On July 16, 2003, Standard&Poor's Ratings Services lowered its long-term corporate credit rating on Dutch diversified technology group Koninklijke Philips Electronics N.V. (Philips) to 'BBB+' from 'A-', following a review. The outlook is stable. At the same time, Standard&Poor's lowered its senior unsecured debt rating on Philips to 'BBB+' from 'A-' and affirmed its 'A-2' short-term debt rating on the group. The rating actions reflect the fact that Philips' credit protection measures, adjusted for operating leases and unfunded pension and postretirement liabilities, are insufficient to sustain a 'A-' long-term rating. Standard&Poor's believes that Philips will not achieve its targeted adjusted net debt-to-EBITDA ratio of 2.0x in the near term to maintain a 'A-' long-term
