To estimate the FFO / Net Debt ratio for Hera S.p.A. for the year 2022 based on S&P methodology, we need to calculate Funds From Operations (FFO) and Net Debt.

**1. Calculate Funds From Operations (FFO)**

According to S&P Global Ratings methodology, FFO is generally calculated as:
$$FFO = \text{Net Income} + \text{Depreciation and Amortization} + \text{Other Non-Cash Items} \pm \text{Changes in Working Capital (sometimes excluded or adjusted, but standard FFO often starts with Net Income + D&A)}$$

However, a more precise S&P definition for industrial/utility companies often starts with:
$$FFO = \text{Net Income attributable to parent} + \text{Depreciation and Amortization} + \text{Deferred Taxes} + \text{Other non-cash items}$$

Let's look at the available data points for the period 2022-01-01 to 2023-01-01 (Fiscal Year 2022):

*   **Net Income (Profit Loss Attributable To Owners Of Parent):** 255,200,000 EUR
    *   *Note: S&P often uses Consolidated Net Income including non-controlling interests for the numerator if debt is consolidated, or adjusts. Let's look at the total Profit Loss first.*
    *   Total Profit Loss: 305,300,000 EUR.
    *   Usually, FFO is calculated on a consolidated basis. Let's use the total Net Income (Profit Loss) of 305,300,000 EUR as the starting point, or strictly follow the "Attributable to Owners" if matching equity. S&P typically uses consolidated net income. Let's use **305,300,000 EUR**.

*   **Depreciation and Amortization:**
    *   The line item "Amortisation Depreciation And Provisions" is 667,100,000 EUR.
    *   However, "Provisions" are not non-cash add-backs in the same way D&A are (they involve cash outflows eventually). The line item "Adjustments For Depreciation And Amortisation Expense..." in the cash flow statement is **478,600,000 EUR**. This is a more accurate figure for actual D&A added back in cash flow contexts. Let's verify.
    *   Usually, S&P adds back D&A. Let's use the explicit D&A adjustment from the cash flow statement: **478,600,000 EUR**.

*   **Deferred Taxes:**
    *   Change in Deferred Tax Assets: $240,400,000 - 229,400,000 = 11,000,000$ (Increase in asset is a use of cash/non-cash expense reduction? No, increase in DTA is a non-cash benefit, so we subtract it? Or we add back the expense?).
    *   Change in Deferred Tax Liabilities: $215,700,000 - 132,100,000 = 83,600,000$ (Increase in liability is a non-cash expense add-back).
    *   Net Deferred Tax Expense/Benefit: The Income Tax Expense is 103,500,000.
    *   Let's look at the Cash Flow from Operations.
    *   S&P FFO Definition: Net Income + Depreciation/Amortization + Deferred Income Taxes + Other Non-Cash Items.
    *   Deferred Tax Expense = Current Tax + Change in Deferred Taxes.
    *   Let's approximate Deferred Tax add-back. The increase in DTL is 83.6M. The increase in DTA is 11M. Net Deferred Tax Liability increase is roughly $83.6 - 11 = 72.6$M. This represents a non-cash tax expense included in Net Income, so we add it back.
    *   Add back: **~72,600,000 EUR**.

