Mario Arruda Sampaio Rui de Britto Álvares Affonso - Chief Financial Officer, Investor Relations Officer, Member of The Board of Executive Officers and Member of Statutory Regulatory Affairs Committee

Hasan Doza Francisco Navarrete - Barclays Capital, Research Division

Good afternoon, ladies and gentlemen. At this time, we would like to welcome everyone to SABESP conference call to discuss its results for the third quarter of 2012. The audio for this conference is being broadcast simultaneously through the Internet on the website, www.sabesp.com.br. In that same address, you can also find the slideshow presentation available for download. [Operator Instructions] Before proceeding, let me mention that forward-looking statements are being made under the Safe Harbor of the Securities Litigation Reform Act of 1996. Forward-looking statements are based on the beliefs and assumptions of SABESP's management and on information currently available to the company. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions because they relate to future events and therefore, depend on circumstances that may or may not occur in the future. Investors should understand that general economic conditions, industry conditions and other operating factors could also affect the future results of SABESP and could cause results to differ materially from those expressed in such forward-looking statements. Today with us, we have Mr. Rui Affonso, Chief Financial Officer and Investor Relations Officer; Mr. Mario Arruda Sampaio, Head of Capital Markets and Investor Relations; and Ms. Nara Maria Marcondes França, Head of Accounting. Now I'll turn the conference over to Mr. Arruda Sampaio. Sir, you may begin your conference.

