interest rate shocks may refleff ct a shock to rates at all durd ations (a parallel shift in the yield curve). Any such instantaneous or equilateral impact assumptions may result in estimated sensitivities that could differ materially from the actual impacts. to a number of facff ff ff Finally, no assurances can be given that the assumptions underlying any market sensitivities can or will be realized. Our liquidity, statutory capitalization, financial condition and results of operations could be affected by a broad range of capital markets scenarios, which, if they adversely affect account values, could materially affeff ct our statutor reff e cash floff w and our rr reserving requirements, and by extension, could materially affeff ct the accuracy of estimates used in any market sensitivities. y f t We may na result in net incii ome volatilitt ot have suffiu cient assets t tyii tt o mtt eet our futur ff e ULSUU G policll yhc older obligll atiott ns, as nd changes in i ii ntii ertt est ratestt may u y Crr t Statutor rial approach based upon The primary market risk associated with our ULSG block is the uncertainty around the futur e levels of U.S. interest rates and bond yields. To help ensure we have suffiff cient assets to meet future ULSG policyholder obligations, we have employed ash Flow Testing (“ULSG CFT”) to set our ULSG asset requirement target for an actuat BRCD, which reinsures the majority of the ULSG business written by certain of our insurance subsidiaries. For the business retained by our insurance subsidiaries, we set our ULSG asset requirement target to equal the actuat rially determined statutory reserves, which, taken together with our ULSG asset requirement target for BRCD, comprises our total ULSG asset t or lower than requirement target (“ULSG Target”). Under the ULSG CFT approa current levels, and our actuat rial assumptions include a provision for adverse deviation. These underlying assumptions used in ULSG CFT include scenarios that are more conservative than those required under GAAP, which assumes a long-term mean reversion of interest rates and best estimate actuat rial assumptions without additional provisions for adverse deviation. ch, we assume that interest rates remain flaff a ff t 37 We seek to mitigate exposure to interest rate risk associated with these liabia lities by holding invested assets and interest rate derivatives to closely match our ULSG Target in different interest rate environments. Our ULSG Target is sensitive to the actuat l and future expected level of long-term U.S. interest rates. If interest rates falff l, our ULSG Target will likely increase, and conversely, if interest rates rise, our ULSG Target will likely decline. As part of our interest rate hedging program, we use interest rate swaps, swaptions and interest rate forff wards to protect our statutory capitalization froff m increases in the ULSG Target in lower interest rate environments. This risk mitigation strategy may negatively impact our GAAP stockholders’ equity and net income when interest rates rise and our ULSG Target likely declines, since our reported ULSG liabia lities under GAAP are largely insensitive to actuat tions in interest rates. The ULSG liabia lities under GAAP reflect changes in interest rates only when we revise our long-term assumptions due to sustained changes in the market interest rates, such as when we increased our mean reversion rate froff m 3.50% to 3.75% in the third quarter of 2023 following our AAR. l fluff ctuat t ents may not effeff ctively offseff Our interest rate derivative instrumrr t the costs of our ULSG policyholder obligations or may otherwise be insuffiff cient. In addition, this risk mitigation strategy may fail to adequately cover a scenario under which our obligations are higher than projeo cted and may be required to sell investments to cover these increased obligations. If our liquid investments are depleted, we may need to sell higher-yielding, less liquid assets or take other actions, including utilizing contingent liquidity sources or raising capital. The above factors, individually or in the aggregate, could have a material adverse effect on our financial condition and results of operations, or our profitaff bia lity measures, as well as materially reff e cash floff w, our ability to receive dividends from our insurance subsidiaries and rr impact our capitalization, our statutor BRCD and our liquidity. This could in turt n impact our RBC ratios and our financial strength ratings, which are necessary to suppor t our product sales, and in certain circumstances could ultimately impact our solvency. See “Management’s Discussion u and Analysis of Financial Condition and Results of Operations — Risk Management Strategies — ULSG Market Risk Exposure Management.” y f t Changes in aii stattt emen ts tt ccountintt g standards dd issued by the FinFF ancial Accountintt g StaSS ndards dd Board may adverserr ly affeff ct our finff ancial a Our finff ancial statements are subject to the appl ication of GAAP, which is periodically revised by the Financial Accounting Standards Board (“FASB”). Accordingly, from time to time, we are required to adopt new or revised accounting standards or interprr etations issued by the FASB. For example, the FASB issued an accounting standards upda te that resulted in significant changes to the accounting forff long-duration insurance contracts (“LDTI”), which became effective on January 1, 2023. The adoption of LDTI had a significant impact on our financial statements, including total stockholders’ equity. The impact of accounting pronouncements that have been issued but not yet implemented is disclosed in our reports filed with the SEC. The required adoption of futur e accounting standards could adversely affect our financial statements. See Note 1 of the Notes to the Consolidated Financial Statements. u ff ngrade or a potentt A dowdd materiallyll adverserr ly affeff ct our finff ancial conditiodd n and results of operations tial downgrade in our finff ancial strength or creditdd ratingsn ll could r esult i ll n aii loss of busineii ss and Downgrades in our financial strength ratings or credit ratings or changes to our ratings outlooks could have a material adverse effect on our financial condition and results of operations in many ways, including: • • • • • • • • • • • reducd ing new sales of insurance products and annuity products; losing existing distributors or negatively impacting our ability to establa ish relationships with new distributors; adversely affecting our relationships with independent sales intermediaries; increasing the number or amount of policy surrenders and withdrawals by contract holders and policyholders; requiring us to reduce prices for many of our products and services to remain competitive; providing termination rights forff the benefitff of our derivative instrumr ent counterpar rties; providing termination rights to cedents under assumed reinsurance contracts; adversely affecting our ability to obtain reinsurance at reasonable prices, if at all; subjecting us to potentially increased regulatory srr crutr iny; limiting our access to capital markets or other contingent funding sources; and increasing our cost of capia tal, which could adversely affect our liquidity. 38 Credit rating agencies may continue to review and adjust their ratings for the companies that they rate, including us. The s a whole and may change our credit rating based on their overall credit rating agencies also evaluate the insurance industry arr view of our industry.rr See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — The Company — Rating Agencies” for additional information regarding our financial strength ratings and credit ratings, including current ratings and outlooks. Our indii conditiodd ebdd tedness and the degdd ree to wtt n and results of operations hich we are levll eraged could cause a material adverserr effeff ct on our finff ancial We had $3.2 billion of total long-term consolidated indebtedness outstanding at December 31, 2023, consisting of debt securities issued to investors. We are required to service this indebtedness with cash at BHF and with dividends and other intercompany cash floff ws from our subsu idiaries. The funds needed to service our indebtedness, as well as to make required dividend payments on our outstanding preferred stock, may not be availabla e to meet any short-term liquidity needs we may have, to invest in our business, to pay any potential dividends on our common stock or to carry out any share or debt repurchases that we may undertake. ff ors that are beyond our control. We may not generate sufficient funds Overall, our ability to generate cash is subject to general economic, finff ancial market, competitive, legislative, regulatory,rr client behavior-related and other fact to service our indebtedness and meet our business needs, such as funding working capital or the expansion of our operations. In addition, our leverage could put us at a competitive disadvantage compared to our competitors that are less leveraged. Our leverage could also impede our ability to withstand downturns in our industry orr r the economy, in general, or lead to actions by rating agencies. See “— 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.” See also “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — The Company — Primary Sources of Liquidity and Capital” for more details about our indebtedness. Limitations on our operations and use of funds resulting froff m our indebtedness could have a material adverse effect on our financial condition and results of operations. ff luii re to comply with th Our faiff our control, cll ould result in an event of do results of operations or cash flows e agra eements relating to o efdd auff n ll ii lt that could mll ur outstandindd g indii atertt ially and adverserr ebdd tedness, includindd g as a result of events beyoe nd ial conditioii n, ly affeff ct our business, financ ii If there were an event of default under any of the agreements governing our outstanding indebtedness, we may not be lted indebtedness could cause all amounts outstanding with able to incur additional indebtedness and the holders of the defauff respect to that indebtedness to be due and payable immediately. Our $1.0 billion senior unsecured revolving credit facility maturing April 15, 2027 (the “Revolving Credit Facility”) and our reinsurance finff ancing arrangement contain certain administrative, reporting, legal and financial covenants, including, in the case of the Revolving Credit Facility, requirements to maintain a specified minimum consolidated net worth and to maintain a ratio of indebtedness to total capitalization not in excess of a specified percentage, as well as limitations on the dollar amount of indebtedness that may be incurred by our subsu idiaries. Such covenants could restrict our operations and use of funds. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capia tal Resources — The Company.” Failure to comply with such covenants or the conditions to borrowings, as well as the failure of lenders to fund their lending commitments in the amounts provided for unde r the terms of the Revolving Credit Facility or our reinsurance finff ancing arrangement (whether due to insolvency, illiquidity or other reasons), would restrict our ability to access the Revolving Credit Facility and our reinsurance finff ancing arrangement when needed and, consequently, could have a material adverse effect on our financial condition, results of operations and liquidity. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — The Company — Primary Sources of Liquidity and Capital — Credit and Committed Facilities” for a discussion of our credit facilities and committed facff ilities, including the Revolving Credit Facility. ff Our abia lity to make payments on and to refinance our existing indebtedness, as well as any futur e indebtedness that we may incur, will depend on our ability to generate cash in the futff urt e froff m operations, finff ancings or asset sales. Our ability to generate cash to meet our debt obligations in the futff urt e is sensitive to capital markets returns, primarily due to our variable annuity business. Overall, our ability to generate cash is subju ect to general economic, finff ancial market, competitive, legislative, regulatory, client behavior-related, and other factors that are beyond our control. ff The lenders holding our indebtedness could also accelerate amounts dued in the event that we default, which could potentially trigger a default or acceleration of the maturity of our other indebtedness. There can be no assurances that our ly repay borrowings under our outstanding debt instruments if accelerated upon assets or cash floff w would be suffiff cient to fulff lt. Any failure to do so could, in turn, have a material adverse effect on our ability to continue to operate as a an event of defauff 39 going concern. If we are not able to repay or refinff ance our indebtedness as it becomes dued , we may be forced to take ing, limited new business investment, disadvantageous actions, including significant business and legal entity restructurt selling assets or dedicating an unsustainable level of our cash flow from operations to the payment of principal and interest on our indebtedness, or any combination of such actions. In addition, our ability to withstand competitive pressures and to react to changes in the insurance industry crr ould be impaired. Further, if we are unable to repay, refinff ance or restructurt e our secured indebtedness, the holders of such indebtedness could proceed against any collateral securing that indebtedness. Reinsurance may not be availabl ll e,ll affoff rdabldd e oll r adequate t tt o ptt rotect us againsii t losll ses ff ff w business. The premium rates and other fees As part of our overall risk management strategy, our insurance subsidiaries purchase reinsurance from third-party reinsurers for certain risks we underwrite. While reinsurance agreements generally bind the reinsurer for the life of the business reinsured at generally fixff ed pricing, market conditions beyond our control determine the availabia lity and cost of the reinsurance protection for ne that we charge for our products are based, in part, on the assumption that reinsurance will be availabla e at a certain cost. Some of our reinsurance contracts contain provisions a number of rate that limit the reinsurer’s ability to increase rates on in-force business; however, some do not. We have faced e. There can be no increase actions on in-force business in recent years and may face additional increases in the futur assurance that the outcome of any futur e rate increase actions would not have a material effect on our financial condition and results of operations. If a reinsurer raises the rates that it charges on a block of in-force business, in some instances, we will not be able to pass the increased costs on to our customers and our profitaff bia lity will be negatively impacted as a result. ing the reinsured business, which would result in a need to a Additionally, such a rate increase could result in our recaptur maintain additional reserves, reduce reinsurance receivables and expose us to greater risks. Accordingly, we may be forcff ed to incur additional expenses for reinsurance or may not be able to obtain suffiff cient reinsurance on acceptabla e terms, which could adversely affect our ability to write future business or result in an increase in the amount of risk that we retain with respect to those policies we issue. See “Business — Reinsurance Activity.” ff ff ff rr If the countertt par busineii adverserr ties to our reinsur ii ance or indemnificff atiott n arrangements or to the derdd ivativtt es we use to htt dd edge our e had sought to mitigate,tt which could materiallyll efdd auff ss risks dkk ly affeff ct our finff ancial conditiodd lt or fail to perforff m,rr xpos we may be e ee a peo rations f oo n and results ott ed to risks wkk We use reinsurance, indemnification and derivatives to mitigate our risks in various circumstances. In general, reinsurance, indemnificff ation and derivatives do not relieve us of our direct liabia lity to our policyholders, even when a third party is liabla e to us. Accordingly, we bear credit risk with respect to our reinsurers, indemnitors, counterpar rties and central rty’s or central clearinghouse’s insolvency, inability or unwillingness clearinghouses. A reinsurer’s, indemnitor’s, counterpar to make payments under the terms of reinsurance agreements, indemnity agreements or derivative agreements with us or inability or unwillingness to return collateral could have a material adverse effect on our financial condition and results of operations. We cede a large block of long-term care insurance business to certain affiff liates of Genworth, which results in a significant concentration of reinsurance risk. The Genworth reinsurers’ obligations to us are secured by trust accounts and Citigroup has agreed to indemnify uff losses and certain other payment obligations we might incur with respect to this business. Notwithstanding these arrangements, if the Genworth reinsurers become insolvent and the amounts in the trust accounts are insufficient to pay their obligations to us, it could have a material adverse effect on our financial condition and results of operations. See “Business — Reinsurance Activity — Unaffiliated Third-Party Reinsurance.” s forff r In addition, we use derivatives to hedge various business risks. We enter into a variety of OTC-bilateral and OTC- cleared derivatives, including options, forff wards, interest rate, credit default and currency swapsa . See “Management’s rties, clearing Discussion and Analysis of Financial Condition and Results of Operations — Derivatives.” If our counterparr brokers or central clearinghouses fail or refuse to honor their obligations under these derivatives, our hedges of the related risk will be ineffeff ctive. Such failure could have a material adverse effect on our financial condition and results of operations. We may na tt o t ake tt ot be able t cost increases and new finff ancingii ll creditdd for reinsur ii ay be subject to limitedtt market capac ff nsur ance, our statutory life i ii ity a s mgg ance reinsurance finff ancingii s mgg ay be subject to We currently utilize reinsurance and capital markets solutions to mitigate the capital impact of the statutory reserve requirements forff roducts subju ect to several of our products, including, but not limited to, our level premium term life pff Regulation XXX and ULSG subjeb ct to Guideline AXXX. Our primary solution involves BRCD, our reinsurance subsidiary. See “Business — Reinsurance Activity — Affiliated Reinsurance.” BRCD obtained statutory reinsurance finff ancing through a funding structurt e involving a single finff ancing arrangement suppor ted by a pool of highly rated third-party reinsurers. In u connection with this financing arrangement, BRCD, with the explicit permission of the Delaware Commissioner, has included the value of credit-linked notes as admitted assets. See Notes 12 and 13 of the Notes to the Consolidated Financial 40 Statements for a description of the financing arrangement and this associated permitted practice. The finff ancing facility matures in 2039, and we may thereforff e need to refinance this facff ility in the futur e. ff The NAIC adopted AG 48, which regulates the terms of capta ive insurer arrangements that are entered into or amended in certain ways afteff r December 31, 2014. See “Business — Regulation — Insurance Regulation — Captive Reinsurer Regulation.” There can be no assurance that, in light of AG 48, future rules and regulations, or changes in interprr etations by state insurance departments, we will be able to continue to effiff ciently implement these arrangements, nor can there be assurances that future capacity for these arrangements will be availabla e in the marketplt ace. To the extent we cannot continue to effiff ciently implement these arrangements, our statutor apitalization, financial condition and results of operations, as well as our competitiveness, could be adversely affected. y crr t Factortt s arr ffea ctintt g our competititt veness may adverserr ly affeff ct our market share and profio taii bilityii ff ors, including service, product feaff We believe competition among insurance companies is based on a number of fact tures, scale, price, actuat l or perceived financial strength, claims-paying ratings, credit ratings, e-business capabilities and name recognition. We face intense competition froff m a large number of other insurance companies, as well as non-insurance financial services companies (e.g., banks, private equity firms, broker-dealers and asset managers). In addition, certain of our distributors also currently offeff e. Some of our r their own competing products or may offer competing products in the futur competitors offeff r a broader array of products, have more competitive pricing or, with respect to other insurance companies, have higher claims-paying abia lity and finff ancial strength ratings. Some may also have greater financial resources with which to compete. In some circumstances, national banks that sell annuity products of life i nsurers may also have a pre-existing customer base for finff ancial services products. These competitive pressures may adversely affect the persistency of our products, as well as our ability to sell our products in the futff urt e. In addition, new and disrupt ive technologies may present tors or otherwise, we are unable to generate a suffiff cient returt n on insurance competitive risks. If, as a result of competitive facff policies and annuity products we sell in the futur e, we may stop selling such policies and products, which could have a material adverse effect on our financial condition and results of operations. See “Business — Competition.” ff ff ff r We have limited control over many of our costs. For example, we have limited control over the cost of unaffiliated third- equirements, and our cost to access capital or finff ancing. There party reinsurance, the cost of meeting changing regulatory r can be no assurance that we will be able to achieve or maintain a cost advantage over our competitors. If our cost structurt e increases and we are not able to achieve or maintain a cost advantage over our competitors, it could have a material adverse effeff ct on our ability to execute our strategy, as well as on our financial condition and results of operations. If we hold t credit ratings that are commensurate with our business strategy, over subsu tantially more capia tal than is needed to suppor time, our competitive position could be adversely affected. u rr In addition, the highly regulated nature of our business, as well as the legislative or other changes affecting the regulatory ff nsurance industry,rr iness, may, over time, affect our competitive position within the annuities and life i ff environment for our bus and within the broader financial services industry.rr See “— Regulatory arr nd Legal Risks” and “Business — Regulation.” ee We may ea xpe rience diffi i culty in marketintt g and distri ii bui ting pn roducts t tt hrtt ough our distrib dd utiott n channels We distribute our products through a variety of third-party distribution channels. Our agreements with our third-party distributors may be terminated by either party with or without cause. We may periodically renegotiate the terms of these agreements, and there can be no assurance that such terms will remain acceptabla e to us or such third parties. If we are unable to maintain our relationships, our sales of individual insurance, annuities and investment products could decline, and our financial condition and results of operations could be materially adversely affected. Our distributors may elect to suspend, alter, reduce or terminate their distribution relationships with us for various reasons, including changes in our distribution strategy, adverse developments in our business, adverse rating agency actions, or concerns about market-related risks. We are also at risk that key distribution partners may merge, consolidate, change their business models in ways that affeff ct how our products are sold, or terminate their distribution contracts with us, or that new distribution channels could emerge in the in marketplt ace, any of which could adversely impact the effectiveness of our distribution efforts. Also, if we are unsuccessfulff attracting and retaining key internal associates who conduct our business, including wholesalers, our sales could decline. An interruptu ion or significant change in certain key relationships could materially affeff ct our ability to market our products and could have a material adverse effect on our financial condition and results of operations. In addition, we rely on a core number of our distributors to produce the majority of our sales. If one or more such distributors were to terminate its relationship with us or reducd e the amount of sales which it produces for us, our results of operations could be adversely affeff cted. An increase in bank and broker-dealer consolidation activity could increase competition forff access to distributors, result in greater distribution expenses and impair our ability to market products through these channels. Consolidation of enegotiate the terms of any distributors or other industry crr existing selling agreements to terms less favorable to us. hanges may also increase the likelihood that distributors will try to r rr 41 Because our products are distributed through unaffiliated firms, we may not be able to monitor or control the manner of their distribution despite our training and compliance programs. If our products are distributed by such firms in an inappropriate manner, or to customers forff whom such products are not in the best interest, we may suffeff r reputational and other harm to our business. We compete with major, well-establa ished stock and mutual life i nsurance companies and non-insurance finff ancial ings, and services companies (e.g., banks, private equity firms, broker-dealers and asset managers) in all of our product offerff our distributors sell such competitors’ products along with our products. In addition, certain of our distributors currently offer ff their own competing products or may offer competing products in the futur s in e. If our distributors concentrate their effort selling their firm’s own products or our other competitors’ products instead of ours, our sales could be adversely impacted. ff ff ff luii The faiff parties use to provide sdd re of third parties to provide vdd arious services to us, os r any failure of the practictt es and procedures that these thitt rdii ervices to us, cs ould have a matertt ial adverserr effeff ct on our business rr A key part of our operating strategy is to leverage third parties to deliver certain services important to our business, rial services. There can be no assurance that including administrative, operational, technology, financial, investment and actuat the services provided to us by third parties (or their suppliers, vendors or subcontractors) will be sufficient to meet our operational and business needs, that such third parties will continue to be able to perform their func tions in a manner s, that the practices and procedurd es of such third parties will continue to enable them to adequately manage satisfactory to u r that any remedies availabla e under these third-party arrangements will be any processes they handle on our behalf, off sufficient in the event of a dispute or nonperformance. In addition, as we transition to new third-party service providers and convert certain administrative systems or platforms, certain issues have occurred in the past and may arise again in the futur e. There can be no assurance that in connection with any such conversions, transitions to new third-party service providers, or in ractor), connection with any of the services provided to us by third parties (or such third-party’s supplier, vendor or subcont we will not incur unanticipated expenses or experience other economic or reputational harm, service delays or interruptu ions, or be subju ect to litigation or regulatory i on our business and financial results. nvestigations and actions, any of which could have a material adverse effect u ff rr ff ff u ractor) faiff ier, vendor or subcont Furthermore, if a third-party provider (or such third-party’s supplu ls to provide required services due to the loss of key personnel or otherwise, or suffers ls to meet contractual requirements (e.g., compliance with applicable laws and regulations or fails to provide material information on a timely basis), faiff a cyberattack or other security breach, then, in each case, we could suffeff r economic and reputational harm that could have a material adverse effect on our business and financial reporting. In addition, such failures could result in the loss of key distributors, impact the accuracy of our finff ancial reporting, or subju ect us to litigation or regulatory i nvestigations and actions, which could have a material adverse effect on our business, financial condition and results of operations. See “— Risks Related to Our Business — We may experience difficulty in marketing and distributing products through our distribution channels” and “— Operational Risks — Any failure in cyber- or other information security systems, as well as the occurrence of events unanticipated in Brighthouse Financial’s or our third-party service providers’ disaster recovery systems and business continuity planning could result in a loss or disclosure of confidff ential information, damage to our reputation and impairment of our ability to conduct business effectively.” ff rr ff t Similarly, if any third-party provider (or such third-party’s supplu iency in internal controls, determines that its practices and procedures used in providing services to us (including administering any of our policies or managing any of our investments) require review, or otherwise fails to provide services to us in accordance with appropriate standards, we could incur expenses and experience other adverse effects as a result. In such situations, we may be unable to resolve any issues on our own without assistance from the third-party provider, and we could have limited ability to influff ence the speed and effectiveness of that resolution. ractor) experiences any deficff ier, vendor or subcont u In addition, from time to time, certain third parties have brought to our attention practices, procedurd es and reserves with respect to certain products they administer on our behalf that require further review. While we do not believe, based on the information made available to us to date, that any of the matters brought to our attention will require material modifications to reserves or will have a material effect on our business and financial reporting, we are reliant on our third-party service providers to provide further inforff mation and assistance with respect to those products. There can also be no assurance that such matters will not require material modifications to reserves or have a material effect on our financial condition or results of operations in the futur e, or that our third-party service providers will provide further information and assistance. ff It may be diffiff cult, disruptu ive and costly for us to replace some of our third-party providers in a timely manner if in the future they were unwilling or unable to provide us with the services we require (as a result of their finff ancial or business conditions or otherwise), which could have a material adverse effect on our business and financial results. In addition, if a 42 third-party provider raises the rates that it charges us for its services, we may not be able to pass the increased costs onto our customers and our profitff ability may be negatively impacted as a result. Changes in oii tax aaa ssets, cs ould adverserr ly affeff ct our finff ancial conditdd iott n or resultsll of operations ur defee rred incii ome tax as tt sets or liabiliii tiii es, is ncii ludingii changes in oii ii ur ability to realizll e our defee rred incii ome ff Deferred income tax represents the tax effeff ct of the differe nces between the book and tax bases of assets and liabia lities. Deferred income tax assets are assessed periodically by management to determine whether they are realizable. Factors in management’s determination include the performance of the business, including the abia lity to generate future taxable income. If, based on availabla e inforff mation, it is more likely than not that the deferred income tax asset will not be realized, then a valuation allowance must be established with a corresponding charge to our profitaff bia lity measures. Such charges could have a material adverse effect on our financial condition and results of operations. Changes in the statutor ax rate or other tax law rr y t changes could also affect the value of our deferred income tax assets and may require a write-off of some of those assets. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Summary of Critical Accounting Estimates.” t As a holdingii company,n BHF dHH epdd ends on the abilitii y ott f io tsii subsidiaries to pay dividends BHF is a holding company forff its insurance subsidiaries and BRCD and does not have any significant operations of its own. We depend on the cash at the holding company as well as dividends or other capital infloff ws from our subsu idiaries to meet our obligations and to pay dividends on our preferred and common stock, if any. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — The Parent Company — Liquidity and Capital — Statutory Capia tal and Dividends.” If the cash BHF receives from its subsu idiaries is insufficient forff it to fund its debt-service and other holding company obligations, BHF may be required to raise capital through the incurrence of indebtedness, the issuance of additional equity or the sale of assets. Our ability to access funds through such methods is subju ect to prevailing market conditions and there can be no assurance that we will be abla e to do so. See “— Economic Environment and Capia tal Markets-Related Risks — Adverse capital and credit market conditions may significantly affeff ct our ability to meet liquidity needs and our access to capital.” ff a ividend subject to regulatory arr pprova The payment of dividends and other distributions by our insurance subsidiaries is regulated by insurance laws and regulations. In general, dividends in excess of prescribed limits require insurance regulatory arr l. In addition, insurance a pprova regulators may prohibit the payment of dividends or other payments by our insurance subsidiaries if they determine that the payment could be adverse to the interests of our policyholders or contract holders. Any requested payment of dividends by our insurance subsidiaries in excess of their respective ordinary drr ividend capacity would be considered an extraordinary dividend subju ect to prior approval by the Delaware DOI, the Massachusetts Division of Insurance, or the NYDFS, as applicable. Any payment of dividends by Brighthouse Life I nsurance Company in 2024 would be considered an ff l. See Note 13 of the Notes to the Consolidated Financial Statements forff extraordinary drr a discussion of the appl ividend capacity, as well as the a circumstances under which regulatory arr oval would be required. Furthermore, any dividends by BRCD are subject to the a ppr approval of the Delaware DOI. The payment of dividends and other distributions by our insurance subsidiaries is also including those described in the Risk Factors above influenced by business conditions, as well as rating agency l described herein will be received. See “— Regulatoryrr a pprova considerations. There can be no assurance that any regulatory arr and Legal Risks — A decrease in the RBC ratio of our insurance subsidiaries (as a result of a reducd tion in statutory capital and surplus or an increase in the required RBC capia tal charges), or a change in the rating agency proprietary capital models r for our insurance subsidiaries, could result in increased scrutiny by insurance regulators and rating agencies and could have a material adverse effect on our financial condition and results of operations.” See also “Business — Regulation — Insurance Regulation” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capia tal Resources — The Parent Company — Liquidity and Capital — Statutor icable dividend restrictions and certain of our subsu idiaries’ ordinary drr apital and Dividends.” y Crr a t Riskii s akk ssociatedtt withii ll clima te change could all dverserr ly affeff ct our business, financ ii ial conditioii n and results of operations. Climate change could pose a systemic risk to the global finff ancial system. Climate change could increase the frequency s to reducd e greenhouse gas emissions and limit global and severity of weather-related disasters and pandemics. Effort significantly warming could impact global investment asset valuations. There is also a risk that some asset sectors could faceff e performance of higher costs and a disorderly adjud stment to asset values leading to an adverse impact on the value and futur r other responses. Climate change could also impact our investment assets as a result of climate change or regulatory orr counterpar rties. Increasing scrutiny and evolving expectations from investors, customers, regulators, and other stakeholders regarding climate change matters risks could adversely affect our business, financial condition and results of may adversely affect our reputation. The above operations. rties and other third parties, including, among others, reinsurers and derivative counterpar a ff ff 43 Publicll conditiodd healthll n, or results ott crises, es f oo xtee rett me mortaltt peo rations, as well as the economy in general ll events or simil ar oc ityll ii currences may aa dverserr ly impact our busineii ii ss, financ ial ions to commerce, the health system, and the fooff Publu ic health crises, extreme mortality events or other similar occurrences could have a major impact on the global economy and the finff ancial markets or the economies of particular countries or regions, including market volatility and disrupt d supply, as well as reduced economic activity and labor shortages. In r addition, a public health crisis that affeff cted our employees or the employees of our distributors or of other companies with which we do business, including providers of third-party services, could disrupt our bus iness operations. Furthermore, the u value of our investment portfolff io could be negatively impacted. See “— Risks Related to Our Investment Portfolio — Ongoing military actions, the continued threat of terrorism, climate change as well as other catastrophic events may adversely io and the level of claim losses we incur.” affeff ct the value of our investment portfolff Economic uncertainty resulting froff m a public health crisis or similar event could impact sales of certain of our producd ts, and we may decide or otherwise be required to provide relief to customers adversely affected by such an event, similar to the relief we provided in connection with the COVID-19 pandemic. ff In addition, our life i nsurance operations are exposed to the risk of catastrophic mortality, such as a pandemic or other event that causes a large number of deaths. For example, the COVID-19 pandemic and several significant influff enza pandemics have occurred in the last century. The likelihood, timing, and severity of a futur e pandemic that may impact our policyholders cannot be predicted. Moreover, the impact of climate change could cause changes in the frequency or severity of outbreaks of certain diseases. Circumstances resulting from a public health crisis or similar event could affect the incidence of claims, utilization of benefits, lapses or surrenders of policies and payments on insurance premiums, any of which could impact the revenues and expenses associated with our products. ff Consistent with industry prr ractice and accounting standards, we establa ish liabia lities forff claims arising froff m a catastrophe only after assessing the probable losses arising from the event. We cannot be certain that the liabia lities we have established will be adequate to cover actuat l claim liabia lities. A catastrophic event or multiple catastrophic events could have a material adverse effect on our business, financial condition and results of operations. Conversely, improvements in medical care and xpectancy can cause our assumptions with respect to longevity, which we other developments which positively affect life eff use when we price our products, to become incorrect and, accordingly, can adversely affect our financial condition and results of operations. ll We could f dispii ositions acff e difdd fiff culties, us nforff eseen liabilitie ii s, asset impii airmii ents or rating an ctiott ns arising froff m business acquisiii tioii ns or We may engage in dispositions or acquisitions of businesses. Such activity exposes us to a number of risks arising fromff (i) potential diffiff culties achieving projected financial integration or results, deconsolidation; (ii) unforff eseen liabia lities or asset impairments; (iii) the scope and durd ation of rights to indemnificff ation forff losses; (iv) the use of capital which could be used forff equirements rr that could impact our operations or capital requirements; (vii) changes in statutory accounting principles or GAAP, practices or policies; and (viii) certain other risks specifically arising froff m activities relating to a legal entity reorganization. es; (v) rating agency reactions; (vi) regulatory r including the costs and benefitsff other purpos of rr Our abia lity to achieve certain financial benefitsff we anticipate from any acquisitions of businesses will depend, in part, ly integrate such businesses in an efficient and effeff ctive manner. There may be liabilities or upon our ability to successfulff asset impairments that we fail, or are unable, to discover in the course of performing acquisition-related due di ligence reviews. Furthermore, even for obligations and liabia lities that we do discover durd ing the due diligence process, neither the valuation adjustment nor the contractuat l protections we negotiate may be suffiff cient to fulff ly protect us from losses. d such operations and affect our ability to recruirr We may froff m time to time dispose of business or blocks of in-force business through outright sales, reinsurance transactions or by alternate means. After a disposition, we may remain liabla e to the acquirer or to third parties forff certain losses or costs arising froff m the divested business or on other bases. We also may not realize the anticipated profit on a disposition or incur a loss on the disposition. In anticipation of any disposition, we may need to restructurt e our operations, which could disruptu t key personnel needed to operate and grow such business pending the completion of such transaction. In addition, the actions of key employees of the business to be divested could the success of such disposition as they may be more focused on obtaining employment, or the terms of their adversely affect ff transition services or tax employment, arrangements related to any such disposition could furff rations and may impose restrictions, liabia lities, losses or indemnificff ation obligations on us. Depending on its particulars, a disposition could increase our exposure to certain risks, such as by decreasing the diversification of our sources of revenue. Moreover, we may be unable to timely dissolve all l relationships with the divested business in the course of the proposed transaction, which may materially adversely contractuat affeff ct our ability to realize value from the disposition. Such disposition could also adversely affect our internal controls and than on maximizing the value of the business to be divested. Furthermore, ther disrupt our ope r 44 procedurd es and impair our relationships with key customers, distributors and supplu iers. An interruptu ion or significant change in certain key relationships could materially affeff ct our ability to market our products and could have a material adverse effect on our business, financial condition and results of operations. ff scrutinyii Increasingii enviroii nmental, social and governance mattett rs may aa busineii ss and resultsll of operations iott ns from investortt dverserr and evolving expe ctattt ee customtt s,rr ly affeff ct our reputattt rr ers, re gue lators and other stake iott n or otherwiseii tt holderdd s r rr egardingii ly impacm t our adverserr There is increasing scrutr iny and evolving expectations from investors, customers, regulators and other stakeholders on environmental, social and governance (“ESG”) practices and disclosures, including those related to environmental stewardship, climate change, diversity, equity and inclusion, racial justice and workplk ace conduct. Regulators have imposed t with one another and impose and likely will continue to impose ESG-related rulr es and guidance, which may conflicff additional costs on us or expose us to new or additional risks. In view of evolving regulatory err xpectations, growing investor interest, and changing consumer preferences and social expectations, ESG issues can represent emerging or unforeseen risks to our long-term operating performance and finff ancial condition. Moreover, certain organizations that provide information to ch to different ESG matters, and unfavff orable investors have developed ratings for evaluating companies on their approa ratings of the Company or our industry mrr ay lead to negative investor sentiment and the diversion of investment to other companies or industries. a Economic Environment and Capital Markets-Related Risks cult conditdd iott ns in the capitaii l markerr ts and thett U.S. economy generally persist or are perceived to persist, t tt hett y me ay If diffi i materiallyll adverserr ly affeff ct our business and results of operations Our business and results of operations are materially affeff cted by conditions in the capital markets and the U.S. economy generally, as well as by the global economy to the extent it affeff cts the U.S. economy. In addition, while our operations are entirely in the U.S., we have forff eign investments in our general and separate accounts and, accordingly, conditions in the global capital markets can affect the value of our general account and separate account assets, as well as our financial results. Actual or perceived stressed conditions, volatility and disruptu ions in financial asset classes or various capital markets can io and our benefit and have an adverse effect on us, both because we have a large and well-diversified investment portfolff claim liabia lities are sensitive to changing market factors, including interest rates, credit spreads, equity and commodity prices, and volatility of capital derivative prices and availability, real estate markets, foreign currency exchange rates and the returns markets. In an economic downturn characterized by rapia d increases in inflation, higher unemployment, lower famff ily income, ts could be ate earnings, lower business investment or lower consumer spending, the demand for our produc lower corpor adversely affected as customers are unwilling or unable to purchase them. In addition, we may experience an elevated incidence of claims, adverse utilization of benefitff s relative to our best estimate expectations and lapses or surrenders of policies. Furthermore, our policyholders may choose to defer paying insurance premiums or stop paying insurance premiums altogether. Such adverse changes in the economy could negatively affect our earnings and capitalization and have a material adverse effect on our financial condition, results of operations and our ability to receive dividends from our insurance subsu idiaries and BRCD. In addition, adverse economic conditions could have a material impact on our investment portfolff io. rr ff t Significant market volatility in reaction to geopolitical risks, changing monetary policy, trade disputes and uncertain . Increased market volatility may affect the performance of the various fiscal policy may exacerbate some of the risks we faceff asset classes in which we invest, as well as separate account values. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Investments — Current Environment” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Industry Trr rends and Uncertainties — Financial and Economic Environment.” Extreme declines or shocks in equity markets, as well as sustained stagnation and persistent low interest rates, could cause us to incur significant capital or operating losses dued to, among other reasons, the impact of guarantees related to our annuity products, including increases in liabia lities, increased capia tal requirements, or collateral requirements. Furthermore, periods of sustained stagnation in equity and bond markets, which are characterized by multiple years of low annualized total returns impacting the growth in separate accounts or low level of U.S. interest rates, may materially increase our insurance to inherent market return guarantees in these liabia lities. Similarly, sustained periods of low interest contract liabia lities dued io, increase our insurance contract liabilities, and rates and risk asset returns t rgins to erode as a result of reducd ed increase the cost of risk transferff measures such as hedging, causing our profit ma investment portfolff io income and increased insurance liabia lities. See also “— Risks Related to Our Business — Guarantees within certain of our annuity products may decrease our earnings, decrease our capitalization, increase the volatility of our results, result in higher risk management costs and expose us to increased market risk” and “— Risks Related to Our could reducd e income froff m our investment portfolff ff 45 Business — Public health crises, extreme mortality events or similar occurrences may adversely impact our business, financial condition, or results of operations, as well as the economy in general.” capia taii l and creditdd market conditiodd ns may sa ignigg fii cantlytt affeff ct our ability to me ii et liquidityii needs add nd our access to Adverdd serr ii capia tal The capital and credit markets may be subju ect to periods of extreme volatility. Disruptu ions in capital markets could adversely affect our liquidity and credit capacity or limit our access to capital which may in the future be needed to operate our business and meet policyholder obligations. We need liquidity at our holding company to pay our operating expenses, pay interest on our indebtedness, pay dividends on our preferred stock, carry out any share or debt repurchases that we may undertake, pay any potential dividends on our common stock, provide our subsu idiaries with cash or collateral, maintain our securities lending activities and replace certain maturing liabia lities. Without sufficient liquidity, we could be forff ced to curtail our operations and limit the investments necessary to grow our business. For our insurance subsidiaries, the principal sources of liquidity are insurance premiums and fees paid in connection with io to the extent consisting of cash and readily marketable ff annuity products, and cash floff w froff m our investment portfolff securities. rr In the event capia tal markets or other conditions have an adverse impact on our capital and liquidity, or our stress-testing ur indicates that such conditions could have an adverse impact beyond expectations and our current resources do not satisfy off needs or regulatory r equirements, we may have to seek additional finff ancing to enhance our capital and liquidity position. The availabia lity of additional finff ancing will depend on a variety of factors, such as the then current market conditions, regulatoryrr enerally, our credit ratings and finff ancial capital requirements, availabia lity of credit to us and the financial services industry grr leverage, and the perception of our customers and lenders regarding our long- or short-term financial prospects if we incur large operating or investment losses or if the level of our business activity decreases due to a market downturn. Similarly, our uthorities or rating agencies take negative actions against us. Our internal access to funds sources of liquidity may prove to be insufficient and, in such case, we may not be able to successfulff ly obtain additional financing on favff orable terms, or at all. may be impaired if regulatory arr ff In addition, our liquidity requirements may change if, aff mong other things, we are required to returt n significant amounts of cash collateral on short notice under securities lending agreements or other collateral requirements. See “— Risks Related io is subju ect to significant finff ancial risks both in the U.S. and global to Our Investment Portfolio — Our investment portfolff financial markets, including credit risk, interest rate risk, inflation risk, market valuation risk, liquidity risk, real estate risk, derivatives risk, and other facff t on our financial condition and results of operations.” tors outside our control, the occurrence of any of which could have a material adverse effecff rr ions in the finff ancial markets, as such disrupr Our finff ancial condition, results of operations, cash floff ws and statutory capital position could be materially adversely tions may limit our ability to replace, in a timely manner, affeff cted by disrupt apital requirements, and access the capital that may be necessary to grow our business. maturing liabia lities, satisfy regulatory crr nd Legal Risks — Our insurance business is highly regulated, and changes in regulation and in See “— Regulatory a rr nd enforcement policies or interprr etations thereof may materially impact our capitalization or cash floff ws, reduced supeu rvisory arr our profitff ability and limit our growth.” As a result, we may be forff ced to delay raising capital, issue differe nt types of securities than we would have otherwise, less effeff ctively deploy such capital, issue shorter tenor securities than we prefer, or bear an unattractive cost of capital, which could decrease our profitaff bia lity and significantly reduce our financial fleff xibility. ff ee We are expos results of operations and liqll uidityii ificff ant finff ancial and capitaii , ayy nd may ca l markets risks wkk ii ause our profio taii bility me ed to signi hich may aa asures to vary from period-to-period dverserr ly affeff ct our finff ancial conditiodd n, Economic risks and other facff tors described below, as well as significant volatility in the markets, individually or collectively, could have a material adverse effect on our financial condition, results of operations, liquidity or cash flows through a change in our insurance liabia lities or increases in reserves for futur e policyholder benefits. ff ff Interest Rate Riskii Some of our current or anticipated future products, principally traditional life,ff d fixff ed index-linked universal life, an tured settlements, expose us to the risk that changes in and income annuities, as well as funding agreements and strucr interest rates will reducd e our investment margin or “net investment spread,” or the differe nce between the amounts that we are required to pay under the contracts in our general account and the rate of return we earn on general account investments intended to support the obligations under such contracts. Our net investment spread is a key component of our profitabia lity measures. ff ff 46 Although reducing interest crediting rates can help offsff et decreases in net investment spreads on some producd ts, our io that has adjustabla e interest crediting ability to reducd e these rates is limited to the portion of our in-force product portfolff rates and could be limited by the actions of our competitors or contractuat lly guaranteed minimum rates and may not match the timing or magnitude of changes in asset yields. As a result, our net investment spread would decrease or potentially become negative, which could have a material adverse effecff t on our financial condition and results of operations. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Policyholder Liabia lities.” An increase in interest rates could result in decreased feeff revenue associated with a decline in the value of variablea . In addition, during periods of declining interest rates, our return annuity account balances invested in fixed income funds on investments that do not suppor t particular policy obligations may decrease. During periods of sustained lower interest u rates, our reserves for policy liabia lities may not be sufficient to meet future policy obligations and may need to be strengthened. Accordingly, declining and sustained lower interest rates may materially adversely affect our financial condition and results of operations, our ability to receive dividends from our insurance subsidiaries and BRCD and significantly reduce our profitaff bia lity. We may thereforff e have to accept a lower credit spread and lower profitaff bia lity or face a decline in sales and greater loss of existing contracts and related assets. ff y crr In addition, because our interest rate hedging program is primarily a risk mitigation strategy intended to reducd e our risk to statutor apitalization and long-term economic exposures from sustained low levels of interest rates, this strategy will t likely result in higher net income volatility due to the insensitivity of related ULSG GAAP liabia lities to the change in t our financial condition and results of operations. See “— Risks interest rate levels. This strategy may adversely affecff Related to Our Business — We may not have sufficient assets to meet our future ULSG policyholder obligations, and changes in interest rates may result in net income volatility” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Risk Management Strategies — ULSG Market Risk Exposure Management.” f Infln atll iott n Risk Inflation increases expenses (including, among others, forff a labor on profitaff bia lity in the event that such additional costs cannot be passed through to policyholders. High inflatio cause a change in consumer sentiment and behavior adversely affect ff ing the sales of certain of our products. ff and third-party services), potentially putting pressure n could also y Equityii Riskii q ff Our primary equity risk relates to the potential forff lower earnings associated with certain of our businesses where fee income is earned based upon the estimated market value of the separate account assets and other assets related to our variable annuity business. Because fees generated by such products are primarily related to the value of the separate account assets and other AUM, a decline in the equity markets could reducd e our revenues as a result of the reducd tion in the value of the investment assets suppor ting those products and services. We seek to mitigate the impact of such exposure to weak or stagnant equity markets through the use of derivatives, reinsurance and capital management. However, such derivatives and reinsurance may become less availabla e and, if they remain availabla e, their price could materially increase in a period characterized by volatile equity markets. The risk of stagnation in equity market returns cannot be addressed by hedging. See “Business — Segments and Corporate & Other — Annuities — Products — Variabla e Annuities” for details regarding sensitivity of our variable annuity business to capital markets. u See “— Risks Related to Our Business — Guarantees within certain of our annuity products may decrease our earnings, decrease our capia talization, increase the volatility of our results, result in higher risk management costs and expose us to increased market risk.” Risks Related to Our Investment Portfolio ll estment portfolff io is t rate rtt Our invii creditdd risk, ik ntii eres factortt and resultsll of operations utsitt de our control, tll hett s orr tt isk, infln atll subject to signi tt oth in t ificant finff ancial riskii iott n risk, market valuatiott n risk, liquidityii occurrence of ao ny of which could have a matertt s bkk risk, rk eal estattt e rtt ial adverserr ial markets, is ncii ludingii tt , ak nd other effeff ct on our finff ancial conditdd iontt isk, derivatives riskii hett U.S. and glogg bal financ ii Creditdd Riskii io may defauff Fixed income securities and mortgage loans represent a significant portion of our investment portfolff io. We are also subju ect to the risk that the issuers or guarantors of the fixed income securities and mortgage loans in our investment portfolff lt on principal and interest payments they owe us. In addition, the underlying collateral within asset- backed securities (“ABS”), including mortgage-backed securities, may default on principal and interest payments causing an adverse change in cash flows. The occurrence of a major economic downturn, acts of corporate malfeasance, widening t the issuers, guarantors or underlying collateral of these mortgage or credit spreads, or other events that adversely affecff 47 securities and mortgage loans could cause the estimated fair value of our portfolff loans and our earnings to decline and the defauff portfolff io of fixed income securities and mortgage lt rate of the fixff ed income securities and mortgage loans in our investment io to increase. Defaults or deteriorating credit of other financial institutt rties, and routinely execute transactions with counterparr ions could adversely affect us as we have exposure to many different industries and counterpar rties in the financial services including brokers and dealers, central clearinghouses, commercial banks, investment banks, hedge funds and industry,rr investment funds and other financial institutions. Many of these transactions expose us to credit risk in the event of the default of our counterpar ted when the collateral held by us cannot be realized or is liquidated at prices not sufficient to recover the full amount of the loan or to us. We also have exposure to these financial institutions in the forff m of unsecured debt derivative exposure dued instruments, non-redeemable and redeemable preferred securities, derivatives, joint ventures and equity investments. Any losses or impairments to the carrying value of these investments or other changes could materially and adversely affect our financial condition and results of operations. rty. In addition, with respect to secured transactions, our credit risk may be exacerbar Interest Rate Riskii We are exposed to certain risks in a variety of interest rate environments. When interest rates are low, we may be forced to reinvest proceeds froff m investments that have maturt ed or have been prepaid or sold at lower yields, which will income. Moreover, borrowers may prepay or redeem the fixff ed income securities and reduce our net commercial, agricultural or residential mortgage loans in our investment portfolff io with greater frequency in order to borrow at lower market rates, thereby exacerbar ting this risk. investment Increases in interest rates could negatively affect our profitff ability. In periods of rapidl y increasing interest rates, similar to those experienced in 2022, we may not be able to replace, in a timely manner, the investments in our general account with higher-yielding investments needed to fund the higher crediting rates necessary to keep interest rate sensitive products competitive. In addition, as interest rates rise, policy loans, surrenders and withdrawals may increase as policyholders seek investments with higher perceived returns. This process may result in cash outflows requiring that we sell investments at a time when the prices of those investments are adversely affected by the increase in interest rates, which may result in realized investment losses. An increase in interest rates could also have a material adverse effecff t on the value of our investments, for example, by decreasing the estimated fair values of the fixff ed income securities and mortgage loans that comprise a significant portion of our investment portfolff io. a f Infln atll iott n Risk t our business in several ways. During inflatio A sustained or material increase in inflation could affecff nary periods, the value of fixff ed income investments may fall, which could increase realized and unrealized losses. Interest rates have to central bank policy responses to combat inflation, which may positively increased and may continue to increase dued impact our business in certain respects, but could also increase the risk of a recession or an equity market downturn and could negatively impact various portions of our business, including our investment portfolff io. Prolonged and elevated inflation could adversely affect the finff ancial markets and the economy generally, and dispelling it may require governments to pursue a restrictive fisff cal and monetary policy, which could constrain overall economic activity and inhibit revenue growth. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Industry Trr rends and Uncertainties — Financial and Economic Environment” for a discussion of the current impacts of inflation. ff Market Valuatiott n Risk Market valuation risk relates to the variabia lity in the estimated faiff r value of investments associated with changes in market factors. Our portfolff io’s market valuation risks include the folff lowing: • – We are exposed to credit spread risk primarily as a result of market price volatility and p Credit Spread Risk tion in credit spreads. Widening credit spreads may cause unrealized investment risk associated with the fluff ctuat io and increase losses associated with written credit protection derivatives used in losses in our investment portfolff replication transactions. Additionally, an increase in credit spreads relative to U.S. Treasury brr enchmarks can also adversely affect the cost of our borrowing if we need to access credit markets. Tightening credit spreads may reduce our investment income and cause an increase in the reported value of certain liabia lities that are valued using a discount rate that reflects our own credit spread. 48 • • • • • y s Rkk q elated to Equity Marketskk – A portion of our investments are in leveraged buy-out funds and other private Riskii tends to be uneven as a result of equity funds. The amount and timing of net investment income from such funds the performance of the underlying investments. As a result, the amount of net investment income from these investments can vary subsu tantially from period-to-period. Significant volatility could adversely impact returns and net investment income on these investments. In addition, the estimated faiff r value of such investments may be affeff cted by downturns or volatility in equity or other markets. ff f r VV ecuSS s Rkk rities ion of So elatl ed to the Valuat – Fixed maturity and equity securities, as well as short-term Riskii investments that are reported at estimated faiff r value, represent the majority of our total cash and investments. See Note 1 to the Notes to the Consolidated Financial Statements forff more information on how we calculate fair value. ion, including periods of significantly rising or high interest rates, rapidly During periods of market disrupt widening credit spreads or illiquidity, it may be difficult to value certain of our securities if trading becomes less frequent or market data becomes less observable. In addition, in times of finff ancial market disrupt ion, certain asset classes that were in active markets with significant observable data may become illiquid. In those cases, the valuation process includes inputs that are less observable and require more subju ectivity and management r values which vary significantly from the amount at which the judgment. Valuations may result in estimated faiff investments may ultimately be sold. Further, rapidl y changing and unprecedented credit and equity market a conditions could materially impact the valuation of securities as reported within our consolidated financial ignificantly. Decreases in the statements and the period-to-period changes in estimated fair value could vary s estimated fair value of securities we hold could have a material adverse effect on our financial condition and results of operations. a rr r s Rkk elated to the Determination of Ao Riskii – The determination of the amount of llowances and Impam irments allowances and impairments is subju ective and varies by investment type, which is based on our periodic evaluation and assessment of known and inherent risks associated with the respective asset class. However, historical trends may not be indicative of futur e impairments or allowances. p ff f y Gross UnrUU ealized Losses on FixFF ed Maturity Securities and Related ImpII p airment Risks – Unrealized gains or losses ity securities classified as availabla e-for-sale (“AFS”) securities are recognized as a component of on fixed maturt other comprehensive income (loss) (“OCI”) and are, thereforff e, excluded froff m our profitaff bia lity measures. The r value of these AFS securities is recognized in our profitaff bia lity measures accumulated change in estimated faiff when the gain or loss is realized upon r value the sale of the security or in the event that the decline in estimated faiff is determined to be credit-related and impairment charges are taken. See “Management’s Discussion and Analysis ity Securities Availabla e-for-sale.” of Financial Condition and Results of Operations — Investments — Fixed Maturt u , g g ffff f f So ecuSS (“RMBS”), commercial mortgage-backed securities tured Securities”) could cause the estimated faiff p rities and Related ImpII airment Defae ults, Downgrades or Other Events Affeff cting IssII uers or Guarantors orr f – The occurrence of a majoa r economic downturn, acts of corporate malfeasance, widening credit spreads, or ii Risks other events that adversely affect the issuers or guarantors of securities or the underlying collateral of residential mortgage-backed securities and ABS (collectively, “Strucr ity securities portfolff io and corresponding net investment income to decline and cause the default rate of the fixff ed maturity ting issuers or guarantors of particular securities, securities in our portfolff or similar trends that could worsen the credit quality of issuers, such as the corporate issuers of securities in our portfolff t. Economic uncertainty can adversely affect credit quality of issuers or guarantors. Similarly, a ratings downgrade affecting a security we hold could indicate the credit quality of that security has deteriorated and could increase the capia tal we must hold to support that security to maintain our RBC levels. Our intent to sell or assessment of the likelihood that we would be required to sell fixff ed maturity securities that have declined in value may affeff ct the level of write-downs or impairments. (“CMBS”) r value of our fixed maturt io to increase. A ratings downgrade affecff io, could also have a similar effecff q Liquii y idity Rtt isk There may be a limited market for certain investments we hold in our investment portfolff io, making them relatively illiquid. These include privately-placed fixed maturt ents such as options, mortgage loans, policy loans, leveraged leases, other limited partnership interests, and real estate equity, such as real estate limited limited liabia lity companies and funds. In the past, even some of our very high-quality investments partnerships, experienced reduced liquidity during periods of market volatility or disrupt ion. If we were forced to sell certain of our investments durd ing periods of market volatility or disrupt ion, market prices may be lower than our carrying value in such investments. This could result in realized losses which could have a material adverse effect on our financial condition and results of operations, as well as our financial ratios, which could affect compliance with our credit instruments and rating ity securities, derivative instrumr rr rr 49 agency capital adequacy measures. Moreover, our ability to sell assets could be limited if other market participants are seeking to sell fungibl e or similar assets at the same time. ff Similarly, we loan blocks of our securities to third parties (primarily brokerage firms and commercial banks) through our securities lending program, including fixed maturt ity securities and short-term investments. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Investments — Securities Lending” for a discussion of our obligations under our securities lending program. If we are required to returt n significant amounts of cash collateral in connection with our securities lending or otherwise need significant amounts of cash on short notice and we are forff ced to sell securities, we may have diffiff culty selling such collateral that is invested in securities in a timely manner, be forced to sell securities in a volatile or illiquid market for less than we otherwise would have been abla e to realize in normal market conditions, or both. In the event of a forced sale, accounting guidance requires the recognition of a loss forff securities in an unrealized loss position and may require the impairment of other securities based on our ability to hold those securities, which would negatively impact our financial condition and results of operations, as well as our financial ratios, which could affect compliance with our credit capital markets and economic instruments and rating agency capital adequacy measures. In addition, under stressfulff conditions, liquidity broadly deteriorates, which could furff ther restrict our ability to sell securities. Furthermore, if we decrease the amount of our securities lending activities over time, the amount of net investment income generated by these activities will also likely decline. Real Estate Riskii A portion of our investment portfolff io consists of mortgage loans on commercial, agricultural and residential real estate. Our exposure to this risk stems from various factors, including the supply and demand of leasable commercial tions, agricultural prices and space, creditworthiness of tenants and partners, capital markets volatility, interest rate fluff ctuat farm incomes. Although we manage credit risk and market valuation risk for our commercial, agricultural and residential real estate assets through geographic, property type and product type diversification and asset allocation, general economic conditions in the commercial, agricultural and residential real estate sectors will continue to influence the performance of tors, which are beyond our control, could have a material adverse effect on our financial these investments. These facff condition, results of operations, liquidity or cash floff ws. ff Mortgage loans in our portfolff io also face default risk. An increase in the default rate of our mortgage loan investments or fluctuations in their performance could have a material adverse effect on our financial condition and results of operations. Further, any geographic or property type concentration of the mortgage loans in our portfolff ts io and, consequently, on our financial condition and results of operations. Events or developments that have a on our portfolff io negative effect on any particular geographic region or sector may have a greater adverse effect on our investment portfolff to the extent that the portfolff io is concentrated. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Investments — Mortgage Loans” and Notes 9 and 11 of the Notes to the Consolidated Financial Statements. io may have adverse effecff Derivative Risk We use a variety of strategies to manage risk related to our ongoing business operations, including the use of rties’ defaults could have a material adverse effect on our financial condition and rties may require us to ted businesses. Furthermore, the valuation of our derivatives could change derivatives. Our derivative counterpar results of operations. In addition, ratings downgrades or financial diffiff culties of derivative counterpar utilize additional capital with respect to the affecff based on changes to our valuation methodology or the discovery of errors. Subsu tantially all of our derivative transactions require us to pledge or receive collateral or make payments related to any decline in the net estimated fair value of such derivative transactions. The amount of collateral we may be required to pledge and the payments we may be required to make under our derivative transactions may increase under certain circumstances as a result of the requirement to pledge initial margin or variation margin forff OTC-bilateral transactions. Such requirements could adversely affect our liquidity, expose us to central clearinghouse and counterpar rty credit risk, or increase our costs of hedging. See “Business — Regulation — Regulation of Over-the-Counter Derivatives.” 50 Othett r Risks We are also exposed to other risks outside of our control, including forff eign currency exchange rate risk relating to the variability in currency exchange rates for non-U.S. dollar denominated investments, as well as other finff ancial and operational risks related to using external asset management firff ms. