**Step 1: Identify the relevant industry**

Ferrovial S.A. is a global infrastructure company. Its primary business segments include Airports (Heathrow, etc.), Highways (toll roads), and Construction/Services. Based on the provided methodologies, the most appropriate classification is **Transportation Infrastructure**. While it has construction activities, the core credit drivers for Ferrovial are its regulated/concession-based infrastructure assets (Airports and Roads). The "Transportation Infrastructure" methodology explicitly covers Airports and Roads.

**Step 2: Estimate 2021 Adjusted_EBITDA**

We need to reconstruct EBITDA for the fiscal year ended Dec 31, 2021 (reported as 2021-01-01 to 2022-01-01 in the data).

*   **Profit from Operations (EBIT):** The report provides "Profit Loss From Operating Activities" which is effectively EBIT.
    *   2021 EBIT: 1,479,000,000 EUR.
    *   *Note:* This figure includes a large non-recurring gain. The line item "Impairment And Gains Or Losses On Disposal Of Non Current Assets" for 2021 is 1,139,000,000 EUR. The breakdown shows "Fair Value Adjustments Member" contributed 1,101,000,000 EUR. This is likely related to the revaluation of assets (possibly the Heathrow stake or similar) and is considered non-recurring/unusual for operating performance analysis.
    *   Recurring EBIT = Reported EBIT - Non-recurring Gains
    *   Recurring EBIT = 1,479,000,000 - 1,139,000,000 = 340,000,000 EUR.
    *   Alternatively, we can look at "Profit From Operations Before Impairment And Disposals Of Non Current Assets" which is 340,000,000 EUR. This confirms the recurring operating profit.

*   **Add back Depreciation and Amortization (D&A):**
    *   "Amortisation Expense" 2021: 270,000,000 EUR.
    *   Depreciation is not explicitly listed as a single line item in the P&L provided, but we can infer it or look for "Depreciation and Amortization". The cash flow statement adjustments show "Ajustes Al Resultado Por Gastos Por Depreciacion YAmortizacion" for 2021 is 270,000,000 EUR. Wait, looking at 2022, the Amortisation expense is 299m and the adjustment is 299m. It appears the provided "Amortisation Expense" line might include depreciation or the adjustment line is the total D&A. Let's verify with PPE changes.
    *   PPE 2022-01-01: 354m. PPE 2023-01-01: 479m.
    *   Intangibles (excluding goodwill/infra) are small.
    *   Infrastructure projects are largely intangible asset model (concessions), so amortization is the key charge.
    *   Let's assume the "Amortisation Expense" line provided (270m for 2021) represents the total D&A charge relevant for EBITDA add-back, consistent with the cash flow adjustment line "Ajustes Al Resultado Por Gastos Por Depreciacion YAmortizacion" which is also 270,000,000 EUR for 2021.

