Mail Stop 3561
September 30, 2005
Mr. Gerard Lamarche
Chief Financial Officer
Suez
16 rue de la Ville l`Eveque
75008 Paris, France
Re: Suez
Form 20-F for Fiscal Year Ended December 31, 2004
Filed June 29, 2005
Form 6-K for the Month of September 2005
Filed September 8, 2005
File No. 1-15232
Dear Mr. Lamarche:
We have reviewed your filings and have the following
comments.
We have limited our review to specific targeted issues. Where
indicated, we think you should revise your disclosures in future
filings in response to these comments. If you disagree, we will
consider your explanation as to why our comment is inapplicable or
a
revision is unnecessary. Please be as detailed as necessary in
your
explanation. In some of our comments, we may ask you to provide
us
with information so we may better understand your disclosure.
After
reviewing this information, we may or may not raise additional
comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or on any other
aspect
of our review. Feel free to call us at the telephone numbers
listed
at the end of this letter.
Form 20-F for Fiscal Year Ended December 31, 2004
Item 5. Operating and Financial Review and Prospects, page 84
A. Results of Operations, page 90
1. We note your presentation of organic gross operating income
growth
and organic revenue growth, which you identify as non-GAAP
measures.
In arriving at these measures, it appears you exclude items that
are
recurring in nature. Please note that if you intend to include in
your future filings any non-GAAP performance measure that excludes
items of a recurring nature, you must justify the usefulness of
each
measure. Please refer to Item 10(e) of Regulation S-K and
Question 8
of our Frequently Asked Questions Regarding the Use of Non-GAAP
Financial Measures, available on our website at www.sec.gov, in
crafting your revised disclosure. Further, revise your
disclosures
throughout your filing each place where each non-GAAP measure is
presented, as follows:
* Identify the item as a non-GAAP measure of performance.
* Provide cautionary disclosure that the non-GAAP measure
presented
may not be comparable to similarly titled measures used by other
entities.
* Disclose that the non-GAAP measure should not be considered as
an
alternative to the most directly comparable financial measure
calculated and presented in accordance with GAAP as an indicator
of
operating performance.
* Disclose the specific manner in which you use the non-GAAP
measure
to conduct or evaluate your business.
* Disclose the economic substance behind your decision to use the
measure.
* Disclose the material limitations associated with use of the
measure as compared to the use of the most directly comparable
GAAP
financial measure.
* Disclose the manner in which you compensate for these
limitations
when using the measure.
* Disclose the substantive reasons why you believe the measure
provides useful information to investors.
Show us how the revised disclosure will read in future filings.
In
responding to our comment, you may also want to consider whether
it
would make more sense to discuss the impact of items such as gas
prices, foreign exchange effects, acquisitions and dispositions on
your results of operations without eliminating or adjusting these
items in connection with a non-GAAP financial measure.
B. Liquidity and Capital Resources, page 110
Liquidity and Contractual Commitments, page 114
2. In future filings, please revise your table of contractual
commitments to include the following:
(a) Estimated interest payments on your debt; and
(b) Estimated payments under interest rate swap agreements.
Because the table is aimed at increasing transparency of cash
flow,
we believe these payments should be included in the table. If you
choose not to include these payments, a footnote to the table
should
clearly identify the excluded items and provide any additional
information that is material to an understanding of your cash
requirements. See Section IV.A and footnote 46 to the
Commission`s
MD&A Guidance issued December 19, 2003, available at www.sec.gov.
Item 15. Controls and Procedures, page 192
3. You disclose that your chief executive and financial officers
concluded that your disclosure controls and procedures were
effective
at a reasonable assurance level for "gathering, analyzing and
disclosing the information the Company is required to disclose in
the
reports it files under the Securities Exchange Act of 1934, within
the time periods specified in the SEC`s rules and forms." In
future
filings, please also state, if true, whether the same officers
concluded the controls and procedures were effective in
"ensur[ing]
that information required to be disclosed by an issuer in the
reports
that it files or submits under the Act is accumulated and
communicated to the issuer`s management, including its chief
executive and chief financial officers, or persons performing
similar
functions, as appropriate to allow timely decisions regarding
required disclosure." See Exchange Act Rule 13a-15(e).
Note 26. Summary of Differences Between Accounting Principles
Followed by the Group and US GAAP, page F-80
4. On page F-12, you disclose that tangible assets subject to
legal
revaluation are stated at their revalued amount under French GAAP.
As US GAAP does not allow tangible assets to be revalued unless
impaired, it appears an adjustment may be necessary to reconcile
from
French GAAP to US GAAP. Please tell us where this adjustment is
included in your reconciliation or tell us why you believe an
adjustment is not necessary.
5. Based on your disclosures with respect to your regulatory
environment in Item 4, it appears that at least a portion of your
operations are currently rate regulated and that, prior to July
2004,
a significant portion of your operations were rate regulated.
Thus,
please tell us your consideration of the applicability of SFAS 71
to
your accounting under US GAAP, with reference to the scope
guidelines
in paragraphs 5-8 of SFAS 71.
Form 6-K dated September 8, 2005
6. We note your presentation of EBITDA, organic EBITDA growth,
organic revenue growth, and organic operating income growth, each
of
which represent non-GAAP measures. Each time a non-GAAP measure
is
presented, please revise to also present the most directly
comparable
financial measure calculated in accordance with GAAP and provide a
reconciliation of the differences between the non-GAAP financial
measure disclosed with the most comparable financial measure
calculated in accordance with GAAP. See Regulation G.
* * * *
As appropriate, respond to these comments within 10 business
days or tell us when you will provide us with a response. Please
furnish a cover letter that keys your responses to our comments
and
provides any requested information. Detailed cover letters
greatly
facilitate our review. Please understand that we may have
additional
comments after reviewing your responses to our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing to be certain that the
filing includes all information required under the Securities
Exchange Act of 1934 and that they have provided all information
investors require for an informed investment decision. Since the
company and its management are in possession of all facts relating
to
a company`s disclosure, they are responsible for the accuracy and
adequacy of the disclosures they have made.
In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that:
* the company is responsible for the adequacy and accuracy of the
disclosure in the filing;
* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and
* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.
You may contact Staff Accountant Sarah Goldberg at (202)
551-
3340, or in her absence, Robyn Manuel at (202) 551-3823 if you
have
questions regarding comments on the financial statements and
related
matters. Please contact me at (202) 551-3843 with any other
questions.
Sincerely,
George F. Ohsiek, Jr.
Branch Chief
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Mr. Lamarche
Suez
September 30, 2005
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