I need to calculate the FFO (Funds From Operations) / Net Debt ratio for 2022. First, let me identify the relevant data for 2022 (which corresponds to the period 2022-01-01 to 2023-01-01): **FFO Calculation:** FFO is typically calculated as: - Net Profit + Depreciation and Amortization + Deferred Taxes + Other non-cash items - Gain on sale of assets From the data: - Profit Loss (Net Profit): 681,187,000 EUR - Depreciation And Amortisation Expense: 544,992,000 EUR - Adjustments For Undistributed Profits Of Investments Accounted For Using Equity Method: 50,405,000 EUR (this is added back as it's non-cash) Let me also check if there are other items. Looking at cash flow from operating activities: - Cash Flows From Used In Operating Activities: 1,566,829,000 EUR A more standard FFO calculation for credit analysis: FFO = Profit before tax + Interest expense + Depreciation & Amortization - Taxes paid Or more commonly for utilities/infrastructure: FFO = Net income + Depreciation & Amortization + Deferred taxes + Other non-cash charges Let me use a comprehensive approach: - Net Profit: 681,187,000 EUR + Depreciation and Amortization: 544,992,000 EUR + Adjustments For Undistributed Profits Of Investments (equity method): 50,405,000 EUR FFO = 681,187,000 + 544,992,000 + 50,405,000 = 1,276,584,000 EUR Alternatively, using operating cash flow as a base and adjusting: Cash Flows From Used In Operating Activities = 1,566,829,000 EUR But FFO typically excludes working capital changes. Let me calculate more carefully: From the cash flow statement, the adjustments to reconcile profit to operating cash flow: - Adjustments For Reconcile Profit Loss: 592,571,000 EUR - Includes Depreciation: 544,992,000 EUR - Other adjustments: 47,579,000 EUR A more standard FFO for credit ratios: FFO = Net income + Depreciation + Amortization + Deferred income taxes + Other non-cash items Let me use: Net Profit + D&A + Equity method adjustments = 681,187,000 + 544,992,000 + 50,405,000 = 1,276,584,000 EUR Or we can use: Profit before tax + Interest expense - Current taxes + D&A = 869,517,000 + 116,468,000 - 188,330,000 + 50,405,000 (equity adj) = 1,048,060,000... this gets complicated. Let me use a cleaner approach. FFO is often approximated as: Operating Cash Flow - Change in Working Capital + Interest paid Or: FFO = EBITDA - Taxes + Other non-cash items Actually, let me look at this more carefully. For 2022 (period 2022-01-01 to 2023-01-01): From the cash flow statement: - Cash Flows From Used In Operating Activities: 1,566,829,000 EUR This includes working capital changes. FFO typically excludes working capital changes. FFO = Operating Cash Flow - Increase Decrease In Working Capital = 1,566,829,000 - 574,568,000 = 992,261,000 EUR Wait, let me verify: "Increase Decrease In Working Capital" is 574,568,000 EUR (positive means decrease in working capital, adding to cash flow). Actually, looking at the components: - Variacion En Existencias Deudores... : 71,466,000 EUR (increase in receivables/inventory, negative for cash) - Variacion En Acreedores... : 503,102,000 EUR (increase in payables, positive for cash) So working capital change of 574,568,000 is a source of cash (decrease in working capital or increase in liabilities). FFO = Operating Cash Flow - Working capital changes (removing the working capital benefit) = 1,566,829,000 - 574,568,000 = 992,261,000 EUR But wait, I need to add back interest paid since FFO is pre-interest: Interest Paid Classified As Operating Activities: 123,524,000 EUR FFO = 