São Paulo, Friday, February 24, 2017 – AES Tietê Energia S.A. (“Company” or “AES Tietê Energia”) (BOVESPA: TIET3, TIET4, TIET11) announced today the results referring to the 4th quarter of 2016 (“4Q16”) and 2016. The Company’s operational and financial information, except when indicated otherwise, is presented on the basis of consolidated figures of the Controlling company and in millions of Brazilian Reals, in accordance with corporate law.

COMPANY SETS GROWTH STRATEGY: EXPANSION IN NON-HYDRAULIC SOURCES WITH LONG-TERM AGREEMENTS

Comments by Mr. Francisco Morandi

Director Vice President and Investor Relations Officer

The Company announced in 2016 its growth strategy and value creation to its shareholders, which consists of searching for generation opportunities in order to diversify its installed capacity and risk profile, by expanding non-hydraulic sources with long-term contracts and new energies/technologies, such as wind and solar generation, distributed generation and energy storage via batteries, and it updated its commercial platform, considering the new commercial dynamics of the energy market, which is oriented to the customer and the development of electric-energy technology and solutions. Throughout 2017, we may present the advances in growth and diversification streams, as well as in the integrated commercial platform. In January 2017, the Company agreed with Renova Energia S.A. on a proposal for the purchase of the set of wind parks constituting Alto Sertão II Complex, located in the State of Bahia, which has a total installed capacity of 386.1 MW and contracted energy for 20 years. The purchase contributes to AES Tietê Energia’s growth strategy of comprising 50% of its EBITDA with non-hydraulic sources with long-term regulated electric energy purchase and sale agreements until 2020. In regard to the energy commercialization, over 2016, AES Tietê Energia signed new contracts for the period between 2017 to 2021 and closed the year with contracting levels above 88%, 73%, 40%, 28% and 13% for the years 2017, 2018, 2019, 2020 and 2021, respectively. It may be highlighted that, in virtue of the current scenario and hydrological risk, the Company chose to reserve a portion of its own non-contracted energy in order to reduce possible exposure risks to the spot market and the physical guarantee reduction in the ERM. The Company maintains its focus on long-term contracting, as well as the expectation of the free market price level ranging from R$ 140 to R$ 170/MWh. Throughout the year of 2016, discussions were opened in the electric sector about the necessity of an adjustment in the parameter of risk aversion adopted for the models of price formation. In the Company’s view, this adjustment is important so that the spot price reflects, with the most precision, the reality of the National Interconnected System’s (“SIN”) operational conditions. Additionally, it is expected that the raise of the risk aversion should raise the thermal dispatch, reducing the necessity of dispatch for energetic security that occurs today. In 2016, the hydrology registered in SIN was worse than that in 2015 (86.7% of the LTA in 2016 vs. 89.4% of the LTA in 2015). Despite this factor, the lower thermal dispatch in the year (11.4 GWh in 2016 vs. 15.5 GWh in 2015), aligned with the load maintenance, caused a smaller physical guarantee reduction in the ERM, of 13.2% in 2016 vs. 15.9% in 2015. As a result of the smaller reduction, the Company decreased the volume of energy purchased in the spot market that, together with the lower average spot price verified in the SE/MW submarket (R$ 94.10/MWh in 2016 vs. R$ 287.20/MWh in 2015), resulted in decreased costs of energy purchased in the spot market by R$ 357,8 million in relation to the same period in the previous year, a prevailing factor for the reduction of operational costs and expenses (does not include depreciation) of 38.6% when compared to 2015. Our economic-financial results also reflected our new portfolio of contracts in the Free and Regulated Market, given the expiration of the contract with AES Eletropaulo in late 2015. Thus, the average sale price of our commercialized energy decreased from R$ 198.40/MWh in 2015 to R$ 146.80/MWh in 2016, adversely affecting the Company's net revenue. This change also affected the Company's EBITDA, amounting to R$ 802.7 million in the year (with a margin of 51.4%) versus an EBITDA of R$ 1,389.2 million in 2015 (with a margin of 52.9%). The net income reached R$ 358.5 million in 2016 versus R$ 738.8 million in 2015. Based on the net income assessed in the year, plus the equity assessment adjustment, dividends and interest on shareholders' equity prescribed and withheld for the constitution of the legal reserve, the Company's management shall submit for the approval of its shareholders' at the General Meeting, the distribution of R$ 34.5 million of supplementary dividends referring to the fiscal year 2016. amounting to R$ 400.00 million in 2016.

RESULTS

2016 Results Conference Call

03.03.2017

11h00 (BRT) and 09h00 (EDT)

Code: AES Tietê

Connection: - Brazil: +55 11 3193 1001

+55 11 2820 4001

- USA: +1 888 700 0802

Slides of the presentation and audio will be available at:

ri.aestiete.com.br

Index

HIGHLIGHTS 2

SECTOR CONTEXT 3

PROFILE 7

SECTOR PERFORMANCE 8

OPERATIONAL AND COMMERCIAL EFFICIENCY 12

FINANCIAL PERFORMANCE 17

SHAREHOLDER REMUNERATION 26

SOCIAL AND ENVIRONMENTAL PERFORMANCE

32

BUSINESS DEVELOPMENT 33

CORPORATE GOVERNANCE 37

ATTACHMENTS / GLOSSARY 41

TIET11: R$ 16.07 (24/02/2017) MARKET CAP: R$ 6,127 million MARKET CAP: US$ 1,977 million

AES Tietê Energia S.A. - R$ million 2015 2016

Gross Revenues 2,779.2 1,762.6

Net Revenue 2,625.8 1,561.3

Operational Costs and Expenses1 1,236.6 758.7

EBITDA 1,389.2 802.7

EBITDA Margin % 52.9% 51.4% -1.5 b.p.

Net Income 738.8 358.5

Net Margin % 28.1% 23.0% -5.1 b.p.

Shareholder Equity 2,018.5 1,578.1

Net Debt 644.9 869.0

Operational Cash Flow 1,220.8 1,144.1

1 does not include depreciation

-40.5%

Chg (%)

-36.6%

-21.8%

-38.6%

-42.2%

-51.5%

34.7%

-6.3%

Ratios 2015 20160

Net Income / Equity (times) 0.4x 0.2x -0.2 b.p.

Net Debt / Equity (times) 0.3x 0.6x 0.3 b.p.

Net Debt / Adjusted EBITDA2 (times) 0.5x 1.1x 0.6 b.p.

Adjusted EBITDA2 / Adjusted Financ.Exp. (times) 6.3x 4.1x -2.2 b.p.0

2 adjusted to debt service

Operational Data 2015 20160

Generated Energy - GWh 7,928.0 13,108.9

PPA's Price3 198.4 146.8

Capex - R$ million 167.7 101.0

Own Employees 350 3620

Chg (%)

65.3%

Chg (%)

3 AES Eletropaulo PPA in 2015 and Regulated and Free Market PPA's in 2016

3.4%

-26.0%

-39.8%

2

HIGHLIGHTS 2016

Hydrology

— The SIN Inflow in 2016 of 86.7% of the long-term average - LTA (vs. 89.4% in 2015); inflow in the SE/MW region in 2016 of 94.9% of the LTA vs. 84.6% in 2015;

— The SIN reservoir level closed 2016 at 31.7%, 2.3 p.p. higher than that in 2015 (29.4%); and

— Average ERM reduction of13.2% in 2016 vs. 15.9% in 2015.

Operational

— The volume of energy generated by AES Tietê Energia’s plants was 13,108.9 GWh in 2016, 65.3% higher than the same period in 2015 (7,928.0 GWh); and

— Company's reservoir level closed 2016 at 38.7%, 26.7 p.p. lower than that in 2015 (65.4%).

Commercial

— Spot price of the SE/MW submarket closed 2016 at R$ 94.10/MWh, a 67.3% reduction in comparison with 2015 (R$ 287.20/MWh);

— Over 2016, in line with AES Tietê Energia's business strategy, the Company signed 2 new distributed generation agreements, amounting to 36.3 kWp; and

— The portfolio of contracted energy totaled 88%, 73%, 40%, 28% and 13% of the Company’s available energy for 2017, 2018, 2019, 2020, and 2021 respectively.

Financial1

— Net revenue of R$ 1,561.3 million in 2016; 40.5% lower than 2015 (R$ 2,625.8 million);

— Operational costs and expenses, excluding depreciation, amounted to R$ 758.7 million in 2016, 38.6% less than the R$ 1,236.6 million recorded in 2015;

— Reported PMSO R$ 246.5 million in 2016, an increase of 12.8% vs. 2015 (R$ 218.5 million);

— EBITDA of R$ 802.7 million in 2016 vs. R$ 1,389.2 million in 2015; and

— Net income of R$ 358.5 million in 2016 vs. R$ 738.8 million in 2015.

Shareholder Remuneration

— Distribution proposal: R$ 34.5 million of dividends in 4Q16 and R$ 400.0 million in 2016; and

— Dividend yield2 of 7.1% and payout of 111.6% in 2016, considering dividends and interest on shareholders' equity.

Social and Environmental Acknowledgments

— Inclusion of the 2017 Corporate Sustainability Index in the portfolio for the 10th year in a row;

— Winner of 2016 Transparency Trophy at ANEFAC Award3 acknowledging the companies with the most transparent financial statements in Brazil; and

— Elected among the 150 Best Companies to Work, according to Guia Você S/A, one of the major acknowledgments for Human Resources practices in the market.

1 Information for 2015 refers to results of continuing operations. 2 Considers weighted average price of the Company's units in 2016. 3 National Finance, Management and Accounting Business people Association.

3

SECTOR CONTEXT HYDROELECTRIC GENERATION IN BRAZIL The energy produced by the generating plants in Brazil is destined for the Interconnected National System (“SIN”), which is formed by hydroelectric power plants located in the South, Southeast, Midwest and Northeast regions and a portion of the Northern region of the country. According to the National System Operator (“ONS”), only 1.7% of the Brazilian electric power generation capacity falls outside the scope of SIN in small isolated systems mainly located in the Amazon region. The activities involving the coordination and the control of operations are performed by ONS, which seeks to manage the available energy resources, to ensure energy security throughout the country.

Climate changes may cause surplus or shortage in hydroelectric production in certain regions and at particular times of the year since the volume of energy generated by hydroelectric power plants (“HPP’s”) depend on the rainfall rates to contribute to the suitable water storage levels in the reservoirs. The SIN ensures that all the energy generated in the system is captured and distributed properly throughout the country, enabling the exchange of energy between regions, in addition to obtaining advantages from the diversity of the hydrographic basins.

According to the rules of the Energy Reallocation Mechanism (“ERM”), the total volume of energy generated by the hydroelectric power plants is allocated to each plant that integrates this mechanism, proportionally to its respective physical guarantee levels4 (or assured energy). This distribution is intended to assure that all ERM members reach their respective assured energy levels, regardless of the level of their actual energy production. If, even after the stage mentioned above is completed, all ERM members achieve their physical guarantee levels and still show a surplus of produced energy, this surplus, called "Secondary Energy", is allocated proportionally among the generators. If, after the secondary energy apportionment, all generators reach their assured energies, the remaining energy may be settled at the spot market at the Settlement Price for Differences ("PLD").

Likewise, when energy generation falls short of the SIN plants' physical guarantee, such deficit is also proportionally distributed among ERM members through the Generation Scaling Factor (“GSF”), an effect known as the reduction of the physical guarantee in the ERM. Such reduction may result in exposures to the spot market and PLD.

In the two situations mentioned above, it may also occur that the allocation of energy in the ERM may take place in a submarket other than the one where the energy was generated, which may or may not create exposure to the difference between the submarkets' PLD where the plant is located and where the energy is allocated. Such exposures, either positive or negative, are subject to a financial relief mechanism and may be reduced or deleted, depending on the short-term accounting of the Chamber of Commercialization of Electric Energy ("CCEE") in the month of the configuration.

Furthermore, the plants dispatched by ONS are subject to the application of the Physical Guarantee Lowering Mechanism (“MRA”). MRA is in charge of monitoring whether or not the ERM member’s plants have complied with the established availability requirements. Those calculations are made by taking into consideration the scheduled and unscheduled outage parameters, recorded in relation to the reference parameters of the Brazilian Electric Energy Agency (“ANEEL”). In case the availability indexes are not met by the plants, the physical guarantee is adjusted, which may result in exposures to the spot energy market.

The MRA effects related to ERM allocations, reductions of the GSF or secondary energy are calculated and accounted for by the CCEE.

4 The physical guarantee, calculated by the Energy Research Company (“EPE”) and ANEEL for each hydropower plant, is the quantity of energy that any plant has the right to commercialize.

4

ENERGY COMMERCIALIZATION The commercialization of energy, according to the current rules, is performed in two spheres: the Free Contracting Environment (“ACL”) and the Regulated Contracting Environment (“ACR”). In the ACL, contracts of the purchase and sale of electric energy are traded between generators, retailers and free and special consumers. These contracts can be short, medium, or long term and the price and volume are freely negotiated between the parties involved.

Conventional free consumers are those consumers that have a minimum contracted demand equal to or higher than 3 MW and may choose their energy utility (generator and/or dealer) upon free trading by acquiring energy with any source, either subsidized and/or conventional. The incentivized source arises from Small Hydropower Plants ("SHPP’s"), Biomass Thermal Power, Wind and Solar Plants of 30 MW as a maximum. The conventional source includes large-sized hydropower or thermal power plants having contracted demand over 30 MW.

Special consumers are those which demand is between 500 kW and 3 MW. They are required to acquire energy from special subsidized sources (wind, biomass, SHPP’s or solar).

In the ACR, the sale of energy occurs only through sale and purchase auctions promoted by the CCEE, under ANEEL's delegation. Contracts traded in that environment are called Electricity Commercialization in a Regulated Environment Contracts (“CCEAR”) and the contractual conditions are regulated by ANEEL. These contract prices are established in each energy auction.

The agreements entered into those environments are settled and accounted for by the CCEE, which further appraises the energy produced by ERM members, as well as the physical guarantee available for contracting. Any eventual difference is settled in the spot market, initially in order to serve the ERM and generating plants that were not able to produce sufficient energy to fulfill their energy agreements. In a second stage, if there is surplus generation, the generated energy (secondary energy) can be settled in the spot market at the PLD.

REGULATION Review of Physical Guarantee of Hydro Power Projects

The determination of the physical guarantee is fundamentally important to agents in the electric sector.

According to Decree 5.163 of July 30th, 2004, in article 2, paragraph 2, the physical guarantee of an energy generation project as defined by the Ministry of Mines and Energy ("MME") and appearing in the concession contract or authorization term, shall correspond to the maximum quantities of energy associated with the project, which may be used for commercialization.

