INVESTING FOR OUR CONTRIBUTORS & BENEFICIARIES

1 INVESTING FOR OUR CONTRIBUTORS & BENEFICIARIES2017 Annual ReportTable of ContentsOperational Highlights 2 Performance 3 Chairperson s Report 4 President s Message 7 Purpose 10 Advantages 12 Global Investments 14 Our People 16 Senior Management Team 17 Our Mission and Investment Strategy 18 Management s Discussion & Analysis 42 Compensation Discussion & Analysis 70 Governance Practices of the Board of Directors 86 Financial Statements and Notes 97 CPP Investment Board is an investment organization established to help ensure the canada Pension Plan (CPP) will be there for generations to compete around the world to secure and manage public and private assets to maximize returns and deliver sustainable value.

2 We have global teams who bring deep expertise and local knowledge. We ensure the Fund has both asset and geographic diversification to make the Fund more resilient to single-market volatility and to safeguard the best interests of current and future BENEFICIARIES against other factors affecting the funding of the CPP. Our success depends on the strength of our governance framework, which safeguards our sole investment focus while upholding our accountability to the 20 million CPP CONTRIBUTORS and BENEFICIARIES . 1 CPP Investment Board 2017 Annual Repor tOperational Highlights Scaling Our Investment Programs > Grew equity programs in Public Market Investments by $ billion in assets under management through new and follow-on investments, including an approximate 20% stake in Advanced Disposal Services, Inc., the fourth largest solid waste company in the > Committed $ billion in Investment Partnerships including the acquisition of an stake in MISA Investments Limited through our Thematic INVESTING team.

3 MISA is the parent company of Viking Cruises, a market-leading river and ocean cruise operator with strong long-term growth drivers. > Deployed $ billion in Private Investments including the acquisition of Ascot Underwriting Holdings Ltd. and certain related entities, together with Ascot s management, for US$ billion. Ascot is a Lloyd s of London syndicate and a global specialty insurance underwriter with expertise spanning multiple lines of businesses. > Com mi t ted $12 .9 billion in Real Assets including our first infrastructure investment in Mexico, a stake in the concessionaire of the Arco Norte toll road, one of the largest federal toll road concessions in Mexico. Developing Talent > Over 800 employees took part in organization-wide training programs. > Expanded and improved our talent development initiatives including the launch of a leadership development program for Managing Directors.

4 > Welcomed the inaugural cohort of female students through the Women in Capital Markets Internship Program. > Provided more opportunities for employees to receive cross-functional training via secondments and international assignments. > Increased campus hiring for both full-time and summer internship roles. > Reinforced and renewed employee commitment to our unique culture through the annual Living our Guiding Principles sessions held across the entire organization. Expanding Our Global Investment Activities Grew our investments outside canada from $ billion to $ billion during the year; this represents of our total assets. Continuing to Enhance Our Investment Framework > Completed the development of key tools for managing and governing the total Fund, including an enhanced daily process to optimize the Fund s return-risk factor exposures, leverage and liquidity, and a new Long-Term Risk Measure for use starting in fiscal 2018 (as described on page 26).

5 Completing the Straight-through Processing of Publicly Traded Securities > Completed the implementation of new trade execution and processing systems to support listed and over-the-counter securities across our public market portfolios. The benefits of this project include improved efficiencies, reduced operational risk and enhanced agility. 2 CPP Investment Board 2017 Annual Repor tPerformance-20-15-10-5051015201708 09 10 11 12 13 14 15 16 RATE OF RETURN (NET NOMINAL)For the Year Ended March 31 (%)CUMULATIVE NET INCOME FROM OPERATIONSF iscal Years 2007 2017 ($ billions) 11 . 8%Fiscal 2017 Rate of Return (net nominal)$ BillionNet Income After All CPPIB Costs$ BillionCPP Fund Value at March 31, Annualized Rate of Return (net nominal) 11 . 8%Five-Year Annualized Rate of Return (net nominal)$ BillionCumulative Net Income for 10-Year Period After All CPPIB Assets21.

