2016 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 24.7 million people and sewage

services to 21.2 million people

Also sells wholesale treated water to 5

municipalities (3.0 million people)

Natural monopoly, low operating risk

Serves the City of São Paulo and 365 out of 645

municipalities in the State

Covers around 66% of State's urban population

Operations in the São Paulo Metropolitan Region*

represent 70% of our total revenues

(1) As of December 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) 8.7 7.1

Coverage (%) 100 87

Treatment (%) 100 79(²)

Billed Volume (m³ million) 1,990.3 1,552.2

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$ 19.7 billion (as of December, 2016)

(1) As of December, 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

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

Nº of

contracts

% of revenue

Renewed/Secured (Program and Service Contract) 281 80.3%

Expired Contracts 54 12.2%

To be expired (2017 - 2030) 34 6.7%

Total Retail 369* 99.2%

Wholesale 5 0.8%

Total Sabesp 374 100.0%

*Incluides 2 partial contracts with Mogi das Cruzes and Santa Branca with operations starting in 2017

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 IRR = WACC (8.06%)

ARSESP: Recent Resolutions / Public Consultation 03/31/16 Resolutions nº 640 e nº 641: ARSESP authorizes the cancelation of the Contingency Tariff and Consumption Reduction Incentive Program –

Bonus In effect since 05/01/2016

03/31/16 Arsesp discloses the RAB

04/11/16 ARSESP authorizes the tariff adjustment of 8.4478% in effect since 05/12/16

06/30/16 Update of the Methodology and general criteria for the definition of SABESP’s Regulatory Asset Base Start of the 2nd Ordinary Tariff Revision

08/30/16 Methodology Update and criteria for the definition of the RAB → ARSESP disclosed the Detailed Public Consultation Report

01/19/17 ARSESP approves the beginning of the 2nd Ordinary Tariff Revision and discloses the timeline for the 1st stage that will be performed as the

following:

• First stage preliminary June 2017

• Second stage final April de 2018 Timeline for the 1st stage of the 2nd Tariff Revision Stage No. Description Beginning Conclusion

1 Submission of the Business Plan by Sabesp Jan 23, 2017 Jan 31, 2017

2 Analysis of Sabesp's data Jan 23, 2017 Mar 31, 2017

3 Delivery of the Appraisal Report of the RAB by Sabesp Mar 31, 2017

4 Validation of the RAB by ARSESP: reinforced base + partial incremental Apr 1, 2017 May 15, 2017

5 Receipt of SABESP's final data (historical) Mar 1, 2017

6 Development of the Initial Technical Note with Initial P0 and Weighted Average Cost of Capital (WACC) Apr 1, 2017 Apr 26, 2017

7 Opening of Public Consultation and Public Hearing - Initial Tariff P0 and WACC Apr 27, 2017 May 19, 2017

8 Analysis of the contributions received, development of the Final Technical Note and Detailed Report - Initial Tariff P0 and

WACC May 22, 2017 Jun 8, 2017

9 Approval of the Final Technical Note, Detailed Report and Publication of the Resolution with the Preliminary Tariff P0 Jun 9, 2017 Jun 10, 2017

Tariff Adjustment and Revisions

11

Annual tariff adjustment formula

Productivity

Factor

(0.9386%) 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 2022

Add 1.3 million new connections by 2022

Collection: 93% in 2021

Treatment: 83% in 2021

7.5 7.7

7.9 8.2

8.4 8.7

2011 2012 2013 2014 2015 2016

Capex plan

13

Capex Plan of R$ 13.9 billion from 2017 to 2021

Metropolitan Water Program

Tietê Project

Corporate Program for Reduction of Water Loss

Clean Stream Program

Clean Wave Program

Main Programs

Financial Value (R$ million) 3,900*

2,136**

(*) Book Value – Includes non-cash items

(**) Book Value – Items that affected cash

- Additional information is presented in

Note 31 of the 2016 Financial Information

Investment Plan – Financing

14

2017 to 2021 – R$ 13.9 billion

Company’s Funds R$ 10.2 bi

73.7 %

Contracted R$ 3.5 bi

95.9%

Financing R$ 3.6 bi 26.3 %

Under Negotiation R$ 0.1 bi 4.1%

BNDES R$ 1.3B CAIXA R$ 1.1B BID R$ 580MM JICA R$ 350MM BIRD R$ 70 MM FINEP R$ 40 MM

CAIXA

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 2016

Dividend Declared

(R$)