*   **Lease Adjustment:** S&P adds back lease expenses to EBITDA and treats leases as debt.
    *   We need to estimate the lease expense included in operating costs.
    *   Current Lease Liabilities (2022-01-01): 58,000,000 EUR.
    *   Noncurrent Lease Liabilities (2022-01-01): 115,000,000 EUR.
    *   Total Lease Liabilities beginning of 2021 (2021-01-01 data not explicitly given for leases, but we can approximate or use the interest).
    *   Usually, lease expense = Interest on lease liability + Amortization of right-of-use asset.
    *   However, a simpler proxy often used when detailed lease P&L is missing is to add back the implied rental expense. Without explicit "Lease Expense" in P&L, we can estimate it.
    *   Let's look at the change in Right-of-Use (ROU) Assets.
    *   ROU Assets 2022-01-01: 176,000,000 EUR.
    *   ROU Assets 2023-01-01: 183,000,000 EUR.
    *   Depreciation of ROU is part of D&A. If the 270m D&A includes ROU depreciation, we don't add it back again. We need to add back the *interest* component of lease payments if it was in EBIT, but EBIT is before interest.
    *   Standard S&P adjustment: EBITDA = EBIT + D&A. Then Adjusted EBITDA adds back lease *rentals* if they were deducted to get EBIT? No, under IFRS 16, lease interest is in Finance Costs, and ROU depreciation is in Operating Expenses (D&A).
    *   So, Reported EBIT already excludes lease interest (it's below the line). Reported EBIT includes ROU depreciation.
    *   Therefore, EBITDA = EBIT + D&A (which includes ROU depreciation). This gives us earnings before lease interest and ROU depreciation.
    *   S&P defines Adjusted EBITDA for infrastructure often as EBITDA + Lease Rentals (if operating leases were used) or simply EBITDA under IFRS 16. Under IFRS 16, EBITDA is higher than under old standards because rent is replaced by depreciation (lower) and interest (below EBITDA).
    *   S&P typically adds back the entire lease cost to approximate a pre-lease obligation metric, OR they treat the lease liability as debt and add back the implied "rental" equivalent.
    *   A common simplification in S&P methodology for IFRS 16 adopters: Adjusted EBITDA = Reported EBITDA + Lease Interest + Lease Principal Repayment? No.
    *   Let's stick to the baseline formula: `Adjusted_EBITDA = EBITDA + adjustment_leases`.
    *   Under IFRS 16, Reported EBITDA = EBIT + D&A.
    *   The "adjustment_leases" usually refers to adding back the operating lease rent if the company was on old GAAP, or normalizing. For IFRS 16, S&P often considers Reported EBITDA as the starting point. However, to make it comparable to debt which now includes leases, some analysts add back the lease interest and principal? No, that's for FFO.
    *   Let's assume `adjustment_leases` is 0 for the EBITDA calculation itself under IFRS 16 unless specified otherwise, as the depreciation is added back. The cost of leasing is split into Depreciation (added back to get EBITDA) and Interest (not in EBITDA). Thus, Reported EBITDA is a good proxy for cash generation before lease principal/interest.
    *   However, S&P often adds back "Lease Expense" to EBITDA to create a metric that covers the full lease obligation. If we assume the "adjustment_leases" implies adding back the cash lease payment or similar.
    *   Let's look at the magnitude. Lease liabilities are ~170m. Interest rate ~3-4%? Interest ~5-7m. Principal repayment ~50-60m?
    *   Let's calculate Reported EBITDA first.
    *   2021 Recurring EBIT: 340,000,000 EUR.
    *   2021 D&A: 270,000,000 EUR.
    *   2021 Reported EBITDA = 340m + 270m = 610,000,000 EUR.
    *   Is there a lease adjustment? The prompt formula says `+ adjustment_leases`. In many S&P reports for IFRS 16 companies, they do not add back anything to EBITDA for leases, but they *do* add lease liabilities to Debt. The "adjustment" might be zero. Let's assume 0 for now, as IFRS 16 EBITDA is standard.

*   **Other Adjustments:**
    *   Non-recurring losses: 0.
    *   Non-recurring gains: 1,139,000,000 EUR (removed from EBIT).
    *   Pension/JV: No specific data provided to adjust. We will assume reported figures are close enough or adjustments are negligible relative to the scale, or included in the "recurring" EBIT derived from "Profit From Operations Before Impairment...".

    **2021 Adjusted EBITDA = 610,000,000 EUR.**

**Step 3: Estimate 2021 FFO**

Formula: `FFO = Adjusted_EBITDA - cash_interest - cash_taxes`

*   **Cash Interest:**
    *   We need "Finance Income Cost" and adjust for non-cash items.
    *   Reported "Finance Income Cost" 2021: -335,000,000 EUR.
    *   This includes non-cash items like fair value adjustments on derivatives/hedges.
    *   "Result On Derivatives And Other Financial Results Infrastructure Projects" Fair Value Adj: -84,000,000 EUR.
    *   "Result On Derivatives And Other Financial Results Excluding Infrastructure Projects" Fair Value Adj: 1,000,000 EUR.
    *   Total Fair Value Adjustments in Finance Cost: -83,000,000 EUR.
    *   Cash Interest ≈ Reported Finance Cost - Non-cash FV adjustments.
    *   Cash Interest ≈ -335m - (-83m) = -252,000,000 EUR.
    *   Let's verify with "Finance Income Cost Before Fair Value Adjustments Member": -252,000,000 EUR. This is a good proxy for cash interest (assuming no other significant non-cash interest items like PIK).
    *   Cash Interest = 252,000,000 EUR (expense).

