The ratings on United Waterworks reflect the consolidated credit quality of ultimate parent, Suez S.A., and are determined in conjunction with the parent's above-average business and financial positions. Suez has reduced its net debt (including securitizations) to Ç15.4 billion at year-end 2003, down from Ç26.3 billion at the end of 2002. This reduction was mainly due to Ç11.2 billion in asset sale proceeds and Ç1.3 billion attributable to favorable currency fluctuations. Net debt is expected to fall further, to Ç14 billion by mid-year 2004, partially due to Suez's sale of communication assets M6 and NOOS in early 2004. Management remains committed to improved credit quality and to ensuring that free operating cash flow covers dividends by 2005. Standard & Poor's