992,261,000 + 123,524,000 = 1,115,785,000 EUR Or more commonly, FFO includes interest paid as it's a financing cost, so: FFO = 992,261,000 EUR... but this seems low. Let me try another standard approach: FFO = Net Income + Non-cash charges + Interest expense - Gain on asset sales = 681,187,000 + 544,992,000 + 50,405,000 + (-708,000) + 116,468,000 - 23,161,000 (finance income, not expense) Actually, let me use the most common definition for infrastructure companies: FFO = Net Profit + D&A + Deferred Taxes + Other non-cash items - Gain on sale Looking at "Other Adjustments To Reconcile Profit Loss": 47,579,000 EUR This includes: equity method adjustment (50,405,000) + asset sale gains/losses (-708,000) + other items So FFO = 681,187,000 + 544,992,000 + 50,405,000 - 708,000 = 1,275,876,000 EUR Or adding finance costs (since FFO is pre-financing): = 1,275,876,000 + 116,468,000 - 23,161,000 (finance income) = 1,369,183,000 EUR Hmm, this is getting complex. Let me use a simpler, widely accepted approach: **FFO = Cash Flow from Operations before working capital changes** From the cash flow statement structure: - Profit Loss: 681,187,000 + Adjustments For Reconcile Profit Loss: 592,571,000 = 1,273,758,000 (this is before working capital changes, interest, and taxes) Then add back interest paid (classified as operating): 123,524,000 And subtract interest received: -15,680,000 And subtract dividends received: -7,578,000 Actually, the standard format is: Cash flow before working capital changes = 681,187,000 + 592,571,000 = 1,273,758,000 Then: + Interest paid (123,524,000) - Interest received (15,680,000) - Dividends received (7,578,000) + Income taxes paid (363,996,000) - Other... Let me try: FFO = EBITDA - Cash taxes EBITDA = Profit before tax + Finance Costs + D&A - Finance Income = 869,517,000 + 116,468,000 + 544,992,000 - 23,161,000 = 1,507,816,000 EUR FFO ≈ EBITDA - Taxes paid in cash = 1,507,816,000 - 363,996,000 = 1,143,820,000 EUR Or using a more standard credit metric: FFO = Net income + D&A + Interest expense + Deferred taxes - Gain on sales = 681,187,000 + 544,992,000 + 116,468,000 + (70,567,000 - 69,217,000) - (-708,000) Deferred tax change = 69,217,000 - 70,567,000 = -1,350,000 (decrease, so add back) = 681,187,000 + 544,992,000 + 116,468,000 - 1,350,000 + 708,000 = 1,342,005,000 EUR This is getting too complicated. Let me use the most straightforward approach used by rating agencies: **FFO = Funds from Operations = Net Income + Depreciation + Amortization + Deferred Taxes + Other non-cash items** From data for 2022-2023: - Net Income: 681,187,000 - D&A: 544,992,000 - Equity method undistributed profits: 50,405,000 (non-cash) - Asset sale gains/losses: -708,000 (negative means loss, so add back) FFO = 681,187,000 + 544,992,000 + 50,405,000 + 708,000 = 1,277,292,000 EUR Or if we include interest expense (since Net Debt is post-interest, but FFO/Net Debt is often calculated with FFO before interest): FFO before interest = 1,277,292,000 + 116,468,000 - 23,161,000 = 1,370,599,000 EUR Actually, standard FFO for leverage ratios is typically: FFO = Net Income + D&A + Deferred Tax + Other non-cash - Gain on sale + Interest expense But since we're comparing to Net Debt, and Net Debt doesn't include interest-bearing... let me just use the standard. Let me use: **FFO = Operating Cash Flow - Working Capital Changes + Interest Paid** = 1,566,829,000 - 574,568,000 + 123,524,000 = 1,115,785,000 EUR Or more commonly for European companies: FFO = EBIT + D&A - Cash Taxes = (869,517,000 + 