2Q16 DISTRIBUTION OF R$ MILLION IN DIVIDENDS THIS QUARTER RESULTS. Results Conference Call. Table of Contents

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1 DISTRIBUTION OF R$ MILLION IN DIVIDENDS THIS QUARTER Comments by Mr. Francisco Morandi Vice President and Investor Relations Officer Barueri, August 4 th, AES Tietê Energia S.A. (BM&FBovespa: TIET3, TIET4 and TIET11) announced today the results referring to 2Q16. The Company's operational and financial information, except when indicated otherwise, is presented on the basis of consolidated figures, according to corporate law. The results referring to the second quarter of 2016 were influenced in a positive way by the reduction of the physical guarantee allocation mechanism in the ERM, an effect known as GSF, when comparing the quarters (10.1% in 2Q16 vs. 18.9% in 2Q15). This resulted in a lower volume of purchased energy and in addition to the lower average spot price in the Southeast submarket (R$ 62.37/MWh in 2Q16 vs. R$ /MWh in 2Q15) resulted in the decrease of costs with energy purchased in the spot market of R$ million, in comparison with the same period in the previous year. The partial recovery of the reservoir levels in the SE/MW submarket (56.1% in 2Q16 vs. 36.1% in 2Q15), despite the reduction in the affluent natural energy from this same submarket in comparison with the same period in previous year (89.9% of the LTA in 2Q16 vs. 92.7% of the LTA in 2Q15), was a key factor for the recovery of the volume of generated energy in 2Q16, which increased by 130.1% between the periods. In the operational sphere, aiming at the maintenance of the increased operational availability and efficiency of our plants, the maintenance and modernization program received investments of R$ 26.5 million in 2Q16. These investments were mainly allocated to the Água Vermelha hydroelectric power plant. For the cycle, we intend on investing R$ million for the continuous improvement of our operational conditions. As for the financial performance, our results reflect the end of the bilateral agreement with AES Eletropaulo and the sale of energy in the Free and Regulated Markets. The average sale price for our commercialized energy decreased from R$ /MWh in 2Q15 to R$ /MWh in 2Q16. Therefore, in view of the aforementioned factors, the Company reported a positive EBITDA of R$ million in the quarter (with a margin of 58.5%) versus a positive EBITDA at R$ million (with a margin of 40.2%) recorded in 2Q15. The net income of the period reached R$ million, a decrease of R$ 17 million when compared to From this assessed profit, R$ million will be distributed to shareholders as interim dividends, corresponding to 115% of the net income assessed in the quarter and 117% of the net income assessed in 1H16. The signing of new energy agreements for the period between 2018 to 2020 was also a highlight. With that said, the contracting levels for 2017, 2018 and 2019 amounted to 88%, 70% and 38%, respectively. At last, as announced, on August 15 th, 2016, the Company will hold a Special Shareholders' Meeting in order to assess a proposal for the capital increase arising from the partial capitalization of the Special Goodwill Reserve equivalent to R$ million. After approving that capitalization, the Company's share capital will increase from R$ million to R$ million. RESULTS 2Q16 Results Conference Call h00 (BRT) and 10h00 (EDT) Code: AES Tietê Connection: - Brazil: EUA: The presentation and audio will be available at: ri.aestiete.com.br Table of Contents HIGHLIGHTS 2Q16 2 SECTOR CONTEXT 3 PROFILE 6 SECTOR PERFORMANCE 7 OPERATIONAL PERFORMANCE 10 COMMERCIAL PERFORMANCE 11 FINANCIAL PERFORMANCE 14 DIVIDENDS 22 SOCIAL AND ENVIRONMENTAL PERFORMANCE 29 BUSINESS DEVELOPMENT 30 CORPORATE GOVERNANCE 33 ATTACHMENTS /GLOSSARY 36 AES Tietê Energia S.A. (R$ million) 2Q15* 2Q16 Chg (%) Ratios 2Q15* 2Q16 0 Chg (%) Gross Revenues % Net Income**** / Equity (times) 0.3x 1.5x 449.2% Net Revenue** % Operational Costs and Expenses*** % EBITDA % EBITDA Margin % b.p. Net Income % Net Margin % b.p. Shareholder Equity 1, , % Net Debt** 1, , % Operational Cash Flow % * figures of 2015 refer to the result of the former Companhia Brasiliana, except the result of the discontinued operations (AES Eletropaulo, AES Elpa, AES Serviços, newly renamed as AES Ergos and AES Uruguaiana) ** normalized revenue *** does not include depreciation Net Debt / Equity (times) 0.7x 0.6x Net Debt / Adjusted EBITDA**** (times) 2.0x 0.9x Adjusted EBITDA / Financ.Exp. (times) 4,2x 4,7x 0 **** last 12 months Operational Data 2Q15* 2Q16 0 Generated Energy - GWh 1, ,019.9 PPA's Price***** Capex - R$ million Own Employees ***** AES Eletropaulo PPA in 2015 and Regulated and Free M arket PPA's in % -55.0% 11.9% Chg (%) 130.1% -25.9% -26.1% 1.1% TIET11: R$ (08/04/2016) MARKET CAP: R$ 6,790 million MARKET CAP: US$ 2,115 million 1

