I need to calculate the FFO (Funds From Operations) / Net Debt ratio for 2022 using S&P methodology. First, let me understand S&P's FFO methodology. S&P defines FFO as: - Net income from continuing operations - Plus depreciation and amortization - Plus/minus other non-cash items - Minus gains on asset sales (or plus losses) - Minus interest income - Plus interest expense - Plus/minus changes in working capital (sometimes excluded) Actually, for S&P's FFO, the standard formula is more commonly: - Net income before extraordinary items - Plus depreciation and amortization - Plus/minus deferred taxes - Plus other non-cash items - Minus gains on asset sales Let me look more carefully at what's available in the data. For S&P FFO, I need to use: - Profit/Loss from continuing operations (or net income) - Add back depreciation and amortization - Add back other non-cash items - Adjust for gains/losses on disposals From the cash flow statement adjustments, I can see: - "Adjustments For Reconcile Profit Loss" 2022-01-01 - 2023-01-01: -697000000 EUR Let me look at what's in this reconciliation. The adjustments include: - Adjustments for non-controlling interests: 116,000,000 - Adjustment for net profit loss from discontinued operations: -64,000,000 - Adjustments for income tax expense: -30,000,000 - Adjustments for undistributed profits of investments accounted for using equity method: -165,000,000 - Adjustments for finance income cost: 320,000,000 - Adjustments for gain loss on disposals property plant and equipment: 6,000,000 - Ajustes al resultado por gastos por depreciacion y amortizacion: 299,000,000 Wait, let me re-read. The "Adjustments For Reconcile Profit Loss" is -697,000,000. This seems to be the total of all adjustments to get from profit to operating cash flow. Actually, let me think about this more carefully. S&P FFO is typically calculated as: FFO = Net income from continuing operations + Depreciation & amortization + Deferred income taxes + Other non-cash items - Gains on asset sales + Minority interest in income + Interest expense Or more precisely for S&P: FFO = Funds from operations = Operating cash flow before working capital changes - Interest expense - Tax paid (sometimes) Actually, the standard S&P FFO formula is: FFO = Net income + Depreciation & amortization + Deferred income taxes + Other non-cash items - Gains on asset sales + Minority interest Let me use the direct approach from the cash flow statement. The "Cash Flows From Used In Operating Activities" is 1,002,000,000 EUR. But S&P FFO is NOT operating cash flow. It's different. Let me think again. S&P FFO = Net income before extraordinary items + Depreciation & amortization + Deferred income taxes + Other non-cash items - Gain on asset sales From the data: - Profit Loss From Continuing Operations 2022-01-01 - 2023-01-01: 238,000,000 EUR - Ajustes Al Resultado Por Gastos Por Depreciacion YAmortizacion (Depreciation and amortization): 299,000,000 EUR But I need to adjust for other items. Let me look at what S&P typically includes: S&P FFO = - Net income from continuing operations: 238,000,000 + D&A: 299,000,000 + Interest expense (part of finance costs): need to figure out + Minority interest: 116,000,000 - Gains on disposals: -6,000,000 (negative because it's a gain, so subtract) +/- Other adjustments Actually, looking at S&P's specific methodology, they define FFO as: FFO = Net income from continuing operations + Depreciation + Deferred income taxes + Other non-cash items - Gain on asset sales + Minority interest + Interest expense Wait, I need to be more careful. Let me look at the "Profit Loss From Continuing Operations" which is 238,000,000. But actually, for S&P, they often start with "Profit from operating activities" or similar. Let me try a different approach. S&P's FFO can also be approximated from the cash flow statement as: FFO = Cash flow from operating activities + Interest paid - Interest received + Tax paid - Working capital changes Or: FFO = CFO + Interest expense - Interest income + Taxes - Change in working capital From the data: - Cash Flows From Used In Operating Activities: 1,002,000,000 - Interest Paid Classified As Financing Activities: 329,000,000 (but this includes infrastructure projects interest) - Income Taxes Paid Refund Classified As Operating Activities: 82,000,000 (paid, so positive outflow, meaning we add back) - Increase Decrease In Working Capital: 83,000,000 Wait, I need to think about this more carefully. The 82,000,000 for taxes is "Income Taxes Paid Refund" - positive 82 million likely means refund received (or less paid). Let me assume this is taxes paid (outflow would be negative in standard cash flow, but here it's positive... actually in the data it's shown as positive 82,000,000 which might mean refund). Actually, looking more carefully at S&P methodology, FFO is defined as: FFO = Net income from continuing operations + Depreciation & amortization + Deferred income taxes + Other non-cash items - Gains on asset sales + Minority interest + Interest expense Or from cash flows: FFO = Cash flow from operating activities before working capital changes - Interest expense + Interest income - Tax paid Hmm, let me look at this from the adjustments to profit: Profit Loss From Continuing Operations: 238,000,000 Add back: - Depreciation and amortization: 299,000,000 - Interest expense (finance cost): part of the 320,000,000 "Adjustments For Finance Income Cost" - Income tax expense: 30,000,000 - Minority interest: 116,000,000 But wait, the "Profit Loss From Continuing Operations" already includes minority interest? No, looking at the structure: - Profit Loss Attributable To Owners Of Parent: 186,000,000 - Profit Loss Attributable To Noncontrolling Interests: 116,000,000 - Total Profit Loss: 302,000,000 But Profit Loss From Continuing Operations is 238,000,000, and Profit Loss From Discontinued Operations is 64,000,000, so 238 + 64 = 302. Yes. So Profit Loss From Continuing Operations (238M) is BEFORE allocating to parent and NCI. So it already includes the NCI portion. Actually wait, let me check: 186 + 116 = 302, which equals total profit loss. But profit loss from continuing is 238, and from discontinued is 64. So 238 = profit from continuing. Is 238 before or after NCI? Looking at the line items, "Profit Loss From Continuing Operations" at 238M and "Profit Loss" at 302M. The 302M is split into 186M (owners) + 116M (NCI). So 238M is the total continuing operations profit before NCI allocation? Or is 238M the net after all allocations? Actually, looking at standard IFRS presentation: - Profit from continuing operations (attributable to the entity, before NCI) - Then profit from discontinued operations - Then profit for the year - Then attribution to NCI and owners But the data shows "Profit Loss From Continuing Operations" as 238M, and then "Profit Loss" as 302M. The 302M is split into 186M + 116M. So 238M must be after tax but before discontinued operations. Is it before or after NCI? Typically, "Profit Loss From Continuing Operations" in IFRS is before attribution to NCI. Actually, let me check: 238 (continuing) + 64 (discontinued) = 302 (total). And 302 = 186 (owners) + 116 (NCI). So the 238M is total continuing operations profit, not yet split between parent and NCI. For S&P FFO, the standard formula is: FFO = Profit from continuing operations + D&A + Interest expense + Minority interest - Gains on asset sales + Deferred taxes + Other non-cash items Wait, I need to check if minority interest is already in or not. Since 238M is total continuing operations, it should include results from subsidiaries, and NCI is the portion not owned. So 238M is the GROUP profit from continuing operations, which includes 100% of subsidiaries. Then we allocate 116M to NCI and 186M to parent. For S&P FFO, they typically add back minority interest because they want to reflect the full cash flow generation available to the enterprise, not just the parent's share. So starting point: 238,000,000 (profit from continuing operations) Add: - Depreciation & amortization: 299,000,000 - Interest expense: need to figure out from finance costs - Minority interest: 116,000,000 (since we want total enterprise FFO) But wait, if 238M is already the total group profit, then NCI is already included in revenues and expenses. The 116M is just the allocation. So do we add it back? Actually, S&P adds back "minority interest in income" because they want to get to a pre-distribution figure. But if 238M is already the total profit before allocation to NCI, then we don't need to add it back - it's already there! Hmm, let me re-read. The "Profit Loss From Continuing Operations" of 238M - is this net of NCI or before NCI? In IFRS, the income statement typically shows: - Profit before tax - Income tax expense - Profit from continuing operations - Profit from discontinued operations - PROFIT FOR THE YEAR - Attributable to: Owners of parent, Non-controlling interests So "Profit from continuing operations" is usually before the attribution line. It's the total for the group. Then "Profit for the year" = continuing + discontinued = 238 + 64 = 302. Then 302 is split: 186 to owners, 116 to NCI. So 238M is total group profit from continuing operations, before attribution. For S&P FFO, starting from profit from continuing operations (238M), we add back: - D&A: 299M - Interest expense: ? - Deferred taxes: ? - Other non-cash items - Subtract gains on asset sales Let me look at the finance costs. "Finance Income Cost" is -320,000,000 (negative means net cost). This includes: - Financial Result On Financing Of Infrastructure Projects: -243,000,000 - Result On Derivatives And Other Financial Results Infrastructure Projects: -122,000,000 - Financial Result On Financing Excluding Infrastructure Projects: 1,000,000 (positive = income) - Result On Derivatives And Other Financial Results Excluding Infrastructure Projects: 44,000,000 (positive = income) Wait, let me recalculate: - Financial Result Of Infrastructure Projects: -365,000,000 - Financial Result Excluding Infrastructure Projects: 45,000,000 - Total Finance Income Cost: -320,000,000 Yes, -365 + 45 = -320. Correct. For S&P FFO, we typically add back NET interest expense (interest expense minus interest income). But we need to be careful about what's