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
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Yes ______ No ___X___

Table of Contents

Company Information / Capital Breakdown

Parent Company’s Financial Statements / Statement of Financial Position – Assets

(R$ thousand)

Parent Company’s Financial Statements / Statement of Financial Position – Liabilities

(R$ thousand)

Parent Company’s Financial Statements / Statement of Financial Position – Liabilities

(R$ thousand)

Parent Company’s Financial Statements / Income Statement

(R$ thousand)

Parent Company’s Financial Statements / Statement of Comprehensive Income

(R$ thousand)

Parent Company’s Financial Statements / Statement of Cash Flows – Indirect Method

(R$ thousand)

Parent Company’s Financial Statements / Statement of Cash Flows – Indirect Method

(R$ thousand)

Parent Company’s Financial Statements / Statement of Changes in Equity / 01/01/2022 to 03/31/2022

(R$ thousand)

Parent Company’s Financial Statements / Statement of Changes in Equity / 01/01/2021 to 03/31/2021

(R$ thousand)

Parent Company’s Financial Statements / Statement of Value Added

(R$ thousand)

Highlights

The Company recorded a net income of R$ 975.6 million in 1Q22, compared to the R$ 496.8 million reported in 1Q21, an increase of R$ 478.8 million (+96.4%).

Adjusted EBITDA totaled R$ 1,721.3 million, up by R$ 84.9 million from the R$ 1,636.4 million reported in 1Q21 (+5.2%).

Revenue from sanitation services

Increase of R$ 361.0 million, impacted by (i) tariff adjustment; and (iii) higher average tariff, due to the increase in the billed volume in the Commercial and Public categories.

Costs, administrative & selling expenses (excluding construction costs)

Growth of R$ 286.0 million, mainly due to the (i) R$ 56.6 million increase in allowances for doubtful accounts; (ii) R$ 53.1 million increase in electricity expenses; (iii) R$ 48.4 million increase in treatment supplies; (iv) R$ 47.6 million increase in depreciation and amortization; and (v) R$ 46.7 million increase in expenses with salaries, payroll charges, benefits, and pension plan obligations.

Impacts from the exchange variation

Exchange variation expenses on borrowings and financing fell by R$ 731.8 million, due to the depreciation of the U.S. dollar and the Japanese Yen against the Brazilian real in 1Q22, compared to the appreciation reported in 1Q21, as shown in the table below:

1.          Result for the period

(*) Number of shares = 683,509,869

Adjusted EBITDA Reconciliation (Non-accounting measures)

* Adjusted EBIT corresponds to income before: (i) other operating revenues (expenses), net; (ii) financial result; and (iii) income tax and social contribution.

** Adjusted EBITDA corresponds to income before: (i) other operating revenues (expenses), net; (ii) financial result; (iii) income tax and social contribution; and (iv) depreciation and amortization expenses.

The net operating revenue, which considers construction revenue, totaled R$ 4,870.4 million in 1Q22, up by 4.1% over 1Q21.

Costs and expenses, which consider construction costs, totaled R$ 3,744.4 million, up by 4.3% over 1Q21.

Adjusted EBIT, of R$ 1,131.6 million, increased by 3.4% over the R$ 1,094.3 million recorded in 1Q21.

Adjusted EBITDA, of R$ 1,721.3 million, increased by 5.2% over the R$ 1,636.4 million recorded in 1Q21 (R$ 6,457.6 million in the last 12 months).

The adjusted EBITDA margin was 35.3% in 1Q22, compared to 35.0% in 1Q21 (32.8% in the last 12 months).

Excluding the effects of revenue and construction costs, the adjusted EBITDA margin reached 42.7% in 1Q22, compared to 44.2% in 1Q21 (41.2% in the last 12 months).

The Company recorded a net income of R$ 975.6 million in 1Q22, compared to R$ 496.8 million in 1Q21.

2.          Revenue from sanitation services

The gross operating revenue from sanitation services, which excludes construction revenue, totaled R$ 4,298.2 million in 1Q22, an increase of R$ 361.0 million (+9.2%) over the R$ 3,937.2 million recorded in 1Q21.