116,468,000 - 23,161,000) + 544,992,000 - 363,996,000 = 962,824,000 + 544,992,000 - 363,996,000 = 1,143,820,000 EUR I'll go with a cleaner approach. Let me calculate FFO as: **FFO = Net Profit + D&A + Interest Expense - Interest Income + Equity Earnings - Dividends from Equity** = 681,187,000 + 544,992,000 + 116,468,000 - 23,161,000 + 50,405,000 - 7,578,000 = 1,362,313,000 EUR Hmm, this is too high. Let me reconsider. Standard FFO (as per Moody's/SP): FFO = Net Income + Depreciation + Amortization + Deferred Income Taxes + Other Non-Cash Items - Gain on Sale of Assets = 681,187,000 + 544,992,000 + (70,567,000 - 69,217,000) + 50,405,000 + 708,000 = 681,187,000 + 544,992,000 + 1,350,000 + 50,405,000 + 708,000 = 1,278,642,000 EUR Let me round to **FFO = 1,279,000,000 EUR** approximately, or about 1,277 million. Actually, let me use a simpler and more widely accepted version: **FFO = Cash Flow from Operations before changes in working capital** From cash flow statement: - Start with Profit: 681,187,000 - Add back Adjustments For Reconcile Profit Loss: 592,571,000 = 1,273,758,000 EUR This is cash flow from operations before working capital changes, which equals FFO for many purposes. **Net Debt Calculation for 2022 (as of 2023-01-01, end of 2022):** Net Debt = Total Financial Debt - Cash and Cash Equivalents Financial Debt: - Noncurrent Financial Liabilities: 5,543,755,000 - Longterm Borrowings: 5,491,124,000 - Other Noncurrent Financial Liabilities: 52,631,000 - Current Financial Liabilities: 1,705,277,000 - Current Borrowings And Current Portion Of Noncurrent Borrowings: 721,845,000 - Other Current Financial Liabilities: 983,432,000 Total Financial Debt = 5,543,755,000 + 1,705,277,000 = 7,249,032,000 EUR Cash and Cash Equivalents: 794,824,000 EUR Net Debt = 7,249,032,000 - 794,824,000 = 6,454,208,000 EUR Wait, I need to check if there are other current financial assets that should be included as "cash-like": Current Financial Assets At Amortised Cost: 752,505,000 EUR Current Derivative Financial Assets: 0 EUR If we include current financial assets as near-cash: Cash and near-cash = 794,824,000 + 752,505,000 = 1,547,329,000 EUR But standard Net Debt typically only includes Cash and Cash Equivalents. Let me verify if current financial assets are liquid investments or restricted. Looking at the data: "Current Financial Assets At Amortised Cost" = 752,505,000 EUR. These could be short-term deposits or investments. For conservative Net Debt, I'll use just Cash and Cash Equivalents: 794,824,000 EUR Net Debt = 7,249,032,000 - 794,824,000 = 6,454,208,000 EUR Or if we want Gross Debt: 7,249,032,000 EUR Now, FFO/Net Debt ratio: Using FFO = 1,273,758,000 (cash flow before working capital) FFO/Net Debt = 1,273,758,000 / 6,454,208,000 = 0.1973 or 19.73% Or using a more comprehensive FFO including interest add-back: FFO = 1,273,758,000 + 123,524,000 (interest paid, operating) = 1,397,282,000 FFO/Net Debt = 1,397,282,000 / 6,454,208,000 = 0.2165 or 21.65% Actually, let me recalculate more carefully. The standard FFO for credit analysis: FFO = Net Income + D&A + Deferred Taxes + Other non-cash items - Gain on asset sales + Interest Expense But when we calculate FFO/Net Debt, we want FFO available to service debt, so FFO before interest is appropriate. Let me use: FFO = EBIT + D&A - Cash Taxes = (Profit before tax + Interest expense - Interest income) + D&A - Cash taxes = (869,517,000 + 116,468,000 - 23,161,000) + 544,992,000 - 363,996,000 = 962,824,000 + 544,992,000 - 363,996,000 = 1,143,820,000 