1Q16 Results

Economic-Financial Office and Investor Relations Office

This presentation may contain forward-looking statements referring to

SABESP’s business outlook, operating and financial results estimates, and growth

prospects. These are only forecasts, and as such, they are exclusively based on

SABESP’s management expectation in relation to the future of business and its

continuous access to capital to finance the Company’s business plan. These

forward-looking statements largely depend on changes in market conditions,

governmental rules, industry performance and the Brazilian economy, among

other factors, in addition to risks exhibited in disclosure documents filed by

SABESP. Therefore, they are subject to changes without prior notice.

Disclaimer

Agenda

Company Overview 1

Our Operations 2

Our Financial Performance 3

4 SPMR – Water Situation

Sabesp is one of the largest water and sewage

service providers in the world based on the

number of Customers

Provides water to 25.6 million people and sewage

services to 22.9 million people

Also sells wholesale treated water to 5

municipalities (3.1 million people)

Natural monopoly, low operating risk

Serves the City of São Paulo and 364 out of 645

municipalities in the State

Covers around 60% of State's urban population

Operations in the São Paulo Metropolitan Region*

represent 68.1% of our total revenues

(1) As of March 31, 2016

(2) Treated sewage as percentage of collected sewage

São Paulo Regional Systems

Metropolitan Region

One of the largest water and sewage service

providers in the world…

*The Metropolitan Region we consider for this estimate, includes 8

municipalities outside the legal boundaries of the São Paulo

Metropolitan Region and represents the municipalities served by

the Company’s Metropolitan Division

4

Main Operational Indicators(1) Company Overview

Water Sewage

Connections (million) 8.5 6.9

Coverage (%) 100 86

Treatment (%) 100 78(²)

Billed Volume (m³ million) 490 382

We are a mixed capital company, majority-owned by the State of São Paulo, with significant private

ownership

State law requires the State of São Paulo to own at least 50% + 1 voting shares at all times

Currently the Government of São Paulo has 50.3% share

100% common shares

Market Cap: R$ 16.4 billion (as of March, 2016)

(1) As of March, 2016

…with strong corporate governance

5

Ownership Structure % (1)

Agenda

6

3

Our Operations 2

Our Company 1

Our Financial Performance

4 SPMR – Water Situation

Diversified customer base

7

Water Billed Volume by Type of Customer Sewage Billed Volume by Type of Customer

Over 80% of water volume comes from residential,

commercial and industrial customer Over 90% of sewage volume comes from residential,

commercial and industrial customer

Water Revenues by Type of Customer Sewage Revenues by Type of Customer

Nº of

contracts

% of

revenue

Renewed/Secured (Program and Service Contract) 276 78.9%

Metropolitan Region Without Contract 18 8.9%

Expired/Under Negotiations 35 3.8%

To be expired:

Today to 2025 9 1.7%

2026 to 2034 27 5.9%

Total Retail 365 99.1%

Wholesale 5 0.9%

Total Sabesp 370 100.0%

Broad coverage of municipalities Municipalities

8

30-year-service agreement between Sabesp, Municipality of São Paulo and State Government (expires in 2040)

Minimum investment of 13% of the Gross Revenue, net of Cofins and Pasep

Transfer of 7.5% of the Gross Revenue, net of Cofins and Pasep, to the Municipal Environmental Sanitation and

Infrastructure Fund – to be recovered in tariff

Contract with the Municipality of São Paulo

Diadema – From wholesale to retail

Full operation of water supply and sewage services – 30-year contract

Contract signed in March 2014

Population of 386,000 - 100% of water and 96% sewage coverage

9

Regulatory Framework

Concession Power in Metropolitan Regions

Legal proceedings related to this matter under Supreme Court (STF) appraisal were ruled in

February 2013

Final decision released in September 2013:

Sanitation services in metro regions are subject to shared responsibility between State and

Municipality

State Legislative has two years to adjust the legislation, create entities and mechanisms to

implement the ruling

Obligatory creation of a Regulatory Agency Municipal or State level

Clarifies the payment conditions of non-amortized investments up to 4 years

Disbursement of federal funds conditioned to the existence of a sanitation plan

Federal Law # 11,445/07 Federal Decree 7,217/10 and Federal Decree 8,211/14

Regulation activities and responsibilities include:

