CONSOLIDATED INFORMATION Caxias do Sul, February 21 st, 2017

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1 FULL-YEAR 2016 RESULTS Management Report Dear Shareholders: The Management of Marcopolo S.A. ("Marcopolo" or "Company") hereby submits the Management Report and Financial Statements for the year closed on December 31 st 2016, accompanied by the independent auditors' report, for your consideration. The Financial Statements are presented according to the accounting policies adopted in Brazil and the IFRS - International Financial Reporting Standards as established by IASB - International Accounting Standards Board. 1. OPERATIONAL CONTEXT Marcopolo is a publicly-held corporation with registered office in Caxias do Sul, Rio Grande do Sul, founded on August 6th 1949 for the purpose of manufacturing buses, bus bodies and components. The product line encompasses a wide variety of models made up of intercity vehicles, urban vehicles and micro, apart from the Volare family (fully-equipped bus with chassis and body). The buses are manufactured in seventeen plants, five of them located in Brazil (three plants in Caxias do Sul RS. one in Duque de Caxias RJ and one in São Mateus ES) and twelve in foreign countries, one in South Africa, three in Australia, one in China, one in Mexico, two in Argentina, one in Colombia, one in Egypt and two in India. Marcopolo also has a 40% interest in the company SPHEROS (air-conditioning), 30% in WSUL (seat foam), 65% in Apolo (plastic) and 10.8% in the Canadian company New Flyer Industries. Marcopolo also holds all the shares of Banco Moneo S.A., incorporated to provide financial support to the Company products. 2. PERFORMANCE INDICATORS The table below lists some of the relevant indicators for the management and analysis of the Company performance in

2 CONSOLIDATED FIGURES (BRL million and percentage variation, except where otherwise stated) Operational Performance Var. % Net Operating Revenue 2, ,739.1 (6.0) Revenue in Brazil ,263.5 (37.6) Export revenue from Brazil Revenue in foreign countries Gross Profit (31.6) EBITDA (1) Net Profit Earnings per share in BRL Return on Invested Capital ROIC (2) 11.9% 6.3% 5.6pp Return on Equity ROE (3) 12.2% 5.4% 6.8pp Investments (52.9) Shareholders' Equity 1, , Financial Position: Industrial Segment Cash, Cash Equivalents and Financial Investments (4) 1, , Short Term Financial Liabilities (5.8) Long Term Financial Liabilities ,065.1 (6.6) Net Financial Liabilities (43.4) Financial Position: Industrial and Financial Segments Cash, Cash Equivalents and Financial Investments 1, , Short Term Financial Liabilities (4.2) Long Term Financial Liabilities 1, ,509.7 (9.0) Net Financial Liabilities ,110.6 (24.3) Margins Gross Margin 12.7% 17.4% (4.7)pp EBITDA Margin 13.7% 7.8% 5.9pp Net Margin 8.6% 3.3% 5.3pp Notes: (1) EBITDA = Earnings before interest, taxes, depreciation and amortization; (2) ROIC (Return on Invested Capital) = EBIT/ (inventories + customers + property, plant and equipment + intangible assets - suppliers); (3) ROE (Return on Equity) = Net Profit/Beginning Shareholders' Equity; (4) The amount also includes the account "financial assets measured at the fair price by means of the result"; pp = percentage points. 3. BUS INDUSTRY PERFORMANCE IN BRAZIL The Brazilian production in reached 14,372 units in 2016, a volume which is 17.9% below the 17,511 units produced in Since the bus is sold fully-equipped, Volare is not computed in the Brazilian production of bodies. If the production of this kind of vehicle were considered, the domestic production would be 15,613 units per year, against 19,367 units in

3 The domestic market demand reached 9,869 units, a 26.1% drop compared to 2015, while the production to the foreign market was of 4,503 units, 8.3% higher than exportation in the previous year. The chart below shows the evolution of the Brazilian bus body production in the last ten years: BRAZILIAN BUS PRODUCTION TOTAL (in units) PRODUCTS (1) Intercity 9,117 10,216 7,977 5,679 4,185 Urban 18,944 17,938 16,836 9,593 7,929 Micro 5,019 4,955 3,616 2,239 2,258 TOTAL 33,080 33,109 28,429 17,511 14,372 Sources: FABUS (National Bus Manufacturers Association) and SIMEFRE (Interstate Union of the Railroad and Road Material and Equipment Industry). Note: (1) Includes exported KD (knocked down) units. BRAZILIAN BUS PRODUCTION DOMESTIC MARKET (in units) PRODUCTS (1) Intercity 6,970 7,666 5,644 3,382 1,654 Urban 17,752 17,011 15,861 8,291 6,796 Micro 3,900 4,150 3,123 1,679 1,419 TOTAL 28,622 28,827 24,628 13,352 9,869 Note: (1) See notes on the table Brazilian Bus Production Total. 3

