# Moody's Adjusted Leverage Trend Analysis for REDEIA (2022)

## Key Metrics Calculation

### Leverage Ratios:

**2022 (as of 2022-01-01):**
- Total Debt = Longterm Borrowings + Current Borrowings = 5,896,170 + 1,391,722 = 7,287,892 thousand EUR
- EBITDA 2021 = Operating Profit + D&A = 991,970 + 522,114 = 1,514,084 thousand EUR
- Leverage Ratio = 7,287,892 / 1,514,084 = 4.82x

**2023 (as of 2023-01-01):**
- Total Debt = Longterm Borrowings + Current Borrowings = 5,491,124 + 721,845 = 6,212,969 thousand EUR
- EBITDA 2022 = Operating Profit + D&A = 961,554 + 544,992 = 1,506,546 thousand EUR
- Leverage Ratio = 6,212,969 / 1,506,546 = 4.13x

### Trend Analysis:

**Debt Reduction:**
- Total debt decreased by 1,074,923 thousand EUR (14.7% reduction)
- Net borrowings decreased significantly from 5,713,465 to 5,418,145 thousand EUR

**EBITDA Stability:**
- EBITDA remained relatively stable (1,514,084 to 1,506,546, -0.5% change)
- Operating cash flow improved to 1,566,829 thousand EUR

**Equity Strengthening:**
- Equity increased 32.8% from 3,685,131 to 4,894,276 thousand EUR
- Reserves increased substantially (2,989,711 to 4,064,486 thousand EUR)
- Equity ratio improved from 26.4% to 33.1%

### Financial Metrics Summary:
- **Leverage decreased:** 4.82x → 4.13x (improvement of 69 basis points)
- **Net Debt/EBITDA decreased** from approximately 3.77x to 3.59x
- **Interest coverage:** Stable with strong operational cash generation
- **Debt service:** Interest paid remained controlled at ~123-124 million EUR

## Conclusion

The leverage trend shows clear improvement across 2022:
1. Absolute debt declined by 14.7%
2. Leverage ratio improved by ~0.69x
3. Equity base strengthened significantly
4. EBITDA maintained despite operational challenges
5. Strong cash generation supports debt reduction capacity

The company demonstrated disciplined financial management with systematic deleveraging while maintaining operational performance.

<answer>Improving</answer>