Step 1: Identify the relevant industry for "FERROVIAL SA". Based on the balance sheet, Ferrovial SA has massive "Investments In Infrastructure Projects" (€11.185 billion in 2022) and is known as a major developer and operator of transportation infrastructure (toll roads, airports). The provided methodologies include "Transportation Infrastructure", which is the relevant industry for this entity. Step 2: Estimate the 2021 "Adjusted_EBITDA". Formula: Adjusted_EBITDA = EBITDA (reported) + adjustment_leases + nonrecurring_losses - nonrecurring_gains ± pension_adjustments ± joint_venture_proportional_EBITDA ± other_normalization_adjustments - Reported EBITDA = Profit Loss From Operating Activities + Amortisation Expense = 1,479,000,000 + 270,000,000 = 1,749,000,000 EUR - Lease adjustment: Right-of-use Assets (2022-01-01) = 176,000,000 EUR. S&P typically adds back 8x the operating lease asset (or rent expense) as an adjustment. 8 * 176,000,000 = 1,408,000,000 EUR. (Note: Even if we assume the rent is the minimum lease liability repayment ~ 115M/6.5 ~ 18M, the standard 8x ROU asset proxy yields ~1.4B). We will use 1,408,000,000 EUR. - Nonrecurring items: Impairment And Gains Or Losses On Disposal Of Non Current Assets = 1,139,000,000 EUR (Gain). Since this is a large nonrecurring gain, we subtract it to normalize EBITDA. - Other adjustments: None apparent from data. Adjusted_EBITDA_2021 = 1,749,000,000 + 1,408,000,000 - 1,139,000,000 = 2,018,000,000 EUR. Step 3: Estimate the 2021 "FFO". Formula: FFO = Adjusted_EBITDA - cash_interest - cash_taxes - Cash Interest: Interest Paid Classified As Financing Activities + Cash Outflow For Leases = 295,000,000 + 131,000,000 = 426,000,000 EUR. - Cash Taxes: Income Taxes Paid Refund Classified As Operating Activities = 155,000,000 EUR. FFO_2021 = 2,018,000,000 - 426,000,000 - 155,000,000 = 1,437,000,000 EUR. Step 4: Estimate the 2021 "Adjusted_Debt". Formula: Adjusted_Debt = (reported_debt + leases + pension_deficit + guarantees + hybrid_debt_portion + other_debt_like_items) - eligible_cash - Reported Debt: Noncurrent Debt + Current Borrowings = 9,513,000,000 + 1,096,000,000 = 10,609,000,000 EUR. - Leases (debt-like): Noncurrent Lease Liabilities + Current Lease Liabilities = 115,000,000 + 58,000,000 = 173,000,000 EUR. - Hybrid debt: Other Equity Securities (Perpetual Subordinated Bonds) = 507,000,000 EUR (treated as equity under IFRS, but S&P usually classifies hybrids as debt if not deeply subordinated; we will include it). - Other debt-like items: Noncurrent Derivative Financial Liabilities + Current Derivative Financial Liabilities = 295,000,000 + 110,000,000 = 405,000,000 EUR. - Total Debt before cash = 10,609,000,000 + 173,000,000 + 507,000,000 + 405,000,000 = 11,694,000,000 EUR. - Eligible Cash: Cash And Cash Equivalents Excluding Infrastructure Projects = 5,329,000,000 EUR. Adjusted_Debt_2021 = 11,694,000,000 - 5,329,000,000 = 6,365,000,000 EUR. Step 5: Calculate the 2021 "Adjusted_Debt / Adjusted_EBITDA" ratio. Ratio_2021 = 6,365,000,000 / 2,018,000,000 = 3.15x Step 6: Calculate the 2021 "FFO / Adjusted_Debt" ratio. Ratio_2021 = 1,437,000,000 / 6,365,000,000 = 0.2258 (or 22.58%) Step 7: Estimate the 2022 "Adjusted_EBITDA". - Reported EBITDA = Profit Loss From Operating Activities + Amortisation Expense = 423,000,000 + 299,000,000 = 722,000,000 EUR - Lease adjustment: 8 * Right-of-use Assets (2023-01-01) = 8 * 183,000,000 = 1,464,000,000 EUR. - Nonrecurring items: Impairment And Gains Or Losses On Disposal Of Non Current Assets = -6,000,000 EUR (Loss). We add back this nonrecurring loss to normalize EBITDA. Adjusted_EBITDA_2022 = 722,000,000 + 1,464,000,000 + 6,000,000 = 2,192,000,000 EUR. Step 8: Estimate the 2022 "FFO". - Cash Interest: Interest Paid Classified As Financing Activities + Cash Outflow For Leases = 329,000,000 + 72,000,000 = 401,000,000 EUR. - Cash Taxes: Income Taxes Paid Refund Classified As Operating Activities = 82,000,000 EUR. FFO_2022 = 2,192,000,000 - 401,000,000 - 82,000,000 = 1,709,000,000 EUR. Step 9: Estimate the 2022 "Adjusted_Debt". - Reported Debt: Noncurrent Debt + Current Borrowings = 10,776,000,000 + 877,000,000 = 11,653,000,000 EUR. - Leases (debt-like): 120,000,000 + 64,000,000 = 184,000,000 EUR. - Hybrid debt: Other Equity Securities = 508,000,000 EUR. - Other debt-like items: Noncurrent Derivative Financial Liabilities + Current Derivative Financial Liabilities = 66,000,000 + 47,000,000 = 113,000,000 EUR. - Total Debt before cash = 11,653,000,000 + 184,000,000 + 508,000,000 + 113,000,000 = 12,458,000,000 EUR. - Eligible Cash: Cash And Cash Equivalents Excluding Infrastructure Projects = 4,962,000,000 EUR. Adjusted_Debt_2022 = 12,458,000,000 - 4,962,000,000 = 7,496,000,000 EUR. Step 10: Calculate the 2022 "Adjusted_Debt / Adjusted_EBITDA" ratio. Ratio_2022 = 7,496,000,000 / 2,192,000,000 = 3.42x Step 11: Calculate the 2022 "FFO / Adjusted_Debt" ratio. Ratio_2022 = 1,709,000,000 / 7,496,000,000 = 0.2280 (or 22.80%) Step 12: Classify the year-on-year credit trend. - Signal 1 (Leverage): Change in Adjusted_Debt / Adjusted_EBITDA = 3.42x - 3.15x = +0.27x. Threshold: ≥ +0.2x indicates "Deteriorating". Signal 1 is Deteriorating. - Signal 2 (Cash-flow coverage): Change in FFO / Adjusted_Debt = 0.2280 - 0.2258 = +0.0022. Threshold: between -0.03 and +0.03 indicates "Stable". Signal 2 is Stable. - Combining the signals: One is "Stable" and the other is "Deteriorating". Following the rule to return the non-Stable category, we select Deteriorating. Deteriorating