The ratings on U.K.-based Tesco PLC reflect its leading market position and superior operating performance in the stable but highly competitive U.K. food-retail market, with good brand recognition and an extensive store network across the U.K. The ratings are also underpinned by some international diversification and the successful leveraging of its brand to sell nonfood products. These positives are partially offset by Tesco's intermediate financial risk profile, owing to ongoing substantial capital investments. With sales and earnings before interest, taxes, depreciation, amortization, and rent (EBITDAR) of about £39.5 billion and £3.4 billion, respectively, for the fiscal year ended Feb. 25, 2006, Tesco is one of the world's most rapidly growing retailers. The group derives 76% of its sales and 78%