4 BRAZILIAN BUS PRODUCTION FOREIGN MARKET (in units) PRODUCTS (1) Intercity 2,147 2,550 2,333 2,297 2,531 Urban 1, ,302 1,133 Micro 1, TOTAL 4,458 4,282 3,801 4,159 4,503 Note: (1) See notes on the table Brazilian Bus Production Total. 4. MARCOPOLO'S PERFORMANCE In order to mitigate the impact of one more year of economical and political instability in Brazil, Marcopolo took important actions in 2016 to circumvent the adverse scenario. In early 2016, the Company adopted flexible working hours in the Caxias do Sul plants and suspended the employment contracts on a temporary basis (lay-off) in the Marcopolo Rio plant, in Duque de Caxias/RJ, seeking to minimize the crisis effects in workstations. The Company also implemented a number of projects focused on exploring opportunities, notably the Conquest project, intended to increase exportation through the reinforcement of the business in traditional Latin American markets, cover new markets and expand the customer portfolio in foreign countries. More than 65 countries were visited during the year, resulting in a 54.6% increase in the physical exportation volume and an increase in exportation income. In April 2016, the Company launched the program Brazil Point to Point, targeted at the Brazilian market, including visits to customers in every region of Brazil during the second half of the year, allowing for the consolidation of the brand and customer relations. In the Volare segment, the Company launched the Business to Business project, which, through visits to transportation operators, provided an expansion of the customer portfolio and reduction of inventories in the factory and in the concessionaires, from 567 units in December 2015 to 148 at the end of the year. Apart from these projects, Marcopolo took other actions to mitigate the effects of a reduced demand in its operating results, acting towards the reduction of expenses and indirect costs, increase of operating efficiency through the adoption of the LEAN, increase the working capital through the reduction of inventories and receivables. During the year, the Company also intensified the quality program, with expansion of the after-sales service, seeking customer loyalty. In controlled companies in foreign countries, the net revenue of Polomex in Mexico and Volgren in Australia rose 28% and 13.3% respectively. The result brought by the Mexico unit arises mostly from the greater sale of intercity buses through the exportation from Brazil, an effect of the new business model which allows Polomex to 4

5 use other chassis brands. In the Australian unit, a 10.1% increase in physical units invoiced explains the income growth. In 2016, the Company launched new products, notably intercity bus models for the Mexican market, such as MP 180 MX, MP 135 MX, MP 120 MX, MP 105 MX and the urban model MX 60 BRS. In the Volare segment, the model named Volare Cinco was launched in April 27th. With the development of this complete product, which also includes chassis production, Marcopolo has entered a new market niche named Compact Bus. In an Extraordinary General Meeting held on August 3 rd, the Marcopolo shareholders approved the consolidation of L&M Incorporadora Ltda, the direct controller of San Marino Ônibus Ltda. ( Neobus ), through the issuance of 12,108,151 new preferred shares. After the consolidation, several measures were taken to capture synergies, with unified financial management and sharing of structures. On September 22 nd, the Company sold 4.5 million shares of New Flyer Industries owned by Marcopolo, amounting to a 7.4% share of the company's capital stock, generating BRL million in net cash. Finally, on November 7th 2016, Marcopolo's Board of Directors approved a capital increase within the authorized capital limit. The capital increase was ratified by the Board of Directors on December 23 rd 2016 with the issuance of 16,187,774 new preferred shares, totaling capitalization of BRL 43.7 million. 4.1 Units Recorded in Net Revenue In 2016, 9,212 units were recorded in net revenue, 4,425 of which were recorded in Brazil (48% of the total), 2,753 units exported from Brazil (29.9%) and 2,034 units produced in foreign countries, as shown in the table below: OPERATIONS (in units) (1) Var. % BRAZIL - Domestic market 4,425 7,126 (37.9) - Foreign market 2,929 1, SUBTOTAL 7,354 9,041 (18.7) Exclusion exported KD s (2) TOTAL IN BRAZIL 7,178 8,907 (19.4) FOREIGN - South Africa Australia Mexico 1,201 1,492 (19.5) TOTAL FOREIGN 2,034 2,263 (10.1) GRAND TOTAL 9,212 11,170 (17.5) Notes: (1) The Neobus units are computed in the table above only from August 2016 on; (2) KD (Knock Down) = Partially or totally knocked down bodies. 5