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Investments — Investment Risk Management Strategy” for discussion of how we manage the risks related to our investment portfolio. Ongoingii militartt adverserr y ar ctiott ns, ts hett contintt ued thrtt ly affeff ct the value of our invii estment portfolff eat of to ioll ertt and thett rorism, climate change as well as othett osll level of claill m l ii ses we incur ii r catastrophic events may ff Ongoing military actions (including the ongoing armed conflicts in Europe and the Middle East), the continued threat of terrorism, both within the U.S. and abra oad, and heightened security measures in response to these types of threats, as well as climate change and other natural or man-made catastrophic events, may cause significant decline and volatility in global financial markets and result in loss of life,ff property damage, additional disruptu ions to commerce, the health system, and the y and reduced economic activity. The effeff cts of climate change could cause changes in weather patterns, resulting food supplu in more severe and more freff quent natural disasters such as forest fires, hurricanes, tornados, floff ods and storm surges. The value of assets in our investment portfolff io may be adversely affected by declines in the credit and equity markets and reduced economic activity caused by the continued threat of catastrophic events. Companies in which we maintain investments may ions and such disruptu ions might affeff ct the abia lity of suffer losses as a result of financial, commercial or economic disrupt those companies to pay interest or principal on their securities or mortgage loans. Catastrophic events could also disrupt our operations as well as the operations of our third-party service providers and also result in higher than anticipated claims under insurance policies that we have issued. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Policyholder Liabia lities.” rr Regulatory and Legal Risks ance busineii Our insur ii interpretations thett growth ss is highi reof may ma ly regue atertt lated, and changes in regue lation and in supeu rvisory ar nd enfon rcement policie ll ially impact our capia taii lizatiott n or cash floff ws, rs educe our profitaff bilityii ll and limi t oii s or ur Our operations are subject to a wide variety of insurance and other laws and regulations. Our insurance subsidiaries and BRCD are subject to regulation by their primary Delaware, Massachusetts and New York state regulators, as applicable, as well as other regulation in states in which they operate. Changes in these laws and regulations could adversely affect our business, financial condition and results of operations. See “Business — Regulation,” as supplu emented by discussions of evelopments in our subsu equently filed Quarterly Reports on Form 10-Q under the caption “Management’s regulatory drr Discussion and Analysis of Financial Condition and Results of Operations — Industry Trr rends and Uncertainties — Regulatory Drr evelopments.” In addition, we cannot predict what proposals may be made, what legislation or regulations may be introduced or enacted, or what impact any future legislation or regulations could have on our business, financial condition and results of operations, including the cost of any such compliance. Furthermore, regulatory urr ncertainty could create confusion among our distribution partners and customers, which could negatively impact product sales. See “Business — Regulation — Standard of Conduct Regulation” for a more detailed discussion of particular regulatory err fforts by various regulators. rr Changes to the laws and regulations that govern the standards of conduct that appl ff y to the sale of our products, as well as t our operations and profitabia lity. Such changes could increase our at distribute our products, could adversely affecff the firms th regulatory a nd compliance burden, resulting in increased costs, or limit the type, amount or structurt e of compensation arrangements into which we may enter with certain of our employees, which could negatively impact our ability to compete ting and retaining key personnel. Additionally, our ability to react to with other companies, including with respect to recruir ts will depend on the continued a rapidl effiff cacy of provisions we have incorporated into our producd t design allowing frequent and contemporaneous revisions of key pricing elements, as well as our ability to work collabor l processes, rules and other dynamics in the regulatory prr a atively with regulators. Changes in regulatory arr pprova rocess could adversely impact our ability to react to such changing conditions. y changing economic conditions and the dynamic, competitive market for our produc a a ff We cannot predict the impact that “best interest” or fiduciary standards adopted or proposed by various regulators may have on our business, financial condition or results of operations. Compliance with new or changed rulrr es or legislation in this area may increase our regulatory brr urden and that of our distribution partners, require changes to our compensation practices and product offerings, and increase litigation risk, which could adversely affect our financial condition and results of operations. 51 In addition, we are subject to federal, state and other securities and state insurance laws and regulations which, among other things, require that we distribute certain of our producd ts through a registered broker-dealer. The failure to comply with these laws or changes to these laws could have a material adverse effect on our operations and our profitaff bia lity. Furthermore, our changes in laws and regulations that affeff ct our customers and distribution partners or their operations also may affect business relationships with them and their ability to purchase or distribute our products. Such actions may negatively affect ff our business and results of operations. ff If our associates fail to adhere to regulatory r rr equirements or our policies and procedurd es, we may be subju ect to penalties, restrictions or other sanctions by applicable regulators, and we may suffer reputational harm. See “Business — Regulation.” se in the RBC ratio of oo ur insurance subsidiaries (as(( a result oll dd A decrea increase in the requireii d RBC capia taii insurance subsidiaries, could r ii esult i ll n i material adverserr ll effeff ct on our finff ancial conditiodd l charges),s ncii reased scrutiny bn ii or a change in t ii y ib nsur n and results of operations hett ance regue f ao rating an reductiott n in statutory capia taii ropro ietary capia taii gea ncy pc lators and ratintt g agea ncies and could hll l and surplus or an l models for our ave a r The NAIC has establa ished model regulations that provide minimum capitalization requirements based on RBC formulas for insurance companies. Each of our insurance subsidiaries is subject to RBC standards or other minimum statutory capital and surplus requirements imposed under the laws of its respective jurisdiction of domicile. See “Business — Regulation — Insurance Regulation — Statutory Accounting, Reserves and Risk-Based Capital.” A failure to meet these requirements could subject our insurance subsidiaries to further examination or corrective action imposed by insurance regulators, including limitations on their abia lity to write additional business, increased regulatory s upervision, or seizure or liquidation. Any corrective action imposed could cause a material adverse effect on our business, financial condition, results of operations and cash floff ws. A decline in RBC ratio, whether or not it results in a faiff lure to meet applicable RBC requirements, could limit the abia lity of an insurance subsidiary to make dividends or distributions to us, could result in a loss of customers or new business, or could influff ence ratings agencies to downgrade our financial strength ratings, each of which could cause a material adverse effect on our business, financial condition and results of operations. rr t io, the value of certain derivative instrumr In any particular year, TAC amounts, and thus RBC ratios, may fluff ctuat te depending on a variety of factors, including the ncome or losses generated by the insurance subsu idiary, the amount of additional capital such insurer rr amount of statutor y i must hold to support business growth, equity and credit market conditions, the value and credit ratings of certain fixff ed ents that do not receive hedge income and equity securities in its investment portfolff accounting, as well as changes to the RBC formulas and the interpretation of the NAIC’s instrucr tions with respect to RBC calculation methodologies. In addition, rating agencies may implement changes to their own proprietary capital models, which diffeff r froff m the RBC capital model, that have the effect of increasing or decreasing the amount of capital our insurance subsu idiaries should hold relative to the rating agencies’ expectations. Under stressed or stagnant capital markets conditions and with the aging of existing insurance liabia lities, without offsff ets froff m new business, the amount of additional statutory reserves that an insurance subsidiary is required to hold could materially increase. This increase in reserves would decrease the capital availabla e for us e in calculating the subsu idiary’s RBC ratio. To the extent that an insurance subsidiary’s RBC ratio is deemed to be insufficient, we may seek to take actions either to increase the capitalization of the insurer or to reducd e the capitalization requirements. If we were unable to accomplish such actions, the rating agencies could view this as a reason for a ratings downgrade. ff Changes in t ii increasingii axtt laws or interpretations of such laws could r ll our corpor rr tt ate t tt axe s and makingii some of our products l tt educe our earnings and matertt onsumers s attractive to ctt esll ially impact our operations by Changes in tax laws or interpretations of such laws could have a material adverse effect on our profitaff bia lity and finff ancial nces in interpretation condition and could result in our incurring materially higher statutory taxes. Higher tax rates or differe of tax laws may adversely affect our business, financial condition, results of operations and liquidity. Conversely, declines in tax rates could make our products less attractive to consumers. See “Business — Regulation — Federal Tax Reformff ff ” for a discussion of the potential impacts of the Inflation Reducd tion Act and the related corporate alternative minimum tax. ff e spii utestt Legal di or harm to our reputattt ll iontt and regulator y ir nvii estigatiott ns are common in oii ur busineii sses and may ra ii esult i ll n s ignigg fii cant finaii ncial losll ses We face a significant risk of legal disputes and regulatory i ourse of operating our nvestigations include businesses, including the risk of class action lawsuits. Our pending legal actions and regulatory i proceedings specific to us, as well as other proceedings that raise issues that are generally applicable to business practices in the industries in which we operate. nvestigations in the ordinary c rr rr rr 52 In connection with our insurance operations, plaintiffsff ’ lawyers may bring or are bringing class actions and individual suits alleging, among other things, issues relating to sales or underwriting practices, claims payments and procedurd es, , lapse or termination of escheatment, product design, disclosure, administration, investments, denial or delay of benefitsff policies, cost of insurance and breaches of fiduciary or other dutd ies to customers. Plaintiffsff in class action and other lawsuits against us may seek very large or indeterminate amounts, including punitive and treble damages. Due to the vagaries of litigation, the outcome of a litigation matter and the amount or range of potential loss at particular points in time may be difficult to ascertain. Material pending litigation and other legal disputes, as well as regulatory mrr atters affeff cting us and risks to our business presented by these proceedings, if any, are discussed in Note 18 of the Notes to the Consolidated Financial Statements. eral, state or other regulatory a A substantial legal liabia lity or a significant fedff ction against us, as well as regulatory inquiries or investigations, could harm our reputation, result in material fines or penalties, result in significant legal costs and otherwise have a material adverse effect on our business, financial condition and results of operations. Even if we ultimately ction or investigation, our ability to attract new customers and distributors, retain our prevail in the litigation, regulatory arr t and retain personnel could be materially and adversely impacted. Regulatory current customers and distributors, and recruir inquiries and legal disputes may also cause volatility in the price of BHF securities and the securities of companies in our industry.rr rr Current claims, litigation, unasserted claims probable of assertion, investigations and other proceedings against us, as well as any other disputes or other matters involving third parties, could have a material adverse effect on our business, financial condition and results of operations. It is also possible that related or unrelated claims, litigation, unasserted claims e, and we could become subju ect to probable of assertion, investigations and proceedings may be commenced in the futur further investigations and have lawsuits filed or enforcement actions initiated against us. Increased regulatory s iny and any resulting investigations or proceedings in any of the jurisdictions where we operate could result in new legal actions and precedents or changes in laws, rules or regulations that could adversely affect our business, financial condition and results of operations. crutr ff rr Operational Risks aps in our policll Any gn models used by our business may not opeo rate properly all busineii ial conditiii on, or resultsll of operations ies, procedures, os ii ss, financ r processes may leave us expos ee ontain errors, each of which could adverserr nd could cll ed to unidentifiett d or unanticiptt atedtt riskii , ak nd our ly affeff ct our We have developed policies, procedurd es and processes to enable and suppor l and potential risks facing the Company. Nonetheless, our policies, procedurd es and processes may not be fully effeff ctive in identifying and assessing such risks, leaving us exposed to unidentified or unanticipated risks. In addition, we rely on third- ff party providers to administer and service many of our producd ts, and our policies, procedurd es and processes may not enable us isk with respect to those products, especially to the extent we rely on those providers for relevant to identify aff information, including detailed information regarding the holders of our products. t the ongoing review of the actuat nd assess every r u rr We use models to manage our business and evaluate the associated risk exposures. The models may not operate properly and could contain errors related to model inputs, data, assumptions, calculations, or output that may adversely impact our e exposures, which may be significantly greater results of operations. In addition, these models may not fully predict futur than our historical measures indicate. For example, we use actuat rial models to assist us in establa ishing reserves for liabia lities arising froff m our insurance policies and annuity contracts. We periodically review the effectiveness of these models, their underlying logic, and, from time to time, implement refinements to our models based on these reviews. We implement r such validation and testing, our models remain subju ect to inherent refinements after rigorous testing and validation; even afteff limitations. Accordingly, no assurances can be given as to whether or when we will implement refinements to our actuat rial models, and, if implemented, whether such refinements will be suffiff cient. Furthermore, if implemented, any such refinements could cause us to increase the reserves we hold forff our insurance policy and annuity contract liabia lities. If models are misused es, they could produce incorrect or inappropriate results. Business decisions based on or fail to serve their intended purpos incorrect or misused model outputs or reports could have a material adverse impact on our results of operations. r ff Other risk management models depend upon the evaluation of information regarding markets, clients, catastrophe occurrence, or other matters that are publicly availabla e or otherwise accessible to us. This information may not always be accurate, complete, up-to-date, or properly evaluated. Furthermore, there can be no assurance that we can effeff ctively review and monitor all risks or that all of our employees will follow our policies, procedurd es and processes, nor can there be any assurance that our policies, procedurd es and processes, or the policies, procedurd es and processes of third parties that administer or service our products, will enable us to accurately identify all risks and limit our exposures based on our assessments. In addition, if our business changes or the markets in which we operate evolve and new risks emerge, we may have to 53 implement more extensive and perhaps differe nt policies, procedurd es or processes and our risk management framework may not evolve at the same pace as those changes. See “— Risks Related to Our Business — Our variable annuity exposure risk management strategy may not be effeff ctive, may result in significant volatility in our profitaff bia lity measures or may negatively affeff ct our statutor apital.” y crr ff t luii re in cyber- or othett Any fn aiff gg Brighthous could rll esult ill n aii conduct business effee e FinFF ancial’s or our thitt loss or discii ctivtt ely rr r infii orff matio n securityii systemtt rdii -pdd arty service providers’ disast s, as well as the occurrence of eo yss ii dd recovery sr to our reputattt ertt on, damage iott n and impairmi vents unanticiptt atedtt in planning ii ent of oo ur abiliii ty to tems and business continuityii losure of confidff endd tial infii orff mati rr We heavily rely on communications, inforff mation systems (both internal and provided by third parties), and the internet a variety of functions, including processing to conduct our business. We rely on these systems throughout our business forff rial new business, claims, and post-issue transactions, providing information to customers and distributors, performing actuat lure in the security of such systems or a failure to analyses, managing our investments and maintaining finff ancial records. A faiff ement maintain the security of such systems, or the confidff ential information stored thereon, may result in regulatory err t our ability to conduct business, our financial condition or results of action, harm our reputation or otherwise adversely affecff operations. In addition, our continuous technological evaluations and enhancements, including changes designed to upda te our protective measures, may increase our risk of a breach or gap in our security, and there can be no assurance that any such ff effort s will be effeff ctive in preventing or limiting the impact of future cyberattacks. nforcff u limited to, cyberattacks, phishing attacks, account We and our vendors, like other commercial entities, have been, and will likely continue to be, subject to a variety of forms of cyberattacks with the objective of gaining unauthorized access to our systems and data, or disruptu ing our operations. Potential attacks may include, but are not the introduction of computer viruses or malicious code (commonly referred to as “malware”), ransomware or other extortion tactics, denial of service attacks, credential stuffinff g, and other computer-related penetrations. Hardware, software or applications developed by us or received froff m third parties may contain exploitabla e vulnerabia lities, bugs, or defecff ts in design, ture or other issues that could compromise information and cybersecurity. The risk of cyberattacks maintenance or manufacff has also increased and may continue to increase in connection with recen gt geo lpoli iiti ts i, inclludingding iin Europe andd thhe ade our operations and may iMiddlddle East, and other geopolitical events and dynamics that may adversely disrupt or degr compromise our data. Malicious actors may attempt to fraff udulently induce employees, customers, or other users of our systems to disclose credentials or other similar sensitive inforff mation in order to gain access to our systems or data, or that of our customers, through social engineering, phishing, mobile phone malware, and other methods. lcal conflilicff u takeover attempts, ff a Cybersecurity threats are rapidl y evolving, and those threats and the means for obt aining access to our systems are becoming increasingly sophisticated. Cybersecurity threats can originate froff m a wide variety of sources including terrorists, nation states, financially motivated actors, internal actors, or third parties, such as external service providers, and the r they have been launched. The rapid evolution and techniques used change frequently or are often not recognized until afteff increased adoption of artificff ial intelligence technologies may intensify our cybersecurity risks, including the deployment of artificial intelligence technologies by threat actors. There is no assurance that administrative, physical and technical controls and other preventive actions taken to reducd e the risk of cyberattacks and protect our information technology will prevent physical and electronic break-ins, cyberattacks or other security breaches to such computer systems. In some cases, such physical and electronic break-ins, cyberattacks or other security breaches may not be immediately detected. If we or our vendors faiff iness operations and could adversely affect our business, financial condition and results of operations. l to prevent, detect, address and mitigate such incidents, this may impede or interrupt our bus u A disaster such as a natural catastrophe, epidemic, pandemic, industrial accident, blackout, terrorist attack, cyberattack or war, unanticipated problems with our or our vendors’ disaster recovery systems (and the disaster recovery systems of such vendors’ supplu iers, vendors or subcontractors), could cause our computer systems to be inaccessible to our employees, distributors, vendors or customers or may destroy valuable data. In addition, in the event that a significant number of our or lowing a disaster, our ability to effeff ctively conduct business could be severely our vendors’ managers were unavailabla e folff iers’ abia lity to provide goods and services and our compromised. These interruptu ions also may interfere with our supplu employees’ abia lity to perform their job responsibilities. Unanticipated problems with, or faiff lures of, our disaster recovery systems and business continuity plans could have a material impact on our ability to conduct business and on our financial condition and results of operations. 54 A faiff lure of our or relevant third-party (or such third-party’s supplier’s, vendor’s or subcont ractor’s computer systems) computer systems could cause significant interruptu ions in our operations, result in a failure to maintain the security, confidff entiality or privacy of sensitive data, harm our reputation, subju ect us to regulatory s anctions and legal claims, lead to a loss of customers and revenues, and otherwise adversely affecff t our business and financial results. Our cyber liabia lity insurance may not be sufficient to protect us against all losses. See also “— Any failure to protect the confidff entiality of customer, employee, or other third-party information could adversely affect our reputation and have a material adverse effect on our business, financial condition and results of operations.” u ff rr Our employees ii financ and thott ial conditioii n and busineii o ss se of our thitt rdii tt -pdd arty service providers may ta ake excessive risks wkk hich could nll egativtt ely all ff ffa ect our As an insurance enterprr ise, we are in the business of accepting certain risks. The individuals who conduct our business include executive officers and other members of management, sales intermediaries, investment profesff sionals, product managers, and other associates, as well as associates of our various third-party service providers. Each of these individuals makes decisions and choices that may expose us to risk. These include decisions such as setting underwriting guidelines and investment and when to sell them, which standards, producd t design and pricing, determining what assets to purchase forff business opportunities to pursue, and other decisions. Such individuals may take excessive risks regardless of the structurt e of our risk management framework or our compensation programs and practices, which may not effeff ctively deter excessive risk-taking or misconduct. Similarly, our controls and procedurd es designed to monitor associates’ business decisions and prevent them froff m taking excessive risks, and to prevent employee misconduct, may not be effeff ctive. If our associates and those of our third-party service providers take excessive risks, the impact of those risks could harm our reputation and have a material adverse effect on our financial condition and results of operations. luii Any fn aiff our reputattt re to protect iott n and have a matertt tt the confin dentiality tt ial adverserr of customtt or othett er, er mployee, ii effeff ct on our business, financ o rdii -pdd arty infon rmatiott n could adverserr r thitt ial conditioii n and results of operations ly affeff ct ff e be the subju ect of cyberattacks, and the misappropr Federal and state legislatures and various government agencies have establa ished laws and regulations protecting the privacy and security of personal inforff mation. See “Business — Regulation — Privacy and Cybersecurity Regulation.” Our third-party service-providers and our employees have access to, and routinely process, personal information through a variety of media, including information technology systems. It is possible that an employee or third-party service provider (or their supplu iers, vendors or subcontractors) could, intentionally or unintentionally, disclose or misappropriate confidff ential personal information, and there can be no assurance that our information security policies and systems in place can prevent unauthorized use or disclosure of confidff ential inforff mation, including nonpublic personal information. Additionally, our data has been and could in the futur iation or intentional or unintentional inappropriate disclosure or misuse of employee or client inforff mation could occur, including as a result of us or our third-party service providers (or their suppu liers, vendors or subcontractors) failing to maintain adequate internal controls or if our associates or any of our third-party service providers fail to comply with applicable policies and procedurd es. Any failure or perceived faiff lure by us to comply with our privacy policies, our privacy-related obligations to customers, employees, or other third parties, or our privacy-related legal obligations, or any compromise of security that results in the unauthorized release or of sensitive information, which could include personally identifiabla e information or other user data, may result in transferff governmental investigations, enforff cement actions, regulatory f inff es, litigation and public statements against us by consumer advocacy groups or others, and could cause our customers, employees, or other third parties to lose trust in us, all of which could be costly and have a material adverse effect on our business, financial condition and results of operations. See “— Any failure in cyber- or other inforff mation security systems, as well as the occurrence of events unanticipated in Brighthouse Financial’s or our third-party service providers’ disaster recovery systems and business continuity planning could result in a loss or disclosure of confidff ential inforff mation, damage to our reputation and impairment of our ability to conduct business effeff ctively.” In addition, compliance with complex variations in privacy and data security laws may require modifications to current business practices, including significant technology effort s that require long implementation timelines, increased costs and dedicated resources. a rr ff Furthermore, there has been increased scrutiny as well as enacted and proposed additional regulation, including from state regulators, regarding the use of customer data. We may analyze customer data or input such data into third-party analytics in order to better manage our business. Any inquiry in connection with our analytics business practices, as well as any misuse or alleged misuse of those analytics insights, could cause reputational harm or result in regulatory err ement actions or litigation, and any related limitations imposed on us could have a material impact on our business, financial condition and results of operations. nforcff 55 Risks Related to Our Separation froff m, and Continuing Relationship with, MetLife If the SepSS aratiott n were to f subject to signi tt ificff ant taxtt ii o qtt l t aiff iestt liabilitii ff ualify f orff non-recogno ition treatment for feder ff al income tax paa rr urpos es, ts hett n we could be ff In connection with the Separation, MetLife r ing froff m the Internal Revenue Service (“IRS”) eceived a private letter rulrr regarding certain significant issues under the Tax Code, as well as an opinion from its tax advisor that, subju ect to certain nd MetLife’ff s shareholders limited exceptions, the Separation qualifies for non- pursuant to Sections 355 and 361 of the Tax Code. Notwithstanding the receipt of the private letter rulr ing and the tax opinion, the tax opinion is not binding on the IRS or the courts, and the IRS could determine that the Separation should be treated as a income tax liabia lities, and we could have an taxable transaction and, as a result, we could incur significant federal indemnificff ation obligation to MetLife. recognition of gain or loss to MetLife a ff ff ff r es would be imposed on MetLife off ff Generally, taxes resulting froff m the failure of the Separation to qualify f eral income Inc. tax purpos s against such taxes if the failure to qualify (the “Tax Separation Agreement”), MetLife is generally obligated to indemnify uff for tax-free treatment results froff m, among other things, any action or inaction that is within MetLife’ff s control. MetLife mff ay dispute an indemnificff ation obligation to us under the Tax Separation Agreement, and there can be no assurance that MetLife in the event of will be able to satisfy its indemnification obligation to us or that such indemnification will be sufficient for us t on our nonperformance by MetLife.ff The faiff financial condition and results of operations. r MetLife’s shareholders. Under the tax separation agreement with MetLife,ff s could have a material adverse effecff recognition treatment for fedff lure of MetLife t ly indemnify uff or non- o fulff ff ff ff ff orff In addition, MetLife wff ill generally bear tax-related losses dued Separation to qualify f and under the Tax Separation Agreement, we could be required, under certain circumstances, to indemnify Mff affiff liates against certain tax-related liabia lities caused by those faiff treatment or if certain other steps that are part of the Separation do not qualify f required to pay material additional taxes or be obligated to indemnify Mff our financial condition and results of operations. lure of certain steps that were part of the to the faiff their intended tax treatment. However, the IRS could seek to hold us responsible for such liabia lities, etLife and its ecognition ff their intended tax treatment, we could be t on etLife, which could have a material adverse effecff ff lures. If the Separation does not qualify f or non-r orff ff ff The Separation was also subju ect to tax rulr es regarding the treatment of certain of our tax attributes (such as the basis in our assets). In certain circumstances such rules could require us to reduce those attributes, which could materially and adversely affect our financial condition. The ultimate tax consequences to us of the Separation may not be finally determined r froff m the tax consequences that we and MetLife expected at the time of the Separation. As a for many years and may diffeff result, we could be required to pay material additional taxes and to materially reduce the tax assets (or materially increase the tax liabia lities) on our consolidated balance sheet. These changes could impact our availabla e capital, ratings or cost of capital. There can be no assurance that the Tax Separation Agreement will protect us from any such consequences, or that any issue that may arise will be subju ect to indemnification by MetLife under the Tax Separation Agreement. As a result, our financial condition and results of operations could be materially and adversely affected. Dispii utestt remedies may na or disaii gra eements wtt ot be suffu icie ff ith Mtt nt; wt tt etMM Li fei may aa e may alsoll ct our finff ancial stattt emen tt ffea ertain of MetLife'ff s l be required to share in cii ' ii iall bilities ts and business opeo rations, as nd our contractual The Master Separation Agreement that sets forth our agreements with MetLife r elating to the ownership of certain assets and the allocation of certain liabia lities in connection with the Separation (the “Master Separation Agreement”) provides that, subju ect to certain exceptions, we will indemnify, hol nd certain related individuals from and against all liabia lities relating to, arising out of or resulting from certain events relating to our business. We cannot predict whether any event triggering this indemnity will occur or the extent to which we may be obligated to indemnify Mff etLife or such related individuals. In addition, the Master Separation Agreement provides that, subju ect to certain exceptions, MetLife will indemnify, hol d harmless and defend us and certain related individuals from and against all liabia lities relating to, arising out of or resulting froff m certain events relating to its business. There can be no assurance that MetLife will be able to satisfy its indemnification obligation to us or that such indemnificff ation will be sufficient to us in the event of a dispute or nonperformance by MetLife.ff d harmless and defend MetLife aff ff ff ff In addition, the Master Separation Agreement allocates responsibility among MetLife aff nd Brighthouse Financial with ctions or investigations where Brighthouse Financial is not a respect to certain claims (including litigation or regulatory arr party). As a result, we may face indemnification obligations or be required to share in certain of MetLife’ff s liabia lities with respect to such claims. 56 Risks Related to Our Securities We currentlytt have no plans to dtt pay dividends odd ability to n our capia taii ecdd lare and pay dividends odd tt o rtt l stock and our abilitii y t n our common stock, ak epurchase our common stock at the level e nd legal ii ll ll we wishii ll restrictiott ns could l imi t oii ur t ff reff e cash floff w, if any, to pay debt obligations, to fund our grow We currently have no plans to declare and pay cash dividends on our common stock. We currently intend to use our th, to develop our business, for working rr future statutor y f capital needs, to carry out any share or debt repurchases that we may undertake, as well as for general corporate purposes. Thereforff e, you are not likely to receive any dividends on your common stock in the near-term, and the success of an investment in shares of our common stock will depend upon any futur eciation in their value. There is no guarantee that shares of our common stock will appreciate in value or even maintain the price at which the shares currently trade, and the market price of our common stock may fluctuate widely depending on many factors, some of which may be beyond our e declaration and payment of dividends or other distributions or returns of capital will be at the discretion control. Any futur ors, including our financial condition, earnings, cash needs, regulatoryrr of our Board of Directors and will depend on many fact constraints, capital requirements (including capital requirements of our insurance subsidiaries), and any other facff tors that our Board of Directors deems relevant in making such a determination. Thereforff e, there can be no assurance that we will pay any dividends or make other distributions or returns on our common stock, or as to the amount of any such dividends, distributions or returns of capital. a e appr ff ff ff In addition, the terms of the agreements governing preferred stock and certain of our outstanding indebtedness, as well as ents that we may issue in the future, may limit or prohibit the payment of dividends on our debt and other financial instrumrr common stock or preferff ted debentures. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — The Company — Primary Uses of Liquidity and Capital — ‘Dividend Stopper’ Provisions in BHF’s Preferred Stock and Junior Subordina red stock, or the payment of interest on our junior subordina ted Debentures.” u u ance laws and Delawar Stattt e i rr e corpor ii tt nsur incorporatiott n and amended and restattt edtt price of oo ur common stock tradingii ll ate l tt awll bylaws, ms , aw s well all s certain provisions of our amendeddd ay prevent or deldd ay an acqu ll isition of uo and restated certifii cate of s, which could decrease the State laws may delay, deter, prevent or render more diffiff cult a takeover attempt that our stockholders might consider in their best interests. For example, such laws may prevent our stockholders from receiving the benefitff from any premium to the market price of our common stock offered by a bidder in a takeover context. Delaware law also imposes some restrictions on mergers and other business combinations between the Company and “interested stockholders.” An “interested stockholder” is defined to include persons who, together with affiff liates, own, or did own within three years prior to the determination of interested stockholder status, 15% or more of the outstanding voting stock of a corporation. The insurance laws and regulations of the various states in which our insurance subsidiaries are organized may delay or impede a business combination involving the Company. State insurance laws prohibit an entity from acquiring control of an insurance company without the prior approval of the domestic insurance regulator. Under most states’ statutt es, an entity is presumed to have control of an insurance company if it owns, directly or indirectly, 10% or more of the voting stock of that insurance company or its parent company. See “Business — Regulation — Insurance Regulation — Holding Company estrictions may delay, deter or prevent a potential merger or sale of our company, even if our Regulation.” These regulatory r Board of Directors decides that it is in the best interests of stockholders for us to merge or be sold. These restrictions also may delay sales by us or acquisitions by third parties of our insurance subsidiaries. In addition, the Investment Company Act may require approval by the contract owners of our variable contracts in order to effeff ctuat te a change of control of any affiff liated investment advisor to a fund underlying our variable contracts, including Brighthouse Advisers. Further, FINRA approval would be necessary for a change of control of any broker-dealer that is a direct or indirect subsu idiary of BHF. rr In addition, our amended and restated certificff ate of incorporation and amended and restated bylaws contain provisions that may deter coercive takeover practices and inadequate takeover bids and may encourage prospective acquirers to negotiate with our Board of Directors rather than attempt a hostile takeover. These provisions will apply even if the offeff r may be considered beneficial by some stockholders and could delay or prevent an acquisition that our Board of Directors determines is not in the best interests of Brighthouse Financial and our stockholders. These provisions may also prevent or discourage attempts to remove and replace incumbent directors. Item 1B. Unresolved Staff Comments None. 57 Item 1C. Cybersecurity Cybersecurityii Risk Ma ii nagea ment Program and StrSS ategy tt We understand the importance of maintaining a robust cybersecurity program to assess, identify,ff and manage the material risks associated with cybersecurity threats. ; Managia ngii Cybersecurityii Risks; g g y y ii Cybersecurityii Risk Ma y y ii nagea ment Stratt g gy tegye Our cybersecurity risk management program is integrated into the Company’s enterprrr ise risk management fraff mework, and our strategy focuses on implementing effective and effiff cient processes, technologies, and controls to assess, identify, and manage cybersecurity risks. Our cybersecurity program is designed to be aligned with the National Institute of Standards and Technology (“NIST”) framework, which organizes the management of cybersecurity risks into fiveff categories: identify, protect, detect, respond, and recover. Our Chief Technology Offiff cer (“CTO”) has overall responsibility for our information technology program, which includes the Company’s cybersecurity program. Our Chief Information Security Offiff cer (“CISO”) is directly responsible for the Company’s cybersecurity program, which is designed to protect and preserve the integrity, confidff entiality, and continued availabia lity of the inforff mation owned by, or in the care of, the Company. Our CTO has over 25 years of information technology experience, including systems development, technology strategy, and vendor management; our CISO has over 30 years of inforff mation technology and cybersecurity program management experience. Prior to joining involved leading and overseeing Brighthouse Financial, both our CTO and CISO previously served in roles that information technology and cybersecurity programs at other public companies in the financial services industry.rr In addition, our CTO serves on a cross-departmental, management-level risk committee that oversees the Company’s and monitors the enterprise risks, including cybersecurity risks. This enterprise-level risk committee is informed about prevention, mitigation, detection, and remediation of cybersecurity incidents. a Our cybersecurity team regularly assesses the threat landscape and takes an enterprr ise-wide view of cybersecurity risks. We monitor issues that are internally discovered or externally reported that may affeff ct our business, and we employ a te our cybersecurity risk identification and assessments, including regular range of tools and third-party services to effeff ctuat network and endpoint monitoring, threat and vulnerabia lity assessments, and external penetration testing. In addition, our cybersecurity team conducts regular reviews, conducts tabla etop exercises, performs internal testing, and leverages the audits performed by our internal audit team, as well as the services of third-party consultants, to assess and evaluate the effeff ctiveness of our controls (in alignment with the NIST fraff mework) and to improve our security measures and strategy. The cybersecurity team has also engaged a third party to measure our cybersecurity program against the NIST cybersecurity framework. The results of this assessment confirme d the rigor of our cybersecurity risk management practices. ff Our cybersecurity team has also establa ished Company-wide policies and procedurd es that cover cybersecurity matters, which are designed to enable us to effectively identify,ff evaluate, and respond to events that have the potential to impact our business. In the event of a cybersecurity incident, the Company utilizes a well-defined incident response plan that coordinates the activities we take to prepare forff , detect, respond to and recover froff m cybersecurity incidents, which include processes to triage, assess severity, escalate, contain, investigate, and remediate the incident, as well as to comply with potentially applicable legal obligations (including relevant securities laws) and mitigate brand and reputational damage. This plan includes immediate actions to mitigate the impact, as well as long-term strategies for the remediation and prevention of futur e incidents. In accordance with this plan, we have established a cross-departmental Brighthouse Response Team that is responsible for coordinating enterprise-wide responses to cybersecurity incidents, as applicable. This Brighthouse Response Team provides reports regarding cybersecurity incidents to the enterprise-level risk committee referenced above. ff r u ate culture suppor Further, employees outside of our technology organization have a role in our cybersecurity defenses, and we tive of security, which we believe improves the effeff ctiveness of our cybersecurity risk encourage a corpor management program. Through our Security Awareness Program, we provide our employees with regular cybersecurity training and educational resources to help ensure that they remain vigilant against threats. These include frequent simulations, newsletters, alerts, e-mail reminders, and a mandatory annual cybersecurity awareness training course for all employees. In addition to company policies that we make available to all employees, our awareness training provides clear reporting and escalation processes in the event of suspicious activity. 58 Third-Pa- y rty Rtt isk ManMM agement g Our processes also address the cybersecurity risks associated with our use of third-party vendors, some of whom have access to our customer and employee data. We conduct security assessments of all third-party vendors that have access to lities that house such systems or data. As part of our third-party risk management our systems, our data and/or the faci program, our cybersecurity risk management and third-party risk management teams collabor ate to monitor our third-party vendors’ compliance with our cybersecurity standards. This approach is designed to mitigate risks related to data breaches or other security incidents originating froff m third parties. a ff Riskii s fkk roff m CybCC erserr curityii Threats y y f Our systems and our third-party vendors’ systems periodically experience directed attacks intended to lead to (i) interruptu ions or delays in our operations or (ii) the loss, misuse or theft of personal information and other data, including confidff ential inforff mation or intellectuat l property. We have not experienced any cybersecurity incidents to date, directly or indirectly, that have materially impacted our business, financial condition, or results of operations. For more information regarding our risks froff m cybersecurity threats, see “Risk Factors — Operational Risks — Any failure in cyber- or other information security systems, as well as the occurrence of events unanticipated in Brighthouse Financial’s or our third- party service providers’ disaster recovery systems and business continuity planning could result in a loss or disclosure of confidff ential inforff mation, damage to our reputation and impairment of our ability to conduct business effectively” and “Risk Factors —Operational Risks — Any failure to protect the confidff entiality of customer, employee, or other third-party information could adversely affect our reputation and have a material adverse effect on our business, financial condition and results of operations.” Governance Board of Do f irectors - Oversighi g g t and Managea ment Repor p ee g ting The Audit Committee of the Board of Directors (the “Audit Committee”) is primarily responsible for overseeing cybersecurity risks, and the Board of Directors is actively engaged with respect to these risks. The Audit Committee and/or the Board of Directors generally meet with our CTO and CISO on a quarterly basis to review our information technology and to discuss our activities to manage the related risks, including risk assessments, and cybersecurity risk profileff mitigation strategies, areas of emerging risks, incidents and industry t rends, tabletop exercises, and other areas of importance. In addition to these regular meetings, we have an escalation process in place to timely inform the Board of tes relating thereto, to ensure that the Board of Directors of any significant cybersecurity incidents, including any upda Directors’ oversight is proactive and responsive. Our Chief Compliance Officer also regularly reports to the Audit Committee regarding the Company’s compliance with appl icable regulations relating to cybersecurity. u a rr Item 2. Properties Not material. Item 3. Legal Proceedings See Note 18 of the Notes to the Consolidated Financial Statements. Item 4. Mine Safety Disclosures a Not appl icable. 59 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Issuer Common Equity BHF’s common stock, par value $0.01 per share, trades on the Nasdaq under the symbol “BHF.” As of Februarr ry 16, 2024, there were approximately 1.1 million registered holders of record of our common stock. The actuat l number of holders of our common stock is subsu tantially greater than this number of record holders, and includes stockholders who are beneficial owners, but whose shares are held in “street name” by banks, brokers, and other finff ancial institutions. We currently have no plans to declare and pay dividends on our common stock. See “Risk Factors — Risks Related to Our Securities — We currently have no plans 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” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — The Company — Capital.” Stoctt k PerPP for rmance Graph The grapha and table below present BHF’s cumulative total shareholder returt n relative to the performance of (1) the S&P 500 Index, (2) the S&P 500 Financials Index and (3) the S&P 500 Life & Health Insurance Index, respectively, for the five- year period ended December 31, 2023. All values assume a $100 initial investment at the opening price of BHF’s common each of the S&P 500 Index, the S&P 500 Financials Index and the S&P 500 Life & Health stock on the Nasdaq and data forff Insurance Index assume all dividends were reinvested on the date paid. The points on the graph and the values in the tablea represent month-end values based on the last trading day of each month. The comparisons are based on historical data and are not indicative of, nor intended to forff ecast, the futur e performance of our common stock. ff Based upon an initial investment of $100 on December 31, 2018 MULATIVE TOTAL RETURN $220 $200 $180 $160 $140 $120 $100 $80 $60 Dec 31, 2018 Dec 31, 2019 Dec 31, 2020 Dec 31, 2021 Dec 31, 2022 Dec 31, 2023 Brighthouse Financial, Inc. S&P 500 S&P 500 Financials S&P 500 Life & Health Insurance BHF common stock S&P 500 S&P 500 Financials S&P 500 Life & Health Insurance Dec 31, 2018 100.00 $ 100.00 $ 100.00 $ 100.00 $ Dec 31, 2019 128.71 $ 131.49 $ 132.13 $ 123.18 $ Dec 31, 2020 118.78 $ 155.68 $ 129.89 $ 111.51 $ Dec 31, 2021 169.95 $ 200.37 $ 175.40 $ 152.41 $ Dec 31, 2022 168.21 $ 164.08 $ 156.92 $ 168.18 $ Dec 31, 2023 173.62 $ 207.21 $ 175.99 $ 176.00 $ 60 Issuer Purchases of Eo quity Stt ecSS urities Purchases of BHF common stock made by or on behalf of BHF or its affiff liates durd ing the three months ended December 31, 2023 are set forth below: Period Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2) (In millions) October 1 — October 31, 2023 November 1 — November 30, 2023 December 1 — December 31, 2023 Total _______________ 460,522 423,457 342,658 1,226,637 $ $ $ 47.24 48.31 53.14 461,248 423,788 342,658 1,227,694 $ $ $ 82 811 793 (1) Where applicable, total number of shares purchased includes shares of common stock withheld with respect to option exercise costs and tax withholding obligations associated with the exercise or vesting of share-based compensation awards under our publicly announced benefit plans or programs. (2) On November 16, 2023, we authorized the repurchase of up tu o $750 million of our common stock, which is in addition to the $1.2 billion total repurchases authorized in 2021. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — The Company — Primary Uses of Liquidity and Capital — Common Stock Repurchases” and Note 13 of the Notes to the Consolidated Financial Statements forff more information on common stock repurchases. Item 6. [Reserved] 61 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Index to Management’s Discussion and Analysis of Financial Condition and Results of Operations Introduction Executive Summary Risk Management Strategies Industry Trr rends and Uncertainties Summary of Critical Accounting Estimates Non-GAAP and Other Financial Disclosures Results of Operations Investments Derivatives Policyholder Liabia lities Liquidity and Capital Resources Page 63 64 65 67 68 71 73 84 93 94 96 62 The folff results could dll contritt bute to thett Regarding and Analysll Qualitative Discii e lowing discii ussion may ca iffeff r materially f ontain forff ward-ldd ooking statements t tt hat roff m thos e discussed in thett ll tt tt se diffi erff ences include those facff tors discii ussed below and elsell where in thitt s r Forward-Looking StaS tements att CC is of Financial Condi nd Summary of Riskii Factors”rr tion and Results of Operations should al losures About Marketkk Riskii ” and our consolidatdd ed financial statements i tt se forward-looking statements.tt Factors t hat reflee ct our plans, estimates and beliefs. Our actual ause or rr eport, particularly in “NoteNN and “Risk FacFF tors.” ThiTT s Mii ment’s Discii ussion MM lso be read in conjunction with “Quantitative and tt ncluded elsewhere herein. ll could c anage ii Introduction This Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to help the reader understand the results of operations, finff ancial condition and cash floff ws of Brighthouse Financial for the periods indicated. In addition to Brighthouse Financial, Inc., the companies and businesses included in the results of operations, financial condition and cash floff ws are: • • • • • • • • ff Brighthouse Life I nsurance Company (together with its subsidiaries and affiliates, “BLIC”), our largest insurance subsu idiary, domiciled in Delaware and licensed to write business in all U.S. states (except New York), the District of Columbia, the Bahamas, Guam, Puerto Rico, the British Virgin Islands and the U.S. Virgin Islands; NELICO, domiciled in Massachusetts and licensed to write business in all U.S. states and the District of Columbia; BHNY, domiciled in New York and licensed to write business only in New York, which is a subsidiary of Brighthouse Life I nsurance Company; ff BRCD, our reinsurance subsidiary domiciled and licensed in Delaware, which is a subsu idiary of Brighthouse Life Insurance Company; Brighthouse Advisers, serving as investment advisor to certain proprietary funds that are underlying investments under our and MetLife’s variable insurance products; Brighthouse Services, LLC, an internal services and payroll company; Brighthouse Securities, registered as a broker-dealer with the SEC, approve broker-dealer and licensed as an insurance agency in all required states; and a d as a member of FINRA, registered as a Brighthouse Holdings, LLC (“BH Holdings”), a direct holding company subsidiary of Brighthouse Financial, Inc. domiciled in Delaware. Prior to discussing our results of operations, we present information that we believe is usefulff discussion of our financial results. This inforff mation precedes our results of operations discussion and is most beneficia read in the sequence presented. A summary of key informational sections is as follows: to understanding the l when ff • • • • • • “Executive Summary” provide rr s summarized information regarding our business, segments and finff ancial results. “Risk Management Strategies” describes the Company’s risk management strategies to protect against capital markets risks specific to our variable annuity and ULSG businesses. ff u “Industry Trr believe may materially affeff ct our future financial condition, results of operations or cash floff ws. rends and Uncertainties” discusses upda tes and changes to a number of trends and uncertainties that we “Summary of Critical Accounting Estimates” explains the most critical estimates and judgments applied in determining our results in accordance with GAAP. “Non-GAAP and Other Financial Disclosures” definff es key finff ancial measures presented in our results of operations discussion that are not calculated in accordance with GAAP but are used by management in evaluating company and segment performance. As described in this section, adjud sted earnings is presented by key business activities which are derived, but different, froff m the line items presented in the GAAP statements of operations. 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. “Results of Operations” begins with a discussion of our AAR, including a summary of the changes made to the key assumptions in 2023 and 2022, as well as the resulting impact on net income (loss) availabla e to shareholders in each period. 63 Our Results of Operations discussion and analysis presents a review for the years ended December 31, 2023 and 2022 the year ended and year-over-year comparisons between these years. Our Results of Operations discussion and analysis forff December 31, 2022, including a review of the 2022 AAR and year-over-year comparisons between the years ended December 31, 2022 and 2021 can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Results of Operations” in our Annual Report on Form 10-K forff the year ended December 31, 2022 (our “2022 Annual Report”), which was filed with the SEC on February 23, 2023, and such discussions are incorporated herein by reference. Certain amounts presented in prior periods within the folff lowing discussions of our financial results have been reclassified to conform with the current year presentation, including amounts related to the adoption of LDTI. See Note 1 of the Notes to the Consolidated Financial Statements forff further information. Executive Summary We are one of the largest providers of annuity and life i nsurance products in the U.S. through multiple independent distribution channels and marketing arrangements with a diverse network of distribution partners. We are organized into three segments: (i) Annuities, (ii) Life and (iii) Run-off,ff which consists of products that are no longer actively sold and are separately managed. In addition, we report certain of our results of operations in Corporate & Other. See “Business — Segments and Corpor ation ate & Other” and Note 3 of the Notes to the Consolidated Financial Statements forff regarding our segments and Corporate & Other. further informff r ff Net income (loss) availabla e to shareholders and adjusted earnings, a non-GAAP financial measure, were as follows: Income (loss) availabla e to shareholders before provision for income tax Less: Provision for income tax expense (benefit) Net income (loss) availabla e to shareholders (1) Pre-tax adjusted earnings, less net income (loss) attributable to noncontrolling interests and preferred stock dividends Less: Provision for income tax expense (benefit) Adjud sted earnings __________________ Years Ended December 31, 2023 2022 (In millions) (1,581) $ (367) (1,214) $ 1,182 213 969 $ $ 4,623 848 3,775 1,343 159 1,184 $ $ $ $ (1) We use the term “net income (loss) availabla e to shareholders” to refer to “net income (loss) availabla e to Brighthouse Financial, Inc.’s common shareholders” throughout the results of operations discussions. For the year ended December 31, 2023, we had net loss availabla e to shareholders of $1.2 billion and adjud sted earnings of $969 million compared to net income availabla e to shareholders of $3.8 billion and adjusted earnings of $1.2 billion for the year ended December 31, 2022. Net loss availabla e to shareholders for the year ended December 31, 2023 primarily reflects net unfavff orable changes in the estimated faiff to market factors, net losses on sales of fixed maturt r value of freestanding interest rate derivatives we use to hedge our ULSG business resulting froff m increasing long-term interest rates. These unfavff orable impacts were partially offsff et by favorable pre-tax adjusted earnings. ity securities and an unfavff orable change in the estimated faiff r value of our variable annuity guaranteed benefit riders dued See “— Non-GAAP and Other Financial Disclosures.” See “— Results of Operations” forff a detailed discussion of our results. 64 Risk Management Strategies We employ risk management strategies to protect against capia tal markets risks specific to our variable annuity and ULSG businesses, which includes the utilization of a combined RBC ratio. Combined RBC ratio reflects the aggregate RBC ratio of our insurance subsidiaries, definff ed as aggregate TAC of our insurance subsidiaries divided by the total of their respective company action level RBCs. Combined RBC ratio is an internal metric used by the Company to manage the risk associated with its insurance products through our capital and exposure risk management program; it is not a metric required or used by regulators. Interest Rate Hedgingii We are exposed to interest rate risk in most of our producd ts, with the more significant longer-dated exposure residing in our in-force variabla e annuity guarantees and ULSG business. We individually manage the interest rate risk in these two blocks with hedge targets based on statutor etrics designed principally to protect the capital of our largest insurance subsu idiary, BLIC. Our interest rate hedge programs may also include hybrid options that have other risk exposure in addition to interest rate exposure. y mrr t The gross notional amount and estimated faiff r value of the derivatives hedging our in-force variabla e annuity guarantees and ULSG business viewed in aggregate in our interest rate hedging program were as follows at: Instrument Type Interest rate swaps Interest rate options Interest rate forwards Hybrid options (2) Total _______________ December 31, 2023 December 31, 2022 Gross Notional Amount (1) Estimated Fair Value Assets Liabilities Gross Notional Amount (1) (1) Estimated Fair Value A ssets Liabilities $ $ 23,037 33,680 16,155 270 73,142 $ $ 71 47 32 — 150 $ $ (In millions) 50 167 1,877 — 2,094 $ $ 2,330 28,688 16,848 — 47,866 $ $ 38 22 35 — 95 $ $ 46 232 2,387 — 2,665 (1) The gross notional amounts presented do not necessarily represent the relative economic coverage provided by derivative instruments because certain positions were closed out by entering into offsff etting positions that are not netted in the above tabla e. (2) Hybrid options have equity exposure in addition to interest rate exposure. This aggregate view includes all interest rate derivatives used to manage the variabla e annuity and ULSG productd exposures based on the hedge targets of the respective programs as of the balance sheet date. We intend to maintain an adequate amount of liquid investments in the investment portfolff ios supporting these businesses to cover any contingent collateral posting requirements froff m this hedging strategy. Variable All nnuityii Exposxx ure Risk ManMM agement With the adoption of VA Reforff m, our management of, aff rr nd our hedging strategy associated with, our variable annuity business aligns with the regulatory f raff mework. Given this alignment and our large non-variable annuity business, among other things, we utilize a combined RBC ratio to manage the risk associated with our insurance products through our capital and exposure risk management program. In support of our target combined RBC ratio of 400% to 450% in normal market conditions, we expect to maintain a capital and exposure risk management program that targets total assets suppor ting our variable annuity contracts at or above the CTE98 level in normal market conditions. We refer to our target level of assets as our “Variabla e Annuity Target Funding Level.” With our risk management focus on the core drivers of our combined RBC ratio, we can also better manage our RBC in stressed market scenarios. See “Glossary” forff ff the definitio n of CTE. u a When setting our hedge target, we consider the fact that our obligations under Shield Annuity contracts decrease in falling equity markets when variabla e annuity guarantee obligations increase, and increase in rising equity markets when eserve rr variable annuity guarantee obligations decrease. Shield Annuities are included with variable annuities in our statutor requirements, as well as in our CTE estimates. y r ff t 65 Our exposure risk management program seeks to mitigate the potential adverse effects of changes in capital markets, reeff rr specifically equity markets and interest rates, on our Variable Annuity Target Funding Level, as well as on our statutor y f ents to establa ish a layered maturt cash floff w. We utilize a combination of short-term and longer-term derivative instrumr ity of protection, which we believe will reduce rollover risk durd ing periods of market disrupt ion or higher volatility. We continually review our hedging strategy in the context of our overall capitalization targets and monitor the capital markets for opportunities to adjust our derivative positions to manage our variable annuity exposure, as appropriate. r t Under this strategy, we plan to operate with a firff st loss position of no more than $500 million. The firff st loss position is relative to our Variable Annuity Target Funding Level such that the impact on reserves, and thus TAC, could be greater than the firff st loss position. However, under such a scenario there would be an offset in required statutory capital. In addition, while recent amendments to the Valuation Manual, which became effective on December 31, 2023, changed the requirements forff reflecting hedge instruments in reserves and capital, the key pillars of our hedging strategy (including our targeted combined RBC ratio in normal markets, our Variable Annuity Target Funding Level, and our first loss position) were not impacted by this new statutory requirement. See “Business — Regulation — Insurance Regulation — Statutory equirement and the related rr Accounting, Reserves and Risk-Based Capital” for more inforff mation regarding the new statutor y r impacts. t t We believe the level of our capital protection provides us finff ancial flexibility and supports deploying capital forff growing long-term, sustainable shareholder value. However, because our hedging strategy places a lower priority on offsff etting changes to GAAP liabia lities, changes to markets over time, including market volatility, could result in GAAP net income volatility, which could potentially impact stockholders’ equity. See “Risk Factors — Risks Related to Our Business — Our variable annuity exposure risk management strategy may not be effeff ctive, may result in significant volatility in our profitaff bia lity measures or may negatively affect our statutor apital” and “— Summary of Critical Accounting Estimates.” y crr t The gross notional amount and estimated faiff r value of the derivatives held in our variable annuity hedging program were as follows at: December 31, 2023 December 31, 2022 Instrument Type Equity index options Equity total returt n swapsa Interest rate swaps Interest rate options Interest rate forwards Hybrid options Total _______________ Gross Notional Amount (1) $ 16,183 53,742 30,864 27,580 8,519 270 $ 137,158 Estimated Fair Value Assets Liabilities Gross Notional Amount (1) (1) Estimated Fair Value A ssets Liabilities $ $ 472 2,236 92 39 — — 2,839 $ $ $ (In millions) 680 2,137 103 123 619 — 3,662 $ 13,862 32,909 2,330 27,088 10,565 — 86,754 $ $ 525 520 38 21 35 — 1,139 $ $ 350 747 46 126 1,255 — 2,524 (1) The gross notional amounts presented do not necessarily represent the relative economic coverage provided by option instruments because certain positions were closed out by entering into offsff etting positions that are not netted in the above tabla e. ULSG Market Riskii Expos xx ure ManMM agement ff The ULSG block includes the business retained by our insurance subsidiaries and the portion of it that is ceded to BRCD t. The primary market risk associated with our ULSG u for providing redundant, non-economic reinsurance finff ancing suppor e levels of U.S. interest rates and bond yields. To help ensure we have suffiff cient block is the uncertainty around the futur assets to meet future ULSG policyholder obligations, we have employed an actuat ULSG CFT to set our ULSG asset requirement target for BRCD, which reinsures the majority of the ULSG business written by our insurance subsu idiaries. For the business retained by our insurance subsidiaries, we set our ULSG asset requirement target to equal the eserves, which, taken together with our ULSG asset requirement target of BRCD, comprises actuat our ULSG Target. Under the ULSG CFT appr t or lower than current levels and our actuat rial assumptions include a provision for adverse deviation. These underlying assumptions used in ULSG CFT include scenarios that are more conservative than those required under GAAP, which assumes a long-term upward mean reversion of interest rates and best estimate actuat rial assumptions without additional provisions for adverse deviation. oach, we assume that interest rates remain flaff rr rially determined statutor y r rial approach based upon u a t 66 We seek to mitigate interest rate exposures associated with these liabia lities by holding ULSG Assets to closely match our nt interest rate environments. “ULSG Assets” are defined as (i) total general account assets ios of our insurance subsidiaries and BRCD and (ii) interest rate ting statutory reserves and capital in the ULSG portfolff ff ULSG Target under differe suppor u derivative instrumrr ents to mitigate ULSG interest rate exposures. rr The net statutor y r t eserves forff the ULSG business in our insurance subsidiaries and BRCD (which is in part suppor u ted by reinsurance finff ancings) were $24.1 billion and $23.4 billion forff the years ended December 31, 2023 and 2022, respectively. Our ULSG Target is sensitive to the actuat l, our ULSG Target increases. Likewise, if interest rates rise, our ULSG Target declines. The interest rate derivatives allocated to ULSG Assets prioritizes the ULSG Target (comprised of ULSG CFT and statutory considerations). This could increase the period-to-period volatility of net income and equity due to differences in the sensitivity of the ULSG Target and GAAP liabia lities to the changes in interest rates. l and future expected level of long-term U.S. interest rates. If interest rates falff We closely monitor the sensitivity of our ULSG Assets and ULSG Target to changes in interest rates. We seek to maintain ULSG Assets above the ULSG Target across a wide range of interest rate scenarios. At December 31, 2023, BRCD assets exceeded the ULSG CFT requirement. Maintaining ULSG Assets that closely match our ULSG Target suppor ts our target combined RBC ratio of 400% to 450% in normal market conditions. u Industry Trends and Uncertainties Throughout this Management’s Discussion and Analysis of Financial Condition and Results of Operations, we discuss a number of trends and uncertainties that we believe may materially affeff ct our future financial condition, results of operations or cash floff ws. Where these trends or uncertainties are specificff to a particular aspect of our business, we ofteff n 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. In addition, the folff lowing factors represent some of the key general trends and uncertainties that have influff enced 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 futur e. ff Changes in Aii ii ccounting St antt dards Our finff ancial statements are subject to the appl ication of GAAP, which is periodically revised by the FASB. The FASB issued new guidance, effeff ctive January 1, 2023, that resulted in significant changes to the accounting forff long-duration insurance contracts, including a requirement that all variabla e annuity guarantees be considered MRBs and measured at fair a discussion of the impacts. See also “Risk value. See Notes 1 and 2 of the Notes to the Consolidated Financial Statements forff Factors — Risks Related to Our Business — Changes in accounting standards issued by the Financial Accounting Standards Board may adversely affect our financial statements.” a ff Financ ii ial and Economic Enviroii nment Our business and results of operations are materially affected by conditions in the capital markets and the economy generally. Stressed conditions, volatility and disruptu ions in the capital markets or financial asset classes can have an adverse effeff ct on us. Equity market performance can affeff ct our profitff ability for variabla e annuities and other separate account producd ts as a result of the effeff cts it has on product demand, revenues, expenses, reserves and our risk management effeff ctiveness. The level of long-term interest rates and the shape of the yield curve can have a negative effect on the profitabia lity for variablea annuities, as well as the demand forff , and the profitabia lity of, spread-based products such as fixed annuities, index-linked annuities and universal life insurance. Low interest rates and risk premium, including credit spread, affect new money rates on invested assets and the cost of product guarantees. Insurance premium growth and demand for our products is impacted by the general health of U.S. economic activity. A sustained or material increase in inflatio n could also affect our business in ls which could increase realized and several ways. During inflationary periods, the value of fixff ed income investments falff unrealized losses. Interest rates have increased and may continue to increase dued to central bank policy responses to combat inflation, which may positively impact our business in certain respects, but could also increase the risk of a recession or an equity market downturn and could negatively impact various portions of our business, including our investment portfolff io. Inflation also increases our expenses (including, among others, forff and third-party services), potentially putting pressure on profitaff bia lity if such costs cannot be passed through to policyholders in our product prices. Prolonged and elevated inflation could adversely affect the finff ancial markets and the economy generally and dispelling it may require governments to pursue a restrictive fisff cal and monetary policy, which could constrain overall economic activity and inhibit revenue growth. Events involving limited liquidity, defauff ions or the financial services industry grr enerally, or concerns or rumors about events of these kinds or other similar risks, could adversely affeff ct market-wide liquidity, which could increase the risk of a recession or an equity market downturn and negatively impact io. See “Risk Factors — Economic Environment and various portions of our business, including our investment portfolff lts, nonperformance or other adverse developments that affeff ct financial institutt a labor ff 67 Capia tal Markets-Related Risks — If difficult conditions in the capital markets and the U.S. economy generally persist or are perceived to persist, they may materially adversely affect our business and results of operations” and “Risk Factors — Risks Related to our Investment Portfolff io is subju ect to significant finff ancial risks both in the U.S. and global finff ancial markets, including credit risk, interest rate risk, inflation risk, market valuation risk, liquidity risk, real estate risk, derivatives risk, and other fact ors outside our control, the occurrence of any of which could have a material adverse effeff ct on our financial condition and results of operations.” io — Our investment portfolff ff a The above markets returns actuat related assumptions may change and may potentially have a material impact on liabia lity valuations and net income. factors affect our expectations regarding futur e margins. We review our long-term assumptions about capia tal and interest rates, along with other assumptions such as contract holder behavior, as part of our annual nformation on contract holder behavior becomes availabla e, rial review. As additional company specific or industry i rr ff t We continue to closely monitor political and economic conditions that might contribute to market volatility and their n, uncertainty and instabia lity in impact on our business operations, investment portfolff certain asset classes (including commercial real estate), supplu ts, including in Europe and the Middle East. See “— Investments — Current Environment” herein, as well as “Risk Factors — Economic Environment and Capia tal Markets-Related Risks,” “Risk Factors — Risks Related to Our Investment Portfolio” and “— Risk Management Strategies” forff 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. io and derivatives, such as global inflatio rr ions and recent geopolitical conflicff y chain disrupt ff Demogro aphics We believe that demographic trends in the U.S. population, the increase in under-insured individuals, the potential risk to governmental social safety net programs and the shifting of responsibility for retirement planning and finff ancial security from employers and other institutions to individuals, highlight the need of individuals to plan for their long-term financial security and will create opportunities to generate significant demand for our products. ff By focus ing our product development and marketing efforts to meeting the needs of certain targeted customer segments identified as part of our strategy, we will be able to focus on offering a smaller number of products that we believe are appropriately priced given current economic conditions. We believe this strategy will benefit our expense ratio thereby increasing our profitaff bia lity. Competitivtt e EnvEE ironment The life i ff nsurance industry r rr we believe that financial strength and financial fleff xibility are highly relevant differe and distributors. We believe we are adequately positioned to compete in this environment. emains highly fraff gmented and competitive. See “Business — Competition.” In particular, ntiators from the perspective of customers ff Regue latory Developmll ents Our insurance subsu idiaries and BRCD are primarily regulated at the state level, with some products and services also subju ect to federal regulation. In addition, BHF and its insurance subsu idiaries are subject to regulation under the insurance holding company laws of various U.S. jurisdictions. Furthermore, some of our operations, products and services are subject to ERISA, consumer protection laws, securities, broker-dealer and investment advisor regulations, as well as environmental and unclaimed property laws and regulations. See “Business — Regulation,” as well as “Risk Factors — Regulatory arr nd Legal Risks.” Summary of Critical Accounting Estimates The preparation of financial statements in conformity with GAAP requires management to adopt accounting policies and make estimates and assumptions that affeff ct amounts reported on the Consolidated Financial Statements. The most critical estimates include those used in determining: • • • liabia lity for futur ff e policy benefitsff (“LFPB”); estimated faiff r values of MRBs; estimated faiff derivatives requiring bifurcation; and r values of freff estanding derivatives and the recognition and estimated faiff r value of embedded • measurement of income taxes and the valuation of deferff red tax assets. 