The rating on Eastman Kodak Co. reflects Standard&Poor's Ratings Services' concern about the company's earnings and cash flow prospects in light of the ongoing and rapid deterioration of its traditional consumer imaging business, the unproven long-term profit potential of its consumer digital imaging businesses, its still-meaningful cash restructuring costs, and its leveraged financial profile. Kodak's substantial cash balances, competitive positions in various digital imaging markets, some business diversity provided by the Graphic Communications Group, and our expectation that cash restructuring costs will subside in 2009 only partially offset these risks. The secular decline of the conventional photography businesses that Kodak has long dominated elevates the company's business risk. Areas of vulnerability include the unproven profit potential of the
