On April 29, 2005, Standard&Poor's Ratings Services lowered its ratings on Blockbuster Inc. The corporate credit rating was lowered to 'BB-' from 'BB'. The outlook is negative. The downgrade reflects Standard&Poor's concern over the ability of Blockbuster to increase rental revenues in the near term in order to offset the loss of income from the elimination of late fees and expenses for other new business initiatives. The ratings on Blockbuster reflect the risks of operating in a mature and declining video rental industry, the company's dependence on decisions made by movie studios, its high leverage, and the technology risks associated with delivery of video movies to the home. These risks are partially mitigated by Blockbuster's dominant