On the other hand, paragraph 1 of article 4 of the same Decree states that the MME through the supply assurance criteria proposed by the National Council of Energy Policy ("CNPE") shall regulate the form of calculation of the physical guarantee of generation projects, to be defined by the Energy Research Company ("EPE") by means of the criteria of general supply assurance.

In light of such provisions, the MME Ordinance No. 303, of November 18th, 2004, set the methodology for calculating the physical guarantees of electric power generation projects and established in paragraph 2 of article 1 thereof that the amounts of physical guarantees for hydroelectric generation projects, except Itaipu Binacional, would be the same as those in force on the date of its publication, and would thus remain until December 31st, 2014.

However, in MME Ordinance no. 681, published on December 30th, 2014, it was determined by the MME that the physical guarantees of hydroelectric power plants dispatched mainly in the SIN, including Itaipu, would remain valid until December 31st, 2015. This Ordinance also established the creation of working groups consisting of MME representatives, Executive power regulatory agencies and representative institutions of the Electric Industry, aiming to discuss the methodology and models required for the ordinary review of the physical guarantees of these plants.

5

On November 17th, 2015, MME Ordinance No. 544/2015 was published, in which the new physical guarantee calculation methodology of HPP’s was submitted to the Public Hearing with a deadline for contribution by January 24th, 2016. The results of this Public Inquiry were not published. As for the physical guarantee values, the MME published the Ordinance No. 537/2015 defining that the values, then in force, would remain as valid until December 31st, 2016.

On December 28th, 2016, the MME published the Ordinance No. 714/2016 determining that the current physical guarantee values will be valid until December 31st, 2017.

Concerning the determination of the effective physical guarantee for generators in 2018, on November 17th, 2016, a new Public Inquiry was opened concerning the methodology and the reviewed values of physical guarantee at the hydropower plants dispatched in a centralized manner. The result of this Public Inquiry is expected to be disclosed during the first quarter of 2017, with the publication of the values to be valid for the fiscal year of 2018.

It should be mentioned that, pursuant to Decree 2.655/1998, the ordinary physical guarantee reviews of hydropower plants must take place every 5 years or as a result of any material fact. The reviews cannot imply any reduction higher than 5% of the value established in the last review, limiting the reductions as a whole to 10% of the base value appearing in the respective concession agreement during the effective term thereof.

Maximum and minimum limits of PLD - Homologation Resolution No. 2190/2016

Every year in December, ANEEL establishes the maximum and minimum limits of the PLD that should be in force for the next year. The maximum PLD is calculated based on the highest Variable Cost per Unit (“CVU”) of a natural gas Thermal Power Plant in commercial operation contracted through the CCEAR. The minimum PLD must be calculated based on estimates of the generation cost of HPP Itaipu and the necessary costs to maintain and operate hydroelectric projects, charges and the CFURH – Financial Compensation for Hydric Resources Use.5

On December 13th, 2016, Resolution No. 2190/2016 was published, which established the maximum and minimum limits of the PLD for the year 2017. The minimum and maximum PLD were defined at R$ 33.68/MWh and R$ 533.82/MWh, respectively.

Changes in the PLD calculation

In order to reduce distortions in the short-term price signal, represented by the PLD, arising from the thermal dispatch out of the merit order defined in the actual system operation, discussions in the electric energy industry began in 2016 on the need to adjust the risk aversion parameter adhered to in the price formation models.

The Permanent Commission for the Analysis of Electric Sector Methodologies and Software ("CPAMP"), at a meeting held on October 18th, 2016, approved the use of a single level for representation of the loss cost ("energy outage cost") and new parameters of the Conditional Value at Risk ("CVaR"), to be applied in the operation planning and price formation. Such alterations imply the increased risk aversion represented in the computer models. Depending on the hydrology, parameter review of the models and evolution and the projection of the SIN load, the PLD value may be affected, particularly in the short and medium-terms.

In February 2017, the MME determined a certain CVaR parameter to be updated, in effect as from the first operating week of May 2017; however, for the effects of expansion planning, the parameter was promptly adopted. The alteration of the lambda parameter of the CVaR from 25 to 40 is associated

5 Percentage paid by utilities seeking to reimburse the cities and states affected by the water from hydropower plant reservoirs. The calculation takes into consideration 7.00% of the value of produced energy. The total amount payable is calculated according to the standard formula: 7.00% x energy generated in the month x Updated Reference Rate ("TAR"). TAR is defined on an annual basis by means of ANEEL's Approval Resolution.

6

with the higher intended degree of aversion to risk. Such alteration will allow a smoother transition to the implementation of the Surface of Aversion to Risk ("SAR") model in 2018.

In the Company's view, this adjustment is important for the PLD to reflect, in a more accurate manner, the reality of operating conditions in the NIS. Additionally, the increased aversion to risk is expected to increase the thermal dispatch, decreasing the need for energy security dispatch, as it currently occurs.

Impacts of retraction of hydroelectric generation in the ERM - GSF

As previously mentioned, the hydroelectric dispatch is defined by the ONS, whose model has the load service and minimizing the total cost of the operation system as its main objective.

The hydroelectric generators have to keep their plants available for dispatch by the ONS and have no control over the level of generated energy. Thus, the resulting risk of this centralized operation model is shared only between hydroelectric generators through the ERM.

However, considering the change of the energy mix, with the higher participation of thermal power plants, reserve generation (wind, biomass and solar) or factors out of the control of the generators such as the dispatch out of merit order, consumption retraction and the importation of energy from neighboring countries, the hydroelectric generators are involuntary exposed to a hydrological risk much higher than previously considered in the contracting strategies.

Therefore, since the end of 2013, the generation of hydro power plants participating in the ERM has been lower than their respective Physical Guarantees, resulting in a variable of commercialization rules of a GSF less than 1, indicating the physical guarantee reduction level for the purpose of short-term market accounting.

The recent injunctions obtained by agents in the electric sector limited or neutralized the impacts of hydroelectric displacement for some plants belonging to ERM. The Brazilian Association of Independent Power Producers (“APINE”) obtained, on June 1st, 2015, an injunction favorable to all electrical generating companies included in the association, among them, AES Tietê Energia, which prevents such hydroelectric displacement from being allocated to generators with injunctions in the next settlement.

By December 31st, 2016, the adjusted overall amount of the provisioning of the Company referring to the injunction obtained in the GSF discussion in favor of the Company was R$ 315.0 million (R$ 289.9 million of principal and R$ 25.1 million referring to the inflation adjustment by the IGP-M).

Renegotiation of the GSF

The regulator showed two proposals for the hydrological risk renegotiation: one for the ACR and the other for the ACL. Although the Company falls within the ACL proposal, it decided not to adhere thereto, since it did not make economic sense. The proposal for the ACL presented by the regulator was not consistent with the provision in Law 13203/2015, which rendered the proposal to have no adhesion by the generators with agreements solely in the ACL.

The ANEEL was asked about the possibility of the Company to adhere to the proposal in the ACR, considering its participation in the A-1 Auction in December 2015, regarding the power supply starting from January 2016. However, ANEEL considered that the Company would not be eligible because the contract sold in that auction began in 2016, which would not ensure the reimbursement of hydrological risk impacts referring to 2015.

The Public Hearing to regulate article 2 of Law 13203/2015, providing for the hydroelectric generation displacement cost arising from the thermoelectric generation exceeding the former by the order of merit and the import of electric energy, was reopened. In the proposal of the ANEEL, the displacement cost ('PLDx") must correspond to the opportunity cost that the generator would obtain from the generation, arising from a compulsory water storage that would occur at the same time as the displacement.

ANEEL presented a proposal with the following methodology:

7

(i) volume to be considered as Generation Out of Merit Order (“GFOM”) must be considered as generation dispatched for energetic security;

(ii) value to be reimbursed to generators participant in the ERM for hydroelectric dislocation resultant from GFOM to be equal to the PLD of the referred period subtracted by the PLDx. This value will be the average cost of regulated contracts of ERM’s participant plants, that correspond today to R$ 152/MWh, in the case of payments that are paid upfront, which in the vision of generators would be a large amount; and

(iii) in case of a long term payment, the PLDx will be the amount of the PLD 12 months forward

At the contribution of the Public Hearing, most of ERM’s generators and its associations of class – APINE and the Brazilian Association of Companies that Generate Electric Energy (“ABRAGE”) – argue that the PLDx should be in the order of R$ 70/MWh, an amount that is based on the amount of the liquid margin of energy considered for the calculation of the extension of the concession for generators that renegotiated the hydrological risk in the ACR. The deadline to contribute in the Public Hearing has taken place on February 6th, and there hasn’t been a definition regarding the subject yet.

PROFILE AES Tietê Energia, a generation company of the AES Brasil group, is a public Company listed at the BM&FBOVESPA and is authorized to do business as a concessionaire for the use of public property, in electrical energy generation and commercialization and in the capacity of independent electrical energy producer.

Because it is an energy platform adaptable to customers' demand, AES Tietê Energia offers off-the-shelf products and customized solutions ensuring energy autonomy and allows customers to decide the most sustainable method of supply in all matters: efficiency, availability/reliability and innovation.

GENERATION PARK The Company has its business regulated and inspected by ANEEL, linked to the MME. The concession agreement was executed on December 20th, 1999, with duration of 30 years, as from April 1, 1999.

AES Tietê Energia is one of the most efficient electrical energy generators in Brazil, with a generating station comprised of nine hydropower plants and three SHPPs. The concessions of hydropower plants and SHPP Mogi-Guaçu expire in 2029 and SHPPs São José and São Joaquim are authorized to operate until 2032. Its installed capacity is 2,658 MW and gross physical guarantee for 2017 is 1,278 MWavg.

The Company's plants are located on the rivers: Tietê, Pardo, Grande and Mogi-Guaçu, as shown on the map below:

All twelve AES Tietê Energia’s plants have obtained valid environmental operating licenses. Two of them - Água Vermelha and Caconde - are licensed by the Brazilian Institute of Environment and Renewable Natural Resources (IBAMA) and the others by the Environmental Company of State of São Paulo (CETESB).

Usinas da AES Tietê Energia:

8

SUSTAINABLE STRATEGIC PLANNING AES Brasil's strategy, a group of which AES Tietê Energy is a part of, is directed by a new mission and vision, revised for the 2017-2021 cycle. The mission of the Company is to promote welfare and development by providing energy solutions in a safe, sustainable and reliable manner, and its vision is to be acknowledged by its customers and shareholders as the main partner of innovative energy solutions in a safe, sustainable, reliable and affordable manner. Promoting innovation, assuring operational efficiency, expanding options and reducing risks, are the four strategic drivers defined by the Company to achieve its objectives.

Thus, in line with the strategic drivers, the mission and the vision of AES Brasil, AES Tietê Energia's focus, until 2020, is to comprise 50% of its EBITDA with sources of non-hydraulic energy with long-term regulated agreements. Additionally, the Company seeks to supplement its portfolio with new energies/technologies, such as distributed generation and energy storage via battery, as mentioned as follows.

SOLUTIONS & SERVICES As highlighted over the past periods, AES Tietê Energia has been working towards the growth of its operations by means of new energies, energy solutions and the provision of services in the sector. For this purpose, the Company is dedicated to the following fronts:

• The distributed generation business, including solar energy projects and gas cogeneration;

• Energy commercialization;

• Storage solutions via battery ("Energy Storage"), relying on the AES Group's global expertise and leadership;

• The provision of services for distributed generation-related projects, including installation, maintenance, management, advisory, energy efficiency; and

• Electrical system improvement services.

SECTOR PERFORMANCE RESERVOIRS, THERMAL DISPATCH, INFLOWS AND LOAD The following chart presents the monthly inflow recorded (also known as Natural Inflow Energy – NIE)6 for the SIN over 2014, 2015 and 2016. As can be observed, excluding some months, the registered inflow was lower than the long-term average (“LTA”) of the respective periods of time.

6 NIE is a parameter used to represent the inflows in hydroelectric use.

9

Natural Energy Inflow in SIN (GWavg) 2014 x 2015 x 2016 x LTA7

Source: ONS

Comparative 4Q15 x 4Q16 and 2015 x 2016

The hydrology in 4Q16 was more critical when compared to the hydrologic result in the same period in the previous year. The inflow recorded in SIN amounted to 77.4% of the LTA in 4Q16, 38.8 p.p. lower than the average inflow in 4Q15, which amounted to 116.2% of the LTA. The inflow in the Southeast/Mid-West ("SE/MW") submarket, representing roughly 70% of the storage capacity system and the region where the Company's plants are located, decreased by 21.7 p.p. as compared to the inflow in 4Q15 (83.1% of the LTA in 4Q16 vs. 104.8% of the LTA in 4Q15), as verified in the following chart.

In 2016, the inflow in the SE/MW was 94.9% of the LTA, a 10.3 p.p. increase in relation to the LTA in 2015 (84.6% of the LTA). However, the high inflow observed in the SE/MW submarket did not repeat in the SIN inflow, which amounted to 86.7% in 2016, a 2.7 p.p. reduction versus the previous year (89.4% of the LTA in 2015).

Natural Inflow Energy in submarkets (% LTA)

7 Currently the sector uses the LTA's values disclosed in December 2016, the long-term average since 1931 and is subject to change (Source: ONS).

35 37

Dec

71

7054

Nov

49

53

66

505347

Apr

89

576463

Mar

106

92

6767

Feb

106

95

5845

Jan

96

105

4762

5332

Oct

42

5234

Sep

37

293731

Aug

37

352826

Jul

44

36

6139

Jun

53

5145

74

May

LTA201620152014

105

238

39

11683 89

45 517785

166

3872 8995

118

43 5287

25

NorthNortheast SINSouthSoutheast/Centerwest

2015 20164Q164Q15

10

Thermal Generation

Since the end of 2012, the ONS has opted to keep the policy of greater thermal dispatch to preserve the reservoirs, due to the low inflows recorded, reducing hydroelectric generation. However, in virtue of the consumption retraction in 2015 and 2016 and the improved hydrology in the previous 2015/2016 rainfall season, the ONS has been reducing the thermal generation in the SIN, which reached the average level of 11.6 GWm in 4Q16 in comparison with 14.7 GWm in 4Q15.

The following chart illustrates the evolution of the SIN's thermal generation since 2013 until the fourth quarter of 2016. It is possible to observe that, despite the increased level of thermal generation in the SIN over 2014, the reservoir level dramatically decreased after the second quarter of 2014, in virtue of the critical period for hydrology over the period, which resulted in a maximum thermal generation level of 17.0 GWm in 4Q14. After the hydrology improvement and consequent recovery of the reservoirs, starting from the fourth quarter of 2014, thermal generation has been reduced from quarter to quarter, reaching 11.6 GWm in 4Q16.