*   **Other Non-Cash Items:**
    *   Share of profit of associates (equity method): 10,000,000 EUR. This is non-cash income included in Net Income. We must **subtract** this.
    *   Capital Gains/Losses: "Capital Gains Losses And Other Non Monetary Elements" is 41,600,000 EUR. This is likely a gain (positive number in adjustments usually implies it was deducted from NI to get CFO, or added? In the CFO section, it's listed under adjustments. Usually, gains are subtracted from Net Income to get CFO. If it's a positive adjustment in the list of "Adjustments... recognized in Profit or Loss", it might be an expense. Let's look at the context. "Adjustments for... Capital Gains Losses...". If it's a gain, it reduces FFO. If it's a loss, it increases FFO. Given the magnitude and nature of utilities, let's assume these are non-operating or non-cash.
    *   Let's stick to a simpler, robust S&P proxy often used when detailed breakdowns are tricky: **EBITDA - Cash Taxes - Cash Interest - Changes in Working Capital**? No, FFO is closer to Operating Cash Flow before working capital changes minus cash interest/taxes?
    *   Actually, a very common S&P formula is:
        $$FFO = \text{Net Income} + \text{Depreciation} + \text{Amortization} + \text{Deferred Taxes} + \text{Non-Cash Compensation} \dots$$
    *   Let's try calculating **CFO (Cash Flow from Operations)** and adjusting for S&P specifics.
    *   Reported "Cash Flows From Used In Operating Activities": **35,700,000 EUR**.
    *   This is extremely low compared to Net Income (305M). Why?
    *   Working Capital changes were huge negatives: -927,600,000 EUR.
    *   S&P FFO typically **excludes** changes in working capital.
    *   So, a good proxy for FFO is **Cash Flow from Operations BEFORE changes in working capital** minus **Cash Interest** and **Cash Taxes**?
    *   Wait, the standard definition of FFO (NAREIT) is Net Income + D&A. S&P modifies this.
    *   S&P's "Funds From Operations" for rated companies:
        $$FFO = \text{Consolidated Net Income} + \text{Depreciation and Amortization} + \text{Deferred Income Taxes} + \text{Other Non-Cash Items}$$
        It does **not** subtract changes in working capital.
        
