I need to calculate the FFO / Net debt ratio for 2022 based on S&P methodology. First, let me understand what FFO (Funds From Operations) means under S&P methodology. S&P typically defines FFO as: - Net income from continuing operations - Plus depreciation and amortization - Plus/minus other non-cash items - Minus gains on asset sales (plus losses) - Minus working capital changes However, for a simplified S&P FFO calculation, it's often: - Operating profit (EBITDA-like) or - Net income + D&A + deferred taxes + other non-cash items - working capital changes Let me look at what we have. For S&P methodology, FFO is typically calculated as: - Profit from continuing operations before tax + Interest expense + D&A - Capitalized interest (if any) +/- Other adjustments Actually, let me use a more standard S&P approach: FFO = Net income from continuing operations + Depreciation & Amortization + Deferred tax changes + Other non-cash items - Working capital changes (sometimes excluded) Looking at the data, let me try another common S&P FFO definition: FFO = Operating profit (EBIT) + D&A - Cash taxes +/- Working capital changes Or more commonly for S&P credit analysis: FFO = Net income + D&A + Deferred tax expense + Other non-cash items - Gain on sale of assets Let me use the most standard S&P FFO calculation: FFO = Profit/Loss from continuing operations + Depreciation and amortization + Other non-cash items From the data: - Profit Loss From Continuing Operations (2022): 615,000,000 EUR - Dotacion Amortizacion YVariacion De Provisiones (D&A and provisions): 762,000,000 EUR But wait - this D&A line includes "variacion de provisiones" (changes in provisions), which may not all be non-cash or may include impairments. Let me check if there's a cleaner way. S&P FFO is often calculated from the cash flow statement as: FFO = Cash flow from operating activities - Working capital changes - Interest received + Interest paid - Dividends received (sometimes) Actually, let me use a more precise S&P methodology: FFO = Net income + Depreciation & Amortization + Deferred income taxes + Other non-cash items From the income statement: - Profit Loss From Continuing Operations: 615,000,000 EUR - Dotacion Amortizacion YVariacion De Provisiones: 762,000,000 EUR (this is D&A and provision changes) But I need to be careful. The "Dotacion Amortizacion YVariacion De Provisiones" includes amortization, provision changes, and impairments. Let me look at cash flow statement adjustments: - Adjustments For Reconcile Profit Loss: 927,000,000 EUR - Ajustes Por Amortizacion Variacion De Provisiones YDeterioros: 848,000,000 EUR This 848M is the D&A, provision changes, and impairments in the cash flow statement. For S&P FFO, a common approach is: FFO = Cash Flows From Used In Operating Activities + Interest Paid - Interest Received + Dividends Received (sometimes excluded) + Income Taxes Paid - Working capital changes... Actually, let me use the most standard S&P formula: FFO = Net income + D&A + Deferred taxes + Other non-cash items Or from operating cash flow: FFO = CFO + Interest paid - Interest received + Dividends received (if equity method investments are part of operations) Let me try: FFO = Cash Flows From Used In Operating Activities + Interest Paid - Interest Received - Dividends Received + Tax paid... Actually, S&P typically calculates FFO as: FFO = Funds from operations before working capital changes Looking at the cash flow statement: - Cash Flows From Used In Operating Activities: 1,648,000,000 EUR - Interest Paid Classified As Operating Activities: 209,000,000 EUR - Interest Received Classified As Operating Activities: 40,000,000 EUR - Dividends Received Classified As Operating Activities: 89,000,000 EUR - Income Taxes Paid Refund Classified As Operating Activities: 215,000,000 EUR For S&P, FFO is often: CFO before working capital changes and before interest/dividends. Let me use a different approach. S&P FFO formula: FFO = Net income from continuing operations + Depreciation & amortization + Deferred income taxes + Other non-cash expenses From the data: - Profit Loss From Continuing Operations: 615,000,000 EUR - Ajustes Por Amortizacion Variacion De Provisiones YDeterioros (from CF): 848,000,000 EUR But I need to check if this includes everything. Let me also look at: - Impairment Loss Reversal Of Impairment Loss Recognised In Profit Or Loss: -15,000,000 EUR (this is a reversal, so negative) Actually, looking more carefully at S&P methodology, they typically define FFO as: FFO = Net income from continuing operations + Depreciation and amortization + Deferred income taxes + Other non-cash items - Gain on sale of assets (or + loss) Let me calculate using cash flow adjustments: - Profit Loss: 615,000,000 EUR (from continuing operations, same as total) - Ajustes Por Amortizacion Variacion De Provisiones YDeterioros: 848,000,000 EUR - Other Adjustments To Reconcile Profit Loss: 79,000,000 EUR Total adjustments: 927,000,000 EUR So FFO before working capital = 615,000,000 + 927,000,000 = 1,542,000,000 EUR But wait, this includes working capital changes? Let me check the cash flow structure: - Cash Flows From Used In Operating Activities: 1,648,000,000 EUR = Profit Loss (615M) + Adjustments For Reconcile Profit Loss (927M) + Increase Decrease In Working Capital (135M) + Otros Flujos De Efectivo De Actividades De Explotacion (-283M) Let me verify: 615 + 927 + 135 - 283 = 1,394? That doesn't equal 1,648. Actually, looking more carefully: - Adjustments For Reconcile Profit Loss: 927,000,000 EUR - Ajustes Por Amortizacion Variacion De Provisiones YDeterioros: 848,000,000 EUR - Other Adjustments To Reconcile Profit Loss: 79,000,000 EUR Then: - Increase Decrease In Working Capital: 135,000,000 EUR - Otros Flujos De Efectivo De Actividades De Explotacion: -283,000,000 EUR - Interest Paid: -209,000,000 EUR - Interest Received: 40,000,000 EUR - Dividends Received: 89,000,000 EUR - Income Taxes Paid Refund: -215,000,000 EUR - Other Inflows Outflows Of Cash Classified As Operating Activities: 12,000,000 EUR Sum of Otros Flujos: -209 + 40 + 89 - 215 + 12 = -283,000,000 EUR ✓ So: 615 + 927 + 135 - 283 = 1,394? No wait, let me recheck: 615 + 927 = 1,542; 1,542 + 135 = 1,677; 1,677 - 283 = 1,394. That doesn't match 1,648. Hmm, let me re-read. The "Otros Flujos" might be separate. Let me check if Interest Paid etc. are included in "Otros Flujos" or separate. Actually, looking at the structure, it seems like "Otros Flujos De Efectivo De Actividades De Explotacion" is a total that includes the detailed items. So: Cash Flow From Operating Activities = Profit Loss (615M) + Adjustments For Reconcile Profit Loss (927M) + Increase Decrease In Working Capital (135M) + Otros Flujos De Efectivo De Actividades De Explotacion (-283M) But 615 + 927 + 135 - 283 = 1,394, not 1,648. Wait, I need to re-check. Maybe "Otros Flujos" is not -283 but the components sum differently. Let me check: Interest Paid is 209M (outflow, so negative), Interest Received 40M (positive), Dividends Received 89M (positive), Income Taxes Paid 215M (negative, so -215), Other 12M (positive). -209 + 40 + 89 - 215 + 12 = -283. Yes. Hmm, 615 + 927 + 135 - 283 = 1,394. But stated is 1,648. Difference is 254M. Wait - Income Tax Expense was 254M! Maybe the "Profit Loss" in cash flow is before tax? No, the income statement shows Profit Loss Before Tax: 869M, then Income Tax Expense: 254M, then Profit Loss From Continuing Operations: 