Okay, thank you. Good afternoon or good morning for some of you. Let's start this presentation, but to let you know, we have 6 slides. And after we go through the slides and present the overall results for the company and a quick comment on the offset of the development, we will open for question and answers. Let's start on Slide 3. Here we show the company billed water and sewage volume, which was 3.2% above the same quarter in 2011. This higher volume resulted from the 2.5% increase in water connections and a 3.3% upturn in sewage connections, this is in line with the company's expectations to grow with billed water volume by around 2.5% and its billed sewage volume anywhere between 3% to 3.5%. This later influenced by the high investments that the company has been making in this segment, meaning in the sewage segment. In the third quarter of 2012, the water loss ratio remained flat at 25.9% in relation to the same period in 2011. We understand that with the contracting of the investments that are financed on the Japan International Cooperation Agency program, our water loss program, more of a loss reduction program, which is scheduled for conclusion early -- somewhat early 2013, we shift to a greater decline in this indicator as we move into next year. Let's move to financial highlights on next slide. Net revenue was positively affected by the 6.83% tariff increase as of September 2011, and a 3.2% upturn in billed volume as mentioned in the previous slide. Cost and expenses grew by 2.3% in the period as a percentage of net operating revenue, however, cost and expenses fell from 75% in third quarter 2011, and 73.4% in third quarter 2012. EBITDA increased from BRL 814.2 million in third quarter 2011 to BRL 902 million in third quarter 2012. EBITDA margin increased to 33.3% versus 31.4% in last quarter -- sorry, third quarter 2011. If we exclude construction and revenue costs from the total revenue, EBITDA margin was 42.4% this quarter versus 41.6% in third quarter 2011. EBIT moved up as you can see by 11.7% from BRL 646 million in third quarter 2011 to BRL 721.8 million in third quarter 2012, net income increased from BRL 68 million in third quarter 2011 to BRL 361.8 million in third quarter 2012. Let's move to the next slide and discuss the variation costs, help explain all the numbers we went through. Obviously, this explanation will be in relation to the same period of the previous year that is then in comparison with the third quarter of 2011, cost and expenses grew by 2.3%. The main factors behind this upturn were the increase of 310.5% credit write-offs, 8.5% in supply, 8% in general expenses and 6.7% in service. Note that the somewhat small variation costs and expenses was heavily impacted by the 0.1% reduction in payroll and benefits, which accounts for a large portion of our total cost. Expenses with credit write-offs increased by BRL 53.4 million from BRL 17.2 million in third quarter 2011 to BRL 70.6 million this quarter, largely due to the additional provision for overdue agreements with private clients in the amount of BRL 14.5 million and for the overdue debits with state public entity in the amount of BRL 26.7 million. Expenses with supplies, increased by BRL 3.6 million or 8.5% when compared to the same period of the previous year from BRL 42.5 million to BRL 46.1 million, mostly due to water and sewage operating system's preventive and corrective maintenance in the amount of BRL 2.4 million and maintenance of water and sewage connections and network totaling BRL 1 million. General expenses increased BRL 15.5 million or 8% from BRL 194.2 million to BRL 209.7 million, predominantly due to the increase of BRL 4.7 million in the provision for transfer of funds. The municipal environmental infrastructure fund as defined by the service contract and agreement we have signed with the municipal government of São Paulo. Also the increase in the provision for losses amounting for BRL 2.4 million and the increase of BRL 1.7 million due to the beginning of the billing from the use of water in the Baixada Santista water basin. This is a Santos sports area water basin since February 2012. Services increased BRL 16.4 million or 6.7% from BRL 245.1 million in third quarter 2011 to BRL 261.5 million in third quarter 2012 most explained by the BRL 8.6 million increase related to advertising campaign, focused on socio-environmental initiatives. This BRL 5.9 million increase related to fleet renewal and growth reform through a rental program. They also shipped a water production system performed under a public and private partnership, provided an increase of BRL 4.1 million due to the start-up in September 2011 of the additional 5 cubic meters per second water production capacity. This increases mentioned above were partly offset by BRL 10.1 million reduction with social and environmental activities related to the agreement with the municipal government of Sao Paulo, remembering that this agreement we established prior to finding the contract -- the service contract, but we have still commitments still related to that agreement that we have to perform and undertake an impact as you can see. Payroll and benefits fell BRL 0.4 million or 0.1% from BRL 427 million to BRL 426 million due to the greater adjustments to the provision for severance pay in the amount of BRL 15.7 million in the third quarter 2011, explained, in that case, by the greater number -- sorry, and also explained by the greater number of employees that applied for retirement and the approval of law '12 5/06/11, which changed the notice period, without cost dismissals from 30 days to maximum of 90 days. Other factors that contributed to the reduction in payroll and benefits were the decline in the current cost based for the actuarial calculations for 2012 related to the Defined Benefits Plan in the amount of BRL 4.1 million. These decreases were offset by the 8% increase in salary since May 2011 and of 6.17% since May 2012 with an impact of approximately BRL 19.4 million. Let's move now to Slide 6. You will analyze the items that affected that net income or net income. Net operating revenue moved up by BRL 119.7 million or 4.6% over the third quarter of 2011. Cost and expenses grew by BRL 45.5 million, or 2.3%, negatively impacting results yet at a lower expansion rate for the growth in revenue to compensate them. Total operating revenues and expenses decreased by BRL 45.4 million, chiefly due to the accounting provision related to impairment losses totaling BRL 35.1 million and provision for intangible asset losses in the amount of BRL 35.1 million, partly offset by the sale of scrap materials in third quarter 2011 in the amount of BRL 11.7 million among other factors. Net financial had a positive impact of BRL 401.4 million in the third quarter results. The bulk of this increase explained by exchange rate variations resulting from the 0.4% depreciation of the Brazilian real versus the U.S. dollar, and the 2.8% depreciation of Brazilian real versus yen in the third quarter 2012. This in comparison to a 15.8% depreciation of the Brazilian real versus dollar and the -- sorry, the 19.4% depreciation of the Brazilian real versus the yen in third quarter last year. Financial expenses decreased by BRL 0.6 million due to the lower expenses with interest on domestic loans and financing of