Thermal Dispatch in the SIN8 Level of reservoirs (%)

The following chart shows a comparison between the thermal dispatch in and out of merit order recorded for the SIN since January of 2014. It is possible to note a significant increase, starting from May 2015, in the dispatch out of merit order, which interferes with correct price formation and leads to lower values of the PLD, particularly in the SE/MW submarket.

The reason for the higher thermal dispatch out of merit order over that period was associated with a more conservative dispatch practice by the ONS in order to ensure the recovery of the reservoir levels for the dry season, which occurs from May to November in the SE/MW, North and Northeast submarkets.

Since then, a reduction in the total thermal dispatch has been noted, in comparison with 2015. However, the out of merit order thermal dispatch level still remains proportionally higher than the thermal dispatch in the merit order, despite the fact that it is more related to electrical restrictions and not to energy security.

It is noteworthy, however, that the recent attitude adopted by the Electrical Sector Monitoring Committee (“CMSE”) to reduce thermal generation out-of-merit-order for reasons related to energy

8 ONS data.

32

38

5357

293238

3029

434043

49

63

55

22

4Q14

17.0

3Q14

15.9

2Q14

15.6

1Q14

14.8

4Q13

12.1

3Q13

11.8

2Q13

12.5

1Q13

12.8

4Q163Q16

11.4

2Q16

10.8

1Q16

11.9

4Q15

14.7

3Q15

14.9

2Q15

15.7

1Q15

16.911.6

Thermal Generation – GwavgReservoir Level (%)

11

security tends to bring the formation of energy prices and the operation of the system, which is desirable and healthy for the correct signaling to the market of the conditions of the system.

As mentioned in the item “Changes in the PLD calculation”, in the sense of approximating the formation of price and aversion of risk to the real operation of the system and reduce thermal dispatch out of the merit order, alterations in the methodology of the calculation of the PLD are predicted. As of May 2017 there will be a new parameterization of CVar, and in 2018 SAR will be adopted.

The additional cost of the dispatch out of merit order is borne mainly by consumers through the System Service Charge ("ESS"), but it has a direct impact on the decrease of physical guarantee allocation in the ERM by the GSF factor.

Thermal dispatch in the SIN regarding the merit order (GWavg) vs the PLD in the SE / MW submarkets (R$/MWh)9

SIN Load

In the following chart, it may be noted that the SIN load had a slight reduction of 0.8% in its load in 4Q16 vs. 4Q15, and remained at the same level when comparing 2016 vs. 2015, when the load remained at the same level.

As aforementioned, although the 2016 inflow in the SIN has been lower than that observed in 2015, the reservoirs increased by 2.3 p.p. in the annual comparison, a result of the high level of the SIN reservoirs in January/16 (42.2%) in relation of the same period in 2015 (20.6%).

Additionally, the load reduction observed in the quarter, combined with the high thermal dispatch, also influenced the improvement of the reservoir level.

9 Source: ONS

13

16 16 1516

15 1516 16 17 17 17 17 17 17 16

1516

14 1516

14 15 1413

1210

1210 11 10

1213 13 12

10

0

2

0

4

8

12

16

20

Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16

R$/MWh(PLD SE/MW)

Thermal Dispatch out of the Order of Merit Thermal Dispatch in the Order of Merit + Inflexibility Total Thermal Dispatch PLD – SE/MW

Aumento do Despacho Fora da Ordem de Mérito

GWavg¹

Increase in Thermal Dispatch out of Order of Merit

122200116614930116212145373388388

601777710

413

823823

378

12

Level of reservoirs (%) Load in the SIN (GWavg)10

Level of the reservoirs of AES Tietê Energia’s plants

The level of equivalent energy storage in the reservoirs of AES Tietê Energia’s plants closed the 4Q16 at 38.7%, a level 26.7 p.p. lower than the 4Q15 (65.4%). This performance was higher than that of the submarket in which the Company's plants are located (SE/MW) that, in late December, was at 33.7% of its full capacity, with a SIN performance that, at the end of 2016, was at 31.7%.

OPERATIONAL AND COMMERCIAL EFFICIENCY GENERATED ENERGY In Brazil, due to the dominance of hydroelectric power in the energy matrix (64%11), the adopted model of centralized dispatch, in which the ONS determines the amount of energy to be dispatched by each of the SIN's participant power plants, is based on models for optimizing the use of stored water in reservoirs and considering some operational constraints, in order to meet the market demand in a reliable and economical way.

AES Tietê Energia's plants follow the above criteria, so that the variation in their generation is directly linked to the dispatches defined by the ONS to ensure the stability of the system and not necessarily to its operational performance.

In 4Q16, the total volume of energy generated by AES Tietê Energia plants reached 3,239.0 GWh, 25.5% higher than the same period of 2015. For 2016, the Company generated 13,108.9 GWh, an increase of 65.3% versus 2015. The variation is a result of the higher dispatch from our hydroelectric power plants.

10 Values obtained from the generation of energy from all scheduled plants and those dispatched in a centralized manner by ONS, summing the plants not monitored by ONS. 2015 values updated, as per new ONS publication. Source: ONS. 11 According to Generation Information Base ("BIG") of ANEEL (02/10/2017) – including hydropower plants and e SHPP’s.

98

293460

193230

155 16

+2.3 p.p.

SINNorthNortheastSouthSoutheast / Middlewest

20162015

6565656664 6565656465

+0.3% 0.0%

YearDecemberNovemberOctober9M

20162015

Variation 4Q15 x 4Q16: -0.8%

Generation (Power plants) - GWh 4Q15 4Q16 Chg (%) 2015 2016 Chg (%)

Gross Energy Generated 2,580.7 3,239.0 25.5% 7,928.0 13,108.9 65.3%

Agua Vermelha (Sen. José Ermírio de Moraes) 1,108.7 1,729.8 56.0% 3,548.6 6,765.4 90.6%

Bariri (Álvaro de Souza Lima) 206.6 177.5 -14.1% 577.8 764.8 32.4%

Barra Bonita 154.8 140.3 -9.4% 457.9 631.5 37.9%

Caconde 42.2 97.6 131.6% 173.1 366.6 111.7%

Euclides da Cunha 74.4 130.2 75.0% 254.1 365.4 43.8%

Ibitinga 188.2 207.8 10.4% 616.2 808.7 31.2%

Limoeiro (Armando Salles de Oliveira) 20.5 38.1 85.5% 69.2 151.4 118.9%

Nova Avanhandava 454.9 417.0 -8.3% 1,293.9 1,803.0 39.3%

Promissão (Mário Lopes Leão) 322.3 289.8 -10.1% 915.0 1,414.0 54.5%

Mogi / S. Joaquim / S. José 8.1 10.9 35.6% 22.0 38.0 72.6%

13

PHYSICAL GUARANTEE AND SEASONALITY The reduction in the ERM recorded in 2016 was 13.2%, lower than that recorded in 2015, which totaled 15.9%. Despite the worse hydrology registered in the SIN, in the annual comparison (86.7% of the LTA in 2016 vs. 89.4% of the LTA in 2015), the lower reduction is explained by the maintenance of the load and the lower thermal dispatch in the year (11.4 GWh in 2016 vs. 15.5 GWh in 2015).

The graph below shows the reductions accounted by the CCEE in the ERM on the financial settlements made in 2015 and 2016.

Reduction in the ERM (%)

Physical Guarantee Seasonality for purposes of the Ballast and the ERM

Because of the ANEEL's Resolution No. 584/2013, which establishes the seasonality of the physical guarantee for ballast purposes (contracts) and for the purposes of allocating energy in the ERM, in 2017 the Company has adopted a strategy that aims towards minimizing its exposure to hydrological risks, according to the graph below.

Thus, in December 2016, for the purposes of the ERM allocation, the Company decided to follow the profile of the set of the ERM generators, which resulted into the higher allocation of its energy in the second half of 2017. In relation to the ballast, the profile was adopted in accordance with the seasonality of the sale agreements.

The seasonality effect of the physical guarantee combined with the ERM (the GSF or secondary energy) is reflected in the energy settlement in the spot market.

13.2

Nov/16

15.0

Oct/169M16 Dec/16 2016Oct/159M15 2015Dec/15Nov/15

13.417.8

4.1

15.9

6.28.77.9

18.3

PG Reduction 4Q15: (7.6%) PG Reduction 4Q15: (12.4%)

14

Gross Physical Guarantee Seasonality for ERM and Ballast (MWavg)12

*SHPP’s São José, São Joaquim and Mogi Guaçu were excluded from the mechanism for 2017.

DIFFERENCE OF PRICE BETWEEN SUBMARKETS, SURPLUS AND FINANCIAL EXPOSURE The difference of the PLD between the submarkets is due to the limits of energy exchange between the SIN regions, given the operational restrictions of these regions’ transmission systems. They give rise to the financial surplus and to the financial exposures recorded by the CCEE.

The first three quarters of 2016 were marked by a negative financial exposure, which affected the ERM agents and caused the increase in the costs related to energy purchase. In the fourth quarter, there was no such exposure, since there was no difference of the PLD between submarkets in the SIN.

It is noteworthy that the financial exposure verified in the first nine months of the year cannot be managed by the Company and, in order to neutralize it, the CCEE regulation provides financial exposure relief as detailed as follows.

It should be mentioned that the Company may be subject to the price difference risk between submarkets if it chooses to sell energy outside the submarket in which its physical guarantee is located. In this case, in verifying the price difference, the Company shall assume the positive or negative variation of prices in the spot market. The Company may also make commercial operations in order to mitigate the risk of exposure to the price difference between submarkets.

Financial surplus, Financial exposure and Relief of the Financial Exposure

The energy transactions within the ERM are subject to the differences of price between the submarkets. In the transfers between the generators, there can be a deficit in the mechanism related to the energy transfer from generators in a cheaper submarket to another in a more expensive submarket. This effect is called financial exposure in the CCEE accounting, which may be either negative or positive.

The eventual residual negative financial exposure in the ERM is relieved by the financial surplus generated from the physical exchange between the submarkets. If this surplus is not enough to cover the negative financial exposure in the ERM, the residual balance will be divided between all the generators.

12 Includes seasonality of conventional and encouraged energy

4Q17

1,3521,270

3Q17

1,3831,339

2Q17

1,2171,302

1Q17

1,1281,171

4Q16

1,2101,206

3Q16

1,2301,305

2Q16

1,2631,342

1Q16

1,258

1,410

ERM Seasonality*Ballast Seasonality

15

The difference of the PLD between the submarkets generated, up to the December/16 settlement, a financial surplus of nearly R$ 1.8 billion; however, it is not enough to cover the R$ 2.5 billion in negative exposure generated in the ERM.

REVENUE SOURCES

Eletropaulo Metropolitana Eletricidade de São Paulo S.A. (“AES Eletropaulo”)

The amount of contracted energy up to December 31, 2015 with AES Eletropaulo was 1,268 MWavg, the amount of which should be delivered on an annual basis until the expiration of the agreement. The agreement admitted the seasonality, following a market demand that it met and the allocation of energy from further executed agreements. The bilateral agreement with AES Eletropaulo expired in December 2015.

The bilateral contract price was established in 2000, when it was approved by the ANEEL, which established the Normative Value (NV) as the parameter for bilateral contract prices. Since then, the agreement price has been readjusted annually by the IGP-M variation. On July 4th, 2015, after the adjustment, the agreement price was R$ 217.85/MWh, based on the accumulated IGP-M of the period of 8.1%. That was the price applied until December 31, 2015.

ERM and Spot

The ANEEL annually adjusts the rate applied to the ERM invoiced energy in January, according to variation of the IPCA and is determined to repay the variable costs with operation and maintenance of hydroelectric power plants. The current rate for 2017 is R$ 11.58/MWh, while in 2016, 2015 and 2014, the rate was R$ 12.32/MWh, R$ 11.25/MWh and R$ 10.54/MWh, respectively.

The prices of invoiced energy in the short-term market, called the PLD or Spot, varies according to the electric-energetic conditions, as well as the supply and demand of energy.

In 2016, the average PLD of the SE/MW region totaled R$ 94.10/MWh, which was 67.2% lower than the amount recorded in 2015 (R$ 287.20/MWh).

The improvement of the hydrology verified in the wet season from November 2015 to April 2016 was the main cause of the reduction in the average 2016 PLD for the SE/MW submarket compared to the 2015 PLD. Despite the hydrology below the average observed in the SIN, the load review held in January 2017 by the ONS maintained the PLD in lower levels until the alteration of the parameters of risk aversion mechanisms adopted in the price formation models, as mentioned in the item "Changes of the PLD calculation".

Energy Commercialization Strategy

The Company has adopted a commercialization strategy for its available energy as of January 2016 to form a diversified portfolio of free customers, in order to completely replace the bilateral contract with AES Eletropaulo that expired in December 2015.

Due to the current situation and the perspective of an increased hydrological risk, the Company chose to reserve a portion of their own energy available starting from 2016, aiming to minimize the potential exposure risk to the spot market and the physical guarantee reduction in the ERM.

Considering the opportunity of decreasing the exposure to GSF throughout 2016, which is at 13.2%, the Company chose to renegotiate with some distribution companies, which entered into agreements in the latest A-1 auction in 2015, the commencement and/or amount of supply of some of the CCEARs from 2016 to 2018.

16

Thus, considering such negotiations and the new executed agreements, as shown in the following chart, 88%, 73%, 40%, 28% and 13% of the Company's available energy is already contracted for 2017, 2018, 2019, 2020 and 2021, respectively.

History and Evolution of the Customer Portfolio13- MWavg

CUSTOMER SATISFACTION In AES Brasil's Sustainable Strategic Planning, assuring customer satisfaction is one of its commitments. The goal of AES Tietê Energia in this area is to achieve a customer satisfaction rating of 90% by 2019.

Periodic Surveys are carried out with marketing customers to assess their satisfaction with the company's services. In the first half of 2015, the survey was conducted for the first time by an independent institute.

In 2016, AES Tietê Energia restructured its commercial platform starting from its dedication to the customer-oriented energy commercialization. With that new commercial platform, the Company started adhering to more robust market intelligence procedures, expanding the offer for products and working more closely with customers in order to deliver customized and autonomous electrical and energy solutions.

BILLED ENERGY The total energy billed by AES Tietê Energia in 4Q16 amounted to 3,573.8 GWh, a 6.3% reduction compared to 4Q15. The performance is mainly explained by the expiration of the agreement with AES Eletropaulo on December 31, 2015, which was replaced with new free and regulated market agreements ("bilateral agreements"). Despite the replacement, there was still a 19.1% reduction in the total volume of contracted energy (AES Eletropaulo bilateral agreement, free and regulated market) between the quarters, which is equivalent to a 624.6 GWh reduction. Such decrease was partially offset by the higher volume of energy invoiced in the ERM, which increased by 70.7% or 384.7 GWh, in virtue of the higher dispatch of the Company's plants over 2016.

