The ratings on Dutch diversified technology group Koninklijke Philips Electronics N.V. (Philips) reflect its continued stable performance in several core business segments, along with its diversified business portfolio. These have helped temper the group's weaker profitability in consumer electronics and exposure to the cyclical and capital-intensive semiconductor industry. Philips' net debt adjusted for leases was about €4.2 billion ($5.1 billion) at June 30, 2004, compared with €6.1 billion one year earlier. Philips' credit metrics have improved over the past year and remain in line with the ratings expectations, as the group benefited from sales of certain financial assets to reduce debt. It is also acknowledged, however, that Philips might look to grow its portfolio by acquisitions and the ratings have