operating vs financing. Actually, S&P FFO specifically adds back "interest expense on debt" and subtracts "interest income from cash investments". But in practice, they often use total interest expense. Looking at the cash flow statement: - Interest Paid Classified As Financing Activities: 329,000,000 - Interest Received Classified As Investing Activities: 47,000,000 But wait, there's also interest in operating activities? Let me check... No, the operating cash flow seems to be after working capital changes. Actually, for S&P FFO, the formula is: FFO = Net income from continuing operations + Depreciation & amortization + Interest expense + Minority interest + Deferred income taxes + Other non-cash items - Gain on asset sales But since our "Net income from continuing operations" of 238M is already the total group amount (before NCI allocation), we don't add minority interest separately - it's already included! Hmm, but S&P's published methodology says to add "minority interest in income" back. This is because in US GAAP, net income is after minority interest. In IFRS, "profit for the period" is after NCI, but "profit from continuing operations" might be before or after NCI depending on presentation. Actually, looking at IFRS standards, the attribution to NCI comes AFTER "profit for the year". So "profit from continuing operations" and "profit for the year" are both group totals, before attribution. So for S&P FFO from IFRS statements, we should add back the minority interest (since S&P wants the total enterprise cash generation). Wait, but if 238M is already the total, and we're trying to get total enterprise FFO, then we don't add NCI. The 238M already includes 100% of subsidiary operations. Let me think about this differently. S&P's FFO is meant to approximate "cash flow from operations before financing and tax changes". It's similar to EBITDA but from a cash flow perspective, or like "operating cash flow before working capital changes". From the cash flow statement, we can calculate: Cash flow from operating activities: 1,002,000,000 + Interest paid: 329,000,000 (financing outflow, add back to get pre-financing) + Tax paid: 82,000,000 (well, this is refund, so actually subtract) - Working capital changes: 83,000,000 (positive means source of cash, so subtract to get pre-WC) Wait, the 83M working capital is "Increase Decrease In Working Capital" as positive 83M. In cash flow statements, if working capital decreases, it's a source of cash (positive). So to get FFO (before working capital), we need to remove this effect. Actually, let me recalculate: CFO = 1,002,000,000 This includes: - Working capital changes: +83,000,000 (source) - Taxes: +82,000,000 (refund, so source of cash) - Interest: typically interest paid is in financing for IFRS, but sometimes in operating Looking at the adjustments to profit: - Adjustments For Reconcile Profit Loss: -697,000,000 This is the total of all adjustments to get from profit (302M) to operating cash flow (1,002M)? No wait, 302M profit + adjustments = 1,002M CFO? That would mean adjustments are 700M. 302M + (-697M) + other items = 1,002M? That doesn't work. Let me look at the cash flow reconciliation more carefully. The standard indirect method is: Profit before tax +/- Adjustments for non-cash items = Cash flow before working capital changes +/- Working capital changes - Tax paid = CFO From the data: "Cash Flows From Used In Operating Activities": 1,002,000,000 And we have various adjustments. Let me try to reconstruct. Actually, looking at the adjustments listed: - Adjustments For Reconcile Profit Loss: -697,000,000 - Adjustments For Non Controlling Interests: 116,000,000 - Adjustment For Net Profit Loss From Discontinued Operations: -64,000,000 - Adjustments For Income Tax Expense: -30,000,000 - Adjustments For Undistributed Profits Of Investments Accounted For Using Equity Method: -165,000,000 - Adjustments For Finance Income Cost: 320,000,000 - Adjustments For Gain Loss On Disposals Property Plant And Equipment: 6,000,000 - Ajustes Al Resultado Por Gastos Por Depreciacion YAmortizacion: 299,000,000 Hmm, these don't seem to add up to -697M. Let me check: 116 - 64 - 30 - 165 + 320 + 6 + 299 = 482. Not -697. Actually, the -697M might be the total adjustment, and the other items are components. Let me see if they sum differently. Wait, I think "Adjustments For Reconcile Profit Loss" is the total, and the other lines are details or alternative presentations. Let me look at this from a different angle. S&P Global's definition of FFO: "Funds from operations (FFO): Net income from continuing operations plus depreciation, amortization, deferred income taxes, and other non-cash items, minus gains (or plus losses) on sales of property, plants, and equipment, plus/minus adjustments for changes in other assets and liabilities that are not part of the company's main operations." Or more precisely for corporate issuers: FFO = Net income before extraordinary items + Depreciation & amortization + Deferred income taxes + Other non-cash items - Gain on asset sales + Minority interest + Interest expense Let me try to calculate this directly: Starting point: Profit Loss From Continuing Operations = 238,000,000 Add back: 1. Depreciation & amortization: 299,000,000 2. Interest expense (net): 320,000,000 (from "Adjustments For Finance Income Cost" - this is the add-back) 3. Income tax expense: 30,000,000 (from "Adjustments For Income Tax Expense" - wait, this is -30M, meaning tax expense reduced profit, so we add it back for pre-tax FFO?) Actually, for FFO, we typically want a pre-financing, post-tax measure. So we add back interest but not tax. Let me reconsider. S&P's FFO is typically: - After tax - Before interest - Before D&A add-back - Before working capital changes So: Net income + D&A + Other non-cash - Gains on sales + Minority interest + Interest expense But wait, "Net income + Interest expense" is essentially pre-interest income. And if we use "Profit before tax + Interest expense - Tax", that's the same as Net income + Interest expense. Actually, let me look at this more carefully. S&P's FFO for corporate issuers is: FFO = Funds from operations = Net income from continuing operations + Depreciation + Deferred income taxes + Other non-cash items - Gain on asset sales + Minority interest + Interest expense Where "Net income from continuing operations" is the bottom-line net income from continuing ops (after tax, after NCI if presented that way). In IFRS, if "Profit from continuing operations" is presented as 238M and it's the group total (before NCI allocation), then we need to think about whether NCI is included. Actually, I think I need to look at this more carefully. Let me trace through the income statement: Profit Loss Before Tax: 268,000,000 Income Tax Expense Continuing Operations: -30,000,000 (expense, so 268 - 30 = 238) Profit Loss From Continuing Operations: 238,000,000 Profit Loss From Discontinued Operations: 64,000,000 Profit Loss: 302,000,000 Attributable to: - Owners Of Parent: 186,000,000 - Noncontrolling Interests: 116,000,000 So "Profit Loss From Continuing Operations" of 238M is after tax, and is the GROUP total (before attribution to NCI and before discontinued operations). For S&P FFO, if we start with 238M, we need to add back: - D&A: 299M - Interest expense: the net finance cost of 320M (but this includes infrastructure project finance) - Deferred taxes: ? - Gains on asset sales: -6M (subtract the gain) - Minority interest: 116M (add back since we want total enterprise) Wait, but 238M already includes 100% of subsidiaries' results. The NCI is just an allocation of the already-recorded profit. So if we want "funds from operations available to the enterprise", we don't add NCI - the profit is already there. Hmm, but S&P's methodology specifically says to add "minority interest in income". This suggests their starting point is net income attributable to the parent, not the group total. Let me check: If we start from "Profit Loss Attributable To Owners Of Parent" for continuing operations... we don't have that directly. We have 186M total for parent, which includes discontinued operations. From discontinued operations: total is 64M. Is this attributable to parent or total? "Profit Loss From Discontinued Operations" is 64M, and then total profit is 302M split as 186M + 116M. If we assume the 64M discontinued is split proportionally or all to parent... actually, looking at the structure, "Profit Loss From Discontinued Operations" of 64M is likely the group total. Then total profit 302M = 238M continuing + 64M discontinued. But 186M + 116M = 302M. So how is the 64M split? We don't know directly. Actually, looking at the detailed lines: "Profit Loss Attributable To Owners Of Parent" "Before Fair Value Adjustments Member" 2022-01-01 - 2023-01-01: 202000000 EUR "Profit Loss Attributable To Owners Of Parent" "Fair Value Adjustments Member": -16000000 EUR Total: 186,000,000 EUR And for NCI: "Profit Loss Attributable To Noncontrolling Interests" total: 116,000,000 EUR For discontinued operations, we only have total 64M, no split. For S&P FFO, let me use the standard approach from cash flows: FFO = Cash flow from operating activities + Interest paid (financing) + Tax paid (operating) - Working capital changes - Other non-operating items in CFO Actually, a cleaner approach is: FFO = EBIT + D&A - Cash taxes paid + Other non-cash items - Gains on sales Or from the cash flow statement: FFO = CFO + Interest expense - Interest income + Tax paid - Working capital changes From our data: CFO = 1,002,000,000 Interest paid (financing) = 329,000,000 Tax paid (operating) = -82,000,000? Or +82,000,000? The line says "Income Taxes Paid Refund Classified As Operating Activities" = 82,000,000. Positive likely means refund received (inflow). Working capital = 83,000,000 (positive means decrease in WC, source of cash) So to get pre-interest, pre-WC, pre-tax cash flow: FFO ≈ CFO + Interest paid - Working capital source + Tax paid = 1,002,000,000 + 329,000,000 - 83,000,000 + (-82,000,000)? Wait, if 82M is a refund (inflow), then tax paid would be negative or zero. Let me assume 82M is net tax refund. Actually, let me try a different formula. S&P FFO from cash flow: FFO = Cash flow from operating activities before working capital changes - Interest expense + Interest income But we don't have that breakdown directly. Let me use the income statement approach with the reconciliation items: Start with Profit from continuing operations: 238,000,000 Add D&A: 299,000,000 Add back net finance cost: 320,000,000 (this is the adjustment, meaning finance cost reduced profit by 320M) Add back income tax expense: 30,000,000 (to get pre-tax, but S&P FFO is typically post-tax) Hmm, S&P FFO is POST-TAX. So we don't add back tax. Let me look up S&P's exact formula for FFO: From S&P Global Corporate Methodology: "FFO: Funds from operations. We calculate FFO as net income from continuing operations plus depreciation, amortization, deferred income taxes, and other non-cash items, minus gains (or plus losses) on sales of property, plants, and equipment, plus interest expense, minus interest income, plus/minus adjustments for changes in other assets and liabilities that are not part of the company's main operations." Actually, I found a more precise definition. S&P's FFO for industrials is: FFO = Net income from continuing operations + Depreciation & amortization + Deferred taxes + Other non-cash items - Gain on asset sales + Minority interest + Interest expense But this "Net income from continuing operations" in US GAAP is after minority interest. So they add it back. In IFRS, if "Profit for the year" is after NCI, then we'd add NCI back. But our "Profit from continuing operations" of 238M - is it after NCI? Looking at IFRS presentation, the line "Profit from continuing operations" appears BEFORE the attribution to NCI. It's a group total. Actually, let me check this more carefully. In IAS 1, the presentation is: ... Profit before tax Income tax expense Profit from continuing operations Profit from discontinued operations PROFIT FOR THE YEAR Attributable to: Owners of parent Non-controlling interests So "Profit from continuing operations" is BEFORE attribution to NCI. It's the total group amount. Therefore, for our 238M, we do NOT add back NCI - it's already included. So S&P FFO = 238,000,000 + 299,000,000 + 320,000,000 + 0 (deferred taxes?) - 0 (gains) + other adjustments Wait, what about deferred taxes? The "Adjustments For Income Tax Expense" is -30,000,000. This is the tax expense. But deferred tax is a non-cash item. Do we have deferred tax in the income statement? "Income Tax Expense Continuing Operations" total is 30,000,000. This includes current and deferred tax. We don't have the split. Also, what about "Adjustments For Gain Loss On Disposals Property Plant And Equipment" of 6,000,000? This is a positive adjustment, meaning a loss of 6M (or we add back a loss). Wait, "Adjustments For Gain Loss On Disposals" as +6M in the reconciliation means we're adding back a loss of 6M, or subtracting a gain. Looking at the income statement, "Impairment And Gains Or Losses On Disposal Of Non Current Assets" is -6,000,000 (negative = loss). So the +6M adjustment adds this back. For S&P FFO, we subtract gains on asset sales. Since there was a loss of 6M, we would... actually S&P says "minus gains (or plus losses)". So we add losses. The +6M adjustment in cash flow already adds back the loss. For FFO, if we start from net income, the loss is already in net income, so we... hmm, losses are already reducing net income, so we don't need to adjust them for FFO (since FFO is about cash generation, and losses on disposal are non-cash or non-recurring). Actually, S&P specifically says "minus gains on sales of property, plant, and equipment". They don't add back losses. So if there was a loss, we leave it (or add it back if it was deducted in arriving at net income). Let me try a different approach. Let me use the cash flow based method: FFO = Cash flow from operating activities + Interest paid (if in financing) + Tax paid (if we want pre-tax... no, S&P FFO is post-tax) - Working capital changes - Other non-FFO items Actually, the most common practical formula is: FFO = CFO + Net interest expense + Tax paid - Working capital changes From data: CFO = 1,002,000,000 Interest paid (financing) = 329,000,000 Interest received (investing) = 47,000,000 Tax paid/refund = -82,000,000 (refund received) Working capital = 83,000,000 (positive = source) So: FFO = 1,002,000,000 + 329,000,000 - 47,000,000? - 83,000,000 - 82,000,000? Hmm, this is getting messy. Let me look at what S&P actually does in practice for European companies. For European corporates, S&P typically calculates FFO as: FFO = Operating cash flow before working capital changes - Net interest paid - Tax paid Or from EBITDA: FFO = EBITDA - Cash interest - Cash taxes - Maintenance capex + Dividends received Actually, let me try yet another approach. The standard S&P FFO for infrastructure/utility companies: FFO = Net income + D&A + Deferred taxes + Other non-cash - Gains + Minority interest + Interest expense Using: Net income from continuing operations: 238,000,000 D&A: 299,000,000 Interest expense (net, from adjustment): 320,000,000 Minority interest: 116,000,000? (but this is already in 238M if it's group total) Wait, I need to resolve this NCI issue. Let me assume 238M is group total before NCI. Then S&P FFO should add NCI if we want "funds available to service debt". Actually, no - the 238M already includes 100% of subsidiary operations. The NCI just takes their share of the already-generated profit. For debt service capacity, we care about total cash generated, not just parent's share. But 238M IS the total cash generation (in accrual terms). The NCI is just a distribution. Hmm, but if we think about it, the actual cash flow to the parent is less than total by the NCI's share. But for enterprise value/ debt capacity, we look at total. I think for S&P FFO, since they add "minority interest" back to net income, their starting point must be net income attributable to parent. Let me try that: Parent net income from continuing operations: We don't have this directly. Total parent net income is 186M, which includes discontinued ops. If discontinued ops of 64M is all attributable to parent (common when selling a subsidiary), then parent continuing = 186M - 64M = 122M. But we don't know. Actually, looking at the detailed lines, we have "Profit Loss Attributable To Owners Of Parent" with "Before Fair Value Adjustments" of 202M and "Fair Value Adjustments" of -16M, totaling 186M. For NCI, we just have total 116M, no split. Let me try: if total profit is 302M = 238M cont + 64M disc, and parent gets 186M total, NCI gets 116M total. If NCI only gets continuing ops (unlikely), then NCI continuing = 116M, parent continuing = 238-116 = 122M, parent disc = 186-122 = 64M. That would mean all discontinued goes to parent. Or if NCI gets proportional: NCI is 116/302 = 38.4% of total. Then NCI continuing = 38.4% × 238 = 91.4M, parent continuing = 146.6M, NCI disc = 24.6M, parent disc = 39.4M. But 146.6 + 39.4 = 186. Yes. Actually, for simplicity, let me just use the total group figures since S&P's FFO is meant to be an enterprise-level metric. Let me try this calculation: FFO = Profit from continuing operations (group) + D&A + Interest expense + Other non-cash adjustments - Gains = 238,000,000 + 299,000,000 + 320,000,000 + ? - ? But wait, the 320M "finance income cost" adjustment is already added back in the cash flow reconciliation. If we're starting from profit, we add it back. But is it "interest expense" for S&P purposes? Actually, the 320M includes: - Financing of infrastructure projects: 243M - Derivatives and other financial results infrastructure: 122M - Financing excluding infrastructure: -1M (income) - Derivatives excluding infrastructure: -44M (income) Net: 243 + 122 - 1 - 44 = 320M. Wait, that's 365 - 45 = 320. Yes. For S&P FFO, do we add back all of this? The derivative gains/losses might be non-cash or non-operating. The infrastructure project financing is project-level, not corporate-level. Hmm, this is getting complicated. Let me look for a simpler approach using the cash flow statement. S&P FFO can be approximated as: FFO = EBITDA - Cash taxes + Other non-cash items - Gains Or: FFO = Cash flow from operating activities before working capital changes - Net interest paid From the cash flow statement, let me try to find "cash flow before working capital changes": CFO = 1,002,000,000 Less: Working capital changes = 83,000,000 Less: Tax refund = 82,000,000 Less: Dividends received = 284,000,000? (these are investing-like) Actually, dividends received are typically operating or investing. Here it's "Dividends Received Classified As Operating Activities" = 284M. Cash flow before working capital and tax = ? = CFO - Working capital source - Tax refund - Dividends received + Interest (if included)? This is messy. Let me try the direct S&P formula from net income. After more research in my knowledge base, S&P's standard FFO formula for corporate issuers is: FFO = Net income from continuing operations + Depreciation & amortization + Deferred income taxes + Other non-cash items - Gains on sales of PP&E + Minority interest in income + Interest expense Where: - "Net income from continuing operations" is after tax, after NCI (i.e., attributable to parent) - We add back minority interest to get to total enterprise - We add back interest expense to get pre-interest - We add back D&A and other non-cash items Given our data structure, let me estimate: If total profit is 302M, and parent gets 186M, NCI gets 116M. If we assume the 64M discontinued is mostly or all attributable to parent (common in divestitures), then parent continuing ≈ 186M - 64M = 122M. But actually, let me check if we can derive parent continuing more precisely. Looking at "Profit Loss From Discontinued Operations" = 64M. Is this group or parent? The line doesn't specify "Attributable To", so it's likely the group total. If we assume NCI has no share of discontinued ops (simplifying), then: - Parent continuing = 186M - 64M = 122M? No wait, 186M is total parent, which would include any discontinued ops. Actually, let me try: Total profit 302M = Parent 186M + NCI 116M. Discontinued ops 64M is part of total 302M. If discontinued ops is all attributable to parent: Parent = 122M cont + 64M disc = 186M. NCI = 116M all from continuing. Check: 122 + 64 + 116 = 302. And 122 + 116 = 238 continuing. Yes! This works. So Parent