The ratings on The Netherlands-based diversified technology group Koninklijke Philips Electronics N.V. (Philips) reflect improvements in the group's business risk profile and its solid consolidated financial performance, leading to modest financial risk and improved underlying profitability. The ratings also reflect Philips' diversified portfolio. Philips' total lease-adjusted debt at Sept. 30, 2005, was €5 billion ($6 billion). A significant proportion of earnings now comes from the group's less cyclical businesses such as lighting, medical systems, and domestic appliances (about 71% of EBIT from Philips' five divisions excluding unallocated operations in the first nine months of 2005), with the remainder coming from the more traditionally volatile consumer electronics and semiconductor segments. Philips has made good progress in underlying combined last-12-month profitability at
