I need to analyze FERROVIAL SA's financial data and estimate the S&P-adjusted debt-to-EBITDA ratio for 2022. ## Step 1: Identify the Relevant Industry Ferrovial SA is a Spanish multinational company primarily engaged in infrastructure development and management, including toll roads, airports, and construction. Based on the provided methodologies, Ferrovial fits into the **Transportation Infrastructure** sector. The company operates toll roads, airports, and other infrastructure assets under concession agreements. Key characteristics from the data: - "Investments In Infrastructure Projects" is a major asset category (€13.67 billion as of 2023-01-01) - The company has significant concession-based operations - Revenue includes infrastructure project financing results ## Step 2: Estimate Adjusted_Debt For Transportation Infrastructure, I need to follow S&P guidelines. Let me identify the components from the balance sheet data (using 2022-01-01 values for the start of 2022, or 2023-01-01 for end of 2022 - I need to be careful about timing. The fiscal year ended December 31, 2022, so 2023-01-01 represents year-end 2022). ### Reported Debt Components (as of 2023-01-01, i.e., end of 2022): **Noncurrent borrowings:** - Noncurrent Portion Of Other Noncurrent Borrowings: €10,776,000,000 - Noncurrent Debt Securities And Bank Borrowings Of Infrastructure Projects: €7,893,000,000 - Noncurrent Debt Securities And Bank Borrowings Excluding Infrastructure Projects: €2,883,000,000 **Current borrowings:** - Current Borrowings And Current Portion Of Noncurrent Borrowings: €877,000,000 - Current Debt Securities And Bank Borrowings Of Infrastructure Projects: €74,000,000 - Current Debt Securities And Bank Borrowings Excluding Infrastructure Projects: €803,000,000 **Total reported debt** = €10,776,000,000 + €877,000,000 = **€11,653,000,000** ### Leases: - Noncurrent Lease Liabilities: €120,000,000 - Current Lease Liabilities: €64,000,000 - **Total leases** = €184,000,000 Note: Right-of-use assets are €183,000,000, which is consistent. ### Other items to consider: **Pension deficit:** - Noncurrent Provisions For Employee Benefits: €2,000,000 (very small) - This is likely not a material pension deficit **Guarantees, hybrid debt, other debt-like items:** - Other Noncurrent Financial Liabilities: €838,000,000 - These could include some debt-like items **Cash and equivalents to deduct:** - Cash And Cash Equivalents: €5,130,000,000 - However, we need to consider what is "eligible" cash For infrastructure companies, S&P typically considers: - Cash excluding restricted cash related to projects - Cash And Cash Equivalents Excluding Infrastructure Projects: €4,962,000,000 - Current Restricted Cash And Cash Equivalents Infrastructure Projects: €38,000,000 (restricted) - Cash And Cash Equivalents Infrastructure Projects: €168,000,000 (may be restricted/ring-fenced) For transportation infrastructure with concessions, S&P typically deducts available cash, but may not deduct cash that is restricted or ring-fenced for specific projects. Let me use a conservative approach: - **Eligible cash** = Cash And Cash Equivalents Excluding Infrastructure Projects = €4,962,000,000 - (or potentially less if some is needed for operations) However, looking more carefully at S&P methodology for infrastructure: they typically deduct "surplus cash" or available cash. For conservatism and following typical S&P practice, I'll use total cash less restricted cash. Cash And Cash Equivalents: €5,130,000,000 Less: Current Restricted Cash And Cash Equivalents Infrastructure Projects: €38,000,000 Less: potentially other restricted cash (Restricted Cash Relating To Infrastructure Projects And Other Financial Assets is €597,000,000 but this is noncurrent) Actually, let me re-read: "Restricted Cash Relating To Infrastructure Projects And Other Financial Assets" is €597,000,000 (noncurrent). This is already classified as noncurrent financial assets, not as cash. For eligible cash deduction, S&P typically uses: - Cash and cash equivalents less restricted cash Total cash: €5,130,000,000 Less restricted current: €38,000,000 Eligible cash ≈ €5,092,000,000 Or more conservatively, exclude infrastructure project cash: €4,962,000,000 (excluding infrastructure projects) + €130,000,000 (other cash in infrastructure projects) = €5,092,000,000... actually let me just use €4,962,000,000 as the clearly available cash. Let me use **€4,962,000,000** as eligible cash (cash excluding infrastructure projects). ### Calculate Adjusted_Debt: Adjusted_Debt = (Reported debt + Leases + Other debt-like items) - Eligible cash = (€11,653,000,000 + €184,000,000 + €838,000,000) - €4,962,000,000 Wait - I need to check if Other Noncurrent Financial Liabilities should be included. These could be debt-like or not. Let me be more careful. Actually, looking at S&P methodology for transportation infrastructure, they typically focus on: - Total debt (short-term + long-term) - Plus capitalized leases - Less cash and equivalents Let me recalculate more carefully: **Reported debt:** - Noncurrent Debt Securities And Bank Borrowings: €10,776,000,000 (this includes infrastructure and non-infrastructure) - Current Debt Securities And Bank Borrowings: €877,000,000 - Total: €11,653,000,000 **Plus leases:** €184,000,000 **Plus other debt-like items:** Looking at the liabilities, "Other Noncurrent Financial Liabilities" of €838,000,000 could include some debt-like items. However, this might also include derivatives, etc. Let me check if there are derivative liabilities: - Noncurrent Derivative Financial Liabilities: €66,000,000 - Current Derivative Financial Liabilities: €47,000,000 These are already likely excluded from "debt" as they are derivatives. The "Other Noncurrent Financial Liabilities" of €838,000,000 is quite large compared to 2022 (€72,000,000). This might include put options to non-controlling interests or other items. For S&P purposes, these may be debt-like. Let me include a portion or all of this as debt-like. Actually, for S&P, they typically add "debt-like items" such as: - Put options to NCI - Guarantees - Pension deficits - etc. Given the large increase from €72M to €838M, this likely includes some debt-like obligations. Let me include it. **Total debt + debt-like** = €11,653,000,000 + €184,000,000 + €838,000,000 = €12,675,000,000 **Less eligible cash** = €4,962,000,000 (cash excluding infrastructure projects) **Adjusted_Debt** = €12,675,000,000 - €4,962,000,000 = **€7,713,000,000** Wait - I should reconsider. For infrastructure companies, S&P may not deduct all cash if it's needed for operations or if it's trapped in project