EUR FFO/Net Debt = 1,143,820,000 / 6,454,208,000 = 0.1772 or 17.72% Or using a simpler FFO = Operating CF - Working capital changes: = 1,566,829,000 - 574,568,000 = 992,261,000 FFO/Net Debt = 992,261,000 / 6,454,208,000 = 0.1537 or 15.37% Let me try yet another approach. Looking at the cash flow statement more carefully: Cash Flows From Used In Operating Activities = 1,566,829,000 This includes: - Profit + adjustments: 1,273,758,000 - Working capital changes: 574,568,000 - Other operating cash flows: -469,827,000 (includes interest paid, taxes, etc.) Actually, let me verify: 1,273,758,000 + 574,568,000 - 469,827,000 = 1,378,499,000... doesn't match 1,566,829,000. Let me recheck: The cash flow statement items should sum up. Looking at the structure: - Adjustments For Reconcile Profit Loss: 592,571,000 - D&A: 544,992,000 - Other: 47,579,000 Other adjustments include equity earnings, asset sales, finance items, provisions, subsidies, etc. Let me just use the direct approach: **FFO = Cash Flow from Operations before Working Capital Changes** From operating cash flow of 1,566,829,000, subtract working capital benefit of 574,568,000: FFO = 1,566,829,000 - 574,568,000 = 992,261,000 EUR But this includes interest paid and taxes paid. To get "pure" FFO: FFO = 992,261,000 + 123,524,000 (interest paid) + 363,996,000 (taxes paid) - 15,680,000 (interest received) - 7,578,000 (dividends received) = 992,261,000 + 123,524,000 + 363,996,000 - 15,680,000 - 7,578,000 = 1,456,523,000 EUR This is too high. Let me reconsider. Actually, standard FFO as used by rating agencies: **FFO = Net Income + Depreciation + Amortization + Deferred Taxes + Other Non-Cash Items** = 681,187,000 + 544,992,000 + (69,217,000 - 70,567,000) + 50,405,000 + ... Deferred tax assets decreased from 70,567,000 to 69,217,000, meaning deferred tax expense was 1,350,000. Other non-cash: equity earnings 50,405,000, asset sale loss 708,000, provisions 35,046,000, subsidies -24,996,000... Let me just use the comprehensive adjustment total of 592,571,000, but remove working capital and financing items: From 592,571,000 adjustments: - D&A: 544,992,000 - Equity earnings: 50,405,000 - Asset sales: -708,000 - Finance income: 23,161,000 (to remove) - Finance costs: 116,468,000 (to remove) - Provisions: 35,046,000 - Subsidies: -24,996,000 - Other operating: 4,665,000 Non-cash operating adjustments (excluding financing): 544,992,000 + 50,405,000 + (-708,000) + 35,046,000 + (-24,996,000) + 4,665,000 = 609,404,000 Wait, that doesn't match. Let me recalculate: 544,992 + 50,405 - 708 + 35,046 - 24,996 + 4,665 = 609,404... but total is 592,571. The difference is finance items: 23,161 - 116,468 = -93,307... 609,404 - 93,307 = 516,097... still not 592,571. Let me check: 544,992 + 47,579 = 592,571. The "Other Adjustments" of 47,579 includes equity earnings (50,405), asset sales (-708), and other items. Actually: 50,405 - 708 + other = 47,579, so other = -2,118? Doesn't make sense. Let me just accept: Total adjustments = 592,571,000, of which D&A = 544,992,000 and Other = 47,579,000. The 47,579,000 includes: equity earnings (50,405), asset sales (-708), and other net items ( -2,118)... or the breakdown is different. Actually re-reading: "Adjustments For Undistributed Profits Of Investments Accounted For Using Equity Method" = 50,405,000 is listed separately, and "Other Adjustments To Reconcile Profit Loss" = 47,579,000. Total other adjustments = 50,405,000 + (-708,000) + 23,161,000 + 116,468,000 + 35,046,000 + (-24,996,000) + 4,665,000 + ... Let me check if these sum to 47,579,000: No, they don't. These are separate line items that sum to the total adjustments. Actually, looking more carefully at the structure: - Adjustments For Reconcile Profit Loss: 592,571,000 - Adjustments For Depreciation And Amortisation Expense: 544,992,000 - Other Adjustments To Reconcile Profit Loss: 47,579,000 And separately listed (which are components): - Adjustments For Undistributed Profits: 50,405,000 - Ajustes Por Resultados Por Enajenacion: -708,000 - Adjustments For Finance Income: 23,161,000 - Adjustments For Finance Costs: 116,468,000 - Adjustments For Provisions: 35,046,000 - Ajustes Por Imputacion De Subvenciones: -24,996,000 - Other Operating Income Expense: 4,665,000 Sum: 50,405 - 708 + 23,161 + 116,468 + 35,046 - 24,996 + 4,665 = 204,041,000 But "Other Adjustments To Reconcile Profit Loss" is only 47,579,000. So these are NOT all components - some are already included in the main categories or are separate. Actually, I think the structure is: - Total adjustments: 592,571,000 - D&A: 544,992,000 - Other adjustments: 47,579,000 (which might include some of the above, or the above are additional details) This is confusing. Let me just use the simplest approach: **FFO = Net Income + D&A = 681,187,000 + 544,992,000 = 1,226,179,000 EUR** Or more comprehensively including equity earnings (non-cash): **FFO = 681,187,000 + 544,992,000 + 50,405,000 = 1,276,584,000 EUR** I'll use **FFO ≈ 1,277,000,000 EUR** or about 1.28 billion. For Net Debt, let me recalculate: - Long-term borrowings: 5,491,124,000 - Current borrowings: 721,845,000 - Other noncurrent financial liabilities: 52,631,000 - Other current financial liabilities: 983,432,000 Total debt = 5,491,124,000 + 721,845,000 + 52,631,000 + 983,432,000 = 7,249,032,000 EUR Less: Cash and Cash Equivalents = 794,824,000 EUR Net Debt = 6,454,208,000 EUR Or if we include current financial assets (at amortized cost, likely liquid): Net Debt = 7,249,032,000 - 794,824,000 - 752,505,000 = 5,701,703,000 EUR I'll use the standard definition with just cash: **Net Debt = 6,454,208,000 EUR** FFO/Net Debt = 1,276,584,000 / 6,454,208,000 = 0.1978 or **19.8%** Or using FFO = 1,226,179,000 (just net income + D&A): FFO/Net Debt = 1,226,179,000 / 6,454,208,000 = 0.1900 or **19.0%** Let me also try with Gross Debt (no cash subtraction): FFO/Gross Debt = 1,276,584,000 / 7,249,032,000 = 0.1761 or 17.6% Given the variations, let me settle on a reasonable estimate. For European utilities, FFO typically includes: - Net income - D&A - Deferred taxes - Other non-cash items (equity earnings, etc.) And Net Debt is total financial debt minus cash and cash equivalents. Using **FFO = 1,277 million EUR** and **Net Debt = 6,454 million EUR**: FFO/Net Debt = 1,277 / 6,454 = 0.1979 ≈ **0.20 or 20%** Or expressed as a ratio: 0.20x Actually, looking at this again, I want to be more precise. Let me use the cash flow from operations before working capital as FFO: From the cash flow statement: - Cash from operations: 1,566,829,000 - Less: Working capital changes: 574,568,000 - Plus: Interest paid (financing cost, add back for FFO): 123,524,000 - Less: Interest received (financing income, remove): -15,680,000 - Less: Dividends received (investing, remove): -7,578,000 FFO = 1,566,829,000 - 574,568,000 + 123,524,000 - 15,680,000 - 7,578,000 = 1,092,527,000 EUR FFO/Net Debt = 1,092,527,000 / 6,454,208,000 = 0.1693 or **16.9%** Hmm, but this includes taxes paid. FFO before taxes: = 1,092,527,000 + 363,996,000 = 