continuing = 122M, NCI continuing = 116M, Total continuing = 238M. Parent discontinued = 64M, NCI discontinued = 0. Now for S&P FFO, starting from parent continuing (122M): + D&A: 299M + Deferred taxes: ? + Other non-cash: various items - Gains on sales: 0 (or adjust for the 6M loss) + Minority interest: 116M + Interest expense: ? = 122 + 299 + 116 + Interest + other adjustments But wait, if we use total continuing 238M, we don't add NCI. Let's see: 238 + 299 + Interest + other = ? For interest, S&P typically uses "interest expense on debt". From our data, the total finance cost is 320M, but this includes derivatives and other items. The cash interest paid is 329M. For a cleaner FFO, let me use: FFO = Total continuing profit + D&A + Interest expense + Other non-cash - Gains = 238 + 299 + 320 + ... But this double counts? No, 238 is after deducting 320 finance cost. So 238 + 320 = pre-finance income of 558M. Then + 299 D&A = 857M. Then adjust for other non-cash. Actually, this is getting to "EBIT + D&A - Cash taxes" territory. Let me try: EBIT (before finance cost) = 238 + 320 = 558M? No, 238 is after tax. So: Profit before tax = 268M Finance cost = 320M So EBIT = 268 + 320 = 588M? No, profit before tax already includes finance cost. So: Profit before tax = EBIT - Finance cost 268 = EBIT - 320 EBIT = 588M Then EBITDA = EBIT + D&A = 588 + 299 = 887M Then FFO ≈ EBITDA - Cash taxes + Other non-cash - Gains Cash taxes = ? We have tax expense of 30M, but cash tax is different. We have tax refund of 82M, so cash tax paid is negative (refund received). FFO = 887 - (-82) + ... = 887 + 82 = 969M? But this seems too high and includes working capital effects. Actually, let me step back. The standard S&P FFO from EBITDA: FFO = EBITDA - Cash interest - Cash taxes - Maintenance capex But that's free cash flow, not FFO. For FFO specifically, S&P uses: FFO = Net income + D&A + Deferred taxes + Other non-cash - Gains + Minority interest + Interest expense Let me just calculate this as best I can: Net income from continuing operations (parent): 122M (estimated) + D&A: 299M + Deferred taxes: unknown, assume 0 or part of 30M tax expense + Other non-cash: 165M (undistributed profits of equity method investments, added back) - Gains on sales: 0 (actually there was a loss of 6M, so we add 0 or adjust) + Minority interest: 116M + Interest expense: 320M (net finance cost) = 122 + 299 + 165 + 116 + 320 = 1,022M? But this seems too high. Let me check with operating cash flow of 1,002M. FFO should be higher than CFO because we add back working capital uses and interest, and remove working capital sources. Actually, S&P FFO is typically LOWER than CFO if CFO includes working capital sources. Let me try a different approach. Let me look at what the "Adjustments For Reconcile Profit Loss" of -697M represents. If profit is 302M, and adjustments are -697M, that would give -395M, not 1,002M. So this doesn't work directly. Actually, I think the "Adjustments For Reconcile Profit Loss" might be a separate line, and the total reconciliation includes more items. Let me try adding up the detailed adjustments: 116 - 64 - 30 - 165 + 320 + 6 + 299 = 482M But this is positive 482M, not -697M. Hmm, maybe the -697M is the total including working capital and other items? Let me look at the cash flow statement structure more carefully. The items listed seem to be: 1. Adjustments For Reconcile Profit Loss: -697,000,000 (total?) 2. Adjustments For Non Controlling Interests: 116,000,000 3. Adjustment For Net Profit Loss From Discontinued Operations: -64,000,000 4. Adjustments For Income Tax Expense: -30,000,000 5. Adjustments For Undistributed Profits Of Investments Accounted For Using Equity Method: -165,000,000 6. Adjustments For Finance Income Cost: 320,000,000 7. Adjustments For Gain Loss On Disposals Property Plant And Equipment: 6,000,000 8. Ajustes Al Resultado Por Gastos Por Depreciacion YAmortizacion: 299,000,000 Then later: - Increase Decrease In Working Capital: 83,000,000 - Income Taxes Paid Refund: 82,000,000 - Dividends Received: 284,000,000 Total CFO: 1,002,000,000 Let me try: Starting profit 302M + adjustments: ? + working capital: 83M + tax refund: 82M + dividends received: 284M = 1,002M So adjustments (excluding WC, tax, dividends) = 1,002 - 302 - 83 - 82 - 284 = 251M But my sum of detailed adjustments was 482M. Not matching. Actually, maybe the detailed adjustments are components, and some are positive/negative differently. Let me re-read: "Adjustments For Non Controlling Interests" 116M. In cash flow, this is likely ADDED back (deducted from profit to get to cash, or rather, since NCI is an allocation not a cash flow, we add it back to get from parent profit to group cash flow). Actually, for the indirect method starting from GROUP profit: - Start with group profit: 302M - Add back NCI: not needed if starting from group profit - Add back D&A: 299M - Add back finance cost: 320M - Add back tax expense: 30M (to get pre-tax, then subtract cash tax) - etc. Starting from GROUP profit 302M: + D&A 299M + Finance cost 320M + Tax expense 30M + Loss on disposal 6M - Undistributed profits of associates 165M (deduct, since equity method profit not cash) - Working capital source 83M (deduct, since it's a source not from operations) - Tax refund 82M (deduct, since it's inflow not from operations) - Dividends received 284M (deduct or classify differently) = 302 + 299 + 320 + 30 + 6 - 165 - 83 - 82 - 284 = 423M? Not 1,002M. Hmm, I'm confusing myself. Let me try starting from PARENT profit 186M: + NCI 116M = 302M group + D&A 299M + Finance cost 320M + Tax expense 30M + Loss on disposal 6M - Undistributed profits of associates 165M = 302 + 299 + 320 + 30 + 6 - 165 = 792M (cash flow before working capital, tax, dividends) Then + working capital 83M = 875M + tax refund 82M = 957M + dividends received 284M = 1,241M? Not 1,002M. Hmm, not matching. Maybe dividends received are not in operating? But the data says they are. Let me try without adding tax expense: 302 + 299 + 320 + 6 - 165 = 762M + 83M WC = 845M + 82M tax = 927M + 284M dividends = 1,211M Still not 1,002M. Maybe the "undistributed profits of associates" of -165M means we SUBTRACT 165M (since equity method profit included but not received as cash)? That would reduce, not increase. Let me try: 302 + 299 + 320 + 6 + 165 = 1,092M? No, undistributed profits should be subtracted. Actually wait - "Adjustments For Undistributed Profits Of Investments Accounted For Using Equity Method" = -165,000,000. In the cash flow statement, this is likely a negative adjustment (subtract the equity method profit not received as cash). So if profit includes 165M from equity method (share of profit of associates), we subtract it because no cash was received. From the income statement: "Share Of Profit Loss Of Associates Accounted For Using Equity Method" = 165M (total, including fair value adjustments). So yes, this 165M is included in profit but not cash, so we subtract it. So: 302 (profit) - 165 (equity method profit not cash) + 299 (D&A) + 320 (finance cost) + 6 (loss on disposal) + 30 (tax expense? or is this separate?) Hmm, I think the issue is whether tax expense is in the adjustments or not. Let me try a completely different approach. Let me use the direct S&P formula and accept some approximation. S&P FFO = Net income from continuing operations + D&A + Interest expense + Minority interest - Gains on asset sales Using: - Net income from continuing operations (group): 238M - D&A: 299M - Interest expense: I'll use the cash interest paid of 329M, or the net finance cost of 320M - Minority interest: 116M (but already in 238M?) If 238M is group total before NCI allocation, then we don't add NCI. If 238M is after NCI, we add NCI. Given IFRS presentation, 238M is group total. So: FFO = 238 + 299 + 320 = 857M (using net finance cost) Or FFO = 238 + 299 + 329 = 866M (using interest paid) But we need to adjust for other items. The "undistributed profits of associates" of 165M - should we subtract this? S&P says "other non-cash items" - this could include adding back or subtracting. Actually, S&P FFO includes "other non-cash items" which are ADDED back. The undistributed profits of associates are a POSITIVE in net income but NEGATIVE for cash. So for FFO, do we subtract them? In the cash flow statement, we subtract 165M (negative adjustment). For FFO, S&P might also subtract this since it's non-cash income. Let me try: FFO = 238 + 299 + 320 - 165 = 692M? Or using the cash flow approach: FFO ≈ CFO + Interest paid - Working capital changes - Tax effects + Other adjustments = 1,002 + 329 - 83 - 82 - 284 + 165? This is getting too messy. Let me look for a cleaner formula. Actually, I recall that for European utilities and infrastructure companies, S&P often calculates FFO as: FFO = EBIT + D&A - Cash taxes + Dividends received from associates - Maintenance capex Or from cash flows: FFO = Cash flow from operating activities + Cash interest paid - Working capital changes Let me try: FFO = 1,002 + 329 - 83 = 1,248M? Then subtract tax refund 82M = 1,166M? Hmm, but this includes dividends received and other items. Let me try yet another approach. The "Cash Flows Before Financing Activities" is 270M. This is: CFO + CFI = 1,002 - 732 = 270M. For S&P, FFO is typically before financing but after operations. So FFO is related to operating cash flow, not before financing. OK, let me try to find a definitive answer by looking at standard S&P methodology for FFO/Net Debt. S&P's FFO definition (from their published methodology): "Funds from operations (FFO). Net income from continuing operations adjusted for depreciation and amortization, deferred income taxes, other non-cash items, gains/losses on disposal of assets, and minority interest. For utility and infrastructure companies, we also adjust for changes in working capital related to regulatory assets/liabilities." The formula is: FFO = Net income from continuing operations + Depreciation & amortization + Deferred income taxes + Other non-cash items - Gains on sales of property, plant, and equipment + Minority interest + Interest expense Where "Net income from continuing operations" is AFTER minority interest (i.e., attributable to parent company). So I need parent company's net income from continuing operations. From my earlier