615M. Actually, I think I misread. Let me re-check: 615 + 927 = 1,542. Then + working capital 135 = 1,677. Then -283 = 1,394. But the stated Cash Flows From Used In Operating Activities is 1,648. There's a discrepancy of 254M. Oh wait! I think I see it. The "Income Taxes Paid Refund" is 215M, but tax expense is 254M. The difference might be timing. But that still doesn't explain 1,648 vs 1,394. Let me re-read the data more carefully. Actually, I wonder if "Otros Flujos" at -283M is the net, and the detailed items are shown for disclosure but not all included in that total? No, they sum to -283M. Actually, let me check if maybe the Profit Loss used in cash flow is different. "Profit Loss" (total) is 615M, same as continuing operations. Hmm, let me try another combination. Maybe working capital is already included in adjustments? Actually, I think I need to just use the direct approach. S&P FFO is typically: FFO = Net income + D&A + Deferred taxes + Other non-cash items From income statement: - Profit Loss From Continuing Operations: 615,000,000 EUR Add back non-cash items from cash flow adjustments: - Ajustes Por Amortizacion Variacion De Provisiones YDeterioros: 848,000,000 EUR - Other Adjustments To Reconcile Profit Loss: 79,000,000 EUR But I need to be careful about what's in "Other Adjustments." This might include equity method income, gains/losses, etc. Actually, for S&P methodology, let me use a more standard definition: FFO = Operating cash flow before working capital changes - Interest paid + Interest received (or some variation) Or: FFO = EBIT + D&A - Cash taxes From income statement: - Profit Loss From Operating Activities (EBIT): 1,334,000,000 EUR - Dotacion Amortizacion YVariacion De Provisiones: 762,000,000 EUR Wait, "Profit Loss From Operating Activities" at 1,334M is likely EBIT or operating profit. Let me check if this includes D&A or not. Looking at the income statement structure: Revenue: 11,195M + Other Income: 1,016M - Changes In Inventories: -72M (so +72M? No, it's negative) - Raw Materials: -3,483M - Employee Benefits: -2,077M - Other Expense: -4,814M - D&A: -762M - Impairment reversal: +15M - Other Gains Losses: -13M - Equity method result: +159M = Profit Loss From Operating Activities: 1,334M Let me verify: 11,195 + 1,016 + (-72) wait, "Changes In Inventories" is -72M, so it's negative. Let me parse: Revenue: 11,195 + Other Income: 1,016 = 12,211 + Changes In Inventories: -72 = 12,139 - Raw Materials: -3,483 = 8,656 - Employee Benefits: -2,077 = 6,579 - Other Expense: -4,814 = 1,765 - D&A: -762 = 1,003 + Impairment reversal: +15 = 1,018 + Other Gains Losses: -13 = 1,005? Or is it +13? Wait, "Other Gains Losses" is 13,000,000 EUR. Is this positive or negative? The line says "13" but in context might be gain or loss. Let me assume it's -13M (expense). Then: 1,003 + 15 - 13 = 1,005. Then + Equity method 159 = 1,164. But stated is 1,334. Hmm, let me recheck. "Resultado De Puesta En Equivalencia Operativa" is 159M. This is equity method income. Actually, I think "Profit Loss From Operating Activities" includes everything up to operating profit, which might be EBIT or EBITDA depending on definition. Let me try: 11,195 + 1,016 = 12,211. Then -72 (change in inventories, negative means increase, so expense) = 12,139. Then -3,483 = 8,656. Then -2,077 = 6,579. Then -4,814 = 1,765. Then -762 = 1,003. Then +15 (impairment reversal, so gain) = 1,018. Then -13 (other losses) = 1,005. Then +159 (equity method) = 1,164. But stated is 1,334. Difference is 170M. Wait, I need to re-read "Changes In Inventories Of Finished Goods And Work In Progress" = -72,000,000 EUR. In financial statements, this is typically shown as negative when inventories increase (use of cash). But in the P&L, it's often: negative change in inventories means you produced more than you sold, so it's an expense? No, actually in P&L presentation, "Changes in inventories" is typically: positive when inventories decrease (credit to P&L), negative when inventories increase (debit to P&L). So -72M means expense of 72M. Hmm, but then my calculation gives 1,164, not 1,334. Let me check if "Other Income" 1,016M includes anything special. Or if "Other Expense By Nature" 4,814M includes D&A? No, D&A is shown separately. Actually, maybe "Dotacion Amortizacion YVariacion De Provisiones" 762M is not all in operating expenses? Or maybe "Other Expense By Nature" is after some adjustments? Let me try a different approach. Maybe the 1,334M is correct as stated and I should just use it. For S&P FFO, a common calculation is: FFO = Operating profit (1,334M) + D&A (762M) - Cash taxes? No, that would be EBITDA basically. Actually, S&P FFO is closer to: FFO = Net income + D&A + Deferred taxes + Other non-cash - Gain on asset sales Or from cash flows: FFO = CFO - Working capital changes + Interest paid - Interest received + Dividends received (if equity investments are strategic) Let me use: FFO = Cash Flows From Used In Operating Activities - Increase Decrease In Working Capital + Interest Paid - Interest Received - Dividends Received + Income Taxes Paid = 1,648 - 135 + 209 - 40 - 89 + 215 = 1,648 - 135 + 295 = 1,808? Wait: -135 + 209 - 40 - 89 + 215 = 160. So 1,648 + 160 = 1,808? No wait, I need to think more carefully. Actually, S&P FFO before working capital changes = CFO - Working capital changes. But working capital is +135M (positive, meaning source of cash). So FFO before WC = 1,648 - 135 = 1,513M? But then we need to add back interest and taxes. Standard S&P FFO = EBIT + D&A - Cash taxes. Or = Net income + Interest + D&A - Cash taxes + Deferred taxes. Let me try: FFO = Profit Loss From Operating Activities + D&A - Cash taxes? No, operating profit already includes D&A. If Profit Loss From Operating Activities = EBIT (includes equity method), then: FFO = EBIT + D&A - Cash taxes + Interest paid? No, EBIT is before interest. Actually, let me check if 1,334M is EBIT or EBITDA. If my calculation was off, maybe 1,334M includes D&A? No, D&A is 762M separately. Let me try: EBITDA = 1,334 + 762 = 2,096M? But then - taxes + interest... For S&P, FFO = Net income + D&A + Deferred tax expense + Other non-cash items From balance sheet, Deferred Tax Assets changed from 920M to 872M, so decrease of 48M (use, expense). Deferred Tax Liabilities changed from 813M to 890M, increase of 77M (source, gain). Net deferred tax change: -48 - 77 = -125M? Or is it expense of 125M? Actually, DTA decrease means tax benefit was used, DTL increase means more tax deferred. Income Tax Expense was 254M. Cash taxes paid were 215M. So deferred tax expense = 254 - 215 = 39M. For S&P FFO, we add back deferred tax expense (non-cash): 39M. Also, equity method income is 159M in operating but -194M total. The difference might be non-operating equity method. Actually, let me look at "Share Of Profit Loss Of Associates And Joint Ventures Accounted For Using Equity Method" = -194M (total, including non-operating). And "Resultado De Puesta En Equivalencia Operativa" = 159M (operating part). So non-operating equity method = -194 - 159 = -353M? Or is 159M part of the -194M? Let me check: -194M total, but 159M positive operating. That doesn't make sense unless there are different investments. Actually, re-reading: "Resultado De Puesta En Equivalencia Operativa" might be a sub-component. Let me check if 159M is included in 1,334M operating profit. Going back to my calculation: if operating profit is 1,334M and it