I need to calculate Net Debt / EBITDA for 2022 using S&P methodology. First, let me identify the components needed: **EBITDA Calculation (S&P methodology typically starts from operating profit and adds back certain items):** From the income statement data for 2022 (2022-01-01 to 2023-01-01): - "Profit Loss From Operating Activities" = 6,489,000,000 EUR - "Adjustments For Depreciation And Amortisation Expense" = 3,613,000,000 EUR However, I need to be more careful. Let me look at what's available. For S&P methodology, EBITDA is typically: - Operating profit (before interest, taxes, depreciation, amortization) - OR: Profit from operating activities + depreciation and amortization Looking at the data: - "Profit Loss From Ordinary Operating Activities" = 6,824,000,000 EUR (2022) - "Profit Loss From Operating Activities" = 6,489,000,000 EUR (2022) The difference between these two includes: - "Other Operating Income Expense Recurring" = -9,000,000 EUR - "Other Operating Income Expense Non Recurring" = 8,000,000 EUR For S&P EBITDA, we typically use: - Operating profit before depreciation and amortization Let me check: "Profit Loss From Ordinary Operating Activities" = 6,824,000,000 EUR Adding back depreciation and amortization: - "Adjustments For Depreciation And Amortisation Expense" = 3,613,000,000 EUR But wait - "Profit Loss From Ordinary Operating Activities" likely already includes D&A as an expense. So EBITDA would be: EBITDA = Profit Loss From Ordinary Operating Activities + Depreciation and Amortization = 6,824,000,000 + 3,613,000,000 = 10,437,000,000 EUR Actually, let me reconsider. Looking at the cash flow statement adjustments: - "Adjustments For Depreciation And Amortisation Expense" = 3,613,000,000 EUR And "Cash Flows From Used In Operations Before Changes In Working Capital" = 10,215,000,000 EUR This cash flow figure typically = Operating profit + D&A + other non-cash items - taxes paid + interest received/paid adjustments, etc. Actually, let me think more carefully. S&P Global Ratings methodology for EBITDA: - EBITDA = Operating income + Depreciation & Amortization From the P&L: - "Profit Loss From Operating Activities" = 6,489,000,000 EUR (this is after all operating items) But we need to add back D&A. The "Adjustments For Depreciation And Amortisation Expense" in cash flow = 3,613,000,000 EUR suggests this is the D&A charge. However, "Profit Loss From Ordinary Operating Activities" (6,824M) vs "Profit Loss From Operating Activities" (6,489M) - the difference is 335M, which is due to non-recurring items. For S&P methodology, EBITDA typically includes recurring items. Let me use: - Operating profit before D&A = Profit Loss From Ordinary Operating Activities + D&A But actually, Profit Loss From Ordinary Operating Activities should already be after D&A. So: EBITDA = 6,824,000,000 + 3,613,000,000 = 10,437,000,000 EUR Or using "Profit Loss From Operating Activities" + D&A = 6,489,000,000 + 3,613,000,000 = 10,102,000,000 EUR For S&P, they typically adjust for non-recurring items. Let me check if "Profit Loss From Ordinary Operating Activities" is the clean operating profit. Actually, looking more carefully at S&P methodology: they typically define EBITDA as: - Recurring operating profit + depreciation and amortization "Profit Loss From Ordinary Operating Activities" seems to be the recurring operating profit (excluding non-recurring items). So EBITDA = 6,824,000,000 + 3,613,000,000 = 10,437,000,000 EUR Wait - I need to verify if D&A is already included in "Profit Loss From Ordinary Operating Activities". Yes, operating profit is always after D&A expense, so we add it back for EBITDA. **Net Debt Calculation:** Net Debt = Total Debt - Cash and Cash Equivalents Debt components from balance sheet (2023-01-01, which is end of 2022): - "Noncurrent Portion Of Noncurrent Bonds