On Aug. 2, 2004, Standard&Poor's Ratings Services affirmed its 'AA-' long-term issuer credit rating on the City of Milan in northern Italy, reflecting Milan's improved operating balances, excellent liquidity position, good revenue flexibility, and diversified economic base, as well as its heavy debt burden. The outlook is stable. Milan's operating margin increased to nearly 6% of operating revenues in 2003 (from 4% in 2002 and 2% in 2001) thanks to the city's successful fight against tax evasion, increased tariffs, effective outsourcing policy, and strong focus on cost control. These factors are likely to enable Milan to post operating margins at about 7%-8% of operating revenues in 2005 and 2006. These increased operating margins in 2003 helped reduce Milan's
