<SEC-DOCUMENT>0001292814-13-001027.txt : 20130502
<SEC-HEADER>0001292814-13-001027.hdr.sgml : 20130502
<ACCEPTANCE-DATETIME>20130502154913
ACCESSION NUMBER:		0001292814-13-001027
CONFORMED SUBMISSION TYPE:	6-K
PUBLIC DOCUMENT COUNT:		9
CONFORMED PERIOD OF REPORT:	20121231
FILED AS OF DATE:		20130502
DATE AS OF CHANGE:		20130502

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			COMPANHIA DE SANEAMENTO BASICO DO ESTADO DE SAO PAULO-SABESP
		CENTRAL INDEX KEY:			0001170858
		STANDARD INDUSTRIAL CLASSIFICATION:	WATER SUPPLY [4941]
		IRS NUMBER:				000000000
		STATE OF INCORPORATION:			D5
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		6-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-31317
		FILM NUMBER:		13807756

	BUSINESS ADDRESS:	
		STREET 1:		RUA COSTA CARVALHO, 300
		STREET 2:		SAO PAULO
		CITY:			SP
		STATE:			D5
		ZIP:			05429-900
		BUSINESS PHONE:		011-55-11-3388-8000

	MAIL ADDRESS:	
		STREET 1:		RUA COSTA CARVALHO, 300
		STREET 2:		SAO PAULO
		CITY:			SP
		STATE:			D5
		ZIP:			05429-900
</SEC-HEADER>
<DOCUMENT>
<TYPE>6-K
<SEQUENCE>1
<FILENAME>sbs20130423-6k.htm
<DESCRIPTION>FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011
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   <TITLE>sbs20130423-6k.htm - Generated by SEC Publisher for SEC Filing</TITLE>
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<DIV><FONT size=1></FONT>&nbsp;</DIV>

<DIV align=center><FONT color=#000000 size=3 face="Times New Roman"><B>SECURITIES AND EXCHANGE COMMISSION </B></FONT></DIV>

<DIV align=center><FONT color=#000000 size=3 face="Times New Roman"><B>Washington, DC 20549 </B></FONT></DIV>

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<DIV><FONT size=1></FONT>&nbsp;</DIV>

<DIV align=center><FONT color=#000000 size=3 face="Times New Roman"><B>FORM 6-K</B></FONT></DIV>

<DIV><FONT size=1></FONT>&nbsp;</DIV>

<DIV align=center><FONT color=#000000 size=3 face="Times New Roman"><B>REPORT OF FOREIGN ISSUER</B><BR><B>PURSUANT TO RULE 13a-16 OR 15d-16 OF THE</B></FONT></DIV>

<DIV align=center><FONT color=#000000 size=3 face="Times New Roman"><B>SECURITIES EXCHANGE ACT OF 1934</B></FONT></DIV>

<DIV><FONT size=1></FONT>&nbsp;</DIV>

<DIV align=center>

<DIV><FONT color=#000000 size=2 face="Times New Roman"><B>For&nbsp;April 25, 2013</B></FONT></DIV><FONT color=#000000 size=2 face="Times New Roman"><B>(Commission File No. 1-31317) </B></FONT></DIV>

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<DIV align=center><FONT color=#000000 size=3 face="Times New Roman"><B>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP </B></FONT></DIV>

<DIV align=center><FONT color=#000000 size=2 face="Times New Roman"><I>(Exact name of registrant as specified in its charter) </I></FONT></DIV>

<DIV><FONT size=1></FONT>&nbsp;</DIV>

<DIV align=center></DIV>

<DIV align=center><FONT color=#000000 size=3 face="Times New Roman"><B>Basic Sanitation Company of the State of Sao Paulo - SABESP </B></FONT></DIV>

<DIV align=center><FONT color=#000000 size=2 face="Times New Roman"><I>(Translation of Registrant's name into English) </I></FONT></DIV>

<DIV><FONT size=1></FONT>&nbsp;</DIV>

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<BR>

<DIV align=center><FONT color=#000000 size=2 face="Times New Roman"><B>Rua Costa Carvalho, 300 <BR>S&#227;o Paulo, S.P., 05429-900 <BR>Federative Republic of Brazil </B></FONT></DIV>

<DIV align=center><FONT color=#000000 size=2 face="Times New Roman"><I>(Address of Registrant's principal executive offices) </I></FONT></DIV><BR>

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<BR>

<DIV align=center><FONT color=#000000 size=2 face="Times New Roman">Indicate by check mark whether the registrant files or will file <BR>annual reports under cover Form 20-F or Form 40-F. <BR><BR>Form 20-F ___X___ Form 40-F ______</FONT></DIV>

<DIV align=center><FONT color=#000000 size=2 face="Times New Roman">Indicate by check mark if the registrant is submitting the Form 6-K <BR>in paper as permitted by Regulation S-T Rule 101(b)(1)__.</FONT></DIV>

<DIV align=center><FONT color=#000000 size=2 face="Times New Roman">Indicate by check mark if the registrant is submitting the Form 6-K <BR>in paper as permitted by Regulation S-T Rule 101(b)(7)__.</FONT></DIV>

<P align=center><FONT size=2 face="'Times New Roman, Times, Serif'">Indicate by check mark whether the registrant by furnishing the <BR>information contained in this Form is also thereby furnishing the <BR>information to the Commission pursuant to Rule 12g3-2(b) under <BR>the Securities Exchange Act of 1934. <BR><BR>Yes ______ No ___X___</FONT></P>

<DIV align=center><FONT color=#000000 size=2 face="Times New Roman">If "Yes" is marked, indicated below the file number assigned to the<BR>registrant in connection with Rule 12g3-2(b):</FONT> </DIV>

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<P style="TEXT-ALIGN: left"><I><FONT size=3 face=Arial-ItalicMT,Arial,Helvetica,sans-serif>(Convenience Translation into English from the Original Previously Issued in Portuguese)</FONT></I></P>

<P style="TEXT-ALIGN: left"><B><FONT size=5 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: left"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Financial Statements as of and for the Years Ended December 31, 2012 and 2011</FONT></B></P>

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   <TD colSpan=3 align=left><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -</FONT></B></TD>

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   <TD align=right><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">SABESP</FONT></B></TD>

   <TD align=left>&nbsp;</TD>

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   <TD colSpan=4 align=center><FONT size=5 face="Georgia,Times New Roman,Times,serif">Table of Contents</FONT></TD></TR>

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   <TD colSpan=3 align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Management Report</FONT></TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">3</FONT></TD></TR>

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   <TD colSpan=3 align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Independent Auditor&#8217;s Report</FONT></TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">53</FONT></TD></TR>

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   <TD colSpan=3 align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Balance Sheets</FONT></TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">56</FONT></TD></TR>

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   <TD colSpan=3 align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Income Statements</FONT></TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">58</FONT></TD></TR>

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   <TD colSpan=3 align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Statements of Comprehensive Income</FONT></TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">59</FONT></TD></TR>

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   <TD colSpan=3 align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Statements of Changes in Equity</FONT></TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">60</FONT></TD></TR>

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   <TD colSpan=3 align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Statements of Cash Flows</FONT></TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">61</FONT></TD></TR>

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   <TD colSpan=3 align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Statements of Value Added</FONT></TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">63</FONT></TD></TR>

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   <TD colSpan=3 align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Notes to the Financial Statements</FONT></TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">65</FONT></TD></TR>

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   <TD align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">1</FONT></I></TD>

   <TD align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">.</FONT></I></TD>

   <TD style="TEXT-INDENT: 0.035pt" align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">General information</FONT></I></TD>

   <TD align=left>&nbsp;</TD></TR>

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   <TD align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">2</FONT></I></TD>

   <TD align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">.</FONT></I></TD>

   <TD style="TEXT-INDENT: 0.038pt" align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">Basis for preparation and presentation of financial statements</FONT></I></TD>

   <TD align=left>&nbsp;</TD></TR>

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   <TD align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">3</FONT></I></TD>

   <TD align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">.</FONT></I></TD>

   <TD style="TEXT-INDENT: 0.024pt" align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">Summary of significant accounting policies</FONT></I></TD>

   <TD align=left>&nbsp;</TD></TR>

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   <TD align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">4</FONT></I></TD>

   <TD align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">.</FONT></I></TD>

   <TD style="TEXT-INDENT: 0.035pt" align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">Changes in accounting practices and disclosures</FONT></I></TD>

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   <TD align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">5</FONT></I></TD>

   <TD align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">.</FONT></I></TD>

   <TD style="TEXT-INDENT: 0.036pt" align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">Critical accounting estimates and judgments</FONT></I></TD>

   <TD align=left>&nbsp;</TD></TR>

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   <TD align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">6</FONT></I></TD>

   <TD align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">.</FONT></I></TD>

   <TD style="TEXT-INDENT: 0.035pt" align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">Cash and cash equivalents</FONT></I></TD>

   <TD align=left>&nbsp;</TD></TR>

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   <TD align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">7</FONT></I></TD>

   <TD align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">.</FONT></I></TD>

   <TD style="TEXT-INDENT: 0.036pt" align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">Restricted cash</FONT></I></TD>

   <TD align=left>&nbsp;</TD></TR>

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   <TD align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">8</FONT></I></TD>

   <TD align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">.</FONT></I></TD>

   <TD style="TEXT-INDENT: 0.036pt" align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">Trade receivables</FONT></I></TD>

   <TD align=left>&nbsp;</TD></TR>

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   <TD align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">9</FONT></I></TD>

   <TD align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">.</FONT></I></TD>

   <TD style="TEXT-INDENT: 0.029pt" align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">Related-party transactions</FONT></I></TD>

   <TD align=left>&nbsp;</TD></TR>

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   <TD align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">10</FONT></I></TD>

   <TD align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">.</FONT></I></TD>

   <TD style="TEXT-INDENT: 0.035pt" align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">Indemnities receivable</FONT></I></TD>

   <TD align=left>&nbsp;</TD></TR>

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   <TD align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">11</FONT></I></TD>

   <TD align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">.</FONT></I></TD>

   <TD style="TEXT-INDENT: 0.038pt" align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">Intangible assets</FONT></I></TD>

   <TD align=left>&nbsp;</TD></TR>

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   <TD align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">12</FONT></I></TD>

   <TD align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">.</FONT></I></TD>

   <TD style="TEXT-INDENT: 0.036pt" align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">Property, plant and equipment</FONT></I></TD>

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   <TD align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">13</FONT></I></TD>

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   <TD style="TEXT-INDENT: 0.036pt" align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">Loans and financing</FONT></I></TD>

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   <TD align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">14</FONT></I></TD>

   <TD align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">.</FONT></I></TD>

   <TD style="TEXT-INDENT: 0.036pt" align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">Taxes and contributions</FONT></I></TD>

   <TD align=left>&nbsp;</TD></TR>

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   <TD align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">15</FONT></I></TD>

   <TD align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">.</FONT></I></TD>

   <TD style="TEXT-INDENT: 0.038pt" align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">Deferred taxes and contributions</FONT></I></TD>

   <TD align=left>&nbsp;</TD></TR>

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   <TD align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">16</FONT></I></TD>

   <TD align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">.</FONT></I></TD>

   <TD align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">Provisions</FONT></I></TD>

   <TD align=left>&nbsp;</TD></TR>

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   <TD align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">17</FONT></I></TD>

   <TD align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">.</FONT></I></TD>

   <TD style="TEXT-INDENT: 0.038pt" align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">Employee benefits</FONT></I></TD>

   <TD align=left>&nbsp;</TD></TR>

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   <TD align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">18</FONT></I></TD>

   <TD align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">.</FONT></I></TD>

   <TD style="TEXT-INDENT: 0.035pt" align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">Services payable</FONT></I></TD>

   <TD align=left>&nbsp;</TD></TR>

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   <TD align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">19</FONT></I></TD>

   <TD align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">.</FONT></I></TD>

   <TD style="TEXT-INDENT: 0.038pt" align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">Equity</FONT></I></TD>

   <TD align=left>&nbsp;</TD></TR>

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   <TD align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">20</FONT></I></TD>

   <TD align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">.</FONT></I></TD>

   <TD style="TEXT-INDENT: 0.038pt" align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">Earnings per share</FONT></I></TD>

   <TD align=left>&nbsp;</TD></TR>

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   <TD align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">21</FONT></I></TD>

   <TD align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">.</FONT></I></TD>

   <TD style="TEXT-INDENT: 0.035pt" align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">Segment information</FONT></I></TD>

   <TD align=left>&nbsp;</TD></TR>

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   <TD align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">22</FONT></I></TD>

   <TD align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">.</FONT></I></TD>

   <TD style="TEXT-INDENT: 0.029pt" align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">Revenues by region</FONT></I></TD>

   <TD align=left>&nbsp;</TD></TR>

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   <TD align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">23</FONT></I></TD>

   <TD align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">.</FONT></I></TD>

   <TD style="TEXT-INDENT: 0.067pt" align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">Operating costs and expenses</FONT></I></TD>

   <TD align=left>&nbsp;</TD></TR>

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   <TD align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">24</FONT></I></TD>

   <TD align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">.</FONT></I></TD>

   <TD style="TEXT-INDENT: 0.038pt" align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">Financial income and expenses</FONT></I></TD>

   <TD align=left>&nbsp;</TD></TR>

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   <TD align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">25</FONT></I></TD>

   <TD align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">.</FONT></I></TD>

   <TD style="TEXT-INDENT: 0.035pt" align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">Other operating income (expense), net</FONT></I></TD>

   <TD align=left>&nbsp;</TD></TR>

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   <TD align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">26</FONT></I></TD>

   <TD align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">.</FONT></I></TD>

   <TD style="TEXT-INDENT: 0.036pt" align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">Commitments</FONT></I></TD>

   <TD align=left>&nbsp;</TD></TR>

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   <TD align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">27</FONT></I></TD>

   <TD align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">.</FONT></I></TD>

   <TD style="TEXT-INDENT: 0.038pt" align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">Additional cash flow information</FONT></I></TD>

   <TD align=left>&nbsp;</TD></TR>

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   <TD align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">28</FONT></I></TD>

   <TD align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">.</FONT></I></TD>

   <TD style="TEXT-INDENT: 0.045pt" align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">Events after the reporting period</FONT></I></TD>

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   <TD colSpan=3 align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Executive Officers&#8217; Statements</FONT></TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">178</FONT></TD></TR>

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   <TD colSpan=3 align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Fiscal Council&#8217;s Report</FONT></TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">180</FONT></TD></TR>

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   <TD colSpan=3 align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Audit Committee Report</FONT></TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">181</FONT></TD></TR>

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   <TD colSpan=3 align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Capital Budget</FONT></TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">182</FONT></TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-2</FONT></P>

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<P style="TEXT-ALIGN: left"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: left"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">MESSAGE FROM THE CEO</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In 2012, the tax relief was the mark of the economic policy to stimulate Brazil&#8217;s growth. Even though it was highly expected by the sector, the benefit did not reach the sanitation industry, which would have allowed for Sabesp to expand its investments. Our management&#8217;s constant striving for improvement enabled investments of R$2.5 billion. Our profit was R$1.9 billion, 56.3% higher than in the previous year. We also paid R$654 million in PIS/Cofins tax.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Our performance in the stock market was also vigorous, making Sabesp&#8217;s market cap increase 67% to R$ 19.8 billion this year. Our stock posted the third highest appreciation of the Ibovespa. In the U.S. market, the company&#8217;s ADRs gained 50.2%, while the Dow Jones index rose 7.3%. We also had the privilege to celebrate the tenth anniversary of our listing in the Novo Mercado of the BM&amp;FBovespa and on the New York Stock Exchange.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Our operating performance is also worthy of note. We recorded 240,000 new water supply connections, the highest result since 2000. Because we operate in a region where water resources are scarce, we seek new springs to ensure the water supply to 27.7 million customers. We met the commitment of publishing the invitation to bid for the implementation of the S&#227;o Louren&#231;o production system. Once completed, it will integrate the water supply system of the metropolitan region of S&#227;o Paulo, where 20 million people live.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Because we already get water to supply the metropolis 80 km away from the city, this year we put into operation one of our strategies to face the effects climate change may have upon the sanitation industry. We have opened the Aquapolo Ambiental water reuse program to supply the Capuava Petrochemical Complex of Mau&#225;, located in S&#227;o Paulo&#8217;s ABC region. Sabesp increased by 13 times its water reuse production with this project.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Loss reduction is another focus of action for us to face the low water resources availability. Our Corporate Program for the Reduction of Water Loss received an unprecedented funding of R$710 million in February 2012 from the Japanese government. Even though we have not reached the expected loss ratio, starting in the second half of 2013, this loan will allow for us to expand our services and seek greater efficiency, in addition to strengthening our actions to prevent losses.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Regarding our sewage operations, in 2012 we had the second best result since 1998 for new sewage connections, and reached the mark of 77% of collected sewage treated. We delivered 23 new sewage treatment stations and started building 38 other stations, which has made our plan for universal access to sanitation services in the inland of the state before 2014 more and more visible.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">All our achievements in 2012 allow for us to reaffirm, each year, our commitment to provide universal access to sanitation services before the end of this decade in common areas where we operate, having sustainability and environment preservation as our rules for everyday operations.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Dilma Pena</FONT><BR><FONT size=2 face="Georgia,Times New Roman,Times,serif">CEO of Sabesp</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-3</FONT></P>

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<P style="TEXT-ALIGN: left"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: left; MARGIN-LEFT: 20px"><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>PROFILE</FONT><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Sabesp was founded in 1973, from the merger of several companies and under the guidelines of the National Sanitation Plan (Planasa). A publicly-held and mixed-capital company, its majority shareholder is the S&#227;o Paulo State Government, and it is regulated by the principles of both public and private law.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">We are the largest sanitation company of the Americas and the world&#8217;s fifth largest company in terms of population served, according to the 14</FONT><SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">th </FONT></SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">edition (2012-2013) of the Pinsent Masons Water Yearbook. We supply water to 27.7 million people (24.2 million directly and 3.5 million in the wholesale basis market), and collect sewage generated by 21 million people. This means that Sabesp provides its services to approximately 67% of the urban population of the State of S&#227;o Paulo.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Our business structure is divided into five executive boards, in addition to the CEO, two of which are related to operations, accommodating 17 business units distributed throughout the State of S&#227;o Paulo. We operate 214 water treatment stations and 502 sewage treatment stations. Our water distribution network is 67.6 thousand kilometer long, and our sewage network, 45.8 thousand kilometer long. Today we have 15,019 employees, whose production, measured as connections per employee, and has grown 67% for the past ten years.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The company has operations in 363 municipalities of the State of S&#227;o Paulo, 193 of which are fully covered for water supply and sanitation services. We also sell water in the wholesale basis market to six municipalities located in the metropolitan region of S&#227;o Paulo, five of which also use our sewage treatment services.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In three other municipalities, Sabesp provides water supply and sanitation services through partnerships with companies: &#193;guas de Castilho S.A., &#193;guas de Andradina S.A. and Saneaqua Mairinque S.A.. In the city of Mogi Mirim (SP), also through a partnership, with SESAMM &#8211;Servi&#231;os de Saneamento de Mogi Mirim S.A., we are responsible for the modernization, implementation and management of sewage treatment system.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In a partnership with companies, Sabesp created the Aquapolo Ambiental water reuse project, which started operating in 2012 to produce, supply and sell reused water for the Capuava Petrochemical Complex; and Attend Ambiental, whose purpose is to implement and operate a non-residential effluent pre-treatment and sludge conditioning station in the metropolitan region of S&#227;o Paulo, among other activities, and it is expected to start operating in September 2013.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">We have operations in consulting services on water rational use, business and operating management in Panam&#225; and Honduras and in state sanitation concessionaires in Alagoas (Casal) and Esp&#237;rito Santo (Cesan), promoting technology interchange in the industry.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">We are also allowed to operate in the drainage and city cleaning segments, handling of solid waste, selling energy and executing other services, supplying products and obtaining benefits and rights that directly or indirectly derive from its assets, operations and activities, in Brazil and overseas.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-4</FONT></P>

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<P style="TEXT-ALIGN: left"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: left"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Our shares &#8211; all common shares &#8211; are listed on the Securities, Commodities and Futures Exchange of S&#227;o Paulo (BM&amp;FBovespa) under ticker code SBSP3, and on the New York Stock Exchange (NYSE), as American Depositary Receipts (Level 3 ADR), under ticker code SBS.</FONT></P>

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   <TD width="49%" align=left><B><I><FONT size=2 face="Georgia-BoldItalic,Times New Roman,Times,serif">TABLE OF INDICATORS</FONT></I></B></TD>

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   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 1.439pt; BORDER-TOP: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="49%" align=left><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>Indicators</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 9.72pt; BORDER-TOP: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="11%" align=left><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>Unit</FONT></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; BORDER-TOP: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>2012</FONT></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; BORDER-TOP: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>2011</FONT></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; BORDER-TOP: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>2010</FONT></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; BORDER-TOP: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>2009</FONT></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; BORDER-TOP: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>2008</FONT></TD></TR>

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   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; BORDER-TOP: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#b8cce4 width="100%" colSpan=7 align=center><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>Service</FONT></B></TD></TR>

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   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 1.439pt; BORDER-RIGHT: #004080 1px solid" width="49%" align=left><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>Water</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>service</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>indexes</FONT></TD>

   <TD style="BORDER-RIGHT: #004080 1px solid" width="51%" colSpan=6 align=center><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>Tendency</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>to</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>universalization</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><SUP><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>(1)</FONT></SUP></TD></TR>

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   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 1.438pt; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="49%" align=left><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>Sewage</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>collection</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>service</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>indexes</FONT></TD>

   <TD style="TEXT-INDENT: 0pt" bgColor=#dce6f1 width="11%" align=left>

   <P style="MARGIN-TOP: 0px; MARGIN-LEFT: 0px"><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>%</FONT></P></TD>

   <TD bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>83</FONT></TD>

   <TD bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>82</FONT></TD>

   <TD bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>81</FONT></TD>

   <TD bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>80</FONT></TD>

   <TD style="BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>79</FONT></TD></TR>

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   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 1.44pt; BORDER-RIGHT: #004080 1px solid" width="49%" align=left><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>Collected</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>sewage</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>treatment</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>indexes</FONT><SUP><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>(2)</FONT></SUP></TD>

   <TD style="TEXT-INDENT: 0pt" width="11%" align=left>

   <P style="MARGIN-TOP: 0px; MARGIN-LEFT: 0px"><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>%</FONT></P></TD>

   <TD width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>77</FONT></TD>

   <TD width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>76</FONT></TD>

   <TD width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>75</FONT></TD>

   <TD width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>74</FONT></TD>

   <TD style="BORDER-RIGHT: #004080 1px solid" width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>72</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 1.44pt; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="49%" align=left><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>Resident</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>population</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>serviced</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>with</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>water</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>supply</FONT></TD>

   <TD style="TEXT-INDENT: 0pt" bgColor=#dce6f1 width="11%" align=left>

   <P style="MARGIN-TOP: 0px; MARGIN-LEFT: 0px"><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>thousand</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>inhabitants</FONT></P></TD>

   <TD bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>24,249</FONT></TD>

   <TD bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>23,911</FONT></TD>

   <TD bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>23,625</FONT></TD>

   <TD bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>23,363</FONT></TD>

   <TD style="BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>23,162</FONT></TD></TR>

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   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 1.44pt; BORDER-RIGHT: #004080 1px solid" width="49%" align=left><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>Resident</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>population</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>serviced</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>with</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>sewage</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>collection</FONT></TD>

   <TD style="TEXT-INDENT: 0pt" width="11%" align=left>

   <P style="MARGIN-TOP: 0px; MARGIN-LEFT: 0px"><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>thousand</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>inhabitants</FONT></P></TD>

   <TD width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>20,992</FONT></TD>

   <TD width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>20,498</FONT></TD>

   <TD width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>20,024</FONT></TD>

   <TD width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>19,600</FONT></TD>

   <TD style="BORDER-RIGHT: #004080 1px solid" width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>19,198</FONT></TD></TR>

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   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; BORDER-TOP: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#b8cce4 width="100%" colSpan=7 align=center><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>Operational</FONT></B></TD></TR>

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   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 1.44pt; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="49%" align=left><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>Water</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>connections</FONT></TD>

   <TD style="TEXT-INDENT: 0pt" bgColor=#dce6f1 width="11%" align=left><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>thousand</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>units</FONT></TD>

   <TD bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>7,679</FONT></TD>

   <TD bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>7,481</FONT></TD>

   <TD bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>7,295</FONT></TD>

   <TD bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>7,118</FONT></TD>

   <TD bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>6,945</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 1.438pt; BORDER-RIGHT: #004080 1px solid" width="49%" align=left><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>Sewage</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>connections</FONT></TD>

   <TD style="TEXT-INDENT: 0pt" width="11%" align=left><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>thousand</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>units</FONT></TD>

   <TD width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>6,128</FONT></TD>

   <TD width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>5,921</FONT></TD>

   <TD width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>5,718</FONT></TD>

   <TD width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>5,520</FONT></TD>

   <TD width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>5,336</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 1.438pt; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="49%" align=left><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>Water</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>losses</FONT></TD>

   <TD style="TEXT-INDENT: 0pt" bgColor=#dce6f1 width="11%" align=left><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>25.7</FONT></TD>

   <TD bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>25.6</FONT></TD>

   <TD bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>26.0</FONT></TD>

   <TD bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>26.0</FONT></TD>

   <TD bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>27.9</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 1.44pt; BORDER-RIGHT: #004080 1px solid" width="49%" align=left><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>Volume</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>of</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>water</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>produced</FONT></TD>

   <TD style="TEXT-INDENT: 0pt" width="11%" align=left><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>million</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>m&#179;</FONT></TD>

   <TD width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>3,059</FONT></TD>

   <TD width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>2,992</FONT></TD>

   <TD width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>2,952</FONT></TD>

   <TD width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>2,845</FONT></TD>

   <TD width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>2,853</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 1.438pt; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="49%" align=left><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>Volume</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>of</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>water</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>billed</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>at</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>wholesale</FONT></TD>

   <TD style="TEXT-INDENT: 0pt" bgColor=#dce6f1 width="11%" align=left><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>million</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>m&#179;</FONT></TD>

   <TD bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>298</FONT></TD>

   <TD bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>297</FONT></TD>

   <TD bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>293</FONT></TD>

   <TD bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>288</FONT></TD>

   <TD bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>285</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 1.438pt; BORDER-RIGHT: #004080 1px solid" width="49%" align=left><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>Volume</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>of</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>water</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>billed</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>at</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>retail</FONT></TD>

   <TD style="TEXT-INDENT: 0pt" width="11%" align=left><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>million</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>m&#179;</FONT></TD>

   <TD width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>1,796</FONT></TD>

   <TD width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>1,747</FONT></TD>

   <TD width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>1,699</FONT></TD>

   <TD width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>1,630</FONT></TD>

   <TD width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>1,596</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 1.438pt; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="49%" align=left><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>Volume</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>of</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>sewage</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>billed</FONT></TD>

   <TD style="TEXT-INDENT: 0pt" bgColor=#dce6f1 width="11%" align=left><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>million</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>m&#179;</FONT></TD>

   <TD bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>1,535</FONT></TD>

   <TD bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>1,486</FONT></TD>

   <TD bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>1,434</FONT></TD>

   <TD bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>1,373</FONT></TD>

   <TD bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>1,330</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 1.438pt; BORDER-RIGHT: #004080 1px solid" width="49%" align=left><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>Headcount</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><SUP><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>(3)</FONT></SUP></TD>

   <TD style="TEXT-INDENT: 0pt" width="11%" align=left><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>employees</FONT></TD>

   <TD width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>15,019</FONT></TD>

   <TD width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>14,896</FONT></TD>

   <TD width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>15,330</FONT></TD>

   <TD width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>15,103</FONT></TD>

   <TD width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>16,649</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 1.439pt; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="49%" align=left><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>Operational</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>productivity</FONT></TD>

   <TD style="TEXT-INDENT: 0pt" bgColor=#dce6f1 width="11%" align=left><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>connec/empl</FONT></TD>

   <TD bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>919</FONT></TD>

   <TD bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>900</FONT></TD>

   <TD bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>849</FONT></TD>

   <TD bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>837</FONT></TD>

   <TD bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>738</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; BORDER-TOP: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#b8cce4 width="100%" colSpan=7 align=center><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>Financial</FONT></B><B><SUP><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>(4)</FONT></SUP></B></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 1.438pt; BORDER-RIGHT: #004080 1px solid" width="49%" align=left><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>Net</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>revenue</FONT></TD>

   <TD style="TEXT-INDENT: 0pt" width="11%" align=left><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>R$</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>million</FONT></TD>

   <TD width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>10,754.4</FONT></TD>

   <TD width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>9,941.6</FONT></TD>

   <TD width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>9,231.0</FONT></TD>

   <TD width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>8,579.5</FONT></TD>

   <TD style="BORDER-RIGHT: #004080 1px solid" width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>7,809.3</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 1.437pt; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="49%" align=left><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>Adjusted</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>EBITDA</FONT><SUP><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>(5)</FONT></SUP></TD>

   <TD style="TEXT-INDENT: 0pt" bgColor=#dce6f1 width="11%" align=left><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>R$</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>million</FONT></TD>

   <TD bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>3,605.2</FONT></TD>

   <TD bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>3,213.3</FONT></TD>

   <TD bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>3,222.5</FONT></TD>

   <TD bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>2,727.0</FONT></TD>

   <TD style="BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>2,865.0</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 1.437pt; BORDER-RIGHT: #004080 1px solid" width="49%" align=left><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>Adjusted</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>EBITDA</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>Margin</FONT></TD>

   <TD style="TEXT-INDENT: 0pt" width="11%" align=left><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>33.5</FONT></TD>

   <TD width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>32.3</FONT></TD>

   <TD width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>34.9</FONT></TD>

   <TD width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>31.8</FONT></TD>

   <TD style="BORDER-RIGHT: #004080 1px solid" width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>36.7</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 1.44pt; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="49%" align=left><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>Adjusted</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>EBITDA</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>Margin,</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>excluding</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>construction</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>revenue</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>and</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>cost</FONT></TD>

   <TD style="BACKGROUND-COLOR: #dce6f1; TEXT-INDENT: 0pt" width="11%" align=left><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>42.9</FONT></TD>

   <TD bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>41.1</FONT></TD>

   <TD bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>44.7</FONT></TD>

   <TD bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>41.2</FONT></TD>

   <TD style="BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>46.3</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 1.44pt; BORDER-RIGHT: #004080 1px solid" width="49%" align=left><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>Results</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>(profit/loss)</FONT></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; TEXT-INDENT: 0pt" width="11%" align=left><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>R$</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>million</FONT></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid" width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>1,911.9</FONT></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid" width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>1,223.4</FONT></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid" width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>1,630.4</FONT></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid" width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>1,507.7</FONT></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>862.9</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 1.439pt" width="92%" colSpan=6 align=left><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>(1)</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>99%</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>or</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>more</FONT></TD>

   <TD width="8%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 1.44pt" width="84%" colSpan=5 align=left><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>(2)</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>Due</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>to</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>methodological</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>reasons,</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>it</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>considers</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>a</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>variation</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>margin</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>of</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>approximately</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>2</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>percentage</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>points</FONT></TD>

   <TD width="8%" align=left>&nbsp;</TD>

   <TD width="8%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 1.443pt" width="76%" colSpan=4 align=left><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>(3)</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>Number</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>of</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>the</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>Company's</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>employees,</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>excluding</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>those</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>assigned</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>to</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>other</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>agencies</FONT></TD>

   <TD width="8%" align=left>&nbsp;</TD>

   <TD width="8%" align=left>&nbsp;</TD>

   <TD width="8%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 1.445pt" width="49%" align=left><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>(4)</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>Consolidated</FONT></TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="8%" align=left>&nbsp;</TD>

   <TD width="8%" align=left>&nbsp;</TD>

   <TD width="8%" align=left>&nbsp;</TD>

   <TD width="8%" align=left>&nbsp;</TD>

   <TD width="8%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 1.445pt" width="76%" colSpan=4 align=left><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>(5)</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>Earnings</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>before</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>interest,</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>taxes,</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>depreciation</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>and</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>amortization</FONT></TD>

   <TD width="8%" align=left>&nbsp;</TD>

   <TD width="8%" align=left>&nbsp;</TD>

   <TD width="8%" align=left>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: left"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">STRATEGY AND PERSPECTIVES FOR THE FUTURE</FONT></B></P>

<P style="TEXT-ALIGN: left"><FONT size=2 face="Georgia,Times New Roman,Times,serif">At the same time Sabesp executes its main purpose&#8212;provide universal access to basic sanitation services in the State of S&#227;o Paulo&#8212;it also participates in important state programs to promote quality of life and preserve the environment, in addition to developing and executing programs to control losses, promote the rational use and reuse of water, and stimulate the technological production for the efficient expansion of services, aiming reasonable tariffs and the appropriation of social gains.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT size=2 face="Georgia,Times New Roman,Times,serif">We provide services having in mind the technical and operational peculiarities of each region, and social responsibility permeates all our actions, through our respect for the local characteristics and the engagement of our stakeholders, strongly contributing to shaping the citizen of the future.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-5</FONT></P>

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<P style="TEXT-ALIGN: left"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Preserving the environment is part of our daily routine, and the reason why we seek to improve our operation&#8217;s controls and mitigate the impacts caused by our businesses. We understand that the implementation of educational actions raise awareness about the need to protect the nature.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">SUMMARY OF TARGETS</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company achieved five of the seven performance targets defined in 2012 that guided the concession of salary benefits established in the Profit Sharing Plan (PPR).</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Water supply was maintained in a level we may consider as being universalized in our marketplace.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">New connections of this service followed the vegetative growth of the areas covered by the company and business, and reached, in 2012, the largest record since 2000.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The sewage collection and treatment continue growing as projected. It is worth mentioning that in 2012, we achieved the second best results since 1998 in relation to the number of new sewage connections, and reached the mark of 77% of treatment of sewage collected.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">We have met an important goal&#8212;publishing the international invitation to bid for contracting a public-private partnership (PPP) for the implementation of the S&#227;o Louren&#231;o Production System. The new system will increase water supply in the metropolitan region of S&#227;o Paulo and ensure safe supply. Another highlight was that we performed better than we had expected with regard to the Adjusted EBITDA margin, which reached 33.5%.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Our loss ratio target was not met. Our ratio is at 25.7%, but we wanted to reach 25.2%. In 2013, however, with the beginning of investments made with the R$710 million loan obtained from the Japan International Cooperation Agency (Jica), we believe our indicators will improve. The Company could not keep the level of customer&#8217;s satisfaction at 92% either, even though we were only three points below our target.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-6</FONT></P>

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<A name="page_7"></A><BR>

<P style="TEXT-ALIGN: left"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<DIV align=center>

<TABLE border=0 cellSpacing=0 width="100%">



<TR>

   <TD width="44%"></TD>

   <TD width="8%"></TD>

   <TD width="8%"></TD>

   <TD width="8%"></TD>

   <TD width="8%"></TD>

   <TD width="8%"></TD>

   <TD width="8%"></TD>

   <TD width="8%"></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid; TEXT-INDENT: 0.002pt" width="44%" align=left><B><FONT color=#4f82bd size=2 face="Georgia-Bold,Times New Roman,Times,serif">Summary of Targets</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%" align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%" align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%" align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%" align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%" align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%" align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%" align=left>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=8>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 2.042pt; BORDER-TOP: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="60%" colSpan=3 align=left><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>Indicators</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.284pt; BORDER-TOP: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="16%" colSpan=2 align=left><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>Unit</FONT></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; BORDER-TOP: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="24%" colSpan=3 align=left><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>Target</FONT> <FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>Accomplished</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 2.042pt; BORDER-RIGHT: #004080 1px solid" width="60%" colSpan=3 align=left><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>Adjusted</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>EBITDA</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>Margin</FONT><SUP><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>(1)</FONT></SUP></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.285pt; BORDER-RIGHT: #004080 1px solid" width="16%" colSpan=2 align=left><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 3.966pt" width="8%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>32.4</FONT></TD>

   <TD style="BORDER-RIGHT: #004080 1px solid" width="16%" colSpan=2 align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>33.6</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 2.043pt; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="60%" colSpan=3 align=left><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>Customer</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>satisfaction</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>index</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.275pt; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="16%" colSpan=2 align=left><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 3.306pt" bgColor=#dce6f1 width="8%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>92</FONT></TD>

   <TD style="BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="16%" colSpan=2 align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>89</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 2.043pt; BORDER-RIGHT: #004080 1px solid" width="60%" colSpan=3 align=left><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>Number</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>of</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>new</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>water</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>connections</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif></FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.286pt; BORDER-RIGHT: #004080 1px solid" width="16%" colSpan=2 align=left><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>thousand</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>units</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 3.308pt" width="8%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>175</FONT></TD>

   <TD style="BORDER-RIGHT: #004080 1px solid" width="16%" colSpan=2 align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>212.8</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 2.045pt; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="60%" colSpan=3 align=left><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>Number</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>of</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>new</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>sewage</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>connections</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif></FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.288pt; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="16%" colSpan=2 align=left><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>thousand</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>units</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 3.31pt" bgColor=#dce6f1 width="8%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>217</FONT></TD>

   <TD style="BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="16%" colSpan=2 align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>240.7</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 2.047pt; BORDER-RIGHT: #004080 1px solid" width="60%" colSpan=3 align=left><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>Water</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>billing</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>loss</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>index</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.28pt; BORDER-RIGHT: #004080 1px solid" width="16%" colSpan=2 align=left><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 3.31pt" width="8%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>25.2</FONT></TD>

   <TD style="BORDER-RIGHT: #004080 1px solid" width="16%" colSpan=2 align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>25.7</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 2.047pt; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="60%" colSpan=3 align=left><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>Collected</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>sewage</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>treatment</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>index</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.281pt; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="16%" colSpan=2 align=left><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 3.312pt" bgColor=#dce6f1 width="8%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>77</FONT></TD>

   <TD style="BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="16%" colSpan=2 align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>77</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 2.049pt; BORDER-RIGHT: #004080 1px solid" vAlign=middle width="60%" colSpan=3 align=left><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>S&#227;o</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>Louren&#231;o</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>production</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>system</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>(publish</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>invitation</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>to</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>bid)</FONT></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" vAlign=middle width="16%" colSpan=2 align=left><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>units</FONT></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid" vAlign=middle width="8%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>Publish</FONT><BR><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>Invitation</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>to</FONT><BR><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>Bid</FONT></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" vAlign=middle width="16%" colSpan=2 align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>Published </FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>on</FONT><BR><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>11/8/2012</FONT> <FONT size=2 face=Calibri,Arial,Helvetica,sans-serif></FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 2.042pt" width="100%" colSpan=8 align=left><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>(1)</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>Earnings</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>before</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>interest,</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>taxes,</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>depreciation</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>and</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>amortization</FONT></TD></TR>

<TR>

   <TD width="100%" colSpan=8>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=8>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="52%" colSpan=2 align=left><I><FONT color=#4f82bd size=2 face="Georgia-Italic,Times New Roman,Times,serif">2012 Realized and Targets 2012-2020 </FONT></I><I><SUP><FONT color=#4f82bd size=2 face="Georgia-Italic,Times New Roman,Times,serif">(1)</FONT></SUP></I></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%" align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%" align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%" align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%" align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%" align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%" align=left>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=8>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=8>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-TOP: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" rowSpan=2 width="44%" align=left>&nbsp; </TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; BORDER-TOP: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#b8cce4 width="8%" align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>Accomplished</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-TOP: #004080 1px solid" bgColor=#b8cce4 width="8%" align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-TOP: #004080 1px solid" bgColor=#b8cce4 width="8%" align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-TOP: #004080 1px solid" bgColor=#b8cce4 width="8%" align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-TOP: #004080 1px solid" bgColor=#b8cce4 width="8%" align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-TOP: #004080 1px solid" bgColor=#b8cce4 width="8%" align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-TOP: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#b8cce4 width="8%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="8%" align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>2012</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid" width="8%" align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>2012</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid" width="8%" align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>2013</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid" width="8%" align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>2014</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid" width="8%" align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>2015</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid" width="8%" align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>2016</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="8%" align=center>&nbsp;<STRONG><FONT size=2 face=Arial>2020</FONT></STRONG></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 1.922pt; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="44%" align=left><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>Water</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>supply</FONT></B></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=left>&nbsp;</TD>

   <TD bgColor=#dce6f1 width="32%" colSpan=4 align=right><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>Tendency</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>to</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>universalization</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;&nbsp;</FONT></B><B><SUP><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>(2)</FONT></SUP></B></TD>

   <TD bgColor=#dce6f1 width="8%" align=left>&nbsp;</TD>

   <TD style="BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=left>&nbsp;</TD></TR>

<TR>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="44%">&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="8%">&nbsp;</TD>

   <TD width="8%">&nbsp;</TD>

   <TD width="8%">&nbsp;</TD>

   <TD width="8%">&nbsp;</TD>

   <TD width="8%">&nbsp;</TD>

   <TD width="8%">&nbsp;</TD>

   <TD style="BORDER-RIGHT: #004080 1px solid" width="8%">&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 1.922pt; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="44%" align=left><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>Sewage</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>collection</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>(%)</FONT></B></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>83</FONT></B></TD>

   <TD bgColor=#dce6f1 width="8%" align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>83</FONT></B></TD>

   <TD bgColor=#dce6f1 width="8%" align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>84</FONT></B></TD>

   <TD bgColor=#dce6f1 width="8%" align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>85</FONT></B></TD>

   <TD bgColor=#dce6f1 width="8%" align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>86</FONT></B></TD>

   <TD bgColor=#dce6f1 width="8%" align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>87</FONT></B></TD>

   <TD style="BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=center><STRONG><FONT size=2 face=Arial>95</FONT></STRONG>&nbsp;</TD></TR>

<TR>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="44%">&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="8%">&nbsp;</TD>

   <TD width="8%">&nbsp;</TD>

   <TD width="8%">&nbsp;</TD>

   <TD width="8%">&nbsp;</TD>

   <TD width="8%">&nbsp;</TD>

   <TD width="8%">&nbsp;</TD>

   <TD style="BORDER-RIGHT: #004080 1px solid" width="8%" align=center>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 1.923pt; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="44%" align=left><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>Collected</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>sewage</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>treatment</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>(%)</FONT></B></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>77</FONT></B></TD>

   <TD bgColor=#dce6f1 width="8%" align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>77</FONT></B></TD>

   <TD bgColor=#dce6f1 width="8%" align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>78</FONT></B></TD>

   <TD bgColor=#dce6f1 width="8%" align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>80</FONT></B></TD>

   <TD bgColor=#dce6f1 width="8%" align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>82</FONT></B></TD>

   <TD bgColor=#dce6f1 width="8%" align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>86</FONT></B></TD>

   <TD style="BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=center>&nbsp;<STRONG><FONT size=2 face=Arial>95</FONT></STRONG></TD></TR>

<TR>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="44%">&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="8%">&nbsp;</TD>

   <TD width="8%">&nbsp;</TD>

   <TD width="8%">&nbsp;</TD>

   <TD width="8%">&nbsp;</TD>

   <TD width="8%">&nbsp;</TD>

   <TD width="8%">&nbsp;</TD>

   <TD style="BORDER-RIGHT: #004080 1px solid" width="8%" align=center>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 1.921pt; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="44%" align=left><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>New</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>water</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>connections</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>(thousand)</FONT></B></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>212.8</FONT></B></TD>

   <TD bgColor=#dce6f1 width="8%" align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>175</FONT></B></TD>

   <TD style="TEXT-INDENT: 1.832pt" bgColor=#dce6f1 width="8%" align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>175</FONT></B></TD>

   <TD bgColor=#dce6f1 width="8%" align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>176</FONT></B></TD>

   <TD bgColor=#dce6f1 width="8%" align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>177</FONT></B></TD>

   <TD bgColor=#dce6f1 width="8%" align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>172</FONT></B></TD>

   <TD style="BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>644<SUP>(</SUP><SUP>3)</SUP></FONT></B></TD></TR>

<TR>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="44%">&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="8%">&nbsp;</TD>

   <TD width="8%">&nbsp;</TD>

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   <TD width="8%">&nbsp;</TD>

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   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 1.922pt; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="44%" align=left><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>New</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>sewage</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>connections</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>(thousand)</FONT></B></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>240.7</FONT></B></TD>

   <TD bgColor=#dce6f1 width="8%" align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>217</FONT></B></TD>

   <TD style="TEXT-INDENT: 1.832pt" bgColor=#dce6f1 width="8%" align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>217</FONT></B></TD>

   <TD bgColor=#dce6f1 width="8%" align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>242</FONT></B></TD>

   <TD bgColor=#dce6f1 width="8%" align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>246</FONT></B></TD>

   <TD bgColor=#dce6f1 width="8%" align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>243</FONT></B></TD>

   <TD style="BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>928<SUP>(3)</SUP></FONT></B></TD></TR>

<TR>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="44%">&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="8%">&nbsp;</TD>

   <TD width="8%">&nbsp;</TD>

   <TD width="8%">&nbsp;</TD>

   <TD width="8%">&nbsp;</TD>

   <TD width="8%">&nbsp;</TD>

   <TD width="8%">&nbsp;</TD>

   <TD style="BORDER-RIGHT: #004080 1px solid" width="8%" align=center>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 1.922pt; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="44%" align=left><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>Water</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>losses</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>(%)</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>25.7</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid" bgColor=#dce6f1 width="8%" align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>25.2</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; TEXT-INDENT: 0.603pt" bgColor=#dce6f1 width="8%" align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>25.2</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid" bgColor=#dce6f1 width="8%" align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>23.4</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid" bgColor=#dce6f1 width="8%" align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>22.7</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid" bgColor=#dce6f1 width="8%" align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>21.9</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#c5d9f1 width="8%" align=center><STRONG><FONT size=2 face=Arial>19.0</FONT></STRONG>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 1.922pt" width="44%" align=left><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>(1) </FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>Targets</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>of</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>the</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>2012/2013</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>profit</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>sharing</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>plan</FONT></TD>

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   <TD style="TEXT-INDENT: 1.922pt" width="44%" align=left><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>(2) </FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>99%</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>or</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>more</FONT></TD>

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   <TD style="TEXT-INDENT: 1.922pt" width="44%" align=left><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>(3) </FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>Accumulated</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>2017/2020</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>target</FONT></TD>

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<P style="TEXT-ALIGN: left"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">WATER SUPPLY SECURED IN AN ENVIRONMENT OF SCARCITY</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In 2012, we maintained our pace in the expansion of water supply services. A total of 212.8 thousand new connections were made. With this expansion, we maintained the universal access to water supply in the legal areas of the municipalities where we operate and managed to keep in line with the vegetative growth.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-7</FONT></P>

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<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The </FONT><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Metropolitan Water Program</FONT></B><FONT size=2 face="Georgia,Times New Roman,Times,serif">, which eliminated the water rationing in 1998, continued to progress, with investments estimated at R$2.7 billion. A total of R$1.3 billion has been invested up to 2012, R$95.2 million of which in 2012 alone. Our total capacity in the metropolitan region of S&#227;o Paulo is currently at 2.0 million m</FONT><SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">3</FONT></SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">. The project is under revision to meet the future demand up to the end of the decade.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In November 2012 we published the invitation to bid for the implementation of the </FONT><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">S&#227;o Louren&#231;o Production System </FONT></B><FONT size=2 face="Georgia,Times New Roman,Times,serif">(SPSL). Once completed, this system will increase the water supply in the metropolitan region of S&#227;o Paulo by 4.7 m</FONT><SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">3</FONT></SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">/s. Investments in this project will be made through a public-private partnership (PPP). The bidding is currently in progress. Nearly 1.5 million people will directly benefit from the new system, which may indirectly reach the whole population served by the company in the metropolis, since the water supply in the metropolitan region of S&#227;o Paulo is integrated. This system was designed to meet sustainability principles with greater efficiency and economy in the consumption of energy, and to reduce environmental impact.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In Santos coast region, Sabesp started in 2012 the operation of the new Jurubatuba water treatment station (ETA) of Guaruj&#225;, and the Mamb&#250;-Branco production system installed in Itanha&#233;m. Together, they have capacity to treat 3.6 thousand liters of water per second. These two projects are included in the &#8220;</FONT><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">&#193;gua no Litoral&#8221; </FONT></B><FONT size=2 face="Georgia,Times New Roman,Times,serif">(Water on Coast) program, which has already invested R$569.1 million of a total estimated amount of R$1.1 billion.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In addition to the metropolitan region of S&#227;o Paulo and Santos coast region, in 2012 we solved critical water supply problems in several municipalities in the inland of the state. Focusing mainly on highly socially vulnerable regions located in areas that are far from the major cities of the inland of the state, Sabesp started the construction works of the &#8220;</FONT><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">&#193;gua &#233; Vida&#8221; </FONT></B><FONT size=2 face="Georgia,Times New Roman,Times,serif">(Water is Life) program. Introduced in late 2011, its purpose is to take water supply and sanitation services to 41 areas in the regions of Alto Paranapanema and Vale do Ribeira. The first actions were executed in 2012, and included the drilling of wells that will supply 12 communities with water by the end of 2013.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Sabesp has also developed actions and technologies to increase the reuse of effluents generated from sewage treatment for industrial purposes, equipment refrigeration and other applications for non-potable water.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In this regard, one of the major achievements of the company in 2012 was the start-up of the </FONT><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Aquapolo Ambiental </FONT></B><FONT size=2 face="Georgia,Times New Roman,Times,serif">water reuse project, a partnership between Sabesp and Foz do Brasil (Odebrecht Group) to supply the Capuava Petrochemical Complex in the ABC region in S&#227;o Paulo. It is the largest water reuse plant in Brazil and one of the five-largest in the world. Its full production capacity will be reached in 2016, with the processing of one thousand liters per second, a volume that is enough to supply 300,000 people, further delaying the exploration of new springs and the already limited sources of water. Water is used basically to produce steam for power generation and in refrigeration towers. In 2012, the project won the Brazilian Water Agency award in the &#8220;Company&#8221; category, for the intelligent use of water resources.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">With Aquapolo, Sabesp expanded its water reuse production by 13 times. Today, we have capacity to supply 395,000 m&#179;/month. Also in 2012, we started the conception study to implement a reuse</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-8</FONT></P></DIV>

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<P style="TEXT-ALIGN: left"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">water treatment station at the sewage treatment station (ETE) of Parque Novo Mundo, with the purpose of supplying reused water to textile companies.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In addition to investing in water reuse, we also have actions to raise customer awareness about consumption. One of the actions is Pura (Water Rational Use Program), whose goal is to reduce water use in government buildings. Nearly 2,400 buildings were targeted for actions involving both awareness and the replacement of equipment. With the resources saved, we managed to maintain water volume sufficient to supply approximately 26,000 people without the need of using new springs.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Another initiative to ensure supply is the </FONT><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Corporate Program for the Water Loss Reduction</FONT></B><FONT size=2 face="Georgia,Times New Roman,Times,serif">.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Introduced in 2009, the program received investments of R$328 million in 2012, and should receive R$ 4.5 billion in investments from 2013 to the end of the decade, including resources of the Japan International Cooperation Agency (Jica), the Brazilian Federal Savings Bank (Caixa Econ&#244;mica Federal), and the Brazilian Development Bank (BNDES), in addition to the company&#8217;s own resources.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Our billing loss ratio is currently at 25.7%. The target for 2012 was 25.2%, but it was not met especially due to the following factors, among others: i) contractual issues in the actions to prevent losses developed in the Santos coast region; ii) difficulty to replace pipes, especially in densely urbanized areas; and iii) reduced uncertainty of macro-metered volumes with the installation, in January 2012, of macro-meters at the exit of the Guara&#250; Water Treatment Station.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The company&#8217;s long-term goal for the program has been revised, and we expect to reduce the billing loss to 19% up to the end of this decade with the beginning of the execution of commercial and water network maintenance services deriving from the agreement signed with Jica in 2012. We have already invested R$ 1 billion in the program.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">EXPANSION OF SEWAGE NETWORK AND RECOVERY OF WATER RESOURCES</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Aware of its responsibilities regarding the improvement of the life conditions of the population in the state of S&#227;o Paulo and the preservation of the environment, Sabesp has been implementing structured actions to ensure universal access to basic sanitation in the area where it operates up to the end of the decade.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Today, 193 municipalities are fully covered by our water supply, and sewage collection and treatment in the State of S&#227;o Paulo. Of those, 47 received universal access in 2012. In 2012, we completed the construction of 23 sewage treatment stations, and made 240.7 thousand new connections. With that result, the sewage collection coverage ratio in our area of operation increased to 83%, and the ratio of treated collected sewage reached 77%. 38 other sewage treatment stations are being built in the inland of the state of S&#227;o Paulo, and are expected to be completed this year and next year.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-9</FONT></P>

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<P style="TEXT-ALIGN: left"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Our 2013-2020 business plan provides for 1.9 million new sewage connections. Sabesp will invest R$4.1 billion between 2013 and 2015 in the expansion of its sewage collection and treatment system. We have also participated in the program introduced in 2011 by the S&#227;o Paulo State Government to subsidize, mostly with state Treasury resources, intra-domicile works so that low-income households are able to connect their houses to the public sewage network: the &#8220;</FONT><B><I><FONT size=2 face="Georgia-BoldItalic,Times New Roman,Times,serif">Pr&#243;-Conex&#227;o&#8221; </FONT></I></B><FONT size=2 face="Georgia,Times New Roman,Times,serif">(Pro-Connection) program.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><I><FONT size=2 face="Georgia-BoldItalic,Times New Roman,Times,serif">Tiet&#234; </FONT></I></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Project </FONT></B><FONT size=2 face="Georgia,Times New Roman,Times,serif">is still the company&#8217;s key initiative for the expansion of its sewage system and improvement of bodies of water. We are currently executing the third stage of the construction works, with the purpose of raising the sewage collection coverage ratio in the municipalities of the metropolitan region of S&#227;o Paulo where Sabesp operates from the current 84% to 87%, and the percentage of sewage collected from 70% to 84%.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Investments in this stage will reach R$2 billion, and rely on resources from the Inter-American Development Bank (IDB), the Brazilian Federal Savings Bank (Caixa Econ&#244;mica Federal), and Brazilian Development Bank (BNDES). Up to 2016, when the current stage will be completed, more than 1.5 million people will have access to sewage collection, and 3 million inhabitants will be added to the sewage treatment services.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Sabesp has invested R$698 million in the third stage, R$328 of which in 2012. The beginning of the implementation of the 2.2 km Pinheiros interceptor stands out among the works of Tiet&#234; Project completed in 2012. That interceptor will complete the structure for the intercepting and moving away the sewage generated in the regions on the margins of the Pinheiros River. The whole extension of the river, on both sides, will have appropriate piping to send the effluents to be treated at the sewage treatment station of Barueri, approximately 60 km away from the river.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company is structuring the fourth and last phases of Tiet&#234; Project, with execution estimated to be carried out between 2014 and 2018 and investments estimated at US$2 billion.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In the municipality of S&#227;o Paulo, sewage expansion and water resources recovery actions are supplemented by the &#8220;</FONT><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">C&#243;rrego Limpo&#8221; </FONT></B><FONT size=2 face="Georgia,Times New Roman,Times,serif">program (Clean Stream). This is an initiative carried out together with the capital city government, involving operational and financial resources, to recover bodies of water, prevent the clandestine discharge of sewage in these waters, remove people who live on the riverside and prevent the margins from being irregularly inhabited again, and resettle these families in new homes built in more appropriate places.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The program has been in place since 2007 and in December last year it reached the mark of 116 depolluted streams. The estimate for the third stage of the works was to clean 45 streams in the capital city last year, 19 of which were cleaned up to December, and 33 will be depolluted in the first half of 2013, benefiting a total of 390,000 people in this stage. The total amount invested in this program up to 2012 reached approximately R$710.3 million, R$109.6 million of which are Sabesp&#8217;s resources.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-10</FONT></P>

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<P style="TEXT-ALIGN: left"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">To recover the quality of the waters in the springs of the Billings and Guarapiranga reservoirs, areas that are very important for the company&#8217;s activities, one of our structuring programs, called &#8220;</FONT><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Vida Nova/Mananciais&#8221; </FONT></B><FONT size=2 face="Georgia,Times New Roman,Times,serif">(New Life/Springs), provides for interventions in 43 shantytowns and precarious lots of land located at the two sub-basins, benefiting 58,000 households up to 2015. The company contributes with R$355 million to the program, which estimates total investments of R$1.3 billion, with funds also from the federal, state, municipal governments, Housing and Urban Development Company and the World Bank. In 2012, R$37.3 million were invested out of the total R$81.7 million already invested in this program.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The preservation of the Guarapiranga reservoir&#8217;s waters was strengthened with the actions of the &#8220;</FONT><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Nossa Guarapiranga&#8221; </FONT></B><FONT size=2 face="Georgia,Times New Roman,Times,serif">(Our Guarapiranga) Program. Promoted by Sabesp, the program became fully operational in 2012. It now has ten boats to collect the dirt retained in 11 eco-barriers and one boat to take the dirt collected to regular landfills. Throughout 2012, approximately 4.4 thousand cubic meters of residues that would have otherwise ended up in the reservoir were retained in these eco-barriers. A total of R$12.2 million have been invested.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The </FONT><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Onda Limpa </FONT></B><FONT size=2 face="Georgia,Times New Roman,Times,serif">(Clean Wave) program in the Santos coast region and the northern coast of the state of S&#227;o Paulo aims at providing universal access to the services up to 2016. Started in 2007, the works in the Santos coast region have already raised the percentage of sewage collected in the region from 53% to 71%, and the percentage of sewage treated from 96% to 100%, With resources from the Jica and BNDES, approximately R$1.7 billion have been invested in the program, R$135.7 of which in 2012.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Since 2011, when the main works for the collection and treatment system were completed, the company has focused on expanding the number of homes in the Santos coast region that are connected to the public sewage network. Of a total of 123,000 connections estimated in the program, 79,000 have been carried out, including 15,800 in 2012. Sabesp is currently preparing the second stage of the program, to be executed between 2015 and 2020, to provide universal access to sanitation services in the region.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Onda Limpa program is developed in the north coast, where the target is to increase the sewage collection and treatment ratios to 85% up to 2016&#8212;the ratios were 36% in 2008, and are currently at 50%&#8212;and cover 600,000 people, including residents and tourists. Total investment in the program will be of approximately R$ 500 million up to 2018. A total of R$ 125.9 million has already been invested (R$24.3 million in 2012), including Sabesp&#8217;s funds, and resources from BNDES, FGTS, and the Brazilian Savings Bank (CEF).</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The S&#227;o Paulo State Government introduced, in late 2011, the &#8220;</FONT><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Pr&#243;-Conex&#227;o&#8221; </FONT></B><FONT size=2 face="Georgia,Times New Roman,Times,serif">program (Pro-Connection), whose goal is to connect, in eight years, 192,000 homes of families with income of up to three minimum wages to Sabesp&#8217;s sewage collection system. In this program, the interconnection installation costs are fully paid by the government (80%) and by Sabesp (20%). A total of R$349.5 million will be invested in the period. In the first year, the program executed nearly 700 connections, in relevant areas for the preservation of our springs, such as the region close to the Billings reservoir. Along the coast, seven municipalities of the Santos coast region have already executed instruments of cooperation to participate in the program.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-11</FONT></P>

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<P style="TEXT-ALIGN: left"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Sabesp also has actions that focus on making the population aware of the losses caused by diffuse pollution, which generates additional operating costs and causes setbacks to the execution of sewage collection and treatment services by the company. Diffuse pollution consists of garbage and excrement produced by cats and dogs inadvertently thrown away on the streets, and even the dirt and soot produced by car engines.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">MANAGEMENT IN THE CURRENT INDUSTRY SCENARIO</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Since 2005, in a joint action with the S&#227;o Paulo State Government, Sabesp has been negotiating the continued provision of water supply and sewage services to municipalities. These services are operated based on innovative contractual arrangements that provide for the exercise of the regulation and oversight of the services by an external entity, and include the adoption of service and quality targets set in the municipal plans through public consultations and hearings.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The edition of the new basic sanitation regulatory framework (Federal Law 11,445/07), which has introduced several innovations for the contracting, provision, regulation and oversight of basic sanitation services, has proven this corporate strategy is right, improving the company&#8217;s operations in an environment regulated by several control and oversight bodies and entities, including the Regulatory Agency of Sanitation and Energy of the State of S&#227;o Paulo (Arsesp).</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">From January 1, 2007 to December 31, 2012, we executed agreements to provide services for 30 more years with 258 municipalities (including the city of S&#227;o Paulo), which accounted for nearly 70% of the company&#8217;s total revenues, including construction revenue and for 63.5% of its intangible assets. In the municipalities where the agreements have expired or are about to, the company has been negotiating the new bases for its permanence for at least another 30 years.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In the metropolitan regions, where a judicial discussion was pending a decision by the Federal Supreme Court (STF) about the ownership of the sanitation services, Sabesp and the municipalities in these regions have adopted a specific contract template, which allows for Sabesp to exercise public functions that are of the common interest of the municipalities. This template has continued to be used after the recent decision by the STF, which has attributed the exercise of metropolitan basic sanitation planning, regulation and oversight competencies to an entity to be created by the state governments and municipalities involved. The term to adapt the legislation to the decision expires within two years.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Sabesp also expanded its municipalities base through non-controlling interests in special purpose entities formed with private partners for the rendering of water and/or sewage services in Andradina, Castilho, Mairinque and Mogi Mirim. In 2012, no investment was made in these companies, according to Note 2.1 to the financial statements for the year.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The first works in Mogi Mirim were inaugurated in 2012, raising the percentage of sewage treated in the municipality from 0% to 70%. In Mairinque, water supply has increased from 88% to 97% since 2010, and sewage collection, from 66% to 71%.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-12</FONT></P>

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<P style="TEXT-ALIGN: left"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Regarding regulations, Sabesp participates in all public hearings and consultations promoted by the regulatory agency, aiming at discussing the regulation of important matters for the development of its activities and contracts. Arsesp has been publishing resolutions setting the rules for the provision of water and sewage services, which started being gradually implemented in 2009, and that should continue to be implemented in the upcoming years, with impacts mainly on commercial and operational matters, which could even involve legal disputes.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Also responsible for regulating Sabesp&#8217;s tariffs observing the industry&#8217;s guidelines and legislation, Arsesp has started a process to revise the criteria and methodology for the calculation of the company&#8217;s tariffs. Further detail on this matter is presented in the section named &#8220;Tariff Revision&#8221; of this report.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">From 2007 to 2012, Arsesp&#8217;s overseeing actions have not imposed material penalties regarding the provision of water supply and sewage services in the municipalities.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Anyway, the new regulatory requirements for the basic sanitation industry still imply great challenges, and it is not possible to predict all the effects of Law 11,445/07 and regulatory standards will have on the company&#8217;s businesses, since there are still uncertainties with regard to their implementation.</FONT></P>

<P style="TEXT-ALIGN: justify"><I><FONT color=#4182c0 size=2 face="Georgia-Italic,Times New Roman,Times,serif">Economic-Financial Sustainability</FONT></I></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">For the past five years, in line with its mission of providing public services of basic sanitation that contribute to improve health, quality of life and the environment, the company has invested on average R$2.2 billion per year in water supply and sewage services.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In 2012, the company met the investment target for the year, in line with the investments made in 2011, reaching a little more than R$ 2.5 billion.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-13</FONT></P>

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<P style="TEXT-ALIGN: left"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: center"><B><FONT color=#4f82bd size=2 face="Georgia-Bold,Times New Roman,Times,serif">CAPEX history</FONT></B><B><SUP><FONT color=#4f82bd size=2 face="Georgia-Bold,Times New Roman,Times,serif">(1)</FONT></SUP></B></P>

<DIV align=center>
<IMG border=0 src="sbs20130423-6kx14x1.jpg"> </DIV>

<P style="TEXT-ALIGN: left"><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>(1</FONT><I><FONT size=2 face=Arial-ItalicMT,Arial,Helvetica,sans-serif>) Excluding the commitments undertaken with program contracts (R$253 million, R$18 million, R$63 million, R$139 million and R$155 million, respectively in 2008, 2009, 2010, 2011 and 2012)</FONT></I></P>

<P style="TEXT-ALIGN: left"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Investments made in 2012, broken down by segment and region, are as follows:</FONT></P>

<P style="TEXT-ALIGN: right; MARGIN-BOTTOM: 0pt"><FONT size=2 face="Georgia,Times New Roman,Times,serif"><FONT face=Calibri>(R$<FONT size=2></FONT><FONT size=2>million</FONT><FONT size=2></FONT><FONT size=2>current)</FONT></FONT></FONT></P>

<DIV align=left>

<TABLE border=1 cellSpacing=0 borderColor=#004080 width="100%">



<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #004080 1px solid" bgColor=#b8cce4 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid" bgColor=#b8cce4 align=right>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid" bgColor=#b8cce4 align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>Water</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid" bgColor=#b8cce4 align=right>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid" bgColor=#b8cce4 align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>Sewage</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid" bgColor=#b8cce4 align=right>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid" bgColor=#b8cce4 align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>Total</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD align=left><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>S&#227;o</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>Paulo</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>Metropolitan</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>Region</FONT></B></TD>

   <TD align=right>&nbsp;</TD>

   <TD align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>573.1</FONT></TD>

   <TD align=right>&nbsp;</TD>

   <TD align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>802.4</FONT></TD>

   <TD align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>

   <TD align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>1,375.5</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #004080 1px solid; TEXT-INDENT: 0.002pt" bgColor=#dce6f1 align=left><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>Regional</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>Systems</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>(inland</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>and</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>coast)</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid" bgColor=#dce6f1 align=right>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid" bgColor=#dce6f1 align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>435.8</FONT></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid" bgColor=#dce6f1 align=right>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid" bgColor=#dce6f1 align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>724.3</FONT></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid" bgColor=#dce6f1 align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid" bgColor=#dce6f1 align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>1,160.1</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #004080 1px solid; TEXT-INDENT: 0.005pt" align=left><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>Total</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>1,008.9</FONT></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>1,526.7</FONT></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>2,535.6</FONT></TD></TR></TABLE><I><FONT size=1 face="Cambria-Italic,Times New Roman,Times,serif">Obs.:</FONT></I><I><FONT size=1 face="Cambria-Italic,Times New Roman,Times,serif"> </FONT></I><I><FONT size=1 face="Cambria-Italic,Times New Roman,Times,serif">Excluding</FONT></I><I><FONT size=1 face="Cambria-Italic,Times New Roman,Times,serif"> </FONT></I><I><FONT size=1 face="Cambria-Italic,Times New Roman,Times,serif">the</FONT></I><I><FONT size=1 face="Cambria-Italic,Times New Roman,Times,serif"> </FONT></I><I><FONT size=1 face="Cambria-Italic,Times New Roman,Times,serif">commitments</FONT></I><I><FONT size=1 face="Cambria-Italic,Times New Roman,Times,serif"> </FONT></I><I><FONT size=1 face="Cambria-Italic,Times New Roman,Times,serif">undertaken</FONT></I><I><FONT size=1 face="Cambria-Italic,Times New Roman,Times,serif"> </FONT></I><I><FONT size=1 face="Cambria-Italic,Times New Roman,Times,serif">with</FONT></I><I><FONT size=1 face="Cambria-Italic,Times New Roman,Times,serif"> </FONT></I><I><FONT size=1 face="Cambria-Italic,Times New Roman,Times,serif">the</FONT></I><I><FONT size=1 face="Cambria-Italic,Times New Roman,Times,serif"> </FONT></I><I><FONT size=1 face="Cambria-Italic,Times New Roman,Times,serif">program</FONT></I><I><FONT size=1 face="Cambria-Italic,Times New Roman,Times,serif"> </FONT></I><I><FONT size=1 face="Cambria-Italic,Times New Roman,Times,serif">contracts</FONT></I><I><FONT size=1 face="Cambria-Italic,Times New Roman,Times,serif"> </FONT></I><I><FONT size=1 face="Cambria-Italic,Times New Roman,Times,serif">(R$155</FONT></I><I><FONT size=1 face="Cambria-Italic,Times New Roman,Times,serif"> </FONT></I><I><FONT size=1 face="Cambria-Italic,Times New Roman,Times,serif">million)</FONT></I></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Sabesp estimates its investments will reach R$9.9 billion for the 2013-2016 period, allocated among the services presented on the chart below. These services are aimed at the actions necessary to meet the goal of being recognized until 2018, as a company that has provided universal access to water supply and sewage services in its area of operations, in a sustainable, competitive manner, with excellence in customer service.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-14</FONT></P>

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<P style="TEXT-ALIGN: left"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<DIV align=center>
<IMG border=0 src="sbs20130423-6kx15x1.jpg"> </DIV>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">It is worth mentioning that for the company to have access to the financial resources necessary to meet this goal, it is paramount that Sabesp has a good operating and financial performance. With that in mind, the company strives to develop an efficient management, including actions that aim at reducing costs through efficiency gains and more cost-effective hiring, and actively participates in the tariff revision process with Arsesp, with the purpose of setting tariffs that remunerate in an appropriate manner the services provided by the company.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The effectiveness of the strategy Sabesp has been adopting over the past years, has once again reflected on the upgrade in the Company&#8217;s 2012 rating by credit risk rating agency Fitch Ratings: the International Scale was upgraded from &#8220;BB&#8221; to &#8220;BB+&#8221;, and the National Scale rating was upgraded from &#8220;A+&#8221; to &#8220;AA-&#8221;. Standard &amp; Poors has rated the company &#8220;BB+&#8221; in International Scale and &#8220;AA+&#8221; in Brazil National Scale since December 2011.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Sabesp continues to seek funding sources in line with the maturation of investments, which is a characteristic of the sector. In 2012, R$1.6 billion were raised, as detailed below:</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-15</FONT></P>

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<A name="page_16"></A><BR>

<P style="TEXT-ALIGN: left"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><I><FONT color=#4f82bd size=2 face="Georgia-Italic,Times New Roman,Times,serif">Loans and Investment financing</FONT></I><BR><BR><I><U><FONT size=2 face="Georgia-Italic,Times New Roman,Times,serif">Japan International Cooperation Agency (JICA)</FONT></U></I></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Loan agreement for the second phase of Loss Reduction Corporate Program, amounting to &#165; 33.6 billion (corresponding to approximately R$710 million on the date of signature). This stage has investments estimated at R$1.1 billion (&#165; 52.207 billion) of which R$390 million (&#165;18.623 billion) will be the consideration of Sabesp. The loan term is 25 years, with seven years of grace period, with annual interest rates of 1.7%.</FONT></P>

<P style="TEXT-ALIGN: justify"><I><U><FONT size=2 face="Georgia-Italic,Times New Roman,Times,serif">Caixa Econ&#244;mica Federal &#8211; CEF (Federal Savings Bank)</FONT></U></I></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">58 contracts are included in the Growth Acceleration Plan II, totaling R$375.4 million, as detailed below:</FONT></P>

<UL>

<LI style="TEXT-ALIGN: justify"><FONT style="TEXT-ALIGN: justify" size=2 face="Georgia,Times New Roman,Times,serif">36 contracts to finance studies and projects, water supply and sewage works in several municipalities operated by the company. Total approximate amount is R$215 million, with interest rates indexed to TR (Reference Rate), plus 6% p.a. and management fee of 1.4% p.a. and risk rate of 0.3% p.a.. Total term is up to nine years for studies and projects and 24 years for water supply and sewage works;</FONT>

<LI style="TEXT-ALIGN: justify"><FONT style="TEXT-ALIGN: justify" size=2 face="Georgia,Times New Roman,Times,serif">22 contracts to finance the water supply and sewage works in several municipalities served by the company. The total amount is approximately R$160.4 million, with interest of TR plus 6% p.a., plus a 1.4% p.a. management fee, and risk rate of 0.3% p.a.. The total term is of up to 24 years.</FONT></LI></UL>

<P style="TEXT-ALIGN: justify"><I><U><FONT size=2 face="Georgia-Italic,Times New Roman,Times,serif">Brazilian Development Bank (BNDES)</FONT></U></I></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Loan contract included in the Growth Acceleration Plan II (PAC II), to fund the works for the expansion and optimization of the sewage systems of the municipalities of S&#227;o Paulo, Itapecerica da Serra, Embu das Artes, Carapicu&#237;ba, Osasco, S&#227;o Bernardo do Campo, and Cotia, and to prepare the Executive Project of the S&#227;o Louren&#231;o Production System, at the approximate amount of R$180.7 million and interest of TJLP (long-term interest rate) plus 1,72% p.a.. Total term is 15 years for works and eight years for the executive project.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In February 2013, a loan contract was executed to fund part of the consideration of the project for the execution of the Third Stage of the Program for the Depollution of the Tiet&#234; River, funded by the Inter-American Development Bank (IDB). The purpose of the loan contract is the installation of collectors, interceptors, collecting networks, and home sewage connections, and the expansion of the sewage treatment capacity in the metropolitan region of S&#227;o Paulo, in the amount of R$1.3 billion, and interest of TJLP plus 1.66% p.a.. The total term is 15 years, with a grace period of three years.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Financing Agreement No. 01.2.619.3.1 and Onlending Agreement No. 10/669.748-6, executed in 2002 with BNDES, have had all their financial obligations settled.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-16</FONT></P>

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<P style="TEXT-ALIGN: left"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: left"><I><FONT color=#4f82bd size=2 face="Georgia-Italic,Times New Roman,Times,serif">Capital Markets</FONT></I></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In February 2012, Sabesp concluded its 15</FONT><SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">th </FONT></SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">issue of debentures, at the total amount of R$771.1 million, in two series, and 1</FONT><SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">st </FONT></SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">series at the amount of R$ 287.3 million indexed to CDI + 0.99% p.a. and the 2</FONT><SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">nd </FONT></SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">series at the amount of R$483.8 million, with IPCA (Extended Consumer Price Index) and annual interest rates of 6.20%.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Said resources were used to settle financial commitments falling due in 2012, including the 13</FONT><SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">th </FONT></SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">issue of debentures, in the amount of R$ 600 million maturing in August and pre-paid in February.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Resources raised also were allocated to the amortization occurred in March 2012 of 50% of the 2nd series of the 11th issue of debentures, summing up R$202.5 million.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In December 2012, Sabesp completed the 16th issue of debentures in the total amount of R$500.0 million, in a single series, remunerated at CDI plus 0.30% in the first six months (the surcharge over CDI changes every six months, up to the maturity in 2015, when it will reach 0.70%). The proceeds of this funding will be used to settle financial commitments in 2012 and 2013.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Additionally, in January 2013, the company conducted the 17th issue of debentures in the total amount of R$1.0 billion, divided into three series: the first one, in the amount of R$424.7 million, maturing in January 2018, and paying CDI plus 0.75% p.a.; the second one, in the amount of R$395.2 million, paying IPCA plus annual interest rates of 4.5% , maturing in January 2020; and the third one, in the amount of R$180.1 million, maturing in January 2023, paying IPCA plus 4.75% p.a..</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The proceeds of the 17th issue will be used to settle financial commitments in 2013. In March, the company settled the 11th issue of debentures issued in April 2010, through the amortization of one third of the first series and the remaining 50% of the second series, and the early redemption of the remaining balance of the first series, which would mature in March 2015.</FONT></P>

<P style="TEXT-ALIGN: justify"><I><FONT color=#4f82bd size=2 face="Georgia-Italic,Times New Roman,Times,serif">Indebtedness analysis</FONT></I></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Most of the company&#8217;s debt (54.2%) is taken out with national or international sources, with multilateral agencies and at low cost and long terms. We use the capital markets to raise funds preferably to manage our debt.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">By the end of 2012, the company&#8217;s total indebtedness was R$9.1 billion. The adjusted total debt-to-adjusted EBITDA ratio was 2.5x, far below the 3.65 cap established in some loan agreements and debt instruments. The net debt-to-adjusted EBITDA ratio was 2.0x, strengthening the positive perception of the company&#8217;s financial health.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Foreign currency-denominated debt was 35% of the total debt. The amount amortized during the year reached R$1.5 billion, and the amount raised was R$1.6 billion.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-17</FONT></P>

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<P style="TEXT-ALIGN: left"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: left"><I><FONT color=#4f82bd size=2 face="Georgia-Italic,Times New Roman,Times,serif">Tariff Revision</FONT></I></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In order to maintain or expand our investment level and secure the universal access to sanitation services in our area of operations up to the end of the decade, Sabesp&#8217;s services must be remunerated accordingly.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In ten years, our investments have more than doubled, with no corresponding increase in revenue, a mismatch that has so far been offset by our capacity to generate capital at levels that are still sustainable.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In 2012, we sent to ARSESP the results of surveys of our asset base and Business Plan containing information on revenue, expenses and investments. This allowed for Arsesp to publish in December a Technical Note with the proposed Preliminary Initial Maximum Average Tariff (P0) and the Efficiency Gain Factor (X), which have been submitted to public consultation and hearings.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">On January 15, 2013, Sabesp submitted all its contributions to the Technical Note for Arsesp to analyze. The disclosure of the results of this stage, expected to occur on February 22, 2013, has been postponed to March 22, 2013, for the content of the discussion to be clarified by the Management Committee of the Water and Sewage Services of the City of S&#227;o Paulo, as requested by the local government of S&#227;o Paulo.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Arsesp&#8217;s appraisal of the company&#8217;s assets and the final value of the regulatory remuneration basis will now follow the stages and schedule of events determined by the agency, as follows:</FONT></P>

<UL>

<LI><FONT size=2 face="Georgia,Times New Roman,Times,serif">April &#8211; Sabesp submits a tariff structure proposal to ARSESP;</FONT>

<LI><FONT size=2 face="Georgia,Times New Roman,Times,serif">July &#8211; a public hearing is held about the final Maximum Average Tariff (P0), the Tariff<BR>Structure, and the tariff amounts for the remainder of the Second Cycle of SABESP;</FONT>

<LI><FONT size=2 face="Georgia,Times New Roman,Times,serif">September &#8211; new tariff is applied.</FONT> </LI></UL>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Additionally, in January 2013, Arsesp published the final version of the Regulatory Accounting Manual and the Regulatory Chart of Accounts to be used by the sanitation companies in the State of S&#227;o Paulo that are regulated by the agency. One of the main purposes of the manual is to determine the specific regulatory accounting information that will be applied by the regulatory agency to appraise the concession&#8217;s economic and financial breakeven.</FONT></P>