Issued" = 20,425,000,000 EUR - "Noncurrent Portion Of Other Noncurrent Borrowings" = 3,205,000,000 EUR - "Shortterm Borrowings" = 6,368,000,000 EUR - "Current Lease Liabilities" = 522,000,000 EUR - "Noncurrent Lease Liabilities" = 1,580,000,000 EUR For S&P methodology, debt typically includes: - All borrowings (short-term and long-term) - Bonds - Lease liabilities (operating leases are typically included in debt-like obligations) However, S&P may or may not include lease liabilities depending on the specific methodology version. Let me check both approaches. Standard debt: - Bonds issued: 20,425,000,000 - Other noncurrent borrowings: 3,205,000,000 - Short-term borrowings: 6,368,000,000 Total borrowings = 29,998,000,000 EUR Plus lease liabilities (if included in debt): - Current lease liabilities: 522,000,000 - Noncurrent lease liabilities: 1,580,000,000 Total lease liabilities = 2,102,000,000 EUR Total debt (with leases) = 32,100,000,000 EUR Cash and cash equivalents: - "Cash And Cash Equivalents" = 12,578,000,000 EUR - "Current Cash Management Financial Assets" = 755,000,000 EUR For S&P, "Cash And Cash Equivalents" is definitely deducted. Sometimes liquid investments are also deducted if they're readily available. Net Debt = Total Debt - Cash and Cash Equivalents Using standard definition with leases: Net Debt = 32,100,000,000 - 12,578,000,000 = 19,522,000,000 EUR Or without leases: Net Debt = 29,998,000,000 - 12,578,000,000 = 17,420,000,000 EUR But wait - I should also check if there are other debt-like items. Let me also consider "Other Current Financial Assets" and derivatives. Actually, for S&P methodology, let me be more careful. S&P typically includes: - Short-term borrowings - Current portion of long-term debt - Long-term debt - Sometimes operating lease liabilities (capitalized) Looking at the balance sheet, I don't see a separate "current portion of long-term debt" - the "Noncurrent Portion Of Noncurrent Bonds Issued" and "Noncurrent Portion Of Other Noncurrent Borrowings" suggest these are the noncurrent portions, so there might be current portions elsewhere. Actually, "Shortterm Borrowings" = 6,368,000,000 EUR likely includes all short-term debt including current portion of long-term debt. Let me also check if there are other liabilities that could be debt-like. "Other Noncurrent Liabilities" = 894,000,000 - this might include some debt-like items but typically not counted as debt. For S&P Net Debt calculation, let me use: Total Debt = Short-term borrowings + Noncurrent bonds + Noncurrent other borrowings + Lease liabilities = 6,368 + 20,425 + 3,205 + 522 + 1,580 = 32,100 million EUR Less: Cash and cash equivalents = 12,578 million EUR Net Debt = 19,522 million EUR But I need to check if S&P includes lease liabilities in net debt. In modern S&P methodology post-IFRS 16, operating lease liabilities are typically included in debt. Actually, let me reconsider the EBITDA calculation. S&P typically adjusts EBITDA to exclude certain items and to add back certain costs. Looking at the cash flow statement: "Cash Flows From Used In Operations Before Changes In Working Capital" = 10,215,000,000 EUR This is a good proxy for EBITDA minus taxes and interest, but with some adjustments. Let me recalculate EBITDA more carefully: - Start with "Profit Loss From Ordinary Operating Activities" = 6,824,000,000 - Add: "Adjustments For Depreciation And Amortisation Expense" = 3,613,000,000 - EBITDA = 10,437,000,000 EUR But wait, I need to check if there are other items to add back for S&P EBITDA. S&P typically adds back: - D&A - Sometimes share-based payments - Sometimes other non-cash items "Expense From Sharebased Payment Transactions With Employees" = 356,000,000 EUR - this is typically added back in some EBITDA calculations, but S&P may or may not include it. Actually, looking at the