Let’s go through this step-by-step.

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**Step 1 – Identify the industry**

ACEA S.P.A. is an Italian multi-utility operating in water, electricity, waste management, and related services. It is subject to regulation in segments like water and electricity distribution, fitting the description of a *Regulated Utility* from the S&P criteria.

Industry methodology: **Regulated Utilities**.

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**Step 2 – Estimate Adjusted Debt**

S&P baseline:

```
Adjusted_Debt = (reported_debt + leases + pension_deficit + guarantees + hybrid_debt_portion + other_debt_like_items) - eligible_cash
```

**Data extraction (end of FY2022, i.e., balance as at 2023-01-01):**

- **Non-current financial liabilities** (Other Noncurrent Financial Liabilities) = **€4,722,263,000**
- **Current financial liabilities** (Other Current Financial Liabilities) = **€619,418,000**
- **Reported gross debt** = 4,722,263,000 + 619,418,000 = **€5,341,681,000**
- **Leases** (Right-of-use assets ≈ €90,397,000 — typically approximate for lease liabilities) = **€90,397,000**
- **Pension deficit**: Noncurrent Provisions for Employee Benefits = **€112,989,000**
- **Guarantees**: Not separately quantified in the data → assume **0**
- **Hybrid debt**: Not in the data → assume **0**
- **Other debt-like items**: Not apparent → **0**
- **Eligible cash** = Cash and equivalents = **€559,908,000**

Adjusted debt = (5,341,681,000 + 90,397,000 + 112,989,000 + 0 + 0 + 0) – 559,908,000

= **€4,985,159,000**

---

**Step 3 – Estimate Adjusted EBITDA**

S&P baseline formula:

```
Adjusted_EBITDA = EBITDA ± lease adjustments ± non-recurring ± pensions ± JV proportional EBITDA ± other
```

**Data extraction (FY2022):**

Revenue = €5,138,245,000  
Operating Expense = –€3,861,121,000  
**Gross Profit** (Margine Operativo Lordo) = **€1,305,021,000** — this is essentially EBITDA before impairments/depreciation.

The income statement shows:

- Gross Profit = Revenue – External costs – Employee benefits + Other income
This matches the common Italian definition of MOL/EBITDA.

Also, "Gross Profit" here includes Other Income from subs/JVs/associates already.

From the notes, Ammortamenti EAccantonamenti = €625,799,000, Impairment (IFRS9) = €113,370,000, so:

EBIT = 1,305,021,000 – (625,799,000 + 113,370,000) = €565,851,000 (matches “Profit Loss From Operating Activities”).

**Adjustments for Adjusted EBITDA:**

- **Lease adjustment**: usually add back depreciation on right-of-use assets. Not directly available. But EBITDA is before depreciation, and leases are already in operating expense, so EBITDA already includes the rent portion. No further adjustment unless we reconstruct.
- **Non-recurring**: Not apparent → **0**
- **Pension adjustments**: Not specified → **0**
- **JV proportional EBITDA**:
  - “Share of Profit Loss of Associates and Joint Ventures…” = €17,793,000 after interest & tax, not EBITDA. Without further breakdown, simplest approach is to add back the share of profit to EBITDA and consider interest/tax adjustment; but here we lack full data to gross up. We will leave EBITDA as is.
- **Other normalizations**: None from data.

So **Adjusted EBITDA** ≈ **€1,305,021,000**

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**Step 4 – Calculate ratio**

Adjusted Debt / Adjusted EBITDA = 4,985,159,000 / 1,305,021,000 ≈ **3.82**

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<answer>3.82</answer>