<P style="TEXT-ALIGN: justify"><I><FONT color=#4f82bd size=2 face="Georgia-Italic,Times New Roman,Times,serif">Stock Market</FONT></I></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Regarding annual performance, the Company&#8217;s shares recorded the third highest appreciation at Ibovespa, up 67.0% over 2011. Stocks closed 2012 at R$86.87, while Ibovespa was up 7.4% only. In the U.S. market, Sabesp&#8217;s ADRs were up 50.2% versus the 7.3% high in the Dow Jones index. With this performance, Sabesp&#8217;s market cap increased from R$11.8 billion in 2011 to R$19.8 billion in 2012. The number of the Company&#8217;s shareholders at BM&amp;FBovespa increased by 66.4% in the period.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-18</FONT></P>

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<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The company&#8217;s shares participated 100% at the trading sessions of BM&amp;FBovespa and had a financial volume of R$7.7 billion in 2012. In the U.S. market, the Company closed 2012 with 27.8 million ADRs outstanding on the market. The financial volume traded at NYSE in 2012 was US$6.1 billion, up 64.4% over 2011.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In 2012, the number of financial institutions that follow-up the Company&#8217;s performance and issue reports on the value of stocks and ADRs remained in line at approximately 20 institutions.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">It is worth noting that in early 2013, aiming at improving ADRs liquidity and adjust its price to the levels recommended by NYSE, Sabesp carried out a ratio change when each ADR now corresponds to one share; previously, each ADR corresponded to 2 shares.</FONT></P>

<P style="TEXT-ALIGN: center"><B><FONT color=#4f82bd size=2 face="Georgia-Bold,Times New Roman,Times,serif">Ownership structure on December 31, 2012</FONT></B></P>

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<IMG border=0 src="sbs20130423-6kx19x1.jpg">&nbsp;</DIV>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Sabesp&#8217;s shares are traded at BM&amp;FBovespa under the ticker SBSP3 and at the New York Stock Exchange, as Depositary Receipts (ADRs), under the ticker SBS. The Company still composes the main indexes of BM&amp;FBovespa and NYSE, among them the Dow Jones Sustainability Index, to which it adhered in February 2013.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-19</FONT></P>

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<P style="TEXT-ALIGN: left"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: left"><I><FONT color=#4f82bd size=2 face="Georgia-Italic,Times New Roman,Times,serif">Dividends</FONT></I></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Pursuant to the Company&#8217;s Bylaws, common shares are entitled to minimum mandatory dividend corresponding to 25% of profit for the year, after deductions determined or accepted by laws which can be paid as interest on shareholders&#8217; equity.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In 2012, Sabesp credited dividends as interest on shareholders&#8217; equity in the amount of R$578.7 million, referring to 2011, corresponding to approximately R$2.54 per common share and dividend yield of 4.9%.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Referring to 2012, the Board of Directors approved the payment of interest on shareholders&#8217; equity at the amount of R$534.3 million, corresponding to R$2.345 per common share and dividend yield of 2.7%, to be paid within 60 days after the Annual Shareholders&#8217; Meeting to approve the 2012 accounts.</FONT></P>

<P style="TEXT-ALIGN: justify"><I><FONT color=#4f82bd size=2 face="Georgia-Italic,Times New Roman,Times,serif">Debits of municipalities serviced at wholesale basis</FONT></I></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In municipalities serviced at wholesale basis, there are outstanding debits corresponding to the sale of water, with which the Company has been endeavoring efforts to recover due amounts.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">When negotiation is not possible, debits are sued at court, likewise occurred with the municipalities of Guarulhos, Mau&#225;, Santo Andr&#233; and Diadema. For the first two municipalities, some certificates of judgment debt have been already issued and await payment. For the municipality of Santo Andr&#233;, the collection suit is in progress to issue the certificates of judgment debt.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Regarding the municipality of Diadema, studies to create a new water supply and sewage service company in Diadema, where Sabesp will hold interest, were concluded and pointed out the feasibility of the operation. However, with the change in the municipal government, negotiations had to resume amending the law authorizing the creation of such company. It is not possible to anticipate when this new company will be created.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In 2012, all the municipalities mentioned above partially paid the monthly invoices issued for the sale of water at wholesale basis. It is worth noting that the municipalities of Mogi das Cruzes and S&#227;o Caetano fully paid their invoices on the respective maturity dates.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In addition to the debits related to the sale of water at wholesale basis, the municipalities of Diadema and Mau&#225; have debts with SABESP arising from the indemnity of assets due to the early resumption of the concession.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In the municipality of Diadema, the execution shall proceed through the freeze of ICMS (State VAT) product transfers destined to the municipality. Currently, the freeze of these transfers is suspended, due to the supersedeas effect attributed to the municipality&#8217;s extraordinary appeal. At the same</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-20</FONT></P>

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<P style="TEXT-ALIGN: left"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">time, the weekly pledge of 20% of Saned&#8217;s revenues has been made, allocating this amount to settle the debt related to fees owed to SABESP&#8217;s attorneys in the lawsuit.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Referring to the municipality of Mau&#225;, action was granted relief and the municipality and the Basic Sanitation of Mau&#225; Municipality (SAMA) shall payoff the debt. This court decision was upheld by Federal Supreme Court and appeals shall not apply. Sabesp started the execution in October 2012. Summons on the municipality of Mau&#225; and SAMA is awaited for payment, whose amounts still can be discussed.</FONT></P>

<P style="TEXT-ALIGN: justify"><I><FONT color=#4f82bd size=2 face="Georgia-Italic,Times New Roman,Times,serif">Consolidated Economic and Financial Performance</FONT></I></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Our business&#8217; solidity is reflected on our financial results. In 2012, the Company&#8217;s profit came to R$1.9 billion, up 58% over 2011.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Gross operating revenue from water supply and sewage collection and treatment services increased by R$624.6 million, or 7.5%, from R$8.3 billion in 2011 to R$8.9 billion in 2012.</FONT></P>

<DIV align=center>
<IMG border=0 src="sbs20130423-6kx21x1.jpg"></DIV>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Some of the determining factors for this result were the 2.4% and 3.2% increases in the billed volume of water and sewage, respectively, totaling 2.7% for both services, and the 6.83% and 5.15% tariff adjustments in September 2011 and in September 2012, respectively. The billed volumes of water and sewage, according to the usage category and region, are as follows:</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-21</FONT></P>

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<P style="TEXT-ALIGN: left"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

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   <TD width="100%" colSpan=10 align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>BILLED</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>VOLUME</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>OF</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>WATER</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>AND</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>SEWAGE</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B><B><SUP><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>(1) </FONT></SUP></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>PER</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>USAGE</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>CATEGORY</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp; &nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>million</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>m</FONT></B><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif><SUP>3</SUP></FONT></B></TD></TR>

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   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; BORDER-TOP: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#b8cce4 rowSpan=2 width="28%" align=left>&nbsp; </TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; BORDER-TOP: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#b8cce4 width="24%" colSpan=3 align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>Water</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; BORDER-TOP: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#b8cce4 width="24%" colSpan=3 align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>Sewage</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; BORDER-TOP: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#b8cce4 width="24%" colSpan=3 align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>Water</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>+</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>Sewage</FONT></B></TD></TR>

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   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; BORDER-TOP: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#b8cce4 width="8%" align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>2011</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; BORDER-TOP: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#b8cce4 width="8%" align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>2012</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; BORDER-TOP: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#b8cce4 width="8%" align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>%</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; BORDER-TOP: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#b8cce4 width="8%" align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>2011</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 16.581pt; BORDER-TOP: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#b8cce4 width="8%" align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>2012</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 15.388pt; BORDER-TOP: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#b8cce4 width="8%" align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>%</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; BORDER-TOP: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#b8cce4 width="8%" align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>2011</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; BORDER-TOP: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#b8cce4 width="8%" align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>2012</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; BORDER-TOP: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#b8cce4 width="8%" align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>%</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.001pt; BORDER-RIGHT: #004080 1px solid" width="28%" align=left><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>Residential</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>1,488.0</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>1,530.0</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>2.8</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>1,220.7</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.001pt; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>1,262.6</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.001pt; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>3.4</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>2,708.7</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>2,792.6</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>3.1</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.001pt; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="28%" align=left><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>Commercial</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>167.6</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>172.8</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>3.1</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>156.4</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.001pt; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>160.5</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.001pt; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>2.6</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>324.0</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>333.3</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>2.9</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.001pt; BORDER-RIGHT: #004080 1px solid" width="28%" align=left><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>Industrial</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>38.7</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>38.3</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0pt; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>(1.0)</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>40.5</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.001pt; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>41.6</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.001pt; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>2.7</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>79.2</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>79.9</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>0.9</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.001pt; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="28%" align=left><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>Public</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>53.1</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>54.8</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>3.2</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>41.5</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.002pt; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>42.5</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.002pt; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>2.4</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>94.6</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>97.3</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>2.9</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0pt; BORDER-RIGHT: #004080 1px solid" width="28%" align=left><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>Total</FONT></B><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>retail</FONT></B></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>1,747.4</FONT></B></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>1,795.9</FONT></B></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>2.8</FONT></B></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>1,459.1</FONT></B></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0pt; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>1,507.2</FONT></B></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0pt; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>3.3</FONT></B></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>3,206.5</FONT></B></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>3,303.1</FONT></B></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>3.0</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.001pt; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="28%" align=left><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>Wholesale</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>297.3</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>297.5</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>0.1</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>27.2</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.002pt; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>27.3</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.002pt; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>0.4</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>324.5</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>324.8</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>0.1</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.001pt; BORDER-RIGHT: #004080 1px solid" width="28%" align=left><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>Reuse</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>water</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>0.3</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>0.4</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>33.3</FONT></B></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.001pt; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.001pt; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></B></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>0.3</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>0.4</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>33.3</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; BORDER-TOP: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="28%" align=left><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>Total</FONT></B><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; BORDER-TOP: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>2,045.0</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; BORDER-TOP: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>2,093.8</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; BORDER-TOP: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>2.4</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; BORDER-TOP: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>1,486.3</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; BORDER-TOP: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>1,534.5</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; BORDER-TOP: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>3.2</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; BORDER-TOP: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>3,531.3</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; BORDER-TOP: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>3,628.3</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; BORDER-TOP: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>2.7</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" width="28%" align=left><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>(1) </FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>Unaudited</FONT></TD>

   <TD width="8%" align=left>&nbsp;</TD>

   <TD width="8%" align=left>&nbsp;</TD>

   <TD width="8%" align=left>&nbsp;</TD>

   <TD width="8%" align=left>&nbsp;</TD>

   <TD width="8%" align=left>&nbsp;</TD>

   <TD width="8%" align=left>&nbsp;</TD>

   <TD width="8%" align=left>&nbsp;</TD>

   <TD width="8%" align=left>&nbsp;</TD>

   <TD width="8%" align=left>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=10>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=10>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="100%" colSpan=10 align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>BILLED</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>VOLUME</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>OF</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>WATER</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>AND</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>SEWAGE</FONT></B><B><SUP><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>(1) </FONT></SUP></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>PER</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>REGION</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp; &nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>million</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>m</FONT></B><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif><SUP>3</SUP></FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; BORDER-TOP: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#b8cce4 rowSpan=2 width="28%" align=left>&nbsp; </TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; BORDER-TOP: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#b8cce4 width="24%" colSpan=3 align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>Water</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; BORDER-TOP: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#b8cce4 width="24%" colSpan=3 align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>Sewage</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; BORDER-TOP: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#b8cce4 width="24%" colSpan=3 align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>Water</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>+</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>Sewage</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; BORDER-TOP: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#b8cce4 width="8%" align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>2012</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; BORDER-TOP: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#b8cce4 width="8%" align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>2012</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; BORDER-TOP: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#b8cce4 width="8%" align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>%</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; BORDER-TOP: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#b8cce4 width="8%" align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>2011</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 16.581pt; BORDER-TOP: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#b8cce4 width="8%" align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>2012</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 15.388pt; BORDER-TOP: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#b8cce4 width="8%" align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>%</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; BORDER-TOP: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#b8cce4 width="8%" align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>2011</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; BORDER-TOP: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#b8cce4 width="8%" align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>2012</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; BORDER-TOP: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#b8cce4 width="8%" align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>%</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.001pt; BORDER-RIGHT: #004080 1px solid" width="28%" align=left><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>Metropolitan</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>1,150.6</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>1,181.9</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>2.7</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>976.8</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.602pt; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>1,005.7</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.002pt; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>3.0</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>2,127.4</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>2,187.6</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>2.8</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.001pt; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="28%" align=left><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>Regional</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>Systems</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>(2)</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>596.8</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>614.0</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>2.9</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>482.3</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 1.201pt; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>501.5</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.002pt; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>4.0</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>1,079.1</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>1,115.5</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>3.4</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.001pt; BORDER-RIGHT: #004080 1px solid" width="28%" align=left><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>Total</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>retail</FONT></B></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>1,747.4</FONT></B></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>1,795.9</FONT></B></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>2.8</FONT></B></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>1,459.1</FONT></B></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.601pt; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>1,507.2</FONT></B></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.002pt; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>3.3</FONT></B></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>3,206.5</FONT></B></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>3,303.1</FONT></B></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>3.0</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.001pt; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="28%" align=left><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>Wholesale</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>297.3</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>297.5</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>0.1</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>27.2</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.002pt; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>27.3</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.002pt; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>0.4</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>324.5</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>324.8</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>0.1</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0pt; BORDER-RIGHT: #004080 1px solid" width="28%" align=left><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>Reuse</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>water</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>0.3</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>0.4</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>33.3</FONT></B></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></B></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.601pt; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></B></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.002pt; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></B></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>0.3</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>0.4</FONT></TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="8%" align=right><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>33.3</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.002pt; BORDER-TOP: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="28%" align=left><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>Total</FONT></B><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; BORDER-TOP: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>2,045.0</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; BORDER-TOP: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>2,093.8</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; BORDER-TOP: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>2.4</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; BORDER-TOP: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>1,486.3</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.602pt; BORDER-TOP: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>1,534.5</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.003pt; BORDER-TOP: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>3.2</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; BORDER-TOP: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>3,531.3</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; BORDER-TOP: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>3,628.3</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; BORDER-TOP: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="8%" align=right><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><B><FONT size=1 face=Calibri-Bold,Arial,Helvetica,sans-serif>2.7</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" width="28%" align=left><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>(1)</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp; </FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>Unaudited</FONT></TD>

   <TD width="8%" align=left>&nbsp;</TD>

   <TD width="8%" align=left>&nbsp;</TD>

   <TD width="8%" align=left>&nbsp;</TD>

   <TD width="8%" align=left>&nbsp;</TD>

   <TD width="8%" align=left>&nbsp;</TD>

   <TD width="8%" align=left>&nbsp;</TD>

   <TD width="8%" align=left>&nbsp;</TD>

   <TD width="8%" align=left>&nbsp;</TD>

   <TD width="8%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" width="36%" colSpan=2 align=left><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>(2) </FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>Comprises</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>inland</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>and</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>coast</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=1 face=Calibri,Arial,Helvetica,sans-serif>regions</FONT></TD>

   <TD width="8%" align=left>&nbsp;</TD>

   <TD width="8%" align=left>&nbsp;</TD>

   <TD width="8%" align=left>&nbsp;</TD>

   <TD width="8%" align=left>&nbsp;</TD>

   <TD width="8%" align=left>&nbsp;</TD>

   <TD width="8%" align=left>&nbsp;</TD>

   <TD width="8%" align=left>&nbsp;</TD>

   <TD width="8%" align=left>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Construction revenue increased by R$239.8 million, or 10.8%, over 2011, chiefly due to higher investments in 2012.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In 2012, cost of products and services rendered, and administrative, selling and construction expenses were up 5.2% (R$392.3 million). However, the percentage of costs and expenses over net revenue reduced from 75.4% in 2011 to 73.4% in 2012. Thus, net operating revenue totaled R$10.8 billion, up 8.2% over 2011.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-22</FONT></P>

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<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV>

<A name="page_23"></A><BR>

<P style="TEXT-ALIGN: left"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: center"><B><FONT color=#4f82bd size=2 face="Georgia-Bold,Times New Roman,Times,serif">Net Operating Revenue Track Record </FONT></B><B><SUP><FONT color=#4f82bd size=2 face="Georgia-Bold,Times New Roman,Times,serif">(1)</FONT></SUP></B></P>

<DIV align=center>
<IMG border=0 src="sbs20130423-6kx23x1.jpg">&nbsp;</DIV>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Adjusted EBITDA increased by 12.2%, from R$3.2 billion in 2011 to R$3.6 billion in 2012 and the Adjusted EBITDA margin stood at 33.5%, from the 32.3% recorded in 2011. Excluding revenue effects and construction cost, the Adjusted EBITDA margin came to 42.9% in 2012 (41.1% in 2011).</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-23</FONT></P>

<HR align=center SIZE=2 width="100%" noShade>



<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV>

<!--$$/page=--><A name="page_24"></A><BR>

<DIV style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%">

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT color=#4f82bd size=2 face="Georgia-Bold,Times New Roman,Times,serif">Adjusted EBITDA and Adjusted EBTIDA Margin Track Record </FONT></B><B><SUP><FONT color=#4f82bd size=2 face="Georgia-Bold,Times New Roman,Times,serif">(1)</FONT></SUP></B></P>

<P align=center>
<IMG border=0 src="sbs20130423-6kx24x1.jpg"></P> <BR>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="50%"></TD>

   <TD width="10%"></TD>

   <TD width="10%"></TD>

   <TD width="10%"></TD>

   <TD width="10%"></TD>

   <TD width="10%"></TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 47.16pt" width="90%" colSpan=5 align=center><B><FONT color=#4f82bd size=2 face="Georgia-Bold,Times New Roman,Times,serif">Adjusted EBITDA Reconciliation (Non-accounting measurements)</FONT></B>&nbsp;</TD>

   <TD width="10%" align=left>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=6>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="50%" align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; TEXT-INDENT: 20.401pt" width="20%" colSpan=2 align=left><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>(R$</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>million</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>current)</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; BORDER-TOP: #004080 1px solid" bgColor=#dce6f1 width="50%" align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-TOP: #004080 1px solid" bgColor=#dce6f1 width="10%" align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>2008</FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-TOP: #004080 1px solid" bgColor=#dce6f1 width="10%" align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>2009</FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-TOP: #004080 1px solid" bgColor=#dce6f1 width="10%" align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>2010</FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-TOP: #004080 1px solid" bgColor=#dce6f1 width="10%" align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>2011</FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-TOP: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="10%" align=center><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>2012</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="50%" align=left><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>Profit</FONT>&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="10%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>862.9</FONT>&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="10%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>1,507.7</FONT>&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.001pt; BORDER-RIGHT: #004080 1px solid" width="10%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>1,630.4</FONT>&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.002pt; BORDER-RIGHT: #004080 1px solid" width="10%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>1,223.4</FONT>&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.003pt; BORDER-RIGHT: #004080 1px solid" width="10%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>1,911.9</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.002pt; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="50%" align=left><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>Financial</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>result</FONT>&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="10%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>973.1</FONT>&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="10%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>10.0</FONT>&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.003pt; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="10%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>379.4</FONT>&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.004pt; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="10%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>633.6</FONT>&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.005pt; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="10%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>301.4</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.004pt; BORDER-RIGHT: #004080 1px solid" width="50%" align=left><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>Depreciation</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>and</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>amortization</FONT>&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="10%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>618.2</FONT>&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="10%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>562.3</FONT>&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.005pt; BORDER-RIGHT: #004080 1px solid" width="10%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>552.2</FONT>&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.006pt; BORDER-RIGHT: #004080 1px solid" width="10%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>768.8</FONT>&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.007pt; BORDER-RIGHT: #004080 1px solid" width="10%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>740.1</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.006pt; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="50%" align=left><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>Income</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>tax</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>and</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>social</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>contribution</FONT>&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="10%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>285.3</FONT>&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="10%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>602.6</FONT>&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="10%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>662.3</FONT>&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0pt; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="10%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>497.4</FONT>&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.001pt; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="10%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>632.0</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0pt; BORDER-RIGHT: #004080 1px solid" width="50%" align=left><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>Other</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>operating</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>expenses,</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>net</FONT>&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="10%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>125.5</FONT>&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="10%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>44.4</FONT>&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 2.161pt; BORDER-RIGHT: #004080 1px solid" width="10%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>(1.8)</FONT>&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.001pt; BORDER-RIGHT: #004080 1px solid" width="10%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>90.1</FONT>&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.001pt; BORDER-RIGHT: #004080 1px solid" width="10%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>19.8</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0pt; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="50%" align=left><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>Adjusted</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>EBITDA</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B>&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="10%" align=right><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>2,865.0</FONT></B>&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="10%" align=right><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>2,727.0</FONT></B>&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.002pt; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="10%" align=right><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>3,222.5</FONT></B>&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.004pt; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="10%" align=right><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>3,213.3</FONT></B>&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.005pt; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="10%" align=right><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>3,605.2</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.003pt; BORDER-RIGHT: #004080 1px solid" width="50%" align=left><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>Adjusted</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>EBITDA</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>Margin</FONT></B>&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="10%" align=right><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>36.7</FONT></B>&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="10%" align=right><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>31.8</FONT></B>&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.002pt; BORDER-RIGHT: #004080 1px solid" width="10%" align=right><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>34.9</FONT></B>&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.002pt; BORDER-RIGHT: #004080 1px solid" width="10%" align=right><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>32.3</FONT></B>&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.002pt; BORDER-RIGHT: #004080 1px solid" width="10%" align=right><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>33.5</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.001pt; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="50%" align=left><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>Construction</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>revenue</FONT>&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.002pt; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="10%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>(1,676.9)</FONT>&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.001pt; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="10%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>(2,039.8)</FONT>&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.001pt; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="10%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>(2,130.7)</FONT>&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.001pt; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="10%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>(2,234.8)</FONT>&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.001pt; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="10%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>(2,474.6)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0pt; BORDER-RIGHT: #004080 1px solid" width="50%" align=left><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>Construction</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>cost</FONT>&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="10%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>1,650.5</FONT>&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="10%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>2,009.6</FONT>&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.002pt; BORDER-RIGHT: #004080 1px solid" width="10%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>2,081.1</FONT>&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.004pt; BORDER-RIGHT: #004080 1px solid" width="10%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>2,186.3</FONT>&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.005pt; BORDER-RIGHT: #004080 1px solid" width="10%" align=right><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=Calibri,Arial,Helvetica,sans-serif>2,423.8</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.003pt; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="50%" align=left><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>Adjusted</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>EBITDA,</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>excluding</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B>&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="10%" align=right>&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="10%" align=right>&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="10%" align=right>&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="10%" align=right>&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="10%" align=right>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.002pt; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="50%" align=left><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>construction</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>revenue</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>and</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>cost</FONT></B>&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="10%" align=right><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>2,838.6</FONT></B>&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="10%" align=right><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>2,696.8</FONT></B>&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.003pt; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="10%" align=right><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>3,172.9</FONT></B>&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.005pt; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="10%" align=right><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>3,164.8</FONT></B>&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.006pt; BORDER-RIGHT: #004080 1px solid" bgColor=#dce6f1 width="10%" align=right><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>3,554.4</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.004pt; BORDER-RIGHT: #004080 1px solid" width="50%" align=left><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>Adjusted</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>EBITDA</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>Margin,</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>excluding</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B>&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="10%" align=right>&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="10%" align=right>&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="10%" align=right>&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="10%" align=right>&nbsp;</TD>

   <TD style="BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="10%" align=right>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; TEXT-INDENT: 0.003pt; BORDER-RIGHT: #004080 1px solid" width="50%" align=left><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>construction</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>revenue</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>and</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>cost</FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="10%" align=right><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>46.3</FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="10%" align=right><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>41.2</FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="10%" align=right><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>44.7</FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="10%" align=right><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>41.1</FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #004080 1px solid; BORDER-LEFT: #004080 1px solid; BORDER-RIGHT: #004080 1px solid" width="10%" align=right><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><B><FONT size=2 face=Calibri-Bold,Arial,Helvetica,sans-serif>42.9</FONT></B>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Adjusted EBITDA (&#8220;Adjusted EBITDA&#8221;) corresponds to profit before: (i) depreciation and amortization expenses; (ii) income tax and social contribution (federal taxes levied on income); (iii) financial result, and (iv) other operating expenses, net. The Adjusted EBITDA is not a financial</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-24</FONT></P></DIV>

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<P style="TEXT-ALIGN: left"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">performance measurement according to the accounting practices adopted in Brazil, IFRS (International Financial Reporting Standard) or USGAAP (accounting principles usually accepted in the United States), nor should it be individually taken into account or as alternative to profit, as operating performance measurement, or alternative to operating cash flows, or as liquidity measurement. The Adjusted EBITDA has no standardized meaning and the Company&#8217;s definition of Adjusted EBITDA cannot be compared to those definitions used by other companies. The Company&#8217;s Management understands that the Adjusted EBITDA provides a useful measurement for the Company&#8217;s performance, which is widely used by investors and analysts to assess performance and compare companies. Other companies may calculate Adjusted EBITDA differently from the Company. The Adjusted EBITDA is not part of the financial statements.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The objective of the Adjusted EBITDA is to present an operating economic performance indicator. Sabesp&#8217;s Adjusted EBITDA corresponds to the profit before net financial expenses, income tax and social contribution (federal taxes levied on income), depreciation and amortization, and other net operating expenses. Adjusted EBITDA is not a financial performance indicator recognized by the Brazilian Corporation Law Method and should not be considered individually or as alternative to profit as operational performance indicator, or as alternative to operating cash flows or as liquidity indicator. Sabesp&#8217;s Adjusted EBITDA works as a general economic performance indicator and is not affected by debt restructuring, fluctuations in interest rates, changes in the tax burden or depreciation and amortization levels. Consequently, the Adjusted EBITDA works as an appropriate instrument for the regular comparison of operating performance. Additionally, there is another formula to calculate the Adjusted EBITDA which is applied in clauses of certain financial commitments. The Adjusted EBITDA allows a better understanding not only of the operating performance, but also the Company&#8217;s capacity to comply with its obligations and raise funds to invest in capital goods and working capital. However, the Adjusted EBITDA has some limitations preventing it to be applied as a profitability index, as it does not take into consideration other costs resulting from Sabesp&#8217;s activities or other costs that may significantly affect its profit, such as financial expenses, taxes, depreciation, capital expenditures and other related charges.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Other net operating expenses mainly refer to the write-offs of property, plant and equipment, allowance for losses with intangible assets, loss with economically unfeasible projects, less revenue from sale of property, plant and equipment, invitation to bid, indemnities and reimbursement of expenses, fines and collaterals, property lease, reuse water, Pura and Aqualog projects and services.</FONT></P>

<P style="TEXT-ALIGN: justify"><I><FONT color=#4f82bd size=2 face="Georgia-Italic,Times New Roman,Times,serif">Ten years committed to the best corporate governance practices</FONT></I></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Aware that corporate governance is vital to ensure the success of its mission, ten years ago Sabesp adhered to the BM&amp;FBovespa </FONT><I><FONT size=2 face="Georgia-Italic,Times New Roman,Times,serif">Novo Mercado</FONT></I><FONT size=2 face="Georgia,Times New Roman,Times,serif">, a listing segment with the highest level of transparency in the relationship with the market and shareholders. Sabesp was the second company to join this segment, the first mixed-capital company, a right decision when assessing its performance in the period.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In the same year, the Company&#8217;s shares started to be traded at NYSE as Level III ADR, which required the Company to adhere to the most strict corporate governance rules established by the Securities and Exchange Commission and by NYSE.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-25</FONT></P>

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<P style="TEXT-ALIGN: left"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company&#8217;s broad inclusion in the capital market contributed to improve the perception of its risk, providing access to cheaper financing rates and allowing the Company to expand its investments in expansion and in the continued improvement of sanitation services in the State of S&#227;o Paulo. The Company&#8217;s Management has improved and currently reaches high transparency and efficiency standards.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In ten years, the Company&#8217;s ADRs appreciated by 633.1% at NYSE, exceeding the Dow Jones performance, which increased by 30.5% in the period, and the U.S. dollar, which posted nominal depreciation of 17.7%. Shares increased by 509.6% at BM&amp;FBovespa, versus the 403.5% and 93.9% posted by Ibovespa and IPCA, respectively. Sabesp&#8217;s market cap almost tripled in 10 years from R$6 billion to R$17.1 billion.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">At BM&amp;FBovespa, Sabesp is part of the Differentiated Corporate Governance Index (IGC) and Bovespa Special Tag Along Stock Index (ITAG). Additionally, since 2007 Sabesp has been included in the Corporate Sustainability Index (ISE) and in the Dow Jones Sustainability Index Emerging Markets, since February 2013.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">It is worth noting that in 2012, Sabesp was ranked by the IR Global Ranking as the fifth best company in Latin America in financial reporting procedures.</FONT></P>

<P style="TEXT-ALIGN: justify"><I><FONT color=#4f82bd size=2 face="Georgia-Italic,Times New Roman,Times,serif">Corporate Governance Structure</FONT></I></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Sabesp&#8217;s corporate governance model reflects its characteristics of a mixed-capital company controlled by the State Government, whose shareholding must exceed 50% of total capital, by force of laws and exclusively comprised by common shares.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In 2012, the Board of Directors maintained the ten members elected at the Shareholders&#8217; Meeting held in April 2012, four of them are independent members according to the </FONT><I><FONT size=2 face="Georgia-Italic,Times New Roman,Times,serif">Novo Mercado </FONT></I><FONT size=2 face="Georgia,Times New Roman,Times,serif">criteria. However, in December, one member appointed by the controlling shareholder resigned.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Except for the CEO, no other executive officer composes the Board of Directors. It is worth noting that the CEO cannot hold the position of Chairwoman of the Board of Directors. Our Board of Executive Officers also remained the same throughout 2012, but in February 2013, it received the resignation of the IT, Projects and Environment Officer, Mr. Jo&#227;o Baptista Comparini. His position was taken by Jo&#227;o Paulo Tavares Papa in March 2013.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Our governance structure is represented in the chart below. Additional information about the operation of different levels composing it is available in the &#8220;Corporate Governance&#8221; section, Investor Relations area at the company&#8217;s website (which can be accessed through this </FONT><U><FONT color=#0000ff size=2 face="Georgia,Times New Roman,Times,serif">link</FONT></U><FONT size=2 face="Georgia,Times New Roman,Times,serif">).</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-26</FONT></P>

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<P style="TEXT-ALIGN: left"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<DIV align=center>
<IMG border=0 src="img_pgf27.jpg"> </DIV>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The ethical values guiding Sabesp&#8217;s actions and its stakeholders are detailed in the Company&#8217;s Code of Ethics and Conduct and its compliance is monitored by the Ethics and Conduct Committee, which relies on tools, such as the in-house Denunciation Channel, Corporate Procedure of Checking Responsibilities, Ombudsman and Call Center. The in-house channel is prepared to receive anonymous denunciations and results of investigations are sent to the Audit Committee. In 2012, 160 denunciations were recorded, 61% of which were verified and 39% are under investigation. Out of the total, 22% refer to misconduct, such as moral harassment, discrimination, persecution and unfair treatment. During this period, 27 Company&#8217;s employees or outsourced employees received penalties (1 warning, 2 suspensions and 24 dismissals).</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">According to materiality criteria, the formal procedure to assess control and identify fraud-related risks considered the most representative business units. The risks assessed allow to improving controls in the entire Company.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">To prevent irregularities in relevant processes, the Company is implementing a program to prevent corporate frauds in order to update the fraud risk auditing, adapt policies and procedures, reformulate indicators and disseminate practices to prevent corruption among employees.</FONT></P>

<P style="TEXT-ALIGN: justify"><I><FONT color=#4f82bd size=2 face="Georgia-Italic,Times New Roman,Times,serif">Management Compensation</FONT></I></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The compensation of members of the Board of Directors and Board of Executive Officers in 2012, including benefits was approximately R$3.2 million. Approximately R$1.1 million referring to variable compensation was added to that amount.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">It is worth mentioning that in August 2012, the State government enacted the decree n&#176; 58,265 which forbids the remunerated participation of political agents and public servants of direct or indirect State Management in more than two boards of directors or fiscal council of mixed-capital companies, as well as of entities directly or indirectly controlled by the State government and also forbidding the remuneration by results, eventual bonus or profit sharing. Implemented at the Company, the decree affected the compensation of only one member.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-27</FONT></P>

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<P style="TEXT-ALIGN: left"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Pursuant to the Brazilian Corporation law, the compensation to be paid to the board of directors, fiscal council members and executive officers is defined globally at the Shareholders&#8217; Meeting. At Sabesp, the policy of board member and officer compensation is set out according to the guidelines of the S&#227;o Paulo State Government, mainly based on the market&#8217;s performance and competitiveness, always subject to ratification or approval by shareholders at the Shareholders&#8217; Meeting, then the decree will be taken to the cognizance and ratification at the Shareholders&#8217; Meeting by next April.</FONT></P>

<P style="TEXT-ALIGN: justify"><I><FONT color=#4f82bd size=2 face="Georgia-Italic,Times New Roman,Times,serif">External Audit Services</FONT></I></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Referring to the relationship with independent auditors, Sabesp and the companies in which its holds non-controlling interest abide by the principles that preserve the external auditor&#8217;s independence as to not auditing his own work, not perform managerial duties and not advocate on behalf of his client. PriceWaterhouse Coopers was Sabesp&#8217;s auditor between the third quarter of 2008 and the second quarter of 2012, and Deloitte Touche Tohmatsu Auditores Independentes started auditing the financial statements as of the review of the quarterly financial information &#8211;ITR for September 30, 2012.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">KPMG Auditores Independentes has been auditing &#193;guas de Andradina and &#193;guas de Castilho as of the third quarter of 2011. PricewaterhouseCoopers Auditores Independentes has been auditing the financial statements of Aquapolo Ambiental and Saneaqua Mairinque as of October 2010 and July 2012, respectively.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Deloitte Brasil Auditores Independentes has been auditing SESAMM since August 2012, while Attend Ambiental has not contracted any audit service or independent auditor since its inception in 2010.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">During their performance period at these companies, auditors did not render services not related to external audit.</FONT></P>

<P style="TEXT-ALIGN: justify"><I><FONT color=#4f82bd size=2 face="Georgia-Italic,Times New Roman,Times,serif">Internal controls</FONT></I></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The evaluation of internal controls has been conducted on a structured and systematic basis since 2005, reference the frameworks of the Committee of Sponsoring Organizations of the Treadway Commission (Coso) and Control Objectives for Information and Related Technology (Cobit).</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Yearly, the internal control evaluation process is re-examined considering both any existence of new risks associated with the preparation and disclosure of financial statements and possible significant changes in the processes and computerized systems.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Controls, which are tested by a company&#8217;s independent unit, comprise procedures ensuring the accuracy of accounting records; the preparation of financial statements according to official rules;</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-28</FONT></P>

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<P style="TEXT-ALIGN: left"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">and proper authorization of transactions related to acquisition, use and disposal of the company&#8217;s assets.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The revision conducted on the efficacy of internal controls in 2011, in compliance with section 404 of Sarbanes-Oxley Act, was concluded in April 2012 and did not identify any relevant deficiency, as already occurred in previous years. Tests related to 2012 will be concluded in April 2013.</FONT></P>

<P style="TEXT-ALIGN: justify"><I><FONT color=#4f82bd size=2 face="Georgia-Italic,Times New Roman,Times,serif">Risk Management</FONT></I></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In order to improve the Corporate Governance practices, Sabesp has been improving its risk management process, by continuously improving the procedures to identify, measure and deal with risks, whether internal or external. We point out the in-house approval to create a specific oversight board to deal with risks, in compliance with the independence requirements. This unit will be made official after being approved by governmental authorities.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The risk management activities are in line with market requirements, the U.S. Sarbanes-Oxley Act, the Code of Best Corporate Governance Practices of the Brazilian Institute of Corporate Governance, technical standards, such as ABN NBR ISO 31000 &#8211; Risk Management &#8211; Principles and Guidelines and other procedures defined by CVM, SEC and BM&amp;FBovespa.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In 2012, relevant investments were made to train new unit&#8217;s professionals, procedures to identify and measure risks. The Company is committed to improve risk management actions with a structured focus, aligning the strategy to the processes, people, technology and expertise, aiming at managing natural uncertainties faced by organizations as a way to create value.</FONT></P>

<P style="TEXT-ALIGN: justify"><I><FONT color=#4f82bd size=2 face="Georgia-Italic,Times New Roman,Times,serif">Public Bodies&#8217; access to Information at Sabesp</FONT></I></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The federal law n&#186;. 12,527/11 (LAI), regulated by State Decree n&#186; 58.052/12, determines that bodies and entities of the Public Administration must create an unit to make available Citizen Information Services &#8211; SIC in order to serve and guide citizens, receive and manage information requests, as well as make available to the citizen information of his/her interest and the requirement to present the motives or reasons of request is forbidden.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Sabesp, in order to comply with LAI, implemented the Citizen Information Service - SIC, structuring the internal flow of information to serve citizen within the terms provided for by laws and is drafting the Table of documents, data and information, defining restrictive information, protecting business strategic information and pursuing the transparent management. Sabesp also made available at its website basic information required by laws and the software to citizen request information, according to the standards of the State Government of S&#227;o Paulo.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">These duties are linked to the Risk Management area whose main assumption is the transparency, quality of information and compliance with strategic rules of a listed company.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-29</FONT></P>

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<P style="TEXT-ALIGN: left"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: left"><I><FONT color=#4f82bd size=2 face="Georgia-Italic,Times New Roman,Times,serif">New businesses and environmental solutions</FONT></I></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Over the last years, Sabesp has been operating in new markets not only concerned with the </FONT><I><FONT size=2 face="Georgia-Italic,Times New Roman,Times,serif">stricto sensu </FONT></I><FONT size=2 face="Georgia,Times New Roman,Times,serif">rendering of water supply and sewage services but expanding its activities beyond frontiers and developing solutions that both optimize production process and contribute to the natural resources preservation.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">We maintain consulting services agreements in water rational use, business and operational management in Panam&#225; &#8211; where in partnership with Latin Consult, we provide services to 68 cities and we developed a model to be observed in that country by the local concessionaire Idaan and in Honduras, where we provide technical assistance for the water and sewage system modernization which together involve R$11.5 million.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Sabesp also develops partnerships with two state sanitation concessionaires: Casal, in Alagoas and Cesan, in Esp&#237;rito Santo. At Casal, the objective is to reduce actual and apparent water losses, helping the company to deal with supply intermittence. With interventions that started in 2009, it was possible to reduce by 50% the losses recorded in Macei&#243;. The agreement involves R$25 million and is valid until October 2014. The agreement with Cesan aims at installing and customizing the software Aqualog, developed and owned by Sabesp, in the municipality of Nova Ven&#233;cia (ES), in the amount of R$1.3 million and is close to be concluded.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Main initiatives of Sabesp Environmental Solutions Platform include the Water Rational Use Program (Pura) and initiatives to the benefit of reuse water production.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Other initiatives concerned with offering environmental solutions are the loyalty contracts signed with large customers and consumers, which ensure annual revenues of R$275 million to the company, up 18% over 2011. In 2012, 144 new contracts were signed.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In addition, the non-household sewage treatment deriving from Sabesp&#8217;s customers production processes resulted in sales of R$180 million. We also expect in 2014 to start the operations of Attend Ambiental, a partnership with Estre Ambiental destined to implement and operate the pre-treatment stations of non-household effluents and sludge conditioning in Barueri, in the metropolitan region of S&#227;o Paulo (RMSP).</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The company works together with the municipalities of Alto Tiet&#234;, in the metropolitan region of S&#227;o Paulo to implement a solid waste treatment unit destined to produce energy. Also concerned with the utilization of gas generated in the sewage treatment processes, the company will prepare jointly with Comg&#225;s, a business model which will allow to convert </FONT><I><FONT size=2 face="Georgia-Italic,Times New Roman,Times,serif">in natura </FONT></I><FONT size=2 face="Georgia,Times New Roman,Times,serif">biogas generated by Sabesp (especially at ABC and Barueri sewage treatment stations) into biomethane that can be distributed at the concessionaire&#8217;s pipeline networks.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-30</FONT></P>

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<P style="TEXT-ALIGN: left"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: left"><I><FONT color=#4f82bd size=2 face="Georgia-Italic,Times New Roman,Times,serif">Research and innovation</FONT></I></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">2012 was a special year in terms of investments in research, development and innovation (PD&amp;I). The amount invested reached R$6.3 million, well above the historical average and practically the double amount invested in previous year. This acceleration results from projects that seek new technologies for a more efficient production, optimization of the use of natural resources available and reduction of the Company&#8217;s activities impacts on environment.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">One of the levers of this expansion is the cooperation agreement signed with Fapesp (Foundation of Research Support of the State of S&#227;o Paulo), in 2009. Initially, its validity was extended until 2014, but we signed a contractual addendum to renew it until 2019. In 2012, we had a significant increase of disbursements related to these projects. Out of a total of 12 projects already approved, nine are in progress.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Also in 2012, we launched the second call for the arrangement with Fapesp. Among seven lines of investigation and research we seek to promote are the development of alternatives for treatment, disposal and utilization of sludge at water (ETA) and sewage (ETE) treatment stations; monitoring of water quality; new technologies to implement, operate and maintain water distribution and sewage collection systems; and energy efficiency.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In S&#227;o Jos&#233; dos Campos, Sabesp installed Brazil&#8217;s first research center concerned with the environmental sanitation. Eight master&#8217;s degree projects have been developed focusing on the diffuse pollution impact area in Para&#237;ba do Sul river and the development of specific service automation equipment. These projects rely on the partnership with IPEN (Energy and Nuclear Research Institute) and ITA (Technological Institute of Aeronautics).</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The company also carries out relevant actions concerned with the utilization of gases generated in the sewage treatment process, with positive impacts to reduce the greenhouse effect and the volume of waste to be discharged in sanitary landfills. In this regard, we will start at the sewage treatment station of Franca until the second half of this year, the production of biogas resulting from sewage treatment to supply 49 our fleet&#8217;s vehicles in partnership with Fraunhofer Institute in Germany. Once all biomethane production of this unit is utilized as fuel, 1,600 tonnes of greenhouse gases will no longer be released in the atmosphere every year.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Among 2012 achievements, we also point out Sabesp&#8217;s execution of an extensive technological prospect, pursuing the initiative developed in 2010. Innovative for the sanitation sector in South America, this survey helps to identify promising technologies, as well as indicates business and partnerships opportunities. Thus, the company is able to improve its prospects on the activities developed, in line with the state-of-art of the best practices effective.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">As far as the intellectual property rights protection is concerned, we have six patent proceedings and 10 software registered. One of the patents filed refers to the development of a device to wash water reservoirs capable of reducing by up to 90% the water volume spent in these operations, besides</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-31</FONT></P>

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<P style="TEXT-ALIGN: left"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">significantly decreasing the time spent. This invention was awarded with the Innovation Award, granted by our Regional Systems Executive Board.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">TAKING CARE OF THE ENVIRONMENT: TODAY AND TOMMORROW</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">As a sanitation company, Sabesp understands that contributing to environment preservation is an integral part of its management. This commitment is contained our Environment Policy, in force as of 2008, and is monitored by a committee composed of representatives of five executive boards of the company.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">We also seek to be recognized as an important sustainable development agent. In this regard, in 2012 we prepared our Sustainability Institutional Policy. We understand that sustainability is the essence of our business. Our activities have a positive impact on public health, social-economic and environmental development and on the improvement of population&#8217;s life conditions.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Among the guidelines established, Sabesp plans to build up the sustainability principles into the strategic planning, CAPEX programs and in all activities of the company, from the conception to the operation of systems. During 2012, the draft setting forth the concepts, guidelines and competencies of our future policy was submitted to public consultation and awaits the joint committee&#8217;s resolution to be implemented.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In order to continue growing on a sustainable basis, Sabesp has the Environmental Management System (SGA) at the sewage treatment stations (ETE) and water treatment stations (ETA), associated with ISO 14001 certification in part of operating units, considered strategic. When facilities were selected, Sabesp&#8217;s geographic extensiveness was considered, as well as different types of treatment processes applied, and different scales in relation to the stations&#8217; size.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">SGA is present in 62 ETEs and 3 ETAs, and 50 ETEs are certified by ISO 14001. In 2012, the system implementation started in more than 30 ETEs. We believe that by the end of 2013 SGA will be implemented in 129 stations. Over the upcoming years, the company plans to carry on the SGA implementation at its units to achieve 302 ETEs and ETAs until 2018. Since 2009, Sabesp has already invested approximately R$15 million to develop the system.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Since 2010, Sabesp has trained 300 multipliers to meet the normative requirements of ISO 14001. With the program still effective, we expect to train other 400 people by December 2013.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Sabesp takes part in the decentralized and integrated management of water resources established in the Water Resources National Policy. Our representation envisages the participation of nearly 150 employees in 21 committees of the state hydrographic basins, in three federal committees within the scope of the State of S&#227;o Paulo and in the support group to install the Federal Committee of Paranapanema river.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-32</FONT></P>

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<P style="TEXT-ALIGN: left"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">We also hold a position in the plenary and few technical chambers of the Water Resources National Council, as well as in the Water Resources State Council, in which Sabesp participates in technical chambers as representative of the Sanitation and Water Resources Department of the State of S&#227;o Paulo.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The charge for the water use &#8211; management instrument provided for in the National and State Water Resources policies which aims at promoting the rational use of water and finance programs and actions estimated in the basins plans &#8211; is under gradual implementation in the State of S&#227;o Paulo, where we are the largest individual taxpayer.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In 2012, the company paid approximately R$26.2 million for the use of water from rivers under federal domain &#8211; started in 2003 at the hydrographic basin of Para&#237;ba do Sul &#8211; and under state domain, started in 2007 in this same basin and Piracicaba, Capivari and Jundia&#237; rivers. In 2010, the collection started at the basin of Sorocaba and M&#233;dio Tiet&#234; rivers, and in 2012, at the basin of Santos coast. In 2013, probably collection will start in the following basins: Alto Tiet&#234;, Baixo Tiet&#234;, Tiet&#234;/Batalha, Tiet&#234;/Jacar&#233;, Baixo Pardo and Grande, Mogi Gua&#231;u, Pardo, Sapuca&#237; Mirim/Grande, Serra da Mantiqueira, Ribeira do Iguape/Litoral Sul, Pontal do Paranapanema and Turvo/Grande.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In relation to environmental grants and licensing, the operational complex is the purpose of Corporate Program to Obtain and Maintain Grants for the Right to Use Water Resources and Environmental License. As to the grants, the process has been gradually evolved within the prospect of completing 100% of uses filed or granted during 2013. Concerning new projects, the obtainment of licenses and grants is already part of its life cycle.</FONT></P>

<P style="TEXT-ALIGN: justify"><I><FONT color=#548ed4 size=2 face="Georgia-Italic,Times New Roman,Times,serif">Climate changes and greenhouse gas emissions management</FONT></I></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Attentive to the need of identifying any impacts on its business, Sabesp listed some of the most relevant direct climate change effects and extreme events related thereto in the execution of its mission. These are:</FONT></P>

<UL>

<LI><FONT size=2 face="Georgia,Times New Roman,Times,serif">Change in the water availability;</FONT>

<LI><FONT size=2 face="Georgia,Times New Roman,Times,serif">Changes in the extraction, production and transport of items necessary for our operations;</FONT>

<LI><FONT size=2 face="Georgia,Times New Roman,Times,serif">Elevation of the sea level with risk of physical damages and impacts on the operation of sewage facilities and increase in the frequency of extreme events.</FONT> </LI></UL>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">As part of the Greenhouse Gases Emissions Management Corporate Program which has been structured, Sabesp achieved its target of concluding in 2012, the company&#8217;s inventories of 2009 and 2010. Now we have a series with four inventories, starting with the 2007 inventory. Since then, the quantification methodologies have been improved.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Also in line with our Greenhouse Gases Emissions Management Corporate Program which has been structured, our strategy foresees to mitigate emissions, manage and mitigate climate and potential risks, converting them into business opportunities, whether through technological innovations,</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-33</FONT></P>

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<P style="TEXT-ALIGN: left"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">improvement of energy utilization of processes and increase the capacity of the company of being adjusted to the climate changes.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The implementation of a small hydroelectric power plant and the utilization of biogas generated from sewage treatment are examples of initiatives adopted by the company to mitigate risks related to energy security. Concerning the risk of reduced water availability, we point out as examples of actions in progress, the Loss Reduction Corporate Program, the Water Rational Use Program and the expansion of the planned water-reuse for urban and industrial purposes.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The renovation of the vehicle fleet continues as one of the actions we plan to reduce greenhouse gas emissions. In 2012, 105 light vehicles using flex fuel technology were replaced, with the mandatory supply with ethanol; 254 trucks equipped with engines whose technology abides by Euro-5 legislation, which establishes the reduction of emissions; 28 backhoes and 40 motorcycles. Now, the renovation of our light vehicle fleet reached the percentage of 75.3%, while in the truck fleet is 48.3%.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Another initiative is to capture carbon through actions to recover riparian forest at springs. In 2012, 30,ooo seedlings were planted. The Verde Vida project stands out, which is developed at the business unit Pardo and Grande: includes environmental education, riparian forest recovery, reforestation and mainly, actions to preserve and recover Canoas river, accounting for 80% of the water supply in Franca, and also Pouso Alegre stream. 92,000 seedlings have already been planted, 12,000 of which in 2012, all of them cultivated in the nursery at ETE Franca.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In 2012, it was not possible to proceed with our partnership plans to implement a carbon revolving fund with resources deriving from the sale of carbon credits in new plantations. The idea can be appropriately resumed.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Sabesp has been participating in the Carbon Disclosure Project &#8211; CDP Investors for the last seven years. It refers to disclose greenhouse gas emissions figures based on a questionnaire prepared by this entity, so that to standardize and organize the way how the companies report information about its business as to potential risks and climate change-related opportunities. Combined with this effort, in 2011, we joined the CDP Supply Chain, but we decided to discontinue this participation in 2012, in view of our employees&#8217; low adhesion.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In 2012, the Sustainable Public Contract State Program granted the social and environmental seal for 37 purchase specifications of Sabesp, amounting to 208 specifications. We reached 30% of the target &#8211; the certification of 700 specifications in view of the need of carrying out technical adjustments in the seal issue process required by the State Environment Department. Enacted by State Decree n&#186; 50,170/05, the seal signals to the supplying market the intention of the State of S&#227;o Paulo of adjusting its consumer profile to the sustainable development international guidelines.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-34</FONT></P>

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<P style="TEXT-ALIGN: left"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: left"><I><FONT color=#0070c0 size=2 face="Georgia-Italic,Times New Roman,Times,serif">Environmental education program</FONT></I></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Sabesp also maintains an Environmental Education Corporate Program (PEA), in which measures are developed aiming at building social values, knowledge, skills and attitudes concerned with a sustainable world. Since 2007 more than 1,000 employees were trained to disseminate the environmental sanitation culture. PEA provides guidelines to more than 100 actions and projects, among which we point out:</FONT></P>

<UL>

<LI style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Adoption of the Water Rational Use Program (Pura) at schools which in 2012, allowed to reduce by 72 million liters/month the water consumption at educational units of the municipality of S&#227;o Paulo;</FONT>

<LI style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">School visits to ETAs e ETEs, with the participation of students and teachers throughout the state. In 2012, 1,474 visits took place, and 56,456 persons attended;</FONT>

<LI style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Lectures at schools, communities and companies. In 2012, 165,948 persons attended 1,516 events.</FONT></LI></UL>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">We already promoted 31 sustainability hearings, two of them in 2012. We also conducted seven ecomobilizations in 2012, totaling 25 community efforts already made to collect waste and plant seedlings at water body margins in partnership with NGOs, civil associations and community leaderships.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In 2012, we decided to discontinue the installation of eco stations in areas nearby company&#8217;s main facilities, due to the difficulties to conciliate supply of available areas with surrounding community&#8217;s demands.</FONT></P>

<P style="TEXT-ALIGN: justify"><I><FONT color=#0070c0 size=2 face="Georgia-Italic,Times New Roman,Times,serif">Sabesp 3Rs</FONT></I></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Based on the concept &#8220;reducing, reusing and recycling&#8221;, in 2012 the selective collection program sent 372 tonnes of materials for recycling to garbage collection cooperatives. The result is 30% higher than previous year, when 286 tonnes were recorded. During the program&#8217;s activities created in 2008, approximately 75 sensibilization activities, technical visits, specific training and qualification of representatives at the company&#8217;s organizational units were conducted, gathering nearly 1,200 employees and outsourced service providers.</FONT></P>

<P style="TEXT-ALIGN: justify"><I><FONT color=#0070c0 size=2 face="Georgia-Italic,Times New Roman,Times,serif">Environmental processes</FONT></I></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Sabesp is party in few environmental proceedings within the administrative and legal scope, promoted by the Public Prosecution Office, few municipalities and non-governmental organizations. Most of lawsuits refer to the discharge of raw sewage in water bodies, indemnity due to any environmental damages caused and investment in sewage treatment system facilities.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-35</FONT></P>

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<P style="TEXT-ALIGN: left"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The company has been establishing commitments and formalizing consent decrees and litigation settlements with the Public Prosecution Office, including the resources destined for this purpose in its budgetary planning.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In October 2012, the Public Prosecution Office of S&#227;o Paulo filed a public civil action pleading the nullity of the agreement signed between Sabesp and the municipality of S&#227;o Paulo to provide basic sanitation services; the universal access to sewage collection and treatment in S&#227;o Paulo by 2018; the reduction of volume of sludge produced at ETEs and ETAs, among other aspects. The company filed a counter-draft to an interlocutory appeal in 2012, was defendant in lawsuit in March 2013 and understands that the chances of losses are remote. The lawsuit amount on December 31, 2012 was R$11.7 billion.</FONT></P>

<P style="TEXT-ALIGN: left"><I><FONT color=#0070c0 size=2 face="Georgia-Italic,Times New Roman,Times,serif">Green building</FONT></I></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The first green building certified by Sabesp should start to operate in July 2013. This is an administrative building of sewage treatment station in the municipality of Bragan&#231;a Paulista, which will allow to the municipality to have 100% sewage collected and treated.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Works were already concluded, ETE is in its pre-operational system and the green building awaits to complete the certification with the environmental sustainability seal LEED (Leadership in Energy and Environmental Design</FONT><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#193;</FONT><FONT size=2 face="Georgia,Times New Roman,Times,serif">), granted by USGBC (United States Green Building Council), in view of a set of sustainable solutions adopted.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The new building is located in a 19,000 m&#178; property, with built-up area of 391 m&#178;. More than 13,000 m&#178; remaining, i.e., 70% of total, will be occupied by green areas. The construction meets the sustainability requirements in six categories: space, water use rationalization, energy efficiency, supplies and natural resources, indoor air quality, innovation and project. We estimate that the certification of LEED seal will be granted by March 2013.</FONT></P>

<P style="TEXT-ALIGN: left"><I><FONT color=#0070c0 size=2 face="Georgia-Italic,Times New Roman,Times,serif">Reserves inside protected areas</FONT></I></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Sabesp owns and maintains areas inside conservation units, carrying out inspection and monitoring works, besides supporting biodiversity studies conducted by universities, such as the University of S&#227;o Paulo (USP). There are research spaces that can be used, including for fauna late-night observation.</FONT></P>

<P style="TEXT-ALIGN: justify"><I><FONT color=#4f82bd size=2 face="Georgia-Italic,Times New Roman,Times,serif">Solutions for sludge generated in water and sewage treatment</FONT></I></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The generation of sludge is inherent to sanitation activities. Both water and sewage treatment produce waste requiring an adequate destination, in order to potentialize the beneficial effects to the environment. This is a challenge that Sabesp has been trying to deal with and not only because society rightly claims for that but because taking care of water resources preservation and environment is strictly related to the operations of a company whose raw material is water.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-36</FONT></P>

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<P style="TEXT-ALIGN: left"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Currently, the sludge generated in our activities has as main destination the appropriate disposal in sanitary landfills &#8211; on the other hand, Sabesp treats leachate generated therein. As these areas have been depleted in big cities with low availability on the coast and inland, we have sought to develop new alternatives aiming at reducing the final volume to be disposed. The most relevant alternatives are incineration, aiming the energy utilization of waste and composting to produce soil conditioners for agricultural use. The most promising prospects lie in the sludge generated in the sewage treatment.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Among the initiatives towards this direction, we have been prepared to transform all the sludge produced at the sewage treatment station (ETE) of Lavap&#233;s, in S&#227;o Jos&#233; dos Campos, into agricultural composite as of 2013. The bidding process to contract composting services of 70 daily tonnes of sludge is under phase of conclusion and will enable the registration of authorization by the Ministry of Agriculture. This composite subject to composting was rated as &#8220;class D&#8221;, i.e., it refers to soil conditioner produced from organic source that can be used in certain types of culture, such as coffee, fruits and sugar cane. It is worth mentioning that the utilization of sludge to produce fertilizer allows to reducing by 58% the operating costs of treatment and final disposal of sludge in Lavap&#233;s. In the next years, we will start to adopt the same procedure at ETE Taubat&#233;, using 100% of sludge generated in the sewage treatment process at that unit, i.e., 30 daily tonnes.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In the metropolitan region of S&#227;o Paulo, the company plans to implement incineration units at ETE Barueri, our largest treatment station, with capacity for 9.5 thousand liters/second. The energy contained in sludge will be used as fuel in the incineration process, together with an amount of biogas produced by anaerobic digesters. The volume of biogas in excess may be injected at the gas public network.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Through the optimization of treatment process and the application of new technologies, the company also has been gaining significant results at the water treatment stations. In the eight units of the metropolis, the volume of sludge generated was reduced by 32% over the last four years. At the same time, we decreased by 10% the use of chemical products applied in the water treatment process in the metropolitan region of S&#227;o Paulo, with beneficial effects on the generation of effluents and sludge.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">It is also worth mentioning that the company has been sponsoring few lines of research, in an arrangement with Fapesp, aiming at reducing and better utilizing the sludge generated in the water and sewage treatment processes. In 2012, we sought to incentive, among other guidelines, the utilization of sludge of ETAs as input to recover sanitary landfills; the use of sludge withdrawn from stabilization pools in the sewage treatment as input to recover degraded areas; the processing of sand extracted from ETEs to be applied in civil construction.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">DEVELOPING THE CITIZENS OF THE FUTURE</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Every new year, Sabesp seeks to improve its relationship with the public, as it understands that these partners (customers, shareholders, employees, suppliers, governments and community) may help the company to build a more equitable society which promotes inclusion, citizenship and respect for human rights. These are values and practices pursued with the same efforts we seek our financial targets and sustainable growth, guided by our Code of Ethics and Conduct.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-37</FONT></P>

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<P style="TEXT-ALIGN: left"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Sabesp has been conducting its businesses according to the UN Global Pact, which gathers companies to the benefit of labor human rights, environmental protection and anti-corruption actions. The Company is partner of Ethos Institute, besides supporting and promoting the UM Millennium Eight Objectives, already integrated with our Corporate Volunteer Program. We also supported the Sustainable Planet project, led by Editora Abril.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Our greatest performance proposal is to promote population&#8217;s quality of life and strategic commitment to act as a Sustainable Development Agent. Our activities have a positive impact on public health and on the social, economic and environmental development, as basic sanitation is an essential sector of infrastructure and vital for sustainable development. With an articulated work of social and environmental responsibility, Sabesp also considerably gets close to society.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In the social environment, through the Volunteer Program, we carry out campaigns that result in the collection of tonnes of food, clothing, books and magazines, distributed to more than 200 welfare entities. We maintain partnerships with NGOs, local governments, schools, among other segments, which allow us to build a network of more than 1,200 volunteers. In the development of projects concerned with citizenship, this group devotes on average 10,000 hours of work per year in volunteer programs, helping more than 15,000 people.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Inclusion is present in several of our actions. We emphasize childhood, as we believe that good education of these citizens is essential to build a society close to our wishes. The company works in social risky areas in the metropolitan region of S&#227;o Paulo, through &#8220;Instituto Crian&#231;a Cidad&#227;</FONT><I><FONT size=2 face="Georgia-Italic,Times New Roman,Times,serif">&#8221; </FONT></I><FONT size=2 face="Georgia,Times New Roman,Times,serif">&#8211; ICC or Child Citizenship Institute, which invests in the education of minors of low-income households.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In 2012, our contribution reached R$2.7 million, allowing nearly 6,500 children and youngsters from 3.5 million households to gain education and assistance.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Sabesp is also recognized as &#8220;Empresa Amiga da Crian&#231;a&#8221; (Child Friend Company) by ABRINQ </FONT><FONT size=2 face="Georgia,Times New Roman,Times,serif">Foundation. It is a formal commitment that expresses, for instance, items of suppliers&#8217; agreements that guide the production chain, thus, preventing slave and child labor.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Sabesp has been solidary to families&#8217; afflicted search of missing children and youngsters. Every year, at least, 9,000 of these children and youngsters do not return to their home in the State of S&#227;o Paulo. The first step was to join the S&#227;o Paulo Program in search of Missing Children and Youngsters, launched by the S&#227;o Paulo State Government. Thereafter the actions came. Water bills, for instance, now disseminate this program and guide about measures to be taken to deal with this issue. Messages are disseminated through the company&#8217;s website, at the corporate portal, employees&#8217; paychecks and service bureaus.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">For youngsters between 14 and 21 years of age, we maintain a partnership with the National Service for Industrial Apprenticeship (Senai-SP), giving them a chance of working for the company to gain professional qualification. This initiative gave opportunities to 2,300 youngsters, of which 560 composed the company&#8217;s staff in 2012.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-38</FONT></P>

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<P style="TEXT-ALIGN: left"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: left"><I><FONT color=#4f82bd size=2 face="Georgia-Italic,Times New Roman,Times,serif">Relationship with customers</FONT></I></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The continued improvement of services rendered is part of a new strategic planning (2011-2020) and one of the major components of our success. We understand that transparency of information and the improvement of tools with which we strengthen our relationship with community will base our objective of continuously servicing our customers with excellence.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In 2012, the company implemented the water and/or sewage bill in braille for the blind and visually impaired. This new service results from a partnership with the Department of Impaired People Rights. The bill was developed from 400 interviews with blind people, wherein they pointed out their needs. As of 2013, the clients registered will also receive the braille version of documents, such as the annual report on water quality, the statement of annual settlement of debts and the adhesion contract.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Virtual Branch, available at the company&#8217;s website, was also improved to allow the digital inclusion of the blind and visually impaired. Since April, the channel has been fully accessible, allowing users to check debits, request a second copy and check the bill statement, among other functionalities. In 2012, it was not possible to make available at the Virtual Branch 80% of most requested services by customers, but target is expected to be achieved as of the second half of 2013.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The improved relationship with our customers also can be seen in our call center, where 100% of our calls are made with a maximum waiting time of 60 seconds. Sabesp provides on-site services at 391 agencies and service bureaus, 65 in the metropolitan region of S&#227;o Paulo and 326 in inland and coast of S&#227;o Paulo. In the metropolitan region of S&#227;o Paulo, branches&#8217; business hours now are different, effective as of August. In compliance with Arsesp&#8217;s resolution, the business hours were established observing each region&#8217;s profile.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Another action destined to strengthen customer relationship was to extend to 100% of municipalities operated by Sabesp the services through TACE - Service Technician for External Customer. Currently, municipalities rely on measurement, issue and checking of water and/or sewage services consumption at the customer&#8217;s domicile. Technicians are also qualified to provide clarifications and guide the customer, who does not need to travel to a service bureau.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Travel can also be avoided with the consolidation of process that refunds or charges automatically in future bills the amounts overpaid or underpaid. Monthly, the company corrects credits or debits in nearly 30,000 bills.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The concern with social inclusion can be seen in the action of making the &#8220;social tariff&#8221; available, through which the low-income population can have access to sanitation services, with relevant gains in these communities&#8217; quality of life. This benefit is regulated by Arsesp and assists households earning up to three minimum wages, besides observing dwelling size criteria and energy consumption. Currently, 280,000 domiciles gain this benefit, compared to 242,000 in 2011. It is worth mentioning that the figure mentioned in the 2011 Sustainability Report was misunderstood.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-39</FONT></P>

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<P style="TEXT-ALIGN: left"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Sabesp&#8217;s social tariff is one of the lowest tariffs practiced by state sanitation companies, with a reduction of approximately 64% in the regular residential tariff.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">We maintain in progress the Project to Regularize, Integrate and Transform Irregular Areas (Parit&#225;), implemented in the east zone of the metropolitan region of S&#227;o Paulo. In 2012, 720 water connections were regularized in ten areas irregularly occupied; between 2008 and 2011, other 51 areas have been regularized. Considering the results of the past five years, approximately 20,000 inhabitants have been assisted. These actions also enable to decrease annual losses of 2.7 million m</FONT><SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">3 </FONT></SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">water, which the Company deems strategic, as it operates in areas with strict water scarcity.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Also in order to assist deprived areas, in September, the company signed an arrangement with the local government of S&#227;o Paulo to install fire hydrants in water distribution networks nearby communities in order to assist firemen in fires. Sabesp had already implemented two hydrants at the S&#244;nia Ribeiro community, in Jardim Aeroporto, which worked as a pilot project. The installation of hydrants is expected in 50 settlements, in four stages. Planning and execution of works will occur according to the actions required by municipality.</FONT></P>

<P style="TEXT-ALIGN: justify"><I><FONT color=#4f82bd size=2 face="Georgia-Italic,Times New Roman,Times,serif">Surveys and satisfaction</FONT></I></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Sabesp has been annually conducting satisfaction survey with its customers since 2004, always applying same methodology, which enables the comparison between different business units in different periods. Our objective is to improve services rendered to our customers from results obtained. In 2012, the overall satisfaction level in relation to the company stood at 89%, three percentage points lower than previous year. We believe that the maintenance of good results is mainly due to quality and regularity of water supplied by the company: 90% of 5,862 interviewees said they were &#8220;satisfied&#8221; or &#8220;very satisfied&#8221; with services.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Sabesp also conducted satisfaction surveys in each of the municipalities with which it maintains the program contract. Surveys are carried out every two-year anniversary. In 2012, surveys were conducted in 198 cities. Results guide the improvement of our services. Surveys are disclosed to the public, reinforcing our commitment to transparency and continued improvement of services rendered.</FONT></P>

<P style="TEXT-ALIGN: justify"><I><FONT color=#4f82bd size=2 face="Georgia-Italic,Times New Roman,Times,serif">Ombudsman</FONT></I></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Sabesp&#8217;s Ombudsman expanded its structure and the Call Center staff. This investment enabled to promptly reply almost 100% of phone calls, nearly 99% within one minute &#8211; and according to our evaluation, resulted in the significant reduction of customers seeking for services at Sabesp&#8217;s outdoor institutions, with com notorious quantitative and qualitative gains for the company&#8217;s image.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">After closing 2012 results, we may quote the 45% decrease in total customers who complained through the Regulatory Agency of Sanitation and Energy of the State of S&#227;o Paulo - Arsesp. We also verified an 18% reduction in the number of customers who sought Procon, consumer defense state agency. We also saw a 3% decrease in the number of customers who sought the Digital Civil Special</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-40</FONT></P>

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<P style="TEXT-ALIGN: left"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Court (JEC), which reveals the successful partnership between the company and JEC. The pursuit of excellence in servicing our customers may be attested by the fact that this is the third consecutive year that Sabesp is outside the ranking of top 50 companies with the highest number of complaints released by Procon.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The market&#8217;s recognition occurred through the &#8220;2012 Brazil Ombudsmen Award&#8221; promoted by </FONT><I><FONT size=2 face="Georgia-Italic,Times New Roman,Times,serif">Consumidor Moderno </FONT></I><FONT size=2 face="Georgia,Times New Roman,Times,serif">magazine. This award gathered a jury selected by the Brazilian Association of Company/Customer Relations - Abrarec and by the Brazilian Association of Ombudsmen &#8211; ABO. This initiative ratified the quality of the service model announced by Sabesp&#8217;s Ombudsman area, which won all the categories evaluated by the award: &#8220;10 best ombudsmen in Brazil&#8221;, &#8220;Three outstanding ombudsmen&#8221; and &#8220;Top 3 Ombudsmen in 2012&#8221;.</FONT></P>

<P style="TEXT-ALIGN: justify"><I><FONT color=#4f82bd size=2 face="Georgia-Italic,Times New Roman,Times,serif">Relationship with employees</FONT></I></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Sabesp is proud of having in its staff, employees whose qualification is benchmark in the basic sanitation sector. The retention of these professionals in a competitive market and in full ascension, maintains the company in an ongoing pursuit of people management best practices.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Sabesp currently has 15,019 employees ruled by Consolidation of Labor Laws (CLT). Male employees are the majority (80%), who completed secondary school (49%), white ethnic group (83%), over 40 years of age (71%). Average period of services rendered to the company is 17 years. Sabesp relies on service providers when necessary and under these conditions, approximately 7,372 professionals. In addition, we have 888 trainees and 560 young apprentices, who combine the opportunity of working and taking qualification courses.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The building of the fairer and more sustainable society we seek necessarily means valuing diversity and social inclusion. Sabesp complies with Federal Decree n&#186; 3,298 of 1999, which determines to set aside 5% of vacant positions offered in the public selection processes for impaired people. In 2012, we had 64 job positions under these conditions, 69% physically-impaired, 22% hearing-impaired and 9% visually-impaired employees. We also have been maintaining since 2005, an agreement with the Avape &#8211; Association Valuing People with a Disability, through which 106 impaired people work in our public service bureaus and they receive over 108 hours of previous training.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Sabesp adopts a set of benefits that contribute to improve quality of life and well-being of its employees, enabling a greater performance and rationalization of benefits management. The benefits package adopted by the company envisages: benefits card &#8211; staple basket and arrangements with supermarket and drugstores and meal card. These benefits cover all employees, regardless of working hours system or position, gender or ethnic group. Only the apprentices comply with specific laws. Employees with child custody receive day-care assistance reimbursement or utilization of the company&#8217;s day care center for children between 6 months and 6 years of age (incomplete). The company provides reimbursement of expenses to those employees having children with special needs for treatment at specialized institutions and twice the amount of day-care assistance, without limit of age. Employees under leave due to sickness allowance or accident whose salary is above the maximum amount paid by INSS (National Institute of Social Security), are automatically granted an addition to salary for a period of up to six months.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-41</FONT></P>

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<P style="TEXT-ALIGN: left"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In addition to these benefits, through Funda&#231;&#227;o Sabesp &#8211; Sabesprev, the company subsidizes the health and private pension plans of all its employees. In 2012, the company contributed with 1.8% of the monthly payroll to its private pension plan.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">By the end of December 2011, Sabesp signed an agreement with employees&#8217; unions in order to change their pension plans. The proposal foresees other incentives for those who migrate from Defined Benefit Mode (Basic Plan) to Defined Contribution (Sabesprev Mais Plan). It also includes changes in risk benefits. With this agreement, we expected to deal with the technical deficit of the Basic Plan, estimated at R$557 million. Changes, however, could not be implemented, since the court did not judge the injunction granted in 2010 to a lawsuit that suspended migrations to Sabesprev Mais Plan. In September 2012, the judge in charge of the case ordered an accounting expert examination. An expert was designated in early 2013.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Referring to Sabesprev health plan, in 2012 the National Agency of Supplementary Health issued a Normative Resolution ruling the supply of health insurance plan to former employees and retirees, which suspended the works of the same commission that was working to establish proposals to improve insurance coverage. The studies will resume in 2013.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Aiming at &#8220;Building a work environment with productivity, quality of life and well-being, contributing to decrease absenteeism and improve the organizational climate&#8221;, the &#8220;Programa Viver Feliz&#8221; (Living Happy Program) in 2012 carried out actions related to food reeducation and physical activity, since obesity and sedentariness were identified as main risk factors to employees&#8217; health.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Sabesp gave a qualitative leap in achieving one of its corporate guidelines: &#8220;Human Capital as competitive strength&#8221;. The company was committed to pursue the people management that allows to restructuring the organization according to its needs, qualifying it to new challenges, besides awarding performances. As main people management projects, we point out in 2012, the implementation of the new Career and Salary Plan (PCS), the Evaluation of Competencies and Performance system, the Managerial Excellence Program, besides the automatic replacement of employees. For the company to be competitive and retain its talents, it sought to award the professional development, by establishing the meritocracy, and salaries compatible with the market, with additions in remunerations at the beginning and at the end of careers. Contributions were made to budgetary resources to promotion, which allows us to consider a greater number of employees.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Sabesp also implemented a new Evaluation of Competencies and Performance System developed so that managers may diagnose their units, thus allowing to assessing employees&#8217; performance and competencies and outline development commitments. The company also relied on the immediate hiring of candidates approved in competitive civil-service examination.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">We leveraged the development of our leaderships with the implementation of the Managerial Excellence Program, encompassing development activities articulated by the conducting wire of results-oriented management: on-site course with curriculum framework concerned with several business management segments, lectures with renowned professionals, evaluation of managerial</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-42</FONT></P>

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<P style="TEXT-ALIGN: left"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">profile and coaching. During 2012, we developed 240 leaders of five executive boards. Over the next two years, the program will be extended to all employees holding leadership positions.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Organizational Climate Management perception was evaluated by 14,185 employees in their own competencies and performance evaluation process, who gave grades from zero to five for the following aspects: work environment&#8211; 4.27; communication&#8211; 3.99; work conditions &#8211; 3.91; institutional aspects &#8211; 3.99; activities &#8211; 3.92 and recognition/appreciation &#8211; 3.27.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">A more comprehensive census survey will be conducted besides this Climate perception in 2013, firmly aiming at being recognized in a near future as one of the best companies to work for.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Sabesp incentives and supports its employees to participate in professional entities and associations, as a way of fully exercising their rights, besides promoting the personal development and improving the organizational climate. All our employees are free to be members of an association, to be represented by Unions which is covered by collective bargaining agreements. The company conducts negotiation processes with responsibility and transparency and value a health dialogue with Union entities. They also hold meetings at any time to discuss reasonable proposals which aim at meeting employees&#8217; expectations and maintaining good organizational climate, observing the limit of its financial capacity and governmental guidelines. In 2012, no situation has been seen that this free right of association and negotiation has been under risk.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Yearly Sabesp holds negotiations with five main Unions that represent the majority (90%) of its employees: Sintaema, Sintius, Seesp, Sasp and Sintec. It is worth mentioning that 80% of our employees are voluntary members of each of these Unions</FONT><I><FONT size=2 face="Georgia-Italic,Times New Roman,Times,serif">. </FONT></I><FONT size=2 face="Georgia,Times New Roman,Times,serif">The collective bargaining process of 2012/2013 took place in May and involved main Unions and resulted in 6.17% adjustment to payroll and benefits and in the establishment of the Profit Sharing Program (PPR). It is worth mentioning that as agreed with Unions in the 2011 collective bargaining agreement, on April 26, 2012 the final payment related to the fulfillment of targets was made. The amount distributed was R$53 million, including 100% of employees.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In 2012, 11,348 male employees and 2,837 female employees had their performance and competencies evaluated. Other 834 employees were not evaluated due to the following reasons: retirement due to disability, employees hired less than 3 months, or those working for other bodies. 1,873 transfers of personnel were made, including promotions, reallocations, designation and exclusion of job positions.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Sabesp complies with the Brazilian laws, concerned with employees so that changes that affect their work conditions do not occur. In the event of changes in the processes that would impact labor relations, the company previously discuss this issue with employees&#8217; representatives</FONT><STRIKE><FONT size=2 face="Georgia,Times New Roman,Times,serif">.</FONT></STRIKE></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">We know that the sustainability of our business relies on people who will hold leadership positions at the company in the medium and long terms. This is even more fundamental when we know that 35% of our managers will be entitled to retirement in the next five years. In this regard, in 2012 we trained 39 professionals in the Succession and Career Program. We also started the training of other 45 people with essential and potential competencies to become leaders at Sabesp. The development</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-43</FONT></P>

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<P style="TEXT-ALIGN: left"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">process includes MBA, coaching, evaluation, language and improvement courses nationwide and internationally, in business&#8217;s priority issues.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Sabesp is one of the pioneers in corporate education in Brazil with its Corporate University, implemented in 2001 to qualify leaderships and employees at all levels. The university&#8217;s investments in training are approximately R$12.8 million and they privilege courses mainly concerned with sustainability leadership, corporate governance, environment, social responsibility, quality, health and safety.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In 2012, the company strongly invested in training activities related to the hygiene, occupational safety and medicine, including human rights aspects. 25,000 hours were recorded in social responsibility training, with the attendance of over 4,000 employees. In addition, safety and occupational medicine programs, which also contain an issue related to human rights included 42,000 attendances, totaling 134,000 hours. The company also endeavored efforts to improve the qualification of its professionals, subsidizing graduate course, MBA, technical and specialized courses and language courses, through partnerships with renowned institutions on the market. In addition, agreements with over 135 educational institutions providing discounts of up to 40% for employees and legal dependents in undergraduate, graduate courses, primary and secondary schools, technical school, elementary school, language school, high school equivalency education and literacy program.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The objective of the company&#8217;s occupational health and safety management is to ensure actions that promote the development of the prevention culture at the company, as well as the improvement of work conditions, adding quality of life to employees and service providers.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Sabesp&#8217;s Occupational Health and Safety Management System is certified by OHSAS 18001, comprising 72 establishments within the scope of services and works including digging and restricted areas executed at public areas, being recertified in 2012 by </FONT><I><FONT size=2 face="Georgia-Italic,Times New Roman,Times,serif">Bureau Veritas Certification</FONT></I><FONT size=2 face="Georgia,Times New Roman,Times,serif">.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Out of total employees, 25% of them work in formal health and safety committees and include activities such as: systematization, monitoring and specific programs. In particular, we point out the efforts and commitment of our 4,000 CIPA (Internal Commission of Accident Prevention) members, members of the fire brigade and professionals of Specialized Services in Safety Engineering and Occupational Medicine.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Occupational health and safety programs developed have obtained gradual reduction in frequency and severity of accidents. Most frequent accidents are related to traffic (28%), falls (24%) and crash against moving or fixed objects (18%). The human behavior (68%) is the main factor of accidents due to confidence in excess and the failure to comply with safety procedures. In 2012, we invested nearly R$12 million in accident prevention. We point out the programs: CIPA in Action (identification of 1,047 unsafe conditions with 75% concluded); Safety Campaign Grade 10 (3,904 inspections carried out); Health and Occupational Safety Qualification (40,000 attendances) and Minute of Prevention (2,460 events with 39,338 attendances); &#8220;Campanha Voc&#234; no Tr&#226;nsito&#8221; (You in the Traffic) Campaign: Motorcyclist accident prevention; Occupational Health Physician Control</FONT></P>