cash flow adjustments: "Adjustments For Sharebased Payments" = 162,000,000 EUR (this is the non-cash portion) For S&P EBITDA, the standard is to use operating profit before depreciation and amortization, which typically means: EBITDA = Operating income + Depreciation & Amortization Where Operating income is after all operating expenses including SBC. Let me verify: "Profit Loss From Ordinary Operating Activities" = 6,824,000,000 This should be after D&A and after SBC. So EBITDA = 6,824,000,000 + 3,613,000,000 = 10,437,000,000 EUR But I want to double-check by looking at the relationship to cash flows. "Cash Flows From Used In Operations Before Changes In Working Capital" = 10,215,000,000. This equals roughly: Operating profit + D&A + other non-cash items - taxes + interest adjustments, etc. Actually, let me trace through: "Profit Loss" = 4,417,000,000 + "Income Tax Expense Continuing Operations" = 1,737,000,000 + "Net Finance Costs" = 614,000,000 = Profit before tax and interest = 6,768,000,000... this doesn't match exactly. Let me try: "Profit Loss From Operating Activities" = 6,489,000,000 + "Net Finance Costs" = 614,000,000? No, operating profit is before finance costs. Actually "Profit Loss From Operating Activities" = 6,489,000,000 should be before finance costs and taxes. Then "Profit Loss" = 4,417,000,000 Add back: Income tax = 1,737,000,000 Add back: Net finance costs = 614,000,000 = 6,768,000,000... still not matching 6,489,000,000. Wait, let me re-read. "Profit Loss From Operating Activities" = 6,489,000,000 "Profit Loss" = 4,417,000,000 Difference = 2,072,000,000 This should equal: Income tax (1,737,000,000) + Net finance costs (614,000,000) + some other items = 2,351,000,000... not matching. Actually, "Profit Loss" might be after some other items. Let me check: "Profit Loss From Operating Activities" = 6,489,000,000 Less: "Net Finance Costs" = 614,000,000 Less: "Income Tax Expense Continuing Operations" = 1,737,000,000 = 4,138,000,000... but "Profit Loss" = 4,417,000,000 Difference = 279,000,000, which is "Other Finance Income Cost" = 279,000,000 EUR Actually, "Other Finance Income Cost" is positive 279M, meaning income. So: 6,489 - 614 + 279 - 1,737 = 4,417. Yes! This checks out. So "Profit Loss From Operating Activities" is indeed before finance costs and taxes. Now for EBITDA, I need to add D&A back to operating profit. But which operating profit? "Profit Loss From Ordinary Operating Activities" or "Profit Loss From Operating Activities"? "Profit Loss From Ordinary Operating Activities" = 6,824,000,000 (recurring) "Profit Loss From Operating Activities" = 6,489,000,000 (includes non-recurring) Difference = 335,000,000, which is: "Other Operating Income Expense Recurring" = -9,000,000 "Other Operating Income Expense Non Recurring" = 8,000,000 "Share Of Profit Loss Of Associates And Joint Ventures Accounted For Using Equity Method" = 22,000,000 Wait: 6,824 - 9 + 8 + 22 = 6,845? No... Let me check: "Profit Loss From Ordinary Operating Activities" = 6,824,000,000 Plus: "Other Operating Income Expense Recurring" = -9,000,000 Plus: "Other Operating Income Expense Non Recurring" = 8,000,000 Plus: "Share Of Profit Loss Of Associates And Joint Ventures Accounted For Using Equity Method" = 22,000,000 = 6,824 - 9 + 8 + 22 = 6,845? That's not 6,489. Hmm, let me re-read the items. Actually, looking at the structure: "Profit Loss From Ordinary Operating Activities" → after "Other Operating Income Expense Recurring" → gives "Profit Loss From Operating Activities Recurring" = 6,481,000,000 Wait, let me check: 6,824 + (-9) = 6,815, not 6,481. Actually I misread. Let me look again: "Profit Loss From Ordinary Operating Activities" = 6,824,000,000 "Profit Loss From Operating Activities Recurring" = 6,481,000,000? No, it's 6,481,000,000... wait no, it's 6,481,000,000. Actually the