Service quality

Tariff structure and reviews

Planning is a concession holder attribution

ARSESP´s attribution

Tariff Revision

10

RAB0 CAPEX + OPEX + IRCS + ∆ CG

RABT = RAB0 + ∑(CAPEX+∆ CG-DEP) Volume (M3)

P0 TIR = WACC May 18, 2011 ARSESP discloses WACC of 8.06% (RTS/01/2011)

Feb 03, 2014 Resolution nº 484: ARSESP authorizes implementation of the Water Consumption Reduction Incentive Program

Apr 17, 2014

Resolution nº 484: ARSESP discloses First Tariff Revision of SABESP - calculation of P0, P1, and X Factor

(RTS/004/2014)

repositioning index = 5.4408%

X Factor = 0.9386%

Future annual tariff adjustments = April 11 of 2015 and 2016

Next tariff revision = April 11, 2017

May 17, 2014 Resolution nº 488: ARSESP maintains the suspension of the effectiveness of Resolution nº 407 postponing the

authorization of the pass through to the service bill the 7.5%

Nov 27, 2014 Resolution nº 520: ARSESP authorizes SABESP to apply a repositioning index as of December 27, 2014 adjusted to

6.4952%

Jan 7, 2015 ARSESP aproves Contingency Tariff

40% increase on the tariff amount , applicable to the exceeded consumption by up to 20%

100% increase on the tariff amount , applicable to the exceeded consumption by more than 20%

May 4, 2015 ARSESP authorizes a Tariff Adjustment and an Extraordinary Tariff Revision = 15.24%

Resolution nº 560 authorizes a Tariff Adjustment of 7.7875%

Resolution nº 561 sets an index of 6.9154% related to the Extraordinary Tariff Revision

Dec 23, 2015

Resolution nº 614 and nº 615: ARSESP aproves the extension of the Contingeny Tariff with the maintenance of the current

rules and conditions and the Water Consumption Reduction Incentive Program (updating the reference consumption by

0.78) both until the end of 2016 or until there is more predictability regarding the water situation

Mar 24, 2016 SABESP requests to ARSESP for the cancellation of Water Consumption Reduction Incentive Program and for the

Contingency Tariff

Mar 31, 2016 Resolution nº 640 and nº 641: ARSESP authorizes the cancellation of the Contingengy Tariff and the Bonus as of May, 1,

2016

Apr 11, 2016 Resolution nº 643 : ARSESP authorizes the tariff adjustment of 8.4478% as of May, 12, 2016

Jun 30, 2016 ARSESP starts the 2nd Ordinary Tariff Revision – Methodology and Criteria for the RAB Update

Tariff Adjustment and Revisions

11

Annual tariff adjustment formula

Productivity

Factor New Average

Tariff = 1

Inflation

(IPCA)

100 x

Previous

Average Tariff Quality

Factor * - -

+

ARSESP’s Adjustments and Revisions Sabesp’s Formula

ETR – Extraordinary Tariff Revision IPCA – Amplified Consumer Price Index as of Mar/16

* Not yet defined

12

Water Connection Evolution (million) Water Coverage (Connections in ´000s)

Water and Sewage Operations

Sewage Connection Evolution (million) Sewage Coverage (Connections in ´000s)

Add 1.0 million new connections by 2021

Add 1.4 million new connections by 2020

Collection: 95% in 2020

Treatment: 95% in 2020

Capex plan

13

Capex Plan of R$ 12.5 billion from 2016 to 2020

Metropolitan Water Program

Tietê Project

Corporate Program for Reduction of Water Loss

Clean Stream Program

Clean Wave Program

Main Programs

Financial Value (R$ million)