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<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">(11,645 physician examination); Immunization Campaign (11,343 employees immunized against influenza</FONT><FONT color=#333333 size=2 face="Georgia,Times New Roman,Times,serif">).</FONT></P>

<P style="TEXT-ALIGN: justify"><I><FONT color=#4f82bd size=2 face="Georgia-Italic,Times New Roman,Times,serif">Corporate management</FONT></I></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The year of 2012 was relevant for Sabesp to consolidate its path towards corporate sustainability.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">We seek to enhance transparency and reliability of our in-house management. Thus, we created the Sabesp Corporate Integrated System (SIES), to increase the reliability of processes and reduce costs. SIES will combine in the same platform the financial, accounting, human resources, legal, procurement/bidding areas. Known from the Enterprise Resourcing Planning (ERP), the integrated system will increase the efficiency of the company&#8217;s operations, thus allowing to speeding up the decision-making process.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The implementation of the SIES project has already started and must be concluded within 40 months. The process will occur in two phases. The administrative and financial macro processes must be implemented by the first quarter of 2014; and commercial macro processes by the end of same year.</FONT></P>

<P style="TEXT-ALIGN: justify"><I><FONT color=#4f82bd size=2 face="Georgia-Italic,Times New Roman,Times,serif">Supplier relations</FONT></I></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Suppliers relations are guided by ethics, transparency and social and environmental criteria, reason that we encourage the companies with which we maintain business relations to adhere to the managerial practices and reduction of greenhouse gases emissions. At our electronic bidding portal, available in our website, the company&#8217;s bidding procedures are fully disclosed, ensuring suppliers equal participation conditions. We are the first government company to roll out an electronic procurement process in Brazil. Besides reducing costs, this system offers to its suppliers and population a greater transparency, efficiency and agility. During 2012 1,869 electronic trading sessions occurred, totaling R$1.6 billion, with R$296 million savings for the company&#8217;s treasury.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Sabesp promotes the participation and contracting of local suppliers in the regions where it operates. Our business units have their own budget and independence to contract on a decentralized basis.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">As part of the compliance with a broad peripheral legislation on contracting, a special treatment is also assured to small-sized companies and cooperatives, also encouraging the participation and contracting of local suppliers. In 2012, this participation, only considering contracting due to exemption of bidding by value and invitation, reached 35%.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Sabesp also discloses to the market as much as possible its procurement planning, aiming at stimulating competition. In this regard, we prepared the manual &#8220;Bidding Guidelines in Public Procurements&#8221;, available on our website( </FONT><U><FONT color=#0000ff size=2 face="Georgia,Times New Roman,Times,serif">www.sabesp.com.br</FONT></U><FONT size=2 face="Georgia,Times New Roman,Times,serif">) where we establish the general guidelines to increase the number of suppliers and promote greater competition. Pursuant to State Decree n&#176; 53,336/08, Sabesp also discloses its Sustainable Public Contract Report, which lists our main social and environmental actions and good practices applied to our supply chain.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-45</FONT></P>

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<P style="TEXT-ALIGN: left"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Social and environmental aspects are also included in the public bidding rules and draft agreements, pointing out participation conditions: interdicted companies due to environmental crimes are prohibited from participating in Sabesp&#8217;s bidding processes pursuant to Article 10 of Law n&#186; 9,605/98; restraints to minor children labor; declaration of non-utilization of workforce similar to forced or compulsory labor, in any of its forms, in its production chain; only wood products and byproducts of exotic or native origin deriving from legal sources will be utilized in the execution of engineering works and services, pursuant to State Decree n&#176; 53.047/08; Normative Guideline for Qualification of Suppliers who are committed to environment and its surrounding. It also requires the compliance with local environmental laws through installation and operation licenses issued by environmental authorities. In addition, it assesses the products toxicological risks, so that to ensure safety of use both at water treatment stations and for end consumer.</FONT></P>

<P style="TEXT-ALIGN: justify"><I><FONT color=#4f82bd size=2 face="Georgia-Italic,Times New Roman,Times,serif">Investor relations</FONT></I></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Our Investor Relations area acts with transparency to provide clarifications, solve doubts about issues referring to the company, besides making the top management aware of the market&#8217;s demands. Therefore, we democratize the information so that to allow all stakeholders to have conditions to make decisions with the same level of knowledge.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">During 2012 the company participated in 11 conferences and roadshows in Brazil and abroad, besides dozens of individual meetings at our head offices. The quality effect of this relationship was evidenced, for instance, in the debentures offering that took place in January 2013, when demand for debentures reached approximately four times the tendered amount. The tariff revision that has been developed by the Regulatory Agency was one of the great reasons for the meetings held in 2012.</FONT></P>

<P style="TEXT-ALIGN: justify"><I><FONT color=#4f82bd size=2 face="Georgia-Italic,Times New Roman,Times,serif">Government relations</FONT></I></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">We seek the excellence in the dynamics with governments. Our interfaces with the public sector comprise three political and governmental levels (federal government, states and municipalities), their agencies and entities. We cooperate in the process to formulate and implement sector&#8217;s government policies and others of relevant social interest, towards improvement of quality of life to which the basic sanitations is a determining factor.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Within the federal scope, in 2012, we participated in the public consultation aiming the proposal for the Sanitation National Plan, and also, with entities representing the sanitation sector we sought to reduce the high tax burden incurred on the water and sewage services. In 2012, Sabesp paid R$1.34 billion as income tax, Pasep, Cofins (taxes on revenue) and CSLL (social contribution on net income), which accounts for nearly 53% of investments made in 2012. Within the state scope, we participated in several programs and definition of guidelines for the sanitation sector, aiming at speeding up the execution of services universalization target. We also set aside resources for actions supported by the state government, such as support to culture and sports, based on tax incentives.</FONT></P>

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<P style="TEXT-ALIGN: left"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The dialogue with municipalities is intense taking into account the conditions of our major customers. We seek to be aware and solve local demands, we take part in main discussion forums and we support programs and initiatives in the environmental, health, tourism and cultural areas.</FONT></P>

<P style="TEXT-ALIGN: justify"><I><FONT color=#4f82bd size=2 face="Georgia-Italic,Times New Roman,Times,serif">Community relations</FONT></I></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Sabesp pursues the support of educational activities concerned with customers, suppliers and communities. We have been standing out in training for the rational use of water and environmental education. In 2012, we technically and financially supported a healthy competition idealized by Sagarana Comunica&#231;&#227;o. Employees and dwellers of 15 residential buildings in the district of Moema, south area in the city of S&#227;o Paulo, participated in the &#8220;Condominium Competition&#8221;, the main challenge of which was to save water. During two months &#8211; June and July&#8211; the efforts of 15 participating condominiums allowed to save 1,894,822 liters of water, corresponding to nearly 190 tankers of 10,000 liters each. The Ponte di Rialto condominium won the competition, which saved 200,000 liters of water, reducing by 14% the water consumption.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Sabesp also works with communities in partnership with local governments. Programs concerned with low-income population include technical and social works and aim the social, economic and environmental sustainability of projects, which include the community&#8217;s participation and the environmental education, observing the characteristics of works and the profile of benefited population.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">It is worth mentioning the methodology called Cooperative Governance, developed by the Brazilian Center of Analysis and Planning (Cebrap) utilized, for instance, in programs such as &#8220;C&#243;rrego Limpo&#8221; (Clean Stream) by Metropolitan Executive Board. In this approach, social and environmental projects are maintained with the participation of all stakeholders and beneficiaries are monitored and supported by visits of teams related to the company&#8217;s social responsibility. In the metropolitan region of S&#227;o Paulo, Sabesp also develops the program called &#8220;Agente da Gente&#8221; (People&#8217;s Agent) &#8211; a Community Participation Program, through which we establish an effective communication channel among our 40 technicians and local community leaders. Together, they work to involve area residents, transforming them into environmental consciousness-raising multipliers.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The company continuously seeks means of approaching professionals of its operational area in the communities operated. One of the issues has been to provide services through its own labor, a model adopted by the Regional Systems Executive Board. Referred to as &#8220;Gente que Faz&#8221; (People Who Works) also deals with the strategy aiming at valuing the staff and add value to the company&#8217;s results.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The company is open and seeks to establish new relationships with stakeholders in several sectors, but adopts criteria to focus these partnerships, aiming at contributing to Sabesp&#8217;s business and mission. Thus, the evaluation for sponsorships, institutional support and cooperation agreements is guided by the following criteria: (i) privilege entities/head offices/performance in operated basis; (ii) initiatives related to water and sustainability (example: aquatic sports); (iii) do not exclude and allow full social participation; (iv) credibility, track record of activities and compliance with</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-47</FONT></P>

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<P style="TEXT-ALIGN: left"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">applicable laws for the granting of support by state-owned companies. Agreements are also signed through bidding process with Oscips, NGOs and universities for ecosocial projects, pursuant to Law n&#176; 8,666/93.</FONT></P>

<P style="TEXT-ALIGN: justify"><I><FONT color=#4f82bd size=2 face="Georgia-Italic,Times New Roman,Times,serif">Incentive to culture and sports</FONT></I></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Sabesp has been making efforts to offering tax incentive to environmental, social, cultural and sports projects, with emphasis on environment, in line with social responsibility principles, incentive to culture and well-being of the community. We believe that practice social and environmental responsibility is to respect life, in its most varied needs.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">One of our actions is &#8220;Sabesp para quem tem sede de cultura&#8221; (Sabesp for those yearning for culture), through which the Company supports projects related to movies, literature, fine arts, music, dance, theater, circus and preservation of cultural heritage. In 2012, R$13.9 million were invested, R$4.6 million of which are part of the S&#227;o Paulo Movies Incentive Program, where 15 movies and documentaries were selected. Movies were selected by the State Department of Culture and receive funds that Sabesp makes available through Audiovisual laws. As required by Sabesp, as of 2012, each production started to make available an adapted copy for those visually and hearing impaired, through subtitles and audio-description, an initiative of which Sabesp is pioneer.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Since 2004, when the company adhered to the program, 141 movies had already been sponsored, which allows the company to be recognized as the company that most invests in movies in the State of S&#227;o Paulo and one of the three largest sponsors of the throughout the country. Another initiative is the project &#8220;Escola no Cinema&#8221; (School goes to the Cinema), destined to improve the relationship between students and teachers: 20,000 students already watched commented sessions at &#8220;Cine Sabesp&#8221;, one of the recent movie streets in the city of S&#227;o Paulo and currently supported by the company. In 2012, this program received 5,000 children.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">We considered relevant to have contributed to launch the &#8220;Guia Online de Acessibilidade Cultural&#8221; (Online Guide of Cultural Access), which brings information about cultural public equipment available in the capital city of S&#227;o Paulo. Prepared by Mara Gabrilli Institute in partnership with the Culture State Department, this guide lists </FONT><FONT color=#202020 size=2 face="Georgia,Times New Roman,Times,serif">186 establishments, among theaters, museums, cultural centers, house events, libraries and cinemas, amongst them, </FONT><FONT size=2 face="Georgia,Times New Roman,Times,serif">Cine Sabesp</FONT><FONT color=#202020 size=2 face="Georgia,Times New Roman,Times,serif">. The guide is available on the link: </FONT><FONT color=#0000ff size=2 face="Georgia,Times New Roman,Times,serif">http://acessibilidadecultural.com.br</FONT><FONT color=#202020 size=2 face="Georgia,Times New Roman,Times,serif">.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Sabesp also sponsored sports projects, setting aside R$2.8 million as tax incentives in 2012. Among the beneficiaries are the swimming athletes of the team Esporte Clube Pinheiros. Another R$3 million were remitted by the company to the State Fund of Child and Adolescent Rights, through Condeca.</FONT></P>

<P style="TEXT-ALIGN: justify"><I><FONT color=#4f82bd size=2 face="Georgia-Italic,Times New Roman,Times,serif">Lessons we teach and we learn</FONT></I></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In 2012, 8,604 people participated in lectures and programs through which Sabesp seeks partners to help it to strengthen its commitment to environment.</FONT></P>

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<P style="TEXT-ALIGN: left"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Educational Learning Program, for instance, is open to schools, universities, NGOs, domestic and international companies, investors, amongst others. It allows visitors to learn about two water treatment systems. The Cantareira system, one of the world&#8217;s largest water production systems, composed of six reservoirs interconnected by 48 km of tunnels, is liable for the water supply of almost 50% of the metropolitan region of S&#227;o Paulo (RMSP), where nearly 20 million people live. The other is Alto Cotia system, liable for the supply of west side of RMSP.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In 2012 our facilities received 5,720 people in 164 visits, among representatives of international institutions, such as Franklin TempletonInv-Us, Explorador Capital, MiraeAsset Global Investments, CSHG, CreditAgricole/Amundi and J.P.Morgan. Besides showing how water production works in these systems, our technicians discuss relevant issues, such as water scarcity in the planet and the need of rationally using it. Since its inception, the Educational Learning Program has already received more than 900,000 people.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Sabesp also seeks new partners with the Corporate Project. In 2012, 38 lectures were given to 2,884 employees of companies interested in learning more about Sabesp&#8217;s operations, as for instance, a group of Petrobras. Participants learned about our daily efforts to improve people&#8217;s quality of life and preserve the environment, besides relevant projects, such as depollution of Tiet&#234; river and Aquapolo Ambiental, destined to water reuse.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In January and July, 609 employees&#8217; relatives, with ages between 7 and 14 years, took part in the &#8220;Um dia na Sabesp&#8221; Program (One Day at Sabesp). Children learned how water and sewage are treated at the company where their parents work. They were also received by our chief executive officer, Mrs. Dilma Pena, from whom they were given an hourglass, with capacity to measure five minutes, enough time to bathing without losing water.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Children&#8217;s reactions have been signaling that the company is in the right path by opening its doors to society, in search of partners to make the highest number of people as possible conscious about the relevance of basic sanitation, preservation of our water courses, besides showing on a transparent way the company&#8217;s permanent search for excellent services. After participating in one of the visits, Juan Silva Garcia, a 7-year old boy, entered into his father&#8217;s car and was telling him about what he had learnt on water treatment: &#8220;Did you know that water is treated with aluminum sulphate, lime and chloride?&#8221;</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Also as part of the one-day visit program, children also watched the movie Dr. Seuss&#8217; The Lorax at Cine Sabesp, about the relevance of preserving nature. Watching this animation free of charge was not a privilege only granted to employees&#8217; relatives. In partnership with School Project at the Cinema, Sabesp made available 5,000 tickets so that primary and secondary school students from public and private schools could have access to this history inspired in the book of the U.S. writer and cartoonist, Dr. Seuss.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Sabesp&#8217;s actions also raised the interest of our visitors in working for the company. This was the case of the civil engineer, Ana Stela Barcelos Ferreira de S&#225;, after visiting ETA Guara&#250;, one of the world&#8217;s largest water treatment stations. &#8220;When I learned about water treatment, I decided to join the team of employees&#8221;, says Ana Stela. &#8220;Water is a finite resource and we need to preserve it&#8221;. After</FONT></P>

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<P style="TEXT-ALIGN: left"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">participating in two competitive civil-service examinations, in 2012, the engineer completed one year working at Sabesp&#8217;s Supplies and Equipment Bidding Department. She is in charge of purchasing inputs for treatment of water that Sabesp distributes to its 27.9 million customers.</FONT></P>

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<P style="TEXT-ALIGN: center"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: left"><FONT size=3 face=ArialMT,Arial,Helvetica,sans-serif>ANNUAL SOCIAL BALANCE SHEET/ 2012</FONT></P>

<P style="TEXT-ALIGN: left"><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>Company: COMPANHIA DE SANEAMENTO B&#193;SICO DO ESTADO DE S&#195;O PAULO</FONT></P>

<DIV align=center>

<TABLE border=0 cellSpacing=0 width="100%">



<TR>

   <TD width="28%"></TD>

   <TD width="10%"></TD>

   <TD width="10%"></TD>

   <TD width="2%"></TD>

   <TD width="10%"></TD>

   <TD width="2%"></TD>

   <TD width="11%"></TD>

   <TD width="9%"></TD>

   <TD width="2%"></TD>

   <TD width="8%"></TD>

   <TD width="2%"></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid; TEXT-INDENT: 0pt" bgColor=#002060 align=left><B><FONT color=#ffffff size=1 face=Arial-BoldMT,Arial,Helvetica,sans-serif>1) Calculation basis</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#002060 colSpan=4 align=center><B><FONT color=#ffffff size=1 face=Arial-BoldMT,Arial,Helvetica,sans-serif>2012 (R$ thousand)</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#002060 align=center>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#002060 colSpan=4 align=center><B><FONT color=#ffffff size=1 face=Arial-BoldMT,Arial,Helvetica,sans-serif>2011 (R$ thousand)</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#002060 align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; TEXT-INDENT: 0pt" align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>Net revenue (NR)</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=center><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>10,737,631</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=center><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>9,927,445</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; TEXT-INDENT: 0pt" align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>Operating income (OI)</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=center><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>2,843,343</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=center><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>2,354,495</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; TEXT-INDENT: 0pt" align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>Gross payroll (GP)</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=center><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>1,498,445</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=center><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>1,395,844</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; TEXT-INDENT: 0pt" bgColor=#002060 align=left><B><FONT color=#ffffff size=1 face=Arial-BoldMT,Arial,Helvetica,sans-serif>2) Internal social indicators</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#002060 align=right><B><FONT color=#ffffff size=1 face=Arial-BoldMT,Arial,Helvetica,sans-serif>R$ thousand</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#002060 align=right><B><FONT color=#ffffff size=1 face=Arial-BoldMT,Arial,Helvetica,sans-serif>% on GP</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#002060 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#002060 align=right><B><FONT color=#ffffff size=1 face=Arial-BoldMT,Arial,Helvetica,sans-serif>% on NR</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#002060 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#002060 align=right><B><FONT color=#ffffff size=1 face=Arial-BoldMT,Arial,Helvetica,sans-serif>R$ thousand</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#002060 align=right><B><FONT color=#ffffff size=1 face=Arial-BoldMT,Arial,Helvetica,sans-serif>% on GP</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#002060 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#002060 align=right><B><FONT color=#ffffff size=1 face=Arial-BoldMT,Arial,Helvetica,sans-serif>% on NR</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#002060 align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; TEXT-INDENT: 0pt" align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>Meals</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>118,368</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>7.90</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>1.10</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>109,966</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>7.88</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>1.11</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; TEXT-INDENT: 0pt" align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>Taxes</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>144,082</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>9.62</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>1.34</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>133,908</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>9.59</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>1.35</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; TEXT-INDENT: 0pt" align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>Private pension plans</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>51,829</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>3.46</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.48</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>65,923</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>4.72</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.66</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; TEXT-INDENT: 0pt" align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>Healthcare</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>124,614</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>8.32</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>1.16</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>108,243</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>7.75</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>1.09</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; TEXT-INDENT: 0pt" align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>Occupational health and safety</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>10,983</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.73</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.10</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>10,254</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.73</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.10</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; TEXT-INDENT: 0pt" align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>Education</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>997</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.07</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.01</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>688</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.05</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.01</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; TEXT-INDENT: 0pt" align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>Culture</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>848</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.06</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.01</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>970</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.07</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.01</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; TEXT-INDENT: 0pt" align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>Professional qualification and training</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>11,788</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.79</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.11</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>8,779</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.63</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.09</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; TEXT-INDENT: 0pt" align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>On-site child care and child-care benefits</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>1,797</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.12</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.02</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>1,473</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.11</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.01</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; TEXT-INDENT: 0pt" align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>Employee profit sharing</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>52,574</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>3.51</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.49</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>56,692</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>4.06</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.57</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; TEXT-INDENT: 0pt" align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>Other</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>4,164</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.28</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.04</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>4,563</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.33</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.05</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; TEXT-INDENT: 0pt" align=left><B><FONT size=1 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Total &#8211; Internal social indicators</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>522,044</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>34.84</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>4.86</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>501,459</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>35.93</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>5.05</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; TEXT-INDENT: 0pt" bgColor=#002060 align=left><B><FONT color=#ffffff size=1 face=Arial-BoldMT,Arial,Helvetica,sans-serif>3) External social indicators</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#002060 align=right><B><FONT color=#ffffff size=1 face=Arial-BoldMT,Arial,Helvetica,sans-serif>R$ thousand</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#002060 align=right><B><FONT color=#ffffff size=1 face=Arial-BoldMT,Arial,Helvetica,sans-serif>% on OI</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#002060 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#002060 align=right><B><FONT color=#ffffff size=1 face=Arial-BoldMT,Arial,Helvetica,sans-serif>% on NR</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#002060 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#002060 align=right><B><FONT color=#ffffff size=1 face=Arial-BoldMT,Arial,Helvetica,sans-serif>R$ thousand</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#002060 align=right><B><FONT color=#ffffff size=1 face=Arial-BoldMT,Arial,Helvetica,sans-serif>% on OI</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#002060 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#002060 align=right><B><FONT color=#ffffff size=1 face=Arial-BoldMT,Arial,Helvetica,sans-serif>% on NR</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#002060 align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; TEXT-INDENT: 0pt" align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>Education</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>2,700</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.09</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.03</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.00</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.00</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; TEXT-INDENT: 0pt" align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>Culture</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>15,375</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.54</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.14</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>20,163</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.86</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.20</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; TEXT-INDENT: 0pt" align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>Health and basic sanitation</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>3,048</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.11</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.03</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>2,510</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.11</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.03</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; TEXT-INDENT: 0pt" align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>Sports</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>4,713</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.17</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.04</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>5,943</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.25</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.06</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; TEXT-INDENT: 0pt" align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>Fight on hunger and food security</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>105</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.00</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.00</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.00</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.00</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; TEXT-INDENT: 0pt" align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>Other</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>12,253</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.43</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.11</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>7,820</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.33</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.08</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; TEXT-INDENT: 0pt" align=left><B><FONT size=1 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Total contribution to society</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>38,194</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>1.34</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.36</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>36,436</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>1.55</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.37</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; TEXT-INDENT: 0pt" align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>Taxes (excluding social charges)</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>1,701,446</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>59.84</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>15.85</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>1,466,228</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>62.27</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>14.77</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; TEXT-INDENT: 0pt" align=left><B><FONT size=1 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Total &#8211;External social indicators</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>1,739,640</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>61.18</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>16.20</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>1,502,664</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>63.82</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>15.14</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; TEXT-INDENT: 0pt" bgColor=#002060 align=left><B><FONT color=#ffffff size=1 face=Arial-BoldMT,Arial,Helvetica,sans-serif>4) Environmental indicators</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#002060 align=right><B><FONT color=#ffffff size=1 face=Arial-BoldMT,Arial,Helvetica,sans-serif>R$ thousand</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#002060 align=right><B><FONT color=#ffffff size=1 face=Arial-BoldMT,Arial,Helvetica,sans-serif>% on OI</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#002060 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#002060 align=right><B><FONT color=#ffffff size=1 face=Arial-BoldMT,Arial,Helvetica,sans-serif>% on NR</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#002060 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#002060 align=right><B><FONT color=#ffffff size=1 face=Arial-BoldMT,Arial,Helvetica,sans-serif>R$ thousand</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#002060 align=right><B><FONT color=#ffffff size=1 face=Arial-BoldMT,Arial,Helvetica,sans-serif>% on OI</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#002060 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#002060 align=right><B><FONT color=#ffffff size=1 face=Arial-BoldMT,Arial,Helvetica,sans-serif>% on NR</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#002060 align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; TEXT-INDENT: 0pt" align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>Investments related to company</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; TEXT-INDENT: 0pt" align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>production/operation</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>7,569</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.27</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.07</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>9,304</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.40</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.09</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; TEXT-INDENT: 0pt" align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>Investments in external programs and/or</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; TEXT-INDENT: 0pt" align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>projects</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>20,147</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.71</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.19</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>21,122</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.90</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.21</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; TEXT-INDENT: 0pt" align=left><B><FONT size=1 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Total investments in environmental</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid" align=left><B><FONT size=1 face=Arial-BoldMT,Arial,Helvetica,sans-serif>protection</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>27,716</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.98</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.26</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>30,426</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>1.29</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>0.31</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; TEXT-INDENT: 0pt" vAlign=middle rowSpan=5 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>With regards to the establishment of </FONT><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>"annual</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>goals" for minimizing waste, general</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>production/operation consumption and</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>increasing the efficient use of natural</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>resources, the company:</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 vAlign=middle rowSpan=5 colSpan=5 align=left>

   <P style="MARGIN-LEFT: 20px"><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>(x) has no established goals</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>( ) complies 0 to 50%</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>( ) complies 51 to 75%</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>( ) complies 76 to 100%</FONT></P></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 vAlign=middle rowSpan=5 colSpan=5 align=left>

   <P style="MARGIN-LEFT: 20px"><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>(x) has no established goals</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>( ) complies 0 to 50%</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>( ) complies 51 to 75%</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>( ) complies 76 to 100%</FONT></P></TD></TR>

<TR vAlign=bottom></TR>

<TR vAlign=bottom></TR>

<TR vAlign=bottom></TR>

<TR vAlign=bottom></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; TEXT-INDENT: 0pt" bgColor=#002060 align=left><B><FONT color=#ffffff size=1 face=Arial-BoldMT,Arial,Helvetica,sans-serif>5) Employees indicators</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#002060 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#002060 align=right><B><FONT color=#ffffff size=1 face=Arial-BoldMT,Arial,Helvetica,sans-serif>2012</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#002060 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#002060 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#002060 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#002060 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#002060 align=right><B><FONT color=#ffffff size=1 face=Arial-BoldMT,Arial,Helvetica,sans-serif>2011</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#002060 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#002060 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#002060 align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; TEXT-INDENT: 0pt" align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>Employees at the end of the period</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>15,019</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>14,896</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; TEXT-INDENT: 0pt" align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>Admissions during the period</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>915</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>723</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; TEXT-INDENT: 0pt" align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>Outsourced employees*</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>7,372</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>7,399</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; TEXT-INDENT: 0pt" align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>Trainees/interns</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>888</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>1,424</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; TEXT-INDENT: 0pt" align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>Employees older than 45</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>8,471</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>7,757</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; TEXT-INDENT: 0pt" align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>Female employees</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>3,018</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>2,928</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; TEXT-INDENT: 0pt" align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>% of management positions held by women</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>19.44</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>19.09</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; TEXT-INDENT: 0pt" align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>Employees of African descent</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>2,227</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=right><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>2,137</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 align=left>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-51</FONT></P>

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<A name="page_52"></A><BR>

<P style="TEXT-ALIGN: center"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<DIV align=center>

<TABLE border=1 cellSpacing=0 width="100%">



<TR vAlign=bottom>

   <TD style="BORDER-LEFT: 1px solid; BORDER-TOP: 1px solid" width="29%"></TD>

   <TD style="BORDER-TOP: 1px solid" width="9%"></TD>

   <TD style="BORDER-TOP: 1px solid" width="2%"></TD>

   <TD style="BORDER-TOP: 1px solid" width="9%"></TD>

   <TD style="BORDER-TOP: 1px solid" width="2%"></TD>

   <TD style="BORDER-TOP: 1px solid" width="12%"></TD>

   <TD style="BORDER-TOP: 1px solid" width="11%"></TD>

   <TD style="BORDER-TOP: 1px solid" width="9%"></TD>

   <TD style="BORDER-TOP: 1px solid" width="2%"></TD>

   <TD style="BORDER-TOP: 1px solid; BORDER-RIGHT: 1px solid" width="9%"></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; TEXT-INDENT: 0pt" rowSpan=2 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>% of management positions held by</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>employees of African descent</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 rowSpan=2 colSpan=5 align=center><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>3.49</FONT><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 rowSpan=2 colSpan=4 align=center><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>3.72</FONT><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>%</FONT></TD></TR>

<TR vAlign=bottom></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; TEXT-INDENT: 0pt" rowSpan=3 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>Employees with disabilities or employees</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>with special needs (including employees and</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>AVAPE partnership)</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 rowSpan=3 colSpan=5 align=center><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>170</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 rowSpan=3 colSpan=4 align=center><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>163</FONT></TD></TR>

<TR vAlign=bottom></TR>

<TR vAlign=bottom></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; TEXT-INDENT: 0pt" bgColor=#002060 rowSpan=2 align=left><B><FONT style="COLOR: #ffffff" color=#ffffff size=1 face=Arial-BoldMT,Arial,Helvetica,sans-serif>6) Key information regarding the exercise</FONT></B><FONT style="COLOR: #ffffff"><BR></FONT><B><FONT style="COLOR: #ffffff" size=1 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of business citizenship</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#002060 rowSpan=2 colSpan=5 align=center><B><FONT style="COLOR: #ffffff" size=1 face=Arial-BoldMT,Arial,Helvetica,sans-serif>2012 (R$ thousand)</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#002060 rowSpan=2 colSpan=4 align=center><B><FONT style="COLOR: #ffffff" size=1 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Goals &#8211; 2013</FONT></B></TD></TR>

<TR vAlign=bottom></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; TEXT-INDENT: 0pt" vAlign=middle rowSpan=2 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>Ratio between maximum and minimum</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>salary</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 rowSpan=2 colSpan=5 align=center><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>20.1</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 rowSpan=2 colSpan=4 align=center><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>nd</FONT></TD></TR>

<TR vAlign=bottom></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; TEXT-INDENT: 0pt" vAlign=middle align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>Total number of occupational accidents</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 colSpan=5 align=center><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>140</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 colSpan=4 align=center><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>136</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid" vAlign=middle rowSpan=5 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>The company's social and environmental</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>projects were established by:</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 vAlign=middle rowSpan=5 colSpan=2 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>( ) officers</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 vAlign=middle rowSpan=5 colSpan=2 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>(x) officers</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>and</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>managers</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 vAlign=middle rowSpan=5 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>( ) all employees</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 vAlign=middle rowSpan=5 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>( ) officers</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 vAlign=middle rowSpan=5 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>(x) officers</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>and</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>managers</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 vAlign=middle rowSpan=5 colSpan=2 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>( ) all</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>employees</FONT></TD></TR>

<TR vAlign=bottom></TR>

<TR vAlign=bottom></TR>

<TR vAlign=bottom></TR>

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   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid" vAlign=middle rowSpan=5 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>Occupational safety and health standards</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>were defined by:</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 vAlign=middle rowSpan=5 colSpan=2 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>(x) officers</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>and</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>managers</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 vAlign=middle rowSpan=5 colSpan=2 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>( ) all</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>employees</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 vAlign=middle rowSpan=5 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>( ) all + Cipa</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #d9d9d9; TEXT-INDENT: 0pt" vAlign=middle rowSpan=5 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>(x) officers</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>and</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>managers</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 vAlign=middle rowSpan=5 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>( ) all</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>employees</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 vAlign=middle rowSpan=5 colSpan=2 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>( ) all + Cipa</FONT></TD></TR>

<TR vAlign=bottom></TR>

<TR vAlign=bottom></TR>

<TR vAlign=bottom></TR>

<TR vAlign=bottom></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; TEXT-INDENT: 0pt" vAlign=middle rowSpan=7 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>With regards to freedom of trade union</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>activities, collective bargaining rights and</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>internal employee representation, the</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>company:</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 vAlign=middle rowSpan=7 colSpan=2 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>( ) does not</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>interfere</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 vAlign=middle rowSpan=7 colSpan=2 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>( ) complies</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>with</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>OIT rules</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 vAlign=middle rowSpan=7 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>(x) encourages</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>and complies</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>with OIT</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 vAlign=middle rowSpan=7 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>( ) does not</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>interfere</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 vAlign=middle rowSpan=7 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>( ) complies</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>with</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>OIT rules</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 vAlign=middle rowSpan=7 colSpan=2 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>(x)</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>encourages</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>and complies</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>with OIT</FONT></TD></TR>

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<TR vAlign=bottom></TR>

<TR vAlign=bottom></TR>

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   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid" vAlign=middle rowSpan=5 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>Private pension plans are offered to:</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 vAlign=middle rowSpan=5 colSpan=2 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>( ) officers</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>and</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 vAlign=middle rowSpan=5 colSpan=2 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>( ) officers</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>managers</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 vAlign=middle rowSpan=5 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>(x) all employees</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 vAlign=middle rowSpan=5 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>( ) officers</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 vAlign=middle rowSpan=5 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>( ) officers</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>and</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>managers</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 vAlign=middle rowSpan=5 colSpan=2 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>(x) all</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>employees</FONT></TD></TR>

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   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid" vAlign=middle rowSpan=5 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>The company's profit sharing plan is</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>distributed to:</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 vAlign=middle rowSpan=5 colSpan=2 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>( ) officers</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 vAlign=middle rowSpan=5 colSpan=2 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>( ) officers</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>and</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>managers</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 vAlign=middle rowSpan=5 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>(x) all employees</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 vAlign=middle rowSpan=5 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>( ) officers</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 vAlign=middle rowSpan=5 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>( ) officers</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>and</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>managers</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 vAlign=middle rowSpan=5 colSpan=2 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>(x) all</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>employees</FONT></TD></TR>

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   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; TEXT-INDENT: 0pt" vAlign=middle rowSpan=3 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>When selecting suppliers, the ethical, </FONT><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>social</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>and environmental responsibility standards</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>adopted by the company:</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 vAlign=middle rowSpan=3 colSpan=2 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>( ) are not</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>considered</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 vAlign=middle rowSpan=3 colSpan=2 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>( ) are</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>suggested</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 vAlign=middle rowSpan=3 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>(x) are</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>required</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #d9d9d9; TEXT-INDENT: 0pt" vAlign=middle rowSpan=3 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>( ) are not</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>considered</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 vAlign=middle rowSpan=3 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>( ) are</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>suggested</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 vAlign=middle rowSpan=3 colSpan=2 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>(x) are</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>required</FONT></TD></TR>

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   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; TEXT-INDENT: 0pt" vAlign=middle rowSpan=5 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>With regards to the participation of</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>employees in voluntary work programs, the</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>company:</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 vAlign=middle rowSpan=5 colSpan=2 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>( ) does not</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>interfere</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 vAlign=middle rowSpan=5 colSpan=2 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>( ) gives</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>support</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 vAlign=middle rowSpan=5 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>(x) organizes and</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>encourages</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>participation</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 vAlign=middle rowSpan=5 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>( ) does not</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>interfere</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 vAlign=middle rowSpan=5 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>( ) gives</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>support</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 vAlign=middle rowSpan=5 colSpan=2 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>(x) organizes</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>and</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>encourages</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>participation</FONT></TD></TR>

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   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; TEXT-INDENT: 0pt" vAlign=middle rowSpan=3 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>Total number of consumer&#8217;s complaints and</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>criticisms:</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; TEXT-INDENT: 3.419pt" bgColor=#d9d9d9 vAlign=middle rowSpan=3 colSpan=2 align=center><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>In company:</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>42,174</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 vAlign=middle rowSpan=3 colSpan=2 align=center><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>At Procon:</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>1,222</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 vAlign=middle rowSpan=3 align=center><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>In court:</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>JEC/Conc.343</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #d9d9d9; TEXT-INDENT: 0pt" vAlign=middle rowSpan=3 align=center><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>In company:</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>N/A</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 vAlign=middle rowSpan=3 align=center><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>At Procon:</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>CIP N/A</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 vAlign=middle rowSpan=3 colSpan=2 align=center><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>In court:</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>JEC/Conc</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>N/A</FONT></TD></TR>

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   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid" vAlign=middle rowSpan=3 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>% of complaints and criticisms solved:</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; TEXT-INDENT: 3.419pt" bgColor=#d9d9d9 vAlign=middle rowSpan=3 colSpan=2 align=center><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>In company:</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>99.99<FONT size=1 face=Arial>%</FONT></FONT> <FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif></FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 vAlign=middle rowSpan=3 colSpan=2 align=center><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>At Procon:</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>CIP 88.2%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 vAlign=middle rowSpan=3 align=center><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>In court:<BR>JEC/Conc.75.5%</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #d9d9d9; TEXT-INDENT: 0pt" vAlign=middle rowSpan=3 align=center><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>In company:</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>Ombd N/A</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#d9d9d9 vAlign=middle rowSpan=3 align=center><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>At Procon:</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>CIP N/A</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#d9d9d9 vAlign=middle rowSpan=3 colSpan=2 align=center><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>In court:</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>JEC/Conc.</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>N/A</FONT></TD></TR>

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   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; TEXT-INDENT: 0pt" vAlign=middle rowSpan=2 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>Total value added to be distributed (R$</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>thousand):</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#abbdef vAlign=middle rowSpan=2 colSpan=5 align=center><B><FONT size=1 face=Arial-BoldMT,Arial,Helvetica,sans-serif>In 2012: 6,133,683</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #abbdef; TEXT-INDENT: 0pt; BORDER-RIGHT: #000000 1px solid" vAlign=middle rowSpan=2 colSpan=4 align=center><B><FONT size=1 face=Arial-BoldMT,Arial,Helvetica,sans-serif>In 2011: 5,714,179</FONT></B></TD></TR>

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   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; TEXT-INDENT: 0pt" vAlign=top rowSpan=3 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>Distribution of value added (DVA):</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#abbdef rowSpan=3 colSpan=5 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>27.3% Government, 25.7% Employees</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>31.3% Shareholders, 15.7% Outsourced</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>labor; 0.0% Retained</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#abbdef rowSpan=3 colSpan=4 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>25.5% Government, 29.0% Employees</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>21.4% Shareholders, 24.1% Outsourced</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>Labor, 0.0% Retained</FONT></TD></TR>

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   <TD style="BORDER-BOTTOM: #000000 1px solid; TEXT-INDENT: 2.7pt" bgColor=#002060 colSpan=10 align=left><B><FONT color=#ffffff size=1 face=Arial-BoldMT,Arial,Helvetica,sans-serif>7) Other information</FONT></B></TD></TR>

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   <TD style="BORDER-LEFT: 1px solid; TEXT-INDENT: 2.7pt; BORDER-RIGHT: 1px solid" rowSpan=2 colSpan=10 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>&#8220;This Company does neither employ child nor slave labor, it is not involved with prostitution or child/adolescent sexual exploitation, nor</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>with corruption.&#8221; &#8220;The Company appreciates and respects the internal and external diversity.&#8221;</FONT></TD></TR>

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   <TD style="BORDER-LEFT: 1px solid; TEXT-INDENT: 2.7pt; BORDER-RIGHT: 1px solid" rowSpan=2 colSpan=10 align=left><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>* The number of outsourced employees is estimated considering the labor allocated to service agreements, as Sabesp does not directly</FONT><BR><FONT size=1 face=ArialMT,Arial,Helvetica,sans-serif>hire outsourced employees.</FONT></TD></TR>

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<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-52</FONT></P>

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<P style="TEXT-ALIGN: left"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">(Convenience Translation into English from the Original Previously Issued in Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><U><FONT size=2 face="Georgia,Times New Roman,Times,serif">INDEPENDENT AUDITORS&#8217; REPORT</FONT></U></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">To the Shareholders, Board of Directors and Management of Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP </FONT><U><FONT size=2 face="Georgia,Times New Roman,Times,serif">S&#227;o Paulo - SP</FONT></U></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">We have audited the accompanying individual and consolidated financial statements of Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP (the &#8220;Company&#8221;), identified as Parent and Consolidated, respectively, which comprise the balance sheet as of December 31, 2012, and the income statement, statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Management&#8217;s responsibility for the financial statements</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Management is responsible for the preparation and fair presentation of the individual financial statements in accordance with accounting practices adopted in Brazil and the consolidated financial statements in accordance with International Financial Reporting Standards (IFRS), issued by the International Accounting Standards Board - IASB, and in accordance with accounting practices adopted in Brazil, and for such internal control as Management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Auditors&#8217; responsibility</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Brazilian and International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor&#8217;s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company&#8217;s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company&#8217;s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by Management, as well as evaluating the overall presentation of the financial statements.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-53</FONT></P>

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<P style="TEXT-ALIGN: left"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Opinion on the individual financial statements</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In our opinion, the individual financial statements present fairly, in all material respects, the financial position of Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP as of December 31, 2012, and its financial performance and its cash flows for the year then ended in accordance with accounting practices adopted in Brazil.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Opinion on the consolidated financial statements</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP as of December 31, 2012, and its consolidated financial performance and its consolidated cash flows for the year then ended, in accordance with International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board - IASB and accounting practices adopted in Brazil.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Emphasis of matter</FONT></B></P>

<P style="TEXT-ALIGN: justify"><I><FONT size=2 face="Georgia-Italic,Times New Roman,Times,serif">Individual financial statements</FONT></I></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">We draw attention to Note 2 to the financial statements, which states that the individual financial statements have been prepared in accordance with accounting practices adopted in Brazil. In the case of Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP, these accounting practices differ from the IFRS, which is applicable to separate financial statements, only with respect to the measurement of investments in subsidiaries by the equity method of accounting, which, for purposes of IFRS, would be measured at cost or fair value. Our opinion is not qualified due to this matter.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Other matters</FONT></B></P>

<P style="TEXT-ALIGN: justify"><I><FONT size=2 face="Georgia-Italic,Times New Roman,Times,serif">Statements of value added</FONT></I></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">We have also audited the individual and consolidated statements of value added (DVA) for the year ended December 31, 2012, prepared under the responsibility of the Company&#8217;s management, the presentation of which is required by the Brazilian corporate law for public companies and considered as supplemental information for International Financial Reporting Standards - IFRS, which do not require the presentation of DVA. These statements were subject to the same audit procedures described above, and, in our opinion, present fairly, in all material respects, consistently with the financial statements taken as a whole.</FONT></P>

<P style="TEXT-ALIGN: justify"><I><FONT size=2 face="Georgia-Italic,Times New Roman,Times,serif">Audit of individual and consolidated financial statements for the year ended December 31, 2011</FONT></I></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The amounts for the year ended December 31, 2011, presented for purposes of comparison, were previously audited by other independent auditors, whose report thereon, dated March 23, 2012, was unqualified.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The accompanying individual and consolidated interim financial statements have been translated into English for the convenience of readers outside Brazil.</FONT></P>

<P style="TEXT-ALIGN: left"><FONT size=2 face="Georgia,Times New Roman,Times,serif">S&#227;o Paulo, March 21, 2013</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-54</FONT></P>

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<P style="TEXT-ALIGN: left"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

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<TR>

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   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">DELOITTE TOUCHE TOHMATSU</FONT></TD>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">D&#233;lio Rocha Leite</FONT></TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Auditores Independentes</FONT></TD>

   <TD style="TEXT-INDENT: 0.027pt" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Engagement Partner</FONT></TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-55</FONT></P>

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<P style="TEXT-ALIGN: justify"><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Convenience Translation </FONT><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">into </FONT><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">English </FONT><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">from the </FONT><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Original Previously Issued </FONT><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">in </FONT><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia </FONT></B><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">de </FONT></B><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Saneamento B&#225;sico </FONT></B><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">do </FONT></B><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Estado </FONT></B><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">de S&#227;o </FONT></B><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Paulo </FONT></B><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">- </FONT></B><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Balance Sheets </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">as of </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">December </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">31, 2012 and 2011 <BR></FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(Amounts </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">in </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">thousands </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">of </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Brazilian </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">reais &#8211; R$, </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">unless otherwise indicated)</FONT></B>

<HR align=left color=#000000 SIZE=1 width="100%">



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<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="35%"></TD>

   <TD width="2%"></TD>

   <TD width="7%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD></TR>

<TR vAlign=bottom>

   <TD width="35%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="7%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="26%" colSpan=3 align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Parent</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="26%" colSpan=3 align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Consolidated</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="35%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="7%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="26%" colSpan=3 align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(BR GAAP)</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="26%" colSpan=3 align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(BR GAAP and IFRS)</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="35%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="7%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">December</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">December</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">December</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">December 31</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" width="35%" align=left><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Assets</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="7%" align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Note</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">31, 2012</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">31 2011</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">31, 2012</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" width="35%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Current assets</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="7%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.079pt" width="35%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Cash and cash equivalents</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="7%" align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">6</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,915,974</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">2,142,079</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,921,178</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">2,149,989</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.079pt" width="35%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Trade receivables</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="7%" align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">8</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,038,945</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,072,015</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,043,166</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,072,659</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.079pt" width="35%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Receivables from related parties</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="7%" align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">9</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">109,273</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">185,333</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">109,273</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">185,333</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.079pt" width="35%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Inventories</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="7%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">53,028</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">44,576</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">53,090</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">44,611</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.079pt" width="35%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Restricted cash</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="7%" align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">7</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">64,977</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">99,733</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">64,977</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">99,733</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.078pt" width="35%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Recoverable taxes</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="7%" align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">14</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">118,421</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">117,893</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">129,141</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">118,116</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.078pt" width="35%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Other receivables</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="7%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">29,980</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">43,065</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">16,040</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">55,392</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="35%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Total current assets</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="7%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">3,330,598</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">3,704,694</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">3,336,865</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">3,725,833</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=11>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" width="35%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Noncurrent assets</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="7%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.079pt" width="35%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Trade receivables</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="7%" align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">8</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">335,687</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">333,713</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">335,687</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">333,713</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.079pt" width="35%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Receivables from related parties</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="7%" align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">9</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">153,098</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">170,288</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">153,098</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">170,288</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.079pt" width="35%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Indemnities receivable</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="7%" align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">10</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">60,295</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">60,295</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.079pt" width="35%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Escrow deposits</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="7%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">53,158</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">54,178</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">53,158</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">54,178</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.079pt" width="35%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Deferred income tax and social contribution</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="7%" align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">15</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">135,897</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">177,926</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">141,356</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">179,463</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.079pt" width="35%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Water National Agency &#8211; ANA</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="7%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">108,099</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">100,551</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">108,099</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">100,551</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.079pt" width="35%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Other receivables</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="7%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">111,047</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">35,034</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">118,179</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">39,933</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=11>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.079pt" width="35%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Investments</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="7%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">20,826</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">21,986</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.079pt" width="35%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Investment property</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="7%" align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">11(m)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">54,046</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">52,585</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">54,046</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">52,585</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.078pt" width="35%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Intangible assets</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="7%" align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">11</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">21,967,526</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">20,125,721</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">21,991,922</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">20,141,677</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.078pt" width="35%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Property, plant and equipment</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="7%" align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">12</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">196,710</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">181,585</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">383,383</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">356,468</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=11>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" width="35%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Total noncurrent assets</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="7%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">23,136,094</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">21,313,862</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">23,338,928</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">21,489,151</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" width="35%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Total assets</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="7%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">26,466,692</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">25,018,556</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">26,675,793</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">25,214,984</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: justify"><FONT size=1 face="Georgia,Times New Roman,Times,serif">The </FONT><FONT size=1 face="Georgia,Times New Roman,Times,serif">accompanying </FONT><FONT size=1 face="Georgia,Times New Roman,Times,serif">notes are an </FONT><FONT size=1 face="Georgia,Times New Roman,Times,serif">integral </FONT><FONT size=1 face="Georgia,Times New Roman,Times,serif">part of these </FONT><FONT size=1 face="Georgia,Times New Roman,Times,serif">financial statements.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-56</FONT></P></DIV>

<HR align=center SIZE=2 width="100%" noShade>



<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV>

<!--$$/page=-->

<P><A name="page_57"></A></P>

<P style="TEXT-ALIGN: justify"><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Convenience Translation </FONT><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">into </FONT><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">English </FONT><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">from the </FONT><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Original Previously Issued </FONT><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">in </FONT><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia </FONT></B><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">de </FONT></B><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Saneamento B&#225;sico </FONT></B><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">do </FONT></B><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Estado </FONT></B><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">de S&#227;o </FONT></B><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Paulo </FONT></B><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">- </FONT></B><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Balance Sheets </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">as of </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">December </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">31, 2012 and 2011 <BR></FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(Amounts </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">in </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">thousands </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">of </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Brazilian </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">reais &#8211; R$, </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">unless otherwise indicated)</FONT></B>

<HR align=left color=#000000 SIZE=1 width="100%">



<DIV style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%">

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="36%"></TD>

   <TD width="2%"></TD>

   <TD width="6%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD></TR>

<TR vAlign=bottom>

   <TD width="36%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="6%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="TEXT-INDENT: 0pt" width="26%" colSpan=3 align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Parent</FONT></B></TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="26%" colSpan=3 align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Consolidated</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="36%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="6%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="26%" colSpan=3 align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(BR GAAP)</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; TEXT-INDENT: 7.5pt" width="26%" colSpan=3 align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(BR GAAP and IFRS)</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="36%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="6%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">December</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">December</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">December</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">December</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" width="36%" align=left><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Liabilities and equity</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="6%" align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Note</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">31, 2012</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">31, 2011</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">31, 2012</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">31, 2011</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" width="36%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Current liabilities</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="6%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.078pt" width="36%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Trade payables and contractors</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="6%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">295,392</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">244,658</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">297,198</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">255,557</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.485pt" width="36%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Current portion of long-term loans and financing</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="6%" align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">13</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,342,594</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,629,184</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,367,391</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,630,010</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.078pt" width="36%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Accrued payroll and related charges</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="6%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">267,332</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">243,502</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">267,863</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">243,876</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.078pt" width="36%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Taxes payable</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="6%" align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">14</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">152,710</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">180,794</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">153,121</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">181,122</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.078pt" width="36%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Interest on capital payable</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="6%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">414,355</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">247,486</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">414,355</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">247,486</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.078pt" width="36%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Provisions</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="6%" align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">16</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">565,083</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">764,070</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">565,083</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">764,070</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.078pt" width="36%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Services payable</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="6%" align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">18</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">389,091</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">383,116</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">389,091</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">383,116</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.078pt" width="36%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Public-private partnership &#8211; PPP</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="6%" align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">11 (j)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">24,357</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">12,693</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">24,357</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">12,693</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="36%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="6%" align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">11 (d)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.078pt" width="36%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Program contract commitments</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="6%" align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">(iv)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">148,220</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">62,287</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">148,220</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">62,287</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.078pt" width="36%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Other liabilities</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="6%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">159,055</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">188,356</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">170,691</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">188,451</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="36%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Total current liabilities</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="6%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">3,758,189</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">3,956,146</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">3,797,370</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">3,968,668</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=11>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" width="36%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Noncurrent liabilities</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="6%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.078pt" width="36%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Loans and financing</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="6%" align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">13</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">7,532,661</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">6,794,148</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">7,701,929</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">6,966,285</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.078pt" width="36%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Taxes payable</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="6%" align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">14</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">18,363</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">18,363</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.078pt" width="36%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Deferred Cofins/Pasep</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="6%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">123,731</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">114,106</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">125,404</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">114,957</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.078pt" width="36%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Provisions</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="6%" align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">16</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">624,071</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">807,759</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">624,074</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">807,759</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.078pt" width="36%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Pension obligations</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="6%" align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">17(b)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">2,124,330</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">2,050,697</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">2,124,330</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">2,050,697</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.078pt" width="36%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Public-private partnership &#8211; PPP</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="6%" align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">11 (j)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">331,960</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">416,105</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">331,960</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">416,105</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="36%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="6%" align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">11 (d)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.078pt" width="36%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Program contract commitments</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="6%" align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">(iv)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">87,407</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">130,978</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">87,407</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">130,978</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.079pt" width="36%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Other liabilities</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="6%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">168,766</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">184,358</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">167,742</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">195,276</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" width="36%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Total noncurrent liabilities</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="6%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 3px double" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">10,992,926</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 3px double" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">10,516,514</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 3px double" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">11,162,846</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 3px double" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">10,700,420</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=11>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" width="36%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Total liabilities</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="6%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">14,751,115</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">14,472,660</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">14,960,216</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">14,669,088</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=11>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" width="36%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Equity</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="6%" align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">19</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.078pt" width="36%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Capital stock</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="6%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">6,203,688</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">6,203,688</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">6,203,688</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">6,203,688</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.078pt" width="36%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Capital reserve</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="6%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">124,255</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">124,255</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">124,255</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">124,255</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.078pt" width="36%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Earnings reserves</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="6%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">5,387,634</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">4,217,953</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">5,387,634</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">4,217,953</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" width="36%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Total equity</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="6%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">11,715,577</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">10,545,896</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">11,715,577</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">10,545,896</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" width="36%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Total liabilities and equity</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="6%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 3px double" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">26,466,692</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 3px double" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">25,018,556</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 3px double" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">26,675,793</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 3px double" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">25,214,984</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: justify"><FONT size=1 face="Georgia,Times New Roman,Times,serif">The </FONT><FONT size=1 face="Georgia,Times New Roman,Times,serif">accompanying </FONT><FONT size=1 face="Georgia,Times New Roman,Times,serif">notes are an </FONT><FONT size=1 face="Georgia,Times New Roman,Times,serif">integral </FONT><FONT size=1 face="Georgia,Times New Roman,Times,serif">part of these </FONT><FONT size=1 face="Georgia,Times New Roman,Times,serif">financial statements.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-57</FONT></P></DIV>

<HR align=center SIZE=2 width="100%" noShade>



<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV>

<!--$$/page=--><A name="page_58"></A><BR>

<DIV style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%">

<P style="TEXT-ALIGN: justify"><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Convenience Translation into English from the Original Previously Issued in Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Income Statements for the<BR></FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Years ended December 31, 2012 and 2011<BR></FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(Amounts in thousands of Brazilian reais &#8211; R$, unless otherwise indicated)</FONT></B>

<HR align=left color=#000000 SIZE=1 width="100%">



<P></P>

<P style="TEXT-ALIGN: justify"></P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="35%"></TD>

   <TD width="2%"></TD>

   <TD width="7%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="11%"></TD>

   <TD width="2%"></TD>

   <TD width="11%"></TD>

   <TD width="2%"></TD>

   <TD width="10%"></TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD colSpan=3 align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Parent</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD colSpan=3 align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Consolidated</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=3 align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(BR GAAP)</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; TEXT-INDENT: 1.38pt" colSpan=3 align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(BR GAAP and IFRS)</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Note</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; TEXT-INDENT: 13.5pt" align=left><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; TEXT-INDENT: 11.04pt" align=left><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; TEXT-INDENT: 13.62pt" align=left><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD colSpan=11>&nbsp;</TD></TR>

<TR>

   <TD colSpan=11>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Net revenue from sales and services</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">22</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">10,737,631</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">9,927,445</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">10,754,435</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">9,941,637</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 14.22pt" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Cost of sales and services</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">23</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(6,449,951)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(6,018,732)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(6,465,398)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(6,030,977)</FONT>&nbsp;</TD></TR>

<TR>

   <TD colSpan=11>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" align=left><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Gross profit</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">4,287,680</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">3,908,713</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">4,289,037</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">3,910,660</FONT>&nbsp;</TD></TR>

<TR>

   <TD colSpan=11>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 14.218pt" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Selling expenses</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">23</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(697,252)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(619,304)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(697,874)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(619,542)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 14.1pt" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Administrative expenses</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">23</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(717,377)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(841,077)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(726,128)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(846,593)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 14.218pt" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Other operating income (expenses), net</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">25</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(23,175)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(90,253)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(19,775)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(90,138)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 14.1pt" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Equity in the earnings of subsidiaries</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(6,532)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(3,584)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD></TR>

<TR>

   <TD colSpan=11>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" align=left><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Operating profit</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">2,843,344</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">2,354,495</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">2,845,260</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">2,354,387</FONT>&nbsp;</TD></TR>

<TR>

   <TD colSpan=11>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 14.1pt" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Financial expenses</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">24</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(578,230)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(701,889)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(582,822)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(702,766)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 14.1pt" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Financial income</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">24</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">333,129</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">465,753</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">332,041</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">465,926</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 14.218pt" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Foreign exchange result, net</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">24</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(50,571)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(396,882)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(50,575)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(396,801)</FONT>&nbsp;</TD></TR>

<TR>

   <TD colSpan=11>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" align=left><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Financial income (expenses), net</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(295,672)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(633,018)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(301,356)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(633,641)</FONT>&nbsp;</TD></TR>

<TR>

   <TD colSpan=11>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" align=left><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Profit before income tax and social</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" align=left><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">contribution</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">2,547,672</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,721,477</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">2,543,904</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,720,746</FONT>&nbsp;</TD></TR>

<TR>

   <TD colSpan=11>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Income tax and social contribution</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 14.218pt" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Current</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">15</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(593,743)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(598,024)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(594,052)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(598,303)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 14.1pt" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Deferred</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">15</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(42,029)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">99,966</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(37,952)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">100,976</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(635,772)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(498,058)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(632,004)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(497,327)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" align=left><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Net income for the year</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,911,900</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,223,419</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,911,900</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,223,419</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" align=left><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Earnings per share - basic and diluted</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" align=left><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(in reais)</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">20</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">8.39</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">5.37</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">8.39</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">5.37</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The accompanying notes are an integral part of these financial statements.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-58</FONT></P></DIV>

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<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV>

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<DIV style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%">

<P style="TEXT-ALIGN: justify"><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Convenience Translation into English from the Original Previously Issued in Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Statements of Comprehensive Income for the Years ended December 31, 2012 and 2011<BR></FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(Amounts in thousands of Brazilian reais &#8211; R$, unless otherwise indicated)</FONT></B>

<HR align=left color=#000000 SIZE=1 width="100%">



<P></P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="34%"></TD>

   <TD width="2%"></TD>

   <TD width="9%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="11%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="9%"></TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD colSpan=3 align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Parent</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD colSpan=3 align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Consolidated</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=3 align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(BR GAAP)</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=3 align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(BR GAAP and IFRS)</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Note</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; TEXT-INDENT: 2.4pt" align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; TEXT-INDENT: 8.699pt" align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; TEXT-INDENT: 4.44pt" align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD colSpan=11>&nbsp;</TD></TR>

<TR>

   <TD colSpan=11>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Net income for the year</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,911,900</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,223,419</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; TEXT-INDENT: 5.459pt" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,911,900</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,223,419</FONT>&nbsp;</TD></TR>

<TR>

   <TD colSpan=11>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Total comprehensive income for the year</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,911,900</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,223,419</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; TEXT-INDENT: 5.459pt" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,911,900</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,223,419</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The accompanying notes are an integral part of these financial statements.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-59</FONT></P></DIV>

<HR align=center SIZE=2 width="100%" noShade>



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<P style="TEXT-ALIGN: justify"><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Convenience Translation </FONT><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">into </FONT><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">English </FONT><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">from the </FONT><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Original Previously </FONT><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Issued in </FONT><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia </FONT></B><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">de </FONT></B><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Saneamento B&#225;sico </FONT></B><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">do </FONT></B><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Estado </FONT></B><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">de S&#227;o </FONT></B><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Paulo </FONT></B><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">- </FONT></B><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Statements </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">of </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Changes </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">in </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Equity </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">for the Years </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">ended December </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">31, 2012 and 2011<BR></FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(Amounts </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">in </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">thousands </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">of </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Brazilian </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">reais &#8211; R$, unless </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">otherwise indicated)</FONT></B>

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<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="27%"></TD>

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   <TD width="2%"></TD>

   <TD width="5%"></TD>

   <TD width="2%"></TD>

   <TD width="9%"></TD>

   <TD width="2%"></TD>

   <TD width="7%"></TD>

   <TD width="2%"></TD>

   <TD width="9%"></TD>

   <TD width="2%"></TD>

   <TD width="6%"></TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1>&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=left><FONT size=1>&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=left><FONT size=1>&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=left><FONT size=1>&nbsp;</FONT></TD>

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   <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1>&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=3 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Earnings reserves</FONT></B><FONT size=1>&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=left><FONT size=1>&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=left><FONT size=1>&nbsp;</FONT></TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1>&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=left><FONT size=1>&nbsp;</FONT></TD>

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   <TD align=left><FONT size=1>&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=left><FONT size=1>&nbsp;</FONT></TD>

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   <TD align=left><FONT size=1>&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=left><FONT size=1>&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Additional</FONT></B><FONT size=1>&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Retained</FONT></B><FONT size=1>&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=left><FONT size=1>&nbsp;</FONT></TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1>&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=left><FONT size=1>&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=left><FONT size=1>&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=left><FONT size=1>&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=left><FONT size=1>&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=left><FONT size=1>&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">proposed</FONT></B><FONT size=1>&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">earnings</FONT></B><FONT size=1>&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=left><FONT size=1>&nbsp;</FONT></TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1>&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=left><FONT size=1>&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Capital</FONT></B><FONT size=1>&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Capital</FONT></B><FONT size=1>&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Legal</FONT></B><FONT size=1>&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Investments</FONT></B><FONT size=1>&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">dividend</FONT></B><FONT size=1>&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">(accumulated</FONT></B><FONT size=1>&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=left><FONT size=1>&nbsp;</FONT></TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1>&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Note</FONT></B><FONT size=1>&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">stock</FONT></B><FONT size=1>&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">reserve</FONT></B><FONT size=1>&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">reserve</FONT></B><FONT size=1>&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">reserve</FONT></B><FONT size=1>&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1>&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">losses)</FONT></B><FONT size=1>&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Total</FONT></B><FONT size=1>&nbsp;</FONT></TD></TR>

<TR vAlign=bottom>

   <TD align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Balances as of December 31, 2010</FONT></B><FONT size=1>&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=left><FONT size=1>&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">6,203,688&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">124,255&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">460,048&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,825,048&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">68,761&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">9,681,800&nbsp;</FONT></TD></TR>

<TR>

   <TD colSpan=17><FONT size=1>&nbsp;</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 5.759pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Net income for the year&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=left><FONT size=1>&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,223,419&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,223,419&nbsp;</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 5.759pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Legal reserve&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">19(e)&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">61,171&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(61,171)&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-&nbsp;</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 5.76pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Interest on shareholders&#8217; equity (R$1.27 per share)&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">19(c)&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(290,562)&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(290,562)&nbsp;</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 5.759pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">2010 additional dividends, approved (R$0.30 per share)&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=left><FONT size=1>&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(68,761)&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(68,761)&nbsp;</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 5.76pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Additional proposed dividends&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=left><FONT size=1>&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">288,143&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(288,143)&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-&nbsp;</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 5.76pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Transfer to investments reserve&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=left><FONT size=1>&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">583,543&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(583,543)&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-&nbsp;</FONT></TD></TR>

<TR>

   <TD colSpan=17><FONT size=1>&nbsp;</FONT></TD></TR>

<TR vAlign=bottom>

   <TD align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Balances as of December 31, 2011</FONT></B><FONT size=1>&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=left><FONT size=1>&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">6,203,688&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">124,255&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">521,219&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">3,408,591&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">288,143&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">10,545,896&nbsp;</FONT></TD></TR>

<TR>

   <TD colSpan=17><FONT size=1>&nbsp;</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 5.759pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Net income for the year&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=left><FONT size=1>&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,911,900&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,911,900&nbsp;</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 5.759pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Legal reserve&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">19(e)&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">95,595&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(95,595)&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-&nbsp;</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 5.76pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Interest on shareholders&#8217; equity (R$1.99 per share)&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">19(c)&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(454,076)&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(454,076)&nbsp;</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 5.76pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">2011 additional dividends, approved (R$1.26 per share)&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=left><FONT size=1>&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(288,143)&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(288,143)&nbsp;</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 5.76pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Additional proposed dividends&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=left><FONT size=1>&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">80,201&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(80,201)&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-&nbsp;</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 5.76pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Transfer to investments reserve&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=left><FONT size=1>&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,282,028&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(1,282,028)&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-&nbsp;</FONT></TD></TR>

<TR>

   <TD colSpan=17><FONT size=1>&nbsp;</FONT></TD></TR>

<TR vAlign=bottom>

   <TD align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Balances as of December 31, 2012</FONT></B><FONT size=1>&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD align=left><FONT size=1>&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">6,203,688&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">124,255&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">616,814&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">4,690,619&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">80,201&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-&nbsp;</FONT></TD>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">11,715,577&nbsp;</FONT></TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The </FONT><FONT size=2 face="Georgia,Times New Roman,Times,serif">accompanying </FONT><FONT size=2 face="Georgia,Times New Roman,Times,serif">notes are an </FONT><FONT size=2 face="Georgia,Times New Roman,Times,serif">integral </FONT><FONT size=2 face="Georgia,Times New Roman,Times,serif">part of these </FONT><FONT size=2 face="Georgia,Times New Roman,Times,serif">financial statements.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-60</FONT></P></DIV>

<HR align=center SIZE=2 width="100%" noShade>



<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV>

<!--$$/page=--><A name="page_61"></A><BR>

<DIV style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%">

<P style="TEXT-ALIGN: justify"><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Convenience Translation into English from the Original Previously Issued in Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Statements of Cash Flows for the</FONT></B><BR><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Years ended December 31, 2012 and 2011<BR></FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(Amounts in thousands of Brazilian reais &#8211; R$, unless otherwise indicated) (continued)</FONT></B>

<HR align=left color=#000000 SIZE=1 width="100%">



<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="44%"></TD>

   <TD width="2%"></TD>

   <TD width="13%"></TD>

   <TD width="2%"></TD>

   <TD width="11%"></TD>

   <TD width="2%"></TD>

   <TD width="11%"></TD>

   <TD width="2%"></TD>

   <TD width="10%"></TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD colSpan=3 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">PARENT</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="TEXT-INDENT: 24.42pt" colSpan=3 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">CONSOLIDATED</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; TEXT-INDENT: 35.22pt" colSpan=3 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">(BR GAAP)</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; TEXT-INDENT: 18.54pt" colSpan=3 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">(BRGAAP and IFRS)</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">December 31,</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">December 31,</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">December 31,</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">December 31,</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; TEXT-INDENT: 14.94pt" align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; TEXT-INDENT: 14.52pt" align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; TEXT-INDENT: 14.88pt" align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Cash flow from operating activities</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.142pt" align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Profit before income tax and social contribution</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2,547,672</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">1,721,477</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2,543,904</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">1,720,746</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 1.679pt" align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Adjustments for:</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.727pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Depreciation and amortization</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">738,525</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">768,704</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">740,147</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">768,769</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.727pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Losses on disposal of property, plant and equipment and</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">12,059</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">56,548</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">12,059</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">56,548</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.727pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Allowance for doubtful accounts and losses due to supply at wholesale</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">401,576</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">289,589</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">401,576</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">289,589</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.727pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Provisions and inflation adjustment</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">201,196</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">310,075</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">201,196</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">310,075</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.727pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Interest on loans and financing</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">404,196</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">434,315</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">406,254</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">439,117</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.727pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Inflation adjustment and exchange gains (losses)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 11.763pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">on loans and financing</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">85,122</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">442,954</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">85,122</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">442,954</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.727pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Interest and inflation adjustment losses</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">24,553</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">31,422</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">24,553</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">31,422</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.727pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Interest and inflation adjustment gains</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(12,862)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(33,589)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(12,862)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(33,589)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.727pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Financial charges from customers</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(171,481)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(169,941)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(171,481)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(169,941)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.2pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Margin on intangible assets construction related concession </FONT><FONT size=1 face="Georgia,Times New Roman,Times,serif">contracts</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(50,072)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(47,589)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(50,815)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(47,589)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.727pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Provision for Consent Decree (TAC)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">57,332</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">46,991</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">57,332</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">46,991</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.727pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Indemnities receivable</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">60,295</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">85,918</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">60,295</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">85,918</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.727pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Equity in the earnings of subsidiaries</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">6,532</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">3,584</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.727pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Provision for S&#227;o Paulo agreement</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,466</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">15,386</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,466</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">15,386</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.727pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Provision for defined contribution plan</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">5,728</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(8,746)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">5,728</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(8,746)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.727pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Pension obligations</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">213,747</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">257,927</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">213,747</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">257,927</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.727pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Other adjustments</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">34,772</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">4,833</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">34,772</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">4,833</FONT>&nbsp;</TD></TR>

<TR>

   <TD colSpan=9>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">4,561,356</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">4,209,858</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">4,553,993</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">4,210,410</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Changes in assets</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 5.048pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Trade receivables</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(153,337)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(188,202)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(156,914)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(188,575)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 5.048pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Receivable from related parties</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">60,450</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">20,455</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">60,450</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">20,455</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 5.048pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Inventories</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(8,858)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(8,490)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(8,885)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(8,519)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 5.048pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Recoverable taxes</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(29,758)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(61,926)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(40,564)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(62,149)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 5.048pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Escrow deposits</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(1,020)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">573</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(1,020)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">573</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 5.048pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Other receivables</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(77,613)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(41,080)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(53,579)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(43,025)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Changes in liabilities</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 5.048pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Trade payables and contractors</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(16,898)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">135,961</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(25,991)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">145,451</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 5.048pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Services received</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">5,975</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">87,944</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">5,975</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">87,944</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 5.048pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Accrued payroll and related charges</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(33,502)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(49,814)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(33,345)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(49,582)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 5.048pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Taxes and contributions payable</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(47,800)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(14,416)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(47,717)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(14,649)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 5.048pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Deferred Cofins/Pasep</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">9,625</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,144</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">10,602</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,995</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 5.048pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Provisions</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(583,871)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(197,521)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(583,868)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(197,521)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 5.048pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Pension obligations</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(140,115)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(11,268)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(140,115)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(11,268)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 5.048pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Other liabilities</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(53,086)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">140,220</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(53,488)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">150,855</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Cash generated from operations</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">3,493,588</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">4,023,438</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">3,487,574</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">4,042,395</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 5.048pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Interest paid</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(589,189)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(736,382)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(590,196)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(736,853)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 5.048pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Income tax and social contribution paid</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(561,158)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(588,484)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(561,158)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(588,484)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Cash generated from operating activities</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2,343,241</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2,698,572</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2,336,220</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2,717,058</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD colSpan=9>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD colSpan=3 align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">The accompanying notes are an integral part of these financial statements.</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR></TABLE></P>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-61</FONT></P></DIV>

<HR align=center SIZE=2 width="100%" noShade>



<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV>

<!--$$/page=--><A name="page_62"></A><BR>

<DIV style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%">

<P style="TEXT-ALIGN: justify"><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Convenience Translation into English from the Original Previously Issued in Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Statements of Cash Flows for the</FONT></B><BR><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Years ended December 31, 2012 and 2011<BR></FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(Amounts in thousands of Brazilian reais &#8211; R$, unless otherwise indicated) (continued)</FONT></B>

<HR align=left color=#000000 SIZE=1 width="100%">

</P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="44%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD></TR>

<TR vAlign=bottom>

   <TD width="44%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="26%" colSpan=3 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">PARENT</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="26%" colSpan=3 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">CONSOLIDATED</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="44%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="26%" colSpan=3 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">(BR GAAP)</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="26%" colSpan=3 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">(BRGAAP and IFRS)</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=9>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="44%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">December 31,</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">December 31,</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">December 31,</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">December 31,</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="44%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; TEXT-INDENT: 14.94pt" width="12%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; TEXT-INDENT: 15.42pt" width="12%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; TEXT-INDENT: 14.88pt" width="12%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="44%" align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Cash flows from investing activities</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 5.048pt" width="44%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Restricted cash</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">34,752</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">202,841</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">34,752</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">202,841</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 5.048pt" width="44%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Investment increase</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(5,372)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(17,308)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 5.048pt" width="44%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Purchases of property, plant and equipment</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(17,377)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(11,995)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(30,647)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(143,684)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 5.048pt" width="44%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Purchases of intangible assets</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(2,008,699)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(2,056,756)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(2,002,883)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(2,067,435)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="44%" align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Cash used in investing activities</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">(1,996,696)</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">(1,883,218)</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">(1,998,778)</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">(2,008,278)</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD width="44%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD></TR>

<TR>

   <TD width="44%" align=left><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">Cash flows from financing activities</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD></TR>

<TR>

   <TD style="TEXT-INDENT: 3.601pt" width="44%" align=left><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">Loans and financing</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD></TR>

<TR>

   <TD style="TEXT-INDENT: 11.763pt" width="44%" align=left><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">Proceeds from loans</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">1,620,852</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">1,685,506</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">1,627,249</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">1,854,052</FONT>&nbsp;</TD></TR>

<TR>

   <TD style="TEXT-INDENT: 11.763pt" width="44%" align=left><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">Repayments of loans</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">(1,518,240)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">(1,923,862)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">(1,518,240)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">(1,979,099)</FONT>&nbsp;</TD></TR>

<TR>

   <TD style="TEXT-INDENT: 3.37pt" width="44%" align=left><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">Payment of interest on shareholders&#8217; equity</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">(578,705)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">(422,923)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">(578,705)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">(422,923)</FONT>&nbsp;</TD></TR>

<TR>

   <TD style="TEXT-INDENT: 3.37pt" width="44%" align=left><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">Public-private partnership &#8211; PPP</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">(40,285)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">(40,285)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD></TR>

<TR>

   <TD style="TEXT-INDENT: 3.37pt" width="44%" align=left><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">Program Contract Commitments</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">(56,272)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">(56,272)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="44%" align=left><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">Cash used in financing activities</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">(572,650)</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">(661,279)</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">(566,253)</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">(547,970)</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=9>&nbsp;</TD></TR>

<TR>

   <TD width="44%" align=left><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">Increase (decrease) in cash and cash equivalents</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD></TR>

<TR>

   <TD width="44%" align=left><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">Cash and cash equivalents at beginning of year</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">2,142,079</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">1,988,004</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">2,149,989</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">1,989,179</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="44%" align=left><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">Cash and cash equivalents at end of year</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">1,915,974</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">2,142,079</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">1,921,178</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">2,149,989</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="44%" align=left><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">Increase (decrease) in cash and cash equivalents</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">(226,105)</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">154,075</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">(228,811)</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">160,810</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD width="44%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD></TR>

<TR>

   <TD width="44%" align=left><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">Cash flows from financing activities</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD></TR>

<TR>

   <TD style="TEXT-INDENT: 3.601pt" width="44%" align=left><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">Loans and financing</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD></TR>

<TR>

   <TD style="TEXT-INDENT: 11.763pt" width="44%" align=left><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">Proceeds from loans</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">1,620,852</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">1,685,506</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">1,627,249</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">1,854,052</FONT>&nbsp;</TD></TR>

<TR>

   <TD style="TEXT-INDENT: 11.763pt" width="44%" align=left><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">Repayments of loans</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">(1,518,240)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">(1,923,862)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">(1,518,240)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">(1,979,099)</FONT>&nbsp;</TD></TR>

<TR>

   <TD style="TEXT-INDENT: 3.37pt" width="44%" align=left><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">Payment of interest on shareholders&#8217; equity</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">(578,705)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">(422,923)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">(578,705)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">(422,923)</FONT>&nbsp;</TD></TR>

<TR>

   <TD style="TEXT-INDENT: 3.37pt" width="44%" align=left><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">Public-private partnership &#8211; PPP</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">(40,285)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">(40,285)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD></TR>

<TR>

   <TD style="TEXT-INDENT: 3.37pt" width="44%" align=left><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">Program Contract Commitments</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">(56,272)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">(56,272)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="44%" align=left><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">Cash used in financing activities</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">(572,650)</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">(661,279)</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">(566,253)</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">(547,970)</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=9>&nbsp;</TD></TR>

<TR>

   <TD width="44%" align=left><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">Increase (decrease) in cash and cash equivalents</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD></TR>

<TR>

   <TD width="44%" align=left><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">Cash and cash equivalents at beginning of year</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">2,142,079</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">1,988,004</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">2,149,989</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">1,989,179</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="44%" align=left><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">Cash and cash equivalents at end of year</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">1,915,974</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">2,142,079</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">1,921,178</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">2,149,989</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="44%" align=left><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">Increase (decrease) in cash and cash equivalents</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">(226,105)</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">154,075</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">(228,811)</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">160,810</FONT></B>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<DIV align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">The accompanying notes are an integral part of these financial statements.</FONT></DIV>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-62</FONT></P></DIV>

<HR align=center SIZE=2 width="100%" noShade>



<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV>

<!--$$/page=--><A name="page_63"></A><BR>

<DIV style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%">

<P style="TEXT-ALIGN: justify"><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Convenience Translation </FONT><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">into </FONT><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">English </FONT><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">from the </FONT><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Original Previously </FONT><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Issued in </FONT><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia </FONT></B><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">de </FONT></B><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Saneamento B&#225;sico </FONT></B><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">do </FONT></B><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Estado </FONT></B><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">de S&#227;o </FONT></B><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Paulo </FONT></B><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">- </FONT></B><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Statements </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">of Value </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Added </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">for the Years </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">ended December </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">31, 2012 and 2011<BR></FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(Amounts </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">in </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">thousands </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">of </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Brazilian </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">reais &#8211; R$, unless </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">otherwise indicated)</FONT></B>

<HR align=left color=#000000 SIZE=1 width="100%">

</P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="33%"></TD>

   <TD width="2%"></TD>

   <TD width="9%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD></TR>

<TR vAlign=bottom>

   <TD width="33%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="26%" colSpan=3 align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">PARENT</FONT></B></TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="26%" colSpan=3 align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">CONSOLIDATED</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="33%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Note</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 1.92pt" width="33%" align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Revenues</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 10.619pt" width="33%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Sales and services</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="9%" align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">22(a)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">8,926,737</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">8,305,043</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">8,934,698</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">8,310,120</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 10.619pt" width="33%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Other income</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">75,721</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">80,821</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">79,122</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">80,936</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 10.619pt" width="33%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Income related to construction of assets</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="9%" align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">22(b)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,464,482</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,224,633</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,474,612</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,234,778</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 10.619pt" width="33%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Allowance for doubtful accounts</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="9%" align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">8(c)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(192,236)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(120,260)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(192,295)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(120,393)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="33%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">11,274,704</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">10,490,237</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">11,296,137</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">10,505,441</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 3.54pt" width="33%" align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Inputs purchased from third parties</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 10.619pt" width="33%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Cost of sales, services and construction costs</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(3,961,486)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(3,624,471)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(3,974,090)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(3,635,920)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 10.619pt" width="33%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Materials, electricity, outsourced services, and other</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(676,063)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(667,932)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(680,759)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(670,492)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 10.619pt" width="33%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Other operating expenses</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="9%" align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">25</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(91,539)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(162,639)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(91,539)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(162,639)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="33%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(4,729,088)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(4,455,042)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(4,746,388)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(4,469,051)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 3.54pt" width="33%" align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Gross value added</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">6,545,616</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">6,035,195</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">6,549,749</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">6,036,390</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 5.46pt" width="33%" align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Retentions</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 10.619pt" width="33%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Depreciation and amortization</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="9%" align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">23</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(738,525)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(768,704)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(740,147)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(768,769)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 3.54pt" width="33%" align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Value added generated by the Company</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">5,807,091</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">5,266,491</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">5,809,602</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">5,267,621</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 3.54pt" width="33%" align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Value added received in transfer</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 10.619pt" width="33%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Equity in the earnings of subsidiaries</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(6,532)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(3,584)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 10.619pt" width="33%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Financial income</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">333,124</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">451,272</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">332,045</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">451,526</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="33%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">326,592</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">447,688</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">332,045</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">451,526</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 3.54pt" width="33%" align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Total value added for distribution</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 3px double" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">6,133,683</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">5,714,179</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 3px double" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">6,141,647</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 3px double" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">5,719,147</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=11>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=11>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 3.54pt" width="33%" align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Value added distribution</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 3.54pt" width="33%" align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Personnel</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 10.619pt" width="33%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Direct compensation</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,051,453</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">992,045</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,054,608</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">994,312</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=11>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="44%" colSpan=3 align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">The accompanying notes are an integral part of these financial statements.</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-63</FONT></P></DIV>