1,456,523,000 FFO/Net Debt = 1,456,523,000 / 6,454,208,000 = 0.2257 or **22.6%** I think the most standard approach for this ratio is: **FFO = Net Income + D&A + Deferred Taxes + Other Non-Cash Items - Gain on Sale** = 681,187,000 + 544,992,000 + (70,567,000 - 69,217,000) + 50,405,000 - (-708,000) = 681,187,000 + 544,992,000 + 1,350,000 + 50,405,000 + 708,000 = 1,278,642,000 EUR FFO/Net Debt = 1,278,642,000 / 6,454,208,000 = 0.1981 or **19.8%** Rounding to a reasonable precision: **0.20** or **19.8%** Actually, I realize I should check if "Other Current Financial Liabilities" of 983,432,000 is truly debt or includes trade payables. Looking at the balance sheet: Trade And Other Current Payables: 1,160,176,000 - Trade And Other Current Payables To Trade Suppliers: 485,624,000 - Other Current Payables: 661,232,000... wait, 485,624 + 661,232 = 1,146,856, not 1,160,176. There's a discrepancy. Actually 485,624 + 661,232 = 1,146,856, but total is 1,160,176. Difference is 13,320, which matches Current Tax Liabilities of 13,320,000? No, tax liabilities are separate. Looking at Current Liabilities total: 2,903,042,000 - Current Provisions: 30,536,000 - Current Financial Liabilities: 1,705,277,000 - Current Borrowings: 721,845,000 - Other Current Financial Liabilities: 983,432,000 - Trade And Other Current Payables: 1,160,176,000 - Current Tax Liabilities: 13,320,000 - Current Derivative Financial Liabilities: 7,053,000 Sum: 30,536 + 1,705,277 + 1,160,176 + 13,320 + 7,053 = 2,916,362... not 2,903,042. Hmm, discrepancy of 13,320,000. Maybe tax liabilities are included in other payables? Actually 30,536 + 1,705,277 + 1,160,176 + 7,053 = 2,903,042. Yes! Current Tax Liabilities of 13,320,000 must be included in Trade And Other Current Payables or elsewhere. So "Other Current Financial Liabilities" of 983,432,000 is definitely financial debt (not trade payables). Let me recalculate Net Debt more carefully: Financial Debt: - Noncurrent: 5,543,755,000 (total noncurrent financial liabilities) - Longterm Borrowings: 5,491,124,000 - Other Noncurrent Financial Liabilities: 52,631,000 - Current: 1,705,277,000 (total current financial liabilities) - Current Borrowings And Current Portion Of Noncurrent Borrowings: 721,845,000 - Other Current Financial Liabilities: 983,432,000 Total Financial Debt = 7,249,032,000 EUR Cash and Cash Equivalents = 794,824,000 EUR Net Debt = 7,249,032,000 - 794,824,000 = 6,454,208,000 EUR Or if we include current financial assets as available to pay debt: Current Financial Assets At Amortised Cost = 752,505,000 EUR Net Debt (broader) = 7,249,032,000 - 794,824,000 - 752,505,000 = 5,701,703,000 EUR I'll use the standard **Net Debt = 6,454,208,000 EUR**. For FFO, let me use a comprehensive but standard definition: **FFO = Operating Cash Flow - Increase in Working Capital + Interest Expense** Wait, operating cash flow already includes interest paid (as operating). So: FFO = Operating Cash Flow - Working Capital Changes + Interest Paid = 1,566,829,000 - 574,568,000 + 123,524,000 = 1,115,785,000 EUR FFO/Net Debt = 1,115,785,000 / 6,454,208,000 = 0.1729 or **17.3%** Or if we use FFO before taxes (since taxes are a cash outflow in operations but FFO is often pre-tax for debt service capacity): = 1,115,785,000 + 363,996,000 = 1,479,781,000 FFO/Net Debt = 1,479,781,000 / 6,454,208,000 = 0.2293 or **22.9%** I think the most widely accepted FFO for this ratio in European context is: **FFO = Net Income + D&A + Interest Expense - Interest Income + Deferred Taxes + Other non-cash** But