13 Conventional energy only excluding losses and internal consumption; including energy agreements executed until December 31, 2016; actual values based in December 2016.

905

495345

164

155339

749899

2016 20212020201920182017

1,080

1,0891,178

66

Own energy soldEnergy available for sale

Contracting level

Average price (R$/MWh) 157 159 159 148 141

95% 88% 73% 40% 28%

128

13%

17

In 2016, 15,669.5 GWh of energy were billed, an increase of 8.2% in comparison to 2015. Despite the lower volume of energy invoiced in the scope of contracted energy, of 11.9%, the sale of energy in the ERM increased by 310.0% (3,854.3 GWh in 2016 vs. 940.0 GWh in 2015), as aforementioned.

FINANCIAL PERFORMANCE GROSS REVENUES In 4Q16, AES Tietê Energia’s gross operational revenue amounted to R$ 410.8 million, 38.8% less than the R$ 671.7 million recorded in 4Q15. This result is explained mainly by the following factors:

(i) the reduction of revenue from the contracted energy in the amount of R$ 226.2 million, particularly in virtue of the lower average price (R$ 150.99 MWh in 4Q16 vs. R$ 203.57/MWh in 4Q15), in virtue of the expiration of the agreement with AES Eletropaulo on December 31, 2015; partially offset by:

(ii) the increase of revenue from the ERM, equivalent to R$ 5.1 million, in virtue of the higher dispatch from the Company's plants throughout the period.

In 2016, AES Tietê Energia's gross operational revenue amounted to R$ 1,762.6 million, a reduction of 36.6% compared to the R$ 2,779.2 million recorded in 2015. This result is explained by the following factors:

(i) the reduction of revenue from the contracted energy in the amount of R$ 896.3 million, particularly in virtue of the decreased average price of energy commercialized between such periods (R$ 146.80 MWh in 2016 vs. R$ 198.40/MWh in 2015), as aforementioned;

(ii) the R$ 150.6 million decrease of the revenue arising from the energy sold in the spot market, in virtue of the lower PLD in the SE/MW submarket comparing the periods (R$ 94.10/MWh in 2016 vs. R$ 287.20/MWh in 2015) and lower volume of sold energy; partially offset by:

(iii) the increase of R$ 34.8 million arising from the revenue of energy sold in the ERM, in the comparison between the periods.

Billed Energy - GWh 4Q15 4Q16 Chg (%) 2015 2016 Chg (%)

Billed Energy 3,813.7 3,573.8 -6.3% 14,484.6 15,669.5 8.2%

Contracted Energy 3,269.7 2,645.1 -19.1% 12,961.9 11,413.3 -11.9%

AES Eletropaulo Bilateral Contract 2,798.5 0.0 -100.0% 11,107.7 0.0 -100.0%

Free Market 471.2 2,472.3 424.7% 1,854.2 10,682.1 476.1%

Regulated Market 0.0 172.8 - 0.0 731.3 -

CCEE 544.0 928.7 70.7% 1,522.7 4,256.2 179.5%

Spot 0.0 0.0 - 582.7 402.0 -31.0%

ERM 544.0 928.7 70.7% 940.0 3,854.3 310.0%

18

REVENUE DEDUCTIONS The deductions of AES Tietê Energia's revenue amounted to R$ 47.1 million in 4Q16 vs R$ 34.8 million in 4Q15, an increase of 35.1% in the period. In 2016, the deductions amounted to R$ 201.3 million vs. R$ 153.4 million in 2015, a 31.2% increase, as per the following table.

AES Tietê Energia recorded R$ 37.4 million in revenue deductions with PIS/COFINS in 4Q16, an increase of 33.9% vs. 4Q15. In 2016, deductions with PIS/COFINS reached R$ 160.6 million, representing an increase of 28.5% when compared to 2015. Such performance is explained by the increase of the PIS/COFINS tax rate to 9.25% (non-cumulative regimen), considering the closing of the agreement with AES Eletropaulo (in which the tax rate was 3.65% (cumulative regimen)).

In regard to the revenue deductions with ICMS, the increase is associated with the levy of ICMS as part of the agreements executed by the Company under the scope of the free market, which is transferred to the customers.

In regard to Research & Development (R&D), pursuant to Law No. 12.111/09, generating plants, transmission and distribution companies must annually invest at least 1% of their net operating revenue in R&D. In virtue of the revenue reduction between the periods, in 4Q16, the Company recorded R$ 3.4 million in revenue deductions related to R&D, a reduction of 46.4% compared to 4Q15. In 2016, R$ 14.2 million was recorded in revenue deductions relating to R&D compared to the R$ 26.3 million in 2015 (a reduction of 46.0%).

NET REVENUES AES Tietê Energia's net operational revenue amounted to R$ 363.7 million in 4Q16, 42.9% lower than the amount recorded in 4Q15 (R$ 636.9 million). This performance particularly reflects the reduction in the volume and the price charged in the sale of energy by means of free and regulated market agreements, mainly due to the expiration of the agreement with AES Eletropaulo and the increased deductions, as previously addressed.

Gross Revenues - R$ million 4Q15 4Q16 Chg (%) 2015 2016 Chg (%)

Power Supply 671.7 410.8 -38.8% 2,779.2 1,762.6 -36.6%

Contracted Energy 665.6 399.4 -40.0% 2,571.7 1,675.4 -34.9%

AES Eletropaulo Bilateral Agreement 609.6 0.0 -100.0% 2,355.2 0.0 -100.0%

Free Market 55.9 374.8 570.0% 216.5 1,571.6 625.8%

Regulated Market 0.0 24.5 - 0.0 103.8 -

CCEE 6.1 11.4 86.0% 207.3 87.0 -58.0%

Spot 0.0 0.0 - 183.9 33.2 -81.9%

MRE 6.1 11.2 83.7% 12.3 47.1 283.5%

Other (Administratives) 0.0 0.1 - 11.1 6.8 -39.3%

Other revenues* 0.0 0.0 -3.9% 0.3 0.1 -59.0%

* includes rent and third-party billing

Revenue Deductions - R$ million 4Q15 4Q16 Chg (%) 2015 2016 Chg (%)

Revenue Deductions -159.8 -207.6 29.9% -278.4 -361.8 30.0%

PIS/COFINS -27.9 -37.4 33.9% -125.0 -160.6 28.5%

ICMS -123.3 -140.3 13.8% -125.0 -160.6 28.5%

ISS -2.2 -26.5 1123.7% -2.2 -26.5 1119.7%

Research and Development -6.4 -3.4 -46.4% -26.3 -14.2 -46.0%

19

In 2016, the net operational revenue amounted to R$ 1,561.3 million, which presents a decrease of 40.5% in relation to 2015 (R$ 2,625.8 million), due to the same factors explained above.

OPERATIONAL COSTS AND EXPENSES The operational costs and expenses, excluding depreciation and amortization, totaled R$ 194.4 million in 4Q16, which represents a 19.0% reduction, when compared to 4Q15 (R$ 240.0 million). The result is particularly explained by the lower cost of energy purchased, as will be detailed below.

In the yearly comparison, the operational costs and expenses, excluding depreciation and amortization, totaled R$ 758.7 million in 2016, a reduction of 38.6% compared to the amount recorded in 2015 (R$ 1,236.6 million).

The reported expenses with PMSO (Personnel, Materials, Services and Others) increased by 8.6% in 4Q16, in relation to 4Q15, particularly reflecting the higher costs with personnel, third-party services and some non-recurring items, as will be addressed below.

In 2016, PMSO expenses increased by 12.8% in relation to 2015, particularly reflecting the higher costs with personnel and others, as detailed below.

The main factors that influenced the variations in operational costs and expenses are detailed as follows:

Costs of Purchased Energy, Sectorial Fees and Charges

Financial Compensation for the Use of Water Resources ("CFURH")

The expenditures with the CFURH increased 29.1% when comparing 4Q16 and 4Q15 (R$ 18.8 million vs. R$ 14.6 million, respectively), due to the increase of 25.5% in the volume of energy generated in the period (3,239.0 GWh in 4Q16 vs. 2,580.7 GWh in 4Q15) and the readjustment of 9.5% in the Updated Reference Tariff (“TAR”), which was fixed at R$ 93.35/MWh in January 2016.

Operational Costs and Expenses - R$ million 4Q15 4Q16 Chg (%) 2015 2016 Chg (%)

Operational Costs and Expenses* 240.0 194.4 -19.0% 1,236.6 758.7 -38.6%

Charges and Sectorial taxes 46.3 50.1 8.4% 165.6 194.6 17.5%

Purchased Energy 116.1 60.0 -48.3% 852.5 317.6 -62.7%

Total of charges and sectorial taxes + purchased energy 162.4 110.1 -32.2% 1,018.1 512.2 -49.7%

Personnel 23.1 25.8 11.6% 84.8 99.4 17.2%

Material and third party services 38.0 26.3 -30.8% 98.5 98.2 -0.3%

Others 16.5 32.2 94.6% 35.2 48.9 38.9%

PMSO - reported 77.6 84.3 8.6% 218.5 246.5 12.8%*does not include depreciation

R$ million 4Q15 4Q16 Chg (%) 2015 2016 Chg (%)

Financial Payoff for the Use of Water Resources 14.6 18.8 29.1% 44.6 75.1 68.4%

Transmission and Connection 30.1 29.6 -1.8% 114.9 112.6 -2.0%

Inspection Fee / Further Charges 1.5 1.7 11.4% 6.2 6.9 11.4%

Energy Purchased / CCEE Settlement 116.1 60.0 -48.3% 852.5 317.6 -62.7%

Total 162.4 110.1 -32.2% 1,018.1 512.2 -49.7%

20

The increase of 65.3% in the volume of energy generated in 2016 (13,108.9 GWh) in relation to 2015 (7,928.0 GWh) was the main factor for the 68.4% increase related to the expenditures with the CFURH in the period, that was from R$ 44.6 million in 2015 to R$ 75.1 million in 2016.

Transmission and Connection

The costs with transmission and connection, the net of PIS/COFINS, amounted to R$ 29.6 million in 4Q16, a 1.8% decrease in comparison with 4Q15 (R$ 30.1 million). Disregarding PIS/COFINS credits levying in 2016, the transmission and connection costs would have amounted to R$ 32.8 million in 4Q16, an increase of 8.8% in relation to 4Q15, particularly reflecting the positive adjustment of the distribution system usage tariff (TUSDg) in part of the agreements of the Company's hydroelectric power plants.

In 2016, the costs with transmission and connection, net of PIS/COFINS, amounted to R$ 112.6 million, a 2.0% decrease in comparison with 2015 (R$ 114.9 million). Disregarding the effects of PIS/COFINS credits levying in 2016, the transmission and connection costs would have amounted to R$ 124.6 million, 8.5% higher than the amount observed in 2015 in virtue of the aforementioned adjustments.

Inspection Fees

The costs of Inspection Fees totaled R$ 1.7 million in 4Q16 and R$ 6.9 million in 2016, 11.4% and 11.4% higher than the value registered in 4Q15 (R$ 1.5 million) and in 2015 (R$ 6.2 million) respectively. This performance reflects the increase of 11.4% in the Electricity Services Inspection Fee (“TFSEE”)14 in 2016 compared to the TFSEE proposed by the ANEEL in 2015.

Purchased Energy / CCEE Settlement

The cost of energy purchased/settlement in the CCEE saw a reduction of R$ 56.1 million in the comparison of the quarters, from R$ 116.1 million in 4Q15 to R$ 60.0 million in 4Q16, according to the table below:

This result is primarily influenced by the:

(i) by the reduction of R$ 51.8 million associated with the lower volume of energy purchased in the spot market (199.6 MWh in 4Q16 versus 456.5 MWh in 4Q15) and the price in the SE/MW submarket (R$ 162.76/MWh in 4Q16 vs. R$ 176.79/MWh in 4Q15) due to the seasonality of energy and the fact that the Company was not 100% contracted in 2016;

14 The TFSEE is charged by plant and it is equivalent to 0.4% of the annual economic benefit value obtained by the concessionaire, multiplied by its installed power.

Energy Purchase - R$ million 4Q15 4Q16 Chg (%) 2015 2016 Chg (%)

Energy Purchase 116.1 60.0 -48.3% 852.5 317.6 -62.7%

CCEE 91.1 37.3 -59.1% 696.4 238.1 -65.8%

Spot 87.4 35.7 -59.2% 650.9 210.5 -67.7%

MRE 3.7 0.0 -100.0% 31.1 3.7 -88.2%

Other (Administratives) 0.0 1.6 - 14.5 23.8 64.8%

Bilateral Contracts 64.8 29.7 -54.1% 246.4 110.1 -55.3%

PIS/COFINS (Taxes) -39.7 -7.0 -82.3% -90.3 -30.5 -66.2%

21

(ii) reduction of R$ 33.4 million, a reflection of the lower volume of energy purchased allocated for resale (144.0 MWh in 4Q16 vs. 477.9 MWh in 4Q15).

The cost of energy purchased for resale/CCEE settlement decreased by R$ 534.9 million, in the annual comparison, from R$ 852.5 million in 2015 to R$ 317.6 million in 2016. This result is primarily influenced by the:

(i) reduction of R$ 357.8 million in energy purchased in the spot market, influenced by the lower volume (1,423.9 GWh in 2016 vs. 2,315.3 GWh in 2015) and spot price in the SE/MW submarket comparing the periods (R$ 94.10/MWh in 2016 vs. R$ 287.20/MWh in 2015).

(ii) reduction of R$ 124.9 million, a reflection of the lower volume of energy purchased allocated for resale (638.5 MWh in 2016 vs. 1,856.9 MWh in 2015);

(iii) financial exposure cost and difference of prices between submarkets in 2016 in the amount of R$ 48.3 million; and

(iv) energy purchased in the spot market in the amount of R$ 34.4 million (associated with the volume of 164.6 MWh) referring to the effect of settlements in 2015.

Costs and Expenses on Personnel, Material, Services and Others

Personnel

The expenses with personnel amounted to R$ 25.8 million in 4Q16, an increase of 11.6% in comparison with 4Q15 (R$ 23.1 million). In the annual comparison, the personnel expenses amounted to R$ 99.4 million in 2016, an increase of 17.2% in relation to 2015 (R$ 84.8 million). These variations particularly result from the:

(i) levy of 9.3% of the union agreement which occurred in June 2016 in the amount of R$ 0.5 million in the quarterly comparison and R$ 7.8 million in the annual comparison;

(ii) payment of the Company's share profit and income, levying an increase of R$ 0.9 million in the quarterly comparison and R$ 4.1 million in the annual comparison; and

(iii) restructuring of the Company's list of employees aiming to bring more agility to the decision-making process and prepare the Company for its growth strategy and supply of integrated solutions for its customers in the amount of R$ 1.1 million in the quarterly comparison and R$ 4.3 in the annual comparison.