2 2Q16 HIGHLIGHTS Hydrology Inflows in the Southeast/Midwest region in 2Q16 was at 89.9% of the LTA 1 (vs. 92.7% in 2Q15); SIN reservoir levels closed 2Q16 at 53.3% (vs. 38.3% in 2Q15); Average lowering of the physical guarantee at 10.1% in 2Q16 vs. 18.9% in 2Q15. Operational Volume of energy generated by AES Tietê Energia s plants was 3,019.9 GWh, 130.1% higher than the same period in 2015; Company's reservoir levels closed 2Q16 at 91.6%, 11.1 p.p. above 2Q15 (80.5%). Commercial The portfolio of contracted energy totaled 88%, 70% and 38% of the Company s available energy for 2017, 2018 and 2019, respectively. Financial 2 Net revenue at R$ million in 2Q16; 38% lower than 2Q15 (R$ million); Operational costs and expenses, excluding depreciation, amounted to R$ million in the quarter, 57% less than the R$ million recorded in 2Q15; Reported PMSO R$ 49.3 million in 2Q16, an increase of 12% vs. 2Q15 (R$ 44.1 million); EBITDA of R$ million in 2Q16 vs. EBITDA of R$ million in 2Q15; Net income of R$ million in 2Q16 vs. R$ million in 2Q15. Dividends Distribution of R$ million in dividends in 2Q16 to be paid on September 27 th, 2016; Dividend yield of 2.1% and payout of 115.1% in 2Q16. Acknowledgments and Social and Environmental There was no record of accidents involving the population in 2Q16, maintaining the zero accident result in the plants reservoirs since 2009; Winner of ANEFAC s 2016 Transparency Trophy for the 2 nd time, acknowledging the most transparent financial statements in Brazil. 1 Long Term Average 2 Figures of 2015 refer to the results of former Companhia Brasiliana, excluding the results of the discontinued operations (AES Eletropaulo, AES Elpa, AES Ergos and AES Uruguaiana) 2

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 hydro 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 coordination and control 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 hydro power plants depends on the rainfall rates to contribute to the suitable water storage levels in the reservoirs. 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 hydrographic basins. According to the rules of the Energy Reallocation Mechanism (ERM), the total volume of energy generated by the hydro power plants is allocated to each plant that integrates this mechanism, proportionally to its respective physical guarantee levels3 (or assured energy). This distribution is intended to assure that all ERM members reach their respective insured energy levels, regardless of their actual energy production levels. 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. Similarly, if the overall energy generated by the plants falls short of the physical guarantee of SIN's plants, this deficit, called the Generation Scaling Factor (GSF), is also proportionally distributed among the ERM members, resulting in an exposure to the short-term market and the Settlement Price for Differences (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 is 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, whether positive or negative, are subject to a mechanism for financial relief and can be reduced or eliminated, depending on the month s short-term accounting in which is included. 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. Such calculations are based on the parameters for scheduled and unscheduled outages, verified by comparing to the reference standards set out by the Brazilian National Electric Energy Agency (ANEEL). Should the established availability requirements not be accomplished by any of the plants, an adjustment in the physical guarantee would occur, which may lead to exposures to the short-term energy market. The MRA effects related to ERM allocations, reductions of the GSF or secondary energy are calculated and accounted for by the Electric Energy Trading Chamber (CCEE). ENERGY COMMERCIALIZATION The commercialization of energy, according to the current rules, is performed in two spheres: Free Contracting Environment (ACL) and Regulated Contracting Environment (ACR). In the Free Contracting Environment (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. 3 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 by means of long-term agreements. 3

4 Conventional free consumers are those consumers having a minimum contracted demand equal to or higher than 3MW 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 subsidized source arises from Small Hydropower Plants (SHPP s), Biomass Thermal Plants, Wind and Solar Power Plants of up to 50 MW and the conventional source includes large-sized hydropower plants and thermal power plants above 50 MW. Special consumers are those consumers having any demand between 500 kw and 3MW, who are required to acquire energy from special subsidized sources (wind, biomass, SHPP s or solar). Considering the expiration of AES Eletropaulo's energy contract in December 2015, in 2012 AES Tietê Energia began the implementation of its strategy for selling energy to negotiate their available energy in this commercialization sphere in ACL. The monitoring of this strategy is detailed in the "Strategy for Energy Commercialization and Other Bilateral Contracts" section of this release. In the Regulated Contracting Environment (ACR), the sale of energy occurs only through sale and purchase auctions promoted by 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 contracts signed in these environments are settled and calculated by CCEE. In addition, CCEE accounts for energy produced by plants participating in the ERM and the physical guarantee available for contracting and any difference is paid for in the spot market (or short-term market). The initial objective of this settlement is to attend the ERM and the generators that failed to produce enough to meet their energy contracts. In a second stage, if there is surplus generation, the generated energy (secondary energy) can be settled on the spot market at the PLD. REGULATION Review of Physical Guarantee of Hydro Power Projects The determination of physical guarantee is fundamentally important to agents in the electric sector. According to Decree 5163 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 supply assurance criteria proposed by the National Council of Energy Policy ("CNPE") shall discipline the 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 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, However, in MME Ordinance no. 681, published on December 30th, 2014, it was determined by the MME that the physical guarantees of hydro power plants dispatched mainly in 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. On November 17th, 2015, MME Ordinance No. 544/2015 was published, in which the new calculation methodology for Physical Guarantee of UHEs was submitted to Public Inquiry with contribution deadline on January 24th, The result thereof has not been disclosed yet. The new Physical Guarantee values will be in effect as from January 1st, 2017, as published in Ordinance 537, of December 8th,

