The ratings on British American Tobacco PLC (BAT) are based on the group's strong position as the world's second-largest international tobacco company; its high and mostly predictable level of cash flows; and unrivalled geographical diversification, which will be marginally enhanced by current acquisitions. These factors are balanced, however, by BAT's moderate financial policy, which allows for potential further debt-funded acquisitions, and ongoing litigation risk, particularly in the U.S. At June 30, 2003, BAT had gross debt of £6.3 billion ($10.0 billion). With sales of £10.5 billion in the year to June 2003, BAT commands a stable 15% share of the global cigarette market, through a diverse portfolio of brands, including Lucky Strike, Dunhill, Kent, and Pall Mall. No single country
