Indicate by check mark whether the registrant by furnishing the
information contained in this Form is also thereby furnishing the
information to the Commission pursuant to Rule 12g3-2(b) under
the Securities Exchange Act of 1934.

Yes ______ No ___X___

Companhia de Saneamento Básico do Estado de São Paulo – SABESP

Financial Statements as of

December 31, 2024 and 2023

	Companhia de Saneamento Básico do Estado de São Paulo –SABESP Table of Contents - 2024 Financial Statements

INDEPENDENT AUDITOR’S REPORT ON THE PARENT COMPANY AND CONSOLIDATED FINANCIAL STATEMENTS

To the

Shareholders and Management of

Companhia de Saneamento Básico do Estado de São Paulo - SABESP

São Paulo – SP

Opinion

We have audited the individual and consolidated financial statements of Companhia de Saneamento Básico do Estado de São Paulo - SABESP (“Company”), identified as parent company and consolidated, respectively, which comprise the statement of financial position as at December 31, 2024, and the respective statements of profit or loss, comprehensive income, changes in equity and cash flows for the year then ended, as well as the corresponding notes to the financial statements, including material accounting policies and other explanatory information.

In our opinion, the accompanying financial statements present fairly, in all material respects, the Company’s individual and consolidated financial position as at December 31, 2024, its individual and consolidated financial performance and its individual and consolidated cash flows for the year then ended in accordance with Brazilian accounting practices and International Financial Reporting Standards (IFRSs) issued by the International Accounting Standards Board (IASB).

Basis for opinion

We conducted our audit in accordance with Brazilian and International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the “Auditor’s responsibilities for the audit of the individual and consolidated financial statements” section of our report. We are independent of the Company and its controlled company in accordance with the relevant ethical principles established in the Code of Ethics for Professional Accountants and in the professional standards issued by the Brazilian Federal Council of Accounting (CFC), and we have fulfilled our other ethical responsibilities in accordance with these standards. We believe that the audit evidence obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements for the current year. These matters were addressed in the context of our audit of the individual and consolidated financial statements as a whole and in forming our opinion thereon and, accordingly, we do not provide a separate opinion on these matters.

Other matters

Statements of value added

The individual and consolidated statements of value added for the year ended December 31, 2024, prepared under the responsibility of the Company’s Management and presented as supplementary information for IFRS purposes, were submitted to the same audit procedures followed for the audit of the Company’s financial statements. In order to form an opinion, we have checked whether these statements are reconciled with the financial statements and accounting records as applicable, and whether their form and contents meet the criteria established in Technical Pronouncement CPC/NBCTG 09 - Statement of Value Added. In our opinion, the statements of value added were properly prepared, in all material respects, in accordance with the criteria established in that Technical Pronouncement and are consistent with the individual and consolidated financial statements taken as a whole.

Other information accompanying the individual and consolidated financial statements and the auditor’s report

The Company’s Management is responsible for this other information comprising the Management Report.

Our opinion on the individual and consolidated financial statements does not cover the Management Report and we do not express any form of audit conclusion thereon.

In connection with our audit of the individual and consolidated financial statements, our responsibility is to read the Management Report and, in doing so, consider whether the report is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this Management Report, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and those charged with governance for the individual and consolidated financial statements

Management is responsible for the preparation and fair presentation of the individual and consolidated financial statements in accordance with Brazilian accounting practices and the IFRS issued by IASB, 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.

In preparing the individual and consolidated financial statements, Management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless Management either intends to liquidate the Company and its controlled company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company’s and its controlled company’s financial reporting process.

Auditor’s responsibilities for the audit of the individual and consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the individual and consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but it is not a guarantee that an audit conducted in accordance with Brazilian and International Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.

As part of an audit in accordance with Brazilian and international standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal controls that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence and communicate to them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

Of the matters communicated to those charged with governance, we determine those that were of most significance for the audit of the financial statements for the current year and which are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The accompanying financial statements have been translated into English for the convenience of readers outside Brazil.

São Paulo, March 24, 2025.

BDO RCS Auditores Independentes SS Ltda. CRC 2 SP 013846/O-1

Dário Vieira De Lima

Accountant CRC 1 SP 238754/O-6

	Companhia de Saneamento Básico do Estado de São Paulo –SABESP

Management Report

COMPANY OVERVIEW

Sabesp is one of the world’s largest sanitation companies in number of customers. In 2024, it served approximately 28.1 million people with water supply and 25.1 million with sewage services, through 9.5 million water connections and 8.2 million sewage connections.

In addition to serving 375 municipalities, the Company holds a minority stake in three companies that provide water supply and sewage collection and treatment services, in addition to six other companies, in the sectors of energy, paving, and other sanitation-related services. More information on the investees is available in Note 12 to the 2024 Financial Statements.

PRIVATIZATION PROCESS

The year 2024 marked a transformative moment in Sabesp's trajectory. In July, the privatization was completed, representing an opportunity for the renewal of the Company. As a result, Sabesp became a publicly-held company with dispersed control and took on the challenge of accelerating universalization goals to 2029.

This new chapter could not have come at a more opportune time, considering the challenge ahead: to universalize basic sanitation services within the concession area, bringing dignity, health, and quality of life to the served population. The Company's new Management is enthusiastic about the growth and efficiency opportunities that lie ahead.

In this context, the position of "reference shareholder" was created and is now held by Equatorial S.A., which owns 15% of the Company's shares. As the reference shareholder, Equatorial is bound by the “Agreement of Investment, Lock-up, and Other Covenants" with the São Paulo State.

Following the privatization process, the Company's new Management took office on October 01, 2024, and is responsible for leading the transformation of the "New Sabesp”. Its main challenge is to accelerate the Universalization goals for basic sanitation from 2033 to 2029, with planned investments of approximately R$ 70 billion by 2029 and R$ 260 billion by 2060.

In parallel with the privatization process, Sabesp executed a new concession agreement with the Regional Unit of Drinking Water Supply and Sewage Services – URAE 1 – Southeast, covering 371 municipalities. This agreement incentivizes investment acceleration by remunerating it based on its regulatory asset base and universalization goals, which will be monitored starting in 2025, as outlined in Exhibit VII of the concession agreement^[1]. This agreement is already in effect and incentivizes Sabesp to accelerate its investments by compensating the Company based on its regulatory asset base. In this regard, annual tariff adjustments have been established, incorporating the asset base for the first two five-year cycles: (i) 2024 to 2029 and (ii) 2030 to 2034.

	Companhia de Saneamento Básico do Estado de São Paulo –SABESP

During the first cycle, the priority is the Universalization of basic sanitation, which will require significant investments, doubling the size of the Company's regulatory asset base to meet the main metrics of the URAE-1 Concession Agreement, which include:

It is also worth noting that, as part of a carefully structured incentive alignment to achieve the U Factor and the Q Factor, all efficiencies that Sabesp generates regarding its regulatory operating expenses (Opex) during this first cycle will be fully retained by the Company, without the obligation to share them in the customer tariff.