5 Maximum and minimum limits of PLD - Homologation Resolution Number 2002/2015 Every year in December, Aneel establishes the maximum and minimum limits of 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 Thermal Power Plant in commercial operation, natural gas contracted through CCEAR. The minimum PLD must be calculated based on estimates of generation cost of UHE Itaipu and the necessary costs to maintain and operate hydroelectric projects, charges and CFURH Financial Compensation for Hydric Resources Use. On December 22nd, 2015, Homologation Resolution Number 2002/2015 was published, which established the maximum and minimum limits of PLD for the year For 2016, the minimum PLD was established at R$ 30.25/MWh based on operation costs of the plants, added to the CFURH. The maximum PLD was set at R$ /MWh based on CVU of thermal power plant Mário Lago, determined as thermal reference. IMPACTS OF RETRACTION OF HYDROELECTRIC GENERATION IN THE ERM - GSF As previously mentioned, the hydroelectric dispatch is defined by the ONS, whose dispatch model has the main objective the cargo service and minimizing the total cost of operation system. 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 higher participation of thermal power plants, reserve generation (wind, biomass, 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 GSF economic impact in 2015 for the whole industry was R$ 22 billion, disregarding the effect of injunctions. The recent injunctions obtained by power agents 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, a favorable injunction to all electrical generating companies included in the association, among them, AES Tietê Energia, which prevents such hydroelectric displacement be allocated to generators with injunctions in the next settlement. It is noteworthy that the results recorded by the Company in 2015 have a negative impact from the GSF, which totaled 15.9% in the year. Renegotiation of GSF The regulator presented two proposals for hydrological risk renegotiation: one for ACR (Regulated Contracting Environment) and a distinct one for ACL (Free Contracting Environment). The Company falls within ACL proposal, however, it decided not to adhere thereto, since it didn t make sense economically. It is important to highlight that no other generator member of APINE adhered to ACL proposal. ANEEL was asked about the possibility of the Company to adhere the proposal in the ACR, considering its participation in the Auction A-1 in December 2015, with power supply from January 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 Changes in PLD calculation In order to reduce distortions in the short-term price signal, represented by PLD, arising from the thermal dispatch out of the merit order defined in the actual system operation, discussions in the electric energy 5

6 industry began in 2016 on the need to adjust the risk aversion parameters adhered to in the price formation models, NEWAVE and DECOMP. Depending on the hydrology, parameter review on the models and evolution and projection of SIN load, PLD value may be affected, particularly in short and mediumterm. The calculation change must also be presented to the agents by means of Public Inquiry and applied as from In the Company's view, this adjustment is important for PLD to reflect, in a more accurate manner, the reality of operating conditions in the National Interconnected System. PROFILE GENERATION PARK Up to December 31st, 2015, Companhia Brasiliana was a publicly-traded corporation and its purpose was to exercise the control on companies mostly acting in the electrical energy generation and distribution sector. Its main controlled companies were: AES Elpa S.A. ("AES Elpa"), Eletropaulo Metropolitana Eletricidade de São Paulo S.A. ( AES Eletropaulo ), AES Uruguaiana Empreendimentos S.A. ( AES Uruguaiana ), AES Tietê and AES Serviços TC Ltda. ( AES Ergos ), upon direct or indirect shareholding in the capital of those companies. AES Tietê Energia, after the Corporate Restructuring mentioned in "Capital Market" section, took over AES Tietê Energia's business and became one of the generators in AES Brasil group. AES Tietê Energia is a publicly-traded corporation listed at FBOVESPA and is authorized to do business as a concessionaire for use of public property, in electrical energy generation and commercialization and in the capacity of independent electrical energy producer. With a generation park that comprises of nine hydro power plants and three small hydro power plants (SHPPs), AES Tietê Energia has operated in Brazil since 1999 in the generation and commercialization of electric energy. The Company holds an installed capacity of 2,658 MW and a physical guarantee of 1,278 MW. AES Tietê Energia's hydro power plants and Mogi Guaçu's SHP concessions expire in 2029 and SHP São José and São Joaquim's SHPP are authorized to operate until the year of AES Tietê Energia's plants are located in 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 other by the Environmental Company of State of São Paulo (CETESB). 6

