To estimate the FFO / Net debt ratio for 2022 based on S&P methodology, we need to calculate Funds From Operations (FFO) and Net Debt. **Step 1: Calculate Funds From Operations (FFO)** S&P defines FFO as: Profit/Loss for the period from continuing operations + Depreciation and Amortisation + Other non-cash adjustments (like impairments, provisions, deferred taxes, profit from equity method investments net of dividends) - Gains on asset disposals + non-recurring items. From the data for the period 2022-01-01 to 2023-01-01: - Profit Loss: 681,187,000 EUR - Depreciation and Amortisation Expense: 544,992,000 EUR - Adjustments: - "Participacion En Beneficios De Sociedades Valoradas Por El Metodo De La Participacion" (Income from equity method investments): -50,405,000 EUR (This is subtracted in FFO to replace with dividends received if available, or simply to show operating CF; S&P usually deducts equity income and adds dividends received from associates). - "Deterioro YResultado Por Enajenaciones Del Inmovilizado" (Impairment and result on disposals): 488,000 EUR (Expense, so add back? Check sign: if positive, it's a net expense/inflow. The 2022 value is 488,000 EUR. Actually, S&P adds back impairments and deducts gains on disposals. The "Deterioro" line includes net results. Let's assume we add back this net amount as non-cash/windfall if it's a loss, but the sign is positive 488k. If it's a profit, we subtract. Let's look at operating profit reconciliation. Actually, "Ajustes Por Resultados Por Enajenacion ODeterioro..." in Cash Flow is -708,000 EUR. This implies a net gain was deducted from FFO. Let's use the direct cash flow adjustments: "Ajustes Por Resultados Por Enajenacion ODeterioro De Activos No Corrientes EInstrumentos Financieros": -708,000 EUR (deducted in cash flow, so implies a net gain subtracted). - "Adjustments For Provisions": 35,046,000 EUR (Add back). - "Other Adjustments To Reconcile Profit Loss": 47,579,000 EUR (Let's assume non-cash). - "Ajustes Por Imputacion De Subvenciones De Capital YOtros": 24,996,000 EUR (Add back? Actually, this is "Imputacion de subvenciones", it's income from grants recognized in P&L, which is non-cash, so subtract). - "Imputacion De Subvenciones De Inmovilizado No Financiero YOtras" in P&L is -15,780,000 EUR. - "Other Operating Income Expense": 4,665,000 EUR. - Deferred taxes: Income Tax Expense is 188,330,000. There's no explicit deferred tax breakdown for FFO, but we can use the tax paid and adjust. Better: use the actual FFO definition: FFO = Profit/Loss (681,187) + D&A (544,992) + Provisions (35,046) - Gains on disposals (708) - Equity income (50,405) - Grants recognized (-15,780) + Other adjustments. Let's use the Adjustments for Reconcile Profit Loss line item from the Cash Flow statement directly: 592,571,000 EUR. This Adjustment total reconciles Profit/Loss to Funds from Operations before working capital changes. FFO before interest and taxes? No, the cash flow adjustment is: Profit Loss (681,187) + Adjustments (592,571) = 1,273,758 EUR. From this, we must subtract cash interest paid and cash taxes paid to get FFO per S&P? Actually, S&P's FFO is an operating performance measure before interest and taxes paid? No, "FFO / Net Debt" uses an FFO that is typically after tax and after interest. Let's check S&P definitions: FFO = EBITDA - Net Interest Paid - Current Tax Paid - Other non-operating adjustments. Or from Operating Cash Flow: Operating CF before working capital changes. Net interest paid = Interest Paid (-123,524) + Interest Received (15,680) = -107,844 EUR. Tax paid = -363,996 EUR. FFO = 1,273,758 (Operating CF before WC) - 363,996 (Tax Paid) - 107,844 (Net Interest Paid) + adjustments? S&P usually includes dividends from associates as FFO. Let's calculate using the P&L structure: EBITDA = Operating Profit (961,554) + D&A (544,992) = 1,506,546 EUR. Other non-operating items (before interest and tax): "Deterioro" (488), "Imputacion subvenciones" (15,780), "Misc. Other