I need to calculate the FFO (Funds From Operations) / Net Debt ratio for 2022 based on S&P methodology. First, let me understand S&P's methodology for FFO: - FFO = Net Income + Depreciation/Amortization + Deferred Income Taxes + Other non-cash items - More specifically for S&P: FFO = Profit/Loss + Depreciation & Amortization + Net Interest Expense + Current Income Taxes + Minority Interest - Extraordinary items + Other non-cash charges Let me also look at S&P's standard approach for FFO: FFO = Net income before extraordinary items + Depreciation and amortization + Deferred income taxes + Other non-cash items Actually, let me use a more standard S&P approach: FFO = Profit Loss + Depreciation Amortisation And Impairment + Provisions + Deferred Taxes + Minority Interest - Equity in earnings of affiliates + Other non-cash items Let me look at what's available in the data and use S&P's typical methodology: **FFO Calculation (S&P methodology typically):** FFO = - Profit/Loss (net income) + Depreciation, Amortization and Impairment + Minority interest (if not already in net income - but here net income is consolidated) + Interest expense (net) + Current income tax expense +/- Other non-cash items Actually, looking more carefully at S&P Global Ratings methodology: FFO = Funds from operations = Net income from continuing operations + Depreciation & amortization + Deferred income taxes + Other non-cash items For utility/energy companies, S&P typically uses: FFO = Net income + D&A + Deferred taxes + Other non-cash items - Working capital changes (sometimes) Let me use a more practical S&P approach: FFO = Profit Loss + Depreciation Amortisation And Impairment Loss Reversal Of Impairment Loss Recognised In Profit Or Loss + Provisions Expenses + Income Tax Expense Continuing Operations + Extraordinary Contribution To The Energy Sector CESE + Minority interest portion Wait - let me reconsider. The Profit Loss of 1,169,749,000 EUR is the bottom-line consolidated net income. For S&P FFO, the standard formula is: FFO = Net income + Depreciation & Amortization + Deferred income taxes + Other non-cash items But we need to be careful about what "Net income" means. In S&P methodology: - Start with Net income before extraordinary items (or net income attributable to all shareholders, i.e., consolidated net income) - Add back D&A - Add back deferred income taxes - Add back other non-cash items Let me look at what we have: From the cash flow statement approach, I can also derive FFO as: FFO = Cash Flows From Used In Operations + Net Interest Paid - Interest Received + Current Income Taxes Paid Actually, let me use the more direct S&P approach. S&P typically calculates FFO as: FFO = Net income + Depreciation & amortization + Net interest expense after tax + Minority interest + Deferred taxes + Other non-cash items - Extraordinary gains + Extraordinary losses Or more commonly for European utilities: FFO = Profit before tax + Interest expense - Interest income + D&A + Minority interest - Current taxes ± Changes in working capital (sometimes excluded) Let me use the standard S&P formula more carefully: **FFO = Net income + Depreciation & Amortization + Deferred income taxes + Other non-cash items** But we need to adjust for the fact that Net income already includes interest expense and taxes. Actually, the most common S&P methodology for FFO is: **FFO = Net income from continuing operations + Depreciation & amortization + Deferred income taxes + Other non-cash items** Or alternatively, from the income statement: **FFO = EBIT + D&A - Current cash taxes + Minority interest dividends - Equity earnings** Let me try another approach that's more standard for S&P: FFO = Profit Loss + Depreciation Amortisation And Impairment + Income Tax Expense + Interest Expense (net) - Minority interest in profit + Other adjustments Actually, I think the cleanest S&P approach given our data is: FFO = Cash Flows From Used In Operations (which is 3,777,785,000 EUR for 2022) + Interest paid - Interest received But wait, "Cash Flows From Used In Operating Activities" already includes interest paid and received and taxes paid. Let me use the income-statement based approach which is more standard for S&P ratings: **S&P FFO Formula:** FFO = Net income + Depreciation & Amortization + Deferred taxes + Other non-cash items Where: - Net income = Profit Loss = 1,169,749,000 EUR (consolidated, i.e., including minority interest) - D&A = Depreciation Amortisation And Impairment Loss Reversal Of Impairment Loss Recognised In Profit Or Loss = 1,979,007,000 EUR For deferred taxes: We have Deferred Tax Assets and Deferred Tax Liabilities, but not the change in deferred tax expense. However, we can infer from the income tax reconciliation or use the cash flow approach. Actually, let me look at this differently. S&P also uses: **FFO = Profit before financial items + Depreciation & Amortization - Current income taxes** Or: **FFO = EBITDA - Current income taxes - Cash interest paid** Let me try to use a comprehensive approach. Looking at S&P's published methodology for utilities: FFO typically includes: - Net income + D&A + Deferred income taxes + Other non-cash expenses - Gain on asset sales + Minority interest (if deducted to get to net income attributable) Actually, for consolidated net income (which includes minority interest), we don't add back minority interest. Let me use the most standard S&P formula: **FFO = Net income + Depreciation & Amortization + Deferred income taxes + Other non-cash items** From our data: - Net income (Profit Loss) = 1,169,749,000 EUR - D&A = 1,979,007,000 EUR For deferred taxes, I need to calculate the change in deferred tax assets and liabilities, or use the tax expense breakdown. We have "Income Tax Expense Continuing Operations" = 398,490,000 EUR, but we don't know how much is current vs deferred. However, looking at the balance sheet: - Deferred Tax Assets: 1,784,292,000 (2023) vs 1,509,092,000 (2022) → Increase of 275,200,000 - Deferred Tax Liabilities: 1,244,593,000 (2023) vs 989,078,000 (2022) → Increase of 255,515,000 Net deferred tax asset increase = 275,200,000 - 255,515,000 = 19,685,000 This suggests a small deferred tax benefit. But this is balance sheet based and may not equal the deferred tax expense. Actually, let me use a different approach. S&P often uses "Funds From Operations" as essentially: FFO = Cash from operations before working capital changes + After-tax interest received - After-tax interest paid Or more practically for many European companies: FFO = EBIT + D&A - Cash taxes Where Cash taxes = Income tax expense - Change in deferred taxes Let me try yet another standard S&P approach: **FFO = Net income + D&A + Interest expense (net of tax) + Minority interest + Deferred taxes + Other non-cash items** But this double counts if we start with pre-interest net income. Actually, I think the most reliable approach given standard S&P methodology is: **FFO = Profit Loss Before Financial Income And Financial Expenses Income Tax Expense And Extraordinary Contribution To The Energy Sector CESE + Depreciation Amortisation And Impairment - Current income taxes** Wait, "Profit Loss Before Financial Income And Financial Expenses Income Tax Expense And Extraordinary Contribution To The Energy Sector CESE" = 2,529,993,000 EUR already includes D&A (since it's before D&A is deducted). Let me check... Actually, looking at the line items: - "Profit Loss Before Provisions Amortisation And Impairment Financial Income And Financial Expenses Income Tax Expense And Extraordinary Contribution To The Energy Sector CESE" = 4,523,539,000 EUR - "Provisions Expenses" = 14,539,000 EUR - "Depreciation Amortisation And Impairment Loss Reversal Of Impairment Loss Recognised In Profit Or Loss" = 1,979,007,000 EUR - Then "Profit Loss Before Financial Income And Financial Expenses Income Tax Expense And Extraordinary Contribution To The Energy Sector CESE" = 2,529,993,000 EUR Check: 4,523,539,000 - 14,539,000 - 1,979,007,000 = 2,530, - wait let me calculate: 4,523,539,000 - 14,539,000 = 4,509,000,000; 4,509,000,000 - 1,979,007,000 = 2,529,993,000. Yes, matches. So "Profit Loss Before Financial Income And Financial Expenses Income Tax Expense And Extraordinary Contribution To The Energy Sector CESE" = 2,529,993,000 EUR = EBIT + Provisions - wait, this is actually EBITDA - Provisions, or more precisely EBIT before D&A and after provisions. Actually it's: EBIT before financial items, before tax, before extraordinary items = EBITDA - Provisions. No wait, let me re-read. "Profit Loss Before Provisions Amortisation And Impairment Financial Income And Financial Expenses Income Tax Expense And Extraordinary Contribution To The Energy Sector CESE" = 4,523,539,000 EUR This is: before provisions, before amortization/impairment, before financial income/expenses, before tax, before CESE. This is essentially EBITDA (or close to it). Then after provisions (14,539,000) and D&A (1,979,007,000), we get: "Profit Loss Before Financial Income And Financial Expenses Income Tax Expense And Extraordinary Contribution To The Energy Sector CESE" = 2,529,993,000 EUR This is EBIT (earnings before interest and tax, but after CESE? No wait, it's before CESE too). Actually the name says "Before Financial Income And Financial Expenses Income Tax Expense And Extraordinary Contribution To The Energy Sector CESE" - so this is EBIT but also before CESE. It's operating profit before financial items, tax, and CESE. Then: + Finance Income 843,000,000 - Finance Costs 1,753,220,000 = Profit Before Income Tax And CESE = 1,619,773,000 Check: 2,529,993,000 + 843,000,000 - 1,753,220,000 = 1,619,773,000. Yes. Then - Income Tax 398,490,000 - CESE 51,534,000 = 1,169,749,000 = Profit Loss. Check: 1,619,773,000 - 398,490,000 - 51,534,000 = 1,169,749,000. Yes. Now for S&P FFO, the standard formula is: **FFO = Net income + D&A + Deferred income taxes + Other non-cash items** But we need to be more precise. Let me use S&P's typical adjusted formula: FFO = - Profit Loss (net income): 1,169,749,000 + Depreciation Amortisation And Impairment: 1,979,007,000 + Income Tax Expense (as a non-cash add-back only for deferred portion... but we don't have split) + Minority interest if deducted (but it's not - Profit Loss is consolidated) + Interest expense (net of tax, or sometimes gross) Actually, S&P has a specific definition. Let me use: **FFO = Profit Loss Before Financial Income And Financial Expenses Income Tax Expense And Extraordinary Contribution To The Energy Sector CESE + Depreciation Amortisation And Impairment - Current income taxes paid + Minority interest dividends** Hmm, that's getting complicated. Let me use the most widely accepted S&P formula: **FFO = Net income + D&A + Deferred income taxes + Other non-cash items** For "Other non-cash items", we can look at the cash flow statement adjustments. The "Cash Flows From Used In Operations" is 4,200,324,000 EUR, which includes working capital changes and other adjustments. Actually, a cleaner S&P approach is: **FFO = Cash Flows From Used In Operations + Net interest paid + Current income taxes paid** But we don't have the split of taxes paid into current and deferred. Let me try: **FFO = EBITDA - Current cash taxes - Cash interest paid** Or from the income statement: **FFO = EBIT + D&A - Current income tax expense - Net cash interest** Actually, I think the best approach given data availability is to use S&P's standard published formula for European utilities: **FFO = Net income + D&A + Deferred taxes + Other non-cash items - Gain on asset sales + Minority interest** Where: - Net income = 1,169,749,000 - D&A = 1,979,007,000 For deferred taxes: I need to estimate. The total income tax expense is 398,490,000. If I can estimate deferred portion... From balance sheet changes in deferred taxes (net): - Deferred Tax Assets increased by 275,200,000 - Deferred Tax Liabilities increased by 255,515,000 - Net increase in deferred tax asset = 19,685,000 This suggests a deferred tax benefit of approximately 19,685,000 (meaning current tax expense exceeds total tax expense by this amount, or total tax expense includes a deferred tax benefit). Actually, the relationship is: Total tax expense = Current tax expense + Deferred tax expense If deferred tax asset increases (net of liabilities), that's a deferred tax benefit (negative deferred tax expense). So Deferred tax expense ≈ -19,685,000 (benefit) Current tax expense ≈ 398,490,000 + 19,685,000 = 418,175,000 But wait, this balance sheet approach is approximate and may not match exactly due to acquisitions, FX, etc. For S&P FFO, we add back deferred tax expense (which is negative here, so we'd subtract the benefit): FFO adjustment for deferred taxes = +(-19,685,000) = -19,685,000? Actually, no. S&P adds back deferred tax expense to net income. If deferred tax expense is negative (benefit), we add back a negative = subtract. But this seems wrong for FFO. Let me reconsider: If total tax expense is 398,490,000 and this includes a deferred tax benefit of 19,685,000, then cash taxes paid were about 418,175,000. FFO should reflect cash generation, so we want to add back the non-cash deferred tax benefit to get closer to cash: FFO = Net income + D&A + Deferred tax expense (which is -19,685,000, i.e., subtract 19,685,000). Hmm, this is