approximately BRL 2.8 million versus the same period of 2011. This was most explained by the amortization of the ninth debenture in October 2011, and also a reduction of BRL 0.7 million in interest in charges on international loans and financing. This reduction was in part offset by an increase in financial expenses, the high interest rate related to the lawsuits in the amount of BRL 2.9 million. Financial revenue decreased by BRL 41.5 million due to the gradual reduction of the market interest rates paying the financial investment and the lower cash position compared during the difference in time. Finally, income tax and social contributions vary negatively by BRL 136.5 million due to the exchange rate variation in the period of 2011 in relation to the period of 2012. Let's move to our next slide. We'll quickly go through 2 events related to our debt. October, the Board of Directors approved the general terms for the 16th nonconvertible, unsecured, single-series debenture issuance for public distributions but would restrict placement efforts for a total amount of BRL 500 million. The proceeds of this debenture will be used to settle the company's maturing financial obligation. Also now in November, the Board of Directors again approved the general terms for the 17th, nonconvertible, unsecured, with up to 3-series debenture issuance, this one for public distribution with no restriction, totaling up to BRL 1 billion whose proceeds will be used to settle the company's obligation in 2013, including the early redemption of its debentures for the payment of other debts throughout the year. Let's now move to our last slide. Now here, we will comment on ARSESP implementation process for SABESP's first tariff review. But before we start the discussion on the new schedule and the technical note related to the preliminary average initial tariff, we would like to say that these 2 events -- we'd like to say that we see these 2 events as a relevant part of the process of establishing a new tariff methodology that is in our view, a very important institutional step for the future of this company and for its commitment along with its client base, society, environment, employees, shareholders, and credit holders. And then let's start by commenting -- first, start by commenting on the new implementation schedule for the SABESP's first tariff revision set out by ARSESP recently last week on November 9 and as shown and detailed in our slide. According to ARSESP, the new schedule was necessary in order for her to accommodate the screening process for hiring the consultants that will audit the regulatory asset base presented by SABESP at the same time provide more time for us to present a more detailed and robust tariff structured proposal. According to the new schedule, on November 13, the regulatory agency made public its proposal for the preliminary maximum average initial tariff the efficiency gain factor, X factor, and opens the matter for public discussions all the way until December 13 when it will be held a public field hearing and the entire process will be closed for that period. The results of the public contribution and hearing related to the preliminary tariff and the efficiency gain factor will be released on December 29. According to ARSESP, the preliminary tariff will be effective 30 days later of its release, that is on February 1, 2013. As for the proactive aspect of the tariff as of September 2012, ARSESP has made no comments. But note, September 2012 is the base date for our adjustment. So we understand that there should be some comment from ARSESP whether it will be or will not be redirected. The new schedule also establishes the release date for the final maximum average initial tariff and tariff structure, which will be on August 9, with implementation 30 days later on September 2013. We would like to highlight that the new schedule divided the process for implementing the first tariff review into 2 steps. We're now on the base assumptions in the criteria. We're implementing the final methodology such as OpEx, efficiency factors and the remaining elements of the technical note released this November 13 will be defined. Remaining for next year, only 2 points, which are the confirmation of the final regulatory asset base value and tariff structure. In other words, the discussion that is taking place now and that will be concluded by December 13 will define the central elements of our TACE proposed tariff model for the next 4 years. We believe this is very important for you to understand. The relation to ARSESP's technical note on the preliminary maximum initial tariff and efficiency gain factor of made public recently. For those who have the opportunity to read and analyze, it probably serves us the complexity and in certain ways, a magnitude that lack of clearness of some base information, statement, assumptions and definitions adopted. On the company side, we're working on our company. From our side, we're working on understanding of this document and we'll present our final comments and suggestions only on December 13 during the public hearing on it. Nonetheless, we would like to share with you some points that we have detected that have raised our attention and concern. On the OpEx, the cut in expenses are considered nonregulated. Related was arbitrary in our understanding and in some cases, without even legal grounds, especially the ones related to salary and personnel. In the case of average monthly consumption volumes, we understand that the reference series adopted were extremely short, not to mention inaccuracies on its estimation. What we can see that led to an overestimated projected volumes with significant impact under proposed tariffs. As for the proposed efficiency gain factor, the X factor, on one side, the short series adopted to detect technological changes, in our understanding, are not sufficient and material for detecting a threat. And on the other, the selection of U.K. sanitation company as a benchmark for determining the level and efficiencies for SABESP considering that the U.K. companies present different levels of regulatory maturity and full-service coverage compared to ORC, it's inappropriate. Also, the exclusion of capitalized expenses from the regulatory asset base was unexplained and technically not supported by ARSESP's regulatory accounting manual. In other words, a technical flaw on their side. The lack of clearness -- also the lack of clearness and explanations in the treatment given to the depreciation and the cash flow estimate were assessed considered asset life of 44 years well above what the company have knowledge and practice resulted in a relevant impact to the preliminary average tariff estimate. Well just to finalize, we would like to reiterate the importance in the institutional advances that is taking place with the consolidation of this proposed methodology as confirmed once more by the technical note and assessments and also by the indication of a real tariff increase of 1.94%. Although we disagree with this magnitude, in our view, this tariff increased proposed short of the necessary for the company to sustain its long-term proposed investment and also desired and committed service levels. That concludes our initial remarks, and now we would like to open the session for questions and answers.