Operating Income" (77,673) are already in Operating Profit? Yes, Operating Profit is 961,554. Net Interest Paid = Finance Income (23,161) - Finance Costs (-116,468) = -93,307 EUR. Current Taxes Paid = -363,996 EUR. Dividends from associates: Often added. We have "Dividends Received Classified As Operating Activities": 7,578 EUR. So FFO = EBITDA (1,506,546) - Net Interest Paid (-93,307) - Tax Paid (-363,996) + Dividends from associates (7,578) = 1,243,435 EUR. Let's refine: S&P usually deducts non-cash operating income like grant amortization, and adds back non-cash expenses. EBITDA already handles this. **Step 2: Calculate Net Debt** Net Debt = Total Debt - Cash and Cash Equivalents - Liquid Financial Assets. Total Debt = Noncurrent Borrowings + Current Borrowings. From the balance sheet 2023-01-01: Noncurrent Borrowings: 5,491,124,000 EUR Current Borrowings: 721,845,000 EUR Total Debt = 5,491,124 + 721,845 = 6,212,969,000 EUR. Cash and Cash Equivalents: 794,824,000 EUR. Other liquid assets: "Other Current Financial Assets" at amortised cost: 752,505,000 EUR. (These are highly liquid financial instruments). Net Debt = 6,212,969 - 794,824 - 752,505 = 4,665,640,000 EUR. **Step 3: Calculate the Ratio** FFO / Net Debt = 1,243,435,000 / 4,665,640,000 = 0.2665 Let me double-check S&P's exact formula. S&P uses a "Core" or "Proposed" FFO. S&P's FFO usually equals: Operating cash flow before working capital changes, adjusted for changes in current assets/liabilities related to non-operating items, less cash interest paid, minus cash tax paid. Using the exact line items from the cash flow: Operating Profit before WC changes = Profit (681,187) + Adjustments (592,571) = 1,273,758. We need to remove/confirm the Adjustments. The Adjustments include Interest Paid (-123,524) and Interest Received (15,680) and Tax Paid (-363,996), and Dividends Received (7,578). Wait, the "Otros flujos de efectivo de las actividades de explotacion" section in the CF statements often includes these items *after* "Increase Decrease In Working Capital" in IFRS standard. Look at the data: "Increase Decrease In Working Capital" = 574,568 "Otros Flujos De Efectivo De Las Actividades De Explotacion" = -469,827 EUR (which includes interest paid -123,524, interest received 15,680, dividends received 7,578, income tax paid -363,996, other inflows -5,565). Thus, Cash Flows from Operating Activities = Profit + Adjustments + Working Capital + Others = 681,187 + 592,571 + 574,568 - 469,827 = 1,378,499? No, the table gives total Operating CF: 1,566,829 EUR. To get FFO as usually taken by S&P (Cash Flow from Operations before working capital, after removing non-recurring/non-operational cash items): FFO = Cash Flow from Operations - "Increase Decrease In Working Capital" (reverse WC) + Cash Interest Paid + Cash Tax Paid - Dividends from associates? No, S&P's definition: FFO = EBITDA - Net Interest Paid - Income Tax Paid - Other non-cash adjustments + adjustments for asset disposals, etc. Let's take the clean approach from P&L and adjustments: FFO = Operating Profit (961,554) - Interest Paid (-123,524) + Interest Received (15,680) - Income Tax Paid (-363,996) + D&A (544,992) + Provisions (35,046) - Grants recognized (-15,780) + Other adjustments (e.g., equity method income -50,405 + dividends 7,578). Wait, Operating Profit already includes D&A. Let's use EBITDA. EBITDA = 961,554 (Op Profit) + 544,992 (D&A) = 1,506,546. Interest Expense = Finance Costs = -116,468. Interest Income = Finance Income = 23,161. Net Interest Paid in Cash = 123,524 (paid) - 15,680 (received) = 107,844 net paid. Cash Tax Paid = 363,996. FFO = EBITDA (1,506,546) - Net Cash Interest (107,844) - Cash Tax (363,996) + Other cash adjustments (e.g., dividends from associates 7,578). FFO = 1,506,546 - 107,844 - 363,996 + 7,578 = 1,042,284 EUR. This seems low relative to Net Income. Let's use the formula directly from the S&P methodology documents: FFO = Operating Cash Flow before working capital changes + Interest Paid - Interest Received - Tax Paid - Dividends received from associates? Actually, S&P defines FFO as FFO = EBITDA - net interest expense - income tax expense +/- other non-cash items. But for cash flow-based FFO: FFO = OCF before WC + Net Interest Paid + Tax Paid (since OCF before WC already has these deducted? Wait, IFRS puts interest and tax in operating. S&P usually Grosses them back out.) Industry standard (S&P): FFO = Operating Cash Flow before working capital changes - Other non-operating adjustments. Let's calculate from Operating CF lines: OCF = 1,566,829 Increase in WC = 574,568 OCF before WC = 1,566,829 - 574,568 = 992,261. Wait, "Increase Decrease in Working Capital" is 574,568. Wait, 574,568 is positive? The line is "Variacion en Existencias..." which might be an outflow. The adjustment is "574,568 EUR", which is added in reconciliation from P&L to OCF. Cash Flow Statement summary: Profit Loss: 681,187 Adjustments: 592,571 --> Cash from operations before WC = 1,273,758 Increase/Decrease in WC = 574,568 Other operating CF (Interest/Tax/Dividends) = -469,827 Net OCF = 1,378,499? Wait, given OCF Total = 1,566,829. 681,187 + 592,571 + 574,568 - 469,827 = 1,378,499. There is a gap. Let's sum exactly: 681,187 + 592,571 = 1,273,758. 1,273,758 + 574,568 = 1,848,326. 1,848,326 - 469,827 = 1,378,499. But total OCF is 1,566,829. There is a missing 188,330. Wait! The Adjustments of 592,571 include Non-cash. But "Income Tax Paid" is -363,996. The difference is 1,566,829 - 1,378,499 = 188,330 = Income Tax Expense. This means "Other Adjustments" doesn't include the Tax Payment? No, tax paid is in the -469,827. The gap is exactly the Income Tax Expense. Why? Because the Adjustments in IFRS don't reverse the tax expense to replace with tax paid; the tax expense is 188,330, the tax paid is 363,996. The gap of 188,330 is the tax expense flowing through. Anyway, S&P uses OCF before interest and tax. Standard S&P methodology: Funds from Operations (FFO) = Operating profit (EBIT) + Depreciation and Amortization + Other non-cash adjustments (provisions, equity accruals, etc.) - Cash tax paid - Cash interest paid. Or alternatively, FFO = EBITDA - Cash Interest - Cash Tax - Other adjustments. Let's use a robust FFO estimate built from the ground up: FFO = EBITDA - Cash Tax Paid - Cash Interest Paid + Cash Interest Received - Cash Dividends Paid to NCI? (No, NCI is usually not deducted for FFO to Total Debt). + Dividends from Associates (if not already in EBITDA). EBITDA = 961,554 (Op Profit) + 544,992 (D&A) = 1,506,546. Cash Interest Paid = -123,524. Cash Interest Received = 15,680. Cash Tax Paid = -363,996. Dividends Received = 7,578. Other provisions, impairment, grants, etc. are already non-cash and mostly inside EBITDA. EBITDA is a good approximation for operating non-cash. FFO = 1,506,546 - 123,524 + 15,680 - 363,996 + 7,578 = 1,042,284. Let's verify with S&P's exact formula: S&P usually defines FFO as: Net Income + Depreciation, Amortization, and other non-cash items (incl. deferred tax, provisions) - Gains on asset disposals + Losses on asset disposals - Equity method income (net of dividends) - Non-operating one-off items. Let's rebuild from Net Income: Net Income = 681,187. Add back: D&A (544,992). Add back: Deferred tax? We don't have the exact deferred tax components, but we have Income Tax Expense (188,330) and Cash Tax Paid (363,996). The difference is non-cash tax. Add back: Provisions (35,046). Add back: Equity method income (-50,405). We must subtract the income, so add back -50,405. Add back: Dividends from associates (7,578). Grants recognized in P&L (-15,780) -> subtract. Deterioro/Disposals: -708. FFO = 681,187 + 544,992 - 50,405 + 7,578 - 15,780 - 708 + 35,046 = 1,201,910. This is the "CFO before working capital" except for interest and tax. Wait, this above FFO is before Interest and Tax adjustments! The S&P FFO definition: "FFO is a measure of recurring cash flows from operations, after interest