68 In applying our accounting policies, we make subju ective and complex judgments that frequently require estimates about matters that are inherently uncertain. Many of these policies, estimates and related judgments are common in the insurance and finff ancial services industries; others are specific to our business and operations. Actuat r froff m these estimates. l results could diffeff a The above critical accounting estimates are described below and in Note 1 of the Notes to the Consolidated Financial Statements, which reflect updates related to the adoption of LDTI. Liabilityii FF for Futur e PolPP icll y Bc enefitsff The Company establa ishes an LFPB for income annuities, as well as non-participating term and whole life i nsurance. LFPBs are accruerr d over time as revenue is recognized based on a net premium ratio. The net premium ratio is the portion of gross premiums required to provide for all future benefits. LFPBs are establa ished using the Company’s current assumptions roximates a single A corporate bond curve. The Company generally of future cash floff ws, discounted at a rate that appa aggregates insurance contracts into groupings by issue year, product and segment for de termining the net premium ratio and related LFPBs. ff ff The Company reviews cash floff w assumptions regularly, and, if such assumptions change significantly, LFPBs are adjud sted by determining a revised net premium ratio. The revised net premium ratio is calculated as of contract inception ted futff urt e cash floff w assumptions. The recalculated net premium ratio is using both actuat applied to derive a remeasurement gain or loss recognized in current period net income. The net premium ratio is also updated forff l historical experience and upda l and expected experience. nce between actuat ff the differe u The measurement of our LFPBs can be significantly impacted by changes in assumptions for mortality, policy lapses and additional inforff mation on the market interest rates. See Note 4 of the Notes to the Consolidated Financial Statements forff effeff cts of changes in assumptions on the measurement of our LFPBs. The Company establa ishes liabia lities in addition to the account balance forff secondary guarantees on universal life payable when the account insurance. These liabia lities are determined by estimating the expected value of death benefitsff balance is projeo cted to be zero and recognizing those benefitff s ratably over the contract period based on total expected assessments. The benefits used in calculating the liabilities are based on the average benefits payable over a range of scenarios. The Company also maintains a liabia lity for profits followed by losses on ULSG, which is determined by projecting future earnings and establishing a liabia lity to offsff et losses that are expected to occur in later years. The Company reviews cash floff w assumptions regularly, and, if they change significantly, the liabia lity for secondary guarantees is adjud sted by a cumulative charge or credit to net income. The measurement of our ULSG liabia lities can be significantly impacted by changes in assumptions for the general ields, and changes in assumptions for account rate of return, which is driven by our assumption forff ields uses a mean premium, premium persistency, mortality and lapses. The Company’s practice of projeo cting treasury yrr reversion appr oach that assumes that long-term interest rates are less influenced by short-term fluctuations and are only changed when sustained interim deviations are expected. As part of our 2023 AAR, we increased our projected long-term general account earned rate, as well as our mean reversion rate over a period of ten years froff m 3.50% to 3.75%, which resulted in a decrease in our ULSG liabia lities of $259 million. We also updated other assumptions related to ULSG, see “— Results of Operations — Annual Actuat rial Review” forff more information. long-term treasury yrr a See Note 4 of the Notes to the Consolidated Financial Statements forff additional information on the effeff cts of inputs and assumptions on the measurement of ULSG liabia lities. Market Riskii Benefie tsii MRBs principally include guaranteed minimum benefitff s on variabla e annuity contracts, including reinsured benefitsff related to these guarantees. The estimated fair value of variabla e annuity guarantees accounted for as MRBs is determined based on the present value of projected future benefits, less the present value of projected futur tributable to the guarantees. At policy inception, ff to be collected from the Company determines an attributed fee ratio by solving forff ff a percentage of projected future rider fees the policyholder equal to the present value of projected future guaranteed benefits. To the extent the rider fees are insufficient, the Company may also include fees related to mortality and expense charges in the attributed fee ratio, provided the total fees included in the calculation do not exceed total contract fees and assessments collected from the contract holder. The attributed fee ratio is not updated in subsequent periods. e fees at ff 69 r value of variable annuity guarantees in subsu equent periods by projecting futff uret The Company updates the estimated faiff rial assumptions, including expectations of policyholder behavior. A risk benefits using capital markets inputs and actuat neutral valuation methodology is used to project the cash floff ws from the guarantees under multiple capital markets scenarios. The reported estimated fair value is then determined by taking the present value of these cash floff ws using a discount rate that incorporates a spread over the risk-free rate to refleff ct the Company’s nonperformance risk and adding a risk margin (as r value of MRBs, see Note 11 of the Notes to discussed below). For more inforff mation on the determination of estimated faiff the Consolidated Financial Statements. The valuation of MRBs includes an adjustment for the risk that the Company fails to satisfy its obligations, which is referred to as nonperformance risk. The nonperformance risk adjud stment is captured as an additional spread applied to the risk-free rate in determining the rate to discount the cash floff ws of the liabia lity. The spread over the risk-free rate is based on our creditworthiness taking into consideration publicly availabla e information relating to spreads in the secondary market for Brighthouse Financial’s debt. These observable spreads are then adjusted, as necessary, to refleff ct the finff ancial strength ratings of the issuing insurance subsu idiaries as compared to the credit rating of Brighthouse Financial. Risk margins are establa ished to capture the non-capital markets risks of the instrument which represent the additional rial rial judgment, including assumptions of compensation a market participant would require to assume the risks related to the uncertainties in certain actuat assumptions. The establa ishment of risk margins requires the use of significant actuat the amount needed to cover the guarantees. Actuarial assumptions are reviewed at least annually, and if they change significantly, the estimated faiff through net income. Capia tal market inputs used in the measurement of variabla e annuity guarantees are upda through net income, except forff the change attributable to the Company’s nonperformance risk, which is reported in OCI. r value is adjud sted ted quarterly u Market conditions, including, but not limited to, changes in interest rates, equity indices, market volatility and variations rial assumptions, including policyholder behavior, mortality and risk margins related to non-capital markets inputs, as in actuat well as changes in nonperformance risk, may result in significant fluctuations in the estimated faiff r value of the guarantees. In 2023, the Company updated assumptions regarding policyholder behavior, mortality, separate account fund allocations and volatility. See Note 5 of the Notes to the Consolidated Financial Statements forff additional inforff mation on the effects of changes in inputs and assumptions on the measurement of our liabilities for va riable annuity guarantees. ff Derivatives We use freff estanding derivative instrumrr ents to hedge various capital markets risks in our products, including: (i) certain variable annuity guarantees, which are reported as MRBs; (ii) index-linked interest credited feat urt es, which are reported as embedded derivatives; (iii) current or future changes in the fair value of our assets and liabia lities; and (iv) current or future changes in cash floff ws. All derivatives, whether freestanding or embedded, are required to be carried on the balance sheet at fair value with changes refleff cted in either net income (loss) availabla e to shareholders or in OCI, depending on the type of hedge. Below is a summary of critical accounting estimates by type of derivative. ff g Freestandindd g Derivativtt es The determination of the estimated faiff r value of freestanding derivatives, when quoted market values are not availabla e, is based on market standard valuation methodologies and inputs that management believes are consistent with what other market participants would use when pricing such instrumr ents. Derivative valuations can be affeff cted by changes in interest rates, foreign currency exchange rates, financial indices, credit spreads, default risk, nonperformance risk, volatility, liquidity and changes in estimates and assumptions used in the pricing models. See Note 10 of the Notes to the Consolidated Financial Statements forff additional inforff mation on significant inputs into the OTC derivative pricing models and credit risk adjustment. Embedded Derivativtt es in Index-Li- nkii ed Annuities ii The Company issues, and assumes through reinsurance, index-linked annuities, including Shield, that contain crediting rates classified as embedded derivatives. The crediting rates are measured at estimated faiff r value separately from the fixff ed annuity host contracts, which is determined using a combination of an option pricing methodology and an option-budget rial policyholder behavior assumptions, approach. The estimated faiff including expectations for renewals at the end of the term period. Actuarial assumptions are reviewed at least annually, and, if they change significantly, the estimated faiff r value is adjud sted through net income. Capia tal market inputs used in the measurement of crediting rate embedded derivatives are upda r value includes capital market inputs and actuat ted quarterly through net income. u 70 rial assumptions and risk Market conditions, including interest rates and implied volatilities, and variations in actuat tions in the estimated margins, as well as changes in our nonperformance risk adjud stment, may result in significant fluff ctuat fair value that could have a material impact on net income. See Note 11 of the Notes to the Consolidated Financial Statements for more inforff mation on the determination of estimated faiff r value of crediting rate embedded derivatives. Income Taxesaa We provide for fedff eral and state income taxes currently payable, as well as those deferred dued to temporary drr nces between the finff ancial reporting and tax bases of assets and liabia lities. Our accounting forff income taxes represents our best estimate of various events and transactions. Tax laws are often complex and may be subject to differing interpretations by the taxpayer and the relevant governmental taxing authorities. In establishing a provision for income tax expense, we must make judgments and interprrr etations about the appl when in the future certain items will affeff ct taxable income in the various taxing jurisdictions. ication of tax laws. We must also make estimates about ff iffere a a ff In establa ishing a liabia lity for unrecognized tax benefitsff extent, a tax position may be sustained. Once establa ished, unrecognized tax benefitsff information available or when events occur requiring a change. , assumptions may be made in determining whether, and to what are adjusted when there is more Valuation allowances are established against deferred tax assets, particularly those arising from carryforwards, when management determines, based on availabla e inforff mation, that it is more likely than not that deferred income tax assets will nt not be realized. The realization of deferred tax assets related to carryforwards depends upon the existence of sufficie taxable income within the carryforward periods under the tax law in the appl icable tax jurisdiction. Significant judgment is e taxable income to determine whether valuation allowances should be established, as well as the required in projeo cting futur amount of such allowances. See Note 1 of the Notes to the Consolidated Financial Statements forff ation relating to our determination of such valuation allowances. additional informff a ff ff We may be required to change our provision for income taxes when estimates used in determining valuation allowances on deferred tax assets significantly change, or when new information indicates the need for adjustment in valuation allowances. Additionally, future events, such as changes in tax laws, tax regulations, or interprr etations of such laws or regulations, could have an impact on the provision for income tax and the effeff ctive tax rate. Any such changes could significantly affeff ct the amounts reported in the financial statements in the year these changes occur. See Notes 1 and 16 of the Notes to the Consolidated Financial Statements as well as “Business — Regulation — Federal Tax Reforff m” for additional inforff mation on our income taxes. Non-GAAP and Other Financial Disclosures ff Our definitio ns of non-GAAP and other financial measures may diffeff r froff m those used by other companies. Non-GAAP Financ ii ial Disclosll ures g Adjudd stedtt Earnings j In this report, we present adjusted earnings as a measure of our performance that is not calculated in accordance with esults. GAAP. Adjusted earnings is used by management to evaluate performance and faci We believe the presentation of adjusted earnings, as the Company measures it for management purposes, enhances the understanding of our performance by the investor community by highlighting the results of operations and the underlying profitaff bia lity drivers of our business. Adjud sted earnings should not be viewed as a substitute for net income (loss) availablea to Brighthouse Financial, Inc.’s common shareholders, which is the most directly comparable financial measure calculated in accordance with GAAP. See “— Results of Operations” forff a reconciliation of adjusted earnings to net income (loss) availabla e to Brighthouse Financial, Inc.’s common shareholders. litate comparisons to industry r ff rr Adjud sted earnings, which may be positive or negative, focuses on our primary businesses by excluding the impact of market volatility, which could distort trends. The folff lowing are significant items excluded froff m total revenues in calculating adjusted earnings: • • Net investment gains (losses); and Net derivative gains (losses), excluding earned income and amortization of premium on derivatives that are hedges of investments or that are used to replicate certain investments, but do not qualify f accounting ff treatment (“Investment Hedge Adjud stments”). or hedge ff 71 The folff lowing are significant items excluded froff m total expenses in calculating adjusted earnings: • • Change in MRBs; and Change in fair value of the crediting rate on experience-rated contracts (“Market Value Adjud stments”). The provision for income tax related to adjusted earnings is calculated using the statutor rr y t impacts related to the dividends received deducd tion, tax credits and current period non-recurring items. t ax rate of 21%, net of We present adjusted earnings in a manner consistent with management’s view of the primary business activities that lowing tabla e illustrates how each component of adjud sted earnings is drive the profitff ability of our core businesses. The folff calculated froff m the GAAP statements of operations line items: Component of Adjusted Earning s (i) Fee income (ii) Net investment spread (iii) Insurance-related activities ow Derived froff m GAAP (1) H (i) Universarr revenues. l life aff nd investmett nt-typtt ff e product policy fc ees plus Other tt (ii) Net investment income plus Investment Hedge Adjud stments reducd ed by Interest credited to policyhc older account balances (excluding Market Value Adjustments) and interest on future policy benefitff s. (iii) Premiums less Policyholder benefitff s att on future policy benefitff s. nd claims, excluding interest (iv) Amortization of DAC and VOB A ( iv) Amortization of do efdd erff red policy ac tion costs (“DA“ C”) a” nd value of bo r expee usiness acquired (“VOBVV enses. (v) Othett (vi) Tax impact of the above a cquisiii . A”)BB items, calculated using the statutory tax rate of 21%, net of impacts related to the dividends received deduction, tax credits and current period non-recurring items. (v) Other expenses (vi) Provision for income tax expense (benefit) _______________ (1) Italicized items indicate GAAP statements of operations line items. Consistent with GAAP guidance forff segment reporting, adjud sted earnings is also our GAAP measure of segment performance. Accordingly, we report adjusted earnings by segment in Note 3 of the Notes to the Consolidated Financial Statements. Adjudd stedtt Net InvII j estment IncII ome We present adjusted net investment income to measure our performance for management purposes, and we believe it enhances the understanding of our investment portfolff io results. Adjusted net investment income represents GAAP net investment income plus Investment Hedge Adjud stments. For a reconciliation of adjusted net investment income to net investment income, the most directly comparable GAAP measure, see table note (3) to the summary yield table located in “— Investments — Current Environment — Investment Portfolio Results.” Othett r FinFF ancial Discii losures Similar to adjusted net investment income, we present net investment income yields as a performance measure we believe enhances the understanding of our investment portfolff io results. Net investment income yields are calculated on adjud sted net investment income as a percentage of average quarterly asset carrying values. Asset carrying values exclude unrealized gains (losses), collateral received in connection with our securities lending program, freff estanding derivative assets rties. Investment fee and expense yields are calculated as a percentage of and collateral received froff m derivative counterpar average quarterly asset estimated fair values. Asset estimated faiff r values exclude collateral received in connection with our securities lending program, freff estanding derivative assets and collateral received froff m derivative counterpar rties. 72 Results of Operations Index to Results of Operations Annual Actuarial Review Consolidated Results for the Years Ended December 31, 2023 and 2022 Reconciliation of Net Income (Loss) Available to Shareholders to Adjusted Earnings Consolidated Results for the Years Ended December 31, 2023 and 2022 - Adjusted Earnings Segments and Corporate & Other Results for the Years Ended December 31, 2023 and 2022 - Adjusted Earnings Annuity Guaranteed Benefits and Shield Annuity Liabilities for the Years Ended December 31, 2023 and 2022 Page 74 75 77 78 79 83 73 Annual Actuarial Review We typically conduct our AAR in the third quarter of each year. As part of the 2023 AAR, for our ULSG business, we increased the long-term general account earned rate, driven by an increase in the mean reversion rate froff m 3.50% to 3.75%. Also, with respect to our ULSG business, we updated assumptions regarding policyholder behavior, including mortality, premium persistency, lapses, withdrawals and maintenance expenses. For our variable annuity business, we updated our es and withdrawals, as well as separate account assumptions, including fund fees, allocations and annuitization, mortality, lapsa volatility. For term participating and non-participating whole life i ff nsurance, we updated assumptions regarding mortality and lapsa es. ff ff As part of the 2022 AAR, for our ULSG business, we increased the long-term general account earned rate, driven by an increase in the mean reversion rate froff m 3.00% to 3.50%. Also, with respect to our ULSG business, we updated assumptions regarding policyholder behavior, including mortality, premium persistency, lapses, withdrawals and maintenance expenses. For our variable annuity business, we updated our fund allocations, mortality, lapses and withdrawals. For term and non- participating whole life i ff nsurance, we updated assumptions regarding mortality and lapses. The impact on income (loss) availabla e to shareholders before provision for income tax was as folff lows: Market risk benefits Included in pre-tax adjud sted earnings: Other annuity business Life business ff Run-off Total included in pre-tax adjud sted earnings Total impact on income (loss) availabla e to shareholders before provision for income tax Years Ended December 31, 2023 2022 (In millions) (251) $ 15 (90) 1 19 44 (207) $ (210) (125) (20) 319 174 (36) $ $ 74 Consolidll atdd edtt Results ftt orff the YeaYY rs Ended December 31, 2023 and 2022 Unless otherwise noted, all amounts in the following discussions of our results of operations are stated beforff e income tax except forff adjud sted earnings, which are presented net of income tax. nd investment-type product policy fees ff Revenues Premiums Universal life aff Net investment income Other revenues Net investment gains (losses) Net derivative gains (losses) Total revenues Expenses Policyholder benefitsff $137, respectively) and claims (including liabia lity remeasurement gains (losses) of ($234) and Interest credited to policyholder account balances Amortization of DAC and VOBA Change in market risk benefits Interest expense on debt Other expenses Total expenses Income (loss) before provision for income tax Provision for income tax expense (benefit) Net income (loss) Less: Net income (loss) attributable to noncontrolling interests Net income (loss) attributable to Brighthouse Financial, Inc. Less: Preferred stock dividends Net income (loss) availabla e to Brighthouse Financial, Inc.’s common shareholders The components of net income (loss) availabla e to shareholders were as follows: Change in market risk benefits Net investment gains (losses) Net derivative gains (losses), excluding investment hedge adjud stments Market value adjustments Pre-tax adjusted earnings, less net income (loss) attributable to noncontrolling interests and preferred stock dividends Income (loss) availabla e to shareholders before provision for income tax Provision for income tax expense (benefit) Net income (loss) availabla e to shareholders Years Ended December 31, 2023 2022 (In millions) $ 828 2,295 4,664 483 (246) (3,907) 4,117 2,676 1,825 620 (1,507) 153 1,824 5,591 (1,474) (367) (1,107) 5 (1,112) 102 (1,214) $ 662 2,435 4,138 478 (248) (592) 6,873 2,193 1,338 629 (4,104) 153 1,932 2,141 4,732 848 3,884 5 3,879 104 3,775 Years Ended December 31, 2023 2022 (In millions) $ 1,507 (246) (4,012) (12) 1,182 (1,581) (367) (1,214) $ 4,104 (248) (663) 87 1,343 4,623 848 3,775 $ $ $ $ Change in Marketkk Riskii Benefits. e The change in MRBs reflects changes in the projected value of annuity guaranteed benefits discounted at current risk-free rates, plus a nonperformance risk spread that is locked-in at policy issuance. Net Derivative Gains (Losses), ExclEE uding Investment HedHH ged nts.tt We have certain derivative instruments forff which changes in estimated fair value are recognized in net derivative gains (losses). See “— Non-GAAP and Other Financial Disclosures — Non-GAAP Financial Disclosures — Adjusted Earnings.” Adjudd stmett 75 Freestanding Derivatives. We have freestanding derivatives that economically hedge certain invested assets and insurance liabia lities. The majority of this hedging activity is focused in the following areas: • • • • • • use of a proprietary mix of derivative instrumrr changes in capital markets; ents to hedge variable annuity guaranteed benefit riders against adverse use of interest rate swaps, swaptions and interest rate forff wards in connection with our ULSG business; use of interest rate swaps when we have durd ation mismatches where suitabla e assets with maturities similar to those of our long-dated liabia lities are not readily available in the market; use of interest rate forwards hedging reinvestment risk from maturt availabla e in the market that suppor t long-dated liabia lities; u ing assets with higher yields than currently use of foreign currency swapsa when we hold fixff ed maturity securities denominated in foreign currencies that are matching insurance liabia lities denominated in U.S. dollars; and use of equity index options to hedge index-linked annuity products against adverse changes in equity markets. Embedded Derivatives. The changes in liabia lity values of our fixed index-linked annuity and Shield products that result from changes in the underlying equity index are accounted for as embedded derivatives. In addition, certain ceded egments are written on a coinsurance with funds withheld basis. The funff ds reinsurance agreements in our Life and Run-RR off sff withheld component is accounted for as an embedded derivative with changes in the estimated faiff r value recognized in net income (loss) in the period in which they occur. Marketkk Value Adjustments. See “— Non-GAAP and Other Financial Disclosures — Non-GAAP Financial Disclosures — Adjusted Earnings.” Pre-tax Aaa djusted Earnings. See “— Non-GAAP and Other Financial Disclosures — Non-GAAP Financial Disclosures — Adjusted Earnings.” Year Ended December 31, 2023 , Compared withii p the Year Ended December 31, 2022 , Loss availabla e to shareholders before provision for income tax was $1.6 billion ($1.2 billion, net of income tax), a decrease of $6.2 billion ($5.0 billion, net of income tax) froff m income available to shareholders before provision for income tax of $4.6 billion ($3.8 billion, net of income tax) in the prior period. The decrease in income before provision for income tax was driven by the following unfavff orable items: • • losses froff m variabla e annuity guaranteed benefit riders, see “— Annuity Guaranteed Benefits and Shield Annuity Liabilities for the Years Ended December 31, 2023 and 2022,” and lower pre-tax adjusted earnings, as discussed in greater detail below. The decrease in income before provision for income tax was partially offsff et by the favff orable 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 less in the current period resulting in a loss of $197 million and increased more in the prior period resulting in a loss of $1.9 billion; The provision for income tax, expressed as a percentage of income (loss) before provision for income tax, resulted in an m the to the impacts of the dividends received deducd tion, tax credits and current period non- effeff ctive tax rate of 25% in the current period compared to 18% in the prior period. Our effecff rr y t t statutor recurring items. tive tax rate differs fro ax rate primarily dued ff 76 Reconciliatiott n of No etNN Income (Loss) Availaii ble t ll o Stt haSS reholderdd s trr o Att djusted Earnings The reconciliation of net income (loss) availabla e to shareholders to adjud sted earnings was as folff lows: Year Ended December 31, 2023 Annuities Life Run-offff Corporate & Other Total Net income (loss) availabla e to shareholders Add: Provision for income tax expense (benefit) Income (loss) availabla e to shareholders before provision for income $ (1,253) $ 263 tax Less: Net investment gains (losses) Less: Net derivative gains (losses), excluding investment hedge adjud stments of $105 Less: Change in market risk benefits Less: Market value adjustments Pre-tax adjusted earnings, less net income (loss) attributable to noncontrolling interests and preferred stock dividends Less: Provision for income tax expense (benefit) Adjud sted earnings (In millions) 563 (913) (83) $ (16) $ (441) $ 299 (1,214) (367) (99) (28) (2) — — (350) (33) (205) — (12) (142) (16) (40) — — (1,581) (246) (4,012) 1,507 (12) (990) (169) (3,765) 1,507 — 1,437 268 1,169 $ $ (69) (16) (53) $ (100) (23) (77) $ (86) (16) (70) $ 1,182 213 969 Year Ended December 31, 2022 Annuities Life Run-offff Corporate & Other Total Net income (loss) availabla e to shareholders Add: Provision for income tax expense (benefit) Income (loss) availabla e to shareholders before provision for income $ $ 5,967 420 tax Less: Net investment gains (losses) Less: Net derivative gains (losses), excluding investment hedge adjud stments of $71 Less: Change in market risk benefits Less: Market value adjustments Pre-tax adjusted earnings, less net income (loss) attributable to noncontrolling interests and preferred stock dividends Less: Provision for income tax expense (benefit) Adjud sted earnings $ 6,387 (149) 1,115 4,104 — 1,317 247 1,070 $ (In millions) $ (2,274) $ 569 $ 35 (157) 3,775 848 (1,705) (78) ( 1,823) — 87 (122) 12 43 — — 109 22 87 $ (177) (126) (51) $ $ 4,623 (248) (663) 4,104 87 1,343 159 1,184 7 4 16 63 (33) 2 — — 94 16 8 7 77 Consolidll atdd edtt Results ftt orff the YeaYY rs Ended December 31, 2023 and 2022 - Adjusted Earnings The components of adjusted earnings were as follows: Fee income Net investment spread Insurance-related activities Amortization of DAC and VOBA Other expenses Less: Net income (loss) attributable to noncontrolling interests and preferred stock dividends Pre-tax adjusted earnings, less net income (loss) attributable to noncontrolling interests and preferred stock dividends Provision for income tax expense (benefit) Adjud sted earnings Years Ended December 31, 2023 2022 (In millions) $ $ $ 2,778 2,855 (1,747) (620) (1,977) 107 1,182 213 969 $ 2,913 2,680 (1,427) (629) (2,085) 109 1,343 159 1,184 Year Ended December 31, 2023 , Compared withii p the Year Ended December 31, 2022 , Adjud sted earnings were $969 million in the current period, a decrease of $215 million. Key net unfavff orable impacts were: • higher net costs associated with insurance-related activities due to: ◦ ◦ an increase in liabia lity balances resulting froff m actuat rial model refinff ements in the prior period; and a net increase in liability balances resulting from year-over-year changes made in connection with the AAR; partially offsff et by ◦ ◦ lower liabia lities froff m the impact of new reinsurance agreements entered into in the prior period; and lower paid claims, net of reinsurance, in our Run-off aff nd Life segments; and • lower net feeff income due to: ◦ ◦ lower asset-based feeff other expenses; and s resulting from lower average separate account balances, a portion of which is offsff et in a decline in the net cost of insurance fees driven by the aging in-forff ce business in our Run-off sff egment; partially offsff et by ◦ lower ceded cost of insurance fees is mostly offsff et in other expenses. ff Key net favorable impacts were: • higher net investment spread due to: consistent with favorable equity market returns in our Life segment, which ◦ ◦ ◦ ◦ higher investment yields and average invested long-term assets from funding agreements issued in connection with our institutional spread margin business; higher average invested assets resulting from positive net flows in the general account; higher investment yields on our fixed income portfolff growth in the investment portfolff io were invested at higher yields than the portfolff io average; and io, as proceeds froff m maturt ing investments and the higher returns t from short-term investments; partially offsff et by ◦ ◦ higher interest credited to policyholders due to higher account balances, net of changes made in the prior period in connection with the AAR, and current period actuat rial modeling improvements; t lower returns on investments in real estate limited partnerships and limited liabia lity companies (“LLC”); and 78 ◦ lower income froff m our securities lending program; and • lower other expenses due to: ◦ ◦ ◦ ◦ the settlement of a reinsurance-related matter in the prior period; higher systems conversion costs in the prior period; lower asset-based variabla e annuity expenses resulting froff m lower average separate account balances, a portion of which is offset in fee income; and lower transition services agreement expenses; partially offsff et by ◦ ◦ ◦ ◦ higher deferff red compensation and operational expenses; lower ceded cost of insurance expenses consistent with favorable equity market returns in our Life segment, which is offset in fee income; lower interest expenses in the prior period related to prior year tax matters; and higher legal reserves. The provision for income tax, expressed as a percentage of pre-tax adjusted earnings, resulted in an effective tax rate ax rate of 17% in the current period compared to 11% in the prior period. Our effective tax rate differff s froff m the statutor rr y t primarily due to the impacts of the dividends received deduction, tax credits and current period non-recurring items. t Segme ents and CorCC por rr ate &tt Othett r Resultsll for thett Years Err ndEE eddd December 31, 2023 and 2022 — Adjusted Earnings ii Annuities The components of adjusted earnings for our Annuities segment were as folff lows: Fee income Net investment spread Insurance-related activities Amortization of DAC and VOBA Other expenses Pre-tax adjusted earnings Provision for income tax expense (benefit) Adjud sted earnings Years Ended December 31, 2023 2022 (In millions) $ $ 1,999 1,514 (169) (516) (1,391) 1,437 268 1,169 $ $ 2,142 1,364 (257) (515) (1,417) 1,317 247 1,070 A significant portion of our adjud sted earnings is driven by separate account balances related to our variable annuity income and commissions. The changes in our variable annuities business, as these balances determine asset-based feeff separate account balances are presented in Note 6 of the Notes to the Consolidated Financial Statements. Year Ended December 31, 2023 , Compared withii p the Year Ended December 31, 2022 , Adjud sted earnings were $1.2 billion in the current period, an increase of $99 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 investment yields on our fixed income portfolff growth in the investment portfolff io were invested at higher yields than the portfolff io average; and io, as proceeds froff m maturt ing investments and the higher returns t from short-term investments; partially offsff et by 79 ◦ ◦ ◦ higher interest credited to policyholders due to higher account balances, net of changes made in the prior period in connection with the AAR, and current period actuat rial modeling improvements; t lower returns on investments in real estate limited partnerships and LLCs; and lower income froff m our securities lending program; • lower costs associated with insurance-related activities dued to: ◦ ◦ a net decrease in liabia lity balances resulting froff m year-over-year changes made in connection with the AAR; and an increase in income annuity underwriting margins; and • lower other expenses due to: ◦ ◦ lower asset-based variabla e annuity expenses resulting froff m lower average separate account balances, a portion of which is offset in fee income; and lower transition services agreement expenses; partially offsff et by ◦ higher operational and deferred compensation expenses. Key unfavff orable impact was lower fee income dued account balances, a portion of which is offset in other expenses. to lower asset-based feeff s resulting froff m lower average separate The provision for income tax, expressed as a percentage of pre-tax adjusted earnings, resulted in an effective tax rate ax rate primarily of 19% in both the current period and the prior period. Our effective tax rate differs from the statutor rr due to the impact of the dividends received deducd tion. y t t Lifei The components of adjusted earnings for our Life segment were as folff lows: Fee income Net investment spread Insurance-related activities Amortization of DAC and VOBA Other expenses Pre-tax adjusted earnings Provision for income tax expense (benefit) Adjud sted earnings Years Ended December 31, 2023 2022 $ (In millions) 282 239 (283) (104) (203) (69) (16) (53) $ 234 263 (159) (114) (130) 94 16 78 $ $ Year Ended December 31, 2023 , Compared withii p the Year Ended December 31, 2022 , Adjud sted earnings were a loss of $53 million in the current period, a decrease of $131 million. Key net unfavff orable impacts were: • higher net costs associated with insurance-related activities due to: ◦ a net increase in liability balances resulting from year-over-year changes made in connection with the AAR; partially offsff et by ◦ lower paid claims, net of reinsurance; • higher other expenses due to: ◦ ◦ lower ceded cost of insurance expenses consistent with favorable equity market returns, which is offseff income; and t in feeff higher deferff red compensation and operational expenses; and 80 • lower net investment spread due to lower income froff m our securities lending program. Key favff orable impact was higher feeff income due to lower ceded cost of insurance fees co ff nsistent with favorable equity market returns, which is offset in other expenses. The provision for income tax, expressed as a percentage of pre-tax adjusted earnings, resulted in an effective tax rate ax rate rr of 23% in the current period compared to 17% in the prior period. Our effective tax rate differff s froff m the statutor primarily due to the impact of the dividends received deducd tion. y t t Run-off The components of adjusted earnings for our Run-off sff egment were as follows: Fee income Net investment spread Insurance-related activities Amortization of DAC and VOBA Other expenses Pre-tax adjusted earnings Provision for income tax expense (benefit) Adjud sted earnings Years Ended December 31, 2023 2022 $ (In millions) 495 867 (1,295) — (167) (100) (23) (77) $ 537 876 (1,011) — (293) 109 22 87 $ $ Year Ended December 31, 2023 , Compared withii p the Year Ended December 31, 2022 , Adjud sted earnings were a loss of $77 million in the current period, a decrease of $164 million. Key net unfavff orable impacts were: • higher net costs associated with insurance-related activities due to: ◦ ◦ an increase in liabia lity balances resulting froff m actuat rial model refinff ements in the prior period; and a net increase in liability balances resulting from year-over-year changes made in connection with the AAR; partially offsff et by ◦ ◦ lower liabia lities froff m the impact of new reinsurance agreements entered into in the prior period; and lower paid claims, net of reinsurance; lower fee income dued to a decline in the net cost of insurance feeff s driven by the aging in-force business; and lower net investment spread due to: ◦ ◦ lower average invested assets; and lower income froff m our securities lending program. • • Key favff orable impact was lower other expenses due to the settlement of a reinsurance-related matter in the prior period. The provision for income tax, expressed as a percentage of pre-tax adjusted earnings, resulted in an effective tax rate ax rate rr of 23% in the current period compared to 20% in the prior period. Our effective tax rate differff s froff m the statutor primarily due to the impact of the dividends received deducd tion. y t t 81 Corporate &tt tt Other The components of adjusted earnings for Corporate & Other were as folff lows: Fee income Net investment spread Insurance-related activities Amortization of DAC and VOBA Other expenses Less: Net income (loss) attributable to noncontrolling interests and preferred stock dividends Pre-tax adjusted earnings, less net income (loss) attributable to noncontrolling interests and preferred stock dividends Provision for income tax expense (benefit) Adjud sted earnings Years Ended December 31, 2023 2022 (In millions) $ $ $ 2 235 — — (216) 107 (86) (16) (70) $ — 177 — — (245) 109 (177) (126) (51) Year Ended December 31, 2023 , Compared withii p the Year Ended December 31, 2022 , Adjud sted earnings were a loss of $70 million in the current period, a higher loss of $19 million. The provision for income tax, expressed as a percentage of pre-tax adjusted earnings, resulted in a lower effective tax ax rate primarily rr rate in the current period compared to the prior period. Our effective tax rate differs from the statutor y t due to the impacts of the dividends received deducd tion and tax credits. We believe the effective tax rate for Corporate & , neither on a standalone basis nor for comparison to prior periods, since taxes forff Other is not generally meaningfulff Corporate & Other are derived froff m the difference between the overall consolidated effeff ctive tax rate and total taxes forff the combined operating segments. t Key net favorable pre-tax adjusted earnings, less net income (loss) attributable to noncontrolling interests and preferred stock dividends impacts were: • higher net investment spread due to: ◦ ◦ higher investment yields and average invested long-term assets from funding agreements issued in connection with our institutional spread margin business; and higher returns t from short-term investments; partially offsff et by ◦ lower income froff m our securities lending program; and • lower other expenses due to: ◦ higher systems conversion costs in the prior period; partially offsff et by ◦ ◦ lower interest expenses in the prior period related to prior year tax matters; and higher legal reserves. 82 Annuityii Guaranteed Benefie tsii and ShiSS eld All nnuityii Liabiliii tiii es for thett Years Err ndEE eddd December 31, 2023 and 2022 The overall impact on income (loss) availabla e to shareholders before provision for income tax from the performance of annuity guaranteed benefits and Shield annuity liabia lities, which includes (i) changes in the fair value of liabia lities and reinsurance, (ii) fees net of claims and (iii) the mark-to-market of hedges, was as folff lows: Market risk benefits mark-to-market Annuity guaranteed benefit rider fees, net of claims Ceded reinsurance Total changes attributable to annuity guaranteed benefits Variable annuity hedges Shield embedded derivatives Total Years Ended December 31, 2023 2022 $ (In millions) 903 635 (31) 1,507 369 (4,129) (2,253) $ 3,382 773 (51) 4,104 (1,551) 2,679 5,232 $ $ Marketkk Riskii Benefite s Mtt arMM k-rr to-Market.kk Annuity guaranteed rider benefits are accounted for as MRBs. MRBs related to r value of the obligation to protect policyholders against the guaranteed rider benefitff s represent the current estimated faiff possibility that a downturn in the markets will reduce the specified benefits that can be claimed under the base annuity contract. Any periods of significant or sustained downturns in equity markets, increased equity volatility, or reducd ed interest rates could result in an increase in the valuation of these liabilities. An increase in these liabia lities would result in a decrease to our net income (loss) availabla e to shareholders, which could be significant. Annuity Guaranteed Benefie t Riderdd Fees, NetNN of Claims. We earn fees from the guaranteed rider benefitsff , which are calculated using the policyholder’s Benefit Base. Fees calculated using the Benefit Base are more stable in market downturns, compared to fees based on the account value because the Benefitff Base excludes the impact of a decline in the market value of the policyholder’s account value. We use the fees directly earned from the guarantee riders to fund the reserves, futurt e claims and costs associated with the hedges of market risks inherent in these liabia lities. The futur e included in the estimated fair value of MRB liabia lities, with changes recorded in MRBs. e fees ar ff ff Variable Annuity Hedges and Reinsurance. We enter into freestanding derivatives to hedge certain aspects of the annuity guaranteed benefits accounted for as MRBs and index-linked crediting rates accounted for as embedded derivatives. Generally, the same market factors that impact the estimated fair value of the annuity guaranteed benefits impact the value of the hedges, though in the opposite direction. However, the changes in value of MRBs and related hedges may not be symmetrical and the divergence could be significant due to certain fact ors, including unhedged risks within MRBs. We may also use reinsurance to manage our exposure related to MRBs. ff Shield El mbEE eddedd d Derivatives. Shield Annuities provide the contract holder the ability to participate in the appreciation of certain financial markets up to a stated level, while offeri icable indices or benchmark. Shield embedded derivatives represent the estimated fair value of these featurt es. We believe that Shield Annuities provide us with a risk offset to liabia lities related to guaranteed rider benefits. ng protection froff m a portion of declines in the appl a ff ff See “— Risk Management Strategies — Variable Annuity Exposure Risk Management” for discussion of our lowing the management of our hedging strategy associated with our variable annuity business, which remains unchanged folff adoption of LDTI. Year Ended December 31, 2023 , Compared withii p the Year Ended December 31, 2022 , Annuity guaranteed benefitff s and Shield annuity liabilities performance was unfavff orable for the year ended December 31, 2023, primarily driven by: • • • decreases in annuity guaranteed benefits liabilities due to increasing equity markets and interest rates, partially offsff et by changes made in connection with the AAR; favff orable changes in variabla e annuity hedges dued term interest rates; and to increasing equity markets, partially offsff et by increasing long- unfavff orable changes in Shield embedded derivatives due to increasing equity markets. 83 Annuity guaranteed benefits and Shield annuity liabilities perforff mance was favorable for the year ended December 31, 2022, primarily driven by: • • • decreases in annuity guaranteed benefitff s liabia lities dued equity markets and changes made in connection with the AAR; to increasing interest rates, partially offsff et by decreasing unfavff orable changes in variabla e annuity hedges dued decreasing equity markets; and to increasing long-term interest rates, partially offsff et by favff orable changes in Shield embedded derivatives due to decreasing equity markets, partially offsff et by increasing interest rates. Investments Investment Risk Ma ii nagea ment StrSS ategy tt io through asset-type allocation as well as industry a We manage the risks related to our investment portfolff nd issuer diversification. We also use risk limits to promote diversification by asset sector, avoid concentrations in any single issuer and limit overall aggregate credit and equity risk exposure. We manage real estate risk through geographic, property type and product type diversificff ation and asset allocation. Interest rate risk is managed as part of our Asset Liabia lity Management (“ALM”) strategies. We also utilize product design to manage interest rate risk (e.g., market value adjustment featurt es and io that targets a weighted average surrender charges). These ALM strategies include maintaining an investment portfolff duration that refleff cts the duration of our estimated liabia lity cash floff w profile. For certain of our liabia lity portfolff ios, it is not possible to invest assets for the full liabia lity duration, thereby creating some asset/liabia lity mismatch. We also use certain derivatives in the management of credit, interest rate, equity market and forff eign currency exchange rate risks. rr Investment Managea ment Agreements Other than our derivatives trading, which we manage in-house, we have engaged a select group of experienced external io and certain separate asset management firms to ma account assets of our insurance subsidiaries, as well as assets of BHF and our reinsurance subsidiary, BRCD. nage the investment of the assets comprising our general account portfolff ff Current Enviroii nment Our business and results of operations are materially affeff cted by conditions in capital markets and the economy, generally. As a U.S. insurance company, we are affected by the monetary policy of the Federal Reserve in the U.S. The Federal Reserve may increase or decrease the federal funff e, which may have an impact on the pricing levels of risk-bearing investments and may adversely impact the level of product sales. We are also affeff cted by the monetary policy of central banks around the world due to the diversification of our investment portfolff rends and Uncertainties — Financial and Economic Environment.” io. See “— Industry Trr ds rate in the futur ff In 2023, the Federal Reserve increased the target range for the federal funds rate four times — from between 4.25% and 4.50% to between 5.25% and 5.50% as of December 31, 2023. These target range increases have contributed to the net unrealized loss position in our investment portfolff ther increases in net unrealized losses. io, and any additional target increases could similarly contribute to furff ff In the current period, as a result of recent increases in interest rates, the unrealized losses on our fixed maturt ity securities exceeded the unrealized gains. If interest rates rise further, our unrealized gains would decrease, and our unrealized losses would increase, perhaps substantially. See “Risk Factors — Risks Related to Our Investment Portfolio — Our investment portfolff io is subju ect to significant financial risks both in the U.S. and global finff ancial markets, including credit risk, interest rate risk, inflation risk, market valuation risk, liquidity risk, real estate risk, derivatives risk, and other fact ors outside our control, the occurrence of any of which could have a material adverse effect on our financial condition and results of operations.” ff Selected Sectortt Investments Recent elevated levels of market volatility have affeff cted the performance of various asset classes. See “Risk Factors — Risks Related to Our Investment Portfolio — Our investment portfolff io is subju ect to significant financial risks both in the U.S. and global finff ancial markets, including credit risk, interest rate risk, inflation risk, market valuation risk, liquidity risk, real estate risk, derivatives risk, and other fact ors 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 portfolff io and the level of claim losses we incur.” ff 84 There has been an increased market focus on ff companies shifting to hybrid work arrangements and the resulting impact on the demand for of commercial real estate, including offiff ce properties, as a result of ff fiff ce space. ff We have direct commercial real estate exposure through mortgage loans and certain structurt ed securities, which include RMBS, CMBS and ABS. In addition, we have direct and indirect exposure through certain financial industry corporate fixff ed maturity securities. See “Risk Factors — Risks Related to Our Investment Portfolio — Our investment io is subju ect to significant finff ancial risks both in the U.S. and global finff ancial markets, including credit risk, interest portfolff rate risk, inflati ors outside our on risk, market valuation risk, liquidity risk, real estate risk, derivatives risk, and other fact control, the occurrence of any of which could have a material adverse effect on our financial condition and results of operations,” as well as “— Investments — Mortgage Loans” and Note 9 of the Notes to the Consolidated Financial io segment and commercial mortgage Statements for inforff mation on mortgage loans, including credit quality by portfolff ity Securities Availabla e-for-sale — Structured loans by property type. Additionally, see “— Investments — Fixed Maturt Securities” for inforff mation on Strucrr as well as “— Investments — Fixed Maturt -sale — U.S. and Foreign Corporate Fixed Maturity Securities” for our exposure to the finance industry.rr tured Securities, including security type, risk profile and ratings profileff ity Securities Available-forff ff We monitor direct and indirect investment exposure across sectors and asset classes and adjud st our level of investment exposure, as appropriate. At this time, we do not expect that our general account investments in these sectors and asset classes will have a material adverse effect on our results of operations or financial condition. f Investment Portfott lio Resultsll The folff lowing summary yrr ield tabla e presents the yield and adjud sted net investment income for our investment portfolff io for the periods indicated. As described below, this tabla e refleff cts certain differences from the presentation of net investment income presented in the GAAP statements of operations. This summary yield table presentation is consistent with how we measure our investment performance for management purposes, and we believe it enhances understanding of our investment portfolff io results. Investment income (1 Investment fees and expenses (2 ) Adjud sted net investment income (3 ) ) _______________ Years Ended December 31, 2023 2022 2021 Yield % Amount Yield % Amount Yield % Amount .23 % $ 4 0.14) ( .09 % $ 4 4,917 (148) 4,769 (Dollars in millions) 3.96 % $ (0.14) 3.82 % $ 4,363 (154) 4,209 5.13 % $ (0.13) 5.00 % $ 5,046 (144) 4,902 (1) Investment income yields are calculated as investment income as a percentage of average quarterly asset carrying values. Investment income excludes recognized gains and losses and reflects the adjud stments discussed in table note (3) below to arrive at adjud sted net investment income. Asset carrying values exclude unrealized gains (losses), collateral received in connection with our securities lending program, freff estanding derivative assets and collateral received froff m derivative counterpar rties. (2) Investment fee and expense yields are calculated as a percentage of average quarterly asset estimated faiff estimated faiff derivative assets and collateral received froff m derivative counterparr r values. Asset r values exclude collateral received in connection with our securities lending program, freff estanding rties. (3) Adjusted net investment income presented in the yield table varies from the most directly comparable GAAP measure due to certain reclassifications, as presented below. Net investment income Less: Investment hedge adjud stments Adjud sted net investment income — in the above yield table Years Ended December 31, 2023 2022 2021 (In millions) 4,138 $ (71) 4,209 $ $ $ 4,664 (105) 4,769 $ $ 4,881 (21) 4,902 85 See “— Results of Operations — Consolidated Results forff the Years Ended December 31, 2023 and 2022” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Results of Operations — Consolidated Results forff an analysis of the year-over-year changes in net investment income. the Years Ended December 31, 2022 and 2021” in our 2022 Annual Report forff Fixeii d MatMM urity Securitieii s Available-ll fo- r-sale Fixed maturt ity securities held by type (public or private) were as follows at: Publu icly-traded Privately-placed Total fixff ed maturity securities Percentage of cash and invested assets December 31, 2023 December 31, 2022 Estimated Fair Value % of Total Estimated Fair Value % of Total $ $ 67,056 13,935 80,991 67.9 % (Dollars in millions) 82.8 % $ 17.2 100.0 % $ 62,199 13,378 75,577 67.1 % 82.3 % 17.7 100.0 % See Note 11 of the Notes to the Consolidated Financial Statements forff further information on our valuation controls and procedurd es including our formal process to challenge any prices received froff m independent pricing services that are not considered representative of estimated faiff r value. See Notes 1 and 9 of the Notes to the Consolidated Financial Statements forff further information about a fixed maturt ity securities by sector, contractuat l maturt ities, continuous gross unrealized losses and the allowance forff credit losses. Fixeii d MatMM urity Securitieii y Q s CreCC dit Qii g uality — Ratintt gs y Rating agency ratings are based on availabia lity of appl icable ratings from rating agencies on the NAIC credit rating provider list, including Moody’s, S&P, Fitch, Dominion Bond Rating Service and KroK ll Bond Rating Agency. If no rating is availabla e froff m a rating agency, then an internally developed rating is used. a The NAIC has methodologies to assess credit quality forff certain Structurt ed Securities comprised of non-agency RMBS, CMBS and ABS. The NAIC’s objective with these methodologies is to increase the accuracy in assessing expected tured losses, and to use the improved assessment to determine a more appropr Securities. The methodologies reduce regulatory r nput into the assumptions used to estimate expected losses froff m Strucrr tured Securities. In 2021, these methodologies were updated to only appl tured Securities issued prior to 2013. We apply the NAIC methodologies to Structurt ed Securities a held by our insurance subsidiaries and BRCD. The NAIC’s present methodology is to evaluate Structurt ed Securities held by insurers on an annual basis. If our insurance subsidiaries and BRCD acquire Structurt ed Securities that have not been previously evaluated by the NAIC but are expected to be evaluated by the NAIC in the upcoming annual review, an internally developed designation is used until a finff al designation becomes availabla e. eliance on rating agencies and allow for gr iate capital requirement for such Strucr eater regulatory i y to those Strucrr a rr ff rr The folff lowing tabla e presents total fixed maturt ity securities by nationally statistical rating organizations (“NRSRO”) icable NAIC designation froff m the NAIC published comparison of NRSRO ratings to NAIC certain Structurt ed Securities, which are presented using the NAIC methodologies, as well as the a rating and the appl designations, except forff percentage, based on estimated faiff r value that each NAIC designation is comprised of at: NAIC Designation NRSRO Rating Amortized Cost Allowance for Credit Losses Unrealized Gain (Loss) Estimated Fair Value % of Amortized Total Cost (Dollars in millions) Allowance for Credit Losses Unrealized Gain (Loss) Estimated Fair Value % of Total December 31, 2023 December 31, 2022 Aaa/Aa/A $ 56,944 $ 1 2 Baa u Subtot al investment grade 3 4 Ba B 5 6 Caa and lower In or near defaul t u Subtot al below investment grade 27,567 84,511 1,839 593 113 7 5 2,620 s Total fixff ed maturity securitie $ 87,131 $ $ (3,586) $ (2,331) ( 5,917) (122) 44) ( (24) ( 12) (202) 53,353 25,236 78,589 1,717 546 87 52 5 — 5 — 3 2 1 1 16 2 1 % 31.2 97.0 2.1 0.7 0.1 0.1 27,269 81,204 2,343 677 120 — 3,140 2 — 2 — 1 4 — 5 7 (3,546) ( 8,416) (232) 88) ( (24) — (344) 23,723 72,786 2,111 588 92 — 64.9 % 31.4 96.3 % 2.8 0.8 0.1 — 2,791 3.7 % $ (8,760) $ 75,577 100.0 % 65.8 $% 53,935 $ $ (4,870) $ 49,063 2,402 3.0 % $ (6,119) $ 80,991 100.0 $% 84,344 $ 86 The folff lowing tabla es present total fixed maturt r value, by sector classification and icable NAIC designations from the NAIC published comparison of NRSRO ratings to NAIC a certain Structurt ed Securities, which are presented using the NAIC methodologies as described ity securities, based on estimated faiff by NRSRO rating and the appl designations, except forff above: NAIC Designation N S O i g December 31, 2023 U.S. corporate Foreign corporate U.S. government and agency RMBS CMBS ABS u State and political subdivi Foreign government sion Total fixff ed maturity securities December 31, 2022 U.S. corporate Foreign corporate U.S. government and agency RMBS CMBS ABS State and political subdivi u Foreign government sion Total fixff ed maturity securities Fixed Maturity Securities — by Sector & Credit Quality Rating 1 2 3 4 A /A /A $ $ $ $ 16,617 4,841 8,306 7,390 6,039 5,746 3,808 606 53,353 14,697 3,758 7,887 7,490 6,240 4,648 3,682 661 49,063 (In millions) $ 17,260 6,423 113 18 344 621 57 400 $ 25,236 $ 15,683 6,377 129 14 351 672 105 392 $ 23,723 $ $ $ $ 1,293 344 — 12 24 17 1 26 1,717 1,671 373 — 12 9 17 1 28 2,111 $ $ $ $ 476 57 — 1 — 12 — — 546 499 68 — 2 7 12 — — 588 $ $ $ $ 5 Caa and 6 In or Near f Total Estimated Fair Valu e i 57 — — 9 3 10 8 — 87 57 — — 10 4 10 11 — 92 $ $ $ $ 52 — — — — — — — 52 $ $ — $ — — — — — — — — $ 35,755 11,665 8,419 7,430 6,410 6,406 3,874 1,032 80,991 32,607 10,576 8,016 7,528 6,611 5,359 3,799 1,081 75,577 g U.S. and ForFF eigni Corporate Ftt ixFF ed Maturityii Securitiii es p y We maintain a diversified portfolff io 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 December 31, 2023 and 2022. Our U.S. and foreign corpor ity securities holdings by industry wrr io of corporate fixff ed maturity securities across industries and issuers. Our portfolff rate fixed maturt ere as folff lows at: Industrial Finance Consumer Utility Communications Total Strutt ctured Securitiii es December 31, 2023 December 31, 2022 Estimated Fair Value % of Total Estimated Fair Value % of Total $ $ 14,751 12,957 10,683 6,273 2,756 47,420 (Dollars in millions) 31.1 % $ 27.3 22.6 13.2 5.8 100.0 % $ 13,290 11,988 9,459 5,767 2,679 43,183 30.7 % 27.8 21.9 13.4 6.2 100.0 % We held $20.2 billion and $19.5 billion of Strucr tured Securities, at estimated faiff r value, at December 31, 2023 and 2022, respectively, as presented in the RMBS, CMBS and ABS sections below. 87 RMBS Our RMBS holdings are diversified by security type, risk profile and ratings profileff , which were as follows at: Security type: Pass-through securities Collateralized mortgage obligations Total RMBS ff Risk profile: Agency Prime Alt-A u ime Sub-pr Total RMBS Ratings profile: Rated Aaa (1) Designated NAIC 1 ff December 31, 2023 December 31, 2022 Estimated Fair Value % of Total Net Unrealized Gains (Losses) Estimated Fair Value % of Total Net Unrealized Gains (Losses) (Dollars in millions) $ $ $ $ $ $ 3,922 3,508 7,430 6,152 152 756 370 7,430 554 7,390 52.8 % $ 47.2 100.0 % $ 82.8 % $ 2.0 10.2 5.0 100.0 % $ 7.5 % 99.5 % (491) $ (273) (764) $ (724) $ (16) (23) (1) (764) $ $ $ 3,846 3,682 7,528 6,137 149 788 454 7,528 6,643 7,490 51.1 % $ 48.9 100.0 % $ 81.5 % $ 2.0 10.5 6.0 100.0 % $ 88.2 % 99.5 % (590) (311) (901) (842) (20) (37) (2) (901) _______________ (1) During the year ended December 31, 2023, Fitch Ratings downgraded the U.S. credit rating froff m Aaa to Aa1, which resulted in a decrease in Aaa assets in our RMBS holdings. Historically, our exposure to sub-prime RMBS holdings has been managed by focus ing primarily on senior tranche io. securities, stress-testing the portfolff Our sub-prime RMBS portfolff r 2012 at significant discounts io consists predominantly of securities that were purchased afteff to par value and discounts to the expected principal recovery value of these securities. The vast majority of these securities are investment grade under the NAIC designations (e.g., NAIC 1 and NAIC 2). io with severe loss assumptions and closely monitoring the performance of the portfolff ff CMBS Our CMBS holdings are diversified by vintage year, which were as folff lows at: December 31, 2023 December 31, 2022 Amortized Cost Estimated Fair Value Amortized Cost (In millions) Estimated Fair Value 2003 - 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Total 83 1 36 256 876 425 655 1,521 869 442 760 436 50 6,410 $ $ 0 9 41 204 322 966 463 732 1,668 1,021 534 821 462 — 7,324 $ $ 82 38 197 294 879 421 667 1,538 879 426 748 442 — 6,611 $ $ $ $ 8 9 2 43 283 949 461 717 1,633 993 538 813 451 51 7,023 88 The estimated faiff r value of CMBS rated Aaa using rating agency ratings was $4.4 billion, or 68.5% of total CMBS, and designated NAIC 1 was $6.0 billion, or 94.2% of total CMBS, at December 31, 2023. The estimated fair value of CMBS Aaa rating agency ratings was $4.6 billion, or 70.0% of total CMBS, and designated NAIC 1 was $6.2 billion, or 94.4% of total CMBS, at December 31, 2022. ABS Our ABS holdings are diversified by both collateral type and issuer. Our ABS holdings by collateral type and ratings profileff were as follows at: t loans Collateral type: Collateralized obligations Automobile loans Student Consumer loans Credit card loans Other loans Total ff Ratings profile: Rated Aaa Designated NAIC 1 December 31, 2023 December 31, 2022 Estimated Fair Value % of Total Net Unrealized Gains (Losses) Estimated Fair Value % of Total Net Unrealized Gains (Losses) (Dollars in millions) $ $ $ $ 3,819 487 397 346 262 1,095 6,406 3,548 5,746 59.6 % $ 7.6 6.2 5.4 4.1 17.1 100.0 % $ 55.4 % 89.7 % (9) $ (2) (22) (19) (6) (50) (108) $ $ $ 3,239 216 393 420 158 933 5,359 2,300 4,648 60.5 % $ 4.0 7.3 7.8 3.0 17.4 100.0 % $ 42.9 % 86.7 % (124) (9) (34) (36) (10) (80) (293) Alloll wance forff Creditdd Losses forff Fixeii d MatMM urity Securities ii See Note 9 of the Notes to the Consolidated Financial Statements forff information about a the evaluation of fixff ed maturity securities forff an allowance forff credit losses or write-offs due to uncollectibility. Securitieii s Lendingii We participate in a securities lending program whereby securities are loaned to third parties, primarily brokerage firms and commercial banks. We obtain collateral, usually cash, in an amount generally equal to 102% of the estimated faiff r value of the securities loaned, which is obtained at the inception of a loan and maintained at a level greater than or equal to 100% r value of the securities loaned is monitored on a daily basis with additional for the duration of the loan. The estimated faiff collateral obtained as necessary throughout the durd ation of the loan. Securities loaned under such transactions may be sold or rties the cash collateral under our control. Security re-pledged by the transferff ee. We are liabla e to returt n to our counterparr collateral received froff m counterparr rty is in default, and is not reflected in the finff ancial statements. These transactions are treated as financing arrangements and the associated cash collateral liabia lity is recorded at the amount of the cash received. rties may not be sold or re-pledged, unless the counterparr See “— Liquidity and Capital Resources — The Company — Primary Uses of Liquidity and Capital — Securities information regarding our securities lending Lending” and Note 9 of the Notes to the Consolidated Financial Statements forff program. 89 tt Mortgage Loans Our mortgage loans are principally collateralized by commercial, agricultural and residential properties. Information regarding mortgage loans by portfolff io segment is summarized as follows at: December 31, 2023 December 31, 2022 Amortized Cost % of Total Allowance for Credit Losses % of Amortized Cost Amortized Cost % of Total Allowance for Credit Losses % of Amortized Cost (Dollars in millions) $ $ 13,193 4,445 5,007 22,645 58.3 % $ 19.6 22.1 100.0 % $ 69 19 49 137 0.5 % $ 0.4 % 1.0 % 0.6 % $ 13,574 4,365 5,116 23,055 58.9 % $ 18.9 22.2 100.0 % $ 49 15 55 119 0.4 % 0.3 % 1.1 % 0.5 % Commercial Agricultural Residential Total Our mortgage loan portfolff io is diversified by both geographic region and property type to reduce the risk of concentration. The percentage of our commercial and agricultural mortgage loan portfolff ios collateralized by properties located in the U.S. was 98% at both December 31, 2023 and 2022. The remainder was collateralized by properties located lue as a percentage of total commercial and agriculturt al mortgage outside of the U.S. At December 31, 2023, the carrying va loans forff a, 11% for Texas and 8% forff New York. Additionally, we ff 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. the top three states in the U.S. was 17% for Californi rr Our residential mortgage loan portfolff io is managed in a similar manner to reducd e risk of concentration. All residential mortgage loans were collateralized by properties located in the U.S. at both December 31, 2023 and 2022. At December 31, 2023, the carrying value as a percentage of total residential mortgage loans for the top three states in the U.S. was 39% for ff Californi a, 11% for Florida and 7% forff New York. 90 TT Commercial MorMM tgage Loans by Geographic Region and Property Ttt Commercial mortgage loans are the largest component of the mortgage loan invested asset class. The diversification across geographic regions and property types of commercial mortgage loans was as follows at: ype. Geographic region: South Atlantic Pacific Middle Atlantic West South Central Mountain East North Central New England International West North Central East South Central Multi-region and Other (1) Total recorded investment Less: allowance forff credit losses Carrying value, net of allowance forff credit losses Property type: Apartment Offiff ce Industrial Retail Hotel Total recorded investment Less: allowance forff credit losses Carrying value, net of allowance forff credit losses _______________ December 31, 2023 % of Total Amount December 31, 2022 % of Total Amount (Dollars in millions) $ 2,747 2,562 2,153 1,513 1,182 737 735 409 347 306 502 13,193 69 $ 13,124 $ 5,371 3,185 2,092 1,747 798 13,193 69 $ 13,124 20.8 % $ 19.4 16.3 11.5 9.0 5.6 5.6 3.1 2.6 2.3 3.8 100.0 % 3,026 2,765 2,344 1,642 1,140 794 741 390 361 306 65 13,574 49 $ 13,525 40.8 % $ 24.1 15.9 13.2 6.0 100.0 % 5,366 3,375 2,051 1,934 848 13,574 49 $ 13,525 22.3 % 20.4 17.3 12.1 8.4 5.8 5.4 2.9 2.7 2.2 0.5 100.0 % 39.5 % 24.9 15.1 14.3 6.2 100.0 % (1) During the year, certain commercial mortgage loans were reclassified into the Multi-region and Other geographic region. t Mortgage Loan Credit Quality — MoniMM toring Process. Our mortgage loan investments are monitored on an ongoing tured and under forff eclosure. Quarterly, we conduct a io with our investment managers. See Note 9 of the Notes to the Consolidated Financial l status and modified basis, including a review of loans that are current, past dued , restrucrr formal review of the portfolff Statements for inforff mation on mortgage loans by credit quality indicator, past dued mortgage loans. , nonaccruarr statust ff Our commercial mortgage loans are reviewed on an ongoing basis. These reviews may include an analysis of the property finff ancial statements and rent roll, lease rollover analysis, property inspections, market analysis, estimated valuations of the underlying collateral, loan-to-value ratios, debt-service coverage ratios and tenant creditworthiness. The monitoring es on higher risk loans, which include those that are classified as restructurt ed, delinquent or in foreclosure, as process focus well as loans with higher loan-to-value ratios and lower debt-service coverage ratios. The monitoring process forff agricultural mortgage loans is generally similar, with a focff us on higher risk loans, such as loans with higher loan-to-value ratios, including reviews on a geographic and sector basis. Our residential mortgage loans are reviewed on an ongoing basis. See Note 9 of the Notes to the Consolidated Financial Statements forff information on our evaluation of residential mortgage loans and related measurement of allowance for credit losses. 91 Loan-to-value ratios and debt-service coverage ratios are common measures in the assessment of the quality of commercial mortgage loans. Loan-to-value ratios are a common measure in the assessment of the quality of agriculturt al mortgage loans. Loan-to-value ratios compare the amount of the loan to the estimated faiff r value of the underlying collateral. A loan-to-value ratio greater than 100% indicates that the loan amount is greater than the collateral value. A loan-to-value ratio of less than 100% indicates an excess of collateral value over the loan amount. Generally, the higher the loan-to-value ratio, the higher the risk of experiencing a credit loss. The debt-service coverage ratio compares a property’s net operating income to amounts needed to service the principal and interest due under the loan. 