getting messy with the sign. Let me just use a simpler approach. Standard S&P FFO for utilities (simplified): **FFO = Net income + D&A + Interest expense (net of tax) + Minority interest + Rent expense (if capitalized) - Equity earnings** Or more commonly: **FFO = Funds from operations = Net income from continuing operations + D&A + Deferred taxes + Other non-cash items** Let me use the cash flow based approach which is often more reliable: From cash flow statement: Cash Flows From Used In Operations = 4,200,324,000 EUR This includes: - Net income adjustments for non-cash items - Changes in working capital - Other adjustments For S&P FFO, we typically want to exclude working capital changes: FFO ≈ Cash Flows From Used In Operations - Changes in working capital From the detailed adjustments, working capital changes include: - Adjustments For Decrease Increase In Trade And Other Receivables: 405,817,000 - Adjustments For Increase Decrease In Trade And Other Payables: 766,260,000 - Changes In Working Capital To Personnel: -142,137,000 - Changes In Working Capital For Regulatory Assets: 502,859,000 These are already included in the 4,200,324,000. The "Other Adjustments To Reconcile Profit Loss" (-1,384,104,000) likely includes various non-cash and working capital items. Actually, let me look at this more carefully. The cash flow statement shows: Starting from Profit Loss, adjustments to get to Cash Flows From Used In Operations: - Adjustments For Depreciation And Amortisation: 1,979,007,000 - Adjustments For Provisions: 14,539,000 - Adjustments For Joint Ventures And Associates: -208,684,000 (this is equity earnings, subtracted) - Adjustments For Finance Income Cost: 910,220,000 (net interest, added back) - Gains Losses On Disposal: -4,377,000 - Working capital items: 405,817,000 + 766,260,000 - 142,137,000 + 502,859,000 = 1,532,799,000 - Other Adjustments: -1,384,104,000 - Income Tax And CESE: -258,849,000 Sum: 1,169,749,000 + 1,979,007,000 + 14,539,000 - 208,684,000 + 910,220,000 - 4,377,000 + 1,532,799,000 - 1,384,104,000 - 258,849,000 = 4,200,324,000? Let me check. Actually, let me verify: 1,169,749,000 + 1,979,007,000 = 3,148,756,000 + 14,539,000 = 3,163,295,000 - 208,684,000 = 2,954,611,000 + 910,220,000 = 3,864,831,000 - 4,377,000 = 3,860,454,000 + 1,532,799,000 = 5,393,253,000 - 1,384,104,000 = 4,009,149,000 - 258,849,000 = 3,750,300,000 Hmm, that doesn't equal 4,200,324,000. I'm off by about 450 million. Let me recheck. Actually, I think "Adjustments For Finance Income Cost" = 910,220,000 might be the net interest after tax or something else. Let me check: Finance Income 843,000,000 - Finance Costs 1,753,220,000 = -910,220,000 net cost. So adding back 910,220,000 makes sense to get to pre-interest position. Let me recalculate: 1,169,749,000 + 1,979,007,000 + 14,539,000 - 208,684,000 + 910,220,000 - 4,377,000 = 3,860,454,000 Then working capital: 405,817,000 + 766,260,000 - 142,137,000 + 502,859,000 = 1,532,799,000 Then other: -1,384,104,000 Then tax: -258,849,000 Total: 3,860,454,000 + 1,532,799,000 - 1,384,104,000 - 258,849,000 = 3,750,300,000 Still not matching 4,200,324,000. The difference is 450,024,000. Wait - I notice "Income Tax And CESE" = -258,849,000, but earlier we have "Income Tax Expense And Extrodinary Contribution To The Energy Sector Cese" = 450,024,000. The difference is 450,024,000 - 258,849,000 = 191,175,000. This might be the deferred tax portion or timing difference. Actually, looking more carefully: 450,024,000 is the expense, but cash paid is 258,849,000. The difference 191,175,000 could be deferred taxes or changes in tax payable. Hmm, but my calculation is still off. Let me check if "Other Adjustments To Reconcile Profit Loss" = -1,384,104,000 includes some items I'm double counting. Actually, I think I need to re-read the cash flow. The "Cash Flows From Used In Operations" of 4,200,324,000 is after all adjustments. Let me just use this and adjust for working capital to get FFO. For S&P FFO, a common approach is: **FFO = Cash Flows From Used In Operations - Working capital changes + Net interest paid** Or: **FFO = Cash Flows From Used In Operations - (Changes in receivables + Changes in payables + Changes in inventory + Other working capital)** From the detailed items, working capital changes in the cash flow are: - Adjustments For Decrease Increase In Trade And Other Receivables: 405,817,000 - Adjustments For Increase Decrease In Trade And Other Payables: 766,260,000 - Changes In Working Capital To Personnel: -142,137,000 - Changes In Working Capital For Regulatory Assets: 502,859,000 Sum of these working capital items: 405,817,000 + 766,260,000 - 142,137,000 + 502,859,000 = 1,532,799,000 So FFO (before working capital) = Cash Flows From Used In Operations - Working capital changes = 4,200,324,000 - 1,532,799,000 = 2,667,525,000 But we also need to add back net interest paid to get to true FFO (since FFO is pre-interest). In the cash flow, interest paid is part of financing activities, not operating. Let me check... Actually, looking at S&P methodology more carefully, they typically define FFO as: **FFO = Net income + D&A + Deferred taxes + Other non-cash items** This is essentially cash from operations BEFORE working capital changes and BEFORE interest paid (since interest is below the line in net income for European utilities, or included in operating cash flows). Wait, I need to check if interest paid is in operating or financing cash flows. Looking at the cash flow statement: - "Interest And Similar Costs Of Financial Debt Including Hedge Derivatives" in financing: 716,454,000 - "Interest Received Classified As Investing Activities": 101,841,000 - "Interest And Similar Costs Relating To Loans From Non Controlling Interests" in financing: 12,885,000 - "Interest And Similar Costs Of Loans From Related Parties Including Hedge Derivatives" in financing: 111,000 So interest paid is in financing activities, not operating. This is common under IFRS. For S&P FFO, since we start with Net income (which is after interest expense), we need to add back interest expense (net of tax) to get to a pre-interest measure, OR we can use a measure that includes interest. Actually, standard S&P FFO is AFTER interest expense (i.e., it's funds available to pay debt, not before debt service). Let me verify... No, actually S&P's FFO is typically defined as: "Funds from operations (FFO): Net income from continuing operations adjusted for depreciation and amortization, deferred income taxes, and other non-cash items." This is AFTER interest expense. So FFO is not a pre-interest measure. However, for the FFO/net debt ratio, S&P uses FFO as a measure of cash generation available for debt repayment. So it includes interest expense as a use of cash, but not as a financing outflow. Let me use the standard formula: **FFO = Net income + D&A + Deferred income taxes + Other non-cash items** From our data: - Net income (Profit Loss) = 1,169,749,000 - D&A = 1,979,007,000 - Deferred taxes: Need to estimate For deferred taxes, I'll use the change in net deferred tax position: - Deferred Tax Assets 2022: 1,509,092,000; 2023: 1,784,292,000; Change: +275,200,000 - Deferred Tax Liabilities 2022: 989,078,000; 2023: 1,244,593,000; Change: +255,515,000 - Net change: +19,685,000 (increase in net deferred tax asset) This increase in net deferred tax asset represents a deferred tax benefit of approximately 19,685,000 (reduces tax expense). So Deferred tax expense ≈ -19,685,000 (benefit, not expense) For S&P FFO, we add back deferred tax expense. If it's a benefit, we add back a negative = subtract. But this doesn't make intuitive sense. Actually, let me think again. The formula is: Net income + D&A + Deferred tax expense + Other non-cash items If deferred tax expense is negative (i.e., a benefit), then: FFO = Net income + D&A + (-19,685,000) + ... This would reduce FFO, which is wrong because a deferred tax benefit is non-cash income that inflated net income, so we should subtract it to get to cash. Actually yes! If net income includes a non-cash deferred tax benefit, we need to subtract it to get to cash-based FFO. So adding back a negative deferred tax expense (i.e., subtracting the benefit) is correct. But wait, the total tax expense is 398,490,000. If this includes a deferred tax benefit of 19,685,000, then current tax expense is 418,175,000. The cash tax paid (from cash flow) is 258,849,000. There's still a gap. Actually, looking at "Income Tax And CESE" in cash flow = -258,849,000. This is the cash outflow for taxes and CESE. But CESE is 51,534,000. So cash tax paid ≈ 258,849,000 - 51,534,000 = 207,315,000? Or is CESE included in the 398,490,000? Looking at income statement: "Income Tax Expense Continuing Operations" = 398,490,000 and "Extraordinary Contribution To The Energy Sector CESE" = 51,534,000, total 450,024,000. Cash flow shows "Income Tax And CESE" = -258,849,000. This is likely the cash paid. So non-cash tax expense = 450,024,000 - 258,849,000 = 191,175,000. This is the deferred portion or accrual change. For S&P FFO, we'd add back this non-cash portion: 191,175,000. Let me verify with another approach. The difference between tax expense and cash tax paid is 191,175,000. This should equal the change in net tax assets/liabilities plus other items. Actually, looking at current tax assets/liabilities: - Tax Assets-Current: 551,842,000 (2022) → 814,298,000 (2023), change +262,456,000 - Tax Liabilities-Current: 582,686,000 (2022) → 1,001,102,000 (2023), change +418,416,000 Net change in current tax position: +262,456,000 - 418,416,000 = -155,960,000 (more liability, meaning less tax paid than accrued) This doesn't directly give us the deferred tax. Let me just use the cash flow difference as the deferred/non-cash tax adjustment. So for S&P FFO: - Net income: 1,169,749,000 + D&A: 1,979,007,000 + Non-cash tax adjustment (tax expense - cash tax paid): 191,175,000 = 3,339,931,000 But wait, we also need to consider other non-cash items. Looking at the cash flow reconciliation: - Adjustments For Joint Ventures And Associates: -208,684,000 (equity earnings, non-cash) - Gains Losses On Disposal: -4,377,000 (non-cash or realized?) For S&P FFO, we typically add back equity earnings (since it's non-cash) and subtract gains on disposal (since they're non-operating). Actually, in standard S&P FFO: - Equity earnings are ADDED BACK to net income (since they're non-cash) - Gains on asset sales are SUBTRACTED (since they're non-recurring/non-operating) From our data: - "Joint Ventures And Associates" in income statement = 239,429,000 (positive, equity earnings) - "Adjustments For Joint Ventures And Associates" in cash flow = -208,684,000 (subtracted to reconcile to cash) Wait, the income statement shows "Joint Ventures And Associates" = 239,429,000. But in the cash flow, "Adjustments For Joint Ventures And Associates" = -208,684,000. Actually, looking at 2021: Income statement 108,106,000 vs cash flow adjustment -108,106,000. So the cash flow adjustment is negative of the income statement amount. This means in cash flow: Net income includes +239,429,000 equity earnings, but cash flow subtracts -208,684,000 (only the non-cash portion, perhaps after dividends received). Actually, "Dividends Received" in investing activities = 81,394,000. So cash dividends received are in investing, not operating. The cash flow adjustment of -208,684,000 is removing the non-cash equity earnings from operating cash flow. For S&P FFO, we want to add back equity earnings to net income (since they're non-cash). But we also need to consider if dividends were received. Standard S&P approach: FFO includes dividends received from affiliates, not equity earnings. So: FFO adjustment = -Equity earnings + Dividends received = -239,429,000 + 81,394,000 = -158,035,000 Or more simply, use the cash flow adjustment: -208,684,000 (which seems to already net something). Actually, let me look at this more carefully. The cash flow shows: - "Joint Ventures And Associates" income = 239,429,000 - "Adjustments For Joint Ventures And Associates" = -208,684,000 - "Dividends Received" = 81,394,000 (in investing) The adjustment -208,684,000 brings the equity earnings down to the cash impact. The difference between 239,429,000 and 208,684,000 is 30,745,000, which might be dividends received or other cash items already in operating cash flow. For S&P FFO, I think the standard treatment is: - Start with Net income (includes equity earnings) - Add back D&A - Add back deferred taxes - Subtract gain on asset sales - For equity earnings: either add back and include dividends received, or use the cash-based amount Actually, a more standard S&P formula for FFO including equity earnings: FFO = Net income + D&A + Deferred taxes + Equity earnings - Dividends received from equity investments This effectively replaces equity earnings with actual dividends received. Or: FFO = Net income + D&A + Deferred taxes - Equity earnings (if we don't include dividends) Hmm, I think I'm overcomplicating this. Let me use the most widely accepted S&P formula for European utilities: **FFO = Net income + D&A + Net interest expense after tax + Deferred taxes + Other non-cash items - Minority interest (if in net income) + Minority interest dividends** Wait, but Net income is consolidated, so it includes minority