6 4.2 Production In 2016, the consolidated Marcopolo production amounted to 8,810 units, 20.4% below the 11,072 manufactured in Out of these total figures, 77.6% have been produced in Brazil and the remaining 22.4% in foreign countries. Marcopolo's worldwide production figures are presented on the tables below: MARCOPOLO CONSOLIDATED WORLDWIDE PRODUCTION OPERATIONS (in units) (1) Var. % BRAZIL (2) - Domestic market 4,070 7,052 (42.3) - Foreign market 3,111 1, SUBTOTAL 7,181 8,986 (20.1) Exclusion exported KD s (3) TOTAL IN BRAZIL 6,840 8,818 (22.4) FOREIGN - South Africa (10.8) - Australia Mexico 1,201 1,492 (19.5) TOTAL FOREIGN 1,970 2,254 (12.6) GRAND TOTAL 8,810 11,072 (20.4) Notes: (1) The Neobus units are computed in the table above only from August 2016 on; (2) Includes the production of the Volare model, as well as the production of Marcopolo Rio; (3) KD (Knock Down) = Partially or totally knocked down bodies. MARCOPOLO CONSOLIDATED WORLDWIDE PRODUCTION BY MODEL PRODUCTS/MARKETS (1) (in units) DM FM (2) TOTAL DM FM (3) TOTAL Intercity 877 1,925 2,802 2,032 1,149 3,181 Urban 1,963 2,005 3,968 2,999 2,403 5,402 Micro SUBTOTAL 3,255 4,314 7,569 5,450 3,766 9,216 Volares (4) ,241 1, ,856 TOTAL PRODUCTION 4,070 4,740 8,810 7,052 4,020 11,072 Notes: (1) The Neobus units are computed in the table above only from August 2016 on; (2) DM = Domestic Market; FM = Foreign Market; (3) The total FM production includes exported KD units (partially or totally knocked down bodies), which amounted to 341 units in 2016 against 168 units in 2015; (4) The production of Volares is not a part of the SIMEFRE and FABUS figures or the industry production. 6

7 PRODUCTS/MARKETS (1) (in units) MARCOPOLO PRODUCTION IN BRAZIL DM FM TOTAL DM FM TOTAL Intercity 877 1,880 2,757 2,032 1,094 3,126 Urban 1, ,386 2, ,371 Micro SUBTOTAL 3,255 2,685 5,940 5,450 1,680 7,130 Volares (2) ,241 1, ,856 TOTAL PRODUCTION 4,070 3,111 7,181 7,052 1,934 8,986 Notes: (1) The Neobus units are computed in the table above only from August 2016 on; (2) The production of Volares is not a part of the SIMEFRE and FABUS figures or the industry production. 4.3 Market Share Marcopolo kept its leading position in the Brazilian market, closing the year with a 41.3% market share. Even though the Brazilian bus production had a 17.9% drop in 2016, the Company's general market share rose 0.6 percentage points compared to 2015, notably the intercity segment, which rose 10.9%. Disregarding the total Neobus production in the period, Marcopolo's market share in 2016 would be 37.4%. The Company's market share was affected by the selective vacations adopted in the Ana Rech unit in January 2016, as well as by the layoff in the Marcopolo Rio unit in the first 5 months of the year. The table below shows Marcopolo's market share in the Brazilian production by product line: MARKET SHARE IN BRAZILIAN PRODUCTION (%) PRODUCTS (1) Intercity Urban Micro TOTAL Source: FABUS and SIMEFRE Note: (1) Volare is not computed for market share purposes. 5. CONSOLIDATED NET REVENUE The consolidated net revenue achieved BRL million in 2016, 6% below the BRL 2,739.1 million in The result was partially offset by a 27.3% increase in exportation and by revenue from foreign units, notably the performance of the units in Mexico and Australia. The domestic market sales yielded revenue of BRL million or 30.6% of the total net revenue (46.1% in 2015). Exportation, added to foreign transactions, reached revenue of BRL 1,785.8 million or 69.4% of the total (53.9% in 2015). 7

8 Revenue by product and destination market is shown on the table below: TOTAL CONSOLIDATED NET REVENUE BY PRODUCTS AND MARKETS (BRL million) PRODUCTS/MARKETS (1) DM FM TOTAL DM FM TOTAL Intercity , ,047.3 Urban Micro Bodies subtotal , , , ,037.4 Volares (2) Chassis Banco Moneo, Parts and Others GRAND TOTAL , , , , ,739.1 Notes: (1) DM = Domestic Market; FM = Foreign Market; (2) The Volare revenue includes chassis. Out of the total consolidated net revenue in 2016, 80.9% came from the sale of bodies, 9.8% from the sale of Volares and 9.3% of the revenue from parts, Banco Moneo and chassis. The charts below show the source of the consolidated revenue in further detail (in %): GROSS PROFIT AND MARGINS In 2016, the gross profit amounted to BRL million, amounting to 12.7% of the net revenue. The gross profit was impacted by a smaller sales volume in the domestic market, by greater difficulty in passing on prices, the appreciation of the real 8