<HR align=center SIZE=2 width="100%" noShade>



<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV>

<!--$$/page=--><A name="page_64"></A><BR>

<DIV style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%">

<P style="TEXT-ALIGN: justify"><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Convenience Translation </FONT><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">into </FONT><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">English </FONT><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">from the </FONT><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Original Previously </FONT><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Issued in </FONT><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia </FONT></B><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">de </FONT></B><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Saneamento B&#225;sico </FONT></B><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">do </FONT></B><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Estado </FONT></B><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">de S&#227;o </FONT></B><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Paulo </FONT></B><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">- </FONT></B><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Statements </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">of Value </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Added </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">for the Years </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">ended December </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">31, 2012 and 2011<BR></FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(Amounts </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">in </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">thousands </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">of </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Brazilian </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">reais &#8211; R$, unless </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">otherwise indicated)</FONT></B>

<HR align=left color=#000000 SIZE=1 width="100%">



<P></P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="35%"></TD>

   <TD width="2%"></TD>

   <TD width="7%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD></TR>

<TR vAlign=bottom>

   <TD width="35%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="7%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="26%" colSpan=3 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">PARENT</FONT></B></TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=center>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">CONSOLIDATED</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="35%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="7%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Note</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 8.887pt" width="35%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Benefits</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="7%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">406,443</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">551,616</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">406,992</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">551,921</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 8.887pt" width="35%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Severance pay (FGTS)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="7%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">124,699</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">105,900</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">124,953</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">106,048</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="35%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="7%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,582,595</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,649,561</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,586,553</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,652,281</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="35%" align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Taxes, fees and contributions</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="7%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 8.887pt" width="35%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Federal</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="7%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,596,633</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,398,783</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,595,049</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,399,691</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 8.887pt" width="35%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">State</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="7%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">51,686</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">42,843</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">52,184</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">42,857</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 8.887pt" width="35%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Municipal</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="7%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">28,333</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">24,602</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">28,495</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">24,738</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="35%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="7%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,676,652</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,466,228</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,675,728</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,467,286</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="35%" align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Lenders and lessors</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="7%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 8.887pt" width="35%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Interest, exchange and monetary variations</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="7%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">900,151</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,336,380</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">904,757</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,337,258</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 8.887pt" width="35%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Rentals</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="7%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">62,385</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">38,591</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">62,709</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">38,903</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="35%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="7%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">962,536</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,374,971</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">967,466</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,376,161</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="35%" align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Shareholders</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="7%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.079pt" width="35%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Interest on shareholders&#8217; equity</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="7%" align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">19(c)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">454,076</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">290,562</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">454,076</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">290,562</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.079pt" width="35%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Retained earnings</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="7%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,457,824</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">932,857</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,457,824</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">932,857</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="35%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="7%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,911,900</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,223,419</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,911,900</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,223,419</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="35%" align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Value added distributed</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="7%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 3px double" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">6,133,683</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 3px double" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">5,714,179</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 3px double" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">6,141,647</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 3px double" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">5,719,147</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The </FONT><FONT size=2 face="Georgia,Times New Roman,Times,serif">accompanying </FONT><FONT size=2 face="Georgia,Times New Roman,Times,serif">notes are an </FONT><FONT size=2 face="Georgia,Times New Roman,Times,serif">integral </FONT><FONT size=2 face="Georgia,Times New Roman,Times,serif">part of these </FONT><FONT size=2 face="Georgia,Times New Roman,Times,serif">financial statements.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-64</FONT></P></DIV>

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<P style="TEXT-ALIGN: justify"><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>(Convenience Translation into English from the Original Previously Issued in Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes to the Financial Statements <BR>Years Ended December 31, 2012 and 2011 <BR></FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Amounts in thousands of reais, unless otherwise indicated</FONT></B>

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<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">1 General information</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo ("SABESP" or the "Company") is a mixed-capital company headquartered in S&#227;o Paulo, at Rua Costa Carvalho, 300, CEP</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">05429-900, controlled by the S&#227;o Paulo State Government. The Company is engaged in the provision of basic and environmental sanitation services in the State of S&#227;o Paulo, as well as it supplies treated water on a wholesale basis.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In addition to providing basic sanitation services in the State of S&#227;o Paulo, SABESP may perform these activities in other states and countries, and can operate in drainage, urban cleaning, solid waste handling and energy markets. The objective set in the new vision of SABESP is to be recognized as the company that ensured universal access to water and sewage services in its marketplace, focused on the customer, and in a sustainable and competitive manner, with excellence in environmental solutions.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">As of December 31, 2012, the Company operated water and sewage services in 363 municipalities of the State of S&#227;o Paulo. Most of these municipalities operations are based on 30-year concession agreements.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">SABESP is temporarily not operating in some municipalities due to judicial orders under ongoing lawsuits: Iper&#243;, Cajobi, &#193;lvares Florense and Macatuba, the carrying amount of these municipalities' intangible assets was R$16,516 as of December 31, 2012.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">As of December 31, 2012, 67 concessions had expired and are being negotiated. From 2013 to 2034, 38 concessions will expire. Management believes that all concessions expired and not yet renewed will result in new contracts, disregarding the risk of discontinuity in the provision of municipal water supply and sewage services. By December 31, 2012, 258 program and metropolitan contracts were signed (225 contracts on December 31, 2011).</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">As of December 31, 2012, the carrying amount of the underlying assets used in the 67 concessions of the municipalities under negotiation totaled R$5,874 million, accounting for 26.71% of total, and the related gross revenue for the year then ended totaled R$2,122,759 million, accounting for 18.61% of total.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company's operations are concentrated in the municipality of S&#227;o Paulo, which represents 54.74% of the gross revenues in 2012 (55.11% in December 2011) and 43.51% of intangible assets (45.63% in December 2011).</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">On June 23, 2010, the State of S&#227;o Paulo, the Municipality of S&#227;o Paulo, the Company and the regulatory agency &#8220;Sanitation and Energy Regulatory Agency &#8211; ARSESP&#8221; signed an agreement to share the responsibility for water supply and sewage services to the Municipality of S&#227;o Paulo based on a 30-year concession agreement. This agreement is extendable for another 30 years, pursuant to the law. This agreement sets forth SABESP as the exclusive service provider and designates ARSESP as regulator, establishing prices, controlling and monitoring services.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Also, on June 23, 2010, the State of S&#227;o Paulo, the city of S&#227;o Paulo and SABESP signed the &#8220;Public service provision agreement of water supply and sewage services&#8221;, a 30-year concession agreement which is extendable for another 30 years. This agreement involves the following activities:</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-65</FONT></P></DIV>

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<P style="TEXT-ALIGN: justify"><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>(Convenience Translation into English from the Original Previously Issued in Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes to the Financial Statements <BR>Years Ended December 31, 2012 and 2011 <BR></FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Amounts in thousands of reais, unless otherwise indicated</FONT></B></FONT></B>

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<P></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif"><STRONG><FONT face=Arial>&nbsp;</FONT></STRONG><FONT size=2 face="Georgia,Times New Roman,Times,serif">i. protection of the sources of water in collaboration with other agencies of the State and the City; ii. capture, transport and treat of water; iii. collect, transport, treatment and final dispose of sanitary sewage; and iv. adoption of other actions of basic and environmental sanitation.</FONT></FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In the municipality of Santos, in the Santos coast region, which has a significant population, the Company operates under an authorization by public deed, a situation similar to other municipalities in that region and in the Ribeira valley, where the Company started to operate after the merger of the companies that formed it. As of December 31, 2012, the carrying amount of the municipality of Santos&#8217; intangible assets was R$328,693 (R$175,069 in December 2011) and its gross revenue was R$202,103 (R$196,831 in December 2011).</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Article 58 of Law 11445/07 establishes that precarious and expired concessions, as well as those effective for an undetermined period of time, including those that do not have an instrument formalizing them, will be valid until December 31, 2010. However, Article 2 of Law 12693 of July 24, 2012 allows program agreements to be executed until December 31, 2016.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company&#8217;s management understands that the concession agreements not yet renewed are valid and are governed by Laws 8987/95 and 11445/07, including those municipalities served without an agreement.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Public deeds are valid and governed by the Brazilian Civil Code.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company's shares have been listed in the </FONT><I><FONT size=2 face="Georgia-Italic,Times New Roman,Times,serif">Novo Mercado </FONT></I><FONT size=2 face="Georgia,Times New Roman,Times,serif">(New Market) segment of BM&amp;FBOVESPA (the S&#227;o Paulo Stock Exchange) since April 2002 and on the New York Stock Exchange (NYSE) as American Depositary Receipts (&#8220;ADRs&#8221;) since May 2002.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Since 2008, the Company has been setting up partnerships with other companies, which resulted in the following companies: Sesamm, &#193;guas de Andradina, Saneaqua Mairinque, Aquapolo Ambiental, &#193;guas de Castilho and Attend Ambiental. Although SABESP has no majority interest in the capital stock of these companies, the shareholders&#8217; agreements provide for the power of veto and casting vote in certain issues jointly with associates, indicating the shared control in the management of investees. For the purposes of accounting classification in the financial statements, these companies are considered joint ventures, under the criteria of CPC 19.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The financial statements were approved by the Board of Directors on March, 21 2013.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2 Basis of Preparation and Presentation of the Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company is presenting the parent and consolidated financial statements.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The financial statements of the parent company was prepared in accordance with accounting policies accepted in Brazil, in conformity with Pronouncements, Interpretations and Guidelines of the Brazilian Pronouncements Committee (CPC). These accounting policies applied in the financial statements of the parent company are different from the International Financial Reporting Standards (IFRSs) only in the valuation of the joint</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-66</FONT></P></DIV>

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<P style="TEXT-ALIGN: justify"><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>(Convenience Translation into English from the Original Previously Issued in Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes to the Financial Statements <BR>Years Ended December 31, 2012 and 2011 <BR></FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Amounts in thousands of reais, unless otherwise indicated</FONT></B>&nbsp;</FONT></B>

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<P></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">controlled entities by equity method, since in IFRS the valuation should be at cost or fair value.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">As there is no difference between the consolidated equity and the consolidated net income attributable to the owners of the Company, disclosed in the consolidated financial statements prepared in accordance with IFRSs and the accounting practices adopted in Brazil, and the Company&#8217;s equity and net income disclosed in the individual financial statements prepared in accordance with accounting practices adopted in Brazil, the Company opted for presenting these individual and consolidated financial statements in a single set, side by side.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The consolidated financial statements of the Company have been prepared in accordance with the IFRS, issued by the International Accounting Standards Board ("IASB"), and the accounting practices adopted in Brazil and issued by the CPC.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The financial statements have been prepared under the historical cost except for certain financial instruments which were measured at fair value according to IFRS.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The preparation of financial statements in conformity with IFRSs and CPCs requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Company's accounting policies. The areas involving a higher degree to judgment or complexity, or areas where assumptions and estimates are significant to the individual and consolidated financial statements are described in Note 5.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2.1 Consolidated financial statements</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The consolidated financial statements include the financial statements of the Company and its investees: Sesamm &#8211; Servi&#231;os de Saneamento de Mogi Mirim S/A, &#193;guas de Andradina, &#193;guas de Castilho, Saneaqua Mairinque, Aquapolo Ambiental and Attend Ambiental, which were proportionately consolidated according to the equity interests held in these investees. The accounting policies of its investees are consistent with the accounting policies adopted by the Company. The Company shares the control of its investees, which have the same fiscal year basis. The consolidation processes of assets, liabilities and income statements add the assets, liabilities, revenues and expenses, according to the nature, by applying the percentage of the Company&#8217;s interest held in each investee.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Although SABESP has no majority shares of its investees, the shareholders&#8217; agreement provides for the power of veto in certain management issues, indicating participating shared control. Therefore, the financial statements were proportionately consolidated.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The following entities were consolidated proportionately:</FONT></P>

<P style="TEXT-ALIGN: justify"><U><FONT size=2 face="Georgia,Times New Roman,Times,serif">Sesamm</FONT></U></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">On August 15, 2008, the Company, together with the companies OHL M&#233;dio Ambiente, Inima S.A.U. Unipersonal ("Inima"), T&#233;cnicas y Gesti&#243;n Medioambiental S.A.U. ("TGM") and Estudos T&#233;cnicos e Projetos ETEP Ltda. ("ETEP") incorporated the company Servi&#231;os de Saneamento de Mogi Mirim S.A. - SESAMM ("SESAMM"), for a period of 30 years from the date the concession agreement with the municipality of Mogi Mirim for the purpose of providing complementary services to the sewage diversion system and implementing and</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-67</FONT></P></DIV>

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<P style="TEXT-ALIGN: justify"><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>(Convenience Translation into English from the Original Previously Issued in Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes to the Financial Statements <BR>Years Ended December 31, 2012 and 2011 <BR></FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Amounts in thousands of reais, unless otherwise indicated</FONT></B> </FONT></B>

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<P></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">operating sewage treatment system in the municipality of Mogi Mirim, including the disposal of solid waste.<FONT size=3 face="Times New Roman"> </FONT></FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">SESAMM's capital as of December 31, 2012 totaled R$19,532, and was represented by 19,532,409 registered shares without a par value. SABESP holds 36% of its equity interest and Inima holds another 46% of its equity interest. The Company concluded that both, SABESP and Inima, have joint control over SESAMM. Accordingly, SABESP records their interest over SESAMM applying the proportional consolidation method, equivalent to the 36% of SESAMM's assets and liabilities, revenues and expenses.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Operations started in June 2012.</FONT></P>

<P style="TEXT-ALIGN: justify"><U><FONT size=2 face="Georgia,Times New Roman,Times,serif">&#193;guas de Andradina</FONT></U></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">On September 15, 2010, the Company, together with the company Companhia de &#193;guas do Brasil &#8211; Cab Ambiental incorporated the company &#193;guas de Andradina S.A., with indefinite term, for the purpose of providing water supply and sewage services to the municipality of Andradina.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">As of December 31, 2012, the capital of &#193;guas de Andradina totaled R$2,908, and was represented by 2,908,085 registered shares without a par value. SABESP holds 30%of its equity interest.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Operations started in October 2010.</FONT></P>

<P style="TEXT-ALIGN: justify"><U><FONT size=2 face="Georgia,Times New Roman,Times,serif">&#193;guas de Castilho</FONT></U></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">On October 29, 2010, the Company, together with the Companhia de &#193;guas do Brasil &#8211; Cab Ambiental, incorporated the company &#193;guas de Castilho, for the purpose of providing water supply and sewage services to the municipality of Castilho.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">As of December 31, 2012, the company&#8217;s capital was R$622, and was represented by 622,160 registered share without par value. SABESP holds 30% equity interest.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Operations started in January 2011.</FONT></P>

<P style="TEXT-ALIGN: justify"><U><FONT size=2 face="Georgia,Times New Roman,Times,serif">Saneaqua Mairinque</FONT></U></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">On June 14, 2010, the Company, together with the company Foz do Brasil S.A. incorporated the company Saneaqua Mairinque S.A., with indefinite term, for the purpose of exploring the public service of water supply and sewage services to the municipality of Mairinque.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">As of December 31, 2012, the capital of Saneaqua Mairinque totaled R$2,000, and was represented by 2,000,000 registered shares without a par value. SABESP holds 30% equity interest.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Operations started in October 2010.</FONT></P>

<P style="TEXT-ALIGN: justify"><U><FONT size=2 face="Georgia,Times New Roman,Times,serif">Aquapolo Ambiental S.A.</FONT></U></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">On October 8, 2009, the Company, together with the company Foz do Brasil S.A. incorporated the company Aquapolo Ambiental S.A., for the purpose of producing, providing and commercializing of reused water for Quattor Qu&#237;mica S.A., Quattor</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-68</FONT></P></DIV>

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<P style="TEXT-ALIGN: justify"><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>(Convenience Translation into English from the Original Previously Issued in Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes to the Financial Statements <BR>Years Ended December 31, 2012 and 2011 <BR></FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Amounts in thousands of reais, unless otherwise indicated</FONT></B>&nbsp;</FONT></B>&nbsp;</FONT></B>

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<P></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">operating sewage treatment system in the municipality of Mogi Mirim, including the disposal of solid waste<FONT size=2 face=Georgia>.</FONT></FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Petriqu&#237;mica S.A., Quattor Participa&#231;&#245;es S.A. and other companies comprising the Petrochemical Complex.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">As of December 31, 2012, the capital of Aquapolo totaled R$36,412, and was represented by 42,419,045 registered shares without a par value. SABESP holds 49%of its equity interest.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Operations started in October 2012.</FONT></P>

<P style="TEXT-ALIGN: justify"><U><FONT size=2 face="Georgia,Times New Roman,Times,serif">Attend Ambiental</FONT></U></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">On August 23, 2010 the Company and Companhia Estre Ambiental S.A, incorporated the company Attend Ambiental S.A, for constructing and operating a pretreatment of non-domestic effluent station, mud transportation and related services in the Metropolitan area of S&#227;o Paulo city as well as implement similar structures in other areas in Brazil and abroad.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">As of December 31, 2012, the capital totaled R$2,000, and was represented by 2,000,000 registered shares without par value. SABESP holds 45% equity interest. A total of R$11,400 was recorded under the investee&#8217;s equity as advance for future capital increase.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Attend is at startup stage and startup is scheduled for September 2013.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">See below a summary of financial information of the joint controlled entities:</FONT></P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="16%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="11%"></TD>

   <TD width="2%"></TD>

   <TD width="11%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="13%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD></TR>

<TR vAlign=bottom>

   <TD width="16%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="81%" colSpan=11 align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD width="16%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=center>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">&#193;GUAS DE</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">&#193;GUAS DE</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">SANEAQUA</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">AQUAPOLO</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">ATTEND</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="16%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">SESAMM</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">ANDRADINA</FONT></B></TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=center><STRONG><FONT size=1>&nbsp;CASTILHO</FONT></STRONG>&nbsp;&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">MAIRINQUE</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">AMBIENTAL</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">AMBIENTAL</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="16%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">36%</FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">30%</FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">30%</FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">30%</FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="13%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">49%</FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">45%</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="16%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Current assets</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">875</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,199</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">404</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">414</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">15,247</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,976</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="16%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Noncurrent assets</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">19,609</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">3,934</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">904</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">858</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">181,749</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,570</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=13>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="16%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Current liabilities</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">822</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">4,777</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">868</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">272</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">32,304</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">167</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="16%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Noncurrent</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="16%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">liabilities</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">13,902</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">555</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">77</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">15</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">157,047</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="16%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Equity</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">5,760</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">801</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">363</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">985</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">7,645</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">4,379</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="16%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="11%"></TD>

   <TD width="2%"></TD>

   <TD width="11%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="13%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD></TR>

<TR vAlign=bottom>

   <TD width="16%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="81%" colSpan=11 align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD width="16%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=center>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">&#193;GUAS DE</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">&#193;GUAS DE</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">SANEAQUA</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">AQUAPOLO</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">ATTEND</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="16%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">SESAMM</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">ANDRADINA&nbsp;</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=center><STRONG><FONT size=1>CASTILHO</FONT></STRONG>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">MAIRINQUE</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">AMBIENTAL</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">AMBIENTAL</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="16%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">36%</FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">30%</FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">30%</FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">30%</FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="13%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">49%</FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">45%</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="16%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Current assets</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,658</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">360</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">133</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">561</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">12,424</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">5,003</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="16%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Noncurrent assets</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">14,447</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,300</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">423</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">164</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">180,717</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">223</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=13>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="16%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Current liabilities</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">832</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">815</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">256</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">228</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">10,262</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">127</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="16%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Noncurrent</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="16%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">liabilities</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">11,120</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">84</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">47</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">28</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">167,498</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">5,130</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="16%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Equity</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">5,153</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">761</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">253</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">469</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">15,381</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(31)</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-69</FONT></P></DIV>

<HR align=center SIZE=2 width="100%" noShade>



<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV>

<A name="page_70"></A><BR>

<DIV style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%">

<P style="TEXT-ALIGN: justify"><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>(Convenience Translation into English from the Original Previously Issued in Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes to the Financial Statements <BR>Years Ended December 31, 2012 and 2011 <BR></FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Amounts in thousands of reais, unless otherwise indicated</FONT></B> </FONT></B></FONT></B>

<HR align=left color=#000000 SIZE=1 width="100%">



<P></P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="17%"></TD>

   <TD width="2%"></TD>

   <TD width="11%"></TD>

   <TD width="2%"></TD>

   <TD width="11%"></TD>

   <TD width="2%"></TD>

   <TD width="11%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="13%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD></TR>

<TR vAlign=bottom>

   <TD width="17%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="80%" colSpan=11 align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD width="17%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=center>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">&#193;GUAS DE</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">&#193;GUAS DE</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">SANEAQUA</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">AQUAPOLO</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">ATTEND</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="17%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">SESAMM</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">ANDRADINA&nbsp;</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=center><STRONG><FONT size=1>CASTILHO</FONT></STRONG>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">MAIRINQUE</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">AMBIENTAL</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">AMBIENTAL</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="17%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">36%</FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">30%</FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">30%</FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">30%</FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="13%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">49%</FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">45%</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="17%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Operating revenue</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">9,364</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">4,611</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,336</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,931</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">3,249</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="17%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Operating expenses</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(8,775)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(4,747)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(1,203)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(2,715)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(10,118)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(1,057)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="17%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Financial income,</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="17%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">net</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">85</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">104</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">22</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">19</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">26</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">336</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="17%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Net income (loss)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="17%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">for the year</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">674</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(32)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">155</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">235</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(6,843)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(721)</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="17%"></TD>

   <TD width="2%"></TD>

   <TD width="11%"></TD>

   <TD width="2%"></TD>

   <TD width="11%"></TD>

   <TD width="2%"></TD>

   <TD width="11%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="13%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD></TR>

<TR vAlign=bottom>

   <TD width="17%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="80%" colSpan=11 align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD width="17%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=center>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">&#193;GUAS DE</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">&#193;GUAS DE</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">SANEAQUA</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">AQUAPOLO</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">ATTEND</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="17%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">SESAMM</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">ANDRADINA&nbsp;</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=center><STRONG><FONT size=1>CASTILHO</FONT></STRONG>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">MAIRINQUE</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">AMBIENTAL</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">AMBIENTAL</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="17%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; TEXT-INDENT: 9.36pt" width="11%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">36%</FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">30%</FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">30%</FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">30%</FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="13%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">49%</FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">45%</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=13>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="17%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Operating revenue</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">9,203</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,985</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">651</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,498</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="17%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Operating expenses</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(10,494)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(2,954)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(568)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(2,730)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(1,438)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(992)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="17%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Financial income,</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="17%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">net</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">115</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">31</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">5</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">44</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">60</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="17%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Net income (loss)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="17%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">for the year</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(1,176)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">62</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">88</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(188)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(1,438)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(932)</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">3 Summary of Significant Accounting Practices</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Main accounting policies applied in the preparation of these financial statements are defined below. These policies have been applied consistently in all years presented.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">3.1 </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Cash and cash equivalents</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Cash and cash equivalents include cash in hand, bank deposits, other short-term highly liquid investments with original maturities less than three months as from the investment date, with an insignificant risk of change value, as well as current account overdrafts.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">3.2 </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Financial instruments Classification</FONT></B></P>

<P style="TEXT-ALIGN: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company classifies its financial assets according to the following categories: measured at fair value through profit or loss, loans and receivables, held-to-maturity and available for sale. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of the financial assets at inception. As of December 31, 2012 and 2011, the Company did not have financial assets</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-70</FONT></P></DIV>

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<P style="TEXT-ALIGN: justify"><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>(Convenience Translation into English from the Original Previously Issued in Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes to the Financial Statements <BR>Years Ended December 31, 2012 and 2011 <BR></FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Amounts in thousands of reais, unless otherwise indicated</FONT></B>&nbsp;</FONT></B></FONT></B><FONT size=2 face="Georgia,Times New Roman,Times,serif"> </FONT>

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<P></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif"><FONT face=Georgia>classified under the fair value through profit or loss, held-to-maturity and available-for-sale financial instruments category.</FONT><FONT size=3> </FONT></FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif"><STRONG>Financial assets calculated at fair value through profit or loss</STRONG></FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">These are financial assets held for trading. A financial asset is classified into this category when mainly acquired for sale purposes in the short term. These assets are classified as current assets. Gains or losses arising from changes in the fair value of financial assets measured at fair value through profit or loss are presented in the income statement in 'Financial income' or 'Financial expenses&#8217; in the period they occur, unless the instrument has been contracted in connection to another transaction. In this case, changes are recognized in the same line item of income affected by this transaction.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Loans and receivables</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">These comprise receivables which are non-derivative financial assets with fixed or determinable payments, not quoted in an active market. Loans and receivables are presented in current assets or liabilities, except for those with maturity of more than 12 months after the statement of financial position date (these are classified as noncurrent assets or liabilities). The Company's loans and receivables include cash and cash equivalents, balances of trade receivables, receivables from related parties, other receivables, indemnities receivable, receivables from the Water National Agency &#8211; ANA, contractors and suppliers, loans and financing, interest on shareholders&#8217; equity payable, services payable, balances payable from public-private partnership (PPP), and program contract commitments. Loans and receivables are recorded at fair value and subsequently at amortized cost, under the effective interest rate method.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">3.3 </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Revenue from sales and services</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=3 face="Georgia,Times New Roman,Times,serif">(a)</FONT><FONT size=2 face="Georgia,Times New Roman,Times,serif">Revenue from sales and services</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Revenue from water supply and sewage collection are recognized as the water is consumed and services are provided. Revenues, including the revenues unbilled, are recognized at the fair value of the consideration received or receivable for the sale of those services. Revenue is shown net of value-added tax, rebates and discounts. Revenues from unbilled represent incurred revenues in which the services were provided, but not yet billed until the end of the each period. Water supply and sewage services are recorded as trade receivables based on monthly estimates of the services provided.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company recognizes revenue when: i) products are delivered or services are rendered; ii) the amount of revenue can be reliably measured, iii) it is probable that future economic benefits will flow to the Company and iv) it is probable that the amounts will be collected. The amount of revenue is not considered to be reliably measurable until all conditions relating to the sale have been satisfied. Amounts in dispute are recognized as revenue when collected.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=3 face="Georgia,Times New Roman,Times,serif">(b)</FONT><FONT size=2 face="Georgia,Times New Roman,Times,serif">Construction revenue</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Revenue from concession construction contracts is recognized in accordance with CPC 17 and IAS 11 (Construction Contracts), using the percentage-of-completion method, provided</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-71</FONT></P></DIV>

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<P style="TEXT-ALIGN: justify"><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>(Convenience Translation into English from the Original Previously Issued in Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes to the Financial Statements <BR>Years Ended December 31, 2012 and 2011 <BR></FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Amounts in thousands of reais, unless otherwise indicated</FONT></B>&nbsp;</FONT></B></FONT></B><FONT size=2 face="Georgia,Times New Roman,Times,serif"> </FONT>

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<P></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">that the applicable conditions for application are fulfilled. The percentage of completion is calculated from the ratio of the actual costs incurred on the balance sheet date to the planned total costs (cost-to-cost method). Revenue from cost plus contracts is recognized by reference to the construction costs incurred during the period plus a fee earned. The fee represents the additional margin related to the work performed by the Company in relation to such construction contracts and it is added to the construction costs incurred and the total is recognized as construction revenue.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">3.4 </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Trade receivables and allowance for doubtful accounts</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Trade receivables are amounts due from customers for services performed in the ordinary course of business. If collection is expected in one year or less, they are classified as current assets. If not, they are presented as noncurrent assets.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company records an allowance for doubtful accounts for receivable balances in an amount that is deemed by management to be sufficient to cover probable losses in accounts receivable, based on the analysis of the history of receipts and current guarantees and it does not expect to incur in additional significant losses.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">3.5 </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Inventories</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Inventories of supplies for consumption and maintenance of the water and sewage systems are stated at the lower of average cost of acquisition or realizable value, and are classified in current assets.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">3.6 </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Investment property</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The investment properties are recorded at the acquisition or construction cost, less accumulated depreciation, calculated on a straight-line basis at rates that consider the estimated useful life of assets. Expenditures related to repairs and maintenance are recorded in the income statement when incurred.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company also maintains few assets for indeterminate use in the future, i.e., it is not defined if the Company will use the property in the operation or sell the property in the short term during the ordinary course of business.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">3.7 </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Property, plant and equipment</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Property, plant and equipment comprise mainly administrative facilities not composing the assets subject-matter of the concession agreements. Those assets are stated at historical acquisition or construction cost less depreciation, net of impairment charge, when necessary. Interest, other financial charges and inflationary effects deriving from financing effectively applied to construction in progress are recorded as cost of respective property, plant and equipment.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Subsequent costs included in the asset's carrying amount or recognized as a separate asset, as appropriate, only when it is probable that the future economic benefit associated with the item will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the income statement during the financial period in which they were incurred.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-72</FONT></P></DIV>

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<P style="TEXT-ALIGN: justify"><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>(Convenience Translation into English from the Original Previously Issued in Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes to the Financial Statements <BR>Years Ended December 31, 2012 and 2011 <BR></FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Amounts in thousands of reais, unless otherwise indicated</FONT></B>&nbsp;</FONT></B></FONT></B><FONT size=2 face="Georgia,Times New Roman,Times,serif"></FONT></P>

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<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Depreciation is calculated using the straight-line method to allocate their cost and is described in Note 12(a). Land is not depreciated.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Residual values and the useful lives of assets are reviewed and adjusted, where applicable, at the end of each year.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Gain and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognized within other operating income (expenses) in the income statements.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">3.8 </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Intangible assets</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Valued at acquisition cost and/or construction of the underlying assets, including construction margin, interest and other financial charges capitalized during the construction period, in this case, for the qualifying assets. Qualifying assets are assets that, necessarily, take a substantial period to get ready for its intended use or sale. The Company considers that substantial period means a period greater than 12 months. This period was established by considering the completion period of the majority of its constructions which is greater than 12 months.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The amortization is calculated when the intangible assets are available for use in the necessary condition established by the Company.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The amortization reflects the period over the expected future economic benefits generated by the intangible asset and can be the period of the contract, depending on the contract or the useful life of the asset.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The amortization of the intangible assets is discontinued when the asset is fully consumed or it is disposed of, whatever occurs first.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Infrastructure to which the operator is given access by the concession grantor or donations received from third parties is not recognized in the consolidated balance sheet, since such donations are controlled by the concession grantor.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Financial resources received as donations for the construction of infrastructure are recorded under &#8220;Other operating income&#8221;.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">(a)</FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Concession arrangements/programs</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company operates concession agreements including the rendering of basic sanitation, environmental, water supply and sewage collection services signed with the concession grantor. The infrastructure used by SABESP subject to service concession arrangements is considered to be controlled by the concession grantor when:</FONT></P>

<TABLE border=0 cellSpacing=0>



<TR>

   <TD vAlign=top width="2%" noWrap><FONT size=2 face="Georgia,Times New Roman,Times,serif">(i)</FONT>&nbsp; &nbsp; &nbsp; </TD>

   <TD width="98%"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The grantor controls or regulates what services the operator must provide with the infrastructure, to whom it most provide them, and at what price; and</FONT> </TD></TR>

<TR>

   <TD vAlign=top width="2%" noWrap><FONT size=2 face="Georgia,Times New Roman,Times,serif">(ii)</FONT>&nbsp; &nbsp; &nbsp; </TD>

   <TD width="98%"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The grantor controls the infrastructure, i.e., retains the right to take back the infrastructure at the end of the concession.</FONT> </TD></TR></TABLE>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">SABESP's rights over infrastructure operated under concession arrangements is accounted for as an intangible asset as SABESP has the right to charge for use of the infrastructure</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-73</FONT></P></DIV>

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<P style="TEXT-ALIGN: justify"><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>(Convenience Translation into English from the Original Previously Issued in Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes to the Financial Statements <BR>Years Ended December 31, 2012 and 2011 <BR></FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Amounts in thousands of reais, unless otherwise indicated</FONT></B>&nbsp;</FONT></B></FONT></B>

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</P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">assets, and users (consumers) have the primary responsibility to pay SABESP for the services.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The fair value of construction and other work on the infrastructure is recognized as revenue, at its fair value, when the infrastructure is built, provided that this work is expected to generate future economic benefits. The accounting policy to recognize construction revenue is described in Note 3.3 &#8220;Revenue from sales and services.&#8221;</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Intangible assets related to Concession agreements and Program contracts, when there is no right to receive the residual value of the assets at the end of the contract, are amortized on a straight-line basis over the period of the contract or the useful life of the underlying asset, whichever is shorter.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Investments made and not recovered through rendering of services, within the agreement term, must be indemnified by the concession grantor, (1) with cash or cash equivalents or also, in general (2) with the contract extension. These investments are amortized over the useful life of asset.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Law 11445/07 prescribes that, whenever possible, basic sanitation public utilities shall have their economic and financial sustainability ensured through the consideration received from service collection, preferably as tariffs and other public prices, which may be established for each service or both jointly. Therefore, investments made and not recovered through services rendered, within original term of the contract, are recorded as intangible assets and amortized over the useful life of the asset, taking into consideration a solid track record of concession renewal and, therefore, the continuity of services.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">(b) </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Software licenses</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Software licenses of computer programs and business management systems acquired are capitalized and amortized over their useful lives, and the expenses associated with maintaining these are recognized as expenses when incurred.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">3.9 </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Impairment of non-financial assets</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Property, plant and equipment, intangibles and other noncurrent assets with definite useful lives, are yearly reviewed for impairment or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company does not have assets with indefinite useful lives and concluded that there are no indications of impairment losses.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">3.10 </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Payables to suppliers and contractors</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Accounts payable to contractors and suppliers are obligations to pay for goods or services purchased from suppliers in the ordinary course of business and are classified as current liabilities if the payment is due in the period up to one year. Otherwise, the accounts payable are presented as non-current liabilities and are initially measured at fair value, which generally correspond to the bill and subsequently at amortized cost.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">3.11 </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Loans and financing</FONT></B></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-74</FONT></P></DIV>

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<P style="TEXT-ALIGN: justify"><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>(Convenience Translation into English from the Original Previously Issued in Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes to the Financial Statements <BR>Years Ended December 31, 2012 and 2011 <BR></FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Amounts in thousands of reais, unless otherwise indicated</FONT></B>&nbsp;</FONT></B></FONT></B>

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<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Borrowings are initially recognized at fair value, upon receipt of funds, net of transaction costs. Subsequently, borrowings are stated at amortized cost, as presented in Note 13. Loans and financing are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Nonconvertible debentures issued by the Company are recognized in a similar manner to borrowings.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">3.12 </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Loan costs</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The cost of loans attributable to acquisition, construction or production of an asset, which, necessarily, requires a substantial time period to be ready for use or sale are capitalized as part of the cost of these assets. Other borrowing costs are recognized as expenses in the period they are incurred. Borrowing costs are interest rates and other charges incurred by the Company related to loans, including exchange variation, as described below.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The capitalization occurs during the period in which the asset has been built, considering the weighted average rate of loans effective on the capitalization date.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">For foreign currency-denominated loans or financing, the Company analyzes them as if they were contracted in domestic currency, restricting the capitalization of interest and/or exchange variation by the amount that would be capitalized if these were contracted in the domestic market.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">3.13 </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Payroll and related charges</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Salaries include an accrual for vacations and the 13</FONT><SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">th </FONT></SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">salary and additional payments negotiated in collective labor agreements plus related charges and are recorded on the accruals basis.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">3.14 </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Profit sharing</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company's profit sharing plan for its employees is based on general targets of the Company as a whole, and based on the performance of each business units. The Company recognizes a provision when it is contractually required or when there is a practice in the past that created a constructive obligation. The accrual for profit sharing is recorded on the accrual basis period as operating expenses and as cost of sales and services rendered.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">3.15 </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Provisions, legal liabilities, judicial deposits, escrow deposits and contingent assets</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Provisions related to claims are recognized when: i) the Company has a present legal or constructive obligation as a result of past events; ii) it is probable that an outflow of resources will be required to settle the obligation; and iii) the amount can be reliably estimated. Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Provisions are measured at the present value of the disbursements expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-75</FONT></P></DIV>

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<P style="TEXT-ALIGN: justify"><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>(Convenience Translation into English from the Original Previously Issued in Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes to the Financial Statements <BR>Years Ended December 31, 2012 and 2011 <BR></FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Amounts in thousands of reais, unless otherwise indicated</FONT></B>&nbsp;</FONT></B></FONT></B>

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</P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognized as interest expense.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">For financial statement presentation purposes, the provision is stated net of the related escrow deposits based on the legal right to offset. The bases and the nature of the provisions for civil, tax, labor and environmental risks are described in Note 16.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Escrow deposits not linked to related liabilities are recorded in noncurrent assets. Escrow deposits are restated for inflation.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Contingent assets are not recognized.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">3.16 </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Environmental costs</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Costs related to ongoing environmental programs are expensed in the income statement.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Ongoing programs are designed to minimize the environmental impact of the operations and to manage the environmental risks inherent to the Company's activities.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">3.17 </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Income taxes &#8211; current and deferred</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In order to calculate the income tax and social contribution, since 2008, the Company has been adopting the Transition Tax Regime (RTT), as provided for by Law 11941/09, i.e., in the calculation of taxable income considered the accounting criteria of Law 6404/76 preceding the amendments to Law 11638/07.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The RTT will be effective until the enactment of the law ruling the tax effects from new accounting methods, seeking tax neutrality.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">This regime was optional in the 2008 and 2009 calendar years and mandatory as of 2010.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company opted for adopting RTT in 2009, referring to the calendar years 2008 and 2009. In order to calculate the income tax and social contribution for the years ended December 31, 2011 and 2010, the Company adopted the prerogatives defined by RTT.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The tax expense for the period comprises current and deferred tax.</FONT></P>

<P style="TEXT-ALIGN: justify"><U><FONT size=2 face="Georgia,Times New Roman,Times,serif">Current tax</FONT></U></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The provision for income tax and social contribution is based on the taxable income for the year. Income tax was calculated at the rate of 15%, plus a 10% surtax on annual taxable income exceeding R$240. Social contribution was calculated at the rate of 9% on adjusted net income. Taxable income differs from the profit disclosed in the income statement because it excludes income or expenses taxable or deductible in other years, as well as permanently nontaxable or nondeductible items. The provision for income tax and social contribution is calculated individually (by each jointly controlled entity) based on the tax rates in effect at the end of the reporting period. Management periodically reviews the positions assumed by the Company in the income tax returns in cases where the applicable tax regulation gives rise to different interpretations. Management recognizes provisions, when applicable, based on the estimated amounts payable to tax authorities.</FONT></P>

<P style="TEXT-ALIGN: justify"><U><FONT size=2 face="Georgia,Times New Roman,Times,serif">Deferred taxes</FONT></U></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-76</FONT></P></DIV>

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<P style="TEXT-ALIGN: justify"><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>(Convenience Translation into English from the Original Previously Issued in Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes to the Financial Statements <BR>Years Ended December 31, 2012 and 2011 <BR></FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Amounts in thousands of reais, unless otherwise indicated</FONT></B>&nbsp;</FONT></B></FONT></B></FONT></B>

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</P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Deferred income tax and social contribution are recognized on the differences between the tax bases and the accounting balances of assets and liabilities, as prescribed by CPC 32 and IAS 12 - Taxes on Income; however, they are not recognized if generated in the first-time recording of assets and liabilities in transactions that do not affect the tax bases, except for business combinations. Deferred income tax and social contribution are determined based on the tax rates and laws enacted or substantially enacted at the end of the reporting period and applicable when the respective income tax and social contribution will be paid.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Deferred income tax and social contribution assets are recognized only to the extent that it is probable that there will be a positive tax base for which temporary differences can be used and tax loss carryforwards can be offset.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Deferred income tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when deferred tax assets and liabilities are related to the taxes imposed by the same tax authorities over the same taxable entity.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">3.18 </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Taxes on revenues</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Revenues from sales and services are recognized on accrual basis for PASEP and Cofins. Taxes levied on billed amounts to public entities are due when bills are received.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">As these taxes are calculated by the non-cumulativeness regime and presented net of tax credits, as deductions from gross revenues. Debts measured on &#8220;other operating income&#8221; are presented as deductions from the respective operating income or expense.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">3.19 </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Pension obligations</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">(a) Defined benefit</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Liabilities from defined benefit pension plan obligations correspond to the present value of the defined benefit obligation at balance sheet date, less the fair value of the plan assets, and adjusted by unrecognized actuarial gains or losses. The defined benefit obligation (G1) and (G0) are calculated on an annual basis by independent actuaries, using the projected unit credit method. The estimated future cash outflows is discounted to its present value, using the interest rates of the Brazilian National Government bonds with maturities that approximate the maturity of the related liability.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company adopts the corridor method to recognize actuarial gains and losses. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are in excess of the greater of 10% of the fair value of plan assets or 10% of the present value of the defined benefit obligation are charged or credited to income over the employees' expected average remaining working lives. The higher the number of plan retirees the smaller is the average remaining working period of plan participants. For plans substantially composed of retirees and pensioners, the Company immediately records all actuarial gains and losses in excess of the limits of the corridor, i.e. on the first day of the subsequent year after the calculation of the referred actuarial gains or losses. The expenses related to pension plan are recognized in profit and loss of the year as cost of sales and services, selling expenses or administrative expenses, according to employee&#8217;s allocation.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-77</FONT></P></DIV>

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<P style="TEXT-ALIGN: justify"><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>(Convenience Translation into English from the Original Previously Issued in Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes to the Financial Statements <BR>Years Ended December 31, 2012 and 2011 <BR></FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Amounts in thousands of reais, unless otherwise indicated</FONT></B>&nbsp;</FONT></B></FONT></B>

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<P></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In an event where a curtailment relates to only some of the employees covered by a plan, or where only part of an obligation is settled, the gain or loss includes a proportionate share of the previously unrecognized past service cost and actuarial gains and losses. The proportionate share is determined on the basis of the present value of the obligations before and after the curtailment or settlement.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company makes contributions to defined benefit plans on a contractual basis and sponsored thereby, managed by Funda&#231;&#227;o Sabesp de Seguridade Social &#8211; SABESPREV, a supplementary private close-end pension entity. The regular contributions are recognized in the income statement of the period.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">(b) Defined contribution</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company makes contributions to defined contribution plans (Sabesprev Mais) on a contractual basis and sponsored thereby, managed by Funda&#231;&#227;o Sabesp de Seguridade Social &#8211; SABESPREV, a supplementary private close-end pension entity that provides post-employment benefits to its employees.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">A defined contribution plan is a pension plan according to which the Company makes fixed contributions to a separate entity. The Company has no obligation of making contributions if the fund does not have sufficient funds to pay to all employees the benefits related to employee&#8217;s services in current and previous period.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">3.20</FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Financial income and expenses</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Financial income is primarily comprised of interest, inflation adjustments and exchange variations on escrow deposits and negotiations with customer to pay by installments, using the effective interest rate method.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Financial expenses are primarily comprised of interest, inflation adjustments and exchange variations on loans and financing, refinancing, provisions, public-private partnership, program contract commitments and provisions. These financial income and expenses are calculated using the effective interest rate method.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Inflation adjustments and foreign exchange gains and losses derive from the collection or payment to third parties, as contractually required by law or court decision, and recognized on an accrual basis </FONT><I><FONT size=2 face="Georgia-Italic,Times New Roman,Times,serif">pro rata temporis</FONT></I><FONT size=2 face="Georgia,Times New Roman,Times,serif">.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Inflation adjustments included in the agreements are not considered embedded derivatives, since they are deemed as inflation adjustment rates for the Company&#8217;s economic scenario.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">3.21 </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Leases</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Lease agreements are classified as financial lease when property, risks and rewards inherent to the ownership of asset to the lessee are transferred. Other leases are classified as operating leases, recognized as expenses in the income statement on a straight-line basis during the lease period.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Financial lease agreements are measured based on the lower of the present value of minimum lease payments or the fair value of leased asset at the start of the lease. The</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-78</FONT></P></DIV>

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<P style="TEXT-ALIGN: justify"><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>(Convenience Translation into English from the Original Previously Issued in Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes to the Financial Statements <BR>Years Ended December 31, 2012 and 2011 <BR></FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Amounts in thousands of reais, unless otherwise indicated</FONT></B>&nbsp;</FONT></B></FONT></B>

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<P></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">amounts payable deriving from considerations of financial lease agreements are recognized and allocated between financial expenses and amortization of financial lease payables so as to obtain a constant interest rate. The corresponding liability is recorded as short- and long-term debt.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">3.22 </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Other current and noncurrent assets and liabilities</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Other assets are stated at cost of acquisition, net of any impairment loss, where applicable.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The amounts recognized as other liabilities are stated at known or estimated amounts, including, where applicable, related charges and monetary variations.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">3.23 </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Dividends and Interest on shareholders&#8217; equity</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company uses the tax benefits of distributing dividends as interest on shareholders&#8217; equity, as permitted by Brazilian Law. This distribution of dividend is accounted for in accordance with Brazilian Law 9249/95 for tax deductibility purposes, limited to the daily pro rata fluctuation of the Long-term Interest Rate (TJLP). The benefit attributed to the shareholders is recognized in the current liability against Equity, based on its by-laws. Dividends and interest on shareholders&#180; equity over the minimum established in the bylaws are recognized when approved by the shareholders in the general meeting. The tax effects of the interest on shareholders&#8217; equity are recognized in the income statement for the year, under the same recognition basis.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">3.24</FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Present value adjustment</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Current and noncurrent financial assets and liabilities are adjusted to present value based on discount rate at current market rate as of the transaction date, when the effects are relevant.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">3.25 </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Statements of value added (DVA)</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The purpose of the statement of value added is to present the wealth generated and distributed by the Company as required by Brazilian corporate law. The statement of value added is part of the individual financial statements and as supplementary information for the consolidated financial statements since it is not required by IFRS.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The DVA was prepared based on information obtained in the accounting books, which is the base to prepare the financial statements. In its first part is presented the wealth generated by the Company representing revenues (gross revenue, including taxes on revenues, other revenues and the effects of the allowance for doubtful account), by services and products acquired from third party (cost of sales and material purchases, electricity and outsourced services, the effects of losses and recoverable of assets, depreciation and amortization) and by value added received from third parties (equity share of investment in investee, financial income and other revenues). The second part of the DVA present the distribution of the wealth segregated in employees, taxes, fees and contributions, lenders and lessors and shareholders.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">3.26</FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Segment reporting</FONT></B></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-79</FONT></P></DIV>

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<P style="TEXT-ALIGN: justify"><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>(Convenience Translation into English from the Original Previously Issued in Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes to the Financial Statements <BR>Years Ended December 31, 2012 and 2011 <BR></FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Amounts in thousands of reais, unless otherwise indicated</FONT></B>&nbsp;</FONT></B></FONT></B>

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<P></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker, for taking decision, for allocating resources and assessing performance of the operating segments.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Based on how the Company treats its business and how decision-making of resources allocation is made, two operating segments (water and sewage) were stated for financial reporting purposes. The segment reporting is detailed in Note 21.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">3.27 </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Translation into foreign currency </FONT></B><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">(a) </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Functional and reporting currency</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Items included in the financial statements are measured using the currency of the primary economic environment in which the company operates ("the functional currency"). The financial statements are presented in Brazilian </FONT><I><FONT size=2 face="Georgia-Italic,Times New Roman,Times,serif">reais </FONT></I><FONT size=2 face="Georgia,Times New Roman,Times,serif">(R$), which is also the Company's functional and presentation currency. All financial information presented has been presented in reais, except where indicated.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">(b) </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Foreign currency translation</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Foreign currency-denominated transactions are translated into Brazilian </FONT><I><FONT size=2 face="Georgia-Italic,Times New Roman,Times,serif">reais </FONT></I><FONT size=2 face="Georgia,Times New Roman,Times,serif">using the exchange rates prevailing at the transaction dates. Balance sheet accounts are translated at the exchange rate prevailing at balance sheet date.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Foreign exchange gains and losses resulting from the settlement of these transactions and the translation of foreign currency-denominated cash assets and liabilities are recognized in foreign exchange result in the income statement, except for loans and financing related to property, plant and equipment or intangible assets in progress, where foreign exchange gains and losses are recognized as contra entry to the asset while construction is in progress.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-80</FONT></P></DIV>

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<P style="TEXT-ALIGN: justify"><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>(Convenience Translation into English from the Original Previously Issued in Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes to the Financial Statements <BR>Years Ended December 31, 2012 and 2011 <BR></FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Amounts in thousands of reais, unless otherwise indicated</FONT></B>&nbsp;</FONT></B></FONT></B>

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<P></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">4 Changes in accounting practices and disclosures</FONT></B><BR><BR><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">4.1 New and revised standards and interpretations effective for periods</FONT></B><BR><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">beginning on or after January 1, 2012</FONT></B><BR><BR><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">New and revised standards</FONT></B></P>

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<TR>

   <TD width="30%"></TD>

   <TD width="2%"></TD>

   <TD width="47%"></TD>

   <TD width="2%"></TD>

   <TD width="18%"></TD></TR>

<TR vAlign=bottom>

   <TD align=left><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Standard</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Key requirements</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Effectiveness</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">date</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD colSpan=5>&nbsp;</TD></TR>

<TR>

   <TD colSpan=5>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD vAlign=top align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Deferred taxes: recovery of</FONT><BR><FONT size=2 face="Georgia,Times New Roman,Times,serif">underlying assets</FONT><BR><FONT size=2 face="Georgia,Times New Roman,Times,serif">(amendments to IAS 12)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD vAlign=top align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">It amends IAS 12 &#8211; Income Tax to</FONT><BR><FONT size=2 face="Georgia,Times New Roman,Times,serif">provide the assumption that the recovery</FONT><BR><FONT size=2 face="Georgia,Times New Roman,Times,serif">of the carrying amount of an asset</FONT><BR><FONT size=2 face="Georgia,Times New Roman,Times,serif">measured based on the fair value model</FONT><BR><FONT size=2 face="Georgia,Times New Roman,Times,serif">of IAS 40 &#8211; Investment Property will</FONT><BR><FONT size=2 face="Georgia,Times New Roman,Times,serif">usually occur through sale.</FONT><BR><FONT size=2 face="Georgia,Times New Roman,Times,serif">Due to this amendment, SIC 21 &#8211; Income</FONT><BR><FONT size=2 face="Georgia,Times New Roman,Times,serif">Taxes &#8211; Recovery of Revalued Non-</FONT><BR><FONT size=2 face="Georgia,Times New Roman,Times,serif">Depreciable Assets would no longer be</FONT><BR><FONT size=2 face="Georgia,Times New Roman,Times,serif">applicable to investment property carried</FONT><BR><FONT size=2 face="Georgia,Times New Roman,Times,serif">at fair value. The amendments also</FONT><BR><FONT size=2 face="Georgia,Times New Roman,Times,serif">include in IAS 12 a remaining guidance</FONT><BR><FONT size=2 face="Georgia,Times New Roman,Times,serif">previously included in SIC 21, which was</FONT><BR><FONT size=2 face="Georgia,Times New Roman,Times,serif">duly removed.</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD vAlign=top align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">January 1, 2012</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">4.2 New and revised standards and interpretations that are not yet effective</FONT></B></P>

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<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="9%"></TD>

   <TD width="2%"></TD>

   <TD width="13%"></TD>

   <TD width="2%"></TD>

   <TD width="13%"></TD>

   <TD width="2%"></TD>

   <TD width="14%"></TD>

   <TD width="2%"></TD>

   <TD width="13%"></TD>

   <TD width="2%"></TD>

   <TD width="15%"></TD>

   <TD width="2%"></TD>

   <TD width="7%"></TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" vAlign=top colSpan=9 align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company did not adopt the new and revised IFRSs below:</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD vAlign=top align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD vAlign=top align=left>&nbsp;</TD></TR>

<TR>

   <TD vAlign=top colSpan=13>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0pt" vAlign=top align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">IFRS 9</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="TEXT-INDENT: 28.395pt" vAlign=top colSpan=5 align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Financial Instruments</FONT><SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">4</FONT></SUP>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD vAlign=top align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD vAlign=top align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD vAlign=top align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" vAlign=top align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">IFRS 10</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="TEXT-INDENT: 28.441pt" vAlign=top colSpan=7 align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Consolidated Financial Statements</FONT><SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">2</FONT></SUP>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD vAlign=top align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD vAlign=top align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" vAlign=top align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">IFRS 11</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="TEXT-INDENT: 0.037pt" vAlign=top colSpan=3 align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Joint Arrangements</FONT><SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">2</FONT></SUP>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD vAlign=top align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD vAlign=top align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD vAlign=top align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD vAlign=top align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" vAlign=top align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">IFRS 12</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="TEXT-INDENT: 28.399pt" vAlign=top colSpan=7 align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Disclosure of Interests in Other Entities</FONT><SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">2</FONT></SUP>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD vAlign=top align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD vAlign=top align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" vAlign=top align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">IFRS 13</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD vAlign=top colSpan=3 align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Fair Value Measurement</FONT><SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">2</FONT></SUP>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD vAlign=top align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD vAlign=top align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD vAlign=top align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD vAlign=top align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD vAlign=top colSpan=3 align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Amendments to IAS 1</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="TEXT-INDENT: 28.338pt" vAlign=top colSpan=9 align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Presentation of Items of Other Comprehensive Income</FONT><SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">1</FONT></SUP>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" vAlign=top colSpan=3 align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Amendments to IFRS 7</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD vAlign=top colSpan=9 align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Disclosure &#8211; Offsetting Financial Assets and Financial Liabilities</FONT><SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">2</FONT></SUP>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" vAlign=top colSpan=5 align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Amendments to IFRS 9 and IFRS 7</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD vAlign=top colSpan=7 align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Effective Date of IFRS 9 and Transition Disclosures</FONT><SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">4</FONT></SUP>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" vAlign=top colSpan=5 align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Amendments to IFRS 10, 11 and 12</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="TEXT-INDENT: 0.063pt" vAlign=top colSpan=7 align=left>

   <P align=justify><FONT size=2 face="Georgia,Times New Roman,Times,serif">Consolidated</FONT> <FONT size=2 face="Georgia,Times New Roman,Times,serif">Financial</FONT> <FONT size=2 face="Georgia,Times New Roman,Times,serif">Statements,</FONT> <FONT size=2 face="Georgia,Times New Roman,Times,serif">Joint </FONT><FONT size=2 face="Georgia,Times New Roman,Times,serif">Arrangements and Disclosure of Interests in Other </FONT><FONT size=2 face="Georgia,Times New Roman,Times,serif">Entities: Transition Guide</FONT><SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">2</FONT></SUP></P></TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" vAlign=top colSpan=3 align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">IAS 19 (revised in 2011)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="TEXT-INDENT: 0.104pt" vAlign=top colSpan=3 align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Employee Benefits</FONT><SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">2</FONT></SUP>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD vAlign=top align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD vAlign=top align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD vAlign=top align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" vAlign=top colSpan=3 align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">IAS 27 (revised in 2011)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="TEXT-INDENT: 28.428pt" vAlign=top colSpan=5 align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Separate Financial Statements</FONT><SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">2</FONT></SUP>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD vAlign=top align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD vAlign=top align=left>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-81</FONT></P></DIV>

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<P style="TEXT-ALIGN: justify"><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>(Convenience Translation into English from the Original Previously Issued in Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes to the Financial Statements <BR>Years Ended December 31, 2012 and 2011 <BR></FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Amounts in thousands of reais, unless otherwise indicated</FONT></B>&nbsp;</FONT></B></FONT></B>

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<P></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes to the Financial Statements Years Ended December 31, 2012 and 2011 </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Amounts in thousands of reais, unless otherwise indicated</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">IAS 28 (revised in 2011) Investments in Associates and Joint Ventures</FONT><SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">2 </FONT></SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">Amendments to IAS 32 Offsetting Financial Assets and Financial Liabilities</FONT><SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">3 </FONT></SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">Amendments to IFRSs 2009-2011 Annual Improved Cycle IFRIC 20 Stripping Costs in the Production Phase in a Surface Mine</FONT><SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">2</FONT></SUP></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">1 Effective for annual periods beginning on or after July 1, 2012.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">2 Effective for annual periods beginning on or after January 1, 2013. 3 Effective for annual periods beginning on or after January 1, 2014. 4 Effective for annual periods beginning on or after January 1, 2015.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The new standards, amendments and interpretations that may affect the Company are as follows:</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">IFRS 11 supersedes IAS 31 </FONT><I><FONT size=2 face="Georgia-Italic,Times New Roman,Times,serif">Interest in Joint Ventures</FONT></I><FONT size=2 face="Georgia,Times New Roman,Times,serif">. IFRS 11 addresses how a joint arrangement with two or more parties holding joint control should be classified. SIC-13 Jointly Controlled Entities &#8211; Non-Monetary Contributions by Venturers will be removed with the issue of IFRS 11. According to IFRS 11, joint arrangements are classified as joint operations or joint ventures, depending on the rights and obligations of the contractual parties. On the other hand, according to IAS 31, there are three types of joint arrangements: jointly controlled entities, jointly controlled assets, and jointly controlled operations. In addition, according to IFRS 11, joint ventures must be recognized by the equity method, while jointly controlled entities may be recorded by the equity method or by the proportionate accounting method, according to IAS 31.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The adoption of IFRS 11 will result in changes in the accounting for investments held by the Company in Sesamm &#8211; Servi&#231;os de Saneamento de Mogi Mirim S/A, &#193;guas de Andradina S.A., &#193;guas de Castilho, Saneaqua Mairinque S.A., Aquapolo Ambiental S.A. and Attend Ambiental S/A, jointly controlled entities according to IAS 31, currently accounted for the proportionate consolidation method. According to IFRS 11, these jointly controlled entities will be classified as joint ventures and recorded by the equity method, resulting in the recognition of the Company&#8217;s proportionate interest in net assets, net income for the year, and other comprehensive income in a single account which will be reported in the consolidated statement of financial position, as well as in the consolidated income statement or comprehensive income as &#8220;investment in joint venture&#8221; and &#8220;equity in earnings of joint venture&#8221;, respectively. Therefore, the consolidated balances as of December 31, 2012 are shown below:</FONT></P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="43%"></TD>

   <TD width="2%"></TD>

   <TD width="2%"></TD>

   <TD width="16%"></TD>

   <TD width="3%"></TD>

   <TD width="17%"></TD>

   <TD width="3%"></TD>

   <TD width="13%"></TD></TR>

<TR vAlign=bottom>

   <TD width="43%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 1px solid" width="52%" colSpan=5 align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">December 31, 2012</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD width="43%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="16%" align=left>&nbsp;</TD>

   <TD width="3%">&nbsp;</TD>

   <TD width="17%" align=left>&nbsp;</TD>

   <TD width="3%">&nbsp;</TD>

   <TD width="13%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">After</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="43%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="16%" align=left>&nbsp;</TD>

   <TD width="3%">&nbsp;</TD>

   <TD width="17%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">IFRS 11</FONT></B>&nbsp;</TD>

   <TD width="3%">&nbsp;</TD>

   <TD width="13%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">applying</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="43%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Original</FONT></B>&nbsp;</TD>

   <TD width="3%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="17%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Effects</FONT></B>&nbsp;</TD>

   <TD width="3%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="13%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">IFRS 11</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="43%" align=left><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Assets</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=left>&nbsp;</TD>

   <TD width="3%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="17%" align=left>&nbsp;</TD>

   <TD width="3%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="13%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="43%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Total current assets</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">3,336,865</FONT>&nbsp;</TD>

   <TD width="3%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="17%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(6,267)</FONT>&nbsp;</TD>

   <TD width="3%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="13%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">3,330,598</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=8>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.84pt" width="43%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Investments</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="16%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="3%">&nbsp;</TD>

   <TD width="17%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">20,826</FONT>&nbsp;</TD>

   <TD width="3%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">20,826</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.077pt" width="43%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Intangible assets</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="16%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">21,991,922</FONT>&nbsp;</TD>

   <TD width="3%">&nbsp;</TD>

   <TD width="17%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(24,396)</FONT>&nbsp;</TD>

   <TD width="3%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">21,967,526</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.077pt" width="43%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Property, plant and equipment</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="16%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">383,383</FONT>&nbsp;</TD>

   <TD width="3%">&nbsp;</TD>

   <TD width="17%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(186,673)</FONT>&nbsp;</TD>

   <TD width="3%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">196,710</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=8>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="99%" colSpan=8 align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-82</FONT></TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P></DIV>

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<P style="TEXT-ALIGN: justify"><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>(Convenience Translation into English from the Original Previously Issued in Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes to the Financial Statements <BR>Years Ended December 31, 2012 and 2011 <BR></FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Amounts in thousands of reais, unless otherwise indicated</FONT></B>&nbsp;</FONT></B></FONT></B>

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<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="58%"></TD>

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   <TD width="12%"></TD>

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   <TD width="2%"></TD>

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   <TD width="58%" align=left>&nbsp;</TD>

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   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 1px solid" width="40%" colSpan=5 align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">December 31, 2012</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD width="58%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">After</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="58%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">IFRS 11</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">applying</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="58%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Original</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Effects</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">IFRS 11</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=7>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="58%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Total noncurrent assets</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">23,338,928</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(202,834)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">23,136,094</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="58%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Total assets</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">26,675,793</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(209,101)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">26,466,692</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=7>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="58%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 1px solid" width="40%" colSpan=5 align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">December 31, 2012</FONT></B></TD></TR>

<TR>

   <TD width="100%" colSpan=7>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="58%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">After</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="58%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">IFRS 11</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">application</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="58%" align=left><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Liabilities and equity</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; TEXT-INDENT: 6.359pt" width="12%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Original</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Effects</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">of IFRS 11</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="58%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Total current liabilities</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">3,797,370</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(39,181)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">3,758,189</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=7>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="58%" align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">Loans and financing</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">7,701,929</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(169,268)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">7,532,661</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="58%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Total noncurrent liabilities</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">11,162,846</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(169,920)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">11,992,926</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=7>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="58%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Total liabilities</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">14,960,216</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(209,101)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">14,751,115</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=7>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="58%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Total equity</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">11,715,577</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">11,715,577</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="58%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Total liabilities and equity</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">26,675,793</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(209,101)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">26,466,692</FONT>&nbsp;</TD></TR></TABLE></DIV>

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<TR>

   <TD width="58%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD></TR>

<TR vAlign=bottom>

   <TD width="58%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="40%" colSpan=5 align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD width="58%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">After</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="58%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">IFRS 11</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">applying</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="58%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Original</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Effects</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">IFRS 11</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="58%" align=left><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Net revenue from sales and services</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">10,754,435</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(16,804)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">10,737,631</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="58%" align=left><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Gross profit</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">4,289,037</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(1,357)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">4,287,680</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="58%" align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">equity in earnings of joint venture of subsidiaries</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(6,532)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(6,532)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="58%" align=left><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Operating profit</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">2,845,260</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(1,916)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">2,843,344</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="58%" align=left><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Income before income tax and social</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="58%" align=left><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">contribution</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">2,543,904</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">3,768</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">2,547,672</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="58%" align=left><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Net income for the year</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,911,900</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,911,900</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="58%" align=left><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Basic and diluted earnings per share (in reais)</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">8.39</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">8.39</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-83</FONT></P></DIV>

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<P style="TEXT-ALIGN: justify"><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>(Convenience Translation into English from the Original Previously Issued in Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes to the Financial Statements <BR>Years Ended December 31, 2012 and 2011 <BR></FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Amounts in thousands of reais, unless otherwise indicated</FONT></B>&nbsp;</FONT></B></FONT></B>

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<P></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">IAS 19 Employee Benefit</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The amendments to IAS 19 change the accounting for both defined benefit plans and severance pay benefits. The most significant change refers to the accounting for changes in defined benefit obligations and plan assets. These amendments require the recognition of changes in defined benefit obligations and in the fair value of the plan assets as they occur, and, therefore, the elimination of the corridor approach allowed in the previous version of IAS 19 and the early recognition of past cost of services. In addition, the amendments require all actuarial gains and losses to be immediately recognized through other comprehensive income so that the net asset or liability of the pension plan is recognized in the consolidated statement of financial position so that to reflect the full amount of the plan&#8217;s deficit or surplus. Additionally, interest expenses and the return expected on the plan assets used in previous version of IAS 19 were replaced by a &#8220;net interest&#8221; amount, calculated based on the discount rate of the asset or liability of the net defined benefit.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The amendments to IAS 19 are effective for annual periods beginning on or after January 1, 2013 and require retrospective adoption. Based on Management&#8217;s preliminary evaluation, the impact of the Company&#8217;s early adoption of the amendments to IAS 19 in the year ending December 31, 2013, would be a reduction of in the Company&#8217;s equity on January 1, 2013 in the amount of R$468,220 (R$34,370 increase in equity on January 1, 2012).</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">This effect represents the full recognition of actuarial gains and losses through other comprehensive income.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Annual improvements to the 2009-2011 IFRS cycle (May 2012)</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The annual improvements to the 2009-2011 IFRS cycle include several amendments to several IFRSs. The amendments to IFRSs are effective to annual periods beginning on or after January 1, 2013 and include:</FONT></P>

<UL>

<LI><FONT size=2 face="Georgia,Times New Roman,Times,serif">amendments to IAS 16 &#8211; Property, Plant and Equipment; and</FONT>

<LI><FONT size=2 face="Georgia,Times New Roman,Times,serif">amendments to IAS 32 &#8211; Financial Instruments: Presentation.</FONT> </LI></UL>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Amendments to IAS 16</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The amendments to IAS 16 clarify that spare parts, stand-by equipment and service equipment are classified as property, plant and equipment when they meet the definition of property, plant and equipment set out in IAS 16, or otherwise as inventory. The Company does not expect significant impacts on its financial statements.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Amendments to IAS 32</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The amendments to IAS 32 clarify that the income tax related to distributions to holders of equity instruments and equity transaction costs should be accounted pursuant to IAS 12 -Income Taxes. The Company does not expect relevant impacts on its financial statements.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-84</FONT></P></DIV>

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<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV>

<A name="page_85"></A><BR>

<DIV style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%">

<P style="TEXT-ALIGN: justify"><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>(Convenience Translation into English from the Original Previously Issued in Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes to the Financial Statements <BR>Years Ended December 31, 2012 and 2011 <BR></FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Amounts in thousands of reais, unless otherwise indicated</FONT></B>&nbsp;</FONT></B></FONT></B>

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<P></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">4.3 Financial Risk Management</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">4.3.1 Financial risk factors</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company's activities are exposed to Brazilian economic environment, exposing it to market risk, such as exchange rate, interest rate, credit risk and liquidity risk. The Company&#8217;s financial risk management is focused on the unpredictability of the financial markets and aims at minimizing adverse impacts on its financial performance.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company has not utilized derivative instruments in any of the reporting periods.</FONT></P>

<P style="TEXT-ALIGN: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">(a)</FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Market risk Foreign currency risk</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">SABESP&#8217;s foreign exchange exposure entails market risks associated with Brazilian </FONT><I><FONT size=2 face="Georgia-Italic,Times New Roman,Times,serif">real </FONT></I><FONT size=2 face="Georgia,Times New Roman,Times,serif">currency fluctuations against the US dollar and the yen. SABESP&#8217;s foreign currency-denominated liabilities mainly include US dollar- and yen-denominated loans.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In case of Brazilian </FONT><I><FONT size=2 face="Georgia-Italic,Times New Roman,Times,serif">real </FONT></I><FONT size=2 face="Georgia,Times New Roman,Times,serif">depreciation in relation to foreign currency in which the debt is denominated, SABESP will incur in monetary loss in relation to such debt.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">SABESP&#8217;s specific foreign currency risks are related to exposures caused by its short and long-term debts denominated in foreign currency.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The management of SABESP&#8217;s foreign currency exposure considers several current and projected economic factors, besides market conditions.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">This risk arises from the possibility of the Company incurring losses due to foreign exchange fluctuations that would affect the balances of market foreign currency-denominated loans and financing and related financial expenses. The Company does not maintain hedge or swap contracts or any financial instrument to hedge against this risk, but conducts an active management of debt, taking advantage of opportunities to replace expensive debt for cheaper debt, reducing the cost through accelerated maturity.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">A significant amount of the Company&#8217;s financial debt is indexed to the U.S. dollar and Yen, in the total amount of R$3,215.8 million on December 31, 2012 (R$3,053.4 million in December 2011). Below, the Company&#8217;s exposure to foreign currency risk:</FONT></P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="44%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD></TR>

<TR vAlign=bottom>

   <TD width="44%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; TEXT-INDENT: 35.459pt" width="54%" colSpan=7 align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">PARENT AND CONSOLIDATED</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD width="44%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; TEXT-INDENT: 6.179pt" width="26%" colSpan=3 align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">December 31, 2012</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="26%" colSpan=3 align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">December 31, 2011</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="44%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Foreign</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Foreign</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="44%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; TEXT-INDENT: 5.339pt" width="12%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">currency</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">R$</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">currency</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">R$</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="44%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Loans and financing &#8211; US$</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="TEXT-INDENT: 6.179pt" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,136,274</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,321,976</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,113,236</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,088,208</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="44%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Loans and financing &#8211; Yen</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">37,535,650</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">890,346</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">39,456,912</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">959,198</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="44%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Interest and charges from loans and financing &#8211; US$</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">12,487</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">13,025</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="44%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Interest and charges from loans and financing &#8211; Yen</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">6,374</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">6,646</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=9>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="44%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">TOTAL</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">3,231,183</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">3,067,077</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-85</FONT></P></DIV>

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<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV>

<A name="page_86"></A><BR>

<DIV style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%">

<P style="TEXT-ALIGN: justify"><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>(Convenience Translation into English from the Original Previously Issued in Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes to the Financial Statements <BR>Years Ended December 31, 2012 and 2011 <BR></FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Amounts in thousands of reais, unless otherwise indicated</FONT></B>&nbsp;</FONT></B></FONT></B>

<HR align=left color=#000000 SIZE=1 width="100%">



<P></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The table above shows the foreign currency-denominated loans and financing, emphasizing.that the balance is gross of loans costs of R$15,422 on December 31, 2012 (R$13,656 in December 2011).</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">As of December 31, 2012, had the Brazilian real appreciated or depreciated by 10% against the US dollar and the yen with all other variables remaining constant, the effect on pre-tax profit for the year would have been R$323,118 (R$306,708 in December 2011) lower or higher, mainly as a result of foreign exchange losses or gains on the translation of foreign currency-denominated loans.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Scenario I below presents the effect for the next 12 months, considering the projected rates of the U.S. dollar and the yen. Considering that the other variables as remaining constant, the impacts for the next 12 months are shown in scenarios II and III with possible depreciations of 25% and 50%, respectively, in the Brazilian Real.</FONT></P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="51%"></TD>

   <TD width="2%"></TD>

   <TD width="15%"></TD>

   <TD width="2%"></TD>

   <TD width="13%"></TD>

   <TD width="2%"></TD>

   <TD width="13%"></TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=5 align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">PARENT AND CONSOLIDATED</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">Scenario I</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">Scenario II</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">Scenario III</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">(Probable)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; TEXT-INDENT: 7.02pt" align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">(+25%)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; TEXT-INDENT: 8.519pt" align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">(+50%)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">(*)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Net currency exposure at December 31, 2012</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(Liabilities) in US$</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,136,274</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,136,274</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,136,274</FONT>&nbsp;</TD></TR>

<TR>

   <TD colSpan=7>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">US$ rate at December 31, 2012</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">2.0435</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">2.0435</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">2.0435</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Exchange rate estimated according to the scenario</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">2.0900</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">2.6125</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">3.1350</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Difference between the rates</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(0.0465)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(0.5690)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(1.0915)</FONT>&nbsp;</TD></TR>

<TR>

   <TD colSpan=7>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Effect on net financial result R$ - (loss)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(52,837)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(646,540)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(1,240,243)</FONT>&nbsp;</TD></TR>

<TR>

   <TD colSpan=7>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Net currency exposure at December 31, 2012</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(Liabilities) in Yen</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">37,535,650</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">37,535,650</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">37,535,650</FONT>&nbsp;</TD></TR>

<TR>

   <TD colSpan=7>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Yen rate at December 31, 2012</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">0.02372</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">0.02372</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">0.02372</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Exchange rate estimated according to the scenario</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">0.02443</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">0.03054</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">0.03664</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Difference between the rates</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(0.00071)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(0.00682)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(0.01292)</FONT>&nbsp;</TD></TR>

<TR>

   <TD colSpan=7>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Effect on net financial result in R$ - (loss)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(26,650)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(255,993)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(484,960)</FONT>&nbsp;</TD></TR>

<TR>

   <TD colSpan=7>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Total effect on net financial result in R$ - (loss)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(79,487)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(902,533)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(1,725,203)</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: justify"><FONT size=1 face="Georgia,Times New Roman,Times,serif">(*) The probable scenario in US$ considered the average exchange rate for the 12-month period after December 31, 2012, according to BM&amp;FBovespa. The Yen used an average rate for the next 12 months as of December 31, 2012, according to BM&amp;FBovespa.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-86</FONT></P></DIV>

<HR align=center SIZE=2 width="100%" noShade>



<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV>

<A name="page_87"></A><BR>

<DIV style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%">

<P style="TEXT-ALIGN: justify"><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>(Convenience Translation into English from the Original Previously Issued in Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes to the Financial Statements <BR>Years Ended December 31, 2012 and 2011 <BR></FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Amounts in thousands of reais, unless otherwise indicated</FONT></B>&nbsp;</FONT></B></FONT></B>

<HR align=left color=#000000 SIZE=1 width="100%">



<P></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Interest rate risk</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">This risk arises from the possibility that the Company could incur losses due to fluctuations in interest rates, increasing the financial expenses related to loans and financing.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company has not entered into any derivative contract to hedge against this risk; however continually monitors market interest rates, in order to evaluate the possible need to replace its debt.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The table below provides the Company's loans and financing subject to variable interest rate:</FONT></P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="66%"></TD>

   <TD width="2%"></TD>

   <TD width="15%"></TD>

   <TD width="2%"></TD>

   <TD width="15%"></TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="32%" colSpan=3 align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Parent</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">December 31,</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">December 31,</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=5>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">UPR</FONT><SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">(i)</FONT></SUP>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">2,019,924</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">2,350,919</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">CDI</FONT><SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">(ii)</FONT></SUP>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,799,830</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,815,000</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">TJLP</FONT><SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">(iii)</FONT></SUP>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">845,913</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">881,861</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">IPCA</FONT><SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">(iv)</FONT></SUP>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">697,385</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">180,759</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">LIBOR</FONT><SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">(v)</FONT></SUP>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,243,058</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,123,662</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Interest and charges</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">95,475</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">108,053</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=5>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Total</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">6,701,585</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">6,460,254</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=5>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=5>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; TEXT-INDENT: 0pt" width="32%" colSpan=3 align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Consolidated</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">December 31,</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">December 31,</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=5>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">UPR</FONT><SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">(i)</FONT></SUP>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">2,192,684</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">2,520,936</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">CDI</FONT><SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">(ii)</FONT></SUP>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,799,830</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,815,000</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">TJLP</FONT><SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">(iii)</FONT></SUP>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">845,913</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">881,861</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">IPCA</FONT><SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">(iv)</FONT></SUP>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">697,385</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">180,759</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">LIBOR</FONT><SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">(v)</FONT></SUP>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,243,058</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,123,662</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Interest and charges</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">114,421</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">110,999</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=5>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Total</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">6,893,291</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">6,633,217</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P><FONT size=2 face="Georgia,Times New Roman,Times,serif">(i) UPR (</FONT><I><FONT size=2 face="Georgia-Italic,Times New Roman,Times,serif">Unidade Padr&#227;o de Refer&#234;ncia</FONT></I><FONT size=2 face="Georgia,Times New Roman,Times,serif">), a standard benchmark unit, which is equal to the TR, a managed prime rate.</FONT></P>

<P><FONT size=2 face="Georgia,Times New Roman,Times,serif">(ii) CDI (</FONT><I><FONT size=2 face="Georgia-Italic,Times New Roman,Times,serif">Certificado de Dep&#243;sito Interbanc&#225;rio</FONT></I><FONT size=2 face="Georgia,Times New Roman,Times,serif">), interbank deposit certificate rate (iii) TJLP (</FONT><I><FONT size=2 face="Georgia-Italic,Times New Roman,Times,serif">Taxa de Juros a Longo Prazo</FONT></I><FONT size=2 face="Georgia,Times New Roman,Times,serif">), long-term interest rate (iv) IPCA (</FONT><I><FONT size=2 face="Georgia-Italic,Times New Roman,Times,serif">&#205;ndice Nacional de Pre&#231;os ao Consumidor Amplo</FONT></I><FONT size=2 face="Georgia,Times New Roman,Times,serif">), a consumer price index (v) LIBOR - London Interbank Offered Rate</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-87</FONT></P></DIV>

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<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV>

<A name="page_88"></A><BR>

<DIV style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%">

<P style="TEXT-ALIGN: justify"><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>(Convenience Translation into English from the Original Previously Issued in Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes to the Financial Statements <BR>Years Ended December 31, 2012 and 2011 <BR></FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Amounts in thousands of reais, unless otherwise indicated</FONT></B>&nbsp;</FONT></B></FONT></B>