During the second cycle, the focus will shift toward operational efficiencies, with specific targets related to loss reduction, at which point the efficiencies will begin to be shared with our customers.

The URAE-1 agreement stipulates that service remuneration is determined based on the actual cost structure incurred during the provision of services and a predefined return on investment (WACC).

The agreement also establishes that the equilibrium tariff will be annually adjusted during the first two tariff cycles (2024-2029 and 2030-2034), and every five years from the third tariff cycle onwards during periodic tariff reviews. The key performance metrics of the agreement include the previously mentioned U and Q Factors.

In this context, to mitigate the impact of potential tariff increases on the population and support the necessary investment for Universalization, the Support Fund for the Universalization of Sanitation in the São Paulo State (FAUSP) was established, using funds obtained from the privatization that should be applied to ensure affordable tariffs, i.e. to ensure that the tariff charged by Sabesp is the fairest for customers and for the Company, without compromising service quality and efficiency.

	Companhia de Saneamento Básico do Estado de São Paulo –SABESP

In addition to the 371 municipalities under URAE-1, Sabesp also serves four other municipalities under specific agreements (Miguelópolis, Quintana, Nova Guataporanga, and Olímpia).

CULTURE

The Company fosters a culture of ethics and a strong sense of duty toward the population it serves, instilling a deep sense of pride in belonging. Aligned with this, the new Management aims to strengthen ownership mindset, meritocracy, and austerity, focusing on efficiency.

Additionally, the Company's Code of Conduct and Integrity plays a fundamental role in defining the expected behaviors from all stakeholders.

GOVERNANCE

As a publicly-held company listed on B3 S.A.’s Novo Mercado Segment, Sabesp adheres to corporate governance practices that ensure transparency, equal treatment, accountability, and corporate responsibility.

To support the first cycle of the new Agreement, the Board of Directors consists of nine members, of which three are appointed by the São Paulo State, three by Equatorial, and three are independent members, as outlined in the Investment Agreement executed between the São Paulo State and Equatorial.

The Board of Directors is supported by four statutory committees, namely (i) Audit, (ii) Eligibility and Compensation, (iii) Related-Party Transactions, (iv) Sustainability and Corporate Responsibility, composed of Board members and external members, as well as other non-statutory committees, namely (v) Performance and Finance, (vi) Regulatory Affairs, and (vii) Strategy and New Business.

The Company’s Fiscal Council is currently composed of four sitting members and three alternates.

The Executive Board is currently composed of three statutory executive officers appointed to conduct their operations.

ECONOMIC AND FINANCIAL PERFORMANCE

In 2024, Sabesp achieved a net revenue of R$ 36.1 billion (+41% vs. 2023) and a Net Income of R$ 9.6 billion (+172% vs. 2023) – the highest in its history. This allows the Company to distribute R$ 2.5 billion in dividends to its shareholders for the 2024 fiscal year. It is worth noting that the bifurcation of the financial asset generated a gain of around R$ 5.5 billion in the Company’s Net Income.

	Companhia de Saneamento Básico do Estado de São Paulo –SABESP

Financial Asset (Indemnity)

The completion of the privatization process and signing of the agreement with URAE-1 in July 2024 resulted in a single contract covering 371 municipalities with a new expiration term in 2060, providing greater legal security and granting an unconditional right to receive indemnity over the assets not fully amortized until the end of the concession. The Company recognized this modification in the contract, which led to a bifurcation of concession assets considering the contractual right that reversible and not fully amortized investments must be compensated by the end of the agreement. For further information, refer to Note 16 of the 2024 Financial Statements.

Adjusted for the bifurcation of the financial asset, the main pillars for profitability growth were (i) higher revenue from the tariff adjustment and growth in the number of new units; (ii) personnel, as a result of the Incentivized Dismissal Program carried out in 2023; (iii) dilution of fixed costs that grew below volume growth.

The adjusted net revenue from sanitation services reached R$ 21,726 million in 2024 (+9% vs. 2023), driven by:

(1) Units billed in the end of the period
Unaudited by external auditors

	Companhia de Saneamento Básico do Estado de São Paulo –SABESP

Additionally, in the second half of 2024, the eligibility criteria for the Social and Vulnerable Tariff categories were updated to incorporate the Cadastro Único (Unified Registry) concept, expanding the number of users eligible for these tariff classes. Additionally, the growth in new units in vulnerable regions increases and will increase the representation of a lower average tariff within the tariff mix.

ADMINISTRATIVE COSTS AND EXPENSES

Operating costs and expenses fell by R$ 165 million in 2024 (-1% vs. 2023), featuring the R$ 439 million reduction in personnel costs (-14% vs. 2023), due to the 11% decline in workforce size, resulting from the Incentivized Dismissal Plan implemented in 2023, which continued to impact the workforce throughout 2024.

General expenses increased by R$ 302 million (+19% vs. 2023), due to a larger number of municipalities requiring transfers to Municipal Sanitation Funds (pass-through) under the new agreement.

DEPRECIATION AND AMORTIZATION

Decrease of R$ 114 million (-4.1%) in 2024, due to the signing of the new agreement with URAE-1, effective until October 19, 2060, resulting in the reduction of the average amortization rate, which was adjusted to reflect the extended term of the agreement and, consequently the revenue-generating capacity of these assets.

INVESTMENTS

In 2024, Sabesp invested R$ 6.9 billion (+10.0% vs. 2023). To accelerate universalization goals, the Company plans to invest around R$ 70 billion by 2029, mainly in the expansion of sewage treatment systems, expanding its reach to 28.1 million users and nearly doubling its current asset base.

LEVERAGE AND CAPITAL STRUCTURE

The Company's Leverage Ratio remained virtually flat in 2024 compared to the previous year, as shown below, driven by the strong operational cash flow generation throughout 2024:

	Companhia de Saneamento Básico do Estado de São Paulo –SABESP

The Company believes that its capital structure is well-suited to its operations and industry. Historically, these capitalization metrics have enabled the Company to access official and multilateral banks, manage current investment levels, and maintain a favorable debt profile, characterized by long-term, low-cost financing.

As of December 31, 2024, the Company's equity reached R$ 36.9 billion (+24% vs. 2023). This increase was driven by retained earnings generated in 2024:

Thus, the Company believes it is fully capable of meeting its financial commitments and, as of December 31, 2024, remained compliant with all its obligations.

Due to that, the new Management expresses its gratitude to all the Company's stakeholders and is confident that this new chapter for New Sabesp will bring significant positive impacts for both the Company and its customers.