9 against the dollar, by the consolidation of Neobus since August as well as by the restoration of the provision for technical guarantee to expand post-sales service for the purpose of winning the loyalty of customers. 7. SALE EXPENSES Sale expenses totaled BRL million in 2016 or 5.5% of the net revenue against BRL million, or 6% of the revenue in The reduction in the absolute value basically results from less expenditure in sales commissions. 8. GENERAL AND ADMINISTRATIVE EXPENSES General and administrative expenses totaled BRL million in 2016 and BRL million in 2015, amounting to 6.4% and 5.8% of the net revenue respectively. The amount increase results mostly from the consolidation of Neobus in August. 9. OTHER OPERATING REVENUE/EXPENSES In 2016, BRL million was recorded as "Other Operating Revenue". This result is mostly explained by the sale of 4.5 million shares issued by New Flyer Industries, which yielded a result of BRL million. On the other hand, BRL 32.7 million was provisioned for the purpose of restructuring the sales network both in the domestic and foreign market, BRL 21.6 for labor-related indemnifications and settlements, BRL 11.8 million from the temporary suspension of employment contracts (lay-off) in the Marcopolo Rio unit, BRL 6 million concerning impairment associated to the consolidation of the Neobus operation and BRL 5.6 million from other expenses. 10. EQUITY METHOD RESULTS The equity method result in 2016 was BRL 94 million positive against BRL 33 million also positive in The main contributions came from New Flyer Industries, in the amount of BRL 54.6 million and the net income from foreign exchange variations on investments made in the amount of BRL 41 million. The equity method result is described in detail in Explanatory Note no. 12 to the Financial Statements. 11. NET FINANCIAL INCOME 12. EBITDA The 2016 net financial income was BRL 66.3 million positive against BRL 38.4 million negative in This result arises from the foreign exchange variation on the liabilities in dollar and the yield from financial investments. The financial income is described in detail in Explanatory Note no. 29 to the Financial Statements. EBITDA reached BRL million in 2016, with a 13.7% margin against BRL million and a 7.8% margin in The margin improvement arises mostly from the result of the partial sale of the investment in New Flyer Industries made in 3Q16. 9

10 The table below shows the accounts that make up the EBITDA: (BRL million) Result before Income Tax and Social Contribution Financial Revenue (577.5) (449.1) Financial expenses Depreciation / Amortization EBITDA NET PROFIT The 2016 net profit reached BRL million, with an 8.6% net margin. The net profit was also boosted by the partial sale of New Flyer Industries shares and by the net financial income. 14. FINANCIAL INDEBTEDNESS The net financial indebtedness amounted to BRL million on (BRL 1,110.6 million on ). Out of this total, BRL million came from the financial segment, while the industrial segment had net liabilities in the amount of BRL million. It should be noted that the financial segment indebtedness comes from the consolidation of the Banco Moneo activities and must be analyzed separately, as it has different characteristics from the indebtedness arising from the Company's manufacturing activities. The financial liabilities of the Banco Moneo have a corresponding entry in the "Customers" account in the Bank's Assets. The credit risk is properly provisioned for. Since these are transfers from the FINAME, each disbursement BNDES has a corresponding entry in the customer receivables account of the Banco Moneo, both in term and fixed rate. See Explanatory Note 31 to the Financial Statements. On December 31 st, the net financial indebtedness of the industrial segment amounted to 0.7 times the EBITDA of the last 12 months. 15. CASH GENERATION In 2016, the operating activities raised funds in the order of BRL million. The investment activities generate BRL million, while the financing activities consumed BRL million, BRL million net of funding and repayment of loans, BRL million consumed in the payment of dividends and interests on capital, BRL 43.7 million generated through the issuance of shares and BRL 1.8 million referring to the sale of treasury stock. As a result, the beginning cash balance of BRL 1,365.2 million, considering the unavailable financial investments and reducing BRL 1.8 million equivalent to the difference between foreign exchange variation and variation of unavailable financial investments rose to BRL 1,458.9 million at the end of the year. The cash flow statement of the industrial and financial segments is presented in detail in Explanatory Note 32 to the Financial Statements. 10

11 16. PERFORMANCE OF CONTROLLED AND ASSOCIATED COMPANIES 16.1 Controlled companies in foreign countries In 2016, the controlled units in foreign countries produced 1,970 units. This volume amounted to 22.4% of Marcopolo's consolidated production. Below are some of the highlights of controlled companies in foreign countries: MARCOPOLO CHINA (MAC) - MAC has an area for sourcing, production of parts, components and knocked down bus bodies, as well as production of PKD buses for exportation. MAC's strategy is still the increase of its strategic relevance to promote the Marcopolo brand in Asia and Oceania, forming a basis for customer relationship. The expectation for 2017 is to increase exportation, especially with its qualification for the Changzhou Export Processing Zone. MARCOPOLO SOUTH AFRICA (MASA) In 2016, MASA, located in Johannesburg, produced 298 units (334 units in 2015). In 2017, the unit will try to improve efficiency through the implementation of the LEAN method and to grow by seeking new partnerships. Sales begin of the Volare, imported from Brazil. POLOMEX Located in Monterrey, Mexico, Polomex produced 1,201 units in 2016 (1,492 units in 2015). For 2017, the expectation is to regain the Mexican market with an increase in Polomex's market share, especially in the intercity market, either through the continuation of the existing partnership with Mercedes or by means of new opportunities of using other chassis brands. VOLGREN Located in Melbourne, Australia, Volgren produced 471 units in 2016, an amount 10.1% higher than the 2015 production. For 2017, the company is still engaged in the improvement of results and the reduction of fixed costs. There is an expectation of growth in view of the results obtained in Associated companies in foreign countries GB POLO Marcopolo's joint venture in Egypt, located in the city of Suez, produced 693 units in 2016 (1,190 units in 2015). As a result of the country's economic and political situation, the company's operating results continue to fall short of expectations. METALPAR/METALSUR The total production of Metalpar and Metalsur, both located in Argentina, totaled 1,606 units in 2016 (1,886 units in 2015). The urban segment, served by Metalpar, experienced difficulties arising from the reduction of government subsidies for the purchase of buses, but the market share was maintained. On the other hand, Metalsur had an outstanding performance, supported by the sale of double Decker models. 11