companies. Let me also consider using total cash less restricted. Actually, looking more carefully at typical S&P treatment for infrastructure: they often use "Net debt" = total debt - cash and equivalents, but with adjustments for restricted cash. Let me also consider: should I include the €168M "Cash And Cash Equivalents Infrastructure Projects" as eligible? This is likely ring-fenced for specific projects. S&P typically excludes restricted/ring-fenced cash. So eligible cash = €4,962,000,000 (excluding infrastructure projects) + €130,000,000 (other infrastructure cash) - wait, the €168M total infrastructure cash includes €38M restricted + €130M other. The €130M "Other Cash And Cash Equivalents Infrastructure Projects" might be available or might not. Let me be conservative and use €4,962,000,000 + €130,000,000 = €5,092,000,000, or just €4,962,000,000. Actually, for precision, let me use total cash and equivalents less restricted cash: €5,130,000,000 - €38,000,000 = €5,092,000,000 But I'll use €4,962,000,000 to be conservative (excluding all infrastructure-related cash). Let me recalculate with €5,092,000,000: Adjusted_Debt = €12,675,000,000 - €5,092,000,000 = €7,583,000,000 I'll use **€7,713,000,000** with €4,962M cash deduction, or let me settle on a middle ground. Actually, rethinking: S&P for infrastructure typically uses "FFO to debt" as preferred measure, and they define debt as "total debt" including leases, less cash. They may not deduct all cash if it's not available to service debt at the corporate level. For Ferrovial, with significant infrastructure project debt (€7,893M noncurrent + €74M current = €7,967M), much of the debt is at project level and may be non-recourse or limited recourse. The cash in those projects may be restricted. Let me try a different approach: separate corporate and project debt. **Corporate debt** (excluding infrastructure projects): - Noncurrent: €2,883,000,000 - Current: €803,000,000 - Total corporate debt: €3,686,000,000 **Project debt** (infrastructure projects): - Noncurrent: €7,893,000,000 - Current: €74,000,000 - Total project debt: €7,967,000,000 **Total debt**: €11,653,000,000 For S&P purposes, they typically consolidate all debt, including project debt, unless it's clearly non-recourse and the projects are not consolidated. Since Ferrovial consolidates these projects, the debt is included. For cash, project-level cash may be restricted. Let me use: - Corporate cash: €4,962,000,000 - Project cash (other, not restricted): €130,000,000 - Total available: €5,092,000,000 Adjusted_Debt = €11,653,000,000 + €184,000,000 + €838,000,000 - €5,092,000,000 = €7,583,000,000 Let me round to **€7,583,000,000** or approximately **€7.6 billion** Actually, I want to reconsider the €838M "Other Noncurrent Financial Liabilities". Looking at the prior year (2022-01-01), this was only €72M. The large increase suggests an acquisition or new obligation. This could be put options, earn-outs, or other items. For S&P, these are often treated as debt-like. However, I also need to check if there are any "Liabilities Included In Disposal Groups Classified As Held For Sale" - in 2022 this was €1,395,000,000, but in 2023 it's €0. This suggests a disposal group was sold or reclassified during 2022. For year-end 2022 (2023-01-01), held for sale liabilities are €0. Let me finalize Adjusted_Debt: - Debt: €11,653,000,000 - Leases: €184,000,000 - Other noncurrent financial liabilities (debt-like): €838,000,000 - Less: Cash and equivalents (excluding restricted): €5,092,000,000 Adjusted_Debt = €7,583,000,000 I'll use **€7,583,000,000** or for rounding purposes in calculation, keep precise. ## Step 3: Estimate Adjusted_EBITDA For Transportation Infrastructure, I need to calculate EBITDA with appropriate adjustments. From the income statement for 2022 (2022-01-01 to 2023-01-01): **Revenue**: €7,551,000,000 **Other Income**: €2,000,000 **Revenue And Operating Income**: €7,553,000,000 **Operating Expense**: €6,825,000,000 (total, including fair value adjustments) - Raw Materials And Consumables Used: €1,197,000,000 - Miscellaneous Other Operating Expense: €4,182,000,000 - Employee Benefits Expense: €1,446,000,000 **Gross Profit**: €728,000,000 **Amortisation Expense**: €299,000,000 **Profit From Operations Before Impairment And Disposals Of Non Current Assets**: €429,000,000 **Impairment And Gains Or Losses On Disposal Of Non Current Assets**: -€6,000,000 (loss) **Profit Loss From Operating Activities**: €423,000,000 Now, to calculate EBITDA: EBITDA = Profit Loss From Operating Activities + Depreciation/Amortisation + Interest + Taxes - Other non-operating items in operating profit Or: EBITDA = Gross Profit - Other operating expenses + D&A (but need to be careful) Let me reconstruct: - Revenue and operating income: €7,553,000,000 - Operating expenses (excluding D&A): €6,825,000,000 - but this includes all operating costs - Actually, operating expense is €6,825,000,000 which includes raw materials, other operating expenses, and employee benefits Wait, let me check: €1,197M + €4,182M + €1,446M = €6,825M. Yes, that matches. Gross Profit = €7,553M - €6,825M = €728M. Yes, matches. Then from Gross Profit: - Less: Amortisation Expense: €299M - = Profit From Operations Before Impairment: €429M? Wait: €728M - €299M = €429M. Yes, matches. Then: €429M - €6M (impairment) = €423M = Profit Loss From Operating Activities. So Operating Profit (EBIT) = €423,000,000 But wait - is there depreciation as well as amortisation? The line item says "Amortisation Expense" but for infrastructure companies, there may also be depreciation in "Miscellaneous Other Operating Expense" or elsewhere. Looking at the cash flow statement: "Ajustes Al Resultado Por Gastos Por Depreciacion YAmortizacion" = €299,000,000. This suggests total depreciation and amortization is €299M. So: **EBITDA = EBIT + D&A = €423,000,000 + €299,000,000 = €722,000,000** Wait, that seems low. Let me verify: €423M + €299M = €722M. But Gross Profit was €728M. That would mean EBITDA ≈ Gross Profit, which implies minimal other operating expenses between gross profit and EBIT. But we know amortisation is the main item. Actually, looking again: Profit From Operations Before Impairment And Disposals = €429M. This is after amortisation. So: - Gross Profit: €728M - Less Amortisation: €299M - = €429M (before impairment) - Less impairment: €6M - = €423M (operating profit) So EBIT = €423M, and EBITDA = €423M + €299M = €722M. But wait - is the €299M amortisation the only D&A? Let me check if there's depreciation elsewhere. The cash flow adjustment item "Ajustes Al Resultado Por Gastos Por Depreciacion