I'll work through this step-by-step for ENI S.P.A.

## Step 1: Identify the Relevant Industry

ENI S.P.A. is a major integrated oil and gas company (exploration & production, refining, marketing, chemicals, and power generation). The most relevant methodology is **Oil And Gas Exploration And Production** (integrated oil and gas), combined with elements of unregulated power and gas for some segments.

## Step 2: Estimate 2021 Adjusted EBITDA

For fiscal year 2021 (period 2021-01-01 to 2022-01-01):

**Start with Operating Profit:**
- Profit Loss From Operating Activities = €12,341M

**Add back D&A and impairments:**
- Depreciation and Amortisation = €7,063M
- Impairment losses = €167M
- Write-offs = €387M

**EBITDA (reported basis):**
EBITDA = 12,341 + 7,063 + 167 + 387 = **€19,958M**

**S&P Adjustments:**
- **Lease adjustment:** Add back lease payments (approximation from lease liabilities). Current lease liabilities ~€948M as proxy for annual lease expense. Since IFRS 16 already capitalizes leases, the D&A and interest on leases are already in EBITDA. Under S&P methodology, operating lease rents are added back and replaced with depreciation component. For simplicity, the EBITDA already includes lease-related D&A, so the main adjustment is already captured.
- **Share of equity-accounted investments:** Loss of -€1,091M (already excluded from operating profit, which is appropriate for S&P)
- **Other operating income/expense:** The €903M includes some items that may be non-recurring, but I'll keep them as reported.

**Adjusted EBITDA 2021 ≈ €19,958M**

## Step 3: Estimate 2021 FFO

FFO = Adjusted EBITDA - cash interest - cash taxes

- Cash interest paid = €792M
- Cash taxes paid = €3,726M

FFO = 19,958 - 792 - 3,726 = **€15,440M**

## Step 4: Estimate 2021 Adjusted Debt

As of 2022-01-01 (end of FY2021):

**Reported debt:**
- Short-term borrowings: €2,299M
- Current portion of long-term borrowings: €1,781M
- Long-term borrowings: €23,714M
- Total reported debt = €27,794M

**Lease liabilities:**
- Current lease liabilities: €948M
- Non-current lease liabilities: €4,389M
- Total leases = €5,337M

**Pension deficit:**
- Non-current provisions for employee benefits: €819M

**Hybrid debt (perpetual subordinated bonds):**
ENI issued perpetual subordinated bonds. From equity changes, ~€2B was issued in FY2021 and there were prior issuances (Other Reserves show ~€6,289M which includes hybrids). S&P typically gives 50% equity / 50% debt credit to hybrids. From the data, the cumulative hybrid equity component appears to be approximately €5B (based on net issuances). The debt portion (50%) ≈ €2,500M.

**Cash adjustment:**
- Cash and cash equivalents: €8,254M (but S&P typically only deducts surplus cash; for large integrated oil companies, a portion is considered operational). I'll assume ~€2B is operational, so eligible cash ≈ €6,254M.

**Adjusted Debt 2021:**
= 27,794 + 5,337 + 819 + 2,500 - 6,254 = **€30,196M**

## Step 5: 2021 Adjusted Debt / Adjusted EBITDA

= 30,196 / 19,958 = **1.51x**

## Step 6: 2021 FFO / Adjusted Debt

= 15,440 / 30,196 = **0.511 (51.1%)**

## Step 7: Estimate 2022 Adjusted EBITDA

For fiscal year 2022 (period 2022-01-01 to 2023-01-01):

**Operating Profit:** €17,510M

**Add back:**
- Depreciation and Amortisation: €7,205M
- Impairment losses: €1,140M
- Write-offs: €599M

**EBITDA = 17,510 + 7,205 + 1,140 + 599 = €26,454M**

**Adjusted EBITDA 2022 ≈ €26,454M**

## Step 8: Estimate 2022 FFO

- Cash interest paid: €851M
- Cash taxes paid: €8,488M

FFO = 26,454 - 851 - 8,488 = **€17,115M**

## Step 9: Estimate 2022 Adjusted Debt

As of 2023-01-01 (end of FY2022):

**Reported debt:**
- Short-term borrowings: €4,446M
- Current portion of long-term: €3,097M
- Long-term borrowings: €19,374M
- Total = €26,917M

**Leases:**
- Current: €884M
- Non-current: €4,067M
- Total = €4,951M

**Pension:** €786M

**Hybrid debt portion:** No new issuances in 2022, coupon paid €138M. Cumulative hybrid ~€5B, debt portion ≈ €2,500M.

**Cash:** €10,155M; eligible cash ≈ €8,155M

**Adjusted Debt 2022:**
= 26,917 + 4,951 + 786 + 2,500 - 8,155 = **€26,999M**

## Step 10: 2022 Adjusted Debt / Adjusted EBITDA

= 26,999 / 26,454 = **1.02x**

## Step 11: 2022 FFO / Adjusted Debt

= 17,115 / 26,999 = **0.634 (63.4%)**

## Step 12: Classify Credit Trend

**Signal 1 - Leverage:**
Change = 1.02x - 1.51x = **-0.49x**
≤ -0.2x → **Improving**

**Signal 2 - Cash-flow coverage:**
Change = 0.634 - 0.511 = **+0.123**
≥ +0.03 → **Improving**

Both signals agree: **Improving**

<answer>Improving</answer>