665

Investment Plan – Financing

14

BNDES R$ 1.5 bi CAIXA R$ 897 mi IDB R$ 622 mi JICA R$ 460 mi IBRD R$ 145 mi

CAIXA/BNDES

Company Funds R$ 7.5 bi 59.8 %

Contracted R$ 3.6 bi

72.1%

Under Negotiation R$ 1.4 bi

27.9%

Financing R$ 5.0 bi 40.2 %

2016 to 2020 – R$ 12.5 billion

15

Our Company 1

Our Operations 2

Our Financial Performance 3

Agenda

4 SPMR – Water Situation

16

Long term and low cost funding

Total debt breakdown Total debt by currency

Debt amortization profile (R$ million)

(*) IDB 713 agreement

17

Net Revenues (R$ million)

Adjusted EBITDA (R$ million)

Consistent performance

Net Income (R$ million)

2010 2011 2012 2013 2014 2015

Dividend Declared

(R$)

2.00 2.54 2.35 0.78 0.37 0.22

Pay Out % 27.9 47.3 27.9 27.9 27.9 27.9

Outstanding Shares

(million) 227.8 227.8 227.8 683.5 683.5 683.5

Dividends/Pay Out

Adjusted EBITDA Ajustado – Last 12 months Adjusted EBTIDA Margin – Last 12 months Adjusted EBITDA Margin Without Construction – Last 12 months

18

* Adjusted EBITDA – LTM ** Financial Explosures paid - LTM Calculated in accordance with CPCs/IFRS

Historical leverage metrics (R$ million)

Net Debt vs. Adjusted EBITDA* Net Debt vs. Equity

Adjusted Total Debt vs. Adjusted EBITDA* Adjusted EBITDA* vs. Financial Expenses**

Adjusted Total Debt = Total Debt - Interest

Financial Highlights

19

* In accordance with CPCs / IFRS, which includes Construction Costs.

(R$ million)

** R$ / 000 shares

2002 2003 2004 2005 2006 2007 2008* 2009* 2010* 2011* 2012* 2013* 2014* 2015* 1Q16*

Net Revenues (R$) 3,767 4,131 4,397 4,953 5,527 5,971 7,809 8,580 9,231 9,927 10,738 11,316 11,213 11,739 3,028

Adjusted EBITDA (R$) 1,860 2,077 1,927 2,286 2,446 2,699 2,865 2,727 3,223 3,371 3,605 4,007 2,919 3,978 908

Adjusted EBITDA Margin (%) 49.4 50.3 43.8 46.1 44.3 45.2 36.7 31.8 34.9 34.0 33.6 35.4 26.0 33.9 30.0

Adjusted EBITDA w ithout Construction Margin (%) 41.2 44.7 43.1 43.0 44.6 34.4 46.6 37.2

Net Income (R$) (651) 833 513 866 789 1,055 863 1,508 1,631 1,381 1,912 1,924 903 536 629

Net Margin (%) - 20.2 11.7 17.5 14.3 17.7 11.0 17.6 17.7 13.9 17.8 17.0 8.1 4.6 20.8

Total Assets (R$) 16,332 16,590 16,784 17,431 18,000 18,660 17,206 20,243 23,293 24,983 26,476 28,274 30,355 33,707 33,974

Total Debt (R$) 7,878 7,264 7,051 6,664 6,327 5,685 6,865 6,560 8,209 8,423 8,875 9,450 10,786 13,122 12,193

Short-term Debt (R$) 1,132 997 1,497 759 853 742 1,449 1,010 1,240 1,629 1,343 641 1,207 1,526 1,474

Long-Term Debt (R$) 6,593 6,267 5,554 5,905 5,474 4,943 5,416 5,548 6,970 6,794 7,533 8,809 9,579 11,595 10,719

Foreign Currency Debt (R$) 3,708 3,013 2,681 1,576 1,472 1,242 2,281 1,746 2,249 3,053 3,216 3,699 4,346 6,718 6,261

Shareholders' Equity (R$) 4,217 7,577 7,952 8,483 9,019 9,781 6,758 8,439 9,682 10,546 11,257 12,931 13,304 13,717 14,345

Total Debt/Total Cap. (%) 65.1 48.9 47.0 44.0 41.2 36.8 50.4 43.7 45.9 44.4 44.1 42.2 44.8 48.9 45.9

