I don’t have a complete taxonomy-based S&P industry classification for “FERROVIAL SA” in the input, but from the financials, the company has large investments in infrastructure projects (intangible asset model, financial asset model), operates toll roads and airports, and holds associates in similar businesses, which aligns with the **Transportation Infrastructure** methodology. I’ll follow the Transportation Infrastructure method, noting that FFO to debt is the core ratio and the sector uses S&P’s standard adjustments (leases, pensions, surplus cash, etc.) unless specified otherwise. --- ### Step 1 – Identify industry Ferrovial’s main assets are concession-based infrastructure projects → **Transportation Infrastructure** sector. --- ### Step 2 – Adjusted EBITDA (S&P basis) Start from **Profit from operations before impairment and disposals** = 429,000,000 EUR (FY2022). This is reconciled from the P&L: - Revenue + Other Income = 7,553,000,000 EUR - Less: Operating Expense (excl. amort.) = (6,825,000,000 – 299,000,000) = 6,526,000,000 EUR ? Wait—Operating Expense = 6,825,000,000 includes amortisation? Check: Gross Profit = 728,000,000 Amortisation = 299,000,000 Profit from operations before impairment = 429,000,000 → Correct. So EBITDA = Profit from operations before impairment + Amortisation = 429,000,000 + 299,000,000 = 728,000,000 EUR. Now add back lease depreciation (depreciation of right-of-use assets) if it’s in operating expense—but lease deprec. is included in amort./deprec. and the lease interest is in finance cost; S&P adjustments for leases will be added later. Ferrovial’s EBITDA already = 728,000,000 EUR (since no D&A other than amortisation, no impairment in that line). However, S&P may adjust for: - **Non-recurring items** – Fair value adjustments in Operating Expense: +1,000,000 EUR negative fair value? In 2022, Operating Expense includes –1,000,000 from fair value, meaning 1M gain already netted. We should add back unusual non-cash items if needed. For simplicity, none large. - **Proportional consolidation of associates** – S&P adds proportional EBITDA from significant JVs/associates. Ferrovial’s share of profit of associates = 165,000,000 EUR (before tax). We would add proportional EBITDA share (not just net income). Without full details, generally we approximate by adding (Share of profit + proportional interest + depreciation + interest). But here no detail, so we keep it simple: approximate proportional EBITDA contribution as share of profit before tax plus D&A proportional. Not enough info → exclude for now. So adjusted EBITDA ≈ 728,000,000 EUR. **Lease adjustment:** S&P adds operating lease expense (depreciation + interest) for entities that have ROU assets/lease liabilities. With IFRS 16 already capitalised, no additional EBITDA add-back needed; leases already recognised. So **Adjusted EBITDA** = 728,000,000 EUR. --- ### Step 3 – FFO Formula: FFO = Adjusted EBITDA – cash interest – cash taxes. **Cash interest:** Finance income/cost (total) = –320,000,000 EUR. This includes: - Financial result of infrastructure projects: –365,000,000 (includes –100M fair value derivatives). - Financial result excluding infrastructure projects: +45,000,000 EUR (includes +48M fair value derivatives). Cash interest = reported finance cost minus non-cash items (fair value changes on derivatives, amortised fees, etc.): - Infrastructure: –243,000,000 financing cost is likely cash interest. Derivatives result (–22M before fair value) could be partly non-cash. We'll take the “before fair value adjustments” portion: Financial result of infrastructure projects before fair value = –265,000,000 EUR, of which –243M is financing cost (cash) and –22M derivatives may have cash elements. For simplicity, cash interest = –243M (financing of infrastructure) + (–1M financing excl. infra before fair value) = –244,000,000 EUR. Excluding derivatives, cash interest ≈ –244,000,000 EUR. **Cash taxes:** Income tax expense = 30,000,000 EUR. Cash taxes paid (from cash flow) = 82,000,000 EUR. S&P uses cash taxes from cash flow statement, so 82,000,000 EUR. Thus: FFO = 728,000,000 – 244,000,000 – 82,000,000 = 402,000,000 EUR. --- ### Step 4 – Adjusted Debt Reported debt = Noncurrent borrowings + Current borrowings (excluding leases): - Noncurrent borrowings (excl. leases) = 10,776,000,000 EUR - Current borrowings (excl. leases) = 877,000,000 EUR Total reported debt ≈ 11,653,000,000 EUR. **Add:** - Lease liabilities (current + noncurrent) = 120,000,000 + 64,000,000 = 184,000,000 EUR. - Pension deficits? Provisions for employee benefits negligible (2M). No material adjustment. - Guarantees/debt-like items? No info → assume 0. - Hybrid debt? Other equity securities (perpetual subordinated bonds) 508,000,000 EUR – S&P often treats 50% as debt = 254,000,000 EUR. We’ll add that. So Adjusted gross debt = 11,653,000,000 + 184,000,000 + 254,000,000 = 12,091,000,000 EUR. **Less eligible cash:** S&P caps cash at a certain amount; usually surplus cash = cash in excess of operating needs, but often simplified as total cash. Cash and equivalents = 5,130,000,000 EUR. Restricted cash related to infra projects excluded (597M noncurrent restricted, + current restricted cash 38M). Non-restricted cash = 4,962,000,000 EUR (excl. infra project cash). We’ll assume all non-restricted cash is surplus. Adjusted Debt = 12,091,000,000 – 4,962,000,000 = 7,129,000,000 EUR. --- ### Step 5 – Ratio FFO / Adjusted Debt = 402,000,000 / 7,129,000,000 = 0.05639… Rounded to 4 decimal places: **0.0564**. --- 0.0564