I need to estimate the Net Debt / EBITDA ratio for 2022 using S&P methodology. First, let me identify the relevant data and define the components: **Net Debt (S&P methodology):** S&P typically defines Net Debt as: - Short-term financial debt + Long-term financial debt + Current portion of long-term debt - Cash and cash equivalents - Liquid investments From the balance sheet data at 2023-01-01 (end of 2022): - Short Term Financial Liabilities Excluding Other Current Financial Liabilities: 142,437,000 EUR - Long Term Financial Liabilities Excluding Other Non Current Financial Liabilities: 6,402,913,000 EUR - Other Current Financial Liabilities: 290,000 EUR - Other Noncurrent Financial Liabilities: 34,000 EUR Cash and cash equivalents at 2023-01-01: 451,946,000 EUR Current Financial Assets Excluding Other Current Financial Assets: 5,770,000 EUR For S&P Net Debt, I need to include: - Total financial debt (short-term + long-term) - Less: Cash and cash equivalents - Less: Liquid financial assets (current financial assets that are readily convertible to cash) Let me calculate Gross Debt: - Short-term financial debt: 142,437,000 + 290,000 = 142,727,000 EUR - Long-term financial debt: 6,402,913,000 + 34,000 = 6,402,947,000 EUR - Total Gross Debt = 142,727,000 + 6,402,947,000 = 6,545,674,000 EUR Less liquid assets: - Cash and cash equivalents: 451,946,000 EUR - Current Financial Assets (liquid): 5,770,000 EUR Net Debt = 6,545,674,000 - 451,946,000 - 5,770,000 = 6,087,958,000 EUR Wait - let me reconsider. The "Current Financial Assets Excluding Other Current Financial Assets" might include items that are not all liquid. Let me check if there's a "Related Parties Member" component. Current Financial Assets Excluding Other Current Financial Assets 2023-01-01: 5,770,000 EUR Related Parties Member: 2,246,000 EUR So non-related party portion: 5,770,000 - 2,246,000 = 3,524,000 EUR But actually, for S&P methodology, we typically use: Net Debt = (Short-term borrowings + Long-term borrowings + Current portion of long-term debt) - (Cash and cash equivalents + Marketable securities) Let me be more careful. Looking at the items: - "Short Term Financial Liabilities Excluding Other Current Financial Liabilities": 142,437,000 EUR - "Other Current Financial Liabilities": 290,000 EUR - "Long Term Financial Liabilities Excluding Other Non Current Financial Liabilities": 6,402,913,000 EUR - "Other Noncurrent Financial Liabilities": 34,000 EUR Total Financial Debt = 142,437,000 + 290,000 + 6,402,913,000 + 34,000 = 6,545,674,000 EUR Cash and Cash Equivalents = 451,946,000 EUR For liquid financial assets, I should include "Current Financial Assets Excluding Other Current Financial Assets" = 5,770,000 EUR (these are typically short-term deposits, securities, etc.) Net Debt = 6,545,674,000 - 451,946,000 - 5,770,000 = 6,087,958,000 EUR Actually, let me reconsider whether to include all current financial assets. The S&P Global methodology typically includes: - Cash and cash equivalents - Short-term marketable securities (liquid investments) The "Current Financial Assets Excluding Other Current Financial Assets" likely represents liquid investments. So yes, subtract these. **EBITDA for 2022:** EBITDA = Operating Profit + Depreciation and Amortization From the income statement 2022-01-01 to 2023-01-01: - Profit Loss From Operating Activities: 641,338,000 EUR - Depreciation Amortisation And Impairment Loss Reversal Of Impairment Loss Recognised In Profit Or Loss: 479,186,000 EUR Wait - I need to check if "Profit Loss From Operating Activities" is EBIT or operating profit before D&A. Looking at the structure: - "Operating Expense" = 1,191,952,000 EUR - "Revenue And Operating Income" = 2,312,476,000 EUR - "Profit Loss From Operating Activities" = 641,338,000 EUR Let me verify: Revenue - Operating Expense - D&A = Operating Profit? 2,312,476,000 - 1,191,952,000 = 1,120,524,000 But Profit Loss From Operating Activities is 641,338,000, which is less. So D&A must be included in Operating Expense or deducted separately. Actually, looking more carefully at typical income statement structure: Revenue - Operating Expenses = EBITDA EBITDA - D&A = EBIT (Operating Profit) But here "Operating Expense" might be before D&A, or the structure could be different. Let me check: "Depreciation Amortisation And Impairment Loss Reversal Of Impairment Loss Recognised In Profit Or Loss" = 479,186,000 EUR If Operating Profit = 641,338,000 and this includes the effect of D&A, then: EBIT = 641,338,000 EUR (this is "Profit Loss From Operating Activities") Wait - "Profit Loss From Operating Activities" is typically EBIT in many European presentations. Let me verify by checking if D&A is already deducted. Actually, looking at the cash flow statement: "Adjustments For Depreciation And Amortisation Expense" = 478,290,000 EUR This is added back to profit to get operating cash flow, which means D&A was deducted to get to profit. So "Profit Loss From Operating Activities" is after D&A (i.e., EBIT). Therefore: EBITDA = EBIT + D&A = 641,338,000 + 479,186,000 = 1,120,524,000 EUR Let me verify this matches: Revenue - Operating Expense = 2,312,476,000 - 1,191,952,000 = 1,120,524,000 EUR Yes! This confirms: EBITDA = 1,120,524,000 EUR **Net Debt / EBITDA Ratio:** Net Debt = 6,087,958,000 EUR EBITDA = 1,120,524,000 EUR Ratio = 6,087,958,000 / 1,120,524,000 = 5.43 Wait, let me double-check my Net Debt calculation. Let me reconsider if "Other Current Financial Liabilities" and "Other Noncurrent Financial Liabilities" should be included in gross debt. For S&P methodology, typically: - Bank debt and bonds (financial debt) are included - Sometimes other financial liabilities like finance leases are included - Trade payables and operating liabilities are excluded "Short Term Financial Liabilities Excluding Other Current Financial Liabilities" - this is clearly financial debt "Long Term Financial Liabilities Excluding Other Non Current Financial Liabilities" - this is clearly financial debt The "Other Current Financial Liabilities" (290,000) and "Other Noncurrent Financial Liabilities" (34,000) - these might include derivative liabilities, finance lease liabilities, etc. For conservative S&P approach, I should include all financial liabilities. But actually, looking at the naming: "Excluding Other" suggests the main line items are the primary debt instruments, and "Other" captures additional items. So yes, include all. However, let me also check if there are any "Current Financial Assets" that are truly liquid. The item "Current Financial Assets Excluding Other Current Financial Assets" = 5,770,000 EUR. Actually, I want to be more careful. Let me see if this includes items like short-term deposits, government securities, etc. that are truly cash-like. The name suggests these are financial assets held for trading or available-for-sale, which would be liquid. But wait - I also see "Other Current Financial Assets" = 17,455,000 EUR at 2023-01-01. Should I include this? Looking at the structure: - "Current Financial Assets Excluding Other Current Financial Assets" = 5,770,000 EUR - "Other Current Financial Assets" = 17,455,000 EUR The "Other Current Financial Assets" might include things like derivatives, loans to related parties, etc. The "Excluding Other" suggests the main category is more standard/liquid. For S&P Net Debt, we typically subtract: - Cash and cash equivalents - Short-term liquid investments (marketable securities, short-term deposits) I think "Current Financial Assets Excluding Other Current Financial Assets" = 5,770,000 is the liquid portion, while "Other Current Financial Assets" = 17,455,000 might include less liquid items. Actually, looking more carefully, I see "Other Current Financial Assets" "Related Parties Member" = 0 EUR, so the 17,455,000 is all non-related party. Let me check if there are any debt-like items in current liabilities I might have missed. Looking at "Trade And Other Current Payables" - these are operating liabilities, not financial debt. Let me recalculate Net Debt more carefully: Gross Financial Debt: - Short Term Financial Liabilities Excluding Other Current Financial Liabilities: 142,437,000 - Other Current Financial Liabilities: 290,000 - Long Term Financial Liabilities Excluding Other Non Current Financial Liabilities: 6,402,913,000 - Other Noncurrent Financial Liabilities: 34,000 Total: 6,545,674,000 Less: - Cash and Cash Equivalents: 451,946,000 - Current Financial Assets Excluding Other Current Financial Assets: 5,770,000 Net Debt = 6,545,674,000 - 451,946,000 - 5,770,000 = 6,087,958,000 Actually, I want to double check if "Other Current Financial Assets" should also be subtracted. These might include things like: - Derivatives (positive fair value) - Loans to third parties - Deposits For S&P, typically only "Cash and cash equivalents" and "Readily marketable securities" are subtracted. "Other Current Financial Assets" might not all be liquid. Let me check the related party breakdown for Other Current Financial Assets: "Other Current Financial Assets" "Related Parties Member" 2023-01-01: 0 EUR So all 17,455,000 is non-related party. Without more detail, I'll be conservative and not subtract this (as it may include non-liquid items like derivatives, loans, etc.). Actually, re-reading S&P methodology: they typically subtract "Cash and cash equivalents" and "Short-term investments" or "Marketable securities." The "Current Financial Assets Excluding Other Current Financial Assets" is likely the main category of short-term financial investments, while "Other Current Financial Assets" is a residual category. I'll stick with subtracting only Cash and the main Current Financial Assets. Net Debt = 6,545,674,000 - 451,946,000 - 5,770,000 = 6,087,958,000 EBITDA = 1,120,524,000 Ratio = 6,087,958,000 / 1,120,524,000 = 5.433... Let me recalculate more precisely: 6,087,958,000 / 1,120,524,000 = 5.4332... Hmm, but let me also consider an alternative: maybe "Current Financial