includes 159M equity method income, then EBIT before equity method = 1,334 - 159 = 1,175M. For S&P FFO, a clean approach is: FFO = Net income from continuing operations + Net interest expense + D&A + Deferred taxes + Other non-cash items - Equity method income (if not part of FFO) + Dividends from equity method investments Net income: 615M + Interest expense (net): 256 - 47 = 209M + D&A: 762M (from P&L) or 848M (from CF, includes provisions and impairments) + Deferred taxes: 39M (254 - 215) - Equity method income: 194M (or 159M operating part) + Dividends received: 89M Using CF-based D&A (848M, more comprehensive): FFO = 615 + 209 + 848 + 39 - 194 + 89 = 1,606M Or if we use 159M operating equity method and add back only non-operating part: FFO = 615 + 209 + 848 + 39 - 194 + 89 = 1,606M (same, since we subtract total equity method) But wait, S&P typically includes dividends from equity investments in FFO, not the equity method income. So we should subtract equity method income and add dividends received. Actually, let me verify with another approach. S&P FFO can also be calculated as: FFO = CFO + Interest paid - Interest received - Dividends received (if equity method is strategic) + Income taxes paid - Working capital changes... Hmm, this is getting complex. Let me use a more standard S&P definition: FFO = Funds from operations = Net income + D&A + Deferred taxes + Other non-cash items - Gain on asset sales From cash flow statement, we can derive: FFO = Cash Flows From Used In Operating Activities - Increase Decrease In Working Capital + Interest Paid - Interest Received - Dividends Received (if we consider these as investment income) + Income Taxes Paid = 1,648 - 135 + 209 - 40 - 89 + 215 = 1,808M? Wait, I need to check signs. In CFO of 1,648M: - Interest paid of 209M is an outflow (negative in CFO) - Interest received of 40M is an inflow (positive) - Dividends received of 89M is an inflow (positive) - Taxes paid of 215M is an outflow (negative) So CFO = 1,648M includes these items as negative/positive contributions. To get FFO before these financing/investment items and before working capital: FFO = CFO - (Interest Paid) [add back the outflow] + (Interest Received) [subtract the inflow] - (Dividends Received) [subtract the inflow, if not operating] + (Income Taxes Paid) [add back the outflow] - (Increase Decrease In Working Capital) [add back if positive, subtract if negative] = 1,648 - (-209) wait no. Interest Paid is shown as 209M, which is a cash outflow. In the cash flow, it's probably shown as -209M. Actually, the data shows "Interest Paid Classified As Operating Activities" as 209,000,000 EUR. Is this positive or negative? Usually these are shown as positive numbers with the understanding they're outflows. Let me assume: CFO = Profit 615 + Adjustments 927 + WC 135 + Other -283 = 1,394? No, stated is 1,648. Actually, re-reading: "Otros Flujos De Efectivo De Actividades De Explotacion" = -283,000,000 EUR. This is negative. Let me recalculate: 615 + 927 + 135 - 283 = 1,394. But stated CFO is 1,648. There's a 254M difference. This is exactly the Income Tax Expense! Maybe the "Profit Loss" in the cash flow is before tax? But no, "Profit Loss From Continuing Operations" is 615M after tax. Wait - maybe "Profit Loss" in cash flow is 869M (before tax)? Let me check: 869 + 927 + 135 - 283 = 1,648. Yes! 869 + 927 = 1,796; +135 = 1,931; -283 = 1,648. So the cash flow starts with Profit Loss Before Tax (869M), not Net Income (615M)! That makes sense. So: CFO = Profit Before Tax 869 + Adjustments 927 + WC 135 + Other -283 = 1,648M. Then FFO (before working capital, interest, taxes) = 869 + 927 = 1,796M? Or we need to adjust. For S&P FFO, we want after-tax, so: FFO = Net income + D&A + Other non-cash items + Deferred taxes - Equity method + Dividends... = 615 + 927 + 39 - 194 + 89 = 1,476M? Or using the cash flow approach: FFO = CFO - WC changes + Interest paid - Interest received - Dividends received + Taxes paid - Tax expense... Actually, let me use a cleaner S&P definition. S&P typically calculates: FFO = Net income from continuing operations + Depreciation and amortization + Deferred income taxes + Other non-cash items - Gain on sale of assets (or + loss) + Interest expense - Interest income (sometimes excluded) - Equity method income + Dividends from equity investments = 615 + 848 + 39 + (-15) + 256 - 47 - 194 + 89 Wait, "Impairment Loss Reversal" is -15M (negative, so it's a reversal/gain). We should subtract this or not add it back. Let me be more careful. "Other Adjustments To Reconcile Profit Loss" is 79M. This might include equity method adjustment, gain/loss on sales, etc. From CF: Adjustments For Reconcile Profit Loss = 927M = 848M (D&A, provisions, impairments) + 79M (other). The 79M "Other Adjustments" likely includes: - Equity method income adjustment (-194M or +194M depending on sign) - Gain/loss on asset sales - Other non-cash items Actually, looking at the P&L: "Share Of Profit Loss Of Associates And Joint Ventures" = -194M. This is negative, meaning loss? Or is it presented as negative because it's an expense line? In standard P&L, "Share of profit of associates" is positive income. But here it's shown as -194M, which might mean loss. Wait, "Resultado De Puesta En Equivalencia Operativa" = 159M (positive, operating). And "Share Of Profit Loss..." = -194M (negative). These might be different things or the same with different scope. Actually, re-reading: "Share Of Profit Loss Of Associates And Joint Ventures Accounted For Using Equity Method" 2022-01-01 - 2023-01-01: -194000000 EUR. This is negative, suggesting a loss from associates. But "Resultado De Puesta En Equivalencia Operativa" = 159M positive. This might be a sub-component or different classification. Hmm, this is confusing. Let me look at the balance sheet: "Investment Accounted For Using Equity Method" increased from 1,325M to 1,730M, increase of 405M. With equity method losses of 194M, this suggests investments of about 600M. For FFO calculation, let me use the most standard S&P approach and not overcomplicate: FFO = Cash Flows From Used In Operating Activities - Increase Decrease In Working Capital + Interest Paid (classified as operating) - Interest Received (classified as operating) - Dividends Received (classified as operating, if equity method) = 1,648 - 135 + 209 - 40 - 89 = 1,593M Or, if we include dividends (as S&P sometimes does for strategic investments): = 1,648 - 135 + 209 - 40 = 1,682M Actually, S&P typically includes dividends received in FFO if the equity investments are part of core operations. For Acciona, with significant infrastructure investments, equity method investments are likely strategic. Let me check S&P's standard formula more carefully. According to S&P Global Ratings methodology: FFO = Funds from operations = Net income from continuing operations + Depreciation & amortization + Deferred income taxes + Other non-cash items - Gain on sale of assets + Interest expense - Interest income - Equity earnings in affiliates + Dividends received from affiliates Using this: = 615 + 848 + 39 + 79 - 0 + 256 - 47 - (-194) + 89? Wait, is equity method income -194M or +194M? The line says -194M. If it's a loss, then - Equity earnings = -(-194) = +194? No, the formula says "- Equity earnings", so if earnings are negative (loss), we subtract a negative = add. But actually, looking at the sign convention: "Share Of Profit Loss" = -194M. In P&L, this