6 5%Fixed and Private $ Billionin Private AssetsASSET MIX As at March 31, 20171. Net of external debt developed market public equities %Foreign developed market private equities IncomeInvestment Management FeesTransaction CostsOperating ExpensesNet IncomeGovernment bonds, Cash and Absolute return strategies1 estate 12 .6%Infrastructure %Emerging market public equities investments public equities Other real assets market private equities private equities Investment Board 2017 Annual Repor tCPPIB serves a strong public purpose, playing a significant role in supporting canada s national retirement income security system, and the confidence you place in your CPP retirement funds. We believe that transparency is the foundation of the trust that our stakeholders place in us. The confidence you have in CPPIB safeguards our singular focus on INVESTING in your best interests, protected from other preoccupations, and at arm s length from governments.

7 Among the Board s prime responsibilities is to ensure that Management carries out full and timely disclosure to the Board and to the Canadian public. This Annual Report is only one facet of our extensive disclosure, which is described on page 40 of this report. CPPIB s Board holds itself highly accountable through an annual assessment process that evaluates the performance of the Board as a whole, as well as individual committees, the Chairperson and each Director (see page 89). Most importantly, the Board and Management s aspirations are closely aligned in a steadfast commitment to high standards of organizational culture and conduct, and a drive to create governance structures and strategies that support enduring value for our CONTRIBUTORS and Competitiveness: A Source of Pride and Strength The celebration this year of canada s 150th anniversary provides a special context within which to consider key attributes that contribute to our nation s success.

8 Among these is the outward-looking nature of Canadians. The relatively small size of our nation s population and of our economy compels us to reach out to the world and, from an economic perspective, to reach out to global markets to achieve growth. The same can be said of CPPIB. Our global mindset allows us to capitalize on attractive long-term investment opportunities wherever these arise. This ability to punch above our weight in the global marketplace is a significant advantage for our BENEFICIARIES . Our geographic diversification serves as a prudent hedge against the CPP s heavy exposure in our home market. With the exception of investment returns, virtually all other factors that impact the economic viability of the Fund including real wage growth, birth rates, longevity, demographics and immigration are domestic. Chairperson s ReportDear fellow CONTRIBUTORS to and BENEFICIARIES of the canada Pension Plan,I am pleased to report to you on the work of CPPIB over the past year, on your behalf.

9 Dr. Heather Munroe-Blum, Chairperson4 CPP Investment Board 2017 Annual Repor tThe Canadian market, representing less than 3% of the world s capital markets today, is too small and undiversified for CPPIB to achieve its investment mandate and properly manage risk if it invested primarily at home. By seeking out the best opportunities around the world in talented people, technology, assets and investment partners, we serve the best interests of Canadians at home. For canada and for CPPIB, our global perspectives and global networks are great strengths, and that is worth celebrating. This sesquicentennial year also marks a pivotal juncture for one of canada s most treasured assets, the canada Pension Plan. In March 2017, legislation became effective to enhance the CPP. Anticipating the implementation of this legislation, CPPIB s Management has been working diligently to ensure the organization will be ready to manage the Additional CPP beginning in 2019, and the Board is confident that CPPIB will be well-positioned to do Canadian Prime Minister and former federal Finance Minister, The Right Honourable Paul Martin, played an instrumental role during the development of the CPP reforms in the 1990s.

10 In a foreword written for the Chinese translation of Fixing the Future, a book chronicling the steps taken to ensure canada Pension Plan s stability, he wrote: To all those who ask, what is the secret to the CPPIB s success: There is no secret. It is the independence of the Board combined with the crisp and unconfused language created to describe the investment board s mandate. CPPIB s long-term objective is to maximize returns without undue risk of loss, having regard to the factors that may affect the funding of the CPP. In pursuing this objective, we anticipate short-term periods of market volatility, and our current risk profile anticipates losses of at least 12% one year in ten. Over time, we expect that this risk profile will deliver superior long-term returns. Within this strategic framework, fiscal 2017 was a good year for CPPIB. Our diversified portfolio achieved a net return of after all costs.