The ratings on British American Tobacco PLC (BAT) are based on the company's position as the world's second-largest international tobacco company, its unrivalled geographic diversification, excellent brand management, and its moderate financial structure. These factors are mitigated, however, by direct and indirect risks arising from ongoing litigation, especially in the U.S. In the year to June 2001, BAT generated operating profits of £2.8 billion ($4.2 billion) (up 8% compared with fiscal 2000) on sales of £11.8 billion (up 2%). BAT was able to improve profit margins and boost sales largely due to the successful integration of Rothmans International BV's worldwide tobacco operations. On a like-for-like basis, BAT's cigarette volumes have remained stable, in line with the global market trend, and
