Consolidated Capital As at December 31, ($ millions) 2022 2021 Non-controlling interests $ 1,664 $ 1,694 Participating policyholders’ equity (1,346) (1,233) Preferred shares and other equity 6,660 6,381 (1) Common shareholders’ equity 49,401 52,027 Total equity 56,379 58,869 Exclude the accumulated other comprehensive gain/(loss) on cash flow hedges 8 (156) Total equity excluding accumulated other comprehensive gain/(loss) on cash flow hedges 56,371 59,025 Qualifying capital instruments 6,122 6,980 (2) Consolidated capital $ 62,493 $ 66,005 (1) Common shareholders’ equity is equal to total shareholders’ equity less preferred shares and other equity. (2) Consolidated capital does not include $6.2 billion (2021 – $4.9 billion) of MFC senior debt as this form of financing does not meet OSFI’s definition of regulatory capital at the MFC level. The Company has down-streamed the proceeds from this financing into operating entities in a form that qualifies as regulatory capital at the subsidiary level. MFC’s consolidated capital was $62.5 billion as at December 31, 2022, compared with $66.0 billion as at December 31, 2021, a decrease of $3.5 billion. The decrease was driven by a decline in total equity and the redemption of capital instruments. The decline in total equity was due to a reduction in the carrying value of AFS debt securities from higher interest rates, and common share buybacks, partially offset by growth in retained earnings, the impact of a weaker Canadian dollar, and net capital issuance. Remittance of Capital As part of its capital management, Manulife promotes internal capital mobility so that Manulife’s parent company, MFC, has access to funds to meet its obligations and to optimize capital deployment. Remittances is defined as the cash remitted or made available for distribution to the Manulife Group from operating subsidiaries and excess capital generated by standalone Canadian operations. It is one of the key metrics used by management to evaluate our financial flexibility. In 2022, MFC subsidiaries delivered $6.9 billion in remittances 1,2 have delivered $0.9 billion and $2.8 billion, respectively. Remittances in 2022 increased by of which Asia and U.S. operations $2.5 billion compared with 2021 primarily due to the benefits from the reinsurance of U.S. variable annuities and other corporate actions. Financial Leverage Ratio MFC’s financial leverage ratio as at December 31, 2022 was 27.7%, an increase of 1.9 percentage points from 25.8% as at December 31, 2021. The increase in the ratio was driven by a reduction in the carrying value of AFS debt securities from higher interest rates, common 3 share buybacks, and the net issuance of securities , partially offset by growth in retained earnings and the impact of a weaker Canadian dollar. Common Shareholder Dividends The declaration and payment of shareholder dividends and the amount thereof are at the discretion of the Board and depend upon various factors, including the results of operations, financial conditions, future prospects of the Company, dividend payout ratio and taking into account regulatory restrictions on the payment of shareholder dividends. CommonShareholderDividendsPaid For the years ended December 31, $ per share 2022 2021 Dividends paid $ 1.32 $ 1.17 The Company offers a Dividend Reinvestment Program (“DRIP”) whereby shareholders may elect to automatically reinvest dividends in the form of MFC common shares instead of receiving cash. The offering of the program and its terms of execution are subject to the Board’s discretion. During 2022, the required common shares in connection with the DRIP were purchased on the open market with no applicable discount. 1 Remittances from Asia and U.S. operations include the remittances from their respective affiliate reinsurers. In addition, U.S. operation remittances include the International High Net Worth business written in the Bermuda branch of MLI. 2 Asia and U.S. operations include their respective insurance, and wealth and asset management segments. 3 For financial leverage ratio, net issuance of securities consisted of the issuance of Limited Recourse Capital Notes (reported as other equity instruments) of $1.0 billion and senior debt of $1.0 billion, offset by the redemption of subordinated debt of $1.0 billion, and two series of preferred shares totaling $0.7 billion. 86 | 2022AnnualReport | Management’sDiscussionandAnalysis