Highlights:

• Healthy operations lead to cash generation. In 4Q16, Oi recorded a R$ 708 million cash increase, closing 2016 with R$ 7.8 billion in cash position. Performance demonstrates Oi's continuous operational improvement.
• Higher investments confirm commitment to the judicial reorganization plan. Even in a year of economic slowdown, with lower investments in the industry, Oi increased its Brazilian investments by 17.6% in 2016 and 26.6% in 4Q16, compared to the same periods of the year before.
• Focus on operations promotes quality improvements. Increase in investments reinforces Oi's commitment to improving network quality. Managing field operations more closely and implementing a new customer service model promote operational efficiency, consequently improving customer experience. Better operational indicators contribute to a consistent improvement in quality indicators of ANATEL, PROCON and Special Civil Court (JEC).
• Operational efficiency, productivity gains and strict cost control are reflected in margin growth. Routine Opex of Brazilian operations fell 7.3% y.o.y. and 4.8% q.o.q. Considering inflation of 6.3% in 2016, real reduction reached almost 13% in 4Q16 versus 4Q15. Sequential reduction in costs helped to improve routine EBITDA margin: +0.7 p.p over 4Q15 and +2.6 p.p. over 3Q16, coming to 27.4% in the quarter.
• Net loss impacted by write-off of tax credits, with no cash impact. With reduction of 47% y.o.y., net loss before tax and social contribution amounted to R$ 3.2 billion in 2016. Net loss, after taxes and social contribution, amounted to R$ 7.1 billion in 2016, mainly impacted by a write-off of R$ 2.8 billion of tax credits on tax loss carry-forwards, reflecting the forecasts on tax results included in the judicial reorganization plan.
• Judicial reorganization is progressing as expected. Despite the complexity of the judicial reorganization process, Oi has been complying with the procedures required by law. The Company has been generating cash, increasing investments and improving service quality and customer experience, confirming its focus on operations during the judicial reorganization process.

To see the Earnings Release, click here.