Materials and third-party services

The costs with third party materials and services amounted to R$ 26.3 million in 4Q16, a 30.8% decrease in comparison with 4Q15 (R$ 38.0 million). This variation is mainly related to the:

Costs and Expenditures with Personnel

R$ million4Q15 4Q16 Chg (%) 2015* 2016 Chg (%)

Personnel 22.4 25.1 12.3% 82.2 98.0 19.3%

Private Entity 0.7 0.7 -9.8% 2.6 1.3 -47.9%

TOTAL 23.1 25.8 11.6% 84.8 99.4 17.2%

Costs and Expenditures with Material

and Third Party Services - R$ million4Q15 4Q16 Chg (%) 2015* 2016 Chg (%)

Material 1.8 2.8 55.9% 6.7 8.4 26.1%

Third Party Services 36.1 23.4 -35.1% 91.8 89.8 -2.3%

TOTAL 38 26 -30.8% 99 98 -0.3%

22

(i) provision of the amount of R$ 5.3 million of the corporate restructuring project at Companhia Brasiliana in 4Q15, a cost which was not levied in 4Q16;

(ii) borrowing of PIS/COFINS credit on materials in the amount of R$ 4.8 million in 4Q16;

(iii) preventive punctual maintenance of the gates in 4Q15, in the amount of R$ 3.5 million, a cost which was not levied in 4Q16; partially offset by:

(iv) maintenance and purchase of licenses to use software in the amount of R$ 0.6 million in 4Q16; and

(v) installation of reforestation fences for the management of the Company's reservoirs in the amount of R$ 0.6 million in 4Q16.

In the annual comparison, the costs with third party materials and services amounted to R$ 98.2 million, a 0.3% decrease in comparison with 2015 (R$ 98.5 million). This variation is mainly related to the:

(i) reduction of R$ 5.3 million related to the procurement of the corporate restructuring project at Companhia Brasiliana, which was completed in the end of 2015;

(ii) borrowing of PIS/COFINS credit on materials in the amount of R$ 4.8 million in 4Q16; partially offset by:

(iii) payment of attorney's fees referring to the success in PIS/COFINS proceedings in 2016, in the amount of R$ 5.7 million;

(iv) maintenance and purchase of licenses to use software in the amount of R$ 1.2 million in 2016; and,

(v) installation of reforestation fences for the management of the reservoirs in the amount of R$ 0.8 million in 2016.

Operational Provisions and Other Operational Expenses/Revenues

In 4Q16, the operational provisions and other operating expenses/revenues amounted to an expense of R$ 32.2 million, an increase of 94.6% in comparison with the expense of R$ 16.5 million recorded in 4Q15. This variation is mainly related to the:

(i) payment of R$ 28.0 million arising from the agreement in the arbitration proceeding scope with Banco BTG Pactual15; partially offset by:

(ii) reduction of R$ 9.1 million from donation costs related to the culture incentive law compared to the same quarter in 2015, a result of the Company's decreased gross revenue in the period, which is used as a basis for applying the incentive; and

15 Arbitration proceeding in which BTG Pactual claims that the Company has defaulted an energy purchase contract by purchasing more energy than that authorized in the contract between the parties. As a result of the agreement, the Company has paid BTG Pactual the amount of R$ 28.0 million. Each party paid its costs under the scope of the Arbitration.

Operational Provisions and Other

operating expenses /revenues - R$

million

4Q15 4Q16 Chg (%) 2015* 2016 Chg (%)

Other operating expenses (revenues) 16.5 5.9 -64.4% 30.6 21.8 -28.7%

Operational Provisions 0.0 26.3 55906.4% 4.7 27.1 483.3%

TOTAL 17 32 94.6% 35 49 38.9%

23

(iii) reversal of provision for doubtful settlements in the amount of R$ 2.5 million arising from the bankruptcy of Banco Santos.

In 2016, the operational provisions and other operating expenses/revenues amounted to an expense of R$ 48.9 million, an increase of 38.9% in relation to the R$ 35.2 million assessed in 2015. This variation is mainly related to the:

(i) payment of R$ 28.0 million arising from the agreement in the arbitration proceeding scope with Banco BTG Pactual; partially offset by:

(ii) reduction of R$ 9.1 million from donation costs related to the culture incentive law as compared to 2015, a result of the Company's decreased gross revenue, which is used as a basis for applying the incentive;

(iii) provision of assets from Rio SHPP(former company of the group) in the amount of R$ 3.0 million in 1Q15, which was not levied in 2016; and

(iv) reversal of provision for doubtful settlements in the amount of R$ 2.5 million arising from the bankruptcy of Banco Santos.

EBITDA AES Tietê Energia recorded an EBITDA of R$ 169.3 million in 4Q16 compared to an EBITDA of R$ 396.9 million in 4Q15, a reduction of 57.3%. This variation is mainly explained by the:

(i) decrease of the average price for contracted energy in 4Q16 vs. 4Q15, a reflection of the expiration of the agreement with AES Eletropaulo on December 31, 2015, with a negative impact of R$ 254.9 million comparing the quarters. The average price of the contracted portfolio, excluding the energy sold in the ERM and Spot Market, in 4Q16 is R$ 150.99/MWh vs. R$ 203.57/MWh in 4Q15; partially offset by the

(ii) positive effect of R$ 30.7 million in EBITDA, mainly due to less exposure in the spot market.

EBITDA - R$ million

803

1.389

169

397

-42%

-57%

201620154T164T15

EBITDAMargem EBITDA

47%

62%

51%53%

24

AES Tietê Energia’s EBITDA totaled R$ 802.7 million in 2016, representing a reduction of 42.2% compared to that recorded in 2015 (R$ 1,389.2 million). This performance is mainly explained by the:

(i) decrease in the average price for contracted energy in 2016 vs. 2015, a reflection of the expiration of the agreement with AES Eletropaulo on December 31, 2015, with a negative impact of R$ 834.9 million comparing the periods. The average price of the contracted portfolio, excluding the energy sold in the ERM and Spot Market, in 2016 is R$ 146.80/MWh vs. R$ 198.40/MWh in 2015; partially offset by the:

(ii) positive impact of R$ 257.5 million arising from the spot market, particularly in virtue of the lower volume of energy purchased in the spot market (1,423.9 GWh in 2016 vs. 2,315.3 GWh in 2015), and the lower value of the PLD in the SE/MW submarket comparing the periods (R$ 94.10/MWh in 2016 vs. R$ 287.20/MWh in 2015).

FINANCIAL INCOME

The net financial result registered by the Company in 4Q16 was a financial expenditure of R$ 34.9 million, compared to a financial expense of R$ 14.7 million registered in 4Q15, representing an increased expense of R$ 20.2 million between the periods. The variation is, above all, due to the lower financial investment income in R$ 11.5 million and interest received from the postponing of the payments of the contract with AES Eletropaulo, in the amount of R$ 8.6 million in 4Q15.

In 2016, the net financial result registered by AES Tietê Energia was a financial expenditure of R$ 135.8 million compared to a R$ 107.6 million financial expenditure registered in 2015. This higher expenditure particularly reflects the inflation adjustment of the 4th issue of debentures (3rd series) and the inflation adjustment of the amount provided in reference to GSF injunction, as detailed below.

Financial Revenue

The financial revenue decreased by 55.4% in 4Q16 compared to 4Q15. This variation is particularly explained by the lower income of the financial investments in 4Q16, which amounted to R$ 17.6 million vs. R$ 29.1 million in 4Q15, and the interest received from the postponing of the payments of the agreement with AES Eletropaulo, in the amount of R$ 8.6 million in 4Q15.

In 2016, the Company's financial revenues decreased by 13.4% in comparison to 2015, particularly due to the interest received from the postponing of the agreement with AES Eletropaulo in the amount of R$ 12.3 million in 2015, as well as the financial application income, which decreased by R$ 8.3 million and amounted to R$ 78.7 million in 2016 vs. R$ 87.1 million in 2015. This reduction was partially offset by the increase by R$ 6.6 million arising from the Company's success in a legal proceeding filed against Furnas Centrais Elétricas S.A. referring to the collection of amounts relating to energy sold in the spot market of the Energy Wholesale Market (“MAE”) between September 1999 and July 2000

Financial Expenses and Monetary Variations

Financial expenditures and exchange rate variations amounted to R$ 51.7 million in 4Q16, a decrease of 1.2% compared to the same period of the last year (R$ 52.3 million). This variation is, above all, explained by:

Financial Income - R$ million 4Q15 4Q16 Chg (%) 2015 2016 Chg (%)

Financial Income 37.6 16.8 -55.4% 101.0 87.5 -13.4%

Financial Expenses / Monetary Variations (52.3) (51.7) -1.2% (208.6) (223.3) 7.0%

Financial Expenses (53.2) (51.4) -3.4% (192.0) (231.8) 20.7%

Monetary Variations 0.9 (0.3) -128.4% (16.6) 8.5 -151.5%

Net Financial Income (14.7) (34.9) 137.4% (107.6) (135.8) 26.2%

25

(i) the reduction of the financial charges of the Company's debt in the amount of R$ 4.0 million, particularly influenced by the reduction of the average CDI over the period (13.84% in 4Q16 vs. 14.14% in 4Q15);

(ii) a decreased inflation adjustment in legal proceedings of R$ 1.7 million; partially offset by:

(iii) the recorded inflation adjustment amounting to R$ 2.3 million regarding the provision of energy purchase costs associated with the GSF since obtaining an injunction in favor of the Company on June 1st, 2015;

(iv) the inflation adjustment of the 4th and 5th issue of debentures in the amount of R$ 1.4 million; and

(v) an R$ 1.1 million exchange rate adjustment on the provision for the legal proceeding discussing the mandatory nature of Itaipu energy acquisition by AES Tietê Energia.

In 2016, the financial expenses and exchange rate variations amounted to R$ 223.3 million, R$ 14.7 million higher than that recorded in 2015 (R$ 208.6 million). This variation is, above all, explained by:

(i) the inflation adjustment of the amount provided for the GSF injunction in the amount of R$ 25.1 million;

(ii) inflation adjustment of the 4th issue of debentures (3rd series) and 5th issue in the amount of R$ 20.0 million; partially offset by:

(iii) a R$ 24.9 million exchange rate adjustment on the provision for the legal proceeding discussing the mandatory nature of Itaipu energy acquisition by AES Tietê Energia;

(iv) reduction of financial charges of debts of R$ 4.3 million, in virtue of the settlement of the 1st issuance of debentures of the Company, which occurred in 2Q15, and the 2nd issuance of promissory notes in 4Q15, partially offset by the 4th issuance of debentures in 4Q15 and increase of the average CDI in the year (14.06% in 2016 vs. 13.36% in 2015).

NET INCOME In 4Q16 AES Tietê Energia recorded a net income of R$ 83.1 million, a decrease of 68.7% in comparison with 4Q15 (R$ 265.6 million). The following factors contributed to this performance:

(i) a reduction of the Company's margin particularly in virtue of the expiration of the agreement with AES Eletropaulo on December 31, 2015 and, subsequently, the lower average price of the contracted portfolio, which resulted in a negative impact of R$ 177.9 million in the quarterly comparison; partially offset by:

(ii) less exposure to the spot market and a lower PLD value, which resulted in a positive effect of R$ 22.1 million; and,

(iii) a positive balance in the ERM in the amount of R$ 7.7 million in comparison between the periods, a result of the higher dispatch of the Company's plants in 4Q16 vs. 4Q15.

AES Tietê Energia registered a net income of R$ 358.5 million in 2016 versus R$ 738.8 million in 2015 ("former discontinued operations"), a 51.5% decrease. The following factors contributed to this performance:

(i) the negative impact of R$ 550.5 million particularly in virtue of the expiration of the agreement with AES Eletropaulo on December 31, 2015, and, subsequently, the lower average price of the contracted portfolio, contributing to the reduction of the Company's margin;

(ii) the negative impact of R$ 37.9 million under Income Tax/Social Contribution, a result of the corporate restructuring occurred in late 2015 and the reduction from donations related to the culture incentive law and interest on shareholders' equity;

26

(iii) increased negative performance of the financial result, which contributed R$ 18.6 million to the reduction of the net income in the period; and

(iv) increased PMSO costs in the amount of R$ 18.5 million, a reflection of the higher personnel and other costs, influenced by the agreement under the scope of the arbitration proceeding with Banco BTG Pactual; partially offset by:

(v) less exposure to the spot market and a lower PLD value, which resulted in a positive effect of R$ 169.8 million;

(vi) the reduction from the amortization of fixed assets of the concession in the amount of R$ 56.1 million, which occurred in 2015 and was not repeated in 2016; and

(vii) a positive balance in the ERM in the amount of R$ 38.9 million in the comparison between the periods, a result of the higher dispatch of the Company in 2016.

SHAREHOLDER REMUNERATION

In view of the aforementioned result and cash generation estimates, AES Tietê Energia's management proposes the use of proceeds of the fiscal year ended on December 31, 2016, in comparison to the net income assessment in the amount of R$ 358.5 million, plus the equity assessment adjustment in the amount of R$ 61.9 million, dividends and interest on shareholders' equity prescribed, in the amount of R$ 0.6 million, and the retention of R$ 21.0 million for the constitution of legal reserve, amounted to a payment base of dividends in the amount of R$ 400.0 million.

Over 2016, the Company's Management distributed R$ 305.5 million, referring to the interim dividends for the first three quarters and R$ 60.0 million in the form of interest on shareholders' equity, relating to the fiscal year to be ended on December 31, 2016.

Additionally, the Company's management shall submit for the approval of the shareholders at the General Assembly expected to be held by April 28, 2017, the proposal for supplementary dividend distribution referring to the fiscal year of 2016 in the amount of R$ 34.5 million, where the dividend would be R$ 0.01754997248 per common and preferred share and R$ 0.08774986240 per unit.

Earnings of the Fiscal Year - December 31, 2016 358.5

Equity valuation adjustment 61.89

Adjustment due to prescribed dividends 0.613

Constitution of legal reserve (21.0)

Base for dividend payment 400.0

Intermediate distributed dividends 305.5

Interest on Equity 60.0

Complementary dividends that exceed the mandatory minimum 34.5

Total distributed 400.0

2016 AES Tietê Energia Dividends - R$ million

27

DEBT16

*It takes principal and interests into consideration

AES Tietê Energia's gross debt amounted to R$ 1,446.6 million on December 31, 2016, 3.9% higher than the Company's gross debt position on December 31, 2015 (R$ 1,391.7 million). This variation is associated with the 5th issue of debentures on November 15, 2015, in the amount of R$ 180 million, added to the 1st series settlement of the 4th issue of debentures on December 15, 2016, with amortization in the amount of R$ 143.5 million.