    Let's reconstruct FFO using the components:
    1.  **Net Income (Consolidated):** 305,300,000 EUR
    2.  **Add: Depreciation & Amortization:** 478,600,000 EUR (from "Adjustments For Depreciation And Amortisation...")
    3.  **Add: Deferred Taxes:**
        *   Tax Expense: 103,500,000
        *   Cash Taxes Paid: 165,900,000
        *   The difference is roughly the change in tax liabilities/assets.
        *   Alternatively, calculate the deferred portion directly.
        *   Change in Deferred Tax Liab: +83,600,000
        *   Change in Deferred Tax Asset: +11,000,000 (Increase in asset reduces tax expense but doesn't save cash? No, increase in DTA means we paid more cash than expense? Or we recognized expense but didn't pay?
        *   Let's use the simple add-back of the net change in deferred tax balances.
        *   Net Deferred Tax Expense = Change in DTL - Change in DTA = $83.6M - 11.0M = 72.6M$.
        *   Add back **72,600,000 EUR**.
    4.  **Adjust for Non-Cash/Non-Operating Items:**
        *   **Share of Associates:** 10,000,000 EUR (Income). Subtract this as it's non-cash equity pickup. **-10,000,000 EUR**.
        *   **Finance Income/Cost:** FFO is pre-interest? No, FFO is after interest in some definitions, but S&P often looks at FFO as a debt service metric. Actually, standard S&P FFO is **after** interest and taxes.
        *   **Capital Gains/Losses:** The item "Capital Gains Losses And Other Non Monetary Elements" is 41,600,000 EUR. In the cash flow statement, this is an adjustment to reconcile Net Income to Operating Cash Flow. If it's positive in the adjustment list, it usually means it was a loss (added back) or a gain (subtracted)?
        *   Let's check the sign convention. Net Income is 305M. CFO is 35M.
        *   Start with Net Income: 305.3
        *   + D&A: 478.6
        *   + Provisions/Other: 188.5 (Allocation to provisions) - 27.8 (Change in provision risks) ... this is getting complex.
        *   Let's look at "Cash Flows From Used In Operations Before Changes In Working Capital": **1,202,000,000 EUR**.
        *   This figure (1.202B) represents the cash generated from operations before working capital swings.
        *   Does S&P FFO equal this?
        *   S&P FFO $\approx$ CFO before working capital changes - Cash Interest - Cash Taxes?
        *   Let's check the components of that 1.202B.
        *   It usually starts with Net Income + D&A + Other non-cash.
        *   So, $FFO_{proxy} = 1,202,000,000$ EUR?
        *   Wait, FFO is an earnings measure, not strictly a cash flow measure, but S&P uses it as a cash flow proxy.
        *   Standard S&P Calculation:
            $$FFO = \text{Net Income} + \text{D\&A} + \text{Deferred Tax} + \text{Non-Cash Comp} + \dots$$
        *   Let's sum the explicit add-backs to Net Income found in the Cash Flow statement up to the "Before Working Capital" line.
        *   Net Income: 305,300,000
        *   Adjustments listed:
            *   Depreciation/Amortization: 478,600,000
            *   Allocation to Provisions: 188,500,000
            *   Undistributed Profits of Associates: -10,000,000
            *   Finance Income/Cost Adjustments: 135,000,000 (This likely adds back interest expense net of income)
            *   Capital Gains/Losses: 41,600,000
            *   Change in Provision for Risks: -27,800,000
            *   Employee Benefit Liabilities: -12,700,000
        *   Sum of Adjustments: $478.6 + 188.5 - 10 + 135 + 41.6 - 27.8 - 12.7 = 793.2$ million.
        *   Net Income (305.3) + Adjustments (793.2) = 1,098.5 million.
        *   The reported "Cash Flows From Used In Operations Before Changes In Working Capital" is **1,202,000,000**.
        *   The difference (1,202 - 1,098.5 = 103.5) might be due to other items or the specific treatment of "Finance Income Cost".
        *   Note: The adjustment for Finance Income/Cost is 135M. The net finance cost in P&L is 125M (Cost 217.2 - Income 82.2). The difference (10M) might be non-cash or accrued.
        *   S&P FFO typically **includes** interest expense (it is deducted to arrive at Net Income, and not added back in FFO, unlike EBITDA). Wait.
        *   **Crucial Distinction:**
            *   **EBITDA** adds back Interest and Taxes.
            *   **FFO** (S&P) starts with Net Income (which has Interest and Taxes deducted). It adds back D&A and non-cash items. It does **NOT** add back Interest or Cash Taxes.
            *   Therefore, the line "Cash Flows From Operations Before Changes In Working Capital" (1,202M) likely **adds back** interest and taxes (or starts from EBITDA).
            *   Let's verify. If we take Net Income (305.3) and add back D&A (478.6) and Deferred Taxes (72.6) and subtract Equity Income (10), we get:
                $305.3 + 478.6 + 72.6 - 10 = 846.5$ million.
            *   This looks like a reasonable FFO figure.
            *   Let's refine the Deferred Tax.
                *   Tax Expense: 103.5M.
                *   Cash Tax Paid: 165.9M.
                *   The difference is 62.4M. This implies we paid more cash than we expensed. This reduces cash flow but FFO is an earnings-based metric.
                *   In FFO, we add back the *non-cash* portion of tax expense (Deferred Tax).
                *   Deferred Tax Expense = Total Tax Expense - Current Tax Expense.
                *   We don't have Current Tax Expense explicitly, but we have Cash Taxes Paid and changes in Tax Payables.
                *   Change in Current Tax Liabilities: $17.1M - 27.9M = -10.8M$ (Decrease).
                *   Change in Current Tax Assets: $46.0M - 21.2M = +24.8M$ (Increase).
                *   Current Tax Expense $\approx$ Cash Paid + Increase in Payable (or - Decrease) + Increase in Asset?
                *   Current Tax Expense $\approx 165.9 - 10.8 + 24.8 = 179.9$M?
                *   Total Tax Expense = 103.5M.
                *   This implies a large Deferred Tax *Benefit* (negative expense) of $103.5 - 179.9 = -76.4$M.
                *   If Deferred Tax is a benefit (income), it increased Net Income. To get to FFO, we must **subtract** this non-cash benefit.
                *   So, Add Back Deferred Tax = -76.4M.
                *   Let's re-calculate FFO:
                    *   Net Income: 305.3M
                    *   Add D&A: 478.6M
                    *   Subtract Deferred Tax Benefit: -76.4M
                    *   Subtract Equity Income: -10.0M
                    *   **FFO Estimate:** $305.3 + 478.6 - 76.4 - 10.0 = 697.5$ million EUR.

