The ratings on United Waterworks reflect the consolidated credit quality of its ultimate parent, Suez S.A., and are determined in conjunction with the company's above-average business and financial positions. Suez's operations consist of European electric and gas utilities, global power development and cogeneration, U.S. liquefied natural gas, and global water utilities and waste services. The ratings on Suez are driven by diversity among its energy, international energy, water, and waste services, and the resiliency of cash flow from water and waste activities. The ratings also reflect the company's 2003-2004 plan to reduce debt by about one-third. These strengths are offset by a weak financial profile characterized by projected negative free cash flow until 2005 and high dividend payout levels. The