and taxes". Actually, S&P usually calculates FFO as: Profit/Loss from continuing operations + Depreciation, Amortization, Impairments + Other non-cash items - Gains from asset disposals - Equity method income + dividends from equity method. And then for the ratio, they use FFO to Net Debt. In S&P's documentation, FFO is generally after cash interest and cash taxes? No, often FFO is defined before interest and taxes, but then Net Debt is used. Let's recall the exact definition. "S&P Global Ratings typically calculates FFO as: EBITDA - Net Interest Expense - Income Tax Expense +/- other non-cash adjustments." Wait, S&P's "FFO to Net Debt" uses an FFO that is: EBITDA - cash interest (net) - cash taxes paid. Or is it based on accrual? If based on accrual: EBITDA = 1,506,546 Net Interest Expense (accrual) = Finance Income (23,161) + Finance Costs (-116,468) = -93,307. Income Tax Expense (accrual) = -188,330. FFO = 1,506,546 - 93,307 - 188,330 = 1,224,909. If based on cash: FFO = 1,506,546 - 107,844 (net cash interest) - 363,996 (cash tax) = 1,034,706. Most often, S&P adjusts FFO to approximate operating cash flow, removing one-time items. They normally use accrual-based Interest and Tax, but sometimes cash tax. Let's look at their documents: "We adjust EBITDA for non-recurring items, then deduct net cash interest and cash taxes." But for a quick ratio, the FFO field in S&P's XBRL templates often uses the OCF before working capital changes, minus cash interest and cash taxes. Actually, S&P's methodology: FFO = EBITDA + Non-cash adjustments (provisions, etc.) - Gains on disposals - Net Cash Interest - Cash Tax Paid. Let's use the clear S&P definition: Funds From Operations (FFO) = EBITDA - Net Interest Paid - Tax Paid. We will factor in the Equity Method adjustments and other non-cash operating items to get a "clean" EBITDA. Clean EBITDA = Operating Profit (961,554) + D&A (544,992) = 1,506,546. Check if Operating Profit includes Equity Method income: "Participacion En Beneficios De Sociedades Valoradas Por El Metodo De La Participacion" is 50,405, and it is in Operating Profit? Yes, it's below Revenue, above Operating Profit. S&P removes it from EBITDA and adds dividends received. Core EBITDA = 1,506,546 - 50,405 (Equity income) + 7,578 (Dividends received) = 1,463,719. Net Cash Interest = Cash Interest Paid (123,524) - Cash Interest Received (15,680) = 107,844 net paid. Cash Tax Paid = 363,996. FFO = Core EBITDA - Net Cash Interest - Cash Tax Paid FFO = 1,463,719 - 107,844 - 363,996 = 991,879. Let's verify Net Debt again: Total Debt = Noncurrent Borrowings (5,491,124) + Current Borrowings (721,845) = 6,212,969. Cash and Cash Equivalents = 794,824. Adjustments for liquid assets: S&P usually deducts cash and sometimes other liquid short-term investments from debt to get Net Debt. The company has "Other Current Financial Assets" at amortised cost = 752,505. We assume this is liquid. Net Debt = 6,212,969 - 794,824 - 752,505 = 4,665,640. Final ratio: 991,879 / 4,665,640 = 0.2126. Let me double-check if "Other Noncurrent Financial Liabilities" (52,631) and "Noncurrent Derivative Financial Liabilities" (22,016) are included in S&P Debt. Usually, S&P includes derivatives and other financial liabilities like lease liabilities in adjusted debt. The "Longterm Borrowings" already covers bonds and loans. The "Other Noncurrent Financial Liabilities" and "Derivatives" should be added to gross debt. Let's add them: Total Adjusted Debt = 6,212,969 + 52,631 + 22,016 (Non-current) + Others? There is "Other Current Financial Liabilities" which is 983,432. But "Current Borrowings" (721,845) is already included. Does "Other Current Financial Liabilities" include leases? Yes, IFRS 16 leases are often in "Other financial liabilities". We should add them. Let's check Total Financial Liabilities: Noncurrent Financial Liabilities = 5,543,755. (This equals Borrowings 5,491,124 + Other Fin. Liab 52,631). Noncurrent Derivative Liabilities = 22,016. Total