7 SUSTAINABLE STRATEGIC PLANNING AES Brasil s strategy is still guided by its Sustainable Strategic Planning ( PES ), defining the strategic directors of the Company as Customer Satisfaction, Business Development, Efficiency Resource Use and Discipline in Execution and Engagement of Stakeholders. SECTOR PERFORMANCE RESERVOIRS, THERMAL DISPATCH, INFLOWS AND LOAD The rainfall season in Brazil, particularly in the Southeast/Midwest ("SE/MW"), North and Northeast submarkets, occurs between late November and April. In 2016, the recorded inflows (also known as Natural Inflow Energy - NIE) at SE/MW has been in line with SIN inflows. The inflows recorded at SIN in 1H16 was higher than that recorded in the same period in 2015 and 2014, however, it continues to be lower than the Long-Term Average, as shown in the following chart: Natural Energy Inflows 4 in SIN (GWavg) 2014 x 2015 x 2016 x LTA Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec LTA Comparative 2Q15 x 2Q16 and 1H15 x 1H16 In 2Q16, the inflows recorded in the SE/MW region, representing about 70% of the system in storage capacity, reduced by 2.8 p.p., when compared to the inflows in 2Q15 (89.9% of the LTA in 2Q16 vs. 92.7% of the LTA in 2Q15). The inflow recorded in SIN throughout 2Q16 was of 78.5% of the LTA, lower than the average inflow of 2Q15, which amounted to 90.5% of the LTA. In the first semester of 2016, the inflows in the SE/MW region remained at 98.0% of the LTA, an increase of 26.4 p.p., regarding the average in the long-term period, when compared to the same period in This same increase trend in inflows for the first quarter 2016 vs was verified in the SIN. The following chart shows the comparison of the evolution of the inflows in each submarket and SIN, in the second quarter and in the first semesters of 2016 and 2015, in comparison with the long term average ("LTA") observed since The Natural Inflow Energy, also known as NIE, is a parameter used to represent the inflows in hydroelectric use. 5 Currently the sector uses the LTA's values disclosed in June 2016 and is subject to change - Source: ONS. 7

8 Inflows in submarkets (% of the LTA) Southeast/Centerwest South Northeast North 2Q15 2Q16 1H15 1H16 SIN Thermal Dispatch 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 verified, reducing hydroelectric generation. However, in virtue of the consumption retraction in 2015 and 2016 and improved hydrology in the previous 2015/2016 rainfall season, ONS has been reducing the thermal generation at SIN, which reached the average level of 10.8 GWavg in 2Q16 in comparison with 11.9 GWavg in 1Q16 and 15.7 GWavg in 2Q15. The following chart shows the evolution of SIN's thermal generation from 2013 to the second quarter of It is possible to observe that, despite the increased level of thermal generation in 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 into a maximum thermal generation level of 17.0 MWavg 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 10.8MWavg in 2Q16. Thermal Dispatch of SIN (MWavg) 6 Level of Reservoirs (%) Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 Reservoir Level (%) Thermal Generation Gwavg 6 ONS Data. 8

9 jan/13 feb/13 mar/13 apr/13 may/13 jun/13 jul/13 aug/13 sep/13 oct/13 nov/13 dec/13 jan/14 feb/14 mar/14 apr/14 may/14 jun/14 jul/14 aug/14 sep/14 oct/14 nov/14 dec/14 jan/15 feb/15 mar/15 apr/15 may/15 jun/15 jul/15 aug/15 sep/15 oct/15 nov/15 dec/15 jan/16 feb/16 mar/16 apr/16 may/16 jun/16 The following chart shows a comparison between the thermal dispatch in and out of merit order recorded for SIN since January It is possible to note a significant increase in the dispatch out of merit order, which interferes the correct price formation and leads to lower values of the PLD, particularly at SE/MW submarket. It is assumed that the reason for the high thermal dispatch over this period was associated with a more conservative dispatch policy in order to ensure the recovery of reservoir levels during the dry season, which began in April 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 electric restrictions and not to energy safety. Thermal dispatch regarding the merit order (GWavg) vs PLD on SE / MW submarkets (R$/MWh) 7 R$/MWavg (PLD SE/CW) GWavg¹ Thermal Dispatch out of Order of Merit Total Thermal Dispatch Thermal Dispatch in the Order of Merit PLD SE/CW Increase in Thermal Dispatch out of Order of Merit It is noteworthy, however, that the latter attitude adopted by Electrical Sector Monitoring Committee ( CMSE ) to reduce thermal generation out-of-merit-order, due to energy security, tends to bring the determination of energy prices and the operation of the system, which is desirable and sound to the correct signal to the conditions market of the system. The additional cost of dispatch out-of-merit-order is borne mainly by consumers through System Service Charge ("ESS"), but it has direct impact on the decrease of physical guarantee allocation in ERM by the GSF factor. SIN Load In the following chart, it may be noted that SIN's load has increased by 2.8% in 2Q16 vs. 2Q15. Despite the load increment, the higher level of inflows at SIN and the increased thermal dispatch resulted into an improvement of 39% in the reservoir levels in 2Q16, in comparison with the same period in the previous year. It is important to mention that the load increment is also associated with the load review performed by ONS for Source: ONS 9