	Companhia de Saneamento Básico do Estado de São Paulo –SABESP Statements of Financial Position as of December 31, 2024 and 2023 In thousands of reais

	Companhia de Saneamento Básico do Estado de São Paulo –SABESP Statements of Financial Position as of December 31, 2024 and 2023 In thousands of reais

	Companhia de Saneamento Básico do Estado de São Paulo –SABESP Income Statements for the Years ended December 31, 2024 and 2023 In thousands of reais, unless otherwise stated

	Companhia de Saneamento Básico do Estado de São Paulo –SABESP Statements of Comprehensive Income for the Years ended December 31, 2024 and 2023 In thousands of reais

	Companhia de Saneamento Básico do Estado de São Paulo –SABESP Statements of Changes in Equity for the Years ended December 31, 2024 and 2023 In thousands of reais, unless otherwise stated

	Companhia de Saneamento Básico do Estado de São Paulo –SABESP Statements of Cash Flows for the Years ended December 31, 2024 and 2023 In thousands of reais (continued)

	Companhia de Saneamento Básico do Estado de São Paulo –SABESP Statements of Cash Flows for the Years ended December 31, 2024 and 2023 In thousands of reais (continued)

	Companhia de Saneamento Básico do Estado de São Paulo –SABESP Value Added Statements for the Years ended December 31, 2024 and 2023 In thousands of reais

	Companhia de Saneamento Básico do Estado de São Paulo –SABESP Notes to financial statements Years ended December 31, 2024 and 2023 In thousands of reais, unless otherwise stated

Companhia de Saneamento Básico do Estado de São Paulo (SABESP or Company) is a publicly-held company headquartered in the municipality of São Paulo, at Rua Costa Carvalho, 300, CEP 05429-900. The Company is engaged in the provision of basic and environmental sanitation services in the São Paulo State, and supplies treated water and sewage services on a wholesale basis.

In addition to providing basic sanitation services in the São Paulo State, SABESP may perform activities in other states and countries and can operate in drainage, urban cleaning, solid waste handling and energy markets. SABESP aims to be a world reference in the provision of sanitation services, in a sustainable, competitive, and innovative manner, with a focus on customers.

As of December 31, 2024, the Company operated water and sewage services in 375 municipalities of the São Paulo State.

As of July 23, 2024, a new Concession Agreement between SABESP and the Regional Unit of Drinking Water Supply and Sewage Services of the Southeast Region (URAE-1) became effective, covering 371 municipalities and valid until October 19, 2060.

As of December 31, 2024, the accounting balance of intangible assets, contract asset, and financial asset (indemnity) totaled R$ 65,783,885 in URAE-1, accounting for 97.82% of the consolidated. Revenue from sanitation services totaled
R$ 32,433,660, accounting for 99.33% of the consolidated.

For comparison purposes, as of December 31, 2023, the accounting balance of intangible assets and contract asset totaled R$ 49,789,584, accounting for 96.85% of the consolidated. Revenue from sanitation services totaled R$ 21,328,553, accounting for 99.14% of the consolidated.

Management expects that the funds raised with the improved water security from the works carried out, the generation of operational cash, and credit lines available for investments, will be sufficient to meet the Company’s commitments and not compromise the necessary investments.

The Company's shares have been listed on the Novo Mercado segment of B3 under ticker SBSP3 since April 2002 and on the New York Stock Exchange (NYSE) as Level III American Depositary Receipts (“ADRs”), under ticker SBS, since May 2002.

Since 2008, the Company has been setting up partnerships with other companies, which resulted in the following companies: Sesamm, Águas de Andradina, Aquapolo Ambiental, Águas de Castilho, Attend Ambiental, Paulista Geradora de Energia, Cantareira SP Energia, Barueri Energia Renovável (previously Foxx URE-BA Ambiental), and Infranext Soluções em Pavimentação. Although SABESP has no majority interest in the capital stock of these companies, the shareholders’ agreements provide for the power of veto and casting votes on certain issues jointly with associates, indicating the shared control in the management of these investees, except for Saneaqua Mairinque, which, as of August 2020, no longer has a shared control.

	Companhia de Saneamento Básico do Estado de São Paulo –SABESP Notes to financial statements Years ended December 31, 2024 and 2023 In thousands of reais, unless otherwise stated

Cyberattack

In October 2024, the Company was targeted by a ransomware cyberattack; however, no significant impact resulted from the incident. The Company immediately implemented appropriate security measures to mitigate the impacts and ensure operational continuity, including the isolation and temporary suspension of systems to protect its data. It is worth noting that the suspension of part of the systems was a preventive action following security protocols, and it did not cause significant disruptions to the Company’s operations or customer experience.

Following the implementation of emergency measures, the Company, together with its legal and technical advisors, conducted a comprehensive assessment of the incident, including a detailed analysis of its systems and data repositories. As a result of this process, all necessary actions were taken, and it was concluded that there was no significant data compromise or material impact on the Company’s operations.

Approvals

The financial statements were approved by the Board of Directors on March 24, 2025.

The Company’s financial statements have been prepared according to the International Financial Reporting Standards (IFRS), issued by the International Accounting Standards Board (IASB) and according to the accounting practices adopted in Brazil, which observe the pronouncements issued by the Brazilian Accounting Pronouncements Committee (CPC). All material information related to the financial statements, and this information alone, is being disclosed and corresponds to the information used by the Company’s Management in its administration.

The financial statements have been prepared under the historical cost except for certain financial instruments measured at fair value when required by the standards.

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 of judgment or complexity, or areas where assumptions and estimates are significant to the financial statements are described in Note 6.

The material information of the accounting policies used in the preparation of these financial statements are defined below and have been applied consistently in all years presented.

Given the relevance of the performance agreements, the Company segregated the respective amounts previously recorded under “other liabilities” in current and noncurrent liabilities for the year ended December 31, 2024 (including the comparative information for December 31, 2023), to the “performance agreements” line item in current and noncurrent liabilities, as shown below:

	Companhia de Saneamento Básico do Estado de São Paulo –SABESP Notes to financial statements Years ended December 31, 2024 and 2023 In thousands of reais, unless otherwise stated

The Company controls an entity when (i) it has power over the investee; (ii) it is exposed to, or has rights to, variable returns from its involvement with the investee; and (iii) it has the ability to use its power to affect its returns.

When the Company does not hold the majority of voting rights in an investee, it will have power over the investee when the voting rights are sufficient to give it the practical ability to unilaterally conduct the relevant activities of the investee. When assessing whether SABESP's voting rights in an investee are sufficient to give it power, the Company considers all relevant facts and circumstances, including (i) the Company's proportionate interest in voting rights regarding the interests of other voting right holders; (ii) potential voting rights held by the Company, other voting right holders, or other parties; (iii) rights arising from other contractual agreements; and (iv) any additional facts and circumstances that indicate whether the Company has the ability to conduct the relevant activities of the investee.

The financial statements of the subsidiary are included in the consolidated financial statements from the date the Company obtains control until the date when such control ceases to exist. Revenues and expenses of a subsidiary acquired or disposed of during the fiscal year are included in the results from the date the Company obtains control until the date when the Company ceases to control the subsidiary.

The subsidiary's financial statements have been prepared for the same reporting date of the parent company.