    Let's try another angle. S&P often defines FFO as:
    $$FFO = \text{EBITDA} - \text{Cash Interest} - \text{Cash Taxes} - \text{Preferred Dividends}$$
    *   **EBITDA:**
        *   Operating Profit (Profit Loss From Operating Activities): 533.8M
        *   Add D&A: 478.6M (Using the cash flow adj, not the 667M which includes provisions)
        *   EBITDA $\approx 533.8 + 478.6 = 1,012.4$ million EUR.
        *   *Check:* Revenue (20,082) - Raw Mat (16,730) - Services (2,105.8) - Employee (601.1) - Other Exp (74.9) + Other Rev (548.2) + Cap Work (82.5) = Op Profit?
        *   $20,082 + 548.2 + 82.5 - 16,730 - 2,105.8 - 601.1 - 74.9 = 1,200.9$?
        *   Reported Op Profit is 533.8M. There is a large gap. Ah, "Raw Materials" is very high.
        *   Let's trust the reported "Profit Loss From Operating Activities": 533.8M.
        *   Add back D&A (478.6M).
        *   EBITDA $\approx 1,012.4$M.
    *   **Cash Interest:**
        *   Finance Costs Paid (Operating): 128.0M.
        *   Finance Income Received (Operating): 41.8M.
        *   Net Cash Interest Paid = $128.0 - 41.8 = 86.2$ million EUR.
    *   **Cash Taxes:**
        *   Income Taxes Paid (Operating): 165.9 million EUR.
    *   **FFO Calculation:**
        *   $FFO = 1,012.4 - 86.2 - 165.9 = 760.3$ million EUR.

    Let's compare the two estimates:
    1.  Net Income + D&A + Def Tax - Equity Inc: **697.5M**
    2.  EBITDA - Cash Interest - Cash Taxes: **760.3M**

    The difference (62.8M) is roughly the Deferred Tax Benefit we calculated earlier (76.4M) plus/minus other small items.
    Which one is more "S&P"?
    S&P's "Funds From Operations" generally aligns with the Net Income approach but ensures non-cash items are handled. However, for utilities, S&P often focuses on **CFO before working capital changes** minus **maintenance capex**? No, that's Free Operating Cash Flow.
    
    Standard S&P Corporate Methodology:
    **FFO = Net Income + Depreciation + Amortization + Deferred Income Taxes + Other Non-Cash Items.**
    
    Let's refine the "Other Non-Cash Items".
    In the Cash Flow statement, the bridge from Net Income (305.3) to "Cash Flows From Operations Before Changes In Working Capital" (1,202.0) includes:
    - Add: D&A (478.6)
    - Add: Provisions (188.5 - 27.8 = 160.7) -> Provisions are non-cash expenses. S&P usually adds these back to FFO? Yes, if they are non-cash.
    - Add: Finance Cost Net (135.0) -> This adds back interest. **FFO should NOT add back interest.** Interest is a real cash cost.
    - Add: Capital Gains/Losses (41.6)
    - Less: Equity Income (10.0)
    
    So, the line "Cash Flows From Operations Before Changes In Working Capital" (1,202M) is effectively **EBITDA + Non-Cash Provisions - Equity Income +/- Other**. It is **not** FFO because it adds back interest.
    
    To get FFO from this 1,202M figure:
    $$FFO = 1,202.0 - \text{Interest Added Back} - \text{Cash Taxes?}$$
    Wait, the 1,202M is *before* working capital, but is it before or after cash taxes/interest?
    The adjustments include "Finance Income Cost" (135M add-back). This means Interest was deducted to get Net Income, and then added back. So 1,202M is pre-interest.
    The adjustments do *not* explicitly add back "Income Taxes Paid". They adjust for "Income Tax Expense" via Deferred Taxes and Current Tax changes implicitly in the working capital or separate lines?
    Usually, "Cash Flows From Operations" starts with Net Income (after tax). The adjustments add back non-cash tax (deferred). The cash tax is an outflow.
    So, 1,202M is likely **Pre-Interest, After-Cash-Tax**? Or **Pre-Interest, Pre-Cash-Tax**?
    
    Let's look at the structure:
    Net Income (After Interest, After Tax)
    + D&A
    + Deferred Tax (Non-cash tax)
    + Interest (Non-cash? No, added back here)
    = 1,202M.
    
    If Interest is added back, 1,202M is roughly EBITDA (adjusted for provisions/equity).
    To get FFO (which is After Interest, After Tax, but Before Working Capital changes in some definitions? No, FFO is an earnings metric, not cash flow).
    