YAmortizacion" is €299M, which matches the amortisation expense. This suggests D&A total is €299M. However, this seems quite low for a company with €18.9B in noncurrent assets. The amortisation might be mainly on intangibles (€137M intangibles + €13.5B infrastructure investments intangible model). Infrastructure investments under intangible asset model might not be depreciated/amortized in the traditional sense, or might be amortized over concession life. Actually, for infrastructure concessions under IFRIC 12, the intangible asset model means the asset is amortized over the concession period. But the amortization might be included in cost of sales or other operating expenses, not as a separate line item. Looking more carefully: The "Amortisation Expense" of €299M is shown separately. But there might also be depreciation included in operating expenses. Let me check the cash flow statement more carefully. The adjustment "Ajustes Al Resultado Por Gastos Por Depreciacion YAmortizacion" = €299M. This is the add-back for D&A in the cash flow statement. So total D&A is €299M. But wait - I need to check if this is just the explicit amortization, or if there's more. The Spanish label "Gastos Por Depreciacion Y Amortizacion" means "Depreciation and Amortization Expenses". So €299M is the total D&A. So EBITDA = €423M + €299M = **€722,000,000** Hmm, but let me cross-check with another approach. Looking at the cash flow from operations: Cash Flows From Used In Operating Activities: €1,002,000,000 This includes: - Profit Loss: €302,000,000 (total profit, not operating) - Adjustments: various Actually, let me use the operating profit approach. The €423M operating profit plus €299M D&A gives €722M EBITDA. But I need to check if there are other items to add back. For S&P Adjusted EBITDA for infrastructure: - Start with reported EBITDA or reconstruct - Add back non-recurring items - Adjust for joint ventures (equity accounted) - Other normalization From the income statement: - Share Of Profit Loss Of Associates: €165,000,000 (positive, meaning profit) This is equity-accounted income. For S&P, when calculating EBITDA for the group, they sometimes want to include proportional EBITDA from JVs, or they may treat equity income separately. Actually, for debt/EBITDA, S&P typically uses proportional consolidation for JVs or adds back the equity income and includes proportional debt. But for EBITDA, they may add the equity income back to EBITDA (since it's after operating profit). Wait - the €165M equity income is after operating profit. It's in the "financial" or "other" section. Let me check where it appears: Looking at the structure: - Profit Loss From Operating Activities: €423M - Then various financial results... - Share Of Profit Loss Of Associates: €165M - Then Profit Loss Before Tax: €268M So: €423M (operating) - €320M (finance costs) + €165M (associates) = €268M? Let me check: €423M - €320M + €165M = €268M. Yes, that works. For S&P Adjusted EBITDA, I need to consider: 1. Base EBITDA = €722M (from above) 2. Adjustments for non-recurring items 3. Treatment of equity-accounted investments For transportation infrastructure, S&P may use proportional EBITDA from associates, or they may use the equity income as a proxy. The €165M share of profit of associates needs to be considered. If we want proportional EBITDA from associates: - Investments In Associates: €1,892,000,000 - Share of profit: €165,000,000 - This suggests a return of about 8.7%, but we don't have their D&A or interest. Alternatively, S&P might add the equity income back to calculate a "cash flow" measure, or they might use FFO which already includes equity dividends received. Looking at cash flow: "Dividends Received Classified As Operating Activities" = €284,000,000. This is actual cash from investments, which is higher than the €165M equity income. For EBITDA calculation, S&P typically: - Includes dividends received from investments if they are part of operations - Or proportionally consolidates JVs Given the complexity, let me use a simpler approach: S&P Adjusted EBITDA for infrastructure companies often starts from operating profit and adds back D&A, then makes other adjustments. Let me also consider if there are non-recurring items. Looking at: - Impairment And Gains Or Losses On Disposal Of Non Current Assets: -€6M (small loss) - This is already in operating profit For 2021, there was a large €1,139M gain, but for 2022 it's only -€6M. Also, "Profit Loss From Discontinued Operations": €64M. This is after tax and below the line. For S&P, discontinued operations are typically excluded from ongoing EBITDA. Let me also check if there are fair value adjustments that need normalization: - "Fair Value Adjustments Member" shows various amounts - For 2022, operating profit "Fair Value Adjustments Member" = €1M (positive) - Finance costs "Fair Value Adjustments Member" = -€52M These fair value adjustments might be non-cash or non-recurring. For S&P, they typically normalize these. Actually, looking more carefully at the "Before Fair Value Adjustments" vs "Fair Value Adjustments Member": - Profit Loss From Operating Activities "Before Fair Value Adjustments": €422M - "Fair Value Adjustments Member": €1M - Total: €423M So the fair value adjustment to operating profit is only €1M, very small. For finance costs: - "Before Fair Value Adjustments": -€268M - "Fair Value Adjustments Member": -€52M - Total Finance Income Cost: -€320M The -€52M fair value adjustment in finance costs might be derivative mark-to-market or other non-cash items. For EBITDA, we don't add back finance costs anyway. For S&P Adjusted EBITDA, I should use: - Operating profit before fair value adjustments where they are non-recurring, or use reported Let me use **EBITDA = €722,000,000** as base. But wait - I need to check if this is too low. Revenue is €7.55B and EBITDA is €0.72B, giving a 9.6% margin. For infrastructure, this seems low but possible for a construction/infrastructure hybrid. Actually, Ferrovial has both construction and infrastructure operations. Construction typically has low margins, while infrastructure (toll roads, airports) has higher margins. Let me verify by looking at 2021: - Operating profit 2021: €1,479M (including €1,139M gain on disposal) - Without gain: €340M - Plus D&A 2021: €270M - EBITDA 2021 (normalized): €610M So 2022 EBITDA of €722M is higher than 2021 normalized €610M, which makes sense. Now, for S&P adjustments to EBITDA: 1. **Leases**: For operating leases that were capitalized under IFRS 16, S&P may add back the lease expense or make other adjustments. But under IFRS 16, leases are already capitalized and the amortization is in D&A or operating expenses. The EBITDA I calculated should already reflect this correctly (EBITDA is before lease depreciation). 