interest. "Profit Loss" = 1,169,749,000 is the total consolidated net income. "Profit Loss Attributable To Owners Of Parent" = 679,001,000 "Profit Loss Attributable To Noncontrolling Interests" = 490,748,000 Sum: 679,001,000 + 490,748,000 = 1,169,749,000. Yes. For S&P FFO, when using consolidated net income, we don't adjust for minority interest (it's already included). But for "Funds from operations" available to the parent and debt holders, sometimes S&P uses net income attributable to parent. Actually, for credit analysis, S&P typically uses consolidated figures since debt is often at the consolidated level. Let me use a practical approach. I'll calculate FFO as: **FFO = Profit Loss + Depreciation Amortisation And Impairment + Income Tax Expense + Interest Expense (net) - Cash taxes - Cash interest + Other adjustments** Or more simply, using the cash flow from operations before working capital: From cash flow statement, "Cash Flows From Used In Operations" = 4,200,324,000 includes: - Net income: 1,169,749,000 - D&A: 1,979,007,000 - Provisions: 14,539,000 - Equity earnings adjustment: -208,684,000 - Finance cost adjustment: 910,220,000 - Gains on disposal: -4,377,000 - Working capital: 1,532,799,000 - Other adjustments: -1,384,104,000 - Tax and CESE paid: -258,849,000 For FFO (before working capital), I can compute: FFO = Cash Flows From Used In Operations - Working capital changes = 4,200,324,000 - 1,532,799,000 = 2,667,525,000 But this includes tax paid and interest adjustments. Let me verify if this is correct S&P FFO. Actually, S&P FFO is typically closer to: FFO = Net income + D&A + Deferred taxes + Other non-cash items Where "Other non-cash items" includes provisions, equity earnings, etc. Let me compute: - Net income: 1,169,749,000 + D&A: 1,979,007,000 + Provisions: 14,539,000 (non-cash expense) - Equity earnings (non-cash, to be replaced with dividends): -239,429,000? Or use the cash flow adjustment? Actually, for S&P, equity earnings are typically ADDED BACK (subtracted from net income) and dividends received are added. But since we're calculating FFO for debt service capacity, we might want to include the actual cash dividends. Let me use: FFO = Net income + D&A + Provisions - Equity earnings + Dividends received + Deferred taxes + Other = 1,169,749,000 + 1,979,007,000 + 14,539,000 - 239,429,000 + 81,394,000 + 191,175,000 + ... Hmm, the "Other Adjustments To Reconcile Profit Loss" = -1,384,104,000 is large and negative. This likely includes various items like fair value changes, FX, etc. Let me try a different approach. I'll use the standard S&P formula as published in their methodology: **FFO = Net income from continuing operations + Depreciation & amortization + Deferred income taxes + Other non-cash items** And define "Other non-cash items" from the cash flow reconciliation: - Provisions: 14,539,000 - Equity earnings adjustment: -208,684,000 (this is the net adjustment, not the gross equity earnings) - Gains on disposal: -4,377,000 Wait, the cash flow adjustment for JVs is -208,684,000, not -239,429,000. The difference might be dividends or other items already adjusted. Let me just use the cash flow based FFO: FFO before working capital = Cash from operations - Working capital changes = 4,200,324,000 - (405,817,000 + 766,260,000 - 142,137,000 + 502,859,000) = 4,200,324,000 - 1,532,799,000 = 2,667,525,000 But I need to check if this is correct. The working capital items I identified might not be all working capital changes. Actually, looking more carefully, "Other Adjustments To Reconcile Profit Loss" = -1,384,104,000 might include some working capital or non-cash items that are hard to classify. Let me use a simpler, more direct S&P approach: **FFO = EBITDA - Current cash taxes - Cash interest paid + Dividends received from equity investments** Or: **FFO = EBIT + D&A - Current income taxes - Net interest paid** From income statement: - EBIT (before financial items, tax, CESE) = 2,529,993,000 - D&A is already deducted to get to this figure? No wait, let me check. Actually: "Profit Loss Before Provisions Amortisation And Impairment Financial Income And Financial Expenses Income Tax Expense And Extraordinary Contribution To The Energy Sector CESE" = 4,523,539,000 This is EBITDA (before provisions, D&A, etc.) or actually it's before provisions and D&A, so it's more like gross profit minus opex, or "operating profit before depreciation." Then after Provisions (14,539,000) and D&A (1,979,007,000): "Profit Loss Before Financial Income And Financial Expenses Income Tax Expense And Extraordinary Contribution To The Energy Sector CESE" = 2,529,993,000 This is EBIT before CESE, or operating profit. So EBIT = 2,529,993,000 + D&A = 1,979,007,000 = EBITDA = 4,509,000,000 (which is 4,523,539,000 - 14,539,000, yes) For S&P FFO: FFO = EBIT + D&A - Current taxes - Net interest paid? No, that's double counting D&A. Standard formula: FFO = EBITDA - Current taxes - Net interest paid (after tax)? Actually, let me use: FFO = Net income + D&A + Interest expense (net of tax) + Deferred taxes = 1,169,749,000 + 1,979,007,000 + 910,220,000*(1-tax rate) + 191,175,000 Tax rate ≈ 398,490,000 / 1,619,773,000 = 24.6% After-tax interest = 910,220,000 * (1-0.246) = 686,306,000? No, we add back gross interest to get to a pre-interest measure, but FFO is post-interest. Actually, I think the confusion is whether FFO is pre- or post-interest. Let me clarify: S&P's FFO is typically POST-interest expense. It's "funds from operations" available to service debt, which means interest has already been paid. So FFO includes the ability to pay interest from operations, but the interest is not added back. Wait, no. For the FFO/net debt ratio, S&P wants to measure cash generation relative to debt. FFO should be a measure of cash available to pay debt. If interest is already deducted, then FFO is after interest. But actually, looking at S&P's published methodology, they say: "FFO: Net income from continuing operations adjusted for depreciation and amortization, deferred income taxes, and other non-cash items." This is POST-interest. So FFO = Net income + D&A + Deferred taxes + Other non-cash items. For European utilities with capitalized interest or specific adjustments, there might be variations. Let me just calculate FFO as: **FFO = Profit Loss + Depreciation Amortisation And Impairment + Provisions + Deferred tax adjustment + Other non-cash items** From cash flow reconciliation, the adjustments to net income are: - D&A: 1,979,007,000 - Provisions: 14,539,000 - JVs adjustment: -208,684,000 - Finance cost: 910,220,000 - Gains on disposal: -4,377,000 - Other adjustments: -1,384,104,000 - Tax and CESE paid: -258,849,000 For FFO (post-interest, pre-working capital): FFO = Net income + Non-cash adjustments - Working capital changes = Cash Flows From Used In Operations - Working capital changes + Interest paid (if in financing) But interest paid is in financing, not operating. So Cash Flows From Used In Operations is already post-interest. Hmm, but "Adjustments For Finance Income Cost" = 910,220,000 is added back in operating cash flow. This is the net interest expense. So operating cash flow starts from net income (post-interest) and adds back the net interest to get to a pre-interest position? No, that doesn't make sense. Wait, let me re-read. "Adjustments For Finance Income Cost" = 910,220,000. Finance income is 843,000,000 and finance costs are 1,753,220,000. Net finance cost = 910,220,000. In cash flow from operations, we ADD BACK 910,220,000. This means we're adjusting net income (which already deducted net interest expense of 910,220,000) by adding it back. So cash flow from operations is PRE-NET-INTEREST. But then in financing activities, we see "Interest And Similar Costs Of Financial Debt Including Hedge Derivatives" = 716,454,000 and other interest payments. So the cash flow statement shows interest paid in financing, but in operating cash flow, the net interest is added back. This means "Cash Flows From Used In Operations" is before interest paid, but after interest expense in the income statement. It's a reconciliation that neutralizes the interest expense to get to operating cash before actual interest payments. For S&P FFO, which is post-interest, we should NOT add back interest. So FFO should be based on net income, not pre-interest. Let me recalculate FFO properly: **S&P FFO = Net income + D&A + Deferred taxes + Other non-cash items** Where "Other non-cash items" includes: - Provisions expense (non-cash portion): 14,539,000 - Equity in earnings of affiliates (non-cash): need to adjust - Gains/losses on disposal (non-operating): -4,377,000 - Other items in "Other Adjustments To Reconcile Profit Loss" For equity earnings: Net income includes 239,429,000 equity earnings. This is non-cash. We should subtract it and add dividends received instead. Adjustment = -239,429,000 + 81,394,000 = -158,035,000 (net reduction) Or use the cash flow adjustment: -208,684,000 which seems to already net some items. Actually, looking at 2021: Equity earnings 108,106,000, adjustment -108,106,000, dividends received 53,468,000. The cash flow adjustment exactly equals the negative of equity earnings, not netting dividends. So dividends are separate in investing. For 2022: Equity earnings 239,429,000, adjustment -208,684,000. These don't match. The difference is 30,745,000. Maybe this represents dividends received already included in operating cash flow, or some other item. Given the complexity, let me use a simplified but standard S&P approach: **FFO = Cash Flows From Used In Operations - Working capital changes** = 4,200,324,000 - 1,532,799,000 = 2,667,525,000 But I need to verify what "working capital changes" includes. From the cash flow: - Adjustments For Decrease Increase In Trade And Other Receivables: 405,817,000 - Adjustments For Increase Decrease In Trade And Other Payables: 766,260,000 - Changes In Working Capital To Personnel: -142,137,000 - Changes In Working Capital For Regulatory Assets: 502,859,000 These sum to 1,532,799,000. But wait, "Changes In Working Capital To Personnel" is negative (-142,137,000), meaning an increase in personnel liabilities or decrease in assets? The negative means it reduced cash flow. Actually, looking at the signs: In cash flow from operations, positive numbers mean source of cash, negative means use of cash. - Receivables decrease (positive): +405,817,000 (source) - Payables increase (positive): +766,260,000 (source) - Personnel... negative: -142,137,000 (use, maybe increase in personnel receivables or decrease in payables) - Regulatory assets: +502,859,000 (source, decrease in regulatory assets) So FFO before working capital = 4,200,324,000 - 1,532,799,000 = 2,667,525,000 But this still includes "Other Adjustments To Reconcile Profit Loss" = -1,384,104,000, which might include non-cash items that should stay in FFO. Let me try another approach: FFO = EBITDA - Current cash taxes EBITDA = 4,509,000,000 (from above, or 4,523,539,000 - 14,539,000) Current cash taxes = 258,849,000 (from cash flow, but this includes CESE) CESE cash paid = ? We know CESE expense is 51,534,000. If we assume CESE is current/cash, then cash taxes = 258,849,000 - 51,534,000 = 207,315,000? Or is the entire 258,849,000 for both? Actually, "Income Tax And CESE" = -258,849,000 in cash flow. This is the total cash outflow for both. If CESE is 51,534,000 expense, and assuming it's paid in cash, then cash income taxes = 207,315,000. But wait, total tax expense is 450,024,000 (398,490,000 + 51,534,000). Cash paid is 258,849,000. The difference 191,175,000 is non-cash or timing difference. FFO = EBITDA - Cash taxes paid = 4,509,000,000 - 258,849,000 = 4,250,151,000? But this is too high and doesn't match standard FFO. Also, EBITDA includes pre-interest, while FFO is typically post-interest. Let me use: FFO = EBIT - Current taxes + D&A = 2,529,993,000 - 207,315,000 + 1,979,007,000 = 4,301,685,000? No, EBIT already includes D&A deducted. Actually EBIT = 2,529,993,000 is after D&A. So EBIT + D&A - Current taxes = EBITDA - Current taxes = 4,509,000,000 - 207,315,000 = 4,301,685,000. But this is pre-interest. FFO should be post-interest. Post-interest FFO = EBIT + D&A - Current taxes - Net interest paid = 4,301,685,000 - 910,220,000 (net interest) = 3,391,465,000 Or using net income based: FFO = Net income + D&A + Deferred taxes + Other non-cash = 1,169,749,000 + 1,979,007,000 + 191,175,000 + (provisions 14,539,000 - equity earnings adjustment + other) Hmm, let me try to match: 1,169,749,000 + 1,979,007,000 = 3,148,756,000. Add deferred tax 191,175,000 = 3,339,931,000. Add provisions 14,539,000 = 3,354,470,000. Subtract equity earnings (non-cash) 239,429,000 = 3,115,041,000. Add dividends received 81,394,000 = 3,196,435,000. Add back gains on disposal? No, subtract gains 4,377,000 = 3,192,058,000. This is getting close to 3.2 billion. But I'm not sure about the exact S&P methodology. Let me look for a more authoritative S&P formula. According to S&P Global Ratings methodology for corporate issuers: "FFO: We define FFO as net income from continuing operations adjusted for depreciation and amortization, deferred income taxes, and other non-cash items. We also adjust for items that we consider nonrecurring or nonoperating." For utilities specifically, S&P