data says: "Profit Loss From Operating Activities Recurring" = 6,481,000,000 EUR And "Other Operating Income Expense Recurring" = -9,000,000 EUR 6,824 - 9 = 6,815, not 6,481. So there's something else. Hmm, let me look more carefully. The numbers are: - "Profit Loss From Ordinary Operating Activities" = 6,824,000,000 - "Profit Loss From Operating Activities Recurring" = 6,481,000,000... wait no it's 6,481,000,000? Let me re-read: "Profit Loss From Operating Activities Recurring" = 6,481,000,000 Actually I see: "Profit Loss From Operating Activities Recurring" = 6,481,000,000? No, looking again: 6,481,000,000 EUR. Wait, I need to re-read: "Profit Loss From Operating Activities Recurring" 2022-01-01 - 2023-01-01: 6481000000 EUR And "Profit Loss From Ordinary Operating Activities" = 6824000000 EUR Difference = 343,000,000 Hmm, that doesn't match -9,000,000 either. Let me look at the sequence more carefully. Perhaps "Profit Loss From Ordinary Operating Activities" includes something else. Actually, re-reading: "Profit Loss From Ordinary Operating Activities" might be before associates, while "Profit Loss From Operating Activities Recurring" is after associates? "Share Of Profit Loss Of Associates And Joint Ventures Accounted For Using Equity Method" = 22,000,000 6,824 + 22 = 6,846, not 6,481. Hmm, this is confusing. Let me try another approach. Looking at "Profit Loss From Operating Activities" = 6,489,000,000 This is described as total operating activities (recurring + non-recurring). "Profit Loss From Operating Activities Recurring" = 6,481,000,000 "Other Operating Income Expense Non Recurring" = 8,000,000 6,481 + 8 = 6,489. Yes! That matches. So the structure is: "Profit Loss From Operating Activities Recurring" = 6,481,000,000 + "Other Operating Income Expense Non Recurring" = 8,000,000 = "Profit Loss From Operating Activities" = 6,489,000,000 And "Profit Loss From Ordinary Operating Activities" = 6,824,000,000 must be a different concept. Looking at the name "Ordinary Operating Activities" - this might be before certain adjustments. The difference 6,824 - 6,481 = 343,000,000 doesn't match any single item I can see. Actually, re-checking: "Profit Loss From Ordinary Operating Activities" = 6,824,000,000 and "Operating Expense" = 55,691,000,000. Revenue items: - "Revenue From Contracts With Customers" = 62,265,000,000 - "Other Revenue" = 249,000,000 Total revenue = 62,514,000,000 62,514 - 55,691 = 6,823, close to 6,824. So "Profit Loss From Ordinary Operating Activities" = Revenue - Operating Expense. Then "Profit Loss From Operating Activities Recurring" = 6,481,000,000 is after other adjustments. For S&P EBITDA, I think the best approach is: - Use "Profit Loss From Operating Activities" or "Profit Loss From Ordinary Operating Activities" as base - Add back D&A S&P typically uses "EBITDA" based on recurring operating profit if possible, or total operating profit. Let me use "Profit Loss From Ordinary Operating Activities" + D&A as a starting point, since this is the cleanest operating profit before other adjustments. EBITDA = 6,824,000,000 + 3,613,000,000 = 10,437,000,000 EUR But S&P might adjust this. Let me also consider if we need to add back other items. Actually, for S&P Global Ratings, their methodology typically defines EBITDA as: - Recurring operating profit before depreciation and amortization They may adjust for non-recurring items. "Profit Loss From Operating Activities Recurring" = 6,481,000,000 seems to be the recurring operating profit. But wait - is 6,481,000,000 already after D&A? Yes, operating profit is always after D&A. So Recurring EBITDA = 6,481,000,000 + 3,613,000,000 = 10,094,000,000 EUR Or if we use total operating profit including non-recurring: EBITDA = 6,489,000,000 + 3,613,000,000 = 10,102,000,000 EUR For S&P, they typically prefer to include non-recurring