The rating reflects our concern about Rochester, N.Y.-based Eastman Kodak Co.'s earnings and cash flow prospects. This concern is based on the ongoing and rapid deterioration of the company's traditional consumer imaging business, the unproven long-term profit potential of its consumer digital imaging businesses, longer-term potential for a decline in its entertainment imaging businesses, significant discretionary cash flow deficits, vulnerability to economic pressures, and its leveraged financial profile. Kodak's substantial cash balance and competitive positions in certain digital imaging markets minimally offset these risks. The global recession, tight credit markets, and unfavorable foreign exchange movements contributed to revenue from digital businesses declining 23% in the fourth quarter. This underperformance heightens our concern regarding the company's increasing reliance on its digital
