# FFO / Net Debt Ratio Calculation (S&P Methodology)

## Step 1: Calculate FFO (Funds From Operations)

S&P's FFO methodology typically starts with:
- Net Income from continuing operations
- Add back: Depreciation & Amortization
- Add back: Impairment losses/reversals (non-recurring)
- Add back: Deferred taxes
- Adjust for: Other non-cash items

For 2022:
- Net Income (Continuing Operations): -1,793 EUR million
- Depreciation, Amortization & Provisions: 5,187 EUR million
- Impairment Loss/Reversal: 2,774 EUR million (charge, so add back)
- Income Tax Expense (continuing): -83 EUR million (benefit, so adds to FFO)
- Share of profit of associates: 1,059 EUR million (non-cash, add back)
- Adjustments for undistributed profits: 1,059 EUR million (already included above)

More directly, starting from operating cash flow approach:
**Cash from operations (continuing): 8,488 EUR million**

This is a good proxy for FFO as it includes adjustments for working capital.

FFO ≈ 8,488 EUR million

## Step 2: Calculate Net Debt

**Total Borrowings:**
- Long-term borrowings: 30,458 EUR million
- Current borrowings: 10,590 EUR million
- Total debt: 41,048 EUR million

**Less: Cash and equivalents:**
- Cash: 13,890 EUR million

**Net Debt = 41,048 - 13,890 = 27,158 EUR million**

## Step 3: Calculate FFO / Net Debt Ratio

FFO / Net Debt = 8,488 / 27,158 = 0.3126 or approximately 0.31x

<answer>0.31</answer>