items if they're part of normal operations, or exclude truly one-time items. The 8M non-recurring is small relative to the total. Let me also check if S&P includes share of associates in EBITDA. "Share Of Profit Loss Of Associates And Joint Ventures Accounted For Using Equity Method" = 22,000,000. This is typically EXCLUDED from EBITDA (it's below operating profit in some presentations, or included in operating profit depending on the company). Actually, looking at the structure again, this share of associates seems to be included in "Profit Loss From Operating Activities" but maybe not in "Profit Loss From Ordinary Operating Activities"? The naming is confusing. Let me just proceed with a reasonable estimate. For S&P methodology, I'll use: EBITDA = "Profit Loss From Operating Activities" + Depreciation & Amortization = 6,489,000,000 + 3,613,000,000 = 10,102,000,000 EUR Or if we want a cleaner number: "Profit Loss From Ordinary Operating Activities" + D&A = 10,437,000,000 EUR Actually, I realize I should check the cash flow more carefully. "Cash Flows From Used In Operations Before Changes In Working Capital" = 10,215,000,000 EUR. This is typically calculated as: Operating profit + D&A + other non-cash items - taxes paid + interest received - interest paid (depending on classification) Actually, for many companies, this equals: EBITDA - taxes paid +/− working capital changes in some items... no wait, it's "before changes in working capital". Let me think: "Cash Flows From Used In Operations Before Changes In Working Capital" = 10,215,000,000 This typically = EBIT + D&A - taxes paid + other adjustments, or similar. Actually, standard formula: Cash from operations before working capital changes = Net income + D&A + other non-cash items - taxes paid + interest expense - interest received... Hmm, this is getting complicated. Let me just use the direct approach. For S&P Net Debt / EBITDA: **Net Debt:** Total Debt = Short-term borrowings + Long-term debt (bonds + other borrowings) + Lease liabilities = 6,368 + 20,425 + 3,205 + 522 + 1,580 = 32,100 million EUR Less: Cash and Cash Equivalents = 12,578 million EUR Net Debt = 19,522 million EUR Some S&P methodologies also deduct "Current Cash Management Financial Assets" = 755 million EUR if they're liquid. Net Debt (strict) = 19,522 - 755 = 18,767 million EUR? Or some include it. Actually, for standard Net Debt, we typically include only cash and cash equivalents. "Current Cash Management Financial Assets" might be included if they're very liquid. Let me use standard definition: Net Debt = Total Debt - Cash and Cash Equivalents = 32,100 - 12,578 = 19,522 million EUR **EBITDA:** I'll use "Profit Loss From Operating Activities" + D&A = 6,489 + 3,613 = 10,102 million EUR Or, if S&P adjusts for associates and other items, they might use a different base. Actually, let me reconsider. S&P typically calculates EBITDA as: - Operating profit (excluding share of associates if equity-accounted) + D&A But in many European presentations, "Profit Loss From Operating Activities" includes share of associates. Let me check: if we exclude associates (22M), operating profit = 6,489 - 22 = 6,467 million, then EBITDA = 6,467 + 3,613 = 10,080 million. This is a small difference. Let me proceed with 10,102 million as a reasonable estimate. **Ratio calculation:** Net Debt / EBITDA = 19,522 / 10,102 = 1.93x Or if we use stricter EBITDA (recurring only, excluding non-recurring): Recurring EBITDA = 6,481 + 3,613 = 10,094 million Net Debt / Recurring EBITDA = 19,522 / 10,094 = 1.93x Or if we use "ordinary" operating profit: EBITDA = 6,824 + 3,613 = 10,437 million Net Debt / EBITDA = 19,522 / 10,437 = 1.87x Hmm, let me also consider if S&P includes lease liabilities in debt. In some methodologies, especially for corporate issuers, S&P includes lease liabilities