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

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

Under S&P methodology, FFO is generally calculated as:
**FFO = Net Income + Depreciation & Amortization + Deferred Taxes + Other Non-Cash Items - Gains on Asset Sales**

Alternatively, S&P defines FFO starting from cash flows from operations and adjusting, or from EBITDA minus interest and taxes.

Let me use the available data to approximate FFO:

**Starting from Net Income (Profit/Loss):**
- Net Income (Profit Loss): 1,169,749,000 EUR
- Add back: Depreciation, Amortisation & Impairment: 1,979,007,000 EUR
- Add back: Provisions: 14,539,000 EUR
- Less: Equity method income (non-cash portion): Joint ventures contribution was 239,429,000, but dividends received were 81,394,000, so non-cash portion = 239,429,000 - 81,394,000 = 158,035,000 (subtract this)
- Add back: Non-cash finance costs adjustments (net finance costs 910,220,000 vs cash interest paid ~716,454,000 + 12,885,000 + 111,000 = 729,450,000; difference ~180,770,000 non-cash)

Let me try a simpler S&P approach:

**FFO = Cash Flows from Operations + Interest Paid - Working Capital Changes**

From the cash flow statement:
- Cash Flows from Operations (before working capital): We can reconstruct this.
- Net Income: 1,169,749,000
- D&A: 1,979,007,000
- Provisions: 14,539,000
- JV adjustment: -208,684,000
- Finance income/cost adjustment: 910,220,000
- Disposal gains: -4,377,000
- Other adjustments: -1,384,104,000
- **Subtotal before WC and tax**: 2,476,350,000

Working capital changes:
- Trade receivables: 405,817,000
- Trade payables: 766,260,000
- Personnel WC: -142,137,000
- Regulatory assets: 502,859,000
- Total WC: 1,532,799,000

Tax paid: -258,849,000
Other operating: -422,539,000

**CFO = 3,777,785,000**

S&P FFO typically = CFO - net working capital changes (to remove timing effects):
FFO ≈ CFO - WC changes = 3,777,785,000 - 1,532,799,000 = 2,244,986,000

But S&P also adds back interest paid (already deducted in CFO) and subtracts it as cash interest. Since interest is already in CFO, let me reconsider.

**S&P FFO ≈ Net Income + D&A + Deferred taxes + other non-cash charges - non-cash income**

Simpler approach: FFO ≈ CFO adjusted for working capital
FFO ≈ 3,777,785,000 - 1,532,799,000 ≈ 2,244,986,000

## Step 2: Estimate Net Debt

**Gross Debt:**
- Long-term borrowings: 15,782,604,000
- Current borrowings: 4,239,869,000
- Lease liabilities (Right-of-use ~1,320,270,000 suggests lease debt; S&P includes this)
- **Total Gross Debt ≈ 15,782,604,000 + 4,239,869,000 = 20,022,473,000**

Adding lease obligations (already likely included in borrowings given IFRS 16). If not, add ~1,320,270,000.

**Cash and equivalents:** 4,900,205,000

**Net Debt = 20,022,473,000 - 4,900,205,000 = 15,122,268,000**

S&P may also include institutional partnerships (2,212,162,000) as debt-like:
Net Debt with partnerships = 15,122,268,000 + 2,212,162,000 = 17,334,430,000

## Step 3: FFO / Net Debt

**FFO / Net Debt = 2,244,986,000 / 15,122,268,000 ≈ 14.8%**

With institutional partnerships: 2,244,986,000 / 17,334,430,000 ≈ 13.0%

A reasonable mid-point estimate: ~13-15%

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