In the U.S., core earnings were $374 million in 4Q22 compared with $467 million in 4Q21. The 25% decrease on a constant exchange rate basis was due to lower core earnings in both Annuities and Insurance. The decline in Annuities core earnings was driven by reduced in-force earnings of $55 million related to the two transactions to reinsure over 80%1 of our U.S. variable annuity block in 2022. Annuities core earnings were also impacted by lower in-force earnings from unfavourable equity markets and lower policyholder experience gains. Insurance core earnings were lower primarily due to lower new business gains and lower other experience gains, partially offset by more favourable long-term care policyholder experience. Life insurance policyholder experience was neutral compared with 4Q21. In addition, higher investment income on allocated capital increased core earnings by US$6 million compared with 4Q21 (see Corporate and Other segment). Global WAM core earnings were $267 million in 4Q22 compared with $387 million in 4Q21. The 34% decrease was driven by a decline in net fee income from lower average AUMA due to higher interest rates and equity market declines in 2022, and the non-recurrence of favourable tax benefits in 4Q21. Corporate and Other core earnings excluding core investment gains were $86 million in 4Q22 compared with core loss of $79 million in 4Q21. The $165 million increase in core earnings was primarily due to higher yields on fixed income investments, $53 million of gains on seed money investments in segregated funds and mutual funds in 4Q22 compared with losses in the prior year and lower withholding taxes, partially offset by higher interest on allocated capital to operating segments. The table below presents net income attributed to shareholders for the periods presented consisting of core earnings and the items excluded from core earnings. For the quarters ended December 31, ($ millions) 2022 2021 Core earnings $ 1,746 $ 1,708 Items excluded from core earnings: (1) Investment-related experience outside of core earnings (457) 126 Direct impact of equity markets and interest rates and variable annuity guarantee liabilities (see table below) 184 398 (2) Directimpactofequitymarketsandvariableannuityguaranteeliabilities 109 124 (3) Fixedincomereinvestmentratesassumedinthevaluationofpolicyliabilities 130 454 SaleofAFSbondsandderivativepositionsintheCorporateandOthersegment (55) (180) (4) Reinsurance transactions, tax-related items and other 418 (148) Total items excluded from core earnings 145 376 Net income (loss) attributed to shareholders $ 1,891 $ 2,084 (1) Total investment-related experience in 4Q22 was a net charge of $357 million, compared with a net gain of $226 million in 4Q21, and in accordance with our definition of core earnings, we included $100 million in investment-related experience gains in core earnings and a $457 million loss in items excluded from core earnings in 4Q22 ($100 million in investment gains and $126 million, respectively, in 4Q21). Investment-related experience charge in 4Q22 reflected lower-than-expected returns (including fair value changes) on ALDA related to real estate, partially offset by the favourable impact of fixed income reinvestment activities and strong credit experience. Investment-related experience gains in 4Q21 reflected higher-than-expected returns (including fair value changes) on ALDA primarily driven by gains on private equity and infrastructure as well as strong credit experience, partially offset by the unfavourable impact of fixed income reinvestment activities primarily driven by the acquisition of US Treasury bills. (2) In 4Q22, the net gain related to equity markets of $109 million included a gain of $126 million from gross equity exposure, partially offset by a loss of $14 million from dynamic hedge experience and a modest charge of $3 million from macro hedging experience. In 4Q21, the net gain related to equity markets of $124 million included a gain of $145 million from gross equity exposure, partially offset by a loss of $20 million from dynamic hedging experience and a modest charge of $1 million from macro hedge experience. (3) The $130 million gain in 4Q22 due to fixed income reinvestment rates was driven by gains due to the flattening of the yield curve in the U.S. and Canada and the impact of favourable equity market performance, partially offset by losses from corporate spread movements across several markets of differing magnitudes and from the sale of AFS bonds. The $454 million gain in 4Q21 was driven by flattening of the yield curve in Canada and the U.S. and, to a lesser extent, widening corporate spreads in the U.S. (4) The $418 million gain in 4Q22 includes $297 million related to the favourable impact of an increase in the Canadian corporate tax rate, $86 million net gain from acquiring full ownership interest of MTEDA by purchasing the remaining 51% of shares from our joint venture partner and a $35 million gain from a reinsurance transaction in the U.S. 4Q21 includes a $119 million charge related to updating the impact of the 2017 U.S. Tax Cuts and Jobs Act and a $37 million charge from a reinsurance transaction in the U.S., partially offset by Asia reinsurance transaction gains of $8 million in 4Q22. Net income attributed to shareholders by segment is presented in the following table. For the quarters ended December 31, ($ millions) 2022 2021 Net income attributed to shareholders by segment Asia $ 569 $ 645 Canada 320 616 U.S. 410 494 Global Wealth and Asset Management 347 387 Corporate and Other 245 (58) Total net income attributed to shareholders $ 1,891 $ 2,084 1 Represents a reduction in guarantee value on our total U.S. variable annuity block compared with December 31, 2021. Guarantee value on our U.S. variable annuity Guaranteed Minimum Withdrawal Benefits block reduced by more than 90% compared with December 31, 2021. 44 | 2022AnnualReport | Management’sDiscussionandAnalysis