On Oct. 21, 2004, Standard&Poor's Ratings Services placed its 'BBB-' long-term and 'A-3' short-term ratings on Eastman Kodak Co. on CreditWatch with negative implications. The CreditWatch listing reflects heightened concern about Kodak's profit outlook, given the rapid erosion of its core traditional photography sales. This may challenge the company's ability to maintain strong credit measures for the rating, which is essential because of Kodak's significant and increasing business risk as its markets transition to digital technologies. Other concerns include doubts about the profit potential of Kodak's digital imaging businesses relative to conventional photography, the risk that further large cash acquisitions may keep debt levels elevated (notwithstanding some recent balance sheet improvement), and the additional burden from the company's