[Operator Instructions] Our first question comes Hasan Doza with Water Asset Management.

So I just want to clarify 3 things. From your reading of the technical document, the tariff increase is how much?

1.94%.

Okay. If I am a customer of SABESP and, for example, my bill is, for example, BRL 100 per month. Next year, on February, when this is into effect, my bill in real terms would go up by 1.94%?

On average, yes. That's correct.

Okay. So my bill is not going from BRL 100 to BRL 115. It's going from BRL 100 to BRL 102?

That's the way we, so far, can understand the technical note and what was being proposed by the regulator.

Okay. On that comment, if I look at your 2012 revenues on an annualized basis, just based upon your first 9 months results, you are on case to generate net revenue, net of the Cofins and Pasep taxes of like around BRL 8 billion? So when I look at your revenues for 2012 and I look at your potential revenues for 2013, on a real basis, your revenues could go from, say, net revenues of BRL 8 billion to up like 1.94% next year in real terms, right?

Yes, on real terms. I think you can infer that based on what we can also infer on the technical note.

Okay. So your revenues are going from BRL 8 billion plus on -- if you look at 1.94% plus 5% inflation, on a nominal basis, your revenues are going up from BRL 8 billion, up 7%, not 15%?

No. Again, we don't know how much the revenues are going to go up next year due to inflation. Remember that we don't know the figure. We will only know that later in August. So from a nominal standpoint, I think it's a lot of guessing and we would not like to do that right now. But from a real term, we believe that 1.94% is the closest we can understand and infer from the technical note on how we see impacting in a very general term of our revenue.

Okay, that's helpful. So it's just on your example, if I assume for this year, based upon your 9 months predictive results, you generate BRL 8 billion of net revenues for 2013, it should go up 8x 1.94%, correct?

Just consider that the last quarter is already going to be affected by the September 2012 tariff increase. So revenues from the last quarter, you have to consider the increase which was 5.15% and you can't give it right off the bat on September because of the deferred implementation pretty much have to dilute it through the next -- through September -- sorry, November -- October, November, December. Okay?

Okay. So that's why I was mentioning my 7%. So if I take into account the full-year impact next year of the inflation that you got at the end of August of this year, you have the 5% increase for next year affected, plus you have this real increase of 1.94%. And the way I look at it, okay, you approximately report revenues of approximately BRL 8 billion, give or take a little bit. But your revenues then are going up by 5.15% on a full year basis, plus 1.94% which is 7%. I mean it's not going up by 20%. It's going up in order of magnitude by 7%, right?

Yes. Roughly, the same estimate we would get.

Okay. That's helpful to clarify. That's very helpful. The third question I have is SABESP projected your OpEx to be in the node BRL 4.6 billion for 2013 and as you mentioned, ARSESP is proposing BRL 600 million lower at BRL 4 billion. So my question is if you, for example, don't reduce your OpEx by BRL 600 million, what happens to your earnings? Like what is the impact to earnings if you don't reduce your OpEx by BRL 600 million?

So let's put it this way, first, we're doing some guessing here because we're not totally in agreement with this reduction. I think it's really important to know, as I highlighted in the speech, that we're going to seriously discuss with ARSESP the cuts that they are proposing, especially the cuts in payroll and salary, which to a great extent, we don't even find the legal grounds in some cases for them to support that, the thought that this is not part of the regulatory operations and so forth. So this is -- now remember that the technical note is a parameter for estimating a tariff adjustment for SABESP and to a great extent -- to some extent, not a great extent, it is not so much correlated to our actual numbers, okay? Now if answering your question, if in case it prevails that the regulator will require us to reduce that delta in terms of -- and we do not do it, certainly, there will be an impact in net income.

Okay, that's helpful because that's I wanted to clarify. Is that the way you read this proposal is that the 1.94% real increase is predicated upon having a regulatory OpEx of BRL 4 billion, right?

Give or take, yes. Although there are some different take when you look at the accounting numbers and the regulatory accounting numbers.

Sure, sure. But in terms of the ballpark, we're talking about in terms of, like, order of magnitude. We're talking about, like, BRL 500 million to BRL 600 million delta?

Yes, it nailed us in 13% in our OpEx. I mean if you look at our current OpEx, it's very convincing, simple. We would have to work in reducing it by '13, which will not happen because we disagree with the base -- the bulk of the cuts in the payrolls and so forth.