actually, let me look at this from the EBITDA perspective and adjust: EBITDA = Revenue + Other Work + Misc Operating Income - Aprovisionamientos - Employee Benefits - Misc Operating Expense + Equity Earnings + Subsidies Or: EBITDA = Profit before tax + Finance Costs - Finance Income + D&A = 869,517,000 + 116,468,000 - 23,161,000 + 544,992,000 = 1,507,816,000 EUR FFO = EBITDA - Cash Taxes = 1,507,816,000 - 363,996,000 = 1,143,820,000 EUR FFO/Net Debt = 1,143,820,000 / 6,454,208,000 = 0.1772 or **17.7%** Or FFO = EBITDA - Taxes paid + Interest paid - Interest received (since we want funds available for debt service) = 1,507,816,000 - 363,996,000 + 123,524,000 - 15,680,000 = 1,251,664,000 EUR FFO/Net Debt = 1,251,664,000 / 6,454,208,000 = 0.1939 or **19.4%** Given all these variations, I think a reasonable estimate is in the range of **17-20%**. Let me settle on using: - **FFO = Net Income + D&A + Interest Expense (net of interest income) + Equity earnings - Dividends from equity** = 681,187,000 + 544,992,000 + (116,468,000 - 23,161,000) + 50,405,000 - 7,578,000 = 681,187,000 + 544,992,000 + 93,307,000 + 50,405,000 - 7,578,000 = 1,362,313,000 EUR This seems too high. Let me remove the interest and dividends (since Net Debt is post-interest, but FFO/Net Debt ratio compares FFO available to service debt to the debt level): Actually standard is FFO before interest, since the ratio measures how well FFO covers the debt. FFO = EBIT + D&A - Cash Taxes = (869,517,000 + 116,468,000 - 23,161,000) + 544,992,000 - 363,996,000 = 962,824,000 + 544,992,000 - 363,996,000 = 1,143,820,000 EUR FFO/Net Debt = 1,143,820,000 / 6,454,208,000 = 0.1772 I'll go with **0.18** or **17.7%** or about **0.20** rounded. Actually, let me check one more thing. Is there any noncontrolling interest adjustment to FFO? Usually FFO is for the whole company, so no adjustment needed. Final calculation: - FFO ≈ 1,144,000,000 EUR (using EBIT + D&A - Cash Taxes) - Net Debt = 6,454,208,000 EUR - FFO/Net Debt = 0.1772 Or using a slightly different FFO definition that includes more add-backs: FFO = 1,277,000,000 EUR FFO/Net Debt = 0.198 Given the range, I'll provide **0.20** as a rounded estimate, or more precisely **0.18-0.20**. Let me use the most defensible calculation: **FFO = Operating Cash Flow before Working Capital Changes = 1,273,758,000 EUR** (This is Profit + Adjustments, before working capital, interest, and tax cash flows) But this includes interest received and paid, and taxes. To get "Funds From Operations" proper: FFO = 1,273,758,000 - 23,161,000 (finance income) + 116,468,000 (finance costs) - ... Actually, the adjustments already include finance income and costs as positive numbers (added back to profit). So: Profit 681,187,000 + Adjustments 592,571,000 = 1,273,758,000 This 1,273,758,000 is before working capital changes and before actual cash interest/tax/dividend flows. Then the cash flow statement shows: + Working capital changes 574,568,000 - Other operating cash flows 469,827,000 (interest paid, taxes, etc.) = Operating cash flow 1,566,829,000... wait: 1,273,758 + 574,568 - 469,827 = 1,378,499, not 1,566,829. There's a 188,330,000 difference. This might be the income tax expense (not cash taxes)? Or other items. Actually, looking at "Otros Flujos De Efectivo De Las Actividades De Explotacion": -469,827,000 This includes: - Interest Paid: 123,524,000 (negative, so outflow) - Dividends Received: 7,578,000 (positive, inflow) - Interest Received: 15,680,000 (positive, inflow) - Income Taxes Paid: 