often uses: FFO = Net income + D&A + Deferred taxes + Other non-cash items - Capitalized development costs - Change in working capital (sometimes) Actually, I found a more specific formula. S&P's FFO for infrastructure/utilities: FFO = EBITDA - Current cash taxes - Net interest paid - Minority dividends Or from net income: FFO = Net income + D&A + Deferred taxes + Other non-cash items Where "Other non-cash items" includes: - Provisions (non-cash portion) - Equity earnings (subtract) + Dividends received (add) - Gains on disposal (subtract) - Other fair value changes, FX, etc. Let me use the cash flow approach which is cleaner: **FFO = Cash Flows From Used In Operations + Net interest paid - Working capital changes** Because Cash Flows From Used In Operations is already post-interest (interest paid is in financing), but it includes working capital changes. We need to remove working capital to get FFO. Wait, is Cash Flows From Used In Operations post-interest? Looking at the adjustments, "Adjustments For Finance Income Cost" = 910,220,000 is ADDED BACK. This means the starting point (net income) had interest expense deducted, and we add it back to get to pre-interest operating cash flow. But then "Cash Flows From Used In Operations" includes this add-back, so it's PRE-NET-INTEREST. However, actual interest paid is in financing activities. For FFO, which is post-interest, we need to subtract interest paid. Actually, I think the confusion is about whether "Cash Flows From Used In Operations" is pre- or post-interest. Under IFRS, companies can classify interest paid as operating or financing. EDP classifies it as financing. The adjustment "Adjustments For Finance Income Cost" = 910,220,000 in operating cash flow is just a reconciliation item to remove the non-cash interest accrual from net income. It doesn't mean interest is paid in operating activities. So "Cash Flows From Used In Operations" = 4,200,324,000 is the operating cash flow BEFORE interest paid and BEFORE working capital changes? No, it includes working capital changes. Let me recalculate from the adjustments: Starting: Net income 1,169,749,000 + D&A 1,979,007,000 + Provisions 14,539,000 - JVs adjustment 208,684,000 (wait, it's -208,684,000, so subtract) + Finance cost 910,220,000 - Gains on disposal 4,377,000 + Receivables 405,817,000 + Payables 766,260,000 - Personnel 142,137,000 + Regulatory assets 502,859,000 - Other adjustments 1,384,104,000 - Tax and CESE paid 258,849,000 = 4,200,324,000 Wait, I need to check signs. The cash flow shows "Adjustments For Joint Ventures And Associates" = -208,684,000. This is a negative adjustment to net income. Since net income includes +239,429,000 equity earnings, and we want to remove it for cash flow, we subtract 208,684,000 (not 239,429,000, for some reason). Let me verify: 1,169,749,000 + 1,979,007,000 + 14,539,000 - 208,684,000 + 910,220,000 - 4,377,000 + 405,817,000 + 766,260,000 - 142,137,000 + 502,859,000 - 1,384,104,000 - 258,849,000 Calculate step by step: 1,169,749,000 + 1,979,007,000 = 3,148,756,000 + 14,539,000 = 3,163,295,000 - 208,684,000 = 2,954,611,000 + 910,220,000 = 3,864,831,000 - 4,377,000 = 3,860,454,000 + 405,817,000 = 4,266,271,000 + 766,260,000 = 5,032,531,000 - 142,137,000 = 4,890,394,000 + 502,859,000 = 5,393,253,000 - 1,384,104,000 = 4,009,149,000 - 258,849,000 = 3,750,300,000 This doesn't equal 4,200,324,000. I'm off by 450,024,000. Wait! 450,024,000 is exactly "Income Tax Expense And Extrodinary Contribution To The Energy Sector Cese". But in the cash flow, I used -258,849,000 which is "Income Tax And CESE". The difference is 191,175,000. Hmm, but 3,750,300,000 + 450,024,000 = 4,200,324,000. Yes! So I need to use +450,024,000 instead of -258,849,000? No, that would be adding expense instead of subtracting cash paid. Actually, I think the issue is that "Income Tax And CESE" = -258,849,000 is the cash paid, but in my calculation I need to reconcile to cash flow from operations. Let me check if the sign convention is different. Actually, looking at the cash flow statement format: All these "Adjustments" are added to net income. The "Income Tax And CESE" of -258,849,000 means subtract 258,849,000. But in my calculation, I already subtracted it. Wait, let me recheck: 3,750,300,000 vs 4,200,324,000. Difference is 450,024,000. If I change -258,849,000 to +191,175,000 (which is 450,024,000 - 258,849,000), then: 4,009,149,000 + 191,175,000 = 4,200,324,000. Yes! So the correct adjustment is +191,175,000, not -258,849,000. This means the cash flow reconciliation uses the non-cash tax expense adjustment, not cash tax paid. Let me verify: 450,024,000 (expense) - 258,849,000 (cash paid) = 191,175,000 (non-cash portion, added back). So in the cash flow from operations, the tax adjustment is +191,175,000 (adding back the non-cash portion to net income), not -258,849,000. Wait, but the data says "Income Tax And CESE" = -258,849,000. Is this an inflow or outflow? Looking at the pattern: "Other Inflows Outflows Of Cash Classified As Operating Activities" = -422,539,000. This is negative, meaning outflow. And "Cash Flows From Used In Operating Activities" = 3,777,785,000 = 4,200,324,000 - 422,539,000. So "Cash Flows From Used In Operations" = 4,200,324,000 is before "Other Inflows Outflows", and "Cash Flows From Used In Operating Activities" includes the other outflows. Hmm, but my calculation issue remains. Let me just accept that the cash flow reconciliation has 191,175,000 as the tax adjustment (non-cash), not the 258,849,000 cash paid. Actually, re-reading: "Income Tax And CESE" = -258,849,000. The negative sign in the data might mean cash outflow. But in the reconciliation, if it's an adjustment to net income, and net income already deducted 450,024,000 expense, then to get to cash flow we need to add back the non-cash portion (191,175,000) and subtract the actual cash outflow beyond the expense? No, that doesn't make sense. I think the issue is simply that my manual calculation has an error, and the cash flow statement is correct. Let me just use the published "Cash Flows From Used In Operations" = 4,200,324,000. For S&P FFO, I'll use: **FFO = Cash Flows From Used In Operations - Working capital changes + Net interest paid** Where: - Cash Flows From Used In Operations = 4,200,324,000 - Working capital changes = 1,532,799,000 (sum of receivables, payables, personnel, regulatory) - Net interest paid = Interest paid - Interest received From financing activities: Interest paid = 716,454,000 + 12,885,000 + 111,000 = 729,450,000 Interest received = 101,841,000 (investing) - but some might be in operating? Actually, "Finance Income" = 843,000,000 and "Finance Costs" = 1,753,220,000. Net interest expense = 910,220,000. Cash interest paid (financing): 716,454,000 + 12,885,000 + 111,000 = 729,450,000 Cash interest received (investing): 101,841,000 Net interest paid = 729,450,000 - 101,841,000 = 627,609,000 But wait, "Finance Income" includes 843,000,000 which might include more than just interest (dividends, fair value changes, etc.). For S&P FFO, since we're starting from Cash Flows From Used In Operations which already added back the net interest expense (910,220,000), we need to subtract the actual net interest paid to get to a post-interest FFO. Actually, no. Cash Flows From Used In Operations is a reconciliation from net income to operating cash. It adds back non-cash items and working capital changes. The "Adjustments For Finance Income Cost" = 910,220,000 is added back because net income included a net interest expense of 910,220,000, but this is just an accrual-to-cash adjustment for the operating section. Since actual interest paid is in financing, the operating cash flow is before interest paid. So Cash Flows From Used In Operations = 4,200,324,000 is: - Pre-interest paid (interest paid is in financing) - Post-interest expense (net income is after interest expense, but we added back the accrual) - Includes working capital changes For FFO, which is post-interest, we want: FFO = Cash Flows From Used In Operations - Working capital changes - Net interest paid (actual cash) = 4,200,324,000 - 1,532,799,000 - 627,609,000 = 2,039,916,000 Or, if FFO is meant to be a measure before interest but after operating costs: FFO = Cash Flows From Used In Operations - Working capital changes = 2,667,525,000 I think the latter is more standard for "Funds From Operations" as used by S&P. The interest is a financing cost, and FFO measures operating cash generation before financing decisions. But wait, S&P's FFO is typically post-interest. Let me check S&P's definition again. According to S&P Global: "Funds from operations (FFO): Net income from continuing operations adjusted for depreciation and amortization, deferred income taxes, and other non-cash items." This is POST-interest (since it starts with net income). So FFO includes the deduction of interest expense. Using this definition: FFO = Net income + D&A + Deferred taxes + Other non-cash items From our data and reconciliation: - Net income: 1,169,749,000 + D&A: 1,979,007,000 + Deferred taxes (non-cash): 191,175,000 (estimated from expense vs cash paid) + Provisions: 14,539,000 - Equity earnings (non-cash): -239,429,000? Or use -208,684,000 from cash flow? + Dividends received: 81,394,000 - Gains on disposal: -4,377,000 + Other adjustments: need to determine Let me try to match the cash flow reconciliation. The "Other Adjustments To Reconcile Profit Loss" = -1,384,104,000 is large and negative. This likely includes: - Fair value changes - FX gains/losses - Other non-cash items For S&P FFO, we add back negative non-cash items (expenses) and subtract positive non-cash items (income). If "Other Adjustments" = -1,384,104,000 is the net of various items, and it's negative (reducing cash flow), then for FFO we might need to add it back if it's non-cash, or keep it if it's cash. Actually, the cash flow reconciliation is from net income to operating cash flow. Negative adjustments reduce cash flow (uses of cash or non-cash income). Positive adjustments increase cash flow (sources of cash or non-cash expenses). For FFO, we want to add back non-cash expenses and subtract non-cash income. From the reconciliation: - D&A: +1,979,007,000 (non-cash expense, add back) - Provisions: +14,539,000 (non-cash expense, add back) - JVs: -208,684,000 (non-cash income or net adjustment, subtract) - Finance cost: +910,220,000 (non-cash accrual adjustment, add back - but this is for interest) - Gains on disposal: -4,377,000 (non-cash or realized gain, subtract) - Working capital: various (exclude for FFO) - Other adjustments: -1,384,104,000 (need to analyze) - Tax: -258,849,000 or +191,175,000 (need to analyze) For "Other Adjustments" = -1,384,104,000: This reduces operating cash flow. It could include: - Fair value gains (non-cash income, should subtract from FFO) - FX gains (non-cash, subtract) - Other non-cash income items If we assume "Other Adjustments" is largely non-cash income (negative adjustment means it reduced cash flow relative to net income), then for FFO we should SUBTRACT it from net income (i.e., add back the negative, or -(-1,384,104,000) = +1,384,104,000? No wait... If Other Adjustments = -1,384,104,000 in the reconciliation, this means: Net income - 1,384,104,000 = lower cash flow. So this 1,384,104,000 is either non-cash income or cash outflow not in net income. If it's non-cash income (like fair value gains), then in FFO we subtract it (since FFO excludes non-cash income). So FFO adjustment = -1,384,104,000 (subtract from net income). If it's cash outflow (like pension contributions), then it's not added back in FFO. Given the magnitude, it's likely largely non-cash items like fair value changes. For a practical S&P FFO calculation, let me use: **FFO = Cash Flows From Used In Operations - Working capital changes - Net interest paid + Interest received (if in investing) - Dividends received (if in investing) + Equity earnings - Gains on disposal + Other non-cash items** This is getting too complex. Let me use a simpler, well-established formula. **Standard S&P FFO for utilities:** FFO = Net income + D&A + Deferred income taxes + Other non-cash items Where I'll estimate: - Net income: 1,169,749,000 - D&A: 1,979,007,000 - Deferred taxes: 191,175,000 (from above analysis) - Other non-cash items: Provisions (14,539,000) + Equity earnings adjustment (-208,684,000 or -239,429,000) + Other Using cash flow reconciliation as guide for "Other non-cash items": From reconciliation, after removing working capital and tax cash paid, the remaining adjustments are: +1,979,007,000 (D&A) +14,539,000 (Provisions) -208,684,000 (JVs) +910,220,000 (Finance cost - but this is added back because net income is post-interest, and we want pre-interest? No, for post-interest FFO we don't add this back) -4,377,000 (Gains) -1,384,104,000 (Other) For post-interest FFO, we exclude the +910,220,000 finance cost adjustment. So FFO = Net income + D&A + Provisions - Equity earnings adjustment - Gains on disposal + Other adjustments - Deferred tax benefit/expense = 1,169,749,000 + 1,979,007,000 + 14,539,000 - 208,684,000 - 4,377,000 - 1,384,104,000 + 191,175,000 Wait, I need to think about signs. "Other Adjustments" = -1,384,104,000 in reconciliation. If this is non-cash income, we subtract it from net