Okay. I mean, this is the math that I'm doing. It's very simple. Is that your -- I know that if the tariff is predicated, the tariff increase of 1.94% real, it's predicated upon a OpEx, regulatory OpEx of BRL 4 billion and so hypothetically, in the short run, you are not able to reduce BRL 600 million. So, I mean, that's basically a delta of over close to BRL 150 per share, share of penalty that the shareholders would have to borne in the meantime, right?

Yes, yes.

Okay. So the 1.94% tariff increase says that you must get to a regulatory OpEx of BRL 4 billion and whatever is a delta that you're not being able to get to is going to be borne by shareholders?

Yes.

So essentially, theoretically, what could potentially happen at least in the short run, assuming that this BRL 4 billion regulatory OpEx doesn't change? Is that your top line tariff increase of 1.94% could be negated by this BRL 600 million OpEx delta?

Hasan, let me -- let's begin a little there. The point is if we all agree on the approach that what he's really estimating is this allows increase. It is that we're going to get 1.94% increase in reps. If we keep ourselves all constant and we do the math using the accounting base numbers, you're going to find out that definitely you are not going to get the same return on the walk return that we're allowed on the regulatory accounting base. So the point is, we might not even have significant impact on the bottom line because all constant you're just adding 1.94% to the top line. But when you look from a return on the asset base, from an accounting standpoint, we are not going to get the significant amount of increase we were expecting. Now we're going to that's called a complex ground of translating the regulatory accounting numbers that were utilized to term to get -- to provide the estimation for the tariff increase and the renumeration of the asset base, being the regulatory asset base with all the accounting numbers that you and we have access on a publicly public base.

No, that's -- yes, okay.

So imagining that, obviously, if we do move forward and reduce, in a great extent, the OpEx as suggested, we would actually increase the dividend and the income that we will make. But if we don't, we will have just this inefficiency that will not be shared with you guys.

Right. So -- and you said it in your -- at the end of the comment and if I heard you correctly, you said that this 1.94% increase is not sufficient relative to the proposed CapEx that you guys are thinking about. I mean, if I heard you correctly, then my question is going to be the follow-up that, yes, if you look at the math, you would be under earning the allowed return if you're not able to get your a CapEx down to the regulatory OpEx or, I mean, the OpEx. So if you have a 1.94% increase and then this OpEx hanging over your head, I mean, how does that impact your BRL 2.5 billion of CapEx in terms of whether or not it's economic to spend that CapEx when you don't have a sufficient tariff increase, plus you have this regulatory OpEx issue?

Hasan, we -- basically, we're not going to get the desired return of 8.06% of anything like that on the additional CapEx. What we're saying that we don't see, based on the numbers he utilized on his technical note that although from a number crunching standpoint, obviously, it's correct, the numbers he put out there. But we argue that the numbers do not reflect correctly whether on the OpEx side, whether on the depreciation side, whether on the projection of the volume side, what we find proper. So the way we see it is that if you adjust these variables and assumptions to what we think are more actual, real and operational-related, the outcome will be a greater increase than the one provided by the regulator, okay? That's our point.

Our next question comes from Enrique Tuvedi [ph] of UBS.

I would like to confirm one thing. Is the cost of the contract income policy, the different policy, their [indiscernible] 5% of revenues included as a passthrough in the terms of the recent proposal?

No, it's not included. It's not included. All the -- it's called the legal obligations on the contracts we have with City of São Paulo and other municipalities we operate are not part of what the regulator considers a regulatory and an operational cost. So it's going to be treated in separate the way the regulator has set out is that he will allow us to charge on a specific line in our bill, in our water bill. But that is not the final conclusion for that and the implementation for that is not yet clear. The regulator is also working on the legality of that, trying and working on obtaining a legal opinion from the state level lawyers, attorneys. So if it's not included, and it is not yet finalized by the regulator, how and when this is going to be applied. What we know is that it's not included, okay?

Okay, but you're going to treat this in your proposal in the public hearings, right?

No, we're not going to add it because we do agree with them that the 7.5% is not related to the operation. So we're not arguing so far with them. How he's dealing with this. We move from a very negative position to what we see as a very positive position. We recognize this that this is a legal obligation that is -- I'll give you an example. He is not including the Cofins and Pasep in the passthrough for -- in the expenses for passthrough. They're not even including. It has already actually technical notes, comments that he will allow that this will be a charge in separate. So when I'm paying my bill, I will know exactly how much Cofin and Pasep I will be paying, how much I'm paying for the service and potentially, whether we're paying for the legal obligation of the 7.5% for the municipal fund of the city of São Paulo. So it's going to be separate.