is typically shown after operating profit. If it's negative, it's a loss. Hmm, but "Resultado De Puesta En Equivalencia Operativa" = 159M positive, and this is included in "Profit Loss From Operating Activities" = 1,334M. So total equity method = -194M, with 159M being operating and -353M non-operating? That doesn't add up. Actually, let me re-read: "Resultado De Puesta En Equivalencia Operativa" might mean "Equity method result from operations" = 159M. And "Share Of Profit Loss Of Associates And Joint Ventures" = -194M is the total including non-operating. Wait, 159M - 353M = -194M? That would mean non-operating equity method = -353M. For S&P FFO, we typically use total equity method and add back dividends. Let me try a different, simpler approach. S&P FFO can be approximated as: FFO = EBITDA - Cash interest - Cash taxes + Dividends from equity investments Or: FFO = EBIT + D&A - Cash taxes + Interest received - Interest paid... Actually, let me use the cash flow based approach which is often cleaner: FFO = CFO - Working capital changes + Interest paid (add back financing outflow) - Interest received (subtract investment inflow) - Dividends received (subtract if not operating) But wait, in CFO, interest paid is already deducted. So: CFO before interest = CFO + Interest paid = 1,648 + 209 = 1,857M CFO before interest and taxes = 1,857 + 215 = 2,072M? No, taxes are operating. Actually, let me think of it as: FFO = CFO - WC changes + Interest paid - Interest received Because: - We want FFO before working capital changes: so subtract WC changes (if positive WC is source, we remove it) - We want FFO before interest paid: so add back interest paid - We want FFO before interest received: so subtract interest received (it was added in CFO) = 1,648 - 135 + 209 - 40 = 1,682M But we also need to consider dividends received. S&P sometimes includes these in FFO for infrastructure companies. Actually, for a cleaner S&P FFO: FFO = Net income + D&A + Deferred taxes + Interest expense - Interest income - Equity method + Dividends = 615 + 848 + 39 + 256 - 47 - (-194) + 89 = 615 + 848 + 39 + 256 - 47 + 194 + 89 = 1,994M? That seems high. Let me recheck: 615 + 848 = 1,463; +39 = 1,502; +256 = 1,758; -47 = 1,711; +194 = 1,905; +89 = 1,994M. But if equity method is a loss (-194M), then subtracting equity earnings (negative) means adding it back: -(-194) = +194. So yes, 1,994M. Hmm, but this seems too high compared to CFO of 1,648M. Let me try: FFO = EBIT + D&A - Cash taxes + Dividends - Equity method adjustment = 1,334 + 762 - 215 + 89 - (-194 - 159)? Actually, EBIT (1,334M) already includes equity method of 159M. So EBIT before equity method = 1,334 - 159 = 1,175M. Then EBITDA = 1,175 + 762 = 1,937M? Or 1,334 + 762 = 2,096M if equity method is not in EBIT. Actually, I think 1,334M includes 159M equity method. So "clean" EBIT = 1,175M. Then add D&A 762M = 1,937M. Then - cash taxes 215M = 1,722M. Then + dividends 89M = 1,811M. Then - equity method 159M + ... This is getting too complicated. Let me use the standard S&P formula from their published methodology: FFO = Net income from continuing operations + Depreciation & amortization + Deferred income tax expense + Other non-cash items - Gain on sale of assets + Interest expense - Interest income - Equity in earnings/losses of affiliates + Dividends received from affiliates Using: - Net income from continuing operations: 615M - D&A (from CF, most comprehensive): 848M - Deferred tax expense: 39M (254 expense - 215 paid) - Other non-cash items: need to determine - Interest expense: 256M - Interest income: 47M - Equity in earnings: -194M (loss, so negative) - Dividends received: 89M For "Other non-cash items", the 79M in "Other Adjustments" might include some of these. Let me check if 848M + 79M = 927M covers everything. Actually, the 79M "Other Adjustments" likely includes equity method adjustment, gain/loss on sales, etc. So: Net income 615 + Total adjustments 927 + Deferred tax 39 + Interest expense 256 - Interest income 47 - Equity method (-194) + Dividends 89 - Other non-cash already in adjustments... This is circular. Let me use a different approach. From the cash flow statement, the cleanest FFO calculation is: FFO = Cash Flows From Used In Operating Activities - Increase Decrease In Working Capital + Interest Paid (add back) - Interest Received (subtract) - Dividends Received (subtract, or not) = 1,648 - 135 + 209 - 40 - 89 = 1,593M Or with dividends: 1,648 - 135 + 209 - 40 = 1,682M Actually, I realize I need to check if "Otros Flujos" includes more than just interest and dividends. Looking at the components: - Interest Paid: 209M (outflow) - Interest Received: 40M (inflow) - Dividends Received: 89M (inflow) - Income Taxes Paid: 215M (outflow) - Other: 12M (inflow) Sum: -209 + 40 + 89 - 215 + 12 = -283M. Matches "Otros Flujos" of -283M. So CFO = Profit (or PBT) + Adjustments 927 + WC 135 + Otros Flujos -283 = 1,648. If Profit is PBT 869: 869 + 927 + 135 - 283 = 1,648. ✓ So FFO before WC, interest, and taxes = PBT 869 + Adjustments 927 = 1,796M. Then adjust to S&P FFO: - Taxes: we want after-tax, so -254M tax expense = 1,542M? Or -215M cash taxes = 1,581M? - Interest: add back interest paid 209M, subtract interest received 40M = +169M - Dividends: add 89M or not? S&P FFO is typically after-tax but before interest and dividends. So: FFO = 1,796 - 254 (tax expense) + 209 (interest paid) - 40 (interest received) = 1,711M Or with cash taxes: 1,796 - 215 + 209 - 40 = 1,750M Hmm, but S&P uses tax expense, not cash taxes, in the FFO calculation typically. Actually no, for FFO they typically use funds from operations, which is a cash-like concept. Let me check: FFO = Net income + D&A + Deferred taxes + Interest + ... = 615 + 848 + 39 + 256 - 47 - (-194) + 89 = 1,994M? But this uses P&L D&A of 762M or CF D&A of 848M. If 848M: 615 + 848 = 1,463. Then +39 deferred = 1,502. Then +256 interest = 1,758. Then -47 interest income = 1,711. Then +194 equity loss = 1,905. Then +89 dividends = 1,994M. Wait, I need to check if 848M is the right D&A. The P&L shows "Dotacion Amortizacion YVariacion De Provisiones" = 762M. The CF shows "Ajustes Por Amortizacion Variacion De Provisiones YDeterioros" = 848M. The difference (86M) might be provision changes and impairments. For S&P FFO, we typically add back D&A and also add back provision changes and impairments (non-cash). So 848M is better. But then we need to avoid double counting. The 79M "Other Adjustments" in CF might include some items we already counted. Actually, let me verify: Adjustments For Reconcile Profit Loss = 927M = 848M + 79M. If I use 848M for D&A/provisions/impairments, and 79M for other, then total adjustments are 927M. For S&P FFO starting from Net income: = 615 + 927 (all adjustments) + Interest expense 256 - Interest income 47 - Equity method (-194) + Dividends 89 - Other items already in 927... Hmm, the 927M might already include some of these. Let me think about what's in "Other Adjustments" 79M. From P&L to CFO reconciliation, typical adjustments include: - D&A: 762M (P&L) or 848M (CF, includes more) - Impairment reversals: -15M (reversal, so negative adjustment) - Equity method income/loss: -194M or +194M - Gain/loss on asset sales: ? - Other non-cash: ? If "Other Adjustments" is 79M, and we know: - Impairment reversal was -15M (in P&L, so in CF we add back 15M? Or subtract?) - Other gains/losses: 13M Actually, "Other Gains Losses" = 13M. If this is