Investments (R$) 619 594 601 678 905 921 1,734 2,059 2,194 2,440 2,536 2,716 3,211 3,482 665

Dividend Declared (R$/ share) - 17.7** 5.4** 12.2** 9.5** 1.3 1.3 1.7 2.0 2.5 2.3 0.8 0.4 0.2 -

Pay Out (%) - 60.5 29.8 40.2 34.7 28.5 34.3 26.1 28.0 47.3 27.9 27.9 27.9 27.9 -

Dividend Yield (%) - 10.8 3.4 7.8 3.2 3.2 4.7 5.0 4.7 4.9 2.7 3.0 2.2 1.2 -

Outstanding shares (million) 28.5 28.5 28.5 28.5 28.5 227.8 227.8 227.8 227.8 227.8 227.8 683.5 683.5 683.5 683.5

Our Company 1

Our Operations 2

Our Financial Performance 3

SPMR – Water Situation 4

Agenda

Cantareira System – Rainfall (mm)

21

OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP

Historical avg. 130.8 161.2 226.8 265.9 206.5 184.1 89.2 83.2 56.0 49.9 36.9 91.9

Historical low 21.4 52.4 104.5 111.8 40.2 55.8 7.6 8.8 0.0 0.0 0.1 0.9

2013/14 123.4 97.0 62.9 87.8 73.0 193.3 85.7 37.3 15.8 40.4 22.6 66.0

2014/15 42.5 135.0 165.5 148.2 322.4 189.9 45.3 74.4 39.7 43.9 30.8 154.5

2015/16 116.5 197.6 259.4 248.4 236.4 179.6 4.4 96.6 178.9

Until June, 30th

October to June

Average: 1,403.7 mm

Minimum: 40.5 mm

2013/14: 776.2 mm

2014/15: 1,162.9 mm

2015/16: 1,517.8 mm

Cantareira System – Water inflow (m³/s)

22

Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep

Historical avg. 30.6 35.0 53.1 70.9 73.9 66.9 48.4 38.4 35.3 28.8 24.5 25.6

Historical low 14.0 14.0 21.8 26.9 27.6 28.1 24.7 19.9 16.5 13.9 12.0 11.8

1953 17.5 26.0 31.5 26.9 34.5 29.8 34.6 23.8 20.7 17.6 16.3 16.2

2013/14 25.1 22.1 22.5 15.4 10.5 18.9 17.2 10.1 10.0 6.4 8.2 9.0

2014/15 5.2 8.8 16.0 11.5 40.7 42.6 18.1 14.0 16.2 11.3 5.8 18.3

2015/16 14.8 27.1 52.3 73.8 49.6 69.8 24.1 25.0 62.9

Until June, 30th

Inflow Oct/15-June/16:

88% of Inflow historical average

Historical Average Inflow (October to June): 50.3 m³/s

1953: 27.3 m³/s

2013/14: 16.9 m³/s

2014/15: 19.2 m³/s

2015/16: 44.4 m³/s

Alto Tietê System – Rainfall (mm)

23

OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP

Historical avg. 117.1 129.4 193.5 246.6 194.3 175.4 97.2 78.3 52.5 49.0 38.4 84.5

Historical low 29.5 32.7 52.0 97.9 29.6 39.7 19.8 12.8 3.1 2.1 1.1 7.0

2013/14 102.1 120.1 95.9 187.7 85.9 158.4 89.8 33.4 11.2 29.5 28.8 103.1

2014/15 20.1 108.2 190.6 103.8 304.0 179.1 116.7 73.7 38.2 57.4 18.6 170.2

2015/16 94.5 212.2 243.8 204.6 222.0 186.1 8.2 106.2 139.4

Until June, 30th

October to June

Average: 1,284.3 mm

Minimum: 317.1 mm

2013/14: 884.5 mm

2014/15: 1,134.4 mm

2015/16: 1,417.0 mm

Alto Tietê System – Water inflow (m³/s)