All intragroup balances, revenues, expenses, and unrealized gains and losses from intragroup transactions have been eliminated. Other comprehensive income of the parent company, where applicable, will be directly recorded in the Company’s equity, under “other comprehensive income”.

As of December 31, 2024, SABESP held 100% of direct interest in Sabesp Olímpia S/A.

	Companhia de Saneamento Básico do Estado de São Paulo –SABESP Notes to financial statements Years ended December 31, 2024 and 2023 In thousands of reais, unless otherwise stated

Cash and cash equivalents include cash in hand, bank deposits, overdraft accounts, and other short-term highly liquid investments with maturities and intention of use by the Company’s Management in a period lower than three months.

Financial assets - Classification

The Company classifies its financial assets according to the following categories: measured at amortized cost, measured at fair value through other comprehensive income and measured at fair value through profit or loss. 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, 2024, the Company had financial assets classified in the three categories mentioned above and as of December 31, 2023, they were classified under amortized cost only.

Amortized cost

This category includes financial assets that meet the following conditions (i) assets held within the business model to hold financial assets to collect contractual cash flows; and (ii) the contractual terms of the financial asset give rise, on specified dates, to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Financial assets measured at amortized cost are recorded at fair value and subsequently at amortized cost, under the effective interest rate method, except for trade receivables, which are initially measured at transaction price, as it contains no financing items, and are subsequently measured at amortized cost.

Fair value through other comprehensive income

In this category, the changes in assets and liabilities of the fair value of derivative instruments designated as cash flow hedge used by the Company to protect against the risk and variability of future cash flows from financing denominated in U.S. dollars are recognized.

Fair value through profit or loss

In this category, the changes in assets and liabilities of the fair value of derivative instruments designated as fair value used by the Company to protect against the risk and variability of financing denominated in Yen are recognized.

Financial liabilities - Classification

The Company classifies its financial liabilities measured at amortized cost or fair value through profit or loss. The classification depends on the purpose for which the financial liabilities were assumed. As of December 31, 2024, the Company had financial liabilities classified in the two categories mentioned above and, as of December 31, 2023, they were classified under amortized cost only.

	Companhia de Saneamento Básico do Estado de São Paulo –SABESP Notes to financial statements Years ended December 31, 2024 and 2023 In thousands of reais, unless otherwise stated

Amortized cost

This category includes balances payable to contractors and suppliers, borrowings and financing in local currency, services payable, balances payable from Public-Private Partnerships (PPP), and program contract commitments.

The effective interest rate method is adopted to calculate the amortized cost of a financial liability and allocate its interest expense under the respective period. The effective interest rate exactly deducts the estimated future cash flows (including fees, transaction costs, and other issue costs) over the estimated life of the financial liability or, when appropriate, during a shorter period, for the initial recognition of the net carrying amount.

Value through profit or loss

In this category, the financings denominated in U.S. dollars and Yen for which the Company contracted derivative instruments designated as cash flow hedge and fair value hedge, respectively, to protect against the risk and variability in future cash flows are recognized.

Derivative financial instruments and hedge accounting

Since 2024, the Company has been entering into foreign currency swap derivative financial instruments ("Cross currency interest rate swap") to hedge its financing denominated in foreign currency (U.S. dollar and Japanese yen). Initially, derivatives are recognized at fair value on the contract date and are subsequently remeasured at fair value. The method used for recognizing gains or losses in either profit or loss for the year or in other comprehensive income depends on whether the derivative is designated as a hedging instrument in cases where hedge accounting is applied. If so, the method depends on the nature of the item being hedged.

Starting in December 2024, the Company adopted hedge accounting and designated swap derivatives contracted as fair value hedge and cash flow hedge to protect financing denominated in foreign currency (U.S. dollar and yen).

The Company applies fair value hedge accounting to protect against the risk of fixed-rate financing denominated in foreign currency (Yen). The gain or (loss) resulting from changes in the fair value of derivatives designated and qualified as fair value hedge is recorded in the income statement under "Financial income (expenses), net", along with any changes in the fair value of the hedged financing liability. The gain or loss related to the ineffective portion of the hedge is also recognized in the income statement under "Financial income (expenses), net”.

See details in Note 5.1 (d).

The Company applies cash flow hedge accounting to protect against the risk of floating-rate financing denominated in foreign currency (U.S. dollar). Changes in the fair value of derivatives designated and qualified as cash flow hedges are recorded and accumulated under "Other Comprehensive Income (OCI)" in equity, along with changes in the fair value of the hedged financing liability, calculated at present value from the date the hedging instrument is designated.

See details in Note 5.1 (d).

	Companhia de Saneamento Básico do Estado de São Paulo –SABESP Notes to financial statements Years ended December 31, 2024 and 2023 In thousands of reais, unless otherwise stated

Hedge ineffectiveness is determined at the inception of the hedge relationship and through periodic prospective effectiveness assessments to ensure an economic relationship exists between the hedged item and the hedging instrument. The Company contracts derivatives with critical terms similar to those of the hedged items, such as reference rate, reset dates, payment dates, maturities, and notional amount.

Hedge ineffectiveness in interest rate swaps is assessed by the Company and may arise due to (i) credit valuation adjustments/debit valuation adjustments on interest rate swaps that are not matched by the borrowing; and (ii) differences in key terms between interest rate swaps and borrowings.

Where applicable, when certain derivative instruments do not qualify for hedge accounting, changes in the fair value of any of these derivative instruments are recognized immediately in the income statement under "Other operating income (expenses), net”.

Impairment of financial assets

Due to the characteristics of the Company’s accounts receivable such as (i) insignificant financial component; (ii) non-complex receivables portfolio; and (iii) low credit risk, the simplified approach of expected credit loss was adopted - it consists of recognizing the expected credit loss based on the asset’s useful life.

The methodology to calculate the allowance for doubtful accounts consisted of using an estimate calculated based on the average default observed in the last 36 months, per maturity range, in addition to estimating the recovery of credits overdue for more than 360 days, based on the track record of the last three years. It also considered the category of private and public customers and segregated accounts receivable among the regular consumption accounts and agreements. The Company concluded correlation analyses between macroeconomic indicators—Gross Domestic Product (GDP), Unemployment Rate, and the Extended Consumer Price Index (IPCA)—and its historical delinquency rates and found no significant impact on the calculation of expected losses.

The Company analyzes changes in the rates of investments in bank deposit certificates and information obtained from regulatory agencies about the financial institutions. The likelihood of delinquency over 12 months was based on historical data provided by credit rating agencies for each credit level and analyzed in terms of sensitivity based on current returns.

These deposits and financial investments are subject to an insignificant risk of change in value.

Revenue from water supply and sanitation services are recognized as water is consumed and services are provided. Revenues, including unbilled revenues, are recognized at the fair value of the consideration received or receivable for the rendering of those services. Revenue is shown net of value-added tax, rebates, and discounts. Unbilled revenues represent incurred revenues in which the services were provided but not yet billed until the end of each period, and are recorded as trade receivables based on monthly estimates of the completed services.