a loss, it's +13M in P&L? Or -13M? The line shows 13,000,000 EUR without clear sign. But in my earlier calculation, I assumed -13M. Let me re-approach. I'll use the standard S&P FFO formula and available data: FFO = Net income from continuing operations: 615M + Depreciation and amortization: I'll use 762M from P&L (cleaner D&A) + Deferred income taxes: 39M + Other non-cash items: provision changes, impairment reversals, etc. From P&L "Dotacion Amortizacion YVariacion De Provisiones" = 762M. This includes provision changes. So maybe I shouldn't add more. + Interest expense: 256M - Interest income: 47M - Equity in earnings of affiliates: -194M (loss, so subtract negative = add) + Dividends from affiliates: 89M = 615 + 762 + 39 + 256 - 47 + 194 + 89 = 1,908M Wait, I need to check if 762M includes everything or if I need 848M. Actually, for S&P, they typically want comprehensive add-backs. Let me use 848M (from CF, includes impairments and provision changes). = 615 + 848 + 39 + 256 - 47 + 194 + 89 = 1,994M But this seems high. Let me verify with another approach. CFO = 1,648M. This includes: - Working capital changes: +135M (source) - Interest paid: -209M (use) - Interest received: +40M (source) - Dividends received: +89M (source) - Taxes paid: -215M (use) - Other: +12M (source) FFO (S&P definition, before WC and financing items, after tax): = CFO - WC + Interest paid - Interest received - Dividends received + Taxes paid? No, let me think again. We want FFO = operating cash flows before working capital and before financing items. Starting from CFO 1,648M: - Remove working capital: -135M (it was a source, so FFO is lower without it) - Remove interest paid: +209M (add back the outflow) - Remove interest received: -40M (subtract the inflow) - Keep or remove dividends received: depends on S&P view - Keep taxes: they're operating = 1,648 - 135 + 209 - 40 = 1,682M (without dividends) = 1,648 - 135 + 209 - 40 - 89 = 1,593M (with dividends subtracted) Or if we think of FFO as before interest and taxes: = 1,648 - 135 + 209 - 40 + 215 - 89 = 1,808M? No, taxes are operating. Actually, S&P FFO is typically after tax but before interest. So: = 1,648 - 135 + 209 - 40 = 1,682M (if dividends are part of FFO) or = 1,593M (if dividends are not part of FFO) For infrastructure companies, S&P typically includes dividends from strategic investments in FFO. So 1,682M might be right. But wait, I need to check if "Other Inflows Outflows Of Cash Classified As Operating Activities" = 12M is part of FFO or not. It's likely operating, so keep it. Let me verify: 1,682 + 12 - 12 = 1,682. The 12M is already in CFO. Hmm, but I also need to consider if CFO starts with PBT or Net Income. We established it starts with PBT 869M. So FFO after tax but before WC and interest: = PBT 869 + Adjustments 927 - Tax expense 254 + Interest paid 209 - Interest received 40 - Dividends received? = 869 + 927 - 254 + 209 - 40 = 1,711M Or with dividends: 869 + 927 - 254 + 209 - 40 - 89 = 1,622M Let me check: 1,711 - 89 = 1,622. Yes. Now, comparing to my earlier calculation: 615 + 848 + 39 + 256 - 47 + 194 + 89 = 1,994M. This is different because I added equity method and dividends, but in the CF approach, equity method is already in PBT. Actually, I think the CF approach is more reliable. Let me verify: PBT 869 includes: - Equity method income/loss: -194M (loss) - Interest expense: -256M - Interest income: +47M So operating profit before interest and equity = 869 + 256 - 47 + 194 = 1,272M? Wait, PBT = Operating profit 1,334 + Interest income 47 - Interest expense 256 + Other financial items + Equity method -194 = ? From P&L: 1,334 (operating) + 47 (finance income) - 256 (finance costs) + 8 (exchange) - 70 (fair value) - 194 (equity method) = 869. Let me check: 1,334 + 47 = 1,381; -256 = 1,125; +8 = 1,133; -70 = 1,063; -194 = 869. Yes! So PBT 869 = Operating 1,334 + Net financial -271 + Exchange 8 - Fair value -70 - Equity -194. For S&P FFO, we want to add back non-cash and non-operating items to get to a sustainable operating cash flow measure. Standard S&P FFO: = Net income from continuing operations + Depreciation & amortization + Deferred income taxes + Other non-cash items - Gain on sale of assets + Interest expense - Interest income - Equity in earnings/losses of affiliates + Dividends received from affiliates = 615 + 848 + 39 + 79 - 0 + 256 - 47 - (-194) + 89 Wait, "Other non-cash items" - is it 79M or something else? The 79M "Other Adjustments" in CF includes various items. Actually, let me check if 79M includes equity method adjustment, gain/loss on sales, etc. If I use total adjustments 927M = 848M + 79M, then: FFO = 615 + 927 + 39 + 256 - 47 - (-194) + 89 - adjustments_already_in_927... This is circular. The 927M already includes some items. Let me use the direct cash flow based FFO which is cleaner: FFO = CFO - Working capital changes + Interest paid - Interest received = 1,648 - 135 + 209 - 40 = 1,682M This is FFO before interest but after tax and including dividends and other operating items. If S&P wants to exclude dividends received (as investment income, not operating): FFO = 1,648 - 135 + 209 - 40 - 89 = 1,593M For Acciona, with significant infrastructure investments, dividends from affiliates are likely considered part of operating FFO. So I'll use 1,682M. Actually, let me double-check S&P's standard definition. According to S&P Global Ratings corporate methodology: "FFO is calculated as funds from operations. It generally approximates cash flow from operations before changes in working capital, but it also includes dividends received from equity investments and excludes certain items that are not considered sustainable or operating in nature." So FFO = CFO - Changes in working capital + Dividends received? No, dividends are typically included in FFO. Wait, let me re-read: "before changes in working capital" and "includes dividends received from equity investments". So if CFO already includes dividends, we don't need to adjust. Actually, CFO includes dividends received. So: FFO = CFO - Changes in working capital = 1,648 - 135 = 1,513M? But then S&P also adjusts interest. Let me check if interest is included or excluded from FFO. In S&P methodology, FFO is typically BEFORE interest and taxes (like EBITDA but cash-based). Or sometimes after tax but before interest. Actually, I found a reference: S&P FFO = Net income + Depreciation + Deferred taxes + Other non-cash - Gain on sale + Interest expense - Interest income - Equity earnings + Dividends. This is after tax, before interest, and with equity adjustments. Using: 615 + 848 + 39 + 79 + 0 + 256 - 47 - (-194) + 89 = 2,073M? Wait, I need to check if 79M is "Other non-cash" or if it includes items already counted. Let me try yet another approach. Let me calculate FFO as S&P does for utilities/infrastructure: FFO = EBITDA - Cash interest - Cash taxes + Dividends from equity investments EBITDA = EBIT + D&A = 1,334 + 762 = 2,096M? Or clean EBITDA without equity method = 1,334 - 159 + 762 = 1,937M? For S&P, EBITDA typically includes equity method income. So 2,096M. Cash interest = 209M (interest paid) Cash taxes = 215M (taxes paid) Dividends from equity = 89M FFO = 2,096 - 209 - 215 + 89 = 1,761M Or if we use P&L interest expense and tax expense: = 2,096 - 256 - 254 + 89 = 1,675M Hmm, 1,675M is close to my 1,682M from CF approach. Actually, let me use a more precise S&P formula for infrastructure: FFO = Cash flow from operating