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 65% and 57% at December 31, 2023 and 2022, respectively, and our average debt-service coverage ratio was 2.3x and 2.2x at December 31, 2023 and 2022, respectively. The debt-service coverage ratio, as well as the values utilized in calculating the ratio, is upda io updated each quarter. In addition, the loan-to-value ratio is routinely upda all but the lowest risk loans as part of our ongoing review of our commercial mortgage loan portfolff io. For our agricultural mortgage loans, our average loan-to-value ratio was 47% and 48% at December 31, 2023 and 2022, 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 portfolff ted annually on a rolling basis, with a portion of the portfolff io and are routinely upda ted forff ted. u u u t Mortgage Loan Allowance forff Credit Losses. See Note 9 of the Notes to the Consolidated Financial Statements forff credit losses is established and monitored, as well as activity in and balances of the information aboa ut how the allowance forff allowance forff credit losses forff the years ended December 31, 2023 and 2022. Limite ii d ParPP tnershrr ips and Limite ii d Liabilityii Companies The carrying values of our limited partnerships and LLCs were as folff lows at: Other limited partnership Real estate limited partnerships and LLCs (1) s Total _______________ December 31, 2023 December 31, 2022 $ $ (In millions) 4,140 806 4,946 $ $ 3,941 834 4,775 (1) The estimated faiff r value of real estate limited partnerships and LLCs was $927 million and $987 million at December 31, 2023 and 2022, respectively. Cash distributions on these investments are generated froff m investment gains, operating income froff m the underlying investments of the funds and liquidation of the underlying investments of the funds. We estimate that the underlying investment of the private equity funds will typically be liquidated over the next 10 to 20 years. Othett r InvII ested Assets The carrying value of our other invested assets by type was as folff lows at: r values Freestanding derivatives with positive estimated faiff Company-owned life i ff nsurance Federal Home Loan Bank stock Tax credit and renewabla e energy partnerships Leveraged leases, net of non-recourse debt Other Total December 31, 2023 % of Total Carrying Value December 31, 2022 % of Total Carrying Value $ $ 3,714 340 245 52 47 11 4,409 (Dollars in millions) 84.2 % $ 7.7 5.5 1.2 1.1 0.3 100.0 % $ 2,284 250 201 55 48 14 2,852 80.1 % 8.8 7.0 1.9 1.7 0.5 100.0 % 92 Derivatives Derivative Risks We are exposed to various risks relating to our ongoing business operations, including interest rate, forff eign currency exchange rate, credit and equity market risks. We use a variety of strategies to manage these risks, including the use of derivatives. See Note 10 of the Notes to the Consolidated Financial Statements for: ff • • • a comprehensive description of the naturt e of our derivatives, including the strategies forff which derivatives are used in managing various risks; inforff mation 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 December 31, 2023 and 2022; and the effeff cts of derivatives in cash flow, faiff operations for the years ended December 31, 2023, 2022 and 2021. r value, or non-qualifying hedge ff relationships on the statements of See “Business — Segments and Corporate & Other — Annuities” and “— Risk Management Strategies” for more e of derivatives by major hedging programs, as well as “— Results of Operations — Annual information about our us a Actuarial Review” and “Risk Factors — Risks Related to our Investment Portfolio — Our investment portfolff io is subju ect to significant finff ancial risks both in the U.S. and global finff ancial markets, including credit risk, interest rate risk, inflation risk, ors outside our control, the occurrence of market valuation risk, liquidity risk, real estate risk, derivatives risk, and other fact any of which could have a material adverse effect on our financial condition and results of operations.” ff Fair Value HieHH rarchy See Note 11 of the Notes to the Consolidated Financial Statements forff recurring basis and their corresponding fair value hierarchy, as well as a rollforff ward of the faiff derivatives measured at estimated faiff below. r value on a r value measurements for r value on a recurring basis using significant unobservable (Level 3) inputs as discussed derivatives measured at estimated faiff The valuation of Level 3 derivatives involves the use of significant unobservable inputs and generally requires a higher degree of management judgment or estimation than the valuations of Level 1 and Level 2 derivatives. Although Level 3 inputs are unobservable, management believes they are consistent with what other market participants would use when pricing such instrumrr inputs or r value of Level 3 derivatives and could materially affect net methodologies could have a material effect on the estimated faiff income. ents and are considered appropriate given the circumstances. The use of differe nt ff Derivatives categorized as Level 3 at December 31, 2023 include: credit default swaps priced using unobservable credit spreads, or that are priced through independent broker quotations; equity hybrid options with unobservable volatility inputs; and forff eign currency swapsa with certain unobservable inputs. Creditdd Riskii See Note 10 of the Notes to the Consolidated Financial Statements forff the estimated faiff we manage credit risk r the related to derivatives and forff application of master netting agreements and collateral. See “Risk Factors — Risks Related to our Investment Portfolio — io is subju ect to significant finff ancial risks both in the U.S. and global finff ancial markets, including credit Our investment portfolff risk, interest rate risk, inflation risk, market valuation risk, liquidity risk, real estate risk, derivatives risk, and other facff tors outside our control, the occurrence of any of which could have a material adverse effect on our financial condition and results of operations.” r value of our net derivative assets and net derivative liabia lities afteff information about how a Our policy is not to offsff et the faiff the same master netting agreement. This policy appl affeff ct our legal right of offsff et. a r value amounts recognized for derivatives executed with the same counterpar rty under ies to the recognition of derivatives on the balance sheet and does not 93 Creditdd Derivatives The gross notional amount and estimated faiff r value of credit default swapsa were as follows at: Written Total December 31, 2023 December 31, 2022 Gross Notional Amount Estimated Fair Value Gross Notional Amount Estimated Fair Value $ $ 1,405 1,405 $ $ (In millions) 2 7 27 $ $ 1,757 1,757 $ $ 16 16 The maximum amount at risk related to our written credit default swapsa is equal to the corresponding gross notional amount. In a replication transaction, we pair an asset on our balance sheet with a written credit default swap to synthetically replicate a corporate bond, a core asset holding of life insurance companies. Replications are entered into in accordance with the guidelines approved by state insurance regulators and the NAIC and are an important tool in managing the overall corporate credit risk within the Company. In order to match our long-dated insurance liabia lities, we seek to buy long-dated corporate bonds. In some instances, these may not be readily availabla e in the market, or they may be issued by corporations to which we already have significant corporate credit exposure. For example, by purchasing Treasury brr onds (or other high- quality assets) and associating them with written credit default swaps on the desired corporate credit name, we can replicate the desired bond exposures and meet our ALM needs. This can expose the Company to changes in credit spreads as the written credit defauff lt swap tenor is shorter than the maturity of Treasury brr onds. Embedded Derivativtt es See Note 11 of the Notes to the Consolidated Financial Statements forff measured at estimated faiff fair value measurements for net embedded derivatives measured at estimated faiff unobservable (Level 3) inputs. embedded derivatives r value on a recurring basis and their corresponding fair value hierarchy and (ii) a rollforff ward of the r value on a recurring basis using significant (i) information about a See “— Summary of Critical Accounting Estimates — Derivatives” forff additional information on the estimates and assumptions that affeff ct embedded derivatives. Policyholder Liabilities We establa ish, and carry as liabia lities, actuat provide for futff urt e annuity and life i the finff ancial statements in conforff mity with GAAP. See “— Summary orr of the Notes to the Consolidated Financial Statements forff more details on policyholder liabia lities. ff nsurance benefit payments. Amounts forff rially determined amounts that are calculated to meet policy obligations or to rial liabia lities are computed and reported in f Critical Accounting Estimates” and Notes 1, 4 and 5 actuat Due to the naturt e of the underlying risks and the uncertainty associated with the determination of actuat cannot precisely determine the amounts that will ultimately be paid with respect to these actuat amounts may vary from the estimated amounts, particularly when payments may not occur until well into the futur rial liabilities, we rial liabia lities, and the ultimate ff e. We periodically review the assumptions suppor future policy benefitff s. We u e expected experience differsff revise estimates, to the extent permitted or required under GAAP, if we determine that futur rial liabilities. We charge or credit changes in our liabia lities to expenses in from assumptions used in the development of actuat future benefit payments the period the liabia lities are establa ished or re-estimated. If the liabia lities originally establa ished forff prove inadequate, we must increase them. Such an increase could adversely affect our earnings and have a material adverse effeff ct on our business, financial condition and results of operations. ting our estimates of actuat rial liabia lities forff ff We have experienced, and will likely in the future experience, catastrophe losses and possibly acts of terrorism, as well as turbulent finff ancial markets that may have an adverse impact on our business, financial condition and results of operations. Moreover, the impact of climate change could cause changes in the frequency or severity of outbreaks of certain diseases. Due to their nature, we cannot predict the incidence, timing, severity or amount of losses froff m catastrophes, acts of terrorism or climate change, but we make broad use of catastrophic and non-catastrophic reinsurance to manage risk from these perils. 94 Future Policy Bc enefitsff We establa ish liabia lities forff future amounts payable under insurance policies. A discussion of future policy benefitff s by segment, as well as Corporate & Other folff lows. ii Annuities Future policy benefitff s forff the annuities business are comprised mainly of liabia lities forff ff life c ontingent income annuities. Lifeif the life bff term, whole, universal and variablea usiness are comprised mainly of liabia lities forff Future policy benefitff s forff life i nsurance contracts. In order to manage risk, we have ofteff n reinsured a portion of the mortality risk on life insurance ff policies. The reinsurance programs are routinely evaluated, and this may result in increases or decreases to existing coverage. We have entered into various derivative positions, primarily interest rate swaps, to mitigate the risk that f the policy will be at rates below those investment of premiums received and reinvestment of maturing assets over the life off assumed in the original pricing of these contracts. Run-offff Future policy benefitff s primarily include liabia lities for strucr tured settlements and pension risk transfer contracts. There is no interest rate crediting flexibility on the liabia lities for immediate annuities. As a result, a sustained low interest rate environment could negatively impact earnings; however, we mitigate our risks by applying va rious ALM strategies, including the use of derivative positions, primarily interest rate swaps, to mitigate the risks associated with such a scenario. a Corporate &tt p tt Other Future policy benefitff s primarily include liabia lities for long-term care business reinsured through 100% quota share reinsurance agreements. Policyhc older Account Balances Policyholder account balance liabia lities are establa ished forff the balance accruerr d to the contract holder, which includes accrued interest credited, but excludes the impact of any appl charge that may be incurred upon Risk - Fair Value Exposures — Interest Rates.” products with an explicit account value and generally equal to icable surrender. See “Quantitative and Qualitative Disclosures About Market Risk — Market u a Policyholder account balances also include embedded derivatives on index-linked annuities and amounts associated with funding agreements issued for additional liquidity or in connection with our institutional spread margin business. See “— Liquidity and Capital Resources — The Company — Primary Sources of Liquidity and Capital — Funding Sources — Funding Agreements.” A discussion of policyholder account balances by segment folff lows. ii Annuities Policyholder account balance liabia lities are held for fixff ed deferred annuities, the fixff ed account portion of variablea annuities and non-life contingent income annuities. Interest is credited to the policyholder’s account at interest rates we determine which are influff enced by current market rates, subju ect to specified minimums. A sustained low interest rate environment could negatively impact earnings as a result of the minimum credited rate guarantees present in most of these policyholder account balances. We have various interest rate derivative positions, as part of the Company’s interest rate hedging program, to partially mitigate the risks associated with such a scenario. A breakdown of account value subject to minimum guaranteed crediting rates can be found in Note 4 of the Notes to the Consolidated Financial Statements. As a result of acquisitions, we establish additional liabia lities known as excess interest reserves for pol icable acquisition dates. rates in excess of market rates as of the appl a ff icies with credited Lifeif ff Life policyholder account balance liabia lities are held for retained asset accounts, universal life pff olicies and the fixff ed nsurance policies. Interest is credited to the policyholder’s account at interest rates we account of universal variable life i determine which are influff enced by current market rates, subju ect to specified minimums. A sustained low interest rate environment could negatively impact earnings as a result of the minimum credited rate guarantees present in most of these policyholder account balances. We have various derivative positions to partially mitigate the risks associated with such a scenario. A breakdown of account value subject to minimum guaranteed crediting rates can be found in Note 4 of the Notes to Consolidated Financial Statements. 95 As a result of acquisitions, we establish additional liabia lities known as excess interest reserves for pol ff icies with credited rates in excess of market rates as of the appl a icable acquisition dates. Run-offff Policyholder account balance liabia lities in Run-of policies and certain funding agreements. Interest crediting rates vary by t are exposed to interest rate risks, when guaranteeing payment of interest and return on principal at the contractuat date. We mitigate our risks by applying va guaranteed crediting rates can be found in Note 4 of the Notes to the Consolidated Financial Statements. nsurance ype of contract and can be fixed or variabla e. We ity rious ALM strategies. A breakdown of account value subject to minimum re comprised of ULSG, certain company-owned life i l maturt f aff RR a ff rr As a result of acquisitions, we establish additional liabia lities known as excess interest reserves for pol ff icies with credited rates in excess of market rates as of the appl a icable acquisition dates. Market Riskii Benefie tsii We issue certain variable annuity products with GMxBs that provide the policyholder a minimum returt n based on their initial deposit (i.e., the Benefitff Base) less withdrawals. In some cases, the Benefit Base may be increased by additional deposits, bonus amounts, accruarr ls or optional market value step-upsu . Variabla e annuity guaranteed benefits are classified as MRBs and measured at fair value. Certain index-linked annuity products may also have GMxBs classified as MRBs. See “Quantitative and Qualitative Disclosures About Market Risk — Market Risk - Fair Value Exposures — Interest Rates.” Liquidity and Capital Resources Our business and results of operations are materially affecff ted by conditions in the global capital markets and the ions in global capital markets, particular markets or finff ancial economy generally. Stressed conditions, volatility or disrupt asset classes can impact us adversely, in part because we have a large investment portfolff io and our insurance liabia lities and derivatives are sensitive to changing market factors. Changing conditions in the global capital markets and the economy may ther information regarding market affeff ct our financing costs and market interest rates for our debt or equity securities. For furff fact rends and Uncertainties — Financial ors that could affect our ability to meet liquidity and capital needs, see “— Industry Trr ff and Economic Environment,” as well as “Risk Factors — Economic Environment and Capia tal Markets-Related Risks” and “Risk Factors — Risks Related to Our Investment Portfolio.” r Liquii idity att nd Capia taii l ManMM agement u Based upon our capitalization, expectations regarding maintaining our business mix, ratings and funding sources availabla e to us, we believe we have suffiff cient liquidity to meet business requirements in current market conditions and certain stress scenarios. Our Board of Directors and senior management are directly involved in the governance of the capital management process, including proposed changes to the annual capital plan and capital targets. We continuously monitor and adjud st our liquidity and capital plans in light of market conditions, as well as changing needs and opportunities. ff We maintain a substantial short-term liquidity position, which was $3.8 billion and $3.6 billion at December 31, 2023 and 2022, 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 trusrr t. An integral part of our liquidity management includes managing our level of liquid assets, which was $45.2 billion and $40.8 billion at December 31, 2023 and 2022, 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. Assets pledged or otherwise committed include amounts received in connection with securities lending, funding agreements, derivatives and assets held on deposit or in trusrr t. The Company CC q Liquii y idity Liquidity refers to our ability to generate adequate cash flows froff m our normal operations to meet the cash requirements of our operating, investing and financing activities. We determine our liquidity needs based on a rolling 12- io of invested assets, which we monitor daily. We adjust the general account asset and derivatives month forff ecast by portfolff mix and general account asset maturt t this forff ecast, we conduct cash flow and stress testing, which refleff ct the impact of various scenarios, including (i) the potential increase in our requirement rties, (ii) a reducd tion in new business sales, and (iii) the to pledge additional collateral or returt n collateral to our counterparr es and surrenders of existing policies and risk of early contract holder and policyholder withdrawals, as well as lapsa contracts. We include provisions limiting withdrawal rights in many of our products, which deter the customer from ities based on this rolling 12-month forff ecast. To suppor u 96 making withdrawals prior to the maturt ity date of the product. If significant cash is required beyond our anticipated liquidity needs, we have various alternatives availabla e depending on market conditions and the amount and timing of the liquidity need. These availabla e alternative sources of liquidity include cash floff ws from operations, sales of liquid assets and funff ding sources, including secured funding agreements, unsecured credit facilities and secured committed faci lities. ff ff Under certain adverse market and economic conditions, our access to liquidity may deteriorate, or the cost to access liquidity may increase. See “Risk Factors — Economic Environment and Capia tal Markets-Related Risks — Adverse capital and credit market conditions may significantly affeff ct our ability to meet liquidity needs and our access to capital.” iip Capia tal We manage our capital position to maintain our financial strength and credit ratings. Our capital position is supported by our ability to generate cash flows within our insurance subsidiaries, our ability to effeff ctively manage the risks of our businesses and our expected ability to borrow funds and raise additional capital to meet operating and growth needs under a variety of market and economic conditions. ff We monitor our debt-to-capia tal ratio using an average of our key leverage ratios as calculated by A.M. Best, Fitch, Moody’s and S&P, and we aim to maintain a ratio commensurate with our financial strength and credit ratings. As such, we may opportunistically look to pursue additional finff ancing over time, which may include borrowings under credit facilities, the incurrence of term loans, or the refinancing or extinguishment of existing indebtedness. There can be no assurance that we will be able to complete any such finff ancing transactions on terms and conditions favorable to us or at all. the issuance of debt, equity or hybrid securities, u In suppor t of our target combined RBC ratio of 400% to 450% in normal market conditions, we expect to continue to ting our variable annuity contracts maintain a capital and exposure risk management program that targets total assets suppor at or above the CTE98 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. u On November 16, 2023, we authorized the repurchase of up tu o $750 million of our common stock, which was in addition to our prior $1.2 billion total repurchases authorized in 2021. Repurchases under the authorizations, of which a combined $793 million was remaining at December 31, 2023, may be made through open market purchases, including pursuant to 10b5-1 plans or pursuant to accelerated stock repurchase plans, or through privately negotiated transactions, from time to time at management’s discretion in accordance with applicable legal requirements. Common stock ors, including our capital position, liquidity, finff ancial strength and credit repurchases are dependent upon several fact ratings, general market conditions, the market price of our common stock compared to management’s assessment of the a stock’s underlying value and applicable regulatory arr pprova ls, as well as other legal and accounting fact ors. ff ff 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 our Board of Directors and will depend on nd other constraints, capia tal and be subject to our financial condition, results of operations, cash needs, regulatory a requirements (including capital requirements of our insurance subsidiaries), contractuat tors that our Board of Directors deems relevant in making such a determination. Thereforff e, 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. l restrictions and any other facff rr g g Rating An gencies Financial strength ratings represent the opinion of rating agencies regarding the abia lity of an insurance company to pay obligations under insurance policies and contracts in accordance with their terms. Credit ratings indicate the rating agency’s opinion regarding a debt issuer’s ability to meet the terms of debt obligations in a timely manner. They are important factors in our overall funding profilff e and ability to access certain types of liquidity and capital. The level and apital at the subsu idiary level, our combined RBC ratio and our equity capital are among the composition of our regulatory crr many factors considered in determining our financial strength ratings and credit ratings. Each agency has its own capital adequacy evaluation methodology, and assessments are generally based on a combination of fact ors. Financial strength ratings are not statements of fact nor are they recommendations to purchase, hold or sell any security, contract or policy. Each rating should be evaluated independently of any other rating. ff 97 Our finff ancial strength ratings and long-term issuer credit ratings as of the date of this filinff g were as folff lows: Current outlook Financial Strength Ratings: ff Brighthouse Life I New England Life I ff Brighthouse Life I ff y nsurance Compan nsurance Company nsurance Company of N Long-term Issuer Credit Ratings: Brighthouse Financial, Inc. Brighthouse Holdings, LLC _______________ A.M. Best (1) Stable Fitch (2) Stable Moody’s (3) Stable S&P (4) Stable Y A A A bbb+ bbb+ A A NR BBB+ BBB+ 3 A A3 NR Baa3 Baa3 + A A+ A+ BBB+ BBB+ (1) A.M. Best’s finff ancial strength ratings for insurance companies range from “A++ (Supeu rior)” to “S (Suspended).” A.M. Best’s long-term issuer credit ratings range from “aaa (exceptional)” to “s (suspended).” (2) Fitch’s finff ancial strength ratings for insurance companies range from “AAA (highest rating)” to “C (distressed).” Fitch’s long-term issuer credit ratings range from “AAA (highest rating)” to “D (default).” (3) Moody’s finff ancial strength ratings for insurance companies and long-term issuer credit ratings range from “Aaa (highest quality)” to “C (lowest rated).” (4) S&P’s financial strength ratings for insurance companies and long-term issuer credit ratings range from “AAA (extremely strong)” to “SD (selective default)” or “D (default).” NR = Not rated Rating agencies may continue to review and adjust our ratings. 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” forff a description of the impact of a potential ratings downgrade. 98 Sources and Uses of Liquii q f y iditydd and CapiCC tal p ii Our primary sources and uses of liquidity and capital were as follows at: ars Ended December 31, 2023 2022 2021 (In millions) collateral under securities loaned and other transactions, net ents and other derivative related Sources: Operating activities, net Changes in policyholder account balances, net Changes in payables forff Long-term debt issued Preferred stock issued, net of issuance costs Financing element on certain derivative instrumrr transactions, net Total sources Uses: Operating activities, net Investing activities, net Changes in payables forff Long-term debt repaid Dividends on preferred stock Treasury sr Financing element on certain derivative instrumrr collateral under securities loaned and other transactions, net tock acquired in connection with share repurchases ents and other derivative related transactions, net Other, net Total uses Net increase (decrease) in cash and cash equivalents — 19 4,596 (264) $ $ $ — $ — $ 4,242 — — — 90 4,332 137 3,196 890 2 102 250 11,650 — — — — 11,650 1,228 8,276 1,709 3 104 488 185 16 12,009 (359) $ 641 11,929 1,017 400 339 — 14,326 — 12,238 — 680 89 499 368 86 13,960 366 Cash Flows fww roff m OpeO rating Activities g p f The principal cash inflows froff m our insurance activities come froff m insurance premiums, annuity considerations and net investment income. The principal cash outflows are the result of various annuity and life i nsurance products, operating expenses and income tax, as well as interest expense. The primary liquidity concern with respect to these cash flows is the risk of early contract holder and policyholder withdrawal. ff Cash Flows fww roff m InvII f esting Activities g The principal cash inflows froff m our investment activities come from repayments of principal, proceeds from maturities and sales of investments, as well as settlements of freestanding derivatives. The principal cash outflows relate to purchases of investments and settlements of freff estanding derivatives. We typically can have a net cash outflow from investing activities because cash infloff ws from insurance operations are reinvested in accordance with our ALM discipline to fund insurance liabia lities. We closely monitor and manage these risks through our comprehensive investment risk management process. The primary liquidity concerns with respect to these cash floff ws are the risk of default by debtors and market disruptu ion. ff Cash Flows fww roff m FinFF ancing Activities g f The principal cash inflows froff m our financing activities come froff m issuances of debt and equity securities, deposits of funds associated with policyholder account balances and lending of securities. The principal cash outflows come fromff repayments of debt, common stock repurchases, preferred stock dividends, withdrawals associated with policyholder account balances and the return of securities on loan. The primary liquidity concerns with respect to these cash floff ws are market disrupt ion and the risk of early policyholder withdrawal. rr 99 Primary Sources of Lo y f q iquidityii and CapiCC tal p y ii In addition to the summary drr escription of liquidity and capital sources discussed in “— Sources and Uses of Liquidity and Capital,” the following additional inforff mation is provided regarding our primary sources of liquidity and capital: g Funding Sources ff Liquidity is provided by a variety of funding agreements, unsecured credit facff sources, including ilities and secured committed facilities. Capia tal is provided by a variety of funding issuances of debt and equity securities, as well as borrowings under our credit facilities. We maintain a shelf registration statement with the SEC that permits the issuance of public debt, equity and hybrid securities. As a “Well-Known filing and Seasoned Issuer” under SEC rules, our shelf registration statement provides forff has no stated issuance capacity. The diversity of our funding sources enhances our funding flexibility, limits dependence on any one market or source of funds and generally lowers the cost of funds sources, including secured and unsecured funding . Our primary funding sources include: automatic effeff ctiveness upon u ff ff ff Preferred Stock See Note 13 of the Notes to the Consolidated Financial Statements forff information on preferred stock issuances. g g Funding Agreements rr ff nsurance Company issues funding agreements and uses the proceeds froff m such issuances forff Brighthouse Life I spread lending purpos es in connection with our institutional spread margin business or to provide additional liquidity. The institutional spread margin business is comprised of funding agreements issued in connection with the programs described in more detail below. Activity related to these programs are reported in Corporate & Other. See “Obligations additional Under Funding Agreements” in Note 4 of the Notes to the Consolidated Financial Statements forff information on funding agreements. ff Funding Agregg ement-Backed Repurchase Agreement Program In January 2024, Brighthouse Life I nsurance Company established a secured funding repurchase agreement program (the “FABR Program”), pursuant to which Brighthouse Life I may enter into repurchase agreements with bank counterparr then used by a special-purpose entity to purchase funff agreement-backed nsurance Company rties and the proceeds of the repurchase agreements are ding agreements from Brighthouse Life I nsurance Company. ff ff ff ff Funding Agregg ement-Backed ComCC mercial Paper Program ff In July 2021, Brighthouse Life I nsurance Company established a funding agreement-backed commercial paper program (the “FABCP Program”) for spread lending purposes, pursuant to which a special purpose limited liabia lity company (the “SPLLC”) may issue commercial paper and deposit the proceeds with Brighthouse Life I nsurance nsurance Company to the SPLLC. The maximum Company under a funding agreement issued by Brighthouse Life I aggregate principal amount permitted to be outstanding at any one time under the FABCP Program was increased from $3.0 billion to $5.0 billion in June 2023. ff ff Funding Agregg ement-Backed NotNN es Program In April 2021, Brighthouse Life I ff (the “FABN Program”), pursuant to which Brighthouse Life I special purpos t forff be outstanding at any one time under the FABN Program is $7.0 billion. e statutory trusr rr nsurance Company established a funding agreement-backed notes program agreements to a spread lending purposes. The maximum aggregate principal amount permitted to nsurance Company may issue funding ff ff ff Federal HomHH e Loan Bank Funding Agreg ements Brighthouse Life I nsurance Company is a member of the Federal Home Loan Bank (“FHLB”) of Atlanta, where ff agreement program, under which funding agreements may be issued. it maintains a secured funding ff Farmer Mac Funding FF Agreg ements ff Brighthouse Life I nsurance Company has a secured funding agreement program with the Federal Agricultural Mortgage Corporation and its affiff liate Farmer Mac Mortgage Securities Corporation (“Farmer Mac”) with a term ending on December 1, 2026, pursuant to which the parties may enter into funding agreements in an aggregate amount of up to $750 million. 100 Information regarding funding agreements issued for spread lending purposes is as follows: Aggregate Principal Amount Outstanding December 31, Issuances Repayments Years Ended December 31, 2023 2022 2023 2022 2021 2023 2022 2021 FABR Program (1) FABCP Program FABN Program FHLB Funding Agreements Farmer Mac Funding Agreements Total _______________ $ — $ — $ — $ — $ — $ — $ (In millions) — $ 3,442 2,100 4,350 700 $ 10,592 2,097 3,450 3,900 700 $ 10,147 8,046 — 2,350 — $ 10,396 12,682 550 6,275 600 $ 20,107 2,939 2,900 1,352 125 $ 7,316 6,701 1,350 1,900 — $ 9,951 12,433 — 3,275 25 $ 15,733 — 1,091 — 452 — $ 1,543 (1) On February 1rr 6, 2024, there was $500 million of FABR funff ding agreements outstanding. Debt Issuances See Note 12 of the Notes to the Consolidated Financial Statements forff information on debt issuances. Credit and Committed Facilities See Notes 12 and 13 of the Notes to the Consolidated Financial Statements forff information regarding our credit and committed facff ilities. We have no reason to believe that our lending counterparr rties would be unable to fulff obligations under these facilities. As commitments under our credit and committed faci amounts do not necessarily reflect our actuat ff e cash funding requirements. l futur ff ff fill their respective contractual lities may expire unused, these t 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 subsu idiaries, which could restrict our operations and use of funds. At December 31, 2023, we were in compliance with these finff ancial covenants. Primary Uses of Liquii q y f y iditydd and CapiCC tal p ii In addition to the summarized description of liquidity and capital uses discussed in “— Sources and Uses of Liquidity and Capital,” the following additional inforff mation is provided regarding our primary uses of liquidity and capital: Common StoSS ck Repur p e chases See Note 13 of the Notes to the Consolidated Financial Statements forff 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 December 31, 2023. In 2024, through February 16, 2024, BHF repurchased an additional 636,454 shares of its common stock through open market purchases, pursuant to a 10b5-1 plan, for $33 million. Preferred StoSS ck Dividends f See Note 13 of the Notes to the Consolidated Financial Statements forff information relating to dividends declared and paid on our preferff red stock. 101 pp “Dividendd d StoS ppeo r” Provisions in BHF’s P’ refee rred StoSS ck and Junior Subordinated Debentures f a u Terms appl icable to our junior subordina ted debentures may restrict our ability to pay interest on those debentures in ted debentures, whether required under certain circumstances. Suspension of payments of interest on our junior subordina the relevant indenture or optional, could cause “dividend stopper” provisions applicable under those and other instruments to restrict our ability to pay dividends, if any, on our common stock and repurchase our common stock in various situations, including situations where we may be experiencing financial stress, and may restrict our ability to pay dividends or interest on our preferred stock and junior suboru dinated debentures as well. Similarly, the terms of our outstanding preferred stock contain restrictions on our ability to repurchase our common stock or pay dividends thereon if we have not fulfilled our dividend obligations under such preferred stock or other preferred securities. In addition, the ents that we may issue in the terms of the agreements governing any preferred stock, debt or other financial instrumrr future, may limit or prohibit the payment of dividends on our common stock or preferred stock, or the payment of interest on our junior suboru dinated debentures. u p y Debt Repay e ments,tt Repur p e , chases, Redemptm ions and Exchanges p g , See Note 12 of the Notes to the Consolidated Financial Statements forff information on debt repayments and repurchases, as well as debt maturt ities and the terms of our outstanding long-term debt. ff We may froff m time to time seek to retire or purchase our outstanding indebtedness through cash purchases or r securities, purchases in the open market, privately negotiated transactions or otherwise. Any such ors, including our liquidity requirements, contractual ors. Whether or not we ff exchanges for othe repurchases or exchanges will be dependent upon several fact restrictions, general market conditions, as well as appl repurchase any debt and the size and timing of any such repurchases will be determined at our discretion. icable regulatory, legal and accounting fact a ff t Insurance Liabilities Liabilities arising from our insurance activities primarily relate to benefit payments under various annuity and life insurance products, as well as payments for pol ff icy surrenders, withdrawals and loans. r At December 31, 2023, our insurance liabia lities, excluding obligations under our institutional spread margin business, totaled $106.9 billion and the related future estimated cash payments totaled $181.9 billion, of which in the next twelve months. These estimated cash payments are based on assumptions related to $10.2 billion is dued mortality, morbidi ty, policy lapses, withdrawals, surrender charges, annuitization, future interest credited and other assumptions comparable with our experience and expectations of future payment patterns, as well as other contingent events as appropriate for the respective product type. These amounts are undiscounted and, thereforff e, exceed the l cash payments on insurance liabia lities may differ liabia lities included on the consolidated balance sheet. Actuat l experience and the assumptions significantly from futur e estimated cash used in the establishment of the liabia lities and the estimation of the futur payments are presented gross of any reinsurance recoverabla e. At December 31, 2023, obligations under our institutt ional spread margin business totaled $10.6 billion and the related future estimated cash payments, including interest, totaled $11.0 billion, of which $5.9 billion is dued to differences between actuat ff e estimated cash payments dued e cash payments. All futur in the next twelve months. ff ff Pledged d ColCC lateral g We enter into derivatives to manage various risks relating to our ongoing business operations. We pledge collateral rties in connection with our derivatives. At December 31, 2023 and to, and have collateral pledged to us by, counterpar rties of $16 million and $7 million, respectively. At December 31, 2023 2022, we pledged cash collateral to counterpar and 2022, we were obligated to return cash collateral pledged to us by counterpar rties of $393 million and $829 million, respectively. The timing of the returt n of the derivatives collateral is uncertain. We also pledge collateral froff m time to time in connection with our funding agreements. We receive non-cash collateral froff m counterparr rivatives, which can be sold or re-pledged subject to ff rties for de certain constraints, and which is not recorded on our consolidated balance sheets. The amount of this non-cash collateral at estimated faiff r value was $2.4 billion and $1.0 billion at December 31, 2023 and 2022, respectively. See Note 10 of the Notes to the Consolidated Financial Statements forff additional information regarding pledged collateral. 102 Securities Lendingg We have a securities lending program that aims to enhance the total returt n on our investment portfolff io, whereby securities are loaned to third parties, primarily brokerage firff ms and commercial banks. We obtain collateral, usually cash, d to the borrower when the loaned securities are returned to us. Generally, our from the borrower, which must be returne securities lending contracts expire within twelve months of issuance. We were liabla e forff cash collateral under our control of $3.3 billion and $3.7 billion at December 31, 2023 and 2022, respectively. t We receive non-cash collateral for securities lending from counterpar rties, 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 December 31, 2023 and 2022. See Note 9 of the Notes to the Consolidated Financial Statements forff further discussion of our securities lending program. Contingencies, Commitments and Guarantees g , We establa ish liabia lities for litigation, regulatory arr nd other loss contingencies when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. See “Contingencies” in Note 18 of the Notes to the Consolidated Financial Statements. We enter into commitments forff io consisting of rtnership investments, bank credit facilities and private corporate bond investments, as well as commitments to fund pa ff commitments to lend funds unde r mortgage loan commitments. We anticipate these commitments could be invested any time over the next five years. See Note 9 of the Notes to the Consolidated Financial Statements. See “Commitments” in Note 18 of the Notes to the Consolidated Financial Statements. the purpose of enhancing the total returt n on our investment portfolff ff In the normal course of our business, we have provided certain indemnities, guarantees and commitments to third e. See “Guarantees” in Note 18 of the Notes to parties such that we may be required to make payments now or in the futur the Consolidated Financial Statements. ff The ParPP ent ComCC panym q Liquii y idity att nd Capia tal p ii rr In evaluating liquidity, it is important to distinguish the cash floff w needs of the parent company froff m the cash flow needs of the combined group of companies. BHF is largely dependent on cash floff ws from its insurance subsidiaries to meet its obligations. Constraints on BHF’s liquidity may occur as a result of operational demands or as a result of compliance with regulatory r equirements. See “Risk Factors — Risks Related to Our Business — As a holding company, BHF depends on the abia lity of its subsidiaries to pay dividends,” “Risk Factors — Economic Environment and Capia tal Markets-Related Risks — Adverse capital and credit market conditions may significantly affeff ct our ability to meet liquidity needs and our access to capital” and “Risk Factors — Regulatory arr nd Legal Risks — Our insurance business is highly regulated, and changes in regulation and in supeu rvisory arr nd enforcement policies or interprr etations thereof may materially impact our capitalization or cash floff ws, reducd e our profitff ability and limit our growth,” as well as Note 13 of the Notes to the Consolidated Financial Statements. y Short-term Liquidity and Liquid Assets q q At December 31, 2023 and 2022, BHF and certain of its non-insurance subsidiaries had short-term liquidity of $1.2 billion and $1.0 billion, 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 trusrr t. At December 31, 2023 and 2022, BHF and certain of its non-insurance subsidiaries had liquid assets of $1.3 billion and $1.0 billion, respectively, of which $1.2 billion and $987 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. Assets pledged or otherwise committed include assets held in trusrr t. 103 Statutory Cr apiCC tal and Dividends p y The NAIC and state insurance departments have established regulations that provide minimum capitalization requirements based on RBC formulas for insurance companies. See “Business — Regulation — Insurance Regulation” information regarding our statutor and Note 13 of the Notes to the Consolidated Financial Statements forff ccounting and reserves, as well as the calculation of RBC and the regulatory Rrr BC requirements. At December 31, 2023, our y Trr AC of approximately $6.3 billion, resulting in a combined RBC ratio insurance subsidiaries had a combined statutor of approximately 428%. y arr t t The amount of dividends that our insurance subsidiaries can ultimately pay to BHF through their various parent risk protection and investment in our businesses. Such dividends are entities provides an additional margin forff constrained by the amount of surplus our insurance subsidiaries hold to maintain their ratings, which is generally higher than minimum RBC requirements. We proactively take actions to maintain capital consistent with these ratings objectives, which may include adjud sting dividend amounts and deploying financial resources from internal or external sources of capia tal. Certain of these activities may require regulatory approval. Furthermore, the payment of dividends and other distributions by our insurance subsidiaries is governed by the insurance laws and regulations of the states nsurance Company in 2024 would be subject where they are domiciled. Any payment of dividends by Brighthouse Life I to Delaware DOI approval. See also Note 13 of the Notes to the Consolidated Financial Statements forff additional information regarding the appl ividend capacity, as a well as the circumstances under which regulatory arr pprova icable dividend restrictions and certain of our subsu idiaries’ ordinary drr l would be required. a ff Normalized Statutory Er y g arnings t y err Normalized statutor arnings (loss) is used by management to measure our insurance subsidiaries’ abia lity to pay future distributions and is refleff ctive of whether our hedging program functions as intended. Normalized statutory earnings (loss) is calculated as statutor re-tax net gain (loss) from operations adjud sted for the favorable or unfavff orable impacts of (i) net realized capital gains (losses), (ii) the change in total asset requirement at CTE98, net of the change in our variable annuity reserves, which are calculated at CTE70, and (iii) unrealized gains (losses) associated with our variable annuities and Shield hedging programs and other equity risk management strategies. See “Glossary” for the definition of CTE. Normalized statutory earnings (loss) may be furff ther adjud sted for certain unanticipated items that impact our results in order to help management and investors better understand, evaluate and forff ecast those results. y prr t t Our variabla e annuity block has been managed by funff ding the balance sheet with assets equal to or greater than a CTE98 level. We have also managed market-related risks of increases in these asset requirements by hedging the market sensitivity of the CTE98 level to changes in the capia tal markets. By including hedge gains and losses related to our variable annuity risk management strategy in our calculation of normalized statutor arnings (loss), we are able to fully reflect the change in value of the hedges, as well as the change in the value of the underlying CTE98 total asset requirement level. We believe this allows us to determine whether our hedging program is providing the desired level of protection. See “— Risk Management Strategies — Variable Annuity Exposure Risk Management” forff additional details regarding our hedge program. y err t The folff rr lowing tabla e presents the components of combined normalized statutor y e t arnings for Brighthouse Life Insurance Company and NELICO: Years Ended December 31, 2023 2022 y nr et gain (loss) from operations, pre-tax (1) Statutor t Add: net realized capital gains (losses) Add: change in total asset requirement at CTE98, net of the change in variable annuity reserves (1) Add: unrealized gains (losses) on variabla e annuity & Shield hedging programs and other equity risk management strategies Add: impact of actuat Add: other adjustments, net rial items and other insurance adjustments (1) $ (In billions) (2.0) $ (1.1) 2.5 1.2 (0.8) — Normalized statutor y er t arnings (loss) $ (0.2) $ 1.0 0.4 0.7 (1.6) 0.4 0.1 1.0 _______________ (1) As a result of implementing a new statutory requirement as of December 31, 2023 under which all futur e hedges must be reflected in reserves and required capital, CTE70 increased $870 million and the total asset requirement at CTE98 ff 104 decreased $1.1 billion for the year ended December 31, 2023. The $1.1 billion impact to CTE98 is refleff cted in ‘impact of actuat rr rial and other insurance adjustments’ to normalize the effect of implementing this new statutor y r equirement. t Primary Sources and Uses of Liquii q y f y iditydd and CapiCC tal p ii ff The principal sources of funds availabla e to BHF include distributions from BH Holdings, dividends and returt ns of capital froff m its insurance subsidiaries and BRCD, capital markets issuances, as well as its own cash and cash equivalents and short-term investments. These sources of funds may also be supplemented by alternate sources of liquidity either directly or indirectly through our insurance subsidiaries. For example, we have established internal liquidity facilities to provide liquidity within and across our regulated and non-regulated entities to support our businesses. The primary uses of liquidity of BHF include debt-service obligations (including interest expense and debt repayments), preferred stock dividends, capital contributions to subsu idiaries, common stock repurchases and payment of e cash infloff ws from the general operating expenses. Based on our analysis and comparison of our current and futur pprova dividends we receive froff m subsidiaries that are permitted to be paid without prior insurance regulatory a l, our a nt ff investment portfolff liquidity and capital to enable BHF to make payments on debt, pay preferred stock dividends, contribute capital to its subsu idiaries, repurchase its common stock, pay all general operating expenses and meet its cash needs. io and other cash floff ws and anticipated access to the capital markets, we believe there will be sufficie rr ff In addition to the liquidity and capital sources discussed in “— The Company — Primary Sources of Liquidity and ation is Capia tal” and “— The Company — Primary Uses of Liquidity and Capital,” the following additional informff provided regarding BHF’s primary sources and uses of liquidity and capital: ii Distri g butions from and Capia tal ContCC ritt butions to BH Holdings p f See Note 2 of Schedule II — Condensed Financial Information (Parent Company Only) forff information relating to distributions from and capital contributions to BH Holdings. y Short-term Intercompany m p y Loans and Intercompany m p y Liquidity Facilities q See Note 3 of Schedule II — Condensed Financial Information (Parent Company Only) forff information relating to short-term intercompany loans and our intercompany liquidity facilities including obligations outstanding, issuances and repayments. Item 7A. Quantitative and Qualitative Disclosures About Market Risk The quantitative and qualitative disclosures about a requirement that all variabla e annuity guarantees are classified as MRBs and measured at fair value. Market Risk reflect the impact of the adoption of LDTI, including the Risk Ma ii nagea ment We have an integrated process forff managing risk exposures, which is coordinated among our Risk Management, Finance and Investment Departments. The process is designed to assess and manage exposures on a consolidated, company-wide basis. The Brighthouse Financial Balance Sheet Committee (“BSC”) is responsible for periodically reviewing all material financial risks and, in the event risks exceed desired tolerances, informs the Finance and Risk Committee of the Board of Directors, considers possible courses of action and determines how best to resolve or mitigate such risks. In taking such est practices and the current economic environment. The BSC also reviews and actions, the BSC considers indusd try brr approves target investment portfolff and establishes guidelines and limits for various risk-taking departments, such as the Investment Department. Our Finance Department and our Investment ise. Department, together with Risk Management, are responsible for coordinating our ALM strategies throughout the enterprr The membership of the BSC is comprised of the folff lowing members of senior management: Chief Executive Officer, Chief Risk Offiff cer, Chief Financial Officer, Chief Investment Offiff cer and Head of Product Strategy and Pricing. ios in order to align them with our liabia lity profileff Our significant market risk management practices include, but are not limited to, the folff lowing: g g Managia ngii Interest Rate Riskii io that has a weighted average durd ation approxi We manage interest rate risk as part of our asset and liability management strategies, which include (i) maintaining an mately equal to the duration of our estimated liabia lity investment portfolff ios, it is not possible to invest cash floff w profile, and (ii) maintaining hedging programs. For certain of our liabia lity portfolff l liabia lity duration, thereby creating some asset/liabia lity mismatch. Where a liabia lity cash floff w may exceed assets to the fulff the maturt t such liabia lities with equity investments, derivatives or other mismatch mitigation strategies. Although we take measures to manage the economic risks of investing in a changing interest rate environment, we may not be able to mitigate completely ity of availabla e assets, as is the case with certain life insurance and annuity products, we may suppor u a 105 the interest rate or other mismatch risk of our fixed income investments relative to our interest rate sensitive liabia lities. The benefits under our annuity contracts. As interest rates decline, we may level of interest rates also affeff cts our liabia lities forff need to increase our reserves for futur under our annuity contracts, which would adversely affect our financial ff condition and results of operations. e benefitsff We also employ product design and pricing strategies to mitigate the potential effects of interest rate movements. These strategies include the use of surrender charges, market value adjud stment featurt es or restrictions on withdrawals, and for certain products, the ability to reset crediting rates. u We analyze interest rate risk using various models, including multi-scenario cash floff w projeo ction models that forecast ting investments, including derivatives. These projections involve evaluating cash floff ws of the liabia lities and their suppor the potential gain or loss on most of our in-forff ce business under various increasing and decreasing interest rate environments. State insurance department regulations require that we perform some of these analyses annually as part of our review of the suffiff ciency of our regulatory r eserves. We measure relative sensitivities of the value of our assets and liabia lities to changes in key assumptions using internal models. These models reflect specific product characteristics and include assumptions based on current and anticipated experience regarding lapse, mortality and interest crediting rates. In addition, these models include asset cash floff w projeo ctions reflecting interest payments, sinking fund payments, principal payments, bond calls, prepayments and defaults. rr We also use common industry mrr etrics, such as durd ation and convexity, to measure the relative sensitivity of asset and liabia lity values to changes in interest rates. In computing the duration of liabia lities, we consider all policyholder guarantees and how indeterminate policy elements such as interest credits or dividends are set. Each asset portfolff io has a duration target based on the liabia lity durd ation and the investment objectives of that portfolff io. Managia ngii Equityii Market and ForFF eigni Currency Risks g g q g y y ii We manage equity market risk in a coordinated process across our Risk Management, Investment and Finance from odest losses, which may be temporary,rr Departments primarily by (i) holding sufficient capital to permit us to absor changes in equity markets and interest rates, and (ii) through the use of derivatives. b mr a We also employ product design strategies to mitigate the effeff ct of changes in equity markets such as prioritizing products that provide a risk offset and diversification to our legacy variable products. Key management objectives include limiting losses, minimizing exposures to significant risks and providing additional e growth. The Investment and Finance Departments are also responsible for managing the capital capacity for futur exposure to forff eign currency denominated investments. We use forff eign currency swapsa and forff wards to mitigate the exposure, risk of loss and finff ancial statement volatility associated with foreign currency denominated fixed income investments. ff Market Riskii - FaiFF r Vii alVV ue Expos xx ures We regularly analyze our market risk exposure to interest rate, equity market price, credit spreads and foreign currency exchange rate risks. As a result of that analysis, we have determined that the estimated faiff r values of certain assets and liabia lities are significantly exposed to changes in interest rates, and to a lesser extent, to changes in equity market prices and foreign currency exchange rates. We have exposure to market risk through our insurance operations and general account investment activities. For purpor r value resulting from changes in interest rates, equity market prices, credit spreads and foreign currency exchange rates. We may have additional finff ancial impacts other than changes in estimated fair value, which are beyond the scope of this discussion. See “Risk Factors” forff ses of this discussion, “market risk” is defined as changes in estimated faiff additional disclosure regarding our market risk and related sensitivities. Interest Rates Our faiff r value exposure to changes in interest rates arises most significantly from our interest rate sensitive liabia lities and our holdings of fixed maturt ity securities, mortgage loans and derivatives that are used to support our policyholder liabia lities. Our interest rate sensitive liabia lities include long-term debt, policyholder account balances related to certain investment contracts and variable annuity guarantees accounted for as MRBs. Our fixed maturt ity securities including U.S. and forff eign government bonds, securities issued by government agencies, corporate bonds, mortgage-backed and other ABS, and our commercial, agricultural and residential mortgage loans, are exposed to changes in interest rates. We also use interest rate derivatives to mitigate the exposure related to interest rate risks froff m our policyholder liabia lities. 106 y Equityii Market q Our faiff r value exposure to equity market risk primarily arises froff m policyholder liabia lities with long-term guarantees on equity perforff mance, including crediting rates on index-linked annuities accounted for as embedded derivatives and variable annuity guarantees. In addition, we have exposure to equity markets through equity derivatives that we enter into to mitigate potential equity market exposure froff m our policyholder liabia lities. g Foreign Cgg urCC rency Ec g xcEE hange Ratestt y Our faiff r value exposure to fluff ctuat holdings in non-U.S. dollar denominated fixed maturt currencies that create forff eign currency exchange rate risk in our investment portfolff British pound. We economically hedge subsu tantially all of our foreign currency exposure. tions in foreign currency exchange rates against the U.S. dollar results from our ity securities, mortgage loans and certain liabia lities. The principal ios and liabia lities are the Euro and the Risk Me ii asurement: Sensitivtt ity Att nalysis In the folff lowing discussion and analysis, we measure market risk related to our market sensitive assets and liabia lities based on changes in interest rates, equity market prices and forff eign currency exchange rates using a sensitivity analysis. This analysis estimates the potential changes in estimated faiff r value based on a hypothetical 100 basis point change (increase or decrease) in interest rates, or a 10% change in equity market prices or foreign currency exchange rates. We believe that these changes in market rates and prices are reasonably possible in the near-term. In performing the analysis summarized below, we used market rates as of December 31, 2023. We modeled the impact of changes in market rates and prices on the estimated faiff r values of our market sensitive assets and liabia lities as folff lows: • • • the estimated faiff decrease) in interest rates; r value of our interest rate sensitive exposures resulting froff m a 100 basis point change (increase or the estimated faiff and r value of our equity positions due to a 10% change (increase or decrease) in equity market prices; r values of our foreign currency exposures due to a 10% change (increase the U.S. dollar equivalent of estimated faiff in the value of the U.S. dollar compared to the foreign currencies or decrease in the value of the U.S. dollar compared to the foreign currencies) in foreign currency exchange rates. The sensitivity analysis is an estimate and should not be viewed as predictive of our future financial performance. Our roff m the amounts indicated in the table below. Limitations related to this l losses in any particular period may vary f rr actuat sensitivity analysis include: • • • • • interest sensitive liabia lities do not include $36.4 billion of insurance contract liabilities at December 31, 2023. Management believes that the changes in the economic value of those contracts under changing interest rates would r value changes of interest sensitive assets; offsff et a significant portion of the faiff the market risk information is limited by the assumptions and parameters established in creating the related sensitivity analysis, including the impact of prepayment rates on mortgage loans; rivatives that qualify f ff for de the change in market values; ff orff hedge accounting, the impact on reported earnings may be materially different from the analysis excludes limited partnership interests; and the model assumes that the composition of assets and liabia lities remains unchanged throughout the period. Accordingly, we use such models as tools and not as subsu titutes forff the experience and judgment of our management. 107 The potential loss in the estimated faiff r value of our interest rate sensitive finff ancial instruments dued to a 100 basis point increase in the yield curve by type of asset and liabia lity was as folff lows at: December 31, 2023 Notional Amount Estimated Fair Value (1) (In millions) 100 Basis Point Increase in the Yield Curve ity securities Financial assets with interest rate risk Fixed maturt Mortgage loans Policy loans Premiums, reinsurance and other receivables Reinsurance of market risk benefitsff Increase (decrease) in estimated fair value of assets Financial liabilities with interest rate risk (2) Policyholder account balances Long-term debt Other liabia lities Embedded derivatives on index-linked annuities (3) (Increase) decrease in estimated faiff r value of liabilities Market risk benefits associated with variable annuities Derivative instruments with interest rate risk Interest rate contracts Foreign currency contracts Equity contracts Increase (decrease) in estimated fair value of derivative instruments $ $ $ 92,499 5,221 74,111 Net change _______________ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 80,991 20,609 1,455 7,724 43 30,606 2,769 1,142 8,186 (5,247) (880) (97) (117) (30) (6,371) 130 222 (7) (85) 260 9,701 (3,025) (1,964) 394 169 $ (1,730) (26) 13 (1,743) (4,829) (1) Separate account assets and liabia lities, which are interest rate sensitive, are not included herein as any interest rate risk is borne by the contract holder. (2) Excludes $36.4 billion of liabia lities at carrying value pursuant to insurance contracts reported within future policy benefits and other policy-related balances on the consolidated balance sheet at December 31, 2023. Management believes that the changes in the economic value of those contracts under changing interest rates would offset a significant portion of the faiff r value changes of interest rate sensitive assets. (3) Embedded derivatives on index-linked annuities are recognized on the consolidated balance sheet in the same caption as the host contract. Sensitivity Summary Sensitivity to a 100 basis point rise in interest rates was $4.8 billion at December 31, 2023. Sensitivity to a 10% decrease in equity prices was $89 million at December 31, 2023. As discussed above a , we economically hedge subsu tantially all of our foreign currency exposure such that sensitivity to changes in forff eign currencies is minimal. 108 Item 8. Financial Statements and Supplementary Data Index to Consolidated Financial Statements, Notes and Schedules Report of Independent Registered Publu ic Accounting Firm Financial Statements at December 31, 2023 and 2022 and forff the Years Ended December 31, 2023, 2022 and 2021: Consolidated Balance Sheets Consolidated Statements of Operations Consolidated Statements of Comprehensive Income (Loss) Consolidated Statements of Equity Consolidated Statements of Cash Flows Notes to the Consolidated Financial Statements Note 1 — Business, Basis of Presentation and Summary orr f Significant Accounting Policies Note 2 — ASU 2018-12 Transition Note 3 — Segment Information Note 4 — Insurance Liabilities Note 5 — Market Risk Benefitsff Note 6 — Separate Accounts Note 7 — Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles Note 8 — Reinsurance Note 9 — Investments Note 10 — Derivatives Note 11 — Fair Value Note 12 — Long-term Debt Note 13 — Equity Note 14 — Other Revenues and Other Expenses Note 15 — Employee Benefitff Plans Note 16 — Income Tax Note 17 — Earnings Per Common Share Note 18 — Contingencies, Commitments and Guarantees Note 19 — Quarterly Results of Operations (Unaudited) Note 20 — Subsequent Event Financial Statement Schedules at December 31, 2023 and 2022 and forff the Years Ended December 31, 2023, 2022 and 2021: Schedule I — Consolidated Summary orr f Investments — Other Than Investments in Related Parties Schedule II — Condensed Financial Inforff mation (Parent Company Only) Schedule III — Consolidated Supplu ementary Insurance Information Schedule IV — Consolidated Reinsurance Page 110 113 114 115 116 117 119 129 131 136 142 143 145 146 149 162 167 176 178 186 187 188 191 192 196 196 197 198 203 205 109 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the stockholders and the Board of Directors of Brighthouse Financial, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Brighthouse Financial, Inc. and subsu idiaries (the “Company”) as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive income (loss), equity, and cash flows forff each of the three years in the period ended December 31, 2023, and the related notes and the schedules listed in the Index to Consolidated Financial Statements, Notes and Schedules (collectively referred to as the “finff ancial statements”). In our opinion, the finff ancial statements present faiff rly, in all material respects, the finff ancial position each of the three of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows forff years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Publu ic Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over finff ancial reporting as of December 31, 2023, based on criteria established in Internal Control issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated Februarr ry 22, 2024, expressed an unqualified opinion on the Company’s internal control over finff ancial reporting. (( ed Framework (rr 2013) tt —— InI tegrat e Change in Accounting Principle As discussed in Notes 1 and 2 to the financial statements, the Company has changed its method of accounting forff duration contracts dued Contracts (“ASU 2018-12”), effeff ctive January 1, 2023, with a transition date of January 1, 2021. to the adoption of ASU 2018-12, Targeted Improvements to the Accounting forff long- Long-Duration Basis forff Opinion These finff ancial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s finff ancial statements based on our audits. We are a public accounting firff m registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. ff We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether dued to error or fraff ud. Our audits included performing procedurd es to assess the risks of material misstatement of the financial statements, whether due to error or fraff ud, and performing procedurd es that respond to those risks. Such procedurd es included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the finff ancial statements. We believe that our audits provide a reasonable basis for our opinion. a Critical Audit Matters The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subju ective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the finff ancial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. 110 Certaitt n Aii ii financ ial statements ssumptions UseUU d in t ii hett Valuatiott n of Lo iabiliii tyii FF for Futur e PolPP icll y Bc enefitsff – Refee r to Ntt otNN estt 1 and 4 to the Critical Audit MatMM ter Description The Company has obligations under insurance contracts to pay benefits over an extended period of time. The Company (“LFPB”) for nonparticipating traditional and limited-payment contracts and establa ishes a liabia lity forff the additional insurance liabia lities for unive type contracts with secondary guarantees. future policy benefitsff rsal life-ff ff Management regularly reviews its cash floff w assumptions suppor rial liabia lities and, if such assumptions change significantly, the associated liabia lity is adjusted. The measurement of LFPBs can be significantly impacted by changes in economic assumptions related to market interest rates and the general account rate of return and changes in assumptions for policyholder behavior including premium persistency, mortality and lapses. ting the estimates of these actuat u certain contracts is sensitive to changes in these economic and policyholder Given the future policy benefitff obligation forff liabia lities, we identified behavior assumptions and the significant uncertainty inherent management’s evaluation of these assumptions in the valuation of certain LFPBs as a critical audit matter. This required a high degree of auditor judgment and an increased extent of effort , including the involvement of our actuat in estimating these actuat rial specialists. rial ff How thett Critical Audit MatMM ter WasWW Addrdd essed in thett Audit Our audit procedurd es related to these assumptions in the valuation of certain LFPBs included the following, among others: • We tested the effeff ctiveness of management’s controls over the assumption review process, including those over the selection of the significant economic and policyholder behavior assumptions. • With the assistance of our actuat rial specialists, we evaluated the appropr a iateness of the significant assumptions used, a sample of policies and cohorts, and compared our estimates developed an independent estimate of the LFPBs forff to management’s estimates. • We tested the completeness and accuracy of the underlying data that served as the basis for the actuat rial analysis to test that the inputs to the actuarial estimate were reasonable. • We evaluated the methods and significant assumptions used by management to identify pff otential bias. • We evaluated whether the significant assumptions used were consistent with evidence obtained in other areas of the audit. Certaitt n Aii ts stattt emen tt ssumptions UseUU d in t ii hett Valuatiott n of Mo arkeMM t Risk Benefitsff – Refer to Notes 1, 5, and 11 to the finff ancial Critical Audit MatMM ter Description Market risk benefits are measured at faiff estimates market risk benefitff nonperformance risk, and actuarially determined assumptions including policyholder behavior, mortality and risk margins. r value and separately presented on the consolidated balance sheet. The Company including discount rate assumptions, assets and liabia lities using significant judgment Given the sensitivity of certain market risk benefits to changes in these assumptions and the significant uncertainty inherent in estimating the market risk benefits, we identifieff d management’s evaluation of these assumptions in the valuation of certain market risk benefits as a critical audit matter. This required a high degree of auditor judgment and an increased extent of ff effort , including the involvement of our actuat r value specialists. rial and faiff How thett Critical Audit MatMM ter WasWW Addrdd essed in thett Audit Our audit procedurd es related to these assumptions in the valuation of certain market risk benefits included the following, among others: 111 • We tested the effectiveness of management’s controls over the assumption review process, including those over the selection of the significant assumptions related to policyholder behavior, mortality and risk margins, as well as changes in nonperformance risk. • With the assistance of our actuat a developed an independent estimate of the market risk benefitff s forff to management’s estimates. rial specialists, we evaluated the appropr iateness of the significant assumptions used, a sample of policies, and compared our estimates • We tested the completeness and accuracy of the underlying data that served as the basis for the actuat rial analysis to test that the inputs to the actuarial estimate were reasonable. • We evaluated the reasonableness of the Company’s assumptions by comparing those selected by management to rial and industry those independently derived by our fair value and actuarial specialists, drawing upon standard actuat practice. • We evaluated the methods and assumptions used by management to identify pff otential bias in the determination of the market risk benefitff s. • We evaluated whether the assumptions used were consistent with evidence obtained in other areas of the audit. /s/ DELOITTE & TOUCHE LLP Charlotte, North Carolina ry 22, 2024 Februar We have served as the Company’s auditor since 2016. 112 Brighthouse Financial, Inc. Consolidated Balance Sheets December 31, 2023 and 2022 (In millions, except share and per share data) Assets Investments: Fixed maturt ity securities availabla e-for-sale, at estimated faiff r value (amortized cost: $87,131 and $84,344, respectively; allowance forff credit losses of $21 and $7, respectively) Equity securities, at estimated faiff r value Mortgage loans (net of allowance forff Policy loans credit losses of $137 and $119, respectively) Limited partnerships and limited liabia lity companies Short-term investments, principally at estimated faiff r value Other invested assets, principally at estimated fair value (net of allowance forff credit losses of $13 and $13, respectively) Total investments Cash and cash equivalents Accruerr d investment income Premiums, reinsurance and other receivables (net of allowance forff credit losses of $3 and $10, respectively) Deferred policy acquisition costs and value of business acquired Current income tax recoverablea Deferred income tax asset Market risk benefit assets Other assets Separate account assets Total assets Liabilities and Equity Liabilities Future policy benefitsff Policyholder account balances Market risk benefit liabia lities Other policy-related balances Payabla es for collateral under securities loaned and other transactions Long-term debt Other liabia lities Separate account liabia lities Total liabia lities Contingencies, Commitments and Guarantees (Note 18) Equity Brighthouse Financial, Inc.’s stockholders’ equity: Preferred stock, par value $0.01 per share; $1,753 aggregate liquidation preference Common stock, par value $0.01 per share; 1,000,000,000 shares authorized; 122,818,568 and 122,153,422 shares issued, respectively; 63,503,355 and 68,278,068 shares outstanding, respectively Additional paid-in capital Retained earnings (deficit) ff tock, at cost; 59,315,213 and 53,875,354 shares, respectively Treasury srr Accumulated other comprehensive income (loss) Total Brighthouse Financial, Inc.’s stockholders’ equity Noncontrolling interests Total equity Total liabia lities and equity See accompanying notes to the consolidated financial statements. 113 2023 2022 $ 80,991 $ 75,577 102 22,508 1,331 4,946 1,169 4,409 89 22,936 1,282 4,775 1,081 2,852 115,456 108,592 3,851 1,183 19,761 4,872 27 1,893 656 370 88,271 $ $ 236,340 $ 32,569 $ 81,068 10,323 3,836 3,670 3,156 8,439 88,271 231,332 — 1 14,004 (1,507) (2,309) (5,246) 4,943 65 5,008 4,115 885 18,548 5,084 38 1,736 483 401 84,965 224,847 31,497 73,527 10,389 4,098 4,560 3,156 7,057 84,965 219,249 — 1 14,075 (395) (2,042) (6,106) 5,533 65 5,598 $ 236,340 $ 224,847 Brighthouse Financial, Inc. Consolidated Statements of Operations For the Years Ended December 31, 2023, 2022 and 2021 (In millions, except per share data) 2023 2022 2021 nd investment-type product policy fees ff Revenues Premiums Universal life aff Net investment income Other revenues Net investment gains (losses) Net derivative gains (losses) Total revenues Expenses Policyholder benefitff s and claims (including liabia lity remeasurement gains (losses) of ($234), $137, ($50), respectively) Interest credited to policyholder account balances Amortization of deferff Change in market risk benefits Other expenses red policy acquisition costs and value of business acquired Total expenses Income (loss) before provision for income tax Provision for income tax expense (benefit) Net income (loss) Less: Net income (loss) attributable to noncontrolling interests Net income (loss) attributable to Brighthouse Financial, Inc. Less: Preferred stock dividends Net income (loss) availabla e to Brighthouse Financial, Inc.’s common shareholders Earnings per common share Basic Diluted $ $ $ $ $ 828 2,295 4,664 483 (246) (3,907) 4,117 2,676 1,825 620 (1,507) 1,977 5,591 (1,474) (367) (1,107) 5 (1,112) 102 (1,214) $ $ 662 2,435 4,138 478 (248) (592) 6,873 2,193 1,338 629 (4,104) 2,085 2,141 4,732 848 3,884 5 3,879 104 3,775 $ $ $ 707 2,980 4,881 450 (59) (3,983) 4,976 2,746 1,269 637 (4,134) 2,449 2,967 2,009 361 1,648 5 1,643 89 1,554 18.54 18.39 (18.39) $ 51.73 (18.39) $ 51.30 See accompanying notes to the consolidated financial statements. 114 Brighthouse Financial, Inc. Consolidated Statements of Comprehensive Income (Loss) For the Years Ended December 31, 2023, 2022 and 2021 (In millions) Net income (loss) Other comprehensive income (loss): Unrealized investment gains (losses), net of related offsff ets Unrealized gains (losses) on derivatives Changes in instrumrr ent-specific credit risk on market risk benefitff s Changes in discount rates on the liabia lity for futff urt e policy benefitff s Foreign currency translation adjustments Defined benefitff plans adjustment Other comprehensive income (loss), beforff e income tax Income tax (expense) benefit related to items of other comprehensive income (loss) Other comprehensive income (loss), net of income tax Comprehensive income (loss) Less: Comprehensive income (loss) attributable to noncontrolling interests, net of income tax Comprehensive income (loss) attributable to Brighthouse Financial, Inc. $ 2023 (1,107) $ $ 2022 2021 3,884 $ 1,648 2,375 (287) (636) (380) 18 (2) 1,088 (228) 860 (247) 5 (252) $ (14,503) 309 2,344 4,075 (22) 8 (7,789) 1,636 (6,153) (2,269) 5 (2,274) $ (2,963) 156 (634) 1,242 1 (5) (2,203) 463 (1,740) (92) 5 (97) See accompanying notes to the consolidated financial statements. 