At the close of 4Q16, cash and cash equivalents amounted to R$ 577.6 million, R$ 169.2 million lower than that recorded in the same period in 2015 (R$ 746.8 million).

Thus, the net debt at the end of 2016 was R$ 869.0 million, 34.7% higher than the final position in 2015 (R$ 644.9 million), particularly due to the decrease of R$ 169.2 million in cash and cash equivalents, interest provided from the 4th issue of debentures and 5th issue of debentures in the amount of R$ 180 million, partially offset by the settlement of the 1st series of the 4th issue of debentures.

The following charts present the composition of the Company's debt indexers on December 31st, 2016, as well as the amortization schedule up to 2023.

Gross Debt per Indexer Amortization debt schedule17 - R$ millions

The following table indicates AES Tietê Energia's rating scale.

16 Amounts of 2015 refer to AES Tietê S.A. before the merger by Companhia Brasiliana de Energia, renamed to AES Tietê Energia S.A. 17 Flow composd of amortization of principal, accumulated interest and balance of differed, as explained in “Explanatory Note 13” of the Company’s Financial Statements

Debt - R$ millionAmount -

R$ million*Maturity Nominal Cost

2nd Issue of Debentures 502.3 May/19 CDI + 0.79 per year

3rd Issue of Debentures 308.1 Mar/20 108.20% CDI

4th Issue of Debentures - 2nd serie 148.2 Dec/18 CDI + 2.15 per year

4th Issue of Debentures - 3rd serie 313.2 Dec/20 IPCA + 8.43% per year

5th Issue of Debentures 174.1 Dec/23 IPCA + 6.54% per year

0.04%

33.69%

66.27%

Fixed rateIPCACDI

177

419

261

334

232

2021-20232020201920182017

Ratings MoodysNational Aa1International Ba2

Scal

e

28

Covenants

The covenants of the Company's debts consider the Net Debt index by the Adjusted EBITDA18, which cannot be higher than 3.5x, except for the 5th issue of debentures, which provides that in case of the Purchase of Assets by the issuer, the index increases its limit to 3.85x during the 36-month period or until the maturity date, whichever occurs first. The ratio Net Debt by Adjusted EBITDA ended the quarter within the set limit at 1.1x.

All the issues, except for the 5th issue of debentures, also consider a covenant of interest coverage (Adjusted EBITDA by Financial Expenses), which cannot be lower than 1.75x. At the end of 4Q16, this indicator was at 4.1x vs. 6.3x in the end of 4Q15.

Net debt - R$ millions

The average cost of the Company's debt on December 30, 2016 was 13.1% per year, in comparison with 16.3% in the same period in 2015, as per the following table. This variation particularly arises from the settlement of the 1st issue of debentures of the Company, which occurred in 2Q15, and the 2nd issue of promissory notes in 4Q15, partially offset by the 4th issue of debentures in 4Q15 and the increase of average CDI in the year.

The average term of the consolidated debt in 4Q16 was 2.7 years, lower than the same period of 2015, in which it was 3.0 years.

18 Adjusted EBITDA means the sum of: (i) operational results as presented in the Issuer’s consolidated financial statement, in the “Operational Result” line (excluding reveneues and financial expenses), (ii) all amounts from depreciation and amortization, and (iii) all amounts relating to expenses with private pension entity.

644.9

0.5

4Q16

869.0

1.1

4Q15

Net DebtNet Debt / Adjusted EBITDA¹

29

Cost and average maturity of the debt

INVESTMENTS

AES Tietê Energia’s investments totaled R$ 31.7 million in 4Q16, an amount 48.9% less than the amount invested in 4Q15 (R$ 62.1 million). This decrease occurred due to the completion of the large maintenance cycles, including the general preventive maintenance in the last few years.

Out of this total, the following are highlights:

(i) R$ 13.7 million was allocated to the conclusion of the modernization and preventive maintenance of the Água Vermelha plant at Generation Unit 3 for the maintenance of its operating conditions and the assurance of the energy generation availability, resulting in productivity and efficiency gains; and

(ii) R$ 8.0 million referring to the construction of the new Center of Operations of Generation

and Locks ("COGE") of AES Tietê Energia, located in the City of Bauru - São Paulo, responsible for the centralized management of the Company's plants. The COGE relies on a modern, totally computerized structure that provides more automation to the processes, allowing a safe and remote operation for all AES Tietê Energia's plants and gates, assuring the high availability of systems and enabling the gain of greater operational efficiency for the Company. The COGE's new site, which will go live in 2017, will be equipped with photovoltaic plates and a fuel cell, which will contribute to feeding energy to the site.

In 2016, AES Tietê Energia has invested R$ 101.0 million, mainly for the modernization and preventive maintenance of the Água Vermelha plant, 39.8% less than the amount invested in the same period of 2015 (R$ 167.7 million). The Company's decision on making these investments aims at the improvement of its operational conditions and assures the availability of its generation park, resulting in productivity and efficiency gains.

Main investments made in 2016:

(i) R$ 81.4 million - maintenance and modernization, particularly referring to the preventive maintenance of the Água Vermelha plant, and the construction of the new COGE, located in the City of Bauru - São Paulo, responsible for the centralized management of the Company's plants; and,

(ii) R$ 1.8 million – IT projects.

4Q16

2.7

13.1

3Q16

2.2

13.8

2Q16

2.5

14.4

1Q16

2.7

14.9

4Q15

3.0

16.3

3Q15

1.9

16.2

2Q15

2.1

15.0

Average term of debt* (years)Average debt cost (%)

* Refers to the period of debt principal

30

History and Projection of Investments19 – R$ millions

Investment Plan

As shown in the chart above, the Company plans to invest roughly R$ 400 million from 2017 to 2021, mainly on the modernization of hydropower plants, aiming at the continuous improvement of the operational conditions and the assurance of the energy generation availability at its plants, as presented in the following table.

MANAGERIAL CASH FLOW

The free cash flow was a positive R$ 208.4 million in 4Q16, R$ 108.5 million lower than that in 4Q15. This performance is particularly due to:

19 Nominal values

89

69

47

81

114101

168

32

62

20162015 2021E2019E2018E2017E

-40%

-49%

2020E4T164T15

Investments - R$ million 2017E 2018E 2019E 2020E 2021ETotal 2017 -

2021E

Investments 94.8 65.6 41.0 62.1 79.4 343.0

Capitalization of Interest 19.0 15.5 6.0 6.9 9.2 56.7

Total 113.8 81.1 47.1 69.0 88.6 399.6

* nominal values

Cash Flow - R$ million 4Q15 4Q16 Chg 2015 2016 Chg

INITIAL CASH 422.4 466.0 43.6 528.5 739.3 210.8

Operational Cash Flow 408.6 274.5 -134.1 1,220.8 1,144.1 -76.8

Investments (41.7) (29.9) 11.7 (136.9) (109.6) 27.3

Net Financial Expenses (93.5) (55.8) 37.7 (162.6) (112.5) 50.1

Net Amortization 67.2 31.7 -35.5 (232.9) 31.4 264.3

Income Tax (23.8) (12.1) 11.7 (220.4) (347.0) -126.6

Free Cash Flow 316.9 208.4 -108.5 468.1 606.5 138.4

Dividends and IoE - (97.4) -97.4 (257.3) (768.8) -511.4

Final Cash Consolidated 739.3 577.0 -162.3 739.3 577.0 -162.3

31

(i) the reduction in the operational cash generation of R$ 134.1 million, particularly justified by the decreased revenue, reflecting the expiration of the agreement with AES Eletropaulo on December 31, 2015, partially offset by:

(ii) decrease of R$ 11.7 million in investments in the comparison between the periods.

In accumulated year of 2016, the free cash flow was a positive R$ 606.5 million, an amount R$ 138.4 million higher than that registered in 2015. This performance is due to the:

(i) reduction of net amortization by R$ 264.3 million, in virtue of the settlement of the 1st issue of debentures of the Company, which occurred in 2Q15, and the 2nd issue of promissory notes in 4Q15, as well as the 4th issue of debentures in 4Q15;

(ii) decrease of R$ 27.3 million in investments comparing the periods; and,

(iii) improvement in the net financial result by R$ 50.1 million, due to the average investment volume in 2016 vs. 2015, effects partially offset by:

(iv) reduction in the operational cash generation of R$ 76.8 million, particularly justified by the decreased revenue, reflecting the expiration of the agreement with AES Eletropaulo on December 31, 2015; and

(v) higher expense of income tax of R$ 126.6 million in 2016, due to the higher result of 2015 vs. 2014.

As a result of the above elements and the payment of dividends and the JSCP, the final cash balance in this quarter reached R$ 577.0 million in 4Q16 vs. R$ 739.6 million in 4Q15.

SHAREHOLDING STRUCTURE

As per the Notice to Shareholders disclosed in November 2016, AES Tietê Energia's capital increase process was completed. This increase is due to the partial capitalization of the Special Premium Reserve20 recorded by the Company, in the amount of actual tax credit assessed up to December 31, 2015, which is equivalent to R$ 154.6 million. After this capitalization, the share capital of the Company increased from R$ 262.0 million to R$ 416.6 million.

Thus, after all issues made over the period, the Company's shareholding was maintained as described in the following table:

CAPITAL MARKET AES Tietê Energia stocks are negotiated in Level 2 of BM&FBovespa Corporate Governance under the codes TIET11 (Unit), TIET3 (common) and TIET4 (preferred). AES Tietê Energia's shares are part of the Electric Energy Index ("EEI") and the Corporate Sustainability Index ("CSI") of BM&FBovespa.

20 As disclosed in the Relevant Fact of July 5th, 2016 and, then, in the Notice to Shareholders of August 15, 2016.

Shareholder Common Shares % Preferred Shares % Total % Total

AES Holdings Brasil (AES Corp) 477,289,199 61.6% 471,926 0.0% 477,761,125 24.3%

BNDESPar 111,477,600 14.4% 445,910,403 37.4% 557,388,003 28.3%

Other (Free Float) 186,407,785 24.0% 745,827,999 62.6% 932,235,784 47.4%

Total 775,174,584 100.0% 1,192,210,328 100.0% 1,967,384,912 100.0%

On 12/31/2016

32

In 2016, the Company's units were slightly depreciated by 1.4%; however, if we adjust the value of units by the dividends per share distributed in 2016, we would have a positive valuation of 8.4% over the period. As for the market indicators, EEI increased in value by 45.6% and Ibovespa increased in value by 38.9% in the year, closing at 36,108 points and 60,227 points, respectively. The average daily volume traded in 2016 was 1,220 thousand shares versus 820 thousand shares in 2015. The following chart shows the performance of the shares:

AES Tietê Energia x Ibovespa x IEE x TSR*

Base 100 – 31/12/2015

* Total Shareholder Return (It considers the variation of quotations and dividends declared in the period).

SOCIAL AND ENVIRONMENTAL PERFORMANCE SAFETY AND ENVIRONMENT One of the main social and environmental performances of AES Tietê Energia is related to the safety of its own employees, contractors, and the public.

Over the past year, there were no fatal accidents in the Company's operations and no incident involving its own people. This performance is a result of the training, investments and educational programs developed by the Company in order to make its professional and communities aware of the risks and dangers. With that, AES Tietê Energia achieved the goals established for the period, except for the frequency of accidents involving contractors. In 2016, two events of accidents involving contractors occurred, increasing the LTI rate to 0.37 in 4Q16. Further indicators stayed within the limits defined for the year.

Since 2009, there have been no accidents recorded in relation to the public in the power plant reservoirs.

33

As for the environmental performance, 96 tons of CO2 were avoided in 4Q16 and 144 tons of CO2 in 2016, particularly due to the reduction of the energy consumption of the plants.

BUSINESS DEVELOPMENT One of the commitments of AES Tietê Energia, in the Sustainable Strategic Planning, is to grow with sustainable energy solutions. This commitment is aligned with the global strategy of leveraging business platforms, focusing on growing within markets in which we already operate and in which we have a competitive advantage, seeking synergy and scale in our businesses.

EXPANSION STRATEGY The Company’s growth strategy consists of searching for opportunities by adding installed capacity, generation opportunities from non-hydraulic sources and with long term regulated electric energy purchase and sale agreements. Additionally, the company seeks to expand its portfolio with new energies / technologies, such as distributed generation and energy storage, by means of batteries.

Thus, in line with its strategic driver for risk reduction, the Company's focus is to comprise 50% of its EBITDA with sources of non-hydraulic energy with long-term regulated agreements by 2020.

The following are the main development streams of the Company, aiming at its growth plan.

Potential Purchase - Alto Sertão II Wind Park Complex

On January 13, 2017, AES Tietê Energia agreed with Renova Energia S.A. on a proposal for the purchase of the wind parks constituting the Alto Serão II Complex, whose shares belongs to Renova Eólica Participações S.A., for a total amount of R$ 650.0 million, still subject to amendments.

Performance Indicator Indicators 2015 2016

Zero fatal accidents w ith ow n and contracted employees No. of fatal accidents 0 0

LTI Rate* - own 0 0

LTI Rate* - contracted 0 0.37

Recordable Rate** - own 0 0

Recordable Rate** - contracted 0 0.75

No. of fatal accidents 0 0

No. of total accidents 0 0

** Index of registered accidents (typical accidents, loss of work days)

* Index of incidents of lost time (typical accidents, loss of work days)

Record rate low er than 0.01 for accidents w ith removal, in 2016

Record rate low er than 0.64 for accidents w ith removal, in 2016

Zero accidents w ith the population

The monitoring of the indexes follow the criteria established by Occupational Safety & Health Administration (OSHA), agency of teh Department of Work in the United States. Until 4Q15, the report followed the NBR 14,280 criteria.

Performance Indicator 4Q15 4Q16 2015 2016

MWh of the Company's electrical energy consumption* 2,746 1,651 10,125 8,467

* The follow-up of greenhouse effect gas emissions by the energy consumption of the plants is restricted only to the consumption of the power supply linked to the substations. In compliance with the methodology used by the Federal Government for the calculation of the emission factor of the national energy mix, the energy arising from SIN (National Interconnected System) is taken into consideration.

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The Alto Sertão II Wind Park Complex is located in the State of Bahia, with a total installed capacity of 386.1 MW and contracted energy for 20 years, by means of new energy auctions held in 2010 and 2011.