as debt. In others, they may treat them separately. If we exclude leases from debt: Total Debt = 6,368 + 20,425 + 3,205 = 29,998 million Net Debt = 29,998 - 12,578 = 17,420 million Net Debt / EBITDA = 17,420 / 10,102 = 1.72x I need to decide which approach is more standard for S&P. Post-IFRS 16 (2019), S&P Global Ratings generally includes lease liabilities in total debt for their leverage calculations. So I'll include leases. Let me also verify my debt calculation by checking if there are other debt-like items: From balance sheet 2023-01-01: - "Noncurrent Portion Of Noncurrent Bonds Issued" = 20,425,000,000 - "Noncurrent Portion Of Other Noncurrent Borrowings" = 3,205,000,000 - "Shortterm Borrowings" = 6,368,000,000 - "Noncurrent Derivative Financial Liabilities" = 1,939,000,000 - these are typically not debt but fair value of derivatives - "Current Derivative Financial Liabilities" = 440,000,000 - same, not debt Total borrowings = 29,998,000,000 EUR Lease liabilities: - "Noncurrent Lease Liabilities" = 1,580,000,000 - "Current Lease Liabilities" = 522,000,000 Total = 2,102,000,000 EUR Total debt with leases = 32,100,000,000 EUR Cash = 12,578,000,000 EUR Net Debt = 19,522,000,000 EUR For EBITDA, let me reconsider using a more S&P-specific approach. S&P Global Ratings typically adjusts reported EBITDA for their credit analysis. They may: - Exclude non-recurring items (both gains and losses) - Include their own adjustments for pensions, etc. But for a quick estimate based on public data, I'll use: EBITDA = Operating Profit + D&A Where Operating Profit = "Profit Loss From Operating Activities" = 6,489,000,000 And D&A = 3,613,000,000 EBITDA = 10,102,000,000 EUR Net Debt / EBITDA = 19,522 / 10,102 = 1.932... Let me round to 1.93 or about 1.9x. But wait, I want to double-check if I should use "Profit Loss From Ordinary Operating Activities" instead. This is 6,824,000,000. The term "ordinary" suggests this is before certain non-operating or exceptional items. For S&P, they typically focus on recurring earnings. Actually, looking at the difference: "Profit Loss From Ordinary Operating Activities" = 6,824,000,000 "Profit Loss From Operating Activities Recurring" = 6,481,000,000 These are different! "Ordinary" is higher by 343,000,000. And "Profit Loss From Operating Activities Recurring" = 6,481,000,000 Plus "Other Operating Income Expense Non Recurring" = 8,000,000 = "Profit Loss From Operating Activities" = 6,489,000,000 So "Recurring" = 6,481, "Non-recurring" = 8, total = 6,489. But "Ordinary" = 6,824 is yet another concept. Looking at the naming, "Ordinary Operating Activities" might mean before certain adjustments like share-based payments or other items. The expense "Expense From Sharebased Payment Transactions With Employees" = 356,000,000. 6,824 - 356 = 6,468, not matching 6,481 either. Hmm, let me try: 6,824 - 343 = 6,481. The difference is 343,000,000. Looking for what could explain 343M... I don't see an obvious item. Actually, let me check if "Profit Loss From Ordinary Operating Activities" includes "Other Revenue" while the other doesn't. "Revenue From Contracts With Customers" = 62,265,000,000 "Other Revenue" = 249,000,000 Total = 62,514,000,000 62,514 - 55,691 (operating expense) = 6,823,000,000 ≈ 6,824,000,000 So "Profit Loss From Ordinary Operating Activities" = Total Revenue - Operating Expense. Then "Profit Loss From Operating Activities Recurring" = 6,481,000,000 must be after some other deductions not in "Operating Expense". Looking at the P&L structure, there might be other operating expenses or deductions. Let me check what could reduce 6,824 to 6,481. Difference = 343,000,000. Items that could be deducted: - "Other Operating Income Expense Recurring" = -9,000,000 (negative means expense) - "Share Of Profit Loss Of Associates And Joint Ventures Accounted For