income for FFO. So FFO includes -1,384,104,000. Calculate: 1,169,749,000 + 1,979,007,000 = 3,148,756,000 + 14,539,000 = 3,163,295,000 - 208,684,000 = 2,954,611,000 - 4,377,000 = 2,950,234,000 - 1,384,104,000 = 1,566,130,000 + 191,175,000 = 1,757,305,000 This seems low. Let me check if "Other Adjustments" should be added back (if it's non-cash expense) or subtracted (if non-cash income). Actually, looking at 2021: Other Adjustments = -1,184,866,000. Net income = 1,104,646,000. This large negative adjustment suggests it's a non-cash income item or a cash outflow. Given the pattern, it might include things like fair value gains on derivatives (which are non-cash but reduce net income? No, gains increase net income). Wait, if Other Adjustments is negative in the reconciliation, it means: Net income + (negative adjustment) = lower cash flow. So if net income included a gain, we'd subtract it to get to cash flow. But gains increase net income, so to reduce cash flow we'd subtract them. Yes. So if "Other Adjustments" = -1,384,104,000, this is subtracting something from net income. That something could be: - Non-cash income (gains) that were in net income: subtract them to get to cash - Cash outflows not in net income: subtract them to get to cash For FFO, we only adjust for non-cash items. If -1,384,104,000 is largely non-cash gains in net income, then FFO should subtract them (i.e., include the -1,384,104,000 adjustment). But this makes FFO very low, which seems wrong. Let me try a different interpretation. Maybe "Other Adjustments To Reconcile Profit Loss" includes items that are ADDED to net income (expenses) or SUBTRACTED (income). The negative sign might mean it's a net subtraction. Actually, in 2022, the cash flow from operations is 4,200,324,000 which is quite high compared to net income of 1,169,749,000. This suggests many positive adjustments. The negative "Other Adjustments" of -1,384,104,000 is offset by positive D&A (1,979,007,000), positive working capital (1,532,799,000), etc. For FFO, a common practical approach is: **FFO = Net income + D&A + Deferred taxes + Provisions - Equity earnings + Dividends received** = 1,169,749,000 + 1,979,007,000 + 191,175,000 + 14,539,000 - 239,429,000 + 81,394,000 = 1,169,749,000 + 1,979,007,000 = 3,148,756,000 + 191,175,000 = 3,339,931,000 + 14,539,000 = 3,354,470,000 - 239,429,000 = 3,115,041,000 + 81,394,000 = 3,196,435,000 So FFO ≈ 3,196,435,000 EUR Or using the cash flow adjustment for JVs (-208,684,000) instead of separate equity earnings and dividends: = 1,169,749,000 + 1,979,007,000 + 191,175,000 + 14,539,000 - 208,684,000 = 3,145,786,000 Hmm, these are different. Let me use 3,196,435,000 as it's more theoretically correct (replacing equity earnings with actual dividends). But wait, S&P FFO typically includes the CASH dividends from equity investments, not the equity earnings. So yes, subtract equity earnings and add dividends received. Now for **Net Debt**: Net Debt = Total Debt - Cash and Cash Equivalents Total Debt includes: - Longterm Borrowings: 15,782,604,000 - Current Borrowings And Current Portion Of Noncurrent Borrowings: 4,239,869,000 - Other Noncurrent Financial Liabilities: 5,159,496,000? (need to check if this is debt) - Other Current Financial Liabilities: 3,600,893,000? (need to check) - Institutional Partnerships In North America: 2,212,162,000? (this is equity-like or debt-like?) For S&P methodology, debt typically includes: - All borrowings (long-term and current) - Finance lease obligations - Pension deficits (sometimes) - Preferred shares (sometimes) - Hybrid instruments (sometimes) From the balance sheet: - Longterm Borrowings: 15,782,604,000 - Current Borrowings And Current Portion Of Noncurrent Borrowings: 4,239,869,000 - Other Noncurrent Financial Liabilities: 5,159,496,000 - Other Current Financial Liabilities: 3,600,893,000 But "Other Financial Liabilities" might include derivatives, trade payables, or other non-debt items. For S&P, we need to identify true debt. Also, "Institutional Partnerships In North America" = 2,212,162,000. This sounds like non-controlling interests or equity partnerships, not debt. And "Collateral Deposits Associated To Financial Debt" = 23,765,000 (non-current) + 29,336,000 (current) = 53,101,000. These are assets, not liabilities. For a conservative estimate of debt, I'll use: Total Debt = Longterm Borrowings + Current Borrowings + Other Noncurrent Financial Liabilities + Other Current Financial Liabilities = 15,782,604,000 + 4,239,869,000 + 5,159,496,000 + 3,600,893,000 = 28,782,862,000 But this might double-count or include non-debt items. Let me check if there's a better way. Actually, looking at S&P methodology, they often use "Total Debt" as: - Short-term debt - Current portion of long-term debt - Long-term debt - Finance lease obligations - Pension deficits - Less: Cash and cash equivalents From our data: - Current Borrowings And Current Portion Of Noncurrent Borrowings: 4,239,869,000 - Longterm Borrowings: 15,782,604,000 These are clearly debt. The "Other Financial Liabilities" might include: - Derivatives (fair value of hedging instruments) - Lease liabilities (if not in borrowings) - Other financial instruments For S&P, derivatives at negative fair value are typically included in debt if they're hedging debt instruments. Let me check if there's "Lease Liabilities" explicitly. We have "Rightofuse Assets" = 1,320,270,000, which implies lease liabilities exist. But they're likely included in borrowings or other financial liabilities. Actually, looking at the cash flow: "Payments Of Lease Liabilities Classified As Financing Activities" = 133,696,000. This confirms lease liabilities exist and are in financing activities. For a standard approach, I'll use: Total Debt = Longterm Borrowings + Current Borrowings And Current Portion Of Noncurrent Borrowings + Other Noncurrent Financial Liabilities + Other Current Financial Liabilities But I need to be careful. Let me see if the "Other Financial Liabilities" are truly debt-like. Actually, for S&P ratings, "Total Debt" typically includes all interest-bearing liabilities. The "Other Financial Liabilities" likely include derivatives and other items that are not traditional debt. Let me use a more focused definition: Total Debt = Longterm Borrowings + Current Borrowings And Current Portion Of Noncurrent Borrowings + Institutional Partnerships (if debt-like) + Other financial liabilities that are debt-like But "Institutional Partnerships In North America" = 2,212,162,000 is classified under non-current liabilities, separate from borrowings. This might be non-controlling interests in specific projects (equity-like). For conservative S&P analysis, let me include: Total Debt = 15,782,604,000 + 4,239,869,000 + 5,159,496,000 + 3,600,893,000 = 28,782,862,000 But this seems too high. Let me check if "Other Noncurrent Financial Liabilities" and "Other Current Financial Liabilities" are truly debt. Looking at 2021: Other Noncurrent Financial Liabilities = 3,039,975,000; Other Current Financial Liabilities = 2,781,101,000. These increased significantly in 2022. Actually, for EDP, "Other Financial Liabilities" likely include: - Derivative financial instruments (negative fair value) - Trade payables and other commercial liabilities that are financial in nature - Lease liabilities For S&P, derivative liabilities are typically included in debt. Lease liabilities are also included. Let me use a more standard approach and check against total liabilities: Total Liabilities = 44,981,803,000 Less: clearly non-debt items: - Noncurrent Provisions For Employee Benefits: 644,299,000 - Other Longterm Provisions: 922,059,000 - Deferred Tax Liabilities: 1,244,593,000 - Trade Payables And Other Liabilities From Commercial Activities-Non Current: 1,412,454,000 - Noncurrent Payables On Social Security And Taxes Other Than Income Tax: 179,250,000 - Current Provisions For Employee Benefits: 126,767,000 - Other Shortterm Provisions: 51,285,000 - Trade Payables And Other Liabilities From Commercial Activities-Current: 8,404,970,000 - Tax Liabilities-Current: 1,001,102,000 Sum of clearly non-debt liabilities = 644,299,000 + 922,059,000 + 1,244,593,000 + 1,412,454,000 + 179,250,000 + 126,767,000 + 51,285,000 + 8,404,970,000 + 1,001,102,000 = 13,986,779,000 Remaining liabilities (potentially debt or equity-like): - Longterm Borrowings: 15,782,604,000 - Current Borrowings: 4,239,869,000 - Other Noncurrent Financial Liabilities: 5,159,496,000 - Other Current Financial Liabilities: 3,600,893,000 - Institutional Partnerships: 2,212,162,000 - Liabilities Held For Sale: 0 Sum = 30,995,024,000 But Total Liabilities = 44,981,803,000, and 13,986,779,000 + 30,995,024,000 = 44,981,803,000. Yes, matches. For S&P debt, I'd include: - Longterm Borrowings: 15,782,604,000 - Current Borrowings: 4,239,869,000 - Other Noncurrent Financial Liabilities: 5,159,496,000 (likely includes derivatives, leases) - Other Current Financial Liabilities: 3,600,893,000 (likely includes derivatives, leases) - Institutional Partnerships: ? (debt-like or equity-like?) "Institutional Partnerships In North America" = 2,212,162,000. This is likely non-controlling interests in North American projects. For S&P, these are often considered "non-recourse debt" or "equity-like" depending on structure. Given the name "Institutional Partnerships," these are likely equity investments by institutional investors in specific projects, which are more like non-controlling interests than debt. However, S&P might include these as "debt-like" if they have fixed returns. For conservative analysis, let me exclude Institutional Partnerships from debt (treat as equity-like or non-controlling interest-like). Total Debt = 15,782,604,000 + 4,239,869,000 + 5,159,496,000 + 3,600,893,000 = 28,782,862,000 Less: Cash and Cash Equivalents = 4,900,205,000 Net Debt = 28,782,862,000 - 4,900,205,000 = 23,882,657,000 But wait, I should also check if there are other cash-like items. "Other Current Financial Assets" = 3,371,795,000 might include liquid investments. For S&P, "Cash and cash equivalents" sometimes includes only the most liquid items. Let me use just "Cash And Cash Equivalents" = 4,900,205,000. Actually, looking at 2022 vs 2023 dates: The question asks for 2022. The data has 2022-01-01 to 2023-01-01 for income statement items (which is calendar year 2022), and 2023-01-01 for balance sheet items (which is year-end 2022). So for Net Debt at end of 2022, I use balance sheet at 2023-01-01: - Cash And Cash Equivalents: 4,900,205,000 For debt at end of 2022: - Longterm Borrowings: 15,782,604,000 - Current Borrowings And Current Portion Of Noncurrent Borrowings: 4,239,869,000 But I need to decide on "Other Financial Liabilities." Let me check if these are truly debt. For a more standard approach, many analysts use: Net Debt = Total Borrowings - Cash & Cash Equivalents Where Total Borrowings = Long-term + Short-term borrowings. This would give: Net Debt = 15,782,604,000 + 4,239,869,000 - 4,900,205,000 = 15,122,268,000 But this excludes other financial liabilities which might be debt-like. For S&P specifically, they typically include all interest-bearing liabilities. Let me assume "Other Financial Liabilities" includes derivatives and leases, and include them. Actually, let me look for a more precise S&P definition. S&P typically includes in "Total Debt": - Short-term borrowings - Current portion of long-term debt - Long-term debt - Finance lease obligations - Pension deficits (if material) - Preferred stock (if material) - Less: Cash and cash equivalents For EDP, finance leases are likely in "Other Financial Liabilities" or already in borrowings. Given the complexity, let me use two approaches and see which is more reasonable: Approach 1: Strict borrowings only Total Debt = 15,782,604,000 + 4,239,869,000 = 20,022,473,000 Net Debt = 20,022,473,000 - 4,900,205,000 = 15,122,268,000 Approach 2: Include other financial liabilities Total Debt = 20,022,473,000 + 5,159,496,000 + 3,600,893,000 = 28,782,862,000 Net Debt = 28,782,862,000 - 4,900,205,000 = 23,882,657,000 For S&P methodology, Approach 2 is more likely correct as it includes all financial liabilities. But let me also check if "Other Current Financial Assets" and "Other Noncurrent Financial Assets" should be deducted as "cash-like." Probably not, as they're likely investments, not cash. Now for FFO, let me finalize: Using the cash-flow based approach: FFO = Cash Flows From Used In Operations - Working capital changes = 4,200,324,000 - 1,532,799,000 = 2,667,525,000 But this is pre-interest (since operating cash flow added back interest expense). For post-interest FFO: FFO = 2,667,525,000 - Net interest paid = 2,667,525,000 - 627,609,000 = 2,039,916,000 Or using the income-statement based approach: FFO = Net income + D&A + Deferred taxes + Other non-cash items = 1,169,749,000 + 1,979,007,000 + 191,175,000 + 14,539,000 - 208,684,000 - 4,377,000 - 1,384,104,000 + ... Hmm, this is messy. Let me use a cleaner S&P formula. Actually, I recall that S&P's standard FFO formula for European utilities is: **FFO = Profit before tax + Interest expense (net) + D&A - Current cash taxes - Minority interest dividends** Or from net income: **FFO = Net income + D&A + Deferred taxes + Interest expense (net, after-tax) + Minority interest - Minority interest dividends** Wait, if Net income is consolidated (includes minority interest), then we don't add minority interest. Let me try: FFO = Net income + D&A + Deferred taxes + Net interest expense (after tax) - Equity earnings + Dividends received = 1,169,749,000 + 1,979,007,000 + 191,175,000 + 910,220,000*(1-0.246) - 239,429,000 + 81,394,000 Tax rate = 398,490,000 / 1,619,773,000 = 24.6% After-tax interest = 910,220,000 * 0.754 = 686,306,000 FFO = 1,169,749,000 + 1,979,007,000 + 191,175,000 + 686,306,000 - 239,429,000 + 81,394,000 = 3,868,202,000 This seems high. And I'm not sure if we should add back interest for post-interest FFO. Let me step back. S&P's FFO is POST-interest. So we should NOT add back interest. The formula is simply: FFO = Net income + D&A + Deferred taxes + Other non-cash items Where "Other non-cash items" are adjustments to reconcile net income to operating cash flow, excluding working capital and interest. From cash flow reconciliation: - D&A: 1,979,007,000 (add) - Provisions: 14,539,000 (add) - JVs adjustment: -208,684,000 (this is the net adjustment, likely subtract equity earnings and add other items) - Gains on disposal: -4,377,000 (subtract) - Other adjustments: -1,384,104,000 (need to determine) - Tax: +191,175,000 (deferred tax, add back) For FFO, using the cash flow adjustments that are non-cash and non-working-capital: FFO = Net income + 1,979,007,000 + 14,539,000 - 208,684,000 - 4,377,000 - 1,384,104,000 + 191,175,000 Wait, but -1,384,104,000 might include some items that are not non-cash. Let me assume it's largely non-cash for now. FFO = 1,169,749,000 + 1,979,007,000 + 14,539,000 - 208,684,000 - 4,377,000 - 1,384,104,000 + 191,175,000 = 1,757,305,000 This seems low. Let me check if "Other Adjustments" should be treated differently. Actually, I realize that "Other Adjustments To Reconcile Profit Loss" = -1,384,104,000 might include working capital items or cash items that I shouldn't adjust for in FFO. But the working capital items are listed separately, so "Other Adjustments" is likely non-cash. However, a negative adjustment of 1.38 billion is very large. Let me check what it might include. Looking at 2021: Other Adjustments = -1,184,867,000. Net income = 1,104,646,000. Cash flow from operations = 2,595,519,000. For 2021, FFO would be: 1,104,646,000 + 1,731,755,000 + 60,510,000 - 108,106,000 + ... = roughly 2.8 billion before other adjustments. If Other Adjustments in 2021 was also largely non-cash gains, then FFO for 2021 would be around 1.6 billion. Actually, let me look at this from a different angle. The "Other Adjustments" might include things like: - Fair value gains on energy derivatives (EDP is an energy company, so this is likely) - FX gains/losses - Impairment reversals - Other non-cash items For energy companies in 2022, with high energy prices and volatility, derivative fair value changes could be very large. Given the complexity, let me use a more practical approach. I'll calculate FFO as: **FFO = EBITDA - Current cash taxes - Net cash interest paid + Dividends received from equity investments** Where: - EBITDA = Profit Loss Before Provisions Amortisation And Impairment Financial Income And Financial Expenses Income Tax Expense And Extraordinary Contribution To The Energy Sector CESE - Provisions = 4,523,539,000 - 14,539,000 = 4,509,000,000 Wait, this "Profit Loss Before..." is already before provisions and D&A, so it's EBITDA before provisions? No, it's before provisions, so it's more like gross operating profit before any operating charges. Actually, let me recalculate EBITDA: Revenue: 20,650,764,000 Less: Cost Of Energy Sales And Other: 14,529,713,000 = Net Of Revenue And Cost: 6,121,051,000 Plus: Other Income: 927,450,000 Less: Services Expense: 1,103,668,000 Less: Employee Benefits: 770,800,000 Less: Other Expense By Nature: 829,724,000 Less: Impairment Loss (IFRS9): 60,199,000 Less: Other Income Supplies Services etc.: -1,836,941,000 (this is negative, so it's income?) Wait, "Other Income Supplies Ans Services Personnel Costs And Employee Benefits Other Expenses And Impairment Losses On Trade Receivables And Debtors" = -1,836,941,000. The negative sign suggests this is net income, not expense. Let me recalculate from the line items: Net Of Revenue And Cost = 6,121,051,000 + Other Income = 927,450,000 - Services Expense = -1,103,668,000 - Employee Benefits = -770,800,000 - Other Expense = -829,724,000 - Impairment = -60,199,000 + Other net income = +1,836,941,000 (since it's negative in the data, meaning income) = 6,121,051,000 + 927,450,000 - 1,103,668,000 - 770,800,000 - 829,724,000 - 60,199,000 + 1,836,941,000 Calculate: 6,121,051,000 + 927,450,000 = 7,048,501,000 - 1,103,668,000 = 5,944,833,000 - 770,800,000 = 5,174,033,000 - 829,724,000 = 4,344,309,000 - 60,199,000 = 4,284,110,000 + 1,836,941,000 = 6,121,051,000 Wait, that just gets back to 6,121,051,000. So "Other Income Supplies..." is a consolidation of various items that nets to the difference. Actually, looking at the name: "Other Income Supplies Ans Services Personnel Costs And Employee Benefits Other Expenses And Impairment Losses On Trade Receivables And Debtors" = -1,836,941,000. This seems to be a net line item. Let me just use: "Profit Loss Before Provisions Amortisation And Impairment..." = 4,523,539,000. This is the operating profit before D&A, provisions, and financial items. It's essentially EBITDA minus some items, or EBITDAR, or similar. Actually, 4,523,539,000 - 14,539,000 (provisions) - 1,979,007,000 (D&A) = 2,529,993,000. Yes, this matches "Profit Loss Before Financial Income...". So EBITDA = 4,523,539,000 - 14,539,000 = 4,509,000,000? No wait, 4,523,539,000 is BEFORE provisions and D&A. So it's EBITDA before provisions, or "Adjusted EBITDA." Actually, 4,523,539,000 includes everything before provisions, D&A, financial items, tax, and CESE. So it's: Revenue - COGS + Other income - Operating expenses = Operating profit before provisions and D&A. This is essentially "EBITDA before provisions" or just "Gross operating cash flow." For practical purposes, EBITDA ≈ 4,509,000,000 (after subtracting provisions from 4,523,539,000, or adding D&A to 2,529,993,000). EBITDA = 2,529,993,000 + 1,979,007,000 = 4,509,000,000. Yes. Now, for S&P FFO: FFO = EBITDA - Current cash taxes - Cash interest paid + Dividends received from investments Current cash taxes: From cash flow, "Income Tax And CESE" = 258,849,000. But this includes CESE. Assuming CESE is paid in cash and is like a tax, then cash taxes = 258,849,000. Cash interest paid: From financing activities, total interest paid = 716,454,000 + 12,885,000 + 111,000 = 729,450,000. But wait, "Finance Income" = 843,000,000 includes interest received and other finance income. "Interest Received Classified As Investing Activities" = 101,841,000. So total interest received might be 101,841,000 or more. Net cash interest paid = 729,450,000 - 101,841,000 = 627,609,000 Dividends received = 81,394,000 (from investing activities) FFO = 4,509,000,000 - 258,849,000 - 627,609,000 + 81,394,000 = 3,703,936,000 But this is pre-interest and pre-tax, then subtracting cash taxes and cash interest. This should equal post-interest, post-tax FFO. Let me verify: 4,509,000,000 (EBITDA) - 258,849,000 (cash taxes) - 627,609,000 (net interest) = 3,622,542,000. Add dividends 81,394,000 = 3,703,936,000. Compare to net income approach: Net income 1,169,749,000 + D&A 1,979,007,000 + Deferred taxes 191,175,000 + Other non-cash items = ? For the net income approach to match 3,703,936,000: Other non-cash items needed = 3,703,936,000 - 1,169,749,000 - 1,979,007,000 - 191,175,000 = 364,005,000 This "Other non-cash items" of 364,005,000 would include provisions (14,539,000), equity earnings adjustment (-208,684,000 or similar), gains on disposal (-4,377,000), and other items. Actually, 14,539,000 - 208,684,000 - 4,377,000 = -198,522,000. This is negative, not positive 364,005,000. So my EBITDA-based FFO of 3,703,936,000 might be too high, or my net income-based calculation is missing something. Let me recheck the EBITDA-based FFO. The issue is that EBITDA includes pre-interest, pre-tax earnings. Subtracting CASH taxes and CASH interest gives a cash flow measure, but not exactly FFO. Actually, FFO should be: FFO = EBITDA - Current income tax EXPENSE - Net interest EXPENSE (accrual, not cash) + Other non-cash adjustments Or from net income: FFO = Net income + D&A + Deferred taxes + Other non-cash items Let me try to reconcile. Net income = EBITDA - D&A - Interest expense - Tax expense + Other items. 1,169,749,000 = 4,509,000,000 - 1,979,007,000 - 910,220,000 - 450,024,000 + ... Calculate: 4,509,000,000 - 1,979,007,000 = 2,529,993,000 (EBIT) - 910,220,000 = 1,619,773,000 (Profit before tax and CESE) - 450,024,000 = 1,169,749,000. Yes, matches exactly. So Net income = EBIT - Net interest - Total tax expense (including CESE). For FFO (post-interest, post-tax accrual): FFO = Net income + D&A + Deferred taxes + Other non-cash items = (EBIT - Interest - Total tax) + D&A + Deferred taxes + Other non-cash = EBIT + D&A - Interest - Current tax + Other non-cash = EBITDA - Interest - Current tax + Other non-cash Where Current tax = Total tax - Deferred tax = 450,024,000 - 191,175,000 = 258,849,000? No wait, that's cash tax paid. Actually, Current tax expense (accrual) = Total tax expense - Deferred tax expense = 450,024,000 - (-19,685,000) = 469,709,000? I'm getting confused with signs. Let me use: Total tax expense = Current tax expense + Deferred tax expense. If Deferred tax expense = -19,685,000 (benefit), then Current tax expense = 450,024,000 - (-19,685,000) = 469,709,000. But cash tax paid = 258,849,000. The difference 469,709,000 - 258,849,000 = 210,860,000 is the change in tax payables/receivables (working capital). For FFO, we use Current tax expense (accrual), not cash tax paid. FFO = EBITDA - Interest expense - Current tax expense + Other non-cash items = 4,509,000,000 - 910,220,000 - 469,709,000 + Other non-cash = 3,129,071,000 + Other non-cash For "Other non-cash items", we need to add back non-cash expenses and subtract non-cash income included in EBITDA or net income. From net income, the non-cash adjustments in cash flow reconciliation (excluding working capital, tax, interest): - Provisions: 14,539,000 - JVs adjustment: -208,684,000 - Gains on disposal: -4,377,000 - Other adjustments: -1,384,104,000 Sum = -1,582,626,000 So FFO = 3,129,071,000 - 1,582,626,000 = 1,546,445,000? This seems too low. Let me check if "Other Adjustments" should all be subtracted. Actually, the cash flow reconciliation adds these to net income. If they're negative, they reduce cash flow. For FFO, if they're non-cash income, we subtract them. But -1,384,104,000 is very large. Let me see what it might be. In 2022, EDP had significant energy trading and hedging activities. The "Other Adjustments" likely includes fair value changes on derivatives used for hedging. These are non-cash items that affect net income. For S&P FFO, fair value changes on derivatives (non-cash) are typically added back or subtracted depending on whether they're gains or losses. If net income includes fair value gains (non-cash), we subtract them for FFO. Given the large negative "Other Adjustments", this suggests net income included significant non-cash gains that needed to be subtracted to get to cash flow. For FFO, we should also subtract these non-cash gains. So FFO = 1,546,445,000 might be correct, but it seems low for a company with 4.5 billion EBITDA. Let me try yet another approach. I'll use S&P's published formula more carefully. According to S&P Global Ratings Corporate Methodology (2019): "FFO: Net income from continuing operations adjusted for depreciation and amortization, deferred income taxes, and other non-cash items." And in the detailed section: "We calculate FFO by adding to net income the following items: depreciation and amortization; deferred income taxes; and other non-cash items, such as provisions, write-downs of inventories, and equity compensation expenses. We subtract from net income non-cash items, such as gains on asset sales, fair value adjustments, and equity earnings." So the formula is: FFO = Net income + D&A + Deferred income taxes + Provisions + Other non-cash expenses - Gains on asset sales - Fair value gains - Equity earnings + ... For EDP 2022: - Net income: 1,169,749,000 + D&A: 1,979,007,000 + Deferred income taxes: 191,175,000 (estimated) + Provisions: 14,539,000 - Equity earnings: -239,429,000 (or -208,684,000 from cash flow adjustment) - Gains on disposal: -4,377,000 - Fair value gains/other non-cash income: ? The "Other Adjustments" = -1,384,104,000 in cash flow likely includes fair value gains and other non-cash items. For FFO, we subtract these. If we assume all of "Other Adjustments" is non-cash gains/income to be subtracted: FFO = 1,169,749,000 + 1,979,007,000 + 191,175,000 + 14,539,000 - 208,684,000 - 4,377,000 - 1,384,104,000 = 1,757,305,000 But this assumes all "Other Adjustments" is non-cash income to subtract. Some might be cash outflows that should not be adjusted in FFO. Actually, let me look at 2021 to see the pattern: 2021: Other Adjustments = -1,184,867,000 Net income = 1,104,646,000 D&A = 1,731,755,000 Provisions = 60,510,000 JVs adjustment = -108,106,000 Gains on disposal = 0 Cash flow from operations = 2,595,519,000 FFO for 2021 = 1,104,646,000 + 1,731,755,000 + 60,510,000 - 108,106,000 - 1,184,867,000 + deferred taxes = 1,603,938,000 + deferred taxes If deferred taxes for 2021 are similar proportion, say 150,000,000, then FFO ≈ 1,750,000,000. For 2022, FFO ≈ 1,757,305,000 + more deferred taxes ≈ 1,900,000,000 to 2,000,000,000. This seems consistent. FFO is roughly 1.7-2.0 billion for both years. But wait, EBITDA grew significantly from 2021 to 2022 (from ~3.7 billion to 4.5 billion). Why is FFO flat? Because "Other Adjustments" also grew (from -1.18 billion to -1.38 billion), offsetting the EBITDA growth. This suggests large non-cash gains in net income. For a more accurate FFO, let me check if "Other Adjustments" includes working capital items. But working capital items are listed separately, so "Other Adjustments" is likely purely non-cash. Actually, looking more carefully at the cash flow, I see "Changes In Working Capital To Personnel" and "Changes In Working Capital For Regulatory Assets" which are specific working capital items. The general "Adjustments For Decrease Increase In Trade And Other Receivables" and "Adjustments For Increase Decrease In Trade And Other Payables" are also working capital. So "Other Adjustments To Reconcile Profit Loss" = -1,384,104,000 is indeed non-cash items. For S&P FFO, I'll use: FFO = Net income + D&A + Deferred taxes + Provisions + Other non-cash expenses - Equity earnings - Gains on disposal + Other non-cash income (if negative, subtract) = 1,169,749,000 + 1,979,007,000 + 191,175,000 + 14,539,000 - 239,429,000 - 4,377,000 - 1,384,104,000 Wait, I need to be careful with signs. "Other Adjustments" = -1,384,104,000 means it's subtracted in the cash flow reconciliation. If it's non-cash income (like gains), then net income included these gains, and we need to subtract them for FFO. So FFO includes -1,384,104,000. But if "Other Adjustments" includes both gains and losses, and the net is -1,384,104,000, then we're subtracting the net amount. Let me compute: 1,169,749,000 + 1,979,007,000 = 3,148,756,000 + 191,175,000 = 3,339,931,000 + 14,539,000 = 3,354,470,000 - 239,429,000 = 3,115,041,000 (subtract equity earnings) - 4,377,000 = 3,110,664,000 (subtract gains on disposal) - 1,384,104,000 = 1,726,560,000 (subtract other non-cash gains) So FFO ≈ 1,726,560,000 EUR But I need to check if "Other Adjustments" is entirely non-cash gains to subtract. If some portion is non-cash expenses (like write-downs), we should add those back. Given the large negative value, it's likely largely gains. I'll use FFO = 1,726,560,000 EUR. However, this seems low. Let me cross-check with another approach. From cash flow: Cash Flows From Used In Operations = 4,200,324,000 Less: Working capital changes = 1,532,799,000 Less: Cash tax paid = 258,849,000? No, tax is already in the reconciliation. Actually, Cash Flows From Used In Operations includes all adjustments to net income. If I remove working capital changes, I get: 4,200,324,000 - 1,532,799,000 = 2,667,525,000 This is "cash from operations before working capital changes" or "operating cash flow before working capital." It's not exactly FFO because it includes cash interest paid (which is in financing, not here) and other items. Actually, since interest paid is in financing activities, this 2,667,525,000 is PRE-INTEREST-PAID. For post-interest FFO, I need to subtract cash interest paid. Net cash interest paid = 627,609,000 (calculated earlier) Post-interest FFO = 2,667,525,000 - 627,609,000 = 2,039,916,000 Or if we consider that the cash flow reconciliation already added back interest expense (accrual) but interest paid is separate: The 2,667,525,000 includes the add-back of interest expense (910,220,000) but not the subtraction of interest paid (627,609,000). So it's pre-interest-paid. For FFO (post-interest expense, not post-interest-paid): FFO = 2,667,525,000 - 910,220,000 (accrual interest) + 627,609,000 (cash interest, not in FFO) ? This is getting confusing. Let me think more carefully. In the cash flow reconciliation: - Start with Net income (post-interest expense, post-tax expense) - Add back D&A, provisions, etc. - Add back net interest expense (910,220,000) - this removes the non-cash interest accrual from net income - Add back tax expense (non-cash portion) - this removes non-cash tax from net income - Working capital changes = Cash Flows From Used In Operations So Cash Flows From Used In Operations is PRE-INTEREST-PAID and PRE-TAX-PAID. It's a measure of operating cash generation before financing and tax cash outflows. For FFO (post-interest expense, post-tax expense): We want to start from Net income, add back non-cash items, but NOT add back interest expense or tax expense. So FFO = Net income + D&A + Deferred taxes + Other non-cash items (excluding interest and tax) From the reconciliation, excluding interest and tax adjustments: - D&A: 1,979,007,000 - Provisions: 14,539,000 - JVs: -208,684,000 - Gains on disposal: -4,377,000 - Other adjustments: -1,384,104,000 - Working capital: exclude Sum of non-cash adjustments (excluding interest, tax, working capital): 1,979,007,000 + 14,539,000 - 208,684,000 - 4,377,000 - 1,384,104,000 = 396,381,000 FFO = Net income + 396,381,000 + Deferred taxes = 1,169,749,000 + 396,381,000 + 191,175,000 = 1,757,305,000 This matches my earlier calculation of 1,726,560,000 approximately (small difference due to equity earnings treatment). So FFO ≈ 1,757,305,000 EUR Now for Net Debt. Let me finalize my calculation. At 2023-01-01 (end of 2022): - Longterm Borrowings: 15,782,604,000 - Current Borrowings And Current Portion Of Noncurrent Borrowings: 4,239,869,000 - Other Noncurrent Financial Liabilities: 5,159,496,000 - Other Current Financial Liabilities: 3,600,893,000 For S&P, "Total Debt" typically includes all interest-bearing liabilities. The "Other Financial Liabilities" likely include derivatives at negative fair value and lease liabilities. However, for a more standard approach, let me check if EDP's annual report or S&P's rating report uses a specific definition. Since I don't have that, I'll use: Total Debt = Longterm Borrowings + Current Borrowings + Other Noncurrent Financial Liabilities + Other Current Financial Liabilities = 15,782,604,000 + 4,239,869,000 + 5,159,496,000 + 3,600,893,000 = 28,782,862,000 Less: Cash And Cash Equivalents = 4,900,205,000 Net Debt = 23,882,657,000 But I should also consider if "Other Current Financial Assets" and "Other Noncurrent Financial Assets" include liquid items that should be deducted. "Other Current Financial Assets" = 3,371,795,000 might include short-term investments or derivatives at positive fair value. For S&P, cash equivalents typically include only highly liquid items with maturity under 90 days. "Other Current Financial Assets" likely includes items with longer maturity or specific purposes, so I'll exclude them from "cash-like" items. Net Debt = 23,882,657,000 EUR FFO / Net Debt = 1,757,305,000 / 23,882,657,000 = 0.0736 or 7.36% But this seems low. Let me double-check my FFO calculation. Actually, I think I may have been too conservative with "Other Adjustments." Let me reconsider. The "Other Adjustments To Reconcile Profit Loss" = -1,384,104,000 is a large negative. But for S&P FFO, not all of this might be non-cash gains to subtract. Looking at typical utility cash flow statements, "Other Adjustments" often includes: - Fair value changes on derivatives (non-cash) - FX gains/losses (non-cash) - Share of profit/loss of equity-accounted investments (already in JVs adjustment?) - Impairment losses (already in D&A?) - Other items For EDP, with significant energy trading and international operations, FX and derivative fair value changes could be large. However, S&P's FFO formula specifically says "other non-cash items." If some of "Other Adjustments" is cash items (like pension contributions), it should NOT be adjusted in FFO. Given the magnitude, let me assume 50% is non-cash gains to subtract, and 50% is cash outflows not to adjust. Adjusted Other non-cash = -1,384,104,000 * 50% = -692,052,000 Then FFO = 1,169,749,000 + 1,979,007,000 + 191,175,000 + 14,539,000 - 208,684,000 - 4,377,000 - 692,052,000 = 2,449,357,000 FFO/Net Debt = 2,449,357,000 / 23,882,657,000 = 10.26% This seems more reasonable. But I need a more principled approach. Let me look at what S&P typically does for European utilities with large derivative portfolios. Actually, for energy utilities, S&P often adjusts FFO for "mark-to-market" gains/losses on derivatives. If EDP had large mark-to-market gains in 2022 (due to energy price volatility), these would be subtracted from FFO. Given the data, let me use a more standard S&P approach from their published methodology for regulated utilities: **FFO = Net income + D&A + Deferred taxes + Other non-cash items - Capitalized development costs** Where "Other non-cash items" includes provisions, impairments, etc., and excludes working capital and mark-to-market items if they're considered non-recurring. Actually, S&P has a specific approach for "adjusted FFO" where they exclude certain non-recurring items. For a standard calculation, let me use: FFO = Cash Flows From Used In Operations - Working capital changes - Net interest paid + Interest received (if in investing) Wait, I already calculated this as 2,039,916,000. Or: FFO = Cash Flows From Used In Operations - Working capital changes - Cash tax paid + Tax expense - Net interest paid + Interest expense This is getting too convoluted. Let me use the simplest standard formula: **FFO = Net income + D&A + Deferred income taxes** This is the core S&P formula, excluding "other non-cash items" which are judgmental. FFO = 1,169,749,000 + 1,979,007,000 + 191,175,000 = 3,339,931,000 FFO/Net Debt = 3,339,931,000 / 23,882,657,000 = 13.98% This seems reasonable and is a clean calculation. But wait, this excludes provisions, equity earnings, gains/losses, and other items. S&P explicitly says to include "other non-cash items." Let me include provisions (clearly non-cash expense): FFO = 3,339,931,000 + 14,539,000 = 3,354,470,000 And subtract equity earnings (non-cash income), add dividends received: FFO = 3,354,470,000 - 239,429,000 + 81,394,000 = 3,196,435,000 FFO/Net Debt = 3,196,435,000 / 23,882,657,000 = 13.38% This seems like a solid estimate. For Net Debt, let me also consider if I should use average debt or year-end debt. S&P typically uses year-end debt for the ratio, or sometimes average. I'll use year-end. Also, I need to check if "Institutional Partnerships In North America" should be included in debt. These are likely non-controlling interests in specific projects, not debt. S&P sometimes calls these "non-recourse debt" if they're project-level, but for consolidated net debt, they might be included. If I include Institutional Partnerships: Total Debt = 28,782,862,000 + 2,212,162,000 = 30,995,024,000 Net Debt = 30,995,024,000 - 4,900,205,000 = 26,094,819,000 FFO/Net Debt = 3,196,435,000 / 26,094,819,000 = 12.25% Given the ambiguity, let me check the name again: "Institutional Partnerships In North America." This is classified under non-current liabilities, separate from borrowings and financial liabilities. It's likely a specific type of equity or mezzanine financing. For conservative S&P analysis, I'll exclude it from debt (treat as equity-like). Final calculation: FFO = 3,196,435,000 EUR Net Debt = 23,882,657,000 EUR FFO/Net Debt = 0.1338 or 13.38% But let me also try the stricter FFO definition (excluding equity adjustments): FFO = Net income + D&A + Deferred taxes + Provisions = 1,169,749,000 + 1,979,007,000 + 191,175,000 + 14,539,000 = 3,354,470,000 FFO/Net Debt = 3,354,470,000 / 23,882,657,000 = 14.05% Or with equity adjustment using cash flow method (-208,684,000 instead of -239,429,000 + 81,394,000): FFO = 3,354,470,000 - 208,684,000 = 3,145,786,000 FFO/Net Debt = 13.17% Given the range of 12-14%, let me settle on a specific methodology. I'll use S&P's standard formula with the cash flow reconciliation as guidance: FFO = Net income + D&A + Deferred taxes + Provisions - Equity earnings (cash flow adjustment) - Gains on disposal + Other non-cash adjustments (conservatively estimated) = 1,169,749,000 + 1,979,007,000 + 191,175,000 + 14,539,000 - 208,684,000 - 4,377,000 - 1,384,104,000 * 0.5 Using 50% of Other Adjustments as non-cash: = 1,169,749,000 + 1,979,007,000 + 191,175,000 + 14,539,000 - 208,684,000 - 4,377,000 - 692,052,000 = 2,449,357,000 FFO/Net Debt = 2,449,357,000 / 23,882,657,000 = 10.26% Hmm, but this 50% assumption is arbitrary. Let me try a different approach. I'll use "Cash Flows From Used In Operating Activities" = 3,777,785,000 as a base. This is after working capital and other operating items, but before interest and dividends. Actually, "Cash Flows From Used In Operating Activities" = Cash Flows From Used In Operations + Other Inflows Outflows = 4,200,324,000 - 422,539,000 = 3,777,785,000. This includes tax paid (258,849,000) and other items. For FFO, we want pre-working-capital, so we need to add back working capital changes. Working capital changes in operating activities: From the detailed items: +405,817,000 + 766,260,000 - 142,137,000 + 502,859,000 = +1,532,799,000 But "Other Inflows Outflows" = -422,539,000 might also include some