The ratings on British American Tobacco PLC (BAT) reflect the group's strong position as the world's second-largest international tobacco company, its high and relatively predictable cash flows, and exceptional geographical diversification. These factors are mitigated, however, by BAT's intermediate financial risk profile and ongoing litigation risk, particularly in the U.S. and Canada. At June 30, 2006, BAT had unadjusted gross debt of £7.9 billion. With slightly rising net sales of £9.7 billion in the year to June 30, 2006, 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. BAT's free cash