	Companhia de Saneamento Básico do Estado de São Paulo –SABESP Notes to financial statements Years ended December 31, 2024 and 2023 In thousands of reais, unless otherwise stated

Revenues are recognized based on CPC 47 / IFRS 15 – Revenue from Contracts with Customers, which establishes a five-step model applicable to revenue from a contract with a customer. Revenues are recognized when i) it identifies contracts with customers; ii) it identifies the different contract obligations; iii) it determines the transaction price; iv) it allocates the transaction price to the performance obligations in the contracts; and (v) it satisfies all performance obligations. Disputed amounts are recognized as revenue when collected.

Revenue from construction is recognized in accordance with ICPC 01 (R1) / IFRIC 12 (Service Concession Arrangements) and CPC 47/IFRS 15 (Revenue from Contracts with Customers), as all performance obligations are satisfied over time. During the construction of the contract, an asset is classified as a contract asset, in which the Company estimates that the fair value of its consideration is equivalent to expected construction costs plus margin. 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 construction costs, resulting in the construction revenue.

Update of assets classified as financial assets (indemnity), as described in Note 3.10 (b). The amounts are recognized based on the difference between the fair value adjustment of assets, using the Extended National Consumer Price Index (IPCA), and the amortized cost of the bifurcated intangible asset.

Trade receivables are amounts due from customers for services performed in the ordinary course of business. These are classified as current assets, except when maturity exceeds 12 months after the end of the reporting date, when they are presented as noncurrent assets.

The Company establishes an allowance for doubtful accounts for receivable balances at an amount that Management considers to be sufficient to cover eventual losses, as described in Note 3.3.

Inventories comprise supplies for consumption and maintenance of the water and sewage systems and are stated at the lowest between the average cost of acquisition or realizable value and are classified in current assets.

Investment properties are recorded at the acquisition or construction cost, less accumulated depreciation, except for the land group, calculated by the straight-line method at rates that consider the estimated useful life of the assets. Expenditures related to repairs and maintenance are recorded in the income statement when incurred.

	Companhia de Saneamento Básico do Estado de São Paulo –SABESP Notes to financial statements Years ended December 31, 2024 and 2023 In thousands of reais, unless otherwise stated

The Company also maintains some assets for undetermined use in the future, i.e. it is not defined whether they will be used in the operation or sold in the short term during the ordinary course of business.

Contract Asset (works in progress) is the right to consideration in exchange for goods or services transferred to customers. As established by CPC 47 – Revenue from Contracts with Customers, assets subject to the concession under construction, recorded under the scope of ICPC 01 (R1) – Concession Agreements, must be classified as Contract Asset during the construction period and transferred to Intangible Assets after the conclusion of the works.

A Contract Asset is recognized at fair value, including the capitalization of labor, construction margin, interest, and other financial charges capitalized during the construction period of qualifying assets, where applicable, based on the weighted average rate of borrowings in effect on the capitalization date. A qualifying asset necessarily requires a substantial period, established by the Company as being higher than 12 months, to be ready for use, considering the completion period of the works, given that most of them take on average more than 12 months to be completed, which corresponds to one fiscal year of the Company.

Infrastructure construction values are recognized as revenue, at fair value, provided that they generate future economic benefits. The accounting policy to recognize construction revenue is described in Note 3.4 (b).

Property, plant, and equipment comprise mainly administrative facilities not composing the assets subject to the concession agreements. Those assets are stated at acquisition or construction cost less depreciation and impairment losses, as applicable. Where applicable, interest, other finance charges, and inflationary effects resulting from financing effectively applied to construction in progress are recorded as the cost of the respective property, plant and equipment for the qualifying assets. A qualifying asset necessarily requires a substantial period, established by the Company as being higher than 12 months, to be ready for use, considering the completion period of the works, given that most of them take on average more than 12 months to be completed, which corresponds to one fiscal year of the Company.

Subsequent costs are included in the existing 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 reliably measured. Repairs and maintenance are charged to the income statement of the year, as incurred.

The depreciation of property, plant, and equipment begins when such an item becomes available for use, in its location, and under the necessary condition, when this asset becomes operational. Depreciation is calculated using the straight-line method and the average rates are presented in Note 17 (a). Land is not depreciated.

The useful lives of assets are revised and adjusted, where applicable, at the end of each year.

Gains and losses on disposals are determined by the difference between the sales value and residual book balance and are recognized in profit or loss, under other operating income (expenses).

	Companhia de Saneamento Básico do Estado de São Paulo –SABESP Notes to financial statements Years ended December 31, 2024 and 2023 In thousands of reais, unless otherwise stated

Intangible assets are those arising from concession contracts, and the main costs are transferred from the Contract Asset, as described in Note 3.8.

The amortization of an intangible asset begins when it becomes available for use, in its location and necessary condition, when this asset becomes operational. The amortization reflects the period in which it is expected that the asset’s future economic benefits are consumed by the Company, which may be the final term of the concession or their useful life.

The amortization of intangible assets ends when the asset is fully consumed or written-off, whatever occurs first.

Donations in assets received from third parties and government entities to allow the Company to render water supply and sewage services are not recorded in the financial statements at zero cost, since these assets are owned by the granting authority.

Financial resources received as donations for infrastructure construction are recorded under “Other operating income”.

For the concession agreement with URAE-1, established with the privatization of the Company in July 2024, the investments made and not amortized until the end of the concession are accounted for as a Financial Asset (Note 16).

The Company operates concession agreements including the rendering of basic sanitation, environmental, water supply and sewage services, signed with the granting authorities. The infrastructure used by SABESP related to service concession agreements is considered to be controlled by the granting authority when:

The rights over the infrastructure operated under the concession agreements are accounted for as an intangible asset as the Company has the right to charge for the use of the infrastructure assets, and the users (consumers) must pay for the services.

Intangible assets related to the concessions are amortized on a straight-line basis over the contract period or useful life of the underlying asset, the lowest of them.

The details referring to the amortization of intangible assets are described in Note 15 (e).

During the effectiveness of the concession agreements, SABESP makes continuous investments to ensure the quality and continuity of services, and may replace assets related to the concession until the expiration of the contract.

At the end of the concession, infrastructure assets are returned to the granting authority through compensation, when provided for in the agreement, calculated based on the fair value updated by the IPCA. SABESP recognizes as a financial asset the portion of investments in reversible assets that have not yet been amortized at the end of the agreement, recording its update as operational revenue, in line with the Company's business model.

	Companhia de Saneamento Básico do Estado de São Paulo –SABESP Notes to financial statements Years ended December 31, 2024 and 2023 In thousands of reais, unless otherwise stated

Software licensing is capitalized based on acquisition costs and other implementation costs. Amortizations are recorded according to the useful life and the expenses associated with maintaining them in profit or loss, when incurred.