Our next question comes from Giovanna Siracusa of Barclays. Francisco Navarrete - Barclays Capital, Research Division: It's Francisco Navarrete. I know I already addressed a bunch of questions in the Portuguese call. I just have a one follow-up question. It's -- if you could help us understand the disconnect between what you're saying is going to happen with the revenue for SABESP for next year, either 1.94% increase and the regulator's statement just a few minutes ago saying that what should matter in Page 51 of the technical note is the BRL 10 billion that you're saying that you should achieve as well in year in 2013 with the tariff structure that SABESP needs to decide and provide and inform the regulator about. So in other words, you're saying that the focus should be in this BRL 10 billion of revenue that you should be allowed to collect as opposed to a 1.94% tariff increase or whatever percentage tariff increase or for the matter, whatever real per cubic meter new tariff that you have been set. So if you could please help us understand that, it will be very helpful for trying to model revenue and the [indiscernible] .

Francisco, let me see if I understand what you said. We just said on a fairly first approach, we understand that the best way to see and look the 1.94% is buy it to the total revenue and move on from the accounting numbers as they are and do your analysis. This is what we said in the Portuguese and we just reiterated with Mr. Hasan now. But let me understand you, you mentioned that the regulator has just made a comment that we should consider the BRL 10 billion payout revenue, is that it? Francisco Navarrete - Barclays Capital, Research Division: Correct, after the Portuguese call, we're kind of understand as you mentioned, a very complex technical note. And there's a lot of confusion by the market by analyst. Arguably, even you guys were kind of how deal with the new information that they're proposing to you. So we want to understand what is the revenue or how we should think about revenue for SABESP after the review is implemented in February 1? And his comment, the regulator's comment is that what we should focus on in Page 51 of the technical note is not the BRL 2.92 per cubic meter, not the 1.94% tariff increase that it represents, but what the technical note points to is that SABESP being allowed to collect the revenue amount of BRL 9.9 billion beginning 2013 once the regulation is implemented. So this is and I don't really know how the technical note maybe kind of relates to that or not, but clearly, if this is a statement by the regulator, then maybe we should think that the 1.94% written in the note doesn't really converge to the intention of the regulator which is allowed BRL 10 billion revenue for a new beginning next year? And this is just our thoughts based on a discussion with the regulator and we want to try to connect the dots here. Rui de Britto Álvares Affonso: Okay. Francisco, truly speaking. We're not aware and we have had no information from the regulator. If you have it, that's great. That what should be considered is the revenue is proposing to start in February. I mean, in fact, the way we read it and I'm trying to find it here in the technical note, we're trying -- so if you have this information, we don't have that information, okay? But the way we look at it is that on Page 51, we actually see that -- let me see if it's on Page 51 -- on items. No, no, it's not that. We're saying what we're looking at is on Page 42 on Item 10.10, last paragraph, what he's basically saying that this new tariff level corresponds to a linear increase in tariff of 1.94% given that the tariff, the start base tariff that he estimated is 2.87%, okay? So that's the only thing we can understand, we cannot understand from what he just he put out that our revenue starting next year will be BRL 9.9 billion, BRL 9,994,000,000. Maybe we don't have the same information. But again, Francisco, the way we're looking at it, maybe too much simplistic. But we cannot start inferring unless he has made any public statement that all of us are aware of it. We don't know. Francisco Navarrete - Barclays Capital, Research Division: Yes, I understand the confusion. It's really difficult for us to come up to a final conclusion, and I understand where you're coming from because it's in a way poorly written and there's a big disconnect that we're trying to fill in the blanks.

We will be working on this and hopefully, we'll be getting better and we can review all this as we move on, okay?

[Operator Instructions] We appear to have no further questions. Now I'll turn the conference back to SABESP for their final remarks.

Okay. Thank you, everybody, for your time. I know this is a -- we have fairly good results on one side. On the other side, we do believe we have a fairly good results with the process of establishing the methodology. But nonetheless, as we can all see very complex. We will be working to understand and bring more clarity to ourselves and to the market, and feel free to call us, myself, Angela and the IR team. We will be fully available. Thank you and goodbye.

The conference has now ended. You may now disconnect your lines.