2. **Joint ventures**: For equity-accounted JVs, S&P sometimes uses proportional EBITDA. Let me estimate this. If associates generate €165M profit with typical infrastructure margins, their EBITDA might be higher. But we don't have enough data. S&P may use the equity income as a proxy or add it back. Actually, for FFO/debt (S&P's preferred metric for infrastructure), FFO includes dividends from investments, not equity income. For EBITDA/debt, they might use a similar approach. Let me add back the share of profit of associates to get a "cash flow" proxy, or use proportional consolidation. If I add share of profit of associates (€165M) to EBITDA: €722M + €165M = €887M. But this double-counts if the associates' operations are already in revenue. Actually, no - the €165M is equity income, not in revenue. Revenue is €7.55B from consolidated operations only. For proportional EBITDA: If associates have similar margin profile, and €1.89B investment generates €165M profit (8.7% return), their EBITDA might be €165M + D&A. If they have €1.89B assets and similar D&A rate, maybe €200M D&A, so proportional EBITDA ≈ €365M. But this is speculative. Let me use a simpler S&P approach: add equity income and dividends from investments to EBITDA, or use FFO-based approach. Actually, for debt/EBITDA specifically, S&P typically uses: - EBITDA from consolidated operations - Plus proportional EBITDA from JVs (if material) - Or, if JVs are not consolidated, include equity income as a proxy Given the materiality of associates (€1.89B investment, €165M income), I should include some adjustment. Let me use: **Adjusted_EBITDA = €722M + €165M (equity income proxy for JV EBITDA) = €887M** Or more conservatively, if associates have 50% EBITDA margin on their revenue (typical for mature infrastructure), and €165M is after D&A and interest... this gets too complex. Let me use a different approach. S&P's FFO for infrastructure includes: - Net income from continuing operations - Plus D&A - Plus deferred taxes - Plus other non-cash items - Less gains/losses on disposals - Plus dividends from investments (not equity income) From cash flow: Adjustments For Reconcile Profit Loss = -€697M (2022). This is negative, meaning adjustments reduce profit. Let me try to calculate FFO: Profit Loss (total): €302M Plus D&A: €299M Plus other non-cash: ? Less gains on disposals: ? Plus dividends received: €284M (but this is already in operating cash flow) Actually, Cash Flows From Used In Operating Activities = €1,002M. This is already the cash flow. For S&P FFO, they typically adjust operating cash flow: - Less working capital changes - Plus interest paid - Less dividends received (if not part of operations) - etc. This is getting complex. Let me stick with EBITDA and make reasonable adjustments. **Base EBITDA**: €722,000,000 **Adjustments**: - Add: Share of profit of associates (to proxy proportional EBITDA): €165,000,000 - Add: Non-recurring losses or less gains: The -€6M impairment is small, ignore or add back - Less: Non-recurring gains: none material in 2022 Actually, for 2022, there was a small loss on disposal (-€6M). In 2021, there was a large gain. For 2022, no material non-recurring gain to deduct. But wait - I need to check "Profit Loss From Discontinued Operations": €64M. This is a gain from discontinued ops. Should I exclude this? For ongoing EBITDA, yes. However, discontinued operations are below operating profit, so they don't affect EBITDA anyway. Let me also consider if the €64M discontinued ops gain should be deducted from some measure. For S&P, discontinued operations are typically excluded. **Adjusted_EBITDA = €722,000,000 + €165,000,000 = €887,000,000** Or, if I use a more conservative approach without adding associates: **Adjusted_EBITDA = €722,000,000** Given that S&P for infrastructure often uses FFO/debt rather than EBITDA/debt, and FFO would include dividends from investments (€284M vs €165M equity income), let me consider using a higher number. Actually, let me look at this differently. The €284M dividends received is cash from investments. The €165M is equity income (accrual). For EBITDA, cash dividends are not included (they're after EBITDA). If I want to proxy "cash EBITDA" or FFO-like measure: - EBITDA: €722M - Less: cash taxes (€82M per cash flow) - Plus: dividends received €284M - This gets to cash flow, not EBITDA. For pure EBITDA, I should stick with the accrual measure. Let me use **Adjusted_EBITDA = €887,000,000** (including equity income as proxy for JV contribution). Or, if I want to be more conservative and not add back equity income (since it's already in net income but not EBITDA, and EBITDA is meant to be pre-interest, pre-tax, pre-D&A operating measure), then **€722,000,000**. Hmm, but equity income is not in EBITDA because it's not operating income - it's financial/investment income. For a infrastructure holding company like Ferrovial, the associates are integral to operations. Let me check if Ferrovial is more of a holding company or operating company. Given that "Investments In Associates" is €1.89B and "Investments In Infrastructure Projects" is €13.67B, with revenue of €7.55B, it seems like most operations are consolidated. Actually, looking at revenue: €7.55B. This includes construction and services. The infrastructure projects (€13.67B) are likely consolidated under IFRIC 12. The associates (€1.89B) are equity-accounted. For S&P, when calculating debt/EBITDA for a company with equity-accounted JVs, they may: 1. Consolidate proportionally (adjust both debt and EBITDA) 2. Or use the "EBITDA including equity income" approach Given that debt is consolidated but JVs are not, there's a mismatch. S&P typically addresses this by either: - Using proportional consolidation for both - Or adding equity income to EBITDA and keeping debt as is (which is conservative, as debt doesn't include JV debt) Actually, for leverage ratios, S&P typically wants consistency. If debt includes only consolidated debt, EBITDA should include only consolidated EBITDA. If we add equity income to EBITDA, we should also add proportional debt. But we don't have JV debt. So let me be consistent: use consolidated EBITDA only = €722M. However, this penalizes Ferrovial because the associates generate significant returns but their debt isn't included. For a practical compromise, let me use: **Adjusted_EBITDA = €722,000,000 + €165,000,000 = €887,000,000** This is a common market practice for holding companies. But actually, looking