*   **Cash Taxes:**
    *   Reported "Income Tax Expense Continuing Operations": -9,000,000 EUR (benefit).
    *   This is likely distorted by deferred taxes and the large one-off gain.
    *   We need *cash* taxes paid.
    *   Look at Cash Flow Statement: "Income Taxes Paid Refund Classified As Operating Activities" 2021: 155,000,000 EUR.
    *   Note: The sign in CF statements usually indicates inflow/outflow. "Paid" is an outflow. The value is positive 155m in the list, but contextually it's a payment.
    *   Let's check the sign convention. "Cash Flows From Used In Operating Activities" is 810,000,000 EUR (positive, meaning inflow?).
    *   Let's check the components.
    *   Profit Loss: 1,336,000,000.
    *   Adjustments: +256,000,000.
    *   Working Capital: +249,000,000.
    *   Taxes Paid: 155,000,000.
    *   If Profit is 1.3bn and CFO is 0.8bn, taxes paid reduces cash.
    *   So Cash Taxes Paid = 155,000,000 EUR.

*   **FFO Calculation:**
    *   FFO = 610,000,000 (Adj EBITDA) - 252,000,000 (Cash Interest) - 155,000,000 (Cash Taxes)
    *   FFO = 203,000,000 EUR.

**Step 4: Estimate 2021 Adjusted_Debt**

Formula: `Adjusted_Debt = reported_debt + leases + pension_deficit + guarantees + hybrid_debt_portion + other_debt_like_items - eligible_cash`

*   **Reported Debt (Interest-bearing):**
    *   We need to sum interest-bearing borrowings.
    *   From Balance Sheet 2022-01-01 (which is end of 2021):
    *   Noncurrent Portion Of Other Noncurrent Borrowings: 9,513,000,000 EUR.
        *   Breakdown:
            *   Noncurrent Debt Securities And Bank Borrowings Of Infrastructure Projects: 7,362,000,000 EUR.
            *   Noncurrent Debt Securities And Bank Borrowings Excluding Infrastructure Projects: 2,151,000,000 EUR.
            *   (Sum: 7,362 + 2,151 = 9,513. Matches.)
    *   Current Borrowings And Current Portion Of Noncurrent Borrowings: 1,096,000,000 EUR.
        *   Breakdown:
            *   Current Debt Securities And Bank Borrowings Of Infrastructure Projects: 47,000,000 EUR.
            *   Current Debt Securities And Bank Borrowings Excluding Infrastructure Projects: 1,049,000,000 EUR.
            *   (Sum: 47 + 1,049 = 1,096. Matches.)
    *   Total Reported Interest-Bearing Debt = 9,513m + 1,096m = 10,609,000,000 EUR.

*   **Leases:**
    *   Current Lease Liabilities: 58,000,000 EUR.
    *   Noncurrent Lease Liabilities: 115,000,000 EUR.
    *   Total Leases = 173,000,000 EUR.

*   **Pension Deficit:**
    *   "Noncurrent Provisions For Employee Benefits": 3,000,000 EUR. This is negligible.

*   **Hybrid Debt/Other:**
    *   "Other Noncurrent Financial Liabilities": 72,000,000 EUR. This might include derivatives or other items. Derivatives are listed separately.
    *   "Noncurrent Derivative Financial Liabilities": 295,000,000 EUR. S&P typically excludes derivatives from debt unless they are synthetic debt. We will exclude them from Debt but note they are liabilities.
    *   "Perpetual Subordinated Bonds": Listed in Equity movements. In 2021, there was a -7m adjustment. The balance in Equity "Other Equity Securities" is 507m. If these are treated as equity, they are not debt. If treated as hybrid debt, they might be added. S&P often treats perpetuas as 50% debt or full debt depending on terms. Given they are in Equity, and no explicit "debt" classification, we might treat them as equity or 50% debt. However, without specific terms, and given they are small relative to total debt (~500m vs 10,600m), we will conservatively leave them in equity or add 50%. Let's assume they are equity for now as they are in "Other Equity Securities".
    *   Let's stick to strict interest-bearing debt + leases.

*   **Eligible Cash:**
    *   "Cash And Cash Equivalents": 5,536,000,000 EUR.
    *   S&P allows deduction of unrestricted cash.
    *   "Restricted Cash Relating To Infrastructure Projects...": 579,000,000 EUR (Noncurrent) + 47,000,000 EUR (Current, from "Current Restricted Cash..."). Total Restricted = 626,000,000 EUR.
    *   Unrestricted Cash = Total Cash - Restricted Cash.
    *   Unrestricted Cash = 5,536m - 626m = 4,910,000,000 EUR.
    *   Note: "Cash And Cash Equivalents Excluding Infrastructure Projects" is 5,329,000,000 EUR. This likely includes some restricted cash or is just a segment split. The explicit "Restricted Cash" lines are safer to deduct.
    *   Let's use Unrestricted Cash = 4,910,000,000 EUR.