Property, plant, and equipment, intangible assets, and other noncurrent assets with defined useful lives are reviewed for impairment on an annual basis, or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company does not have assets with indefinite useful life and assessed that there are no indications of impairment losses, mainly supported by Law 14,026/2020, which ensures economic and financial sustainability to public sanitation services through tariffs or indemnity.

Trade payables and contractors are obligations to pay for goods or services acquired from suppliers in the ordinary course of business and are initially measured at fair value, which generally corresponds to the bill and subsequently at amortized cost, being classified as current liabilities, except when the maturity exceeds 12 months after the reporting date, being presented as noncurrent liabilities.

Borrowings and financing are initially recognized at fair value, upon receipt of funds, net of transaction costs, and stated at amortized cost. See Note 18. Borrowings and financing are classified as current liabilities, unless the Company has an unconditional right to defer the settlement of the liability for at least 12 months after the reporting date.

The bonds issued by the Company are not convertible into shares and are recorded similarly to borrowings.

Borrowing costs consist of interest rates and other charges incurred by the Company and arise from borrowing and financing agreements, including exchange rate changes.

Costs attributable to the acquisition, construction, or production of an asset, which, necessarily, requires a substantial time 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. The capitalization occurs during the construction period of the asset, considering the weighted average rate of borrowings effective on the capitalization date.

The Company analyses foreign currency-denominated borrowings or financing as if they were contracted in local currency, restricting the capitalization of interest and/or exchange rate changes by the amount that would be capitalized if they were contracted in the domestic market in similar lines of credit and loans.

	Companhia de Saneamento Básico do Estado de São Paulo –SABESP Notes to financial statements Years ended December 31, 2024 and 2023 In thousands of reais, unless otherwise stated

Salaries, vacations, Christmas bonuses, profit sharing, and additional payments negotiated in collective labor agreements plus related charges and contributions are recorded on an accrual basis.

The profit-sharing plan is based on operational and financial targets, and a provision is created when it is contractually required or when there is a past practice that created a constructive obligation, and is recorded as operating cost, selling and administrative expenses, or capitalized in assets.

Provisions are recognized when: i) the Company has a present (legal or constructive) obligation resulting from a past event; ii) an outflow of resources that comprise economic benefits will probably be required to settle the obligation; and iii) the amount can be reliably estimated. Where there are several similar obligations, the likelihood that an outflow of resources will be required to settle an obligation is determined by considering the nature of these obligations as a whole.

Provisions are measured at the present value of the disbursements expected to be required to settle an obligation using a pre-tax rate that reflects the current market assessments of the time value of money and the risks specific to the obligation. The increase in the obligation due to the passage of time is recognized as a financial expense.

For financial statement presentation purposes, the provision is stated net of escrow deposits, based on the legal offset right.

Escrow deposits not linked to the related obligations are recorded in noncurrent assets and adjusted by the indexes defined by the competent authorities.

The Company does not recognize contingent liabilities in the financial statements since it either does not expect outflows to be required or the amount of the obligation cannot be reliably measured.

Contingent assets are not recognized in the financial statements.

Costs related to ongoing environmental programs are expensed in the income statement, when there is a taxable event. Ongoing programs are designed to minimize the environmental impact of the operations and to manage the environmental risks inherent to the Company's activities.

Income tax expenses comprise current and deferred income tax and social contributions.

Current taxes

The provision for income tax and social contribution is calculated based on the taxable profit for the year and the rates effective at the end of the year. The income tax was defined at a rate of 15%, plus a 10% surtax on taxable income exceeding R$ 240. The social contribution was defined at a rate of 9% over the adjusted net income. Taxable income differs from net income (profit presented in the income statement) because it excludes income or expenses taxable or deductible in other years, and excludes items not permanently taxable or not deductible. The Company periodically assesses the positions taken in income tax filings regarding situations where the applicable tax regulations allow for interpretation and establishes provisions, when appropriate, based on estimated amounts payable to tax authorities.

	Companhia de Saneamento Básico do Estado de São Paulo –SABESP Notes to financial statements Years ended December 31, 2024 and 2023 In thousands of reais, unless otherwise stated

Deferred taxes

Deferred taxes are fully recognized on temporary differences arising between the tax basis of assets and liabilities and their carrying amounts in the financial statements. However, deferred taxes are not accounted for if they arise from the initial recognition of an asset or liability in a transaction that does not affect the tax basis, except in business combinations. Deferred taxes are determined using tax rates (and laws) effective at the end of the reporting period and are expected to be applied when the related income tax and social contribution are realized.

Deferred tax assets are recognized only to the extent that it is probable that future taxable profit will be available for which temporary differences can be used and tax losses can be offset.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when deferred income tax assets and liabilities are related to income taxes levied by the same tax authority over the tax entity.

Current Taxes

Revenues from sanitation services are subject to PIS (Social Integration Program) and COFINS (Contribution for Social Security Financing) rates of 1.65% and 7.60%, except for financial revenues that are calculated at the rates of 0.65% and 4.00%, respectively.

PIS and COFINS taxes levied on amounts billed to public entities are due when the bills are received.

These taxes are calculated by the regime of noncumulative taxation and presented net of the corresponding credits, such as deductions from gross revenues. The lines “other operating income” and “financial revenues” are presented net of such taxes on the income statement.

In addition, revenues from sanitation services are also subject to the Regulatory, Control, and Oversight Fee (TRCF), whose taxable event is the performance of regulatory, control, and monitoring activities by ARSESP (regulatory authority), calculated at 0.50% of the annual revenue directly generated by the service provided less taxes levied on the service that works as a mechanism to transfer funds from Sabesp to the regulatory authority.

Deferred taxes

The deferred taxes related to PIS and COFINS are determined based on the rates (and laws) in effect on the date of preparation of the financial statements, and they are expected to apply when the respective taxes are realized. These taxes are recognized only to the extent that it is probable that a taxable base will exist for them to be paid or offset.

	Companhia de Saneamento Básico do Estado de São Paulo –SABESP Notes to financial statements Years ended December 31, 2024 and 2023 In thousands of reais, unless otherwise stated

The Company makes contributions to defined benefit plans sponsored by it on a contractual basis. Regular contributions comprise the net administrative expenses and are recognized in the result of the period in which they are due.

Pension plan liabilities correspond to the present value of the obligation on the reporting date, less the fair value of the plan’s assets. The defined benefit obligations (G1 Plan), as well as the additional retirement and pension plan (G0), are calculated on an annual basis by independent actuaries, using the projected unit credit method. The estimated future cash outflows are discounted to their present value, using the interest rates of Government bonds with maturities that approximate those of the related liability.

Regarding actuarial gains and losses arising from adjustments based on the experience and changes in actuarial assumptions are directly recorded under equity, as other comprehensive income (OCI), so that the plan's net asset or liability is recognized in the statement of financial position to reflect the full amount of plan’s deficit or surplus.

In an event of curtailment or settlement of the plan, related to only some of the employees covered by the plan, or where only part of an obligation is settled, the gain or loss includes a proportional share of the past service cost and actuarial gains and losses. The proportional share is determined based on the present value of the obligations before and after the curtailment or settlement.