Noncurrent Financial Debt = 5,543,755 + 22,016 = 5,565,771. Current Financial Liabilities = 1,705,277. (Borrowings 721,845 + Other Fin. Liab 983,432). Current Derivative Liabilities = 7,053. Total Current Financial Debt = 1,712,330. Total Gross Debt = 5,565,771 + 1,712,330 = 7,278,101. Cash and Equivalents = 794,824. Current Financial Assets at amortized cost = 752,505. Noncurrent Financial Assets at amortized cost = 175,714. (These might not be liquid, but sometimes S&P nets them if they are highly liquid. We'll be conservative and not assume all non-current are cash-like, but current ones 752,505 definitely are.) Total Cash and Liquid Assets = 794,824 + 752,505 = 1,547,329. Net Debt = 7,278,101 - 1,547,329 = 5,730,772. Ratio FFO / Net Debt = 991,879 / 5,730,772 = 0.173. Let's refine FFO with more detail. S&P FFO definition: Profit (loss) from continuing operations: 681,187 + D&A: 544,992 + Provisions: 35,046 + Deferred Taxes (difference between accrual and cash taxes: 188,330 - 363,996? Wait, deferred tax is the non-cash part. The adjustments in OCF use "Adjustments for Income Tax" which are non-cash.) Let's derive FFO exactly from the cash flow statement: Cash flow from operations (1,566,829) Subtract: Working capital changes (574,568) Add back: Cash interest and taxes paid? No, S&P usually subtracts them for FFO. Operating cash flow before working capital = 992,261. (Wait, 1,566,829 - 574,568 = 992,261). But earlier I got 1,273,758 as "Cash from operations before WC". Why the difference? Because in the data: Profit (681,187) + Adjustments (592,571) = 1,273,758. The difference between 1,273,758 and 992,261 is exactly the "Otros flujos de efectivo de las actividades de explotacion" (-469,827) and the missing tax piece. Wait, 1,273,758 + 574,568 (WC) = 1,848,326. 1,848,326 - 469,827 (Other) = 1,378,499. Total OCF is 1,566,829. Difference is 188,330 (the income tax expense). This means the Adjustments line does NOT include the reversal of income tax expense. It includes adjustments for depreciation, provisions, finance costs, etc., but the income tax expense is handled separately. S&P's precise definition: FFO = Net Income + D&A + Provisions + Other non-cash items - Gains on sales + Adjustments for equity method (net of dividends) - Interest expense non-cash? + Deferred Tax adjustment. A very standard S&P calculation: FFO = EBITDA - Interest Paid - Tax Paid +/- Dividends from Associates. Let's recalculate clean EBITDA: Operating Profit: 961,554 Adjusted for: - Equity Method Income: -50,405 + Dividends from Associates: +7,578 = Adjusted Operating Profit before D&A: 918,727 Add D&A: +544,992 Core EBITDA: 1,463,719 Net Cash Interest: -107,844 (Interest Paid 123,524 - Interest Received 15,680) Cash Tax Paid: -363,996 FFO = 1,463,719 - 107,844 - 363,996 = 991,879. How about other items? "Other Work Performed by Entity and Capitalised" (62,903) is capitalized costs, which are non-cash income? It's in Revenue/total operating income. It increases EBITDA but isn't cash. We should remove it for FFO? Yes, S&P usually removes capitalized development costs or similar non-cash items from FFO because they don't generate cash. Actually, S&P does NOT deduct it by default unless it's explicitly a non-cash earning. Capitalized internal costs are added to P&L and PPE. Cash spent on them is in Investing Activities. So, the EBITDA includes 62,903 of non-cash income. S&P might deduct it. Let's assume we don't adjust unless specifically mandated; it's a standard IFRS adjustment. "Imputacion De Subvenciones De Inmovilizado No Financiero YOtras" = 15,780. This is Non-cash income. S&P deducts this. So, Core EBITDA = 1,506,546 - 50,405 + 7,578 - 62,903 - 15,780? Wait, "Other Work Performed by Entity and Capitalised" is a form of income (capitalized own work) that flows into Operating Profit. It is non-cash and often adjusted by analysts. If we deduct it: 1,506,546 - 62,903 = 1,443,643. Then FFO = 1,443,643 - 107,844 - 363,996 = 971,803. Let's check "Adjustments for Undistributed Profits of Investments Accounted for Using Equity Method" in Cash Flow. Cash Flow Statement Adjustments: Profit = 681,187. Adjustments = 592,571. This includes: D&A = 544,992 Other Adjustments = 47,579 (Net of equity method, provisions, grants, etc.) Equity method = 50,405 (deducted? The line is "Adjustments For Undistributed Profits Of Investments Accounted For Using Equity Method" which is usually added back to profit, so 50,405 is deducted from FFO in the cash flow statement). The sum is: 544,992 + 47,579 + 50,405 + ... Cash Flow from operations before WC = 1,273,758. If S&P's FFO is OCF before WC, minus non-recurring, it's 1,273,758. But S&P deducts cash interest and tax from FFO. IFRS places Interest and Tax inside OCF. So FFO = 1,273,758 - (Interest Paid) - (Tax Paid) + Interest Received? No, S&P's FFO is defined in their methodologies as: EBITDA - Cash Interest - Cash Taxes. It's NOT OCF before WC. S&P explicitly builds it from EBITDA. Let's use the exact S&P reference: "FFO is EBITDA (adjusted for non-cash items) less net cash interest paid and less cash taxes paid." EBITDA: 961,554 + 544,992 = 1,506,546. Adjustments: - Equity Method Income: -50,405 + Dividends from Assoc: +7,578 - Grants: -15,780 = 1,447,939. Net Cash Interest = Finance Costs Paid 123,524 - Finance Income Received 15,680 = 107,844. Cash Tax = 363,996. FFO = 1,447,939 - 107,844 - 363,996 = 976,099. Let's calculate Adjusted Net Debt again. S&P's Net Debt definition: Net Debt = Total Debt (Short-term + Long-term + Derivatives + Leases + Other Financial Debt) - Cash - Highly Liquid Securities. Total Debt = Current Financial Liabilities (1,705,277) + Noncurrent Financial Liabilities (5,543,755) + Noncurrent Derivative Liabilities (22,016) + Current Derivative Liabilities (7,053) = 7,278,101. Cash and Equivalents = 794,824. Liquid Securities = Current Financial Assets at Amortised Cost (752,505). Total Cash/Liquid = 1,547,329. Net Debt = 7,278,101 - 1,547,329 = 5,730,772. Ratio = 976,099 / 5,730,772 = 0.1703. Let's do a sanity check. 976,099 FFO on 14.78B total assets with ~5.73B net debt is plausible for a regulated utility. I will use the standard FFO formula: FFO = Profit Loss (681,187) + Depreciation & Amortisation (544,992) + Provisions (35,046) - Gains on Disposals (708) - Equity Method Income (50,405) + Dividends from Associates (7,578) - Grants Recognized (15,780) - Deferred Tax Adjustment? Actually, the simplest is exactly what S&P publishes: FFO = EBITDA - Net Cash Interest - Cash Tax +/- Cash Dividends from Associates - Other Adjustments. EBITDA = 1,506,546 Net Cash Interest = -107,844 (paid net) Cash Tax = -363,996 Cash Dividends from Assocs = +7,578 We subtract non-cash income: Capitalized own work? (62,903) No, S&P doesn't usually remove this unless it's unreliable. Grants: -15,780. FFO = 1,506,546 - 107,844 - 363,996 + 7,578 - 15,780 = 1,026,504. Wait, I subtracted Equity method income from EBITDA! EBITDA includes it. Yes, Operating Profit 961,554 includes the 50,405 equity income. To get an EBITDA representing actual operating cash flow potential, we deduplicate by subtracting 50,405 and adding back the cash dividend of 7,578. Core EBITDA = 1,506,546 - 50,405 + 7,578 = 1,463,719. FFO = 1,463,719 - 107,844 - 363,996 = 991,879. Let's check Net Debt calculation. Does S&P include Non-current Financial Assets at Amortized Cost in subtractor from Debt? Only if they are readily convertible to cash and not needed for operations. We can't assume, so we only deduct Cash (794,824) and Current Financial Assets at Amortized Cost (752,505). Net Debt = (5,491,124 [NC Borrow] + 52,631 [NC Other Fin] + 22,016 [NC Deriv] + 721,845 [C Borrow] + 983,432 [C Other Fin] + 7,053 [C Deriv]) - (794,824 + 752,505) = 7,278,101 - 1,547,329 = 5,730,772. FFO = 991,879,000 Net Debt = 5,730,772,000 Ratio = 991,879 / 5,730,772 = 0.17307 Let's use the straightforward definition from Annual Report metrics for FFO: Funds from operations (FFO) = Net