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; high and relatively predictable cash flows; and exceptional geographical diversification. These factors are balanced, however, by BAT's moderate financial policy, which allows for potential further debt-funded acquisitions; and its ongoing litigation risk, particularly in the U.S. At Dec. 31, 2004, BAT had unadjusted gross debt of £7.1 billion ($13 billion). With stable net sales of £10.7 billion in 2004, BAT commands a steady 15% share of the global cigarette market through a diverse portfolio of brands including Lucky Strike, Dunhill, Kent, and Pall Mall. No single country accounts for more than 12% of the group's operating profits. The