The Company makes contributions to defined benefit plans sponsored by it on a contractual basis, which provides post-employment benefits to its employees, in which the Company makes equal contributions to employees, within the limits set by regulation. In this model, the benefits paid are directly related to the amount contributed, with no deficits to be covered by the Company.

Financial income is primarily comprised of interest and inflation adjustments resulting from financial investments, escrow deposits, and negotiations with customers to pay by installments, calculated using the effective interest rate method.

Financial expenses refer to interest, inflation adjustments, and exchange rate changees mainly on borrowings and financing, provisions, public-private partnership, and program contract commitments, and are calculated using the effective interest rate method.

Inflation adjustment gains and losses arise from the collection or payment to third parties, as contractually required by law or court decision, recognized on an accrual basis pro rata temporis. Inflation adjustments included in the agreements are not considered embedded derivatives, since they are deemed as inflation indexes for the Company’s economic scenario.

	Companhia de Saneamento Básico do Estado de São Paulo –SABESP Notes to financial statements Years ended December 31, 2024 and 2023 In thousands of reais, unless otherwise stated

Leases are recorded at the present value of the contractual obligations, presented in assets as Right of Use (Note 15 (f)) and in liabilities as Leases (Note 18 (b)), except for short-term contracts (12 months or less) and/or low value contracts (below US$ 5,000), which are recorded as expenses when incurred.

Other assets are recorded at acquisition cost, net of any impairment loss, where applicable. Other liabilities are recorded at known or estimated amounts, including, where applicable, related financial charges.

The Company uses the tax benefit of distributing dividends as interest on capital, as permitted by law and based on the Bylaws. Interests are accounted for under Law 9,249/1995 for tax-deductibility purposes, limited to the daily pro rata variation of the long-term interest rate (TJLP). The dividend attributed to shareholders is recognized in current liability against Equity. Any amount over the minimum mandatory is recognized when approved by shareholders in the General Meeting, except for taxes incurring in the distribution of interest on capital. The tax benefit of interest on capital is accrued in the profit/loss of the year, under the same recognition basis of expenses.

Current and noncurrent financial assets and liabilities arising from long- or short-term transactions are adjusted to present value based on market discount rates as of the transaction date, when the effects are significant.

This statement is intended to demonstrate the wealth created by the Company and its distribution during a certain period. It is presented as required by the accounting practices adopted in Brazil, as supplementary information to the financial statements for purposes of IFRS.

The Value Added Statement was prepared according to the information obtained from the accounting records that serve as a basis for preparing the financial statements. The first part presents the wealth generated by the Company, represented by revenues, inputs acquired from third parties and retentions, and the wealth received in transfer, represented by the equity result and financial income. The second part presents the distribution of wealth segregated into employees, taxes, fees and contributions, value distributed to providers of capital, and value distributed to shareholders.

Operating segments are determined in a manner consistent with the decision maker’s internal reporting, i.e. the Company’s Management, which is composed of the Board of Directors and the Executive Board, regarding strategic decisions, allocation of resources, and performance evaluation.

The Company determined that it has one operating segment, namely sanitation services.

	Companhia de Saneamento Básico do Estado de São Paulo –SABESP Notes to financial statements Years ended December 31, 2024 and 2023 In thousands of reais, unless otherwise stated

The accounting policies used to determine segment information are the same as those used to prepare the financial statements.

The measurement of the result per segment is the profit from operations before other net operating expenses and equity accounting, which excludes construction costs and revenue.

The Company’s Management analyzes asset and liability information on a consolidated basis. Consequently, the Company does not disclose segregated information on assets and liabilities.

Substantially all noncurrent assets and revenue generated from customers are located in the São Paulo State. Consequently, financial information is not disclosed by geographic area.

Items included in the financial statements are measured using the currency of the main economic environment in which the company operates ("functional currency"). The financial statements are presented in Brazilian reais (R$), which is also the Company's functional currency.

Foreign currency-denominated transactions are translated into Brazilian reais using the exchange rates prevailing on the transaction dates. Statements of financial position balances are translated by the exchange rate prevailing on the reporting date.

Exchange gains and losses resulting from the settlement of these transactions and the translation of foreign currency-denominated monetary assets and liabilities are recognized in the income statement, except for borrowings and financing referring to property, plant and equipment or intangible assets in progress, where exchange losses are recognized as corresponding entry to the asset while construction is in progress, as described in Note 3.14.

The amendments to CPC 26 (R1) / IAS 1 – Classification of Liabilities as Current or Noncurrent; CPC 26 (R1) / IAS 1 – Presentation of Financial Statements– Noncurrent Liabilities with Covenants; CPC 06 (R2) / IFRS 16 – Leases – Lease Liability in a Sale and Leaseback Transaction, did not impact the disclosures or amounts recognized in the annual financial statements.

The Company did not early adopt these standards and is assessing the impacts of the new and revised IFRS below on the disclosures or amounts recognized in the financial statements that Management understands to apply to the Company:

	Companhia de Saneamento Básico do Estado de São Paulo –SABESP Notes to financial statements Years ended December 31, 2024 and 2023 In thousands of reais, unless otherwise stated

There are no other standards and interpretations not yet adopted that may, in the opinion of Management, have a significant impact on the result for the year of equity disclosed by the Company in its financial statements.

	Companhia de Saneamento Básico do Estado de São Paulo –SABESP Notes to financial statements Years ended December 31, 2024 and 2023 In thousands of reais, unless otherwise stated

Financial risk factors

The Company's activities are affected by the Brazilian economic scenario, making it exposed to market risk (exchange rate and interest rate), credit risk, and liquidity risk. Financial risk management is focused on the unpredictability of financial markets and seeks to minimize potential adverse effects on financial performance.

Foreign currency risk

Foreign exchange exposure implies market risks associated with currency fluctuations, since the Company has foreign currency-denominated liabilities, arising from long-term funding, in development institutions, at more attractive interest rates, in U.S. dollars and Yen.

The management of currency exposure considers several current and projected economic factors, besides market conditions.

This risk arises from the possibility that the Company may incur losses due to exchange rate fluctuations that would impact liability balances of foreign currency-denominated borrowings and financing and related financial expenses. The Company contracted hedge transactions in 2024 to protect itself against such risk, according to Note 5.1 (d).

Part of the financial debt, totaling R$ 3,366,723 as of December 31, 2024 (R$ 2,785,853 as of December 31, 2023), is indexed to the U.S. dollar and Yen. The exposure to exchange risk is as follows:

(*) Debt in Yen measured at fair value as part of the hedge contract, as detailed in Note 5.1(d).