10 Reservoir Levels in SIN (%) Load in SIN (GWavg) 8-2.3% Variation 2Q15 x 2Q16: 2.8% 0.2% % SE / CW South Northeast North SIN 1Q April May Jun 1H 2Q15 2Q Reservoirs levels of AES Tietê Energia s power plants The level of equivalent energy storage in the reservoirs of AES Tietê Energia s plants closed the second quarter of 2016 at 91.6%, a level 11.1 p.p. higher than in the second quarter of 2015 (80.5%). Such performance was higher than the submarket where the Company's plants are located (SE/MW) which closed June at 56.1% and above the performance of National Interconnected System (SIN), which closed the 2Q16 at 53.3% of its full capacity. EFFICIENCY IN RESOURCE USE AND DISCIPLINE IN EXECUTION Maximizing value by anticipating and decreasing economic, social and environmental risks and impacts is also one of the commitments of AES Brasil Group companies. For comparison purposes, the Company's management presented in the following sections business, operational, financial and environmental results pro forma for AES Tietê Energia. OPERATIONAL PERFORMANCE GENERATED ENERGY In Brazil, due to the dominance of hydro power in the energy matrix (~61.04%) 9, the adopted model of centralized dispatch, in which ONS determines the amount of energy to be dispatched by each of SIN's participant power plants, 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 ONS to ensure the stability of the system and not necessarily to its operational performance. In 2Q16, the total volume of energy generated by AES Tietê Energia plants reached 3,019.9 GWh, 130.1% higher than the same period of The variation is a result of the higher dispatch from our hydropower plants. 8 Values obtained from the generation of plants scheduled and dispatched centrally by ONS, plus the plants not monitored by ONS. Values of 2015 updated pursuant to a new publication by ONS. Source: ONS 9 As per ANEEL s Managerial Information Bank (7/25/16), does not include SHPP 10

11 Generation (Power plants) - GWh 2Q15 2Q16 Chg (%) 1H15 1H16 Chg (%) Gross Energy Generated 1, , % 3, , % Agua Vermelha (Sen. José Ermírio de Moraes) , % 1, , % Bariri (Álvaro de Souza Lima) % % Barra Bonita % % Caconde % % Euclides da Cunha % % Ibitinga % % Limoeiro (Armando Salles de Oliveira) % % Nova Avanhandava % % Promissão (Mário Lopes Leão) % % Mogi / S. Joaquim / S. José % % CUSTOMER SATISFACTION In the Sustainable Strategic Planning of AES Brasil, one of the commitments is to ensure excellence in services provided with ethics and respect for the customer. The goal of AES Tietê Energia in this area is to achieve a customer satisfaction rating of 90% by Periodic Surveys are carried out with marketing customers to assess their satisfaction with the company's services. In the 1H15, the survey was conducted for the first time by an independent institute. The overall result was 85.7% of satisfaction from the performance in Relationship, Image, Service and Purchase and Management areas. COMMERCIAL PERFORMANCE PHYSICAL GUARANTEE AND SEASONALITY The reduction in the ERM verified in 2Q16 was 10.1% lower than that registered in the same period of 2015, which totaled 18.9%. The variation is a result of the improvement in SIN s reservoirs levels in 2Q16 in comparison with 2Q15 (53.3% vs. 38.3%), of the reduction of the thermal dispatch in the period (10.8 GWavg in 2Q16 vs GWavg in 2Q15) and the raise of the load by 2.8% in the comparison between the quarters. The graph below shows the physical guarantee reductions accounted by CCEE and in ERM on the financial settlements made in the second quarter of 2015 and Physical Guarantee Reduction in ERM (%) PG Reduction 2Q15: (18.9%) PG Reduction 2Q16: (10.1%) Apr/15 May/15 Jun/15 Apr/16 May/16 Jun/16¹ 1 - June data refers to the Company's projection as official data were not yet available 10 It refers to the amounts recorded in the CCEE's settlement. Amounts recorded in the Company are influenced by provisioning, whereas CCEE's settlement for a particular month is available, on average, within 60 days after closing a given month. 11

