SABESP Announces Tariff Revision

Apr 17, 2014, 22:42 ET from SABESP

SAO PAULO, April 17, 2014 /PRNewswire/ -- Companhia de Saneamento Basico do Estado de Sao Paulo - SABESP (BM&FBovespa: SBSP3; NYSE: SBS), one of the largest water and sewage service provider in the world based on the number of customers, informs that, on this date, ARSESP published ARSESP Resolution 484, which, among other measures:

a) Establishes the application, as of May 11, 2014, of a tariff repositioning index of 5.4408% in relation to current tariffs and an annual efficiency factor (Factor X) of 0.9386%, to be deducted in the upcoming annual tariff adjustments;

b) Allows the concessionaire, given the atypical situation in its market due to the lack of rainfall and the measures to encourage water savings in order to ensure supply, to apply, at a more opportune future date, the repositioning index arising from the tariff revision, proceeding to recalculate and restate the applicable amounts, in order to ensure its economic and financial balance;

c) Establishes that the next annual tariff adjustments will occur on April 11, 2015 and April 11, 2016, with the next tariff revision on April 11, 2017;

d) Approves the following annual tariff adjustment formula, to be applied during the second tariff cycle:

P t = [1 + (IPCA – X)/100] * P t-1  - FAQ t

In addition, on April 16, 2014, the Board of Directors, pursuant to item VI of article 13 of the Company's Bylaws, given the possibility established by ARSESP Resolution 484 of the Company applying a repositioning index arising from the tariff revision on an appropriate and opportune date vis-a-vis its market situation, decided to postpone the application of the repositioning index on an opportune date until the end of December 2014 at the most.

Aiming to preserve the Company's economic and financial sustainability conditions, the Board of Directors also decided to adjust the 2014 budget by R$900 million by reducing expenses and deferring investments.

The full version of ARSESP Resolution 484 is available in the Investor Relations section of Sabesp's website.

IR Contacts: Mario Arruda Sampaio: (55 11) 3388-8664 ( Angela Beatriz Airoldi: (55 11) 3388-8793 (