Among others, the main factors that led to the increase were:

·             Average tariff adjustment of 7.0% since May 2021;

·             Higher average tariff due to the increase in the billed volume in the Commercial and Public categories; and

·             Decrease of 0.4% in the total billed volume.

3.          Construction revenue

Construction revenue fell by R$ 135.1 million (-13.2%) in 1Q22, due to lower investments made.

4.          Billed volume

The following tables show the water and sewage billed volumes, on a quarter-over-quarter basis, per customer category and region.

(1) Unaudited by external auditors

(2) Including coastal and interior regions

(3) Wholesale includes volumes of reuse water and non-domestic sewage

5.          Costs, administrative & selling expenses, and construction costs

Costs, administrative and selling expenses, and construction costs increased by R$ 153.2 million in 1Q22 (+4.3%). Excluding construction costs, the increase was R$ 286.0 million (+11.0%).

Costs, administrative and selling expenses, and construction costs as a percentage of net revenue were 76.9% in 1Q22, compared to 76.8% in 1Q21.

Salaries, payroll charges and benefits, and Pension plan obligations

Increase of R$ 46.7 million (+7.5%) in 1Q22, mainly due to the 7.8% salary adjustment in May 2021 and the application of 1% referring to the Career and Salary Plan in February 2022, partially offset by the 2.3% decline in the average number of employees; with a net effect of R$ 51.6 million.

Treatment supplies

Increase of R$ 48.4 million (+48.9%), mainly due to the higher use of algaecides, coagulants, and disinfectants in several Water Treatment Stations to maintain the quality of raw water, as well as to the increase in product prices.

Services

Service expenses totaled R$ 512.1 million, an increase of R$ 8.2 million (+1.6%) over the R$ 503.9 million recorded in 1Q21. The main increases were:

·             R$ 15.5 million paid to technical services, especially computer technical support;

·             R$ 14.1 million with surveillance;

·             R$ 11.0 million with customer service channels; and

·             R$ 9.6 million with advertising.

The increases above were offset by the main decreases:

·             R$ 25.0 million with the maintenance of water and sewage connections and networks; and

·             R$ 20.9 million with paving and replacing of sidewalks.

Electricity

Electricity expenses totaled R$ 412.0 million in 1Q22, up by R$ 53.1 million (+14.8%) over the R$ 358.9 million recorded in 1Q21. In 1Q22, the Free Market Tariffs (ACL) accounted for 52.0% of total expenses (51.5% in 1Q21) while the Regulated Market Tariffs (ACR) accounted for 48.0% (48.5% in 1Q21).

The main factors that contributed to this variation were:

·             Average increase of 1.7% in ACL prices (includes Grid Market Tariffs - TUSD), with a 0.8% rise in consumption; and

·             Average increase of 37.9% in ACR tariffs, with a 6.9% decrease in consumption.

General expenses

Increase of R$ 20.2 million (+7.8%), totaling R$ 279.1 million in 1Q22, compared to the R$ 258.9 million recorded in 1Q21, mainly from the higher provision for transfer to the Municipal Funds for Environmental Sanitation and Infrastructure, of R$ 14.2 million, resulting from an increase in revenue and the number of municipalities with expected transfers.

Expenses with municipal transfers totaled R$ 163.0 million in 1Q22, compared to the R$ 148.8 million reported in 1Q21.

Depreciation and amortization

The R$ 47.6 million increase (+8.8%) was due to the beginning of operations of intangible assets, totaling R$ 4.4 billion.

Allowance for doubtful accounts

Increase of R$ 56.6 million (+46.7%), due to the higher delinquency recorded in 1Q22.

6.          Financial result

Financial expenses, net of revenue

The main impacts in the “financial expenses, net of income” line resulted from:

·             Increase of R$ 85.0 million in interest and charges on domestic borrowings and financing, mainly due to (i) higher interest on debentures, of R$ 52.0 million, mainly from the proceeds of the 28th, 29th, and 30th issues; and (ii) rise in the average DI rate (from 2.02% in 1Q21 to 10.27% in 1Q22), which impacted interest on several domestic borrowings;

·             Increase of R$ 13.0 million in other financial expenses, mainly due to the adjusted present value of receivables and performance agreements; and

·             Increase of R$ 80.8 million in financial revenues, mainly on financial investments in 1Q22, as a result of the higher average balance adopted and the average DI rate.