24

Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep

Historical avg. 16.0 17.1 22.8 30.2 31.6 29.0 22.4 17.3 15.2 12.7 11.6 13.3

Historical low 6.9 8.0 8.8 6.6 12.9 11.3 8.1 9.0 7.3 7.4 5.9 6.4

1953 11.0 9.9 16.8 11.5 12.9 13.1 8.1 9.6 7.3 8.1 7.1 9.3

2013/14 14.9 17.3 17.4 20.6 11.8 19.5 20.2 12.4 11.4 9.3 9.1 12.5

2014/15 8.2 9.0 15.3 9.1 24.4 18.7 12.2 12.6 9.6 9.2 4.8 15.6

2015/16 11.6 17.1 28.6 21.2 19.3 34.1 5.9 10.9 27.5

Until June, 30th

Inflow Oct/15-June/16

87% of Inflow historical average

Historical Average Inflow (October to June): 22.4 m³/s

2013/14: 16.2 m³/s

2014/15: 13.2 m³/s

2015/16: 19.6 m³/s

25

Water Reservoir Level - SPMR

* Volume includes the Technical Reserve

Until July, 6th

100

300

500

700

900

1.100

1.300

1.500

jan fev mar abr mai jun jul ago set out nov dez

* V

olu

me

(h

m³)

2014 2015 2016

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Water Consumption Reduction Incentive Program

26

60% 62% 62% 63% 63% 63%

58% 59% 56% 56%

53% 55%

36% 35%

30%

5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 3% 3% 3%

6% 5% 5% 5% 5% 5% 6% 6% 6% 6% 6% 5% 5% 5% 5%

10% 10% 10% 10% 10% 10% 11% 11% 12% 12% 13% 12%

33% 33%

35%

19% 18% 18%

17% 17% 17% 20% 19%

21% 21% 23% 23% 23% 23%

27%

10% 10% 10% 10% 12% 12% 12% 13% 13% 14% 14% 15% 14% 15% 16%

Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar April

30% Bonus 20% Bonus 10% Bonus Reduction without Bonus Consumption Increase Surcharge

Water Plan for the SPMR – 2015 to 2017 (main initiatives)

27

flow (m³/s)

Availability /

security

Reversal increase from Guaratuba River to the Ponte Nova

reservoir by 0.5 m³/s0.5 jan/15 completed

Reversal from the Guaió River to the Taiaçupeba reservoir: 1

m³/s1 mai/15 completed

Increase of the ABV Water Treatment Station production

from 15 to 16 m³/s jun/15

◦ Transfer water from Guarapiranga to the

Cantareira area via the aqueduct system completed

Interconnection between: Pequeno River → Grande River

(Billings) → Taiaçupeba (Alto Tietê) 4 m³/s 4 set/15

◦ Recover the storage volume and ensure

the Alto Tietê reservoir completed

1 m³/s transfer increasefrom Taquacetuba to Guarapiranga

(from 4 to 5 m³/s)1 dez/15 ◦ Assure Guarapiranga's water source completed

total 2015 6.5

Reversal from Itapanhaú River (Ribeirão Sertãozinho) to the

Biritiba reservoir: 2.5 m³/s2.5 2017

◦ Recover the storage volume and assure

Alto Tietê's water sourceunder development

Reversal of 1 m³/ sfrom Alto Juquiá to Ribeirão Santa Rita

(Guarapiranga basin)1 2017 ◦ Increase Guarapiranga's water source under development

Jaguari → Atibainha Interconnection: 5.13 m³/s to the

Cantareira system (security increase)5.13 2017

◦ Recover storage volume and ensure the

Cantareira System's water sourceworks in progress

São Lourenço Production System: 6 m³/s 6 2017◦ Produce 6.4 m³/s for the Greater São

Paulo's western regionworks in progress

total 2017 14.63

total geral 2015 - 2017 21.13

Innitiatives for 2015

Innitiatives planned for 2017

◦ Recover the storage volume and ensure

Alto Tietê's water source

Objectives StatusDescription est.

www.sabesp.com.br

IR Contacts

Mario Azevedo de Arruda Sampaio Angela Beatriz Airoldi Head of Capital Markets and Investor Relations Investor Relations Manager maasampaio@sabesp.com.br abairoldi@sabesp.com.br +55 (11) 3388-8664 +55 (11) 3388-8793