363,996,000 (negative, outflow) - Other: -5,565,000 Sum of these: -123,524 + 7,578 + 15,680 - 363,996 - 5,565 = -469,827,000. Yes! So: 1,273,758,000 + 574,568,000 - 469,827,000 = 1,378,499,000... but stated operating cash flow is 1,566,829,000. Difference: 1,566,829,000 - 1,378,499,000 = 188,330,000 = Income Tax Expense! So the reconciliation is: Profit 681,187,000 + Adjustments 592,571,000 + Working capital 574,568,000 - Cash interest paid 123,524,000 + Dividends received 7,578,000 + Interest received 15,680,000 - Cash taxes paid 363,996,000 - Other 5,565,000 = 1,378,499,000... still not matching. Wait, I need to add back the tax expense (non-cash) or there's something else. Let me check: 1,378,499 + 188,330 = 1,566,829. Yes! So the "Income Tax Expense" of 188,330,000 is added back somewhere, or the profit is before tax? No, profit is 681,187,000 which is after tax. Actually, I think the issue is that "Adjustments For Reconcile Profit Loss" of 592,571,000 already includes some items that bring the pre-tax profit to a cash basis, and then we need to subtract the actual cash taxes paid. Let me just accept that Operating Cash Flow = 1,566,829,000 is correct as given. For FFO, I'll use: **FFO = Operating Cash Flow - Working Capital Changes + Interest Paid - Interest Received + Dividends Received** = 1,566,829,000 - 574,568,000 + 123,524,000 - 15,680,000 + 7,578,000 Wait, dividends received are from investments, not operations. Exclude. FFO = 1,566,829,000 - 574,568,000 + 123,524,000 - 15,680,000 = 1,100,105,000 EUR Or if we include dividends received (as they're operational for some companies): = 1,107,683,000 EUR FFO/Net Debt = 1,100,105,000 / 6,454,208,000 = 0.1704 or **17.0%** Or = 1,107,683,000 / 6,454,208,000 = 0.1716 or **17.2%** Given all my calculations, the FFO/Net Debt ratio is approximately **17-20%**. I'll provide **0.18** as a reasonable midpoint, or more precisely calculate with my preferred method: **FFO = Net Income + D&A + Net Interest Expense + Equity Earnings (non-cash) - Dividends from Equity** = 681,187,000 + 544,992,000 + (116,468,000 - 23,161,000) + 50,405,000 - 7,578,000 = 681,187,000 + 544,992,000 + 93,307,000 + 50,405,000 - 7,578,000 = 1,362,313,000 EUR Hmm, this is too high because I'm double-counting or misclassifying. The equity earnings of 50,405,000 are already in net income. And dividends received of 7,578,000 are cash, not subtracted from net income. Let me restart with clean FFO: **FFO = Net Income + D&A + Deferred Taxes + Other Non-Cash - Gain on Sale + Interest Expense (gross)** Standard FFO (Moody's definition for corporates): = Net Income + D&A + Deferred Income Taxes + Other Non-Cash Items - Gain on Sale of Assets = 681,187,000 + 544,992,000 + (69,217,000 - 70,567,000) + 50,405,000 + 708,000 = 681,187,000 + 544,992,000 - 1,350,000 + 50,405,000 + 708,000 = 1,275,942,000 EUR FFO/Net Debt = 1,275,942,000 / 6,454,208,000 = 0.1977 or **19.8%** I'll round to **0.20** or provide **0.198**. Actually, for more precision, let me use exact numbers: Net Debt = 7,249,032,000 - 794,824,000 = 6,454,208,000 FFO = 1,275,942,000 Ratio = 1,275,942,000 / 6,454,208,000 = 0.19769... Or about **0.20** or **19.8%** If I use Net Debt including current financial assets as cash-like: Net Debt = 7,249,032,000 - 794,824,000 - 752,505,000 = 5,701,703,000 FFO/Net Debt = 1,275,942,000 / 5,701,703,000 = 0.2238 or **22.4%** Given standard practice is to use only Cash and Cash Equivalents, I'll use **0.20** or **0.198**. Final answer: **0.20** (or more precisely 0.198) 0.20