Let’s go through the steps. --- **Step 1 – Identify the relevant industry for Acciona SA** Acciona SA is primarily an infrastructure and renewable energy company. Its activities include: - Development and operation of renewable energy generation assets (wind, solar, hydro). - Construction and infrastructure concessions (roads, water, social infrastructure). Given its significant renewable energy generation activities and that it operates in deregulated energy markets, **“Unregulated Power and Gas”** is the most appropriate S&P industry methodology among those provided. --- **Step 2 – Estimate Adjusted Debt** *Reported debt*: We can derive total debt from the balance sheet. - Noncurrent borrowings + Current borrowings + Lease liabilities (current + noncurrent). Noncurrent: - **Participaciones Preferentes Obligaciones YOtros Valores Negociables No Corrientes1** 2023-01-01: 3,101M - **Noncurrent Portion Of Noncurrent Loans Received** 2023-01-01: 2,624M - **Noncurrent Lease Liabilities** 2023-01-01: 439M Current: - **Participaciones Preferentes Obligaciones YOtros Valores Negociables Corrientes** 2023-01-01: 1,139M - **Current Loans Received And Current Portion Of Noncurrent Loans Received** 2023-01-01: 553M - **Current Lease Liabilities** 2023-01-01: 72M Total reported debt (including leases) = 3,101 + 2,624 + 439 + 1,139 + 553 + 72 = **7,928M EUR** *Leases*: Already included above. *Pension deficit*: No data given → assume 0. *Guarantees*: Not disclosed → 0. *Hybrid debt portion*: No hybrid debt disclosed → 0. *Other debt-like items*: The S&P methodology for unregulated power mentions adjustments for PPAs and other obligations, but here we have no data to quantify — assume 0. *Eligible cash*: Cash and cash equivalents 2023-01-01: 2,360M EUR. S&P typically allows deduction of surplus cash (often all cash unless restricted). We’ll deduct all. **Adjusted Debt** = 7,928 – 2,360 = **5,568M EUR**. --- **Step 3 – Estimate Adjusted EBITDA** From the P&L (2022-01-01 to 2023-01-01): - Revenue: 11,195M - Other Income: 1,016M - Changes in inventories: -72M - Raw materials and consumables used: -3,483M - Employee benefits: -2,077M - Other expense by nature: -4,814M - Dotacion Amortizacion YVariacion De Provisiones (Depreciation/Amortization/Provisions): 762M (expense) **Operating Profit** (Profit Loss From Operating Activities) = 1,334M. We need EBITDA, so add back Depreciation, Amortization, and Provisions: - Dotacion Amortizacion YVariacion De Provisiones: 762M - Impairment loss reversal: -15M (actually a gain, so subtract from expenses when adding back? Here it’s a *reversal* of impairment, so it was a benefit, not expense. We'll add back the net impairment charge: if reversal = -15M, that means impairment charge was negative, so adding back means subtracting 15M from EBITDA? We’ll treat "Impairment Loss Reversal" as already included in the operating profit, so for EBITDA we add back actual D&A: 762M + 0 for impairment (since it's non-cash reversal net). Actually, reversal means negative expense, so adding it back would reduce EBITDA. We’ll assume the 762M already includes the impairment effect, so no extra adjustment.) EBITDA = 1,334 + 762 = **2,096M EUR**. *Adjustments for leases*: The leases are already included in operating expenses — no double-count. *Nonrecurring items*: - Other Gains Losses: +13M (small, assume operating) - Resultado De Puesta En Equivalencia Operativa: +159M — this is equity-method income from operations, already in operating profit. We’ll leave as is for now; methodology may exclude it for Adjusted EBITDA — but for unregulated power, proportional JV EBITDA adjustment may apply. We lack proportional data, so we leave in. *Pension adjustment*: None. *Joint venture proportional EBITDA*: Not quantified here → no adjustment. We’ll keep **Adjusted EBITDA = 2,096M**. --- **Step 4 – Ratio** Adjusted Debt / Adjusted EBITDA = 5,568 / 2,096 ≈ **2.66** --- 2.66