activities before working capital changes - Interest paid + Interest received + Dividends received... No wait, that's not right. Let me go with: FFO = CFO - WC changes + Interest paid - Interest received = 1,682M. Or the EBITDA-based: 2,096 - 256 - 254 + 89 = 1,675M. These are close (1,682 vs 1,675). The difference is due to using cash vs accrual for interest and taxes. For S&P, they typically use the accrual-based approach starting from net income. So let me use: FFO = Net income 615 + D&A 762 + Deferred tax 39 + Interest expense 256 - Interest income 47 - Equity method (-194) + Dividends 89 + Other non-cash 79 = 615 + 762 + 39 + 256 - 47 + 194 + 89 + 79 = 1,987M? Hmm, this is higher because I'm adding 79M "Other adjustments" which might already be included or might be double counted. Actually, let me check: if D&A is 762M (P&L) and total adjustments are 927M, then other adjustments are 165M, not 79M. Wait, 927 - 848 = 79M. But 848M is CF-based D&A, not 762M P&L-based. If I use P&L D&A 762M, then other adjustments = 927 - 762 = 165M. So: 615 + 762 + 165 + 39 + 256 - 47 + 194 + 89 = 2,073M. This is getting too high. I think the issue is that "Other adjustments" 165M or 79M includes equity method and other items that I'm double-counting. Let me just use the CF-based approach which is cleaner and less prone to double counting: FFO = CFO - WC changes = 1,648 - 135 = 1,513M. Then adjust for interest (since S&P FFO is typically before interest): + Interest paid 209 - Interest received 40 = +169M = 1,513 + 169 = 1,682M. This is FFO before interest, after tax, including dividends, excluding WC changes. For S&P, they might also want to exclude dividends if they're not sustainable operating cash flows. But for infrastructure companies with strategic equity investments, dividends are typically included. Actually, I realize I should check if 1,682M is reasonable by comparing to EBITDA. EBITDA = 2,096M (my calculation). FFO should be lower than EBITDA because: - FFO includes cash taxes, EBITDA doesn't - FFO excludes working capital, EBITDA is pure P&L 2,096 - 254 (tax expense) = 1,842. Then - some other items = 1,682. Difference is 160M, which could be other non-cash or timing differences. Actually, let me verify EBITDA. From P&L: Revenue 11,195 + Other Income 1,016 = 12,211 - Raw materials 3,483 = 8,728 - Employee benefits 2,077 = 6,651 - Other expenses 4,814 = 1,837 + Changes in inventories -72? Actually this is typically shown as adjustment. Let me use: 12,211 - 3,483 - 2,077 - 4,814 = 1,837. Then -72 = 1,765. Then + Other gains/losses and equity method... Actually, operating profit 1,334 includes D&A. So EBITDA = 1,334 + 762 = 2,096. Yes. Then FFO = EBITDA - Cash taxes - Cash interest + Dividends? = 2,096 - 215 - 209 + 89 = 1,761M. Or with accrual: 2,096 - 254 - 256 + 89 = 1,675M. My CF-based 1,682M is between these. I'll use 1,682M or round to 1,680M. Actually, let me be more precise. I'll use the S&P standard: FFO = Net income + D&A + Deferred taxes + Interest expense - Interest income - Equity earnings + Dividends But I need to avoid double counting. Let me use the cash flow statement numbers directly: From CFO 1,648M: - Start with PBT 869M (not net income) - Add adjustments 927M For S&P FFO, we want: - After tax: so subtract tax expense 254M - Before interest: add interest paid 209M, subtract interest received 40M - Before working capital: subtract WC changes 135M - Include dividends: keep dividends received 89M (already in CFO) = 1,648 - 135 + 209 - 40 - 254 + ? Wait, CFO already includes tax paid 215M, not tax expense 254M. So if I want FFO after tax expense, I need to adjust. Actually, S&P FFO is typically based on funds, so cash taxes, not tax expense. Let me stick with cash-based. FFO = CFO - WC + Interest paid - Interest received = 1,648 - 135 + 209 - 40 = 1,682M. Now, for Net Debt. Net Debt = Total debt - Cash and cash equivalents Debt includes: - Noncurrent loans received: 2,624M - Current loans received and current portion of noncurrent loans: 553M - Noncurrent lease liabilities: 439M - Current lease liabilities: 72M - Participaciones Preferentes Obligaciones YOtros Valores Negociables No Corrientes (Noncurrent financial instruments): 3,101M - Participaciones Preferentes Obligaciones YOtros Valores Negociables Corrientes (Current financial instruments): 1,139M Total debt = 2,624 + 553 + 439 + 72 + 3,101 + 1,139 = 7,928M Cash and cash equivalents = 2,360M Net debt = 7,928 - 2,360 = 5,568M Wait, I need to check if there are other debt-like items. "Other Noncurrent Liabilities" 1,134M and "Other Current Liabilities" 1,798M - these might include some debt-like items, but typically "other liabilities" are operating (pensions, deferred income, etc.). Also, "Trade And Other Current Payables" 3,889M is operating, not debt. Let me verify my debt calculation. S&P typically includes: - Loans and borrowings (short and long term) - Bonds and notes issued - Lease liabilities - Bank overdrafts - Sometimes preferred shares if they're debt-like - Sometimes pension liabilities if underfunded - Sometimes derivative liabilities if related to debt The "Participaciones Preferentes Obligaciones YOtros Valores Negociables" are preferred shares, bonds, and other negotiable instruments. These are definitely debt-like. So total debt = 2,624 + 553 + 439 + 72 + 3,101 + 1,139 = 7,928M Net debt = 7,928 - 2,360 = 5,568M But wait, I should check if there are any other cash-like items. "Current Financial Assets" 315M - are these cash equivalents? The data shows "Cash And Cash Equivalents" 2,360M and also "Cash" 1,898M + "Shortterm Investments Classified As Cash Equivalents" 462M = 2,360M. So the 315M "Current Financial Assets" is separate, likely not cash. Also, "Noncurrent Financial Assets" 263M - these are investments, not cash. So Net Debt = 5,568M. FFO / Net Debt = 1,682 / 5,568 = 0.302 or 30.2% But wait, I need to double check my FFO. Let me reconsider if dividends should be included. Actually, looking at S&P methodology more carefully, for infrastructure and utility companies, they often calculate FFO as: FFO = Cash flow from operating activities before working capital changes - Interest paid + Interest received Or: FFO = EBITDA - Cash interest - Cash taxes +/- Other adjustments Let me try: EBITDA 2,096 - Cash interest 209 - Cash taxes 215 + Dividends 89 = 1,761M. This is close to my 1,682M. The difference is 79M, which is exactly the "Other Adjustments" in the cash flow statement. Actually, I think the issue is whether to include or exclude dividends. Let me check both: With dividends: 1,682 / 5,568 = 30.2% Without dividends: 1,593 / 5,568 = 28.6% For S&P, they typically include dividends from unconsolidated subsidiaries in FFO. So 30.2% or about 0.30. But let me recheck my FFO calculation. Actually, I want to verify if "Dividends Received Classified As Operating Activities" 89M should be in FFO. In S&P methodology, dividends received from equity method investments are typically ADDED to FFO (they're part of funds from operations). But in my calculation, I kept them in CFO and then subtracted them when calculating FFO without dividends. Wait, let me re-read my calculation: CFO = 1,648M includes dividends received 89M. FFO with dividends = CFO - WC + Interest paid - Interest received = 1,648 - 135 + 209 - 40 = 1,682M. This keeps dividends in FFO. Good. FFO without dividends = 1,682 - 89 = 1,593M. For S&P, I'll use with dividends: 1,682M. Now let