*   **Adjusted Debt Calculation:**
    *   Debt = 10,609,000,000 EUR.
    *   Leases = 173,000,000 EUR.
    *   Total Gross Debt = 10,782,000,000 EUR.
    *   Less Eligible Cash = 4,910,000,000 EUR.
    *   **2021 Adjusted Debt = 5,872,000,000 EUR.**

**Step 5: Calculate 2021 Adjusted_Debt / Adjusted_EBITDA**

*   Ratio = 5,872,000,000 / 610,000,000
*   Ratio = **9.63x**

**Step 6: Calculate 2021 FFO / Adjusted_Debt**

*   Ratio = 203,000,000 / 5,872,000,000
*   Ratio = **0.0346** (or 3.46%)

**Step 7: Estimate 2022 Adjusted_EBITDA**

Fiscal year ended Dec 31, 2022 (2022-01-01 to 2023-01-01).

*   **Recurring EBIT:**
    *   "Profit Loss From Operating Activities": 423,000,000 EUR.
    *   "Impairment And Gains Or Losses...": -6,000,000 EUR (Loss).
    *   "Profit From Operations Before Impairment...": 429,000,000 EUR.
    *   There are no large fair value gains in 2022 operating profit (Fair Value Adjustments Member is 1,000,000 EUR, negligible).
    *   So, Recurring EBIT ≈ 429,000,000 EUR.

*   **Add back D&A:**
    *   "Amortisation Expense": 299,000,000 EUR.
    *   Cash flow adjustment "Ajustes...": 299,000,000 EUR.
    *   2022 Reported EBITDA = 429m + 299m = 728,000,000 EUR.
    *   Check "Gross Profit": 728,000,000 EUR. Wait.
    *   Revenue: 7,551m. Operating Expense: 6,825m.
    *   Gross Profit = Revenue - OpEx? No, Gross Profit is usually Revenue - COGS.
    *   Here, "Gross Profit" is listed as 728,000,000 EUR.
    *   "Profit From Operations Before Impairment..." is 429,000,000 EUR.
    *   Difference = 728m - 429m = 299m. This matches the Amortization expense.
    *   So, EBITDA = Gross Profit + Amortization? No.
    *   EBIT = EBITDA - D&A.
    *   429m = EBITDA - 299m => EBITDA = 728m.
    *   So, **2022 Adjusted EBITDA = 728,000,000 EUR.** (Assuming no lease adjustment needed beyond IFRS 16 standard).

**Step 8: Estimate 2022 FFO**

*   **Cash Interest:**
    *   "Finance Income Cost": -320,000,000 EUR.
    *   "Finance Income Cost Before Fair Value Adjustments Member": -268,000,000 EUR.
    *   Fair Value Adjustments in Finance: -52,000,000 EUR.
    *   Cash Interest ≈ 268,000,000 EUR.

*   **Cash Taxes:**
    *   "Income Taxes Paid Refund Classified As Operating Activities" 2022: 82,000,000 EUR.
    *   Cash Taxes Paid = 82,000,000 EUR.

*   **FFO Calculation:**
    *   FFO = 728,000,000 (Adj EBITDA) - 268,000,000 (Cash Interest) - 82,000,000 (Cash Taxes)
    *   FFO = **378,000,000 EUR.**

**Step 9: Estimate 2022 Adjusted_Debt**

Balance Sheet as of 2023-01-01 (End of 2022).

*   **Reported Debt:**
    *   Noncurrent Portion Of Other Noncurrent Borrowings: 10,776,000,000 EUR.
        *   Infra: 7,893,000,000 EUR.
        *   Excl Infra: 2,883,000,000 EUR.
        *   Sum: 10,776,000,000 EUR.
    *   Current Borrowings And Current Portion Of Noncurrent Borrowings: 877,000,000 EUR.
        *   Infra: 74,000,000 EUR.
        *   Excl Infra: 803,000,000 EUR.
        *   Sum: 877,000,000 EUR.
    *   Total Reported Interest-Bearing Debt = 10,776m + 877m = 11,653,000,000 EUR.