Monetary and exchange variations, net

The effect of net monetary and exchange variations in 1Q22 was R$ 707.8 million, lower than the amounts reported in 1Q21, especially due to:

·             R$ 18.3 million increase in monetary variations on borrowings and financing, due to the rise in the IPCA consumer price index (from 2.05% in 1Q21 to 3.20% in 1Q22), and the 29th issue debenture;

·             R$ 731.8 million decrease in exchange variations on borrowings and financing, due to the (i) depreciation of the U.S. dollar and Yen against the Real in 1Q22 (-15.1% and -19.5%, respectively), when compared to the appreciations recorded in 1Q21 (9.6% and 2.2%, respectively);

·             R$ 12.5 million increase in other monetary variations, due to (i) higher monetary variation on asset leases (leases), of R$ 6.1 million, due to the rise in the quarter IPC; and (ii) higher monetary variation on lawsuits, of R$ 6.3 million; and

·             R$ 6.8 million increase in monetary and exchange variation gains, mainly due to higher adjustments on the agreement with the São Paulo State Government - GESP, of R$ 6.1 million, given the rise in the IPCA consumer price index.

7.          Income tax and social contribution

The R$ 244.9 million increase in 1Q22 was mainly due to:

·             Higher net operating revenue, of R$ 193.0 million;

·             Positive exchange variation, of R$ 731.8 million, from an expense of R$ 137.6 million in 1Q21 to a revenue of R$ 594.2 million in 1Q22; and

·             Higher costs and expenses, of R$ 286.0 million.

8.          Indicators

a)           Operating

⁽¹⁾ Total connections, active and inactive, in thousand units at the end of the period. Excludes connections in Mauá.

⁽²⁾ In million inhabitants, at the end of the period. Does not include wholesale.

⁽³⁾ In millions of cubic meters. Excludes Aguaí, Tapiratiba, and Tejupá

^(*) Unaudited by external auditors

b)          Economic

⁽¹⁾ Accrued in the quarter (%)

⁽²⁾ Average quarterly rate

⁽³⁾ Ptax sale rate on the last day

^(*) Unaudited by external auditors

9.          Borrowings and financing

(1)           Refers to work contracts signed as Assets Lease;

(2)           Obligations related to leasing agreements, mainly vehicle leases.

Covenants

The table below shows the most restrictive clauses in 1Q22:

(1)           “Other Onerous Debt” corresponds to the sum of pension plan obligations, healthcare plan, installment payment of tax debts, and installment payment of debts with the electricity supplier.

As of March 31, 2022, the Company had met the requirements of its borrowings and financing agreements.

10.     Investments

Investments totaled R$ 980.8 million in 1Q22, presented as additions in the notes to the quarterly information under Contract Asset, Intangible Assets, and Property, Plant and Equipment, of R$ 958.1 million, R$ 14.1 million, and R$ 8.6 million, respectively. Cash disbursed in 1Q22 referring to the Company’s investments, including from previous periods, totaled R$ 660.2 million.

The table below shows investments broken down by water, sewage, and region:

Companhia de Saneamento Básico do Estado de São Paulo (SABESP or Company) is a mixed-capital company headquartered in the municipality São Paulo, at Rua Costa Carvalho, 300, CEP 05429-900, controlled by the São Paulo State. 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 March 31, 2022, the Company operated water and sewage services in 375 municipalities of the São Paulo State, 342 of which have already signed contracts, according to Law 11,445/2007. Most of these municipalities’ operations are based on 30-year concession, program, and service contracts, except for the municipalities of Guarulhos, Mauá, Santo André, São Bernardo do Campo, São João da Boa Vista, and Tejupá, which have 40-year term contracts.

The table below shows a summary of the contractual situation of the municipalities served:

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, Saneaqua Mairinque, Aquapolo Ambiental, Águas de Castilho, Attend Ambiental, and Paulista Geradora de Energia. 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.

