On July 21, 2003, Standard&Poor's Ratings Services lowered its long-term rating on Eastman Kodak Co. to 'BBB' from 'BBB+' based on the company's planned purchase of PracticeWorks Inc. for $500 million in cash. Standard&Poor's long-term and short-term ratings on Kodak remain on CreditWatch with negative implications where they were placed on June 18, 2003. The Rochester, N.Y.-based firm had $2.7 billion in debt on March 31, 2003. The purchase of PracticeWorks for cash will hinder Kodak's debt-reduction efforts as this business is not expected to generate meaningful discretionary cash flow in the near term. Benefits of the acquisition include broadening its product offerings in the growing market for dental digital imaging systems and practice management software.