Using Equity Method" = 22,000,000 (positive means income) If we deduct the expense and add the income: 6,824 - 9 + 22 = 6,837, not 6,481. Hmm, that doesn't work either. Wait, maybe "Profit Loss From Ordinary Operating Activities" is before certain items, and the path is: 6,824 (ordinary) → minus some items → 6,481 (recurring operating activities) → minus non-recurring (-8, i.e., plus 8) → 6,489 (total operating activities) Actually 6,824 - 343 = 6,481. What is 343? Let me check: "Other Operating Income Expense Recurring" = -9,000,000. If this is already included in operating expense, then... Actually, I think I need to re-read the data more carefully. The "Operating Expense" = 55,691,000,000 likely includes most operating costs including D&A. Let me verify: Revenue 62,514 - Operating Expense 55,691 = 6,823. This matches "Profit Loss From Ordinary Operating Activities" = 6,824. So "Profit Loss From Ordinary Operating Activities" is simply Revenue - Operating Expense. Then where does 6,481 come from? It must include additional deductions not in the basic calculation. Perhaps "Profit Loss From Operating Activities Recurring" is after: - "Other Operating Income Expense Recurring" = -9,000,000 - And some other items 6,824 - 9 = 6,815, still not 6,481. I think there might be additional line items not fully explicit in the data, or the naming convention is specific to this company. For practical purposes, let me use "Profit Loss From Operating Activities" = 6,489,000,000 as the most comprehensive operating profit figure, and add D&A. EBITDA = 6,489,000,000 + 3,613,000,000 = 10,102,000,000 EUR Net Debt = 19,522,000,000 EUR Ratio = 19,522 / 10,102 = 1.9325... Let me also try an alternative: if S&P uses "Cash Flows From Used In Operations Before Changes In Working Capital" as a proxy, this is 10,215,000,000. This is close to my EBITDA estimate. Actually, this cash flow figure includes taxes and interest adjustments. Let me see: 10,215 vs 10,102 = difference of 113,000,000. This could be due to: adjustments for share-based payments (162M), provisions (0), impairments (0), fair value adjustments (-236M), undistributed profits of associates (42M), net finance costs added back (614M), but then finance costs paid classified as operating (29M), interest paid/received classified as operating (563M), etc. Actually, the cash flow statement builds up to "Cash Flows From Used In Operations Before Changes In Working Capital" = 10,215,000,000 from "Profit Loss" = 4,417,000,000. Let me verify the build-up: Profit Loss: 4,417 + D&A: 3,613 + Provisions and impairments: 0 + Share-based payments: 162 - Gains on disposal: -68 - Fair value gains: -236 + Undistributed profits of associates: 42 + Net finance costs: 614 + Finance costs paid as operating: 29 + Interest expense on lease liabilities: 48 + Income tax expense: 1,737 = 4,417 + 3,613 + 0 + 162 - 68 - 236 + 42 + 614 + 29 + 48 + 1,737 = 10,358 Hmm, that's not 10,215. Let me recheck. Actually, I need to be more careful. Some items might be deductions rather than additions. Looking at the cash flow adjustments: "Adjustments For Depreciation And Amortisation Expense" = 3,613,000,000 (add back) "Adjustments For Provisions And Adjustments For Impairment Loss Reversal Of Impairment Loss Recognised In Profit Or Loss" = 0 "Adjustments For Sharebased Payments" = 162,000,000 (add back) "Adjustments For Losses Gains On Disposal Of Noncurrent Assets" = -68,000,000 (negative means gain to deduct) "Adjustments For Fair Value Gains Losses" = -236,000,000 (negative means gain to deduct) "Adjustments For Undistributed Profits Of Investments Accounted For Using Equity Method" = 42,000,000 (add back) "Adjustments For Net Finance Costs" = 614,000,000 (add back) "Finance Costs Paid Classified As Operating Activities" = 29,000,000 (this is likely a deduction, as it's a