<HR align=left color=#000000 SIZE=1 width="100%">



<P></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Another risk to which the Company is exposed is the mismatch between the inflation adjustment indices of its loans and financing with those of its receivables. Water supply and sewage services tariffs do not necessarily follow the increases in the inflation adjustment and interest rates affecting the Company's debt.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">As of December 31, 2012, if interest rates on loans and financing denominated in Brazilian </FONT><I><FONT size=2 face="Georgia-Italic,Times New Roman,Times,serif">reais </FONT></I><FONT size=2 face="Georgia,Times New Roman,Times,serif">had been 1% higher or lower with all other variables held constant, the effects on pre-tax profit for the year before taxes would have been R$67,015 (R$64,602 in December 2011) lower or higher, mainly as a result of a lower or higher interest expense on floating rate loans and financing. The effect on the consolidated pre-tax profit for the year would have been R$68,932 (R$66,332 in December 2011) lower or higher.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">(b) </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Credit risk</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Credit risk arises from cash and cash equivalents, deposits in banks and financial institutions, as well as credit exposures to wholesale and retail customers, including outstanding accounts receivable, restricted cash, receivables from related parties and indemnities. The Company is required by law to invest its funds exclusively with Banco do Brasil (rating AA+(bra)). Credit risk exposure is mitigated by sales to a dispersed customer base.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The maximum exposure to credit risk at the reporting date are the carrying amounts of instruments classified as cash equivalents, deposits in banks and financial institutions, trade receivables, restricted cash, receivables from related parties and indemnities in the balance sheet. (See notes 6, 7, 8, 9 and 10.)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">(c)</FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Liquidity risk</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company&#8217;s liquidity relies mainly on cash generated by operating activities, loans from state and Brazilian federal government financial institutions and funding in the local and international markets. Management of the liquidity risk considers the assessment of liquidity requirements to ensure that the Company has enough cash to meet its operating and capital expenditure needs, and debt repayment.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The funds held by the Company are invested in interest-bearing current accounts, time deposits, short-term deposits and securities, selecting instruments with appropriate maturity or liquidity sufficient to provide margin as determined by projections mentioned above.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The table below analyzes the financial assets and liabilities of the Company, into relevant maturities, including the installment of principal and interest to be paid according to the agreement.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-88</FONT></P></DIV>

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<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV>

<A name="page_89"></A><BR>

<DIV style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%">

<P style="TEXT-ALIGN: justify"><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>(Convenience Translation into English from the Original Previously Issued in Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes to the Financial Statements <BR>Years Ended December 31, 2012 and 2011 <BR></FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Amounts in thousands of reais, unless otherwise indicated</FONT></B>&nbsp;</FONT></B></FONT></B>

<HR align=left color=#000000 SIZE=1 width="100%">



<P></P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="23%"></TD>

   <TD width="2%"></TD>

   <TD width="9%"></TD>

   <TD width="2%"></TD>

   <TD width="9%"></TD>

   <TD width="2%"></TD>

   <TD width="9%"></TD>

   <TD width="2%"></TD>

   <TD width="9%"></TD>

   <TD width="2%"></TD>

   <TD width="7%"></TD>

   <TD width="2%"></TD>

   <TD width="9%"></TD>

   <TD width="2%"></TD>

   <TD width="8%"></TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=13 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">CONSOLIDATED</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2018</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2013</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2014</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2015</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2016</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2017</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">onwards</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Total</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">As of December 31, 2012</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR>

   <TD colSpan=15>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Liabilities</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Loans and financing</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,798,489</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,262,826</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,702,103</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,141,226</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">821,117</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">6,158,718</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">12,884,479</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Payables to suppliers and</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">contractors</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">297,198</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">-</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">297,198</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Services payable</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">389,091</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">-</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">389,091</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Interest on shareholders&#8217; equity</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">414,355</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">-</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">414,355</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Pension obligations</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">229,406</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">235,667</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">242,192</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">249,770</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">257,442</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,880,988</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">3,095,465</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Public-private partnership (PPP)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">41,925</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">41,925</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">41,925</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">41,925</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">41,925</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">305,193</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">514,816</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Program contract commitments</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">160,784</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">11,227</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">66,052</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">4,222</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,911</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">37,204</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">281,400</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Other liabilities</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">170,691</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">167,742</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">-</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">338,433</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="22%"></TD>

   <TD width="2%"></TD>

   <TD width="9%"></TD>

   <TD width="2%"></TD>

   <TD width="10%"></TD>

   <TD width="2%"></TD>

   <TD width="8%"></TD>

   <TD width="2%"></TD>

   <TD width="7%"></TD>

   <TD width="2%"></TD>

   <TD width="8%"></TD>

   <TD width="2%"></TD>

   <TD width="9%"></TD>

   <TD width="2%"></TD>

   <TD width="9%"></TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=13 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">CONSOLIDATED</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="TEXT-INDENT: 14.76pt" align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2017</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2013</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2014</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2015</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2016</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">onwards</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Total</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">As of December 31, 2011</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR>

   <TD colSpan=15>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Liabilities</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Loans and financing</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,115,837</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,689,526</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,157,590</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">946,577</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">904,410</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">5,162,889</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">11,976,829</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Payables to suppliers and</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">contractors</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">255,557</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">-</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">255,557</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Services payable</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">383,116</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">-</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">383,116</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Interest on shareholders&#8217; equity</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">247,486</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">247,486</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Pension obligations</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">207,900</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">212,705</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">218,855</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">225,186</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">232,853</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,837,626</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,935,125</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Public-private partnership</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">(PPP)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">40,825</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">41,925</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">41,925</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">41,925</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">41,925</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">347,118</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">555,101</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Program contract commitments</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">71,088</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">78,281</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,150</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">62,974</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,144</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">16,589</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">231,226</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Other liabilities</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">188,451</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">195,276</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">-</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">383,727</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Future interest</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Future interest was calculated based on the contractual clauses for all agreements. For agreements with floating interest rate, the interest rates used correspond to December 31, 2012.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-89</FONT></P></DIV>

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<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV>

<A name="page_90"></A><BR>

<DIV style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%">

<P style="TEXT-ALIGN: justify"><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>(Convenience Translation into English from the Original Previously Issued in Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes to the Financial Statements <BR>Years Ended December 31, 2012 and 2011 <BR></FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Amounts in thousands of reais, unless otherwise indicated</FONT></B>&nbsp;</FONT></B></FONT></B>

<HR align=left color=#000000 SIZE=1 width="100%">



<P></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">(d) </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Sensitivity analysis to interest rate risk</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The table below shows the sensitivity analysis of the financial instruments, prepared in accordance with CVM Rule 475/2008 in order to evidence the balances of main financial assets and liabilities, calculated at a rate projected until the final settlement of each contract, considering a probable scenario (scenario I), appreciation of 25% (scenario II) and 50% (scenario III).</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The purpose of the sensitivity analysis is measure the changes in the market over the financial instruments of the Company, considering constant all other variables. In the time of settlement the amounts can be different from those presented above, due to the estimates used in the measurement.</FONT></P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="40%"></TD>

   <TD width="2%"></TD>

   <TD width="13%"></TD>

   <TD width="2%"></TD>

   <TD width="13%"></TD>

   <TD width="2%"></TD>

   <TD width="13%"></TD>

   <TD width="2%"></TD>

   <TD width="13%"></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="100%" colSpan=9 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">December 31, 2012</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Indicators</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=center>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="TEXT-INDENT: 6.059pt" width="13%" align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">Scenario I</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">Scenario II</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">Scenario III</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="40%" align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="13%" align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">Exposure</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="13%" align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">(Probable) (i)</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="13%" align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">(+ 25%)</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="13%" align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">(+ 50%)</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=9>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="40%" align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Assets</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">CDI</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,796,577</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">7.2500% (*)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">9.0625%</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">10.8750%</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Interest to be incurred</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">130, 252</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">162, 815</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">195,378</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=9>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="40%" align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Liabilities</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">TR</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,019,924</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">0.2897% (*)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">0.3621%</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">0.4346%</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Interest to be incurred</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(5,852)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(7,315)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(8,778)</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=9>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">TJLP</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">845,913</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">5.5000% (*)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">6.8750%</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">8.2500%</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Interest to be incurred</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(46,525)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(58,157)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(69,788)</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=9>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">IPCA</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">697,385</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">5.4700% (*)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">6.8375%</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">8.2050%</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Interest to be incurred</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(38,147)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(47,684)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(57,220)</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=9>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">CDI</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,799,830</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">7.2500% (*)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">9.0625%</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">10.8750%</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Interest to be incurred</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(130,488)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(163,110)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(195,732)</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=9>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">LIBOR</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,243,058</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">0.3420% (**)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">0.4275%</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">0.5130%</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Interest to be incurred</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(4,251)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(5,314)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(6,377)</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=9>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Total net interest to be incurred</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 3px double" width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(95,011)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 3px double" width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(118,765)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 3px double" width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(142,517)</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=9>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="55%" colSpan=3 align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">(*) Source: Focus Report &#8211; BACEN, December 28, 2012</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">(**) Source: Bloomberg</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=left>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">(i) Refers to the scenario of interest to be incurred for the 12 months as of December 31, 2012 or until the maturity of the contracts, whichever is shorter.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">(e)</FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Credit quality of the financial assets</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Regarding the financial assets held with financial institutions, the credit quality that is not past due or subject to provision for impairment can be assessed by reference to external credit ratings (if available) or to historical information about counterparty default rates. The credit quality of counterparties which are banks, such as deposits and financial</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-90</FONT></P></DIV>

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<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV>

<A name="page_91"></A><BR>

<DIV style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%">

<P style="TEXT-ALIGN: justify"><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>(Convenience Translation into English from the Original Previously Issued in Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes to the Financial Statements <BR>Years Ended December 31, 2012 and 2011 <BR></FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Amounts in thousands of reais, unless otherwise indicated</FONT></B>&nbsp;</FONT></B></FONT></B>

<HR align=left color=#000000 SIZE=1 width="100%">



<P></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">investments, the Company considers the lower rating of the counterparty published by three mainly international rating agencies (Moody's, Fitch and S&amp;P), according to internal policy of market risk management:</FONT></P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="44%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD></TR>

<TR vAlign=bottom>

   <TD width="44%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="26%" colSpan=3 align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Parent</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="26%" colSpan=3 align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Consolidated</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="44%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="26%" colSpan=3 align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">December 31</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="26%" colSpan=3 align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">December 31</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="44%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="58%" colSpan=3 align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Cash at bank and short-term bank deposits</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="44%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">AAA(bra)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,913,893</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">38,058</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,916,794</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">43,062</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="44%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">AA+(bra)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">2,102,304</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">507</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">2,104,869</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="44%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Others (*)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">2,081</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,717</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">3,877</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">2,058</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="44%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,915,974</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">2,142,079</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,921,178</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">2,149,989</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">(*) This category includes current accounts and investment funds in banks that have no credit rating information available.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The available credit rating information of the banks in which the Company made transactions during 2011 is as follow:</FONT></P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="34%"></TD>

   <TD width="2%"></TD>

   <TD width="20%"></TD>

   <TD width="2%"></TD>

   <TD width="20%"></TD>

   <TD width="2%"></TD>

   <TD width="20%"></TD></TR>

<TR vAlign=bottom>

   <TD width="34%" align=left><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Banks</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="20%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Fitch</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="20%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Moody's</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="20%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Standard</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="34%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="20%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="20%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="20%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Poor's</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=7>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="34%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Banco do Brasil S.A.</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="20%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">AAA (bra)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="20%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">Aaa.br</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="20%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">brAAA</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="34%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Banco Santander Brasil S.A.</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="20%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">AAA (bra)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="20%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">Aaa.br</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="20%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">brAAA</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="34%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Caixa Econ&#244;mica Federal</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="20%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">AAA (bra)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="20%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">Aaa.br</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="20%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="34%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Banco Bradesco S.A.</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="20%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">AAA (bra)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="20%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">Aaa.br</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="20%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">brAAA</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="34%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Ita&#250; Unibanco Holding S.A.</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="20%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">AAA (bra)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="20%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">Aaa.br</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="20%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">brAAA</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">For financial assets corresponding to trade receivables, the Company&#8217;s credit risk is minimized, given that the client base is diversified.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">4.4 Capital management</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company's objectives when managing capital are ensure its ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders, and to maintain an optimal capital structure to reduce the cost of capital.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company monitors capital based on the leverage ratio. This ratio corresponds to net debt divided by total capital. Net debt corresponds to total loans and financing less cash and cash equivalents. Total capital is calculated as total equity as shown in the Parent Company&#8217;s balance sheet plus net debt.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-91</FONT></P></DIV>

<HR align=center SIZE=2 width="100%" noShade>



<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV>

<A name="page_92"></A><BR>

<DIV style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%">

<P style="TEXT-ALIGN: justify"><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>(Convenience Translation into English from the Original Previously Issued in Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes to the Financial Statements <BR>Years Ended December 31, 2012 and 2011 <BR></FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Amounts in thousands of reais, unless otherwise indicated</FONT></B>&nbsp;</FONT></B></FONT></B>

<HR align=left color=#000000 SIZE=1 width="100%">



<P></P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="66%"></TD>

   <TD width="2%"></TD>

   <TD width="15%"></TD>

   <TD width="2%"></TD>

   <TD width="15%"></TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="32%" colSpan=3 align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">PARENT</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">December 31, 2012</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">December 31, 2011</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Total loans and financing</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">8,875,255</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">8,423,332</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Less: cash and cash equivalents</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(1,915,974)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(2,142,079)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Net debt</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">6,959,281</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">6,281,253</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Total equity</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">11,715,577</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">10,545,896</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Total capital</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">18,674,858</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">16,827,149</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Leverage ratio</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">37%</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">37%</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=5>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="32%" colSpan=3 align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">CONSOLIDATED</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">December 31, 2012</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">December 31, 2011</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Total loans and financing</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">9,069,320</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">8,596,295</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Less: cash and cash equivalents</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(1,921,178)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(2,149,989)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Net debt</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">7,148,142</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">6,446,306</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Total equity</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">11,715,577</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">10,545,896</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Total capital</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">18,863,719</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">16,992,202</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Leverage ratio</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">38%</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">38%</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">As of December 31, 2012, the leverage ratio did not change from December 31, 2011.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">4.5 Fair value estimates</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">It is assumed that the carrying amounts of trade receivables (current), less impairment and trade payables approximate their fair values in view of the short maturity. Long-term trade receivables also approximate their fair values, as they will be adjusted by inflation and/or will bear contractual interest rates over time.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-92</FONT></P></DIV>

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<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV>

<A name="page_93"></A><BR>

<DIV style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%">

<P style="TEXT-ALIGN: justify"><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>(Convenience Translation into English from the Original Previously Issued in Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes to the Financial Statements <BR>Years Ended December 31, 2012 and 2011 <BR></FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Amounts in thousands of reais, unless otherwise indicated</FONT></B>&nbsp;</FONT></B></FONT></B>

<HR align=left color=#000000 SIZE=1 width="100%">



<P></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Financial instruments</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The estimated fair values of financial instruments are as follows:</FONT></P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="44%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD></TR>

<TR vAlign=bottom>

   <TD width="44%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="54%" colSpan=7 align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">PARENT</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD width="44%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="26%" colSpan=3 align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">December 31, 2012</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="26%" colSpan=3 align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">December 31, 2011</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="44%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="TEXT-INDENT: 1.379pt" width="12%" align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Carrying</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="TEXT-INDENT: 0pt" width="12%" align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Fair</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="TEXT-INDENT: 1.26pt" width="12%" align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Carrying</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Fair</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="44%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">amount</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; TEXT-INDENT: 7.02pt" width="12%" align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">value</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">amount</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; TEXT-INDENT: 4.619pt" width="12%" align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">value</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="44%" align=left><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Financial assets</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.078pt" width="44%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Cash and cash equivalents</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,915,974</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,915,974</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">2,142,079</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">2,142,079</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.078pt" width="44%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Restricted cash</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">64,977</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">64,977</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">99,733</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">99,733</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.078pt" width="44%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Trade receivables</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,374,632</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,374,632</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,405,728</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,405,728</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.078pt" width="44%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Receivables from related parties</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">262,371</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">262,371</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">355,621</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">355,621</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.485pt" width="44%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Ag&#234;ncia Nacional de &#193;gua &#8211; ANA</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">108,099</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">108,099</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">100,551</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">100,551</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.078pt" width="44%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Other accounts receivable</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">141,027</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">141,027</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">78,099</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">78,099</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=9>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="44%" align=left><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Financial liabilities</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.078pt" width="44%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Loans and financing</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">8,875,255</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">9,201,317</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">8,423,332</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">8,368,632</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7pt" width="44%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Payables</FONT> <FONT size=2 face="Georgia,Times New Roman,Times,serif">to suppliers</FONT> <FONT size=2 face="Georgia,Times New Roman,Times,serif">and </FONT><FONT size=2 face="Georgia,Times New Roman,Times,serif">contractors</FONT></TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">295,392</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">295,392</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">244,658</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">244,658</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=9>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=9>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="44%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="54%" colSpan=7 align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">CONSOLIDATED</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD width="44%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="26%" colSpan=3 align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">December 31, 2012</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="26%" colSpan=3 align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">December 31, 2011</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="44%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Carrying</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Fair</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Carrying</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Fair</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="44%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; TEXT-INDENT: 2.279pt" width="12%" align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">amount</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; TEXT-INDENT: 5.94pt" width="12%" align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">value</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; TEXT-INDENT: 2.279pt" width="12%" align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">amount</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; TEXT-INDENT: 3.899pt" width="12%" align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">value</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="44%" align=left><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Financial assets</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.078pt" width="44%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Cash and cash equivalents</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,921,178</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,921,178</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">2,149,989</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">2,149,989</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.078pt" width="44%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Restricted cash</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">64,977</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">64,977</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">99,733</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">99,733</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.078pt" width="44%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Trade receivables</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,378,853</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,378,853</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,406,372</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,406,372</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.078pt" width="44%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Receivables from related parties</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">262,371</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">262,371</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">355,621</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">355,621</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 8.643pt" width="44%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Water National Agency &#8211; ANA</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">108,099</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">108,099</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">100,551</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">100,551</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.078pt" width="44%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Other accounts receivable</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">134,219</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">134,219</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">95,325</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">95,325</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=9>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="44%" align=left><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Financial liabilities</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.078pt" width="44%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Loans and financing</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">9,069,320</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">9,418,918</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">8,596,295</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">8,500,515</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7pt" width="44%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Payables</FONT> <FONT size=2 face="Georgia,Times New Roman,Times,serif">to</FONT> <FONT size=2 face="Georgia,Times New Roman,Times,serif">suppliers</FONT> <FONT size=2 face="Georgia,Times New Roman,Times,serif">and </FONT><FONT size=2 face="Georgia,Times New Roman,Times,serif">contractors</FONT></TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">297,198</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">297,198</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">255,557</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">255,557</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">To obtain the fair value of loans and financing, the following criteria have been adopted:</FONT></P>

<TABLE border=0 cellSpacing=0>



<TR>

   <TD vAlign=top width="2%" noWrap><FONT size=3 face="Georgia,Times New Roman,Times,serif">(i)</FONT>&nbsp; &nbsp; &nbsp; </TD>

   <TD width="98%"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Agreements with Banco do Brasil and CEF (Federal Savings Bank) were projected until final maturity, at contractual rates (projected TR + spread) and discounted at present value by TR x DI, both rates were obtained from BM&amp;F.</FONT> </TD></TR></TABLE>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-93</FONT></P></DIV>

<HR align=center SIZE=2 width="100%" noShade>



<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV>

<A name="page_94"></A><BR>

<DIV style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%">

<P style="TEXT-ALIGN: justify"><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>(Convenience Translation into English from the Original Previously Issued in Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes to the Financial Statements <BR>Years Ended December 31, 2012 and 2011 <BR></FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Amounts in thousands of reais, unless otherwise indicated</FONT></B>&nbsp;</FONT></B></FONT></B>

<HR align=left color=#000000 SIZE=1 width="100%">



<P></P>

<TABLE border=0 cellSpacing=0>



<TR>

   <TD vAlign=top width="2%" noWrap><FONT size=3 face="Georgia,Times New Roman,Times,serif">(ii)</FONT>&nbsp; &nbsp; &nbsp; </TD>

   <TD width="98%"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Debentures were projected up to the final mature date (IPCA, DI, TJLP or TR), and discounted to present value considering the future interest rate published by ANBIMA in the secondary market, as of December 31, 2012 and the Company&#8217;s share traded in the Brazilian market.</FONT> </TD></TR>

<TR>

   <TD vAlign=top width="2%" noWrap><FONT size=3 face="Georgia,Times New Roman,Times,serif">(iii)</FONT>&nbsp; &nbsp; &nbsp; </TD>

   <TD width="98%"><FONT size=2 face="Georgia,Times New Roman,Times,serif">BNDES loans are financial instruments valued at carrying amount plus contractual interest rate till mature date, and are indexed by long term interest rate &#8211; TJLP.</FONT> </TD></TR>

<TR>

   <TD width="10%">&nbsp;</TD>

   <TD width="90%"><FONT size=2 face="Georgia,Times New Roman,Times,serif">These loans have specific features and the terms and conditions defined in the loan agreements with the BNDES at arm&#8217;s length, and reflect the terms and conditions for those types of loan. In Brazil there is no consolidated market for long-term debts with the same characteristics of the BNDES loans, as credit offering of to entities in general with this long-term characteristic is usually restricted to the BNDES.</FONT> </TD></TR>

<TR>

   <TD vAlign=top width="2%" noWrap><FONT size=3 face="Georgia,Times New Roman,Times,serif">(iv)</FONT>&nbsp; &nbsp; &nbsp; </TD>

   <TD width="98%"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Other financing in local currency is valued at its nominal amounts plus contractual interest incurred through maturity date, discounted to present value at the future interest rate published on BM&amp;F Bovespa&#8217;s website.</FONT> </TD></TR>

<TR>

   <TD vAlign=top width="2%" noWrap><FONT size=3 face="Georgia,Times New Roman,Times,serif">(v)</FONT>&nbsp; &nbsp; &nbsp; </TD>

   <TD width="98%"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Agreements with IDB, IBRD, were projected until final maturity in origin currency, applying interest rates contracted, discounted at present value at Libor futures rate, obtained from Bloomberg. Eurobonds were priced at market value through quotes published by Bloomberg. All the amounts obtained were translated into Brazilian </FONT><I><FONT size=2 face="Georgia-Italic,Times New Roman,Times,serif">reais </FONT></I><FONT size=2 face="Georgia,Times New Roman,Times,serif">at the exchange rate of December 31, 2012.</FONT> </TD></TR>

<TR>

   <TD vAlign=top width="2%" noWrap><FONT size=3 face="Georgia,Times New Roman,Times,serif">(vi)</FONT>&nbsp; &nbsp; &nbsp; </TD>

   <TD width="98%"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Agreements with the JICA, were projected until final maturity in origin currency, using interest rates contracted and discounted at present value, at Tibor futures rate obtained from Bloomberg. The amounts obtained were translated into Brazilian reais at the exchange rate of December 31, 2012.</FONT> </TD></TR>

<TR>

   <TD vAlign=top width="2%" noWrap><FONT size=3 face="Georgia,Times New Roman,Times,serif">(vii)</FONT>&nbsp; &nbsp; &nbsp; </TD>

   <TD width="98%"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Leases are financial instruments valued at their nominal amount plus</FONT> </TD></TR></TABLE>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">contractual interest incurred through maturity date, and are indexed to fixed contractual interest rate, which is a specific rate and cannot be compared to any other rate available in the market. The Company considers the fair value the same amount recognized in the financial statements for the years ended December 31, 2012 and 2011.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">5 Critical accounting estimates and judgments</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Estimates and judgments are continually evaluated and are based on historical experience and on other factors, including expectations of future events that are believed to be reasonable under the circumstances</FONT><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below:</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-94</FONT></P></DIV>

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<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV>

<A name="page_95"></A><BR>

<DIV style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%">

<P style="TEXT-ALIGN: justify"><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>(Convenience Translation into English from the Original Previously Issued in Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes to the Financial Statements <BR>Years Ended December 31, 2012 and 2011 <BR></FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Amounts in thousands of reais, unless otherwise indicated</FONT></B>&nbsp;</FONT></B></FONT></B>

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<P></P>

<P style="TEXT-ALIGN: justify"><FONT size=3 face="Georgia,Times New Roman,Times,serif">(a) </FONT><FONT size=2 face="Georgia,Times New Roman,Times,serif">Allowance for doubtful accounts</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company records allowance for doubtful accounts in an amount that management considers sufficient to cover probable losses, based on an analysis of trade receivables, in accordance with the accounting policy stated in Note 3.4.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The methodology for determining the allowance for doubtful accounts receivable requires significant estimates, considering a number of factors including historical receipt experience, current economic trends, estimates of forecast write-offs, the aging of the accounts receivable portfolio and other factors. While the Company believes that the estimates used are reasonable, actual results could differ from those estimates.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=3 face="Georgia,Times New Roman,Times,serif">(b) </FONT><FONT size=2 face="Georgia,Times New Roman,Times,serif">Intangible assets arising from concession and program contracts</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company recognizes as intangible the assets arising from concession agreements. The Company estimates the fair value of construction and other work on the infrastructure to recognize the cost of the intangible asset, which is recognized when the infrastructure is built and provided that it will generate future economic benefits. The great majority of the Company's contracts for service concession arrangements entered with each grantor is under service concession agreements in which the Company has the right to receive, at the end of the contract, a payment equivalent to the unamortized asset balance of the concession intangible asset, which in this case, are amortized over the useful life of the underlying physical assets, thus at the end of the contract, the remaining value of the intangible would be equal to the residual value of the related physical asset.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Concession intangible assets under Concession agreements and Program contracts, in which, at the end of the contract, the Company has no right to receive a payment equivalent to the unamortized asset balance of the concession intangible, are amortized on a straight-line basis over the useful life of asset or contract period, whichever is shorter. Additional information on the accounting for intangible assets arising from concession agreements is described in Note 3.8.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The recognition of fair value for the intangible assets arising on concession agreements is subject to assumptions and estimates, and the use of different assumptions could affect the balances recorded. Different assumptions and estimates and changes in future circumstances, could affect the remaining useful lives of the intangible assets and have a significant impact on the results of operations.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=3 face="Georgia,Times New Roman,Times,serif">(c) </FONT><FONT size=2 face="Georgia,Times New Roman,Times,serif">Provisions</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company is party to a number of legal proceedings involving significant claims. These legal proceedings include, but are not limited to, tax, labor, civil, environmental, disputes with customers and suppliers and other proceedings. The Company provides for lawsuits for which it is probable that an outflow of resources will be necessary to settle the liability and the amount of such loss can be reasonably estimated. Judgments regarding future events, the results of which may differ significantly from actual estimates and could exceed the amounts provisioned. Provisions are revised and adjusted to take into consideration changes in circumstances involved. Additional information of these legal proceedings is disclosed in Note 16.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-95</FONT></P></DIV>

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<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV>

<A name="page_96"></A><BR>

<DIV style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%">

<P style="TEXT-ALIGN: justify"><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>(Convenience Translation into English from the Original Previously Issued in Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes to the Financial Statements <BR>Years Ended December 31, 2012 and 2011 <BR></FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Amounts in thousands of reais, unless otherwise indicated</FONT></B>&nbsp;</FONT></B></FONT></B>

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<P></P>

<P style="TEXT-ALIGN: justify"><FONT size=3 face="Georgia,Times New Roman,Times,serif">(d) </FONT><FONT size=2 face="Georgia,Times New Roman,Times,serif">Pension benefits</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company sponsors the defined benefit plan and the defined contribution plan, as described in Note 17.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The liability recognized in the balance sheet in relation to defined benefit pension plans is the present value of defined benefit obligation on the balance sheet date, less the fair value of plan assets, and unrecognized actuarial gains and losses. The defined benefit obligation is calculated yearly by independent actuaries, applying the projected credit unit method. The present value of defined benefit obligation is determined by discounting the estimated future cash outflows, using interest rates compatible with the market, which are denominated in currency in which benefits will be paid and with maturity terms close to those of corresponding pension plan obligation.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=3 face="Georgia,Times New Roman,Times,serif">(e) </FONT><FONT size=2 face="Georgia,Times New Roman,Times,serif">Deferred income tax and social contribution</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company recognizes and settles taxes on income based on the results of operations verified according to the Brazilian Corporate Law, taking into consideration the provisions of the tax laws. Pursuant to CPC 32 (IAS 12), the Company recognizes deferred tax assets and liabilities based on the differences between the accounting balances and the tax bases of assets and liabilities.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company regularly reviews the recoverability of deferred tax assets and recognizes a provision for impairment if it is probable that these assets will not be realized, based on the historic taxable income, the projection of future taxable income and the estimated period to reverse temporary differences. These calculations require the use of estimates and assumptions. The use of different estimates and assumptions could result in provision for impairment of all or a significant amount of deferred tax assets.</FONT></P><STRONG><FONT size=2>6 </FONT></STRONG><STRONG><FONT size=2>Cash and Cash Equivalents</FONT></STRONG>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="66%"></TD>

   <TD width="2%"></TD>

   <TD width="15%"></TD>

   <TD width="2%"></TD>

   <TD width="15%"></TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="32%" colSpan=3 align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">PARENT</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">December 31,</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">December 31,</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=5>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Cash and banks</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">119,397</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">114,794</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Cash equivalents</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,796,577</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">2,027,285</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 3px double" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,915,974</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 3px double" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">2,142,079</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=5>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=5>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=5>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; TEXT-INDENT: 29.04pt" width="32%" colSpan=3 align=left><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">CONSOLIDATED</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">December 31,</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">December 31,</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=5>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Cash and banks</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">119,846</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">118,867</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Cash equivalents</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,801,332</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">2,031,122</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,921,178</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">2,149,989</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-96</FONT></P></DIV>

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<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV>

<A name="page_97"></A><BR>

<DIV style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%">

<P style="TEXT-ALIGN: justify"><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>(Convenience Translation into English from the Original Previously Issued in Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes to the Financial Statements <BR>Years Ended December 31, 2012 and 2011 <BR></FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Amounts in thousands of reais, unless otherwise indicated</FONT></B>&nbsp;</FONT></B></FONT></B>

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<P></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Cash and cash equivalents include cash, bank deposits, other high-liquidity short-term investments, represented by Bank Certificates of Deposit (CDBs), deposited in Banco do Brasil, whose original maturities are lower than three months, which are convertible into a cash amount and subject to an insignificant risk of change in value.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The average yield of financial investments corresponds to 101.01% of CDI in December 2012 (100.19% in December 2011).</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">7 Restricted Cash</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">As of December 31, 2012, the restricted cash totaled R$64,977 (R$99,733 in December 2011), of which R$54,742 corresponded to proceeds from services provided to the Municipal Government of S&#227;o Paulo, net of taxes. These funds shall be reinvested in the water and sewage system of the city of S&#227;o Paulo.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">8 Trade Receivables</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">(a) Balance sheet balances</FONT></P>

<DIV align=center>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="66%"></TD>

   <TD width="2%"></TD>

   <TD width="15%"></TD>

   <TD width="2%"></TD>

   <TD width="15%"></TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="32%" colSpan=3 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">PARENT</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">December 31, 2012</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">December 31, 2011</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Private sector:</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 14.22pt" width="66%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">General and special customers (i) (ii)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">949,800</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">885,203</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 14.22pt" width="66%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Agreements (iii)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">249,470</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">249,929</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=5>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,199,270</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,135,132</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Government entities:</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 14.22pt" width="66%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Municipal</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">610,779</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">578,463</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 14.22pt" width="66%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Federal</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">3,150</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,517</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 14.22pt" width="66%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Agreements (iii)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">181,271</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">182,381</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=5>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=5>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">795,200</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">763,361</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Wholesale customers &#8211; Municipal governments: (iv)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 14.22pt" width="66%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Guarulhos</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">578,314</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">513,218</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 14.22pt" width="66%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Mau&#225;</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">281,398</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">244,204</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 14.22pt" width="66%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Mogi das Cruzes</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">15,202</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">14,864</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 14.22pt" width="66%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Santo Andr&#233;</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">620,276</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">547,764</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 14.22pt" width="66%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">S&#227;o Caetano do Sul</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,072</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,955</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 14.22pt" width="66%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Diadema</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">180,465</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">164,337</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=5>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Total wholesale customers &#8211; Municipal governments</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,677,727</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,486,342</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=5>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Unbilled supply</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">425,843</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">457,321</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=5>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Subtotal</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">4,098,040</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">3,842,156</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-97</FONT></P></DIV>

<HR align=center SIZE=2 width="100%" noShade>



<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV>

<A name="page_98"></A><BR>

<DIV style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%">

<P style="TEXT-ALIGN: justify"><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>(Convenience Translation into English from the Original Previously Issued in Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes to the Financial Statements <BR>Years Ended December 31, 2012 and 2011 <BR></FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Amounts in thousands of reais, unless otherwise indicated</FONT></B>&nbsp;</FONT></B></FONT></B>

<HR align=left color=#000000 SIZE=1 width="100%">



<P></P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="66%"></TD>

   <TD width="2%"></TD>

   <TD width="15%"></TD>

   <TD width="2%"></TD>

   <TD width="15%"></TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="32%" colSpan=3 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">PARENT</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">December 31, 2012</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">December 31, 2011</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Allowance for doubtful accounts</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(2,723,408)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(2,436,428)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Total</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,374,632</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,405,728</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Current</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,038,945</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,072,015</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Noncurrent (v)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">335,687</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">333,713</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,374,632</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,405,728</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The consolidated balance totals R$1,378,853 (R$1,406,372 in December 2011). The R$4,221 difference (R$644 in December 2011) in relation to the Parent&#8217;s balance, refers to current trade receivable of the investees &#193;guas de Andradina, R$457, Saneaqua Mairinque, R$200, &#193;guas de Castilho, R$189, Sesamm, R$290, and Aquapolo, R$3,085.</FONT></P>

<TABLE border=0 cellSpacing=0>



<TR>

   <TD vAlign=top width="2%" noWrap><FONT size=2 face="Georgia,Times New Roman,Times,serif">(i)</FONT>&nbsp; &nbsp; &nbsp; </TD>

   <TD width="98%"><FONT size=2 face="Georgia,Times New Roman,Times,serif">General customers - residential and small and mid-sized companies</FONT> </TD></TR>

<TR>

   <TD vAlign=top width="2%" noWrap><FONT size=2 face="Georgia,Times New Roman,Times,serif">(ii)</FONT>&nbsp; &nbsp; &nbsp; </TD>

   <TD width="98%"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Special customers - large consumers, commercial, industries, condominiums and special billing consumers (industrial waste, wells, etc.).</FONT> </TD></TR>

<TR>

   <TD vAlign=top width="2%" noWrap><FONT size=2 face="Georgia,Times New Roman,Times,serif">(iii)</FONT>&nbsp; &nbsp; &nbsp; </TD>

   <TD width="98%"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Agreements - installment payments of past-due receivables, plus monetary restatement and interest.</FONT> </TD></TR>

<TR>

   <TD vAlign=top width="2%" noWrap><FONT size=2 face="Georgia,Times New Roman,Times,serif">(iv)</FONT>&nbsp; &nbsp; &nbsp; </TD>

   <TD width="98%"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Wholesale customers - municipal governments - This balance refers to the sale of treated water to municipalities, which are responsible for distributing to, billing and charging final customers. Some of these municipalities are questioning in court the tariffs charged by SABESP, which have full allowance for doubtful accounts.</FONT> </TD></TR>

<TR>

   <TD width="10%">&nbsp;</TD>

   <TD width="90%"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Additionally, the overdue amounts are substantially included in the allowance for doubtful account and are classified in noncurrent assets.</FONT> </TD></TR></TABLE>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="66%"></TD>

   <TD width="2%"></TD>

   <TD width="15%"></TD>

   <TD width="2%"></TD>

   <TD width="15%"></TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=5>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Balance at the beginning of the year</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,486,342</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,343,445</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 14.217pt" width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Services provided</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">394,922</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">340,068</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 14.217pt" width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Collection &#8211; current year services</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(165,967)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(167,024)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 14.217pt" width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Collection &#8211; previous years&#8217; services</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(37,570)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(30,147)</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=5>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Balance at the end of the year</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,677,727</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,486,342</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=5>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Current</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">33,924</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">26,485</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Noncurrent</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,643,803</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,459,857</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-98</FONT></P></DIV>

<HR align=center SIZE=2 width="100%" noShade>



<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV>

<A name="page_99"></A><BR>

<DIV style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%">

<P style="TEXT-ALIGN: justify"><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>(Convenience Translation into English from the Original Previously Issued in Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes to the Financial Statements <BR>Years Ended December 31, 2012 and 2011 <BR></FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Amounts in thousands of reais, unless otherwise indicated</FONT></B>&nbsp;</FONT></B></FONT></B>

<HR align=left color=#000000 SIZE=1 width="100%">



<P></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">(v) The noncurrent portion consists of trade receivables that are past due and renegotiated with customers and amounts past due related to wholesale to municipal governments, and the amounts are net of allowance for doubtful account.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">(b) The aging of trade receivables is as follows:</FONT></P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="66%"></TD>

   <TD width="2%"></TD>

   <TD width="15%"></TD>

   <TD width="2%"></TD>

   <TD width="15%"></TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">December 31,</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">December 31,</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=5>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Current</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,091,834</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,129,337</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Past-due:</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Up to 30 days</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">197,936</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">184,958</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">From 31 to 60 days</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">97,426</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">79,720</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">From 61 to 90 days</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">61,527</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">50,020</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">From 91 to 120 days</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">50,729</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">39,686</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">From 121 to 180 days</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">89,297</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">70,037</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">From 181 to 360 days</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">139,788</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">137,039</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Over de 360 days</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">2,369,503</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">2,151,359</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=5>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Total past-due</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">3,006,206</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">2,712,819</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=5>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Total</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">4,098,040</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">3,842,156</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px"><FONT size=2 face=Georgia></FONT>&nbsp;</P>

<P style="MARGIN: 0px"><FONT size=2 face=Georgia>(c)</FONT> <FONT size=2 face=Georgia>Allowance for doubtful accounts</FONT> </P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="4%"></TD>

   <TD width="2%"></TD>

   <TD width="60%"></TD>

   <TD width="2%"></TD>

   <TD width="15%"></TD>

   <TD width="2%"></TD>

   <TD width="15%"></TD></TR>

<TR vAlign=bottom>

   <TD width="4%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="60%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" colSpan=3 align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Balance at the beginning of the year</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">2,436,428</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">2,219,420</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" colSpan=3 align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Private sector/government entities</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">126,823</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">83,094</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" colSpan=3 align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Recoveries</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(49,183)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(35,415)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" colSpan=3 align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Wholesale customers</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">209,340</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">169,329</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" colSpan=3 align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Additions for the year</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">286,980</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">217,008</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" colSpan=3 align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Balance at the end of the year</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">2,723,408</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">2,436,428</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" colSpan=3 align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Current</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,242,967</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,132,638</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" colSpan=3 align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Noncurrent</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,480,441</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,303,790</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-99</FONT></P></DIV>

<HR align=center SIZE=2 width="100%" noShade>



<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV>

<A name="page_100"></A><BR>

<DIV style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%">

<P style="TEXT-ALIGN: justify"><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>(Convenience Translation into English from the Original Previously Issued in Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes to the Financial Statements <BR>Years Ended December 31, 2012 and 2011 <BR></FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Amounts in thousands of reais, unless otherwise indicated</FONT></B>&nbsp;</FONT></B></FONT></B>

<HR align=left color=#000000 SIZE=1 width="100%">



<P></P>

<DIV align=left><FONT size=2><STRONG>Reconciliation of allowance for losses </STRONG></FONT><FONT size=2><STRONG>income to </STRONG><FONT size=3><STRONG><FONT size=2>the </FONT></STRONG></FONT><STRONG>statement</STRONG></FONT>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="66%"></TD>

   <TD width="2%"></TD>

   <TD width="15%"></TD>

   <TD width="2%"></TD>

   <TD width="15%"></TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left></TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left></TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=5>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Losses (write-off)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">79,454</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">77,905</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Allowance for state entities (related parties)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">35,142</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Allowance for private sector/government entities</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">126,823</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">83,094</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Reversal of wholesale supply</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(5,324)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Recoveries</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(49,183)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(35,415)</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=5>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Balance</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">192,236</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">120,260</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company does not have customers accounting for 10% or more of its revenues.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">9 Related-party Balances and Transactions</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company is a party to transactions with its controlling shareholder, the State Government, and companies related to it.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">(a) Receivables, interest on shareholders&#8217; equity payable, and revenue and expenses with the State Government of S&#227;o Paulo (parent and consolidated)</FONT></P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="66%"></TD>

   <TD width="2%"></TD>

   <TD width="15%"></TD>

   <TD width="2%"></TD>

   <TD width="15%"></TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">December 31,</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">December 31,</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Receivables</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Current:</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.078pt" width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Water and sewage services (i)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">113,027</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">116,441</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.078pt" width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">GESP Agreement (iii), (iv) and (v)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">41,360</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.078pt" width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Allowance for losses (i)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(47,531)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(12,389)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.078pt" width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Reimbursement for pension benefits paid -</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.078pt" width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Gesp Agreement (ii) and (vi)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">35,278</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">31,887</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.078pt" width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Reimbursement for pension benefits paid -</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">Monthly flow (ii) and (vi)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">8,499</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">8,034</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=5>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Total current</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">109,273</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">185,333</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=5>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Noncurrent:</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.078pt" width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Reimbursement for pension benefits paid -</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.078pt" width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">GESP Agreement (ii) and (vi)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">153,098</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">170,288</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=5>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Total noncurrent</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">153,098</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">170,288</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=5>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Total receivables from shareholder</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">262,371</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">355,621</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-100</FONT></P></DIV>

<HR align=center SIZE=2 width="100%" noShade>



<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV>

<A name="page_101"></A><BR>

<DIV style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%">

<P style="TEXT-ALIGN: justify"><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>(Convenience Translation into English from the Original Previously Issued in Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes to the Financial Statements <BR>Years Ended December 31, 2012 and 2011 <BR></FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Amounts in thousands of reais, unless otherwise indicated</FONT></B>&nbsp;</FONT></B></FONT></B>

<HR align=left color=#000000 SIZE=1 width="100%">



<P></P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="66%"></TD>

   <TD width="2%"></TD>

   <TD width="15%"></TD>

   <TD width="2%"></TD>

   <TD width="15%"></TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">December 31,</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">December 31,</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=5>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Water and sewage services</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">65,496</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">145,412</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Reimbursement of additional retirement and</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 7.078pt" width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">pension benefits</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">196,875</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">210,209</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=5>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Total</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">262,371</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">355,621</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=5>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Interest on shareholders&#8217; equity payable to related parties</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">228,214</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">153,368</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="2%"></TD>

   <TD width="2%"></TD>

   <TD width="62%"></TD>

   <TD width="2%"></TD>

   <TD width="15%"></TD>

   <TD width="2%"></TD>

   <TD width="15%"></TD></TR>

<TR vAlign=bottom>

   <TD width="2%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="62%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" colSpan=3 align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Gross revenue from sales and services</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="2%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="62%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Water supply</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">228,890</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">216,933</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="2%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="62%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Sewage services</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">202,094</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">188,059</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="2%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="62%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Collection from related parties</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(481,204)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(425,129)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="2%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="62%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Financial income</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">161,552</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">271,847</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=7>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="2%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="62%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Collection of GESP reimbursement referring to Law</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="2%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="62%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">4819/58</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">104,426</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">89,505</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=7>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=7>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="2%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">(i)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="TEXT-INDENT: 14.147pt" width="62%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Water and sewage services</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=left>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company provides water supply and sewage collection services to the S&#227;o Paulo State Government and other companies related to it in accordance with usual market terms and conditions, as considered by management, except for the settlement which can be made according to items (iii), (iv) and (v).</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">An allowance for losses of amounts past due for more than 360 days has been set up due to the uncertainty involving these receipts (R$47,531 in 2012 and R$12,389 in 2011).</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">(ii) Reimbursement for pension benefits paid</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Refers to amounts of supplementary retirement and pension benefits provided for in State Law 4819/58 ("Benefits") paid by the Company to former employees and pensioners.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Under the Agreement referred on item (iii) with the S&#227;o Paulo State Government ("GESP" or the "State"), GESP recognizes its liability from charges arising from the Benefits, provided that the payment criteria set forth by the State Department of Personnel (DDPE), based on legal guidance of the Legal Consultancy of the Department of Finance and of the State Attorney General's Office (PGE).</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">As discussed on item (vi), during the assessment of the debt due from GESP to the Company there were certain divergences in the calculation and eligibility criteria of the benefits paid by the Company on behalf of GESP.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-101</FONT></P></DIV>

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<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV>

<A name="page_102"></A><BR>

<DIV style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%">

<P style="TEXT-ALIGN: justify"><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>(Convenience Translation into English from the Original Previously Issued in Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes to the Financial Statements <BR>Years Ended December 31, 2012 and 2011 <BR></FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Amounts in thousands of reais, unless otherwise indicated</FONT></B>&nbsp;</FONT></B></FONT></B>

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<P></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">For the years ended December 31, 2012 and 2011, 2,459 and 2,492 retired employees, respectively, received additional retirement benefits, and for the years ended December 31, 2012 and 2011, the Company paid R$ 132,704 and R$124,421, respectively. There were 27 active employees as of December 31, 2012 who will be entitled to these benefits as a result to their retirement as compared to 36 as of December 31, 2011.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In January 2004, the payments of supplement retirement and pension benefits were transferred to the Department of Finance and would be made in accordance with the calculation criteria determined by the PGE. As a result of a court decision, the responsibility for making the payments returned to SABESP, as originally established.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">(iii) GESP Agreement</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">On December 11, 2001, the Company, the S&#227;o Paulo State Government (through the State Department of Finance Affairs, currently Department of Finance) and the Water and Electricity Department (DAEE), with the intermediation of the State Department of Sanitation and Energy (former Department of Water Resources, Sanitation and Construction Works), entered into the Obligations, Payment Commitment and Other Covenants Acknowledgement and Consolidation Agreement ("GESP Agreement") for the settlement of outstanding debts between GESP and the Company related to the provision of water supply and sewage services, and the retirement benefits.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In view of the strategic importance of the Taia&#231;upeba, Jundia&#237;, Biritiba, Paraitinga and Ponte Nova reservoirs for ensuring and maintaining the Alto Tiet&#234; water volume, the Company agreed to receive them as partial repayment of the reimbursement related to the Benefits. The DAEE would transfer the reservoirs to the Company, replacing the amount owed by GESP. However, the S&#227;o Paulo State Public Prosecution Office challenged the legal validity of this agreement, and its main argument is the absence of a specific legislative authorization for disposal of DAEE's assets. The Company's legal advisors assess the risk of loss in this lawsuit as probable, in case the legislative authorization is not obtained, which would hinder the transfer of the related reservoirs as a partial settlement of the balance receivable. For further information see item (vi) below.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">(iv) First Amendment to the GESP Agreement</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">On March 22, 2004, the Company and the S&#227;o Paulo State Government amended the terms of the original GESP Agreement, (1) consolidating and recognizing the amounts due by the S&#227;o Paulo State Government for water supply and sewage collection services provided, adjusted for inflation through February 2004; (2) formally authorizing the offset of amounts due by the S&#227;o Paulo State Government with interest on shareholders&#8217; equity declared by the Company and any other debt owed to the S&#227;o Paulo State Government as of December 31, 2003, adjusted for inflation through February 2004; and (3) defining the payment conditions of the remaining liabilities of the S&#227;o Paulo State Government for the receipt of the water supply and sewage services.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">(v) Second Amendment to the GESP Agreement</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">On December 28, 2007, the Company and the S&#227;o Paulo State Government, represented by the Department of Finance, signed the second amendment to the terms of the original GESP Agreement, agreeing upon the payment in installments of the remaining balance of the First Amendment, amounting to R$133,709 at November 30, 2007, to be paid in 60</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-102</FONT></P></DIV>

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<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV>

<A name="page_103"></A><BR>

<DIV style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%">

<P style="TEXT-ALIGN: justify"><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>(Convenience Translation into English from the Original Previously Issued in Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes to the Financial Statements <BR>Years Ended December 31, 2012 and 2011 <BR></FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Amounts in thousands of reais, unless otherwise indicated</FONT></B>&nbsp;</FONT></B></FONT></B>

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<P></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">monthly and consecutive installments of the same amount, beginning on January 2, 2008. The last installment was paid in December 2012.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The State and SABESP agreed on immediately resuming their compliance with their mutual obligations under new assumptions: (a) implementation of an electronic bill management system to facilitate and speed up the monitoring of payment processes and budget management procedures; (b) structuring of the Rational Water Use Program (PURA) to rationalize the consumption of water and the amount of the water and sewage bills under the responsibility of the State; (c) establishment, by the State, of criteria for budgeting so as to avoid the reallocation of amounts to a specific water and sewage accounts as from 2008; (d) possibility of registering state bodies and entities in a delinquency system or reference file; (e) possibility of interrupting water supply to state bodies and entities in the case of nonpayment of water and sewage bills.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">(vi) Third Amendment to the GESP Agreement</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">On November 17, 2008, GESP, SABESP and DAEE signed the third amendment to the GESP Agreement, through which GESP recognized a debt balance payable to SABESP totaling R$915,251, adjusted for inflation up to September 2008 in accordance with the fluctuation of the IPCA-IBGE, corresponding to the Undisputed Reimbursement, determined by FIPECAFI. SABESP accepted on a provisional basis the reservoirs (see item (iii) above) as part of the payment of the Undisputed Reimbursement and offered to GESP a provisional settlement, recognizing a credit totaling R$696,283, corresponding to the value of the reservoirs in the Alto Tiet&#234; system. The Company did not recognize the reimbursement receivable of R$696,283 related to the reservoirs, as it is not virtually certain that will be transferred by the State. The final settlement will only be effected with the actual transfer of the property with the proper Registry of Deeds Office. The remaining balance totaling R$218,967 is being paid in 114 monthly, consecutive installments, totaling R$1,920 each, including the annual IPCA/FIPE fluctuation, plus interest of 0.5% p.m., the first of which fell due on November 25, 2008.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In addition, the third amendment provides for the regularization of the monthly flow of benefits. While SABESP is liable for the flow of monthly payment of benefits, the State shall reimburse SABESP based on the criteria identical to those applied when determining the Undisputed Reimbursement. Should there be no preventive court decision, the State will assume the flow of monthly payment of benefits portion deemed as undisputed.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">(vii) Controversial Amount of Benefits</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">As mentioned before, on November 17, 2008 the Company and the State signed the third amendment to the GESP Agreement, when the reimbursements called disputed and undisputed were quantified. The amendment established the efforts to calculate the so-called Disputed Reimbursement of the Benefits. Under the fourth clause of the amendment, the Disputed Reimbursement represents the difference between the Undisputable Reimbursement and the amount actually paid by the Company as pension benefits and pensioners set out in Law 4,819/58, for which, the Company understands, the State of S&#227;o Paulo is originally liable, but paid by SABESP under a court order.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">By entering into the third amendment, the State's Legal Representative (PGE) agreed to reassess the differences that gave rise to the disposed reimbursement of benefits set out in Law 4,819/58. At the time, the expectation was based on the willingness of the PGE to</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-103</FONT></P></DIV>

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<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV>

<A name="page_104"></A><BR>

<DIV style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%">

<P style="TEXT-ALIGN: justify"><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>(Convenience Translation into English from the Original Previously Issued in Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes to the Financial Statements <BR>Years Ended December 31, 2012 and 2011 <BR></FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Amounts in thousands of reais, unless otherwise indicated</FONT></B>&nbsp;</FONT></B></FONT></B>

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<P></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">reanalyze the issue and the implied right of the Company to the reimbursement, including based on opinions from outside legal advisors.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">However, new opinions issued by the PGE and received on September 4 and 22, 2009 and January 4, 2010, refute the reimbursement of amount previously defined as controversial amount.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Even though the negotiations with the State are still in progress, it is not possible to assure that the Company will recover amicably (without dispute) the receivables related to the Disputed Reimbursement.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">As part of the actions intended to recover the receivables that management considers due by the State, related to discrepancies in the reimbursement of the pension benefits paid by the Company, the Company: (i) on March 24, 2010, reported to the controlling shareholder the official letter approved by the executive committee, proposing that the matter be discussed at the S&#227;o Paulo Stock Exchange (BM&amp;FBovespa) Arbitration Chamber; (ii) in June 2010, presented to Department of Finance a proposal to solve the outstanding items, such proposal was not accepted; (iii) on November 9, 2010, filed a judicial action against the State of S&#227;o Paulo pleading the entire reimbursement related to employee benefits set out in Law 4,819/58 to finalize the discussion between the Company and GESP. Despite the legal action the Company will persist to obtain an agreement with GESP since the management believes that it is the better to the Company and to its shareholders than wait until the end of the judicial action.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company's management decided to not recognize the reimbursements which were not considered virtually certain that will be reimbursed by the State. As of December 31, 2012 and 2011, the amounts not recorded by the Company, related to the pension benefits paid on behalf of the State by the Company, totaled R$1,351,210 and R$1,290,663, respectively, including the amount of R$696,283 related to the transfer of the reservoirs in the Alto Tiet&#234; system. As a result, the Company also recognized the obligation related to the pension benefit obligations maintained with the beneficiaries and pensioners of Plan G0. As of December 31, 2012 and 2011, the pension benefit obligations of Plan G0 totaled R$1,547,161 and R$1,512,078, respectively. For detailed information on the pension benefit obligations refer to Note 17.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">(b) Agreements for the use of reservoirs</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In its operations, the Company uses the Guarapiranga and Billings reservoirs, which are owned by another entity controlled by the S&#227;o Paulo State Government (Empresa Metropolitana de &#193;guas e Energia S.A. - EMAE), according to grants from the relevant competent body and in compliance with the prevailing legislation.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">EMAE has requested the payment of the receivable and to financial compensation for the use of water from these reservoirs, and the reimbursement of damages related to the nonpayment in due time.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company understands that no amounts are due for the use of these reservoirs but it is responsible for their maintenance and operating costs. Should these reservoirs not be available for use to the Company, there could be the need to collect water in more distant places and there would be the risk of making services in the region unfeasible and increasing sourcing cost.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-104</FONT></P></DIV>

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<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV>

<A name="page_105"></A><BR>

<DIV style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%">

<P style="TEXT-ALIGN: justify"><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>(Convenience Translation into English from the Original Previously Issued in Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes to the Financial Statements <BR>Years Ended December 31, 2012 and 2011 <BR></FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Amounts in thousands of reais, unless otherwise indicated</FONT></B>&nbsp;</FONT></B></FONT></B>

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<P></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Three lawsuits were filed, two of them requesting injunctions to toll the statute of limitations and another to seek a decision by arbitration, as prescribed by an arbitration clause in the agreement entered into between the S&#227;o Paulo State Government and former Light, in 1958.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The plaintiff understands that diverging opinions with SABESP should be resolved in an Arbitration Court, an opinion disputed by SABESP, which in turn claims it is not bound to an agreement in which its predecessor only participated as intervening party.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In February 2012, the arbitration commitment was established and this decision is subject to appeal. Notwithstanding, if an arbitration proceeding is concurrently filed, SABESP will take all the available judicial actions to defend its position. The Company&#8217;s management assessed this risk as possible loss.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">(c) Agreements with reduced tariffs with State and Municipal Government Entities that joined the Water Rational Use Program (PURA).</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company has signed agreements with government entities related to the State Government and municipalities where it operates that benefit from a reduction of 25% in the tariff of water supply and sewage services when they are not in default. These agreements provide for the implementation of the rational water use program, which takes into consideration the reduction in the consumption of water.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">(d) Guarantees</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The State Government provides guarantees for some loans and financing of the Company and does not charge any fee with respect to such guarantees.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">(e) Personnel assignment agreement among entities related to the State Government</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company has personnel assignment agreements with entities related to the State Government, under which the expenses are fully passed on and monetarily reimbursed. In 2012, the expenses related to personnel assigned by SABESP to other state government entities amounted to R$12,298 (R$10,888 in December 2011).</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">No expenses related to personnel assigned by other entities to SABESP were recorded at December 31, 2012 and 2011.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">(f) Services obtained from state government entities</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">As of December 31, 2012 and 2011, SABESP had an outstanding amount payable of R$958 and R$12,062, respectively, for services rendered by S&#227;o Paulo State Government entities.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">(g) Non-operating assets</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">As of December 31, 2012, the Company had an amount of R$969 related to free land lent to DAEE (Water and Electricity Department) (R$2,289 in December 2011).</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">(h) SABESPREV</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company sponsors a private defined benefit pension plan, which is operated and administered by Funda&#231;&#227;o Sabesp de Seguridade Social - SABESPREV. The net actuarial</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-105</FONT></P></DIV>

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<P style="TEXT-ALIGN: justify"><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>(Convenience Translation into English from the Original Previously Issued in Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes to the Financial Statements <BR>Years Ended December 31, 2012 and 2011 <BR></FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Amounts in thousands of reais, unless otherwise indicated</FONT></B>&nbsp;</FONT></B></FONT></B>

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<P></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">liability recognized as of December 31, 2012 amounted to R$577,169 (R$538,619 in December 31, 2011) according to Note 18 (b).</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">(i) Compensation of key management personnel</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Compensation:</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">SABESP's compensation policy for the Management and officers is set out according to guidelines of the State Government of S&#227;o Paulo, the CODEC (State Capital Protection Board), and compensation is based on performance, market competitiveness, or other indicators related to the Company's business and subject to the shareholders&#8217; approval at an Annual Shareholders' Meeting.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Officers' compensation is limited to the compensation of the State Governor, and the Board of Directors' compensation is equivalent to 30 percent of the executive committee' overall compensation, contingent on attendance of at least one monthly meeting.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The objective of the compensation policy is to set a private sector management paradigm to retain its staff and recruit competent, experienced and motivated professionals, considering the level of management efficiency currently required by the Company.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In addition to monthly fee, the members of the Board of Directors and the Executive Committee receive:</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Bonuses:</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">For the purposes of compensating directors and officers of the companies where the State is the controlling shareholder, as an incentive policy, providing the company records quarterly, half-yearly, and yearly profits, and distributes mandatory dividends to shareholders, even if in the form of interest on shareholders&#8217; equity. Annual bonuses cannot exceed the lower of six times the monthly compensation of the officers/directors nor 10 percent of the interest on shareholders&#8217; equity paid by the company.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Annual reward:</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Equivalent to one monthly fee, calculated on a prorated basis in December of each year.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The purpose of this reward is to correspond to the thirteenth salary paid to Company employees, as officers and directors' relationship with the Company is governed by its bylaws and not the labor code.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Benefits paid only to statutory officers - meal ticket, basket of food staples, medical care, weekly paid rest typified as a paid leave of 30 calendar days, and payment of a premium equivalent to one third of the monthly fee.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Expenses related to the compensation to the members of its board of directors and officers amounted to R$3,211 and R$2,614 for the years ended December 31, 2012 and 2011, respectively, and they refer to short-term benefits. An additional amount of R$1,074, related to the bonus program, was recorded in 2012 (R$1,069 in December 2011).</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-106</FONT></P></DIV>

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<A name="page_107"></A><BR>

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<P style="TEXT-ALIGN: justify"><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>(Convenience Translation into English from the Original Previously Issued in Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes to the Financial Statements <BR>Years Ended December 31, 2012 and 2011 <BR></FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Amounts in thousands of reais, unless otherwise indicated</FONT></B>&nbsp;</FONT></B></FONT></B>

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<P></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">(j) Loan agreement through credit facility</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company holds interests in some companies, not holding the majority interest but with power of veto in some issues. Therefore, these companies are considered for accounting purposes as jointly controlled entities, and are proportionately consolidated pursuant to CPC 19.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">These SPEs were created to implement specific projects and will be liquidated after their completion.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company entered into a loan agreement through credit facility with the &#193;guas de Andradina S.A., &#193;guas de Castilho S.A., and Aquapolo Ambiental S.A. to finance the operations of these companies, until the loans and financing required to banks are cleared.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The contracts signed on January 19, 2012 with &#193;guas de Andradina and &#193;guas de Castilho were settled in July 2012, according to the agreement&#8217;s provisions. On July 18, 2012, new agreements were signed with both companies, pursuant to the terms and conditions in the table below. The agreement signed with Aquapolo Ambiental on March 30, 2012 remains with the same features, according to the table below:</FONT></P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="19%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="16%"></TD>

   <TD width="2%"></TD>

   <TD width="11%"></TD>

   <TD width="2%"></TD>

   <TD width="16%"></TD>

   <TD width="2%"></TD>

   <TD width="13%"></TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">Credit</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">Principal</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">Interest</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid; TEXT-INDENT: 17.699pt" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Companies</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; TEXT-INDENT: 3.059pt" align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">limit</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">disbursed</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">balance</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">Interest rate</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">Maturity</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">&#193;guas de</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">SELIC + 3.5%</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Andradina</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">3,467</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,427</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">21</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">p.a.</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">07/17/2013</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">SELIC + 3.5%</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">&#193;guas de Castilho</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">675</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">403</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">6</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">p.a.</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">07/17/2013</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Aquapolo</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">CDI + 1.2%</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Ambiental</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">5,629</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">5,629</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">519</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">p.a.</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">04/30/2016</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Aquapolo</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">CDI + 1.2%</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Ambiental</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">19,000</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">19,000</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,076</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">p.a.</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">04/30/2015</FONT>&nbsp;</TD></TR>

<TR>

   <TD colSpan=11>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Total</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">28,771</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">26,459</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,622</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The amount disbursed is recognized in assets, in &#8220;Other receivables&#8221; and amounts to R$1,830 for principal and R$27 for interest recognized in current assets and R$24,629 for principal and R$1,595 for interest in noncurrent assets. As of December 31, 2012, the balance of principal and interest of these contracts is R$28,081. In 2012, financial income was impacted by R$1,672, referring to these loans; of which R$1,622 refers to outstanding agreements and R$50 refers to agreements settled in July 2012.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">10 Indemnities Receivable</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">(i) Diadema</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Indemnities receivable are noncurrent assets that represents amounts receivable from the municipality of Diadema as an indemnity for its unilateral termination of the concession for water supply and sewage services of the Company in 1995. As of December 31, 2011, this balance totaled R$60,295.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company invested in the construction of water and sewage systems in the municipalities of Diadema and Mau&#225; in order to meet the concession service commitments.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-107</FONT></P></DIV>

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<P style="TEXT-ALIGN: justify"><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>(Convenience Translation into English from the Original Previously Issued in Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes to the Financial Statements <BR>Years Ended December 31, 2012 and 2011 <BR></FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Amounts in thousands of reais, unless otherwise indicated</FONT></B>&nbsp;</FONT></B></FONT></B>

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<P></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">For the unilateral termination of the Diadema and Mau&#225; concessions, the municipalities assumed the responsibility of supplying water and sewage services in those regions. At that time, the Company reclassified the balances of property, plant and equipment related to the assets used in those municipalities to noncurrent assets (indemnities receivable).</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The residual value of property, plant, and equipment items relating to the municipality of Diadema, reclassified in December 1996 was R$75,231, and the indemnities receivable from the municipality amounted to R$60,295 at December 31, 2011. In December 2012, an allowance account of R$60,295 was recorded, corresponding to the total receivable held by the Company.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">SABESP filed lawsuits to collect the amounts due by the municipalities. It proposed the enforcement of the settlement entered into with the municipality of Diadema and Companhia de Saneamento de Diadema &#8211; Saned related to the payment of indemnity, and a motion to stay the execution was filed by the municipality of Diadema. In July 2008, the judge approved the seizure of cash from Saned's bank accounts and short-term investments (online seizure) of up to 10% of the adjusted debt, and the amount of R$2,919 were seized and withdrawn on March 3, 2009. Subsequently, the Court of Justice issued an injunction determining the seizure through weekly deposits by Saned in the amount corresponding to 20% of everything received in its bank accounts and short-term investments. Saned filed appeals against this decision, and currently an interlocutory appeal filed at the Federal Supreme Court is pending judgment.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">A court decision was issued in October 2009 on the motion to stay execution filed by the municipality of Diadema that recognizes the existence and collectability of the debt and affirming that the execution against the Municipality should be made through certificate of judgment debt of the government. SABESP and the municipal government appealed against this decision. SABESP obtained favorable decision in September, 2011 from the Special Department of the Court of Justice, affirming to be constitutional the municipal law that allowed blocking the transfers of ICMS made by the State Government to the municipality (instead of payment only through a court-ordered debt bond). In July 2012, Sabesp&#8217;s appeal was partially upheld and the judge sentenced the continuance of execution by blocking the transfers of ICMS made by the State of S&#227;o Paulo to the municipality of Diadema.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">On December 29, 2008, Saned and the Municipality of Diadema entered into a Letter of Intent with the S&#227;o Paulo State and SABESP for the purpose of preparing studies and conducting negotiations to guide Diadema's and SABESP's decisions, aiming to establish SABESP as the exclusive provider of water supply and sewage services for the City of Diadema, by means of an amicable settlement for the conflicts currently existing between the companies.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In January 2009, the parties filed a joint petition requesting the suspension of new seizures, for a three-month period, trying to enable an agreement. The suspension was confirmed by the Tax Court. As the settlement on which a possible agreement will be based was maintained, the suspension request was last renewed in March 2012.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In December 2012, SABESP resumed the execution through the freeze (pledge) of ICMS transfers to the Municipality of Diadema. After the issue of a court order to freeze the transfers, a supersedeas effect was granted to the extraordinary appeal filed by the Municipality of Diadema against the court&#8217;s decision that authorized the continuation of the execution by means of the transfer pledge.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-108</FONT></P></DIV>

<HR align=center SIZE=2 width="100%" noShade>



<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV>

<A name="page_109"></A><BR>

<DIV style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%">

<P style="TEXT-ALIGN: justify"><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>(Convenience Translation into English from the Original Previously Issued in Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes to the Financial Statements <BR>Years Ended December 31, 2012 and 2011 <BR></FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Amounts in thousands of reais, unless otherwise indicated</FONT></B>&nbsp;</FONT></B></FONT></B>

<HR align=left color=#000000 SIZE=1 width="100%">



<P></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Currently, the freeze of transfers is suspended and awaiting the judgment on the appeal filed by the Municipality of Diadema against the decision that sentenced the issue of the court order, as well as the analysis of request for reconsideration submitted by SABESP in view of decision that granted the supersedeas effect to the extraordinary.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In addition, SABESP carries on the negotiations to enter into a new agreement with the current administration of the Municipality of Diadema.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">On the other hand, a public civil action filed by the Public Prosecution Office of the State of S&#227;o Paulo against the agreement based on the execution filed against the municipality of Diadema and Saned is pending judgment and since 2004 has been waiting for engineering and accounting expert examination. After negotiations initiated with the municipality of Diadema, the Public Prosecution Office pleaded the dismissal of the public civil action, which was rejected and was object of an appeal by SABESP.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">(ii) Mau&#225;</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">As regards Mau&#225;, a lower court decision was rendered determining that the Municipality pays the amount of R$153.2 million as compensation for the investments made in the municipality by SABESP and for loss of profits. This award was confirmed by the Federal Supreme Court, in a final and unappealable decision, and SABESP has already resumed the execution in October 2012. The summons on the local government of Mau&#225; and SAMA is currently pending.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The residual value of fixed assets related to the municipality of Mau&#225;, reclassified in December 1999 was R$103,763, and indemnities receivable from the municipality were R$85,918 at December 31, 2010. Court decisions have been favorable to the Company and the receipt of amounts due by municipality shall occur as certificate of judgment debt of the government, which will be recognized upon effective receipt, in view of uncertainties related to the settlement of amounts involved and the track record related to prioritizing payments of certificate of judgment debt of the government in the municipality of Mau&#225;.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In December 2012 and 2011, the indemnity referring to the municipality of Mau&#225; was fully accrued.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Management believes that the Company has legal rights to receive the indemnities and is monitoring the judicial lawsuits.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-109</FONT></P></DIV>

<HR align=center SIZE=2 width="100%" noShade>



<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV>

<A name="page_110"></A><BR>

<DIV style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%">

<P style="TEXT-ALIGN: justify"><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>(Convenience Translation into English from the Original Previously Issued in Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes to the Financial Statements <BR>Years Ended December 31, 2012 and 2011 <BR></FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Amounts in thousands of reais, unless otherwise indicated</FONT></B>&nbsp;</FONT></B></FONT></B>

<HR align=left color=#000000 SIZE=1 width="100%">



<P></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">11 Intangible Assets</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(a) Balance sheet balances (*)</FONT></B></P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="40%"></TD>

   <TD width="1%"></TD>

   <TD width="9%"></TD>

   <TD width="1%"></TD>

   <TD width="9%"></TD>

   <TD width="1%"></TD>

   <TD width="9%"></TD>

   <TD width="1%"></TD>

   <TD width="9%"></TD>

   <TD width="1%"></TD>

   <TD width="9%"></TD>

   <TD width="1%"></TD>

   <TD width="9%"></TD></TR>

<TR vAlign=bottom>

   <TD width="40%" align=left>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="59%" colSpan=11 align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">PARENT</FONT></TD></TR>

<TR vAlign=bottom>

   <TD width="40%" align=left>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; TEXT-INDENT: 39.3pt" width="29%" colSpan=5 align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">December 31, 2012</FONT></TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="29%" colSpan=5 align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">December 31, 2011</FONT></TD></TR>

<TR vAlign=bottom>

   <TD width="40%" align=left>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">Accumulated</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">Accumulated</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="40%" align=left>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">Cost&nbsp;</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face=Georgia>amortization</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">Net</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">Cost</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">amortization</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">Net</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Intangibles arising from:</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Service Concession agreements (i)</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">8,408,007</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(1,511,813)</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">6,896,194</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">8,362,440</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(1,630,618)</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">6,731,822</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Concession contracts (ii)</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,402,854</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(292,918)</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,109,936</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,252,422</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(247,434)</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,004,988</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Program contracts (iii)</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">5,288,541</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(1,469,369)</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">3,819,172</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">3,914,369</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(1,169,810)</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,744,559</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Program contracts &#8211; commitments (iv)</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">627,989</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(56,898)</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">571,091</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">473,327</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(38,341)</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">434,986</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Service contract &#8211; S&#227;o Paulo (v)</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">10,604,942</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(1,036,455)</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">9,568,487</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">9,781,799</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(591,226)</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">9,190,573</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">New businesses (vi)</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">21,400</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(4,923)</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">16,477</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Software licenses</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">55,615</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(52,969)</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,646</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">52,743</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(50,427)</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,316</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Total</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">26,387,948</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(4,420,422)</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">21,967,526</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">23,858,500</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(3,732,779)</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">20,125,721</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="40%"></TD>

   <TD width="1%"></TD>

   <TD width="9%"></TD>

   <TD width="1%"></TD>

   <TD width="9%"></TD>

   <TD width="1%"></TD>

   <TD width="9%"></TD>

   <TD width="1%"></TD>

   <TD width="9%"></TD>

   <TD width="1%"></TD>

   <TD width="9%"></TD>

   <TD width="1%"></TD>

   <TD width="9%"></TD></TR>

<TR vAlign=bottom>

   <TD width="40%" align=left>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="59%" colSpan=11 align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">CONSOLIDATED</FONT></TD></TR>

<TR vAlign=bottom>

   <TD width="40%" align=left>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="29%" colSpan=5 align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">December 31, 2012</FONT></TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="29%" colSpan=5 align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">December 31, 2011</FONT></TD></TR>

<TR vAlign=bottom>

   <TD width="40%" align=left>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">Accumulated</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">Accumulated</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="40%" align=left>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">Cost</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">amortization</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">Net</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">Cost&nbsp;</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face=Georgia>amortization</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">Net</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Intangibles arising from:</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Service Concession agreements (i)</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">8,432,421</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(1,511,981)</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">6,920,440</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">8,378,432</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(1,630,664)</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">6,747,768</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Concession contracts (ii)</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,402,854</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(292,918)</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,109,936</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,252,422</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(247,434)</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,004,988</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Program contracts (iii)</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">5,288,541</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(1,469,369)</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">3,819,172</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">3,914,369</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(1,169,810)</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,744,559</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Program contracts &#8211; commitments (iv)</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">627,989</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(56,898)</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">571,091</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">473,327</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(38,341)</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">434,986</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Service contract &#8211; S&#227;o Paulo (v)</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">10,604,942</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(1,036,455)</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">9,568,487</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">9,781,799</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(591,226)</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">9,190,573</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">New businesses (vi)</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">21,400</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(4,923)</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">16,477</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Software licenses</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">55,784</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(52,988)</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,796</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">52,755</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(50,429)</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,326</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Total</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">26,412,531</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(4,420,609)</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">21,991,922</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">23,874,504</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(3,732,827)</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">20,141,677</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-110</FONT></P></DIV>

<HR align=center SIZE=2 width="100%" noShade>



<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV>

<A name="page_111"></A><BR>

<DIV style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%">

<P style="TEXT-ALIGN: justify"><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>(Convenience Translation into English from the Original Previously Issued in Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes to the Financial Statements <BR>Years Ended December 31, 2012 and 2011 <BR></FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Amounts in thousands of reais, unless otherwise indicated</FONT></B>&nbsp;</FONT></B></FONT></B>

<HR align=left color=#000000 SIZE=1 width="100%">



<P></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(b) Changes</FONT></B></P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="24%"></TD>

   <TD width="10%"></TD>

   <TD width="11%"></TD>

   <TD width="11%"></TD>

   <TD width="11%"></TD>

   <TD width="11%"></TD>

   <TD width="11%"></TD>

   <TD width="11%"></TD></TR>

<TR vAlign=bottom>

   <TD width="24%" align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="76%" colSpan=7 align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">PARENT</FONT></TD></TR>

<TR vAlign=bottom>

   <TD width="24%" align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">December</FONT><BR><FONT size=1 face="Georgia,Times New Roman,Times,serif">31, 2011</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=center><FONT size=1 face=Georgia>Additions</FONT>&nbsp;&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=center><FONT size=1 face=Georgia>Contract</FONT><BR><FONT size=1 face=Georgia>renewal</FONT>&nbsp;&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=center><FONT size=1 face=Georgia>Transfer</FONT>&nbsp;&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=center><FONT size=1 face=Georgia>Write-offs</FONT><BR><FONT size=1 face="Georgia,Times New Roman,Times,serif">and</FONT><BR><FONT size=1 face=Georgia>disposals</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=center><FONT size=1 face=Georgia>Amortization</FONT>&nbsp;&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">December 31,</FONT>&nbsp;<FONT size=1 face="Georgia,Times New Roman,Times,serif">2012</FONT></TD></TR>

<TR vAlign=bottom>

   <TD width="24%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Intangibles arising from:</FONT>&nbsp;</TD>

   <TD width="10%" align=left>&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="11%" align=right>&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="24%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Service Concession agreements</FONT>&nbsp;</TD>

   <TD width="10%" align=left>&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="11%" align=right>&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="24%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">(i)</FONT>&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">6,731,822</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">976,205&nbsp;</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face=Georgia>(652,973)</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(21,602)</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(916)</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(136,342)</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">6,896,194</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="24%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Concession contracts (ii)</FONT>&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,004,988</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">150,963</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(14)</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(46,001)</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,109,936</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="24%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Program contracts (iii)</FONT>&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,744,559</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">483,448 </FONT></TD>

   <TD width="11%" align=right><FONT size=1 face=Georgia>652,973</FONT>&nbsp;&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(3,095)</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(58,713)</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">3,819,172</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="24%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Program</FONT>&nbsp;<FONT size=1 face=Georgia>contracts &#8211;</FONT><FONT size=3 face="Times New Roman"> </FONT></TD>

   <TD width="10%" align=left>&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="24%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">commitments (iv)</FONT>&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">434,986</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">154,662</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(18,557)</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">571,091</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="24%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Service contract &#8211; S&#227;o Paulo (v)</FONT>&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">9,190,573</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">882,868</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(49,486)</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(5,977)</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(449,491)</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">9,568,487</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="24%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">New businesses (vi)</FONT>&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">16,477</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(16,477)</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="24%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Software licenses</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,316</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,872</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(2,542)</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,646</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="24%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Total</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">20,125,721 </FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><FONT size=1 face=Georgia>2,651,018</FONT>&nbsp;&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(87,565)</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(10,002)</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(711,646)&nbsp;</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><FONT size=1 face=Georgia>21,967,526</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=8>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=8>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="24%" align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="76%" colSpan=7 align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">PARENT</FONT></TD></TR>

<TR>

   <TD width="24%" align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=center><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">December</FONT><BR><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">31, 2010</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=center><FONT color=#000000 size=1 face=Georgia>Additions</FONT>&nbsp;&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=center><FONT color=#000000 size=1 face=Georgia>Contract</FONT><BR><FONT color=#000000 size=1 face=Georgia>renewal</FONT>&nbsp;&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=center><FONT color=#000000 size=1 face=Georgia>Transfer</FONT>&nbsp;&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=center><FONT color=#000000 size=1 face=Georgia>Write-offs</FONT><BR><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">and</FONT><BR><FONT color=#000000 size=1 face=Georgia>disposals</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=center><FONT color=#000000 size=1 face=Georgia>Amortization</FONT>&nbsp;&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=center><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">December 31,</FONT>&nbsp;<FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">201a</FONT></TD></TR>

<TR vAlign=bottom>

   <TD width="24%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Intangibles arising from:</FONT>&nbsp;</TD>

   <TD width="10%" align=left>&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="24%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Service Concession agreements(i)</FONT>&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">6,328,773</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,114,665</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(403,786)</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(63,487)</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(16,228)</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(228,115)</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">6,731,822</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="24%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Concession contracts (ii)</FONT>&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">982,973</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,166</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">57,718</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(2,780)</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(35,089)</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,004,988</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="24%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Program contracts (iii)</FONT>&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,134,377</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">225,510</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">403,786</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(31)</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(3,810)</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(15,273)</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,744,559</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="34%" colSpan=2 align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Program contracts &#8211; commitments</FONT>&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="24%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">(iv)</FONT>&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">311,276</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">139,385</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(15,675)</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">434,986</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="24%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Service contract &#8211; S&#227;o Paulo (v)</FONT>&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">8,764,958</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">930,961</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(36,234)</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face=Georgia>&nbsp;(32,383)</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(436,729)</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">9,190,573</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="24%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">New businesses (vi)</FONT>&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">11,228</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">9,271</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(4,022)</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">16,477</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="24%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Software licenses</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">7,937</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">3,285</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(8,906)</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,316</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=8>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="24%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Total</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">18,541,522</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,425,243</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(42,034)</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(55,201)</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(743,809)</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">20,125,721</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=8>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=8>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="24%" align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="76%" colSpan=7 align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">CONSOLIDATED</FONT></TD></TR>

