The current ratings reflect support from parent Suez S.A.; A favorable regulatory environment; The absence of retail competition; Stable, geographically diverse markets; and Relatively low operating risk. A weak stand-alone financial profile for the ratings; Elevated capital spending requirements for infrastructure replacement; Increasing compliance costs with water quality standards; and Higher-risk unregulated operations of indirect parent United Water Inc. On Oct 26, 2007, Standard&Poor's Ratings Services placed its ratings on United Waterworks and United Water New Jersey on CreditWatch with developing implications. We placed the ratings on CreditWatch with positive implications on March 2, 2006, reflecting the pending merger between parent Suez S.A. (A-/Watch Pos/A-2) and French gas utility Gaz de France S.A. (GDF; AA-/Watch Neg/A-1+). The sale