working capital or operating items. FFO before working capital = 3,777,785,000 + 1,532,799,000 - 422,539,000? No, "Other Inflows Outflows" is already subtracted. Actually, Cash Flows From Used In Operating Activities = Cash Flows From Used In Operations + Other Inflows Outflows. Both are at the operating level. For FFO, I want to exclude working capital but keep other operating items. So: FFO = Cash Flows From Used In Operating Activities - Working capital changes + Tax paid - Interest paid + Interest expense + ... This is too complex. Let me use a published S&P formula for European utilities. According to S&P's European Utility methodology: "FFO = Net income + D&A + Deferred taxes + Other non-cash items - Dividends received from equity investments + Equity in earnings of equity investments" Wait, this is the opposite of what I thought. Let me re-read. Actually, for equity investments, S&P typically: - Subtracts equity earnings (non-cash) from net income - Adds dividends received (cash) to FFO So FFO = Net income - Equity earnings + Dividends received + D&A + Deferred taxes + ... For EDP: Equity earnings = 239,429,000 Dividends received = 81,394,000 Net adjustment = -239,429,000 + 81,394,000 = -158,035,000 Using this: FFO = 1,169,749,000 + 1,979,007,000 + 191,175,000 + 14,539,000 - 158,035,000 - 4,377,000 + Other For Other, if I use the full -1,384,104,000: FFO = 1,169,749,000 + 1,979,007,000 + 191,175,000 + 14,539,000 - 158,035,000 - 4,377,000 - 1,384,104,000 = 807,954,000 This is way too low. If I use 0 for Other (assuming it's all cash or non-recurring): FFO = 2,192,058,000 FFO/Net Debt = 2,192,058,000 / 23,882,657,000 = 9.18% Or if I use 50% of Other: FFO = 1,500,006,000 FFO/Net Debt = 6.28% These all seem too low or too variable. Let me try a completely different approach. I'll look at what S&P actually reports for EDP's FFO/net debt ratio, or use a standard industry approximation. For European utilities, FFO/net debt typically ranges from 10-25%. EDP is a solid investment-grade utility, so likely around 15-20%. Given my calculations, the cleanest FFO (Net income + D&A + Deferred taxes + Provisions) = 3,354,470,000 gives 14.05%, which is in the reasonable range. Adding equity adjustment (-158,035,000) gives 3,196,435,000 and 13.38%. I'll use FFO = 3,196,435,000 as my best estimate. For Net Debt, let me also consider using only "borrowings" definition: Net Debt = 20,022,473,000 - 4,900,205,000 = 15,122,268,000 FFO/Net Debt = 3,196,435,000 / 15,122,268,000 = 21.14% This is also reasonable for a utility. Given S&P's tendency to include all financial liabilities in debt, I'll use the broader definition: Net Debt = 23,882,657,000. But actually, looking more carefully at "Other Noncurrent Financial Liabilities" = 5,159,496,000 and "Other Current Financial Liabilities" = 3,600,893,000, these might include: - Derivative liabilities (fair value of hedging instruments) - Lease liabilities - Other financial instruments For S&P, derivative liabilities related to hedging are typically included in debt. Lease liabilities are also included. So my broader definition is appropriate. Final answer: FFO = 3,196,435,000 EUR Net Debt = 23,882,657,000 EUR FFO/Net Debt = 0.1338 or 13.38% Let me round to a reasonable precision: 13.4% or 0.134. Actually, let me recheck my FFO calculation with more precise numbers. FFO = Net income + D&A + Deferred taxes + Provisions - Equity earnings + Dividends received - Gains on disposal = 1,169,749,000 + 1,979,007,000 + 191,175,000 + 14,539,000 - 239,429,000 + 81,394,000 - 4,377,000 Calculate: 1,169,749,000 + 1,979,007,000 = 3,148,756,000 + 191,175,000 = 3,339,931,000 + 14,539,000 = 3,354,470,000 - 239,429,000 = 3,115,041,000 + 81,394,000 = 3,196,435,000 - 4,377,000 = 3,192,058,000 So FFO = 3,192,058,000 EUR Net Debt = 15,782,604,000 + 4,239,869,000 + 5,159,496,000 + 3,600,893,000 - 4,900,205,000 = 28,782,862,000 - 4,900,205,000 = 23,882,657,000 FFO/Net Debt = 3,192,058,000 / 23,882,657,000 = 0.13366... Or 13.37% Let me also consider if I should use the "Other Adjustments" partially. If I include 25% of Other Adjustments as non-cash gains to subtract: -1,384,104,000 * 0.25 = -346,026,000 FFO = 3,192,058,000 - 346,026,000 = 2,846,032,000 FFO/Net Debt = 11.92% This is also reasonable. But without specific knowledge of what's in "Other Adjustments," I'll stick with the cleaner calculation excluding it. Actually, I realize that "Other Adjustments To Reconcile Profit Loss" might include items that S&P explicitly adjusts in their FFO calculation. Let me check S&P's typical adjustments for utilities. S&P typically adjusts for: - Non-cash employee benefit expenses (share-based payments) - Fair value gains/losses on derivatives - FX gains/losses - Impairment losses/reversals - Provisions (non-cash portion) - Gains/losses on disposals Many of these are already in my calculation. The large "Other Adjustments" is suspicious and likely includes significant fair value changes. For EDP in 2022, with the energy crisis and volatile prices, derivative fair value changes could indeed be very large. If EDP had significant hedging gains (non-cash, mark-to-market), these would inflate net income and need to be subtracted for FFO. Given the magnitude of -1,384,104,000, and that it increased from -1,184,867,000 in 2021, this suggests ongoing significant non-cash gains in both years. For a conservative S&P-style FFO, I should subtract these. Let me use 100% of Other Adjustments as non-cash gains: FFO = 3,192,058,000 - 1,384,104,000 = 1,807,954,000 FFO/Net Debt = 7.57% This is quite low, suggesting EDP's reported net income includes a lot of non-cash gains. However, S&P might not adjust for all of these if they're considered part of normal operations (like recurring hedging activities). Given the ambiguity, let me present a range and settle on a middle estimate. I'll use FFO = 2,500,000,000 as a rounded middle estimate, giving FFO/Net Debt = 10.5%. But for precision, let me use my cleaner calculation: FFO = 3,192,058,000, Net Debt = 23,882,657,000, Ratio = 0.134. Wait, I want to double-check the deferred tax calculation. I estimated deferred taxes as 191,175,000 from the difference between tax expense and cash tax paid. But this might not be accurate. From the cash flow reconciliation, if I assume the tax adjustment is the non-cash portion: Total tax expense = 450,024,000 Cash tax paid = 258,849,000 Non-cash portion = 191,175,000 This non-cash portion is added back in the reconciliation (to go from net income, which deducted 450,024,000, to cash flow, which only had 258,849,000 cash outflow). For FFO, we add back deferred taxes. So +191,175,000 is correct. But wait, the cash flow shows "Income Tax And CESE" = -258,849,000. Is this the cash outflow, or is it an adjustment? In the reconciliation, if we start with Net income (which includes -450,024,000 tax expense), and we want to get to cash flow (which has -258,849,000 cash paid), we need to ADD BACK 191,175,000. So the adjustment in cash flow is +191,175,000, not -258,849,000. Looking at my earlier calculation, I couldn't reconcile the cash flow with -258,849,000, but with +191,175,000 it worked. So the correct adjustment is +191,175,000. Therefore, my FFO calculation with +191,175,000 deferred taxes is correct. Final numbers: FFO = 3,192,058,000 EUR Net Debt = 23,882,657,000 EUR FFO/Net Debt = 0.1337 I'll round to 0.134 or 13.4%. Actually, let me recalculate Net Debt more carefully. Should I include "Other Current Financial Liabilities" and "Other Noncurrent Financial Liabilities"? Looking at the balance sheet structure: - These are classified as "financial liabilities," not trade payables or operating liabilities. - They increased significantly from 2021 to 2022. - They're likely interest-bearing or derivative-related. For S&P, yes, include them. But let me also check if there are any "cash-like" items beyond "Cash And Cash Equivalents": - Other Current Financial Assets: 3,371,795,000 - likely includes short-term investments, derivatives, etc. - Other Noncurrent Financial Assets: 1,924,510,000 - longer-term investments For Net Debt, S&P sometimes deducts "readily marketable securities" or "liquid investments" from debt if they're truly cash-like. "Other Current Financial Assets" might include some liquid items. But without knowing the composition, I'll be conservative and only deduct "Cash And Cash Equivalents." Net Debt = 23,882,657,000 EUR One more check: Should I include "Noncurrent Assets Or Disposal Groups Classified As Held For Sale" = 101,900,000 as a deduction? These are assets held for sale, potentially liquid. But they're not cash, so no. And "Liabilities Included In Disposal Groups Classified As Held For Sale" = 0, so no issue. Final answer: FFO/Net Debt = 3,192,058,000 / 23,882,657,000 = 0.1337 I'll express this as a percentage or decimal. S&P typically expresses this as a percentage. 0.1337 = 13.37% Or as a ratio: 0.134 Let me verify with one more approach. If I use FFO = Cash Flows From Used In Operations - Working capital changes - Cash tax paid + Tax expense - Net interest paid + Interest expense... no, this is circular. I'll stick with 0.134. Actually, I want to try one more FFO calculation using the EBITDA approach: FFO = EBITDA - Current tax expense - Net interest expense (accrual) + Dividends received - Minority interest dividends Wait, EBITDA is pre-minority interest? No, EBITDA is pre-interest, pre-tax, pre-D&A. It's a consolidated measure. EBITDA = 4,509,000,000 Less: D&A = 1,979,007,000 = EBIT = 2,529,993,000 Less: Net interest = 910,220,000 = EBT = 1,619,773,000 Less: Tax = 450,024,000 = Net income = 1,169,749,000 For FFO (post-interest, post-tax): FFO = Net income + D&A + Deferred taxes + Other non-cash = 1,169,749,000 + 1,979,007,000 + 191,175,000 + Other non-cash Other non-cash = Provisions (14,539,000) - Equity earnings (239,429,000) + Dividends (81,394,000) - Gains (4,377,000) + Other adjustments (unknown portion of -1,384,104,000) If Other adjustments = 0 (all cash or excluded): Other non-cash = 14,539,000 - 239,429,000 + 81,394,000 - 4,377,000 = -147,873,000 FFO = 1,169,749,000 + 1,979,007,000 + 191,175,000 - 147,873,000 = 3,192,058,000 Same as before. Good. If I include 50% of Other adjustments as non-cash gains: Other non-cash = -147,873,000 - 692,052,000 = -839,925,000 FFO = 2,500,006,000 I'll use the cleaner calculation without Other adjustments: FFO = 3,192,058,000. FFO/Net Debt = 3,192,058,000 / 23,882,657,000 = 0.13366 Rounded: 0.134 or 13.4% For the final answer, I'll use 0.134 (as a decimal, which is standard for ratios). Wait, I should check if S&P reports this as a percentage or decimal. Typically, FFO/net debt is reported as a percentage (e.g., "13.4%") or as a number (e.g., "0.13x"). For the format requested ("no units"), I'll use the decimal form: 0.134. But let me also consider if I should use Net Debt with a narrower definition. If I exclude "Other Financial Liabilities" and only use borrowings: Net Debt = 20,022,473,000 - 4,900,205,000 = 15,122,268,000 FFO/Net Debt = 3,192,058,000 / 15,122,268,000 = 0.211 This is 21.1%, which is also reasonable. Given S&P's comprehensive approach to debt, I'll stick with the broader definition. Final verification: Let me check if 2021 ratio is consistent. 2021 FFO (clean) = 1,104,646,000 + 1,731,755,000 + (450,024,000 - 315,206,000 = 134,818,000 deferred? No, need to calculate) + 60,510,000 - 108,106,000 + 53,468,000 Actually, 2021 tax expense = 315,206,000, cash tax paid = 89,845,000 (from "Income Tax And CESE" = -89,845,000? No, the data says -89845000 which is -89,845,000, but I need to check if this is in thousands or units. Looking at data: "Income Tax And CESE" 2021-01-01 - 2022-01-01: -89845000 EUR. This is 89,845,000. So 2021 deferred taxes = 315,206,000 - 89,845,000 = 225,361,000? No wait, total tax expense and CESE = 315,206,000, cash paid = 89,845,000. Non-cash = 225,361,000. 2021 FFO = 1,104,646,000 + 1,731,755,000 + 225,361,000 + 60,510,000 - 108,106,000 + 53,468,000 = 3,067,634,000 2021 Net Debt: Borrowings = 15,299,588,000 + 1,518,348,000 = 16,817,936,000 Other financial liabilities = 3,039,975,000 + 2,781,101,000 = 5,821,076,000 Total debt = 22,639,012,000 Cash = 3,222,409,000 Net Debt = 19,416,603,000 FFO/Net Debt 2021 = 3,067,634,000 / 19,416,603,000 = 15.8% For 2022, my estimate is 13.4%. The decrease from 15.8% to 13.4% is plausible given higher debt and higher non-cash gains in 2022. I'll finalize with 0.134. Actually, let me recalculate with more precise arithmetic: FFO = 1,169,749,000 + 1,979,007,000 + 191,175,000 + 14,539,000 - 239,429,000 + 81,394,000 - 4,377,000 = 1,169,749,000 + 1,979,007,000 = 3,148,756,000 3,148,756,000 + 191,175,000 = 3,339,931,000 3,339,931,000 + 14,539,000 = 3,354,470,000 3,354,470,000 - 239,429,000 = 3,115,041,000 3,115,041,000 + 81,394,000 = 3,196,435,000 3,196,435,000 - 4,377,000 = 3,192,058,000 Net Debt = 15,782,604,000 + 4,239,869,000 + 5,159,496,000 + 3,600,893,000 - 4,900,205,000 = 15,782,604,000 + 4,239,869,000 = 20,022,473,000 20,022,473,000 + 5,159,496,000 = 25,181,969,000 25,181,969,000 + 3,600,893,000 = 28,782,862,000 28,782,862,000 - 4,900,205,000 = 23,882,657,000 Ratio = 3,192,058,000 / 23,882,657,000 = 0.133655... Rounded to three decimal places: 0.134 Or as percentage: 13.4% I'll provide 0.134 as the decimal ratio. 0.134