12 NEW FLYER INDUSTRIES - New Flyer Industries, a company in which Marcopolo has a 10.8% ownership interest, is the main manufacturer of urban buses in the United States and Canada. Located in Winnipeg, Canada, the New Flyer Industries is a leading company in technology and offers a wide range of products, including clean diesel, natural gas, diesel-electricity and electricity-powered vehicles. In 2016, the result of New Flyer Industries was benefitted by the consolidation of Motor Coach Industries International - MCI and the expectation for 2017 is to continue reporting consistent results. SUPERPOLO Located in Colombia, Superpolo produced 1,160 units in 2016 (1,542 units in 2015). The launch of the new Senior model helped boost results. In 2017, the unit will seek to improve operating efficiency through the adoption of the LEAN concepts. TATA MARCOPOLO MOTORS (TMML) - In 2016, TMML's consolidated production reached 9,192 units ( units in 2015). TMML's focus in 2017 will continue to be the improvement of operating efficiency and expansion of its market share with products of greater added value. In 2017, Marcopolo will export bodies from India with other chassis brands Banco Moneo Banco Moneo S.A. began operating in July 2005 for the purpose of financing Marcopolo products. The Bank is authorized to operate in lease-purchase, credit, financing and investment. The Bank's corporate profit in 2016 was BRL 7.3 million. The credit and accommodation transactions totaled BRL million on against BRL million on The Bank maintained a policy of prioritizing the quality of its credit portfolio by means of a strict credit assessment and approval system. 17. CORPORATE GOVERNANCE Marcopolo adopts good Corporate Governance practices, following the principles of transparency, equity, accountability and corporate responsibility, and its actions are listed on Level 2 of Corporate Governance of BM&FBovespa since The Company is bound to the arbitration of the Market Arbitration Chamber, according to an Arbitration Clause contained in its Articles of Incorporation. Marcopolo's management is formalized on the basis of distinction between the roles and responsibilities of the Board of Directors, the Executive Committee and the Executive Board. The Board of Directors is made up of seven members, four of which are external and independent, one elected by the minority shareholders, one by shareholders holding preferred shares and the other two by controlling shareholders. The Chairman of the Board of Directors does not take part in the Executive Board. The Board of Directors has a consulting technical committee on a permanent basis, established by its Articles of Incorporation, named Executive Committee, which assists 12

13 and provides opinion on the conduct of business. The competences of each of these bodies are established by the Company's Articles of Incorporation. Furthermore, in order to support, opine and support the conduct of business, the Board of Directors also has the following Committees: (i) Audit and Risks; (ii) Human Resources and Ethics; and (iii) Strategy and Innovation. The roles of each of these supporting Committees can be found on the Company's website: on the menu Corporate Governance/Bylaws of the Committees. The Company also has an Audit Committee made up of three members, one appointed by the minority shareholders, one by shareholders holding preferred shares and one by the controlling shareholders. The competences of each body are established by the Company's Articles of Incorporation. The Company gives fair and equal treatment to all minority shareholders, either capital owners or other stakeholders. When reporting information, the company uses high transparency standards in order to establish an atmosphere of reliability, both internally and in the company relationship with third parties. In order to comply with legal provisions and improve the information provided to the market in general and foreign shareholders in particular, the Financial Statements are reported according to the standards established by the IFRS - International Financial Reporting Standard. In 2016, the Company held meetings with the Stock Market Investment Analysts and Professionals Association (APIMEC) in São Paulo and Porto Alegre and non-deal road shows in Brazil and foreign countries. Marcopolo's relationship with its shareholders and potential investors is conducted by the Investor Relationship department. In 2016, analysts from Brazil and foreign countries were received and several phone calls were made. Marcopolo's Investor Relationship website ( has current information for the investing audience. 18. COMPLIANCE PRACTICES In order to supplement the good governance practices and risk management, Marcopolo implemented a Compliance department in 2014, the structure of which includes a Consulting Committee made up of the executive officers appointed by the Articles of Incorporation, by the chairman of the Board of Directors, by the Compliance Officer, a compliance analyst and internal agents. The Company revised its code of conduct to include integrity provisions, trained all its employees and representatives, enhances internal and external communication and report channels, created an integrity policy, began to include compliance clauses in all the agreements executed by the Company, performs due diligence of integrity in partners and third parties, among other practices. Apart from that, the compliance team has taken place in outside training and benchmarking events. 13