at S&P methodology more carefully, they say for FFO: "Funds from operations (FFO): Net income from continuing operations adjusted for depreciation and amortization, deferred income taxes, and other non-cash items." For EBITDA, they don't explicitly say to add equity income. But for infrastructure, they might use "adjusted EBITDA" that includes proportional contributions. Let me settle on: **Adjusted_EBITDA = €887,000,000** (with equity income) or **€722,000,000** (without). Given the need to make a reasonable estimate, and that S&P for infrastructure companies often uses metrics that reflect the full economic ownership, I'll use **€887,000,000** but note this could range. Actually, wait. Let me re-examine. The €165M "Share Of Profit Loss Of Associates" includes €7M fair value adjustments. The "Before Fair Value Adjustments" is €158M. Let me use €158M as the base, or €165M total. Also, I should check if there are any other items in operating profit that need adjustment. The "Miscellaneous Other Operating Expense" of €4,182M includes various items. Is there any non-recurring or non-cash item? Looking at 2021 vs 2022: - 2021 Miscellaneous Other Operating Expense: €3,923M (including €1M fair value adjustment) - 2022: €4,182M (including -€1M fair value adjustment) The increase is €259M, which could be inflation, growth, or other factors. Let me also check if there's any government grant or COVID-related relief that might be non-recurring. Not obvious from the data. For my final calculation, let me use: - **Adjusted_Debt = €7,583,000,000** (or €7,713M with less cash) - **Adjusted_EBITDA = €887,000,000** (including equity income) or €722M Let me recalculate with more precise numbers and also consider an alternative. ### Alternative EBITDA calculation: From the cash flow statement, I can also estimate EBITDA as: Cash Flows From Used In Operating Activities: €1,002M Less: Working capital increase/decrease: €83M (positive, meaning source of cash) Less: Dividends received: €284M Less: Interest paid (if in operating cash flow): ? Plus: Taxes paid: €82M Plus: Interest paid: ? Actually, for Ferrovial, interest paid is in financing activities (€329M), not operating. So operating cash flow is after working capital but before interest and dividends. This is getting too complex. Let me use the direct EBITDA from the income statement. **Final EBITDA choices:** 1. Conservative: €722M (consolidated only) 2. Moderate: €887M (including equity income) For debt, I also have choices: 1. With €4,962M cash deducted: €7,713M 2. With €5,092M cash deducted: €7,583M Let me use the moderate approach for both: **Adjusted_Debt = €7,583,000,000**, **Adjusted_EBITDA = €887,000,000** Or conservative: **Adjusted_Debt = €7,713,000,000**, **Adjusted_EBITDA = €722,000,000** Let me calculate both ratios: - Moderate: 7,583 / 887 = 8.55x - Conservative: 7,713 / 722 = 10.68x Given S&P's typically conservative approach, and that they might not add full equity income to EBITDA, let me use a middle ground. Actually, I want to reconsider the debt. For S&P, they typically include: - All short-term debt - All long-term debt - Capitalized leases - Less: cash and equivalents - Plus: debt-like items For "Other Noncurrent Financial Liabilities" of €838M, I need to be careful. This increased from €72M to €838M. What is this? Looking at the notes or context, this could be: - Put options on NCI - Derivatives (but derivatives are separately listed) - Earn-outs from acquisitions - Other financial obligations For S&P, put options on NCI are typically treated as debt. Given the large increase, this might be related to an acquisition. Let me include it as debt-like. But I also want to check: are there any "hybrid" instruments? Looking at equity, there's no obvious hybrid debt. The "Perpetual Subordinated Bonds" in equity movement shows -€8M, which is very small. So no material hybrid debt to add. For pension deficit: "Noncurrent Provisions For Employee Benefits" is €2M, negligible. For guarantees: Not disclosed separately, likely immaterial or included in provisions. **Final Adjusted_Debt calculation:** - Short-term borrowings: €877M - Long-term borrowings: €10,776M - Lease liabilities: €184M - Other noncurrent financial liabilities (debt-like): €838M - Less: Cash and equivalents (excluding restricted): €5,092M = €7,583M Or if I exclude the €838M (not sure it's debt-like): = €6,745M Given uncertainty, let me use €7,583M with the €838M included, or be more conservative and exclude it if it's not clearly debt-like. Actually, looking at typical S&P treatment: "Other financial liabilities" often includes items like: - Derivatives (already excluded, as they're separate) - Put options - Financial guarantee liabilities - Obligations under funding arrangements Given the magnitude (€838M vs €72M prior year), this is likely a put option or similar from an acquisition. S&P would typically include this. Let me proceed with **Adjusted_Debt = €7,583,000,000** For EBITDA, let me use a compromise: add half the equity income, or use a blended approach. Actually, I realize I should look at this more carefully. For infrastructure companies, S&P's preferred metric is FFO/debt, not EBITDA/debt. The question asks for debt/EBITDA, which is a secondary metric. For debt/EBITDA, S&P typically uses: - Debt as defined - EBITDA from continuing operations, before non-recurring items, with proportional JV adjustments Given that I need to provide an estimate, let me use: **Adjusted_EBITDA = €722,000,000 + €165,000,000 = €887,000,000** But I'm uneasy about this. Let me check if there's another way to estimate EBITDA. From the cash flow statement: "Cash Flows From Used In Operating Activities" = €1,002M This includes: - Profit Loss: €302M - Adjustments: -€697M (net) - Working capital: €83M - Dividends received: €284M - Taxes paid: -€82M Wait, the €1,002M is the net operating cash flow. Let me see the components: - Starting from profit: €302M - Add back D&A: €299M - Add back other non-cash: various - Working capital changes: €83M - Dividends received: €284M - Income taxes paid: -€82M Actually, the cash flow reconciliation shows: "Adjustments For Reconcile Profit Loss" = -€697M This is negative, meaning it reduces profit to get to cash. This is unusual. Let me check: Profit Loss: €302M Adjustments: -€697M Subtotal: -€395M Then add back various items to get to +€1,002M. The adjustments include: - Non-controlling interests: €116M - Discontinued operations: -€64M - Income tax expense: -€30M - Undistributed profits of equity method investments: -€165M - Finance income/cost: €320M - Gain/loss on disposals: €6M - D&A: €299M Sum: €116M - €64M - €30M - €165M + €320M + €6M + €299M = €482M? Not -€697M. Wait, let me re-read. The "Adjustments For Reconcile Profit Loss" is -€697M. This is the total adjustment, not individual items. Looking at individual items listed: - Adjustments For Non Controlling Interests: €116M - Adjustment For Net Profit Loss From Discontinued Operations: -€64M - Adjustments For Income Tax Expense: -€30M - Adjustments For Undistributed Profits Of Investments Accounted For Using Equity Method: -€165M - Adjustments For Finance Income Cost: €320M - Adjustments For Gain Loss On Disposals Property Plant And Equipment: €6M - Ajustes Al Resultado Por Gastos Por Depreciacion YAmortizacion: €299M Sum: 116 - 64 - 30 - 165 + 320 + 6 + 299 = 482M positive, not -697M. Hmm, there's a discrepancy. Maybe there are other adjustments not listed, or the signs are different. Actually, looking more carefully at the signs in the cash flow statement: "Adjustments For Reconcile Profit Loss" 2022: -€697M But individual items: "Adjustments For Non Controlling Interests" 2022: €116M (positive, meaning added back) "Adjustment For Net Profit Loss From Discontinued Operations" 2022: -€64M (negative, meaning deducted? or added back if negative) "Adjustments For Income Tax Expense" 2022: -€30M "Adjustments For Undistributed Profits Of Investments Accounted For Using Equity Method" 2022: -€165M "Adjustments For Finance Income Cost" 2022: €320M "Adjustments For Gain Loss On Disposals Property Plant And Equipment" 2022: €6M "Ajustes Al Resultado Por Gastos Por Depreciacion YAmortizacion" 2022: €299M If we interpret these as adjustments to profit to get operating cash flow before working capital: Start with profit €302M Add: NCI €116M (to get to profit before NCI = €418M) Less: Discontinued ops -€64M? Or add €64M if it's a gain to deduct? Add: Income tax expense €30M? But it's negative. Actually, the signs are confusing. Let me just use the direct EBITDA from income statement. **Revised EBITDA calculation:** From the income statement, let me use "Profit From Operations Before Impairment And Disposals Of Non Current Assets" = €429M, and add back D&A. But wait - is the €429M before or after D&A? It's after D&A, because: Gross Profit €728M - Amortisation €299M = €429M. So EBIT before impairment = €429M + €299M D&A? No, that's wrong. €429M is AFTER D&A. So EBIT before impairment = €429M EBITDA = €429M + €299M = €728M? But Gross Profit was €728M. Wait: Gross Profit €728M - Amortisation €299M = €429M. So EBITDA should be Gross Profit + other operating expenses before D&A? No, Gross Profit is already before D&A. Actually, Gross Profit = Revenue - Cost of Sales. Then from Gross Profit, we subtract operating expenses (including D&A) to get EBIT. So: Gross Profit €728M - Operating expenses (excl D&A) - D&A €299M = EBIT €429M. If D&A is €299M and is included in operating expenses, then: Gross Profit €728M - Other operating expenses €0 - D&A €299M = €429M? That implies no other operating expenses, which is wrong. Let me re-read the income statement structure: - Revenue And Operating Income: €7,553M - Operating Expense: €6,825M - = Gross Profit: €728M Then: - Amortisation Expense: €299M - = Profit From Operations Before Impairment: €429M Wait, €728M - €299M = €429M. So amortisation is the only expense between gross profit and operating profit before impairment? That seems odd. Actually, looking at this again, I think "Amortisation Expense" might be shown separately as an additional expense, not the only one. But the math shows €728M - €299M = €429M, so yes, amortisation appears to be the only operating expense between gross profit and EBIT. This suggests that "Operating Expense" of €6,825M includes all operating costs (raw materials, employee benefits, other operating expenses), and "Gross Profit" of €728M is after all these. Then "Amortisation Expense" of €299M is additional, leading to €429M. But wait - is amortisation included in "Operating Expense" or separate? The way it's presented, "Amortisation Expense" is a separate line item after Gross Profit. So: Revenue and operating income: €7,553M Less: Operating expenses: €6,825M = Gross Profit: €728M Less: Amortisation Expense: €299M = Profit from operations before impairment: €429M This suggests Gross Profit is after all cash operating expenses, and amortisation is the only non-cash charge before EBIT. If so, then EBITDA = Gross Profit + Amortisation? No, EBITDA is before D&A, so if amortisation is deducted after gross profit, then: EBITDA = Profit from operations before impairment + Amortisation = €429M + €299M = €728M But Gross Profit is also €728M. So EBITDA = Gross Profit? That would mean there are no other operating expenses between gross profit and EBITDA, which is correct if amortisation is the only non-cash item and all cash items are in "operating expenses." Actually, this makes sense if "Gross Profit" here is more like "Operating Profit before D&A" or if the company has minimal other operating expenses. Wait, I think I'm confusing myself. Let me look at this more carefully. In standard income statement format: Revenue - Cost of sales = Gross profit - Operating expenses (SG&A, R&D, etc.) - D&A = EBIT But here, the presentation is: Revenue And Operating Income: €7,553M - Operating Expense: €6,825M = Gross Profit: €728M - Amortisation Expense: €299M = Profit From Operations Before Impairment: €429M This is non-standard. "Operating Expense" here seems to include cost of sales and all operating expenses except amortisation. Then "Gross Profit" is actually more like "Operating Profit before Amortisation." Actually, looking at the components of Operating Expense: - Raw Materials And Consumables Used: €1,197M - Miscellaneous Other Operating Expense: €4,182M (net, including €1M fair value adjustment) - Employee Benefits Expense: €1,446M Total: €6,825M So "Gross Profit" = €7,553M - €6,825M = €728M is after all these operating costs. Then "Amortisation Expense" = €299M is deducted to get €429M. So EBITDA = €429M + €299M = €728M, which equals "Gross Profit." This means "Gross Profit" in this presentation is actually equivalent to EBITDA! Let me verify: If Gross Profit = EBITDA = €728M, then EBITDA margin = 9.6%. For 2021: Revenue: €6,911M Operating Expense: €6,301M Gross Profit: €610M Amortisation: €270M Profit before impairment: €340M EBITDA 2021 = €340M + €270M = €610M = Gross Profit. Yes! So "Gross Profit" in Ferrovial's presentation is actually EBITDA (or at least, pre-impairment operating profit plus D&A). So **EBITDA = €728,000,000** for 2022. Now, for Adjusted EBITDA, I need to consider: - Is this "continuing operations" or total? It includes all operations. - Should I add back impairment? The -€6M impairment is after this, so EBITDA is before impairment. - Should I include equity income? No, EBITDA is operating profit before interest, taxes, D&A. Equity income is not operating. So **Base EBITDA = €728,000,000** For S&P adjustments: 1. Non-recurring items: The -€6M impairment is small and already excluded from EBITDA (it's after). No material non-recurring gains to deduct. 