    Let's stick to the strict S&P definition:
    **FFO = Net Income + D&A + Deferred Taxes + Non-Cash Items.**
    
    Using the values:
    *   Net Income: 305.3M
    *   D&A: 478.6M
    *   Deferred Taxes: We established a Deferred Tax *Benefit* of ~76M (because Cash Tax > Tax Expense). So we subtract 76M.
    *   Non-Cash Items:
        *   Equity Income: -10M (Subtract)
        *   Provisions: The "Allocation to Provisions" (188.5M) and "Change in Provision" (-27.8M) are non-cash expenses. S&P typically adds back non-cash provisions. Let's add back the net provision expense: $188.5 - 27.8 = 160.7$M.
        *   Capital Gains/Losses: 41.6M. If this is a loss, add back. If gain, subtract. Given it's an "Adjustment... recognized in Profit or Loss", and typically utilities have small gains/losses, let's assume it's a non-cash loss or write-down added back. Let's add 41.6M.
        *   Employee Benefits: -12.7M. This is an adjustment for liability changes. Likely non-cash. Add back? Or is it a reversal? Let's assume it's part of the provision/non-cash bucket.
    
    Revised FFO:
    $305.3 \text{ (NI)} + 478.6 \text{ (D\&A)} - 76.4 \text{ (Def Tax)} - 10.0 \text{ (Equity)} + 160.7 \text{ (Provisions)} + 41.6 \text{ (Cap Gains/Loss)} - 12.7 \text{ (Emp Ben)}$
    $= 305.3 + 478.6 - 76.4 - 10 + 160.7 + 41.6 - 12.7$
    $= 887.1$ million EUR.

    Let's check this against the "EBITDA - Cash Interest - Cash Taxes" method (760.3M).
    The difference is ~127M. This is largely the Provisions (160M).
    Does S&P add back provisions to FFO?
    S&P says: "We add back noncash expenses such as... provisions for environmental remediation or restructuring."
    So yes, adding back provisions is correct for FFO.
    
    So, **FFO $\approx$ 887 million EUR**.

**2. Calculate Net Debt**

Net Debt = Gross Debt - Cash and Cash Equivalents.

*   **Gross Debt:**
    *   Noncurrent Financial Liabilities: 5,689,900,000 EUR
    *   Current Financial Liabilities: 650,100,000 EUR
    *   Noncurrent Lease Liabilities: 55,100,000 EUR
    *   Current Lease Liabilities: 21,300,000 EUR
    *   *Note: S&P typically includes lease liabilities in debt.*
    *   Total Debt = $5,689.9 + 650.1 + 55.1 + 21.3 = 6,416.4$ million EUR.
    *   Are there other debt-like items? "Noncurrent Derivative Financial Liabilities" (6.3M) and "Current Derivative Financial Liabilities" (1,347.6M). Derivatives are usually excluded from Net Debt unless they are hedging debt, but S&P often looks at "Debt" as borrowings. We will stick to Financial Liabilities + Lease Liabilities.
    *   Gross Debt = **6,416.4 million EUR**.

*   **Cash and Cash Equivalents:**
    *   From Balance Sheet: **1,942.4 million EUR**.
    *   *Note: S&P may deduct restricted cash. We don't have that breakdown, so we use total Cash & Equivalents.*

*   **Net Debt:**
    *   $6,416.4 - 1,942.4 = 4,474.0$ million EUR.

**3. Calculate FFO / Net Debt Ratio**

*   FFO: 887.1 million EUR
*   Net Debt: 4,474.0 million EUR
*   Ratio: $887.1 / 4,474.0 \approx 0.198$

Let's double check the FFO calculation. Is there a simpler S&P proxy?
Often, analysts use **CFO + Interest Paid + Taxes Paid** as a proxy for FFO + Working Capital Changes.
CFO = 35.7M.
Interest Paid (Net) = 86.2M.
Taxes Paid = 165.9M.
Sum = $35.7 + 86.2 + 165.9 = 287.8$M.
This is CFO + Cash Interest + Cash Taxes. This equals **Net Income + D&A + Non-Cash Items - Working Capital Changes**.
To get FFO, we add back the Working Capital Changes.
Working Capital Change = -927.6M (This was a negative impact on CFO, meaning WC increased, consuming cash).
So, add back the increase in WC?
$FFO \approx 287.8 - (-927.6)$? No.
CFO = FFO - Change in WC (roughly).
$35.7 = FFO - 927.6$?
If WC increased by 927.6, CFO is lower than FFO by 927.6.
$FFO = 35.7 + 927.6 = 963.3$ million EUR.

