## 1. Relevant industry

ENI S.p.A. is an integrated oil and gas company with substantial exploration and production, refining, marketing, gas, power, and related energy activities. Among the provided methodologies, the closest fit is:

**Oil And Gas Exploration And Production**, with integrated-company considerations.

Because the data provided does not include reserve life, reserve replacement, production volumes, unit costs, or S&P-specific adjustments, I estimate credit metrics using the baseline formulas and available financial statement data.

---

## 2. Estimate 2021 Adjusted EBITDA

For 2021, reported operating profit was:

- Profit from operating activities: **€12.341bn**
- Depreciation and amortisation: **€7.063bn**
- Impairment loss / reversal recognized in profit or loss: **€0.167bn**
- Write-off of tangible and intangible assets: **€0.387bn**

Reconstructed EBITDA approximation:

\[
EBITDA = Operating\ Profit + D\&A + Impairment + Write-offs
\]

\[
2021\ EBITDA = 12.341 + 7.063 + 0.167 + 0.387 = 19.958
\]

No additional lease, pension, JV proportional EBITDA, or nonrecurring normalization adjustments are determinable from the facts with sufficient precision.

**2021 Adjusted EBITDA ≈ €19.958bn**

---

## 3. Estimate 2021 FFO

Baseline formula:

\[
FFO = Adjusted\ EBITDA - cash\ interest - cash\ taxes
\]

For 2021:

- Adjusted EBITDA: **€19.958bn**
- Interest paid classified as operating activities: **€0.792bn**
- Income taxes paid: **€3.726bn**

\[
2021\ FFO = 19.958 - 0.792 - 3.726 = 15.440
\]

**2021 FFO ≈ €15.440bn**

---

## 4. Estimate 2021 Adjusted Debt

Use year-end 2021 balance sheet, i.e. 2022-01-01 values.

Reported debt components:

- Short-term borrowings: **€2.299bn**
- Current portion of long-term borrowings: **€1.781bn**
- Long-term borrowings: **€23.714bn**
- Current lease liabilities: **€0.948bn**
- Noncurrent lease liabilities: **€4.389bn**

\[
Reported\ debt\ including\ leases = 2.299 + 1.781 + 23.714 + 0.948 + 4.389 = 33.131
\]

Eligible cash approximation:

- Cash and cash equivalents: **€8.254bn**

S&P often applies surplus cash netting subject to restrictions and haircuts, but absent detailed information, I net reported cash only and do not include current financial assets at fair value as cash equivalents.

\[
2021\ Adjusted\ Debt = 33.131 - 8.254 = 24.877
\]

**2021 Adjusted Debt ≈ €24.877bn**

---

## 5. 2021 Adjusted Debt / Adjusted EBITDA

\[
Debt/EBITDA = 24.877 / 19.958 = 1.246
\]

**2021 Adjusted Debt / Adjusted EBITDA ≈ 1.25x**

---

## 6. 2021 FFO / Adjusted Debt

\[
FFO/Debt = 15.440 / 24.877 = 0.621
\]

**2021 FFO / Adjusted Debt ≈ 0.62, or 62.1%**

---

## 7. Estimate 2022 Adjusted EBITDA

For 2022:

- Profit from operating activities: **€17.510bn**
- Depreciation and amortisation: **€7.205bn**
- Impairment loss / reversal recognized in profit or loss: **€1.140bn**
- Write-off of tangible and intangible assets: **€0.599bn**

\[
2022\ EBITDA = 17.510 + 7.205 + 1.140 + 0.599 = 26.454
\]

**2022 Adjusted EBITDA ≈ €26.454bn**

---

## 8. Estimate 2022 FFO

For 2022:

- Adjusted EBITDA: **€26.454bn**
- Interest paid classified as operating activities: **€0.851bn**
- Income taxes paid: **€8.488bn**

\[
2022\ FFO = 26.454 - 0.851 - 8.488 = 17.115
\]

**2022 FFO ≈ €17.115bn**

---

## 9. Estimate 2022 Adjusted Debt

Use year-end 2022 balance sheet, i.e. 2023-01-01 values.

Reported debt components:

- Short-term borrowings: **€4.446bn**
- Current portion of long-term borrowings: **€3.097bn**
- Long-term borrowings: **€19.374bn**
- Current lease liabilities: **€0.884bn**
- Noncurrent lease liabilities: **€4.067bn**

\[
Reported\ debt\ including\ leases = 4.446 + 3.097 + 19.374 + 0.884 + 4.067 = 31.868
\]

Eligible cash approximation:

- Cash and cash equivalents: **€10.155bn**

\[
2022\ Adjusted\ Debt = 31.868 - 10.155 = 21.713
\]

**2022 Adjusted Debt ≈ €21.713bn**

---

## 10. 2022 Adjusted Debt / Adjusted EBITDA

\[
Debt/EBITDA = 21.713 / 26.454 = 0.821
\]

**2022 Adjusted Debt / Adjusted EBITDA ≈ 0.82x**

---

## 11. 2022 FFO / Adjusted Debt

\[
FFO/Debt = 17.115 / 21.713 = 0.788
\]

**2022 FFO / Adjusted Debt ≈ 0.79, or 78.8%**

---

## 12. Year-on-year credit trend classification

### Signal 1: Leverage

\[
Change = 2022\ Debt/EBITDA - 2021\ Debt/EBITDA
\]

\[
Change = 0.821 - 1.246 = -0.425x
\]

Threshold:

- ≤ -0.2x = Improving

**Leverage signal: Improving**

### Signal 2: Cash-flow coverage

\[
Change = 2022\ FFO/Debt - 2021\ FFO/Debt
\]

\[
Change = 0.788 - 0.621 = 0.167
\]

Threshold:

- ≥ +0.03 = Improving

**Cash-flow coverage signal: Improving**

### Combined assessment

Both leverage and cash-flow coverage improved materially. Debt declined on a net basis, EBITDA increased substantially, and FFO coverage strengthened despite higher cash taxes. The year-on-year credit trend from 2021 to 2022 is therefore:

<answer>Improving</answer>