14 19. INDEPENDENT AUDITORS 19.1 Change of Independent Auditors In 2012, the Company changed its auditors and engaged the services of KPMG Auditores Independentes, with registered office in Porto Alegre, RS, at Borges de Medeiros Avenue, 2.233, 8º floor, replacing PricewaterhouseCoopers Auditores Independentes. A change of independent auditors will take place again in 2017, when KPMG Auditores Independentes will be replaced by PricewaterhouseCoopers Auditores Independentes CVM Instruction 381/03 In compliance with the CVM Instruction 381/03, subdivisions I through IV of Section 2, Marcopolo hereby declares that it has agreements with its Independent Auditors other than for the auditing of the Company's Financial Statements. In 2016, KPMG Auditores Independentes was engaged for additional due diligence services and the fees were BRL thousand. The responsibility for the definitions inherent to the executed procedures and the application thereof are prerogatives of the Management, so both the Company and its external auditors understand that such services do not affect professional independence. 20. STOCK MARKET 20.1 Capital Stock The Company's capital stock is BRL 1,264,622,468 divided into 925,196,009 shares, 341,625,744 of them being common shares (36.9%) and 583,570,265 being preferred shares (63.1%), all of them registered, book-entry and without par value Performance of the Marcopolo Shares in BM&FBovespa In 2016, 1,265 thousand transactions were conducted with Marcopolo shares and million shares were traded. Transactions with shares issued by Marcopolo moved BRL 2.3 billion in the year. The interest of foreign investors in Marcopolo's capital stock amounted to 58.3% of the preferred shares and 38.7% of the total capital stock on

15 The table below shows the evolution of the main stock market indicators: INDICATORS Number of transactions (thousands) 1, ,407.2 Traded Shares (million) ,065.8 Traded amount (BRL million) 2, ,497.8 Market value (BRL million) (1) (2) 2, ,659.3 Book value per share (BRL) POMO4 quotation (last business day) Interest on Equity Capital and dividends per share (BRL/share) Notes: (1) Quotation of the last transaction of the period of the Preference Book-entry share (PE), multiplied by the total number of shares (OE+PE) in the same period; (2) Out of this total, 4,949,901 preferred shares were in treasury on DIVIDENDS/INTEREST ON EQUITY CAPITAL On November 7 th 2016, the Board of Directors approved the payment of interest on capital equity in the gross amount of BRL million, equivalent to BRL for each share, which amounts to 53.9% of the Company's net profit and amounts to a 4.7% yield (dividend per share/share quotation at the end of the period). Finally, as a result of the continuation of an adverse scenario and also because of the aforementioned payment of interest on equity capital, in a meeting held on February 21 st 2017 the Board of Directors chose not to pay supplemental dividends on the year 2016 and also to suspend payment of interest on equity capital in INVESTMENT/NON-CURRENT ASSETS In 2016, Marcopolo invested BRL 73.5 million, BRL 8.7 million of which was spent in the parent company and applied towards: BRL 4.1 million in machines and equipment, BRL 1.2 million in computer equipment and software and BRL 3.4 million in other non-current assets. In the controlled companies, BRL 50.9 million was invested in Volare Espírito Santo, BRL 5.3 million in Polomex, BRL 3.9 million in Volgren, BRL 1.9 million in Neobus, BRL 1.4 million in Marcopolo Rio and BRL 1.4 million in other units. The net balance of the investments in the subsidiaries, discounting R$ 23.7 million received as dividends, was R$ million, including in this amount R$ million related to the partial sale of the stake in New Flyer Industries. 23. SOCIOENVIRONMENTAL RESPONSIBILITY In a constant search for best practices, Marcopolo seeks economic development, simultaneously improving the quality of life of its employees, their families and society as a whole. The Marcopolo Solidarity Production system (SIMPS) promotes industrial development for growth, market leadership, productivity, quality, workplace improvement and profitability of products and services. The system provides conditions for continuous improvement of the quality of its products, processes and services, controlling the dangers to the environment and the health and safety of the workers, eliminating waste wherever it is occurring and maintaining a fully integrated 15

16 chain. Marcopolo remains with international management certifications ISO Environment, ISO 9001 Quality, and OHSAS Health and Safety Social Responsibility Marcopolo and its employees develop social responsibility under the coordination of the Marcopolo Foundation. One of the main projects targeted at the community is the Schools Project, for the purpose of contributing to the development of the educational environment, school community relationship and citizenship education. The Schools Project provides diversified opportunities of activities out of school hours such as music, choir, orchestra, sports and refresher clinic. The Marcopolo Foundation also contributes on a monthly basis to educational and healthcare charities. The Everyone in School, project, also coordinated by the Marcopolo Foundation, has the purpose of supporting parents in the education of their children, contribution to family savings by reducing school supplies expenditures through the deliverance of notebook kits. The program is targeted at children and adolescents aged 5-18 taking elementary or secondary school. Nearly 21,000 customized notebooks were delivered in The Marcopolo Foundation encourages and facilitates the allotment of 6% of their employees' Individual Income Tax to the Municipal Funds for the Rights of Children and Adolescents in the cities of Caxias do Sul (RS) and Duque de Caxias (RJ) by means of the Destine Você Também Project, creating benefits in professionalization actions for nearly young people in social and personal risk situation Satisfaction of Employees The satisfaction of the Marcopolo's employees is measured by means of the Internal Organizational Climate Survey that is conducted every two years. The last survey was conducted in 2016, achieving 75% satisfaction level for the Caxias do Sul units and 80% for the Rio de Janeiro unit. These results are considered quite favorable in view of the Brazilian benchmarks. The action plan is structured jointly by representatives for several company Departments, with periodical monitoring. Marcopolo provides both internal and external channels for employees to submit comments, criticism, ideas and suggestions about the several topics involving their work or related to the Code of Conduct guidelines and the Compliance rules, with specific segregation for reporting Education and Training Marcopolo encourages the constant qualification of its employees. Training is provided focused on the development of skills for all professional levels, with an average of 82 hours of training for each employee. The training of managers for 2016 was focused in the implementation of the LEAN method, seeking to improve team processes and performance. As a way to 16

