Substantial contribution to earnings from regulated French gas transmission and distribution operations Diversified gas import portfolio and competitive supply position Robust free cash flow generation Very strong financial profile Dilutive credit impact of proposed all-share merger with Suez Growing exposure to exploration and production sector Market liberalization The ratings on French gas utility Gaz de France S.A. (GDF) remain on CreditWatch with negative implications, where they were placed on Feb. 27, 2006, following the announcement of a proposed all-share merger between GDF and Franco-Belgian multi-utility Suez S.A. (A-/Watch Pos/A-2). The negative CreditWatch placement reflects the dilutive impact the merger would have on GDF from a credit standpoint--in terms of both business and financial risk--given Suez's weaker business mix and financial