<TR>

   <TD width="24%" align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=center><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">December</FONT><BR><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">31, 2011</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=center><FONT color=#000000 size=1 face=Georgia>Additions</FONT>&nbsp;&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=center><FONT color=#000000 size=1 face=Georgia>Contract</FONT><BR><FONT color=#000000 size=1 face=Georgia>renewal</FONT>&nbsp;&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=center><FONT color=#000000 size=1 face=Georgia>Transfer</FONT>&nbsp;&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=center><FONT color=#000000 size=1 face=Georgia>Write-offs</FONT><BR><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">and</FONT><BR><FONT color=#000000 size=1 face=Georgia>disposals</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=center><FONT color=#000000 size=1 face=Georgia>Amortization</FONT>&nbsp;&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=center><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">December 31,</FONT>&nbsp;<FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">2012</FONT></TD></TR>

<TR vAlign=bottom>

   <TD width="24%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Intangibles arising from:</FONT>&nbsp;</TD>

   <TD width="10%" align=left>&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="24%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Service Concession agreements (i)</FONT>&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">6,747,768</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">984,630</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(652,973)</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(21,602)</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(916)</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(136,467)</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">6,920,440</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="24%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Concession contracts &#8211; economic</FONT>&nbsp;</TD>

   <TD width="10%" align=left>&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="24%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">value (ii)</FONT>&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,004,988</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">150,963</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(14)</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(46,001)</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,109,936</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="24%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Program contracts (iii)</FONT>&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,744,559</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">483,448</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">652,973</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(3,095)</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(58,713)</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">3,819,172</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="24%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Program</FONT>&nbsp;<FONT size=1 face=Georgia>contracts</FONT> <FONT size=1 face=Georgia>&#8211;</FONT> </TD>

   <TD width="10%" align=right></TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="24%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">commitments (iv)</FONT>&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">434,986</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">154,662</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(18,557)</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">571,091</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="24%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Service contract &#8211; S&#227;o Paulo (v)</FONT>&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">9,190,573</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">882,868</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(49,486)</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(5,977)</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(449,491)</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">9,568,487</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="24%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">New businesses (vi)</FONT>&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">16,477</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(16,477)</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="24%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Software licenses</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,326</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">3,029</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(2,559)</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,796</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="24%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Total</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">20,141,677</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,659,600</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(87,565)&nbsp;</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><FONT size=1 face=Georgia>(10,002)</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(711,788)</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">21,991,922</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-111</FONT></P></DIV>

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<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV>

<A name="page_112"></A><BR>

<DIV style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%">

<P style="TEXT-ALIGN: justify"><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>(Convenience Translation into English from the Original Previously Issued in Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes to the Financial Statements <BR>Years Ended December 31, 2012 and 2011 <BR></FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Amounts in thousands of reais, unless otherwise indicated</FONT></B>&nbsp;</FONT></B></FONT></B>

<HR align=left color=#000000 SIZE=1 width="100%">



<P></P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="37%"></TD>

   <TD width="9%"></TD>

   <TD width="9%"></TD>

   <TD width="9%"></TD>

   <TD width="9%"></TD>

   <TD width="9%"></TD>

   <TD width="9%"></TD>

   <TD width="9%"></TD></TR>

<TR vAlign=bottom>

   <TD width="37%" align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="27%" colSpan=3 align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">CONSOLIDATED</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=left>&nbsp;</TD></TR>

<TR>

   <TD width="37%" align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=center><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">December</FONT><BR><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">31, 201<FONT size=1 face=Georgia>0</FONT></FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=center><FONT color=#000000 size=1 face=Georgia>Additions</FONT>&nbsp;&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=center><FONT color=#000000 size=1 face=Georgia>Contract</FONT><BR><FONT color=#000000 size=1 face=Georgia>renewal</FONT>&nbsp;&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=center><FONT color=#000000 size=1 face=Georgia>Transfer</FONT>&nbsp;&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=center><FONT color=#000000 size=1 face=Georgia>Write-offs</FONT><BR><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">and</FONT><BR><FONT color=#000000 size=1 face=Georgia>disposals</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=center><FONT color=#000000 size=1 face=Georgia>Amortization</FONT>&nbsp;&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=center><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">December 31,</FONT>&nbsp;<FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">2011</FONT></TD></TR>

<TR vAlign=bottom>

   <TD width="37%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Intangibles arising from:</FONT>&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="37%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Service Concession agreements (i)</FONT>&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">6,334,087</FONT>&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,125,334</FONT>&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(403,786)</FONT>&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(63,487)</FONT>&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(16,228)</FONT>&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(228,152)</FONT>&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">6,747,768</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="37%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Concession contracts (ii)</FONT>&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">982,973</FONT>&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,166</FONT>&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">57,718</FONT>&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(2,780)</FONT>&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(35,089)</FONT>&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,004,988</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="37%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Program contracts (iii)</FONT>&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,134,377</FONT>&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">225,510</FONT>&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">403,786</FONT>&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(31)</FONT>&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(3,810)</FONT>&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(15,273)</FONT>&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,744,559</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="37%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Program contracts &#8211; commitments</FONT>&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="37%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">(iv)</FONT>&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">311,276</FONT>&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">139,385</FONT>&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(15,675)</FONT>&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">434,986</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="37%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Service contract &#8211; S&#227;o Paulo (v)</FONT>&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">8,764,958</FONT>&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">930,961</FONT>&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(36,234)</FONT>&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(32,383)</FONT>&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(436,729)</FONT>&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">9,190,573</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="37%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">New businesses (vi)</FONT>&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">11,228</FONT>&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">9,271</FONT>&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(4,022)</FONT>&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">16,477</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="37%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Software licenses</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">7,937</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">3,297</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(8,908)</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,326</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="37%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Total</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">18,546,836</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,435,924</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(42,034)</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(55,201)</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(743,848)</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">20,141,677</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">(*) The Company reclassified amounts among items within intangible assets note, changing neither the opening or closing balances nor the changes in line items, since this reclassification does not require changing the amortization rates, which did not represented any adjustment to the balance sheet, the income statement, the statement of cash flow, or equity.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">This reclassification, to provide more accurate information, refers to items preceding the signatures of program contracts and service agreements that in the financial statements for the year ended December 31, 2011 were classified under &#8220;Concession contracts&#8221;. Previously existing items were classified as concession contracts prior to the signature of program contracts and service agreements.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The amortization term of previously existing items transferred from &#8220;Service Concession agreements&#8221; to &#8220;Concession contracts&#8221;, &#8220;Program Contracts&#8221; and &#8220;Services contract &#8211; S&#227;o Paulo&#8221; are amortized over their useful lives, i.e. have the same amortization criteria, regardless of the group they are classified.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The net effects of these reclassifications are the following: as of December 31, 2011, R$4,341,877 were reclassified from Service Concession agreements to program contract (R$1,673,779) and to services contract (R$2,668,098). As of December 31, 2010, R$3,938,089 were reclassified from Service Concession agreements to program contract (R$1,269,993) and to services agreements (R$2,668,096). The total balances of intangible assets as of December 31, 2011 and 2010 did not change.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-112</FONT></P></DIV>

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<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV>

<A name="page_113"></A><BR>

<DIV style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%">

<P style="TEXT-ALIGN: justify"><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>(Convenience Translation into English from the Original Previously Issued in Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes to the Financial Statements <BR>Years Ended December 31, 2012 and 2011 <BR></FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Amounts in thousands of reais, unless otherwise indicated</FONT></B>&nbsp;</FONT></B></FONT></B>

<HR align=left color=#000000 SIZE=1 width="100%">



<P></P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="41%"></TD>

   <TD width="2%"></TD>

   <TD width="22%"></TD>

   <TD width="2%"></TD>

   <TD width="18%"></TD>

   <TD width="2%"></TD>

   <TD width="11%"></TD></TR>

<TR vAlign=bottom>

   <TD align=left><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(c) Construction services</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR>

   <TD colSpan=7>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=5 align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">CONSOLIDATED</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=5 align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Water</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Sewage</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">supply</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">services</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Total</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Construction revenue</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,054,851</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,419,761</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">2,474,612</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Construction costs</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,036,456</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,387,341</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">2,423,797</FONT>&nbsp;</TD></TR>

<TR>

   <TD colSpan=7>&nbsp;</TD></TR>

<TR>

   <TD colSpan=7>&nbsp;</TD></TR>

<TR>

   <TD colSpan=7>&nbsp;</TD></TR>

<TR>

   <TD colSpan=7>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=5 align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">CONSOLIDATED</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=5 align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Water</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Sewage</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">supply</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">services</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Total</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Construction revenue</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,066,524</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,168,254</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">2,234,778</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Construction costs</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,044,122</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,142,198</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">2,186,320</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(d) Intangibles arising from concession contracts</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company operates concession contracts covering the provision of basic and environmental sanitation services, water supply and sewage services. These concession contracts set out rights and obligations related to the infrastructure and to the public service (See Note 3.8 (a)). A general obligation also exists to return the concession infrastructure to the concession grantor in good working condition at the end of the concession.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">As of December 31, 2012 and 2011, the Company operates in 363 municipalities in the State of S&#227;o Paulo. In most of these contracts operations are based on 30-year concession period.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The services provided by the Company are billed at a price regulated and controlled by the S&#227;o Paulo State Sanitation and Energy Regulatory Agency (ARSESP).</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Intangible assets arising on concession contracts include:</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">(i) Service Concession contracts</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The concession agreements state that the assets will be handed over to the concession grantor at the end of the agreement, through compensation for the residual value or fair value of the underlying tangible assets as set forth in each agreement, and amortization is calculated on a straight-line basis, taking into consideration the useful lives of the tangible assets.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">(ii) Concession contracts</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">From 1999 through 2006, the negotiations for new concessions were conducted based on the economic and financial results of the transaction, determined in a valuation report issued by independent appraisers.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-113</FONT></P></DIV>

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<P style="TEXT-ALIGN: justify"><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>(Convenience Translation into English from the Original Previously Issued in Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes to the Financial Statements <BR>Years Ended December 31, 2012 and 2011 <BR></FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Amounts in thousands of reais, unless otherwise indicated</FONT></B>&nbsp;</FONT></B></FONT></B>

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<P></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The amount determined in the related agreement, after the transaction is closed with the municipality, realized through the subscription of Company shares or in cash, is recorded in this line item and amortized over the related concession period (usually 30 years). As of December 31, 2012 and 2011 there were no outstanding amounts related to these payments to the municipalities.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Intangible assets are amortized on a straight-line basis over the shorter of the concession period or the useful lives of the underlying assets.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">(iii) Program contracts</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">These refer to the renewal of contracts previously referred to as concession contracts whose purpose is to provide sanitation services. The amortization of the assets acquired until the program contracts&#8217; execution dates is calculated on a straight-line basis, taking into consideration the useful lives of the assets. Assets acquired or built after the program contracts&#8217; execution dates are amortized over the shorter of the contract period (30 years) or the useful lives of underlying assets.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">(iv) Program contracts - Commitments</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">After the enactment of the regulatory framework in 2007, renewals of concessions started to be made through of program contracts. In some of these program contracts, the Company undertakes the commitment to financially participate in social and environmental actions. The assets built and financial commitments assumed within the program contracts are recorded as intangible assets and are amortized on a straight-line basis over the duration of the program contract (mostly, 30 years).</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">As of December 31, 2012, amortization expenses related to the commitments of the program contract were R$18,557 (R$15,675 in December 2011).</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The amounts not yet disbursed related to commitments under the program contracts are recorded in &#8220;Program Contracts &#8211; Commitments&#8221; in current liabilities (in the amount of R$148,220 and R$62,287 at December 31, 2012 and 2011, respectively) and noncurrent liabilities (in the amount of R$87,407 and R$130,978 at December 31, 2012 and 2011, respectively).</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">(v) Services contract - S&#227;o Paulo</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">On June 23, 2010, the Company entered into an agreement with the State of S&#227;o Paulo and the Municipality of S&#227;o Paulo to regulate the provision of water and sewage services in the city of S&#227;o Paulo for a 30-year period, which is extendable for another 30-year period.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Also on June 23, 2010, an agreement was signed between the state and municipal government, and SABESP and the S&#227;o Paulo State Sanitation and Energy Regulatory Agency (&#8220;ARSESP&#8221;) are the consenting and intervening parties, whose main aspects are the following:</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">1. The State and the Municipality of S&#227;o Paulo grant Sabesp the right to explore the sanitation service in the capital of the State of S&#227;o Paulo, which consists of the obligation to such provide service and charge the respective tariff for this service;</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-114</FONT></P></DIV>

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<P style="TEXT-ALIGN: justify"><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>(Convenience Translation into English from the Original Previously Issued in Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes to the Financial Statements <BR>Years Ended December 31, 2012 and 2011 <BR></FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Amounts in thousands of reais, unless otherwise indicated</FONT></B>&nbsp;</FONT></B></FONT></B>

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<P></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">2. The State and the Municipality designate ARSESP as the agency responsible for regulating the tariff, controlling and monitoring the services;</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">3. The evaluation model of the contract is the discounted cash flows, which considered the financial and economic sustainability of the operation;</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">4. All operating costs, taxes, investments and the opportunity cost of the investees and the creditors of Sabesp were considered in the cash flow analysis;</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">5. The agreement provides for investments established in the agreement comply with the minimum of 13% of the gross revenue from the municipality of S&#227;o Paulo, net of the taxes on revenues. Investment plans referring to Sabesp&#8217;s execution shall be compatible with the activities and programs foreseen in the state, municipal sanitation plans, and where applicable, the metropolitan plan. The investment plan is not definite and will be revised by Managing Committee every four years, especially as to investments to be made in the following period;</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">6. The payment related to the Municipal Fund of Environmental Sanitation and Infrastructure to be applied in the sanitation service within the municipality must be recovered through the tariffs charges. Such payment represents 7.5% of the gross revenue from the municipality of S&#227;o Paulo, net of the taxes on revenue;</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">7. The opportunity cost of the investees and the creditors was established by the Weighted Average Cost of Capital (WACC) methodology. The WACC was the interest rate used to discount the cash flow of the operation; and</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">8. The agreement considers the recovery of net assets in operation, preferably evaluated through equity valuation or carrying amount monetarily restated, as defined by ARSESP. In addition, the agreement provides for the remuneration of investments to be made by SABESP, so that there is no residual value at the end of the agreement.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The agreement represents approximately 55% of the total revenue of the Company, ensures the judicial and assets security, adequate return to shareholders and quality services to its customers.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The municipality of S&#227;o Paulo and the Company did not conclude an agreement to equalize financial pending issues existing until the signature date of the Agreement related to the rendering of water supply and sewage collection services to the real properties of the municipality, reason that, the Company filed a suit to collect these accounts, which are accrued for losses.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(e) Disposals of underlying concession intangible assets</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In 2012, the Company wrote off underlying intangible assets totaling R$10,002 (R$55,201 in December 2011), due to obsolescence, theft, disposals and discontinued works, unproductive wells, and economically unfeasible projects, as well as those resulting from the completion of the inventory taking.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-115</FONT></P></DIV>

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<P style="TEXT-ALIGN: justify"><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>(Convenience Translation into English from the Original Previously Issued in Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes to the Financial Statements <BR>Years Ended December 31, 2012 and 2011 <BR></FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Amounts in thousands of reais, unless otherwise indicated</FONT></B>&nbsp;</FONT></B></FONT></B>

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<P></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(f) Capitalization of interest and other financial charges</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In 2012, the Company capitalized interest and inflation adjustment, including related foreign exchange differences, in concession intangible assets totaling R$283,016 at an average rate of 5.92% (R$261,886 in December 2011, at an average rate of 5.32%), during the construction period.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(g) Construction margin</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company acts as a primary responsible to build and install the infrastructure related to the concession, using own efforts or by outsourcing services, and is significantly exposed to the related risks and rewards.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company, therefore, recognizes revenue from construction service corresponding to the cost of construction added of a gross margin. In general, concession-related construction works are performed by third parties. In this case the margin is lower and covers the construction management and the assumption of the primary risk. In 2012 and 2011 the margin was 2.3%.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The consolidated amount of the construction margin for 2012 and 2011 was R$50,815 and R$48,458, respectively.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(h) Expropriations</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">As a result of the construction of priority projects related to water and sewage systems, the Company was required to expropriate or establish rights of way in third-parties' properties, and the owners of these properties will be compensated either amicably or through courts.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The assets received as a result of expropriations are recorded as concession intangible assets after the transaction is completed. In 2012, the total amount related to expropriations was R$34,731 (R$12,167 in December 2011).</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(i) Assets pledged as guarantee</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">As of December 31, 2012 and 2011, the Company had underlying physical assets totaling R$249,034 offered as guarantee to the request for the PAES (tax debt refinancing program) (Note 14).</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(j) Public-Private Partnership (PPP)</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company and CAB-Sistema Produtor Alto Tiet&#234; S.A., special purpose entity, formed by Galv&#227;o Engenharia S.A. and Companhia &#193;guas do Brasil &#8211; Cab Ambiental, signed in June 2008 the contract of public-private-partnership of Alto Tiet&#234; production system.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The contract last 15 years which purpose is to expand the capacity of treated water of Taia&#231;upeba from 10 thousand to 15 thousand of liters per second, whose operation began in October 2011.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">As of December 31, 2012 and 2011 the amount recognized as intangible asset related to PPP was R$426,791 and R$474,818, respectively.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-116</FONT></P></DIV>

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<P style="TEXT-ALIGN: justify"><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>(Convenience Translation into English from the Original Previously Issued in Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes to the Financial Statements <BR>Years Ended December 31, 2012 and 2011 <BR></FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Amounts in thousands of reais, unless otherwise indicated</FONT></B>&nbsp;</FONT></B></FONT></B>

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<P></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(k) Works in progress</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The amount of R$5.1 billion is recorded as intangible assets from works in progress at December 31, 2012 (R$5.7 billion at December 31, 2011).</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(l) Amortization of intangible assets</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The average amortization rate was 4.0% in 2012 and 4.3% in 2011.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(m) Investment property</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">As of December 31, 2012, the balances of &#8220;Investment property&#8221; totaled R$54,046 (R$52,585 in December 2011). As of December 31, 2012, the fair value of these properties totaled R$295,538 (R$284,670 in December 2011).</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">12 Property, Plant and Equipment (a) Balance sheet balances</FONT></B></P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="29%"></TD>

   <TD width="2%"></TD>

   <TD width="9%"></TD>

   <TD width="2%"></TD>

   <TD width="10%"></TD>

   <TD width="2%"></TD>

   <TD width="10%"></TD>

   <TD width="2%"></TD>

   <TD width="10%"></TD>

   <TD width="2%"></TD>

   <TD width="10%"></TD>

   <TD width="2%"></TD>

   <TD width="10%"></TD></TR>

<TR vAlign=bottom>

   <TD width="29%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="69%" colSpan=11 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">PARENT</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD width="29%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="33%" colSpan=5 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">December 31, 2012</FONT></B></TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="34%" colSpan=5 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">December 31, 2011</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD width="29%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Accumulated</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Accumulated</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="29%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Cost</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">depreciation</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Net</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Cost</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">depreciation</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Net</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=13>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="29%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Land</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">88,328</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">88,328</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">109,303</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">109,303</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="29%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Buildings</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">56,339</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(30,778)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">25,561</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">39,574</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(30,142)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">9,432</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="29%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Equipment</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">191,202</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(121,569)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">69,633</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">160,833</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(100,616)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">60,217</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="29%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Transportation equipment</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">13,882</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(7,267)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">6,615</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">21,023</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(19,532)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,491</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="29%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Furniture and fixtures</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">16,203</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(10,016)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">6,187</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">27,690</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(27,593)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">97</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="29%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Outros</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,109</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(723)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">386</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,758</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(1,713)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,045</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="29%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">367,063</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(170,353)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">196,710</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">361,181</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(179,596)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">181,585</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="29%"></TD>

   <TD width="2%"></TD>

   <TD width="9%"></TD>

   <TD width="2%"></TD>

   <TD width="10%"></TD>

   <TD width="2%"></TD>

   <TD width="10%"></TD>

   <TD width="2%"></TD>

   <TD width="10%"></TD>

   <TD width="2%"></TD>

   <TD width="10%"></TD>

   <TD width="2%"></TD>

   <TD width="10%"></TD></TR>

<TR vAlign=bottom>

   <TD width="29%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="69%" colSpan=11 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">CONSOLIDATED</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD width="29%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="33%" colSpan=5 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">December 31, 2012</FONT></B></TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="34%" colSpan=5 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">December 31, 2011</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD width="29%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Accumulated</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Accumulated</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="29%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Cost</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">depreciation</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Net</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Cost</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">depreciation</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Net</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=13>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="29%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Land</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">88,328</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">88,328</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">109,303</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">109,303</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="29%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Buildings</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">233,048</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(33,792)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">199,256</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">39,574</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(30,142)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">9,432</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="29%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Equipment</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">211,393</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(131,480)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">79,913</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">160,915</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(100,626)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">60,289</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="29%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Transportation equipment</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">17,119</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(10,455)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">6,664</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">21,071</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(19,549)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,522</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="29%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Furniture and fixtures</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">16,567</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(10,270)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">6,297</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">27,810</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(27,601)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">209</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="29%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Other</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,448</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(1,063)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">385</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,758</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(1,713)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,045</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="29%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Works in progress</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,540</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,540</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">174,668</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">174,668</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="29%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">570,443</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(187,060)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">383,383</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">536,099</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(179,631)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">356,468</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-117</FONT></P></DIV>

<HR align=center SIZE=2 width="100%" noShade>



<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV>

<A name="page_118"></A><BR>

<DIV style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%">

<P style="TEXT-ALIGN: justify"><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>(Convenience Translation into English from the Original Previously Issued in Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes to the Financial Statements <BR>Years Ended December 31, 2012 and 2011 <BR></FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Amounts in thousands of reais, unless otherwise indicated</FONT></B>&nbsp;</FONT></B></FONT></B>

<HR align=left color=#000000 SIZE=1 width="100%">



<P></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(b) Changes</FONT></B></P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="26%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="12%"></TD>

   <TD width="12%"></TD>

   <TD width="12%"></TD>

   <TD width="12%"></TD>

   <TD width="12%"></TD></TR>

<TR vAlign=bottom>

   <TD width="26%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="72%" colSpan=6 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">PARENT</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD width="26%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">December</FONT></B><BR><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">31, 2010</FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Additions</FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Transfer</FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Write-</FONT></B><BR><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">offs and</FONT></B><BR><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">disposals</FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Depreciation</FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">December</FONT></B><BR><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">31, 2011</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="26%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Land</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">119,567</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(10,264)</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">109,303</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="26%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Buildings</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">12,031</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(287)</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(3)</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(2,309)</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">9,432</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="26%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Equipment</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">71,466</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">9,858</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(1,333)</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(19,774)</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">60,217</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="26%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Transportation equipment</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,661</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,002</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(4)</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(1,168)</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,491</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="26%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Furniture and fixtures</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">453</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">961</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(7)</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(1,310)</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">97</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="26%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Other</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,206</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">174</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(335)</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,045</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="26%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">206,384</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">11,995</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(10,551)</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(1,347)</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(24,896)</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">181,585</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="26%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="12%"></TD>

   <TD width="12%"></TD>

   <TD width="12%"></TD>

   <TD width="12%"></TD>

   <TD width="12%"></TD></TR>

<TR vAlign=bottom>

   <TD width="26%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="72%" colSpan=6 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">PARENT</FONT></B></TD></TR>

<TR>

   <TD width="26%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">December</FONT></B><BR><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">31, 201<FONT size=1 face="Times New Roman">1</FONT></FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">Additions</FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">Transfer</FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">Write-</FONT></B><BR><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">offs and</FONT></B><BR><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">disposals</FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">Depreciation</FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">December</FONT></B><BR><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">31, 201<FONT size=1 face="Times New Roman">2</FONT></FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="26%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Land</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">109,303</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(20,349)</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(626)</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">88,328</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="26%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Buildings</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">9,432</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">18,768</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(873)</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(1,766)</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">25,561</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="26%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Equipment</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">60,217</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">11,829</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">16,825</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(510)</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(18,728)</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">69,633</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="26%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Transportation equipment</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,491</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">4,572</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,427</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(7)</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(868)</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">6,615</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="26%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Furniture and fixtures</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">97</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">976</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">5,429</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(41)</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(274)</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">6,187</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="26%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Other</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,045</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(498)</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(161)</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">386</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="26%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">181,585</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">17,377</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">21,602</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(2,057)</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(21,797)</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">196,710</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="26%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="12%"></TD>

   <TD width="12%"></TD>

   <TD width="12%"></TD>

   <TD width="12%"></TD>

   <TD width="12%"></TD></TR>

<TR vAlign=bottom>

   <TD width="26%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="72%" colSpan=6 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">CONSOLIDATED</FONT></B></TD></TR>

<TR>

   <TD width="26%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">December</FONT></B><BR><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">31, 2010</FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">Additions</FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">Transfer</FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">Write-</FONT></B><BR><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">offs and</FONT></B><BR><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">disposals</FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">Depreciation</FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">December</FONT></B><BR><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">31, 2011</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="26%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Land</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">119,567</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(10,264)</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">109,303</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="26%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Buildings</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">12,031</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(287)</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(3)</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(2,309)</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">9,432</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="26%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Equipment</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">71,466</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">9,940</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(1,333)</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(19,784)</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">60,289</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="26%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Transportation equipment</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,661</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,050</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(4)</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(1,185)</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,522</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="26%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Furniture and fixtures</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">453</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,081</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(7)</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(1,318)</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">209</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="26%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Other</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,206</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">174</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(335)</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,045</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="26%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Works in progress</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">43,222</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">131,446</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">174,668</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=8>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="26%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">249,606</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">143,691</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(10,551)</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(1,347)</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(24,931)</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">356,468</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-118</FONT></P></DIV>

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<P style="TEXT-ALIGN: justify"><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>(Convenience Translation into English from the Original Previously Issued in Portuguese)</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes to the Financial Statements <BR>Years Ended December 31, 2012 and 2011 <BR></FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Amounts in thousands of reais, unless otherwise indicated</FONT></B>&nbsp;</FONT></B></FONT></B>

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<P></P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="26%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="12%"></TD>

   <TD width="12%"></TD>

   <TD width="12%"></TD>

   <TD width="12%"></TD>

   <TD width="12%"></TD></TR>

<TR>

   <TD width="26%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="72%" colSpan=6 align=center><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">CONSOLIDATED</FONT></B></TD></TR>

<TR>

   <TD width="26%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">December</FONT></B><BR><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">31, 201<FONT size=1 face="Times New Roman">1</FONT></FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">Additions</FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">Transfer</FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">Write-</FONT></B><BR><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">offs and</FONT></B><BR><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">disposals</FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">Depreciation</FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">December</FONT></B><BR><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">31, 201<FONT size=1 face="Times New Roman">2</FONT></FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="26%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Land</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">109,303</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(20,349)</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(626)</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">88,328</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="26%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Buildings</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">9,432</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,743</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">190,896</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(873)</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(2,942)</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">199,256</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="26%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Equipment</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">60,289</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">22,316</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">16,825</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(510)</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(19,007)</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">79,913</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="26%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Transportation equipment</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,522</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">4,605</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,427</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(7)</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(883)</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">6,664</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="26%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Furniture and fixtures</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">209</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">983</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">5,429</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(41)</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(283)</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">6,297</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="26%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Other</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,045</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(498)</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(162)</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">385</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="26%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Works in progress</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">174,668</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(172,128)</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,540</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=8>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="26%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">356,468</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">30,647</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">21,602</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(2,057)</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(23,277)</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">383,383</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(c) Depreciation</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company reviews the depreciation rates annually: buildings - 2%; equipment - 5%; transportation equipment - 10%, and furniture and fixtures - 6.7%. Land is not depreciated.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The average depreciation rate was 9.8% in 2012 and 9.9% in 2011.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(d) Capitalization of interest and other financial charges</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In 2012, the amount of capitalized interest proportional to the Company&#8217;s interests held in jointly controlled entities totaled R$13,655.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-119</FONT></P></DIV>

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<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Companhia </FONT></B><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>de </FONT></B><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Saneamento B&#225;sico </FONT></B><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>do </FONT></B><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Estado </FONT></B><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>de S&#227;o </FONT></B><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Paulo </FONT></B><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>- </FONT></B><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>to the </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Years Ended December </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>31, 2012 and 2011</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>in </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>thousands </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Brazilian </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>reais &#8211; R$, </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

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<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"></P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="2%"></TD>

   <TD width="2%"></TD>

   <TD width="40%"></TD>

   <TD width="2%"></TD>

   <TD width="7%"></TD>

   <TD width="2%"></TD>

   <TD width="8%"></TD>

   <TD width="2%"></TD>

   <TD width="8%"></TD>

   <TD width="2%"></TD>

   <TD width="5%"></TD>

   <TD width="2%"></TD>

   <TD width="8%"></TD>

   <TD width="2%"></TD>

   <TD width="5%"></TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" align=left><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">13</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Loans and Financing</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=11 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">PARENT</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; TEXT-INDENT: 32.108pt" colSpan=5 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">December 31, 2012</FONT></B></TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=5 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">December 31, 2011</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD colSpan=3 align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Financial institution</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Current</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Noncurrent</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Total</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Current</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Noncurrent</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Total</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD colSpan=3 align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">LOCAL CURRENCY</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 2.053pt" colSpan=3 align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Banco do Brasil</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">380,631</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">100,306</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">480,937</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">348,695</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">479,548</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">828,243</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 2.053pt" colSpan=3 align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">10</FONT><SUP><FONT size=1 face="Georgia,Times New Roman,Times,serif">th </FONT></SUP><FONT size=1 face="Georgia,Times New Roman,Times,serif">issue debentures</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">36,459</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">252,166</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">288,625</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,008</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">283,293</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">285,301</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 2.053pt" colSpan=3 align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">11</FONT><SUP><FONT size=1 face="Georgia,Times New Roman,Times,serif">th </FONT></SUP><FONT size=1 face="Georgia,Times New Roman,Times,serif">issue debentures</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">472,500</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">535,949</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,008,449</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">202,500</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,005,748</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,208,248</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 4.091pt" colSpan=3 align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">12</FONT><SUP><FONT size=1 face="Georgia,Times New Roman,Times,serif">th </FONT></SUP><FONT size=1 face="Georgia,Times New Roman,Times,serif">issue debentures</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">499,511</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">499,511</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">499,613</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">499,613</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 4.091pt" colSpan=3 align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">13</FONT><SUP><FONT size=1 face="Georgia,Times New Roman,Times,serif">th </FONT></SUP><FONT size=1 face="Georgia,Times New Roman,Times,serif">issue debentures</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">599,411</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">599,411</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 4.09pt" colSpan=3 align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">14</FONT><SUP><FONT size=1 face="Georgia,Times New Roman,Times,serif">th </FONT></SUP><FONT size=1 face="Georgia,Times New Roman,Times,serif">issue debentures</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">284,649</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">284,649</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">279,810</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">279,810</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 4.09pt" colSpan=3 align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">15</FONT><SUP><FONT size=1 face="Georgia,Times New Roman,Times,serif">th </FONT></SUP><FONT size=1 face="Georgia,Times New Roman,Times,serif">issue debentures</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">791,451</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">791,451</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 4.091pt" colSpan=3 align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">16</FONT><SUP><FONT size=1 face="Georgia,Times New Roman,Times,serif">th </FONT></SUP><FONT size=1 face="Georgia,Times New Roman,Times,serif">issue debentures</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">499,457</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">499,457</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 2.053pt" colSpan=3 align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Brazilian Federal Savings Bank</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">116,867</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">918,756</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,035,623</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">110,479</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">908,452</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,018,931</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 2.053pt" colSpan=3 align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Brazilian Development Bank - BNDES</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">4,154</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">4,154</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">37,554</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">3,491</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">41,045</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 2.053pt" colSpan=3 align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Brazilian Development Bank - BNDES BAIXADA SANTISTA</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">16,309</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">97,855</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">114,164</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">16,309</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">114,165</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">130,474</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 2.053pt" colSpan=3 align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Brazilian Development Bank - BNDES PAC</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">8,447</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">80,244</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">88,691</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">6,428</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">67,489</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">73,917</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 2.053pt" colSpan=3 align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Brazilian Development Bank - BNDES PAC II 9751</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">6,500</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">6,500</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 2.053pt" colSpan=3 align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Brazilian Development Bank - BNDES PAC II 9752</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">13,000</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">13,000</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 2.053pt" colSpan=3 align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Brazilian Development Bank - BNDES ONDA LIMPA</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">19,230</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">216,026</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">235,256</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">14,270</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">235,383</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">249,653</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 2.052pt" colSpan=3 align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Leases</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">215,774</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">215,774</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">49,609</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">49,609</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 2.053pt" colSpan=3 align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Other</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">763</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,923</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">3,686</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,155</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">3,503</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">4,658</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 2.053pt" colSpan=3 align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Interest and finance charges</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">89,567</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">89,567</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">100,998</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">100,998</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD colSpan=3 align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">TOTAL IN LOCAL CURRENCY</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,144,927</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">4,514,567</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">5,659,494</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,439,807</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">3,930,104</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">5,369,911</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" colSpan=3 align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">FOREIGN CURRENCY</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD colSpan=3 align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Inter-American Development Bank - BID US$417,295 thousand (US$386,862 thousand in</FONT><FONT size=1 face="Georgia,Times New Roman,Times,serif">December 2011)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">77,967</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">770,494</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">848,461</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">71,591</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">652,141</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">723,732</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-120</FONT></P></DIV>

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<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV>

<A name="page_121"></A><BR>

<DIV style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%">

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Companhia </FONT></B><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>de </FONT></B><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Saneamento B&#225;sico </FONT></B><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>do </FONT></B><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Estado </FONT></B><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>de S&#227;o </FONT></B><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Paulo </FONT></B><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>- </FONT></B><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>to the </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Years Ended December </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>31, 2012 and 2011</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>in </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>thousands </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Brazilian </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>reais &#8211; R$, </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

<HR align=left color=#000000 SIZE=1 width="100%">



<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="42%"></TD>

   <TD width="2%"></TD>

   <TD width="8%"></TD>

   <TD width="2%"></TD>

   <TD width="9%"></TD>

   <TD width="2%"></TD>

   <TD width="8%"></TD>

   <TD width="2%"></TD>

   <TD width="5%"></TD>

   <TD width="2%"></TD>

   <TD width="8%"></TD>

   <TD width="2%"></TD>

   <TD width="5%"></TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=11 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">PARENT</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; TEXT-INDENT: 33.299pt" colSpan=5 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">December 31, 2012</FONT></B></TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=5 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">December 31, 2011</FONT></B></TD></TR>

<TR>

   <TD colSpan=13>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Financial institution</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Current</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Noncurrent</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Total</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Current</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Noncurrent</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Total</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 2.053pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">International Bank for Reconstruction and Development -RBRD &#8211;US$26,864 thousand</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 60.24pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">(US$10,316 thousand in December 2011)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">54,492</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">54,492</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">18,928</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">18,928</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 2.053pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Eurobonds - US$140,000 thousand (US$140,000 thousand in December 2011)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">285,655</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">285,655</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">262,067</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">262,067</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 2.053pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Eurobonds - US$350,000 thousand (US$350,000 thousand in December 2011)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">708,076</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">708,076</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">649,024</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">649,024</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 2.053pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">JICA 15&#8211; &#165; 19,591,310 thousand (&#165; 20,743,740 thousand in December 2011)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">27,335</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">437,371</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">464,706</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">28,015</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">476,266</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">504,281</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 2.052pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">JICA 18 &#8211; &#165; 17,614,720 thousand (&#165; 18,650,880 thousand in December 2011)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">24,578</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">392,894</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">417,472</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">25,189</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">427,843</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">453,032</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 2.053pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">JICA 17-&#165; 324,213 thousand (&#165; 62,292 thousand in December 2011)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">7,524</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">7,524</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,420</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,420</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 2.053pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">JICA 19-&#165; 5,407 thousand</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 2.053pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">BID 1983AB - US$202,115 thousand (US$226,058 thousand in December 2011)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">48,926</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">361,587</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">410,513</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">44,911</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">376,355</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">421,266</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 2.053pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Interest and finance charges</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">18,861</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">18,861</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">19,671</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">19,671</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 2.053pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">TOTAL IN FOREIGN CURRENCY</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">197,667</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">3,018,094</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">3,215,761</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">189,377</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,864,044</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">3,053,421</FONT>&nbsp;</TD></TR>

<TR>

   <TD colSpan=13>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">TOTAL LOANS AND FINANCING</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,342,594</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">7,532,661</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">8,875,255</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,629,184</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">6,794,148</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">8,423,332</FONT>&nbsp;</TD></TR>

<TR>

   <TD colSpan=13>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD colSpan=13 align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">Quote as of December 31, 2012 US$2.0435; Yen 0.023720 (US$1.8758; Yen 0.024310 at December 31, 2011)</FONT></I></TD></TR>

<TR vAlign=bottom>

   <TD colSpan=13 align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">As of December 31, 2012, the Company did not record loans and financing obtained in 2012 maturing within 12 months.</FONT></I></TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-121</FONT></P></DIV>

<HR align=center SIZE=2 width="100%" noShade>



<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV>

<A name="page_122"></A><BR>

<DIV style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%">

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Companhia </FONT></B><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>de </FONT></B><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Saneamento B&#225;sico </FONT></B><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>do </FONT></B><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Estado </FONT></B><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>de S&#227;o </FONT></B><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Paulo </FONT></B><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>- </FONT></B><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>to the </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Years Ended December </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>31, 2012 and 2011</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>in </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>thousands </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Brazilian </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>reais &#8211; R$, </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

<HR align=left color=#000000 SIZE=1 width="100%">



<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="40%"></TD>

   <TD width="1%"></TD>

   <TD width="9%"></TD>

   <TD width="1%"></TD>

   <TD width="9%"></TD>

   <TD width="1%"></TD>

   <TD width="9%"></TD>

   <TD width="1%"></TD>

   <TD width="9%"></TD>

   <TD width="1%"></TD>

   <TD width="9%"></TD>

   <TD width="1%"></TD>

   <TD width="9%"></TD></TR>

<TR vAlign=bottom>

   <TD width="40%" align=left>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="59%" colSpan=11 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">CONSOLIDATED</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD width="40%" align=left>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="29%" colSpan=5 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">December 31, 2012</FONT></B></TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="29%" colSpan=5 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">December 31, 2011</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD width="40%" align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Financial institution</FONT></B>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Current</FONT></B>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Noncurrent</FONT></B>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Total</FONT></B>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Current</FONT></B>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Noncurrent</FONT></B>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Total</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="40%" align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">LOCAL CURRENCY</FONT></B>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 1.923pt" width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Banco do Brasil</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">380,631</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">100,306</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">480,937</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">348,695</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">479,548</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">828,243</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 1.923pt" width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">10</FONT><SUP><FONT size=1 face="Georgia,Times New Roman,Times,serif">th </FONT></SUP><FONT size=1 face="Georgia,Times New Roman,Times,serif">issue debentures</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">36,459</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">252,166</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">288,625</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,008</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">283,293</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">285,301</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 1.923pt" width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">11</FONT><SUP><FONT size=1 face="Georgia,Times New Roman,Times,serif">th </FONT></SUP><FONT size=1 face="Georgia,Times New Roman,Times,serif">issue debentures</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">472,500</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">535,949</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,008,449</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">202,500</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,005,748</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,208,248</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 3.841pt" width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">12</FONT><SUP><FONT size=1 face="Georgia,Times New Roman,Times,serif">th </FONT></SUP><FONT size=1 face="Georgia,Times New Roman,Times,serif">issue debentures</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">499,511</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">499,511</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">499,613</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">499,613</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 3.841pt" width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">13</FONT><SUP><FONT size=1 face="Georgia,Times New Roman,Times,serif">th </FONT></SUP><FONT size=1 face="Georgia,Times New Roman,Times,serif">issue debentures</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">599,411</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">599,411</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 3.841pt" width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">14</FONT><SUP><FONT size=1 face="Georgia,Times New Roman,Times,serif">th </FONT></SUP><FONT size=1 face="Georgia,Times New Roman,Times,serif">issue debentures</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">284,649</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">284,649</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">279,810</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">279,810</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 3.841pt" width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">15</FONT><SUP><FONT size=1 face="Georgia,Times New Roman,Times,serif">th </FONT></SUP><FONT size=1 face="Georgia,Times New Roman,Times,serif">issue debentures</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">791,451</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">791,451</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 3.841pt" width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">16</FONT><SUP><FONT size=1 face="Georgia,Times New Roman,Times,serif">th </FONT></SUP><FONT size=1 face="Georgia,Times New Roman,Times,serif">issue debentures</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">499,457</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">499,457</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 1.923pt" width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">1</FONT><SUP><FONT size=1 face="Georgia,Times New Roman,Times,serif">st </FONT></SUP><FONT size=1 face="Georgia,Times New Roman,Times,serif">issue debentures &#8211; Aquapolo</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">847</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">157,020</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">157,867</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">160,099</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">160,099</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 1.923pt" width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Brazilian Federal Savings Bank</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">117,217</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">931,004</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,048,221</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">110,646</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">917,574</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,028,220</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 1.923pt" width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Brazilian Development Bank &#8211; BNDES</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">4,154</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">4,154</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">37,554</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">3,491</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">41,045</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 1.922pt" width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Brazilian Development Bank - BNDES BAIXADA SANTISTA</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">16,309</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">97,855</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">114,164</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">16,309</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">114,165</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">130,474</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 1.923pt" width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Brazilian Development Bank - BNDES PAC</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">8,447</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">80,244</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">88,691</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">6,428</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">67,489</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">73,917</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 1.923pt" width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Brazilian Development Bank - BNDES PAC II 9751</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">6,500</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">6,500</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 1.923pt" width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Brazilian Development Bank - BNDES PAC II 9752</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">13,000</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">13,000</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 1.923pt" width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Brazilian Development Bank - BNDES ONDA LIMPA</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">19,230</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">216,026</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">235,256</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">14,270</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">235,383</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">249,653</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 1.923pt" width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Loans</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">215,774</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">215,774</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">49,609</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">49,609</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 1.923pt" width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Other</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">5,416</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,923</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">8,339</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,784</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">3,503</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">5,287</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 1.923pt" width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Interest and finance charges</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">108,514</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">108,514</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">101,028</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,916</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">103,944</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">TOTAL IN LOCAL CURRENCY</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,169,724</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">4,683,835</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">5,853,559</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,440,633</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">4,102,241</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">5,542,874</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" width="40%" align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">FOREIGN CURRENCY</FONT></B>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-122</FONT></P></DIV>

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<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV>

<A name="page_123"></A><BR>

<DIV style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%">

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Companhia </FONT></B><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>de </FONT></B><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Saneamento B&#225;sico </FONT></B><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>do </FONT></B><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Estado </FONT></B><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>de S&#227;o Paulo - </FONT></B><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>to the </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Years Ended December </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>31, 2012 and 2011</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>in </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>thousands </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Brazilian </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>reais &#8211; R$, </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

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<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="40%"></TD>

   <TD width="1%"></TD>

   <TD width="9%"></TD>

   <TD width="1%"></TD>

   <TD width="9%"></TD>

   <TD width="1%"></TD>

   <TD width="9%"></TD>

   <TD width="1%"></TD>

   <TD width="9%"></TD>

   <TD width="1%"></TD>

   <TD width="9%"></TD>

   <TD width="1%"></TD>

   <TD width="9%"></TD></TR>

<TR vAlign=bottom>

   <TD width="40%" align=left>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="59%" colSpan=11 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">CONSOLIDATED</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD width="40%" align=left>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="29%" colSpan=5 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">December 31, 2012</FONT></B></TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="29%" colSpan=5 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">December 31, 2011</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" width="40%" align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Financial institution</FONT></B>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Current</FONT></B>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Noncurrent</FONT></B>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Total</FONT></B>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Current</FONT></B>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Noncurrent</FONT></B>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Total</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 1.923pt" width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Inter-American Development Bank - BID US$417,295 thousand ( US$386,862 thousand in December</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">2011)</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">77,967</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">770,494</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">848,461</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">71,591</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">652,141</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">723,732</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 1.923pt" width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">International Bank for Reconstruction and Development -IBRD &#8211;US$26,864 thousand (US$10,316</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">thousand in December 2011)</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">54,492</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">54,492</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">18,928</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">18,928</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 1.923pt" width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Eurobonds - US$140,000 thousand (US$140,000 thousand in December 2011)</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">285,655</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">285,655</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">262,067</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">262,067</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 1.923pt" width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Eurobonds - US$350,000 thousand (US$350,000 thousand in December 2011)</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">708,076</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">708,076</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">649,024</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">649,024</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 1.923pt" width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">JICA 15&#8211; &#165; 19,591,310 thousand (&#165; 20,743,740 thousand in December 2011)</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">27,335</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">437,371</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">464,706</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">28,015</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">476,266</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">504,281</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 1.923pt" width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">JICA 18 &#8211; &#165; 17,614,720 thousand (&#165; 18,650,880 thousand in December 2011)</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">24,578</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">392,894</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">417,472</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">25,189</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">427,843</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">453,032</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 1.923pt" width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">JICA 17-&#165; 324,213 thousand (&#165; 62,292 thousand in December 2011)</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">7,524</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">7,524</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,420</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,420</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 1.918pt" width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">JICA 19-&#165; 5,407 thousand</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 1.924pt" width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">BID 1983AB - US$202,115 thousand (US$226,058 thousand in December 2011)</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">48,926</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">361,587</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">410,513</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">44,911</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">376,355</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">421,266</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 1.923pt" width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Interest and finance charges</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">18,861</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">18,861</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">19,671</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">19,671</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 1.923pt" width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">TOTAL IN FOREIGN CURRENCY</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">197,667</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">3,018,094</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">3,215,761</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">189,377</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,864,044</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">3,053,421</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">TOTAL LOANS AND FINANCING</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 3px double" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,367,391</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 3px double" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">7,701,929</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 3px double" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">9,069,320</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 3px double" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,630,010</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 3px double" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">6,966,285</FONT>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 3px double" width="9%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">8,596,295</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=13>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" width="50%" colSpan=3 align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">Quote as at December 31, 2012 US$2.0435; Yen 0.023720 (US$1.8758; Yen 0.024310 as of December 31, 2011)</FONT></I>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" width="50%" colSpan=3 align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">As of December 31, 2012, the Company did not record loans and financing obtained in 2012 maturing within 12 months.</FONT></I>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="1%">&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-123</FONT></P></DIV>

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<A name="page_124"></A><BR>

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<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Companhia </FONT></B><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>de </FONT></B><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Saneamento B&#225;sico </FONT></B><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>do </FONT></B><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Estado </FONT></B><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>de S&#227;o </FONT></B><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Paulo </FONT></B><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>- </FONT></B><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>to the </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Years Ended December </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>31, 2012 and 2011</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>in </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>thousands </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Brazilian </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>reais &#8211; R$, </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

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   <TD style="TEXT-INDENT: 20.22pt" align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">FOREIGN</FONT></B>&nbsp;</TD></TR>

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   <TD align=left>&nbsp;</TD>

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   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">GUARANTEES</FONT></B>&nbsp;</TD>

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   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">MATURITY</FONT></B>&nbsp;</TD>

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   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">ANNUAL INTEREST RATES</FONT></B>&nbsp;</TD>

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   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">EXCHANGE</FONT></B>&nbsp;</TD></TR>

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   <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">ADJUSTMENT</FONT></B>&nbsp;</TD></TR>

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   <TD align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">LOCAL CURRENCY</FONT></B>&nbsp;</TD>

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   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">S&#195;O PAULO STATE</FONT>&nbsp;</TD>

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   <TD style="TEXT-INDENT: 1.923pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Banco do Brasil</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">GOVERNMENT AND OWN</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2014</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">8.50%</FONT>&nbsp;</TD>

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   <TD align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">UPR</FONT>&nbsp;</TD></TR>

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   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">FUNDS</FONT>&nbsp;</TD>

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   <TD style="TEXT-INDENT: 1.923pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">10</FONT><SUP><FONT size=1 face="Georgia,Times New Roman,Times,serif">th </FONT></SUP><FONT size=1 face="Georgia,Times New Roman,Times,serif">issue debentures</FONT>&nbsp;</TD>

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   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">OWN FUNDS</FONT>&nbsp;</TD>

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   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2020</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">TJLP +1.92% (series 1 and 3) and 9.53% (series 2)</FONT>&nbsp;</TD>

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   <TD align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">IPCA (series 2)</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 1.923pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">11</FONT><SUP><FONT size=1 face="Georgia,Times New Roman,Times,serif">th </FONT></SUP><FONT size=1 face="Georgia,Times New Roman,Times,serif">issue debentures</FONT>&nbsp;</TD>

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   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">OWN FUNDS</FONT>&nbsp;</TD>

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   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2015</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">CDI + 1.95% (series 1) and CDI + 1.4% (series 2)</FONT>&nbsp;</TD>

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   <TD style="TEXT-INDENT: 3.841pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">12</FONT><SUP><FONT size=1 face="Georgia,Times New Roman,Times,serif">th </FONT></SUP><FONT size=1 face="Georgia,Times New Roman,Times,serif">issue debentures</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">OWN FUNDS</FONT>&nbsp;</TD>

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   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2025</FONT>&nbsp;</TD>

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   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">TR + 9.5%</FONT>&nbsp;</TD>

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   <TD style="TEXT-INDENT: 3.841pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">13</FONT><SUP><FONT size=1 face="Georgia,Times New Roman,Times,serif">th </FONT></SUP><FONT size=1 face="Georgia,Times New Roman,Times,serif">issue debentures</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">OWN FUNDS</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2012</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">CDI + 0.65%</FONT>&nbsp;</TD>

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   <TD style="TEXT-INDENT: 3.841pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">14</FONT><SUP><FONT size=1 face="Georgia,Times New Roman,Times,serif">th </FONT></SUP><FONT size=1 face="Georgia,Times New Roman,Times,serif">issue debentures</FONT>&nbsp;</TD>

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   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">OWN FUNDS</FONT>&nbsp;</TD>

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   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2022</FONT>&nbsp;</TD>

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   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">TJLP +1.92% (series 1 and 3) and 9.19% (series 2)</FONT>&nbsp;</TD>

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   <TD align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">IPCA (series 2)</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 3.841pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">15</FONT><SUP><FONT size=1 face="Georgia,Times New Roman,Times,serif">th </FONT></SUP><FONT size=1 face="Georgia,Times New Roman,Times,serif">issue debentures</FONT>&nbsp;</TD>

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   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">OWN FUNDS</FONT>&nbsp;</TD>

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   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2019</FONT>&nbsp;</TD>

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   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">CDI + 0.99% (series 1) and 6.2% (series 2)</FONT>&nbsp;</TD>

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   <TD align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">IPCA (series 2)</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 3.841pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">16</FONT><SUP><FONT size=1 face="Georgia,Times New Roman,Times,serif">th </FONT></SUP><FONT size=1 face="Georgia,Times New Roman,Times,serif">issue debentures</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">OWN FUNDS</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2015</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">CDI + 0.30% to 0.70%</FONT>&nbsp;</TD>

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   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 1.923pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">1</FONT><SUP><FONT size=1 face="Georgia,Times New Roman,Times,serif">st </FONT></SUP><FONT size=1 face="Georgia,Times New Roman,Times,serif">issue debentures &#8211; Aquapolo</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">OWN FUNDS</FONT>&nbsp;</TD>

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   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2029</FONT>&nbsp;</TD>

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   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">TR + 8.75%</FONT>&nbsp;</TD>

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   <TD style="TEXT-INDENT: 1.923pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Brazilian Federal Savings Bank</FONT>&nbsp;</TD>

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   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">OWN FUNDS</FONT>&nbsp;</TD>

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   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2011/32</FONT>&nbsp;</TD>

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   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">6.8% (weighted)</FONT>&nbsp;</TD>

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   <TD align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">UPR</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 1.923pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Brazilian Development Bank - BNDES</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">OWN FUNDS</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2013</FONT>&nbsp;</TD>

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   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">3% + TJLP LIMIT 6%</FONT>&nbsp;</TD>

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   <TD style="TEXT-INDENT: 1.923pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Brazilian Development Bank - BNDES BAIXADA SANTISTA</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">OWN FUNDS</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2019</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2.5% + TJLP LIMIT 6%</FONT>&nbsp;</TD>

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<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 1.923pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Brazilian Development Bank - BNDES PAC</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">OWN FUNDS</FONT>&nbsp;</TD>

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   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2023</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2.15% + TJLP LIMIT 6%</FONT>&nbsp;</TD>

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<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Brazilian Development Bank- BNDES PAC II 9751</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">OWN FUNDS</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2027</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1.72%+TJLP LIMIT 6%</FONT>&nbsp;</TD>

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<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 1.923pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Brazilian Development Bank - BNDES PAC II 9752</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">OWN FUNDS</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2027</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1.72%+TJLP LIMIT 6%</FONT>&nbsp;</TD>

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<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 1.923pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Brazilian Development Bank - BNDES ONDA LIMPA</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">OWN FUNDS</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2025</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1.92% + TJLP LIMIT 6%</FONT>&nbsp;</TD>

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   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2011/2018/</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">TJLP + 6% /</FONT>&nbsp;</TD>

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<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 1.923pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Other</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">OWN FUNDS</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">UPR</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2025</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">12%</FONT>&nbsp;</TD>

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<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">FOREIGN CURRENCY</FONT></B>&nbsp;</TD>

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   <TD align=left>&nbsp;</TD>

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   <TD style="TEXT-INDENT: 1.923pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Inter-American Development Bank - BID US$417,295 thousand</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">FEDERAL GOVERNMENT</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2017 to 2035</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">0.99% to 3.00%</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">US$</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 1.923pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">International Bank for Reconstruction and Development - IBRD US$26,864 thousand</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">FEDERAL GOVERNMENT</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2034</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">0.82%</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">US$</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 1.923pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Eurobonds &#8211; US$140,000 thousand</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2016</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">7.50%</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">US$</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-124</FONT></P></DIV>

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<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Companhia </FONT></B><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>de </FONT></B><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Saneamento B&#225;sico </FONT></B><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>do </FONT></B><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Estado </FONT></B><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>de S&#227;o </FONT></B><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Paulo </FONT></B><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>- </FONT></B><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>to the </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Years Ended December </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>31, 2012 and 2011</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>in </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>thousands </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Brazilian </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>reais &#8211; R$, </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

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   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="TEXT-INDENT: 20.22pt" align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">FOREIGN</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">GUARANTEES</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">MATURITY</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">ANNUAL INTEREST RATES</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">EXCHANGE</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">ADJUSTMENT</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 1.922pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Eurobonds &#8211; US$350,000 thousand</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2020</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">6.25%</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">US$</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 1.923pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">JICA 15 &#8211; &#165;19,591,310 thousand</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">FEDERAL GOVERNMENT</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2029</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1.8% and 2.5%</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">Yen</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 1.923pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">JICA 18&#8211; &#165;17,614,720 thousand</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">FEDERAL GOVERNMENT</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2029</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1.8% and 2.5%</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">Yen</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 1.923pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">JICA 17&#8211; &#165;324,213 thousand</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">FEDERAL GOVERNMENT</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2035</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1.2% and 0.01%</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">Yen</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">JICA 19&#8211; &#165;5,407 thousand</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">FEDERAL GOVERNMENT</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2037</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1.7% and 0.01%</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">Yen</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 1.923pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">BID 1983AB &#8211; US$202,115 thousand</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2023</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2.49% to 2.99%</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">US$</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-125</FONT></P></DIV>

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<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV>

<A name="page_126"></A><BR>

<DIV style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%">

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Companhia </FONT></B><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>de </FONT></B><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Saneamento B&#225;sico </FONT></B><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>do </FONT></B><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Estado </FONT></B><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>de S&#227;o </FONT></B><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Paulo </FONT></B><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>- </FONT></B><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>to the </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Years Ended December </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>31, 2012 and 2011</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>in </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>thousands </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Brazilian </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>reais &#8211; R$, </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

<HR align=left color=#000000 SIZE=1 width="100%">



<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="2%"></TD>

   <TD width="2%"></TD>

   <TD width="21%"></TD>

   <TD width="2%"></TD>

   <TD width="8%"></TD>

   <TD width="2%"></TD>

   <TD width="8%"></TD>

   <TD width="2%"></TD>

   <TD width="7%"></TD>

   <TD width="2%"></TD>

   <TD width="7%"></TD>

   <TD width="2%"></TD>

   <TD width="6%"></TD>

   <TD width="2%"></TD>

   <TD width="5%"></TD>

   <TD width="2%"></TD>

   <TD width="8%"></TD>

   <TD width="2%"></TD>

   <TD width="6%"></TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">(i)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">Payment schedule &#8211; book values</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR>

   <TD colSpan=19>&nbsp;</TD></TR>

<TR>

   <TD colSpan=19>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=15 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">PARENT</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2013</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2014</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2015</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2016</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2017</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2018</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2019 to 2036</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">TOTAL</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="TEXT-INDENT: 10.551pt" align=left><B><I><FONT size=1 face="Georgia-BoldItalic,Times New Roman,Times,serif">LOCAL CURRENCY</FONT></I></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="TEXT-INDENT: 10.551pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Banco do Brasil</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">380,631</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">100,306</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">480,937</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="TEXT-INDENT: 10.551pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Debentures</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">508,959</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">349,265</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">977,720</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">212,313</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">214,296</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">370,787</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">738,802</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">3,372,142</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="TEXT-INDENT: 10.551pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Brazilian Federal Savings Bank</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">116,867</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">78,583</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">56,989</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">56,394</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">59,016</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">62,392</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">605,382</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,035,623</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="TEXT-INDENT: 10.551pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">BNDES</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">4,154</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">4,154</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="TEXT-INDENT: 10.551pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">BNDES BAIXADA SANTISTA</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">16,309</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">16,309</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">16,309</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">16,309</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">16,309</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">16,309</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">16,310</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">114,164</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="TEXT-INDENT: 10.551pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">BNDES PAC</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">8,447</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">8,447</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">8,447</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">8,447</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">8,447</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">8,447</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">38,009</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">88,691</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="TEXT-INDENT: 10.551pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">BNDES PAC II 9751</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">813</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,083</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,083</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,083</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,083</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,355</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">6,500</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="TEXT-INDENT: 10.551pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">BNDES PAC II 9752</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">813</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,083</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,083</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,083</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">8,938</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">13,000</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="TEXT-INDENT: 10.551pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">BNDES ONDA LIMPA</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">19,230</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">19,230</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">19,230</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">19,230</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">19,230</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">19,230</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">119,876</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">235,256</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="TEXT-INDENT: 10.551pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Leases</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">215,774</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">215,774</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="TEXT-INDENT: 10.551pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Other</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">763</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">497</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">560</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">631</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">711</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">524</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">3,686</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="TEXT-INDENT: 10.551pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Interest and finance charges</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">89,567</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">89,567</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="TEXT-INDENT: 10.551pt" align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">TOTAL IN LOCAL CURRENCY</FONT></I>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">1,144,927</FONT></I>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">573,450</FONT></I>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">1,081,151</FONT></I>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">315,490</FONT></I>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">320,175</FONT></I>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">479,855</FONT></I>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">1,744,446</FONT></I>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">5,659,494</FONT></I>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="TEXT-INDENT: 10.551pt" align=left><B><I><FONT size=1 face="Georgia-BoldItalic,Times New Roman,Times,serif">FOREIGN CURRENCY</FONT></I></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="TEXT-INDENT: 10.551pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">BID</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">77,967</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">77,967</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">77,967</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">77,967</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">88,109</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">36,822</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">411,662</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">848,461</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="TEXT-INDENT: 10.551pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">IRBD</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">54,492</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">54,492</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="TEXT-INDENT: 10.551pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Eurobonds</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">285,655</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">708,076</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">993,731</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="TEXT-INDENT: 10.551pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">JICA</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">51,913</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">51,913</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">51,913</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">51,913</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">52,121</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">52,329</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">577,601</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">889,703</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="TEXT-INDENT: 10.551pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">BID 1983AB</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">48,926</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">48,926</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">48,926</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">48,926</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">48,926</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">48,496</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">117,387</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">410,513</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="TEXT-INDENT: 10.551pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Interest and finance charges</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">18,861</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">18,861</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="TEXT-INDENT: 10.551pt" align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">TOTAL IN FOREIGN CURRENCY</FONT></I>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">197,667</FONT></I>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">178,806</FONT></I>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">178,806</FONT></I>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">464,461</FONT></I>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">189,156</FONT></I>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">137,647</FONT></I>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">1,869,218</FONT></I>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">3,215,761</FONT></I>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="TEXT-INDENT: 10.551pt" align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">Total</FONT></I>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">1,342,594</FONT></I>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">752,256</FONT></I>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">1,259,957</FONT></I>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">779,951</FONT></I>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">509,331</FONT></I>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">617,502</FONT></I>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">3,613,664</FONT></I>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">8,875,255</FONT></I>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-126</FONT></P></DIV>

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<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Companhia </FONT></B><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>de </FONT></B><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Saneamento B&#225;sico </FONT></B><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>do </FONT></B><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Estado </FONT></B><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>de S&#227;o </FONT></B><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Paulo </FONT></B><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>- </FONT></B><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>to the </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Years Ended December </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>31, 2012 and 2011</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>in </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>thousands </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Brazilian </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>reais &#8211; R$, </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

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<TR>

   <TD width="19%"></TD>

   <TD width="2%"></TD>

   <TD width="10%"></TD>

   <TD width="2%"></TD>

   <TD width="8%"></TD>

   <TD width="2%"></TD>

   <TD width="7%"></TD>

   <TD width="2%"></TD>

   <TD width="8%"></TD>

   <TD width="2%"></TD>

   <TD width="7%"></TD>

   <TD width="2%"></TD>

   <TD width="6%"></TD>

   <TD width="2%"></TD>

   <TD width="8%"></TD>

   <TD width="2%"></TD>

   <TD width="6%"></TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=15 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">CONSOLIDATED</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2013</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2014</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2015</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2016</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2017</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2018</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2019 to 2036</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">TOTAL</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><B><I><FONT size=1 face="Georgia-BoldItalic,Times New Roman,Times,serif">LOCAL CURRENCY</FONT></I></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Banco do Brasil</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">380,631</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">100,306</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">480,937</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Debentures</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">509,806</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">359,430</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">987,885</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">222,478</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">224,461</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">380,952</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">844,997</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">3,530,009</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Brazilian Federal Savings Bank</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">117,217</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">79,283</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">57,689</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">57,094</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">59,715</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">63,091</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">614,132</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,048,221</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">BNDES</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">4,154</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">4,154</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">BNDES BAIXADA SANTISTA</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">16,309</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">16,309</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">16,309</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">16,309</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">16,309</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">16,309</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">16,310</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">114,164</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">BNDES PAC</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">8,447</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">8,447</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">8,447</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">8,447</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">8,447</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">8,447</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">38,009</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">88,691</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">BNDES PAC II 9751</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">813</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,083</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,083</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,083</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,083</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,355</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">6,500</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">BNDES PAC II 9752</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">813</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,083</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,083</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,083</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">8,938</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">13,000</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">BNDES ONDA LIMPA</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">19,230</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">19,230</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">19,230</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">19,230</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">19,230</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">19,230</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">119,876</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">235,256</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Leases</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">215,774</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">215,774</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Other</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">5,416</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">497</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">560</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">631</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">711</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">524</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">8,339</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Interest and charges</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">108,514</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">108,514</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">TOTAL IN LOCAL CURRENCY</FONT></I>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">1,169,724</FONT></I>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">584,315</FONT></I>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">1,092,016</FONT></I>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">326,355</FONT></I>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">331,039</FONT></I>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">490,719</FONT></I>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">1,859,391</FONT></I>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">5,853,559</FONT></I>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><B><I><FONT size=1 face="Georgia-BoldItalic,Times New Roman,Times,serif">FOREIGN CURRENCY</FONT></I></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">BID</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">77,967</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">77,967</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">77,967</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">77,967</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">88,109</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">36,822</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">411,662</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">848,461</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">IBRD</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">54,492</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">54,492</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Eurobonds</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">285,655</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">708,076</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">993,731</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">JICA</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">51,913</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">51,913</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">51,913</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">51,913</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">52,121</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">52,329</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">577,601</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">889,703</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">BID 1983AB</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">48,926</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">48,926</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">48,926</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">48,926</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">48,926</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">48,496</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">117,387</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">410,513</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Interest and finance charges</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">18,861</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">18,861</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">Foreign currency</FONT></I>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">197,667</FONT></I>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">178,806</FONT></I>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">178,806</FONT></I>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">464,461</FONT></I>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">189,156</FONT></I>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">137,647</FONT></I>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">1,869,218</FONT></I>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">3,215,761</FONT></I>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">Total</FONT></I>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">1,367,391</FONT></I>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">763,121</FONT></I>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">1,270,822</FONT></I>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">790,816</FONT></I>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">520,195</FONT></I>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">628,366</FONT></I>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">3,728,609</FONT></I>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><I><FONT size=1 face="Georgia-Italic,Times New Roman,Times,serif">9,069,320</FONT></I>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-127</FONT></P></DIV>

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<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV>

<A name="page_128"></A><BR>

<P style="TEXT-ALIGN: justify; PADDING-LEFT: 0%; PADDING-RIGHT: 0%"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; PADDING-LEFT: 0%; PADDING-RIGHT: 0%; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>to the </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; PADDING-LEFT: 0%; PADDING-RIGHT: 0%; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Years Ended December </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>31, 2012 and 2011</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; PADDING-LEFT: 0%; PADDING-RIGHT: 0%; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>in </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>thousands </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Brazilian </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>reais &#8211; R$, </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

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<HR align=left color=#000000 SIZE=1 width="100%">

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<DIV style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%">&nbsp;</DIV>

<P style="MARGIN: 0cm 0cm 0pt; PADDING-LEFT: 0%; PADDING-RIGHT: 0%"><B><FONT style="LINE-HEIGHT: normal; FONT-SIZE: 9.5pt" lang=PT-BR face=georgia>(a) Banco do Brasil </FONT></B></P>

<P style="MARGIN: 0cm 0cm 0pt; PADDING-LEFT: 0%; PADDING-RIGHT: 0%"><STRONG><FONT face=Georgia></FONT></STRONG>&nbsp;</P>

<P style="MARGIN: 0cm 0cm 0pt; PADDING-LEFT: 0%; PADDING-RIGHT: 0%" align=justify><FONT style="LINE-HEIGHT: normal; FONT-SIZE: 9.5pt" lang=PT-BR face=georgia>In March 1994, the Company refinanced the existing loan agreements with Caixa Econ&#244;mica </FONT><FONT style="LINE-HEIGHT: normal; FONT-SIZE: 9.5pt" lang=PT-BR face=georgia>Federal, which assigned loans represented by receivables from the Federal Government, with </FONT><FONT style="LINE-HEIGHT: normal; FONT-SIZE: 9.5pt" lang=PT-BR face=georgia>Banco do Brasil acting as financial agent. Under the agreement entered into with the Federal </FONT><FONT style="LINE-HEIGHT: normal; FONT-SIZE: 9.5pt" lang=PT-BR face=georgia>Government, payments are made based on the Price amortization system, monthly indexed by the </FONT><FONT style="LINE-HEIGHT: normal; FONT-SIZE: 9.5pt" lang=PT-BR face=georgia>Standard Benchmark Unit&nbsp;(UPR), which is equal to the Government's benchmark interest rate </FONT><FONT style="LINE-HEIGHT: normal; FONT-SIZE: 9.5pt" lang=PT-BR face=georgia>(TR), plus interest of 8.5% per year. The interest and principal are monthly paid with final </FONT><FONT style="LINE-HEIGHT: normal; FONT-SIZE: 9.5pt" lang=PT-BR face=georgia>maturity in 2014. This financing is&nbsp; uaranteed by the State Government of S&#227;o Paulo by a pledge </FONT><FONT style="LINE-HEIGHT: normal; FONT-SIZE: 9.5pt" lang=PT-BR face=georgia>of its own and Company revenues.</FONT></P>

<P style="TEXT-ALIGN: justify; PADDING-LEFT: 0%; PADDING-RIGHT: 0%"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(b) Debentures</FONT></B></P>

<P style="TEXT-ALIGN: justify; PADDING-LEFT: 0%; PADDING-RIGHT: 0%"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(i) 10</FONT></B><B><SUP><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">th </FONT></SUP></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">issue of debentures</FONT></B></P>

<P style="TEXT-ALIGN: justify; PADDING-LEFT: 0%; PADDING-RIGHT: 0%"><FONT size=2 face="Georgia,Times New Roman,Times,serif">On November 15, 2009, the Company launched 100 debentures, subscribed exclusively by the National Bank for Economic and Social Development (BNDES). These debentures were distributed in three nonconvertible series, at a nominal value of R$2.753, totaling R$275,370. This transaction was settled on December 15, 2009, for all series.</FONT></P>

<DIV style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%" align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="7%"></TD>

   <TD width="2%"></TD>

   <TD width="9%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="18%"></TD>

   <TD width="2%"></TD>

   <TD width="17%"></TD>

   <TD width="2%"></TD>

   <TD width="10%"></TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Number</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Adjustment</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Interest</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Interest payment</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Amortization</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Maturity</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Series 1</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">28</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">TJLP + 1.92%</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Quarterly to November</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">Monthly (starting in</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">November</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">p.a.</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="TEXT-INDENT: 5.52pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">2012 and monthly</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">December 2012)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">2020</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="TEXT-INDENT: 5.52pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">thereafter</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Series 2</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">30</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="TEXT-INDENT: 30.3pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">IPCA</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">9.53% p.a.</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Annual</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Annual (starting in</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">December</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">December 2013)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">2020</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Series 3</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">42</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">TJLP + 1.92%</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Quarterly to November</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">Monthly (starting in</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">November</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">p.a.</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="TEXT-INDENT: 5.52pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">2012 and monthly</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">December 2012)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">2020</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="TEXT-INDENT: 5.52pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">thereafter</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px; PADDING-LEFT: 0%; PADDING-RIGHT: 0%">&nbsp;</P>

<P style="TEXT-ALIGN: justify; PADDING-LEFT: 0%; PADDING-RIGHT: 0%"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The proceeds from this issuance will be used in expenditures in water supply and sewage systems in the following projects: Water Treatment Stations, in Rio Grande, Litoral Norte, Vale do Para&#237;ba and Mantiqueira, Bacia do Piracicaba-Capivari-Jundia&#237;; and in the loss reduction program.</FONT></P>

<P style="TEXT-ALIGN: justify; PADDING-LEFT: 0%; PADDING-RIGHT: 0%"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In 2012 and 2011, interest expense related to series 1 totaled R$5,844 and R$6,016, related to series 2 totaled R$9,273 and R$8,862, and related to series 3 totaled R$8,767 and R$9,025, respectively.</FONT></P>

<P style="TEXT-ALIGN: justify; PADDING-LEFT: 0%; PADDING-RIGHT: 0%"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The early amortization, fully or partially, of the subscribed debentures, when authorized by BNDES and/or BNDESPAR, shall always occur jointly, observing the proportionality between the outstanding balances of Series 1, 2 and 3 Debentures of all issues. The agreement does not include a premium due to early amortization.</FONT></P>

<P style="TEXT-ALIGN: justify; PADDING-LEFT: 0%; PADDING-RIGHT: 0%"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Financial covenants </FONT></B><FONT size=2 face="Georgia,Times New Roman,Times,serif">&#8211; Calculated every quarter, upon the disclosure of interim or annual financial statements:</FONT></P>

<P style="TEXT-ALIGN: center; PADDING-LEFT: 0%; PADDING-RIGHT: 0%"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-128</FONT></P>

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<A name="page_129"></A><BR>

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<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>to the </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Years Ended December </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>31, 2012 and 2011</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>in </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>thousands </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Brazilian </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>reais, </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

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<UL>

<LI><FONT size=2 face="Georgia,Times New Roman,Times,serif">EBITDA/Net operating revenue: equal or higher than 38%.</FONT>

<LI><FONT size=2 face="Georgia,Times New Roman,Times,serif">EBITDA/Financial expenses: equal to or higher than 2.35.</FONT>

<LI><FONT size=2 face="Georgia,Times New Roman,Times,serif">Net debt/EBITDA: equal to or higher than 3.65.</FONT> </LI></UL>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The agreement has a cross default clause, i.e., the early maturity of any of the Company&#8217;s debts, the amount of which may anyhow compromise the settlement of its obligations provided for in the indenture deed shall imply the early maturity of this agreement.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(ii) 11</FONT></B><B><SUP><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">th </FONT></SUP></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">issue of debentures</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">On March 1, 2010, the Company conducted the 11</FONT><SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">th </FONT></SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">issue of debentures. On April 30 and May 3, 2010 the Company settled series 1 and 2, respectively, through a public offering, the proceeds from which will be used to early redeem the 90 promissory notes issued on December 1, 2009, whose features are summarized below:</FONT></P>

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<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="17%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="19%"></TD>

   <TD width="2%"></TD>

   <TD width="16%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">Number</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">Adjustment</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">Interest</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">Interest payment</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">Amortization</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">Maturity</FONT>&nbsp;</TD></TR>

<TR>

   <TD colSpan=11>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">Series 1 810,000</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">DI+ 1.95%</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">Semiannual</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">Annual (from</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">March 2015</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">p.a.</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(September and</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">March 2013)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">March)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">Series 2 405,000</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">DI + 1.40%</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">Semiannual</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">Annual (from</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">March 2013</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">p.a.</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(September and</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">March 2012)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">March)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The interest expense in 2012 and 2011 related to the series 1 was R$82,540 and R$107,081 and R$24,467 and R$52,369 related to series 2, respectively.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Issuer, at its sole discretion, as of the 24</FONT><SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">th </FONT></SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">month, including, after the issue date, and at the end of each capitalization period, pursuant to the terms and conditions set forth hereinbelow, by resolution at the Issuer&#8217;s Board of Directors&#8217; meeting may early redeem series 1 Debentures, fully or partially. There will be no optional early redemption for Series 2 debentures. If the issuer elects the early redemption as of the 24</FONT><SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">th </FONT></SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">month, there will be a premium of 1.00% p.a. to the debenture holder, of 0.90% p.a. as of the 30</FONT><SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">th </FONT></SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">month and of 0.86% p.a. as of the 36</FONT><SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">th </FONT></SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">month.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Financial covenants </FONT></B><FONT size=2 face="Georgia,Times New Roman,Times,serif">&#8211; Calculated every quarter upon the disclosure of interim or annual financial statements:</FONT></P>

<P><FONT size=2 face="Georgia,Times New Roman,Times,serif">. Adjusted current ratio (current assets divided by current liabilities, excluding from current liabilities the current portion of noncurrent debts incurred by the Company that are recorded in current liabilities) higher than 1.0.</FONT></P>

<P><FONT size=2 face="Georgia,Times New Roman,Times,serif">. EBITDA to financial expenses ratio equal to or higher than 1.5.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-129</FONT></P></DIV>

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<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>to the </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Years Ended December </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>31, 2012 and 2011</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>in </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>thousands </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Brazilian </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>reais, </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

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<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Noncompliance with these obligations will only be typified when verified in the quarterly financial statements for at least two consecutive quarters or two nonconsecutive quarters within a twelvemonth period.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In case of noncompliance with the covenants, the trustee should call an extraordinary debenture holders' meeting within 48 hours from the acknowledgement of the noncompliance to resolve on the declaration of accelerated maturity of the debentures.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The agreement has a cross default clause, i.e., the early maturity of any of the Company&#8217;s debts, in amount equal to or exceeding R$50 million adjusted by the IPCA variation as of the issue date, in view of contractual default, the amount of which may anyhow to compromise the settlement of the Company&#8217;s monetary obligations arising from the Issue, shall imply the early maturity of this agreement.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(iii) 12</FONT></B><B><SUP><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">th </FONT></SUP></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">issue of debentures</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In June 2010, SABESP issued R$500 million in debentures to Government Severance Indemnity Fund for Employees (FGTS). The debentures will be invested in program of structures to comply with the goal to universalize the sanitation service in the State of S&#227;o Paulo, which were used until 2011. Among the programs that will receive this investment are Vida Nova (water sources), Programa Metropolitano de &#193;gua (Water Metropolitan Program), Programa Metropolitano de Esgoto (Sewage Metropolitan Program), Programas de &#193;gua e Esgotos do Interior e Litoral (Water and Sewage Program inside the state and coastal region).</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">One of the conditions for approving this transaction is the allocation of 60% of the investments in poor areas.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The issuance of the debentures occurred on September 22, 2010 through a public offer under the Brazilian securities exchange commission rules, according to CVM Instruction n&#186; 476, simple debentures, nonconvertible, are as follows:</FONT></P>

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<TR>

   <TD width="6%"></TD>

   <TD width="2%"></TD>

   <TD width="10%"></TD>

   <TD width="2%"></TD>

   <TD width="11%"></TD>

   <TD width="2%"></TD>

   <TD width="9%"></TD>

   <TD width="2%"></TD>

   <TD width="19%"></TD>

   <TD width="2%"></TD>

   <TD width="17%"></TD>

   <TD width="2%"></TD>

   <TD width="11%"></TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">Number</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">Adjustment</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">Interest</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">Interest payment</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">Amortization</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">Maturity</FONT>&nbsp;</TD></TR>

<TR>

   <TD colSpan=13>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Singe</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">500,000</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">TR</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">9.5% p.a.</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">Monthly (from July</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">Monthly (from</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">June 2025</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">series</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2010)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">July 2014)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The interest expense in 2012 and 2011 related to the single series was R$46,849 and R$51,434, respectively.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Issuer, at any time, may acquire outstanding debentures, in observance to Article 55, Paragraph 2 of the Brazilian Corporation Law, by means of previous and express written consent of the debenture holders. The debentures acquired by the Issuer may be cancelled, held in the Issuer&#8217;s treasury, or again outstanding on the market. The debentures acquired by the Issuer to be</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-130</FONT></P></DIV>

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<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>to the </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Years Ended December </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>31, 2012 and 2011</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>in </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>thousands </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Brazilian </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>reais, </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

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<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">held in treasury pursuant to this clause, if and when outstanding again on the market, will be entitled to same remuneration of other outstanding debentures.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Reimbursement premiums to which debenture holders are entitled upon optional early redemption on the unit face value of debentures, plus remuneration and adjustment, if any, and will be calculated according to the following formula:</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Premium (%) = </FONT><I><U><FONT size=2 face="Georgia-Italic,Times New Roman,Times,serif">P x DD </FONT></U></I><FONT size=2 face="Georgia,Times New Roman,Times,serif">, where</FONT><BR><I><FONT size=2 face="Georgia-Italic,Times New Roman,Times,serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; TDC</FONT></I></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">P = 2% (two per cent); DD = number of running days, as of the date of the optional early redemption until the maturity date; and TDC = total number of running days as of the 1</FONT><SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">st </FONT></SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">to the fourth-eighth (48</FONT><SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">th</FONT></SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">) month as of the issue date to maturity date.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Financial covenants </FONT></B><FONT size=2 face="Georgia,Times New Roman,Times,serif">&#8211; Calculated every quarter with the disclosure of interim or annual financial statements:</FONT></P>