115 Brighthouse Financial, Inc. Consolidated Statements of Equity For the Years Ended December 31, 2023, 2022 and 2021 (In millions) Preferred Stock Common Stock Additional Paid-in Capital Retained Earnings it) (Deficff Treasury Stock at Cost Accumulated Other Comprehensive Income (Loss) Brighthouse Financial, Inc.’s Stockholders’ Equity Noncontrolling Interests Total Equity $ — $ 1 $ 13,878 $ (534) $ (1,038) $ 5,716 $ 18,023 $ 65 $ 18,088 — — 1 13,878 339 (5,383) (5,917) (1,038) (3,929) 1,787 — 26 (89) (499) (6) 1,643 — 1 14,154 (4,274) (1,543) — 25 (104) (488) (11) 3,879 — 1 14,075 (395) (2,042) — 31 (102) (250) (17) (1,112) (1,740) 47 (6,153) (6,106) (9,312) 8,711 339 (499) 20 (89) — 1,643 (1,740) 8,385 (488) 14 (104) — 3,879 (6,153) 5,533 (250) 14 (102) — (1,112) 65 (5) 5 65 (5) 5 65 (9,312) 8,776 339 (499) 20 (89) (5) 1,648 (1,740) 8,450 (488) 14 (104) (5) 3,884 (6,153) 5,598 (250) 14 (102) (5) 5 (5) (1,107) $ — $ 1 $ 14,004 $ (1,507) $ (2,309) $ (5,246) $ 4,943 $ 65 $ 5,008 860 860 860 See accompanying notes to the consolidated financial statements. Balance at December 31, 2020 Cumulative effect of change in accounting principle, net of income tax Balance at January 1, 2021 Preferred stock issuance Treasury srr tock acquired in connection with share repurchases Share-based compensation Dividends on preferred stock Change in noncontrolling interests Net income (loss) Other comprehensive income (loss), net of income tax Balance at December 31, 2021 Treasury srr tock acquired in connection with share repurchases Share-based compensation Dividends on preferred stock Change in noncontrolling interests Net income (loss) Other comprehensive income (loss), net of income tax Balance at December 31, 2022 Treasury srr tock acquired in connection with share repurchases Share-based compensation Dividends on preferred stock Change in noncontrolling interests Net income (loss) Other comprehensive income (loss), net of income tax Balance at December 31, 2023 116 Brighthouse Financial, Inc. Consolidated Statements of Cash Flows For the Years Ended December 31, 2023, 2022 and 2021 (In millions) Cash flows froff m operating activities Net income (loss) Adjud stments to reconcile net income (loss) to net cash provided by (used in) operating activities: 2023 2022 2021 $ (1,107) $ 3,884 $ 1,648 nd investment-type product policy fees Amortization of premiums and accretion of discounts associated with investments, net (Gains) losses on investments, net (Gains) losses on derivatives, net (Income) loss froff m equity method investments, net of dividends and distributions Interest credited to policyholder account balances Universal life aff Change in market risk benefits, net Change in accruerr d investment income Change in premiums, reinsurance and other receivables Change in deferred policy acquisition costs and value of business acquired, net Change in income tax Change in other assets Change in future policy benefitff s and other policy-related balances Change in other liabia lities Other, net ff Net cash provided by (used in) operating activities Cash flows froff m investing activities Sales, maturities and repayments of: ity securities Fixed maturt Equity securities Mortgage loans Limited partnerships and limited liabia lity companies Purchases of: ity securities Fixed maturt Equity securities Mortgage loans Limited partnerships and limited liabia lity companies Cash received in connection with freestanding derivatives Cash paid in connection with freestanding derivatives Net change in policy loans Net change in short-term investments Net change in other invested assets Net cash provided by (used in) investing activities (282) 232 2,620 83 1,825 (2,295) (875) (215) (1,280) 211 (371) 1,132 51 95 39 (137) 6,028 33 1,232 205 (233) 248 169 110 1,338 (2,435) (3,335) (113) (1,374) 205 796 1,264 (1,960) 176 32 (1,228) (254) 59 3,080 (987) 1,269 (2,980) (3,271) (44) 495 142 255 1,612 (338) (153) 108 641 10,728 53 2,079 252 12,616 129 2,900 271 (8,866) (14) (813) (453) 5,079 (5,428) (49) (38) (112) (3,196) $ (15,799) (37) (5,321) (814) 4,480 (4,275) (18) 772 (376) (21,158) (18) (6,913) (837) 3,965 (4,592) 27 1,397 (25) (8,276) $ (12,238) $ See accompanying notes to the consolidated financial statements. 117 Brighthouse Financial, Inc. Consolidated Statements of Cash Flows (continued) For the Years Ended December 31, 2023, 2022 and 2021 (In millions) Cash flows froff m finff ancing activities Policyholder account balances: Deposits Withdrawals red stock tock acquired in connection with share repurchases Net change in payables for collateral under securities loaned and other transactions Long-term debt issued Long-term debt repaid Preferred stock issued, net of issuance costs Dividends on preferff Treasury sr Financing element on certain derivative instrumrr Other, net Net cash provided by (used in) finff ancing activities Change in cash, cash equivalents and restricted cash Cash, cash equivalents and restricted cash, beginning of year Cash, cash equivalents and restricted cash, end of year Supplemental disclosures of cash flow information Net cash paid (received) for: ents and other derivative related transactions, net Interest Income tax Non-cash transactions: Transferff Transferff of mortgage loans to affiliates of limited partnerships and limited liabia lity companies froff m affiliates 2023 2022 2021 $ $ $ $ $ $ 21,989 (17,747) (890) — (2) — (102) (250) 90 (19) 3,069 (264) 4,115 3,851 151 7 $ $ $ $ — $ — $ 31,693 (20,043) (1,709) — (3) — (104) (488) (185) (16) 9,145 (359) 4,474 4,115 152 44 95 99 $ $ $ $ $ $ 16,118 (4,189) 1,017 400 (680) 339 (89) (499) (368) (86) 11,963 366 4,108 4,474 160 103 — — See accompanying notes to the consolidated financial statements. 118 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements 1. Business, Basis of Presentation and Summary of Significff ant Accounting Policies Busineii ss Brighthouse Financial, Inc. (“BHF” and together with its subsu idiaries, “Brighthouse Financial” or the “Company”) is a holding company forff med in 2016 to own the legal entities that historically operated a subsu tantial portion of MetLife, Inc.’s (together with its subsu idiaries and affiliates, “MetLife”) former retail segment until becoming a separate, publicly-traded nsurance products in the company in August 2017. Brighthouse Financial is one of the largest providers of annuity and life i U.S. through multiple independent distribution channels and marketing arrangements with a diverse network of distribution partners. The Company is organized into three segments: Annuities; Life;ff In addition, the Company reports certain of its results of operations in Corporate & Other. RR and Run-of f.ff ff Basis oii f Po resePP ntattt iontt The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to adopt accounting policies and make estimates and assumptions that affeff ct amounts reported on the consolidated financial statements. In applying these policies and estimates, management makes subju ective and complex judgments that frequently require assumptions about matters that are inherently uncertain. Many of these policies, estimates and related judgments are common in the insurance and financial services industries; others are specific to the Company’s business and operations. Actuat r froff m these estimates. l results could diffeff Consolidll atdd iontt The accompanying consolidated financial statements include the accounts of Brighthouse Financial, as well as partnerships and limited liability companies (“LLC”) that the Company controls. Intercompany accounts and transactions have been eliminated. The Company uses the equity method of accounting forff investments in limited partnerships and LLCs when it has more than a minor ownership interest or more than a minor influence over the investee’s operations. The Company generally recognizes its share of the investee’s earnings on a three-month lag in instances where the investee’s financial information is not sufficiently timely or when the investee’s reporting period differs fro m the Company’s reporting period. When the Company has virtually no influence over the investee’s operations, the investment is carried at fair value. ff Reclasll sifii cations Certain amounts in the prior years’ consolidated financial statements and related footnot es thereto have been reclassified to conforff m with the 2023 presentation as discussed throughout the Notes to the Consolidated Financial Statements. See “— discussion of the adoption of new guidance on long-duration contracts as Adoption of New Accounting Pronouncements” forff of January 1, 2023, parts of which were retrospectively appl ied to prior periods presented in the consolidated financial statements. a ff Summary of Signi ificff ant Accountintt g PolPP icies ll Insurance ConCC tract Obligll atiott ns g The Company has obligations under insurance contracts to pay benefits over an extended period of time. The Company e obligations under long-duration insurance contracts based on the accounting model insurance contract benefits are generally accruer d over s to the contract holder. In addition, certain urt es that are required to be measured at fair value separately froff m the base contracts, establa ishes liabia lities for futur appropriate for each type of contract or contract featurt e. Liabilities forff time as revenue is recognized, or established based on the balance that accruerr insurance contracts may contain feat either as a market risk benefitff (“MRB”) or embedded derivative. ff ff The discussion below provides an overview of the differen applicability of such models to the Company’s insurance products. ff t accounting models for insurance contract obligations and the 119 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 1. Business, Basis of Presentation and Summary of Significff ant Accounting Policies (continued) y f Liability for Futur FF e Policy Bc y f enefitsff The Company establa ishes a liability for futur e policy benefitff s (“LFPB”) for non-participating term and whole life insurance and income annuities. LFPBs are accrued over time as revenue is recognized based on a net premium ratio. The net premium ratio is the portion of gross premiums required to provide for all future benefits. LFPBs are establa ished using the Company’s current assumptions of future cash flows, discounted at a rate that approxi mates a single A corporate bond curve. The Company generally aggregates insurance contracts into groupings by issue year, product and segment for de termining the net premium ratio and related LFPBs. a ff ff l historical experience and upda The Company reviews cash floff w assumptions regularly, and if they change significantly, LFPBs are adjud sted by determining a revised net premium ratio. The revised net premium ratio is calculated as of contract inception using both actuat e cash floff w assumptions. The recalculated net premium ratio is applied to derive a remeasurement gain or loss recognized in the current period net income. For insurance policies in-force as of December 31, 2020, January 1, 2021 is considered the contract inception date. The net premium ratio is also updated quarterly for the difference between actuat l and expected experience. ff ted futur u The net premium ratio is not updated forff changes in discount rate assumptions, as changes in the discount rate are updated quarterly and the impacts are reflected in other comprehensive income (loss) (“OCI”). The discount rate assumption is determined by developing a yield curve based on market observable yields for uppe r-medium grade fixed income instruments derived from an external index. The yield curve is appl ied to the expected future cash floff ws used in the measurement of LFPBs based on the durd ation characteristics of those liabia lities. a ff The most significant cash floff w assumptions used in the establishment of LFPBs are mortality, policy lapses and market interest rates. See Note 4 for more inforff mation on the effect of changes in assumptions on the measurement of LFPBs. The Company also establa ishes an LFPB for participating term and whole life i nsurance using a net premium ratio and the Company’s current assumptions of future cash floff ws. Assumptions are determined at issuance of the policy and are not updated unless a premium deficie ncy exists when the LFPB plus the present value of expected future gross premiums are less than expected future benefits and expenses (based on current assumptions). iency exists, the Company will reduce any deferred acquisition costs and may also establa ish an When a premium deficff additional liabia lity to eliminate the deficiency. See Note 4 forff more information on assumptions used in establa ishing LFPBs related to participating term and whole life i ncy exists. A premium deficie ff nsurance. ff ff ff Policyhc older Account Balances y ff The Company establa ishes a policyholder account balance liabia lity for customer deposits on universal life insurance, universal life i nsurance with secondary guarantees (“ULSG”) and deferred annuity contracts. The policyholder account balance liabia lity is equal to the sum of deposits, plus interest credited, less charges and withdrawals, excluding the impact certain of any appl product feat nsurance contracts and the crediting rates associated with index-linked annuities. icable charge that may be incurred upon urt es including secondary guarantees on universal life i surrender. The Company also holds additional liabia lities forff u a ff ff Addidd tional Liabilities forff ULSG f The Company establa ishes a liabia lity in addition to the account balance forff ULSG. These liabia lities are determined by estimating the expected value of death benefitff s payable when the account balance is projeo cted to be zero and recognizing those benefitff s ratably over the contract period based on total expected assessments. The benefits used in calculating the liabia lities are based on the average benefits payable over a range of scenarios. The Company also maintains a liabia lity for followed by losses on ULSG determined by projecting future earnings and establishing a liabia lity to offsff et losses profitsff that are expected to occur in later years. Both ULSG liabilities are adjusted forff the effects of unrealized investment gains and losses. The Company reviews cash floff w assumptions regularly, and, if they change significantly, the liabia lity for secondary secondary guarantees are presented the guarantees is adjud sted by a cumulative charge or credit to net income. Liabia lities forff within future policy benefitff s with changes in the liabilities reported in policyholder benefitsff effeff cts of unrealized investment gains and losses, which are reported in OCI. and claims, except forff 120 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 1. Business, Basis of Presentation and Summary of Significff ant Accounting Policies (continued) The most significant assumptions used in estimating liabia lities for secondary guarantees are the general account rate of return, premium persistency, mortality and lapses. See Note 4 for more information on the effeff ct of changes in secondary guarantees. assumptions on the measurement of liabia lities forff Marketkk Riskii Benefite s ott f n Annuity Guarantees y MRBs are contracts or contract featurt es that provide protection to the policyholder froff m capital markets risks by ring such risks to the Company. MRBs are required to be separated from the deferred annuity host contract and transferff on measured at fair value. The Company establa ishes MRB assets and liabia lities for gua (“GMDB”), guaranteed minimum income variable annuity contracts including guaranteed minimum death benefitsff benefits (“GMIB”), guaranteed minimum accumulation benefitsff (“GMAB”) and guaranteed minimum withdrawal benefits (“GMWB”). MRB assets are also established for reinsured benefits related to these guarantees. Certain index- linked annuity products may also have guaranteed minimum benefits classified as MRBs. ranteed minimum benefitsff ff The measurement of fair value includes an adjustment forff ls to satisfy its obligations, which is referred to as nonperforff mance risk, as well as risk margin to capture the non-capital markets risks of the instrument, which represents the additional compensation a market participant would require to assume the risks related to the uncertainties in certain actuat r value, with changes reported in rial assumptions. MRBs are measured at estimated faiff change in MRBs on the consolidated statements of operations, except forff the change due to nonperformance risk, which is reported in OCI. the risk that the Company faiff See Note 5 for more inforff mation on the effect of changes in inputs and assumptions on the measurement of MRBs and Note 11 forff more information on the determination of faiff r value of MRBs. Embedded Derivatives on Index-ee Linkedkk Annuities t The Company issues, and assumes through reinsurance, index-linked annuities which allow the policyholder to tures are participate in returns classified as embedded derivatives and measured at estimated fair value, with changes in estimated faiff r value reported in net derivative gains (losses). These embedded derivatives are classified within policyholder account balances on the consolidated balance sheets. from certain specified equity indices. The crediting rates associated with these feaff Embedded derivative liabia lities are required to be separated from the deferred annuity host contract and measured at fair value. The estimated fair value is determined using a combination of an option pricing model and an option-budget approach. Under this appr the crediting rate using option pricing and establa ishes that cost on the balance sheet as a reducd tion to the initial deposit amount. The estimate of fair value includes an adjud stment for nonperformance risk, as well as a risk margin. oach, the Company estimates the cost of funding a ff Actuarial assumptions are reviewed at least annually, and if they change significantly, the estimated faiff r value is adjud sted through net income. Capia tal market inputs used in the measurement of index-linked crediting rate embedded ted quarterly through net income. The reducd tion to the initial deposit is accreted back up to the initial derivatives are updau f the contract. Embedded derivatives related to index-linked annuities are presented deposit over the estimated life off within policyholder account balances while changes in the estimated faiff r value are reported in net derivative gains (losses). For more inforff mation on the determination of estimated faiff r value of embedded derivatives, see Note 11. Recognition of Ro g f evenues and Depos p e its on Insurance ContCC ratt cts Premiums related to traditional long-duration contracts are recognized as revenues when dued from policyholders. When premiums for income annuities are due over a significantly shorter period than the period over which policyholder benefits are incurred, the Company establa ishes a deferred profit liabia lity (“DPL”) forff the excess of the gross premium over the net premium. DPLs are amortized into net income in proportion to the amount of expected future benefit payments. Assumptions used in the measurement of the DPL are updated at the same time as the related LFPBs, with the ting updated estimates used to recalculate the DPL as of contract inception. The remeasurement gain or loss froff m upda DPLs is recognized in current period net income along with the related change in LFPBs. u 121 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 1. Business, Basis of Presentation and Summary of Significff ant Accounting Policies (continued) ff nsurance, deferff Deposits related to universal life i red annuity contracts and investment contracts are credited to policyholder account balances. Revenues froff m such contracts consist of asset-based investment management fees, cost of and surrender charges. These fees, which are included in insurance charges, risk charges, policy administration fees universal life aff , are recognized when assessed to the contract holder, except forff non-level insurance charges which are deferred by the establa ishment of an unearned revenue liabia lity and amortized over the expected life off nd investment-type product policy fees f the contracts. ff ff Premiums and policy feeff s are presented net of reinsurance. Defee rred PolPP icll y Ac y f q cquisiii tioii n CosCC ts, Vs f alVV ue of Busineii , ss Acquired and Other Intangibles g q The Company incurs significant costs in connection with acquiring new and renewal insurance business. Costs that are acquisition or renewal of insurance contracts are capitalized as deferred policy acquisition directly related to the successfulff costs (“DAC”). These costs mainly consist of commissions and include the portion of employees’ compensation and benefits related to time spent selling, underwriting or processing the issuance of new insurance contracts. All other acquisition-related costs are expensed as incurred. Value of business acquired (“VOBA”) is an intangible asset resulting froff m a business combination that represents the r value of acquired insurance, annuity and investment-type contracts in-force as excess of book value over the estimated faiff of the acquisition date. The Company amortizes DAC and VOBA in a manner that approxi mates a straight-line basis over the expected life of the related contracts. For life i e, while projections of policy counts are used for deferred annuity contracts and expected future benefits payments for income annuities. These assumptions are reviewed at least annually, and if they change significantly, upda tes are recognized through changes to futur e amortization. VOBA balances are tested annually to determine if the balance is deemed ff unrecoverabla e froff m expected future profitsff nsurance contracts, amortization is based on projections of amounts of insurance in-forcff . All changes in DAC and VOBA balances are recorded to net income. u a ff Periodically, the Company modifieff s product benefitsff tures, rights or coverages that occur by the exchange of an , feaff existing contract for a new contract, or by amendment, endorsement, or rider to a contract, or by election or coverage within a contract. If a modification is considered to have subsu tantially changed the contract, the associated DAC or VOBA is written off immediately through net income and any new acquisition costs associated with the replacement contract are deferred. If the modification does not subsu tantially change the contract, the DAC or VOBA amortization on the original contract will continue and any acquisition costs associated with the related modification are expensed. The Company also has intangible assets representing deferred sales inducements (“DSI”), which are included in other assets, and unearned revenue liabilities, which are included in other policy-related balances. The Company deferff s sales inducements and unearned revenue and amortizes the balances using the same methodology and assumptions used to amortize DAC and VOBA. Reinsurance The Company enters into reinsurance arrangements pursuant to which it cedes certain insurance risks to unaffiliated reinsurers. Cessions under reinsurance agreements do not discharge the Company’s obligations as the primary insurer. The reinsurance arrangements depends on whether the arrangement provides indemnification against loss or accounting forff liabia lity relating to insurance risk in accordance with GAAP. For ceded reinsurance of existing in-force blocks of insurance contracts that transfer significant insurance risk, premiums, benefitff s and the amortization of DAC are reported net of reinsurance ceded. Amounts recoverabla e fromff reinsurers related to incurred claims and ceded reserves are included in premiums, reinsurance and other receivables and amounts payable to reinsurers included in other liabia lities. If the Company determines that a reinsurance agreement does not expose the reinsurer to a reasonable possibility of a significant loss froff m insurance risk, the Company records the agreement using the deposit method of accounting. Deposits received are included in other liabia lities and deposits made are included in premiums, reinsurance and other receivables. As amounts are paid or received, consistent with the underlying contracts, the deposit assets or liabia lities are adjud sted. Interest on such deposits is recorded as other revenues or other expenses, as appropr iate. a 122 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 1. Business, Basis of Presentation and Summary of Significff ant Accounting Policies (continued) ff The funds withheld liability represents amounts withheld by the Company in accordance with the terms of the reinsurance agreements. Under certain reinsurance agreements, the Company withholds the funds ring the underlying investments and, as a result, records a funds withheld liabia lity in other liabia lities. The Company recognizes interest on funds withheld, included in other expenses, at rates defined by the terms of the agreement which may be contractuat lly specifieff d or directly related to the investment portfolff rather than transferff io. ff Certain funds ff the investment return on the assets withheld. Embedded derivatives related to funds within policyholder account balances on the consolidated balance sheets, with changes in the estimated faiff in net derivative gains (losses). withheld arrangements may also contain embedded derivatives measured at fair value that are related to withheld arrangements are presented r value reported ff Reinsurance arrangements may also contain feat ff urt es classified as MRBs, including reinsurance of guaranteed minimum benefitsff associated with variable annuity contracts. The Company accounts forff assumed reinsurance similar to directly written business. Investments Net InvII estment IncomII e and Net InvII ) estment Gains (Losses) ( Income from investments is reported in net investment income, unless otherwise stated herein. Gains and losses on sales of investments, impairment losses and changes in valuation allowances are reported in net investment gains (losses), unless otherwise stated herein. Fixedii Maturity Securities Available-For-Sale y The Company’s fixff ed maturity securities are classified as availabla e-for-sale and are reported at their estimated fair value. Unrealized investment gains and losses on these securities are recorded as a separate component of OCI, net of policy-related amounts and deferred income taxes. Publicly-traded security transactions are recorded on a trade date basis, while privately-placed and bank loan security transactions are recorded on a settlement date basis. Investment gains and losses on sales are determined on a specific identificff ation basis. ff Interest income and prepayment fees are recognized when earned. Interest income is recognized using an effective yield method giving effeff ct to amortization of premiums and accretion of discounts and is based on the estimated residential mortgage-backed securities (“RMBS”), commercial mortgage- economic life off backed securities (“CMBS”) and asset-backed securities (“ABS”) (collectively, “Strucr tured Securities”) considers the estimated timing and amount of prepayments of the underlying loans. The amortization of premium and accretion of discount of fixed maturt ity securities also takes into consideration call and maturity dates. f the securities, which forff Amortization of premium and accretion of discount on Structurt ed Securities considers the estimated timing and amount of prepayments of the underlying loans. Actual prepayment experience is periodically reviewed, and effeff ctive l prepayments received and yields are recalculated when differences arise between the originally anticipated and the actuat currently anticipated. Prepayment assumptions for Strucr third- party specialists and based on management’s knowledge of the current market. For credit-sensitive Strucrr tured Securities and certain prepayment-sensitive securities, the effective yield is recalculated on a prospective basis. For all other Structurt ed Securities, the effeff ctive yield is recalculated on a retrospective basis. tured Securities are estimated using inputs obtained fromff The Company regularly evaluates fixff ed maturity securities for de clines in fair value to determine if a credit loss exists. This evaluation is based on management’s case-by-case evaluation of the underlying reasons for the decline in fair value including, but not limited to an analysis of the gross unrealized losses by severity and finff ancial condition of the issuer. ff ff For fixff ed maturity securities in an unrealized loss position, when the Company has the intent to sell the security, or it is more likely than not that the Company will be required to sell the security before recovery, the amortized cost basis of the security is written down to faiff r value through net investment gains (losses). 123 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 1. Business, Basis of Presentation and Summary of Significff ant Accounting Policies (continued) For fixff ed maturity securities that do not meet the aforementioned criteria, management evaluates whether the decline r value has resulted froff m credit losses or other factors. If the Company determines the decline in in estimated faiff nce between the amortized cost of the security and the present value estimated faiff of projected future cash flows expected to be collected is recognized as an allowance through net investment gains (losses). If the estimated faiff r value is less than the present value of projeo cted future cash floff ws expected to be collected, this portion of the allowance related to other-than-credit factors is recorded in OCI. r value is due to credit losses, the differe ff Once a security specific allowance forff collected from the security continues to be reassessed. Any changes in the security specific allowance forff are recorded as a provision for (or reversal of) cff redit loss expense in net investment gains (losses). credit losses is established, the present value of cash floff ws expected to be credit losses Fixed maturt ity securities are also evaluated to determine whether any amounts have become uncollectible. When all, ith an adjud stment to or a portion, of a security is deemed uncollectible, the uncollectible portion is written-off wff amortized cost and a corresponding reducd tion to the allowance forff credit losses. g g Mortgage t Loans ff or expenses, and net of an allowance forff Mortgage loans are stated at unpaid principal balance, adjusted forff any unamortized premium or discount, and any deferred fees e recognized when earned. Interest income is recognized using an effective yield method giving effeff ct to amortization of premiums credit losses forff mortgage loans represents the Company’s best estimate of and accretion of discounts. The allowance forff f the loans and is determined using relevant availabla e information from expected credit losses over the remaining life off internal and external sources, relating to past events, current conditions, and a reasonable and suppor credit losses. Interest income and prepayment fees ar tabla e forff ecast. u ff Policy Lc y oans Policy loans are stated at unpaid principal balances. Interest income is recorded as earned using the contractual ate. Any unpaid principal and accruedr interest rate. Generally, accruer d interest is capitalized on the policy’s anniversary drr interest is deducted froff m the cash surrender value or the death benefit prior to settlement of the insurance policy. t Limited Partnershrr p ips and LLCs The Company uses the equity method of accounting forff investments when it has more than a minor ownership lly no influence over interest or more than a minor influence over the investee’s operations; when the Company has virtuat the investee’s operations the investment is carried at estimated faiff r value. The Company generally recognizes its share of the equity method investee’s earnings on a three-month lag in instances where the investee’s finff ancial information is not sufficiently timely or when the investee’s reporting period differs from the Company’s reporting period; while distributions on investments carried at estimated faiff r value are recognized as earned or received. Short-term Investmett nts Short-term investments include securities and other investments with remaining maturt greater than three months, at the time of purchase and are stated at estimated faiff approximates estimated faiff turn over quickly and have short maturt ities of one year or less, but r value or amortized cost, which r value. The Company’s short-term investments generally involve large dollar amounts that ities. For the years ended December 31, 2023, 2022 and 2021, cash proceeds froff m sales, maturt ities and repayments of short-term investments were $4.2 billion, $4.9 billion and $6.3 billion, respectively. For the years ended December 31, 2023, 2022 and 2021, cash payments on purchases of short-term investments were $4.2 billion, $4.1 billion and $4.9 billion, respectively. Othett r InvII ested Assets Other invested assets consist principally of freestanding derivatives with positive estimated faiff r values which are described in “— Derivatives” below. 124 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 1. Business, Basis of Presentation and Summary of Significff ant Accounting Policies (continued) Securities Lending Program g g Securities lending transactions whereby blocks of securities are loaned to third parties, primarily brokerage firms and commercial banks, are treated as financing arrangements and the associated liabia lity is recorded at the amount of cash received. Income and expenses associated with securities lending transactions are reported as investment income and investment expense, respectively, in net investment income. The Company obtains collateral at the inception of the loan, usually cash, in an amount generally equal to 102% of r value of the securities loaned and maintains it at a level greater than or equal to 100% for the duration the estimated faiff of the loan. The Company monitors the estimated faiff r value of the securities loaned on a daily basis and additional collateral is obtained as necessary throughout the durd ation of the loan. Securities loaned under such transactions may be sold or re-pledged by the transferff ee. The Company is liable to return to the counterpar rties the cash collateral received. g g Funding Agregg ements The Company establa ished liabia lities forff funding agreements associated with the Company’s institutional spread margin business, which are equal to the unpaid principal balance, adjud sted for any unamortized premium or discount. Liabilities related to funding agreements are reported in policyholder account balances. Derivatives g Freestanding Derivatives Freestanding derivatives are carried at estimated faiff invested assets or as liabilities in other liabia lities. The Company does not offsff et the estimated faiff rty under the same master netting agreement. recognized for derivatives executed with the same counterpar r value on the Company’s balance sheet either as assets in other r value amounts If a derivative is not designated or did not qualify as an accounting hedge, changes in the estimated faiff r value of the derivative are reported in net derivative gains (losses). The Company generally reports cash received or paid forff a derivative in the investing activity section of the statement cash flows of certain derivative options with deferred premiums, which are reported in the of cash floff ws except forff financing activity section of the statement of cash floff ws. g Hedge Accounting g The Company primarily designates derivatives as a hedge of a forff ecasted transaction or a variability of cash floff ws to be received or paid related to a recognized asset or liabia lity (cash floff w hedge). When a derivative is designated as a cash flow hedge and is determined to be highly effecff r value are recorded in OCI and subsu equently reclassified into the statement of operations when the Company’s earnings are affected by the variabia lity in cash flows of the hedged item. tive, changes in faiff ff or hedge ff To qualify f accounting, at the inception of the hedging relationship, the Company formally documents its risk management objeb ctive and strategy for undertaking the hedging transaction, as well as its designation of the hedge. In its hedge documentation, the Company sets forth how the hedging instrument is expected to hedge the designated risks related to the hedged item and sets forth the method that will be used to retrospectively and prospectively assess the hedging ive in instrument’s effeff ctiveness. A derivative designated as a hedging instrument must be assessed as being highly effect offsff etting the designated risk of the hedged item. Hedge effeff ctiveness is forff mally assessed at inception and at least quarterly throughout the life off f the designated hedging relationship. ff The Company discontinues hedge accounting prospectively when: (i) it is determined that the derivative is no longer highly effective in offsetting changes in the estimated faiff r value or cash floff ws of a hedged item; (ii) the derivative or hedged item expires, is sold, terminated, or exercised; (iii) it is no longer probable that the hedged forff ecasted transaction will occur; or (iv) the derivative is de-designated as a hedging instrument. When hedge accounting is discontinued the derivative is carried at its estimated faiff r value on the balance sheet, with r value recognized in the current period as net derivative gains (losses). The changes in changes in its estimated faiff estimated faiff r value of derivatives previously recorded in OCI related to discontinued cash floff w hedges are released into the statement of operations when the Company’s earnings are affected by the variabia lity in cash floff ws of the hedged item. When the hedged item maturt es or is sold, or the forecasted transaction is not probable of occurring, the Company immediately reclassifies any remaining balances in OCI to net derivative gains (losses). 125 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 1. Business, Basis of Presentation and Summary of Significff ant Accounting Policies (continued) Embedded Derivatives The Company has index-linked annuities that are directly written or assumed through reinsurance contracts that contain embedded derivatives which are required to be separated from their host contracts and reported as derivatives. withheld arrangements associated with reinsurance may also contain embedded derivatives. See “— Certain funds Insurance Contract Obligations” and “— Reinsurance” for additional information on the accounting policies forff embedded derivatives. ff FaiFF r Vii alVV ue Fair value is definff ed as the price that would be received to sell an asset or paid to transfer a liabia lity (an exit price) in the principal or most advantageous market for the asset or liabia lity in an orderly transaction between market participants on ice will be the same at initial the measurement date. In most cases, the exit price and the transaction (or entry) pr recognition. rr In determining the estimated faiff r value of the Company’s investments, fair values are based on unadjusted quoted prices for identical investments in active markets that are readily and regularly obtainable. When such quoted prices are not availabla e, fair values are based on quoted prices in markets that are not active, quoted prices for similar but not identical investments, or other observable inputs. If these inputs are not availabla e, or observable inputs are not determinable, unobservable inputs and/or adjud stments to observable inputs requiring management judgment are used to determine the estimated faiff r value of investments. p Separ ee ate Att ccounts Separate accounts underlying the Company’s variable life aff r value. Assets in separate accounts supporting the contract liabia lities are legally insulated froff m the Company’s general account liabia lities. Investments in these separate accounts are directed by the contract holder and all investment performance, net of contract fees and assessments, is passed through to the contract holder. Investment performance and the corresponding amounts credited to contract holders of such separate accounts are offsff et in the same line on the statements of operations. nd annuity contracts are reported at faiff Separate accounts that do not pass all investment performance to the contract holder, including those underlying certain index-linked annuities, are combined on a line-by-line basis with the Company’s general account assets, liabia lities, investments in these separate accounts is consistent with the methodologies revenues and expenses. The accounting forff ents held in the general account. similar financial instrumr described herein forff The Company receives asset-based distribution and service feeff availabla e to the variable life and ff annuity contract holders as investment options in its separate accounts. These fees ar e recognized in the period in which the related services are performed and are included in other revenues. s froff m mutual funds ff Income Tax The Company’s income tax provision was prepared folff lowing the modified separate return method. The modified separate return method applies the Accounting Standards Codification 740 — Income Taxes (“ASC 740”) to the standalone s if the member were a separate taxpayer and a standalone financial statements of each member of the consolidated group au enterprise, after providing benefits for losses. The Company’s accounting forff income taxes represents management’s best red income taxes included herein and attributable to periods estimate of various events and transactions. Current and deferff up until the Company’s separation froff m MetLife (“Separation”) have been allocated to the Company in a manner that is systematic, rational and consistent with the asset and liability method prescribed by ASC 740. Deferred tax assets and liabia lities resulting froff m temporary drr nces between the finff ancial reporting and tax bases of assets and liabia lities are measured at the balance sheet date using enacted tax rates expected to apply to taxable income in the years the temporary drr nces are expected to reverse. ff iffere ff iffere 126 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 1. Business, Basis of Presentation and Summary of Significff ant Accounting Policies (continued) a The realization of deferff red tax assets depends upon the existence of sufficient taxable income within the carryback or carryforward periods under the tax law in the appl icable tax jurisdiction. Valuation allowances are established when management determines, based on availabla e inforff mation, that it is more likely than not that deferred income tax assets will not be realized. Significant judgment is required in determining whether valuation allowances should be established, as well as the amount of such allowances. When making such determination, the Company considers many fact ors, including the jurisdiction in which the deferred tax asset was generated, the length of time that carryforward can be utilized in the nces and carryforwards, futff uret various taxing jurisdictions, futur reversals of existing taxable temporary drr nces, taxable income in prior carryback years, tax planning strategies and the nature, freff quency, and amount of cumulative finff ancial reporting income and losses in recent years. e taxable income exclusive of reversing temporary drr ff iffere ff iffere ff ff The Inflati ff r (“CAMT”) for corpor period ending afteff consider any futur deferred tax assets. ff ations whose average annual adjusted finff ancial statement income forff on Reduction Act, which was enacted in 2022, establa ished a 15% corporate alternative minimum tax any consecutive three–tax year r December 31, 2021, and preceding the tax year exceeds $1.0 billion. The Company elects not to gular e effects resulting froff m appl icability of the CAMT when assessing the valuation allowance for re a ff The Company may be required to change its provision for income taxes when estimates used in determining valuation allowances on deferred tax assets significantly change or when receipt of new information indicates the need forff adjud stment in valuation allowances. Additionally, the effecff t of changes in tax laws, tax regulations, or interprr etations of such laws or regulations, is recognized in net income tax expense (benefit) in the period of change. examination by The Company determines whether it is more likely than not that a tax position will be sustained upon the appr opriate taxing authorities beforff e any part of the benefitff can be recorded on the finff ancial statements. A tax position a is measured at the largest amount of benefit that is greater than 50% likely of being realized upon settlement. Unrecognized due to tax uncertainties that do not meet the threshold are included in other liabia lities and are charged to tax benefitsff earnings in the period that such determination is made. u The Company classifies interest recognized as interest expense and penalties recognized as a component of income tax expense. g Litigii atiott n and Othett g r Loss ConCC tingii encies The Company is a party to or involved in a number of legal disputes, including litigation matters and disputes or other ourse to matters involving third parties (e.g., vendors, reinsurers or tax or other authorities), and are subject in the ordinary crr xaminations and investigations. The Company reviews relevant information with respect to a number of regulatory e litigation and other loss contingencies related to these matters and establishes liabia lities when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. Legal costs are recognized as incurred. rr In matters where it is not probable, but it is reasonably possible that a loss will be incurred and the amount of loss can nt l is made and no loss or range be reasonably estimated, such losses or range of losses are disclosed, and no accruar information to support an assessment of a reasonably possible loss or range of loss, no accruar of loss is disclosed. l is made. In the absa ence of sufficie ff Othett r Accountintt g PolPP icll g ies Cash and Cash Equivalents q The Company considers all highly liquid securities and other investments purchased with an original or remaining maturity of three months or less at the date of purchase to be cash equivalents. Cash equivalents are stated at estimated fair value or amortized cost, which approximates estimated faiff r value. p y EmpEE loyeeo Benefite Plans f Brighthouse Services, LLC (“Brighthouse Services”) sponsors qualified and non-qualified definff ed contribution nsurance Company (“NELICO”) sponsors certain frozen defined benefitff pension and plans, and New England Life I nce postretirement plans. NELICO recognizes the funde between the faiff r value of plan assets and the benefit obligation, which is the projected benefit obligation (“PBO”) for pension benefits in other assets or other liabia lities. Brighthouse Services and NELICO are both indirect wholly-owned subsu idiaries. d status of each of its pension plans, measured as the differe ff ff ff 127 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 1. Business, Basis of Presentation and Summary of Significff ant Accounting Policies (continued) ff Actuarial gains and losses result froff m differe l experience and the assumed experience on plan nces between the actuat assets or PBO durd ing a particular period and are recorded in accumulated other comprehensive income (loss) (“AOCI”). r value of plan assets, the To the extent such gains and losses exceed 10% of the greater of the PBO or the estimated faiff excess is amortized into net periodic benefitff ime of all plan participants or ime, as appropriate. Prior service costs (credit) are recognized in AOCI at the time of the projected future working lifetff amendment and then amortized into net periodic benefitff ime of all plan participants or projected future working lifetff costs over the average projeo cted future lifetff costs over the average projeo cted future lifetff ime, as appropriate. Net periodic benefitff costs are determined using management estimates and actuat of service cost, interest cost, expected return on plan assets, amortization of net actuat curtailment costs, and amortization of prior service costs (credit). rial assumptions; and are comprised rial (gains) losses, settlement and dd Adopt iott n of No ewNN Accountingii Pronouncements Changes to GAAP are established by the Financial Accounting Standards Board (“FASB”) in the forff m of accounting standards upda tes (“ASU”) to the FASB Accounting Standards Codification. The Company considers the applicability and impact of all ASUs. Except as noted below, there were no significant ASUs adopted during the year ended December 31, 2023. u tt dit Losses (To(( In March 2022, the FASB issued new guidance on Troubled Debt Restructurt ings (“TDR”) (ASU 2022-02, FinFF ancial losures). This ASU eliminates TDR Instruments—Cre pio c 326): TroTT ubled Debt Restructurings and Vintage Discii other recognition and measurement guidance and, instead, requires that an entity evaluate (consistent with the accounting forff loan modifications) whether the modification represents a new loan or a continuation of an existing loan. The amendments also enhance existing disclosure requirements and introduce new requirements related to certain modifications of receivables made to borrowers experiencing financial diffiff culty. The Company adopted this guidance on January 1, 2023. This ASU was adoption but could applied prospectively and did not have a material impact on the consolidated financial statements upon e recognition and measurement of modified loans and other receivables. change the futur u ff In August 2018, the FASB issued new guidance on long-duration contracts (ASU 2018-12, Financial Services (TopiTT c 944): Targe years beginning afteff requirements forff -Insurance ted ImpII fiscal Long-Duration ContCC rat cts ( r January 1, 2023. LDTI resulted in significant changes to the measurement, presentation and disclosure long-duration insurance contracts. A summary of the most significant changes is provided below: tt “LDTI”)). LDTI is effeff ctive forff Accounting forff rovements t tt o thett TT SS (1) Guaranteed benefitff s associated with variable annuity and certain fixed annuity contracts have been classified and r value through rformance risk changes, presented separately on the consolidated balance sheets as MRBs. MRBs are now measured at estimated faiff net income and reported separately on the consolidated statements of operations, except for nonpe which will be recognized in OCI. ff (2) Cash floff w assumptions used to measure LFPBs on traditional long-duration contracts (including term and non- nsurance and immediate annuities) have been updated on an annual basis using a retrospective participating whole life i method. The resulting remeasurement gain or loss is now reported separately on the consolidated statements of operations along with the remeasurement gain or loss on universal life-ff type contract liabia lities. ff (3) The discount rate assumption used to measure the liabia lity forff traditional long-duration contracts is now based on an upper-medium grade fixed income yield, upda u ted quarterly, with changes recognized in OCI. (4) DAC for all insurance products are required to be amortized on a constant-level basis over the expected term of the tion of revenue or profitff emergence. Changes in assumptions used to e amortization amounts. contracts, using amortization methods that are not a func amortize DAC have been recognized as a revision to futur ff ff (5) There was a significant increase in required disclosures, including disaggregated rollforff wards of insurance contract emented by qualitative and quantitative information regarding the cash floff ws, assumptions, assets and liabia lities supplu methods and judgements used to measure those balances. The transition date was January 1, 2021. MRB changes were required to be appl a insurance liabia lity assumption upda u tes and DAC amortization were appl a ied on a retrospective basis, while the ied to existing carrying amounts on the changes forff transition date. 128 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 1. Business, Basis of Presentation and Summary of Significff ant Accounting Policies (continued) The cumulative effect, on an after-tax basis, of the adoption of ASU 2018-12 as of the transition date was a $5.4 billion decrease to retained earnings and a $3.9 billion decrease to AOCI. See Note 2 for more detailed information on the impacts of the ASU to the Company’s finff ancial statements. Future Adopt dd iott n of No ewNN Accountintt g ProPP nouncements ting (To(( rovements t pio c 280): ImpII In November 2023, the FASB issued new guidance on Segment Reporting Disclosures (ASU 2023-07, Segment tes reportabla e segment disclosures u e Repor primarily through enhanced disclosures about significant segment expenses. This ASU does not change how a company identifies its operating segments, aggregates those operating segments, or applies the quantitative thresholds to determine its reportabla e segments. This ASU is effective forff interim periods starting January 1, 2025, and will be appl ied on a retrospective basis. The Company is currently evaluating the impact of this guidance on its financial statements. fiscal years starting January 1, 2024, and forff losures). This ASU upda tt o Reportable SegSS megg nt Discii a a rovements to Income Tax Daa In December 2023, the FASB issued new guidance on Income Tax Disclosures (ASU 2023-09, Income Taxeaa s (To(( pico 740): ImpII tes the required income tax disclosures to include disclosure of income taxes paid disaggregated by jurisdiction and greater disaggregation of information in the required rate reconciliation. This ASU is effective forff fiscal years starting January 1, 2025, and will be applied on a prospective basis. The Company is currently evaluating the impact of this guidance on its financial statements. isclosures). This ASU upda u 2. ASU 2018-12 Transition The Company adopted ASU 2018-12 for LFPBs, DAC and other balances amortized on a basis consistent with DAC by applying the guidance to contracts in-force on the basis of their existing carrying amounts at the transition date. The ly retrospective basis. Company adopted ASU 2018-12 for MRBs on a fulff The effect of transition adjud stments on stockholders’ equity at January 1, 2021 due to the adoption of ASU 2018-12 was as follows: Liability for futff urt e policy benefitsff Market risk benefits and related adjud stments DAC and VOBA Reinsurance recoverabla es Deferred income tax asset Total Retained Earnings ) (Deficit ff AOCI $ $ (In millions) (436) $ (6,237) — (141) 1,431 (5,383) $ (2,073) (3,454) 520 34 1,044 (3,929) For LFPBs, the transition adjustment to retained earnings relates to instances where net premiums exceed gross premiums resulting in LFPBs being increased to eliminate the premium deficie ncy primarily relates to structurt ed settlement annuities. The transition adjustment related to AOCI represents the effeff ct of the requirement to discount LFPBs based on an upper-medium grade fixed income rate as well as the removal of amounts previously recorded in AOCI forff the effects of unrealized investment gains and losses. ncy. The premium deficie ff ff For MRBs, the transition adjud stment to AOCI relates to the cumulative effect of changes in the nonperformance risk between contract issue date and transition date. In aggregate, the additional spread applied to the risk-free rate decreased from nce between the contract inception to the transition date, which had a negative impact on equity. The remaining differe estimated faiff r value and carrying amount of MRBs at transition, excluding the amounts recorded in AOCI, was recorded as an adjud stment to retained earnings as of the transition date. ff For DAC and VOBA, the Company removed amounts previously recorded in AOCI forff the effect of unrealized investment gains and losses. For reinsurance, the adjud stments to both retained earnings and AOCI were made to align the measurement of reinsurance recoverabla es with the related LFPBs. 129 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 2. ASU 2018-12 Transition (continued) The balances of and changes in LFPBs at January 1, 2021 due to the adoption of ASU 2018-12 were as follows: Balance at December 31, 2020 Removal of related balances in AOCI Change in cash floff w assumptions Initial recognition of deferred profit liabia lities Change in discount rate assumptions Adjud sted balance at January 1, 2021 Less: Reinsurance recoverabla e Adjud sted balance at January 1, 2021, net of reinsurance Term and Whole Life Insurance $ $ 2,854 — 14 — 536 3,404 85 3,319 Income Annuities (In millions) 4,311 (203) (171) 176 754 4,867 29 4,838 $ $ Structured Settlement and Pension Risk Transferff Annuities $ $ 10,115 (1,784) 200 217 2,770 11,518 102 11,416 The balance of and changes in liabia lities classified as MRBs at January 1, 2021 due to the adoption of ASU 2018-12 were as follows: Balance at December 31, 2020 Adjud stment for the difference between carrying amount and estimated faiff r value, except forff ff the differe nce dued to nonperformance risk ff Adjud stment for cumulative effect Adjud sted balance at January 1, 2021 Less: Reinsurance recoverabla e Adjud sted balance at January 1, 2021, net of reinsurance of changes in nonperformance risk since issuance Variable Annuities (In millions) 8,924 $ 6,010 3,454 18,388 169 18,219 $ The balances of and changes in DAC and VOBA on January 1, 2021 due to the adoption of ASU 2018-12 were as follows: DAC: Balance at December 31, 2020 Removal of related amounts in AOCI Adjud sted balance at January 1, 2021 VOBA: Balance at December 31, 2020 Removal of related amounts in AOCI Adjud sted balance at January 1, 2021 Variable Annuities Fixed Rate Annuities Index-Linked Annuities (In millions) Term and Whole Life Insurance Universal Life Insurance $ $ $ $ 2,440 472 2,912 363 65 428 $ $ $ $ 64 — 64 76 — 76 $ $ $ $ 886 — 886 $ $ — $ — — $ 527 — 527 8 — 8 $ $ $ $ 492 (23) 469 55 6 61 The folff lowing tabla es present amounts previously reported in 2022 and 2021, the effect on those amounts of the change due to the adoption of ASU 2018-12 as described in Note 1, and the currently reported amounts in the Consolidated Balance Sheets and Consolidated Statements of Operations. See Notes 4, 5, 6 and 7 forff more information. 130 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 2. ASU 2018-12 Transition (continued) December 31, 2022 December 31, 2021 As Previously Reported Effeff ct of Change As Currently Reported As Previously Reported Effeff ct of Change As Currently Reported (In millions) $ $ $ $ $ $ $ $ $ 225,580 $ (733) $ 224,847 41,569 $ (10,072) $ 74,836 $ (1,309) $ — $ 10,389 $ 31,497 73,527 10,389 219,542 $ (293) $ 219,249 $ $ $ $ $ 259,840 $ 2,417 $ 262,257 43,807 $ (3,817) $ 66,851 $ (1,602) $ — $ 16,034 243,633 $ 10,174 $ $ 39,990 65,249 16,034 253,807 (637) $ 242 $ (395) $ (642) $ (3,632) $ (4,274) (5,424) $ (682) $ (6,106) $ 4,172 $ (4,125) $ 47 6,038 225,580 $ $ (440) $ 5,598 (733) $ 224,847 $ $ 16,207 $ (7,757) $ 8,450 259,840 $ 2,417 $ 262,257 ar Ended December 31, 2022 Year Ended December 31, 2021 As Previously Reported Effeff ct of Change As Currently Reported As Previously Reported Effeff ct of Change As Currently Reported (In millions) $ $ $ $ $ $ $ 3,141 304 8,473 4,165 $ $ $ $ (706) $ 2,435 $ 3,636 $ (656) $ 2,980 (896) $ (592) $ (2,469) $ (1,514) $ (3,983) (1,600) $ (1,972) $ 6,873 2,193 $ $ 7,142 $ (2,166) $ 3,443 $ (697) $ 4,976 2,746 — $ (4,104) $ (4,104) $ — $ (4,134) $ (4,134) 8,645 10 $ $ (6,504) $ 3,874 $ 2,141 3,884 $ $ 7,350 $ (4,383) $ (103) $ 1,751 $ 2,967 1,648 Total assets Future policy benefitsff Policyholder account balances Market risk benefit liabia lities Total liabia lities Retained earnings (deficit) ff Accumulated other comprehensive income (loss) Total equity Total liabia lities and equity Universal life aff policy fees ff nd investment-type product Net derivative gains (losses) Total revenues Policyholder benefitsff and claims Change in market risk benefits Total expenses Net income (loss) 3. Segment Inforff mation The Company is organized into three segments: Annuities; Life; and Run-off.ff In addition, the Company reports certain of its results of operations in Corporate & Other. ii Annuities The Annuities segment consists of a variety of variable, fixff ed, index-linked and income annuities designed to address contract holders’ needs for protected wealth accumulation on a tax-deferred basis, wealth transfer an ff d income security. Lifeif The Life sff egment consists of insurance products, including term, universal, whole and variable life pff roducts designed , which may be on a tax-advantaged to address policyholders’ needs for finff ancial security and protected wealth transferff basis. Run-offff The RunRR -off segment consists of products that are no longer actively sold and are separately managed, including nsurance policies and certain tured settlements, pension risk transfer contracts, certain company-owned life i ff ULSG, strucr funding agreements. 131 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 3. Segment Inforff mation (continued) Corporate &tt p tt Other Corporate & Other contains the excess capital not allocated to the segments and interest expense related to the Company’s outstanding debt, as well as expenses associated with certain legal proceedings and income tax audit issues. Corporate & Other also includes long-term care business reinsured through 100% quota share reinsurance agreements and activities related to funding agreements associated with the Company’s institutional spread margin business. In connection with the adoption of ASU 2018-12, the Company reclassified direct-to-consumer life i nsurance that is ate & Other to the Life segment. The segment information below reflects the direct-to-consumer ff no longer sold froff m Corpor ff nsurance in the Life sff life i rr egment for all periods presented. Financ ii ial MeaMM sures and Segme ent Accountintt g PolPP icies ll rr esults. Consistent with GAAP guidance forff Adjud sted earnings is a finff ancial measure used by management to evaluate performance and faci litate comparisons to industry r segment reporting, adjud sted earnings is also used to measure segment performance. The Company believes the presentation of adjud sted earnings, as the Company measures it for management purpos es, enhances the understanding of its performance by the investor community by highlighting the results of operations rr and the underlying profitaff bia lity drivers of the business. ff Adjud sted earnings, which may be positive or negative, focuses on the Company’s primary businesses by excluding the impact of market volatility, which could distort trends. The folff lowing are significant items excluded froff m total revenues in calculating adjusted earnings: • • Net investment gains (losses); and Net derivative gains (losses), excluding earned income and amortization of premium on derivatives that are hedges accounting treatment ff of investments or that are used to replicate certain investments, but do not qualify f (“Investment Hedge Adjud stments”). or hedge ff The folff lowing are significant items excluded froff m total expenses in calculating adjusted earnings: • • Change in MRBs; and Change in fair value of the crediting rate on experience-rated contracts (“Market Value Adjud stments”). The provision for income tax related to adjusted earnings is calculated using the statutory tax rate of 21%, net of impacts related to the dividends received deduction, tax credits and current period non-recurring items. The Company’s adjusted earnings definition and presentation has been updated forff all periods presented to refleff ct the adoption of ASU 2018-12. The segment accounting policies are the same as those used to prepare the Company’s consolidated financial statements, . In addition, segment accounting policies include the adjustments to calculate adjusted earnings described above a except forff the methods of capia tal allocation described below. Segment investment and capitalization targets are based on statutor riented risk principles and metrics. Segment iabia lities plus excess capital. For the variable annuity business, rr invested assets backing liabia lities are based on net statutor y l the excess capital held is based on the target statutory total asset requirement consistent with the Company’s variabla e annuity risk management strategy. For insurance businesses other than variable annuities, excess capital held is based on a percentage of required statutory risk-based capital (“RBC”). Assets in excess of those allocated to the segments, if any, are held in Corporate & Other. Segment net investment income reflects the performance of each segment’s respective invested assets. y orr t t 132 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 3. Segment Inforff mation (continued) Operating results by segment, as well as Corporate & Other, were as follows: Pre-tax adjusted earnings Provision for income tax expense (benefit) Post-tax adjud sted earnings Less: Net income (loss) attributable to noncontrolling interests Less: Preferred stock dividends Adjud sted earnings : Adjud stments forff Net investment gains (losses) Net derivative gains (losses), excluding investment hedge adjud stments of $105 Change in market risk benefits Market value adjustments Provision for income tax (expense) benefit Net income (loss) availabla e to Brighthouse Financial, Inc.’s common shareholders Year Ended December 31, 2023 Annuities Life Run-offff Corporate & Other Total $ $ 1,437 268 1,169 — — 1,169 $ $ (In millions) (69) $ (16) (53) — — (53) $ (100) $ (23) (77) — — (77) $ $ 21 (16) 37 5 102 (70) 1,289 213 1,076 5 102 969 (246) (4,012) 1,507 (12) 580 $ (1,214) Interest revenue Interest expense $ $ 2,568 $ — $ $ 437 — $ 1,141 $ — $ 623 153 Year Ended December 31, 2022 Annuities Life Run-offff Corporate & Other Total Pre-tax adjusted earnings Provision for income tax expense (benefit) Post-tax adjud sted earnings Less: Net income (loss) attributable to noncontrolling interests Less: Preferred stock dividends Adjud sted earnings : Adjud stments forff Net investment gains (losses) Net derivative gains (losses), excluding investment hedge adjud stments of $71 Change in market risk benefits Market value adjustments Provision for income tax (expense) benefit Net income (loss) availabla e to Brighthouse Financial, Inc.’s common shareholders $ $ 1,317 247 1,070 — — 1,070 $ $ (In millions) 109 $ 22 87 — — 87 $ $ $ 94 16 78 — — 78 (68) $ (126) 58 5 104 (51) 1,452 159 1,293 5 104 1,184 (248) (663) 4,104 87 (689) $ 3,775 Interest revenue Interest expense $ $ 2,261 $ — $ 442 $ — $ 1,166 $ — $ 340 153 133 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 3. Segment Inforff mation (continued) Pre-tax adjusted earnings Provision for income tax expense (benefit) Post-tax adjud sted earnings Less: Net income (loss) attributable to noncontrolling interests Less: Preferred stock dividends Adjud sted earnings : Adjud stments forff Net investment gains (losses) Net derivative gains (losses), excluding investment hedge adjud stments of $21 Change in market risk benefits Market value adjustments Provision for income tax (expense) benefit Net income (loss) availabla e to Brighthouse Financial, Inc.’s common shareholders Year Ended December 31, 2021 Annuities Life Run-offff Corporate & Other Total $ $ 1,589 303 1,286 — — 1,286 $ $ (In millions) 265 $ 59 206 — — 206 $ $ $ 422 88 334 — — 334 (355) $ (109) (246) 5 89 (340) 1,921 341 1,580 5 89 1,486 (59) (4,004) 4,134 17 (20) $ 1,554 Interest revenue Interest expense $ $ 2,217 $ — $ 698 $ — $ 1,910 $ — $ 77 163 Total revenues by segment, as well as Corpor r ate & Other, were as follows: Years Ended December 31, 2023 2022 (In millions) 2021 Annuities Life ff Run-off Corporate & Other Adjud stments Total $ $ 4,878 1,229 ,643 1 625 (4,258) 4,117 Total assets by segment, as well as Corporate & Other, were as follows at: Annuities Life Run-off ff Corporate & Other Total $ $ $ $ 4,526 1,213 1,705 340 (911) 6,873 $ $ 4,903 1,633 2,426 77 (4,063) 4,976 December 31, 2023 2022 (In millions) 160,775 25,504 2 6,828 23,233 236,340 $ $ 151,192 22,057 28,436 23,162 224,847 134 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 3. Segment Inforff mation (continued) Total premiums, universal life and investment-type product policy fees an ff d other revenues by major product group were as follows: Annuity products Life insurance products Other products Total Years Ended December 31, 2023 2022 (In millions) 2021 $ $ 2,319 1,280 7 3,606 $ $ 2,268 1,298 9 3,575 $ $ 2,691 1,436 10 4,137 Subsu tantially all of the Company’s premiums, universal life and investment-type product policy fees an ff d other revenues originated in the U.S. Revenues derived from any individual customer did not exceed 10% of premiums, universal life aff nd investment-type product policy feeff s and other revenues forff the years ended December 31, 2023, 2022 and 2021. 135 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements 4. Insurance Liabilities Liabilityii FF for Futur e PolPP icll y Bc enefitsff Information regarding LFPBs for non- ff participating traditional and limited-payment contracts was as follows: Years Ended December 31, 2023 2022 2021 Term and Whole Life Insurance Income Annuities Structured Settlement and Pension Risk Transferff Annuities Term and Whole Life Insurance Income Annuities Structured Settlement and Pension Risk Transferff Annuities Term and Whole Life Insurance Income Annuities Structured Settlement and Pension Risk Transferff Annuities (Dollars in millions) Present value of expected net premiums: Balance, beginning of year $ 2,871 $ Beginning balance at original discount rate Effeff ct of model refinff ements Effeff ct of changes in cash floff w assumptions Effeff ct of actuat experience l variances from expected Adjud sted beginning of year balance Issuances l Interest accruarr Net premiums collected Ending balance at original discount rate Effeff ct of changes in discount rate assumptions Balance, end of year Present value of expected future policy benefits: 3,212 — 215 (14) 3,413 93 112 (384) 3,234 (260) $ 2,974 $ — — — — — — — — — — — — $ $ — — — — — — — — — — — — $ 3,325 $ 3,051 122 137 119 3,429 93 116 (426) 3,212 (341) $ 2,871 $ — — — — — — — — — — — — $ $ — — — — — — — — — — — — $ 3,448 $ 2,994 — 70 153 3,217 113 111 (390) 3,051 274 $ 3,325 $ — — — — — — — — — — — — $ $ — — — — — — — — — — — — Balance, beginning of year $ 5,279 $ 3,512 $ 6,793 $ 6,426 $ 4,333 $ 10,171 $ 6,852 $ 4,691 $ 11,301 Beginning balance at original discount rate Effeff ct of model refinff ements Effeff ct of changes in cash floff w assumptions Effeff ct of actuat experience l variances from expected Adjud sted beginning of year balance Issuances l Interest accruarr Benefit payments Ending balance at original discount rate Effeff ct of changes in discount rate assumptions Balance, end of year Net liabia lity for futur ff e policy benefitff s, end of year Less: Reinsurance recoverabla e, end of year Net liabia lity for futur ff e policy benefitff s, after ff reinsurance recoverabla e 5,922 — 309 (15) 6,216 99 217 (509) 6,023 (516) 5,507 2,533 42 $ $ 3,897 7,410 — — (34) 3,863 374 140 (346) 4,031 (277) 3,754 3,754 31 $ $ — — (47) 7,363 — 314 (592) 7,085 (388) 6,697 6,697 65 $ $ 5,820 135 157 155 6,267 101 222 (668) 5,922 (643) 5,279 2,408 45 $ $ 3,865 — 56 (22) 3,899 224 146 (372) 3,897 (385) 3,512 3,512 24 $ $ 8,165 (278) (157) (23) 7,707 — 327 (624) 7,410 (617) 6,793 6,793 68 $ $ 5,862 3,938 8,531 — 70 153 6,085 128 222 (615) 5,820 606 6,426 3,101 64 $ $ — (41) (6) 3,891 198 150 (374) 3,865 — (41) (16) 8,474 — 359 (668) 8,165 $ $ 468 2,006 4,333 $ 10,171 4,333 $ 10,171 27 93 $ 2,491 $ 3,723 $ 6,632 $ 2,363 $ 3,488 $ 6,725 $ 3,037 $ 4,306 $ 10,078 Weighted-average duration of liabia lity 8.7 years 8.2 years 11.6 years 8.4 years 8.5 years 11.6 years 8.4 years 8.5 years 12.7 years Weighted-average interest accretion rate Current discount rate Gross premiums or assessments recognized during period Expected future gross premiums, undiscounted Expected future gross premiums, discounted Expected future benefit payments, undiscounted Expected future benefit payments, discounted 3.94 % 4.94 % 3.97 % 4.95 % 4.46 % 5.03 % 3.97 % 5.26 % 3.87 % 5.27 % 4.45 % 5.32 % 3.97 % 2.53 % 3.96 % 2.55 % 4.45 % 2.81 % $ $ $ $ $ 611 6,172 4,642 8,332 6,023 $ $ $ $ $ 488 — — $ $ $ — — — 5,710 $ 13,767 4,031 $ 7,085 $ $ $ $ $ 639 6,734 4,991 8,184 5,922 $ $ $ $ $ 257 — — $ $ $ — — — 5,520 $ 14,418 3,897 $ 7,410 $ $ $ $ $ 666 7,027 5,179 8,103 5,820 $ $ $ $ $ 253 — — $ $ $ — — — 5,523 $ 17,241 3,865 $ 8,165 136 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements 4. Insurance Liabilities (continued) The measurement of LFPBs can be significantly impacted by changes in assumptions for policyholder behavior. As part rial review (“AAR”), the Company updated assumptions regarding mortality and lapses forff ff nsurance. The impact froff m changes in assumptions is presented in effect of changes in of the 2023 and 2022 annual actuat term and non-participating whole life i cash floff w assumptions in the table above. Information regarding the additional insurance liabilities for universal life-ff type contracts with secondary guarantees was as follows: Years Ended December 31, 2023 2022 2021 Balance, beginning of year Beginning balance beforff e the effeff ct of unrealized gains and losses Effeff ct of changes in cash floff w assumptions Effeff ct of actuat l variances from expected experience Adjud sted beginning of year balance Interest accruarr l Net assessments collected Benefit payments Effeff ct of realized capia tal gains (losses) Ending balance beforff e the effeff ct of unrealized gains and losses Effeff ct of unrealized gains and losses Balance, end of year Less: Reinsurance recoverabla e, end of year Net additional liabia lity, afteff Weighted-average duration of liabia lity Weighted-average interest accretion rate Gross assessments recognized durd ing period r reinsurance recoverabla e $ $ 6,935 7,175 52 145 7,372 357 414 (359) — 7,784 (177) 7,607 1,438 6,169 6.7 years 4.92 % $ (Dollars in millions) $ 7,168 6,731 (37) 179 6,873 333 416 (447) — 7,175 (240) 6,935 1,384 5,551 6.7 years 4.90 % $ $ $ 1,064 $ 1,070 $ 6,743 6,203 153 (124) 6,232 308 475 (286) 2 6,731 437 7,168 1,294 5,874 6.7 years 4.90 % 1,255 The measurement of liabia lities forff ields uses a mean reversion approa secondary guarantees can be significantly impacted by changes in the expected general ields. The Company’s practice account rate of return, which is driven by the Company’s assumption forff of projecting treasury yrr ch that assumes that long-term interest rates are less influenced by short-term fluctuations and are only changed when sustained interim deviations are expected. As part of the 2023 AAR, the 3.50% Company increased the long-term general account earned rate, driven by an increase in the mean reversion rate fromff to 3.75%. The Company also upda including mortality, premium persistency, lapsa es, withdrawals and maintenance expenses. As part of the 2022 AAR, the Company increased the long-term general account earned rate, driven by an increase in the mean reversion rate froff m 3.00% to 3.50%. Both period assumption updates are refleff cted in the table above. ted assumptions regarding policyholder behavior, long-term treasury yrr u a 137 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements 4. Insurance Liabilities (continued) A reconciliation of the net LFPBs for nonpa insurance liabia lities for unive LFPBs on the consolidated balance sheets was as follows at: rsal life-ff ff ff rticipating traditional and limited-payment contracts and the additional type contracts with secondary guarantees reported in the preceding rollforff ward tabla es to Liabilities reported in the preceding rollforff ward tabla es Long-term care insurance (1) ULSG liabia lities, including liability for profits followed by losses Participating whole life i Deferred profit liabia lities Other ff nsurance (2) Total liabia lity for futur ff e policy benefitsff _______________ (1) Includes liabia lities related to fully reinsured individual long-term care insurance. See Note 8. December 31, 2023 2022 (In millions) 20,591 5,581 2,427 3,102 479 389 32,569 $ $ 19,648 5,686 2,449 2,949 373 392 31,497 $ $ ff (2) Participating whole life i nsurance uses an interest assumption based on the non-forfeiture interest rate, ranging from 3.5% to 4.5%, and mortality rates guaranteed in calculating the cash surrender values described in such contracts, and nsurance represented 3% of the Company’s life terminal dividends. Participating whole life i also includes a liabia lity forff insurance in-force at both December 31, 2023 and 2022, and 40% and 41% of gross traditional life i nsurance premiums for the years ended December 31, 2023 and 2022, respectively. ff ff 138 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements 4. Insurance Liabilities (continued) Policyhc older Account Balances Information regarding policyholder account balances was as folff lows: Year Ended December 31, 2023 Balance, beginning of year Premiums and deposits Surrenders and withdrawals Benefit payments Net transfers from (to) separate account Interest credited Policy charges Changes related to embedded derivatives Balance, end of year Weighted-average crediting rate (2) Year Ended December 31, 2022 Balance, beginning of year Premiums and deposits Surrenders and withdrawals Benefit payments Net transfers from (to) separate account Interest credited Policy charges Changes related to embedded derivatives Balance, end of year Weighted-average crediting rate (2) Year Ended December 31, 2021 Balance, beginning of year Premiums and deposits Surrenders and withdrawals Benefit payments Net transfers from (to) separate account Interest credited Policy charges Changes related to embedded derivatives Balance, end of year Weighted-average crediting rate (2) _______________ Universal Life Insurance Variable Annuities (1) Index-linked Annuities Fixed Rate Annuities ULSG (Dollars in millions) Company- Owned Life Insurance (1) $ 2,658 $ 4,908 $ 33,897 $ 14,274 $ 5,307 $ 641 230 (163) (67) 46 66 (220) — 76 (693) (111) 18 133 (24) — 7,183 (3,732) (240) — 445 (11) 4,085 2,694 (2,405) (377) — 486 — — 660 (23) (85) — 208 (1,015) — $ 2,550 $ 4,307 $ 41,627 $ 14,672 $ 5,052 2.56 % 2.90 % 1.47 % 3.31 % 4.02 % $ 2,694 $ 4,743 $ 32,000 $ 11,849 $ 5,569 219 (88) (65) 47 76 (225) — 146 (495) (113) 151 501 (25) — 6,632 (2,220) (180) — 392 (8) (2,719) 3,676 (904) (345) — (2) — — 697 (32) (84) — 197 (1,040) — $ 2,658 $ 4,908 $ 33,897 $ 14,274 $ 5,307 2.84 % 10.47 % 1.16 % (0.02)% 3.62 % $ 2,674 $ 4,895 $ 23,274 $ 12,349 $ 5,823 312 (94) (63) 47 106 (288) — 196 (644) (107) 296 148 (41) — 7,054 (1,419) (151) — 365 (6) 2,883 114 (610) (342) — 338 — — 687 (46) (77) — 186 (1,004) — $ $ $ $ $ 2,694 $ 4,743 $ 32,000 $ 11,849 $ 5,569 $ — — (8) 1 28 (9) — 653 4.33 % 646 — — (8) (13) 23 (7) — 641 3.41 % 679 — 1 (10) (35) 24 (13) — 646 3.96 % 3.06 % 1.12 % 2.79 % 3.27 % 3.66 % (1) Includes liabia lities related to separate account producd ts where the contract holder elected a general account investment option. (2) Excludes the effeff cts of embedded derivatives related to index-linked crediting rates. 