2.00 2.54 2.35 0.78 0.37 0.22 1.20

Pay Out % 27.9 47.3 27.9 27.9 27.9 27.9 27.9

Outstanding Shares

(million) 227.8 227.8 227.8 683.5 683.5 683.5 683.5

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

Covenants – Total Adjusted Debt vs EBITDA

19

Financial Highlights (R$ million)

20

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

** R$ / 000 shares

2002 2003 2004 2005 2006 2007 2008* 2009* 2010* 2011* 2012* 2013* 2014* 2015* 2016*

Net Revenues (R$) 3,767 4,131 4,397 4,953 5,527 5,971 7,809 8,580 9,230 9,927 10,738 11,316 11,213 11,712 14,098

Adjusted EBITDA (R$) 1,860 2,076 1,927 2,286 2,446 2,699 2,865 2,727 3,222 3,371 3,605 4,007 2,919 3,974 4,572

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 32.4

Adjusted EBITDA w ithout Construction Margin (%)- - - - - - - 41.2 44.7 43.1 43.0 44.6 34.4 46.6 43.3

Net Income (R$) (651) 833 513 866 789 1,055 863 1,508 1,630 1,381 1,912 1,924 903 536 2,947

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 20.9

- - - - - - - - - - - - - - -

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 36,745

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 11,964

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 1,247

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 10,718

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 6,618 5,660

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 15,419

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 43.7

Investments (R$) 619 594 601 678 905 921 1,734 2,059 2,194 2,440 2,536 2,716 3,211 3,522 3,878

- - - - - - - - - - - - - - -

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 1.2

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 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 4.2

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)

22

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

2016/17 175.3 170.8 158.4 393.1 94.2 113.4

March, 23rd

March

2014: 193.3 mm

2015: 189.9 mm

2016: 179.6 mm

Oct-Feb

Média: 991.2 mm

Mínima: 330.3 mm

2013/14: 444.1 mm

2014/15: 813.6 mm

2015/16: 1.058.3 mm

2016/17: 991.8 mm

Cantareira System – Water inflow (m³/s)

23

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 19.4 19.3 15.3

2016/17 24.2 29.5 30.2 76.0 36.4 42.9

Inflow Oct-Jan/17:

75% of Historical Average Inflow

March, 23rd

Historical Average Inflow October-January: 52.7 m³/s

Inflow (Oct-Jan) 1953 : 27.3m³/s

Inflow (Oct-Jan) 2013/14 : 19.1 m³/s

Inflow (Oct-Jan) 2014/15 : 16.4m³/s

Inflow (Oct-Jan) 2015/16 : 43.5 m³/s

Inflow (Oct-Jan) 2016/17 : 39.3 m³/s

Cantareira’s Monthly Production vs Average (m³/s)

24

March, 23rd

Average production

Actual production

25

March, 23rd

Operating volume available at SPMR’s Reservoirs

Current operating volume as of June, 7th , 2013

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

Water Plan for the SPMR – 2015 to 2019 (main initiatives)

26

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 May/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 Sep/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 Dec/15 ◦ Assure Guarapiranga's water source completed

total 2015 6.5

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

total 2017 5.13

São Lourenço Production System: 6 m³/s 6 2018◦ Produce 6.4 m³/s for the Greater São

Paulo's western regionworks in progress

Reversal from Itapanhaú River (Ribeirão Sertãozinho) to the

Biritiba reservoir2 2018

◦ Recover the storage volume and assure

Alto Tietê's water sourceunder development

total 2018 8

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

(Guarapiranga basin)1 2019 ◦ Increase Guarapiranga's water source under development

total 2019 1

Total 2015 - 2019 20,63

Initiatives accomplished in 2015

Initiative planned for 2017

◦ Recover the storage volume and ensure

Alto Tietê's water source

Initiative planned for 2019

Purpose StatusDescription Est.

Initiatives planned for 2018

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