12 Seasonality of Physical Guarantee for purposes of Ballast and ERM ANEEL's Resolution No. 584/2013, which establishes seasonality of the physical guarantee for ballast purposes (contracts) and for purposes of allocating energy in the ERM, the Company has adopted a strategy that aimed towards minimizing its exposure to hydrological risks. In December 2015, the Company adopted the strategy to declare the seasonality of its Physical Guarantee following the profile of the generator set of ERM, which resulted in the higher allocation of its energy in the first half of 2016, mostly in 1Q16. 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 (GSF or secondary energy) is reflected in the energy settlement in the spot market For 2016, the Company adopted the strategy of following the ERM seasonality and ballast profile following the sale agreements seasonality, as per the following chart: Gross Physical Guarantee Seasonality for ERM and Ballast (MWavg) 11 1,258 1,410 1,342 1,263 1,305 1,230 1,206 1,210 1Q16 2Q16 3Q16 4Q16 Seasonality Ballast Seasonality ERM DIFFERENCE OF PRICE BETWEEN SUBMARKETS, SURPLUS AND FINANCIAL EXPOSURE The differences of PLD between the submarkets derive from the limits of energy exchange between the SIN regions, given the operational restrictions of these regions transmission systems. The differences of PLDs give rise to the financial surplus and to the financial exposures verified by the CCEE. The first half of 2016 was marked by a negative financial exposure which impacted the ERM agents and caused the increase of the costs related to energy purchase. This result in ERM cannot be managed by the Company, and to neutralize it, the CCEE regulation foresees the relief of the financial exposure, as it is detailed below. Financial surplus, Financial exposure and Relief of the Financial Exposure The energy transactions within 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 other generators 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 ERM is relieved by the financial surplus generated from the physical exchange between the submarkets. If such surplus is not enough to cover the negative financial exposure in ERM, the residual balance will be divided between all the generators. 11 Include seasonality adjustments of conventional and encouraged energy 12

13 The difference of PLD between the submarkets generated, up to the April/16 settlement, a financial surplus of nearly R$ 1.6 billion; however, it is not enough to cover the R$ 2.1 billion in negative exposures generated in the ERM. REVENUE SOURCES AES Eletropaulo The amount of energy contracted by December 31st, 2015 with AES Eletropaulo was 1,268 MWavg. This consists of the total amount of energy that has to be delivered each year until the termination of the contract. The contract accepts seasonal variations, i.e., the volume of energy delivered to AES Eletropaulo varies during the course of the year, according to the demand from the market served by that company and the allocation of energy from the remainder of its contracts. The bilateral contract price was established in 2000, when it was approved by 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, there was a new update of the agreement price with AES Eletropaulo to a readjusted value of R$ /MWh, based on IGP-M accumulated in the period of 8.1%. That was the price applied until December 31st, CCEE (ERM, Spot and Administrative) and Others 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 hydro power plants. The current rate for 2016 is R$ 12.32/MWh, while in 2015, 2014 and 2013, the rate was R$ 11.25/MWh, R$ 10.54/MWh and R$ 10.01/MWh, respectively. The prices of invoiced energy on the short-term market, i.e., the Settlement Price for Differences (PLD) varies according to the electric and energetic conditions, as well as the supply and demand of energy. As of September 2013, the calculation methodology for the Settlement Price for Differences (PLD) started to take into account the risk aversion mechanism (CVaR), which tends to anticipate the thermal dispatch, seeking to conserve the system s operations. Before Resolution No. 3 laid down by the Brazilian Energy Policy Council (Resolution CNPE 3), which set out this new PLD pricing model, the expenses for starting thermal power plants were charged by means of the System Service Charges (ESS). In 2Q16, the average PLD of SE/MW totaled R$ 62.37/MWh, which was 84% lower than the amount recorded in the same period of 2015 (R$ /MWh). The hydrology improvement verified in the rainy period from November 2015 to April 2016, the decrease in the energy consumption and the reduction of the thermal dispatch in the merit order had been preponderant factors leading to the reduction of the 2016 average PLD for the SE/MW submarket. Strategy of Energy Trading The Company has adopted a commercialization strategy for its available energy from January 2016 to form a diversified portfolio of free customers, in order to completely replace the bilateral contract with AES Eletropaulo that expires in December Depending on the current situation and the perspective of an increased hydrological risk for 2015 and 2016, 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. Thus, as demonstrated in the chart below, 88%, 70% and 38% of the Company available energy has already been contracted. 13

14 History and Evolution of client portfolio 12 (MW average) Contracting level Average price (R$/MWh) 95% 88% 70% 38% 26% ,181 1, Energy available for sale Own energy sold BILLED ENERGY The energy invoiced by AES Tietê Energia increased by 13.5% in the comparison between 2Q16 and 2Q15, and 12.7% in comparison with YTD 2016 vs. 2016, mainly explained by the increment of energy sold in the ERM, in virtue of the higher dispatch from Company's plants over 2016, as detailed in the following table. Billed Energy (Consolidated) - GWh 2Q15 2Q16 Chg (%) 1H15 1H16 Chg (%) The seasonality difference between the periods and the trading of 95% of the conventional energy in the year of 2016, when it is compared with the traded 100% conventional gross energy in 2015, justify the reduction of the energy invoicing in the spot market and the energy sale in the regulated/free energy markets, considering the termination of the AES Eletropaulo agreement on December 31st, FINANCIAL PERFORMANCE GROSS REVENUES Billed Energy 3, , % 7, , % AES Eletropaulo Bilateral Contract 2, % 5, % Free Market , % , % Regulated Market CCEE % , % Spot % % MRE % , % In 2Q16, AES Tietê Energia s gross operational revenue amounted to R$ million, 34,2% less than the R$ million recorded in 2Q15. The performance is explained by the following factors: (i) reduction in the revenue of energy sold in contracts in the free and regulated markets in the amount of R$ million, particularly in virtue of the reduction of the average energy price traded between the periods (R$ /MWh in 2Q16 vs. R$ /MWh in 2Q15), taking into consideration the termination of the agreement with AES Eletropaulo, on December 31 st, 2015; 12 Only conventional energy, excluding losses and internal consumption; it includes the energy agreements executed up to June 30, 2016; average price based on June