Economic instability worsened by COVID-19

The global economic instability worsened with the outbreak of a new coronavirus in early 2020, which was considered a pandemic by the World Health Organization (WHO). Accordingly, SABESP adopted several measures to ensure the continuity and quality of the services provided to the population, which have become even more essential. It is worth noting that any interruption in water supply by a basic sanitation company may compromise compliance with WHO’s recommendations for everyone to keep good hygiene habits, such as washing hands correctly and more frequently.

In 2020 and 2021, the Company implemented several preventive measures so that its employees were not exposed to situations of risk, such as (i) remote working, especially in the administrative and commercial areas, and those more than 60 years of age; (ii) restriction of domestic and international trips; (iii) anticipation of influenza and pneumonia vaccination campaigns; (iv) closing of all branches that assist the public, concentrating services in the digital channels to protect customers and employees; among others. These measures were relaxed at the end of 2021 after the professionals’ vaccination cycle was complete.

Regarding the effects of COVID-19, we emphasize the migration, in 2020, of the billed volume of the public, commercial, and industrial categories that have average tariffs higher than the tariff charged from the residential category, which slightly recovered in 2021 compared to 2020. Moreover, in the first quarter of 2022 compared to the same period of 2021, there has been a recovery in the volume of the commercial and public categories to the detriment of the residential and industrial categories.

Expenses with allowance for doubtful accounts are still rising over the same period in 2021, due to the higher delinquency in 2022.

New Legal Sanitation Framework

On July 15, 2020, Federal Law 14,026/2020, known as New Legal Framework for Basic Sanitation, was sanctioned. The new law expands competition in the sector by extinguishing program contracts, encourages the region-wise provision of services to promote economies of scale, and provides for strengthening the service regulation.

Additionally, the New Legal Framework imposes performance goals to reach 99% of the population served with drinking water and 90% with sewage collection and treatment by December 31, 2033, encouraging operators to increase efficiency. The new Law also granted the National Water Agency (ANA) with power to edit reference rules to regulate sanitation services, aiming to standardize the operation of the regulatory agencies and minimize regulatory uncertainties, thus creating a more stable and attractive environment for investments in the sector.

As of May 31, 2021, Federal Decree 10,710 was published, regulating article 10-B of Law 11,445/2007, establishing the methodology for proving the economic and financial capacity of public providers of drinking water supply and sewage services, to enable the compliance with the universalization goals by 2033. Said Decree determines economic and financial evaluation metrics on service providers to prove their ability to make investments within the intended deadlines, as well as several conditions for current contracts to be considered regular. Any adjustments to them should be made by March 31, 2022, in line with paragraph 1 of article 11-B of the New Legal Framework.

According to the aforementioned Decree, as of December 30, 2021, the Company presented a requirement to the São Paulo State Utility Services Regulatory Agency (ARESESP) containing documents that prove its capacity to maintain the provision of services in the operated area by meeting the goals of universal water and sewage collection and treatment by 2033, defined by the New Legal Framework, attested and certified by the independent auditors. As of March 28, 2022, ARSESP recognized the Company’s economic-financial capacity, under the applicable legislation.

In this new context, the Company understands that it is important to highlight that i) it has 366 regular contracts that have already been adapted to the provisions of the New Legal Framework, which ensure 99.5% of revenue; ii) it has access to public capital and the private capital market, due to its sound reputation, favoring the maintenance and/or expansion of its operating base and compliance with the universalization of services within the deadline established by the new law; and iii) it has high governance level.

Management expects that the financial funds raised with the gradual recovery of the economic activities, improved water security from the works carried out, 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.

Approvals

The quarterly information was approved by the Board of Directors on May 6, 2022.

Presentation of the Quarterly Information

The quarterly information as of March 31, 2022, was prepared based on the provisions of CPC 21 (R1) – Interim Financial Information and the international standard IAS 34 – Interim Financial Reporting, issued by the International Accounting Standards Board (IASB), applicable to the preparation of the Quarterly Information Form – ITR, and is fairly presented consistent with the rules issued by the Brazilian Securities and Exchange Commission (CVM). Accordingly, this Quarterly Information takes into consideration the Official Letter CVM/SNC/SEP 003 of April 28, 2011, which allows the entities to present selected notes to the financial statements, in cases of redundant information already disclosed in the Annual Financial Statements. Therefore, the quarterly information as of March 31, 2022, does not include all the notes and reporting required by the annual financial statements, and accordingly, shall be read jointly with the Annual Financial Statements as of December 31, 2021, prepared under the International Financial Reporting Standards – IFRS, issued by the International Accounting Standards Board – IASB, and the accounting practices adopted in Brazil, which observe the pronouncements issued by the Brazilian Accounting Pronouncements Committee - CPC. Therefore, in this quarterly information, the notes below were either not presented or are not as detailed as those in the annual financial statements (according to numerical references):