me also recheck debt. Are there any other debt items? Looking at liabilities: - Noncurrent: 8,467M total - Debt instruments: 3,101M - Loans: 2,624M - Lease liabilities: 439M - Deferred tax: 890M - Provisions: 279M - Other: 1,134M - Current: 7,824M total - Debt instruments: 1,139M - Loans: 553M - Lease liabilities: 72M - Trade payables: 3,889M - Provisions: 299M - Tax liabilities: 74M - Other: 1,798M Debt = 3,101 + 2,624 + 439 + 1,139 + 553 + 72 = 7,928M. Yes. Cash = 2,360M. Net debt = 5,568M. FFO/Net Debt = 1,682 / 5,568 = 0.3021... Let me round to 0.30 or 30.2%. Actually, I want to double-check one more thing. Should I use "Cash And Cash Equivalents" 2,360M or "Cash" 1,898M + "Shortterm Investments" 462M = 2,360M? Same thing. Also, should I include "Current Financial Assets" 315M? These are likely not cash equivalents but short-term investments or receivables. For conservative net debt, S&P sometimes uses "Cash and cash equivalents" only, not other financial assets. So 2,360M is correct. Let me also verify if there are any restricted cash items. The data doesn't show any, so I'll assume all cash is available. Final calculation: FFO = 1,682,000,000 EUR Net Debt = 5,568,000,000 EUR FFO / Net Debt = 1,682 / 5,568 = 0.3021 = 30.21% As a ratio, this is 0.302 or 30.2%. Wait, I should express this as a percentage or decimal? The question asks for "FFO / Net debt ratio", so it's typically expressed as a percentage (30.2%) or as a decimal (0.302). In credit analysis, it's often shown as a percentage. But let me check if I should use a different FFO. Let me try the EBITDA-based approach with accrual items: FFO = EBITDA - Interest expense - Tax expense + Dividends received = 2,096 - 256 - 254 + 89 = 1,675M Or: FFO = EBITDA - Cash interest - Cash taxes + Dividends = 2,096 - 209 - 215 + 89 = 1,761M Or my CF-based: 1,682M. These are all close. The average is around 1,706M. But I should pick one methodology and stick with it. For S&P specifically, let me use their published formula more carefully. According to S&P Global Ratings "Corporate Methodology": FFO = Funds from operations = Net income from continuing operations + Depreciation & amortization + Deferred income taxes + Other non-cash items - Gain on sale of assets + Interest expense - Interest income - Equity in earnings/losses of affiliates + Dividends received from affiliates Using: - Net income from continuing operations: 615M - D&A: I'll use 762M (from P&L, cleaner) or 848M (from CF, more comprehensive) For S&P, they typically use the cash flow statement D&A, so 848M. - Deferred income taxes: 39M (254 expense - 215 paid) - Other non-cash items: This is tricky. The 79M "Other Adjustments" in CF might include equity method, gains/losses, etc. Actually, let me think about what's in the 927M total adjustments: - D&A, provision changes, impairments: 848M - Other adjustments: 79M The 79M likely includes: - Equity method adjustment (to remove accrual, add cash dividends) - Gain/loss on asset sales - Other non-cash items If I add back total adjustments 927M to net income 615M, I get 1,542M. This is essentially Net Income + All non-cash adjustments. Then add Interest expense 256M, subtract Interest income 47M = 1,751M. Then subtract Equity earnings -194M (add back the loss) = 1,945M. Then add Dividends 89M = 2,034M. But this is too high because the 927M already includes some of these adjustments (like equity method). Actually, I think the 927M adjustments are from PBT, not from net income. Let me check: PBT 869 + Adjustments 927 = 1,796. Then + WC 135 - Other 283 = 1,648 = CFO. So adjustments are added to PBT, not net income. If I want FFO after tax: PBT 869 - Tax expense 254 + Adjustments 927 = 1,542M. This is like Net Income + Adjustments. Then + Interest paid 209 - Interest received 40 - Dividends received? = ? Actually, for S&P FFO from PBT: FFO = PBT + Adjustments - Cash taxes + Interest paid - Interest received = 869 + 927 - 215 + 209 - 40 = 1,750M Or with tax expense: 869 + 927 - 254 + 209 - 40 = 1,711M. Hmm, 1,711M is close to my earlier 1,682M. The difference is 29M, which could be dividends or other items. Let me check: 1,750 - 89 (dividends) = 1,661. Or 1,711 - 89 = 1,622. Actually, I think the cleanest S&P FFO is: FFO = Net income + Total adjustments (from CF) + Interest expense - Interest income - Equity method + Dividends But we need to make sure adjustments don't already include these. From the CF statement, adjustments of 927M are added to PBT to get to pre-WC, pre-interest, pre-dividends cash flow. So: PBT 869 + Adjustments 927 = 1,796 = Operating cash before WC, interest, taxes, dividends. Then: - Interest paid 209 + Interest received 40 - Dividends received 89 - Taxes paid 215 + WC changes 135 + Other 12 = CFO 1,648. Wait, let me verify: 1,796 - 209 + 40 - 89 - 215 + 135 + 12 = 1,470. Not 1,648. Hmm, let me recheck: 1,796 - 209 = 1,587; +40 = 1,627; -89 = 1,538; -215 = 1,323; +135 = 1,458; +12 = 1,470. Not 1,648. So my understanding is wrong. Let me re-examine. Actually, maybe "Otros Flujos" at -283M includes more than just interest, dividends, and taxes. Let me check the components again: - Interest Paid: 209M - Interest Received: 40M - Dividends Received: 89M - Income Taxes Paid: 215M - Other: 12M Sum: -209 + 40 + 89 - 215 + 12 = -283M. Yes. But 1,796 + 135 (WC) - 283 (Otros) = 1,648. Yes! 1,796 + 135 = 1,931; -283 = 1,648. So the structure is: PBT 869 + Adjustments 927 = 1,796 (cash earnings before WC and other) + WC 135 = 1,931 + Otros Flujos -283 = 1,648 = CFO So "Otros Flujos" includes interest, dividends, taxes, and other. For FFO, S&P wants before WC, and typically before interest but after tax, with dividends. FFO = CFO - WC changes + Interest paid - Interest received = 1,648 - 135 + 209 - 40 = 1,682M This keeps dividends and taxes as they are (part of FFO). Or if we want before tax too: = 1,682 + 215 (taxes paid) = 1,897M? No, S&P FFO is after tax. So 1,682M seems right for S&P FFO. Let me also check if we should add back dividends received (since they're investment, not operating). S&P includes them in FFO for infrastructure companies. So keep them. FFO / Net Debt = 1,682 / 5,568 = 0.3021 Let me express this as a percentage: 30.21%, or as decimal 0.302. In credit ratios, FFO/Net Debt is typically expressed as a percentage. So 30.2% or 30.21%. But let me verify my net debt once more. Are there any other debt-like items I missed? Looking at "Other Noncurrent Liabilities" 1,134M and "Other Current Liabilities" 1,798M. These could include: - Pension liabilities - Deferred income - Provisions (but provisions are separate) - Other operating liabilities Typically these are not debt. S&P includes only financial debt in net debt. What about "Noncurrent Provisions" 279M and "Current Provisions" 299M? These are typically not debt unless they're specifically debt-like (e.g., restructuring provisions from acquisitions). Usually they're operating or contingent liabilities. So my debt calculation seems correct: 7,928M. One more check: should I include "Treasury Shares" or other equity items? No, those are equity. Should I include "Participaciones Preferentes" as debt? Yes, these are preferred shares, which are debt-like. The name says "Obligaciones YOtros Valores Negociables" (bonds and other negotiable instruments), so definitely debt. Final answer: FFO / Net Debt = 1,682 / 5,568 = 0.3021 = 30.21% Let me round to one decimal: 30.2% or 0.302. Actually, looking at S&P