The consummation of the Potential Purchase shall still depend on, among other factors, the satisfactory negotiation of the final documents between the involved parties, the satisfactory completion of the ongoing legal, technical and accounting audit by the Company, necessary corporate approvals and prior approval by Alto Sertão II Wind Park Complex's creditors.

The purchase contributes to AES Tietê Energia's growth strategy of comprising 50% of its EBITDA by 2020, with non-hydraulic sources with long-term regulated electrical energy purchase agreements.

New Energies - Distributed Generation and Energy Storage

The expansion of the intermittent renewable sources in the Brazilian electric generation matrix, such as wind and solar parks, requires new operational and technological solutions. In parallel, reductions of the tax burden, regulatory advances (such as ANEEL’s Normative Resolution No. 482/2012, amended by the Normative Resolution No. 687/2015) and the increase of the regulated tariff have contributed to the acceleration of the adoption of micro and mini generation in Brazil and, thus, to the diversification and decentralization of the electric matrix.

The Company entered into its first contract of 6 kWp distributed generation of solar energy within AES Eletropaulo’s concession area in December 2015. This project went into commercial operation in June/2016.

In 2016, AES Tietê Energia started offering an integrated energy solution - combining energy commercialization solutions and distributed generation. Throughout the year, the Company has already executed two more distribution generation agreements amounting to 36.3 kWp.

AES Tietê Energia is also working on studies for the installation of its first "solar farm" for distributed generation through the remote auto-consumption system.

Energy storage via batteries21 is another important line of business provided by AES Tietê Energia. AES Corp is the worldwide Energy Storage leader, and, in Brazil, AES Tietê Energia is the pioneer in providing this solution to the market. On June 30, 2016, the Company held an international seminar on Energy Storage in São Paulo, to maintain an ongoing dialogue with the entities of the electric sector and to present the technology, its applications and benefits, as well as contributing to the improvement of the regulatory model, in order to foster the growth of storage solutions.

With the possibility for several investments, some of the most promising investments in Brazil are the optimization of costs with spinning reserve, integration of intermittent renewable sources, cutting-edge generation and investment deferment/optimization in transmission and distribution lines.

The Bariri hydropower plant will be the first national plant to be integrated into a battery system to store its generation. The pilot project, with the capacity of up to 200 kVA in Lithium-Ion batteries, will be installed in 2017 to demonstrate it to customers and regulatory bodies as the equipment operates in practice. With this solution, Brazil will become part of the energy storage world map.

In addition to the initiatives describes above, the Company maintains its efforts to attend the expansion obligation, via solar projects or thermal with natural gas, as will be detailed in the section below.

21 AES has 8 years of experience in technology. With 432 MW of storage systems in operation, construction, or final phase of development, AES has the largest park of energy storage with batteries and is in its 4th generation of its solution, ADVANCION.

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Expansion Obligation

The Privatization Notice of AES Tietê Energia has established to the Company the obligation to expand the installed capacity of its generation system by at least 15% (approximately 400 MW) in the State of São Paulo. This expansion may occur through new energy in the period of eight years from the signing of the concession contract, which took place in December of 1999 ("Expansion Obligation").

However, new regulatory conditions have been established, after the privatization, in particular the creation of a new electric sector model, through the publication of Law No. 10,848 / 2004, which made it difficult to fulfill the Expansion Obligation as originally designed.

With the new sector model, AES Tietê Energia began to be subject to the restrictions on the sale of electricity. The Company was hindered from negotiating agreements directly with distributing companies and, in turn, was obliged to acquire energy in auctions of new energy, making it difficult to comply with the Obligation of Expansion by means of new enterprises built in São Paulo State. There are still regional difficulties, such as the low volume of still unexplored viable hydric resources in the State of São Paulo and the potential for wind and solar projects with lower capacity in comparison to projects in other states of the country, which makes the competitiveness of energy generation projects in São Paulo State with the current model of auctions more difficult.

In September 2011, the Company cited on an ordinary action on which the State of São Paulo requested that AES Tietê Energia fulfill, within a period of 24 months, the obligation to expand its installed capacity. The judge in charge of the ordinary action granted an injunction, determining the beginning of a 60 (sixty) day period for the Company to submit its plan to comply with the Expansion Obligation. AES Tietê Energia presented as a plan of the expansion of its capacity the project "Termo São Paulo", with a net capacity of approximately 500 MW.

In December 2012, the statement of the State of São Paulo on the project submitted by AES Tietê Energia was attached to the process, which basically states that: i) the plan presented is consistent; ii) there is no guarantee of supply of natural gas from Petrobrás, which would undermine the implementation of the plan; iii) the thermal power plant would not be the only alternative to meet the Expansion Obligation; iv) even if the gas is supplied by Petrobrás, there is no guarantee of winning the auction (for the construction of the plant) and this fact (not winning the auction) cannot be interpreted as a justification for non-compliance with the Expansion Obligation. The lower court decided that AES Tietê Energia should disclose its opinion on the comments of the State of São Paulo in respect to the plan, and that the parties should inform them if there was interest in a reconciliation hearing.

In June 2013, AES Tietê Energia:(i) submitted its comments on the considerations of the State of São Paulo; (ii) submitted an expert report prepared by the PSR (expert consultancy in the Brazilian electricity sector) concerning difficulties in complying with the Expansion Obligation in the State of São Paulo, and (iii) informed the court of its interest in a reconciliation hearing.

In August 2013, the parties were summoned to a reconciliation hearing to be held in October 2013. The reconciliation hearing was carried out and the judge responsible ruled for the suspension of proceedings until December 2013 so that the parties could study alternatives to expand AES Tietê Energia’s capacity of generation, other than the expansion plan previously submitted in court by the Company, that is, the project Termo São Paulo.

From October to December 2013, AES Tietê Energia and the State of São Paulo met a few times to discuss the energy potential from different sources and study alternatives for the Expansion Obligation.

In March 2014, a determination of the court was published for the parties to inform whether or not they had reached an agreement with both the Company and the State of São Paulo filing a request for the suspension of the case for another 60 days in order to continue negotiations.

In May 2014, AES Tietê Energia filed a new request for suspension of the case, in view of the negotiations with the State of São Paulo. This new request was submitted before a decision on the suspension of 60 days previously required by both parties. In August 2014, this new request for suspension was approved and AES Tietê Energia is currently working on the development of the expansion plan to be submitted to the State of São Paulo.

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In April 2015, after the judge asked the Company and the State of São Paulo to submit a statement about the completion of the suspension period, the Company submitted a new request for the suspension of the process for 90 days, considering that the negotiations with the State of São Paulo had positively advanced.

In June 2015, a hearing was held as an attempt to reconcile the parties. On that occasion, the parties collectively requested for the suspension of the case for 30 days, which was deferred. During this period, the parties attempted to find options to fulfill the obligation of capacity expansion, but were not successful.

In August 2015, AES Tietê Energia filed a petition informing that an agreement was not reached and requesting the production of new evidence, particularly by an expert.

In February 2017, the judge determined the production of the expert evidence. The Company will indicate a technical assistant and present questions to be answered by the expert.

It may be highlighted that, SHPP São Joaquim (3 MW), completed in July 2011, SHPP São José (4 MW), completed in March 2012 contribute to the fulfillment of the Expansion Obligation, in addition to two long-term sugarcane biomass energy purchase agreements, amounting to 10 MW on average

Projects

The Termo São Paulo project is still under development and consists of the construction of a thermoelectric natural gas plant with a net generation capacity of approximately 500 MW.

Since 2012, the Company acquired a purchase option of a thermoelectric plant project with a net capacity of 579 MW, to be installed in the countryside of the State of São Paulo. As a result of this, exclusivity was ensured to evaluate the project over the next few years and the possibility to bring it into line with AES Tietê Energia’s business development standards. However, the main obstacle for both projects is that the gas supply contract is still unsettled, as of today.

Thus, in March 2016 the Company signed a non-binding memorandum of understanding with the Empresa Metropolitana de Águas e Energia (“EMAE”) in order to forge a partnership to analyze the feasibility for development of a natural gas thermoelectric plant on one of the available lands on the EMAE site of Pedreira, where the thermal plant Fernando Gasparian is located. Currently, environmental pre-feasibility studies are being carried out to establish the allowed capacity for this project and to commence the environmental licensing process.

The Company is also studying an initiative to make the gas supply feasible to thermoelectric projects by building a regasification terminal along State of São Paulo's shore. Several locations are under analysis on the State shore. By the terminal, the construction of a thermal power plant is expected, in order to create synergy and optimize the gas supply chain costs.

As an alternative, in 2015 the Company started developing the Água Vermelha II project (“AGV II”) with an installed capacity of 150 MW and located in the municipality of Ouroeste in the State of São Paulo, approximately 3 km away from the Água Vermelha hydroelectric power plant of AES Tietê Energia. The project already has a signed land rental option agreement, an established connection solution and environmental licensing issued by CETESB on May 16th, 2016, and is able to take part in bids throughout 2016 and 2017.

ENGAGEMENT OF STAKEHOLDERS PEOPLE AND COMMUNITY AES Brasil is committed to promoting advances in the industry, educating people for conscious consumption and developing employees, partners and communities.

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One of AES Tietê Energia's objectives is the retention of its people. In 2016, the satisfaction at the workplace reached 81%, below the 85% goal. In 2015, this index was 82%. The company was awarded in 2016 as one of the Top 150 Companies to Work by Guia Você S/A Magazine.

One of the key indicators is the voluntary turnover, which was practically stable in 4Q16 vs. 4Q15, reaching 0.28%.

AES INSTITUTE In October 2016, Instituto AES was launched, which consolidates the voluntary social activity of AES Brasil group's companies, aiming at higher capillarity and effects to the existing projects, as well as to create new social impact possibilities. Three activity pillars were defined: (i) formation of the citizen, (ii) innovation for social development and (iii) aware entrepreneurship.

The Institute's mission is in line with the business strategy, innovation and AES Brasil's growth, and projects will be developed in network, including the beneficiaries, communities and partners. Thereby, the Company's own and incentive capital invested in social actions will be more assertively allocated in relation to the potential social and environmental impact. The new organization will directly contribute to add shared value between AES Brasil's stakeholders by strengthening the links with communities and customers, reducing reputation risks and mapping of inclusive energy solution opportunities.

ACKNOWLEDGMENTS • BM&FBovespa 2017 Corporate Sustainability Index: inclusion into the portfolio for the 10th

year in a row;

• AES Tietê Energia was the winner of the 2016 Transparency Trophy at ANEFAC’s Awards, in the Energy Sector Company category. This award acknowledges the companies with the most transparent financial statements in Brazil;

• Elected among the Top 150 Companies to Work, according to Guia Você S/A, one of the major acknowledgments for Human Resources practices in the market;

• The Company received an honorable mention from 2016 Abrasca Awards for its transparency and content quality in its 2015 Sustainability Report; and

• Aberje Awards in Best Brand Communication Case, Best Press Relations Case and Best National Press Relations Case categories.

In addition to individual acknowledgments, AES Tietê Energia significantly contributed to important acknowledgments for the AES Brasil Group;

• Destaque Corporate Engagement Trophy during the Open Innovation Week, an award that acknowledged us as one of the top ten companies engaged in innovation.

• 2nd most innovative companies among the energy companies in Brazil, according the Valor Inovação Brasil yearbook, issued by Valor Econômico.

• Guia Época Negócios 360º elected AES Brasil as a champion in Human Resources Practices categories; and

• Highlighted in Guia Exame de Sustentabilidade 2016.

Performance Indicator 4Q15 4Q16

Voluntary Turnover 0.29% 0.28%

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CORPORATE GOVERNANCE Corporate governance is the system by which a Company is controlled and monitored and involves practices and relationships between shareholders, the board of directors, the fiscal council and the executive board. The adoption of good governance practices is essential for strategic and efficient management of the business. With focus on creating value for its shareholders, the Company continually works to improve its practices.

Internally, AES Tietê Energia is managed by a Board of Directors and an Executive Board. The Board of Directors is responsible for planning and strategic issues of the company. Currently, the Board of Directors is composed by eleven members and their respective alternate members. Among their members, seven are effective and their substitute alternate members were appointed by the controlling shareholder, one is effective and their substitute alternate member was appointed by BNDES Participações S.A. – BNDESPAR under the Company's Shareholders' Agreement, one is an effective and independent member appointed by the controller, one is effective and their substitute member was appointed and also considered as an independent director, and the last is effective and their alternative member were elected by the Company's people as per the provision in its bylaws. The term of office of the current members of the Board of Directors shall end on the date of the Annual Meeting that will review the Company's management accounts for the year ending on December 31, 2017.

The Board of Directors is composed of six members, including the CEO and the Investor Relations Officer. Members of the Executive Board perform their duties in accordance with the Company's corporate purpose, usually conducting business and operations in strict compliance with the provisions of the Articles of Association, the decisions of the Annual Shareholders' and the Board of Directors' Meetings.

Currently, the Company has a Fiscal Council, whose main function is to monitor the actions of administrators and verify compliance with their legal and statutory duties. Moreover, the Fiscal Council is also responsible for analyzing the balance sheet and the accounting statements made by the Company, giving opinions on the annual management report and the proposals of the management bodies to be submitted in general meeting. The Company's Fiscal Council currently consists of five members, being five permanent members and their alternates, of which: two are effective members and their alternates were indicated by the controlling shareholder, one is an effective member and his/her alternate were appointed by BNDESPAR and two are effective members and their respective alternates were indicated by the minority preferred and common shareholders of the Company.

In addition to having its administrative management inspected by the Fiscal Council, since it is a subsidiary company of The AES Corporation, a public corporation at New York Stock Exchange, AES Tietê Energia adjusted its internal controls to Sarbanes-Oxley Act ("SOX"), which purpose is to assure the reliability of the financial statements of companies trading shares at the US market.

TRANSPARENCY AND ETHICS The Ethics and Compliance Program of AES Brasil was created from the company's commitment to transparency and the assurance of ethical conduct in all of its business as well as in order to comply with the applicable national and foreign laws. The initiatives under the program aim to safeguard the highest standards of integrity and ethical values at all the Group's stakeholders.

The education and training program has several initiatives related to the themes of Ethics, compliance, Corporate Values and Anti-Corruption, among others, for employees of all the hierarchical levels of the companies.

In addition, AES Brasil has AES Helpline, an open communication channel to all the Group's stakeholders and available 24 hours a day and 365 days a year to receive and address claims of ethical deviation or questions related to the Values of the company.