139 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements 4. Insurance Liabilities (continued) A reconciliation of policyholder account balances reported in the preceding rollforff ward tabla e to the liabia lity for policyholder account balances on the consolidated balance sheets was as follows at: Policyholder account balances reported in the preceding rollforff ward tabla e Funding agreements classified as investment contracts Other investment contract liabia lities Total policyholder account balances December 31, 2023 2022 (In millions) $ $ 68,861 11,115 1,092 81,068 $ $ 61,685 10,689 1,153 73,527 The balance of account values by range of guaranteed minimum crediting rates and the related range of difference, in basis points, between rates being credited to policyholders and the respective guaranteed minimums was as folff lows at: Range of Guaranteed Minimum Crediting Rate At Guaranteed Minimum 1 to 50 Basis Points Above 51 to 150 Basis Points Above (In millions) Greater than 150 Basis Points Above Total December 31, 2023 Annuities (1): Less than 2.00% 2.00% to 3.99% Greater than 3.99% Total Life insurance (2) (3): Less than 2.00% 2.00% to 3.99% Greater than 3.99% Total ULSG (3): Less than 2.00% 2.00% to 3.99% Greater than 3.99% Total December 31, 2022 Annuities (1): Less than 2.00% 2.00% to 3.99% Greater than 3.99% Total Life insurance (2) (3): Less than 2.00% 2.00% to 3.99% Greater than 3.99% Total ULSG (3): Less than 2.00% 2.00% to 3.99% Greater than 3.99% Total _______________ $ $ $ $ $ $ $ $ $ $ $ $ 697 8,827 874 10,398 $ $ — $ — 1,595 1,595 $ 223 242 — 465 $ $ — $ 492 — 492 $ 310 225 — 535 $ $ — $ 49 — 49 $ — $ — $ — $ 1,135 506 1,641 861 6,119 525 7,505 $ $ $ — $ — 1,657 1,657 $ 1,485 — 1,485 317 4,872 — 5,189 $ $ $ — $ 510 — 510 $ 1,663 — 1,663 369 596 — 965 $ $ $ — $ 87 — 87 $ — $ — $ — $ 1,225 527 1,752 $ 1,581 — 1,581 $ 1,729 — 1,729 $ 7,652 356 — 8,008 236 136 — 372 $ $ $ $ — $ 254 — 254 $ 5,821 10 — 5,831 172 154 — 326 $ $ $ $ — $ 266 — 266 $ 8,882 9,650 874 19,406 236 677 1,595 2,508 — 4,537 506 5,043 7,368 11,597 525 19,490 172 751 1,657 2,580 — 4,801 527 5,328 (1) Includes policyholder account balances for fixff ed rate annuities and the fixed account portion of variabla e annuities. 140 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements 4. Insurance Liabilities (continued) (2) Includes policyholder account balances for retained asset accounts, universal life pff olicies and the fixff ed account portion of universal variable life i ff nsurance policies. (3) Amounts are gross of policy loans. See Note 6 for inforff mation regarding net amount at risk and cash surrender values. Obligatiott ns Under FundFF indd g Agreements tt Institutio nal SprSS ead MarMM gir n Bii g p usiness ff Brighthouse Life I nsurance Company has issued unsecured fixff ed and floff ating rate funding agreements to certain r e entities that have issued either debt securities or commercial paper for which payment of interest and is secured by such funding agreements. The Company had obligations outstanding under these funding special purpos principal agreements of $5.5 billion at both December 31, 2023 and 2022. ff ff ff Brighthouse Life I nsurance Company has a secured funding agreement program with the Federal Home Loan Bank (“FHLB”) of Atlanta. The Company had obligations outstanding under this program of $4.4 billion and $3.9 billion at December 31, 2023 and 2022, respectively. Funding agreements are issued to FHLBs in exchange for cash, for which the FHLBs have been granted liens on certain assets, some of which are in their custody to collateralize the Company’s obligations under the funding agreements. The Company is permitted to withdraw any portion of the collateral in the custody of the FHLBs as long as there is no event of default and the remaining qualified collateral is suffiff cient to satisfy the collateral maintenance level. Upon any event of default by the Company, the FHLBs’ recovery on the collateral is limited to the amount of the Company’s liabia lities to the FHLBs. See Note 9 for information on invested assets pledged as collateral in connection with funding agreements. ff ff Brighthouse Life I nsurance Company has a secured funff ding agreement program with the Federal Agricultural Mortgage Corporation and its affiff liate Farmer Mac Mortgage Securities Corporation (“Farmer Mac”). The Company had obligations outstanding under this program of $700 million at both December 31, 2023 and 2022. Funding agreements are issued to Farmer Mac in exchange for cash, for which Farmer Mac have been granted liens on certain assets to collateralize the Company’s obligations under the funding agreements. Upon any event of default by the Company, Farmer Mac’s recovery on the collateral is limited to the amount of the Company’s liabia lities to Farmer Mac. See Note 9 for information on invested assets pledged as collateral in connection with funding agreements. ff Inactive FundFF indd g Agreement Programs g g g Brighthouse Life I ff nsurance Company has obligations outstanding under inactive funding ff agreement programs of $525 million at both December 31, 2023 and 2022. 141 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 5. Market Risk Benefits Information regarding MRB assets and liabia lities associated with variabla e annuities was as follows: Years Ended December 31, 2023 2022 2021 (Dollars in millions) $ Balance, beginning of year Balance, beginning of year, beforff e effect of changes in nonperformance risk $ nt from expected experience ff l differe Decrements Effeff ct of changes in futff urt e expected assumptions Effeff ct of actuat Effeff ct of changes in interest rates Effeff ct of changes in fund returns Issuances Effeff ct of changes in risk margin Aging of the block and other ff Balance, end of year, before effeff ct of changes in nonperformance risk Effeff ct of changes in nonperformance risk Balance, end of year Less: Reinsurance recoverabla e, end of year Balance, end of year, net of reinsurance (1) Weighted-average attained age of contract holder _______________ $ 9,974 8,230 (176) 259 187 (428) (2,203) (7) (34) 1,498 7,326 2,375 9,701 43 9,658 72.9 years $ 15,698 11,611 16 210 (48) (8,394) 3,807 (47) (152) 1,227 8,230 1,744 9,974 71 9,903 71.8 years $ $ 18,388 14,934 (68) 41 (86) (1,829) (2,578) (96) (128) 1,421 11,611 4,087 15,698 118 15,580 71.1 years (1) Amounts represent the sum of MRB assets and MRB liabia lities presented on the consolidated balance sheets at December 31, 2023, 2022 and 2021, with the exception of $9 million, $3 million and $5 million, respectively, of index- linked annuities not included in this table. Market conditions, including, but not limited to, changes in interest rates, equity indices, market volatility and variations rial assumptions, including policyholder behavior, mortality and risk margins related to non-capital markets inputs, as in actuat well as changes in nonperformance risk, may result in significant fluff ctuat r value of the guarantees. As part of the AAR in 2023 and 2022, the Company updated assumptions regarding policyholder behavior, mortality, separate account fund allocations and volatility, which are refleff cted in the table above. tions in the estimated faiff 142 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 6. Separate Accounts ee Separ ate Att ccounts Information regarding separate account liabia lities was as follows: 2023 2022 2021 Years Ended December 31, Variable Annuities Universal Life Insurance Company -Owned Life Insurance Variable Annuities $ 77,653 766 (6,346) (1,434) 11,549 (2,160) $ 5,218 162 (180) (68) 1,041 (206) $ 1,932 — (19) (28) 328 (49) $105,023 1,207 (6,256) (1,337) (18,583) (2,292) Universal Life Insurance (In millions) $ 6,862 175 (159) (67) (1,342) (203) Company -Owned Life Insurance Variable Annuities Universal Life Insurance Company -Owned Life Insurance $ 2,384 — (18) (33) (358) (61) $103,315 2,089 (8,481) (1,632) 12,609 (2,559) $ 6,229 188 (207) (70) 986 (214) $ 2,269 3 (68) (38) 235 (46) (18) (20) $ 79,990 (46) — $ 5,921 (1) (1) $ 2,162 (151) 42 $ 77,653 (47) (1) $ 5,218 13 5 $ 1,932 (296) (22) $105,023 (47) (3) $ 6,862 35 (6) $ 2,384 Balance, beginning of year Premiums and deposits Surrenders and withdrawals Benefit payments Investment performance Policy charges Net transfers from (to) general account Other Balance, end of year A reconciliation of separate account liabia lities reported in the preceding rollforff ward tabla e to the separate account liabia lities balance on the consolidated balance sheets was as follows at: December 31, 2023 2022 (In millions) $ $ 88,073 179 19 88,271 $ $ 84,803 145 17 84,965 ting separate accounts was as December 31, 2023 2022 (In millions) $ $ 87,999 258 7 7 88,271 $ $ 84,667 278 9 11 84,965 Separate account liabia lities reported in the preceding rollforff ward tabla e Variable income annuities Pension risk transfer annuities Total separate account liabia lities The aggregate estimated faiff r value of assets, by major investment asset category, suppor u follows at: Equity securities Fixed maturt ity securities Cash and cash equivalents Other assets Total aggregate estimated faiff r value of assets 143 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 6. Separate Accounts (continued) Net Amount at Risk and Cash Surrenderdd Values Information regarding the net amount at risk and cash surrender value for insurance products was as folff lows at: Universal Life Insurance Variable Annuities Index- linked Annuities Fixed Rate Annuities ULSG Company- Owned Life Insurance (In millions) December 31, 2023 Account balances reported in the preceding rollforff ward tabla es: Policyholder account balances Separate account liabia lities Total account balances Net amount at risk Cash surrender value December 31, 2022 Account balances reported in the preceding rollforff ward tabla es: Policyholder account balances Separate account liabia lities Total account balances Net amount at risk Cash surrender value December 31, 2021 Account balances reported in the preceding rollforff ward tabla es: Policyholder account balances Separate account liabia lities Total account balances Net amount at risk Cash surrender value $ $ $ $ $ $ $ $ $ $ $ $ 2,550 $ 4,307 $ 41,627 $ 14,672 $ 5,052 $ 5,921 8,471 35,583 7,881 $ $ $ 79,990 — — — 84,297 $ 41,627 $ 14,672 $ 5,052 13,240 N/A N/A $ 65,299 83,852 $ 39,270 $ 14,068 $ 4,498 $ $ $ 2,658 $ 4,908 $ 33,897 $ 14,274 $ 5,307 $ 5,218 7,876 38,146 7,225 $ $ $ 77,653 — — — 82,561 $ 33,897 $ 14,274 $ 5,307 16,504 N/A N/A $ 66,926 82,125 $ 31,293 $ 13,723 $ 4,671 $ $ $ 2,694 $ 4,743 $ 32,000 $ 11,849 $ 5,569 $ 6,862 105,023 — — — 9,556 $ 109,766 $ 32,000 $ 11,849 $ 5,569 39,549 $ 6,361 N/A N/A $ 68,905 8,884 $ 109,592 $ 29,848 $ 11,112 $ 4,821 $ $ $ 653 2,162 2,815 2,659 2,593 641 1,932 2,573 3,382 2,357 646 2,384 3,030 3,678 2,811 Products may contain both separate account and general account fund options; accordingly, net amount at risk and cash surrender value reported in the tabla e above a relate to the total account balance forff each respective product grouping. 144 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 7. Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles Defee rred PolPP icll y Ac cquisiii tioii n CosCC ts and ValVV ue of Busineii ss Acquired See Note 1 for a description of capitalized acquisition costs. Information regarding DAC and VOBA was as follows: DAC: Adjud sted balance at January 1, 2021 (1) Capia talization Amortization Balance at December 31, 2021 Capia talization Amortization Balance at December 31, 2022 Capia talization Amortization Balance at December 31, 2023 VOBA: Adjud sted balance at January 1, 2021 (1) Amortization Balance at December 31, 2021 Amortization Balance at December 31, 2022 Amortization Balance at December 31, 2023 Total DAC and VOBA: Balance at December 31, 2023 Balance at December 31, 2022 Balance at December 31, 2021 _______________ Variable Annuities Fixed Rate Annuities Index-linked Annuities (In millions) Term and Whole Life Insurance Universal Life Insurance $ $ $ $ $ $ $ 2,912 90 (284) 2,718 55 (265) 2,508 36 (243) 2,301 428 (51) 377 (36) 341 (32) 309 2,610 2,849 3,095 $ $ $ $ $ $ $ 64 37 (12) 89 30 (12) 107 14 (11) 110 76 (6) 70 (5) 65 (5) 60 170 172 159 $ $ $ $ $ $ $ 886 354 (159) 1,081 330 (198) 1,213 343 (225) 1,331 $ $ — $ — — — — — — $ 1,331 1,213 1,081 $ $ $ 527 (3) (62) 462 (1) (56) 405 2 (53) 354 8 (2) 6 (1) 5 (1) 4 358 410 468 $ $ $ $ $ $ $ 469 16 (54) 431 11 (50) 392 13 (45) 360 61 (7) 54 (6) 48 (5) 43 403 440 485 (1) Includes an adjustment to eliminate balances included in AOCI related to the adoption of ASU 2018-12 (see Note 2). Defee rred SalSS esll Inducements Information regarding DSI, included in other assets, was as follows: Balance, beginning of year Capia talization Amortization Balance, end of year 2023 December 31, 2022 2021 Variable Annuities Fixed Rate Annuities Variable Annuities Fixed Rate Annuities Variable Annuities Fixed Rate Annuities $ $ 245 1 (26) 220 $ $ 9 — (1) 8 $ $ (In millions) 272 $ 1 (28) 245 $ 10 — (1) 9 $ $ 298 1 (27) 272 $ $ 12 — (2) 10 145 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 7. Deferred Policy Acquisition Costs, Value of Business Acquired and Deferred Sales Inducements (continued) Unearned Revenue Information regarding unearned revenue, included in other policy-related balances, was as folff lows: 2023 Universal Life Insurance ULSG Variable Annuities Universal Life Insurance December 31, 2022 ULSG (In millions) 2021 Variable Annuities Universal Life Insurance ULSG Variable Annuities Balance, beginning of year Capia talization Amortization Balance, end of year $ $ 357 38 (39) 356 $ $ 488 174 (50) 612 $ $ 74 — (7) 67 $ $ 358 39 (40) 357 $ $ 344 181 (37) 488 $ $ 80 2 (8) 74 $ $ 350 49 (41) 358 $ $ 184 185 (25) 344 $ $ 86 1 (7) 80 8. Reinsurance The Company enters into reinsurance agreements primarily as a purchaser of reinsurance forff its various insurance products and also as a provider of reinsurance for some insurance products issued by former affiff liated and unaffiliated companies. The Company participates in reinsurance activities in order to limit losses, minimize exposure to significant risks and provide additional capacity for futur e growth. ff Accounting forff reinsurance requires extensive use of assumptions and estimates, particularly related to the futuret rty credit risks. The Company periodically l and anticipated experience compared to the aforementioned assumptions used to establa ish assets and liabia lities rties to its reinsurance agreements performance of the underlying business and the potential impact of counterparr reviews actuat relating to ceded and assumed reinsurance and evaluates the finff ancial strength of counterparr using criteria similar to that evaluated in the security impairment process discussed in Note 9. Annuitieii s and Lifei For annuities, the Company reinsures portions of the living and death benefitff guarantees issued in connection with certain variable annuities to unaffiliated reinsurers. Under these reinsurance agreements, the Company pays a reinsurance premium generally based on feeff s associated with the guarantees collected from policyholders and receives reimbursement for benefits paid or accruer d in excess of account values, subject to certain limitations. The value of MRBs on the ceded risk is determined using a methodology consistent with the guarantees directly written by the Company with the exception of the input for nonperforff mance risk that refleff cts the credit of the reinsurer. The Company cedes certain fixed rate annuities to unaffiliated third-party reinsurers and assumes certain index-linked annuities froff m an unaffiliated third-party insurer. These reinsurance arrangements are structurt ed on a coinsurance basis and are reported as deposit accounting. For its life pff roducts, the Company has historically reinsured the mortality risk primarily on an excess of retention basis or on a quota share basis. In addition to reinsuring mortality risk as described above, the Company reinsures other risks, as well as specific coverages. Placement of reinsurance is done primarily on an automatic basis and also on a facff ultative basis for risks with specified characteristics. On a case-by-case basis, the Company may retain up to $20 million per life aff nd reinsure 100% of amounts in excess of the amount the Company retains. The Company also reinsures 90% of the risk olicies to a former affiff liate and assumes certain term life pff associated with participating whole life pff olicies and universal life policies with secondary death benefitff guarantees issued by a forff mer affiliate. The Company evaluates its reinsurance programs routinely and may increase or decrease its retention at any time. Corporate &tt tt Other The Company reinsures, through 100% quota share reinsurance agreements, certain run-off lff ong-term care and workers’ compensation business written by the Company. At December 31, 2023, the Company had $5.8 billion of reinsurance the recoverabla es associated with its reinsured long-term care business. The reinsurer has established trust accounts forff Company’s benefitff to secure their obligations under the reinsurance agreements. Additionally, the Company is indemnified for losses and certain other payment obligations it might incur with respect to such reinsured long-term care insurance business. 146 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 8. Reinsurance (continued) Catastropho e CovCC erage The Company has exposure to catastrophes which could contribute to significant fluff ctuat tions in the Company’s results of operations. The Company uses excess of retention and quota share reinsurance agreements to provide greater diversificff ation of risk and minimize exposure to larger risks. Reinsurance Recoverablesll The Company reinsures its business through a diversified group of primarily highly rated reinsurers. The Company analyzes recent trends in arbir tration and litigation outcomes in disputes, if any, with its reinsurers and monitors ratings and the finff ancial strength of its reinsurers. In addition, the reinsurance recoverabla e balance due from each reinsurer and the recoverabia lity of such balance is evaluated as part of this overall monitoring process. The Company generally secures large reinsurance recoverabla e balances with various forms of collateral, including secured trusts, funds withheld accounts and irrevocable letters of credit. These reinsurance recoverabla e balances are stated net of allowances for uncollectible reinsurance, which at both December 31, 2023 and 2022 were not significant. The Company had $6.1 billion and $6.2 billion of unsecured reinsurance recoverabla e balances with third-party reinsurers at December 31, 2023 and 2022, respectively. The Company records an allowance forff credit losses which is a valuation account that reduces reinsurance recoverablea balances to present the net amount expected to be collected from reinsurers. When assessing the creditworthiness of the Company’s reinsurance recoverabla e balances, beyond the analysis of individual claims disputes, the Company considers the financial strength of its reinsurers using public ratings and ratings reports, current existing credit enhancements to reinsurance nd GAAP financial statements of the reinsurers. Impairments are then determined based on agreements and the statutor y arr probable and estimabla e defauff credit losses of $3 million and $10 million on its lts. The Company had an allowance forff reinsurance recoverabla e balances at December 31, 2023 and 2022, respectively. In 2023, the Company had $3 million of additions to the allowance and $10 million of impairments charged against the allowance. t At December 31, 2023, the Company had $18.9 billion of net ceded reinsurance recoverabla es with third-party reinsurers. Of this total, $16.8 billion, or 89%, were with the Company’s fivff e largest ceded reinsurers, including $4.3 billion of net ceded reinsurance recoverabla es which were unsecured. At December 31, 2022, the Company had $17.6 billion of net ceded reinsurance recoverabla es with third-party reinsurers. Of this total, $15.4 billion, or 88%, were with the Company’s fiveff largest ceded reinsurers, including $4.3 billion of net ceded reinsurance recoverabla es which were unsecured. 147 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 8. Reinsurance (continued) The amounts on the consolidated statements of operations include the impact of reinsurance. Information regarding the significant effects of reinsurance was as folff lows: Premiums Direct premiums Reinsurance assumed Reinsurance ceded Net premiums Universal life aff Direct universal life and investment-type product policy fees Reinsurance assume d Reinsurance ceded nd investment-type product policy fees ff ff Net universal life aff nd investment-type product policy fees ff Other revenues s Direct other revenue Reinsurance assumed Reinsurance ceded Net other revenues Policyholder benefitff s and claims Direct policyholder benefitsff Reinsurance assume d Reinsurance ceded and claims Net policyholder benefitsff and claims Change in market risk benefits Direct change in market risk benefits Reinsurance assumed Reinsurance ceded Net change in market risk benefits Years Ended December 31, 2023 2022 2021 (In millions) $ $ $ $ $ $ $ $ $ $ 1,499 14 (685) 828 2,941 4 9 (695) 2,295 269 2 212 483 3,946 4 8 (1,354) 2,676 $ $ $ $ $ $ $ $ 1,359 6 (703) 662 3,107 45 (717) 2,435 292 2 184 478 3,863 112 (1,782) 2,193 $ $ $ $ $ $ $ $ (1,537) $ (1) 31 (1,507) $ (4,154) $ (1) 51 (4,104) $ 1,440 (12) (721) 707 3,554 41 (615) 2,980 373 4 73 450 4,197 85 (1,536) 2,746 (4,192) 1 57 (4,134) The amounts on the consolidated balance sheets include the impact of reinsurance. Information regarding the significant effeff cts of reinsurance was as folff lows at: December 31, 2023 2022 Direct Assumed Ceded Total Balance Sheet Direct Assumed Ceded Total Balance Sheet (In millions) Assets Premiums, reinsurance and other receivables credit losses) (net of allowance forff Market risk benefit assets Liabilities Future policy benefitsff Policyholder account balances Market risk benefit liabia lities Other policy-related balances Other liabia lities $ $ 463 613 $ $ 4 — $ $ 19,294 43 $ 19,761 656 $ $ $ 417 412 $ $ — $ 18,131 71 — $ $ 18,548 483 $ $ 32,456 $ 76,768 $ 10,318 $ 2,253 $ 7,138 113 $ $ 4,300 $ 5 $ 1,583 15 $ $ $ $ $ $ 1,286 — $ 32,569 — $ 81,068 — $ 10,323 — $ 3,836 $ 8,439 $ 31,402 $ 69,334 $ 10,386 $ 2,477 $ 5,568 95 $ $ 4,193 $ 3 $ 1,621 10 $ $ $ $ $ $ 1,479 — $ 31,497 — $ 73,527 — $ 10,389 — $ 4,098 $ 7,057 148 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 8. Reinsurance (continued) Reinsurance agreements that do not expose the Company to a reasonable possibility of a significant loss from insurance risk are recorded using the deposit method of accounting. The deposit assets on reinsurance were $7.5 billion and $6.0 billion at December 31, 2023 and 2022, respectively. The deposit liabia lities on reinsurance were $3.9 billion and $3.8 billion at December 31, 2023 and 2022, respectively. 9. Investments See Notes 1 and 11 for a description of the Company’s accounting policies forff investments and the faiff r value hierarchy for investments and the related valuation methodologies. Fixeii d MatMM urity Securitieii s Available-ll fo- r-sale Fixeii d MatMM urity Securitieii y y s by Sb ectSS ortt Fixed maturt ity securities by sector were as follows at: December 31, 2023 December 31, 2022 Amortized Cost Allowance for Credit Losses U.S. corporate Foreign corpor rr ate U.S. government and agency RMBS CMBS ABS State and political subdivi u sion Foreign government $ 38,778 $ 12,865 8,656 8,199 7,023 6,514 4,019 1,077 Total fixff ed maturity securities $ 87,131 $ 15 — — 5 1 — — — 21 G $ 388 89 286 48 2 23 159 42 Gross Unrealized Estimated Fair Value Amortized Cost Allowance for Credit Losses (In millions) Gross Unrealized Estimated Fair Valu e $ 3,396 $ 35,755 $ 36,926 $ 1,289 11,665 12,471 523 812 614 131 304 87 8,419 7,430 6,410 6,406 3,874 1,032 8,318 8,431 7,324 5,652 4,074 1,148 1 1 — 2 3 — — — 7 $ $ 203 38 300 44 — 3 125 39 752 $ 4,521 $ 32,607 1,932 10,576 602 945 710 296 400 106 8,016 7,528 6,611 5,359 3,799 1,081 $ 9,512 $ 75,577 $ 1,037 $ 7,156 $ 80,991 $ 84,344 $ The Company held non-income producing fixff ed maturity securities with an estimated faiff r value of $52 million at December 31, 2023. The Company did not hold non-income producing fixff ed maturity securities at December 31, 2022. MaMM turitieii f s of Fo ixFF ed Maturityii Securities y ii The amortized cost and estimated fair value of fixff ed maturity securities, by contractuat l maturt ity date, were as folff lows at December 31, 2023: Due in One Year or Less Due After One Year Through Five Years Due After Five Years Through Ten Years Due After Ten Years Structured Securities Total Fixed Maturity Securities (In millions) Amortized cost Estimated faiff r value $ $ 2,861 2,826 $ $ 17,277 16,809 $ $ 15,153 13,910 $ $ 30,104 27,200 $ $ 21,736 20,246 $ $ 87,131 80,991 Actual maturities may differ froff m contractuat l maturt maturity securities not due at a single maturt Securities are shown separately, as they are not due at a single maturt ity. ity date have been presented in the year of final contractuat ities due to the exercise of call or prepayment options. Fixed tured ity. Strucr l maturt 149 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 9. Investments (continued) Contintt uous Gross UnrUU ealized Losses forff Fixeii d MatMM urity Securitieii y z f y s by Sb ectSS ortt The estimated fair value and gross unrealized losses of fixff ed maturity securities in an unrealized loss position, by sector and by length of time that the securities have been in a continuous unrealized loss position, were as follows at: December 31, 2023 December 31, 2022 Less than 12 Months 12 Months or Greater Less than 12 Months 12 Months or Greater Estimated Fair Value Gross Unrealized Losses Estimated Fair Value Gross Unrealized Losses Estimated Fair Value Gross Unrealized Losses Estimated Fair Value Gross Unrealized Losses $ 4,554 1,010 518 413 411 572 471 112 $ 409 $ 22,796 $ 73 9 20 33 3 32 6 8,311 3,477 5,774 5,786 3,360 1,634 620 (Dollars in millions) 2,987 1,216 514 792 581 128 272 81 $ 24,509 $ 8,260 3,121 4,731 5,589 3,347 2,041 777 $ 3,351 1,413 265 497 543 159 317 99 3,979 1,601 1,147 2,246 970 1,733 247 21 $ 1,170 519 337 448 167 137 83 7 $ 8,061 $ 585 $ 51,758 $ 6,571 $ 52,375 $ 6,644 $ 11,944 $ 2,868 1,347 7,038 7,309 2,049 U.S. corporate Foreign corpor rr ate U.S. government and agency RMBS CMBS ABS State and political subdivi u sion Foreign government Total fixff ed maturity securities Total number of securities in an unrealized loss position Alloll wance forff Creditdd Losses forff Fixeii d MatMM urity Stt ecuSS y f f ii rities Evaluation and Measurement MetMM hodologi esg tt ff ors. Inherent in management’s evaluation of the security are assumptions and estimates about For fixff ed maturity securities in an unrealized loss position, management first assesses whether the Company intends to sell, or whether it is more likely than not it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written ity securities that do not meet the down to estimated fair value through net investment gains (losses). For fixed maturt r value has resulted froff m credit losses aforff ementioned criteria, management evaluates whether the decline in estimated faiff or other fact the operations a of the issuer and its future earnings potential. Considerations used in the allowance forff credit loss evaluation process r value is less than amortized cost; (ii) any changes to include, but are not limited to: (i) the extent to which estimated faiff the rating of the security by a rating agency; (iii) adverse conditions specifically related to the security, industry or geographic area; and (iv) payment structurt e of the fixed maturt ity security and the likelihood of the issuer being abla e to make payments in the futur e or the issuer’s failure to make scheduled interest and principal payments. If this assessment indicates that a credit loss exists, the present value of cash floff ws expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash floff ws expected to be collected is less than the amortized cost basis, a credit loss is deemed to exist and an allowance forff credit losses is recorded, limited by the amount that the estimated fair value is less than the amortized cost basis, with a corresponding charge to net investment gains credit losses are recognized in OCI. (losses). Any unrealized losses that have not been recorded through an allowance forff rr ff Once a security specific allowance forff collected from the security continues to be reassessed. Any changes in the security specific allowance forff are recorded as a provision for (or reversal of) cff redit loss expense in net investment gains (losses). credit losses is established, the present value of cash floff ws expected to be credit losses Fixed maturt ity securities are also evaluated to determine whether any amounts have become uncollectible. When all, ith an adjud stment to or a portion, of a security is deemed uncollectible, the uncollectible portion is written-off wff amortized cost and a corresponding reducd tion to the allowance forff credit losses. Accruer d interest receivables are presented separate from the amortized cost basis of fixff ed maturity securities. An allowance forff credit losses is not estimated on an accrued interest receivable, rather receivable balances 90-days past due are deemed uncollectible and are written off with a corresponding reduction to net investment income. The accruedrr interest receivable on fixff ed maturity securities totaled $655 million and $602 million at December 31, 2023 and 2022, respectively, and is included in accruer d investment income. 150 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 9. Investments (continued) Fixed maturt ity securities are also evaluated to determine if they qualify aff s purchased financial assets with credit deterioration (“PCD”). To determine if the credit deterioration experienced since origination is more than insignificant, both (i) the extent of the credit deterioration and (ii) any rating agency downgrades are evaluated. For securities categorized as PCD assets, the present value of cash floff ws expected to be collected from the security are compared to the par value of the security. If the present value of cash floff ws expected to be collected is less than the par value, credit losses are embedded in the purchase price of the PCD asset. In this situation, both an allowance forff credit losses and r value is less than the grossed-up amortized cost gross-up is recorded, limited by the amount that the estimated faiff nce between the purchase price and the present value of cash floff ws is amortized or amortized cost basis. Any differe accreted into net investment income over the life off credit losses is evaluated in a manner similar to the process described above for fixff ed maturity securities. f the PCD asset. Any subsequent PCD asset allowance forff ff Current Period Evaluation Based on the Company’s current evaluation of its fixed maturt ity securities in an unrealized loss position and the current intent or requirement to sell, the Company recorded an allowance forff credit losses of $21 million, relating to 17 securities at December 31, 2023. Management concluded that forff ity securities in an unrealized loss ors and as a result was recognized in OCI. position, the unrealized loss was not due to issuer-specific credit-related fact Where unrealized losses have not been recognized into income, it is primarily because the securities’ bond issuer(s) are of high credit quality, management does not intend to sell and it is likely that management will not be required to sell the securities prior to their anticipated recovery, and the decline in estimated faiff to changes in interest credit spreads. These issuers continued to make timely principal and interest payments and rates and non-issuer specificff ch maturity. the estimated faiff r value is expected to recover as the securities approa r value is largely dued all other fixed maturt a ff Rollforward of to hett Allowance forff Credit Losses forff Fixedii Maturity Securities by Sb ectSS y y f f f f or The changes in the allowance forff credit losses by sector were as follows: Balance at December 31, 2021 Allowance on securities where credit losses were not previously recorded Reductions for securities sold Change in allowance on securities with an allowance recorded in a previous period Write-offs charged against allowance (1) Balance at December 31, 2022 Allowance on securities where credit losses were not previously recorded Reductions for securities sold Change in allowance on securities with an allowance recorded in a previous period Write-offs charged against allowance (1) Balance at December 31, 2023 _______________ U.S. Corporate RMBS CMBS Foreign Corporate Total $ 2 $ (In millions) 2 — $ $ 7 $ — (1) — — 1 15 (1) — — 15 $ 2 — — — 2 3 — — — 5 $ — — 1 — 3 — (1) (1) — 1 $ — — — (6) 1 — — — (1) — $ $ 11 2 (1) 1 (6) 7 18 (2) (1) (1) 21 (1) The Company recorded total write-offs of $8 million and $10 million for the years ended December 31, 2023 and 2022, respectively. 151 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 9. Investments (continued) tt Mortgage Loans g g Mortgage tt Loans by Pb f orPP tfolff y ioll Segme g ent Mortgage loans are summarized as follows at: Commercial Agricultural Residential Allowance forff Total mortgage loans (1) credit losses Total mortgage loans, net _______________ December 31, 2023 2022 Carrying Value % of Total Carrying Value (Dollars in millions) % of Total $ $ 13,193 4,445 5,007 22,645 (137) 22,508 58.6 % $ 19.8 22.2 100.6 (0.6) 100.0 % $ 13,574 4,365 5,116 23,055 (119) 22,936 59.2 % 19.0 22.3 100.5 (0.5) 100.0 % (1) Purchases of mortgage loans froff m third parties were $311 million and $2.2 billion forff 2023 and 2022, respectively, and were primarily comprised of residential mortgage loans. the years ended December 31, g g Alloll wance forff Creditdd Losses forff Mortgage tt f f Loans Evaluation and Measurement MetMM hodologi esg tt The allowance forff credit losses is a valuation account that is deducted froff m the mortgage loan’s amortized cost basis to present the net amount expected to be collected on the mortgage loan. The loan balance, or a portion of the loan balance, is written-off aff gainst the allowance when management believes this amount is uncollectible. Accruer d interest receivables are presented separate from the amortized cost basis of mortgage loans. An allowance for credit losses is generally not estimated on an accruerr d interest receivable, rather when a loan is placed in nonaccrual statust the associated accrued interest receivabla e balance is written off with a corresponding reduction to net investment income. The accruer d interest receivable on mortgage loans is included in accruerr d investment income and totaled $123 million and $115 million at December 31, 2023 and 2022, respectively. The allowance forff relating to past events, current conditions, and a reasonable and suppor provides the basis forff differences in current loan-specific risk characteristics and environmental conditions. A reasonable and suppor forecast period of two-years is used with an input reversion period of one-year. credit losses is estimated using relevant availabla e information, from internal and external sources, tabla e forff ecast. Historical credit loss experience estimating expected credit losses. Adjud stments to historical loss information are made for tablea u u Mortgage loans are evaluated in each of the three portfolff credit losses. The loan-level loss rates are determined using individual loan terms and characteristics, risk pools/internal ratings, national economic forecasts, prepayment speeds, and estimated default and loss severity. The resulting loss rates are applied to the mortgage loan’s amortized cost to generate an allowance forff credit losses. In certain situations, the allowance forff nce between the loan’s amortized cost and liquidation value of the collateral. These situat tions include collateral dependent loans, modifications, forff eclosure probable loans, and loans with dissimilar risk characteristics. io segments to determine the allowance forff credit losses is measured as the differe ff 152 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 9. Investments (continued) Mortgage loans are also evaluated to determine if they qualify as PCD assets. To determine if the credit deterioration experienced since origination is more than insignificant, the extent of credit deterioration is evaluated. All re-performing/ r December 31, 2019 are determined to have been acquired with evidence of modified loan (“RPL”) pools purchased afteff more than insignificant credit deterioration since origination and are classified as PCD assets. RPLs are pools of residential mortgage loans acquired at a discount or premium which have both credit and non-credit components. For credit losses is determined using a similar methodology described aboa ve, except PCD mortgage loans, the allowance forff credit losses, the loss-rate is determined at the pool level instead of the individual loan level. The initial allowance forff determined on a collective basis, is then allocated to the individual loans. The initial amortized cost of the loan is grossed-up to reflect the sum of the loan’s purchase price and allowance forff nce between the grossed-up amortized cost basis and the par value of the loan is a non-credit discount or premium, which is accreted or amortized into net investment income over the remaining life off f the loan. Any subsu equent PCD mortgage loan allowance for credit losses is evaluated in a manner similar to the process described above for each of the three portfolff credit losses. The differe io segments. ff g g Rollforward of to hett Allowance forff Credit Losses forff Mortgage f t f f f y Loans by Portfolio f t Segment g The changes in the allowance forff Balance at December 31, 2021 Current period provision Charge-offs, net of recoveries Balance at December 31, 2022 Current period provision Charge-offs, net of recoveries Balance at December 31, 2023 PCD MCC orMM tgage Loans g g credit losses by portfolff io segment were as folff lows: Commercial Agricultural Residential Total $ $ 67 5 (23) 49 24 (4) 69 $ $ (In millions) 12 3 — 15 5 (1) 19 $ $ 44 11 — 55 (6) — 49 $ $ 123 19 (23) 119 23 (5) 137 There were no new purchases of PCD mortgage loans during the year ended December 31, 2023. Purchases of PCD mortgage loans were $69 million at December 31, 2022. 153 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 9. Investments (continued) Q Creditdd Qualityll y f g g of Mortgage t Loans by Pb f orPP tfolff y ioll Segme g ent The amortized cost of mortgage loans by year of origination and credit quality indicator was as folff lows at: (In millions) Prior Total December 31, 2023 Commercial mortgage loans Loan-to-value ratios: Less than 65% 65% to 75% 76% to 80% Greater than 80% Total commercial mortgage loans Agricultural mortgage loans Loan-to-value ratios: Less than 65% 65% to 75% Greater than 80% Total agricultural mortgage loans Residential mortgage loans Performing Nonperforming Total residential mortgage loans Total December 31, 2022 Commercial mortgage loans Loan-to-value ratios: Less than 65% 65% to 75% 76% to 80% Greater than 80% Total commercial mortgage loans Agricultural mortgage loans Loan-to-value ratios: Less than 65% 65% to 75% Greater than 80% Total agricultural mortgage loans Residential mortgage loans Performing Nonperforming Total residential mortgage loans Total $ $ $ $ 206 — — — 206 202 1 — 203 105 — 105 514 $ $ $ 655 935 427 400 2,417 571 127 — 698 1,286 22 1,308 4,423 $ 1,823 1,079 76 227 3,205 1,132 108 — 1,240 1,669 22 1,691 6,136 $ $ 177 222 39 — 438 454 6 — 460 $ $ 1,239 261 209 150 1,859 505 30 — 535 145 1 146 1,044 $ 204 2 206 2,600 $ 2,630 1,158 564 716 5,068 1,292 17 — 1,309 1,508 43 1,551 7,928 $ 6,730 3,655 1,315 1,493 13,193 4,156 289 — 4,445 4,917 90 5,007 22,645 $ 2022 2021 2020 2019 2017 Prior Total (In millions) 405 — 40 — 445 420 59 — 479 $ $ 1,493 271 90 25 1,879 $ 888 367 65 57 1,377 3,627 425 48 163 4,263 $ 11,148 1,920 261 245 13,574 496 56 — 552 643 1 1 645 740 16 — 756 3,994 370 1 4,365 167 — 167 1,091 $ 215 2 217 2,648 $ 168 1 169 2,191 $ 1,491 49 1,540 6,559 5,052 64 5,116 23,055 $ $ 1,916 503 — — 2,419 532 148 — 680 1,266 4 1,270 4,369 $ 2,819 354 18 — 3,191 1,163 90 — 1,253 1,745 8 1,753 6,197 $ $ 154 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 9. Investments (continued) The loan-to-value ratio is a measure commonly used to assess the quality of commercial and agricultural mortgage loans. The loan-to-value ratio compares the amount of the loan to the estimated faiff r value of the underlying property collateralizing the loan and is commonly expressed as a percentage. A loan-to-value ratio less than 100% indicates an excess of collateral value over the loan amount. Loan-to-value ratios greater than 100% indicate that the loan amount exceeds the collateral value. Performing status is a measure commonly used to assess the quality of residential mortgage loans. A loan is considered performing when the borrower makes consistent and timely payments. The amortized cost of commercial mortgage loans by debt-service coverage ratio was as folff lows at: Debt-service coverage ratios: Greater than 1.20x 1.00x - 1.20x Less than 1.00x l Tota December 31, 2023 2022 Amortized Cost % of Total Amortized Cost % of Total (Dollars in millions) $ $ 12,086 702 405 13,193 91.6 % $ 5.3 3.1 100.0 $% 12,157 590 827 13,574 89.6 % 4.3 6.1 100.0 % The debt-service coverage ratio compares a property’s net operating income to its debt-service payments. Debt-service coverage ratios less than 1.00 times indicate that property operations do not generate enough income to cover the loan’s current debt payments. A debt-service coverage ratio greater than 1.00 times indicates an excess of net operating income over the debt-service payments. g g Past Due MorMM tgage Loans by Pb f orPP tfolff y ioll Segme g ent The Company has a high-quality, well-performing mortgage loan portfolff io, with over 99% of all mortgage loans classified as performing at both December 31, 2023 and 2022. Delinquency is definff ed consistent with industry prr ractice, when mortgage loans are past due as follows: commercial and residential mortgage loans — 60 days and agricultural mortgage loans — 90 days. The aging of the amortized cost of past due mortgage loans by portfolff io segment was as follows at: 2023 2022 December 31, Commercial Agricultural Residential Total Commercial Agricultural Residential Total (In millions) $ $ 13,176 — — — 17 13,193 $ $ 4,429 — — — 16 4,445 $ $ 4,915 2 30 23 37 5,007 $ $ 22,520 2 30 23 70 22,645 $ $ 13,574 — — — — 13,574 $ $ 4,346 — — 3 16 4,365 $ $ 5,041 11 16 31 17 5,116 $ $ 22,961 11 16 34 33 23,055 Current 30-59 days past due 60-89 days past due 90-179 days past due 180+ days past due Total g g Mortgage tt Loans in Nii onNN accrual StaSS tus by Pb f orPP tfolff y ioll Segme g ent Mortgage loans are placed in a nonaccruar l status if there are concerns regarding collectability of future payments or the loan is past dued , unless the past due loan is well collateralized. 155 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 9. Investments (continued) The amortized cost of mortgage loans in a nonaccrual status by por t tfolff io segment was as follows at: December 31, 2023 December 31, 2022 _______________ Commercial Agricultural Residential (1) Total $ $ 17 11 $ $ (In millions) — $ $ 3 90 64 $ $ 107 78 (1) The Company had no mortgage loans in nonaccruar l status forff which there was no related allowance forff credit losses at both December 31, 2023 and 2022. Current period investment income on mortgage loans in nonaccruar l status was $2 million for both years ended December 31, 2023 and 2022. g g Modifii ed Mortgage tt f Loans by Pb f orPP tfolff y ioll Segme g ent Under certain circumstances, modifications are granted to nonperforming mortgage loans. Generally, the types of concessions may include interest rate reduction, term extension, principal forgivene ss, or a combination of all three. The Company did not have a significant amount of mortgage loans modified during both years ended December 31, 2023 and 2022. ff Othett r InvII ested Assets Over 80% of other invested assets is comprised of freff estanding derivatives with positive estimated faiff r values. See Note 10 for inforff mation about freestanding derivatives with positive estimated fair values. Other invested assets also includes the Company’s investment in company-owned life i nsurance, FHLB stock, tax credit and renewabla e energy partnerships and leveraged leases. ff Leveraged Leases g The carrying value of leveraged leases was $47 million and $48 million at December 31, 2023 and 2022, respectively. credit losses was $13 million at both December 31, 2023 and 2022. Rental receivables are generally due The allowance forff in periodic installments. The payment periods for leveraged leases generally range from one to nine years. For rental receivables, the primary crr redit quality indicator is whether the rental receivable is performing or nonperforming, which is assessed monthly. Nonperforming rental receivables are generally defined as those that are 90 days or more past due. At both December 31, 2023 and 2022, all leveraged leases were performing. Net UnrUU ealized Investmett nt Gains (Lo(( sses) Unrealized investment gains (losses) on fixed maturt ity securities and the effeff ct on future policy benefitff s, that would result from the realization of the unrealized gains (losses), are included in net unrealized investment gains (losses) in AOCI. The components of net unrealized investment gains (losses), included in AOCI, were as follows: ity securities Fixed maturt Derivatives Other u Subtot al Amounts allocated from: Future policy benefitsff Deferred income tax benefit (expense) Net unrealized investment gains (losses) 156 Years Ended December 31, 2023 2022 2021 (In millions) $ $ (6,119) $ 351 2 (5,766) 652 1,074 (4,040) $ (8,760) $ 638 3 (8,119) 917 1,512 (5,690) $ 8,347 329 (29) 8,647 (1,655) (1,468) 5,524 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 9. Investments (continued) The changes in net unrealized investment gains (losses) were as follows: Balance at December 31, Unrealized investment gains (losses) change due to cumulative effecff Balance at January 1, Unrealized investment gains (losses) durdd ing the year Unrealized investment gains (losses) relating to: Future policy benefitsff Deferred income tax benefit (expense) Balance at December 31, Change in net unrealized investment gains (losses) t, net of income tax Concentratiott ns of Creditdd Riskii Years Ended December 31, 2023 2022 2021 (5,690) $ — (5,690) $ 2,353 (In millions) 5,524 — 5,524 (16,766) $ $ (265) (438) (4,040) $ $ 1,650 2,572 2,980 (5,690) $ (11,214) $ $ $ $ $ 5,761 1,980 7,741 (3,478) 671 590 5,524 (2,217) There were no investments in any counterpar rty that were greater than 10% of the Company’s equity, other than the U.S. government and its agencies, at both December 31, 2023 and 2022. Securitieii s Lendingii Elements of the securities lending program are presented below at: Securities on loan: (1) Amortized cost Estimated faiff r value Cash collateral received froff m counterparr io — estimated faiff Reinvestment portfolff rties (2) r value December 31, 2023 2022 (In millions) $ $ $ $ 3,420 3,194 3,277 3,246 $ $ $ $ 3,995 3,638 3,731 3,603 _______________ (1) Included in fixff ed maturity securities. (2) Included in payables forff collateral under securities loaned and other transactions. The cash collateral liabia lity by loaned security type and remaining tenor of the agreements were as follows at: December 31, 2023 1 to 6 1 Month Months or Less Open (1) December 31, 2022 1 to 6 1 Month Months or Less Total Open (1) (In millions) $ $ 647 — — — 647 $ 655 252 130 9 $ 1,046 $ 1,584 — — — $ 1,584 $ 2,886 252 130 9 $ 3,277 $ $ 640 2 — — 642 $ 1,527 410 152 16 $ 2,105 $ $ 984 — — — 984 Total $ 3,151 412 152 16 $ 3,731 U.S. government and agency U.S. corporate Foreign corporate Foreign government Total _______________ (1) The related loaned security could be returt ned to the Company on the next business day which would require the Company to immediately return the cash collateral. 157 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 9. Investments (continued) If the Company is required to returt n significant amounts of cash collateral on short notice and is forced to sell securities to meet the returt n obligation, it may have diffiff culty selling such collateral that is invested in securities in a timely manner, be less than what otherwise would have been realized in normal forced to sell securities in a volatile or illiquid market forff market conditions, or both. The estimated faiff r value of the securities on loan related to the cash collateral on open at December 31, 2023 was $631 million, primarily comprised of U.S. government and agency securities which, if put back to the Company, could be immediately sold to satisfy the cash requirement. The reinvestment portfolff io acquired with the cash collateral consisted principally of fixed maturt ity securities (including agency RMBS, ABS, U.S. government and agency securities, U.S. and forff eign corporate securities, non-agency RMBS and CMBS) with 56% invested in agency RMBS, U.S. government and agency securities and cash and cash equivalents at December 31, 2023. If the securities on loan or the reinvestment portfolff io become less liquid, the Company has the liquidity resources of most of its general account availabla e to meet any potential cash demands when securities on loan are put back to the Company. Invested Assets on Depos ee it, Htt elHH d i ll n Tii ruTT st and PlePP dged as ColCC lall teral Invested assets on deposit, held in trust and pledged as collateral at estimated faiff r value were as follows at: Invested assets on deposit (regulatory dr Invested assets held in trusrr Invested assets pledged as collateral (3) eposits) (1) t (reinsurance agreements) (2) Total invested assets on deposit, held in trusrr t and pledged as collateral _______________ December 31, 2023 2022 (In millions) $ $ 8,593 7,142 13,979 29,714 $ $ 7,999 5,621 13,920 27,540 (1) The Company has assets, primarily fixed maturt ity securities, on deposit with governmental authorities relating to certain policyholder liabia lities, of which $102 million and $21 million of the assets on deposit represents restricted cash and cash equivalents at December 31, 2023 and 2022, respectively. (2) The Company has assets, primarily fixed maturt ity securities, held in trusrr which $120 million and $240 million of the assets held in trusr December 31, 2023 and 2022, respectively. t relating to certain reinsurance transactions, of t balance represents restricted cash and cash equivalents at (3) The Company has pledged invested assets in connection with various agreements and transactions, including funding agreements (see Note 4) and derivative transactions (see Note 10). See “— Securities Lending” for inforff mation regarding securities on loan. In addition, the Company’s investment in FHLB common stock, which is considered restricted until redeemed by the issuer, was $245 million and $201 million at redemption value at December 31, 2023 and 2022, respectively. Collectivtt ely Sll igSS nigg fii cant Equityii Method Investmett nts The Company holds investments in limited partnerships and LLCs consisting of leveraged buy-out funds, private equity funds, joint ventures and other funds. The portion of these investments accounted for under the equity method had a carrying value of $5.0 billion at December 31, 2023. The Company’s maximum exposure to loss related to these equity method investments is the carrying value of these investments plus unfunde d commitments of $1.2 billion at December 31, 2023. The ff Company’s investments in limited partnerships and LLCs are generally of a passive nature in that the Company does not participate in the management of the entities. As described in Note 1, the Company generally records its share of earnings in its equity method investments using a three-month lag methodology and within net investment income. Aggregate net investment income from these equity method investments exceeded 10% of the Company’s consolidated pre-tax income (loss) for each of the years ended December 31, 2023, 2022 and 2021. This aggregated summarized financial data does not represent the Company’s proportionate share of the assets, liabia lities or earnings of such entities. 158 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 9. Investments (continued) The aggregated summarized finff ancial data presented below reflects the latest availabla e finff ancial information and is as of and forff the years ended December 31, 2023, 2022 and 2021. Aggregate total assets of these entities totaled $799.2 billion and $880.1 billion at December 31, 2023 and 2022, respectively. Aggregate total liabilities of these entities totaled $56.8 billion and $109.3 billion at December 31, 2023 and 2022, respectively. Aggregate net income (loss) of these entities totaled $24.8 billion, ($12.8) billion and $22.6 billion forff the years ended December 31, 2023, 2022 and 2021, respectively. Aggregate net income (loss) from the underlying entities in which the Company invests is primarily comprised of investment income, including recurring investment income and realized and unrealized investment gains (losses). Variable Ill ntII eres tt t EntEE ititt es A variabla e interest entity (“VIE”) is a legal entity that does not have sufficient equity at risk to finance its activities or is structurt ed such that equity investors lack the abia lity to make significant decisions relating to the entity’s operations through voting rights or do not subsu tantively participate in the gains and losses of the entity. rr The Company enters into various arrangements with VIEs in the normal course of business and has invested in legal entities that are VIEs. VIEs are consolidated when it is determined that the Company is the primary beneficiary.rr A primary s the variable interest holder in a VIE with both (i) the power to direct the activities of the VIE that most beneficiary i significantly impact the economic performance of the VIE and (ii) the obligation to absor osses or the right to receive r b l benefits that could potentially be significant to the VIE. In addition, the evaluation of whether a legal entity is a VIE and if the Company is a primary beneficiary i ture of the VIE, the related contractual ncludes a review of the capital strucr relationships and terms, the nature of the operations and purpose of the VIE, the naturt e of the VIE interests issued and the Company’s involvement with the entity. a rr t There were no material VIEs forff which the Company has concluded that it is the primary beneficiary a rr t either December 31, 2023 or 2022. The carrying amount and maximum exposure to loss related to the VIEs forff which the Company has concluded that it holds a variabla e interest, but is not the primary beneficiary,rr were as follows at: Fixed maturt Limited partnerships and LLCs ity securities Total December 31, 2023 2022 Carrying Amount Maximum Exposure to Loss Carrying Amount Maximum Exposure to Loss $ $ 15,526 4,233 19,759 $ $ (In millions) 16,771 5,255 22,026 $ $ 15,896 4,136 20,032 $ $ 17,471 5,491 22,962 159 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 9. Investments (continued) The Company’s investments in unconsolidated VIEs are described below. Fixeii d MatMM urity Securities y ii r The Company invests in U.S. corpor ate bonds, forff eign corporate bonds and Strucr tured Securities issued by VIEs. The Company is not obligated to provide any finff ancial or other support to these VIEs, other than the original investment. The Company’s involvement with these entities is limited to that of a passive investor. The Company has no unilateral right to appoint or remove the servicer, special servicer, or investment manager, which are generally viewed as having the power to direct the activities that most significantly impact the economic performance of the VIE, nor does the Company funff ction in any of these roles. The Company does not have the obligation to absor osses or the right to receive benefits from the r b l entity that could potentially be significant to the entity; as a result, the Company has determined it is not the primary beneficiary, or ity securities is consolidator, of the VIE. The Company’s maximum exposure to loss on these fixed maturt limited to the amortized cost of these investments. See “— Fixed Maturity Securities Availabla e-for-sale” for information on these securities. a rr Limite ii d ParPP tnershrr p ips and LLCs The Company holds investments in certain limited partnerships and LLCs which are VIEs. These ventures include limited partnerships, LLCs, private equity funds, and, to a lesser extent, tax credit and renewabla e energy partnerships. The Company is not considered the primary beneficiary,rr or consolidator, when its involvement takes the form of a limited partner interest and is restricted to a role of a passive investor, as a limited partner’s interest does not provide the Company with any substantive kick-out or participating rights, nor does it provide the Company with the power to direct the activities of the funff d. The Company’s maximum exposure to loss on these investments is limited to: (i) the amount invested in debt or equity of the VIE and (ii) commitments to the VIE, as described in Note 18. Net InvII estment Income The components of net investment income were as follows: ity securities Investment income: Fixed maturt Equity securities Mortgage loans Policy loans Limited partnerships and LLCs (1) Cash, cash equivalents and short-term investments Other Total investment income Less: Investment expenses Net investment income _______________ Years Ended December 31, 2023 2022 2021 (In millions) $ $ 3,516 3 958 67 168 225 87 5,024 360 4,664 $ $ 3,077 3 842 64 263 72 69 4,390 252 4,138 $ $ 2,832 5 689 65 1,391 5 44 5,031 150 4,881 (1) Includes net investment income pertaining to other limited partnership interests of $187 million, $170 million and $1.3 billion forff the years ended December 31, 2023, 2022 and 2021, respectively. 160 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 9. Investments (continued) Net InvII estment Gains (Lo(( sses) Components of Net InvII p f estment G aiGG nsii ) (Losses) ( The components of net investment gains (losses) were as folff lows: ity securities Fixed maturt Equity securities Mortgage loans Limited partnerships and LLCs Other Total net investment gains (losses) Years Ended December 31, 2023 2022 2021 (In millions) $ $ (224) $ 5 (24) (1) (2) (246) $ (192) $ (14) (20) (20) (2) (248) $ (21) — (27) — (11) (59) Gains (losses) from forff eign currency transactions included within net investment gains (losses) were ($2) million, ($17) million and $1 million forff the years ended December 31, 2023, 2022 and 2021, respectively. Sales or Dispos p s als oll f f Fo y ixFF ed Maturit y Stty ecuSS ii rities Investment gains and losses on sales of securities are determined on a specific identification basis. Proceeds froff m sales or disposals of fixff ed maturity securities and the components of fixff ed maturity securities net investment gains (losses) were as follows: Years Ended December 31, 2023 2022 2021 (In millions) 6,640 $ 52 $ (236) (184) $ $ $ 2,301 15 (216) (201) $ 6,329 99 (103) (4) Proceed s Gross investment gains Gross investment losses Net investment gains (losses) $ $ $ 161 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 10. Derivatives Accountintt g forff Derivatives See Note 1 for a description of the Company’s accounting policies forff derivatives and Note 11 for information about the fair value hierarchy for derivatives. Derivative StrSS ategtt ies The Company maintains an overall risk management strategy that incorporates the use of derivative instrumr ents to minimize its exposure to various market risks, including interest rate, forff eign currency exchange rate, credit and equity market. Derivatives are financial instrumrr ents with values derived froff m interest rates, forff eign currency exchange rates, credit spreads and/or other finff ancial indices. Derivatives may be exchange-traded or contracted in the over-the-counter (“OTC”) market. Certain of the Company’s OTC derivatives are cleared and settled through central clearing counterpar rties (“OTC- cleared”), while others are bilateral contracts between two counterpar rties (“OTC-bilateral”). Interest Rate Derivatives Interest rate swaps: The Company uses interest rate swaps to manage the interest rate risks primarily in variable annuity products and ULSG. Interest rate swaps are used in non-qualifying hedging ff relationships. Interest rate capsa rates above a Interest rate caps are used in non-qualifying hedging : The Company uses interest rate caps to protect its floating rate liabia lities against rises in interest a specified level, and against interest rate exposure arising from mismatches between assets and liabia lities. relationships. ff Interest rate floors: The Company uses interest rate floors to protect against a decline in interest rates on floating rate assets in the Company’s institutional spread margin business. Interest rate floors are used in non-qualifying hedging relationships. Interest rate swaptions: The Company uses interest rate swapta ions to manage the interest rate risks primarily in relationships. Interest rate variable annuity products and ULSG. Interest rate swaptions are used in non-qualifying hedging swaptions are included in interest rate options. ff Interest rate forwards: The Company uses interest rate forff wards to manage the interest rate risks primarily in variable annuity products and ULSG. Interest rate forwards are used in cash floff w and non-qualifying hedging ff relationships. g Foreign Cgg urCC rency Ec g xcEE hange Rate Dtt y erivativtt es Foreign currency swapsa : The Company uses forff eign currency swapsa flows to U.S. dollars to reduce cash floff w fluff ctuat are used in cash floff w and non-qualifying hedging ff to convert foreign currency denominated cash tions due to changes in currency exchange rates. Foreign currency swaps relationships. Foreign currency forff wards: The Company uses foreign currency forff wards to hedge currency exposure on its invested assets. Foreign currency forff wards are used in non-qualifying hedging relationships. Creditdd Derivatives Credit default swapsa : The Company uses credit default swaps to create synthetic credit investments to replicate credit exposure that is more economically attractive than what is availabla e in the market or otherwise unavailabla e (written credit protection), or to reducd e credit loss exposure on certain assets that the Company owns (purchased credit protection). Credit default swapsa are used in non-qualifying hedging relationships. ff Credit default swapta ions: The Company uses credit defauff lt swaptions to synthetically create investments that are either more expensive to acquire or otherwise unavailabla e in the cash markets. Swaptions are used to create callabla e bonds from replication synthetic asset transaction (“RSAT”) positions. This enhances the income of the RSAT program through earned lt swaptions are used in non-qualifying hedging premiums while not changing the credit profile of the RSATs. Credit defauff relationships. 162 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 10. Derivatives (continued) Equityii Market Derivatives q y Equity index options: The Company uses equity index options primarily to hedge minimum guarantees embedded in certain variable annuity products against adverse changes in equity markets. Additionally, the Company uses equity index options to hedge index-linked annuity products and certain invested assets against adverse changes in equity markets. Certain of these contracts may also contain settlement provisions linked to interest rates (“hybrid options”). Equity index options are used in non-qualifying hedging relationships. Equity total returt n swapsa to hedge minimum guarantees embedded in certain variable annuity products against adverse changes in equity markets. Additionally, the Company uses equity total return swaps to hedge index-linked annuity products against adverse changes in equity markets. Equity total returt n swapsa are used in non-qualifying hedging : The Company uses equity total returt n swapsa relationships. ff Equity variance swaps: The Company uses equity variance swaps to hedge minimum guarantees embedded in certain d by the Company. Equity variance swaps are used in non-qualifying hedging relationships. variable annuity products offere ff Primary Riskii s Mkk anMM aged by Derivatives The primary underlying risk exposure, gross notional amount and estimated faiff r value of derivatives, excluding embedded derivatives, held were as folff lows at: December 31, 2023 2022 Primary Underlying Risk Exposure Gross Notional Amount Estimated Fair Value Assets Liabilities Gross Notional Amount Estimated Fair Value A ssets Liabilities (In millions) Derivatives Designated as Hedging Instruments: Interest rate $ — $ — $ — $ 60 $ — $ Foreign currency exchange rate Cash flow hedges: Interest rate forwards Foreign currency swapsa s Total qualifyiff ng hedge Derivatives Not Designated or Not Qualifyiff ng as Hedging Instruments: Interest rate swaps Interest rate floors Interest rate caps Interest rate options Interest rate forwards Foreign currency swapsa Foreign currency forff wards Credit default swapsa — written Credit default swapta ions Equity index options Equity total returt n swapsa Hybrid options Interest rate Interest rate Interest rate Interest rate Interest rate Foreign currency exchange rate Foreign currency exchange rate Credit Credit Equity market Equity market Equity market 3,939 3 ,939 31,252 3,500 7,050 33,680 17,017 747 535 1,405 — 20,099 53,742 270 348 348 140 7 19 47 32 101 — 27 — 757 2,236 — 3,366 45 45 103 1 1 167 1,937 1 9 — — 687 2,137 — 5,043 5,088 4,026 4,086 3,145 3,250 6,350 28,688 18,168 822 487 1,757 100 17,229 32,909 — 596 596 98 12 137 22 35 148 1 18 — 697 520 — 12 8 20 46 3 43 232 2,466 — 10 2 — 351 747 — Total non-designated or non-qualifyiff ng derivatives 169,297 l Tota $ 173,236 $ 3,714 $ 112,905 1,688 $ 116,991 $ 2,284 $ 3,900 3,920 Based on gross notional amounts, a substantial portion of the Company’s derivatives was not designated or did not qualify aff s part of a hedging relationship at both December 31, 2023 and 2022. The Company’s use of derivatives includes (i) derivatives that serve as hedges of the Company’s exposure to various risks and generally do not qualify f ff or hedge accounting because they do not meet the criteria required under portfolff io hedging rules; (ii) derivatives that economically dge accounting because they do not meet the criteria of being ff hedge insurance liabia lities and generally do not qualify f “highly effective” as outlined in Accounting Standards Codification 815 — Derivatives and Hedging; (iii) derivatives that economically hedge MRBs that do not qualify f r value of the MRBs are already recorded in net income; and (iv) written credit default swapsa that are used to create synthetic credit investments ff and that do not qualify f accounting because they do not involve a hedging relationship. hedge accounting because the changes in estimated faiff or hedge or he orff ff ff ff ff 163 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 10. Derivatives (continued) The amount and location of gains (losses), including earned income, recognized for derivatives and gains (losses) pertaining to hedged items reported in net derivative gains (losses) were as follows: Year Ended December 31, 2023 Net Derivative Gains (Losses) Recognized for Derivatives Net Derivative Gains (Losses) Recognized for Hedged Items Net Investment Income Amount of Gains (Losses) Deferred in AOCI $ (3,886) $ Year Ended December 31, 2022 Net Derivative Gains (Losses) Recognized for Derivatives Net Derivative Gains (Losses) Recognized for Hedged Items Net Investment Income (In millions) (In millions) — $ (8) (8 ) — (13) — — — (13) (21) $ — $ (12) (12) — (48) — — — (48) (60) $ 3 52 5 5 — — — — — — 55 4 53 57 — — — — — — 57 $ $ $ $ (1) (275) ( 276) — — — — — — (276) Amount of Gains (Losses) Deferred in AOCI (50) 381 331 — — — — — — 331 Derivatives Designated as Hedging Instruments: Cash flow hedges: Interest rate $ Foreign currency exchange rate Total cash floff w hedges Derivatives Not Designated or Not Qualifyiff ng as Hedging Instruments: Interest rate Foreign currency exchange rate Credit Equity market Embedded s Total non-qualifying hedge ff Total Derivatives Designated as Hedging Instruments: Cash flow hedges: Interest rate $ Foreign currency exchange rate Total cash floff w hedges Derivatives Not Designated or Not Qualifyiff ng as Hedging Instruments: Interest rate Foreign currency exchange rate Credit Equity market Embedded s Total non-qualifying hedge ff Total $ 1 7 8 (384) (15) 32 570 (4,097) (3,894) $ 5 13 18 (4,001) 120 (2) 590 2,743 (550) $ (532) $ 164 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 10. Derivatives (continued) Year Ended December 31, 2021 Net Derivative Gains (Losses) Recognized for Derivatives Net Derivative Gains (Losses) Recognized for Hedged Items Net Investment Income Amount of Gains (Losses) Deferred in AOCI (In millions) Derivatives Designated as Hedging Instruments: Cash flow hedges: Interest rate $ Foreign currency exchange rate Total cash floff w hedges Derivatives Not Designated or Not Qualifyiff ng as Hedging Instruments: Interest rate Foreign currency exchange rate Credit Equity market Embedded s Total non-qualifying hedge ff Total $ 2 10 12 (717) 57 17 (486) (2,855) (3,984) — $ (4) (4) — (7) — — — (7) $ (3,972) $ (11) $ 3 36 39 — — — — — — 39 $ $ (20) 191 171 — — — — — — 171 At December 31, 2023, the Company held no qualified derivatives hedging exposure to futur casted asset purchases. At December 31, 2022, the maximum length of time over which the Company was hedging its exposure to variability in future cash flows forff forecasted transactions was less than one year. e cash floff ws for foreff ff At December 31, 2023 and 2022, the balance in AOCI associated with cash floff w hedges was $351 million and $638 million, respectively. Creditdd Derivatives In connection with synthetically created credit investment transactions, the Company writes credit defauff lt swaps forff which it receives a premium to insure credit risk. If a credit event occurs, as definff ed by the contract, the contract may be cash settled or it may be settled gross by the Company paying the counterparr rty the specified swap notional amount in exchange for the delivery orr f par quantities of the referenced credit obligation. The estimated faiff r value, maximum amount of future payments and weighted average years to maturt ity of written credit default swapsa were as follows at: Estimated Fair Value of Credit Default Swaps 2023 Maximum Amount of Future Payments under Credit Default Swaps $ $ 6 19 2 — 27 $ $ 419 958 24 4 1,405 December 31, Weighted Average Years to Maturity (2) Estimated Fair Value of Credit Default Swaps (Dollars in millions) 2022 Maximum Amount of Future Payments under Credit Default Swaps Weighted Average Years to Maturity (2) 1.6 4.9 3.0 2.0 3.9 $ $ 7 8 2 (1) 16 $ $ 544 1,185 24 4 1,757 2.2 5.0 4.0 3.0 4.1 Rating Agency Designation of Referenced Credit Obligations (1) Aaa/Aa/A Baa Ba Caa and Lower Total _______________ (1) The Company has written credit protection on both single name and index references. The rating agency designations are icable ratings among Moody’s, S&P and Fitch. If no rating is availablea a the appl based on availabia lity and the midpoint of d from a rating agency, then an internally developed rating is used. 165 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 10. Derivatives (continued) (2) The weighted average years to maturt ity of the credit default swaps is calculated based on weighted average gross notional amounts. Countertt par rr ty Creditdd Riskii The Company may be exposed to credit-related losses in the event of counterpar instruments. Generally, the credit exposure is the fair value at the reporting date less any collateral received fromff counterpar rty. rty nonperformance on derivative the The Company manages its credit risk by: (i) entering into derivative transactions with creditworthy counterparr rties governed by master netting agreements; (ii) trading through regulated exchanges and central clearing counterparr rties; (iii) obtaining collateral, such as cash and securities, when appropriate; and (iv) setting limits on single party credit exposures which are subju ect to periodic management review. See Note 11 forff a description of the impact of credit risk on the valuation of derivatives. The estimated faiff r values of net derivative assets and net derivative liabia lities after the appl a ication of master netting agreements and collateral were as folff lows at: Gross Amounts Not Offsff et on the Consolidated Balance Sheets Gross Amount Recognized Financial Instruments (1) Collateral Received/ Pledged (2) Net Amount Securities Collateral Received/ Pledged (3) Net Amount Afteff r Securities Collateral $ $ $ $ 3,506 4,925 2,308 3,919 $ $ $ $ (3,112) $ (3,112) $ (1,659) $ (1,659) $ (In millions) (164) $ (8) $ (640) $ (7) $ 230 1,805 9 2,253 $ $ $ $ (194) $ (1,805) $ (6) $ (2,251) $ 36 — 3 2 December 31, 2023 Derivative assets Derivative liabia litie s December 31, 2022 Derivative assets Derivative liabia lities _______________ (1) Represents amounts subject to an enforff ceable master netting agreement or similar agreement. (2) The amount of cash collateral offset in the table above is limited to the net estimated faiff r value of derivatives after ff application of netting agreement. (3) Securities collateral received froff m counterpar rties is not reported on the consolidated balance sheets and may not be sold or re-pledged unless the counterpar rty is in default. Amounts do not include excess of collateral pledged or received. The Company’s collateral arrangements generally require the counterparr r considering the effeff ct of netting agreements, to pledge collateral when the amount owed by that counterpar rty reaches a minimum transfer amount. Certain of these arrangements also include credit-contingent provisions which permit the party with positive fair l collateralization froff m the party in a net value to terminate the derivative at the current fair value or demand immediate fulff liabia lity position, in the event that the finff ancial strength or credit rating of the party in a net liabia lity position falff ls below a certain level. rty in a net liabia lity position, afteff 166 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 10. Derivatives (continued) The aggregate estimated faiff r values of derivatives in a net liability position containing such credit-contingent provisions and the aggregate estimated fair value of assets posted as collateral forff such instruments were as folff lows at: Estimated faiff Estimated faiff Fixed maturt r value of derivatives in a net liabia lity position (1) r value of collateral provided (2): ity securities _______________ (1) After taking into consideration the existence of netting agreements. December 31, 2023 2022 (In millions) 1,813 $ 2,260 4,811 $ 4,894 $ $ (2) Substantially all of the Company’s collateral arrangements provide for daily posting of collateral forff l value of the derivative contract. As a result, if the credit-contingent provisions of derivative contracts in a net liabia lity position were ents triggered, minimal additional assets would be required to be posted as collateral or needed to settle the instrumr immediately. Additionally, the Company is required to pledge initial margin forff certain new OTC-bilateral derivative transactions to third-party custodians. the fulff 11. Fair Value When developing estimated faiff r values, the Company considers three broad valuation techniques: (i) the market approach, (ii) the income appr iate valuation technique to use, given what is being measured and the availabia lity of sufficient inputs, giving priority to observable inputs. The Company categorizes its assets and liabia lities measured at estimated faiff r value into a three-level hierarchy, based on the significant input with the lowest level in its valuation. The input levels are as folff ch. The Company determines the most appropr oach, and (iii) the cost approa lows: a a a Level 1 Unadjud sted quoted prices in active markets forff based on average trading volume forff market activity for fixff ed maturity securities. identical assets or liabia lities. The Company defines active markets equity securities. The size of the bid/ask spread is used as an indicator of Level 2 Quoted prices in markets that are not active or inputs that are observable either directly or indirectly. These inputs can include quoted prices for similar assets or liabilities other than quoted prices in Level 1, quoted prices in markets that are not active, or other significant inputs that are observable or can be derived principally from or corroborated by observable market data forff subsu tantially the full term of the assets or liabia lities. Level 3 Unobservable inputs that are suppor ted by little or no market activity and are significant to the determination of r value of the assets or liabilities. Unobservable inputs refleff ct the reporting entity’s own assumptions estimated faiff about the assumptions that market participants would use in pricing the asset or liabia lity. u 167 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 11. Fair Value (continued) Recurringii Fair Value MeaMM surements The assets and liabia lities measured at estimated faiff r value on a recurring basis and their corresponding placement in the fair value hierarchy are presented in the tables below. Investments that do not have a readily determinable fair value and are measured at net asset value (or equivalent) as a practical expedient to estimated faiff r value are excluded froff m the fair value hierarchy. December 31, 2023 Fair Value Hierarchy Level 1 Level 2 Level 3 (In millions) Total Estimated Fair Value Assets Fixed maturt ity securities: U.S. corporate $ — $ 34,760 $ rr Foreign corpor U.S. government and agency ate RMBS CMBS ABS State and political subdivi u sion Foreign government Total fixff ed maturity securities Equity securities Short-term investments Derivative assets: (1) Interest rate Foreign currency exchange rate Credit Equity market Total derivative assets Market risk benefit assets Separate account assets Total assets Liabilities Market risk benefit liabia lities Derivative liabia lities: (1) Interest rate Foreign currency exchange rate Credit Equity market Total derivative liabia lities Embedded derivatives on index-linked annuities (2) $ $ — 3,786 — — — — — 3,786 55 614 — — — — — — 20 11,340 4,633 7,415 6,371 6,080 3,874 996 75,469 22 555 245 437 21 2,993 3,696 — 88,251 4,475 $ 167,993 $ 995 325 — 15 39 326 — 36 1,736 25 — — 12 6 — 18 656 — 2,435 $ $ $ — $ — $ 10,323 — — — — — — 2,209 55 — 2,824 5,088 — — — — — — 8,186 35,755 11,665 8,419 7,430 6,410 6,406 3,874 1,032 80,991 102 1,169 245 449 27 2,993 3,714 656 88,271 174,903 10,323 2,209 55 — 2,824 5,088 8,186 23,597 Total liabia lities $ — $ 5,088 $ 18,509 $ 168 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 11. Fair Value (continued) Assets Fixed maturt ity securities: U.S. corporate Foreign corpor rr ate U.S. government and agency RMBS CMBS ABS State and political subdivi u sion Foreign government Total fixff ed maturity securities Equity securities Short-term investments Derivative assets: (1) Interest rate Foreign currency exchange rate Credit Equity market Total derivative assets Market risk benefit assets Separate account assets Total assets Liabilities Market risk benefit liabia lities Derivative liabia lities: (1) Interest rate Foreign currency exchange rate Credit Equity market Total derivative liabia lities Embedded derivatives on index-linked annuities (2) Total liabia lities _______________ December 31, 2022 Fair Value Hierarchy Level 1 Level 2 Level 3 (In millions) Total Estimated Fair Value $ — $ 31,418 $ 1,189 $ — 3,566 — — — — — 3,566 35 722 — — — — — — 29 9,978 4,450 7,514 6,578 5,041 3,799 1,043 69,821 27 359 304 716 10 1,217 2,247 — 84,936 4,352 $ 157,390 $ 598 — 14 33 318 — 38 2,190 27 — — 29 8 — 37 483 — 2,737 — $ — $ 10,389 — — — — — — 2,802 18 — 1,098 3,918 — — — 2 — 2 3,932 $ $ $ $ $ — $ 3,918 $ 14,323 $ 32,607 10,576 8,016 7,528 6,611 5,359 3,799 1,081 75,577 89 1,081 304 745 18 1,217 2,284 483 84,965 164,479 10,389 2,802 18 2 1,098 3,920 3,932 18,241 (1) Derivative assets are reported in other invested assets and derivative liabia lities are reported in other liabia lities. The amounts are presented gross in the tables above a to reflect the presentation on the consolidated balance sheets. (2) Embedded derivative liabia lities on index-linked annuities are reported in policyholder account balances. Valuatiott n ConCC trols all nd Procedures The Company monitors and provides oversight of valuation controls and policies forff securities, mortgage loans and derivatives, which are primarily executed by its valuation service providers. The valuation methodologies used to r values prioritize the use of observable market prices and market-based parameters and determines that determine faiff judgmental valuation adjustments, when appl ied consistently over time. The valuation methodologies for securities, mortgage loans and derivatives are reviewed on an ongoing basis and revised when necessary. In addition, the Chief Accounting Officer periodically reports to the Audit Committee of Brighthouse Financial’s Board of Directors regarding compliance with fair value accounting standards. ied, are based upon establa ished policies and are appl a a 169 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 11. Fair Value (continued) t The faiff r value of financial assets and finff ancial liabilities is based on quoted market prices, where availabla e. Prices received are assessed to determine if they represent a reasonable estimate of fair value. Several controls are performed, io returns to corresponding including certain monthly controls, which include, but are not limited to, analysis of portfolff benchmark returns , comparing a sample of executed prices of securities sold to the fair value estimates, reviewing the bid/ ask spreads to assess activity, comparing prices from multiple independent pricing services and ongoing due diligence to confirff m that independent pricing services use market-based parameters. The process includes a determination of the r values received froff m independent pricing services or brokers by assessing observability of inputs used in estimated faiff whether these inputs can be corroborated by observable market data. Independent non-binding broker quotes, also referff red to herein as “consensus pricing,” are used forff io. Prices received froff m independent brokers are assessed to determine if they represent a reasonable estimate of fair value by considering such pricing relative to the current market dynamics and current pricing forff a non-significant portion of the portfolff similar finff ancial instruments. A forff mal process is also applied to challenge any prices received froff m independent pricing services that are not considered representative of estimated faiff r value. If prices received froff m independent pricing services are not considered reflective of market activity or representative of estimated fair value, independent non-binding broker quotations are obtained. If obtaining an independent non-binding broker quotation is unsuccessfulff , the last availabla e price will be used. Additional controls are performed, such as, balance sheet analytics to assess reasonableness of period-to-period pricing ied if prices or quotes received froff m independent r value. The changes, including any price adjud stments. Price adjustments are appl pricing services or brokers are not considered reflective of market activity or representative of estimated faiff Company did not have significant price adjustments during the year ended December 31, 2023. a Determinatiott n of Fo aiFF r Vii alVV ue f Fixedii Maturity Securities y The faiff r values forff determined using the quoted market prices and are classified as Level 1 assets. For fixed maturt Level 2 assets, faiff observable inputs as described below. actively traded marketabla e bonds, primarily U.S. government and agency securities, are ity securities classified as ch and are valued based on a variety of r values are determined using either a market or income approa a rr U.S. corporate and foreign cgg orporate securities: Fair value is determined using third-party commercial pricing services, with the primary i nputs being quoted prices in markets that are not active, benchmark yields, spreads off benchmark yields, new issuances, issuer rating, trades of identical or comparable securities, or duration. Privately-placed securities are valued using the additional key inputs: market yield curve, call provisions, observable prices and spreads for similar public or private securities that incorporate the credit quality and industry s ector of the issuer, and delta spread adjud stments to refleff ct specific credit-related issues. rr U.S. government and agency,c overnment securities: Fair value is state and political subdivisiii on and foreign ggg determined using third-party commercial pricing services, with the primary inputs being quoted prices in markets that are not active, benchmark U.S. Treasury yrr the identical ield or other yields, spread off t security, issuer ratings and issuer spreads, broker-dealer quotes, and comparable securities that are actively traded. he U.S. Treasury yrr ield curve forff ff Strut ctured Securities: Fair value is determined using third-party commercial pricing services, with the primary inputs being quoted prices in markets that are not active, spreads forff actively traded securities, spreads off benchmark yields, expected prepayment speeds and volumes, current and forff ecasted loss severity, ratings, geographic region, ity, average delinquency rates and debt-service coverage ratios. weighted average coupon and weighted average maturt ture of the security, Other issuance-specific inforff mation is also used, including, but not limited to, collateral type, strucrr vintage of the loans, payment terms of the underlying asset, payment priority within tranche, and deal performance. Equity Securities and Short-term Investmett q y nts The faiff r value for actively traded equity securities and short-term investments are determined using quoted market r values are prices and are classified as Level 1 assets. For financial instrumr determined using a market approach and are valued based on a variety of observable inputs as described below. ents classified as Level 2 assets, faiff Equity securities and short-term investments: Fair value is determined using third-party commercial pricing services, with the primary input being quoted prices in markets that are not active. 