This figure (963.3M) is close to our detailed calculation (887.1M). The difference (76M) is likely the Deferred Tax treatment or Provision treatment.
Let's look at the "Cash Flows From Operations Before Changes In Working Capital" again: 1,202M.
This figure is Pre-Interest?
We determined 1,202M adds back Interest (135M).
So, $1,202M - \text{Cash Interest} (86.2M) - \text{Cash Taxes} (165.9M) = 949.9$ million EUR.
This 949.9M represents **Net Income + D&A + Non-Cash Items (including Provisions) - Equity Income**.
This is a very strong candidate for S&P FFO.
Let's use **950 million EUR** as the FFO estimate.

Recalculating Ratio:
$FFO = 950$ million EUR
$Net Debt = 4,474$ million EUR
$Ratio = 950 / 4,474 = 0.212$

Let's refine the Debt.
S&P defines Debt as: Short-term and long-term borrowings, capital leases, and preferred stock (if treated as debt).
Financial Liabilities: $5,689.9 + 650.1 = 6,340.0$
Lease Liabilities: $55.1 + 21.3 = 76.4$
Total Debt = 6,416.4
Cash = 1,942.4
Net Debt = 4,474.0

Let's refine FFO one last time.
S&P Global Ratings: "Funds from operations (FFO) is net income plus depreciation, amortization, and other noncash items."
Using the Cash Flow Statement "Before WC" line (1,202M) is the most reliable "Net Income + Non-Cash" aggregate provided.
However, that line includes the add-back of Finance Costs (135M).
FFO should *not* add back Finance Costs (Interest).
So we must subtract the Net Interest Add-back.
Net Interest Add-back in CF statement: 135M.
Actual Net Cash Interest: 86.2M.
The difference (48.8M) is non-cash interest or accruals.
If we subtract the *entire* finance add-back (135M) from 1,202M, we get 1,067M. This is Net Income + D&A + Provisions + Other Non-Cash - Equity Income.
But we need to subtract Cash Interest to be consistent with "Funds From Operations" available to pay debt?
No, FFO is an *earnings* measure. Interest is an expense. It is already deducted in Net Income. We should NOT add it back.
The 1,202M figure *did* add it back. So we must subtract it.
Should we subtract Cash Interest or Accrued Interest?
FFO is based on Net Income. Net Income has Accrued Interest deducted.
The 1,202M added back the Accrued Interest (via the Finance Cost adjustment).
So, $1,202M - 135M (\text{Finance Add-back}) = 1,067M$.
This 1,067M is Net Income + D&A + Provisions + Other Non-Cash - Equity Income.
Is this FFO?
Yes, this fits the definition: Net Income + Non-Cash Items.
Let's check the components of 1,067M:
NI (305.3) + D&A (478.6) + Provisions (160.7) + CapGains (41.6) + EmpBen (-12.7) - Equity (10) + Other?
$305.3 + 478.6 + 160.7 + 41.6 - 12.7 - 10 = 963.5$.
The difference between 963.5 and 1,067 is ~103M.
Looking at the adjustments again:
"Adjustments For Finance Income Cost" 135M.
"Adjustments For Undistributed Profits" -10M.
"Capital Gains" 41.6M.
"Change in Provision" -27.8M.
"Allocation to Provisions" 188.5M.
Maybe I missed an item. "Other Expense By Nature"? No.
Regardless, the "Before WC" line is 1,202M.
Subtract Finance Add-back (135M) -> 1,067M.
This 1,067M is the FFO.

Let's use **FFO = 1,067 million EUR**.

Ratio: $1,067 / 4,474 = 0.238$.

Let's consider if "Provisions" should be included. S&P adds back *non-cash* provisions. The 188.5M allocation is non-cash. The -27.8M change is also non-cash. So yes, they are included in FFO.

Final Check:
FFO: ~1,067M
Net Debt: ~4,474M
Ratio: 0.238

Rounding to two decimal places: 0.24.

<answer>0.24</answer>