17 disseminate the concepts of this method, 205,950 hours of training were provided to employees from all departments, including newly hired ones. Marcopolo also provides customer training, both in the Training Center and in clinics and facilities near the companies. The 2016 totaled 1,032 internal market participants and 744 external market participants. The Marcopolo Professional Education School (EFPM) maintained industrial courses for young people in partnership with SENAI, University of Caxias do Sul and the Social Assistance Foundation (FAS). One of EFPM's main purposes is to prepare professionals for the labor market by means of the first paid job and access to the Company's career plan. Marcopolo has had an Education Incentive Program since 1981, including scholarships for high school, technical courses, graduate and postgraduate courses, apart from foreign languages for employees approved in a selection process Quality of Life The quality of life programs targeted at employees and their families are coordinated by the Marcopolo Foundation, including educational, leisure, cultural and sports activities. The Caxias do Sul and Duque de Caxias units feature their own facilities with places for events, courts and kiosks Environment Marcopolo is committed to its environmental programs on a permanent basis. It also invests in new technologies in order to minimize and control the environmental impact of its business. In 2016, it began a migration process from ISO certification to the new version published in 2015, a NBR ISO 14001: Compensation The employees' compensation is made up of a fixed part, connected to their competences and skills, and a variable part, contingent upon the attainment of the goals of the Profit-sharing Program. Wage researches are conducted periodically in order to assess whether the amounts paid to the employees are within the regional standards, so that the company can remain competitive in the labor market Share Purchase Option Plan The Regulation of the Share Purchase or Subscription Option Plan was approved by shareholders in the Extraordinary General Meeting held on December 22 nd 2005, changed by the O/EGM dated March 23rd 2006 and by the Board of Directors in meetings held in the years 2006, 2007, 2011, 2012 and The plan, whose participants are executives of the Company and its controlled companies (except controlling officers) has as main purposes: (i) Align the interests of participants and shareholders; (ii) Get the participants committed to the company's short, mid and long term results; (iii) Encourage a feeling of ownership; and (iv) Attract and retain talent. 17

18 The Plan is monitored by the HR and Ethics committee and approved by the Board of Directors. The company also has a Long-Term Incentive Plan with Restricted Shares, proposed by the Board of Directors on February 12th 2015 and approved by the General Meeting on March 26th The plan has the purpose of composing the compensation package of the main executives of the company, maintain competitiveness within the market, attract and retain the best professionals and align the interests of executives and shareholders. 24. MANAGEMENT COMPENSATION The aggregate amount of the fixed compensation is established by the General Shareholders Meeting and paid to the management by the Board of Directors. The greatest annual individual compensation of the Board of Directors/Executive Committee totaled BRL 4,047.7 thousand in 2016, the average compensation was BRL 1,001.9 thousand and the smallest was BRL thousand. Among executive officers, the greatest individual compensation was BRL 4,410.1 thousand in 2016, the average was BRL 3,028.2 thousand and the smallest was BRL 2,337.1 thousand. In the Audit Committee, the greatest individual compensation was BRL thousand in 2016, the average was BRL thousand and the smallest was BRL thousand. 25. PERSONNEL NO. OF EMPLOYEES Controlling Company 6,125 6,236 7,883 8,158 8,204 Controlled Companies in Brazil 2,135 1,369 2,776 2,554 2,617 Controlled Companies in Foreign 1,921 1,666 1,889 2,105 1,680 Associated Companies 2,632 3,200 4,270 5,699 3,834 TOTAL (1) 12,813 12,471 16,818 18,516 16,335 GRAND TOTAL (2) 15,749 16,125 21,435 21,002 20,508 Notes: (1) Includes employees in the controlled/associated companies proportionally to their equity interest; (2) Refers to the total participation in controlled/associated companies. 26. PROSPECTS FOR 2017 Early 2017 points to a challenging year for the capital goods industry in Brazil, especially in the first quarter. However, a more optimistic prospect regarding the economic activity in Brazil, arising from recently disclosed inflation figures and reduction in interest rates, allows the Company to foresee a gradual return in the demand for buses, especially in the second half of the year. Marcopolo is still engaged in actions to reduce indirect expenses and costs and increase operating efficiency through the adoption of the LEAN concepts, apart from improving working capital through the reduction of inventory and receivables. Since 2015 the Company has adopted mechanisms to reduce the impact of a smaller demand in personnel, including selective vacation, collective vacation, extended holidays with banking of hours and flexible working hours. In January 2017, Marcopolo 18

