# Step-by-Step Analysis

## Step 1: Identify Relevant Industry

Acciona SA is a Spanish company focused on renewable energy, infrastructure, and other sustainable solutions. Given the information provided shows significant revenue growth, property plant and equipment, and equity-accounted investments, but no mention of regulated utility operations, oil and gas E&P, or transportation infrastructure concessions, I'll apply the general corporate baseline methodology.

However, Acciona has substantial renewable energy operations (wind, solar) which could fall under "Unregulated Power and Gas." But since the provided facts don't clearly delineate the business segments and the methodology references specific adjustments, I'll use the **general corporate baseline** formulas as instructed.

## Step 2: Estimate 2021 Adjusted_EBITDA

**Reconstructing EBITDA 2021:**

From the income statement (using dates 2021-01-01 to 2022-01-01):
- Revenue: 8,104,000,000
- Other Income: 563,000,000
- Changes in Inventories: -110,000,000
- Raw Materials & Consumables: -1,980,000,000
- Employee Benefits: -1,787,000,000
- Other Expense by Nature: -3,621,000,000
- Dotacion Amortizacion (Depreciation/Amortization/Provisions): -714,000,000
- Impairment Loss: -67,000,000
- Other Gains/Losses: -7,000,000
- Resultado Puesta en Equivalencia Operativa: 94,000,000

Profit from Operating Activities = 829,000,000

EBITDA = Profit from Operating Activities + Depreciation/Amortization/Provisions + Impairment
EBITDA = 829,000,000 + 714,000,000 + 67,000,000 = 1,610,000,000

**Lease adjustments:**
- Right-of-use assets: 528,000,000 (2022-01-01)
- Noncurrent lease liabilities: 430,000,000
- Current lease liabilities: 68,000,000
- Total lease liabilities = 498,000,000

For S&P adjustment, we need to add back lease depreciation and remove lease interest from EBITDA. Without explicit lease depreciation, I'll estimate using the lease liability (~498M) and the right-of-use asset (~528M). The lease depreciation component within the 714M is not separately specified. I'll assume no material adjustment is needed for simplicity given the data.

**Non-recurring items:** No clear non-recurring items identified.

**Adjusted_EBITDA 2021 ≈ 1,610,000,000 EUR**

## Step 3: Estimate 2021 FFO

FFO = Adjusted_EBITDA - Cash_Interest - Cash_Taxes

**Cash Interest:**
- Finance Costs: 235,000,000
- Finance Income: 55,000,000
- Net interest cost ≈ 235,000,000 - 55,000,000 = 180,000,000
- Interest Paid (from cash flow): 206,000,000
- Interest Received: 23,000,000
- Net cash interest ≈ 206,000,000 - 23,000,000 = 183,000,000

Using cash flow figures (more conservative):
Net Cash Interest = 206,000,000 - 23,000,000 = 183,000,000

**Cash Taxes:**
- Income Tax Expense: 171,000,000
- Income Taxes Paid: 82,000,000

Using actual taxes paid: 82,000,000

FFO = 1,610,000,000 - 183,000,000 - 82,000,000 = 1,345,000,000

## Step 4: Estimate 2021 Adjusted_Debt

**Reported Debt:**
- Noncurrent bonds/debt: 2,364,000,000
- Noncurrent loans: 2,073,000,000
- Current bonds/debt: 1,666,000,000
- Current loans: 280,000,000
- Total reported debt = 6,383,000,000

**Leases:**
- Noncurrent lease liabilities: 430,000,000
- Current lease liabilities: 68,000,000
- Total leases = 498,000,000

**Other items:**
- Pension deficit: Not explicitly stated. Other noncurrent liabilities include provisions and others, but no clear pension deficit. I'll assume 0.
- Guarantees/hybrids: Not evident from data.
- Noncontrolling interests and other equity items are not debt-like.

**Cash:**
- Cash & Cash Equivalents: 2,318,000,000
- Current Financial Assets: 218,000,000

S&P typically allows deduction of surplus cash. I'll assume eligible cash = 2,318,000,000 (cash and equivalents).

Adjusted_Debt = 6,383,000,000 + 498,000,000 - 2,318,000,000 = 4,563,000,000

## Step 5: 2021 Adjusted_Debt / Adjusted_EBITDA

= 4,563,000,000 / 1,610,000,000 = 2.83x

## Step 6: 2021 FFO / Adjusted_Debt

= 1,345,000,000 / 4,563,000,000 = 0.295 (29.5%)

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## Step 7: Estimate 2022 Adjusted_EBITDA

**Reconstructing EBITDA 2022 (2022-01-01 to 2023-01-01):**
- Revenue: 11,195,000,000
- Other Income: 1,016,000,000
- Changes in Inventories: -72,000,000
- Raw Materials: -3,483,000,000
- Employee Benefits: -2,077,000,000
- Other Expense: -4,814,000,000
- Dotacion Amortizacion: -762,000,000
- Impairment: -15,000,000
- Other Gains/Losses: 13,000,000
- Resultado Puesta en Equivalencia Operativa: 159,000,000

Profit from Operating Activities = 1,334,000,000

EBITDA = 1,334,000,000 + 762,000,000 + 15,000,000 = 2,111,000,000

**Adjusted_EBITDA 2022 ≈ 2,111,000,000 EUR**

## Step 8: Estimate 2022 FFO

**Cash Interest:**
- Finance Costs: 256,000,000
- Finance Income: 47,000,000
- Interest Paid: 209,000,000
- Interest Received: 40,000,000
- Net cash interest = 209,000,000 - 40,000,000 = 169,000,000

**Cash Taxes:**
- Income Tax Expense: 254,000,000
- Income Taxes Paid: 215,000,000

FFO = 2,111,000,000 - 169,000,000 - 215,000,000 = 1,727,000,000

## Step 9: Estimate 2022 Adjusted_Debt

**Reported Debt:**
- Noncurrent bonds/debt: 3,101,000,000
- Noncurrent loans: 2,624,000,000
- Current bonds/debt: 1,139,000,000
- Current loans: 553,000,000
- Total reported debt = 7,417,000,000

**Leases:**
- Noncurrent lease liabilities: 439,000,000
- Current lease liabilities: 72,000,000
- Total leases = 511,000,000

**Cash:**
- Cash & Cash Equivalents: 2,360,000,000
- Current Financial Assets: 315,000,000

Adjusted_Debt = 7,417,000,000 + 511,000,000 - 2,360,000,000 = 5,568,000,000

## Step 10: 2022 Adjusted_Debt / Adjusted_EBITDA

= 5,568,000,000 / 2,111,000,000 = 2.64x

## Step 11: 2022 FFO / Adjusted_Debt

= 1,727,000,000 / 5,568,000,000 = 0.310 (31.0%)

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## Step 12: Credit Trend Classification

**Signal 1 - Leverage (Debt/EBITDA):**
- 2021: 2.83x
- 2022: 2.64x
- Change: 2.64 - 2.83 = -0.19x

Since -0.19x is between -0.20 and +0.20 (exclusive), this is **Stable**.

**Signal 2 - Cash-flow coverage (FFO/Debt):**
- 2021: 0.295
- 2022: 0.310
- Change: 0.310 - 0.295 = +0.015

Since +0.015 is between -0.03 and +0.03 (exclusive), this is **Stable**.

**Both signals agree: Stable.**

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<answer>Stable</answer>