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Biotech / Medical : ABT: Abbott Laboratories -- Ignore unavailable to you. Want to Upgrade?

To: HerbVic who wrote (16)	7/1/2003 3:53:39 PM
From: HerbVic	Respond to of 33

( BW)(NY-FITCH-RATINGS/ABBOTT) Fitch Affirms Abbott Laboratories 'AA-'; Rating Outlook Stable Business Editors CHICAGO--(BUSINESS WIRE)--June 30, 2003--Fitch Ratings has affirmed Abbott Laboratories' (Abbott) senior unsecured debt credit rating of 'AA-' and the company's commercial paper of 'F1+'. The ratings apply to approximately $6.5 billion of debentures and commercial paper. The Rating Outlook is Stable. The ratings were initiated by Fitch as a service to users of its ratings and are based on public information. The recently announced charge of a $622 million for the pending settlement of a criminal and civil investigation into the company's Ross Products division's enteral nutritional business is not expected to immediately impact Abbott's credit profile given the company's ample liquidity and strong cash flow generation. However, the proposed settlement, coupled with the 2001 settlement of criminal and civil charges involving TAP Pharmaceuticals and the continued compliance issues regarding FDA current good manufacturing practices (cGMP), indicates an increased business risk that could negatively affect the rating if the trend continues. Abbott had cash and cash equivalents of approximately $1 billion and a net debt position of $5.5 billion at March 31, 2003. Additionally, Abbott had $3 billion in unused lines of credit, which supports commercial paper borrowings, at the end of the first quarter 2003. The rating reflects Abbott's well-diversified product portfolio in human pharmaceuticals, medical technology, nutritionals and clinical diagnostics. The rating accounts for an active research and development program across the company, strengthened through internal development, acquisitions and licensing agreements. Potential loss in revenues and earnings from intermediate-term generic pharmaceutical competition is anticipated to be offset by R&D successes, most notably by Humira, with sales currently derived as a treatment for rheumatoid arthritis and potential sales through additional indications for psoriasis, psoriatic arthritis, ankylosing spondylitis, chron's disease and juvenile rheumatoid arthritis. Fitch recognizes that Abbott pays a large dividend and consumes a large amount of cash flow on capital expenditures, in light of the company's increased leverage over traditional levels in conjunction with the acquisition of the pharmaceuticals business of BASF in 2001. Additionally, Abbott augments revenue and earnings growth through corporate acquisition and strategic alliance activities, that focus on key businesses, notably the Pharmaceutical Products, Hospital Products and Abbott Diagnostic divisions. Already in 2003, Abbott bolstered the Hospital Products division's portfolio with the acquisitions of Spinal Concepts and Jomed's coronary business, for a total cost of approximately $240 million. Fitch expects that Abbott will continue to target mid-sized acquisition opportunities, and will monitor the total cash outlay in the near to intermediate term. At the end of the first quarter 2003, leverage as measured by total debt-to-EBITDA was 1.4 times (x) and interest coverage as measured by EBITDA-to-interest incurred was 23.9x. businesswire.com