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CONTRACT COMPLIANCE AES Tietê Energia is committed to keeping the highest ethical standards in all of its commercial transactions. AES Tietê Energia's people, business partners, service providers, suppliers and third parties working together with AES Tietê Energia must adhere to all applicable laws and regulations, and show ethical behavior in their relationships and business-related decisions. AES Tietê Energia's Compliance Program aims to "get to know your business partner", which requires AES Tietê Energia to carry out the due diligence process at its potential partners before executing or renewing any business agreement, in order to assure that such ethical and legal standards are duly complied with in all of their business transactions.

Statements contained herein related to the prospects of AES Tietê Energia business, projections for operating and financial income and the Company's growth potential, constitute mere forecasts and were based on management's expectations regarding the Company's future. Such estimates highly depended on market behavior, Brazil's economic performance, the electricity sector and the international market, and are therefore subject to changes.

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INVESTOR RELATIONS TEAM CONTACTS

Investor Relations Management

Phone:(11) 2195-7048 / ri.aestiete@aes.com

Investor Relations Manager E-mail Phone

Isabela Klemes Taveira isabela.taveira@aes.com (11) 2195-2212

IR Analysts E-mail Phone

Erika Lima erika.regina@aes.com (11) 2195-4881

Gabriela Rigo Bussotti gabriela.bussotti@aes.com (11) 2195-7433

Ivan Martins Vaz ivan.martins@aes.com (11) 2195-2827

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ATTACHMENTS CONSOLIDATED DATA –R$ thousands

ASSETS 12.31.2015 12.31.2016

CURRENT ASSETS 1,185,381 776,479

CASH / CASH EQUIVALENTS 746,768 577,617

Cash and Banks 558 72,086

Financial investments 746,210 505,531

ACCOUNTS RECEIVABLE 299,511 151,817

Distributors 27,697 146,897

Accounts receivable from related parties 271,814 4,920

OTHERS 139,102 47,045

Taxes and social contribution 22,515 23,378

Recoverable taxes 113,731 20,968

Other credits 2,269 2,016

Prepaid expenses 587 683

NON CURRENT ASSETS 3,451,398 3,323,100

Deferred taxes and social contributions 179,860 159,665

Taxes recoverable 789 698

Others taxes compensable 37,008 4,465

Escrow deposits 43 39

Aloowance for possible loan losses 3,145,358 3,089,307

Intangible 75,265 55,851

Resellers 13,075 13,075

TOTAL ASSETS 4,636,779 4,099,579

ASSETS 12.31.2015 12.31.2016

CURRENT LIABILITIES 915,933 827,945

FINANCING 160,597 255,776

Finance lease 314 315

Debentures 160,283 255,461

SUPPLIERS 352,076 411,782

TAXES, FEES AND CONTRIBUTIONS 312,568 63,404

DIVIDENDS PROPOSED AND DECLARED 36,828 52,569

PROVISION FOR LAWSUITS AND CONTINGENCIES 14,090 3,133

OTHERS 39,774 41,281

NON CURRENT LIABILITIES 1,702,380 1,693,535

FINANCING 1,231,061 1,190,794

Finance lease 491 333

Debentures 1,230,570 1,190,461

PROVISIONS FOR LAWSUITS AND CONTINGENCIES 76,823 80,295

DEFFERED TAXES, FEES AND CONTINGENCES 381,111 393,757

OTHERS 13,385 28,689

SHAREHOLDERS EQUITY 2,018,466 1,578,099

Paid up Capital 262,018 416,646

Capital Reserves 352,553 198,072

Retained Earnings - legal 52,404 73,425

Equity valuation adjustment 923,107 855,428

Proposed additional dividends 428,384 34,528

Accumulated profits - -

TOTAL LIABILITIES 4,636,779 4,099,579

CONSOLIDATED DATA

CONSOLIDATED DATA

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Income Statement 4Q15 4Q16 Chg (%) 2015 2016 Chg (%)

Gross Revenues 671,728 410,769 -38.8% 2,779,248 1,762,602 -36.6%

Supply and transmission of energy 671,714 410,753 -38.9% 2,778,977 1,762,454 -36.6%

Other Revenues 14 16 15.7% 271 147 -45.7%

Deductions From Gross Revenue (34,837) (47,058) 35.1% (153,427) (201,254) 31.2%

Net Revenues 636,891 363,711 -42.9% 2,625,821 1,561,348 -40.5%

Cost of Electric Energy Services (282,826) (237,373) -16.1% (1,406,198) (916,972) -34.8%

Personnel (22,369) (25,122) 12.3% (82,181) (98,015) 19.3%

Pension Fund (744) (671) -9.8% (2,577) (1,342) -47.9%

Material (1,827) (2,848) 55.9% (6,693) (8,438) 26.1%

Third party services (36,124) (23,431) -35.1% (91,833) (89,762) -2.3%

Financial Compensation for Use of Water Resources (14,596) (18,843) 29.1% (44,600) (75,104) 68.4%

Eletric Power Purchased for Resale (116,117) (59,995) -48.3% (852,506) (317,633) -62.7%

Transmission and Connection (30,122) (29,576) -1.8% (114,879) (112,600) -2.0%

Inspection Fee/Charges (1,539) (1,715) 11.4% (6,155) (6,859) 11.4%

Depreciation and Amortization (42,849) (42,981) 0.3% (169,564) (158,297) -6.6%

Operating Provisions (47) (26,323) 55906.4% (4,654) (27,145) 483.3%

Other Expenses and Revenues (16,492) (5,868) -64.4% (30,556) (21,777) -28.7%

Service Profit 354,065 126,338 -64.3% 1,219,623 644,376 -47.2%

EBITDA 396,914 169,319 -57.3% 1,389,187 802,673 -42.2%

Amortization of concession intangible (14,026) - -100.0% (56,105) - -

Financial Income (Expense) (14,698) (34,899) 137.4% (107,591) (135,800) 26.2%

Financial Income 37,619 16,784 -55.4% 100,976 87,469 -13.4%

Financial Expenses (53,221) (51,426) -3.4% (192,010) (231,794) 20.7%

Net monetary/exchange variation 904 (257) -128.4% (16,557) 8,525 -151.5%

Income before Taxes/Partic ipations 325,341 91,439 -71.9% 1,055,927 508,576 -51.8%

Provision for I.T. And Social Contribution (113,883) (9,790) -91.4% (387,983) (114,220) -70.6%

Deferred Taxes 54,137 1,468 -97.3% 70,814 (35,823) -150.6%

Net Income 265,595 83,117 -68.7% 738,758 358,533 -51.5%

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GLOSSARY ACL (Free Contracting Environment) – The Free Contracting Environment (ACL) or Free Market is the market segment in which are carried out the purchase and sale of electricity, under bilateral agreements, pursuant conditions, prices and volumes freely negotiated between generators, retailers, importers and exporters of energy and free conventional consumers, as electro- intensive industries, besides large industrial plants, for example, automotive, food, steelworks and chemical industries.

ACR (Regulated Contracting Environment) – In the Regulated Contracting Environment – ACR, the Distribution Agents, through public auctions promoted by the Granting Power (Brazilian Electricity Regulatory Agency – ANEEL) and operationalized by the Electric Power Trading Chamber – CCEE, get the electric power to serve their markets (captive consumers).

ADR (American Depositary Receipt) - Receipts of non-U.S. stock traded on the New York Stock Exchange (NYSE). Because shares of foreign companies cannot be directly traded on the U.S. stock market, the papers are held in custody by a financial institution, and their receipts are traded on the NYSE. The receipts end up following the fluctuation of the shares in their countries of origin as well as of the foreign exchange in the two markets.

ANEEL (Brazilian Electricity Regulatory Agency) – Federal government agency responsible for regulating and overseeing the production, transmission, distribution and trading of electric energy in Brazil, ensuring quality of service, egalitarian treatment of users, and that reasonable rates are charged from consumers, preserving the economic and financial viability of the agents and the industry.

Installed capacity of interlinked systems – It is the sum of rated power of generation centers and energy import facilities in each of the interlinked sectors of North/Northeast and South/Southeast/Midwest regions. In the last example, the rated power is not considered for Itaipu Binacional.

National installed capacity – It is the sum of installed capacities of interlinked systems, added with the installed capacities of isolated systems.

CCEAR (Electricity Trade Agreement in Regulated Contracting Environment) – It is a bilateral electricity and respective associated power purchase and sale agreement, signed between the sales agent and the distribution one in the Regulated Contracting Environment (ACR), as a result of the electricity auctions arising from existing and new generation enterprises.

CCEE (Electric Power Trading Chamber) - Non-profit private legal entity. It operates as authorized by the Granting Authority, is regulated and overseen by ANEEL, and its purpose is to enable power purchase and sale transactions among CCEE agents, restricted to the National Interconnected System (SIN).

CDI (Interbank Deposit Certificate) - Benchmark rate in the interest market, originated from the average traded among financial institutions.

CETESB (Environmental Protection Agency of the State of São Paulo) – State government agency responsible for controlling, overseeing, monitoring and licensing activities that generate pollution, with the core purpose of preserving and recovering the quality of water, air and soil.

CFURH (Financial Compensation for the Use of Water Resources) – Financial compensation for the municipalities affected by the water from hydro power plants reservoirs.

CNPE (Brazilian Energy Policy Board) – A board that assists the President of the Republic, designing energy policies and guidelines.

COFINS (Social Security Funding Tax) – Federal tax charged on companies’ gross revenue. In general, it is allocated for social security funding.

COGE – Generation and Gate Operating Center.

COGE – Lock and Generation Operation Center Bilateral agreement – Legal instrument that formalizes the purchase and sale of electric energy among CCEE agents, and sets prices, deadlines, and supply amounts for determined periods of time.

Covenants– A commitment in a security issue agreement that restricts certain situations of activities with the purpose of ensuring greater security to the funding party.

CVaR (Conditional Value at Risk) – measure used for objective risk assessment of a portfolio indicating the estimated value of financial losses conditioned to the fact that they are higher than a threshold.

EBITDA (Earnings Before Interest, Taxes, Depreciation & Amortization Expenses) – A Company´s earnings before subtracting interests, taxes, depreciation and amortization expenses.

ENA (Run-of-the-river Energy) – Measured in average MW, it represents the flow status of a river at a given moment. It is usually calculated as a percentage so as to show if it is above or below the long-term historical average (historical monthly average for the period between 1931 and 2011).

Secondary Energy – Energy resulting from the processing of primary energy (natural and renewable) in the transforming centers.

EPE (Energy Research Company) - Public federal company, related to the Ministry of Mines and Energy. Agency in charge for the national energy planning, encompassing generation, conveyance, distribution, oil and gas.

Physical Guarantee (Assured Guarantee) – The maximum amount of electric energy that may be generated by hydro power plants during a given period of time, considering the occurrence of all possible risks, such as the hydrological variability.

GSF (Generation Scaling Factor) – The percentage of energy that all ERM participants are generating in relation to their total Physical Guarantee.

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IBAMA (Brazilian Institute of the Environment and Renewable Natural Resources) – Governmental agency responsible for the preservation, control, fiscalization and conservation of fauna and flora, besides carrying through studies on the environment and granting environmental licenses to enterprises that can cause impact on the nature.

EEI (Electric Energy Index) – BMF&BOVESPA’s index aiming to measure the performance of the electric sector.

IPCA (Extended National Consumer Price Index) – Measured on a monthly basis by the Brazilian Institute of Geography and Statistics (IBGE), this monthly inflation index computes the variation of retail prices, reflecting the cost-of-living of households with monthly income ranging from 1 to 40 minimum wages.

IGP-M (General Market Price Index) – Monthly inflation index, measured by Fundação Getúlio Vargas (FGV) calculating the price variation in the wholesale, consumption and civil construction market, considering imported products as well. The indicator assesses the changes in agricultural and manufacturing prices in the wholesale market, and goods and services prices in the consumer market.

ISE (Corporate Sustainability Index) – Tool that enables a comparative analysis of companies listed on BM&FBovespa with regards to corporate sustainability. Its purpose is to create an investment environment that matches the sustainable development demands of contemporary society and to promote corporations’ ethical responsibility.

Short-term market – Market where transactions in which the delivery of goods occurs in short term and the payment is made in cash. It is common to refer to this market for obtaining electric energy with urgency, normally due to the scarcity of the resource, which makes it more expensive.

MME (Ministry of Mines and Energy) – Organ that acts in the formulation and implementation of politics for the energy sector, according to CNPE’s guidelines.

MRA (Assured Energy Reduction Mechanism) – It assesses whether the ER requirements established by ONS. The assessment is made by comparison between the parameters recorded in scheduled and forced shutdowns in relation to reference parameters established by Aneel. When the recorded values surpass the reference values, there is the plant's Physical Guarantee reduction only for purposes of ERM application, not decreasing the plant's resource that may be marketed.

ERM (Energy Reallocation Mechanism) - It is directed to the full usage of the production park, resulting into an energy transfer process between generators.

ONS (Brazilian Electric System Operator) – Limited liability company authorized to coordinate and control the electric energy generation and transmission operations in the interconnected systems.

PIS (Social Integration Program) – The purpose of the PIS is to promote the integration of the employee with the development of the company where he works. By joining the program, the worker receives a registration number he can use to consult and withdraw social benefits.

PLD (Difference Settlement Price) – Short-term price used to settle the differences between contracted and generated energy. Price volatility is directly connected with rainfall dynamics.

SHPP’s (Small Hydro Power Plant) - Hydroelectric projects with more than 1,000 kW and less than or equal to 30,000 KW

Seasonality - Seasonality allows for the amount of energy delivered to AES Eletropaulo to vary throughout the year, according to market demand. The change usually occurs according to the different seasons of the year.

SIN (National Interconnected System) – Large-scale hydrothermal system, with a strong predominance of hydro power plants, consisting of generation plants in the South, Southeast, Midwest, North and Northeast regions of the country. The system's operation is based on interdependence, integrating hydroelectric energy generation and transmission resources to meet the market’s demand. The system enables the exchange of energy between regions with different climatic and hydrological variations, which tend to cause production surplus or shortage. The system also provides for the decrease of operating costs and minimization of thermal production.

Submarket – Given the differences between the characteristics of SIN’s transmission areas, regions that have the most geoelectric similarities are grouped, forming one submarket, that is different than the geopolitic division commonly used.

TAR (Updated Reference Tariff) - Used for the calculation of financial compensation for the use of water resources. The rate is adjusted every year on the basis of the IPCA.

TEO (Energy Optimization Tariff) – Used to value the ERM transactions established by ANEEL.

TUSDg (Generators Distribution System Usage Tariff) - Tax related to the use of the distribution system.

UHE’s (HPP - Hydroelectric Power Plant) - Hydroelectric enterprises with more than 30,000 KW, with total area of reservoir above 3.0 km.

VN (Normative Value) – Reference cost for the examination between the purchase price and the price to be transferred to the rates.