All material information related to the quarterly information, and this information alone, is being disclosed and corresponds to the information used by the Company’s Management in its administration.

The amounts disclosed in the Notes to the quarterly information are in thousands of Brazilian reais, unless otherwise stated.

The accounting policies used in the preparation of the quarterly information as of March 31, 2022, are consistent with those used to prepare the Annual Financial Statements for the year ended December 31, 2021, disclosed in Note 3 of such financial statements.

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.

The Company has not used derivative instruments in any of the reported periods.

Exchange risk

Currency 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 the U.S. dollar 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 does not maintain hedge or swap contracts or any derivative financial instrument to hedge against this risk.

Part of the financial debt, totaling R$ 2,630,316 as of March 31, 2022 (R$ 3,321,489 as of December 31, 2021), is indexed to the U.S. dollar and Yen. The exposure to exchange risk is as follows:

The 21.0% decrease in the balance of the foreign currency-denominated debt from March 31, 2022 to December 31, 2021 was mainly impacted by the depreciation of the U.S. dollar and Yen against the Brazilian real. The table below shows the exchange variation in the period:

Borrowings and financing fell by R$ 692,434 from January to March 2022 (an increase of R$ 4,504 from January to March 2021), due to exchange variation. As of March 31, 2022, 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 taxes for the three-month period ended March 31, 2022, would have been R$ 263,032 (R$ 356,317 for the three-month period ended March 31, 2021), lower or higher, mainly as a result of exchange losses or gains on the translation of foreign currency-denominated borrowings and financing.

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

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

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; however, it continually monitors market interest rates to evaluate the possible need to replace its debt.

The table below provides borrowings and financing subject to variable interest rates:

(i)        CDI - (Certificado de Depósito Interbancário), an interbank deposit certificate

(ii)        TR – Interest Benchmark Rate

(iii)        IPCA - (Índice Nacional de Preços ao Consumidor Amplo), a consumer price index

(iv)        TJLP - (Taxa de Juros a Longo Prazo), a long-term interest rate index

(v)        LIBOR - London Interbank Offered Rate

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 March 31, 2022, 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 the three-month period ended March 31, 2022, would have been R$ 153,698 (R$ 139,415 for the three-month period ended March 31, 2021), lower or higher, mainly as a result of lower or higher interest expense on floating rate borrowings.

Credit risk is related to cash and cash equivalents, financial investments, as well as credit exposures of customers, including accounts receivable, restricted cash, 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 March 31, 2022, is the carrying amount of instruments classified as cash and cash equivalents, financial investments, restricted cash, trade receivables, and accounts receivable from related parties on the reporting date of this quarterly information. See Notes 6, 7, 8, 9, and 10.

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:

The rating assessment disclosed by Fitch for deposit transactions and financial investments in local currency (R$ - domestic rating) is as follows:

(*) As of March 31, 2022, this category includes R$ 267,811 (R$ 262,465 as of December 31, 2021) referring to Banco BV, checking accounts, and financial investments, which are not rated by Fitch.

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 March 31, 2022.

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 are shown in Note 16 (c).

The table below shows the sensitivity analysis of the financial instruments, prepared under CPC 40 (R1) to evidence the balances of main financial assets and liabilities, calculated at a rate projected for the twelve-month period after March 31, 2022, or until the final settlement of each contract, whichever is shorter, considering a probable scenario.

The purpose of the sensitivity analysis is to measure the impact of changes in the market on the financial instruments, considering constant all other market indicators. At the time of settlement, the amounts may be different from those presented, due to the estimates used in the measurement.

