Let’s proceed step by step. --- ## Step 1 – Identify the relevant industry Acciona SA is a Spanish infrastructure and renewable energy group, notably with large activities in: - Renewable power generation (wind, solar, hydro, etc.) - Infrastructure construction and concessions (transport, water, etc.) Among the given methodologies, the **Unregulated Power and Gas** description fits Acciona’s renewable energy activities best, especially because these revenues are not under traditional rate-of-return regulation, but may benefit from long-term contracts, feed-in tariffs, PPAs, etc. Competitive position criteria there include “asset mix and quality,” “earnings structure and stability,” and “market structure.” Given its mix also includes infrastructure concessions, but the dominant energy profile leads us to **Unregulated Power and Gas**. The methodology for unregulated power and gas indicates: - For companies with long-term contracted revenues meeting certain criteria, use **medial volatility table**. - Core ratio remains **FFO to debt**. - Adjustments: operating leases capitalized, pension adjustments, etc. Acciona likely qualifies for medial volatility due to heavy contracted/regulated-like renewables. --- ## Step 2 – Estimate Adjusted EBITDA ### 2.1 Reconstruct reported EBITDA if needed From income statement items: - Revenue (2022): 11,195,000,000 - Other Income: 1,016,000,000 - Changes in inventories: -72,000,000 - Raw materials & consumables: -3,483,000,000 - Employee benefits: -2,077,000,000 - Other expenses by nature: -4,814,000,000 - Dotacion Amortizacion y Variacion de Provisiones (= depreciation, amortization & provisions): -762,000,000 - Impairment loss reversal: +15,000,000 (since the line shows -15M, meaning reversal of provision) - Other gains/losses: +13,000,000 - Resultado de puesta en equivalencia operativa (= operating equity method result): +159,000,000 Sum to operating profit: Operating profit = Revenue 11,195M + Other income 1,016M + Changes in inventories -72M - Raw materials -3,483M - Employee benefits -2,077M - Other expenses -4,814M - Amortization & provisions -762M + Impairment reversal 15M + Other gains 13M + Resultado puesta en equivalencia operativa 159M = 11,195 + 1,016 - 72 - 3,483 - 2,077 - 4,814 - 762 + 15 + 13 + 159 = 1,190M (approx) But reported “Profit Loss From Operating Activities” = 1,334M. Difference likely due to rounding or that “Dotacion Amortizacion...” includes non-cash items; still, we have the reported operating profit, so it’s simpler: Reported EBIT = 1,334M. ### 2.2 Add back D&A to get EBITDA From cash flow statement, “Ajustes por amortizacion variacion de provisiones y deterioros” = 848M (includes D&A, provisions, impairments). Thus: EBITDA = 1,334 + 848 = 2,182M. (To confirm: Amortization & provisions line in P&L = 762M, but CF statement gives 848M; difference may include non-cash items not in Op. Profit line; we'll use CF reconciliation number 848M as correct D&A + provisions.) ### 2.3 Lease adjustment Operating leases already capitalized under IFRS 16 (Right-of-use assets and Lease liabilities present), so EBITDA already includes depreciation on ROU assets instead of rent expense. No additional S&P operating lease adjustment to EBITDA needed (unless S&P reverses D&A and adds back lease expense; but for IFRS reporters, S&P typically uses reported EBITDA and adds back only non-cash lease depreciation if separate, which here is already inside D&A). Thus: no extra lease adjustment needed. ### 2.4 Non-recurring items Impairment reversal (+15M) is non-recurring, so we subtract from EBITDA. Other gains/losses (+13M) likely includes asset sale gains, so subtract. ### 2.5 Pension adjustments Not enough detail; assuming zero. ### 2.6 Equity method EBITDA proportional inclusion We have "Resultado de puesta en equivalencia operativa" +159M in operating profit. That’s already included; no proportional EBITDA addition needed unless we add JV debt – S&P normally adjusts for JV proportional debt later, not EBITDA here. ### Adjusted EBITDA estimate Adjusted EBITDA = 2,182M - 15M - 13M = 2,154M. --- ## Step 3 – Estimate FFO FFO = Adjusted EBITDA - cash interest - cash taxes ### 3.1 Cash interest From cash flow statement: Interest paid (operating) = -209M Interest received (operating) = +40M Net cash interest = paid 209M - received 40M = 169M paid. (No major capitalized interest adjustment evident.) ### 3.2 Cash taxes Income taxes paid (from CF) = -215M. ### 3.3 FFO FFO = 2,154M - 169M - 215M = 1,770M. --- ## Step 4 – Estimate Adjusted Debt Formula: Adjusted Debt = (reported debt + leases + pension deficit + guarantees + hybrid portion + other debt-like) - eligible cash. ### 4.1 Reported debt From balance sheet (2022-12-31): Non-current debt: - Participaciones preferentes obligaciones... no corrientes: 3,101M - Noncurrent loans: 2,624M - Noncurrent lease liabilities: 439M (already included in leases) Current debt: - Participaciones preferentes... corrientes: 1,139M - Current loans: 553M - Current lease liabilities: 72M So total reported financial debt (excl. leases) = 3,101 + 2,624 + 1,139 + 553 = 7,417M. Total lease liabilities = 439 + 72 = 511M. ### 4.2 Pension deficit No data — assume zero. ### 4.3 Guarantees and hybrids No data — assume zero. ### 4.4 Eligible cash Cash and equivalents = 2,360M. Assume all is eligible. S&P may limit surplus cash deduction; in absence of specific restriction, deduct full cash. ### 4.5 Adjusted debt Adjusted Debt = 7,417 + 511 + 0 + 0 + 0 - 2,360 = 5,568M. --- ## Step 5 – Calculate FFO / Adjusted Debt FFO / Adjusted Debt = 1,770 / 5,568 ≈ 0.3179. --- 0.3179