cash outflow not in net income) "Adjustments For Interest Expense On Lease Liabilities" = 48,000,000 (add back) "Adjustments For Income Tax Expense" = 1,737,000,000 (add back) Starting from Profit Loss: 4,417 + 3,613 + 162 - 68 - 236 + 42 + 614 + 48 + 1,737 = 10,325 Then "Finance Costs Paid Classified As Operating Activities" = 29 - this might be subtracted: 10,325 - 29 = 10,296 Still not 10,215. Close but not exact. There might be other items or I'm misinterpreting some signs. Anyway, for EBITDA purposes, the standard is Operating Profit + D&A, not cash flow based. Let me finalize my calculation: **EBITDA = 10,102,000,000 EUR** (or potentially 10,437M if using "ordinary" operating profit) **Net Debt = 19,522,000,000 EUR** **Net Debt / EBITDA = 1.93x** Let me also consider if S&P would use a different EBITDA. They might adjust for: - Non-recurring items: the 8M non-recurring is tiny, doesn't matter much - Associates: might exclude the 22M share of profits If we exclude associates from operating profit: Adjusted Operating Profit = 6,489 - 22 = 6,467 EBITDA = 6,467 + 3,613 = 10,080 Net Debt / EBITDA = 19,522 / 10,080 = 1.94x Very similar result. Let me also check if we should include "Current Cash Management Financial Assets" in cash deduction: Net Debt = 32,100 - 12,578 - 755 = 18,767 Net Debt / EBITDA = 18,767 / 10,102 = 1.86x Or if we exclude leases from debt: Net Debt = 29,998 - 12,578 = 17,420 Net Debt / EBITDA = 17,420 / 10,102 = 1.72x Given the range is 1.72 to 1.94 depending on exact definitions, and S&P typically includes leases and uses standard cash definition, I'll go with approximately **1.9x** or more precisely **1.93x**. Actually, let me reconsider one more time. For S&P Global Ratings, their "Adjusted Debt" and "Adjusted EBITDA" have specific definitions. For Adjusted Debt, S&P typically includes: - Short-term and long-term debt as reported - Lease liabilities (capitalized operating leases) - Pension deficits (if any) - Minority interest adjustments (if any) For Adjusted EBITDA, S&P typically uses: - Reported EBITDA with their own adjustments for non-recurring items, proportional consolidation of JVs, etc. Without detailed S&P adjustments, my best estimate is around 1.9x. Let me try one more calculation using "Profit Loss From Ordinary Operating Activities" which might be closer to S&P's preferred starting point: EBITDA = 6,824 + 3,613 = 10,437 Net Debt / EBITDA = 19,522 / 10,437 = 1.87 Or with stricter cash: Net Debt = 19,522 - 755 = 18,767 Net Debt / EBITDA = 18,767 / 10,437 = 1.80 Given the data, I think the most reasonable single number is approximately **1.9** or about **1.93** if using the most straightforward calculation. Let me provide a more precise calculation with my best assumptions: - Debt: Short-term borrowings (6,368) + Noncurrent bonds (20,425) + Noncurrent other borrowings (3,205) + Lease liabilities (522 + 1,580 = 2,102) = 32,100 - Cash: 12,578 - Net Debt: 19,522 - EBITDA: Operating profit (6,489) + D&A (3,613) = 10,102 - Ratio: 1.93 I'll round to 1.93 or potentially 1.9 if rounding to one decimal place. Actually, looking at this again, I want to check if there are any other current portions of long-term debt hidden in "Other Current Liabilities" or elsewhere. The data doesn't show a separate "current portion of noncurrent borrowings" line, so either it's included in "Shortterm Borrowings" or the company has structured its debt differently. Given "Noncurrent Portion Of Noncurrent Bonds Issued" and "Noncurrent Portion Of Other Noncurrent Borrowings", the "current portion" would logically be in short-term borrowings or other current liabilities. Since we don't see it separately, and "Shortterm Borrowings" is 6,368, I'll assume this includes all short-term debt including current portion of long-term debt. Final answer: Net Debt / EBITDA ≈ 1.93x 1.93