The ratings on British American Tobacco PLC (BAT) reflect 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 mitigated, however, by BAT's intermediate financial policy, which allows for potential further debt-funded acquisitions; and its ongoing litigation risk, particularly in the U.S. and Canada. At Jun. 30, 2005, BAT had unadjusted gross debt of £7.6 billion ($13.7 billion). With stable net sales of £9.6 billion in the year to June 30, 2005, 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