analysis: Parent total net income = 186M. If discontinued ops = 64M is all attributable to parent, then parent continuing = 122M. But wait, let me check if 64M discontinued is all to parent. "Profit Loss From Discontinued Operations" is 64M. Then total profit 302M = 238M cont + 64M disc. The attribution is 186M parent + 116M NCI = 302M. If NCI only has continuing operations, then NCI = 116M from continuing, parent continuing = 238 - 116 = 122M, parent discontinued = 186 - 122 = 64M. This matches! So Parent continuing net income = 122M. Now S&P FFO: = 122 + 299 (D&A) + 0 (deferred taxes? unknown) + 165 (undistributed profits of associates - this is a non-cash item that reduced cash flow, so add back? No wait, it was income not cash, so subtract from net income... actually for FFO we want to remove non-cash income, so subtract 165? Or is it already in 122?) Hmm, the 165M "Share Of Profit Loss Of Associates" is in the income statement. Is it in continuing operations? Yes. So 122M parent continuing includes parent's share of this 165M. For S&P FFO, we need to adjust for "other non-cash items". The undistributed profits of associates are non-cash income. So we SUBTRACT them (since they inflated net income but no cash was received). Wait, but in the cash flow statement, "Adjustments For Undistributed Profits Of Investments Accounted For Using Equity Method" = -165,000,000. This is NEGATIVE, meaning we subtract 165M from profit to get to cash flow. So yes, we need to subtract 165M from net income for FFO as well (or rather, not add it back). So: 122 - 165? That gives negative, which doesn't make sense. Actually, I think I'm confusing myself. Let me re-read the cash flow adjustment. "Adjustments For Undistributed Profits Of Investments Accounted For Using Equity Method" 2022-01-01 - 2023-01-01: -165000000 EUR In the indirect method, adjustments to profit can be positive (add back) or negative (subtract). A negative adjustment means we subtract from profit. So if profit includes 165M from equity method, we subtract it (negative adjustment) to remove this non-cash income. But for S&P FFO, the formula adds back "other non-cash items" to net income. The undistributed profits are already IN net income. They're not an add-back item; they're something we need to remove. So we don't "add back" - we subtract. Actually, looking at S&P's wording: "plus other non-cash items". This means items that reduced net income but didn't use cash (like D&A). The undistributed profits of associates INCREASED net income without cash. So they're not "other non-cash items" in the S&P sense; they're non-cash income that needs to be removed. So my calculation: FFO = 122 (parent continuing) + 299 (D&A) + 116 (minority interest) + 320 (interest expense) - 0 (deferred taxes) + 0 (other non-cash expenses) - 0 (gains) - 165 (remove non-cash equity income) = 122 + 299 + 116 + 320 - 165 = 692M Hmm, 692M. Let me verify with another approach. From cash flows: CFO = 1,002M. This includes: - Working capital source: 83M - Tax refund: 82M - Dividends received: 284M - Interest paid in financing, not operating: 0 (since IFRS puts interest in financing or operating) Actually, under IFRS, interest paid can be in operating or financing. Here, "Interest Paid Classified As Financing Activities" = 329M, so interest is in financing, not operating. So CFO of 1,002M is after working capital, tax, dividends, but before interest. To get S&P FFO from CFO: FFO = CFO - Working capital source + Interest paid - Tax refund - Dividends received + Equity method income removal? = 1,002 - 83 + 329 - 82 - 284 - 165? = 717M Close to 692M but not exact. The difference might be due to gains/losses, other items. Let me try without subtracting dividends: = 1,002 - 83 + 329 - 82 - 165 = 1,001M? No. Actually, S&P FFO typically INCLUDES dividends received from investments (as part of operations). So don't subtract. Let me try: FFO = CFO - Working capital source + Interest paid - Tax refund - Equity method adjustment = 1,002 - 83 + 329 - 82 + 165? Wait, in CFO we already subtracted the 165M (equity method income not cash). So CFO is 1,002M which is AFTER removing equity method income. To get back to a "funds" measure, we might not need to adjust. Hmm, I think the issue is that S&P FFO is meant to be a "normalized" cash flow from operations, not strictly cash. It includes accrual items that are considered sustainable. Let me try a simpler approach. I'll use the standard S&P formula with reasonable assumptions: FFO = Net income from continuing operations (parent) + D&A + Interest expense + Minority interest - Equity method income (non-cash portion) + Other adjustments = 122 + 299 + 320 + 116 - 165 + 0 = 692M Or if we use group continuing profit 238M and don't add minority interest: = 238 + 299 + 320 - 165 = 692M Same result! Good. Now for Net Debt. S&P defines net debt as: - Short-term debt + Long-term debt + Commercial paper + Bank borrowings - Less: Cash and cash equivalents - Less: Marketable securities From the balance sheet: Current borrowings: - Current Borrowings And Current Portion Of Noncurrent Borrowings: 877M - Current Debt Securities And Bank Borrowings Of Infrastructure Projects: 74M - Current Debt Securities And Bank Borrowings Excluding Infrastructure Projects: 803M Noncurrent borrowings: - Noncurrent Portion Of Other Noncurrent Borrowings: 10,776M - Noncurrent Debt Securities And Bank Borrowings Of Infrastructure Projects: 7,893M - Noncurrent Debt Securities And Bank Borrowings Excluding Infrastructure Projects: 2,883M Total debt = 877 + 10,776 = 11,653M But wait, there are also "Other Noncurrent Financial Liabilities" of 838M. Are these debt? Likely yes, or at least debt-like. And "Noncurrent Derivative Financial Liabilities" of 66M and "Current Derivative Financial Liabilities" of 47M. These might be debt or not depending on type. For S&P net debt, we typically include: - All interest-bearing debt - Bank borrowings - Bonds/debt securities - Finance lease liabilities - Sometimes pension liabilities (if funded status is negative) - Sometimes derivative liabilities if related to debt hedging From the data: - Noncurrent Lease Liabilities: 120M - Current Lease Liabilities: 64M - Total lease liabilities: 184M These are included in net debt by S&P. Also "Other Noncurrent Financial Liabilities" of 838M - need to check if this is debt. Looking at the structure, this increased from 72M to 838M, a large increase. This might include put options to NCI, derivatives, or other items. For S&P, if it's debt-like, include it. Actually, let me look more carefully. The line "Other Noncurrent Financial Liabilities" 2023-01-01: 838,000,000 EUR vs 2022-01-01: 72,000,000 EUR. This huge increase suggests it might include something specific. Looking at the components, we also have "Restricted Cash Relating To Infrastructure Projects And Other Financial Assets" of 597M. This is not freely available cash. For S&P net debt: Gross debt = - Current Debt Securities And Bank Borrowings Of Infrastructure Projects: 74M - Current Debt Securities And Bank Borrowings Excluding Infrastructure Projects: 803M - Noncurrent Debt Securities And Bank Borrowings Of Infrastructure Projects: 7,893M - Noncurrent Debt Securities And Bank Borrowings Excluding Infrastructure Projects: 2,883M - Current Lease Liabilities: 64M - Noncurrent Lease Liabilities: 120M - Other Noncurrent Financial Liabilities: 838M? (need to determine if debt) Total debt securities and bank borrowings = 74 + 803 + 7,893 + 2,883 = 11,653M Plus lease liabilities = 184M = 11,837M Plus other noncurrent financial liabilities 838M = 12,675M Now for cash: - Cash And Cash Equivalents: 5,130M - But includes restricted cash for infrastructure projects Freely available cash: - Cash And Cash Equivalents Excluding Infrastructure Projects: 4,962M - Current Restricted Cash And Cash Equivalents Infrastructure Projects: 38M (restricted) - Other Cash And Cash Equivalents Infrastructure Projects: 130M (might be restricted or not) Actually, "Cash And Cash Equivalents Infrastructure Projects" = 168M total, split as: - Current Restricted Cash And Cash Equivalents Infrastructure Projects: 38M - Other Cash And Cash Equivalents Infrastructure Projects: 130M The "Other" 130M might be unrestricted cash within infrastructure projects. Also "Restricted Cash Relating To Infrastructure Projects And Other Financial Assets" (noncurrent) = 597M For S&P net debt, we typically subtract: - Cash and cash equivalents (unrestricted) - Sometimes restricted cash if it's truly restricted and not available for debt repayment Standard approach: Subtract all cash except restricted cash that is contractually required to be maintained. From the data: - Total Cash And Cash Equivalents: 5,130M - Less: Current Restricted Cash: 38M - Less: Noncurrent Restricted Cash: 597M? (this is in noncurrent assets, not current cash) Actually, the 597M "Restricted Cash Relating To Infrastructure Projects And Other Financial Assets" is in noncurrent assets, not in "Cash And Cash Equivalents". So total liquid cash is 5,130M, of which 38M is restricted current, and 130M is "other" infrastructure cash. For S&P, typically: Net debt = Total debt - Cash and cash equivalents Where "Cash and cash equivalents" includes unrestricted cash. Restricted cash is usually NOT subtracted. So if 38M is explicitly restricted, and 597M is restricted noncurrent, then unrestricted cash = 5,130 - 38 = 5,092M? Or is the 130M "other" also restricted? Actually, looking at the split: Cash And Cash Equivalents Infrastructure Projects: 168M - Current Restricted Cash And Cash Equivalents Infrastructure Projects: 38M - Other Cash And Cash Equivalents Infrastructure Projects: 130M So "Other" 130M is part of infrastructure project cash but not classified as restricted. However, it might still be ring-fenced at project level. For conservative S&P analysis, they might only subtract cash at holding company level: Cash And Cash Equivalents Excluding Infrastructure Projects: 4,962M This is clearly available to the parent. The infrastructure project cash (168M) might be trapped at project level. Net debt = 12,675M - 4,962M = 7,713M (if using all debt and holding company cash) Or = 11,837M - 4,962M = 6,875M (if excluding "other noncurrent financial liabilities") Hmm, let me reconsider what to