15 (ii) reduction of R$ 68.5 million in the revenue of energy sold in the spot market in 2Q16 (in comparison with 2Q15), particularly due to the lower PLD in comparison between the quarters in the SE/MW submarkets (R$ 62.37/MWh in 2Q16 vs. R$ /MWh in 2Q15) and lower volume of sold energy; partially offset by: (iii) increase of revenue from the ERM, equivalent to R$ 8.5 million, in virtue of the higher dispatch from Company's plants throughout the period. In 1H16, AES Tietê Energia's gross operational revenue amounted to R$ million, a reduction of 37.7% compared to the R$ 1,441.1 million recorded in 1H15. This result is explained by the following factors: (i) reduction in the revenue of energy sold in contracts in the free and regulated markets in the amount of R$ million, particularly in virtue of the reduction of the average energy price traded between the periods (R$ /MWh in 1H16 vs. R$ /MWh in 1H15), taking into consideration the termination of the agreement with AES Eletropaulo, on December 31 st, 2015; (ii) reduction of R$ million in the revenue of energy sold at spot market, particularly due to the lower PLD in the comparison between the semesters in the SE/MW submarkets (R$ 48.63/MWh in 1H16 vs. R$ /MWh in 1H15) and lower volume of sold energy; partially offset by: (iii) increase of R$ 19.0 million arising from the revenue of energy sold in the ERM, in the comparison between the semesters. Gross Revenues (Consolidated) - R$ million 2Q15* 2Q16 Chg (%) 1H15* 1H16 Chg (%) Pow er Supply % 1, % AES Eletropaulo Bilateral Agreement % 1, % Free Market % % Regulated Market n.a n.a CCEE % % Spot % % MRE % % Other (Administratives) % % Other revenues** % % * figures of 2015 refer to the result of the former Companhia Brasiliana, except the result of the discontinued operations (AES Eletropaulo, AES Elpa, AES Serviços, newly renamed as AES Ergos and AES Uruguaiana) ** includes rent REVENUE DEDUCTIONS The deductions of AES Tietê Energia's revenue amounted to R$ 53.4 million in 2Q16 vs R$ 40.6 million in 2Q15, an increase of 31.5% in the period. In the first semester of 2016, the deductions have amounted to R$ million vs. R$ 84.2 million the same period of the previous year. PIS and COFINS are taxes applied to AES Tietê Energia s revenue. The rate applied to the contracts executed in the free and regulated markets in 2016 is 9.25% (non-cumulative regimen). AES Tietê Energia recorded R$ 42.3 million in revenue deductions with PIS and COFINS in 2Q16 vs. R$ 33.4 million in 2Q15, a 26.7% increase. In 1H16, deductions with PIS and COFINS reached R$ 81.8 million versus R$ 69.6 million recorded in 1H15, representing a 17.6% reduction. This performance is explained by the increase in the PIS and COFINS rates, considering the end of the AES Eletropaulo agreement (with a rate of 3.65%). In the scope of revenue deductions with ICMS, there was an increase of R$ 7.4 million in comparison between 2Q16 (R$ 7.9 million) and 2Q15 (R$ 0.5 million). In the comparison between semesters, there was an increase of R$ 13.3 million between the periods (R$ 14.3 million in 1H16 vs. R$ 1.0 million in 1H15). The reason for such increase is the levy of ICMS in part of the agreements executed by the Company in the free market sphere, which is transferred to the customers. 15