	Companhia de Saneamento Básico do Estado de São Paulo –SABESP Notes to financial statements Years ended December 31, 2024 and 2023 In thousands of reais, unless otherwise stated

The table below shows the prices and exchange rate changes in the period:

Borrowings and financing increased by R$ 574,953 in 2024 (a decrease of R$ 309,854 from January to December 2023), due to exchange rate changes. See Note 18 (ii). As of December 31, 2024, if the Brazilian real had depreciated or appreciated by 10 percentage points, in addition to the impacts already mentioned above, against the U.S. dollar and Yen with all other variables held constant, the effects on the result before funding costs and taxes on the twelve-month period ended December 31, 2024 would have been R$ 336,672 (R$ 278,586 for the twelve-month period ended December 31, 2023), lower or higher, excluding the effects of hedge contracted at the end of 2024, according to Note 5.1 (d).

The probable scenario below presents the effect on the income statements for the next 12 months, considering the projected rates of the U.S. dollar and the Yen.

The Company understands that the scenario presented is reasonable, given the instability of the Brazilian real against the U.S. dollar and the Yen.

	Companhia de Saneamento Básico do Estado de São Paulo –SABESP Notes to financial statements Years ended December 31, 2024 and 2023 In thousands of reais, unless otherwise stated

With the hiring of foreign exchange derivative instruments such as cross-currency interest rate swaps in 2024, aimed at protecting its foreign currency-denominated financings, the Company believes that such a scenario, if it occurs, would not be significant.

Interest rate risk

This risk arises from the possibility that the Company could incur losses due to fluctuations in interest rates, increasing the financial expenses related to borrowings and financing.

The Company has not entered into any derivative contract to hedge against this risk, except for the financing at the Secured Overnight Financing Rate (SOFR), according to Note 5.1 (d); however, it continually monitors market interest rates, to evaluate the possible need to replace its debt.

The table below provides the borrowings and financing subject to different inflation adjustment indices:

	Companhia de Saneamento Básico do Estado de São Paulo –SABESP Notes to financial statements Years ended December 31, 2024 and 2023 In thousands of reais, unless otherwise stated

Another risk to which the Company is exposed is the mismatch of inflation adjustment indices of its debts with those of its service revenues. Tariff adjustments of services provided do not necessarily follow the increases in the inflation indexes to adjust borrowings, financing and interest rates affecting indebtedness.

As of December 31, 2024, if interest rates on borrowings and financing had been 1 percentage point higher or lower with all other variables held constant, the effects on profit before taxes for December 31, 2024 would have been R$ 234,384 (R$ 178,044 as of December 31, 2023), lower or higher, mainly as a result of lower or higher interest expense on floating rate borrowings and financing.

Credit risk is related to cash and cash equivalents, financial investments, as well as credit exposures of customers, including accounts receivable, restricted cash, financial asset (indemnity), and accounts receivable from related parties. Credit risk exposure to customers is mitigated by sales to a dispersed base.

The maximum exposure to credit risk as of December 31, 2024 is the carrying amount of instruments classified as cash and cash equivalents, financial investments, restricted cash, trade receivables, financial asset (indemnity), and accounts receivable from related parties on the balance sheet date. See additional information in Notes 7, 8, 9, 10, and 11.

Regarding the financial assets held with financial institutions, the credit quality was assessed by reference to external credit ratings (if available) or historical information about the bank’s default rates. For the credit quality of the banks, such as deposits and financial investments, the Company assesses the rating published by three main international agencies (Fitch, Moody's and S&P), as follows:

	Companhia de Saneamento Básico do Estado de São Paulo –SABESP Notes to financial statements Years ended December 31, 2024 and 2023 In thousands of reais, unless otherwise stated

The rating assessment disclosed by Fitch for deposit transactions and financial investments in local currency is as follows:

Liquidity is primarily reliant upon cash provided by operating activities and borrowings and financing obtained in the local and international capital markets, as well as the payment of debts. The management of this risk considers the assessment of its liquidity requirements to ensure it has sufficient cash to meet its operating and capital expenditure requirements.

The funds held are invested in interest-bearing current accounts, time deposits, and securities, with instruments with appropriate maturity or liquidity sufficient to provide margin as determined by the projections mentioned above.

The table below shows the financial liabilities, by maturity, including the installments of principal and future interest. For agreements with floating interest rates, the interest rates used correspond to the base date of December 31, 2024.

	Companhia de Saneamento Básico do Estado de São Paulo –SABESP Notes to financial statements Years ended December 31, 2024 and 2023 In thousands of reais, unless otherwise stated

Cross default

The Company has borrowings and financing agreements including cross-default clauses, i.e., the early maturity of any debt may imply the early maturity of these agreements. The indicators are continuously monitored to avoid the execution of these clauses, and the most restrictive ones are shown in Note 18 (c).

Under the Risk Management Policy and the Derivatives Transactions Program, which aim to manage financial risks and mitigate exposure to market variables that impact assets, liabilities, and/or cash flows, thus reducing the effects of undesirable fluctuations of these variables on the Company’s operations, Sabesp contracts hedge instruments, mainly for its financings denominated in foreign currency.

Criteria and guidelines for financial risk management were established to mitigate imbalances between assets and liabilities that have some sort of indexation exclusively to protect the Company’s indexed assets and liabilities that present some mismatch, without characterizing financial leverage.

The Company uses risk ratings disclosed by Standard Poor’s (S&P), Moody’s, or Fitch to support and complement the analysis and judgment of banking risk.

Operations contracted and settled in 2024

As of April 04, 2024, the Company contracted hedge operations, with no speculative nature, through swap transactions of debt variations denominated in US$ + 6.23% and Yen + 1.44% interest per year for a percentage of CDI + 0.13% p.a. The total value of the hedged debt with the aforementioned operations was 98.0%. For the aforementioned transactions, which matured on December 12, 2024, the Company did not apply the hedge accounting policy as it did not meet eligibility criteria, measuring them at fair value through profit or loss, recognizing gains and losses in the financial result as “net financial result”. These operations matured on December 12, 2024.

	Companhia de Saneamento Básico do Estado de São Paulo –SABESP Notes to financial statements Years ended December 31, 2024 and 2023 In thousands of reais, unless otherwise stated

Below are the values of the swap contracts (US$ and Yen + interest vs. CDI) settled on December 12, 2024:

Operations outstanding as of December 31, 2024

The Company entered into hedge operations, effective from December 12, 2024, with no speculative nature, through swap transactions denominated in US$ and Yen + annual interest, as shown in Note 18, for a percentage of CDI - 0.36% p.a. The total value of the debt hedged with the aforementioned operations was 100.0%. For these transactions, the Company applied the hedge accounting policy as it met eligibility criteria, using (i) cash flow hedge for US$-denominated debt, and (ii) fair value hedge for Yen-denominated debt.

The transactions have maturity dates ranging from July 21, 2025, to March 16, 2048, according to the maturities of the corresponding financing, as detailed in Note 18.

Below are the values of the swap contracts (USD and Yen + interest vs. CDI) as of December 31, 2024:

	Companhia de Saneamento Básico do Estado de São Paulo –SABESP Notes to financial statements Years ended December 31, 2024 and 2023 In thousands of reais, unless otherwise stated