*   **Leases:**
    *   Current Lease Liabilities: 64,000,000 EUR.
    *   Noncurrent Lease Liabilities: 120,000,000 EUR.
    *   Total Leases = 184,000,000 EUR.

*   **Total Gross Debt:**
    *   11,653m + 184m = 11,837,000,000 EUR.

*   **Eligible Cash:**
    *   "Cash And Cash Equivalents": 5,130,000,000 EUR.
    *   Restricted Cash:
        *   Noncurrent: 597,000,000 EUR.
        *   Current: 38,000,000 EUR ("Current Restricted Cash...").
        *   Total Restricted = 635,000,000 EUR.
    *   Unrestricted Cash = 5,130m - 635m = 4,495,000,000 EUR.

*   **Adjusted Debt Calculation:**
    *   Adjusted Debt = 11,837,000,000 - 4,495,000,000
    *   **2022 Adjusted Debt = 7,342,000,000 EUR.**

**Step 10: Calculate 2022 Adjusted_Debt / Adjusted_EBITDA**

*   Ratio = 7,342,000,000 / 728,000,000
*   Ratio = **10.09x**

**Step 11: Calculate 2022 FFO / Adjusted_Debt**

*   Ratio = 378,000,000 / 7,342,000,000
*   Ratio = **0.0515** (or 5.15%)

**Step 12: Classify the credit trend**

*   **Signal 1: Leverage (Adjusted Debt / Adjusted EBITDA)**
    *   2021: 9.63x
    *   2022: 10.09x
    *   Change: 10.09 - 9.63 = **+0.46x**
    *   Threshold: ≥ +0.2x is Deteriorating.
    *   Signal 1: **Deteriorating**

*   **Signal 2: Cash-flow coverage (FFO / Adjusted Debt)**
    *   2021: 0.0346
    *   2022: 0.0515
    *   Change: 0.0515 - 0.0346 = **+0.0169**
    *   Threshold:
        *   ≥ +0.03: Improving
        *   Between -0.03 and +0.03: Stable
        *   ≤ -0.03: Deteriorating
    *   The change is +0.0169, which is within the (-0.03, +0.03) range.
    *   Signal 2: **Stable**

*   **Combining Signals:**
    *   Signal 1: Deteriorating
    *   Signal 2: Stable
    *   Rule: "If one is Stable and the other is Improving or Deteriorating, return the non-Stable category."
    *   Therefore, the trend is Deteriorating.

**Reasoning Check:**
Leverage increased significantly (from 9.6x to 10.1x). This is driven by an increase in Net Debt (from 5.9bn to 7.3bn) outpacing the growth in EBITDA (from 0.61bn to 0.73bn). The increase in debt is likely due to acquisitions or infrastructure investments (Infra debt increased from 7.4bn to 7.9bn non-current, plus current changes). EBITDA grew, but not enough to offset the debt accumulation. The coverage ratio improved slightly (from 3.5% to 5.2%) because FFO grew proportionally more than Debt?
FFO 2021: 203m. Debt 2021: 5872m. Ratio: 3.45%.
FFO 2022: 378m. Debt 2022: 7342m. Ratio: 5.15%.
Wait, why did coverage improve?
FFO nearly doubled (203 -> 378). Debt increased by ~25% (5.9 -> 7.3).
The huge jump in FFO is due to the removal of the one-off gain in 2021 EBITDA?
In 2021, we used *Recurring* EBITDA (610m). If we had used Reported EBITDA (including the 1.1bn gain), EBITDA would be ~1.7bn, and FFO would be much higher, and leverage much lower.
However, S&P adjusts for non-recurring items. The 2021 "Profit From Operations Before Impairment..." was 340m. The 2022 was 429m.
The 2021 FFO was low (203m) because the recurring operating profit was low (340m EBIT).
The 2022 FFO is higher (378m) because recurring operating profit was higher (429m EBIT) and taxes/interest were manageable.
So the *operating* performance improved.
However, the *leverage* ratio worsened because Debt increased significantly.
The prompt asks to estimate the trend based on the signals.
Signal 1 (Leverage) says Deteriorating (+0.46x).
Signal 2 (Coverage) says Stable (+0.017).
According to the combination rule, we return the non-Stable category.

<answer>Deteriorating</answer>