2. Leases: Under IFRS 16, leases are capitalized. The EBITDA should already reflect this correctly (lease payments are not in operating expenses, rather depreciation and interest). 3. JVs: For proportional EBITDA, I could add something, but equity income is not in EBITDA. Actually, I realize that for companies with equity-accounted JVs, the revenue and EBITDA are only from consolidated operations. The €728M EBITDA does not include any contribution from JVs (except to the extent they provide dividends or services). For S&P, they might want to include proportional EBITDA from JVs. But without detailed JV financials, I can't calculate this precisely. However, looking at the associates: €1,892M investment, €165M income. If these are mature infrastructure assets with high EBITDA margins (say 70%), their revenue might be around €500M-€1B, and EBITDA €350M-€700M. Ferrovial's share might be 20-50% of this. This is too speculative. Let me use the conservative approach: **Adjusted_EBITDA = €728,000,000** from consolidated operations only. But wait - I should check if there are any adjustments needed for fair value items or other non-cash adjustments in operating profit. Looking at "Gross Profit": - "Before Fair Value Adjustments Member": €727M - "Fair Value Adjustments Member": €1M - Total: €728M The fair value adjustment is only €1M, immaterial. For "Miscellaneous Other Operating Expense": - "Before Fair Value Adjustments": €4,183M - "Fair Value Adjustments Member": -€1M - Total: €4,182M Again, immaterial. So **Adjusted_EBITDA = €728,000,000** (or slightly higher if I add equity income proxy). Let me also consider: should I add the €165M equity income? In some definitions, "Adjusted EBITDA" for holding companies includes equity income or proportional EBITDA. But in strict S&P methodology, EBITDA is usually consolidated only. Given the question asks for "S&P-adjusted" ratio, and S&P for infrastructure typically uses FFO/debt, the EBITDA/debt is a secondary metric. For consistency with how S&P might calculate it, let me use: **Adjusted_EBITDA = €728,000,000** (consolidated EBITDA) Or, if I want to include a proxy for JV contribution: add 50% of equity income as "EBITDA proxy" = €728M + €82.5M = €810.5M. I'll use **€728,000,000** as the base, and note that with JVs it could be higher. ## Step 4: Calculate Adjusted_Debt / Adjusted_EBITDA Using: - **Adjusted_Debt = €7,583,000,000** (with €838M other financial liabilities, €5,092M cash deducted) - **Adjusted_EBITDA = €728,000,000** Ratio = 7,583 / 728 = **10.42x** Alternative with less conservative EBITDA (€887M with equity income): 7,583 / 887 = 8.55x Alternative with more conservative debt (€7,713M with less cash): 7,713 / 728 = 10.60x Let me also try without the €838M other financial liabilities: Debt = €11,653M + €184M - €5,092M = €6,745M Ratio = 6,745 / 728 = 9.27x Given the range, I need to make a best estimate. For S&P, the €838M "Other Noncurrent Financial Liabilities" is likely debt-like and should be included. Let me verify by checking if it's described elsewhere. The large increase from €72M to €838M suggests a new obligation, possibly from an acquisition. I'll use **Adjusted_Debt = €7,583,000,000** and **Adjusted_EBITDA = €728,000,000**. Ratio = 7,583 / 728 = 10.416... ≈ **10.42** But let me reconsider the EBITDA one more time. Should I use a higher number? Looking at S&P's approach for infrastructure: they often calculate "adjusted EBITDA" that includes: - EBITDA from core operations - Plus proportional EBITDA from JVs - Plus dividends received from investments (if not already in revenue) The €284M dividends received in operating cash flow is interesting. This is actual cash from investments, higher than the €165M equity income. If I add this to EBITDA (as a proxy for cash contribution from JVs): Adjusted_EBITDA = €728M + €284M = €1,012M But this is not standard. Dividends are not EBITDA. Alternatively, if JVs have similar EBITDA margin to Ferrovial's consolidated operations (9.6%), and €165M profit represents maybe 30% of their EBITDA (after interest, D&A, taxes), their EBITDA could be €550M, and Ferrovial's proportional share maybe €200M-€300M. This is too speculative. Let me stick with €728M. Actually, I want to check one more thing. Is the €728M "Gross Profit" really EBITDA? Let me verify with 2021: 2021: - Revenue: €6,911M - Operating Expense: €6,301M - Gross Profit: €610M - Amortisation: €270M - Profit before impairment: €340M If Gross Profit = EBITDA, then EBITDA = €610M. Then EBIT = €340M (after D&A). Then EBITDA - D&A = EBIT: €610M - €270M = €340M. ✓ For 2022: €728M - €299M = €429M. But stated profit before impairment is €429M. ✓ Wait, I had €429M before, not €429M. Let me recheck: €728M - €299M = €429M. But the stated is €429M? Let me check: "Profit From Operations Before Impairment And Disposals Of Non Current Assets" = €429,000,000. Yes, matches. So yes, Gross Profit = EBITDA in this presentation. Now, one more check: does "Operating Expense" include lease expenses? Under IFRS 16, lease depreciation might be in D&A or operating expenses. The €183M right-of-use assets suggest lease depreciation might be included. If lease depreciation is in the €299M amortisation, then EBITDA already excludes it (added back). Good. If lease depreciation is in "Operating Expense", then EBITDA (Gross Profit) might already exclude it. Let me check: right-of-use assets €183M, lease liabilities €184M. The depreciation would be over lease term, maybe €50M-€100M per year. This could be in "Miscellaneous Other Operating Expense" or in D&A. Given that D&A total is €299M and intangibles are only €137M + goodwill €480M = €617M, with PPE €479M, the €299M amortisation/depreciation seems reasonable for these assets. It might include some lease depreciation. Anyway, I'll proceed with **Adjusted_EBITDA = €728,000,000**. ## Final Calculation **Adjusted_Debt:** - Short-term debt: €877,000,000 - Long-term debt: €10,776,000,000 - Lease liabilities: €184,000,000 - Other noncurrent financial liabilities (debt-like): €838,000,000 - Total gross debt-like: €12,675,000,000 - Less: Cash and equivalents (excluding restricted infrastructure cash): €5,092,000,000 - **Adjusted_Debt = €7,583,000,000** **Adjusted_EBITDA:** - Consolidated EBITDA (Gross Profit): €728,000,000 - No material non-recurring adjustments needed - **Adjusted_EBITDA = €728,000,000** **Ratio = 7,583 / 728 = 10.416... ≈ 10.42** Wait, let me recheck: 7,583 / 728 = 10.416758... rounds to **10.42** But I want to reconsider if I should use more cash. The €5,130M total cash less €38M restricted = €5,092M. But what about the €168M "Cash And Cash Equivalents Infrastructure Projects"? Is this restricted? Looking at the breakdown: - Cash And Cash Equivalents Infrastructure Projects: €168M - Current Restricted Cash And Cash Equivalents Infrastructure Projects: €38M - Other Cash And Cash Equivalents Infrastructure Projects: €130M The €130M is "other" - is this restricted or available? The name suggests it's part of infrastructure projects, likely ring-fenced. Let me exclude it. So available cash = €5,130M - €38M - €130M = €4,962M = "Cash And Cash Equivalents Excluding Infrastructure Projects." Yes, this matches my earlier figure. Good. One more consideration: should I include the €597M "Restricted Cash Relating To Infrastructure Projects And Other Financial Assets"? This is classified as noncurrent financial assets, not cash. It's already excluded from cash. Final answer: **10.42** But let me also consider an alternative with higher EBITDA including equity income. If S&P includes proportional EBITDA from JVs: Rough estimate: Associates have €1,892M investment, generate €165M profit. If they have similar leverage and D&A to Ferrovial, their EBITDA might be €300M-€400M. Ferrovial's share depends on ownership, typically 20-50%. Say 30% average = €100M proportional EBITDA. Adjusted_EBITDA with JVs = €728M + €100M = €828M Ratio = 7,583 / 828 = 9.16x Or if I use equity income as proxy (not correct but simple): €728M + €165M = €893M Ratio = 7,583 / 893 = 8.49x Given the uncertainty, and that S&P typically uses consolidated metrics unless specified otherwise, I'll stick with **10.42**. However, I realize I should double-check my debt calculation. Let me verify the components: From 2023-01-01 (end of 2022): - Current Borrowings And Current Portion Of Noncurrent Borrowings: €877M - Current Debt Securities And Bank Borrowings Of Infrastructure Projects: €74M - Current Debt Securities And Bank Borrowings Excluding Infrastructure Projects: €803M - Noncurrent Portion Of Other Noncurrent Borrowings: €10,776M - Noncurrent Debt Securities And Bank Borrowings Of Infrastructure Projects: €7,893M - Noncurrent Debt Securities And Bank Borrowings Excluding Infrastructure Projects: €2,883M Total borrowings: €877M + €10,776M = €11,653M ✓ Lease liabilities: - Current: €64M - Noncurrent: €120M - Total: €184M ✓ Other noncurrent financial liabilities: €838M Total debt-like: €11,653M + €184M + €838M = €12,675M ✓ Less cash: €5,092M (or €4,962M) Adjusted debt: €12,675M - €5,092M = €7,583M ✓ Or with €4,962M: €12,675M - €4,962M = €7,713M Hmm, I used €5,092M earlier, which is €5,130M - €38M. But €5,130M includes €168M infrastructure cash. So €5,130M - €168M = €4,962M excluding all infrastructure cash. Then plus €130M "other" infrastructure cash = €5,092M? No, that doesn't work. Let me be precise: - Total Cash And Cash Equivalents: €5,130M - Cash And Cash Equivalents Infrastructure Projects: €168M - Current Restricted Cash And Cash Equivalents Infrastructure Projects: €38M - Other Cash And Cash Equivalents Infrastructure Projects: €130M - Cash And Cash Equivalents Excluding Infrastructure Projects: €4,962M So total = €168M + €4,962M = €5,130M. ✓ For eligible cash, if I exclude all infrastructure cash (€168M) and restricted cash (€38M), but the €38M is already part of €168M. So: €5,130M - €168M (all infrastructure) = €4,962M Or: €5,130M - €38M (restricted only) = €5,092M Which is correct? The €130M "other" infrastructure cash - is it available or restricted? The name "Other Cash And Cash Equivalents Infrastructure Projects" suggests it's still part of infrastructure projects, likely ring-fenced. For conservatism, exclude all €168M: eligible = €4,962M For moderate view, exclude only restricted €38M: eligible = €5,092M I'll use €4,962M for conservatism, giving higher debt. Adjusted_Debt = €12,675M - €4,962M = **€7,713,000,000** Ratio = 7,713 / 728 = **10.60** Or with €5,092M: 7,583 / 728 = **10.42** Given S&P's conservative approach, let me use **€7,713,000,000** and **€728,000,000**. Final ratio: **10.60** Actually, I want to reconsider one more time. The €838M "Other Noncurrent Financial Liabilities" - should I include this? Let me think about what it could be. In 2022-01-01, this was €72M. In 2023-01-01, it's €838M. That's a €766M increase. Looking at equity movements, there was "Issue Of Equity" of €356M to noncontrolling interests. This suggests an acquisition or capital increase where NCI were involved. The €838M could be: - Put options written to NCI (very common in infrastructure) - Earn-out liabilities from acquisitions - Other financial obligations For S&P, put options to NCI are definitely debt-like. Earn-outs might be debt-like depending on terms. Given the timing with the equity issue to NCI, this is likely a put option. S&P would include this as debt. So I'll keep the €838M included. Final numbers: - Adjusted_Debt = €7,713,000,000 (with €4,962M cash deducted) or €7,583,000,000 (with €5,092M) - Adjusted_EBITDA = €728,000,000 Using €7,713M / €728M = 10.60 Or if I use the moderate cash view: €7,583M / €728M = 10.42 I'll go with **10.60** as the more conservative S&P-like approach, or **10.42** as moderate. Given that S&P typically deducts only "available" cash and might view some infrastructure cash as not fully available, let me use **10.42** with €5,092M cash (excluding restricted only, not all infrastructure cash). Actually, re-reading: the €130M is "Other Cash And Cash Equivalents Infrastructure Projects" - this is not labeled as restricted. The €38M is explicitly "Restricted". So maybe €130M is available. For S&P, "available cash" typically means not legally or practically restricted. Cash in infrastructure projects may be available for project purposes but not to the parent. For consolidated debt/EBITDA, we typically deduct cash available to service the consolidated debt. If the €130M is in project companies and those companies have project debt (€7,967M), then that cash is likely not available to service parent company debt. But for consolidated ratios, it's still consolidated cash. This is complex. For simplicity, I'll use total cash less explicitly restricted cash: €5,130M - €38M = €5,092M. Final answer: **10.42** Let me round: 7,583 / 728 = 10.41676... → **10.42** 10.42