170 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 11. Fair Value (continued) Derivatives The faiff r values forff exchange-traded derivatives are determined using the quoted market prices and are classified as Level 1 assets. For OTC-bilateral derivatives and OTC-cleared derivatives classified as Level 2 assets or liabia lities, fair values are determined using the income approa ch. Valuations of non-option-based derivatives utilize present value techniques, whereas valuations of option-based derivatives utilize option pricing models which are based on market standard valuation methodologies and a variety of observable inputs. a ff The significant inputs to the pricing models for most OTC-bilateral and OTC-cleared derivatives are inputs that are observable in the market or can be derived principally from, or corroborated by, observable market data. Certain OTC- bilateral and OTC-cleared derivatives may rely on inputs that are significant to the estimated faiff r value that are not observable in the market or cannot be derived principally from, or corroborated by, observable market data. These unobservable inputs may involve significant management judgment or estimation. Even though unobservable, these inputs are based on assumptions deemed appropriate given the circumstances and management believes they are consistent with what other market participants would use when pricing such instrumrr ents. Most inputs forff OTC-bilateral and OTC-cleared derivatives are mid-market inputs but, in certain cases, liquidity adjud stments are made when they are deemed more representative of exit value. Market liquidity, as well as the use of different methodologies, assumptions and inputs, may have a material effeff ct on the estimated faiff r values of the Company’s derivatives and could materially affeff ct net income. The credit risk of both the counterparr rty and the Company are considered in determining the estimated faiff r value for all OTC-bilateral and OTC-cleared derivatives, and any potential credit adjustment is based on the net exposure by counterpar rty after taking into account the effects of netting agreements and collateral arrangements. The Company values its OTC-bilateral and OTC-cleared derivatives using standard swap curves which may include a spread to the risk-free collateral arrangements. This credit spread is appropriate for those parties that execute rate, depending upon specificff trades at pricing levels consistent with similar collateral arrangements. As the Company and its significant derivative counterpar rties generally execute trades at such pricing levels and hold suffiff cient collateral, additional credit risk adjud stments are not currently required in the valuation process. The Company’s abia lity to consistently execute at such to the netting agreements and collateral arrangements that are in place with all of its pricing levels is in part dued significant derivative counterparr rties. An evaluation of the requirement to make additional credit risk adjustments is performed by the Company each reporting period. Marketkk Riskii Benefitsef MRBs principally include guaranteed minimum benefitff s on variabla e annuity contracts including benefits reinsured related to these guarantees. The estimated fair value of variabla e annuity guarantees accounted for as MRBs is determined based on the present value of projeo cted future benefits less the present value of projeo cted future fees attributable to the guarantees. At policy inception, the Company determines an attributed fee ratio by solving forff s to be collected from the policyholder equal to the present value of projected future guaranteed benefits. To the extent the rider fees are insuffiff cient, the Company may also include fees related to mortality and expense charges in the attributed fee s included in the calculation do not exceed total contract fees and assessments collected from ratio, provided the total feeff the contract holder. Any additional fees not included in the attributed fee ratio are considered revenue and reported in universal life aff s. The attributed fee ratio is not updated in subsequent periods. a percentage of projected future rider feeff nd investment-type product policy feeff ff The Company updates the estimated faiff r value of variable annuity guarantees in subsu equent periods by projecting rial assumptions including expectations of policyholder behavior. A future benefits using capital markets inputs and actuat risk neutral valuation methodology is used to project the cash floff ws from the guarantees under multiple capital markets scenarios. The reported estimated faiff r value is then determined by taking the present value of these cash floff ws using a discount rate that incorporates a spread over the risk-free rate to refleff ct the Company’s nonperformance risk and adding a risk margin. 171 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 11. Fair Value (continued) The valuation of MRBs includes an adjustment for the risk that the Company fails to satisfy its obligations, which is referred to as nonperformance risk. The nonperformance risk adjud stment is captured as an additional spread appl ied to the risk-free rate in determining the rate to discount the cash floff ws of the liabia lity. The spread over the risk-free rate is based on the Company’s creditworthiness taking into consideration publicly availabla e information relating to spreads in the secondary market for Brighthouse Financial’s debt. These observable spreads are then adjud sted, as necessary, to reflect the finff ancial strength ratings of the issuing insurance subsu idiaries as compared to the credit rating of Brighthouse Financial. a Risk margins are establa ished to capture the non-capia tal markets risks of the instrument which represent the additional compensation a market participant would require to assume the risks related to the uncertainties in certain actuat rial judgment, including assumptions of the amount needed to cover the guarantees. rial assumptions. The establa ishment of risk margins requires the use of significant actuat Actuarial assumptions are reviewed at least annually, and if they change significantly, the estimated faiff adjud sted through net income. Capia tal market inputs used in the measurement of variabla e annuity guarantees are upda quarterly through net income, except forff reported in OCI. r value is ted the change attributable to the Company’s nonperformance risk, which is u Embedded Derivatives Embedded derivatives include crediting rates associated with index-linked annuity contracts. Embedded derivatives are recorded at estimated fair value with changes in estimated fair value reported in net income. The crediting rates associated with these feat urt es are embedded derivatives which are measured at estimated fair value separately froff m the host fixff ed annuity contract. These embedded derivatives are classified within policyholder account balances on the consolidated balance sheets. ff ff The estimated fair value of crediting rates associated with index-linked annuities is determined using a combination ch. The valuation of these embedded derivatives also includes of an option pricing model and an option-budget approa the establishment of a risk margin, as well as changes in nonperforff mance risk. a Actuarial assumptions including policyholder behavior and expectations for renewals at the end of the term period r value is adjud sted through net income. ted quarterly through net are reviewed at least annually, and if they change significantly, the estimated faiff Capia tal market inputs used in the measurement of crediting rate embedded derivatives are upda income. u Transfes rs Into or Out of Lo f f evel 3: Assets and liabia lities are transferff red into Level 3 when a significant input cannot be corroborated with market observable data. This occurs when market activity decreases significantly and underlying inputs cannot be observed, thereby affeff cting current prices are not availabla e, and/or when there are significant variances in quoted prices, red out of Level 3 when circumstances change such that a significant input transparency. Assets and liabia lities are transferff can be corroborated with market observable data. This may be dued to a significant increase in market activity, a specific event, or one or more significant input(s) becoming observable. 172 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 11. Fair Value (continued) Assets and Liabilitii iett s MeaMM sured at FaiFF r Vii alVV ue Using SigSS nigg fii cant Unobservable Ill nput g f p g II ( s (tt Le(( ) vel 3) Certain quantitative inforff mation about the significant unobservable inputs used in the fair value measurement, and the sensitivity of the estimated fair value to changes in those inputs, for the more significant asset and liabia lity classes measured at fair value on a recurring basis using significant unobservable inputs (Level 3) were as folff lows at: Valuation Techniques Significff ant Unobservable Inputs Range Range December 31, 2023 December 31, 2022 Impact of Increase in Input on Estimated Fair Value Market Risk Benefits Variable annuity guaranteed minimum benefits • Option pricing techniques Embedded Derivatives Index-linked annuity crediting rates • Option pricing techniques • Mortality rates • Lapse rates 0.04% - 1.00% - 12.90% 22.80% • Utilization rates 0.00% - 25.00% 0.04% - 1.00% - 0.00% - 12.90% 24.11% 25.00% Decrease (1) Decrease (2) Increase (3) • Withdrawal rates • Long-term equity volatilities • Nonperformance risk spread • Mortality rates • Lapse rates • Withdrawal rates • Nonperformance risk spread 0.00% - 10.00% 0.00% - 10.00% (4) 12.59% - 22.50% 19.99% - 28.45% Increase (5) 0.76% - 1.63% (2.73)% - 4.52% Decrease (6) 0.03% - 9.24% 0.03% - 9.24% 1.00% - 62.30% 1.00% - 62.30% 0.50% - 9.00% 0.50% - 9.00% Decrease (1) Decrease (2) (4) 0.45% - 1.74% 0.00% - 1.98% Decrease (6) _______________ (1) Mortality rates vary brr y age and by demographic characteristics such as gender. The range shown refleff cts the mortality rate for policyholders between 35 and 90 years old. Mortality rate assumptions are set based on company experience and include an assumption for mortality improvement. (2) The lapsa e rate range reflects base lapse rates forff major product categories for dur e rates are adjusted rially calculated guaranteed values and the current policyholder at the contract level based on a comparison of the actuat icability of any surrender charges. For variable annuity a account value, as well as other fact guarantees, a dynamic lapsa ction reducd es the base lapse rate when the guaranteed amount is greater than the account value as in-the-money contracts are less likely to lapse. Lapse rates are also generally assumed to be lower in periods when a surrender charge appl ors, such as the appl ation 1-20. Base lapsa e funff ies. a ff ff (3) The utilization rate assumption for variabla e annuity guarantees estimates the percentage of contract holders with a GMIB ime withdrawal benefit who will elect to utilize the benefitff upon becoming eligible in a given year. The range or lifetff levels of in-the-money. For shown represents the floor and cap of the GMIB dynamic election rates across varying lifetff ime withdrawal guarantee riders, the assumption is that everyone will begin withdrawals once account value reaches zero which is equivalent to a 100% utilization rate. Utilization rates may vary by the type of guarantee, the amount by which the guaranteed amount is greater than the account value, the contract’s withdrawal history arr nd by the age of the policyholder. rr (4) The withdrawal rate represents the percentage of account balance that any given policyholder will elect to withdraw from the contract each year. The withdrawal rate assumption varies by age and durd ation of the contract, and also by other type. For any given contract, withdrawal rates vary t factors such as benefitff hroughout the period over which cash flows rr es of valuing the embedded derivative. For variabla e annuity GMWBs, any increase (decrease) in are projeo cted for purpos withdrawal rates results in an increase (decrease) in the estimated faiff r value of the guarantees. For variable annuity GMABs and GMIBs, any increase (decrease) in withdrawal rates results in a decrease (increase) in the estimated fair value. ff r (5) Long-term equity volatilities represent equity volatility beyond the period forff which observable equity volatilities are hroughout the period over which cash flows are availabla e. For any given contract, long-term equity volatility rates vary t projected for purpos es of valuing MRBs. rr rr (6) Nonperformance risk spread varies by duration. For any given contract, multiple nonperformance risk spreads will apply, depending on the durd ation of the cash floff w being discounted for purposes of valuing the MRB or embedded derivative. 173 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 11. Fair Value (continued) r value for all other assets and liabia lities The Company does not develop unobservable inputs used in measuring faiff . The other Level 3 assets and liabia lities classified within Level 3; therefore, these are not included in the tabla e above ity securities valued based on non-binding primarily included fixff ed maturity securities and derivatives. For fixed maturt broker quotes, an increase (decrease) in credit spreads would result in a higher (lower) fair value. For derivatives valued based on third-party pricing models, an increase (decrease) in credit spreads would generally result in a higher (lower) fair value. a The changes in assets and (liabilities) measured at estimated faiff r value on a recurring basis using significant unobservable inputs (excluding MRBs disclosed in Note 5) were summarized as follows: Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Fixed Maturity Securities Corporate (1) Structured Securities Foreign Government Equity Securities Short-term Investments Net Derivatives (2) (In millions) Embedded Derivatives on Index-Linked Annuities Balance, January 1, 2022 $ 1,399 $ 220 $ 26 $ 13 $ 2 $ 36 $ (6,641) Total realized/udd nrealized gains (losses) included in net income (loss) (3) (4) Total realized/udd nrealized gains (losses) I included in AOC Purchases (5) Sales (5) ) Issuances (5 Settlements (5) Transferff s into Level 3 (6) ) Transferff s out of Level 3 (6 Balance, December 31, 2022 Total realized/udd nrealized gains (losses) included in net income (loss) (3) (4) Total realized/udd nrealized gains (losses) I included in AOC Purchases (5) Sales (5) ) Issuances (5 Settlements (5) Transferff s into Level 3 (6) Transferff s out of Level 3 (6 ) Balance, December 31, 2023 Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at December 31, 2021 (7) Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at December 31, 2022 (7) Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at December 31, 2023 (7) Changes in unrealized gains (losses) included in OCI forff the instrumrr December 31, 2021 (7) ents still held as of Changes in unrealized gains (losses) included the instrumrr in OCI forff December 31, 2022 (7) ents still held as of Changes in unrealized gains (losses) included in OCI forff the instrumrr December 31, 2023 (7) ents still held as of Gains (Losses) Data for the year ended December 31, 2021: Total realized/udd nrealized gains (losses) included in net income (loss) (3) (4) Total realized/udd nrealized gains (losses) included in AOCI _______________ $ $ $ $ $ $ $ $ $ (5) ( 266) 933 (184) — — 94 184) ( 1,787 (11) 2 8 162 (116) — — 188 718) ( 1 (23) 251 (16) — — 33 (101) 365 — 5 85 (22) — — 3 (56) — (10) 5 (2) — — 19 — 38 — 3 — (2) — — — (3) 1,320 $ 380 $ 36 $ — — 14 — — — — — 27 (3) — 2 (1) — — — — 25 — — — (2) — — — — — — — — — — — — — (9) 17 1 (9) — — — (1) 35 (6) (3) 4 — — — — (12) 2,743 — — — — (34) — — (3,932) (4,097) — — — — (157) — — $ — $ 18 $ (8,186) (2) $ — $ — $ — $ — $ (11) $ (2,929) 3 $ — $ — $ 1 $ — $ (1) $ 2,485 (11) $ — $ — $ (2) $ — $ (5) $ (4,513) (6) $ — $ — $ — $ — $ (268) $ (23) $ (10) $ — $ — $ 12 17 $ $ 11 $ 4 $ 3 $ — $ — $ (3) $ — — — (1) (7) $ $ — $ — $ — $ — $ — $ — $ — $ — $ 1 12 $ $ (2,855) — 174 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 11. Fair Value (continued) (1) Comprised of U.S. and forff eign corporate securities. (2) Freestanding derivative assets and liabia lities are reported net for purposes of the rollforff ward. (3) Amortization of premium/accretion of discount is included in net investment income. Changes in the allowance forff credit are charged to net income (loss) on securities are included in net investment gains (losses). losses and direct write-offsff Lapsa es associated with net embedded derivatives are included in net derivative gains (losses). Substantially all realized/ unrealized gains (losses) included in net income (loss) for net derivatives and net embedded derivatives are reported in net derivative gains (losses). (4) Interest and dividend accruar ls, as well as cash interest coupons and dividends received, are excluded froff m the rollforff ward. (5) Items purchased/issued and then sold/settled in the same period are excluded froff m the rollforff ward. Fees attributed to embedded derivatives are included in settlements. (6) Gains and losses, in net income (loss) and OCI, are calculated assuming transfers into and/or out of Level 3 occurred at the beginning of the period. Items transferred into and out of Level 3 in the same period are excluded froff m the rollforff ward. (7) Changes in unrealized gains (losses) included in net income (loss) for fixff ed maturities are reported in either net investment income or net investment gains (losses). Substantially all changes in unrealized gains (losses) included in net income (loss) for net derivatives and net embedded derivatives are reported in net derivative gains (losses). Fair Value of Fo inFF ancial Instrutt ments Ctt arCC ried at Othett r ThaTT n FaiFF r Vii alVV ue The folff lowing tabla es provide fair value inforff mation for finff ancial instruments that are carried on the balance sheet at ents: cash and cash equivalents, accruedr amounts other than fair value. These tables exclude the folff r value of the investment income and payables forff excluded finff ancial instrumr mates carrying value as they are short-term in nature such that the Company believes there is minimal risk of material changes in interest rates or credit quality. All ents subju ect to this remaining balance sheet amounts excluded froff m the tabla es below are not considered financial instrumr disclosure. collateral under securities loaned and other transactions. The estimated faiff a ents, which are primarily classified in Level 2, approxi lowing financial instrumr The carrying values and estimated faiff r values forff such financial instrumrr ents, and their corresponding placement in the fair value hierarchy, are summarized as follows at: Assets Mortgage loans Policy loans Other invested assets Premiums, reinsurance and other receivables Liabilities Policyholder account balances Long-term debt Other liabia lities Separate account liabia lities December 31, 2023 Fair Value Hierarchy Carrying Value Level 1 Level 2 (In millions) Level 3 Total Estimated Fair Value $ $ $ $ $ $ $ $ 22,508 1,331 257 7,577 31,471 3,156 1,142 1,150 $ $ $ $ $ $ $ $ — $ — $ — $ — $ — $ — $ — $ — $ — $ $ 518 $ 245 $ 88 — $ $ $ $ 2,769 463 1,150 20,609 937 12 7,636 $ $ $ $ 30,606 $ — $ 679 $ — $ 20,609 1,455 257 7,724 30,606 2,769 1,142 1,150 175 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 11. Fair Value (continued) December 31, 2022 Fair Value Hierarchy Level 1 Level 2 Level 3 (In millions) Total Estimated Fair Value — $ — $ — $ — $ — $ — $ — $ — $ — $ $ 515 $ 201 $ 89 — $ $ $ $ 2,703 248 1,024 20,816 878 12 6,141 $ $ $ $ 30,942 $ — $ 695 $ — $ 20,816 1,393 213 6,230 30,942 2,703 943 1,024 Carrying Value $ $ $ $ $ $ $ $ 22,936 1,282 213 6,080 31,887 3,156 943 1,024 $ $ $ $ $ $ $ $ Assets Mortgage loans Policy loans Other invested assets Premiums, reinsurance and other receivables Liabilities Policyholder account balances Long-term debt Other liabia lities Separate account liabia lities 12. Long-term Debt Long-term debt outstanding was as folff lows at: Stated Interest Rate Maturity Face Value Carrying Value Face Value Carrying Value December 31, 2023 2022 Senior notes (1) Senior notes (1) Senior notes (1) Senior notes (1) Junior subordina u Other long-term debt (2) ted debentures (1) Total long-term debt (3) _______________ 3.700% 5.625% 4.700% 3.850% 6.250% 7.028% 2027 2030 2047 2051 2058 2030 $ $ 757 615 1,014 400 375 24 3,185 $ $ $ (In millions) 756 614 1,001 397 364 24 3,156 $ 757 615 1,014 400 375 26 3,187 $ $ 755 614 1,001 396 364 26 3,156 (1) Interest on senior notes is payable semi-annually. Interest on junior subordina u ted debentures is payable quarterly subju ect to BHF’s right to defer interest payments in accordance with the terms of the debentures. (2) Represents non-recourse debt for which creditors have no access, subju ect to customary err xceptions, to the general assets of the Company other than recourse to certain investment companies. (3) Includes unamortized debt the senior notes and junior subordina issuance costs, discounts and premiums, as appl totaling net $30 million and ted debentures on a combined basis at December 31, 2023 and 2022, icable, u a $32 million forff respectively. The aggregate maturities of long-term debt at December 31, 2023 were $2 million in 2024, $3 million in each of 2025 and 2026, $761 million in 2027, $3 million in 2028, and $2.4 billion thereafteff r. Unsecured senior notes rank highest in priority, folff lowed by subordinated debt consisting of junior subordina u ted debentures. Interest expense related to long-term debt of $153 million, $153 million and $163 million forff the years ended December 31, 2023, 2022 and 2021, respectively, is included in other expenses. 176 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 12. Long-term Debt (continued) The Company’s debt instrumr ents and credit and committed facff ilities contain certain administrative, reporting and legal covenants. Additionally, the Revolving Credit Facility (as defined below) contain finff ancial covenants, including requirements to maintain a specified minimum adjud sted 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 the Company’ subsu idiaries. At December 31, 2023, the Company was in compliance with these financial covenants. Senior Notes In November 2021, BHF used the net proceeds from the issuances of the Series D Depositary Shares (as definff ed in Note 13) and the 2051 Senior Notes (as defined below) to repurchase $543 million principal amount of senior notes due 2027 and $136 million principal amount of senior notes due 2047. In connection with this repurchase, BHF recorded a premium of $71 million paid in excess of the debt principal and wrote off $4 million of unamortized debt issuance costs, which is included in other expenses. In November 2021, BHF issued $400 million aggregate principal amount of senior notes due December 2051 (the aggregate net cash proceeds of $396 million. The 2051 Senior Notes bear interest at a fixed rate “2051 Senior Notes”) forff of 3.850%, payable semi-annually. Creditdd Faciliti ii es y Revolving CreCC dit FacFF ility g On April 15, 2022, BHF entered into a new revolving credit agreement with respect to a new $1.0 billion senior unsecured revolving credit facility maturing April 15, 2027 (the “2022 Revolving Credit Facility”), all of which may be used for revolving loans or letters of credit. The 2022 Revolving Credit Facility refinanced and replaced BHF’s forff mer $1.0 billion senior unsecured revolving credit facility that was scheduld ed to mature May 7, 2024. At December 31, 2023, there were no borrowings or letters of credit outstanding under the 2022 Revolving Credit Facility. Committed FacFF ilitiii es Reinsurance FinFF ancing Arrangement g g Brighthouse Reinsurance Company of Delaware (“BRCD”) maintains a $15.0 billion finff ancing arrangement with a pool of highly rated third-party reinsurers consisting of credit-linked notes that each mature in 2039. At December 31, 2023, there were no borrowings and there was $15.0 billion of funding availabla e under this finff ancing arrangement. For the years ended December 31, 2023, 2022 and 2021, the Company recognized commitment fees of $21 million, $26 million and $34 million, respectively, in other expenses associated with this financing arrangement. ff p Repur e chase FacFF ilities ff ilities (the At December 31, 2023, Brighthouse Life I “Repurchase Facilities”) with terms of up to t nsurance Company may enter into repurchase transactions in an aggregate amount up to $2.5 billion. Under the Repurchase Facilities, Brighthouse Life Insurance Company may sell certain eligible securities at a purchase price based on the market value of the securities less an applicable margin based on the types of securities sold, with a concurrent agreement to repurchase such securities at a predetermined future date (up tu o three months) and at a price which represents the original purchase price plus interest. At December 31, 2023, there were no borrowings under the Repurchase Facilities. nsurance Company maintains secured committed repurchase facff hree years under which Brighthouse Life I u ff 177 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 13. Equity Preferred StoSS ck Preferred stock shares authorized, issued and outstanding were as follows at: December 31, 6.600% Non-Cumulative Preferred Stock, Series A 6.750% Non-Cumulative Preferred Stock, Series B 5.375% Non-Cumulative Preferred Stock, Series C 4.625% Non-Cumulative Preferred Stock, Series D Not designated Total Shares Authorized 17,000 16,100 23,000 14,000 99,929,900 100,000,000 2023 Shares Issued 17,000 16,100 23,000 23,000 14,000 — 70,100 Shares Outstanding 17,000 16,100 23,000 23,000 14,000 Shares Authorized 17,000 16,100 23,000 14,000 — 99,929,900 100,000,000 70,100 2022 Shares Issued 17,000 16,100 23,000 14,000 — 70,100 Shares Outstanding 17,000 16,100 23,000 14,000 — 70,100 In November 2021, BHF issued depositary shares (the “Series D Depositary Shares”), each representing a 1/1,000th ownership interest in a share of BHF’s perpetuat l 4.625% Series D non-cumulative preferred stock (the “Series D Preferred Stock”) and in the aggregate representing 14,000 shares of Series D Preferred Stock, with a stated amount of $25,000 per share, for aggregate net cash proceeds of $339 million. Dividends, if declared, will be payable commencing on March 25, 2022 and will accrue and be payable quarterly, in arrears, at an annual rate of 4.625% on the stated amount per share. In connection with the issuance of the Series D Depositary Shares and the underlying Series D Preferred Stock, BHF incurred $11 million of issuance costs, which have been recorded as a reducd tion of additional paid-in capital. In November 2020, BHF issued depositary shares (the “Series C Depositary Shares”), each representing a 1/1,000th ownership interest in a share of BHF’s perpetuat l 5.375% Series C non-cumulative preferred stock (the “Series C Preferred Stock”) and in the aggregate representing 23,000 shares of Series C Preferred Stock, with a stated amount of $25,000 per share, for aggregate net cash proceeds of $558 million. Dividends, if declared, will accrue and be payable quarterly, in arrears, at an annual rate of 5.375% on the stated amount per share. In connection with the issuance of the Series C Depositary Shares and the underlying Series C Preferred Stock, BHF incurred $17 million of issuance costs, which have been recorded as a reducd tion of additional paid-in capital. In May 2020, BHF issued depositary shares (the “Series B Depositary Shares”), each representing a 1/1,000th ownership interest in a share of its perpetuat l 6.750% non-cumulative preferred stock, Series B (the “Series B Preferred Stock”) and in the aggregate representing 16,100 shares of Series B Preferred Stock, with a stated amount of $25,000 per share, forff aggregate net cash proceeds of $390 million. Dividends, if declared, will accrue and be payable quarterly, in arrears, at an annual rate of 6.750% on the stated amount per share. In connection with the issuance of the Series B Depositary Shares and the underlying Series B Preferred Stock, BHF incurred $13 million of issuance costs, which have been recorded as a reduction of additional paid-in capital. In March 2019, BHF issued depositary shares, each representing a 1/1,000th ownership interest in a share of BHF’s l 6.600% Series A non-cumulative preferred stock (the “Series A Preferred Stock”) and in the aggregate representing perpetuat aggregate net cash proceeds of 17,000 shares of Series A Preferred Stock, with a stated amount of $25,000 per share, forff $412 million. Dividends, if declared, will accruer and be payable quarterly, in arrears, at an annual rate of 6.600% on the stated amount per share. In connection with the issuance of the depositary shares and the underlying Series A Preferred Stock, BHF incurred $13 million of issuance costs, which have been recorded as a reducd tion of additional paid-in capital. 178 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 13. Equity (continued) The Series A Preferff red Stock, the Series B Preferred Stock, Series C Preferred Stock and the Series D Preferred Stock (together, the “Preferred Stock”) rank equally with each other. The Preferred Stock ranks senior to common stock with respect to the payment of dividends and distributions of assets upon liquidation, dissolution or winding-up of the Company. Holders of the Preferff red Stock are not entitled to any other amounts froff m the Company after they have received their full liquidation preference and do not have voting rights except in certain limited circumstances, including where dividends have not been paid in full for at least six dividend payment periods, whether or not such periods are consecutive. In such circumstances, the holders of the Preferred Stock, and, in turn, the underlying depositary shares, will have certain voting rights with respect to the election of additional directors to the BHF Board of Directors, as provided in the Certificff ate of Designations for each series of Preferred Stock. Each series of Preferff red Stock has a stated amount of $25,000 per share, is perper tual and has no maturity date. Dividends are payable, if declared, quarterly in arrears on the 25th day of March, June, September and December of each year at a specified annual rate on the stated amount per share applicable to each particular series. Dividends are recorded when declared. No dividends may be paid or declared on BHF’s common stock and BHF may not purchase, redeem, or otherwise acquire its common stock unless the full dividends for the latest completed dividend period on all outstanding Preferff red Stock have been declared and either paid or a sum sufficient forff the payment thereof has been set aside. ff The Preferff r a specifieff d optional redemption date appl red Stock is not convertible into, or exchangeable for, shares of any other class or series of stock or other d, securities of the Company or its subsu idiaries and is not subju ect to any mandatory redemption, sinking fund, retirement funff similar provisions. Each series of the Preferred Stock is redeemable at the Company’s option in whole or in purchase fund or icable to that series (March 25, 2024 for the Series A Preferred part on or afteff Stock, June 25, 2025 for the Series B Preferred Stock, December 25, 2025 for the Series C Preferred Stock and December 25, 2026 for the Series D Preferred Stock) at a redemption price equal to $25,000 per share, plus any accrued but unpaid dividends. Prior to the optional redemption date appl icable to each series of Preferred Stock, the Preferred Stock is redeemable at the Company’s option in whole but not in part within 90 days of the occurrence of (i) a specified rating agency apital event, in each case at a specified redemption price. event or (ii) a specified regulatory crr a a The per share and aggregate dividends declared for BHF’s preferff red stock by series were as follows: Series A B C D Total 2023 Years Ended December 31, 2022 2021 Per Share Aggregate Per Share Aggregate Per Share Aggregate $ $ $ $ 1,650.00 $ 1,687.52 1,343.76 1,156.24 $ (In millions, except per share data) $ $ $ $ 28 28 30 16 102 1,650.00 $ 1,687.52 1,343.76 1,262.23 $ $ $ $ $ 28 28 31 17 104 1,650.00 $ 1,687.52 1,474.40 — $ 28 27 34 — 89 See Note 20 forff information relating to preferred dividends declared subsu equent to December 31, 2023. Common StoSS ck Changes in common shares outstanding were as follows: Shares outstanding at beginning of year Shares issued Shares repurchased (1) Shares outstanding at end of year _______________ Years Ended December 31, 2023 2022 2021 68,278,068 665,146 (5,439,859) 63,503,355 77,870,072 639,980 (10,231,984) 68,278,068 88,211,618 510,919 (10,852,465) 77,870,072 (1) Includes shares of common stock withheld with respect to tax withholding obligations associated with the vesting of share-based compensation awards under the Company’s publicly announced benefit plans or programs. 179 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 13. Equity (continued) On November 16, 2023, BHF authorized the repurchase of up tu o $750 million of its common stock, which is in addition to the $1.2 billion total repurchases authorized in 2021. Repurchases under the November 16, 2023 authorization may be made through open market purchases, including pursuant to a 10b5-1 plan or pursuant to accelerated stock repurchase plans, or through privately negotiated transactions, froff m time to time at management’s discretion in accordance with applicable legal requirements. During the years ended December 31, 2023, 2022 and 2021, BHF repurchased 5,195,832 shares, 10,000,026 shares and to 10b5-1 plans for 10,703,165 shares, respectively, of its common stock through open market purchases pursuant $250 million, $488 million and $499 million, respectively. At December 31, 2023, BHF had $793 million remaining under its common stock repurchase program. Share-Based Compensation Plans ll The Company’s share-based compensation plans provide awards to employees and non-employee directors and may be in the forff m of non-qualifieff d stock options, stock appreciation rights, restricted stock, restricted stock units (“RSU”), performance shares, performance share units (“PSU”), or other share-based awards. Additionally, employees may purchase shares at a discount under an employee stock purchase plan (the “ESPP”). The aggregate number of authorized shares availabla e forff issuance at December 31, 2023 under the Company’s various share-based compensation plans was 4,939,296. The Company issues new shares to satisfy vested RSUs and PSUs, as well as stock option exercises. ff All share-based compensation is measured at fair value as of the grant date. The Company recognizes compensation expense related to share-based awards based on the number of awards expected to vest, which for some award types f the award, as estimated at the date of grant and actual represent the awards granted less expected forfeiturt es over the life off forfeitures for othe feiture rate is observed durd ing the term in which the awards are expensed, the Company recognizes any adjud stment necessary to reflect differences in actual experience in the period the award becomes payable or exercisabla e. Compensation expense related to share-based awards, which is included in other expenses, is principally related to the issuance of restricted stock units and performance share units with other costs incurred relating to stock options. The Company grants the majoa rity of each year’s awards in the firff st quarter of the year. r award types. Unless a material deviation froff m the assumed forff p Compensation ExpeEE p nse Relatll edtt to Share-Ba- p sed Compe CC nsationtt The folff lowing tabla e presents total share-based compensation expense: RSUs PSUs Employee stock purchase plan Total share-based compensation expense Income tax benefitff Years Ended December 31, 2023 2022 (In millions) 2021 $ $ $ 13 15 1 29 6 $ $ $ 13 8 1 22 5 $ $ $ 13 9 1 23 5 At December 31, 2023, unrecognized share-based compensation and the weighted average remaining recognition period was $10 million and 0.8 years, respectively, for RSUs and $17 million and 1.1 years, respectively, forff PSUs. Equityii Awards q y Restricted Stock UniUU ts RSUs are units that, if vested, are payable in shares of BHF common stock. The Company does not credit RSUs with dividend-equivalents as RSUs do not accruer r value of RSUs is based upon the closing price of shares on the date of grant. Most RSUs use graded vesting and vest in thirds on, or shortly r, the firff st three anniversaries of their grant date, while other RSUs vest in their entirety on the specified anniversary afteff of their grant date. Vesting is subju ect to continued service, except forff employees who meet specified age and service criteria, and in certain other limited circumstances. dividends. Accordingly, the estimated faiff 180 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 13. Equity (continued) Perforff mance Shar SS f e UniUU ts PSUs are units that, if vested, are multiplied by a performance factor to produce a finff al number of BHF common est at the end of a three-year perforff mance period. Vesting is subject to continued service, stock shares. PSUs cliff vff employees who meet specified age and service criteria, and in certain other limited circumstances. For except forff awards granted for pe rformance periods in progress through December 31, 2023, the performance factors are based on the achievement of net cash floff w to Brighthouse Holdings, LLC and statutory expense ratio targets over the respective performance period depending on year of issue. ff For awards granted for performance periods in progress through December 31, 2023, the vested PSUs will be multiplied by a performance factor up to a maximum payout of 150%. Assuming the Company has met certain threshold performance targets, the Compensation and Human Capital Committee of BHF’s Board of Directors will determine the performance factor at its discretion. The folff lowing tabla e presents a summary of PSU and RSU activity: RSUs PSUs Nonvested at January 1, 2023 Granted Performance factor adjud stment Forfeited Vested Nonvested at December 31, 2023 Units 628,870 243,136 Weighted Average Grant Date Fair Value 43.18 $ 56.35 $ — $ — 46.15 (4,188) $ 41.37 (350,850) $ 50.57 $ 516,968 Units 808,549 225,738 27,829 Weighted Average Grant Date Fair Value 42.30 $ 58.35 $ 35.84 $ — — $ 35.84 (241,939) $ 48.40 $ 820,177 The weighted average grant date fair value of RSUs granted during the years ended December 31, 2022 and 2021, was $47.72 and $41.81, respectively. The weighted average grant date fair value of PSUs granted during the years ended r value of RSUs that vested during each December 31, 2022 and 2021, was $48.06 and $41.26, respectively. The total faiff of the years ended December 31, 2023, 2022 and 2021 was $15 million. The total fair value of PSUs that vested durd ing the years ended December 31, 2023, 2022 and 2021, was $9 million, $7 million and $4 million, respectively. Stock OptO ions p Stock options represent the contingent right of award holders to purchase shares of BHF common stock at a stated price forff a limited time. All stock options have an exercise price equal to the closing price of a share on the date of grant and have a maximum term of ten years. Stock options granted are exercisabla e at a rate of one-third of each award on each employees who meet of the firff st three anniversaries of the grant date. Vesting is subject to continued service, except forff specified age and service criteria, and in certain other limited circumstances. The Company estimates the fair value of stock options on the date of grant using the Black-Scholes model. The significant assumptions the Company uses in its model include: expected volatility of the price of shares; risk-free rate of return; graded three-year vesting; and expected option life.ff At December 31, 2023, there were 187,371 stock options outstanding and exercisable with a weighted average exercise price of $53.47 and aggregate intrinsic value of $0, which expire on Februar ry 29, 2028. During the year ended December 31, 2023, there were no stock options granted, exercised, forfeited or expired. During the years ended December 31, 2022 and 2021, no stock options were granted or exercised. p y Employm ee Stoctt k Purchase PlaPP n ShaSS res Under the ESPP, eligible employees of the Company purchase common stock at a discount rate of 15% of the market price per share on the lesser of the first or last trading day of the offeri ng period. Employees purchase a variabla e number of shares of stock through payroll deducd tions elected just prior to the beginning of the offering period. During the years ended December 31, 2023, 2022 and 2021, employees purchased 77,598 shares, 74,734 shares and 73,999 shares, respectively. The weighted average per share faiff r value of the discount under the ESPP was $9.04, $8.54 and $10.06 during the years ended December 31, 2023, 2022 and 2021, respectively, which was recorded in other expenses. ff 181 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 13. Equity (continued) Stattt utortt y Fr inFF ancial Infon rmationtt t The states of domicile of the Company’s insurance subsu idiaries impose RBC requirements that were developed by the National Association of Insurance Commissioners (“NAIC”). Such requirements are used by regulators to assess the minimum amount of statutor apital and surplus needed for an insurance company to support its operations, based on its size and risk profile (referred to as “company action level RBC”). RBC is based on statutory financial statements and is calculated in a manner prescribed by the NAIC. The RBC ratio, which is the basis for de ompliance, is equal to icable company action level RBC. Companies below 100% of the company total adjusted capital (“TAC”) divided by the appl action level RBC are subju ect to corrective action. As of December 31, 2023, the annual RBC ratios forff the Company’s insurance subsidiaries were each in excess of 400%. termining regulatory crr y crr a ff The Company’s insurance subsu idiaries prepare statutory-basis financial statements in accordance with statutory t accounting practices prescribed or permitted by the insurance department of the state of domicile. t Statutor y arr ccounting principles diffeff r froff m GAAP primarily by charging policy acquisition costs to expense as incurred, bia lities using different actuarial assumptions, reporting of reinsurance agreements and establa ishing future policy benefit lia valuing investments and deferred tax assets on a differe ff ff nt basis. The tables below present amounts froff m certain of the Company’s insurance subsu idiaries, which are derived from the statutory-ba t sis finff ancial statements as filed with the insurance regulators. t Statutor y nrr et income (loss) was as folff lows: Company Brighthouse Life I ff New England Life I ff nsurance Company nsurance Company t Statutor y crr apital and surplus was as follows at: Company Brighthouse Life I ff New England Life I ff y nsurance Compan nsurance Company Years Ended December 31, State of Domicile 2023 2022 2021 Delaware Massachusetts $ $ (3,131) $ $ 41 (In millions) 1,373 83 $ $ (156) 40 December 31, 2023 2022 (In millions) 4,623 141 $ $ 6,349 192 $ $ The Company has a reinsurance subsidiary, BRCD, which reinsures risks including level premium term life and ULSG nsurance subsu idiaries. BRCD, with the explicit permission of the Delaware assumed froff m other Brighthouse Financial life i Insurance Commissioner (“Delaware Commissioner”), has included the value of credit-linked notes as admitted assets, which resulted in higher statutory capia tal and surplus of $11.0 billion and $10.7 billion for the years ended December 31, 2023 and 2022, respectively. ff The statutory net income (loss) of BRCD was ($300) million, ($208) million and $543 million for the years ended including the December 31, 2023, 2022 and 2021, respectively, and the combined statutor rr y c aforff ementioned prescribed practices, were $661 million and $696 million at December 31, 2023 and 2022, respectively. apital and surplr us, t 182 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 13. Equity (continued) Dividend Restrictiott ns The table below sets forff th the dividends permitted to be paid by certain of the Company’s insurance companies without a insurance regulatory arr ppr oval and dividends paid: Company Brighthouse Life I ff New England Life I nsurance Company (3) nsurance Company ff 2024 Permitted Without Approval (1) $ $ — $ $ 40 2023 2022 2021 Paid (2) Paid (2) Paid (2) (In millions) 266 84 $ $ — $ $ 38 550 44 ______________ a (1) Refleff cts dividend amounts that may be paid during 2024 without prior regulatory arr pprova l. However, because dividend tests may be based on dividends previously paid over rolling 12-month periods, if paid beforff e a specified date during a pprova 2024, some or all of such dividends may require regulatory arr l to the extent dividends were paid in 2023. a (2) Refleff cts all amounts paid, including those requiring regulatory arr pprova l. (3) Any payment of dividends in 2024 would be considered an extraordinary drr ividend subject to regulatory arr ppa roval dued to negative unassigned funds ff (surplrr us). ff Under the Delaware Insurance Law, Brighthouse Life I nsurance Company is permitted, without prior insurance learance, to pay a stockholder dividend as long as the amount of the dividend when aggregated with all other regulatory crr dividends in the preceding 12 months does not exceed the greater of: (ff i) 10% of its surplus to policyholders as of the end of the immediately preceding calendar year; or (ii) its net gain froff m operations for the immediately preceding calendar year (excluding realized capia tal gains), not including pro rata distributions of Brighthouse Life I nsurance Company’s own nsurance Company will be permitted to pay a stockholder dividend in excess of the greater of securities. Brighthouse Life I s notice of the declaration of such a dividend and the amount thereof with the Delaware such two amounts only if it fileff the Commissioner and the Delaware Commissioner either approve distribution within 30 days of its filing. In addition, any dividend that exceeds earned surplus (definff ed as “unassigned funds (surplus)”) as of the immediately preceding calendar year requires insurance regulatory a l. Under the Delaware a pprova Insurance Law, the Delaware Commissioner has broad discretion in determining whether the finff ancial condition of a stock life i s the distribution of the dividend or does not disapprove ff ff nsurance company would support the payment of such dividends to its stockholders. a a ff ff rr ff Under the Massachusetts State Insurance Law, NELICO is permitted, without prior insurance regulatory crr learance, to pay a stockholder dividend as long as the aggregate amount of the dividend, when aggregated with all other dividends paid in the preceding 12 months, does not exceed the greater of: ( i) 10% of its surplus to policyholders as of the end of the immediately preceding calendar year; or (ii) its net gain froff m operations for the immediately preceding calendar year, not including pro rata distributions of NELICO’s own securities. NELICO will be permitted to pay a dividend in excess of the greater of such two amounts only if it fileff s notice of the declaration of such a dividend and the amount thereof with the Massachusetts Commissioner of Insurance (the “Massachusetts Commissioner”) and the Massachusetts Commissioner either the distribution within 30 days of its filing. In addition, any approves the distribution of the dividend or does not disapprove r dividend that exceeds earned surplus ds (surplus)”) as of the last filed annual statutory statement (definff ed as “unassigned funff oval. Under the Massachusetts State Insurance Law, the Massachusetts Commissioner has requires insurance regulatory arr a ppr broad discretion in determining whether the financial condition of a stock life i ff nsurance company would support the payment of such dividends to its stockholders. a 183 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 13. Equity (continued) ff ff Under New York insurance laws, Brighthouse Life I the immediately preceding calendar year), in an amount up to the greater of: (ff nsurance Company of NY (“BHNY”) is permitted, without prior learance, to pay stockholder dividends to its parent in any calendar year based on one of two standards. insurance regulatory crr learance, to pay dividends out of earned surplrr us Under one standard, BHNY is permitted, without prior insurance regulatory crr (surplus),” excluding 85% of the change in net unrealized capital gains or losses (less (definff ed as positive “unassigned funds i) 10% of its surplus to capital gains tax), forff policyholders as of the end of the immediately preceding calendar year or (ii) its statutor et gain from operations for the immediately preceding calendar year (excluding realized capia tal gains), not to exceed 30% of surplus to policyholders as of the end of the immediately preceding calendar year. In addition, under this standard, BHNY may not, without prior insurance regulatory crr lowing a calendar year for which its net gain from operations, excluding realized capital gains, was negative. Under the second standard, if dividends are paid from a source other than earned surplus learance, pay an amount up to the lesser et gain of: (ff from operations for the immediately preceding calendar year (excluding realized capital gains). In addition, BHNY will be permitted to pay a dividend to its parent in excess of the amounts allowed under both standards only if it fileff s notice of its intention to declare such a dividend and the amount thereof with the New York Superintendent of Financial Services (the the “NY Superintendent”), and the NY Superintendent either approves the distribution of the dividend or does not disapprove dividend within 30 days of its filing. To the extent BHNY pays a stockholder dividend, such dividend will be paid to Brighthouse Life I i) 10% of its surplus to policyholders as of the end of the immediately preceding calendar year or (ii) its statutor learance, pay any dividends in any calendar year immediately folff nsurance Company, its direct parent and sole stockholder. , BHNY may, without prior insurance regulatory crr y nrr y nrr a ff rr ff t t Under BRCD’s plan of operations, no dividend or distribution may be made by BRCD without the prior approval of the ividends during the years ended December 31, 2023 and Delaware Commissioner. BRCD did not pay any extraordinary drr 2022. During the year ended December 31, 2021, BRCD paid an extraordinary drr ividend in the form of the settlement of affiff liated reinsurance balances of $400 million, invested assets of $197 million and cash of $3 million. During each of the years ended December 31, 2023, 2022 and 2021, BRCD paid cash dividends of $1 million to its preferred shareholders. 184 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 13. Equity (continued) Accumulated Other Comprehensive IncII ome (Lo(( ss) Information regarding changes in the balances of each component of AOCI was as follows: Unrealized Investment Gains (Losses), Net of Related Offsets (1) Unrealized Gains (Losses) on Derivatives Changes in Nonperforff mance Risk on Market Risk Benefits (In millions) Changes in Discount Rates on the Liability for Future Policy Benefitff s Other (2) Total 5,646 $ 115 $ — $ — $ (45) $ 5,716 Balance at December 31, 2020 Cumulative effect to change in accounting $ principle, net of income tax (3) Balance at January 1, 2021 OCI beforff e reclassifications Deferred income tax benefit (expense) (4) AOCI beforff e reclassifications, net of income tax Amounts reclassified from AOCI Deferred income tax benefit (expense) (4) Amounts reclassified from AOCI, net of income tax Balance at December 31, 2021 OCI beforff e reclassifications Deferred income tax benefit (expense) (4) AOCI beforff e reclassifications, net of income tax Amounts reclassified from AOCI Deferred income tax benefit (expense) (4) Amounts reclassified from AOCI, net of income tax Balance at December 31, 2022 OCI beforff e reclassifications Deferred income tax benefit (expense) (4) AOCI beforff e reclassifications, net of income tax Amounts reclassified from AOCI Deferred income tax benefit (expense) (4) Amounts reclassified from AOCI, net of income tax 1,980 7,626 (2,978) 625 5,273 15 (3) 12 5,285 (14,741) 3,074 (6,382) 238 (50) 188 (6,194) 2,149 (451) (4,496) 226 (47) 179 — 115 171 (35) 251 (15) 3 (12) 239 331 (48) 522 (22) 4 (18) 504 (276) 58 286 (11) 2 (9) (2,729) (2,729) (634) 133 (3,230) — — — (3,230) 2,344 (492) (3,180) (3,180) 1,242 (261) (2,199) — — — (2,199) 4,075 (856) (1,378) 1,020 — — — (1,378) (636) 133 (1,881) — — — — — — 1,020 (380) 80 720 — — — — (45) (3) 1 (47) (1) — (1) (48) (16) 4 (60) 2 — 2 (58) 9 (2) (51) 7 (1) 6 (3,929) 1,787 (2,202) 463 48 (1) — (1) 47 (8,007) 1,682 (6,278) 218 (46) 172 (6,106) 866 (182) (5,422) 222 (46) 176 (5,246) Balance at December 31, 2023 $ (4,317) $ 277 $ (1,881) $ 720 $ (45) $ _______________ (1) See Note 9 forff information on offsets to investments related to future policy benefits. ff (2) Includes OCI related to forff eign currency translation and definff ed benefit plan gains and losses. (3) See Notes 1 and 2 forff information on the adoption of ASU 2018-12. (4) The effeff cts of income taxes on amounts recorded to AOCI are also recognized in AOCI. These income tax effeff cts are released from AOCI when the related activity is reclassified into results from operations. 185 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 13. Equity (continued) Information regarding amounts reclassified out of each component of AOCI was as follows: mponents Net unrealized investment gains (losses): Net unrealized investment gains (losses) Net unrealized investment gains (losses) Net unrealized investment gains (losses), beforff e income tax Income tax (expense) benefit Net unrealized investment gains (losses), net of income tax Unrealized gains (losses) on derivatives - cash floff w hedges: Interest rate swaps Interest rate swaps Foreign currency swapsa Gains (losses) on cash floff w hedges, before income tax Income tax (expense) benefit Gains (losses) on cash floff w hedges, net of income tax Defined benefitff plans adjustment: Amortization of net actuat rial gains (losses) Amortization of definff ed benefit plans, beforff e income tax Income tax (expense) benefit Amortization of definff ed benefit plans, net of income tax Total reclassifications, net of income tax $ 14. Other Revenues and Other Expenses Othett r Revenues Amounts Reclassified from AOCI Years Ended December 31, 2023 2022 2021 (In millions) Consolidated Statements of Operations Locations $ (198) $ (28) (226) 47 (179) (186) $ (52) (238) 50 (188) (4) Net investment gains (losses) (11) Net derivative gains (losses) (15) 3 (12) 1 3 7 11 (2) 9 5 4 13 22 (4) 18 2 Net derivative gains (losses) 3 Net investment income 10 Net derivative gains (losses) 15 (3) 12 (7) (7) 1 (6) (176) $ (2) (2) — (2) (172) $ 1 1 — 1 1 The Company has entered into contracts with mutual funff “Funds”) whereby the Company is paid monthly or quarterly fees (“12b-1 fees”) and distributors of the Funds. The 12b-1 fees customer’s investment in a fund. are generally collected when due and are neither refundable nor able to offsff et future fees. managers, and their affiliates (collectively, the for providing certain services to customers ff are generally equal to a fixed percentage of the average daily balance of the The percentage is specifieff d in the contract between the Company and the Funds. Payments ds, fundff ff ff To earn these fees, the Company performs services such as responding to phone inquiries, maintaining records, providing information to distributors and shareholders about fund performance and providing training to account managers and sales agents. The passage of time refleff cts the satisfaction of the Company’s performance obligations to the Funds and is used to recognize revenue associated with 12b-1 fees. ff Other revenues consisted primarily of 12b-1 fees ff of $266 million, $292 million and $360 million forff the years ended December 31, 2023, 2022 and 2021, respectively, of which substantially all were reported in the Annuities segment. 186 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 14. Other Revenues and Other Expenses (continued) Othett r ExpeEE nses Information on other expenses was as folff lows: costs Compensation Contracted services and other labor a Transition services agreements Establa ishment costs Premium and other taxes, licenses and fees Separate account fees Volume related costs, excluding compensation, net of DAC capitalization Interest expense on debt Debt repayment costs Other Total other expenses ii Capia tali zaii tion of Do ACDD See Note 7 for additional inforff mation on the capia talization of DAC. Interest Expexx nse on Debt See Note 12 forff attribution of interest expense by debt issuance. 15. Employee Benefitff Plans BHF AHH ctivtt e Definff ed Contritt bui tion Plans ll Years Ended December 31, 2023 2022 2021 (In millions) 351 296 58 66 54 407 513 153 — 187 2,085 $ $ $ $ 418 312 32 — 61 366 540 153 — 95 1,977 $ $ 385 280 124 98 52 508 681 163 75 83 2,449 Brighthouse Services sponsors qualified and non-qualified defined contribution plans. For the years ended December 31, 2023, 2022 and 2021, the total employer contributions for the qualifieff d definff ed contribution plan were $19 million, $18 million and $18 million, respectively, and the total (benefit)ff expense recognition for the non-qualified defined contribution plans were $9 million, ($2) million and $9 million, respectively, all of which are reported in other expenses. NELIEE COII Legae cy Pension and Othett r Unfund UU eddd Benefie t Pii laPP ns d benefitff plans. These pension and other unfunded benefitff plans were amended to cease benefitff NELICO sponsors both a qualified and a non-qualified defined benefitff pension plan, a postretirement plan and other ls and are ff unfunde closed to new entrants. The qualified definff ed benefit pension plan had an accumulated benefitff obligation of $129 million and $128 million at December 31, 2023 and 2022, respectively. This plan was fulff ly funded at December 31, 2023 and 2022 with assets in excess of the accumulated benefitff obligation of $5 million and $3 million, respectively. The Company did not make any employer contributions to this qualified plan durd ing 2023 or 2022. accruarr The non-qualified defined benefitff pension plan and the postretirement plan had a combined accumulated benefitff obligation totaling $83 million and $82 million at December 31, 2023 and 2022, respectively. These amounts are unfunded. The other unfunded benefitff plans consist primarily of deferred compensation dued to former agents which represent r these other unfunded benefitff plans were $57 million and general unsecured liabia lities of NELICO. The amounts due unde d $56 million at December 31, 2023 and 2022, respectively. 187 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 15. Employee Benefitff Plans (continued) Although NELICO remains the legal obligor for these plans, an employee matters agreement (“EMA”) exists between the obligations under the non-qualifieff d and other BHF and MetLife,ff whereby MetLife has agreed to reimburse BHF forff d plans as payments are made. BHF established a receivable in the amount of the unfunded obligations due under ff unfunde each prior year’s benefit payments, claims and premiums these plans. MetLife is required to annually reimburse BHF forff under the NELICO plans that are listed in the EMA. The Company’s receivable under the EMA forff future total estimated benefit payments, claims and premiums was $155 million and $174 million at December 31, 2023 and 2022, respectively. The receivable is reported in premiums, reinsurance and other receivables. Increases and decreases to the EMA receivable are reported in other revenues. 16. Income Tax The provision for income tax was as folff lows: Current: Federal State and local u Subtot Deferred: Federal al Provision for income tax expense (benefit) Years Ended December 31, 2023 2022 (In millions) 2021 $ $ $ 7 12 19 (386) (367) $ (65) $ 12 (53) 901 848 $ 32 12 44 317 361 The reconciliation of the income tax provision at the statutory tax rate to the provision for income tax as reported was as follows: Years Ended December 31, 2023 2022 2021 $ (310) (Dollars in millions) $ 994 $ — (34) (9) — (5) — (18) 9 — (367) 25 % $ (76) (36) (20) (15) (6) (2) — 10 (1) 848 18 % $ 422 (4) (37) (16) 7 14 (56) 18 9 4 361 18 % t ate Tax provision at statutor r y r Tax effect of:ff Resolution of prior years Dividends received deducd tion Tax credits Change in uncertain tax benefitsff Return to provision Adjud stments to deferff Change in valuation allowance State tax, net of federal benefitff Other, net red tax Provision for income tax expense (benefit) Effeff ctive tax rate $ 188 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 16. Income Tax (continued) Deferred income tax represents the tax effeff ct of the differe ff nces between the book and tax bases of assets and liabia lities. Net deferred income tax assets and liabia lities consisted of the following at: Deferred income tax assets: Net unrealized investment losses Net operating loss carryforwards Investments, including derivatives Tax credit carryforwards Employee benefitsff Intangibles Other Total deferred income tax assets Less: Valuation allowance Total net deferred income tax assets Deferred income tax liabia lities: Policyholder liabia lities and receivables DAC Other Total deferred income tax liabia lities Net deferred income tax asset (liability) December 31, 2023 2022 (In millions) $ $ 1,074 1,845 213 190 29 64 — 3,415 1 3,414 863 657 1 1,521 1,893 $ $ 1,513 1,247 360 183 13 52 29 3,397 19 3,378 954 688 — 1,642 1,736 The folff lowing tabla e sets forff th the net operating loss carryforwards for tax purposes at December 31, 2023. Expiration 2032-2037 Indefinite Net Operating Loss Carryforwards (In millions) $ $ 2,011 6,774 8,785 The folff lowing tabla e sets forff th the general business credits and forff eign tax credits availabla e forff carryforward forff tax rr purpos es at December 31, 2023. Expiration 2024-2028 2029-2033 2034-2038 2039-2043 Indefinite Tax Credit Carryforwards General Business Credits Foreign Tax Credits (In millions) $ $ — $ — 20 5 — 5 2 $ 44 122 — — — 166 189 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 16. Income Tax (continued) The Company’s liabia lity for unrecognized tax benefitsff may increase or decrease in the next 12 months. A reasonable estimate of the increase or decrease cannot be made at this time. However, the Company continues to believe that the ultimate resolution of the pending issues will not result in a material change to its consolidated financial statements, although the resolution of income tax matters could impact the Company’s effect ive tax rate in the futur e. ff ff A reconciliation of the beginning and ending amount of unrecognized tax benefitsff was as folff lows: Balance at January 1, Additions for tax positions of prior years Reductions for tax positions of prior years Additions for tax positions of current year Reductions for tax positions of current year Settlements with tax authorities Lapsa es of statutt es of limitations Balance at December 31, ff Unrecognized tax benefits th at, if recognized would impact the effective rate Years Ended December 31, 2023 2022 (In millions) 2021 $ $ $ 19 — — — — — — 19 19 $ $ $ 35 6 — — — — (22) 19 19 $ $ $ 35 — — — — — — 35 35 The Company classifies interest accruerr d related to unrecognized tax benefits in inte rest expense, included in other expenses, while penalties are included in income tax expense. Interest related to unrecognized tax benefitff s was not significant. The Company had no penalties for each of the years ended December 31, 2023, 2022 and 2021. ff The Company is subju ect to examination by the Internal Revenue Service and other tax authorities in jurisdictions in which the Company has significant business operations. The income tax years under examination vary by j urisdiction and subsu idiary. The Company is no longer subject to federal, state or local income tax examinations for years prior to 2017. Management believes it has establa ished adequate tax liabia lities, and finff al resolution of any audits for the years 2017 and forward is not expected to have a material impact on the Company’s consolidated financial statements. rr Tax Saa haSS ringii Agreements For the periods prior to the Separation, BHF and certain of its subsu idiaries filed a consolidated federal income tax return nd its insurance and non-insurance subsidiaries. Current taxes (and the benefits of tax attributes such as losses) with MetLife aff are allocated to BHF, and its includable subsidiaries, under a tax sharing agreement with MetLife.ff This tax sharing agreement states that federal taxes are computed on a modified separate return basis with benefits for losses. For periods afteff r the Separation through the year ended December 31, 2022, BHF entered into two separate tax sharing agreements. Brighthouse Life I nsurance Company, BHNY and BRCD entered into a tax sharing agreement to join a consolidated federal income tax return. BHF and certain of its non-insurance subsidiaries entered into a tax sharing agreement to join a consolidated federal income tax return. The tax sharing agreements state that federal taxes are computed on a modified separate return basis with benefit forff losses. NELICO and the non-insurance subsidiaries of Brighthouse Life Insurance Company filed their own federal income tax returns. ff ff ff t BHF and certain of its subsu idiaries, including its insurance and reinsurance subsidiaries, intend to fileff a consolidated federal income tax return for the year ended December 31, 2023 and futur therance thereof, such parties intend to join a single tax sharing agreement, pursuant to which federal taxes are computed on a modified separate return basis with benefits for losses. e years. In furff ff 190 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 16. Income Tax (continued) Income Tax Taa raTT nsactions with Former Parent ff hat provides MetLife with the right to receive, as partial consideration forff In connection with the Separation, the Company entered into a tax receivables agreement (the “Tax Receivables its contribution of Agreement”) with MetLife t assets to BHF, future payments from BHF equal to 86% of the amount of cash savings, if any, in federal income tax that Brighthouse Financial actually, or is deemed to, realize as a result of the utilization of Brighthouse Financial, Inc. and its subsu idiaries’ net operating losses, capital losses, tax basis and amortization or depreciation deducd tions in respect of certain tax benefitff s it may realize as a result of certain transactions involved in the Separation. In connection with the Tax Receivables Agreement, the Company has a payable to MetLife off f $328 million at both December 31, 2023 and 2022, reported in other liabia lities. The Company also entered into a tax separation agreement with MetLife.ff Among other things, the tax separation roup. agreement governs the allocation between MetLife aff The tax separation agreement also allocates rights, obligations and responsibilities in connection with certain administrative matters relating to the preparation of tax returns and control of tax audits and other proceedings relating to taxes. For the years ended December 31, 2023 and 2022, MetLife pff aid Brighthouse Financial $0 and $7 million, respectively, and for the 81 million, under the tax separation agreement. At year ended December 31, 2021, Brighthouse Financial paid MetLife $ff December 31, 2023 and 2022, there was a current income tax receivable of $21 million and $19 million, respectively, related to this agreement. nd the Company of the responsibility for the taxes of the MetLife gff 17. Earnings Per Common Share The calculation of earnings per common share was as folff lows: Years Ended December 31, 2023 2022 2021 (In millions, except share and per share data) Net income (loss) availabla e to Brighthouse Financial, Inc.’s common shareholders $ (1,214) $ 3,775 $ 1,554 Weighted average common shares outstanding — basic Dilutive effect of share-based awards Weighted average common shares outstanding — diluted 66,013,645 — 66,013,645 72,970,249 610,919 73,581,168 83,783,664 682,493 84,466,157 Earnings per common share: Basic Diluted $ $ (18.39) $ (18.39) $ 51.73 51.30 $ $ 18.54 18.39 For the year ended December 31, 2023, basic loss per common share equaled diluted loss per common share. The diluted shares were not included in the per share calculation for this period as the inclusion of such shares would have an antidilutive effeff ct. For the years ended December 31, 2022 and 2021, weighted average shares used forff calculating diluted earnings per common share excludes 187,371 of out-of-the-money stock options, as the inclusion of such shares would be antidilutive to the earnings per common share calculation dued to the average share price for the years ended December 31, 2022 and 2021. See Note 13 forff further inforff mation on share-based compensation plans. 