<P><FONT size=2 face="Georgia,Times New Roman,Times,serif">. Adjusted current ratio (current assets divided by current liabilities, excluding from current liabilities the current portion of noncurrent debts incurred by the Company that are recorded in current liabilities) higher than 1.0.</FONT></P>

<P><FONT size=2 face="Georgia,Times New Roman,Times,serif">. EBITDA to financial expenses ratio equal to or higher than 1.5.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Noncompliance with these obligations will only be typified when verified in the quarterly financial statements for at least two consecutive quarters or two nonconsecutive quarters within a twelvemonth period.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In case of noncompliance with the covenants, the trustee should call an extraordinary debenture holders' meeting within 48 hours from the acknowledgement of the noncompliance to resolve on the declaration of accelerated maturity of the debentures.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The agreement has a cross default clause, i.e. the early maturity of any of the Company&#8217;s debts, equal to or exceeding R$50 million, adjusted by IPCA variation as of the issue date, due to contractual default, the amount of which may anyhow compromise the settlement of the Company&#8217;s monetary obligations arising from the Issue, shall imply the early maturity of this agreement.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(iv) 13</FONT></B><B><SUP><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">th </FONT></SUP></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">issue of debentures</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">On February 17, 2012, the Company fully redeemed the 13</FONT><SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">th </FONT></SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">issue of debentures, in the amount of R$633,343.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(v) 14</FONT></B><B><SUP><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">th </FONT></SUP></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">issue of debentures</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">On February 15, 2011, the Company issued 100 debentures through exclusive subscription by the Brazilian Development Bank &#8211; BNDES. These debentures were distributed into three series, not</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-131</FONT></P></DIV>

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<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>to the </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Years Ended December </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>31, 2012 and 2011</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>in </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>thousands </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Brazilian </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>reais, </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

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<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">convertible into shares, by the face value of R$2,753.70, totaling R$275,370. The repayment of operation occurred on April 15, 2011, for all series.</FONT></P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="6%"></TD>

   <TD width="2%"></TD>

   <TD width="7%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="14%"></TD>

   <TD width="2%"></TD>

   <TD width="17%"></TD>

   <TD width="2%"></TD>

   <TD width="18%"></TD>

   <TD width="2%"></TD>

   <TD width="11%"></TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">Number</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; TEXT-INDENT: 3.779pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Adjustment</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">Interest</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">Interest payment</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">Amortization</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">Maturity</FONT>&nbsp;</TD></TR>

<TR>

   <TD colSpan=13>&nbsp;</TD></TR>

<TR>

   <TD colSpan=13>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">28</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">TJLP + 1.92%</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Series 1</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">Quarterly up to</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">Monthly (from March</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">February 2022</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">p.a.</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">February 2014 and</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2014)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">monthly as of this</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">date</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR>

   <TD colSpan=13>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Series 2</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">30</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">IPCA</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">9.19% p.a.</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">Annual</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">Annual (from March</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">March 2022</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2015)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR>

   <TD colSpan=13>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Series 3</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">42</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">TJLP + 1.92%</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">Quarterly up to</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">Monthly (from March</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">February 2022</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">p.a.</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">February 2014 and</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2014)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">monthly as of this</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">date</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The proceeds obtained with this issue are allocated to the Company&#8217;s investments in water supply and sewage treatment systems in the projects: ETA Rio Grande, North Coast, Para&#237;ba Valley and Mantiqueira, Bacia do Piracicaba-Capivari-Jundia&#237; and the Loss Reduction Program.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Interest expenses in 2012 referring to the series 1 amounted to R$5,848 and R$5,254, and R$8,371 and R$6,916 for series 2, and R$8,772 and R$7,881 for series 3, respectively.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The early amortization, fully or partially of the subscribed debentures, when authorized by BNDES and/or BNDESPAR, shall always occur jointly, observing the proportionality between the outstanding balance of Series 1, 2 and 3 Debentures of all issues. The agreement does not include premium due to early amortization.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Financial covenants </FONT></B><FONT size=2 face="Georgia,Times New Roman,Times,serif">&#8211; Calculated every quarter upon the disclosure of interim or annual financial statements:</FONT></P>

<UL>

<LI><FONT size=2 face="Georgia,Times New Roman,Times,serif">EBITDA/net operating revenue equal to or higher than 38%.</FONT>

<LI><FONT size=2 face="Georgia,Times New Roman,Times,serif">EBITDA/financial expenses equal to or higher than 2.35.</FONT>

<LI><FONT size=2 face="Georgia,Times New Roman,Times,serif">Net bank debt/EBITDA equal to or lower than 3.65.</FONT> </LI></UL>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The agreement has a cross default clause, i.e., the early maturity of any of the Company&#8217;s debts, the amount of which may anyhow compromise the settlement of its obligations provided for in the indenture deed, shall imply the early maturity of this agreement.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-132</FONT></P></DIV>

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<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>to the </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Years Ended December </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>31, 2012 and 2011</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>in </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>thousands </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Brazilian </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>reais, </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

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<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(vi) 15</FONT></B><B><SUP><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">th </FONT></SUP></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">issue of Debentures</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">On February 15, 2012, the Company issued the 15</FONT><SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">th </FONT></SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">issue of 77,108 non-convertible unsecured debentures, in two series, for public offering, with restricted placement efforts, pursuant to CVM</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Instruction n&#186; 476, totaling R$771,080 and unit value R$10, with the following characteristics:</FONT></P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="6%"></TD>

   <TD width="2%"></TD>

   <TD width="9%"></TD>

   <TD width="2%"></TD>

   <TD width="11%"></TD>

   <TD width="2%"></TD>

   <TD width="10%"></TD>

   <TD width="2%"></TD>

   <TD width="20%"></TD>

   <TD width="2%"></TD>

   <TD width="16%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Number</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">Adjustment</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">Interest</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">Interest payment</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">Amortization</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">Maturity</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">DI+</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">Semiannual</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">Annual (from</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">Series 1</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="TEXT-INDENT: 1.139pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">28,733</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">February 2017</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">0.99% p.a.</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">(February and August)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">February 2015)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR>

   <TD colSpan=13>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">Annual (from</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">Series 2</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="TEXT-INDENT: 1.199pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">48,375</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">IPCA</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">6.20%</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">Annual (February)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">February 2019</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">February 2018)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The proceeds deriving from the 15</FONT><SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">th </FONT></SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">Issue of Debentures were set aside to the settlement of financial commitments falling due until December 31, 2012.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Interest expenses referring to series 1 and 2 totaled R$22,336 and R$27,060, respectively, in 2012.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The total optional early redemption of series 1 debentures may occur as of the twenty-fourth (24</FONT><SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">th</FONT></SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">) month as of the issue date, inclusive and semi-annually, on the first business day after the end of each capitalization period of series 1 debentures, until the maturity date of series 1. There will be no optional early redemption of series 2 Debentures.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Premium of thirty hundredths per cent (0.30%) incurred on the balance of the face value of series 1 debentures, as follows:</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Premium = </FONT><I><U><FONT size=2 face="Georgia-Italic,Times New Roman,Times,serif">P x (DU) </FONT></U></I><I><FONT size=2 face="Georgia-Italic,Times New Roman,Times,serif">x PU</FONT></I><FONT size=2 face="Georgia,Times New Roman,Times,serif">, where,</FONT><BR><I><FONT size=2 face="Georgia-Italic,Times New Roman,Times,serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 252</FONT></I></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">P= 0.30%; DU= number of business days as of the redemption date to the maturity date of the debenture; and PU= unit face value of series 1 debentures, calculated </FONT><I><FONT size=2 face="Georgia-Italic,Times New Roman,Times,serif">por rata temporis </FONT></I><FONT size=2 face="Georgia,Times New Roman,Times,serif">as of the last payment date of series 1 remuneration or as of the issue date, whichever occurs last, until the date of early redemption.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Financial covenants </FONT></B><FONT size=2 face="Georgia,Times New Roman,Times,serif">&#8211; Calculated every quarter upon the disclosure of interim or annual financial statements:</FONT></P>

<UL>

<LI><FONT size=2 face="Georgia,Times New Roman,Times,serif">Adjusted Total Debt/ EBITDA: lower than or equal to 3.65; and</FONT>

<LI><FONT size=2 face="Georgia,Times New Roman,Times,serif">EBITDA /Paid Financial Expenses: equal to or higher than 1.5.</FONT> </LI></UL>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Non-fulfillment of the covenant clauses shall trigger the early maturity of the contract.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The agreement has a cross default clause, i.e., the early maturity of any of the Company&#8217;s debts,</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-133</FONT></P></DIV>

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<A name="page_134"></A><BR>

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<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>to the </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Years Ended December </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>31, 2012 and 2011</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>in </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>thousands </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Brazilian </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>reais, </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

<HR align=left color=#000000 SIZE=1 width="100%">



<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">equal to or exceeding R$90 million, shall imply the early maturity of this agreement, adjusted by IPCA variation as of the issue date, due to contractual default, the amount of which may compromise the settlement of the Company&#8217;s monetary obligations arising from the Issue.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(vii) 16</FONT></B><B><SUP><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">th </FONT></SUP></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">issue of Debentures</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">On November 12, 2012, the Company issued the 16</FONT><SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">th </FONT></SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">issue of 50,000 non-convertible, unsecured debentures, in a single series, for public offering, with restricted placement efforts, pursuant to CVM Instruction n&#186; 476, totaling R$500,000 and unitary value of R$10, with the following characteristics:</FONT></P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="5%"></TD>

   <TD width="2%"></TD>

   <TD width="9%"></TD>

   <TD width="2%"></TD>

   <TD width="11%"></TD>

   <TD width="2%"></TD>

   <TD width="11%"></TD>

   <TD width="2%"></TD>

   <TD width="21%"></TD>

   <TD width="2%"></TD>

   <TD width="17%"></TD>

   <TD width="2%"></TD>

   <TD width="9%"></TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Number</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">Adjustment</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">Interest</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">Interest payment</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">Amortization</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">Maturity</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">DI+ 0.30%</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">Single</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">Semiannual (May and</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">Lump sum (in</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">November</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="TEXT-INDENT: 0.3pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">50,000</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">to 0.70%</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">series</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">November)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">November 2015)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">2015</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">p.a.</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The proceeds deriving from the 16</FONT><SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">th </FONT></SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">Issue of Debentures will be exclusively set aside to the settlement of the Issuer&#8217;s financial commitments in 2012/2013.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Interest expenses corresponding to the single series totaled R$4,504 in 2012.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The optional early redemption of debentures may occur at any time in relation to the total outstanding debentures, from the availability of funds raised with the Issue (&#8220;Total Early Redemption&#8221;), without any addition as redemption premium.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Financial covenants </FONT></B><FONT size=2 face="Georgia,Times New Roman,Times,serif">&#8211; Calculated every quarter upon the disclosure of interim or annual financial statements:</FONT></P>

<UL>

<LI><FONT size=2 face="Georgia,Times New Roman,Times,serif">Adjusted Total Debt/EBITDAlower than or equal to 3.65; and</FONT>

<LI><FONT size=2 face="Georgia,Times New Roman,Times,serif">EBITDA/Paid Financial Expenses equal to or higher than 1.5.</FONT> </LI></UL>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The failure to comply with the indicators by the Issuer, will result in the early maturity of the contract, when it is verified, for at least two consecutive quarters, or even for two non-consecutive quarters within a twelve-month period.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The agreement has a cross default clause, i.e., the early maturity of any of the Company&#8217;s debts, in the individual or aggregate amount equal to or exceeding R$90 million due to contractual default, the occurrence of which may anyhow compromise the settlement of the Company&#8217;s monetary obligations arising from the Issue, shall imply the early maturity.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-134</FONT></P></DIV>

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<A name="page_135"></A><BR>

<P style="TEXT-ALIGN: justify; PADDING-LEFT: 0%; PADDING-RIGHT: 0%"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>to the </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Years Ended December </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>31, 2012 and 2011</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>in </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>thousands </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Brazilian </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>reais, </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

<HR align=left color=#000000 SIZE=1 width="100%">



<P style="TEXT-ALIGN: justify; PADDING-LEFT: 0%; PADDING-RIGHT: 0%"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(viii) 1</FONT></B><B><SUP><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">st </FONT></SUP></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">issue of Debentures - Aquapolo</FONT></B></P>

<P style="TEXT-ALIGN: justify; PADDING-LEFT: 0%; PADDING-RIGHT: 0%"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In August 2011, jointly-owned subsidiary Aquapolo held the 1</FONT><SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">st </FONT></SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">issue of 326,732 book-entry, registered non-convertible debentures, totaling R$326,732, in a single series at the unit value of R$1, whose characteristics are:</FONT></P>

<DIV style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%" align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="7%"></TD>

   <TD width="2%"></TD>

   <TD width="10%"></TD>

   <TD width="2%"></TD>

   <TD width="11%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="17%"></TD>

   <TD width="2%"></TD>

   <TD width="17%"></TD>

   <TD width="2%"></TD>

   <TD width="11%"></TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">Number</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">Adjustment</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">Interest</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">Interest payment</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">Amortization</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">Maturity</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Single</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">326,732</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">TR + 8.75%</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">Monthly (from</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">Monthly (from</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">August 2029</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">series</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">p.a.</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">December 2013)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">December 2013)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px; PADDING-LEFT: 0%; PADDING-RIGHT: 0%">&nbsp;</P>

<P style="TEXT-ALIGN: justify; PADDING-LEFT: 0%; PADDING-RIGHT: 0%"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The proceeds deriving from the 1</FONT><SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">st </FONT></SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">issue of debentures will be fully set aside to the works of the Aquapolo project.</FONT></P>

<P style="TEXT-ALIGN: justify; PADDING-LEFT: 0%; PADDING-RIGHT: 0%"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Financial covenants </FONT></B><FONT size=2 face="Georgia,Times New Roman,Times,serif">&#8211; Calculated every quarter upon the disclosure of interim or annual financial statements:</FONT></P>

<DIV style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%">

<UL>

<LI><FONT size=2 face="Georgia,Times New Roman,Times,serif">Debt service coverage ratio (cash generation/debt service) exceeding 1.2;</FONT>

<LI><FONT size=2 face="Georgia,Times New Roman,Times,serif">Adjusted current liquidity ratio higher than 1.0; and</FONT>

<LI><FONT size=2 face="Georgia,Times New Roman,Times,serif">Do not contract a single operation or series of operations, any medium and long-term</FONT> </LI></UL></DIV>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">operations, in amount exceeding R$20 million.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The agreement has a cross default clause, i.e., the early maturity of any of the issuer&#8217;s debts, in the individual or aggregate amount equal to or exceeding R$5 million, shall imply the early maturity of the agreement.</FONT></P>

<P><STRONG><FONT size=2>(c)</FONT></STRONG> <STRONG><FONT size=2>Caixa Econ&#244;mica Federal - Pro-sanitation Program</FONT></STRONG> </P>

<P><STRONG><FONT size=2>(i)</FONT></STRONG> <STRONG><FONT size=2>Water and sewage</FONT></STRONG> </P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Several loan agreements were entered into from 1996 to 2004 under the Pro-Sanitation Program for expanding and improving the water supply and sewage systems of several municipalities of the State of S&#227;o Paulo and of the City of S&#227;o Paulo. Loans are collateralized by the collections of the daily billings of water supply and sewage services up to the total amount of the debt.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Contractually established repayment terms range from 120 to 180 months, after the beginning of the repayment period.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The balance of these facilities as of December 31, 2012 was R$487,663 (R$563,750 in December 2011).</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The contractual charges are:</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-135</FONT></P>

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<A name="page_136"></A><BR>

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<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>to the </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Years Ended December </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>31, 2012 and 2011</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>in </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>thousands </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Brazilian </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>reais, </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

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   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">Contract signed in:</FONT>&nbsp;</TD>

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   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1996</FONT>&nbsp;</TD>

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   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1997</FONT>&nbsp;</TD>

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   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1998 to 2004</FONT>&nbsp;</TD></TR>

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   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">Interest rate</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">9.5% p.a.</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">6.5% to 8.0% p.a.</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">6.5% to 8.0% p.a.</FONT>&nbsp;</TD></TR>

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   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif"></FONT></B></TD>

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   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">During grace</FONT></B>&nbsp;</TD>

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   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">period:</FONT></B>&nbsp;</TD>

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   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">Risk rate</FONT>&nbsp;</TD>

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   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1.0% p.a. on amount raised</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1.0% p.a. on amount raised</FONT>&nbsp;</TD>

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   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">0.6% p.a. or 2% p.a. on</FONT>&nbsp;</TD></TR>

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   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">outstanding balance</FONT>&nbsp;</TD></TR>

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   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">Management fee</FONT>&nbsp;</TD>

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   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">0.12% p.m. on the contract</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2.0% p.a. on amount raised</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1.0% p.a. on amount raised</FONT>&nbsp;</TD></TR>

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   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">amount</FONT>&nbsp;</TD>

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   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">or 2% p.a. on outstanding</FONT>&nbsp;</TD></TR>

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   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif"></FONT></B></TD>

   <TD></TD>

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   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">During repayment</FONT></B>&nbsp;</TD>

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   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">period:</FONT></B>&nbsp;</TD>

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   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">Management fee</FONT>&nbsp;</TD>

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   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">Difference between installment</FONT>&nbsp;</TD>

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   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1.0% p.a. on the outstanding</FONT>&nbsp;</TD>

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   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1.0% p.a. on the outstanding</FONT>&nbsp;</TD></TR>

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   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">calculation and a 10.5% p.a.</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">balance</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">balance</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

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   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">rate less the 9.5% p.a.</FONT>&nbsp;</TD>

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<P style="MARGIN: 0px"><STRONG><FONT size=2>(ii) Pr&#243;-Sanear Program</FONT></STRONG> </P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In 1997, 1998 and 2008, contracts were signed under the Pr&#243;-Sanear Program for the improvement of water and sewage services, with the involvement of the communities receiving the services, in several municipalities of the Metropolitan Region of S&#227;o Paulo. The credit facilities are collateralized by the collections of the daily billings of water supply and sewage services up to the total amount of the debt. Repayment will be made in 180 months after the beginning of the repayment period. As of December 31, 2012, the balance was R$11,847 (R$14,448 in December 2011).</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The financial charges are:</FONT></P>

<P><FONT size=2 face="Georgia,Times New Roman,Times,serif">. interest rate - 5.0% p.a.;</FONT></P>

<P><FONT size=2 face="Georgia,Times New Roman,Times,serif">. management fee (grace period) - 2.0% p.a. on debt outstanding balance; . management fee (repayment phase) - 1.0% p.a. on debt outstanding balance; . risk rate (grace period) - 1.0% p.a. on amounts raised.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(iii) Growth Acceleration Program (PAC)</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In 2007, 2008 and 2012, the Company entered into agreements linked to the Universal Water and Sewage Services with several municipalities, with funds from the Government Severance Indemnity Fund for Employees (FGTS). The credits facilities are guaranteed by a monthly flow of the billings corresponding to the minimum of three times the monthly charge. Repayments will be</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-136</FONT></P></DIV>

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<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>to the </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Years Ended December </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>31, 2012 and 2011</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>in </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>thousands </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Brazilian </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>reais, </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

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<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">made in 240 months after the beginning of the repayment period. The balance as of December 31, 2012 was R$536,113 (R$440,733 in December 2011).</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The financial charges are:</FONT></P>

<P><FONT size=2 face="Georgia,Times New Roman,Times,serif">. interest rate &#8211; 5% p.a. to 6% p.a.;</FONT></P>

<P><FONT size=2 face="Georgia,Times New Roman,Times,serif">. management fee &#8211; 1.00% p.a. to 1.40% p.a. during the period of the contract; . risk rate &#8211; 0.3% p.a. on the adjusted debt balance.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(iv) Financial covenants &#8211; Calculated every quarter with the disclosure of interim or annual financial statements:</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The agreement is subject to AMD &#8211; Agreement for Performance Improvement sets targets for financial indicators (billing losses, revenue evasion, cash and cash equivalents and reduction of the number of days of committed receivables), and operating indicators that, based on the past two years, are annually projected for the following five years.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The agreement has a cross default clause, i.e., the early maturity of any of the Company&#8217;s debts, due to contractual default, the occurrence of which may anyhow compromise the settlement of its monetary obligations deriving from the Issue shall imply the early maturity.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(d) Caixa Econ&#244;mica Federal - SESAMM</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In September 2010, a loan and onlending agreement was signed between Caixa Econ&#244;mica Federal and the wholly-owned subsidiary SESAMM &#8211; Servi&#231;os de Saneamento de Mogi Mirim SA, destined to investments in sewage systems in the urban area of the municipality of Mogi Mirim, within the scope of the sanitation program for all citizens. According to the terms of the agreement signed with the Federal Government, payments are made by the Price System and monthly indexed by the variation of the Reference Standard Unit &#8211; UPR corresponding to the Benchmark Interest Rate &#8211; TR issued by the Government, plus annual interest of 6.0%, management fee of 2% p.a. and credit risk of 0.3% p.a. Interest rates and principal are monthly paid with final maturity in 2031.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Financial covenants </FONT></B><FONT size=2 face="Georgia,Times New Roman,Times,serif">&#8211; Calculated every quarter upon the disclosure of interim or annual financial statements:</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">- Subscribed and paid-in capital stock, corresponding to, at least, twenty per cent (20%) of the total amount of investments in funds from this financing</FONT></P>

<UL>

<LI><FONT size=2 face="Georgia,Times New Roman,Times,serif">Debt service coverage ratio (ICSD) of, at least, 1.3 during the amortization phase;</FONT>

<LI><FONT size=2 face="Georgia,Times New Roman,Times,serif">Indebtedness limit of up to one twelfth (1/12) of its annual gross revenue or up to the amount</FONT> </LI></UL>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">corresponding to three (3) monthly installments, referring to the agreements in force, whichever is the highest.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-137</FONT></P></DIV>

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<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>to the </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Years Ended December </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>31, 2012 and 2011</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>in </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>thousands </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Brazilian </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>reais, </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

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<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(e) BNDES</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Contract 01.2.619.3.1 - Entered into in August 2002, totaling up to R$60,000, for the purpose of financing part of the Company's contribution to the Tiet&#234; River Pollution Abatement Project -Stage II, related to loan agreement 1212/OC - BR with the Inter-American Development Bank (IADB). The contract was settled on August 15, 2012. The outstanding balance as of December 31, 2011 was R$11,638.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Contract 10/669.748-6, amounting to R$180,000, is in performance of works stage and the debt balance as of December 31, 2012 was R$4,154 (R$29,407 in December 2011). The funds are onlent from BNDES to the agents and from the latter to SABESP. The onlending agreement has the same purpose as the agreement between BNDES and SABESP, and the same interest and repayment terms, as follows:</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Interest - TJLP limited to 6% p.a., plus a 3% p.a. spread, paid quarterly during the grace period, and monthly in the repayment period. The TJLP portion exceeding 6% p.a. will be added to the debt outstanding balance.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Loans are collateralized by part of revenues from the provision of water and sewage services.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Financial covenants </FONT></B><FONT size=2 face="Georgia,Times New Roman,Times,serif">&#8211; Calculated every quarter upon the disclosure of interim or annual financial statements:</FONT></P>

<P><FONT size=2 face="Georgia,Times New Roman,Times,serif">. Adjusted current ratio: higher than 1.0.</FONT></P>

<P><FONT size=2 face="Georgia,Times New Roman,Times,serif">. EBITDA /Net Operating Revenue: equal to or higher than 38%.</FONT></P>

<P><FONT size=2 face="Georgia,Times New Roman,Times,serif">. EBITDA/Debt Service cost: equal to or higher than 1.5.</FONT></P>

<P><FONT size=2 face="Georgia,Times New Roman,Times,serif">. Equity to Total Liabilities: equal to or higher than 0.8.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(f) BNDES Baixada Santista (Onda limpa I)</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Contract 07.2.0800.1 - In November 2007, the Company entered into a financing agreement with BNDES for the Environmental Recovery Program of the Santos Metropolitan Region, totaling R$129,973 with interest of 2.5% p.a. plus TJLP limited to 6%.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Repayment will be made in 96 monthly, consecutive installments, starting January 2012 to December 2019.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The agreement is in progress and the outstanding balance as of December 31, 2012 was R$114,164 (2011 R$130,474).</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Financial covenants </FONT></B><FONT size=2 face="Georgia,Times New Roman,Times,serif">&#8211; Calculated every quarter upon the disclosure of interim or annual financial statements:</FONT></P>

<P><FONT size=2 face="Georgia,Times New Roman,Times,serif">. Adjusted EBITDA /Adjusted Net Operating Revenue: equal to or higher than 38%.</FONT></P>

<P><FONT size=2 face="Georgia,Times New Roman,Times,serif">. Adjusted EBITDA /Adjusted Financial Expenses: equal to or higher than 2.35.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-138</FONT></P></DIV>

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<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>to the </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Years Ended December </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>31, 2012 and 2011</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>in </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>thousands </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Brazilian </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>reais, </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

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<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">. Adjusted Net Debt/Adjusted EBITDA: equal to or higher than 3.65;</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The agreement is subject to AMD &#8211; Performance Improvement Agreement which establishes targets for financial ratios (sales losses, revenue evasion, cash and cash equivalents and reduction of accounts receivable commitment days) and operational ratios which, based on the last two years, are yearly projected for the next five years.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In the event the levels set out in the Financial Commitments are not met, the Company within ninety (90) days as of the date of BNDES&#8217; written notice shall create a reinforced guarantee, preferably revenue commitment and assignment, deemed as satisfactory, at BNDES&#8217; discretion, unless if within such term the levels set out in the financial commitments are recovered, under the power that BNDES may suspend the release of funds and where applicable, declare the agreement&#8217;s early maturity.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(g) BNDES Onda Limpa II</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Contract 09.2.1535.1 &#8211; In March 2010, a loan agreement was signed with BNDES to the Environmental Recovery Program of the metropolitan region of Santos coast, in the amount of R$294,349 and interest rates of 1.92% p.a. plus TJLP limited to 6%.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The amortization is estimated in 156 monthly and successive installments, from April 2012 to March 2025.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The contract is in performance of working stage and the debt balance as of December 31, 2012 was R$235,256 (R$249,653 in 2011).</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Financial covenants </FONT></B><FONT size=2 face="Georgia,Times New Roman,Times,serif">&#8211; Calculated every quarter upon the disclosure of interim or annual financial statements:</FONT></P>

<P><FONT size=2 face="Georgia,Times New Roman,Times,serif">. Adjusted EBITDA / Adjusted Net Operating Revenue: equal to or higher than 38%.</FONT></P>

<P><FONT size=2 face="Georgia,Times New Roman,Times,serif">. Adjusted EBITDA /Adjusted Financial Expenses: equal to or higher than 2.35.</FONT></P>

<P><FONT size=2 face="Georgia,Times New Roman,Times,serif">. Adjusted Net Debt/Adjusted EBITDA: equal to or lower than 3.65.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The agreement is subject to AMD &#8211; Performance Improvement Agreement which establishes targets for financial ratios (sales losses, revenue evasion, cash and cash equivalents and reduction of accounts receivable commitment days) and operational ratios which, based on the last two years, are yearly projected for the next five years.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The agreement has a cross default clause, i.e., the early maturity of any of the Company&#8217;s debt, due to contractual default the amount of which may anyhow compromise the settlement of its obligations deriving from this agreement, shall imply the early maturity of this agreement.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(h) BNDES PAC I and II</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=3 face="Georgia,Times New Roman,Times,serif">(i) </FONT><FONT size=2 face="Georgia,Times New Roman,Times,serif">Contract 08.2.0169.1 &#8211; In November 2007, a loan agreement was signed with BNDES to</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-139</FONT></P></DIV>

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<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>to the </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Years Ended December </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>31, 2012 and 2011</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>in </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>thousands </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Brazilian </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>reais, </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

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<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">the Environmental Recovery Program of the metropolitan region of Santos coast, in the amount of R$174,517 and interest rates of 2.15% p.a. plus TJLP limited to 6%.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The amortization will occur in 150 monthly and successive installments, from January 2011 to December 2023.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The contract is in performance of working stage and the debt balance as of December 31, 2012 was R$88,691 (R$73,917 in 2011).</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=3 face="Georgia,Times New Roman,Times,serif">(ii) </FONT><FONT size=2 face="Georgia,Times New Roman,Times,serif">Contract 11.2.0975.1 &#8211; On March 5, 2012, a loan agreement was signed with BNDES to the program to expand and optimize the sewage systems in the metropolitan region of S&#227;o Paulo, as well as to design the executive project of the S&#227;o Louren&#231;o production system, totaling R$135,850 and interest of 1.72% p.a. plus TJLP limited to 6%.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The amortization will occur in 156 monthly and successive installments, from April 2014 to March 2027.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The contract is in performance of working stage and the debt balance as of December 31, 2012 was R$6,500.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=3 face="Georgia,Times New Roman,Times,serif">(iii) </FONT><FONT size=2 face="Georgia,Times New Roman,Times,serif">Contract 11.2.0975.2 &#8211; On March 5, 2012, a loan agreement was signed with BNDES to the program to expand and optimize the sewage systems of the metropolitan region of S&#227;o Paulo, as well as to design the executive project of the S&#227;o Louren&#231;o production system, totaling R$44,948 with interest rates of 1.72% p.a. plus TJLP limited to 6%.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The amortization will occur in 144 monthly and successive installments, from April 2015 to March 2027.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The contract is in performance of working stage and the debt balance as of December 31, 2012 was R$13,000.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=3 face="Georgia,Times New Roman,Times,serif">(iv) </FONT><FONT size=2 face="Georgia,Times New Roman,Times,serif">Financial covenants &#8211; Calculated every quarter upon the disclosure of interim or annual financial statements:</FONT></P>

<P><FONT size=2 face="Georgia,Times New Roman,Times,serif">. Adjusted EBITDA /Adjusted Net Operating Revenue: equal to or higher than 38%.</FONT></P>

<P><FONT size=2 face="Georgia,Times New Roman,Times,serif">. Adjusted EBITDA /Adjusted Financial Expense: equal to or higher than 2.35.</FONT></P>

<P><FONT size=2 face="Georgia,Times New Roman,Times,serif">. Adjusted Net Debt/Adjusted EBITDA: equal to or lower than 3.65.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The agreement is subject to AMD &#8211; Performance Improvement Agreement which establishes targets for financial ratios (sales losses, revenue evasion, cash and cash equivalents and reduction of accounts receivable commitment days) and operational ratios which, based on the last two years, are yearly projected for the next five years</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In the event the levels set out in the Financial Commitments are not met, the Company within ninety (90) days as of the date of BNDES&#8217; written notice shall create a reinforced guarantee, preferably revenue commitment and assignment, deemed as satisfactory, at BNDES&#8217; discretion,</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-140</FONT></P></DIV>

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<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>to the </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Years Ended December </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>31, 2012 and 2011</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>in </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>thousands </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Brazilian </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>reais, </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

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<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">unless if within that term the levels set out in the financial commitments are recovered, under the power that BNDES may suspend the release of funds and where applicable, declare the agreement&#8217;s early maturity.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(i) Leases</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company has lease agreements signed as Assets Lease. During the construction period, works are capitalized to intangible assets in progress and the lease amount is recorded at the same proportion. Works are estimated to be concluded in 2013 and 2014.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">After startup, the lease payment period starts (240 monthly installments), whose amount is periodically restated by contracted price index.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">No work related to these contracts was in operation on December 31, 2012.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(j) Eurobonds</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=3 face="Georgia,Times New Roman,Times,serif">(i) </FONT><FONT size=2 face="Georgia,Times New Roman,Times,serif">On November 3, 2006, the Company issued Eurobonds abroad (Eurobonds 2016) totaling US$140 million. The issue was led by Deutsche Bank Trust Company Americas and the principal agent was Deutsche Bank Luxembourg S.A. The interest rate is 7.5% p.a., paid semiannually, and maturity is in November 2016. The funds raised were used for the early repayment and partial issue of US$225 million in the Eurobonds, with final maturity in June 2008, and the amount redeemed was US$126,948 thousand.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">As of December 31, 2012 the balance of the Eurobonds was US$140,000 thousand, corresponding to R$285,655, net of issuance costs amounting to R$434, that will be amortized during the period of the contract.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Total redemption at the Company&#8217;s option in view of changes in the withholding income tax laws. Without any addition as redemption premium.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=3 face="Georgia,Times New Roman,Times,serif">(ii) </FONT><FONT size=2 face="Georgia,Times New Roman,Times,serif">On December 9, 2010, the Company concluded the international offer to international qualified foreign institutions of its US$350 million senior unsecured notes due 2020, with interest rate is 6.25% p.a., paid semi-annually and due on December 2020 (the Eurobonds 2020). The funds were used for partial repayment of outstanding debts.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">As of December 31, 2012 the balance of the Eurobonds was US$350,000 thousand equivalent to R$708,076, net of issuance costs amounting to R$7,149, that will be amortized during the period of the contract.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">On December 16, 2015 and subsequently, the Company in one or in several occasions may redeem the Eurobonds, according to its full or partial option. This option shall incur the payment of 103.125% premium as of December 16, 2015 of 102.083%; as of December 16, 2016, 101.042%, as of December 16, 2017 and as of December 16, 2018, 100.000%. In the event of full redemption at the Company&#8217;s option due to changes in the withholding income tax, no addition will occur as redemption premium.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-141</FONT></P></DIV>

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<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>to the </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Years Ended December </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>31, 2012 and 2011</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>in </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>thousands </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Brazilian </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>reais, </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

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<P style="TEXT-ALIGN: justify"><FONT size=3 face="Georgia,Times New Roman,Times,serif">(iii) </FONT><FONT size=2 face="Georgia,Times New Roman,Times,serif">Financial covenants &#8211; Calculated every quarter upon the disclosure of interim or annual financial statements:</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Restrict the funding of new debts so that:</FONT></P>

<P><FONT size=2 face="Georgia,Times New Roman,Times,serif">. adjusted total debt to EBITDA does not exceed 3.65;</FONT></P>

<P><FONT size=2 face="Georgia,Times New Roman,Times,serif">. the Company's debt service coverage ratio, determined on the date this debt was incurred, shall not be lower than 2.35.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Noncompliance with covenants will accelerate the maturity of the contract.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The agreement has a cross default clause, i.e., the early maturity of any indebtedness in view of the Company&#8217;s loans or any of its Subsidiaries with a total principal amount of US$ 25,000,000.00 or more (or its corresponding amount in other currencies) shall imply this agreement&#8217;s early maturity.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(k) Inter-American Development Bank (IDB)</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Loan Agreement 713 - In December 1992, the Company entered into a loan agreement with the IDB for US$400 million to finance the first stage of the Tiet&#234; River Pollution Abatement Project.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The repayment period started in June 1999 in semiannual installments, subject to annual floating rate interest, varying according to the loans raised by the Bank in each six-month period, and final maturity in December 2017. In December 1992, the Federal Republic of Brazil signed a guarantee contract with the IDB guaranteeing the funds for the fulfillment of the contractual obligations. The outstanding balance as of December 31, 2012 was US$125,488 thousand, equivalent to R$256,435 (R$282,605 in December 2011).</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Loan Agreement 896 - In December 1992, the Company entered into a loan agreement with the IDB for US$50 million to finance the first stage of the Tiet&#234; River Pollution Abatement Project. Semiannual repayments started in June 1999, with annual interest of 3% and final maturity in December 2016. In December 1992, the Federal Republic of Brazil signed a guarantee contract with the IDB guaranteeing the funds for the fulfillment of the contractual obligations. The outstanding balance as of December 31, 2012 was US$11,111 thousand, equivalent to R$22,705 (R$26,053 in December 2011).</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Loan Agreement 1212 - In July 2000, the Company entered into a loan agreement with the IDB for US$200 million to finance the second stage of the Tiet&#234; River Pollution Abatement Project. In 2008, the amounts to be raised in this contract were summed up. The loan is being amortized semiannually and final maturity in July 2025. Interest is being paid on a semiannual basis, based on daily balances, at an annual variable rate according to the costs of loans of the Bank in the preceding six-month period, plus a spread, and changes every six months. The debt balance as of December 31, 2012 was US$133,615 thousand, equivalent to R$273,043 (R$269,915 in December 2011).</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Loan Agreement 2202/OC-BR &#8211; On September 3, 2010 the Company and the Inter-American Development Bank (Banco Inter-Americano de Desenvolvimento or BID) signed the contract for</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-142</FONT></P></DIV>

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<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>to the </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Years Ended December </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>31, 2012 and 2011</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>in </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>thousands </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Brazilian </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>reais, </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

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<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">partially finance the third stage of the Tiet&#234; River Project, denominated the decontamination of the Tiet&#234; river. The total estimated cost of this investment is US$800 million, of which US$600 million will be financed by the IDB and US$200 million will be invested by the Company&#180;s own resources. The final maturity of the loan is in 25 years with 6-year grace period. Interest is based on USD-Libor, calculated every quarter, as stipulated in the IDB rules and procedures.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The 1</FONT><SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">st </FONT></SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">funding of the agreement executed on September 3, 2010, no. 2202/OC-BR occurred on March 17, 2011. Funds are used to recover the water quality of Tiet&#234; River basin in the Metropolitan Region of S&#227;o Paulo. The agreement amounts to US$600,000, corresponding to R$1,036,380, on the contracting date, with final maturity in September 2035. The 1</FONT><SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">st </FONT></SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">funding of US$1,829, corresponding to R$3,044, occurred in the first quarter of 2011.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The balance of this agreement as of December 31, 2012 was US$147,080 thousand, corresponding to R$296,276 (R$145,159 in December 2011), less part of funding costs amounting to R$4,282, which will be repaid over the agreement term.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Financial covenants &#8211; Calculated every quarter upon the disclosure of interim or annual financial statements:</FONT></P>

<P><FONT size=2 face="Georgia,Times New Roman,Times,serif">. Loan agreements 713, 896 and 1212 - Tariffs must: (a) produce revenues sufficient to cover the system's operating expenses, including administrative, operating, maintenance, and depreciation expenses; (b) provide a return on property, plant, and equipment no less than 7%; and (c) during project execution, the balances of short-term loans must not exceed 8.5% of total equity.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Noncompliance with covenants will accelerate the maturity of the contract.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The agreement has a cross default clause among IDB agreements (same financial bank), i.e., the early maturity will occur in the event of failure to comply with any obligation therewith or any other agreement signed with IDB related to project finance.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(l) Japan Bank for International Cooperation - JICA</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">On August 6, 2004, the Company entered into a financing agreement with the JBIC - Japan Bank for International Cooperation, currently JICA - Japan International Cooperation Agency, no. BZ-P 15, guaranteed by the Federal Government, totaling &#165;21,320 million, equivalent to approximately R$587,643 on the agreement signature date, for the Environmental Recovery Program of </FONT><I><FONT size=2 face="Georgia-Italic,Times New Roman,Times,serif">Baixada Santista </FONT></I><FONT size=2 face="Georgia,Times New Roman,Times,serif">Metropolitan Region. Total financing period is 25 years, with a seven-year grace period and 18 years of repayment in semi-annual installments. Interest is being paid on a semiannual basis since 2006, and is 2.5% p.a. for the sewage network and 1.8% p.a. for sewage treatment facilities.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">On November 1, 2010 the Company signed with the Japan International Cooperation Agency (JICA) an additional loan agreement referring to the </FONT><I><FONT size=2 face="Georgia-Italic,Times New Roman,Times,serif">Onda Limpa </FONT></I><FONT size=2 face="Georgia,Times New Roman,Times,serif">Program&#8211; 1st Phase, n&#186; BZ-P 17 in the amount of six billion, two hundred and eight million Japanese Yen (JPY 6,208,000,000) corresponding to R$127,326 on November 30, 2011. Resources will be applied to acquire eligible goods and services require to implementing the suppliers project, contractors or consultants. The</FONT></P>

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<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>to the </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Years Ended December </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>31, 2012 and 2011</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>in </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>thousands </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Brazilian </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>reais, </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

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<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">total loan term is 25 years, 7-year grace period and 18 years of amortization, in half-yearly installments. Interest rates are paid half-yearly as of 2011, 1.2% p.a. for sewage network and 0.01% p.a. for sewage treatment facilities.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">On February 15, 2011, the Company and JICA (Japan International Cooperation Agency) signed a supplementary loan agreement related to </FONT><I><FONT size=2 face="Georgia-Italic,Times New Roman,Times,serif">Onda Limpa </FONT></I><FONT size=2 face="Georgia,Times New Roman,Times,serif">Program &#8211; 1st phase, no. BZ-P 18, amounting to nineteen billion, one hundred, sixty-nine million Yen (&#165; 19,169,000) corresponding to R$375,904 on March 31, 2011. Funds will be applied to execute works and services in the Program of </FONT><I><FONT size=2 face="Georgia-Italic,Times New Roman,Times,serif">Baixada Santista </FONT></I><FONT size=2 face="Georgia,Times New Roman,Times,serif">Metropolitan Region. The loan total term is 25 years, 7-year grace period and 18 years of amortization, in half-yearly installments. Interest rates are paid half-yearly as of 2011, 1.8% p.a. for sewage network and 2.5% p.a. for sewage treatment facilities.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In February 2012, the Company signed a loan agreement for the 2</FONT><SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">nd </FONT></SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">phase of the Water Losses Reduction Corporate Program n&#186; BZ -P 19, in the amount of thirty-three billion, five hundred, eighty-four million Japanese Yen (JPY 33,584,000,000) corresponding to R$709,294 on the agreement&#8217;s signature date. The loan total term is 25 years, 7-year grace period and 18 years of amortization, in half-yearly installments. Interest rates are paid half-yearly as of 2013, 1.7% p.a. for sewage network and 0.01% p.a. for sewage treatment facilities.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The balance of these loan agreements as of December 31, 2012 were R$889,703 (R$958,733 in December 2011).</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(m) AB Loan (IADB 1983AB)</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">On May 27, 2008, the Company entered into a loan agreement AB loan with IDB, totaling US$250 million, the funding of which was fully in June 2008. The funds obtained were used to settle Eurobonds 2008 and to partially perform the Company's investment plan.</FONT></P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="10%"></TD>

   <TD width="11%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="11%"></TD>

   <TD width="2%"></TD>

   <TD width="11%"></TD>

   <TD width="2%"></TD>

   <TD width="11%"></TD></TR>

<TR vAlign=bottom>

   <TD width="10%" align=right>&nbsp;</TD>

   <TD width="11%" align=right>&nbsp;</TD>

   <TD width="12%" align=right>&nbsp;</TD>

   <TD width="2%" align=right></TD>

   <TD width="11%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Repayment</FONT></B></TD>

   <TD width="2%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif"></FONT></B></TD>

   <TD width="11%" align=right>&nbsp;</TD>

   <TD width="2%" align=right></TD>

   <TD width="11%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Interest (Libor +</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD width="10%" align=right>&nbsp;</TD>

   <TD width="11%" align=right>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">US$</FONT></B></TD>

   <TD width="2%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif"></FONT></B></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">from</FONT></B></TD>

   <TD width="2%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif"></FONT></B></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Maturity</FONT></B></TD>

   <TD width="2%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif"></FONT></B></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">spread)</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD width="21%" colSpan=2 align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">1983</FONT> <FONT size=1 face="Georgia,Times New Roman,Times,serif">A</FONT></TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">100.0 million</FONT></TD>

   <TD width="2%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif"></FONT></TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">May 2011</FONT></TD>

   <TD width="2%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif"></FONT></TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">May 2023</FONT></TD>

   <TD width="2%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif"></FONT></TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">Libor + 2.99%</FONT></TD></TR>

<TR vAlign=bottom>

   <TD width="21%" colSpan=2 align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">1983</FONT> <FONT size=1 face="Georgia,Times New Roman,Times,serif">B1</FONT></TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">100.0 million</FONT></TD>

   <TD width="2%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif"></FONT></TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">May 2011</FONT></TD>

   <TD width="2%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif"></FONT></TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">May 2020</FONT></TD>

   <TD width="2%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif"></FONT></TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">Libor + 2.69%</FONT></TD></TR>

<TR vAlign=bottom>

   <TD width="21%" colSpan=2 align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">1983</FONT> <FONT size=1 face="Georgia,Times New Roman,Times,serif">B2</FONT></TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">50.0 million</FONT></TD>

   <TD width="2%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif"></FONT></TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">May 2011</FONT></TD>

   <TD width="2%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif"></FONT></TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">May 2018</FONT></TD>

   <TD width="2%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif"></FONT></TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">Libor + 2.49%</FONT></TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Interest is being paid on a semiannual basis since November 2008. The balance of this loan agreement as of December 31, 2012 was US$202,115 million, equivalent to R$410,513 (R$421,266 in December 2011), less part of the loans costs, totaling R$2,510 (R$2,771 in December 2011), which will be repaid over the agreement term.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Financial covenants &#8211; Calculated every quarter upon the disclosure of interim or annual financial statements:</FONT></P>

<UL>

<LI><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company&#8217;s ratio of debt service coverage, determined on a consolidated basis, must be</FONT> <FONT size=2 face="Georgia,Times New Roman,Times,serif">higher than or equal to 2.35; and</FONT> </LI></UL>

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<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>to the </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Years Ended December </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>31, 2012 and 2011</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>in </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>thousands </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Brazilian </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>reais, </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

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<UL>

<LI><FONT size=2 face="Georgia,Times New Roman,Times,serif">Total adjusted debt over Ebitda, determined on a consolidated basis, must be lower than or</FONT> <FONT size=2 face="Georgia,Times New Roman,Times,serif">equal to 3.65.</FONT> </LI></UL>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The agreement has a cross default clause, i.e., if a Default Event occurs and continues (whether voluntarily or involuntarily, whether resulting from the effect of any applicable laws or according to with due to any act or omission to act by any Authority or another one), the IDB through notification to the Borrower may order the early maturity of loan or part of it as specified in the notice (including accrued interest rates) and all other obligations are overdue and shall be promptly payable.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(n) International Bank for Reconstruction and Development - IBRD</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">On October 28, 2009, the Company and &#8220;The World Bank&#8221; &#8211; International Bank for Reconstruction and Development (IBRD) signed a contract (the IBRD agreement 7662BR) amounting to US$100,000. Resources will be applied in the Environmental Sanitation Program of Alto Tiet&#234; springs&#8211; Springs Program. The amortization period will start in September 2019, in half-yearly installments and final maturity in 2034. In November 2009, a collateral agreement was signed between the Federative Republic of Brazil and IBRD, guaranteeing the provision of funds in order to comply with obligations provided for in the loan agreement. On December 31, 2012, the balance of this agreement amounted to US$26,864 thousand, corresponding to R$54,492 (R$18,928 in December 2011), less part of loans costs in the amount of R$405 (R$424 in December 2011), which will be repaid over the agreement term.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(o) Covenants</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">As of December 31, 2012 and 2011, the Company had met the requirements set forth by its loan and financing agreement.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(p) Loans and financing contracted but not used yet</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">SABESP in order to comply with its investment plan relies on a fund-raising plan.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Financing resources contracted have specific purposes, which are released for the execution of their respective investments.</FONT></P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="67%"></TD>

   <TD width="2%"></TD>

   <TD width="30%"></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Agent</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">December 31, 2012</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">(in millions of reais (*))</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Brazilian Federal Savings Bank</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,125</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Japan International Cooperation Agency - JICA</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">936</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Inter-American Development Bank - BID</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">926</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Brazilian Development Bank - BNDES</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">550</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">International Bank for Reconstruction and Development - BIRD</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">149</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Others</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">53</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">TOTAL</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">3,739</FONT></B>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-145</FONT></P></DIV>

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<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>to the </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Years Ended December </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>31, 2012 and 2011</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>in </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>thousands </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Brazilian </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>reais, </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

<HR align=left color=#000000 SIZE=1 width="100%">



<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">(*) closing quote of 12/31/2012. (US$1.00 = R$2.0435; &#165; 1.00 = R$0.02372).</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">14 Taxes Payable </FONT></B><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">(a)</FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Current assets</FONT></B></P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="36%"></TD>

   <TD width="2%"></TD>

   <TD width="6%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD></TR>

<TR vAlign=bottom>

   <TD width="36%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="6%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="26%" colSpan=3 align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">PARENT</FONT></B></TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="26%" colSpan=3 align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">CONSOLIDATED</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="36%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="6%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="26%" colSpan=3 align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">December 31,</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; TEXT-INDENT: 9pt" width="26%" colSpan=3 align=left><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">December 31,</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="36%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="6%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="36%" align=left><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Taxes recoverable</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="6%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="36%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">COFINS and PASEP</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="6%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">9.038</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="36%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Income tax and social contribution</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="6%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">100,225</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">85,852</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">100,486</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">85,854</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="36%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">IRRF (withholding income tax)</FONT>&nbsp;<FONT size=2 face=Georgia>on</FONT> </TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="6%" align=left></TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="36%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">financial investments</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="6%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">14,302</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">31,014</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">14,472</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">31,125</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="36%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Other federal taxes</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="6%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">3,238</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">590</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">3,238</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">590</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="36%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Other state taxes</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="6%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,251</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">109</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="36%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Other municipal taxes</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="6%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">656</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">437</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">656</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">437</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="36%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Total taxes payable</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="6%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">118,421</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">117,893</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">129,141</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">118,116</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">(b)</FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Liabilities</FONT></B></P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="46%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD></TR>

<TR vAlign=bottom>

   <TD width="46%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="54%" colSpan=7 align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">PARENT</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD width="46%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="26%" colSpan=3 align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Current</FONT></B></TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="26%" colSpan=3 align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Noncurrent</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="46%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="26%" colSpan=3 align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">December 31,</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="26%" colSpan=3 align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">December 31,</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="46%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="46%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">COFINS and PASEP</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">46,576</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">57,052</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="46%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">PAES (tax debt refinancing program)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">19,011</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">36,716</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">18,363</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="46%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">INSS (Social Security Contribution)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">29,401</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">25,630</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="46%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">IRRF (withholding income tax)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">41,588</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">44,168</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="46%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Other</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">16,134</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">17,228</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="46%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Total</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">152,710</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">180,794</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">18,363</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-146</FONT></P></DIV>

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<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV>

<A name="page_147"></A><BR>

<DIV style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%">

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>to the </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Years Ended December </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>31, 2012 and 2011</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>in </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>thousands </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Brazilian </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>reais, </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

<HR align=left color=#000000 SIZE=1 width="100%">



<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="39%"></TD>

   <TD width="2%"></TD>

   <TD width="14%"></TD>

   <TD width="2%"></TD>

   <TD width="14%"></TD>

   <TD width="2%"></TD>

   <TD width="13%"></TD>

   <TD width="2%"></TD>

   <TD width="10%"></TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=7 align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">CONSOLIDATED</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=3 align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Current</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=3 align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Noncurrent</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=3 align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">December 31,</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=3 align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">December 31,</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Income tax and social contribution</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">110</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">COFINS and PASEP</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">46,614</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">57,073</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">PAES (tax debt refinancing program)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">19,011</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">36,716</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">18,363</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">INSS (Social Security Contribution)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">29,412</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">25,645</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">IRRF (withholding income tax)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">41,607</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">44,172</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Other</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">16,367</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">17,516</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Total</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">153,121</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">181,122</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">18,363</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The decrease of R$27,634 in consolidated current liabilities mainly arises from the payments made in 2012, from the due installments of the Special Tax Installment Payment Program (Paes).</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The reduction of R$18,363 in consolidated noncurrent liabilities occurred as a result of payment and transfer flow of long-term to short term balance of the Parent Company&#8217;s Special Tax Installment Payment Program (PAES), according to the information below.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company applied for enrollment in PAES on July 15, 2003, in accordance with Law </FONT><FONT size=2 face="Georgia,Times New Roman,Times,serif">N</FONT><U><SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">o </FONT></SUP></U><FONT size=2 face="Georgia,Times New Roman,Times,serif">10,684 of May 30, 2003, and included in its application the debts related to COFINS and PASEP which were involved in a legal action challenging application of Law 9718/98, and the outstanding balance under the Tax Recovery Program (REFIS). The original amount included in PAES was R$316,953, as follows:</FONT></P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="19%"></TD>

   <TD width="2%"></TD>

   <TD width="18%"></TD>

   <TD width="2%"></TD>

   <TD width="18%"></TD>

   <TD width="2%"></TD>

   <TD width="18%"></TD>

   <TD width="2%"></TD>

   <TD width="18%"></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="19%" align=left><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Tax</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="18%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Principal</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="18%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Fine</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="18%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Interest</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="18%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Total</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=9>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="19%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">COFINS</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="18%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">132,499</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="18%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">13,250</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="18%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">50,994</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="18%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">196,743</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="19%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">PASEP</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="18%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">5,001</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="18%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">509</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="18%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">2,061</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="18%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">7,571</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="19%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">REFIS</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="18%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">112,639</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="18%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="18%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="18%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">112,639</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="19%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Total</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="18%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">250,139</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="18%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">13,759</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="18%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">53,055</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="18%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">316,953</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The loan related to Peas (Special Installment Payment) is being paid in 120 months. The amounts paid in 2012 and 2011 were R$37,421 and R$36,091, respectively, and financial expenses of R$1,353 and R$2,761, respectively, were recorded. The outstanding balance as of December 31, 2012 was R$19,011 (R$55,079 in December 2011). The assets offered as guarantee in REFIS, totaling R$249,034, are still guaranteeing the amounts in the PAES program.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-147</FONT></P></DIV>

<HR align=center SIZE=2 width="100%" noShade>



<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV>

<A name="page_148"></A><BR>

<DIV style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%">

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>to the </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Years Ended December </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>31, 2012 and 2011</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>in </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>thousands </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Brazilian </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>reais, </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

<HR align=left color=#000000 SIZE=1 width="100%">



<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">15 Deferred Taxes and Contributions </FONT></B><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">(a) </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Balances</FONT></B></P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="48%"></TD>

   <TD width="2%"></TD>

   <TD width="11%"></TD>

   <TD width="2%"></TD>

   <TD width="11%"></TD>

   <TD width="2%"></TD>

   <TD width="11%"></TD>

   <TD width="2%"></TD>

   <TD width="11%"></TD></TR>

<TR vAlign=bottom>

   <TD width="48%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="24%" colSpan=3 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">PARENT</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; TEXT-INDENT: 4.44pt" width="24%" colSpan=3 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">CONSOLIDATED</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="48%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; TEXT-INDENT: 13.919pt" width="24%" colSpan=3 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Dece</FONT></B><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">mber 31</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; TEXT-INDENT: 13.979pt" width="24%" colSpan=3 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">December 31</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="48%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="48%" align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Deferred income tax assets (i)</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="48%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Provisions</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">512,107</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">575,473</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">512,107</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">575,473</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="48%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Pension obligations &#8211; G1</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">193,125</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">180,018</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">193,125</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">180,018</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="48%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Pension obligations &#8211; G0 (1)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">85,271</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">85,271</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">85,271</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">85,271</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="48%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Donations of underlying assets on concession</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="48%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">agreements</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">41,312</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">38,213</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">41,312</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">38,213</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="48%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Allowance for loan losses</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">162,670</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">135,223</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">162,670</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">135,223</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="48%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Other</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">97,425</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">77,175</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">103,254</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">78,717</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="48%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Total deferred tax assets</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,091,910</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,091,373</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,097,739</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,092,915</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=9>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="48%" align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Deferred income tax liabilities (ii)</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="48%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Temporary difference on concession intangible assets</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(650,093)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(692,210)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(650,093)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(692,210)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="48%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Capitalization of loans costs</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(158,298)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(101,507)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(158,298)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(101,507)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="48%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Revenue &#8211; government entities</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(77,827)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(76,773)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(77,827)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(76,773)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="48%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Other</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(69,795)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(42,957)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(70,165)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(42,962)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="48%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Total deferred tax liabilities</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(956,013)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(913,447)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(956,383)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(913,452)</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=9>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="48%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Deferred tax asset, net</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">135,897</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">177,926</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">141,356</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">179,463</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: justify"><FONT size=3 face="Georgia,Times New Roman,Times,serif">(1) </FONT><FONT size=2 face="Georgia,Times New Roman,Times,serif">Refers to the installment of R$250,798 from accounts receivable adjustment (GESP), which was accrued as loss in previous years.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-148</FONT></P></DIV>

<HR align=center SIZE=2 width="100%" noShade>



<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV>

<A name="page_149"></A><BR>

<DIV style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%">

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP</FONT></B></P>

<DIV align=left>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>to the </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Years Ended December </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>31, 2012 and 2011</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>in </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>thousands </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Brazilian </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>reais, </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

<HR align=left color=#000000 SIZE=1 width="100%">



<P style="MARGIN: 0px"><STRONG></STRONG>&nbsp;</P>

<P style="MARGIN: 0px"><STRONG>(b)</STRONG> <STRONG><FONT size=2>Realization</FONT></STRONG> </P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="40%"></TD>

   <TD width="2%"></TD>

   <TD width="13%"></TD>

   <TD width="2%"></TD>

   <TD width="13%"></TD>

   <TD width="2%"></TD>

   <TD width="13%"></TD>

   <TD width="2%"></TD>

   <TD width="13%"></TD></TR>

<TR vAlign=bottom>

   <TD width="40%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="28%" colSpan=3 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">PARENT</FONT></B></TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; TEXT-INDENT: 7.559pt" width="28%" colSpan=3 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">CONSOLIDATED</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="40%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="28%" colSpan=3 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">December 31</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; TEXT-INDENT: 17.099pt" width="28%" colSpan=3 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">December 31</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD width="40%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="13%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="13%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="13%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="13%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="40%" align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Deferred tax assets</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">to be realized within 1 year</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">193,709</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">259,784</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">193,709</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">259,784</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">to be realized after 1 year</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">898,201</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">831,589</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">904,030</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">833,131</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Total deferred tax assets</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,091,910</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,091,373</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,097,739</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,092,915</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=9>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="40%" align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Deferred tax liabilities</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">to be realized within 1 year</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(38,267)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(27,282)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(38,267)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(27,282)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">to be realized after 1 year</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(917,746)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(886,165)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(918,116)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(886,170)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Total deferred tax liabilities</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(956,013)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(913,447)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(956,383)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(913,452)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="40%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Deferred tax assets</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">135,897</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">177,926</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">141,356</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">179,463</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px"><STRONG></STRONG>&nbsp;</P>

<P style="MARGIN: 0px"><STRONG>(c)</STRONG> <STRONG><FONT size=2>Changes</FONT></STRONG> </P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="13%"></TD>

   <TD width="2%"></TD>

   <TD width="11%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="11%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="8%"></TD>

   <TD width="2%"></TD>

   <TD width="7%"></TD>

   <TD width="2%"></TD>

   <TD width="7%"></TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=13 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">PARENT</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Donations of</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">underlying</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Pension</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Pension</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">assets on</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Deferred income</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">obligations</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">obligations</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">concession</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Loan</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">tax assets</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Provisions</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">&#8211; G1</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">&#8211; G0</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">contracts</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">losses</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Other</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Total</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD colSpan=15>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">As of December 31,</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">2010</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">539,394</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">162,552</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">85,271</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">38,213</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">129,248</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">48,568</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,003,246</FONT>&nbsp;</TD></TR>

<TR>

   <TD colSpan=15>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Recorded in the</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">income statement</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">36,079</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">17,466</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">5,975</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">28,607</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">88,127</FONT>&nbsp;</TD></TR>

<TR>

   <TD colSpan=15>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">As of December 31,</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">2011</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">575,473</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">180,018</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">85,271</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">38,213</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">135,223</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">77,175</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,091,373</FONT>&nbsp;</TD></TR>

<TR>

   <TD colSpan=15>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Recorded in the</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">income statement</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(63,366)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">13,107</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">3,099</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">27,447</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">20,250</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">537</FONT>&nbsp;</TD></TR>

<TR>

   <TD colSpan=15>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">As of December 31,</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">2012</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">512,107</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">193,125</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">85,271</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">41,312</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">162,670</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">97,425</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,091,910</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="18%"></TD>

   <TD width="2%"></TD>

   <TD width="16%"></TD>

   <TD width="2%"></TD>

   <TD width="18%"></TD>

   <TD width="2%"></TD>

   <TD width="14%"></TD>

   <TD width="2%"></TD>

   <TD width="13%"></TD>

   <TD width="2%"></TD>

   <TD width="9%"></TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Temporary difference of</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Revenue &#8211;</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">intangible assets</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Capitalization of loans</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">government</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Deferred income tax liabilities</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">concession</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">costs</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">agencies</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Other</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Total</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">As of December 31, 2010</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(711,283)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(102,339)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(72,968)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(38,743)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(925,333)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Recorded in the income statement</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">19,073</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">832</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(3,805)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(4,214)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">11,886</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">As of December 31, 2011</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(692,210)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(101,507)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(76,773)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(42,957)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(913,447)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Recorded in the income statement</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">42,117</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(56,791)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(1,054)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(26,838)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(42,566)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">As of December 31, 2012</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(650,093)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(158,298)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(77,827)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(69,795)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(956,013)</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P></DIV>

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<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV></DIV>

<A name="page_150"></A><BR>

<DIV style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%">

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>to the </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Years Ended December </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>31, 2012 and 2011</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>in </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>thousands </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Brazilian </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>reais, </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

<HR align=left color=#000000 SIZE=1 width="100%">



<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="12%"></TD>

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   <TD width="13%"></TD>

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   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="8%"></TD>

   <TD width="2%"></TD>

   <TD width="8%"></TD>

   <TD width="2%"></TD>

   <TD width="7%"></TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=13 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">CONSOLIDATED</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Donations of</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

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   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">underlying</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Pension</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Pension</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">assets on</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Deferred income</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">obligations</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">obligations</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">concession</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Loan</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">tax assets</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Provisions</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">&#8211; G1</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">&#8211; G0</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">contracts</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">losses</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Other</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Total</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD colSpan=15>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">As of December</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">31,2010</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">539,394</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">162,552</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">85,271</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">38,213</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">129,248</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">50,108</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,004,786</FONT>&nbsp;</TD></TR>

<TR>

   <TD colSpan=15>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Recorded in the</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">income statement</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">36,079</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">17,466</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">5,975</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">28,609</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">88,129</FONT>&nbsp;</TD></TR>

<TR>

   <TD colSpan=15>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">As of December 31,</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">2011</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">575,473</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">180,018</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">85,271</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">38,213</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">135,223</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">78,717</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,092,915</FONT>&nbsp;</TD></TR>

<TR>

   <TD colSpan=15>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Recorded in the</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">income statement</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(63,366)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">13,107</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">3,099</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">27,447</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">24,537</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">4,824</FONT>&nbsp;</TD></TR>

<TR>

   <TD colSpan=15>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">As of December 31,</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">2012</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">512,107</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">193,125</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">85,271</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">41,312</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">162,670</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">103,254</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,097,739</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="18%"></TD>

   <TD width="2%"></TD>

   <TD width="16%"></TD>

   <TD width="2%"></TD>

   <TD width="16%"></TD>

   <TD width="2%"></TD>

   <TD width="15%"></TD>

   <TD width="2%"></TD>

   <TD width="13%"></TD>

   <TD width="2%"></TD>

   <TD width="10%"></TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Temporary</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">difference of</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Revenue &#8211;</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Deferred income tax</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">concession</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Capitalization of</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">government</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">liabilities</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">intangible assets</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">loans costs</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">agencies</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Other</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Total</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD colSpan=11>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">As of December 31, 2010</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(711,283)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(102,339)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(72,968)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(39,756)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(926,346)</FONT>&nbsp;</TD></TR>

<TR>

   <TD colSpan=11>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Recorded in the income</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">statement</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">19,073</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">832</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(3,805)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(3,206)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">12,894</FONT>&nbsp;</TD></TR>

<TR>

   <TD colSpan=11>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">As of December 31, 2011</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(692,210)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(101,507)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(76,773)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(42,962)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(913,452)</FONT>&nbsp;</TD></TR>

<TR>

   <TD colSpan=11>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Recorded in the income</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">statement</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">42,117</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(56,791)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(1,054)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(27,203)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(42,931)</FONT>&nbsp;</TD></TR>

<TR>

   <TD colSpan=11>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">As of December 31, 2012</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(650,093)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(158,298)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(77,827)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(70,165)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(956,383)</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">(d) </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Reconciliation of the effective tax rate</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The amounts recorded as income and social contribution tax expenses in the financial statements are reconciled to the statutory rates, as shown below:</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-150</FONT></P></DIV>

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<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>to the </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Years Ended December </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>31, 2012 and 2011</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>in </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>thousands </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Brazilian </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>reais, </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

<HR align=left color=#000000 SIZE=1 width="100%">



<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="2%"></TD>

   <TD width="2%"></TD>

   <TD width="37%"></TD>

   <TD width="2%"></TD>

   <TD width="11%"></TD>

   <TD width="2%"></TD>

   <TD width="13%"></TD>

   <TD width="2%"></TD>

   <TD width="14%"></TD>

   <TD width="2%"></TD>

   <TD width="10%"></TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=3 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">PARENT</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=3 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">CONSOLIDATED</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD colSpan=3 align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Profit before income taxes</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,547,672</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,721,477</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,543,904</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,720,746</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD colSpan=3 align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Statutory rate</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">34%</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">34%</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">34%</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">34%</FONT>&nbsp;</TD></TR>

<TR>

   <TD colSpan=11>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD colSpan=3 align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Estimated expenses at statutory rate</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(866,208)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(585,302)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(864,927)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(585,054)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD colSpan=3 align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Tax benefits from interest on shareholders&#8217;</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD colSpan=3 align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">equity</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">252,355</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">122,170</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">252,355</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">122,170</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD colSpan=3 align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Permanent difference</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="TEXT-INDENT: 2.098pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Provisional Law 4819/58 (i)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(32,514)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(87,118)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(32,514)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(87,118)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="TEXT-INDENT: 3.356pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Donations</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(11,447)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(13,692)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(11,447)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(13,692)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Recovery of tax credits</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">37,858</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">37,858</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="TEXT-INDENT: 3.356pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Other differences</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">22,042</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">28,026</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">24,529</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">28,509</FONT>&nbsp;</TD></TR>

<TR>

   <TD colSpan=11>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD colSpan=3 align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Income tax and social contribution</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(635,772)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(498,058)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(632,004)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(497,327)</FONT>&nbsp;</TD></TR>

<TR>

   <TD colSpan=11>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD colSpan=3 align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Current income tax and social contribution</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(593,743)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(598,024)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(594,052)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(598,303)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD colSpan=3 align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Deferred income tax and social contribution</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(42,029)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">99,966</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(37,952)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">100,976</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD colSpan=3 align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Effective rate</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">25%</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">29%</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">25%</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">29%</FONT>&nbsp;</TD></TR>

<TR>

   <TD colSpan=11>&nbsp;</TD></TR>

<TR>

   <TD colSpan=11>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">(i)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="TEXT-INDENT: 17.097pt" colSpan=7 align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Permanent difference related to the provision for actuarial liability (Note 9 (vii)).</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Transition Tax Regime (RTT)</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">For purpose to calculate the income tax and the social contribution related to 2010 and 2009, the Company opted to adopt the Transition Tax Regime (RTT), which allow eliminate the accounting effects of the Law 11,638/07 and the Provisional Measure 449/08, converted into Law No. 11,941/2009, by the registers in the fiscal books &#8211; LALUR and subsidiary controls, without any modification in the bookkeeping.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Since 2008, the Company has adopted the same fiscal practices, since RTT commenced being obligatory and will be valid until the issue of a law that consider the fiscal effects of the new accounting methods.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-151</FONT></P></DIV>

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<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP</FONT></B></P>

<DIV align=left>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>to the </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Years Ended December </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>31, 2012 and 2011</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>in </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>thousands </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Brazilian </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>reais, </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

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<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">16 Provisions</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(a) Lawsuits with probable likelihood of loss</FONT></B></P><STRONG><FONT size=2>(i)</FONT></STRONG> <STRONG><FONT size=2>Balances</FONT></STRONG>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company is party to a number of claims and legal proceedings arising in the normal course of business, including civil, tax, labor and environmental matters. Management, recognized provisions at an amount considered sufficient to cover probable losses. These provisions, net of escrow deposits based on the legal right to offset, are as follows:</FONT></P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="15%"></TD>

   <TD width="2%"></TD>

   <TD width="10%"></TD>

   <TD width="2%"></TD>

   <TD width="11%"></TD>

   <TD width="2%"></TD>

   <TD width="15%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="11%"></TD>

   <TD width="2%"></TD>

   <TD width="13%"></TD></TR>

<TR vAlign=bottom>

   <TD width="15%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="82%" colSpan=11 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">CONSOLIDATED</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD width="15%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Provisions</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="TEXT-INDENT: 2.1pt" width="11%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Escrow</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="17%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">December 31,&nbsp;</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=center><STRONG><FONT size=1>Provisions</FONT></STRONG>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Escrow</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">December 31,</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="15%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=center>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">deposits</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; TEXT-INDENT: 0pt" width="15%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=center>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">deposits</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="13%" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="15%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Customer claims (i)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">652,663</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(131,408)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">521,255</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">727,261</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(108,728)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">618,533</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="15%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Supplier claims (ii)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">290,593</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(175,437)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">115,156</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">422,595</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(1,828)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">420,767</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="15%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Other civil claims (iii)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">169,516</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(4,978)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">164,538</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">188,546</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(10,180)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">178,366</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="15%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Tax claims (iv)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">71,141</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(3,056)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">68,085</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">76,448</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">76,448</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="15%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Labor claims (v)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">173,227</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(1,529)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">171,698</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">156,536</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">156,536</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="15%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Environmental claims</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=right>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="15%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">(vi)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">149,061</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(636)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">148,425</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">121,179</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">121,179</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=13>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="15%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Total</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,506,201</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(317,044)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,189,157</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,692,565</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(120,736)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,571,829</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=13>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="15%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Current</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">565,083</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">- 565,083</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">764,070</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">764,070</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="15%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Noncurrent</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="10%" align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">941,118</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">(317,044)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">624,074</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">928,495</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="11%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(120,736)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="13%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">807,759</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<TABLE border=0 cellSpacing=0>



<TR>

   <TD vAlign=top width="2%" noWrap><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(ii)</FONT></B>&nbsp; &nbsp; &nbsp; </TD>

   <TD width="98%"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Changes</FONT></B> </TD></TR></TABLE>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="23%"></TD>

   <TD width="2%"></TD>

   <TD width="14%"></TD>

   <TD width="2%"></TD>

   <TD width="9%"></TD>

   <TD width="2%"></TD>

   <TD width="10%"></TD>

   <TD width="2%"></TD>

   <TD width="11%"></TD>

   <TD width="2%"></TD>

   <TD width="10%"></TD>

   <TD width="2%"></TD>

   <TD width="8%"></TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=11 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">CONSOLIDATED</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Interest and</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD colSpan=3 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Amounts used Amounts not</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">December</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Additional</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">inflation</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">from</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="TEXT-INDENT: 9.059pt" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">used</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">December</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; TEXT-INDENT: 4.26pt" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">31, 2011</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">provisions</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">adjustment</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">provision</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">(reversal)</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; TEXT-INDENT: 3.839pt" align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">31, 2012</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Customer claims (i)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">727,261</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">93,972</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">80,858</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(68,000)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(181,428)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">652,663</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Supplier claims (ii)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">422,595</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">17,575</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">36,393</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(174,482)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(11,488)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">290,593</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Other civil claims (iii)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">188,546</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">22,788</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">24,501</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(7,495)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(58,824)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">169,516</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Tax claims (iv)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">76,448</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">10,279</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">7,365</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(10,057)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(12,894)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">71,141</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Labor claims (v)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">156,536</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">142,976</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">34,056</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(126,787)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(33,554)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">173,227</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Environmental claims (vi)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">121,179</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">37,496</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">9,383</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(8,801)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(10,196)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">149,061</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Subtotal</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,692,565</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">325,086</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">192,556</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(395,622)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(308,384)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,506,201</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Escrow deposits</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(120,736)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(200,982)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(13,840)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">12,736</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">5,778</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(317,044)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Total</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,571,829</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">124,104</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">178,716</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(382,886)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(302,606)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 3px double" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,189,157</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-152</FONT></P></DIV>

<HR align=center SIZE=2 width="100%" noShade>



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<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>to the </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Years Ended December </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>31, 2012 and 2011</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>in </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>thousands </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Brazilian </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>reais, </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

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<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Parent Company&#8217;s balance amounts to R$1,189,154 (R$1,571,829 in December 2011). The R$3 difference was proportionally recorded in the consolidated financial information. The total amount of the lawsuits recorded in the subsidiaries is R$10, R$5 of which from &#193;guas de Andradina and R$5 from &#193;guas de Castilho.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(b) Lawsuits with possible likelihood of loss</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company is party to lawsuits and administrative proceedings relating to environmental, tax, civil and labor claims, which are assessed by Management whose chances of loss are possible and are not recorded. Liability contingencies, classified as possible loss, are represented as follows:</FONT></P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="66%"></TD>

   <TD width="2%"></TD>

   <TD width="15%"></TD>

   <TD width="2%"></TD>

   <TD width="15%"></TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="32%" colSpan=3 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">CONSOLIDATED</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">December 31, 2012</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">December 31, 2011</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=5>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Customer claims (i)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">862,100</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">844,100</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Supplier claims (ii)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">775,200</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">699,300</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Other civil claims (iii)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">362,200</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">359,600</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Tax claims (iv)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">490,900</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">420,400</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Labor claims (v)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">190,000</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">145,100</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Environmental claims (vi)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">116,300</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">153,300</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=5>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Total</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,796,700</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,621,800</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The balance of parent company amounts to R$2,796,500 (December/2011 &#8211; R$2,621,800) and the R$200 difference shown proportionally in the consolidated. The total amount of lawsuits with possible chances of losses is approximately R$670, referring to Sesamm subsidiaries in the amount of R$624, &#193;guas de Andradina in the amount of R$38 and &#193;guas de Castilho in the amount of R$8.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(c) Explanation on the nature of main classes of lawsuits</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(i) Customer claims</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Approximately 1,560 lawsuits were filed by commercial customers, which claim that their tariffs should correspond to other consumer categories, and 440 lawsuits which claim a reduction in the sewage tariff due to losses in the system, consequently requesting the refund of amounts charged by the Company. The Company was granted both favorable and unfavorable final decisions at several court levels and recognized provisions when the chances of losses are probable. The R$97,278 decrease in the lawsuits classified as probable loss (net of escrow deposits) relates to the payments made in the year and revisions of expectations caused by favorable decisions to the Company in 2012.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-153</FONT></P></DIV>

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<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>to the </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Years Ended December </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>31, 2012 and 2011</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>in </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>thousands </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Brazilian </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>reais, </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

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<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(ii) Supplier claims</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Suppliers&#8217; claims include lawsuits filed by some suppliers alleging underpayment of monetary restatements, withholding of amounts related to the understated inflation rates deriving from Real economic plan, and the economic and financial imbalance of the agreements. These lawsuits are in progress at different courts and a provision is recognized when the chances of losses are probable. The R$305,611 decrease in lawsuits whose likelihood of loss is considered probable (net of escrow deposits) is related to the payments made in the period, and the R$75,900 increase in lawsuits whose likelihood of loss is considered possible is related to interest, fees and update of lawsuits in progress.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(iii) Other civil claims</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company is a party to several civil lawsuits related to indemnities for property damage, pain and suffering, and loss of profits allegedly caused to third parties, filled at different court levels, dully accrued when classified as probable losses. The R$13,828 decrease, for lawsuits with probable chances of loss, was due to favorable decisions to the Company and payments made in 2012.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(iv) Tax claims</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The provision for tax contingencies refers mainly to issues related to tax collections challenged due to differences in the interpretation of legislation by the Company's Management, accrued when classified as probable loss. The R$70,500 increase in lawsuits with chances of possible losses is mainly related to the restatement deriving from lawsuits filed by the municipality of S&#227;o Paulo, related to ISS (services tax) collection, as outlined in item &#8220;b&#8221; below.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">(a) In 2006, the Federal Revenue Service, by means of a tax execution, assessed the Company's compliance with the tax obligations related to income tax and social contribution for calendar year 2001, and recognized taxes payable adjusted through December 31, 2012 in the amount of R$389,505 (R$379,277 in December 2011). The Company filed a timely objection and will appeal against the tax assessment at administrative level and in courts. Managements considers that the likelihood of loss of this administrative proceeding is approximately 90% considered remote and 10% possible.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">(b) The municipality of S&#227;o Paulo through law revoked the services tax exemption which until them the company withheld and thereafter issued tax deficiency notices related to the sewage service and ancillary activities, in the updated amount of R$264,627 (December/2011 &#8211;R$224,349), which currently are subject-matter of Tax Foreclosures, classified by the Management as possible losses. SABESP filed a writ of mandamus against this revocation, which was rejected, and currently is under phase of appealability of Special and Extraordinary Appeals filed. Writs of prevention and actions for annulment were also filed, aiming the suspension of enforceability of credits and the annulment of tax deficiency notices, as it understands that notwithstanding the exemption revocation, the sewage activities and ancillary activities are not included in the list of activities subject to taxation by municipality. Since there is no final decision</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-154</FONT></P></DIV>

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<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>to the </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Years Ended December </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>31, 2012 and 2011</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>in </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>thousands </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Brazilian </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>reais, </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