16 In addition, pursuant to Law No /09, generation, transmission and distribution companies must annually invest at least 1% of their net operating revenue in Research and Development for energy efficiency ("R&D"). In virtue of the revenue reduction between the periods, in 2Q16, the Company recorded R$ 3.1 million in revenue deductions related to R&D, a reduction of 53.0% compared to 2Q15. In 1H16, R$ 7.0 million was recorded in revenue deductions relating to R&D compared to the R$ 13.6 million in 1H15 (a reduction of 48.7%). NET REVENUES AES Tietê Energia's net operational revenue amounted to R$ million in 2Q16, 38.2% lower than the amount recorded in 2Q15 (R$ million). Such performance particularly reflects the reduction of volume and price of energy sold at spot market and reduction of volume and price for energy sale through agreements in the free and regulated markets, taking into consideration the termination of the agreement with AES Eletropaulo on December 31st, 2015, as aforementioned. In 1H16, the net operational revenue amounted to R$ million, which presents a decrease of 41.4% in relation to 1H15 (R$ 1,357.0 million), due to the same factors explained above. OPERATIONAL COSTS AND EXPENSES The operational costs and expenses, excluding depreciation and amortization, totaled R$ million in 2Q16, which represents a 57.2% reduction, or R$ million, compared to 2Q15. The result is mainly explained by the lower energy purchase cost, specifically in the spot market, in virtue of the lower volume (483.9 MWh in 2Q16 versus MWh in 2Q15) and price (R$ 62.37/MWh in 2Q16 versus R$ in 2Q15) of energy purchased in such period. Furthermore, costs were also influenced by the lower GSF assessed over the period. The expenditures with the reported PMSO presented an increase of 11.6% in 2Q16 in relation to 2Q15, primarily reflecting the higher costs with staff, material and third party services, and some non-recurring items, which will be set out below. In the semester comparison, operating costs and expenses, excluding depreciation and amortization, amounted to R$ million in 1H16, a reduction of 46.3% in comparison with the value recorded in 1H16 (R$ million). PMSO expenses increased by 16.4% in 1H16, in comparison with 1H15, particularly as a reflection of the higher costs of third party personnel, materials and services, as detailed as follows. R$ thousand 2Q15* 2Q16 Chg (%) 1H15* 1H16 Chg (%) Operational Costs and Expenses 399, , % 698, , % Charges and Sectorial taxes 36,013 46, % 77, , % Purchased Energy 318,907 75, % 534, , % Total of charges and sectorial taxes + purchased energy 354, , % 612, , % Personnel 20,438 23, % 38,671 46, % Material and external service expenses 18,336 19, % 35,704 43, % Others 5,368 5, % 12,347 10, % PMSO - reported 44,142 49, % 86, , % * figures of 2015 refer to the result of the former Companhia Brasiliana, except the result of the discontinued operations (AES Eletropaulo, AES Elpa, AES Serviços, newly renamed as AES Ergos and AES Uruguaiana) The main factors that influenced the variations in operational costs and expenses were as follows: 16

17 Costs on Purchased Energy, Sectorial Fees and Charges R$ thousand 2Q15* 2Q16 Chg (%) 1H15* 1H16 Chg (%) Financial Payoff for the Use of Water Resources 7,265 18, % 18,757 41, % Transmission and Connection 26,832 25, % 54,977 55, % Inspection Fee / Further Charges 1,916 2, % 3,836 4, % Energy Purchased / CCEE Settlement 318,907 75, % 534, , % Total - Operational costs and purchased energy 354, , % 612, , % * figures of 2015 refer to the result of the former Companhia Brasiliana, except the result of the discontinued operations (AES Eletropaulo, AES Elpa, AES Serviços, newly renamed as AES Ergos and AES Uruguaiana) Financial Compensation for the Use of Water Resources ("CFURH") The expenditures with CFURH increased 158.7% in the comparison between 2Q16 and 2Q15, due to the higher volume of energy generated in the period (3,019.9 GWh in 2Q16 vs. 1,312.3 GWh in 2Q15) and the readjustment of 9.5% in the Updated Reference Tariff ( TAR ) fixed at R$ 93.35/MWh since January The higher volume of energy generated in 1H16 in relation to 1H15 (6,680.7 GWh vs. 3,352.8 GWh, respectively), was the main factor for the increase of 122.6% related to the expenditures with CFURH in the period. Transmission and Connection The transmission and connection costs, net PIS/COFINS, amounted to R$ 25.4 million in 2Q16, a reduction of 5.4% in comparison with 2Q15 (R$ 26.8 million), particularly as a reflection of PIS/COFINS credit appropriation in the first and second quarters 2016 and the negative adjustment of the tariff for using the distribution system (TUSDg) in part of the distribution system usage agreements of the Company's hydropower plants, partially offset by the increased tariff for using the transmission system (TUST) at Água Vermelha plant. In the semester, the transmission and connection costs amounted to R$ 55.3 million, in line with the amounts from the same period in the previous year. Inspection Fees/Other Charges The costs with Inspection Fees/Other Charges, including the Inspection Fee of ANEEL and Other Fees and Charges related to CCEE and ONS (National Electric System Operator) totaled R$ 2.0 million in 2Q16 and R$ 4.2 million in 1H16, 6.3% and 8.3%, respectively, higher than the value registered in 2Q15 (R$ 1.9 million) and in 1H15 (R$ 3.8 million). This performance reflects the increase of 11.4% in the Electricity Services Inspection Fee paid to Aneel ( TFSEE )13 in 2016 compared to the TFSEE proposed by ANEEL in Purchased Energy / CCEE Settlement The cost of energy purchased/settlement in CCEE saw a reduction of R$ million in the comparison of the quarters, from R$ million in 2Q15 to R$ 75.5 million in 2Q16.This result is primarily influenced by the: (i) R$ million reduction associated with the lower volume of energy purchased in the spot market (483.9 MWh in 2Q16 versus MWh in 2Q15) and price (R$ 62.37/MWh in 2Q16 vs. R$ /MWh million in 2Q15), associated with the hydrology recovery, as well as the lower average decrease in ERM in 2Q16 (10.1%) versus the decrease verified in 2Q15 (18.9%); 13 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. 17