presentations, they often show this as a percentage. So I'll use 30.2. But wait, I want to double-check one thing. Is "Cash And Cash Equivalents" at 2023-01-01 the right number for 2022 year-end? Yes, 2023-01-01 is the same as 2022-12-31. And for debt, I should use 2023-01-01 (year-end 2022) as well: - Noncurrent debt instruments: 3,101M - Noncurrent loans: 2,624M - Noncurrent lease liabilities: 439M - Current debt instruments: 1,139M - Current loans: 553M - Current lease liabilities: 72M Total: 7,928M. Yes. Net debt: 7,928 - 2,360 = 5,568M. Yes. FFO: I'll use 1,682M. Ratio: 1,682 / 5,568 = 0.30208... = 30.21% Hmm, but let me also try the alternative FFO of 1,761M (EBITDA - cash interest - cash taxes + dividends): 1,761 / 5,568 = 31.6% Or 1,675M (EBITDA - accrual interest - accrual taxes + dividends): 1,675 / 5,568 = 30.1% These are close to my 30.2%. The difference is minor. I'll stick with 1,682M as it's derived directly from the cash flow statement, which is often preferred for FFO calculations. Actually, one more refinement. S&P sometimes calculates FFO as: FFO = Cash flow from operating activities before changes in working capital and before interest and dividends = CFO - WC changes + Interest paid - Interest received - Dividends received = 1,648 - 135 + 209 - 40 - 89 = 1,593M Then FFO/Net Debt = 1,593 / 5,568 = 28.6% Or with dividends included: = 1,648 - 135 + 209 - 40 = 1,682M = 30.2% I need to decide which is correct for S&P. According to S&P methodology for infrastructure companies, dividends from strategic investments are typically INCLUDED in FFO. So 30.2% is correct. Final answer: 30.2% or 0.302. Let me express as percentage: 30.2 Or should I use more precision? 30.21? I'll use 30.2 as a percentage, or 0.302 as decimal. Since the question asks for "ratio", decimal might be more appropriate, but percentage is also common. Actually, looking at the format requested: "no units". So I should provide just the number, either 0.302 or 30.2. In financial ratios, FFO/Net Debt is typically expressed as a percentage. But "no units" suggests the raw ratio number. If it's 30.2%, the ratio is 0.302. If expressed as percentage points, it's 30.2. I think the safest is to provide 0.302 or 30.2. Let me check S&P typical presentation - they usually show "FFO/Debt (%)" so it's a percentage. But with "no units", I'll provide 30.2 (implying percentage) or 0.302. Actually, I'll provide 0.302 as it's the mathematical ratio. Or should I provide 30.2? Hmm, the question says "FFO / Net debt ratio". If FFO = 1,682 and Net Debt = 5,568, the ratio is 0.302. But in credit analysis, this is almost always expressed as a percentage (30.2%). Let me provide 0.302 as the pure ratio, or I could provide 30.2. I'll go with 0.302 for the mathematical ratio, but I'm uncertain. Let me think... Actually, looking at the answer format requested: "no units, and no prose". So just the number. If I write 0.302, it's clear. If I write 30.2, it could be 30.2% or just 30.2. I'll provide 0.302 as it's unambiguously the ratio. Wait, let me recheck my calculation one more time with fresh eyes. FFO calculation: CFO = 1,648M WC change = +135M (positive = source of cash, decrease in WC or increase in liabilities) Interest paid = 209M (outflow) Interest received = 40M (inflow) Dividends received = 89M (inflow) S&P FFO = CFO - WC change + Interest paid - Interest received = 1,648 - 135 + 209 - 40 = 1,682M This assumes dividends are part of FFO. If not: = 1,648 - 135 + 209 - 40 - 89 = 1,593M For S&P infrastructure methodology, dividends from unconsolidated investments are typically included. I'll use 1,682M. Net Debt calculation: Debt: - Noncurrent portion of noncurrent loans: 2,624M - Current loans and current portion: 553M - Noncurrent lease liabilities: 439M - Current lease liabilities: 72M - Noncurrent financial instruments (bonds, preferred, etc.): 3,101M - Current financial instruments: 1,139M Total debt = 2,624 + 553 + 439 + 72 + 3,101 + 1,139 = 7,928M Cash = 2,360M Net debt = 7,928 - 2,360 = 5,568M FFO/Net Debt = 1,682 / 5,568 = 0.30208... Rounded: 0.302 or 30.2% I'll provide 0.302. Actually, I want to do one more verification. Let me recalculate EBITDA and see if FFO makes sense. EBITDA = 2,096M (from earlier) Minus: Cash interest 209M, Cash taxes 215M = 1,672M Plus: Dividends 89M = 1,761M This 1,761M is close to my 1,682M. The 79M difference is "Other Adjustments" from the cash flow statement, which includes non-cash items that affect CFO but not EBITDA (like equity method adjustments, fair value changes, etc.). Actually, from P&L to CFO reconciliation, the 79M "Other Adjustments" likely includes: - Fair value changes: -70M (loss, so added back) - Exchange differences: 8M - Other gains/losses: -13M or +13M - Equity method adjustment: ? If fair value loss of 70M is added back, that's part of the 79M. Then other items sum to 9M. So FFO from EBITDA approach: 1,761 - 79 (other adjustments that are non-cash and not in EBITDA) = 1,682M. Yes! This matches. So my FFO of 1,682M is correct. Final answer: 1,682 / 5,568 = 0.302 Let me provide this as 0.302 or 30.2. I'll use 0.302 as the mathematical ratio. Hmm, but actually I want to check one more thing. Should "Participaciones Preferentes" (preferred shares) be treated as debt or equity? In Spanish accounting, "Participaciones Preferentes" are typically classified as financial liabilities (debt) because they have fixed returns and no voting rights. The data shows them under liabilities, not equity. So yes, they're debt. Also, "Obligaciones" are bonds, definitely debt. So my debt calculation is correct. One final check: are there any bank overdrafts or other short-term borrowings included in "Other Current Liabilities"? Possibly, but without more detail, I can't identify them. I'll assume they're not material or included in the loans/debt instruments lines. Final answer: 0.302 Or should I express as percentage 30.2? Looking at the question again: "FFO / Net debt ratio". In finance, this is typically expressed as a percentage (e.g., "FFO/Net Debt was 30%"). But mathematically, it's 0.30. I'll provide 0.302 as it's the precise ratio. Actually, wait. Let me re-read the S&P methodology one more time. S&P Global Ratings typically expresses this ratio as a percentage in their credit analysis. But the raw calculation gives 0.302. Since the question asks for "ratio" and says "no units", I'll provide 0.302. But I'm second-guessing because 30.2 is also common. Let me think... If I say "the ratio is 0.302", that's mathematically correct. If I say "the ratio is 30.2", that could mean 30.2% or just 30.2. I'll provide 0.302 to be safe and mathematically precise. Hmm, actually I realize I should double-check one thing. In my net debt calculation, should I include "Current Tax Liabilities" 74M or "Deferred Tax Liabilities" 890M? No, these are tax liabilities, not debt. Should I include "Trade And Other Current Payables" 3,889M? No, these are operating payables. Should I include "Current Provisions" 299M or "Noncurrent Provisions" 279M? No, these are contingent or uncertain liabilities, not financial debt. So debt is correctly 7,928M. One more thing: "Noncurrent Assets Or Disposal Groups Classified As Held For Sale" at 2022-01-01 was 303M with liabilities of 263M. These are for 2021, not 2022. For 2022 year-end (2023-01-01), there's no held for sale mentioned. So no adjustment needed. Final answer: 0.302 Let me round to three decimal places: 0.302. 0.302