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<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">on the merit, the Company&#8217;s Management assessed the risk as possible losses.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">(c) The Federal Revenue Service rejected some offset requests made by the Company for the extinction of IRPJ/CSLL payable, using favorable amounts, arising from undue payments of IRPJ/CSLL, which were paid based on monthly estimates. The amount involved was adjusted through December 31, 2012 and is estimated at R$47,498 (R$44,668 in December 2011). Management assessed it has a possible loss.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">(d) The Company requested an authorization to offset the Corporate Income Tax (IRPJ) and Social Contribution on Net Income (CSLL) of the period of July, August and September 2002 against the amount of IRPJ paid in excess in 1997 and 1998, due to monetary restatement over the financial statements (Law 8.200/91), which was anticipated in 1996 due to an injunction, after excluded by giving up the process and adopted the Provisional Measure 38/02. The Administrative Counsel of Fiscal Resources rejected the credit from 1997. The estimated amount is R$42,403 on December 31, 2012 (R$40,976 in December 2011). The Company&#180;s Management assessed this claim as a possible loss.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">(e) On June 23, 2010, the Company and the municipality of S&#227;o Paulo signed an agreement to provide water supply and sewage services. The negotiation of this agreement led to the extinction of some judicial lawsuits, but others were not part of the referred agreement, and lawsuit proceeds as usual. The remaining judicial lawsuits considered as possible and probable loss are mainly related to taxes and fines. As of December 31, 2012 the amounts of such judicial lawsuits were R$23,882 and R$39,063 (R$27,690 and R$30,118 in December 2011, respectively).</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">(f) In 2005, the Federal Revenue Service partially rejected the Company&#180;s request of offsetting tax credits related to the Corporate Income Tax (IRPJ) and the Social Contribution on Net Income (CSLL) in the amount of approximately R$56,118, and R$8,659, respectively, which relate to the period from January to April 2003, for which the Company offset prior year IRPJ and CSLL negative balances. The amounts not ratified by the authority of IRPJ and CSLL are R$11,164 and R$698, totaling R$11,862 million. As the Company obtained a partial favorable decision on this matter, the Company&#180;s legal advisors believe likelihood of loss amounts to R$6,782 (R$6,541 in December 2011) and R$1,157 (R$1,116 in December 2011) are possible and probable, respectively.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">(g) SABESP filed two writs of mandamus pleading the declaration of unconstitutional municipal law that levies the collection of taxes deriving from the use of public areas in the water and sewage network installation for the rendering of basic sanitation public utilities. The first writ of mandamus was partially granted relief, but will not have any effect because municipal laws were revoked and the second writ of mandamus awaits judgment on the municipality&#8217;s appeal, as this writ of mandamus was granted relief suspending the collection for the use of urban soil and tendering of collateral. The Management assessed the risk as possible loss, but it was not possible to estimate the amount involved, as it would be necessary to know the extension of water and sewage networks and other equipment installed in the municipality&#8217;s urban soil (public areas), as well as define the amount of related property based on the metreage applied.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-155</FONT></P></DIV>

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<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>to the </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Years Ended December </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>31, 2012 and 2011</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>in </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>thousands </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Brazilian </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>reais, </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

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<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(v) Labor claims</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company is a party to labor lawsuits, involving issues such as overtime, shift schedule, health hazard premium and hazardous duty premium, prior notice, change of function, salary equalization, and other. Part of the amount involved is in provisional or final execution at various court levels, and thus is classified as of probable or possible loss. The Company recognized a provision for claims which likelihood of loss is considered probable. The R$15,162 addition in lawsuits with probable chances of losses is mainly due to the additional provision for issues related to overtime and shift schedule, offset by payments mainly referring to shift schedule. The R$44,900 addition in the lawsuits with possible chances of losses is due to the increased number of lawsuits filed in 2012.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(vi) Environmental claims</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Environmental claims refer to several administrative proceedings and lawsuits filed by government entities, including Companhia de Tecnologia de Saneamento Ambiental &#8211; Cetesb, Public Prosecution Office of the State of S&#227;o Paulo and others, that aim affirmative and negative covenants and penalty is estimated due to failure to comply in addition to the imposition of indemnity due to environmental damages allegedly caused by the Company. The amounts accrued represent the best estimate of the Company to date, however, may differ from the amount to be disbursed as indemnity to alleged damages, in view of the current stage of referred proceedings.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">As of December 31, 2012, the total accrued amount represents the R$148,425 (R$121,179 in December 2011).</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Among the main lawsuits the Company is involved, there are four public civil actions the subject-matters of which are: a) sentence SABESP to restrain itself from discharging or releasing sewage without due treatment; b) invest in the water and sewage treatment system of the municipality, under the penalty of paying a fine; c) payment of indemnity due to environmental damages, amongst others. On December 31, 2012, the Management classified part of lawsuits as probable chances of losses, in the amount of R$127,514 (December/2011 &#8211; R$93,782) and another part as possible losses in the amount of R$85,081.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(vii) Settlements reached in 2012</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">During 2012, the Company settled several legal and administrative proceedings, and most of them totaled R$67,417. Out of this amount, R$58,742 refers to investments and R$8,675 refer to environmental compensations, the later, recorded as &#8220;other liabilities&#8221;, under the Statement of Financial Position. The accumulated balance on December 31, 2012, referring to these environmental liabilities amounted to R$28,976.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(viii) Other concession-related legal proceedings</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company is a party to concessions-related proceedings, cases in which it can lose the right of operating water supply and sewage collection services in few municipalities, including the following: a) the municipality of Cajobi filed action against SABESP claiming possession, which</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-156</FONT></P></DIV>

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<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>to the </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Years Ended December </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>31, 2012 and 2011</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>in </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>thousands </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Brazilian </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>reais, </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

<HR align=left color=#000000 SIZE=1 width="100%">



<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">was granted relief and maintained the municipality in the possession of water and sewage assets and services, assessed as probable losses; b) the municipality of Tarum&#227; filed a writ of prevention against SABESP, and the operation is maintained but the final decision is pending, with expected possible losses; c) The Company filed an ordinary action against the municipality of Santos, the operation is maintained and there is a final decision at the appellate court favorable to SABESP, with expected remote losses; d) The Company filed an ordinary action against the municipality of Presidente Prudente, the operation is maintained and there is an appellate court decision favorable to SABESP, with expected remote losses; e) The Company filed an action to recover possession against the municipality of &#193;lvares Florence, and trial court&#8217;s decision was unfavorable to SABESP; the operation is not maintained with expected possible losses; f) The Company filed an action to recover possession against the municipality of Macatuba aiming with injunction return to the possession of facilities under concession, the injunction was rejected and the operation is not maintained in the municipality up to this present date, with expected possible losses; g) The Company filed an action to recover possession against the municipality of Iper&#243;, which was deemed groundless at trial court and appellate court&#8217;s decision is pending.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT style="FONT-FAMILY: Georgia" size=2>17 Employee Benefits</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT style="FONT-FAMILY: Georgia" size=2>(a) Health benefit plan</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The health benefit plan is managed by Funda&#231;&#227;o SABESP de Seguridade Social - SABESPREV and consists of optional, free choice, health plans sponsored by contributions of SABESP and the active participants, as follows:</FONT></P>

<P><FONT size=2 face="Georgia,Times New Roman,Times,serif">. Company - 7.8% (December 31, 2011 - 7.5%) on average, of gross payroll;</FONT></P>

<P><FONT size=2 face="Georgia,Times New Roman,Times,serif">. Participating employees - 3.21% of base salary and premiums, equivalent to 2.1% of payroll, on average.</FONT></P>

<P><B><FONT style="LINE-HEIGHT: normal; FONT-FAMILY: Georgia" lang=PT-BR size=2>(b) Pension plan benefits</FONT></B></P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="66%"></TD>

   <TD width="2%"></TD>

   <TD width="15%"></TD>

   <TD width="2%"></TD>

   <TD width="15%"></TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">December 31,</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">December 31,</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Funded plan &#8211; G1 (i)</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Present value of defined benefit obligations</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,262,440</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,638,220</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Fair value of the plan assets</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(1,657,608)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(1,203,493)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Unrecognized actuarial gains (losses)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(27,663)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">103,892</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=5>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Net liabilities recognized for defined benefit obligations</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">577,169</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">538,619</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-157</FONT></P></DIV>

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<P style="TEXT-ALIGN: left"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>to the </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Years Ended December </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>31, 2012 and 2011</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>in </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>thousands </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Brazilian </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>reais, </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

<HR align=left color=#000000 SIZE=1 width="100%">



<DIV align=left>&nbsp;</DIV>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0 cellPadding=0>



<TR>

   <TD width="68%"></TD>

   <TD width="15%"></TD>

   <TD width="2%"></TD>

   <TD width="15%"></TD></TR>

<TR vAlign=bottom>

   <TD width="68%" align=left>&nbsp;</TD>

   <TD width="15%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">December 31,</FONT></B></TD>

   <TD rowSpan=5 width="2%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif"></FONT></TD>

   <TD width="15%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">December 31,</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD width="68%" align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD width="68%" align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Unfunded plan &#8211; G0 (iii)</FONT></B></TD>

   <TD width="15%" align=left>&nbsp;</TD>

   <TD width="15%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="68%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Present value of defined benefit obligations</FONT></TD>

   <TD width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,987,718</FONT></TD>

   <TD width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,581,600</FONT></TD></TR>

<TR vAlign=bottom>

   <TD width="68%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Unrecognized actuarial gains (losses) (*)</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(440,557)</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(69,522)</FONT></TD></TR>

<TR>

   <TD width="100%" colSpan=4>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="68%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Net liabilities recognized for defined benefit obligations</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,547,161</FONT></TD>

   <TD width="2%" align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,512,078</FONT></TD></TR>

<TR>

   <TD width="100%" colSpan=4>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="68%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Liability as per balance sheet &#8211; pension obligations</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,124,330</FONT></TD>

   <TD width="2%" align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,050,697</FONT></TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: left"><FONT size=2 face="Georgia,Times New Roman,Times,serif">(*) The increase in 2012 was mainly due to a reduction in the discount rate, from 5.75% in 2011 to 4.0% in 2012. Since the Company applied the &#8220;corridor&#8221; approach, actuarial losses exceeding the &#8220;corridor&#8221; limit are accounted for in the following years, as described in Note 3.19 (a).</FONT></P>

<P style="TEXT-ALIGN: left"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(i) Plan G1</FONT></B></P>

<P style="TEXT-ALIGN: left"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company sponsors a defined benefit pension plan for its employees ("Plan G1"), which is managed by Funda&#231;&#227;o SABESP de Seguridade Social &#8211; SABESPREV, the defined benefit plan is sponsored by similar contributions established in a plan of subsidy of actuarial study of SABESPREV, as follows:</FONT></P>

<UL>

<LI><FONT size=2 face="Georgia,Times New Roman,Times,serif">0.53% of the portion of the salary of participation up to 20 salaries; and</FONT>

<LI><FONT size=2 face="Georgia,Times New Roman,Times,serif">4.5% of the surplus, if any, of the portion of the salary of participation over 20 salaries.</FONT> </LI></UL>

<P style="TEXT-ALIGN: left"><FONT size=2 face="Georgia,Times New Roman,Times,serif">As of December 31, 2012, SABESP had a net actuarial liability of R$577,169 (R$538,619 as of December 31, 2011) representing the difference between the present value of the Company's defined benefit obligations to the participating employees, retired employees, and pensioners; the fair value of the related assets; and unrecognized actuarial gains (losses).</FONT></P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="68%"></TD>

   <TD width="15%"></TD>

   <TD rowSpan=7 width="2%"><FONT size=1 face="Georgia,Times New Roman,Times,serif"></FONT></TD>

   <TD width="15%"></TD></TR>

<TR vAlign=bottom>

   <TD width="68%" align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD width="68%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Defined benefit obligation, beginning of year</FONT></TD>

   <TD width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,638,220</FONT></TD>

   <TD width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,572,933</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.9pt" width="68%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Service cost</FONT></TD>

   <TD width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">27,764</FONT></TD>

   <TD width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">26,869</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.9pt" width="68%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Interest cost</FONT></TD>

   <TD width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">176,762</FONT></TD>

   <TD width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">158,069</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.9pt" width="68%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Actuarial losses (gains)</FONT></TD>

   <TD width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">488,956</FONT></TD>

   <TD width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(57,583<FONT size=1 face=Georgia>)</FONT></FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.9pt" width="68%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Benefits paid</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(69,262<FONT size=1 face=Georgia>)</FONT></FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(62,068)</FONT></TD></TR>

<TR>

   <TD width="100%" colSpan=4>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="68%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Defined benefit obligation, end of year</FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,262,440</FONT></TD>

   <TD width="2%" align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,638,220</FONT></TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-158</FONT></P>

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<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>to the </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Years Ended December </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>31, 2012 and 2011</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>in </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>thousands </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Brazilian </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>reais, </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

<HR align=left color=#000000 SIZE=1 width="100%">



<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="66%"></TD>

   <TD width="2%"></TD>

   <TD width="15%"></TD>

   <TD width="2%"></TD>

   <TD width="15%"></TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Fair value of plan assets, beginning of year</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,203,493</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,113,189</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.9pt" width="66%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Expected return on plan assets</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">147,548</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">111,307</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.9pt" width="66%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Actuarial gain (loss)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">357,400</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">18,805</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.9pt" width="66%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Company's contributions</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">7,411</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">8,853</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.9pt" width="66%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Employees' contributions</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">11,018</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">13,407</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.9pt" width="66%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Benefits paid</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(69,262)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(62,068)</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=5>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Fair value of plan assets, end of year</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,657,608</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,203,493</FONT>&nbsp;</TD></TR>

<TR>

   <TD></TD>

   <TD></TD>

   <TD></TD>

   <TD></TD>

   <TD></TD></TR>

<TR>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD align=left><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">Current service cost</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">27,764</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">26,869</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">Interest cost</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">176,762</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">158,069</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">Expected return on plan assets</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">(147,548)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">(111,307)</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">Subtotal</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">56,978</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">73,631</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD align=left><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">Participants contribution</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">(11,018)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT color=#000000 size=1 face="Georgia,Times New Roman,Times,serif">(13,407)</FONT>&nbsp;</TD></TR>

<TR>

   <TD align=left><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">Total recognized in the income statement</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">45,960</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT color=#000000 size=1 face="Georgia-Bold,Times New Roman,Times,serif">60,224</FONT></B>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<DIV align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">In 2012, the expenses related to defined pension plan amounting to R$32,522, R$5,412 and R$8,026, were recorded in cost of sales and services, selling expenses and administrative expenses, and R$46,133, R$7,402 and R$6,689 in 2011, respectively.</FONT></DIV>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="66%"></TD>

   <TD width="2%"></TD>

   <TD width="15%"></TD>

   <TD width="2%"></TD>

   <TD width="15%"></TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Estimated expenses</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">2013</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Cost of current service</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">38,823</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Interest cost</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">206,429</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Expected income from plan assets</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(151,139)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Participants contribution</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(10,876)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Total additional expense to be recognized</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">83,237</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=5>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=5>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Actuarial assumptions:</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=5>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Discount rate &#8211; real (NTN-B)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">4.10% p.a.</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">5.75% p.a.</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Inflation rate</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">5.00% p.a.</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">5.00% p.a.</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Expected rate of return on assets</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">9.30% p.a.</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">12.53% p.a.</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Future salary increase</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">7.10% p.a.</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">7.10% p.a.</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Mortality table</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">AT-2000</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">AT-2000</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-159</FONT></P></DIV>

<HR align=center SIZE=2 width="100%" noShade>



<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV>

<A name="page_160"></A><BR>

<DIV style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%">

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>to the </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Years Ended December </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>31, 2012 and 2011</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>in </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>thousands </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Brazilian </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>reais, </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

<HR align=left color=#000000 SIZE=1 width="100%">



<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The number of active participants as of December 31, 2012 was 9,283 (9,833 as of December 31, 2011), and of inactive participants was 6,328 (5,936 as of December 31, 2011).</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Sensitivity analysis of the pension plan as of December 31, 2012 regarding the changes in the main weighted assumptions are</FONT></B><FONT size=2 face="Georgia,Times New Roman,Times,serif">:</FONT></P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="32%"></TD>

   <TD width="2%"></TD>

   <TD width="35%"></TD>

   <TD width="2%"></TD>

   <TD width="28%"></TD></TR>

<TR vAlign=bottom>

   <TD align=left><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Funded plan - G1</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Impact on present</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Change in</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">value of the defined</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">assumption</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">benefit obligations</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Discount rate</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Increase of 0.5%</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">Decrease of 6.87%</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Decrease of 0.5%</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">Increase of 7.70%</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Wage increase rate</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Increase of 0.5%</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">Increase of 2.83%</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Decrease of 0.5%</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">Decrease of 2.53%</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Life expectation</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Increase of 1 year</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">Increase of 1.73%</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Plan assets</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The plan investment policies and strategies are aim at getting consistent returns and reduce the risks associated to the utilization of financial assets available on the Capital Markets through diversification, considering factors, such as the liquidity needs and the long-term nature of the plan liability, types and availability of financial instruments in the local market, general economic conditions and forecasts as well as requirements under the law. The plan's asset allocation management strategies are determined with the support of reports and analysis prepared by SABESPREV and independent financial consultants:</FONT></P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="38%"></TD>

   <TD width="2%"></TD>

   <TD width="41%"></TD>

   <TD width="2%"></TD>

   <TD width="15%"></TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Allocation - %</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">December 31,</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">December 31,</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Segment</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Fixed rate securities</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">67%</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">69%</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Equity securities</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">16%</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">17%</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Structured investment</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">14%</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">9%</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Real estate</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">2%</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">3%</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Loans</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1%</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">2%</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Total</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">100%</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">100%</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Restrictions with respect to asset portfolio investments, in the case of federal government securities:</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-160</FONT></P></DIV>

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<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV>

<A name="page_161"></A><BR>

<DIV style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%">

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>to the </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Years Ended December </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>31, 2012 and 2011</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>in </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>thousands </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Brazilian </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>reais, </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

<HR align=left color=#000000 SIZE=1 width="100%">



<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">i) papers securitized by the National Treasury will not be permitted; ii) exposure to fluctuations in exchange rates will not be permitted, in the portfolio and derivatives should only be used to hedge existing exposure.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Restrictions with respect to asset portfolio investments, in the case of variable-income securities for external management, are as follows:</FONT></P>

<TABLE border=0 cellSpacing=0>



<TR>

   <TD vAlign=top width="2%" noWrap><FONT size=2 face="Georgia,Times New Roman,Times,serif">i)</FONT>&nbsp; &nbsp; &nbsp; </TD>

   <TD width="98%"><FONT size=2 face="Georgia,Times New Roman,Times,serif">day-trade operations will not be permitted;</FONT> </TD></TR>

<TR>

   <TD vAlign=top width="2%" noWrap><FONT size=2 face="Georgia,Times New Roman,Times,serif">ii)</FONT>&nbsp; &nbsp; &nbsp; </TD>

   <TD width="98%"><FONT size=2 face="Georgia,Times New Roman,Times,serif">sale of uncovered share is prohibited;</FONT> </TD></TR>

<TR>

   <TD vAlign=top width="2%" noWrap><FONT size=2 face="Georgia,Times New Roman,Times,serif">iii)</FONT>&nbsp; &nbsp; &nbsp; </TD>

   <TD width="98%"><FONT size=2 face="Georgia,Times New Roman,Times,serif">swap operations without guarantee are prohibited;</FONT> </TD></TR>

<TR>

   <TD vAlign=top width="2%" noWrap><FONT size=2 face="Georgia,Times New Roman,Times,serif">iv)</FONT>&nbsp; &nbsp; &nbsp; </TD>

   <TD width="98%"><FONT size=2 face="Georgia,Times New Roman,Times,serif">leverage will not be permitted, i.e., operations with derivatives representing leverage of asset</FONT> </TD></TR></TABLE>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">or selling short, such operations cannot result in losses higher than invested amounts.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">SABESPREV does not have in its investment portfolio fixed income securities issued by the Company as of December 31, 2012 and 2011. The real estate held in the portfolio is not used by the Company.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The plan assets had a return of 16.7% in 2012 and 13.7% in 2011.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company expects contributions to Plan G1 for the year ending December 31, 2013 in the amount of R$10,876.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company and Sabesprev are in process of negotiation to resolve the actuarial deficit, by continuing migrating participants from the Defined Benefit Plan to Sabesprev Mais Plan. Management expects to reduce the actuarial deficit due to the change of the referred plans.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(ii) Private pension plan benefits &#8211; Defined contribution</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">As of December 31, 2012, Sabesprev Mais plan, based on defined contribution, had 4,569 active and assisted participants.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">With respect to the Sabesprev Mais plan, the contributions from the sponsor represent 100% over the total basic contribution from the participants.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Regarding the Sabesprev Mais plan, the commitment to all participants who migrated up to December 31, 2012, as per the actuarial report, amounted to R$12,441 (R$14,688 in December 2011) referred to active participants. The Company has made payments in the amount of R$7,496 in 2012 (R$10,241 in December 2011).</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(iii) Plan G0</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Pursuant to Law 4,819/58, employees who provided services prior to May 1974 and were retired as an employee of the Company acquired a legal right to receive supplemental pension payments, which rights are referred as "Plan G0". The Company pays these supplemental benefits on behalf of the State Government and makes claims for reimbursements from the State Government, which are recorded as receivables from related parties, limited to the amounts considered virtually certain that will be reimbursed by the State Government. As of December 31, 2012, the</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-161</FONT></P></DIV>

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<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV>

<A name="page_162"></A><BR>

<DIV style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%">

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>to the </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Years Ended December </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>31, 2012 and 2011</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>in </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>thousands </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Brazilian </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>reais, </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

<HR align=left color=#000000 SIZE=1 width="100%">



<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Company recorded a defined benefit obligation for Plan G0 of R$1,547,161 (R$1,512,078 in December 2011).</FONT></P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="68%"></TD>

   <TD width="2%"></TD>

   <TD width="15%"></TD>

   <TD width="2%"></TD>

   <TD width="11%"></TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Defined benefit obligation, beginning of year</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,512,078</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,316,706</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.9pt" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Interest cost</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">167,787</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">319,793</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.9pt" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Benefits paid</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(132,704)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">(124,421)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Defined benefit obligation, end of year</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,547,161</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,512,078</FONT>&nbsp;</TD></TR>

<TR>

   <TD colSpan=5>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">The amounts recognized in the statement of income are as follows:</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Cost of current service</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">400</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">548</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Interest cost</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">167,387</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">161,718</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Amortization (gains)/losses</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">157,527</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Total</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">167,787</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">319,793</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In 2012 and 2011, the expense related to the defined benefit obligation under Plan G0 was recorded in administrative expenses.</FONT></P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="83%"></TD>

   <TD width="2%"></TD>

   <TD width="15%"></TD></TR>

<TR vAlign=bottom>

   <TD width="83%" align=left><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Estimated expenses</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2013</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=3>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="83%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Cost of current service</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">296</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="83%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Interest cost</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">176,470</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="83%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Total additional expenses to be recognized</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">176,766</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-162</FONT></P></DIV>

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<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV>

<A name="page_163"></A><BR>

<DIV style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%">

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>to the </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Years Ended December </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>31, 2012 and 2011</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>in </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>thousands </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Brazilian </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>reais, </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

<HR align=left color=#000000 SIZE=1 width="100%">



<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The principal actuarial assumptions used:</FONT></P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="66%"></TD>

   <TD width="2%"></TD>

   <TD width="15%"></TD>

   <TD width="2%"></TD>

   <TD width="15%"></TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=5>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Discount rate &#8211; real</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">4.00% p.a.</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">5.75% p.a.</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Inflation rate</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">5.00% p.a.</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">5.00% p.a.</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Future salary increase</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">7.10% p.a.</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">7.10% p.a.</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Mortality table</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">AT-2000</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">AT-2000</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The number of active participants of Plan - Go as of December 31, 2012 was 27 (36 as of December 31, 2011). The number of beneficiaries, retirees and dependents as of December 31, 2012 was 2,318 (2,259 on December 31, 2011).</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The benefit payable from the Go pension plan expected for 2013 is R$142,267.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">The sensitivity analysis of total liabilities of pension plan on December 31, 2012 to the changes in the main weighted assumptions is:</FONT></B></P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="32%"></TD>

   <TD width="2%"></TD>

   <TD width="34%"></TD>

   <TD width="2%"></TD>

   <TD width="28%"></TD></TR>

<TR vAlign=bottom>

   <TD align=left><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Plan - G0</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Impact on present</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Change in</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">value of the defined</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">assumption</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">benefit obligations</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Discount rate</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Increase of 0.5%</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Decrease of 4.96%</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Decrease of 0.5%</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Increase of 5.42%</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Wages increase rate</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Increase of 0.5%</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Increase of 0.01%</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Decrease of 0.5%</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Decrease of 0.01%</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Life expectation</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Increase of 1 year</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Increase of 2.34%</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(c) Profit sharing</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company has a profit sharing program in accordance with an agreement with labor union and Sabesp. The period covered represents the Company fiscal year, which starts in January and ends in December. The limit of the profit sharing is one month salary for each employee, depending on performance goals reached. As of December 31, 2012 the profit distribution amounted to R$60,479 (R$56,576 in 2011).</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-163</FONT></P></DIV>

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<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>to the </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Years Ended December </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>31, 2012 and 2011</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>in </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>thousands </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Brazilian </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>reais, </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

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<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">18 Services payable</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The services account records the balances payable, mainly from services received from third parties, such as supply of electric power, reading of hydrometers and delivery of water and sewage bills, cleaning, surveillance and security services, collection, legal counsel services, audit, marketing and advertising and consulting services, among others. This account also records the amounts payable from the percentage in the revenues of S&#227;o Paulo local government (Note 11 (v)).</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">19 Equity</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(a)Authorized capital</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company is authorized to increase capital by up to R$10,000,000 (R$10,000,000 in December 2011), based on a Board of Directors' resolution, after submission to the Fiscal Council.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(b)Subscribed and paid-in capital</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Subscribed and paid-in capital is represented by 227,836,623 registered, book-entry common shares as of December 31, 2012 and 2011, without par value, held as follows:</FONT></P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="42%"></TD>

   <TD width="2%"></TD>

   <TD width="15%"></TD>

   <TD width="2%"></TD>

   <TD width="9%"></TD>

   <TD width="2%"></TD>

   <TD width="16%"></TD>

   <TD width="2%"></TD>

   <TD width="8%"></TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="TEXT-INDENT: 0pt" colSpan=3 align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">December 31,</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="TEXT-INDENT: 0pt" colSpan=3 align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">December 31,</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=3 align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B></TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=3 align=center><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Number of</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Number of</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">shares</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">%</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">shares</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">%</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">S&#227;o Paulo State Department of Finance</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">114,508,086</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">50.26%</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">114,508,086</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">50.26%</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Companhia Brasileira de Liquida&#231;&#227;o e</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Cust&#243;dia</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">57,523,374</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">25.25%</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">52,990,545</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">23.26%</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Bank Of New York ADR Department</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.898pt" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">(equivalent in shares) (*)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">55,602,286</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">24.40%</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">60,144,856</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">26.40%</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Other</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">202,877</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">0.09%</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">193,136</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">0.08%</FONT>&nbsp;</TD></TR>

<TR>

   <TD colSpan=9>&nbsp;</TD></TR>

<TR>

   <TD colSpan=9>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">227,836,623</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">100.0%</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">227,836,623</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">100.0%</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<TABLE border=0 cellSpacing=0>



<TR>

   <TD vAlign=top width="2%" noWrap><FONT size=2 face="Georgia,Times New Roman,Times,serif">(*)</FONT>&nbsp; &nbsp; &nbsp; </TD>

   <TD width="98%"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Each ADR corresponds to 2 shares. As of January 24, 2013, each ADR corresponds to 1 share. See Note 28(v)</FONT> </TD></TR></TABLE>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Subscribed and paid-in capital is represented by 227,836,623 registered, book-entry common shares, without par value as of January 1, 2012 and December 31, 2012; there was no change during the year.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-164</FONT></P></DIV>

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<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>to the </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Years Ended December </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>31, 2012 and 2011</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>in </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>thousands </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Brazilian </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>reais, </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

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<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(c)Dividends</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Shareholders are entitled to a minimum mandatory dividend of 25% of the adjusted net income under Brazilian GAAP, calculated according to the Brazilian Corporate Law. The dividends do not bear interest and the amounts not claimed within three years from the date of the Shareholders' Meeting that approved them mature in favor of the Company.</FONT></P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="83%"></TD>

   <TD width="2%"></TD>

   <TD width="15%"></TD></TR>

<TR vAlign=bottom>

   <TD width="83%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="83%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Net income for the year</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,911,900</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="83%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">(-) Legal reserve - 5%</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">95,595</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=3>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="83%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,816,305</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=3>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=3>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="83%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Minimum mandatory dividend &#8211; 25% (R$1.9930 per share)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">454,076</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">On April 23, 2012, the Shareholders&#8217; General Meeting approved the distribution of dividends as interest on shareholders&#8217; equity amounting to R$578,705, for the 2011 fiscal year. Therefore, the amount of R$288,143 related to the surplus minimum mandatory dividends of 25%, set forth in the Bylaws, recorded in the 2011 equity under &#8220;Additional proposed dividends&#8221; was transferred to current liabilities, and these amounts were paid in June 2012. The R$578,705 interest on shareholders&#8217; equity, net of withholding income tax of R$40,882, totaled R$537,823.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company proposed dividends as interest on shareholders&#8217;equity in the amount of R$534,277 corresponding to R$2.345 per common share. This interest on shareholders&#8217; equity, net of income tax of R$39,863, totaled R$494,414 to be approved on the Shareholders&#8217; Meeting to be held on April 22, 2013.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company declared dividends payable as interest on shareholders&#8217; equity in the amount of R$454,076, which considers the minimum dividend amount set forth in the Bylaws. The amount exceeding the minimum mandatory dividend due in the year of R$80,201, was reclassified in equity to the &#8220;Additional proposed dividends&#8221; account.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The balance payable as of December 31, 2012 was R$414,355, net of withholding income tax.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(d)Capital reserve</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The capital reserve includes tax incentives and donations received by the company and may only be used for future capital increases.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(e)Legal reserve</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Earnings reserve - legal reserve is a requirement for all Brazilian corporations and represents accrual of 5% of annual net income determined based on Brazilian law, up to 20% of capital. However, we are not required to make any allocations to our legal reserve in a year in which the</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-165</FONT></P></DIV>

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<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>to the </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Years Ended December </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>31, 2012 and 2011</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>in </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>thousands </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Brazilian </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>reais, </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

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<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">legal reserve, when added to our other established capital and earnings reserves, exceeds 30% of our capital stock. The amounts allocated to such reserve may only be used to increase our capital stock or to offset losses. Therefore, they are not available for the payment of dividends.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(f)Investments reserve</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Earnings reserve - investments reserve is specifically formed by the portion corresponding to own funds assigned to the expansion of the water supply and sewage treatment systems, based on capital budget approved by the Management.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">As of December 31, 2012 and 2011, the balance of investment reserve totaled R$4,690,619 and R$3,408,591, respectively.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Pursuant to Paragraph four of Article 29 of the by-laws, the Board of Directors may propose to the Shareholders&#8217; Meeting that the remaining balance of net income for the year, after deducting the legal reserve and minimum mandatory dividends, be allocated to an investment reserve that will comply with the following criteria:</FONT></P>

<P><FONT size=3 face="Georgia,Times New Roman,Times,serif">I- </FONT><FONT size=2 face="Georgia,Times New Roman,Times,serif">its balance, jointly with the balance of the other profit reserves, except for reserves for contingencies and realizable profits, may not exceed the capital stock; <BR></FONT><FONT size=3 face="Georgia,Times New Roman,Times,serif">II- </FONT><FONT size=2 face="Georgia,Times New Roman,Times,serif">the reserve is intended to guarantee the investment plan and its balance may be used:</FONT></P>

<TABLE style="WIDTH: 50%" border=0 cellSpacing=0 cellPadding=0>



<TR>

   <TD vAlign=top width="2%" noWrap><FONT size=2 face="Georgia,Times New Roman,Times,serif">a)</FONT>&nbsp; &nbsp; &nbsp; </TD>

   <TD width="98%"><FONT size=2 face="Georgia,Times New Roman,Times,serif">to absorb losses, whenever necessary;</FONT> </TD></TR>

<TR>

   <TD vAlign=top width="2%" noWrap><FONT size=2 face="Georgia,Times New Roman,Times,serif">b)</FONT>&nbsp; &nbsp; &nbsp; </TD>

   <TD width="98%"><FONT size=2 face="Georgia,Times New Roman,Times,serif">to distribute dividends, at any moment;</FONT> </TD></TR>

<TR>

   <TD vAlign=top width="2%" noWrap><FONT size=2 face="Georgia,Times New Roman,Times,serif">c)</FONT>&nbsp; &nbsp; &nbsp; </TD>

   <TD width="98%"><FONT size=2 face="Georgia,Times New Roman,Times,serif">in share redemption, reimbursement or purchase transactions authorized by law;</FONT> </TD></TR>

<TR>

   <TD vAlign=top width="2%" noWrap><FONT size=2 face="Georgia,Times New Roman,Times,serif">d)</FONT>&nbsp; &nbsp; &nbsp; </TD>

   <TD width="98%"><FONT size=2 face="Georgia,Times New Roman,Times,serif">to increase capital stock.</FONT> </TD></TR></TABLE>

<DIV align=left><STRONG><FONT size=2></FONT></STRONG>&nbsp;</DIV>

<DIV align=left><STRONG><FONT size=2>(g)</FONT></STRONG> <STRONG><FONT size=2>Allocation of profit for the year</FONT></STRONG> </DIV>

<DIV align=left>&nbsp;</DIV>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD colSpan=5>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">(+)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Net income for the year</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,911,900</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">(-)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Legal reserve &#8211; 5%</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">95,595</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">(-)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Minimum mandatory dividends</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">454,076</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">(-)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Additional proposed dividends</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">80,201</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD colSpan=3 align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Investment reserve recorded in 2012</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,282,028</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(h) Retained earnings (accumulated losses)</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Retained earnings (accumulated losses): the statutory balance of this account is zero as all retained earnings must be distributed or allocated to an earnings reserve at year end.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-166</FONT></P></DIV>

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<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>to the </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Years Ended December </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>31, 2012 and 2011</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>in </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>thousands </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Brazilian </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>reais, </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

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<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">20 Earnings per Share Basic and diluted</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Basic earnings per share is calculated by dividing the income attributable to the Company&#8217;s shareholders by the weighted average number of outstanding common shares during the year. The Company does not have potentially dilutive common shares outstanding or debts convertible into common shares. Accordingly, basic and diluted earnings per share are equal.</FONT></P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="60%"></TD>

   <TD width="2%"></TD>

   <TD width="21%"></TD>

   <TD width="2%"></TD>

   <TD width="13%"></TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Income attributable to the Company&#8217;s shareholders</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,911,900</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">1,223,419</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Weighted average number of common shares issued</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">227,836,623</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">227,836,623</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Basic and diluted earnings per share (</FONT><I><FONT size=2 face="Georgia-Italic,Times New Roman,Times,serif">reais </FONT></I><FONT size=2 face="Georgia,Times New Roman,Times,serif">per share)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">8.39</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">5.37</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">21 Segment information</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Management, comprised by the Board of Directors and the Board of Executive Officers, has determined the operating segments used to make strategic decisions, as water supply and sewage services.</FONT></P><FONT size=2 face=Georgia>(i)</FONT> <FONT size=2 face=Georgia>Income statement</FONT>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="42%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="11%"></TD>

   <TD width="2%"></TD>

   <TD width="13%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=7 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">CONSOLIDATED</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=3 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Reconciliation</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">to the</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Balance as</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">financial</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">per financial</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Water</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Sewage</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">statements</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">statements</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD colSpan=9>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Gross revenue from sales and services - from external</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">customers</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">4,947,860</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">3,986,838</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,474,612</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">11,409,310</FONT>&nbsp;</TD></TR>

<TR>

   <TD colSpan=9>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Gross sales deductions</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(362,259)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(292,616)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(654,875)</FONT>&nbsp;</TD></TR>

<TR>

   <TD colSpan=9>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Net revenue from sales and services - from external</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">customers</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">4,585,601</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">3,694,222</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,474,612</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">10,754,435</FONT>&nbsp;</TD></TR>

<TR>

   <TD colSpan=9>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Costs, selling and administrative expenses</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(3,414,352)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(2,051,250)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(2,423,797)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(7,889,400)</FONT>&nbsp;</TD></TR>

<TR>

   <TD colSpan=9>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Income from operations before other operating</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 8.278pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">expenses, net</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,171,249</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,642,972</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">50,815</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,865,035</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-167</FONT></P></DIV>

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<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>to the </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Years Ended December </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>31, 2012 and 2011</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>in </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>thousands </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Brazilian </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>reais, </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

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<TR>

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   <TD width="13%"></TD>

   <TD width="2%"></TD>

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<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=3 align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">CONSOLIDATED</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Reconciliation</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">to the</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="TEXT-INDENT: 13.98pt" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Balance</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">financial</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">per financial</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Water</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Sewage</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">statements</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">statements</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Other operating expenses, net</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(19,775)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Financial result, net</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(301,356)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Income from operations before taxes</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,543,904</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Depreciation and amortization</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">404,803</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">335,344</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">740,147</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Reconciliation</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">to the</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="TEXT-INDENT: 13.86pt" align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Balance</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">financial</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">per financial</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Water</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Sewage</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">statements</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">statements</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Gross revenue from sales and services - from</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 8.278pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">external customers</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">4,610,204</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">3,699,916</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,234,778</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">10,544,898</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Gross sales deductions</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(334,616)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(268,645)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(603,261)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Net revenue from sales and services - from external</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 8.278pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">customers</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">4,275,588</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">3,431,271</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,234,778</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">9,941,637</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Costs, selling and administrative expenses</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(3,309,145)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(2,001,647)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(2,186,320)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(7,497,112)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Income from operations before other operating</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 8.278pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">expenses, net</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">966,443</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,429,624</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">48,458</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,444,525</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Other operating expenses, net</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(90,138)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Financial result, net</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(633,641)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Income from operations before taxes</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,720,746</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Depreciation and amortization</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">415,065</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">353,704</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">768,769</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Explanation on the reconciliation items for the Financial Statements: the impacts on gross revenues from sales and services and in costs are as follows:</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-168</FONT></P></DIV>

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<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>to the </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Years Ended December </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>31, 2012 and 2011</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>in </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>thousands </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Brazilian </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>reais, </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

<HR align=left color=#000000 SIZE=1 width="100%">



<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="66%"></TD>

   <TD width="2%"></TD>

   <TD width="15%"></TD>

   <TD width="2%"></TD>

   <TD width="15%"></TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="32%" colSpan=3 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">CONSOLIDATED</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=5>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Gross revenue from construction recognized under ICPC 1 (a)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,474,612</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,234,778</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Construction costs recognized under ICPC 1 (a)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,423,797</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,186,320</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=5>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Construction margin</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">50,815</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">48,458</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: justify"><FONT size=3 face="Georgia,Times New Roman,Times,serif">(a) </FONT><FONT size=2 face="Georgia,Times New Roman,Times,serif">Revenue from concession construction contracts is recognized in accordance with CPC 17, Construction Contracts (IAS 11), using the percentage-of-completion method. See Notes 3.3 (b) and 3.8 (a).</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">(ii) Intangible assets</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Reportable segment&#8217;s intangible assets are reconciled to total assets as follows:</FONT></P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="66%"></TD>

   <TD width="2%"></TD>

   <TD width="16%"></TD>

   <TD width="2%"></TD>

   <TD width="13%"></TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=3 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">CONSOLIDATED</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">December</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">December</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">31, 2012</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">31, 2011</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Intangible asset:</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Water supply</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">9,138,295</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">8,237,071</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Sewage services</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">11,211,925</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">10,584,402</FONT>&nbsp;</TD></TR>

<TR>

   <TD colSpan=5>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Segment assets for reportable segments</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">20,350,220</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">18,821,473</FONT>&nbsp;</TD></TR>

<TR>

   <TD colSpan=5>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Other intangible assets</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,641,702</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,320,504</FONT>&nbsp;</TD></TR>

<TR>

   <TD colSpan=5>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Total intangible assets</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">21,991,922</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">20,141,677</FONT>&nbsp;</TD></TR>

<TR>

   <TD colSpan=5>&nbsp;</TD></TR>

<TR>

   <TD colSpan=5>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">There are no liabilities allocated to the reportable segments.</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-169</FONT></P></DIV>

<HR align=center SIZE=2 width="100%" noShade>



<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV>

<A name="page_170"></A><BR>

<DIV style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%">

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>to the </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Years Ended December </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>31, 2012 and 2011</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>in </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>thousands </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Brazilian </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>reais, </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

<HR align=left color=#000000 SIZE=1 width="100%">



<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">22 Revenue per Region</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">(a) Gross revenue from sales of products and services:</FONT></P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="44%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD></TR>

<TR vAlign=bottom>

   <TD width="44%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="26%" colSpan=3 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">PARENT</FONT></B></TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="26%" colSpan=3 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">CONSOLIDATED</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="44%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=9>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="44%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Metropolitan region of S&#227;o Paulo</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">6,625,041</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">6,144,669</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">6,625,041</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">6,144,669</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="44%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Regional Systems (i)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,301,696</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,160,374</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,309,657</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,165,451</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="44%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Total (ii)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">8,926,737</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">8,305,043</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">8,934,698</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">8,310,120</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<TABLE border=0 cellSpacing=0>



<TR>

   <TD vAlign=top width="2%" noWrap><FONT size=2 face="Georgia,Times New Roman,Times,serif">(i)</FONT>&nbsp; &nbsp; &nbsp; </TD>

   <TD width="98%"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Including the municipalities operated in inland and at the coast of the State of S&#227;o Paulo.</FONT> </TD></TR>

<TR>

   <TD vAlign=top width="2%" noWrap><FONT size=2 face="Georgia,Times New Roman,Times,serif">(ii)</FONT>&nbsp; &nbsp; &nbsp; </TD>

   <TD width="98%"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Gross operating revenue from sales of products and services increased by 7.5% as of December 31, 2012 over 2011. The volume billed was up 2.7% as of December 31, 2012 and the tariff adjustment has been 5.15% since September 2012 and 6.83% since September 2011.</FONT> </TD></TR></TABLE>

<DIV align=left><FONT size=2 face=Georgia>(b)</FONT> <FONT size=2 face=Georgia>Reconciliation between gross revenue and net revenue:</FONT>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="44%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD></TR>

<TR vAlign=bottom>

   <TD width="44%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="26%" colSpan=3 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">PARENT</FONT></B></TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="26%" colSpan=3 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">CONSOLIDATED</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="44%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=9>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="44%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Gross revenue from sales and/or services</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">8,926,737</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">8,305,043</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">8,934,698</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">8,310,120</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="44%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Construction revenue (Note 11 c)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,464,482</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,224,633</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,474,612</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,234,778</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="44%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Sales tax</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(653,588)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(602,231)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(654,875)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(603,261)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="44%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Net revenues</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">10,737,631</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">9,927,445</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">10,754,435</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">9,941,637</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">23 Operating Costs and Expenses</FONT></B></P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="44%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD></TR>

<TR vAlign=bottom>

   <TD width="44%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="26%" colSpan=3 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">PARENT</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="26%" colSpan=3 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">CONSOLIDATED</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="44%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="44%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Cost of sales and services</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 13.798pt" width="44%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Salaries and payroll charges</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,224,335</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,131,774</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,225,452</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,132,403</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 13.798pt" width="44%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Pension obligations (i)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">36,480</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">49,374</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">36,480</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">49,374</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 13.798pt" width="44%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Construction costs (Note 11 c)</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,414,409</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,177,045</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,423,797</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,186,320</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 13.798pt" width="44%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">General supplies</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">169,097</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">147,268</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">169,389</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">147,464</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 13.798pt" width="44%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Treatment supplies</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">177,453</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">154,748</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">177,965</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">154,867</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 13.798pt" width="44%" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Outsourced services</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">724,478</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">668,138</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">725,471</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="12%" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">668,994</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-170</FONT></P></DIV>

<HR align=center SIZE=2 width="100%" noShade>



<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV>

<A name="page_171"></A><BR>

<DIV style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%">

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>to the </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Years Ended December </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>31, 2012 and 2011</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>in </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>thousands </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Brazilian </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>reais, </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

<HR align=left color=#000000 SIZE=1 width="100%">



<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="49%"></TD>

   <TD width="2%"></TD>

   <TD width="11%"></TD>

   <TD width="2%"></TD>

   <TD width="11%"></TD>

   <TD width="2%"></TD>

   <TD width="10%"></TD>

   <TD width="2%"></TD>

   <TD width="9%"></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=3 align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">PARENT</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=3 align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">CONSOLIDATED</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 13.798pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Electricity</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">588,183</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">582,410</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">589,512</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">583,418</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 13.798pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">General expenses</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">400,446</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">368,932</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">400,719</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">369,054</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 13.798pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Depreciation and amortization</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">715,070</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">739,043</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">716,613</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">739,083</FONT>&nbsp;</TD></TR>

<TR>

   <TD colSpan=9>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">6,449,951</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">6,018,732</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">6,465,398</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">6,030,977</FONT>&nbsp;</TD></TR>

<TR>

   <TD colSpan=9>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Selling expenses</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 13.798pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Salaries and payroll charges</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">198,762</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">194,747</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">198,959</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">194,832</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 13.798pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Pension obligations (i)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">6,054</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">7,942</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">6,054</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">7,942</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 13.798pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">General supplies</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">8,313</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">7,703</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">8,327</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">7,703</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 13.798pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Outsourced services</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">205,393</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">201,941</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">205,568</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">201,955</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 13.798pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Electricity</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">629</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">622</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">629</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">622</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 13.798pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">General expenses</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">77,848</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">78,654</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">78,021</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">78,660</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 13.798pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Depreciation and amortization</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">8,017</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">7,435</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">8,021</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">7,435</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 13.798pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Allowance for doubtful accounts, net of recoveries</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 13.8pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">(Note 8(c))</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">192,236</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">120,260</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">192,295</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">120,393</FONT>&nbsp;</TD></TR>

<TR>

   <TD colSpan=9>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">697,252</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">619,304</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">697,874</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">619,542</FONT>&nbsp;</TD></TR>

<TR>

   <TD colSpan=9>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Administrative expenses</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 13.798pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Salaries and payroll charges</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">168,514</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">157,704</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">171,927</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">160,262</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 13.798pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Pension plan (i)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">104,717</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">262,597</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">104,717</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">262,597</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 13.798pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">General supplies</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">4,374</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">4,142</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">5,244</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">4,267</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 13.798pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Outsourced services</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">145,673</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">123,500</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">148,405</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">125,502</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 13.798pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Electricity</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,175</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,047</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,492</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,052</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 13.798pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">General expenses</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">209,191</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">208,365</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">209,765</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">208,978</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 13.798pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Depreciation and amortization</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">15,438</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">22,226</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">15,513</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">22,251</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 13.798pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Tax expenses</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">68,295</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">61,496</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">69,065</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">61,684</FONT>&nbsp;</TD></TR>

<TR>

   <TD colSpan=9>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">717,377</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">841,077</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">726,128</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">846,593</FONT>&nbsp;</TD></TR>

<TR>

   <TD colSpan=9>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Cost, sales and administrative expenses</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 13.798pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Salaries and payroll charges</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,591,611</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,484,225</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,596,338</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,487,497</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 13.798pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Pension obligations (i)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">147,251</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">319,913</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">147,251</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">319,913</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 13.798pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Construction costs (Note 11 c)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,414,409</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,177,045</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,423,797</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,186,320</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 13.798pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">General supplies</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">181,784</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">159,113</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">182,960</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">159,434</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 13.798pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Treatment supplies</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">177,453</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">154,748</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">177,965</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">154,867</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 13.798pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Outsourced services</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,075,544</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">993,579</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,079,444</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">996,451</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 13.798pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Electricity</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">589,987</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">584,079</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">591,633</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">585,092</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 13.798pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">General expenses</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">687,485</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">655,951</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">688,505</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">656,692</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-171</FONT></P></DIV>

<HR align=center SIZE=2 width="100%" noShade>



<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV>

<A name="page_172"></A><BR>

<DIV style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%">

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>to the </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Years Ended December </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>31, 2012 and 2011</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>in </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>thousands </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Brazilian </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>reais, </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

<HR align=left color=#000000 SIZE=1 width="100%">



<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="48%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="11%"></TD>

   <TD width="2%"></TD>

   <TD width="11%"></TD>

   <TD width="2%"></TD>

   <TD width="9%"></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=3 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">PARENT</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=3 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">CONSOLIDATED</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Depreciation and amortization</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">738,525</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">768,704</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">740,147</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">768,769</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Tax expenses</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">68,295</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">61,496</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">69,065</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">61,684</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Allowance for doubtful accounts, net of recoveries</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.001pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">(Note 8(c))</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">192,236</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">120,260</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">192,295</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">120,393</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">7,864,580</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">7,479,113</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">7,889,400</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">7,497,112</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">(i) The decrease in pension obligations is due to an increase in actuarial liabilities referring to additional retirement and pension benefits granted by State Law 4819/58 (Plan G0), in the amount of R$157,527, which impacted the first quarter of 2011.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">24 Financial income and expenses</FONT></B></P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="46%"></TD>

   <TD width="2%"></TD>

   <TD width="11%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="9%"></TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=3 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">PARENT</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=3 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">CONSOLIDATED</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Financial expenses</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Interest and charges on loans and financing &#8211; local</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">currency</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(304,736)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(354,813)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(306,794)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(355,526)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Interest and charges on loans and financing &#8211; foreign</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">currency</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(87,800)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(79,816)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(87,800)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(79,816)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Other financial expenses</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(33,860)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(21,578)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(36,394)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(21,743)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Income tax on international remittances</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(11,660)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(9,795)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(11,660)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(9,795)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Inflation adjustment on loans and financing (i)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(34,599)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(48,879)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(34,599)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(48,878)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Inflation adjustment on Sabesprev Mais deficit(ii)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(1,525)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(1,794)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(1,525)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(1,794)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Other inflation adjustments (iii)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(6,657)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(41,449)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(6,657)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(41,449)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Interest and inflation adjustments on provisions</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(97,393)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(143,765)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(97,393)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(143,765)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Total financial expenses</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(578,230)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(701,889)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(582,822)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(702,766)</FONT>&nbsp;</TD></TR>

<TR>

   <TD colSpan=9>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Financial income</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Inflation adjustment gains (iv)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">66,497</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">89,351</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">66,514</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">89,361</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Income on short-term investments</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">162,928</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">271,847</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">163,421</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">271,973</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Interest and other income</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">103,704</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">104,555</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">102,106</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">104,592</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Total financial income</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">333,129</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">465,753</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">332,041</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">465,926</FONT>&nbsp;</TD></TR>

<TR>

   <TD colSpan=9>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Financial, net before exchange rate changes</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(245,101)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(236,136)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(250,781)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(236,840)</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-172</FONT></P></DIV>

<HR align=center SIZE=2 width="100%" noShade>



<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV>

<A name="page_173"></A><BR>

<DIV style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%">

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>to the </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Years Ended December </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>31, 2012 and 2011</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>in </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>thousands </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Brazilian </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>reais, </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

<HR align=left color=#000000 SIZE=1 width="100%">



<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="40%"></TD>

   <TD width="2%"></TD>

   <TD width="16%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="9%"></TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=3 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">PARENT</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=3 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">CONSOLIDATED</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD colSpan=9>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Exchange gains (losses), net</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Exchange rate changes on loans and financing</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(50,523)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(382,305)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(50,523)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(382,304)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Other exchange rate changes</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(43)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(96)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(56)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(97)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Exchange gains</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(5)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(14,481)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">4</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(14,400)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Exchange rate changes, net</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(50,571)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(396,882)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(50,575)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(396,801)</FONT>&nbsp;</TD></TR>

<TR>

   <TD colSpan=9>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">Financial, net</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">(295,672)</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">(633,018)</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">(301,356)</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">(633,641)</FONT></B>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<TABLE border=0 cellSpacing=0>



<TR>

   <TD vAlign=top width="2%" noWrap><FONT size=3 face="Georgia,Times New Roman,Times,serif">(i)</FONT>&nbsp; &nbsp; &nbsp; </TD>

   <TD width="98%"><FONT size=2 face="Georgia,Times New Roman,Times,serif">This inflation adjustment derives from changes in the indexes defined in loan agreements, such as, UPR, IPCA, CDI and TJLP, corresponding to 0.3%, 5.8%, 6.9% and 5.5%, respectively, in 2012 (1.2%, 6.5%, 10.9% and 6.0%, respectively, in 2011).</FONT> </TD></TR>

<TR>

   <TD width="10%">&nbsp;</TD>

   <TD width="90%"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The exposures to these rates are shown in Note 4.3.1.</FONT> </TD></TR>

<TR>

   <TD vAlign=top width="2%" noWrap><FONT size=3 face="Georgia,Times New Roman,Times,serif">(ii)</FONT>&nbsp; &nbsp; &nbsp; </TD>

   <TD width="98%"><FONT size=2 face="Georgia,Times New Roman,Times,serif">This inflation adjustment derives from the change in the National Consumer Price Index (INPC) rate of 6.2% in 2012 (6.1% in 2011), which is used to adjust the balance of SABESP&#8217;s commitment in relation to the deficit of the Sabesprev Mais pension plan.</FONT> </TD></TR>

<TR>

   <TD vAlign=top width="2%" noWrap><FONT size=3 face="Georgia,Times New Roman,Times,serif">(iii)</FONT>&nbsp; &nbsp; &nbsp; </TD>

   <TD width="98%"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Other expenses related to inflation adjustment mainly arises from the adjustment of liabilities referring to investment commitments required by the public-private partnerships and mainly from program contracts indexed by the IPC and IPCA of 5.7% and 5.8% in 2012 and 4.9% and 6.5% in 2011, respectively.</FONT> </TD></TR>

<TR>

   <TD vAlign=top width="2%" noWrap><FONT size=3 face="Georgia,Times New Roman,Times,serif">(iv)</FONT>&nbsp; &nbsp; &nbsp; </TD>

   <TD width="98%"><FONT size=2 face="Georgia,Times New Roman,Times,serif">These inflation adjustment mainly arises from the changes in the adjustment indexes of overdue trade receivables which can be IPCA (5.8% in 2012 and 6.5% in 2011) or IPC-Fipe (Consumer Price Index, 5.8% in 2012 and 6.5% in 2011), depending on the contract date, and escrow deposits, which are adjusted by the index defined by the Judiciary Branch, which varied between 6.0% in 2012 and 6.2% in 2011.</FONT> </TD></TR></TABLE>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-173</FONT></P></DIV>

<HR align=center SIZE=2 width="100%" noShade>



<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV>

<A name="page_174"></A><BR>

<DIV style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%">

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>to the </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Years Ended December </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>31, 2012 and 2011</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>in </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>thousands </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Brazilian </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>reais, </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

<HR align=left color=#000000 SIZE=1 width="100%">



<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">25 Other operating income (expenses), net</FONT></B></P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="39%"></TD>

   <TD width="2%"></TD>

   <TD width="15%"></TD>

   <TD width="2%"></TD>

   <TD width="13%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="10%"></TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=3 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">PARENT</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=3 align=center><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">CONSOLIDATED</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2012</FONT></B>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B><FONT size=1 face="Georgia-Bold,Times New Roman,Times,serif">2011</FONT></B>&nbsp;</TD></TR>

<TR>

   <TD colSpan=9>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Other operating income</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">68,364</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">72,386</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">71,764</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">72,501</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Other operating expenses (i)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(91,539)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(162,639)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(91,539)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(162,639)</FONT>&nbsp;</TD></TR>

<TR>

   <TD colSpan=9>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Other operating income (expenses), net</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(23,175)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(90,253)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(19,775)</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">(90,138)</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Other operating income is comprised of sale of property, plant and equipment, sale of contracts awarded in public bids, and indemnities and reimbursement of expenses, fines and collaterals, property leases, reuse water, PURA and Aqualog projects and services.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Other operating expenses consist mainly of write-off of property, plant and equipment due to obsolescence, discontinued construction works, unproductive wells, projects considered economically unfeasible, losses on property, plant and equipment.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">(i) mainly refers to the allowance for losses of the municipality of Diadema in 2012, totaling R$60.295, and the municipality of Mau&#225; in 2011, totaling R$85,918.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">26 Commitments</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company has agreements to manage and maintain its activities, as well as agreements to build new projects aiming at achieving the objectives proposed in its target plan. Below are the main committed amounts as of December 31, 2012:</FONT></P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="22%"></TD>

   <TD width="2%"></TD>

   <TD width="13%"></TD>

   <TD width="2%"></TD>

   <TD width="15%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD>

   <TD width="2%"></TD>

   <TD width="14%"></TD>

   <TD width="2%"></TD>

   <TD width="12%"></TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">More than</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; TEXT-INDENT: 1.74pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">1 year</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1-3 year</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">3-5 year</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=1 face="Georgia,Times New Roman,Times,serif">5 years</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">Total</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Contractual obligations -</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Expenses</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="TEXT-INDENT: 2.769pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,145,001</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">912,264</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">37,078</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">996</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,095,339</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Contractual obligations &#8211;</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Investments</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD style="TEXT-INDENT: 1.269pt" align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,258,344</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">746,046</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">25,811</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">-</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,030,201</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">Total</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=left><FONT size=1 face="Georgia,Times New Roman,Times,serif">2,403,345</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">1,658,310</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">62,889</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">996</FONT>&nbsp;</TD>

   <TD>&nbsp;</TD>

   <TD align=right><FONT size=1 face="Georgia,Times New Roman,Times,serif">4,125,540</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-174</FONT></P></DIV>

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<A name="page_175"></A><BR>

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<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>to the </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Years Ended December </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>31, 2012 and 2011</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>in </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>thousands </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Brazilian </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>reais, </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

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<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">27 Additional cash flow information</FONT></B><BR><BR><FONT size=2 face="Georgia,Times New Roman,Times,serif">Non-cash transactions:</FONT></P>

<DIV align=center>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="66%"></TD>

   <TD width="2%"></TD>

   <TD width="15%"></TD>

   <TD width="2%"></TD>

   <TD width="15%"></TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="32%" colSpan=3 align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">PARENT</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">December 31,</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">December 31,</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">2012</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">2011</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=5>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Interest capitalized</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">283,016</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">261,900</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Contractors</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">67,631</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">33,937</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Program contract commitments</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">75,434</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">43,325</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Leases</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">166,166</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">49,609</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Construction margin</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">50,072</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">47,589</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=5>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=5>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; TEXT-INDENT: 27.839pt" width="32%" colSpan=3 align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">CONSOLIDATED</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">December 31,</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">December 31,</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">2012</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=center><FONT size=2 face="Georgia,Times New Roman,Times,serif">2011</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="100%" colSpan=5>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Interest capitalized</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">296,671</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">261,900</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Contractors</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">67,631</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">33,937</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Program contract commitments</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">75,434</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">43,325</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Leases</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">166,166</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">49,609</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="66%" align=left><FONT size=2 face="Georgia,Times New Roman,Times,serif">Construction margin</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">50,815</FONT>&nbsp;</TD>

   <TD width="2%">&nbsp;</TD>

   <TD width="15%" align=right><FONT size=2 face="Georgia,Times New Roman,Times,serif">47,589</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">28 Events after the reporting period (i) Debentures 17</FONT></B><B><SUP><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">th </FONT></SUP></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">issue of Debentures</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">On February 25, 26 and 27, 2013, the Company registered, respectively, the 1</FONT><SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">st</FONT></SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">, 2</FONT><SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">nd </FONT></SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">and 3</FONT><SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">rd </FONT></SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">series of the 17</FONT><SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">th </FONT></SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">issue of nonconvertible unsecured debentures, in three series for public offering, according to Brazilian Securities and Exchange Commission (CVM) Instruction 400, with the following characteristics: Issue date: January 15, 2013 Series: Three Total amount: R$1,000,000,000.00 (one billion reais) Quantity: 100,000 (one hundred thousand) Unit amount: R$10,000.00 (ten thousand reais)</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-175</FONT></P></DIV>

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<A name="page_176"></A><BR>

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<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>to the </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Years Ended December </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>31, 2012 and 2011</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>in </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>thousands </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Brazilian </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>reais, </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

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<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Series 1</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Amount: R$424,680,000.00 (four hundred twenty four million, six hundred eighty thousand reais) Quantity: 42,468 (forty-two thousand, four hundred and sixty-eight) Payment: semi-annually Amortization: 3 annual installments &#8211; January 15, 2016 (33%), 2017 (33%) and 2018 (balance) Early redemption: none Interest: DI plus 0.75% p.a.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Series 2</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Amount: R$395,230,000.00 (three hundred ninety-five million two hundred and thirty thousand reais) Quantity: 39,523 (thirty-nine thousand, five hundred and twenty-three) Payment: annually Amortization: 2 annual installments &#8211; January 15, 2019 and 2020 Early redemption: none Interest: IPCA plus 4.50% p.a.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Series 3</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Amount: R$180,090,000.00 (one hundred eighty million, ninety thousand reais) Quantity: 18,009 (eighteen thousand and nine) Payment: annual</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Amortization: 3 annual installments &#8211; January 15, 2021 (33%), 2022 (33%) and 2023 (balance) Early redemption: none Interest: IPCA plus 4.75% p.a.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The proceeds from the issue of debentures will be exclusively used as follows: (i) five hundred million reais (R$500,000,000.00) to repay financial commitments falling due in 2013; and (ii) five hundred million reais (R$500,000,000.00) for the early redemption of debentures or other Company&#8217;s debt.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">There is no estimate of optional early redemption.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">11</FONT></B><B><SUP><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">th </FONT></SUP></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">issue of Debentures</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">On March 1, 2013, the Company fully redeemed the balance of series 1 of the 11</FONT><SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">th </FONT></SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">issue of debentures, in the amount of R$1,060,428.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(ii) BNDES - Tiet&#234; Project Phase II</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Loan Agreement 01.2.619.3.1 and Onlending Agreement n</FONT><SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">o </FONT></SUP><FONT size=2 face="Georgia,Times New Roman,Times,serif">10/669.748-6 signed on August 4, 2002, which had the financial settlement of all obligations deriving from loan and onlending agreements in force, considering that the last installment of interest and amortization was paid on February 15, 2013.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-176</FONT></P></DIV>

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<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>to the </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Years Ended December </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>31, 2012 and 2011</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>in </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>thousands </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Brazilian </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>reais, </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

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<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(iii) BNDES - Tiet&#234; Project Phase III.</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">In February 2013, Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo &#8211; SABESP obtained a loan with the Brazilian Development Bank (BNDES), referring to the project to execute the Third Stage of the Tiet&#234; River Depollution Program, financed by the Inter-American Development Bank (IDB). The amount contracted is R$1,350 million and aims at implementing collectors, interceptors, collection networks and residential sewer connections, and expand the sewage treatment capacity in the metropolitan region of S&#227;o Paulo. The agreement is effective for 180 months, with a 36-month grace period and finance charges of TJLP + 1.66% p.a.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(iv) PPP &#8211; S&#227;o Louren&#231;o Production System</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">On February 7, 2013, the Company started the bidding process of Sabesp International Bidding CSS 16.402/2012 &#8211; Public-Private Partnership, by means of Administrative Concession, for the rendering of operation and maintenance services of S&#227;o Louren&#231;o Production System.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">(v) Change in the number of shares &#8211; ADRs</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Company&#8217;s Board of Directors, in a meeting held on January 10, 2013, approved (i) the change in the number of shares backing the Company&#8217;s American Depositary Receipts (&#8220;ADRs&#8221;), traded on the U.S. market at the New York Stock Exchange (&#8220;NYSE&#8221;) from current ratio of one (1) ADR to two (2) common shares to the new ratio of one (1) ADR to one (1) common share issued by the Company, mainly to promote the liquidity of these instruments; and (ii) the proposal for the stock split of common shares issued by SABESP, in ratio to be still defined by the Management, which will be appropriately submitted to the analysis of SABESP&#8217;s shareholders at the Extraordinary Shareholders&#8217; Meeting and once approved, shall result in the amendment to Article 3 of SABESP&#8217;s Bylaws, as the number of shares representing the Company&#8217;s capital stock will be changed according to the ratio to be defined.</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-177</FONT></P></DIV>

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<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>to the </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Years Ended December </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>31, 2012 and 2011</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>in </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>thousands </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Brazilian </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>reais, </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

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<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Statement of Officers on the Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">STATEMENT</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The officers of Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP, with Corporate Taxpayer&#8217;s ID (CNPJ/MF): 43.776.517/0001-80, with headquarters located at Rua Costa Carvalho, n&#186; 300, Pinheiros, S&#227;o Paulo, declare that, in compliance with Paragraph 1 of Article 25, items V and VI of CVM Instruction 480 of December 7, 2009 that:</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">They revised, discussed and agreed with the financial statements for the year ended December 31, 2012.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">S&#227;o Paulo, March 21, 2013.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo &#8211; SABESP</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">/s/ Dilma Seli Pena Chief Executive Officer</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">/s/ Rui de Britto &#193;lvares Affonso</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Chief Financial and Investor Relations Officer</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">/s/ Manuelito Pereira Magalh&#227;es Junior Corporate Management Officer</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">/s/ Manuelito Pereira Magalh&#227;es Junior</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Representing the Technology, Project and Environment Officer</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">/s/ Paulo Massato Yoshimoto Metropolitan Officer</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">/s/ Luiz Paulo de Almeida Neto Regional Systems Officer</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-178</FONT></P></DIV>

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<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>to the </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Years Ended December </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>31, 2012 and 2011</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>in </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>thousands </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Brazilian </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>reais, </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

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<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">Statement of Officers on the Report of Independent Registered Public Accounting Firm</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">STATEMENT</FONT></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The officers of Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP, with Corporate Taxpayer&#8217;s ID (CNPJ/MF): 43.776.517/0001-80, with headquarters located at Rua Costa Carvalho, n&#186; 300, Pinheiros, S&#227;o Paulo, declare that, in compliance with Paragraph 1 of Article 25, items V and VI of CVM Instruction 480 of December 7, 2009:</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">They revised, discussed and agreed with the Report of Independent Registered Public Accounting Firm on the financial statements for the year ended December 31, 2012.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">S&#227;o Paulo, March 21, 2013.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo &#8211; SABESP</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">/s/ Dilma Seli Pena Chief Executive Officer</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">/s/ Rui de Britto &#193;lvares Affonso</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Chief Financial and Investor Relations Officer</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">/s/ Manuelito Pereira Magalh&#227;es Junior Corporate Management Officer</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">/s/ Manuelito Pereira Magalh&#227;es Junior</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">Representing the Technology, Project and Environment Officer</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">/s/ Paulo Massato Yoshimoto Metropolitan Officer</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">/s/ Luiz Paulo de Almeida Neto Regional Systems Officer</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-179</FONT></P></DIV>

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<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>to the </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Years Ended December </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>31, 2012 and 2011</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>in </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>thousands </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Brazilian </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>reais, </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

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<P style="TEXT-ALIGN: justify"><B><U><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">FISCAL COUCIL REPORT</FONT></U></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The members of the Fiscal Council of COMPANHIA DE SANEAMENTO B&#193;SICO DO ESTADO DE S&#195;O PAULO &#8211; SABESP, undersigned hereinbelow, within its duties and legal responsibilities, examined the Consolidated Financial Statements, the Annual Management Report and the Management Proposal For the Allocation of Income for the year ended December 31, 2012 and based on analysis conducted, additional clarifications rendered by Management and the Audit Committee, also considering the Report of Independent Registered Public Accounting Firm of Deloitte Touche Tohmatsu, dated March 21, 2013, concluded that these are fairly presented, reason that they recommend to be sent for approval at the Shareholders' Meeting.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">S&#227;o Paulo, March 21, 2013.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">HUMBERTO MACEDO PUCCINELLI</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">JOS&#201; ANTONIO XAVIER</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">HOR&#193;CIO JOS&#201; FERRAGINO</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">ALEXANDRE LUIZ OLIVEIRA DE TOLEDO</FONT></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-180</FONT></P></DIV>

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<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>to the </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Years Ended December </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>31, 2012 and 2011</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>in </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>thousands </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Brazilian </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>reais, </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

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<P style="TEXT-ALIGN: justify"><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">AUDIT COMMITTEE REPORT</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><I><FONT size=2 face="Georgia-BoldItalic,Times New Roman,Times,serif">To the</FONT></I></B></P>

<P style="TEXT-ALIGN: justify"><B><I><FONT size=2 face="Georgia-BoldItalic,Times New Roman,Times,serif">Board of Directors of</FONT></I></B></P>

<P style="TEXT-ALIGN: justify"><B><I><FONT size=2 face="Georgia-BoldItalic,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo &#8211; SABESP</FONT></I></B></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">The Audit Committee, duly considering its responsibilities and the natural limitations arising from the scope of its performance, based on its works, including information received by the Company&#8217;s Management, Accounting Area, Internal Audit and Independent Registered Public Accounting Firm (Deloitte Touche Tohmatsu) considers that all issues it took cognizance were properly reported in the Financial Statements for the year ended December 31, 2012, accompanied by the Independent Auditor&#8217;s Report with unqualified opinion. As a result, the Audit Committee advises the Board of Directors to approve referred audited, parent company and consolidated financial statements for the year ended December 31, 2012.</FONT></P>

<P style="TEXT-ALIGN: justify"><FONT size=2 face="Georgia,Times New Roman,Times,serif">S&#227;o Paulo, March 21, 2013.</FONT></P>

<P style="TEXT-ALIGN: justify"><B><I><FONT size=2 face="Georgia-BoldItalic,Times New Roman,Times,serif">Jer&#244;nimo Antunes</FONT></I></B><BR><BR><FONT size=2 face="Georgia,Times New Roman,Times,serif">Coordinator</FONT></P>

<P style="TEXT-ALIGN: justify"><B><I><FONT size=2 face="Georgia-BoldItalic,Times New Roman,Times,serif">Heraldo Gilberto de Oliveira</FONT></I></B></P>

<P style="TEXT-ALIGN: justify"><B><I><FONT size=2 face="Georgia-BoldItalic,Times New Roman,Times,serif">Reinaldo Guerreiro</FONT></I></B></P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-181</FONT></P></DIV>

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<P style="TEXT-ALIGN: justify"><B><FONT size=3 face="Georgia-Bold,Times New Roman,Times,serif">Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo -SABESP</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Notes </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>to the </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Financial Statements</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Years Ended December </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>31, 2012 and 2011</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>in </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>thousands </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>of </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>Brazilian </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>reais, </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated </FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

<HR align=left color=#000000 SIZE=1 width="100%">



<P style="TEXT-ALIGN: justify"><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>(Amounts in thousands of Brazilian reais &#8211; R$, unless otherwise </FONT></B><B><FONT size=2 face="Georgia-Bold,Times New Roman,Times,serif">indicated</FONT></B><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>)</FONT></B></P>

<P style="TEXT-ALIGN: justify"><B><FONT size=3 face=Arial-BoldMT,Arial,Helvetica,sans-serif>CAPITAL BUDGET</FONT></B></P>

<DIV align=left>

<TABLE style="WIDTH: 100%" border=0 cellSpacing=0>



<TR>

   <TD width="28%"></TD>

   <TD width="12%"></TD>

   <TD width="12%"></TD>

   <TD width="12%"></TD>

   <TD width="12%"></TD>

   <TD width="12%"></TD>

   <TD width="12%"></TD></TR>

<TR vAlign=bottom>

   <TD rowSpan=4 width="100%" colSpan=7 align=center><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif></FONT></TD></TR>

<TR vAlign=bottom></TR>

<TR vAlign=bottom></TR>

<TR vAlign=bottom></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-TOP: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" width="28%" align=left>&nbsp;
   <IMG border=0 src="fp182.jpg"></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-TOP: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" width="72%" colSpan=6 align=center>

   <P><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif></FONT>&nbsp;</P><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>Department of Planning and Regional Development of the State of S&#227;o Paulo-SPDR</FONT><BR><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>Cia. Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP</FONT><BR><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>Chart III - Loan Structure - 2013</FONT><BR><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>2013 Company Proposal (Budget Approved by Executive Board and Board of Directors)</FONT>

   <P align=right><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>R$ thousand</FONT>&nbsp;</P></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BACKGROUND-COLOR: #ffffff; BORDER-TOP: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#000000 vAlign=top rowSpan=2 width="28%" align=right><STRONG><FONT size=2 face=Arial>Sources</FONT></STRONG> </TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-TOP: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" vAlign=middle width="36%" colSpan=3 align=center><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>LOAN OPERATION</FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-TOP: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" vAlign=middle rowSpan=3 width="12%" align=center><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>OWN FUNDS</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-TOP: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" vAlign=middle rowSpan=3 width="12%" align=center><FONT size=2 face=Arial><STRONG>STATE<BR>TREASURY</STRONG><FONT size=3 face="Times New Roman"></FONT></FONT></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-TOP: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" vAlign=middle rowSpan=3 width="12%" align=center><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>TOTAL</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-LEFT: #000000 1px solid; BORDER-TOP: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" vAlign=middle width="36%" colSpan=3 align=center><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>FINANCING</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BACKGROUND-COLOR: #ffffff; BORDER-TOP: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" bgColor=#000000 width="28%" align=left>&nbsp;<STRONG><FONT size=2 face=Arial>Investments</FONT></STRONG> </TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid" vAlign=middle width="12%" align=center><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>EXTERNAL&nbsp;</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=middle width="12%" align=center><FONT size=2 face=Arial>INTERNAL</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" vAlign=middle width="12%" align=center><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>EXT.+INT.</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; TEXT-INDENT: 2.82pt; BORDER-TOP: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" width="28%" align=left><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>INVESTMENTS</FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-TOP: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" width="12%" align=right><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>429,002</FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-TOP: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" width="12%" align=right><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>602,093</FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-TOP: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" width="12%" align=right><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>1,031,095</FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-TOP: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" width="12%" align=right><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>1,558,402</FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-TOP: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" width="12%" align=right><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>1</FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-TOP: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" width="12%" align=right><B><FONT size=2 face=Arial-BoldMT,Arial,Helvetica,sans-serif>2,589,498</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; TEXT-INDENT: 9.12pt; BORDER-TOP: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" width="28%" align=left><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>Water Supply</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-TOP: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" width="12%" align=right><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>66,176</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-TOP: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" width="12%" align=right><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>335,642</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-TOP: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" width="12%" align=right><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>401,818</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-TOP: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" width="12%" align=right><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>613,068</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-TOP: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" width="12%" align=right><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>1</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-TOP: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" width="12%" align=right><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>1,014,887</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; TEXT-INDENT: 9.12pt; BORDER-TOP: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" width="28%" align=left><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>Sewage Collection</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-TOP: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" width="12%" align=right><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>294,616</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-TOP: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" width="12%" align=right><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>182,748</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-TOP: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" width="12%" align=right><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>477,364</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-TOP: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" width="12%" align=right><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>652,739</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-TOP: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" width="12%" align=right><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>0</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-TOP: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" width="12%" align=right><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>1,130,103</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; TEXT-INDENT: 9.12pt; BORDER-TOP: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" width="28%" align=left><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>Collected Sewage Treatment</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-TOP: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" width="12%" align=right><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>68,210</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-TOP: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" width="12%" align=right><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>83,703</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-TOP: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" width="12%" align=right><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>151,913</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-TOP: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" width="12%" align=right><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>292,595</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-TOP: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" width="12%" align=right><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>0</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-TOP: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" width="12%" align=right><FONT size=2 face=ArialMT,Arial,Helvetica,sans-serif>444,508</FONT>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P>

<P style="TEXT-ALIGN: center"><FONT size=2 face="Georgia,Times New Roman,Times,serif">F-182</FONT></P>

<P style="TEXT-ALIGN: center">&nbsp;</P>

<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV>

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<DIV align=center><FONT color=#000000 size=3 face="Times New Roman"><B><U>

<DIV align=center><FONT color=#000000 size=3 face="Times New Roman"><B><U>SIGNATURE&nbsp;</U></B></FONT><FONT size=1>&nbsp;</FONT></DIV></U></B></FONT>

<DIV><FONT size=1></FONT>&nbsp;</DIV>

<DIV align=justify><FONT color=#000000 size=3 face="Times New Roman">Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the city S&#227;o Paulo, Brazil. <BR></FONT></DIV>

<DIV align=justify><FONT color=#000000 size=3 face="Times New Roman">Date:&nbsp;April 25, 2013</FONT></DIV>

<DIV><FONT size=1></FONT>&nbsp;</DIV>

<DIV align=center>

<TABLE style="WIDTH: 70%" cellSpacing=0 cellPadding=0>



<TR>

   <TD vAlign=top width="50%" colSpan=3>

   <DIV align=left><FONT color=#000000 size=3 face="Times New Roman"><B>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP </B></FONT></DIV></TD></TR>

<TR>

   <TD height=16></TD>

   <TD height=16></TD>

   <TD height=16></TD></TR>

<TR>

   <TD vAlign=top align=left><FONT color=#000000 size=2 face="Times New Roman">By:</FONT></TD>

   <TD vAlign=bottom align=left>/s/&nbsp;&nbsp;<FONT style="FONT-FAMILY: times new roman" size=3>Rui de Britto &#193;lvares Affonso</FONT>&nbsp;&nbsp;&nbsp;&nbsp;

   <HR align=left color=#000000 SIZE=1 noShade>

</TD>

   <TD></TD></TR>

<TR>

   <TD><FONT size=1>&nbsp;</FONT></TD>

   <TD vAlign=bottom width="53%" align=center>

   <DIV align=left><FONT color=#000000 size=2 face="Times New Roman">Name: Rui de Britto &#193;lvares Affonso </FONT></DIV>

   <DIV align=left><FONT color=#000000 size=2 face="Times New Roman">Title: Chief Financial Officer and Investor Relations Officer </FONT></DIV></TD>

   <TD></TD></TR></TABLE></DIV>

<DIV><FONT size=1></FONT>&nbsp;</DIV>

<P>&nbsp;</P>

<DIV><FONT size=1></FONT>&nbsp;</DIV>

<DIV align=center><FONT color=#000000 size=3 face="Times New Roman"><B>FORWARD-LOOKING STATEMENTS </B></FONT></DIV>

<P align=justify><FONT size=2 face="'Times New Roman, Times, Serif'">This press release may contain forward-looking statements. These statements are statements that are not historical facts, and are based on management's current view and estimates of future economic circumstances, industry conditions, company performance and financial results. The words "anticipates", "believes", "estimates", "expects", "plans" and similar expressions, as they relate to the company, are intended to identify forward-looking statements. Statements regarding the declaration or payment of dividends, the implementation of principal operating and financing strategies and capital expenditure plans, the direction of future operations and the factors or trends affecting financial condition, liquidity or results of operations are examples of forward-looking statements. Such statements reflect the current views of management and are subject to a number of risks and uncertainties. There is no guarantee that the expected events, trends or results will actually occur. The statements are based on many assumptions and factors, including general economic and market conditions, industry conditions, and operating factors. Any changes in such assumptions or factors could cause actual results to differ materially from current expectations. </FONT></P>

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end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