include in debt. The "Other Noncurrent Financial Liabilities" of 838M - is this debt? Looking at the balance sheet structure, this is a separate line from "Noncurrent Portion Of Other Noncurrent Borrowings". It might include: - Derivative liabilities (but we have a separate line for that: 66M) - Put options to NCI - Deferred consideration - Other financial obligations For S&P, if these are debt-like (e.g., put options to NCI that are expected to be settled in cash), they are included in net debt. Given the large increase from 72M to 838M, this likely represents something significant like NCI put options or acquisition-related liabilities. S&P would likely include this in adjusted debt. But let me check if there's a more standard presentation. Actually, looking at the 2022 figure: "Other Noncurrent Financial Liabilities" 2022-01-01: 72,000,000 EUR. This was small. The jump to 838M in 2023 is significant. Wait, I'm looking at 2023-01-01 which is year-end 2022. And 2022-01-01 is year-end 2021. So this is the 2022 annual report, showing 2022 year-end vs 2021 year-end. For the FFO/Net Debt ratio FOR 2022, we typically use: - FFO for the year 2022 (which I've calculated as roughly 692M) - Net debt at year-end 2022 (2023-01-01 in the data) So net debt at 2022 year-end: Total debt: - Current borrowings: 877M - Noncurrent borrowings: 10,776M - Lease liabilities: 184M - Other noncurrent financial liabilities: 838M (debt-like?) = 12,675M or 11,837M without other liabilities Cash: 5,130M total, or 4,962M excluding infrastructure projects Net debt = 12,675 - 4,962 = 7,713M (broad definition) Or = 11,653 - 4,962 = 6,691M (narrow, just debt securities and borrowings) Or = 11,837 - 4,962 = 6,875M (including leases) For S&P, standard net debt includes: - Debt securities and bank borrowings - Lease liabilities (operating and finance) - Less: Cash and cash equivalents Sometimes other debt-like items are included in "adjusted net debt". Let me use a standard definition: Gross debt = Debt securities and bank borrowings + Lease liabilities = 11,653 + 184 = 11,837M Less: Cash and cash equivalents = 5,130M Net debt = 6,707M Or if we exclude restricted cash and infrastructure cash: Net debt = 11,837 - 4,962 = 6,875M Actually, for S&P's FFO/net debt ratio, they typically use: - Net debt = Short-term debt + Long-term debt - Cash and marketable securities Including lease liabilities in debt. Let me use: 11,837 - 5,130 = 6,707M Or if we want to be more conservative and use only readily available cash: 11,837 - 4,962 = 6,875M Hmm, actually less cash means higher net debt, so 6,875M is more conservative. But wait - S&P typically uses "Cash And Cash Equivalents" as reported, which is 5,130M. The restricted portion is already identified, but unless it's legally restricted and not available, S&P might still count it. Let me check: "Current Restricted Cash And Cash Equivalents Infrastructure Projects" is 38M. This is explicitly restricted. The 597M noncurrent restricted cash is in "Noncurrent Financial Assets", not in cash and equivalents. So in the 5,130M "Cash And Cash Equivalents", only 38M is explicitly restricted. The 130M "Other Cash And Cash Equivalents Infrastructure Projects" might be available to the project entity but not to the parent. For consolidated net debt, S&P typically subtracts all cash unless it's clearly restricted and unavailable. Let me use 5,130M cash, giving net debt = 11,837 - 5,130 = 6,707M. But I also need to decide about the 838M "Other Noncurrent Financial Liabilities". If this is debt-like (e.g., put options), S&P includes it in adjusted debt. Let me include it for a broader measure: 12,675 - 5,130 = 7,545M. Actually, let me look at this more carefully. The line is "Other Noncurrent Financial Liabilities" not "Other Debt". In many annual reports, this includes derivative liabilities, but we already have "Noncurrent Derivative Financial Liabilities" as a separate line (66M). So the 838M is something else. It could be: - Deferred consideration for acquisitions - Put options written to NCI - Guarantee liabilities - Other financial obligations For S&P, if these are expected to be settled in cash, they're debt-like. Given the context (infrastructure company with project SPVs), this might include shareholder loans or other items. I'll include it to be comprehensive: Gross debt = 11,653 + 184 + 838 = 12,675M. Net debt = 12,675 - 5,130 = 7,545M. Now FFO / Net Debt = 692 / 7,545 = 0.092 or 9.2% But wait, I need to double-check my FFO calculation. Let me recalculate more carefully. Actually, I realize I should re-examine the FFO calculation. Let me use a more standard approach. S&P FFO for the year = Net income from continuing operations (after tax, after NCI) + Depreciation & amortization + Deferred income taxes + Other non-cash items - Gains on sales of PP&E + Minority interest in income + Interest expense From the data, using parent company continuing net income: Parent net income total: 186M Less: Discontinued operations (assumed all parent): 64M Parent continuing net income: 122M Add: + D&A: 299M + Minority interest: 116M (since S&P adds this back) + Interest expense: 320M (net finance cost) + Deferred taxes: ? (part of 30M tax expense) For deferred taxes, we don't have the split. The "Deferred Tax Assets" increased from 570M to 784M, and "Deferred Tax Liabilities" increased from 687M to 924M. The net deferred tax position changed. Actually, "Income Tax Expense Continuing Operations" is 30M. This is the total tax expense. We don't know how much is current vs deferred. For S&P FFO, we add back deferred taxes (the non-cash portion). If I assume roughly half is deferred, that's 15M. But this is speculative. Let me check the balance sheet change in deferred taxes: Deferred tax assets: 784 - 570 = +214M (increase, meaning more future tax benefit) Deferred tax liabilities: 924 - 687 = +237M (increase, meaning more future tax obligation) Net deferred tax liability increased by 23M. This would typically create a deferred tax expense. Actually, the relationship between tax expense and deferred taxes is complex. I'll assume deferred tax expense is roughly the change in net deferred tax position, or about 23M. But this is a balance sheet change, not necessarily the P&L deferred tax. For simplicity, let me assume minimal deferred tax add-back or use the cash tax approach. Actually, looking at the cash flow: "Income Taxes Paid Refund Classified As Operating Activities" = 82M (refund). This means cash tax was negative (refund received). If tax expense is 30M but cash tax is -82M (refund), then there's a large deferred tax component or timing difference. For S&P FFO, if we use the standard formula with deferred taxes: FFO = 122 + 299 + 116 + 320 + 30 (deferred tax add-back? No, total tax is 30M, we want to add back deferred portion) Actually, S&P adds back deferred income taxes. If total tax expense is 30M, and cash tax paid is -82M (refund), then the deferred tax component is roughly 30 - (-82) = 112M? Or there are timing differences. This is getting too complex. Let me use a simpler approach: FFO ≈ EBITDA - Cash taxes + Other non-cash adjustments. EBITDA = EBIT + D&A EBIT = Profit before tax + Interest = 268 + 320 = 588M Wait, profit before tax is 268M, which includes finance cost of 320M. So: EBIT = 268 + 320 = 588M EBITDA = 588 + 299 = 887M Cash taxes = -82M (refund) So EBITDA - Cash taxes = 887 - (-82) = 969M But this is not FFO. FFO is lower because we need to subtract items that are in EBITDA but not cash sustainable. Actually, let me try yet another formula. S&P FFO can be approximated as: FFO = Operating cash flow before working capital changes - Interest paid From the cash flow statement, operating cash flow before working capital changes would be: CFO 1,002M + Working capital source 83M (to remove the benefit) = 1,085M Then FFO = 1,085 - Interest paid? No, interest paid is already not in CFO (it's in financing). Actually, under IFRS, if interest paid is in financing activities, then CFO is already pre-interest. So FFO from CFO: FFO = CFO - Working capital source + Interest paid (if interest was in operating, but it's not) = 1,002 - 83 + 0 = 919M? Then we need to adjust for other items. But S&P FFO includes interest expense, so if CFO is pre-interest, we need to subtract interest to get to a post-interest measure? No, FFO is meant to be pre-interest. I'm confusing myself. Let me re-state: S&P FFO is POST-TAX, PRE-INTEREST. It's the cash available to service debt before dividends. So FFO should be after tax, after working capital changes (for the sustainable part), but before interest and dividends. From CFO of 1,002M (which is after working capital, after tax, pre-interest, pre-dividends?): - Includes working capital benefit of 83M - Includes tax refund of 82M - Includes dividends received of 284M - Excludes interest paid of 329M (in financing) To normalize: - Remove working capital benefit (not sustainable): -83M - Remove tax refund (not sustainable, just timing): -82M? Or keep as part of cash tax? - Remove dividends received (investing, not operating): -284M - Add interest paid (to get pre-interest): +329M = 1,002 - 83 - 284 + 329 = 964M? Then this is pre-tax? No, CFO is after tax. Hmm, but 964M seems high. Let me check with my earlier 692M. Actually, I think the issue is whether dividends received are part of FFO. For S&P, dividends from associates are often included in FFO if they're sustainable. Let me try without removing dividends: = 1,002 - 83 + 329 = 1,248M Or with tax refund removed: = 1,002 - 83 - 82 + 329 = 1,166M These are all higher than my 692M. The difference is largely due to dividends received (284M) and whether we adjust for working capital and tax timing. Let me go back to the income statement approach and be more careful. Net income from continuing operations (group): 238M Add: D&A: 299M Add: Interest expense: 320M Add: Minority interest (if starting from parent): 116M Less: Equity method income (non-cash): 165M Add/Less: Other non-cash items = 238 + 299 + 320 - 165 = 692M (group basis) Or from parent: 122 + 299 + 320 + 116 - 165 = 692M This 692M is essentially: Group continuing profit + D&A + Interest - Non-cash equity income = 238 + 299 + 320 - 165 = 692M Let me verify this makes sense. It's roughly EBIT + D&A - Equity method income. EBIT = 588M (from earlier) + D&A 299M = 887M - Equity method income 165M = 722M - Tax 30M = 692M Yes! This matches. So FFO = EBIT + D&A - Equity method income - Cash tax? Or accrual tax? Actually 722 - 30 = 692. So this is after tax. But wait, EBIT is 588, which is after all operating costs but before interest and tax. So: EBITDA = 887M Less: Cash tax? Or accrual tax? 887 - 30 (accrual tax) = 857M, not 692M. Hmm, let me recalculate EBIT. Profit before tax = 268M This includes: - Finance cost: 320M (negative) - Equity method income: 165M (positive) So operating profit before finance cost and equity method = ? Actually, the standard presentation is: Revenue: 7,551M Operating expenses: various Operating profit (EBIT): ? From the data: "Profit Loss From Operating Activities" = 423M (this is after D&A? No, it's operating profit) Wait, "Profit Loss From Operating Activities" 2022-01-01 - 2023-01-01: 423,000,000 EUR This is operating profit. It includes: - Revenue and operating income: 7,553M - Operating expense: 6,825M - Gross profit: 728M - Amortization: 299M - Other items Actually, 423M is "Profit Loss From Operating Activities" which is after all operating items including D&A. Then: + Financial result: -320M + Share of profit of associates: 165M = Profit before tax: 268M? 423 - 320 + 165 = 268. Yes! So EBIT (as S&P defines it, pre-interest, pre-equity method) would be: Operating profit 423M + D&A 299M? No, 423M is already after D&A. EBITDA = 423 + 299 = 722M? Or is there other depreciation in cost of sales? Actually, "Ajustes Al Resultado Por Gastos Por Depreciacion YAmortizacion" = 299M. This is the D&A expense. So EBITDA = Operating profit + D&A = 423 + 299 = 722M. Then EBIT = 423M (operating profit, which is after D&A but before interest and equity method). Wait, but 423M includes amortization of 299M. So: EBITDA = 722M EBIT = 423M Then: EBIT 423M + Equity method income 165M = 588M? No, equity method is after operating profit. Actually, the 423M operating profit is BEFORE equity method income. So: 423 (operating) - 320 (finance) + 165 (equity method) = 268 (PBT). Yes. So EBIT (pre-interest, pre-tax, pre-equity method) = 423M + interest expense? No, 423M is pre-interest already? Wait, "Profit Loss From Operating Activities" - is this pre-interest or post-interest? In IFRS, operating profit is typically pre-interest. The finance cost comes after. So 423M is pre-interest, pre-tax, and includes D&A. Then: PBT = 423 - 320 (finance) + 165 (equity) = 268. Yes. So EBIT = 423M (since it's pre-interest). But this includes D&A. Actually, standard terminology: - Operating profit = EBIT (pre-interest, pre-tax) - EBITDA = EBIT + D&A So EBIT = 423M EBITDA = 423 + 299 = 722M Then S&P FFO = EBIT + D&A - Cash taxes + Other adjustments = 423 + 299 - (-82) + ... = 804M? (using cash tax refund) Or = 423 + 299 - 30 = 692M (using accrual tax) So my 692M matches: EBIT 423 + D&A 299 - Accrual tax 30 = 692M. But wait, is equity method income in EBIT? No, it's after operating profit. So EBIT 423M is clean operating profit. Then S&P FFO = EBIT + D&A - Taxes + Interest? No, S&P FFO is post-tax, pre-interest. = 423 + 299 - 30 = 692M. Yes! But this doesn't include minority interest or equity method adjustments. Let me think... Actually, 423M operating profit is the GROUP operating profit, before NCI allocation, before interest, before tax. It includes 100% of subsidiaries. Then FFO = 423 + 299 - 30 = 692M. But S&P says to add back minority interest. If 423M is group operating profit, it's already pre-NCI allocation. The NCI is just a distribution. So we don't add it back - it's already in the profit. However, when we get to net income, NCI is deducted. Since we're using operating profit (pre-NCI), we don't need to add it back. So my FFO of 692M seems reasonable. But let me cross-check: FFO should be close to "Cash flow from operations before working capital changes". From cash flow: CFO = 1,002M + Working capital source 83M = 1,085M (before WC changes) - Tax refund 82M = 1,003M (normalized tax) - Dividends received 284M = 719M (operating only) + Interest paid 329M = 1,048M (pre-interest) Hmm, this doesn't match 692M. The difference is due to equity method income (165M) and other items. Actually, if I start from 692M FFO and add interest paid 329M = 1,021M pre-interest cash flow. This is close to my 1,048M above. The difference is about 27M, which could be due to various timing differences. I think 692M is a reasonable FFO estimate. Now for net debt. Let me finalize: Gross debt at 2022 year-end (2023-01-01): - Current Debt Securities And Bank Borrowings Of Infrastructure Projects: 74M - Current Debt Securities And Bank Borrowings Excluding Infrastructure Projects: 803M - Noncurrent Debt Securities And Bank Borrowings Of Infrastructure Projects: 7,893M - Noncurrent Debt Securities And Bank Borrowings Excluding Infrastructure Projects: 2,883M - Current Lease Liabilities: 64M - Noncurrent Lease Liabilities: 120M Total debt = 74 + 803 + 7,893 + 2,883 + 64 + 120 = 11,837M Cash and cash equivalents: 5,130M Net debt = 11,837 - 5,130 = 6,707M FFO / Net Debt = 692 / 6,707 = 0.1032 or 10.3% But wait, I should check if "Other Noncurrent Financial Liabilities" of 838M should be included. Let me think... This is a large amount (838M vs 72M prior year). If it's debt-like, not including it would understate leverage. Common items here might include: - Put options on NCI shares - Deferred acquisition consideration - Derivative liabilities (but we have a separate line) For S&P, they often include "debt-like" items in adjusted debt. If this is put options to NCI, it's definitely debt-like. Let me include it: Gross debt = 11,837 + 838 = 12,675M Net debt = 12,675 - 5,130 = 7,545M FFO / Net Debt = 692 / 7,545 = 0.0917 or 9.2% Hmm, but I need to be more careful. Let me check if my FFO should include any adjustment for this. Actually, let me reconsider the FFO calculation one more time. S&P's exact words: "Funds from operations (FFO): Net income from continuing operations plus depreciation, amortization, deferred income taxes, and other non-cash items, minus gains (or plus losses) on sales of property, plants, and equipment, plus interest expense, minus interest income, plus/minus adjustments for changes in other assets and liabilities that are not part of the company's main operations." Key components: 1. Net income from continuing operations: 238M (group) or 122M (parent). Since S&P adds minority interest, they must start from parent net income. So 122M. 2. Plus D&A: 299M 3. Plus deferred income taxes: unknown, let's estimate 0 or use change in deferred taxes 4. Plus other non-cash items: could include equity method income adjustment? Or the -165M undistributed profits? 5. Minus gains on sales: 0 (we had a loss) 6. Plus interest expense: 320M 7. Minus interest income: ? We have some interest income embedded 8. Plus/minus other adjustments Actually, the 320M "Finance Income Cost" is NET (expense). It includes interest expense and interest income. S&P says "plus interest expense, minus interest income". So if 320M is net expense, we need to separate gross interest expense and interest income. From the cash flow: - Interest Paid: 329M - Interest Received: 47M (in investing activities) Net interest = 329 - 47 = 282M? But the P&L shows 320M net finance cost. The difference might be due to accruals, capitalized interest, or other items. For S&P FFO, if we use the P&L net finance cost of 320M, this already includes interest income. So adding back 320M gets us to pre-net-interest. But S&P says "plus interest expense, minus interest income" separately. If we do this: - Gross interest expense: say 400M? - Interest income: 80M? - Net: 320M We don't have the split. Let me use net 320M as the add-back. So FFO = 122 + 299 + 320 + 116 (minority) - 165 (equity method non-cash) + other items = 122 + 299 + 320 + 116 - 165 = 692M Same result. Actually, I want to verify: is the 165M equity method income already deducted in arriving at 122M parent continuing net income? Parent continuing net income = 122M (estimated) This is derived from: Total continuing 238M, less NCI share 116M = 122M. The 238M total continuing includes 165M equity method income. So yes, 122M includes parent's share of equity method income (which might be all of it or part). If we assume the 165M equity method income is all attributable to parent (since NCI is in subsidiaries, not associates typically), then parent continuing 122M includes 165M equity method income. But 122M is less than 165M! This would mean parent continuing operations ex-equity method is negative. Let me check: 122M parent continuing includes 165M equity method income. So operating profit attributable to parent is 122 - 165 = -43M? That seems odd. Actually, looking at the income statement: Share Of Profit Loss Of Associates = 165M total. Profit Loss From Operating Activities = 423M total. Finance cost = 320M. PBT = 268M. If operating profit 423 includes everything except finance and equity method, then: 423 (operating) + 165 (equity) - 320 (finance) = 268 (PBT). Yes. So operating profit 423M is BEFORE equity method. Then total PBT 268 includes equity method. Then tax 30M. Continuing profit 238M. This 238M includes equity method income of 165M. So operating profit after tax but before equity method = 238 - 165 + tax effect? Actually, 238 = 268 PBT - 30 tax. And 268 = 423 operating - 320 finance + 165 equity. So 238 includes 165 equity method on a post-tax basis? No, the 165 is pre-tax (it's part of PBT). Then tax is 30M on total PBT. So after-tax equity method income = 165 - (30 × 165/268) = 165 - 18.5 = 146.5M approx. Then operating profit after tax = 238 - 146.5 = 91.5M. If NCI is 116M and all from operating subsidiaries, then parent share of operating after-tax = 91.5 × (parent share). If parent owns 80%, that's 73M. Plus parent share of equity method (say all 146.5M) = 219.5M. But parent total is 186M, not 219.5M. Hmm, my assumptions are wrong. Let me not try to allocate. The key point: my FFO of 692M = 238 + 299 + 320 - 165 = group continuing profit + D&A + interest - equity method income. This is essentially: (Group continuing profit - equity method income) + D&A + interest = (238 - 165) + 299 + 320 = 73 + 299 + 320 = 692M This represents the cash-generating ability of the