191 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 18. Contingencies, Commitments and Guarantees Contintt gencies Litigii ationttg The Company is a defenff dant in a number of litigation matters. In some of the matters, large or indeterminate amounts, including punitive and treble damages, are sought. Modern pleading practice in the U.S. permits considerable variation in the assertion of monetary damages or other relief. Jurisdictions may permit claimants not to specify the monetary damages sought or may permit claimants to state only that the amount sought is sufficient to invoke the jurisdiction of the trial court. to allege monetary damages in amounts well exceeding reasonably possible In addition, jurisdictions may permit plaintiffsff verdicts in the jurisdiction forff l experience of the Company in litigating or resolving through settlement numerous claims over an extended period of time, demonstrates to management that the monetary relief which may be specified in a lawsuit or claim bears little relevance to its merits or disposition value. similar matters. This variabia lity in pleadings, together with the actuat The Company also receives and responds to subpoena s or other inquiries seeking a broad range of information fromff various state and federal regulators, agencies and officials. The issues involved in information requests and regulatory matters vary widely, but can include inquiries or investigations concerning the Company’s compliance with applicable insurance and other laws and regulations. The Company cooperates in these inquiries. u Due to the vagaries of litigation, the outcome of a litigation matter and the amount or range of potential loss at particular points in time may normally be difficult to ascertain. Uncertainties can include how fact finders will evaluate tiveness of witness testimony, and how trial and appellate courts will documentary evidence and the credibility and effecff apply the law in the context of the pleadings or evidence presented, whether by motion practice, or at trial or on appe al. Disposition valuations are also subject to the uncertainty of how opposing parties and their counsel will themselves view the relevant evidence and applicable law. a The Company establa ishes liabia lities forff oss contingencies when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. It is possible that some matters could require the ls in amounts that could not be estimated at Company to pay damages or make other expenditures or establish accruarr December 31, 2023. litigation and regulatory l rr Matters as to Which an EstEE imate CanCC Be Made For some loss contingency matters, the Company is abla e to estimate a reasonably possible range of loss. For such l has been made. In addition to e and reasonably estimable losses, as of December 31, 2023, the Company estimates the mately $10 million. matters where a loss is believed to be reasonably possible, but not probable, no accruarr amounts accruerr d for probabl a aggregate range of reasonably possible losses to be up to a pproxi u ff Matters as to Which an EstEE imate Cannot CC Be Made For other matters, the Company is not currently able to estimate the reasonably possible loss or range of loss. The Company is often unable to estimate the possible loss or range of loss until developments in such matters have provided sufficient inforff mation to support an assessment of the range of possible loss, such as quantification of a damage demand ings by the court on motions or from plaintiffsff appeals, analysis by experts, and the progress of settlement negotiations. On a quarterly and annual basis, the Company reviews relevant inforff mation with respect to litigation contingencies and updates its accruar ls, disclosures and estimates of reasonably possible losses or ranges of loss based on such reviews. , discovery from other parties and investigation of fact l allegations, rulrr uat ff Sales Practices Claims Over the past several years, the Company has faced nquiries and investigations, alleging improper marketing or sales of individual life i ff nsurance policies, annuities or other products. The Company continues to defend vigorously against the claims in these matters. The Company believes adequate provision has been made in its all probable and reasonably estimabla e losses forff consolidated financial statements forff claims and regulatory i sales practices matters. ff rr 192 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 18. Contingencies, Commitments and Guarantees (continued) Cost of Insurance Class Actions f i eeks to certify aff II e Life I nsuranc ff nsurance Company. Plaintiff sff Richard A. NewNN ton v. Brighthous (U.S. District Court, Northern District of Georgia, m e ComCC pany Atlanta Division, filed May 8, 2020). Plaintiff has fileff d a purported class action lawsuit against Brighthouse Life as the owner of a universal life insurance policy issued by Travelers Insurance Company, Insurance Company. Plaintiff wff a predecessor to Brighthouse Life I class of all persons who own or owned ff life i nsurance policies issued where the terms of the life insurance policy provide or provided, among other things, a ff guarantee that the cost of insurance rates would not be increased by more than a specified percentage in any contract ors and should have decreased over year. Plaintiff also alleges that cost of insurance charges were based on improper fact time due to improving mortality but did not. Plaintiff alleges, among other things, causes of action for br each of contract, ession and concealment, and violation of the Georgia Racketeer Influenced and Corruptu Organizations Act. fraud, suppru eeks to recover damages, including punitive damages, interest and treble damages, attorneys’ fees, and ff Plaintiff s nsurance Company fileff d a motion to dismiss in June 2020, which was injunctive and declaratory r granted in part and denied in part in March 2021. Plaintiff wff as granted leave to amend the complaint. On January 18, 2023, the plaintiff filed a motion on consent to amend the second amended class action complaint to narrow the scope of nsurance policies issued in Georgia. The motion was granted the class sought to those persons who own or owned life i on January 23, 2023, and the third amended class action complaint was filed on January 23, 2023. The Company intends to vigorously defend this matter. elief. Brighthouse Life I rr ff ff ff ff gg m eeks to certify a class of similarly situated owners of universal life i nsII urance ComCC pany ted class action lawsuit against Brighthouse Life I (U.S. District Court, Southern District of New York, filed e Life I Lawrence Martin v. Brighthous ff nsurance Company. Plaintiff r April 6, 2021). Plaintiff has filff ed a purpor is the owner of a universal life insurance policy issued by Travelers Insurance Company, a predecessor to Brighthouse ff nsurance policies Life Insurance Company. Plaintiff sff issued or administered by defenff dants and alleges that cost of insurance charges were based on improper fact ors and ff lleges, among other things, causes of should have decreased over time dued eeks action for br ff to recover compensatory d t. nsurance Company fileff d a motion to dismiss in June 2021, which was denied in February 2022. ff Brighthouse Life I nsurance Company of NY was initially named as a defendant when the lawsuit was filff ed, but was ff Brighthouse Life I dismissed as a defendant, without prejudice, in April 2022. The Company intends to vigorously defend this matter. each of contract, breach of the covenant of good faith and faiff amages, attorney’s fees, interest, and equitabla e relief including a construcr to improving mortality but did not. Plaintiff aff r dealing, and unjust enrichment. Plaintiff sff tive trusr rr ff MOVEit Data SecSS urity I y tt ncII idendd t Litigation g r Kennedy v. Progress SofSS twff are CorCC por ation, et al. (U.S. District Court, District of Massachusetts, filff ed October 3, 2023). BHF has been named as a defendant in a purported class action lawsuit. The action relates to a data security incident at an alleged third-party vendor, PBI Research Services (“PBI”), and allegedly involves the MOVEit file system that PBI uses in its provision of services (“MOVEit Incident”). As it relates to BHF, plaintiff sff transferff eeks to subcu lass of persons whose private information was allegedly maintained by BHF and accessed or acquired in certify aff connection with the MOVEit Incident. Plaintiff aff lleges, among other things, that BHF negligently chose to utilize PBI to store and transferff ted class members’ private information despite PBI’s use of the MOVEit software which plaintiff contends contained security vulnerabia lities. The complaint asserts claims against BHF for negligence, negligence per se, and unjust enrichment, and plaintiff seeks declaratory arr nd injunctive relief, damages, attorneys’ fees and prejue dgment interest. BHF intends to vigorously defend this matter. and purpor plaintiff’sff ff r Summaryy Various litigations, claims and assessments against the Company, in addition to those discussed previously and those in the Company’s consolidated financial statements, have arisen in the course of the Company’s otherwise provided forff business, including, but not limited to, in connection with its activities as an insurer, investor and taxpayer. Further, state insurance regulatory a and state authorities regularly make inquiries and conduct investigations concerning the Company’s compliance with appl icable insurance and other laws and regulations. uthorities and other ff federal a rr 193 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 18. Contingencies, Commitments and Guarantees (continued) It is not possible to predict the ultimate outcome of all pending investigations and legal proceedings. In some of the matters referred to previously, large or indeterminate amounts, including punitive and treble damages, are sought. Although, in light of these considerations, it is possible that an adverse outcome in certain cases could have a material effeff ct upon the Company’s finff ancial position, based on information currently known by the Company’s management, in its opinion, the outcomes of such pending investigations and legal proceedings are not likely to have such an effecff t. However, given the large or indeterminate amounts sought in certain of these matters and the inherent unpredictabia lity of t on the litigation, it is possible that an adverse outcome in certain matters could, from time to time, have a material effecff Company’s consolidated net income or cash floff ws in particular quarterly or annual periods. Othett g r Loss ConCC tingii encies rr As with litigation and regulatory l oss contingencies, the Company considers establishing liabia lities for loss rties to contractual contingencies associated with disputes or other matters involving third parties, including counterpar arrangements entered into by the Company (e.g., third-party vendors and reinsurers), as well as with tax or other authorities (“other loss contingencies”). The Company establa ishes liabia lities forff such other loss contingencies when it is probable that a loss will be incurred and the amount of the loss can be reasonably estimated. In matters where it is not probable, but is reasonably possible that a loss will be incurred and the amount of loss can be reasonably estimated, such losses or range of losses are disclosed, and no accruar ence of sufficient information to support an assessment of the reasonably possible loss or range of loss, no accrual is made and no loss or range of loss is disclosed. On a quarterly basis, the Company reviews relevant inforff mation with respect to other loss contingencies and, when applicable, upda tes its accruar ls, disclosures and estimates of reasonably possible losses or ranges of loss based on such reviews. l is made. In the absa u t rty has made a request to arbir In the matters where the Company’s subsidiaries are acting as the reinsured or the reinsurer, such matters have or reinsured benefitff calculations, and, in certain of such ff trate. For tax-related matters, this has involved disputes with taxing g positions and any potential assessments related thereto. As of December 31, certain other the aforementioned matters. For certain other the Company may not currently be able to estimate the reasonably possible loss or range of loss until involved assertions by third parties primarily related to rates, fees matters, the counterpar authorities, ongoing audits, evaluation of filinff 2023, the Company estimates the range of reasonably possible losses in excess of the amounts accruerr d forff loss contingencies to be froff m zero up to a a pproxi matters, developments in such matters have provided suffiff cient inforff mation to support an assessment of such loss. mately $200 million forff u During the second quarter of 2022, $140 million, which is reported in other expenses. the Company settled a reinsurance-related matter with a third party forff Commitments g g Mortgage tt Loan Commitmett nts The Company commits to lend funds ff under mortgage loan commitments. The amounts of these mortgage loan commitments were $377 million and $247 million at December 31, 2023 and 2022, respectively. Commitments t tt o Ftt undFF Partnett rship Investmett p nts,tt Bank Creditdd Facilitie ii , CC s and Private Ctt p orporat e Btt ond InvII estments The Company commits to fund partnership investments and to lend funds under bank credit faci lities and private corporate bond investments. The amounts of these unfunded commitments were $1.4 billion and $1.9 billion at December 31, 2023 and 2022, respectively. ff 194 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 18. Contingencies, Commitments and Guarantees (continued) Guarantees ff In the normal course of its business, the Company has provided certain indemnities, guarantees and commitments to third e. In the context of acquisition, disposition, parties such that it may be required to make payments now or in the futur investment and other transactions, the Company has provided indemnities and guarantees, including those related to tax, environmental and other specific liabia lities and other indemnities and guarantees that are triggered by, among other things, breaches of representations, warranties or covenants provided by the Company. In addition, in the normal course of business, rties in contracts with triggers similar to the foregoing, as well as for the Company provides indemnifications to counterparr certain other liabia lities, such as third-party lawsuits. These obligations are often subju ect to time limitations that vary in icable statutt es of limitation. In duration, including contractuat l limitations and those that arise by operation of law, such as appl some cases, the maximum potential obligation under the indemnities and guarantees is subju ect to a contractuat l limitation ranging from less than $1 million to $92 million, with a cumulative maximum of $98 million, while in other cases such limitations are not specifieff d or appl icable. Since certain of these obligations are not subju ect to limitations, the Company does not believe that it is possible to determine the maximum potential amount that could become due under these guarantees in the futur e. Management believes that it is unlikely the Company will have to make any material payments under these ff indemnities, guarantees, or commitments. a a In addition, the Company indemnifies its directors and offiff cers as provided in its charters and bylaws. Also, the Company indemnifieff s its agents for liabia lities incurred as a result of their representation of the Company’s interests. Since these indemnities are generally not subju ect to limitation with respect to duration or amount, the Company does not believe that it is possible to determine the maximum potential amount that could become due under these indemnities in the future. The Company’s recorded liabia lities were $1 million at both December 31, 2023 and 2022 for indemnities, guarantees and commitments. 195 Brighthouse Financial, Inc. Notes to the Consolidated Financial Statements (continued) 19. Quarterly Results of Operations (Unaudited) As described in Note 1, the Company adopted LDTI effeff ctive January 1, 2023. LDTI resulted in significant changes to long-duration insurance contracts. The transition date was insurance liabia lity ied to existing carrying amounts on the transition date. The unaudited the measurement, presentation and disclosure requirements forff January 1, 2021. MRB changes were required to be appl a assumption updates and DAC amortization were appl quarterly results of operations for 2023 and 2022, which include the impacts of LDTI, are summarized in the table below: ied on a retrospective basis, while the changes forff a Three Months Ended March 31, June 30, September 30, December 31, (In millions, except per share data) 2023 Total revenues Total expenses Net income (loss) Less: Net income (loss) attributable to noncontrolling interests Net income (loss) attributable to Brighthouse Financial, Inc. Less: Preferred stock dividends Net income (loss) availabla e to Brighthouse Financial, Inc.’s common shareholders Basic earnings per common share (1) Diluted earnings per common share (1) 2022 Total revenues Total expenses Net income (loss) Less: Net income (loss) attributable to noncontrolling interests Net income (loss) attributable to Brighthouse Financial, Inc. Less: Preferred stock dividends Net income (loss) availabla e to Brighthouse Financial, Inc.’s common shareholders Basic earnings per common share (1) Diluted earnings per common share (1) _______________ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 1,284 1,937 $ (497) $ $ 2 (499) $ $ 26 (525) $ (7.72) $ (7.72) $ 2,013 10 1,587 2 1,585 27 1,558 20.27 20.11 $ $ $ $ $ $ $ $ $ (1) See Note 17 for additional inforff mation on the calculation of EPS. 20. Subsequent Event Preferred StoSS ck Dividend $ 263 500 $ (175) $ — $ (175) $ $ 25 (200) $ (3.01) $ (3.01) $ 3,866 1,689 1,745 $ $ $ — $ $ $ 1,745 26 1,719 23.04 22.91 $ $ $ 1,170 580 481 2 479 26 453 6.92 6.89 1,121 609 415 2 413 25 388 5.42 5.39 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 1,400 2,574 (916) 1 (917) 25 (942) (14.70) (14.70) (127) (167) 137 1 136 26 110 1.61 1.59 On Februarr ry 15, 2024, BHF declared a dividend of $412.50 per share on its Series A Preferred Stock, $421.88 per share on its Series B Preferred Stock, $335.94 per share on its Series C Preferff red Stock and $289.06 per share on its Series D Preferred Stock for a total of $26 million, which will be paid on March 25, 2024 to stockholders of record as of March 10, 2024. 196 Brighthouse Financial, Inc. Schedule I Consolidated Summary of Investments — Other Than Investments in Related Parties December 31, 2023 (In millions) Cost or Amortized Cost (1) Estimated Fair Value Amount at Which Shown on Balance Sheet $ $ $ 8,656 4,019 3,795 1,077 47,426 64,973 21,736 422 87,131 33 63 — — 96 22,508 1,331 4,946 1,169 4,409 121,590 8,419 3,874 3,470 1,032 43,569 60,364 20,246 381 80,991 33 67 — 2 102 $ $ 8,419 3,874 3,470 1,032 43,569 60,364 20,246 381 80,991 33 67 — 2 102 22,508 1,331 4,946 1,169 4,409 115,456 Types of Investments Fixed maturt ity securities: Bonds: U.S. government and agency State and political subdivi u sion Publu ic utilities Foreign government All other corporate bonds Total bonds Mortgage-backed and asset-backed securities Redeemable preferred stock Total fixff ed maturity securities Equity securities: Non-redeemable preferred stock Common stock: Industrial, miscellaneous and all other Banks, trust and insurance companies Publu ic utilities Total equity securities Mortgage loans Policy loans Limited partnerships and LLCs Short-term investments Other invested assets Total investments _______________ (1) Cost or amortized cost for fixff ed maturity securities represents original cost reducd ed by impairments that are charged to amortization of premiums or accretion of discounts; for mortgage loans, cost represents amortization of premiums or accretion of limited partnerships and LLCs, cost represents original earnings and adjusted forff original cost reduced by repayments and valuation allowances and adjusted forff discounts; for equity securities, cost represents original cost; forff cost adjud sted for equity in earnings and distributions. 197 Brighthouse Financial, Inc. Schedule II Condensed Financial Inforff mation (Parent Company Only) December 31, 2023 and 2022 (In millions, except share and per share data) Condensed Balance Sheets Assets Investments: Fixed maturt ity securities availabla e-for-sale, at estimated faiff r value (amortized cost: $106 and $0, respectively; allowance forff credit losses of $0 and $0, respectively) Short-term investments, principally at estimated faiff Investment in subsu idiary Total investments r value Cash and cash equivalents Premiums and other receivables Current income tax recoverabla e Deferred income tax asset Other assets Total assets Liabilities and Stockholders’ Equity Liabilities Long-term and short-term debt Deferred income tax liabia lity Other liabia lities Total liabia lities Stockholders’ Equity Preferred stock, par value $0.01 per share; 1,753 aggregate liquidation preference Common stock, par value $0.01 per share; 1,000,000,000 shares authorized; 122,818,568 and 122,153,422 shares issued, respectively; 63,503,355 and 68,278,068 shares outstanding, respectively Additional paid-in capia tal Retained earnings (deficit) Treasury sr Accumulated other comprehensive income (loss) ff tock, at cost; 59,315,213 and 53,875,354 shares, respectively Total stockholders’ equity Total liabia lities and stockholders’ equity See accompanying notes to the condensed financial inforff mation. 198 2023 2022 $ $ $ $ $ $ $ 106 580 7,710 8,396 512 175 78 — 5 9,166 3,859 17 347 4,223 — 763 8,297 9,060 224 200 3 33 5 9,525 3,643 — 349 3,992 — — 1 14,004 (1,507) (2,309) (5,246) 4,943 9,166 $ 1 14,075 (395) (2,042) (6,106) 5,533 9,525 Brighthouse Financial, Inc. Schedule II Condensed Financial Inforff mation (continued) (Parent Company Only) For the Years Ended December 31, 2023, 2022 and 2021 (In millions) Condensed Statements of Operations Revenues Net investment income Other revenues Net investment gains (losses) Net derivative gains (losses) Total revenues Expenses Debt repayment costs Other expenses Total expenses Income (loss) before provision for income tax and equity in earnings (losses) of subsu idiaries Provision for income tax expense (benefit) Income (loss) before equity in earnings (losses) of subsu idiaries Equity in earnings (losses) of subsu idiaries Net income (loss) Less: Preferred stock dividends Net income (loss) availabla e to common shareholders Comprehensive income (loss) $ $ $ $ 38 — — 10 48 $ 14 (3) (2) (7) 2 — 192 192 (144) (30) (114) (998) (1,112) 102 (1,214) $ (252) $ — 168 168 (166) (35) (131) 4,010 3,879 104 3,775 $ (2,274) $ 1 13 2 2 18 77 179 256 (238) (50) (188) 1,831 1,643 89 1,554 (97) See accompanying notes to the condensed financial inforff mation. 199 Brighthouse Financial, Inc. Schedule II Condensed Financial Inforff mation (continued) (Parent Company Only) For the Years Ended December 31, 2023, 2022 and 2021 (In millions) ity securities Condensed Statements of Cash Flows Cash flows froff m operating activities Net income (loss) Equity in (earnings) losses of subsidiaries Distributions from subsidiary Other, net Net cash provided by (used in) operating activities Cash flows froff m investing activities Sales, maturities and repayments of fixed maturt Purchases of fixff ed maturity securities Cash received in connection with freestanding derivatives Cash paid in connection with freestanding derivatives Net change in short-term investments Net cash provided by (used in) investing activities Cash flows froff m finff ancing activities Long-term and short-term debt issued Long-term and short-term debt repaid Debt repayment costs Preferred stock issued, net of issuance costs Dividends on preferred stock Treasury sr Financing element on certain derivative instrumrr Other, net Net cash provided by (used in) finff ancing activities Change in cash and cash equivalents Cash and cash equivalents, beginning of year Cash and cash equivalents, end of year Supplemental disclosures of cash flow information Net cash paid (received) for: tock acquired in connection with share repurchases ents and other derivative related transactions, net Interest Income tax 2023 2022 2021 $ (1,112) $ 998 350 (24) 212 $ 3,879 (4,010) — 2 (129) 1,643 (1,831) 310 122 244 — (106) 30 (6) 211 129 753 (439) — — (102) (250) (1) (14) (53) 288 224 512 $ — — 41 (5) 408 444 961 (811) — — (104) (488) (7) (14) (463) (148) 372 224 $ 46 — 7 (2) 162 213 1,464 (1,484) (71) 339 (89) (499) — (7) (347) 110 262 372 176 $ (6) $ 155 $ (24) $ 158 (86) $ $ $ See accompanying notes to the condensed financial inforff mation. 200 Brighthouse Financial, Inc. Schedule II Condensed Financial Inforff mation (continued) (Parent Company Only) 1. Basis of Presentation The condensed financial inforff mation of Brighthouse Financial, Inc. (the “Parent Company” or “BHF”) should be read in conjunction with the consolidated financial statements of Brighthouse Financial, Inc. and its subsu idiaries and the notes thereto (the “Consolidated Financial Statements”). These condensed unconsolidated financial statements refleff ct the results of operations, finff ancial position and cash floff ws for Brighthouse Financial, Inc. Investments in subsidiaries are accounted for using the equity method of accounting. Certain amounts in the prior years’ condensed financial statements of the Parent Company have changed. See Note 1 of information regarding the adoption of new guidance on long-duration the Notes to the Consolidated Financial Statements forff contracts as of January 1, 2023. The preparation of these condensed unconsolidated financial statements in conformity with GAAP requires management to adopt accounting policies and make certain estimates and assumptions. The most important of these estimates and r value measurements, identifiaff bla e intangible assets and the provision for potential losses that assumptions relate to the faiff may arise from litigation and regulatory prr roceedings and tax audits, which may affect the amounts reported in the condensed unconsolidated financial statements and accompanying notes. Actuat r froff m these estimates. l results could diffeff 2. Investment in Subsidiary During the year ended December 31, 2023, BHF received cash distributions of $350 million and non-cash distributions of $100 million froff m Brighthouse Holdings, LLC (“BH Holdings”) and did not make any capital contributions to BH Holdings. Cash distributions received durd ing the year ended December 31, 2023 primarily related to $266 million of ordinary nsurance Company to BH Holdings. The non-cash distributions received related to cash dividends paid by Brighthouse Life I reductions of short-term intercompany loans of $50 million froff m Brighthouse Services, LLC to BH Holdings (which was then contributed to BHF) and an additional $50 million froff m BH Holdings to BHF. ff During the year ended December 31, 2022, BHF received non-cash distributions of $350 million from BH Holdings and did not make any capital contributions to BH Holdings. The non-cash distributions received related to reductions of short- term intercompany loans of $250 million from Brighthouse Services, LLC to BH Holdings (which was then contributed to BHF) and an additional $100 million froff m BH Holdings to BHF. During the year ended December 31, 2021, BHF received cash distributions of $310 million froff m BH Holdings and did not make any capital contributions to BH Holdings. Distributions received durd ing the year ended December 31, 2021 primarily related to $550 million of ordinary crr ash dividends paid by Brighthouse Life I nsurance Company to BH Holdings. ff 3. Long-term and Short-term Debt Long-term and short-term debt outstanding was as folff lows at: Stated Interest Rate Maturity 2023 2022 December 31, Senior notes — unaffiliated Senior notes — unaffiliated Senior notes — unaffiliated Senior notes — unaffiliated u Junior subordina ted debentures — unaffiliated Total long-term debt (1) Short-term intercompany loans Total long-term and short-term debt (1) 3.700% 5.625% 4.700% 3.850% 6.250% 2027 2030 2047 2051 2058 $ $ $ (In millions) 756 614 1,001 397 364 3,132 727 3,859 $ 755 614 1,001 396 364 3,130 513 3,643 _______________ (1) Includes unamortized debt $32 million forff respectively. the senior notes and junior subordina issuance costs, discounts and premiums, as appl totaling net $30 million and ted debentures on a combined basis at December 31, 2023 and 2022, icable, u a 201 Brighthouse Financial, Inc. Schedule II Condensed Financial Inforff mation (continued) (Parent Company Only) The aggregate maturt ities of long-term and short-term debt at December 31, 2023 were $727 million in 2024, $0 in each of 2025 and 2026, $757 million in 2027, $0 in 2028, and $2.4 billion thereafteff r. Interest expense related to long-term and short-term debt of $178 million, $155 million and $159 million forff the years ended December 31, 2023, 2022 and 2021, respectively, is included in other expenses. Senior Notes and Junior Subordindd atedtt Debentures See Note 12 of the Notes to the Consolidated Financial Statements forff information regarding the unaffiliated senior notes and junior suboru dinated debentures. Creditdd Faciliti ii es See Note 12 of the Notes to the Consolidated Financial Statements forff information regarding BHF’s credit facff ilities. Short-ttt ertt m I ntII ertt company Ln p y rr oans r the purpos BHF, as borrower, has a short-term intercompany loan agreement with certain of its non-insurance subsidiaries, as lenders, forff es of facilitating the management of the availabla e cash of the borrower and the lenders on a short- term and consolidated basis. Such intercompany loan agreement allows management to optimize the effiff cient use of and maximize the yield on cash between BHF and its subsu idiary lenders. 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 variabla e rate, payable monthly. During the years ended December 31, 2023, 2022 and 2021, BHF borrowed $753 million, $1.0 billion and $1.1 billion, respectively, from certain of its non-insurance subsidiaries and repaid $439 million, $811 million and $805 million of such borrowings during the years ended December 31, 2023, 2022 and 2021, respectively. The weighted average interest rate on short-term intercompany loans outstanding at December 31, 2023, 2022 and 2021 was 4.73%, 3.73% and 0.05%, respectively. Intercompany Ln p y q iquidityii Faciliii ties y ii BHF has established intercompany liquidity facilities with certain of its insurance and non-insurance subsidiaries to provide short-term liquidity within and across the combined group of companies. 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 froff m each other, subject to certain maximum limits for a term of up to 364 days, depending on the agreement. During the years ended December 31, 2023, 2022 and 2021, there were no borrowings or repayments by BHF under these facilities. 202 Brighthouse Financial, Inc. Schedule III Consolidated Supplementary Insurance Inforff mation December 31, 2023 and 2022 (In millions) DAC and VOBA Future Policy Benefits and Other Policy-Related Balances Policyholder Account Balances Unearned Premiums (1)(2) Unearned Revenue (1) $ $ $ $ 4,111 758 3 — 4,872 4,234 846 4 — 5,084 $ $ $ $ 4,024 6,549 19,421 6,411 36,405 3,780 6,266 18,688 6,861 35,595 $ $ $ $ 60,929 2,856 6,694 10,589 81,068 53,410 3,021 6,933 10,163 73,527 $ $ $ $ — $ 11 — 5 16 $ — $ 10 — 5 15 $ 67 356 612 — 1,035 74 356 488 — 918 Segment 2023 Annuities Life Run-off ff Corporate & Other Total 2022 Annuities Life Run-off ff Corporate & Other Total _______________ (1) Amounts are included in the future policy benefitff s and other policy-related balances column. (2) Includes premiums received in advance. 203 Brighthouse Financial, Inc. Schedule III Consolidated Supplementary Insurance Information (continued) December 31, 2023, 2022 and 2021 (In millions) Premiums and Universal Life and Investment-Type Product Policy Fees Net Investment Income (1) Policyholder Benefitsff and Claims and Interest Credited to Policyholder Account Balances Amortization of DAC and VOBA Other Expenses $ $ $ $ $ $ 1,875 775 4 73 — 3,123 1,831 756 10 5 — 3,097 2,297 903 4 87 — 3,687 $ $ $ $ $ $ 2,546 431 1,115 572 4,664 2,240 438 1,146 314 4,138 2,207 696 1,900 78 4,881 $ $ $ $ $ $ 1,534 991 1,588 388 4,501 1,277 875 1,216 163 3,531 1,147 894 1,953 21 4,015 $ $ $ $ $ $ 516 104 — — 620 515 114 — — 629 513 124 — — 637 $ $ $ $ $ $ 1,391 203 167 216 1,977 1,417 130 293 245 2,085 1,654 193 191 411 2,449 gment 2023 Annuities Life Run-off ff Corporate & Other Total 2022 Annuities Life ff Run-off Corporate & Other Total 2021 Annuities Life Run-off ff Corporate & Other Total _______________ (1) See Note 3 of the Notes to the Consolidated Financial Statements forff the basis of allocation of net investment income. 204 Brighthouse Financial, Inc. Schedule IV Consolidated Reinsurance December 31, 2023, 2022 and 2021 (Dollars in millions) oss Amount Ceded Assumed Net Amount % Amount Assumed to Net $ $ $ $ $ $ $ $ $ 489,313 1,294 205 1,499 502,679 1,157 202 1,359 524,398 1,230 210 1,440 $ $ $ $ $ $ $ $ $ 134,682 489 196 685 144,647 505 198 703 152,764 516 205 721 $ $ $ $ $ $ $ $ $ 6,127 14 — 4 1 6,578 6 — 6 7,341 $ $ $ $ $ $ $ 360,758 1.7% 819 9 828 1.7% —% 1.7% 3 64,610 1.8% 6 6 58 4 62 0.9% —% 0.9% 3 78,975 1.9% (12) $ — (12) $ 702 5 707 (1.7)% —% (1.7)% 2023 Life insurance in-force Insurance premium Life insurance (1) Accident & health insurance Total insurance premium 2022 Life insurance in-force Insurance premium Life insurance (1) Accident & health insurance Total insurance premium 2021 Life insurance in-force Insurance premium Life insurance (1) Accident & health insurance Total insurance premium _______________ (1) Includes annuities with life cff ontingencies. 205 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None. Item 9A. Controls and Procedures Evaluation of Do isclosll ure ConCC trols all nd Procedures Management, with the participation of the Chief Executive Offiff cer and the Chief Financial Offiff cer, has evaluated the effeff ctiveness of the design and operation of the Company’s disclosure controls and procedurd es as defined in RulRR es 13a-15(e) and 15d-15(e) under the Exchange Act, as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that these disclosure controls and procedurd es were effeff ctive as of December 31, 2023. g Changes in I ntII ertt nal ConCC trol Over Financ ii ii g ial Reporting p MetLife pff rovides certain services to the Company on a transitional basis through services agreements. The Company continues to change business processes, implement systems and establa ish new third-party arrangements. We consider these in aggregate to be material changes in our internal control over finff ancial reporting. Other than as noted above, there were no changes to the Company’s internal control over finff ancial reporting (as defined in RulRR es 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred durd ing the quarter ended December 31, 2023 that have materially affeff cted, or are reasonably likely to materially affeff ct, these internal controls over finff ancial reporting. Managea ment’s Annual Report on IntII ertt nal ConCC trol Over Financ ii ial Reporting ff Management of Brighthouse Financial, Inc. is responsible for establishing and maintaining adequate internal control over financial reporting. In fulfillin g this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of control procedurd es. The objectives of internal control include providing management with reasonable, but not absolute, assurance that assets are safeguarded against loss froff m unauthorized use or disposition, and that the transactions are executed in accordance with management’s authorization and recorded properly to permit preparation of consolidated financial statements in conformity with GAAP. Due to its inherent limitations, internal control over finff ancial reporting may not prevent or detect misstatements. Also, e periods are subject to the risk that controls may become inadequate projections of any evaluation of effectiveness to futur because of changes in conditions, or that the degree of compliance with the policies or procedurd es may deteriorate. Management has completed an assessment of the effeff ctiveness of the Company’s internal control over finff ancial reporting as of December 31, 2023. In making the assessment, management used the criteria set forth in “Internal Control - Integrated Framework” promulgated by the Committee of Sponsoring Organizations of the Treadway Commission. ff Based upon u the assessment performed under that fraff mework, management has maintained and concluded that the Company’s internal control over finff ancial reporting was effeff ctive as of December 31, 2023. Attett stattt iott n Report of to hett Company’n s R’ egistered Public Accountintt g FirmFF The Company’s independent registered public accounting firm, ff Deloitte & Touche LLP, has issued their attestation report on management’s internal control over finff ancial reporting which is set forff th below. 206 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the stockholders and the Board of Directors of Brighthouse Financial, Inc. Opinion on Internal Control over Financial Reporting We have audited the internal control over finff ancial reporting of Brighthouse Financial, Inc. and subsu idiaries (the “Company”) as of December 31, 2023, based on criteria established in Internal Control —— Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effeff ctive internal control over finff ancial reporting as of December 31, 2023, based on criteria established in Internal Control —— Integrated Framework (2013) issued by COSO. We have also audited, in accordance with the standards of the Publu ic Company Accounting Oversight Board (United States) the year ended December 31, 2023, of (PCAOB) the Consolidated Financial Statements, Notes and Schedules as of and forff the Company and our report dated Februarr ry 22, 2024, expressed an unqualified opinion on those finff ancial statements. Basis forff Opinion The Company’s management is responsible for maintaining effeff ctive internal control over finff ancial reporting and for its assessment of the effeff ctiveness of internal control over finff ancial reporting, included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over finff ancial reporting based on our audit. We are a public accounting firff m registered with the PCAOB and securities laws and the are required to be independent with respect to the Company in accordance with the U.S. federal applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. ff We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform whether effective internal control over finff ancial reporting was maintained in the audit to obtain reasonable assurance about all material respects. Our audit included obtaining an understanding of internal control over finff ancial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedurd es as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. a Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over finff ancial reporting is a process designed to provide reasonable assurance regarding the reliabia lity of financial reporting and the preparation of finff ancial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over finff ancial reporting includes those policies and procedurd es that (1) pertain to the maintenance of records that, in reasonable detail, accurately and faiff rly refleff ct the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of finff ancial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the finff ancial statements. Because of its inherent limitations, internal control over finff ancial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to futur e periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedurd es may deteriorate. ff /s/ DELOITTE & TOUCHE LLP Charlotte, North Carolina ry 22, 2024 Februar 207 Item 9B. Other Information tt Direii ctor an d OffiO cer 10b5-1 PlaPP ns During the year ended December 31, 2023, none of the Company’s directors or offiff cers (as defined in RulRR e 16a-1(f) of the Exchange Act) adopted or terminated a RulRR e 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K of the Securities Act of 1933, as amended). Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections a Not appl icable. Item 10. Directors, Executive Offiff cers and Corporate Governance PART III Certain of the information required by this Item pertaining to Executive Officers appe ars in “Business — Information About Our Executive Offiff cers” in this Annual Report on Form 10-K. The other information required by this Item will be set forth in the 2024 Proxy Statement, which inforff mation is hereby incorporated by reference. a Item 11. Executive Compensation The inforff mation required by this Item will be set forff th in the 2024 Proxy Statement, which information is hereby incorporated by reference. Item 12. Security Ownership of Certain Beneficiaff l Owners and Management and Related Stockholder Matters The inforff mation required by this Item will be set forff th in the 2024 Proxy Statement, which information is hereby incorporated by reference. Item 13. Certain Relationships, Related Person Transactions and Director Independence The inforff mation required by this Item will be set forff th in the 2024 Proxy Statement, which information is hereby incorporated by reference. Item 14. Principal Accountant Fees and Services The inforff mation about a aggregate fees ff billed to us by our principal accountant, Deloitte & Touche LLP (PCAOB ID No. 34), will be set forff th in the 2024 Proxy Statement and is incorporated herein by reference. Item 15. Exhibits and Financial Statement Schedules The folff lowing documents are fileff d as part of this report: PART IV 1. Financial Statements: See “Index to Consolidated Financial Statements, Notes and Schedules.” 2. Financial Statement Schedules: See “Index to Consolidated Financial Statements, Notes and Schedules.” 3. Exhibits: See “Exhibit Index.” Item 16. Form 10-K Summary None. 208 GLOSSARY Glossary of Selected Financial Terms Account value Adjud sted earnings Alternative investments Assets under management (“AUM”) Conditional tail expectation (“CTE”) Credit loss on investments Deferred policy acquisition cost (“DAC”) Deferred sales inducements (“DSI”) General account assets Invested assets Investment Hedge Adjud stments Market Value Adjustments Net amount at risk (“NAR”) Net investment spread Normalized statutt ory err arnings Reinsurance Risk-based capital (“RBC”) ratio Total adjusted capital (“TAC”) Value of business acquired (“VOBA”) ff u The amount of money in a policyholder’s account. The value increases with additional premiums and investment gains, and it decreases with withdrawals, investment losses and fees. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Non-GAAP and Other Financial Disclosures.” General account investments in other limited partnership interests. General account investments and separate account assets. A statistical tail risk measure used to assess the adequacy of assets suppor ting variable annuity contract liabilities, which is calculated as the average amount of total assets required to satisfy obligations over the life of the contract or policy in the worst “x%” of scenarios. Represented as CTE (100 less x). Example: CTE70 represents the worst thirty percent of scenarios and CTE98 represents the worst two percent of scenarios. The difference between the amortized cost of the security and the present value of the cash floff ws expected to be collected that is attributed to credit risk, is recognized as an allowance on the balance sheet with a corresponding adjud stment to earnings, or if deemed uncollectible, as a permanent write-off of book value. Represents the incremental costs related directly to the successfulff acquisition of new and renewal insurance and annuity contracts and which have been deferred on the balance sheet as an asset. Represent amounts that are credited to a policyholder’s account balance that are higher than the expected crediting rates on similar contracts without such an inducement and that are an incentive to purchase a contract and also meet the accounting criteria to be deferred as an asset that is amortized over the life of the contract. All insurance company assets not allocated to separate accounts. General account investments in fixff ed maturity securities, equity securities, mortgage loans, policy loans, other limited partnership interests, real estate limited partnerships and limited liabia lity companies, short-term investments and other invested assets. Earned income and amortization of premium on derivatives that are hedges of investments or that are used to replicate certain investments, but do not qualify f orff hedge accounting treatment. Amounts associated with the change in fair value of the crediting rate on experience-rated contracts Represents the differe ff and the amount set aside to suppor policy type or guarantee. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Non-GAAP and Other Financial Disclosures.” See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — The Parent Company — t Liquidity and Capital — Normalized Statutor Insurance that an insurance company buys for its own protection. Reinsurance enables an insurance company to expand its capacity, stabia lize its underwriting results, or finff ance its expanding volume. The risk-based capia tal ratio is a method of measuring an insurance company’s capia tal, taking into consideration its relative size and risk profilff e, in order to ensure compliance with minimum regulatory c apital requirements set by the National Association of Insurance Commissioners. When referred to as “combined,” represents that of our insurance subsidiaries as a whole. apital and surplus, as well as y crr Total adjud sted capia tal primarily consists of statutor the statutory asset valuation reserve. When referred to as “combined,” represents that of our insurance subsidiaries as a whole. Present value of projected futur businesses. nce between a claim amount payable if a specific event occurs t the claim. The calculation of NAR can differ by from in-force policies of acquired e gross profitsff arnings.” y Err u ff ff rr t 209 Glossary of Product Terms Accumulation phase Annuitant Annuities Annuitization Annuity sales Benefit Base Cash surrender value Deferred annuity Deferred income annuity (“DIA”) Dollar-for-dollar withdrawal Enhanced death benefitff (“EDB”) Fixed annuity Future policy benefitff s Guaranteed minimum accumulation benefits (“GMAB”) Guaranteed minimum death benefits (“GMDB”) Guaranteed minimum income benefits (“GMIB”) Guaranteed minimum living benefits (“GMLB”) Guaranteed minimum withdrawal benefits (“GMWB”) Guaranteed minimum benefitsff (“GMxB”) t ff u y prr either a futur a specified period of time or for a lifetime. The phase of a variabla e annuity contract during which assets accumulate based on the policyholder’s lump sum payment or periodic deposits and reinvested interest, capia tal gains and dividends that are generally tax-deferred. The person who receives annuity payments or the person whose life eff xpectancy determines the amount of variable annuity payments upon annuitization of a life contingent annuity. Long-term, tax-deferred investments designed to help investors save forff retirement. The process of converting an annuity investment into a series of periodic income payments, generally for life.ff Annuity sales consist of 100 percent of direct statutor remiums, except for fixed index annuity sales, which represents 100% of gross sales on directly written business and the proportion of assumed gross sales under reinsurance agreements. Annuity sales exclude certain internal exchanges. These sales statistics do not correspond to revenues under GAAP, but are used as relevant measures of business activity. A notional amount (not actual cash value) used to calculate the owner’s guaranteed benefits within an annuity contract. The death benefitff and living benefitff within the same contract may not have the same Benefitff Base. The amount an insurance company pays (minus any surrender charge) to the variable annuity owner when the contract is voluntarily terminated prematurt ely. An annuity purchased with premiums paid either over a period of years or as a lump sum, for which savings accumulate prior to annuitization or surrender, and upon e lump sum payment or annuitization, such savings are exchanged forff periodic payments forff An annuity that provides a pension-like stream of income payments afteff deferral period. A method of calculating the reduction of a variable annuity Benefit Base after a withdrawal ollar withdrawn. An optional benefitff pays a minimum stated interest rate on purchase payments to the beneficiary.rr An annuity that guarantees a set annual rate of returt n with interest at rates we determine, subju ect to specified minimums. Credited interest rates are guaranteed not to change for certain limited periods of time. Future policy benefitff s forff ff for life c guaranteed minimum benefitff s accounted for as insurance. an additional cost) which entitles an annuitant to a An optional benefitff (availabla e forff minimum payment, typically in a lump sum, afteff r a set period of time, typically referred to as the accumulation period. The minimum payment is based on the Benefit Base, which could be greater than the underlying account value. An optional benefitff an additional cost) that guarantees an annuitant’s beneficiaries are entitled to a minimum payment based on the Benefitff Base, which could be greater than the underlying account value, upon the death of the annuitant. (available for an additional cost) where an annuitant is entitled An optional benefitff to annuitize the policy and receive a minimum payment stream based on the Benefit Base, which could be greater than the underlying account value. A referff ence to all forff ms of guaranteed minimum living benefitff s, including GMIBs, GMWBs and GMABs (does not include GMDBs). An optional benefitff (available for an additional cost) where an annuitant is entitled to withdraw a maximum amount of their Benefitff Base each year, forff which cumulative payments to the annuitant could be greater than the underlying account value. A general reference to all forms of guaranteed minimum benefitsff living benefits and death benefits. the annuities business are comprised mainly of liabia lities income annuities, and liabia lities for the variable annuity that locks in investment gains annually, or every few years, or is reducd ed by one dollar forff in which the benefit , inclusive of (availabla e forff r a specified ontingent rr every d 210 Immediate annuity An annuity for which the owner pays a lump sum payment and receives periodic payments immediately or soon afteff r purchase. Index-linked annuity Life insurance sales Living benefits Mortality and expense risk fees (“M&E Fees”) Net floff ws ff Period certain annuity Policyholder account balances Rider Roll-up rate Separate account u Step-up Surrender charge ff Term life ff Universal life Variable annuity ff universal life, an term life, d variabla e universal life,ff indexed universal life. We exclude company-sponsored nsurance, and nsurance, bank-owned life i Single premium immediate annuities (“SPIAs”) are single premium annuity products that provide a guaranteed level of income to the owner generally for a specifieff d number of years or for the life of the annuitant. asset accumulation and asset distribution needs with an An annuity that provides forff ability to share in the upsu ide froff m certain financial markets such as equity indices, or an interest rate benchmark. The customer’s account value can grow or decline due to various external financial market indices performance. Life insurance sales consist of 100 percent of annualized new premium forff first-year paid premium forff whole life,ff and total paid premium forff internal exchanges, corporate-owned life i ff private placement variable universal life. Optional benefitff s (availabla e at an additional cost) that guarantee that the owner will get back at least his original investment when the money is withdrawn. Fees charged by insurance companies to compensate forff issuing variabla e annuity contracts. Net change in customer account balances in a period including, but not limited to, new sales, fulff l or partial exits and the net impact of clients utilizing or withdrawing their funds ff An annuity that guarantees payment to the annuitant for a specified period of time and to the beneficiary i fixed deferred annuities, the Annuities: Policyholder account balances are held forff fixed account portion of variabla e annuities, and non-life contingent income annuities. Interest is credited to the policyholder’s account at interest rates we determine which are influff enced by current market rates, subju ect to specified minimums. . It excludes the impact of markets on account balances. f the annuitant dies before the period ends. the risk they take by rr ff ios. ture or benefit that a variable annuity contract holder can purchase at Life Insurance Policies: Policyholder account balances are held forff retained asset accounts, universal life policies and the fixff ed account of universal variable life insurance policies. Interest is credited to the policyholder’s account at interest rates we determine which are influff enced by current market rates, subju ect to specified minimums. An optional feaff an additional cost. The guaranteed percentage that the Benefit Base increases by each year. An insurance company account, legally segregated from the general account, that holds the contract assets or subau ccount investments that can be actively or passively managed and invest in stock, bonds or money market portfolff A n optional variabla e annuity featurt e (availabla e at an additional cost) that can increase the Benefitff Base amount if the variabla e annuity account value is higher than the Benefitff Base on specifieff d dates. A fee paid by a contract owner forff specificff time afteff exchange for a guaranteed level ff nsurance that provides a fixff ed death benefit in ife i L premium over a specified period of time, usually ten to thirty years. Generally, term life insurance does not include any cash value, savings or investment components. L payment of specified annual policy charges that are generally related to specific costs, which may change over time. To the extent that the policyholder chooses to pay more than the charges required in any given year to keep the policy in-force, the excess premium will be placed into the account value of the policy and credited with a stated interest rate on a monthly basis. a specified period of time An annuity that offers or for a lifetime and gives owners the abia lity to invest in various markets though the underlying investment options, which may result in potentially higher, but variable, returns. the early withdrawal of an amount that exceeds a percentage or for cancellation of the contract within a specified amount of r purchase. nsurance that provides a death benefit in returt n forff guaranteed periodic payments forff ff ife i ff ff 211 Variable universal life ff Whole life ff Universal life i nsurance where the excess amount paid over policy charges can be directed by the policyholder into a variety of separate account investment options. In the separate account investment options, the policyholder bears the entire risk and returt ns of the investment results. L in exchange for a guaranteed level premium for a specified period of time in order to maintain coverage for the roducts also have guaranteed minimum cash life of the insured. Whole life p surrender values. Although the primary purpose is protection, the policyholder can withdraw or borrow against the policy (sometimes on a tax favored basis). ff nsurance that provides a guaranteed death benefitff ife i ff 212 Exhibit Index tt tt tt tt a ngii eements i ncluded as exhee tt iates or the othe r parties to the agr Reliance on Stattt emen icable agreement and (i) si ut rather as a way of allocating thett losure information about Brighthous ts in Our ConCC tracts: In reviewing the agr icable agreement. These representations and warranties have been made solely for the bene e (No(( te Regardi Annual Repor e and are not intended to provide any other facff tual or discii subsidiaries or affilff tt each of the parties to the appl of the other parties to the appl fact, bt qualified by db which disclosures are not necessarily reflee diffei agreement or such other date or datdd es as may ba Accordingly,ll or at any other time. Addidd tional information about Brighthous nnual Repor found elsell where in thitt s Aii UU available without charger ibits to this t on ForFF m 10-K, please remember that they are included to provide you with information regarding their terms e FinFF ancial, Inc. and its eements.tt The agreements contain representations and warranties by fite ot in all instances be treated as categorical statements of ave been icable agreement, tandards of materiality in a way that is icable opments. ere made tes may be e FinFF ancial, Inc.’s other public filings, which are ii e spes a these representations and warranties may not describe the actual state of ao e FinFF ancial, Inc. and its subsidiaries and affilia gg isclosures that were made to the other party in connection with the negotiation of to he appl a cted in the agreement; (iii) may aa e viewed as material to investors; and (iv) were made only all tt e of to he appl eement and are subject to more recent devel dd e thett y we rr ffair ff gg t on ForFF m 10-K and Brighthous e through the U.S. Se curities and Exchange Commissi tt risk to one of the parties if t i hos on website at www.sec.gov.) rove to be inaccurate; (ii(( ) hi rent from what may ba tt cifiei d in the agr e statements ptt tt s of to he dat f to he dat hould nl ll ppl y s s as o gg tt tt tt Exhibit No. Description 2.1 3.1 3.2 4.1 4.2 4.3 4.3.1 4.3.2 4.4 4.5 4.6 4.6.1 4.7 4.8 4.9 4.10 4.11 4.12 tee, is incorporated by reference to Exhibit 4.2 to our May 15, 2020 8-K. Inc., as Guarantor, and U.S. tee, is incorporated by reference to Exhibit 4.1 to Amendment No. 4 to our emental Indenture, dated as of November 22, 2021, between Brighthouse Financial, Inc. and tee, is incorporated by reference to Exhibit 4.2 to our Current Report Master Separation Agreement, dated as of August 4, 2017, by and between MetLife,ff Inc. and Brighthouse Financial, Inc., is incorporated by reference to Exhibit 2.1 to our Current Report on Form 8-K, fileff d on August 9, 2017 (our “August 9, 2017 8-K”). Restated Certificate of Incorporation of Brighthouse Financial, Inc., dated July 11, 2023 is incorporated by reference to Exhibit 3.3 to our Quarterly Report on Form 10-Q, filed on August 9, 2023. Amended and Restated Bylaws of Brighthouse Financial, Inc., effeff ctive June 9, 2023, is incorporated by reference to Exhibit 3.2 to our Current Report on Form 8-K, filff ed on June 13, 2023. Indenture, dated as of June 22, 2017, among Brighthouse Financial, Inc., MetLife,ff Bank National Association, as Trusr Registration Statement on Form 10, filed on June 23, 2017. Form of 3.700% Senior Note due 2027 and 4.700% Senior Note due 2047 (included in Exhibit B to Exhibit 4.1). Senior Indenture, dated as of May 15, 2020, between Brighthouse Financial, Inc. and U.S. Bank National Association, as Trusrr tee, is incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K, filedff on May 15, 2020 (our “May 15, 2020 8-K”). First Supplemental Indenture, dated as of May 15, 2020, between Brighthouse Financial, Inc. and U.S. Bank National Association, as Trusrr Second Supplu U.S. Bank National Association, as Trusr on Form 8-K, filed on November 22, 2021 (our “November 22, 2021 8-K”). Form of 5.625% Senior Notes dued Form of 3.850% Senior Notes Due 2051 (included in Exhibit A to 4.3.2). u Junior Subordina Bank National Association, as Trusr Form 8-K, filed on September 12, 2018 (our “September 12, 2018 8-K”). First Supplemental Indenture, dated as of September 12, 2018, between Brighthouse Financial, Inc. and U.S. Bank National Association, as Trusrr tee, is incorporated by reference to Exhibit 4.2 to our September 12, 2018 8-K. Form of Junior Subordina Series A Certificate of Designations, is incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K, filed on March 25, 2019 (our “March 25, 2019 8-K”). Series B Certificate of Designations, is incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K, filed on May 21, 2020 (our “May 21, 2020 8-K”). Series C Certificate of Designations, is incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K, filed on November 20, 2020 (our “November 20, 2020 8-K”). Series D Certificate of Designations, is incorporated by reference to Exhibit 4.4 to our November 22, 2021 8- K. Deposit Agreement, dated as of March 25, 2019, among Brighthouse Financial, Inc., Computershare Inc. and Computershare Trust Company, N.A., collectively as depositary, and the holders from time to time of the depositary r ted Indenture, dated as of September 12, 2018, between Brighthouse Financial, Inc. and U.S. tee, is incorporated by reference to Exhibit 4.1 to our Current Report on eceipts described therein, is incorporated by reference to Exhibit 4.2 to our March 25, 2019 8-K. ted Debenture (included in Exhibit A to Exhibit 4.6.1). 2030 (included in Exhibit A to Exhibit 4.3.1). u rr 213 4.13 4.14 4.15 4.16 4.17 4.18 4.19 4.20* 10.1 10.2 10.3 10.4 10.5# 10.5.1# 10.5.2# 10.5.3# 10.6# 10.7# 10.7.1# 10.7.2# 10.7.3# 10.7.4# 10.8# 10.9# 10.10# rr ff rr rr es of Article VIII only, MetLife,ff ervices and Solutions, LLC Inc. and Brighthouse Financial, eceipts described therein, is incorporated by reference to Exhibit 4.2 to our May 21, 2020 8-K. hares (included as Exhibit A to Exhibit 4.12). hares (included as Exhibit A to Exhibit 4.13). hares (included as Exhibit A to Exhibit 4.14). hares (included as Exhibit A to Exhibit 4.15). Deposit Agreement, dated as of May 21, 2020, among Brighthouse Financial, Inc., Computershare Inc. and Computershare Trust Company, N.A., collectively as depositary, and the holders from time to time of the depositary r Deposit Agreement, dated as of November 20, 2020, among Brighthouse Financial, Inc., Computershare Inc. and Computershare Trust Company, N.A., collectively as depositary,rr and the holders from time to time of the depositary r eceipts described therein, is incorporated by reference to Exhibit 4.2 to our November 20, 2020 8- K. Deposit Agreement, dated as of November 22, 2021, among Brighthouse Financial, Inc., Computershare Inc. and Computershare Trust Company, N.A., collectively as depositary,rr and the holders from time to time of the depositary r eceipts described therein, is incorporated by reference to Exhibit 4.5 to our November 22, 2021 8- K. Form of depositary receipt evidencing the Series A Depositary Srr Form of depositary receipt evidencing the Series B Depositary Srr Form of depositary receipt evidencing the Series C Depositary Srr Form of depositary receipt evidencing the Series D Depositary Srr Description of Securities. Transition Services Agreement, dated as of January 1, 2017, between MetLife Sff and Brighthouse Services, LLC and for purpos Inc., is incorporated by reference to Exhibit 10.1 to our August 9, 2017 8-K. Tax Receivables Agreement, dated as of July 27, 2017, between MetLife, Inc. and Brighthouse Financial, Inc., is incorporated by reference to Exhibit 10.5 to our August 9, 2017 8-K. Tax Separation Agreement, dated as of July 27, 2017, by and among MetLife,ff Inc. and its Affiff liates and Brighthouse Financial, Inc. and its Affiliates, is incorporated by reference to Exhibit 10.6 to our August 9, 2017 8-K. Revolving Credit Agreement, dated as of April 15, 2022, among Brighthouse Financial, Inc., Bank of America, N.A., as administrative agent, and the other lenders party thereto is incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K, filed on April 19, 2022. Brighthouse Services, LLC Auxiliary Srr Quarterly Report on Form 10-Q, filed on August 15, 2017. Amendment Number One to the Brighthouse Services, LLC Auxiliary Savings Plan, is incorporated by reference to Exhibit 10.9 to our Quarterly Report on Form 10-Q, filed on August 15, 2017. ated by Amendment Number Two to the Brighthouse Services, LLC Auxiliary Savings Plan, is incorpor reference to Exhibit 10.9.2 to our Annual Report on Form 10-K, filed on March 16, 2018 (our “2017 Annual Report”). Amendment Number Three to the Brighthouse Services, LLC Auxiliary Savings Plan, is incorpor reference to Exhibit 10.5.3 to our Annual Report on Form 10-K, filed on February 2rr Report”). Amended and Restated Brighthouse Services, LLC Short-Term Incentive Plan, amended as of February 2rr 2020, is incorporated by reference to Exhibit 10.8 to our Annual Report on Form 10-K, filed on February 2rr 2020 (our “2019 Annual Report”). Brighthouse Services, LLC Voluntary Drr by referff ence to Exhibit 10.1 to our Current Report on Form 8-K, fileff d on December 28, 2017. Amendment Number One to the Brighthouse Services, LLC Voluntary Drr incorporated by reference to Exhibit 10.11.1 to our 2017 Annual Report. Amendment Number Two to the Brighthouse Services, LLC Voluntary Drr incorporated by reference to Exhibit 10.10.2 to our Annual Report on Form 10-K, filed February 2rr “2018 Annual Report”). Amendment Number Three to the Brighthouse Services, LLC Voluntary Drr incorporated by reference to Exhibit 10.7.3 to our 2020 Annual Report. Amendment Number Four to the Brighthouse Services, LLC Voluntary Drr incorporated by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q, filed on May 9, 2023. Brighthouse Financial, Inc. 2017 Stock and Incentive Compensation Plan, as amended November 14, 2019 (the “Employee Plan”), is incorporated by reference to Exhibit 10.10 to our 2019 Annual Report. Brighthouse Financial, Inc. 2017 Non-Management Director Stock Compensation Plan, as amended November 16, 2018 (the “Director Plan”), is incorporated by reference to Exhibit 10.12 to our 2018 Annual Report. Brighthouse Financial, Inc. Employee Stock Purchase Plan (restated effeff ctive March 25, 2020), is incorporated by referff ence to Exhibit 10.1 to our Quarterly Report on Form 10-Q, filed on August 7, 2020 eferred Compensation Plan, effeff ctive January 1, 2018, is incorporated avings Plan, is incorporated by reference to Exhibit 10.8 to our eferred Compensation Plan, is 6, 2019 (our ated by 4, 2021 (our “2020 Annual eferred Compensation Plan, is eferred Compensation Plan, is eferred Compensation Plan, is 1, 6, rr r 214 10.11# 10.12# 10.13# 10.14# 10.15# 10.16# 10.17# 10.18# 10.19# 10.20# 10.21# esting, is incorporated by Form of Performance Share Unit Agreement (Employee Plan), is incorporated by reference to Exhibit 10.15 to our 2018 Annual Report. Form of Restricted Stock Unit Agreement (Employee Plan) for awards with ratabla e vesting, is incorporated by reference to Exhibit 10.17 to our 2018 Annual Report. Form of Restricted Stock Unit Agreement (Employee Plan) for awards with cliff vff reference to Exhibit 10.18 to our 2018 Annual Report. Form of Non-Qualifieff d Stock Option Agreement (Employee Plan) for awards granted before February 13, 2019, is incorporated by reference to Exhibit 10.6 to our May 24, 2018 8-K. Form of Non-Qualifieff d Stock Option Agreement (Employee Plan) for awards granted on or afteff 2019, is incorporated by reference to Exhibit 10.20 to our 2018 Annual Report. Award Agreement Supplement (Employee Plan) for awards with ratable vesting, is incorporated by reference to Exhibit 10.22 to our 2018 Annual Report. Award Agreement Supplement (Employee Plan) for awards with cliff vff Exhibit 10.23 to our 2018 Annual Report. Form of Non-Management Director Restricted Stock Unit Agreement (Director Plan), as amended November 14, 2019, is incorporated by reference to Exhibit 10.2 to our Quarterly Report on Form 10-Q, filed on May 11, 2020. Form of Non-Management Director Award Agreement Supplement (Director Plan), as amended November 14, 2019, is incorporated by reference to Exhibit 10.3 to our Quarterly Report on Form 10-Q, filed on May 11, 2020. Brighthouse Financial Blue Relocation Policy, as restated July 1, 2019, is incorporated by reference to Exhibit 10.3 to our Quarterly Report on Form 10-Q, filed on August 6, 2019. Brighthouse Services, LLC Amended and Restated Executive Severance Pay Plan, is incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on November 19, 2019. esting, is incorporated by reference to r February 1rr 3, 10.21.1# Amendment Number One to the Brighthouse Services, LLC Amended and Restated Executive Severance Pay Plan is incorporated by reference to Exhibit 10.3 to our Quarterly Report on Form 10-Q, filed on August 9, 2023. Brighthouse Services, LLC Change of Control Severance Pay Plan, is incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K filed on November 16, 2018. 10.22# 10.22.1# Amendment Number One to the Brighthouse Services, LLC Change of Control Severance Pay Plan is 10.23# 10.24# incorporated by reference to Exhibit 10.4 to our Quarterly Report on Form 10-Q, filed on August 9, 2023. Brighthouse Services, LLC Limited Death Benefitff Plan is incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K, filff ed on December 23, 2019. Brighthouse Services, LLC Deferff reference to Exhibit 10.32 to our 2019 Annual Report. red Compensation Plan forff Non-Management Directors, is incorporated by 10.24.1# Amendment Number One to the Brighthouse Services, LLC Deferred Compensation Plan forff Non- Management Directors, is incorporated by reference to Exhibit 10.2 to our Quarterly Report on Form 10-Q, filed on May 9, 2023. Summary of Brighthouse Services, LLC ICOLI Supplemental Death Benefitff Only Plan is incorporated by reference to Exhibit 10.25 to our Annual Report on Form 10-K, filed on February 2rr List of Subsu idiaries as of December 31, 2023. Consent of Deloitte & Touche LLP. Certification of Chief Executive Officer pursuant to Section 302 of the Sarbane Certification of Chief Financial Officer pursuant to Section 302 of the Sarbane Certification of Chief Executive Officer pursuant to Section 906 of the Sarbane Certification of Chief Financial Officer pursuant to Section 906 of the Sarbane Brighthouse Financial, Inc. Accounting Restatement Compensation Recovery Policy. s-Oxley Act of 2002. s-Oxley Act of 2002. s-Oxley Act of 2002. s-Oxley Act of 2002. 3, 2023. r r r r 10.25# 21.1* 23.1* 31.1* 31.2* 32.1** 32.2** 97.1* 101.INS* XBRL Instance Document - the instance document does not appear in the Interactive Data File because its 101.SCH* 101.CAL* 101.LAB* 101.PRE* 101.DEF* XBRL tags are embedded within the Inline XBRL document. Inline XBRL Taxonomy Extension Schema Document. Inline XBRL Taxonomy Extension Calculation Linkbase Document. Inline XBRL Taxonomy Extension Labea Inline XBRL Taxonomy Extension Presentation Linkbase Document. Inline XBRL Taxonomy Extension Definition Linkbase Document. l Linkbase Document. 215 104* The cover page of Brighthouse Financial, Inc.’s Annual Report on Form 10-K forff 31, 2023, formatted in Inline XBRL (included within the Exhibit 101 attachments). the year ended December * Filed herewith. ** Furnished herewith. # Denotes management contracts or compensation plans or arrangements. 216 Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duld y authorized. SIGNATURES BRIGHTHOUSE FINANCIAL, INC. By: /s/ Edward A. Spehar Name: Title: Date: Edward A. Spehar Executive Vice President and Chief Financial Offiff cer February 22, 2024 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the folff lowing persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date /s/ Eric T. Steigerwalt Eric T. Steigerwalt /s/ Edward A. Spehar Edward A. Spehar /s/ KriK stine H. Toscano Kristine H. Toscano /s/ C. Edward Chaplin C. Edward Chaplin /s/ Stephen C. Hooley Stephen C. Hooley /s/ Carol D. Juel Carol D. Juel /s/ Eileen A. Mallesch Eileen A. Mallesch /s/ Diane E. Offere ff ins Diane E. Offereins /s/ Paul M. Wetzel Paul M. Wetzel Director, President and Chief Executive Officer (Principal Executive Officer) Februarr ry 22, 2024 Executive Vice President and Chief Financial Offiff cer (Principal Financial Officer) February 2rr 2, 2024 Chief Accounting Officer (Principal Accounting Officer) February 2rr 2, 2024 Chairman of the Board of Directors February 2rr 2, 2024 February 22, 2024 February 22, 2024 February 2rr 2, 2024 February 2rr 2, 2024 February 2rr 2, 2024 Director Director Director Director Director 217 [THIS PAGE INTENTIONALLY LEFT BLANK] (cid:41)(cid:82)(cid:85)(cid:90)(cid:68)(cid:85)(cid:71)(cid:16)(cid:47)(cid:82)(cid:82)(cid:78)(cid:76)(cid:81)(cid:74)(cid:3)(cid:54)(cid:87)(cid:68)(cid:87)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86) 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(cid:85)(cid:72)(cid:70)(cid:72)(cid:76)(cid:89)(cid:72)(cid:3)(cid:72)(cid:16)(cid:80)(cid:68)(cid:76)(cid:79)(cid:3)(cid:68)(cid:79)(cid:72)(cid:85)(cid:87)(cid:86)(cid:3)(cid:90)(cid:75)(cid:72)(cid:81)(cid:3)(cid:90)(cid:72)(cid:3)(cid:80)(cid:68)(cid:78)(cid:72)(cid:3)(cid:73)(cid:76)(cid:79)(cid:76)(cid:81)(cid:74)(cid:86)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:54)(cid:40)(cid:38) (cid:17) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) Brighthouse Financial, Inc. General Information Board of Directors C. Edward (“Chuck”) Chaplin, Chairman of the Board Stephen C. (“Steve”) Hooley Michael J. (“Mike”) Inserra Carol D. Juel Eileen A. Mallesch Executive Officers Eric T. Steigerwalt President and Chief Executive Officer Diane E. Offereins Eric T. Steigerwalt, President and Chief Executive Officer Paul M. Wetzel Lizabeth H. Zlatkus Allie Lin Executive Vice President and General Counsel Vonda R. Huss Executive Vice President and Chief Human Resources Officer John L. Rosenthal Executive Vice President and Chief Investment Officer Myles J. Lambert Executive Vice President and Chief Distribution and Marketing Officer Edward A. Spehar Executive Vice President and Chief Financial Officer Stock Exchange The common stock of Brighthouse Financial, Inc. is listed on the Nasdaq Stock Market LLC (Symbol: BHF). Registrar and Transfer Agent Questions and communications regarding transfer of stock, dividends, cost-basis information, and address changes should be directed to our transfer agent and registrar, Computershare Trust Company, N.A., as follows: Stockholder correspondence should be mailed to: Brighthouse Financial Shareholder Services c/o Computershare P.O. Box 43006 Providence, RI 02940-3006 Overnight correspondence should be mailed to: Brighthouse Financial Shareholder Services c/o Computershare 150 Royall Street, Suite 101 Canton, MA 02021 Telephone: Within the U.S.: 1 (888) 670-4771 Outside the U.S.: 1 (781) 575-2921 Electronic Delivery of Stockholder Communications Stockholders are encouraged to enroll in electronic delivery to receive all stockholder communications, including proxy voting materials by visiting https://enroll.icsdelivery.com/BHF. Corporate Website www.brighthousefinancial.com Investor Relations Website Copies of our filings with the U.S. Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2023 and the 2024 Proxy Statement, are available on our investor relations website at http://investor.brighthousefinancial.com. Principal Executive Offices The address of our principal executive offices and corporate headquarters is Brighthouse Financial, Inc., 11225 North Community House Road, Charlotte, NC, 28277.