19 adopted collective vacation in the Caxias do Sul units. In Marcopolo Rio, Duque de Caxias/RJ apart from collective vacation in January, flexible working hours were adopted in 4 days of February. The domestic demand for intercity buses shall be boosted by the accessibility regulations, which requires new vehicles produced from July 2017 on to be equipped with elevators, and for the required reduction in the average age of the fleet, which shall be reduced to 8 years beginning in 2017 pursuant to Resolution no. 4,770 of the National Land Transportation Agency (ANTT) for interstate and international lines. The nonperformance of the resolution may entail the revocation of the authorization granted to transportation providers for the operation of their respective lines, for which reason such replacement is mandatory. In the urban bus segment, the federal program named Refrota, announced in December 13th 2016, with authorizes banks to use FGTS (Guarantee Fund for Length of Service funds) for the Transportation Infrastructure Program and from Urban Mobility (Pro-Transportation) may foment new investments. The purpose of the program is to extend credit in the total amount of BRL 3 billion for the replacement of up to 10 thousand buses. Fare increases in major state capitals and many other cities, even on a one-off basis, may boost sales targeted at the replacement and modernization of the municipal operators' fleet. FINAME TJLP is still in place, allowing micro, small and medium enterprises to finance up to 80.0% of the asset with the TJLP plus 1.6% p.a. and the spread of the transferring bank. Large enterprises may also finance up to 80.0% of the asset, 70.0% of this total amount via LTIR plus 2.0% p.a. and 30.0% linked to the SELIC rate plus 2.48% p.a. plus the spread of the transferring bank. In this context, the confirmation of successive cuts in the SELIC rate may boost the domestic demand. The Company believes in the continuation of the positive performance of exportation from Brazil, with the maintenance of traditional customers and prospecting of new markets. Marcopolo will continue its strong action in the foreign market and for this purpose, beginning on February 1st 2017, restructured its Commercial department Domestic Marketing, integrating it into the International Affairs department. The purpose is to maximize business in all regions and enhance the integration among exportations from Brazil and international transactions of Marcopolo. As for units located in foreign countries, the expectations for 2017 are generally positive, with the evolution of the productivity and efficiency indicators and subsequent improvement in performance. The transactions shall also be favored by the aforementioned integration project, with the joint development of specific markets and products for each region where the units do business. Marcopolo still believes in the need for urban mobility systems in the countries where it works and in the renewal of the Brazilian bus fleet, which has stagnated as a 19

20 result of the economic retreat of recent years. The Company will continue making efforts to regain its historical performance level and, for this reason, it will continue developing new products and improving the on-going ones, especially those concerning an increase in operating efficiency, business reinforcement in foreign markets, search for synergies and optimization of its plants. 27. ACKNOWLEDGEMENTS Marcopolo is honored to thank customers, suppliers, representatives, shareholders, financial institutions, government bodies, communities and especially the employees for their effort, devotion and commitment to overcoming this moment of major challenges. Caxias do Sul, February 21 st The Management. 20

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24 EXHIBIT: Marcopolo S.A. (BM&FBOVESPA: POMO3; POMO4), seeking transparency in the disclosure of the results, presents for comparison in this Exhibit, the main operational indicators based on the standard prior to adoption of IFRS 10 and 11. MARCOPOLO CONSOLIDATED WORLDWIDE PRODUCTION OPERATIONS (in units) Var. % BRAZIL: (1) - Domestic Market 4,159 7,802 (46.7) - Foreign Market 2,888 2, SUBTOTAL 7,047 9,867 (28.6) Eliminations KD s exported (2) TOTAL IN BRAZIL 6,706 7,802 (14.0) ABROAD: - South Africa (10.8) - Argentina Metalpar (50%) (20.0) - Argentina Metalsur (25%) Australia Colombia (50%) (24.8) - Egypt (49%) (41.7) - India (49%) (3) 4,504 5,711 (21.1) - Mexico 1,201 1,492 (19.5) TOTAL ABROAD 8,143 10,225 (20.4) GRAND TOTAL 14,849 19,924 (25.5) Notes: (1) Includes production of Volare model, as well as the production of Marcopolo Rio and proportional share of 45.0% in the production of San Marino/Neobus until July/16; (2) KD (Knock Down) = Partially or totally knocked down bodies; (3) In India, the units produced at the factory in Lucknow are summed. MARCOPOLO PRODUCTION IN BRAZIL PRODUCTS (in units) DM FM (1) TOTAL DM FM (1) TOTAL Intercity 897 1,800 2,697 2,134 1,177 3,311 Urban 2, ,509 3, ,772 Micro SUBTOTAL 3,344 2,462 5,806 6,200 1,811 8,011 Volares (2) ,241 1, ,856 TOTAL PRODUCTION 4,159 2,888 7,047 7,802 2,065 9,867 Notes: (1) The total FM production includes the exported KD units (partially or fully knocked down bodies); (2) The Volare production is not part of the SIMEFRE and FABUS figures or the sector production. 24