The Company’s objectives when managing capital are to ensure its ability to increase investments in infrastructure, provide returns for shareholders and benefits for other stakeholders, and maintain an optimal capital structure to reduce such cost.

Capital is monitored based on the leverage ratio, which corresponds to net debt divided by total capital (shareholders and creditor’s equity). Net debt corresponds to total borrowings and financing less cash and cash equivalents and financial investments. Total capital is calculated as total equity plus net debt, as shown in the statement of financial position.

As of March 31, 2022, the leverage ratio fell to 35%, compared to 37% as of December 31, 2021, mainly due to the profit recorded in the first quarter of 2022, of R$ 975,539.

The Company considers that balances from trade receivables (current) and trade payables by carrying amount less impairment approximate their fair values, considering 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.

The Company did not have financial assets classified as fair value through other comprehensive income and fair value through profit or loss. The financial instruments included in the amortized cost category comprise cash and cash equivalents, financial investments, restricted cash, trade receivables balance, balances with related parties, other assets and balances receivable from the Water National Agency (ANA), accounts payable to suppliers, borrowings and financing, services payable, balances payable deriving from the Public-Private Partnership (PPP), and program contract commitments, which are non-derivative financial assets and liabilities with fixed or determinable payments, not quoted in an active market, except for cash equivalents and financial investments.

The estimated fair values of the financial instruments are as follows:

Financial Assets

Additionally, SABESP has financial assets receivable from related parties, totaling R$ 841,157 as of March 31, 2022 (R$ 818,552 as of December 31, 2021), which were calculated under the conditions negotiated between the related parties. The conditions and additional information related to these financial instruments are disclosed in Note 10. Part of this balance, totaling R$ 757,353 (R$ 741,910 as of December 31, 2021), refers to reimbursement of additional retirement and pension plan - G0, indexed by IPCA plus simple interest of 0.5% p.m. On the transaction date, this interest rate approximated that of National Treasury Notes (NTN-b), with a term similar to the terms of related-party transactions.

Financial Liabilities

The criteria adopted to obtain the fair values of borrowings and financing, in preparing the quarterly information as of March 31, 2022, are consistent with those adopted in the Annual Financial Statements for the fiscal year ended December 31, 2021.

Financial instruments referring to financial investments and borrowings and financing are classified as Level 2 in the fair value hierarchy.

Considering the nature of other financial instruments, assets and liabilities, the balances recognized in the statement of financial position approximate the fair values, except for borrowings and financing, considering the maturities close to the end of the reporting date of this quarterly information, comparison of contractual interest rates with market rates in similar operations at the end of the reporting period, their nature, and maturity terms.

The preparation of the quarterly information requires Management to make judgments (except for those that involve estimates) that have a significant impact on the amounts recognized based on experience and other factors deemed as relevant, which affect the values of assets and liabilities and present results that may differ from the actual ones.

The Company makes estimates and assumptions concerning the future, which are reviewed on a timely basis. Such accounting estimates, by definition, may differ from the actual results. The effects of the reviews of the accounting estimates are recognized in the period in which the estimates are reviewed.

The Company evaluated the main accounting policies that involve judgments, except for those that involve estimates, and concluded that none of them have a significant effect.

The areas that require a higher level of judgment and greater complexity, as well as assumptions and estimates that are significant for the quarterly information, are (i) allowance for doubtful accounts; (ii) intangible assets arising from concession agreements and program contracts; (iii) pension plan obligations - pension plans; (iv) deferred income tax and social contribution; (v) provisions; and (vi) unbilled revenue.

Cash and cash equivalents include cash, bank deposits, and high-liquidity short-term financial investments, mainly represented by repurchase agreements, fund shares (accruing CDI interest rates), and CDBs, whose original maturities or intention of realization are lower than three months, which are convertible into a cash amount and subject to an insignificant risk of change in value.

As of March 31, 2022, the average yield of cash equivalents corresponded to 95.00% of CDI (96.00% as of December 31, 2021).

The Company has financial investments in CDB, with daily liquidity, which it does not intend to use in the next three months, as shown below:

As of March 31, 2022, the average yield of the financial investments corresponded to 102.44% of CDI (101.57% as of December 31, 2021).

(a)       Statement of financial position details