consolidated operations (excluding equity method investments), plus D&A add-back, before interest. For net debt, let me use a standard definition: Debt securities and bank borrowings: 11,653M Plus lease liabilities: 184M Less cash and equivalents: 5,130M Net debt: 6,707M FFO / Net Debt = 692 / 6,707 = 0.103 = 10.3% Or if I include other noncurrent financial liabilities: Net debt = 7,545M Ratio = 692 / 7,545 = 0.092 = 9.2% I need to decide which is more appropriate for S&P methodology. Looking at S&P's typical treatment, they include "debt-like" items in adjusted debt. The 838M "Other Noncurrent Financial Liabilities" is large and likely debt-like (possibly put options on NCI). I should include it. But let me also consider: should I subtract restricted cash? The 38M current restricted and 597M noncurrent restricted are not freely available. However, S&P typically only subtracts cash and cash equivalents as reported, unless restricted cash is clearly not available. Actually, looking more carefully, the 597M "Restricted Cash Relating To Infrastructure Projects And Other Financial Assets" is classified as "Noncurrent Financial Assets", not as cash and cash equivalents. So it's already not in the 5,130M cash. The 38M "Current Restricted Cash And Cash Equivalents Infrastructure Projects" IS part of the 5,130M (specifically part of the 168M infrastructure cash). So freely available cash = 5,130 - 38 = 5,092M. For S&P net debt, if we subtract only unrestricted cash: Net debt = 12,675 - 5,092 = 7,583M Or = 11,837 - 5,092 = 6,745M Hmm, but S&P typically uses reported cash and cash equivalents unless there's clear restriction. Let me check the 2022 figure: Cash And Cash Equivalents 2022-01-01: 5,536M. This includes 207M infrastructure cash with 47M restricted. So restricted was 47/207 = 23% of infrastructure cash. In 2023, restricted is 38/168 = 23%. Similar proportion. For consistency with S&P methodology, I'll use reported cash and cash equivalents (5,130M) but include all debt-like liabilities. Net debt = 11,653 + 184 + 838 - 5,130 = 7,545M FFO / Net Debt = 692 / 7,545 = 0.0917 Rounded: 9.2% or 0.092. But wait, I want to double-check my FFO one more time. Should I include dividends received? In the cash flow statement, "Dividends Received Classified As Operating Activities" = 284M. These are dividends from investments, likely including associates. For S&P FFO, dividends from associates are sometimes included if they're sustainable. However, in my calculation, I already removed the equity method income (165M) and didn't add back dividends. If the 165M equity method income on the P&L corresponds to 284M dividends received in cash, then there's a mismatch. The 284M might include dividends from other investments or prior periods. For S&P FFO, if we use the cash flow approach and include dividends received: FFO ≈ CFO + Interest - WC changes - Tax timing = 1,002 + 329 - 83 - 82 = 1,166M? Then subtract equity method income not received as dividends? This is too uncertain. Let me stick with my income-statement-based FFO of 692M. Actually, I realize I should check one more thing. The "Share Of Profit Loss Of Associates Accounted For Using Equity Method" = 165M. This is the total, with "Before Fair Value Adjustments" of 158M and "Fair Value Adjustments" of 7M. In my FFO calculation, I subtracted 165M. But S&P might only subtract the "non-cash" portion. The fair value adjustment of 7M is likely non-cash. The 158M "before fair value adjustments" might include cash dividends and non-cash earnings. Actually, equity method accounting records the investor's share of associate's profit, not dividends received. So the entire 165M is non-cash from a cash flow perspective (the cash flow is dividends received, which is different). So subtracting 165M is correct for FFO. But then where do dividends received fit? They are cash inflows from investing, not operating. For S&P FFO, we might exclude them or include them depending on sustainability. Given the complexity, let me use a more standard S&P approach: FFO = Net income from continuing operations (parent) + D&A + Interest expense + Minority interest - Equity method income + Other non-cash items = 122 + 299 + 320 + 116 - 165 = 692M Net debt = Total debt - Cash = 11,653 + 184 + 838 - 5,130 = 7,545M Ratio = 692 / 7,545 = 0.0917 Let me also try without the 838M other liabilities: = 692 / 6,707 = 0.103 The difference is significant. I need to determine if 838M is truly debt-like. Looking at the annual report context (which I don't have fully), the increase from 72M to 838M in "Other Noncurrent Financial Liabilities" is substantial. This could represent: - Acquisition of new subsidiaries with NCI put options - New project finance structures - Derivative liabilities (but separate line exists) - Deferred consideration Given Ferrovial's business model (infrastructure projects with NCI), this is likely put options written to NCI. S&P definitely includes these in adjusted debt. So I'll include the 838M. Final answer: FFO / Net Debt = 692 / 7,545 = 0.0917 or about 9.2%. Expressed as a ratio: 0.092 or 9.2%. Wait, I want to double-check my net debt calculation once more. Debt: - Current borrowings: 877M - Of which: Infrastructure projects 74M - Excluding infrastructure: 803M - Noncurrent borrowings: 10,776M - Of which: Infrastructure projects 7,893M - Excluding infrastructure: 2,883M - Current lease liabilities: 64M - Noncurrent lease liabilities: 120M - Other noncurrent financial liabilities: 838M Total = 877 + 10,776 + 64 + 120 + 838 = 12,675M Cash: 5,130M Net debt = 12,675 - 5,130 = 7,545M Yes. FFO = 692M Ratio = 692 / 7,545 = 0.0917 Let me round to reasonable precision: 0.092 or 9.2%. Actually, as a ratio, S&P typically presents this as a percentage or as x.x%. But the question asks for "FFO / Net debt ratio", which could be expressed as 0.092 or 9.2%. I'll provide it as 0.092 (or 9.2%). Let me check if I should express as percentage or decimal. The standard format is often as a percentage (e.g., "9.2%") or as a multiple (e.g., "0.09x"). For S&P, they often say "FFO to debt: 9.2%". But the question asks for "ratio", so I'll provide the decimal form: 0.092. Actually, let me reconsider if my FFO might be too low. Let me check using an alternative approach. From EBITDA = 722M (or 887M? Let me recheck) Earlier I said: - Operating profit (EBIT) = 423M - D&A = 299M - EBITDA = 722M But wait, is 423M after D&A? Yes, because D&A is an operating expense. Then: EBITDA = 722M Less: Cash taxes = -82M (refund, so add) Less: Interest paid = 329M (to get to pre-interest? No, EBITDA is pre-interest) For S&P FFO from EBITDA: FFO = EBITDA - Cash taxes - Cash interest? No, FFO is pre-interest. FFO = EBITDA - Cash taxes + Other non-cash - Maintenance capex? No, that's free cash flow. Actually, standard S&P FFO from EBITDA: FFO = EBITDA - Cash taxes - Net interest expense? No, FFO is pre-interest. I think FFO = EBIT + D&A - Taxes + Interest? No, that's wrong. Let me use: FFO = Net income + D&A + Interest + Minority - Equity method + Other = 122 + 299 + 320 + 116 - 165 = 692M Or from EBITDA: EBITDA = 722M Less: Taxes (accrual) = 30M = 692M? 722 - 30 = 692. Yes! But this ignores interest and equity method. Wait, EBITDA 722M - Taxes 30M = 692M. But this is not correct because: - EBITDA includes everything before interest, tax, depreciation - EBIT = EBITDA - D&A = 722 - 299 = 423M - Then FFO should be related to EBIT, not EBITDA Actually, 692M = 423 (EBIT) + 299 (D&A) - 30 (tax) = 692. But this is wrong because EBIT already excludes D&A, so adding D&A back gets to EBITDA. Then subtracting tax gets to 722 - 30 = 692. But this 692M is essentially EBITDA - Taxes. Is this FFO? For S&P, FFO is NOT EBITDA - Taxes. FFO includes adjustments for non-cash items and excludes gains/losses. Actually, let me check: if EBITDA = 722M, and taxes = 30M, then 722 - 30 = 692M. This would be "EBITDA minus taxes" which is sometimes called "tax-adjusted EBITDA" or approximates pre-interest cash flow. But this ignores working capital, capex, and other items. S&P FFO is meant to be closer to "sustainable cash flow from operations before working capital changes". Hmm, 692M seems reasonable but let me verify with another check. From the cash flow statement: Cash flow before financing = 270M This is after all operating and investing activities. If FFO is 692M, and we subtract: - Interest paid: 329M - Tax paid: -82M (refund) - Working capital source: 83M - Dividends received: 284M - Capex and investments: various We get to cash flow before financing. This doesn't directly verify FFO. Let me accept 692M as my FFO estimate. One final check: should I use 2022 average net debt or year-end net debt? S&P typically uses year-end net debt for the FFO/net debt ratio. Sometimes they use average if there's significant seasonality. I'll use year-end. Net debt at 2022 year-end = 7,545M FFO for 2022 = 692M Ratio = 692 / 7,545 = 0.0917 I'll round to 0.092 or present as 9.2%. Given the precision of the inputs, 0.092 seems appropriate. Actually, let me see if I should express this differently. Some present FFO/net debt as a percentage (9.2%), others as a multiple (0.09x). The question says "ratio", so decimal is fine. Final answer: 0.092 Wait, I want to do one more verification of my FFO. Let me see if there's an alternative interpretation where FFO is higher. If I don't subtract the equity method income (165M): FFO = 122 + 299 + 320 + 116 = 857M Ratio = 857 / 7,545 = 0.114 or 11.4% But this would include non-cash equity method income, which S&P typically excludes or adjusts for. Actually, looking at S&P's treatment of equity method investments: they typically include dividends received from associates in FFO, not the equity method income. Since dividends received were 284M, this would be higher than the 165M equity method income. If I use dividends received instead of equity method income: FFO = 122 + 299 + 320 + 116 + 284 - 165? This gets confusing. Let me stick with my calculation. Actually, I realize I should check the S&P methodology more precisely. For companies with significant equity method investments, S&P sometimes calculates "proportional FFO" or adjusts for the equity method. Given the complexity and time spent, let me finalize with my best estimate: FFO = 692M Net debt = 7,545M Ratio = 0.092 0.092