Assets Excluding Other Current Financial Assets" should not be subtracted if it's not clearly liquid. In that case: Net Debt = 6,545,674,000 - 451,946,000 = 6,093,728,000 Ratio = 6,093,728,000 / 1,120,524,000 = 5.438... The difference is small (0.005). Actually, I want to verify my EBITDA calculation once more. Let me check if there are any other items to add back. From the cash flow statement: "Adjustments For Depreciation And Amortisation Expense" = 478,290,000 EUR But in the income statement, "Depreciation Amortisation And Impairment Loss Reversal Of Impairment Loss Recognised In Profit Or Loss" = 479,186,000 EUR The difference is 896,000 EUR, which might be impairment losses. For EBITDA, we add back D&A and impairment. So using 479,186,000 is correct for EBITDA calculation (since impairment is also added back). Actually, let me verify: EBITDA = Earnings Before Interest, Taxes, Depreciation and Amortization, AND impairment. If "Depreciation Amortisation And Impairment Loss Reversal Of Impairment Loss" includes impairment, then adding this back gives us EBITDA. So EBIT = 641,338,000 Plus D&A and impairment = 479,186,000 EBITDA = 1,120,524,000 This matches Revenue - Operating Expense = 2,312,476,000 - 1,191,952,000 = 1,120,524,000 Good, this confirms. Now let me also verify using an alternative approach. S&P sometimes uses "Funds From Operations" or adjusts EBITDA. But for basic S&P methodology, the standard is: Net Debt / EBITDA Let me also check if I need to use average debt or year-end debt. S&P typically uses year-end debt for leverage ratios. One more check: should I include the related party portion of debt? Looking at "Short Term Financial Liabilities Excluding Other Current Financial Liabilities" "Related Parties Member" 2023-01-01: 118,000 EUR This is already included in the total 142,437,000 EUR. And "Long Term Financial Liabilities Excluding Other Non Current Financial Liabilities" "Related Parties Member" 2023-01-01: -2,048,000 EUR Wait, this is negative! That seems odd. Let me check... "Long Term Financial Liabilities Excluding Other Non Current Financial Liabilities" "Related Parties Member" 2023-01-01: -2048000 EUR A negative related party amount might indicate a net receivable from related parties, or it could be a presentation issue. But the total "Long Term Financial Liabilities Excluding Other Non Current Financial Liabilities" is 6,402,913,000 EUR, which is the total including related parties. Actually, looking more carefully: the "Related Parties Member" might be showing the portion attributable to related parties, and a negative might mean... actually this is confusing. Let me just use the total figures which are clearly stated. Total Long Term Financial Liabilities Excluding Other Non Current Financial Liabilities = 6,402,913,000 EUR. This is the figure to use. Now, let me also consider if "Noncurrent Financial Assets" should be subtracted from debt. These are long-term financial assets, not current. S&P typically doesn't subtract these for Net Debt as they're not immediately available to pay down debt. "Noncurrent Financial Assets" 2023-01-01: 22,945,000 EUR I won't subtract these. Let me finalize my calculation: **Gross Financial Debt at 31-Dec-2022 (2023-01-01):** - Short Term Financial Liabilities Excluding Other Current Financial Liabilities: 142,437,000 - Other Current Financial Liabilities: 290,000 - Long Term Financial Liabilities Excluding Other Non Current Financial Liabilities: 6,402,913,000 - Other Noncurrent Financial Liabilities: 34,000 - **Total Gross Debt: 6,545,674,000** **Less Liquid Assets:** - Cash and Cash Equivalents: 451,946,000 - Current Financial Assets (liquid): 5,770,000 - **Total Liquid Assets: 457,716,000** **Net Debt: 6,087,958,000** **EBITDA for 2022:** - Operating Profit (EBIT): 641,338,000 - Depreciation, Amortization & Impairment: 479,186,000 - **EBITDA: 1,120,524,000** **Net Debt / EBITDA = 6,087,958,000 / 1,120,524,000 = 5.43** Let me do the precise division: 6,087,958,000 / 1,120,524,000 = 5.43319... Rounding to two decimal places: 5.43 Actually, let me reconsider if I should include "Other Current Financial Liabilities" in gross debt. This is only 290,000 EUR, so immaterial. And "Other Noncurrent Financial Liabilities" at 34,000 EUR is also immaterial. But for completeness, I included them. One more consideration: S&P sometimes excludes certain items like lease liabilities (if using old methodology) or includes them (IFRS 16). Looking at the data, there's "Cash Outflow For Leases" in financing activities of 27,865,000 EUR, which suggests lease liabilities are included in debt. Actually, under IFRS 16, lease liabilities are included in financial liabilities. The "Short Term Financial Liabilities" and "Long Term Financial Liabilities" likely include lease liabilities. Let me verify by checking if the debt figures seem reasonable. The long-term debt of 6.4 billion EUR for a utility company seems reasonable. Final calculation: Net Debt / EBITDA = 5.43 5.43