cash from operating activities (1,566,829) - Changes in working capital (574,568) + Interest Paid (123,524) - Interest Received (-15,680) + Tax Paid (363,996) - Other non-recurring OCF items. Wait, 1,566,829 - 574,568 = 992,261. Add back Interest Paid: +123,524 = 1,115,785. Subtract Interest Received: -15,680 = 1,100,105. Add back Tax Paid: +363,996 = 1,464,101. Now, this is the "Cash generated from operations before interest and taxes" roughly. S&P deducts Interest and Tax. What about dividends from associates? The 7,578 is already in the OCF. S&P's FFO = this figure (1,464,101) - Cash Interest (123,524) + Cash Interest received (15,680) - Cash Tax (363,996) = 992,261. This equals exactly 1,566,829 (OCF) - 574,568 (WC) = 992,261. So FFO = 992,261. Let's check the definition again. "FFO is a credit measure that we typically calculate as EBITDA less net interest less taxes paid." Wait, "interest less taxes paid" -> accrual interest, cash taxes? Or cash interest? S&P says: "We generally compute funds from operations (FFO) as EBITDA less interest expense (net of interest income), less taxes paid, and adjusted for non-cash items and other items." But then they also say: "We calculate FFO as OCF before working capital, less cash interest and cash taxes." If accrual interest: Net Interest Expense = Finance Costs (116,468) - Finance Income (23,161) = 93,307. Tax Paid = 363,996. FFO = Core EBITDA (1,463,719) - 93,307 - 363,996 = 1,006,416. If FFO = OCF before working capital (992,261): Ratio = 992,261 / 5,730,772 = 0.1731. I will use the 992,261 figure because it reconciles exactly to the IFRS cash flow statement and is the most technically clean "operating cash flow before working capital", which directly equals "EBITDA - non-cash items - equity income + dividends - interest - tax". The OCF before working capital line in S&P's data is precisely what they use to derive FFO when they say "derived from the statement of cash flows". Thus, FFO = 992,261. Net Debt: 5,730,772,000 approx. Wait, I should be precise. Total Financial Liabilities Noncurrent: 5,543,755 (Borrowings + Other Noncurrent Financial Liabilities). This already includes Leases and Other. Noncurrent Derivative Financial Liabilities: 22,016. Current Financial Liabilities: 1,705,277. Current Derivative Financial Liabilities: 7,053. Total Debt = 5,543,755 + 22,016 + 1,705,277 + 7,053 = 7,278,101. Cash and Cash Equivalents: 794,824. Current Financial Assets at Amortised Cost: 752,505. Total Cash/Liquids = 794,824 + 752,505 = 1,547,329. Net Debt = 7,278,101 - 1,547,329 = 5,730,772. Ratio = 992,261 / 5,730,772 = 0.17314. Double-checking the data: "Noncurrent Financial Assets At Amortised Cost" = 175,714. These are not current, I will not deduct them from debt because S&P usually requires surplus cash/liquids to be truly "cash and equivalents and current investments". S&P might deduct surplus cash, but 175M isn't current. My final calculated ratio is 0.173.The S&P FFO/Net Debt ratio for REDEIA CORPORACION SA for 2022 is calculated as follows: **Funds From Operations (FFO):** Using the definition FFO = Operating Cash Flow Before Working Capital Changes, derived from the provided cash flow statement: Total Operating Cash Flow = 1,566,829,000 EUR Minus: Increase/Decrease in Working Capital = 574,568,000 EUR FFO = 992,261,000 EUR **Net Debt:** Following S&P methodology to include all financial liabilities (borrowings, derivatives, other financial liabilities) and deducting cash and liquid assets: Gross Debt = Noncurrent Financial Liabilities (5,543,755,000) + Noncurrent Derivative Liabilities (22,016,000) + Current Financial Liabilities (1,705,277,000) + Current Derivative Liabilities (7,053,000) = 7,278,101,000 EUR Liquid Assets = Cash and Cash Equivalents (794,824,000) + Current Financial Assets at Amortised Cost (752,505,000) = 1,547,329,000 EUR Net Debt = 7,278,101,000 - 1,547,329,000 = 5,730,772,000 EUR **Ratio:** FFO / Net Debt = 992,261,000 / 5,730,772,000 = 0.1731 0.173