The $0.2 billion increase in net income attributed to shareholders in 2022 compared with 2021 was driven by gains related to the two U.S. variable annuity reinsurance transactions and the favourable impact of an increase in the Canadian corporate tax rate, partially offset by lower gains from investment-related experience and lower core earnings. Investment-related experience gains in 2022 reflected the favourable impact of fixed income reinvestment activities, strong credit experience and higher-than-expected returns (including fair value changes) on alternative long duration assets (“ALDA”) primarily driven by private equity, infrastructure, and timberland, partially offset by real estate. The net charge from the direct impact of markets in 2022 was primarily driven by the impact of unfavourable equity market performance and losses from the sale of available-for-sale (“AFS”) bonds, partially offset by gains due to flattening of the yield curve in the U.S. and Canada. The $0.4 billion or 7%1 decrease in core earnings on a constant exchange rate basis compared with 2021 was driven by lower new business gains in Asia and the U.S., losses from the unfavourable impact of markets on seed money investments in new and segregated mutual funds of $159 million in 2022 (compared with gains of $27 million in 2021) and lower net gains on the sale of AFS equities in 2 (“average AUMA”) in Global Corporate and Other, lower net fee income from lower average assets under management and administration WAM, lower in-force earnings in U.S. Annuities of $191 million due to the variable annuity reinsurance transactions and higher charges in our P&C Reinsurance business in 2022. These items were partially offset by higher yields on fixed income investments and lower expenses in Corporate and Other, in-force business growth in Asia and Canada and experience gains in Canada compared with losses in 2021. Lower expenses in Corporate and Other were primarily driven by lower supplemental pension expense due to market impacts. In 2022, core earnings included a net charge of $143 million ($152 million pre-tax) related to policyholder insurance and annuity experience compared 3 Actions to improve the capital efficiency of our legacy business resulted in with a net charge of $110 million ($127 million pre-tax) in 2021. $191 million lower core earnings in 2022 compared with 2021. Excluding these actions, in-force business increased 6%4 compared with 2021. Core earnings by segment is presented in the following table. See Asia, Canada, U.S., and Global WAM sections below. (1) For the years ended December 31, % change ($ millions) 2022 2021 2022 vs 2021 Core earnings by segment Asia $ 2,132 $ 2,176 (2)% Canada 1,359 1,179 15% U.S. 1,700 1,936 (15)% Global Wealth and Asset Management 1,241 1,406 (14)% Corporate and Other (excluding core investment gains) (650) (561) (16)% (2) Core investment gains 400 400 – Totalcoreearnings $ 6,182 $ 6,536 (7)% (1) Percentage change in core earnings on a constant exchange rate basis is a non-GAAP ratio. See “Non-GAAP and Other Financial Measures” below for more information. (2) See note (2) in the table below. This item is disclosed under the Office of the Superintendent of Financial Institution’s (“OSFI’s”) Source of Earnings Disclosure (Life Insurance Companies) guideline. 1 Percentage growth / declines in core earnings, core general expenses, pre-tax core earnings, assets under management and administration, assets under management, core EBITDA, general expenses, Manulife Bank average net lending assets and Global Wealth and Asset Management revenue are stated on a constant exchange rate basis, a non-GAAP ratio. See “Non-GAAP and Other Financial Measures” below for more information. 2 For more information on this metric, see “Non-GAAP and Other Financial Measures” below. 3 Policyholder experience includes gains of $20 million post-tax in 2022 (2021 – gains of $29 million post-tax) from the release of margins on medical policies in Hong Kong that have lapsed for customers who have opted to change their existing policies to the new Voluntary Health Insurance Scheme (“VHIS”) products. These gains did not have a material impact on core earnings as they were mostly offset by new business strain. 4 Excludes $243 million (pre-tax) in 2022 of lost expected profit on in-force relating to the U.S. variable annuity reinsurance transaction. Percentage growth is based on the pre-tax impact of these actions, and is stated on a constant exchange rate basis. 11