Based on the provided financial statements, "BOUYGUES" is a diversified industrial group with operations primarily in construction (Bouygues Construction, Bouygues Immobilier, Colas), telecoms (Bouygues Telecom), and media (TF1). It does not fit into the specific industry methodologies provided (Regulated Utilities, Oil and Gas E&P, Unregulated Power and Gas, Transportation Infrastructure). Therefore, I will apply the general corporate baseline formulas. **Step 1: Adjustments and Calculations** **Step 1.1: Reported EBITDA Reconstruction** EBITDA is not directly reported. It will be reconstructed from Profit/Loss from Operating Activities and Depreciation/Amortisation/Provisions. From the data: * Profit (Loss) from Operating Activities = 1,872,000,000 EUR * Depreciation and Amortisation Expense = 2,228,000,000 EUR * Depreciation Right-of-use Assets = 446,000,000 EUR (already included in the above D&A) * Impairment Loss / Provision Expense = 172,000,000 EUR * Reversal of Unutilised Provisions (in OCI notes, not directly in Op Profit, but relevant for expense) Wait, the "Impairment Loss Reversal Of Impairment Loss Recognised In Profit Or Loss And Provision Expense" is 172,000,000 EUR. This is an expense item. Reported EBITDA = Profit from Operating Activities + Depreciation and Amortisation Expense + Impairment/Provision Expense Reported EBITDA = 1,872,000,000 + 2,228,000,000 + 172,000,000 = 4,272,000,000 EUR Let's verify: The sum of all operating expenses Revenue (44,322 + 76) = 44,398 M Costs: Raw Materials (19,372) + Employee (10,381) + Services (10,572) + Taxes (639) + Change in Inv (-61) + Other Recurring Exp (1,252) - Other Recurring Inc (2,565) = 39,590 EBITDA (Recurring) = 44,398 - 39,590 = 4,808? No, "Profit loss from operating activities recurring" is 1,962 M. Recurring D&A = 2,228 M. Recurring provisions = 172 M? There are non-recurring items. Op Profit = 1,962 (Recurring Op Profit) + 93 (Non-recurring Income) - 183 (Non-recurring Expense) = 1,872. EBITDA = Op Profit + D&A + Provisions. EBITDA = 1,872 + 2,228 + 172 = 4,272 M. **Adjustments to EBITDA for S&P Adjusted EBITDA:** 1. **Lease Adjustments:** The baseline formula: `Adjusted_EBITDA = EBITDA + adjustment_leases`. "Depreciation Right-of-use Assets" = 446,000,000 EUR. This is already added back in EBITDA. "Interest Expense On Lease Liabilities" = 62,000,000 EUR. S&P typically re-adds this depreciation and adds imputed lease interest to FFO? Standard S&P adjustments for leases: they capitalize operating leases. Under IFRS 16, operating leases are already capitalized, and depreciation and interest are recognized. We need to adjust EBITDA to reflect rents paid, or simply use the standard add-back. Usually, S&P adds back lease depreciation and lease interest to get an adjusted EBITDA that is pre-lease cost, and then treats the lease liability as debt. However, IFRS 16 D&A is already added back. We need to add back the lease interest expense? No, adjusted EBITDA is before interest. So D&A of ROUs is already added back. The EBITDA is already before interest. S&P's standard treatment under IFRS 16: They add back the depreciation of right-of-use assets to EBITDA and then deduct a "rent" expense (or keep the interest expense in FFO). Here, EBITDA is already adjusted for depreciation. So Adjusted_EBITDA = Reported EBITDA. Or, we might add back the full lease expense? No, standard formula in the prompt baseline: `Adjusted_EBITDA = EBITDA + adjustment_leases`. The adjustment_leases typically is adding back rent expense for operating leases. Since IFRS 16 capitalization is already reflected, there is no operating lease rent expense. Let's leave `adjustment_leases` as 0 for the EBITDA line. 2. **Non-recurring items:** We have Other Operating Income Non Recurring: 93,000,000 EUR (gain) Other Operating Expense Non Recurring: 183,000,000 EUR (loss) Baseline formula: `+ nonrecurring_losses - nonrecurring_gains` S&P adjusted EBITDA = Reported EBITDA - 93,000,000 + 183,000,000 = 4,272,000,000 - 93,000,000 + 183,000,000 = 4,362,000,000 EUR. 3. **Pension adjustments:** Data is not explicitly detailed to adjust for pension deficit contributions vs service cost. I assume no adjustment. 4. **Joint Ventures:** Share of profit/loss of associates = -30,000,000. Investment accounted for using equity method. S&P typically adds back the proportional EBITDA of the JV and subtracts the equity income. We don't have the proportional EBITDA of the JV. We only have the net income from JV (-30M). We will assume the JV interest/taxes/D&A are not material or not disclosed, so no adjustment is made beyond subtracting the -30M? No, the formula is `+ joint_venture_proportional_EBITDA`. The equity income is in Profit Before Tax. EBITDA doesn't include it. So we must add proportional JV EBITDA. Without data, we cannot adjust. We will skip this due to lack of data, assuming it's minor or offset by dividends (Dividends from JVs might be in Other finance income). Wait, "Adjustments For Undistributed Profits Of Investments Accounted For Using Equity Method" = -92 M. This implies the share of profit was -30 M, but dividends might be distributed? -30M profit + undistributed -92M? Let's skip JV EBITDA adjustment due to lack of detailed information. 5. **Other normalization adjustments:** None observed. **Adjusted_EBITDA = 4,362,000,000 EUR.** **Step 2: Estimate FFO** Formula: `FFO = Adjusted_EBITDA - cash_interest - cash_taxes` 1. **Cash Interest:** "Interest Paid Classified As Financing Activities" = 260,000,000 EUR. This represents cash interest. 2. **Cash Taxes:** "Income Taxes Paid Classified As Operating Activities" = 518,000,000 EUR. FFO = 4,362,000,000 - 260,000,000 - 518,000,000 = 3,584,000,000 EUR. **Step 3: Estimate Adjusted Debt** Formula: `Adjusted_Debt = (reported_debt + leases + pension_deficit + guarantees + hybrid_debt_portion + other_debt_like_items) - eligible_cash` 1. **Reported Debt:** Long-term Borrowings = 11,586,000,000 Current Borrowings (Current portion of Non-current + Short-term) = 1,361,000,000 + 418,000,000 = 1,779,000,000 Total Reported Debt = 11,586,000,000 + 1,779,000,000 = 13,365,000,000 EUR. 2. **Leases:** Non-current Lease Liabilities = 2,107,000,000 Current Lease Liabilities = 498,000,000 Total Leases = 2,605,000,000 EUR. 3. **Pension Deficit:** Not explicitly given, assume 0. 4. **Guarantees / Hybrid Debt:** Not given, assume 0. 5. **Other Debt-like items:** None explicitly mentioned. 6. **Eligible Cash (Surplus Cash):** Cash and Cash Equivalents = 5,736,000,000 EUR. S&P typically caps surplus cash at a certain amount or treats it directly. "Cash And Cash Equivalents If Different From Statement Of Financial Position" = 5,318,000,000. Which one to use? The strict balance sheet figure is 5,736,000,000. The "If Different From..." (5,318M) is usually after bank overdrafts. Overdrafts are 418 M. Cash (5,736) - Overdrafts (418) = 5,318 M. Exactly. Since we are including overdrafts in total reported debt, we should use the gross cash figure (5,736,000,000) and gross debt (including overdrafts), OR net debt + overdrafts. We used Gross Debt (including 418 M). So surplus cash is 5,736,000,000. The baseline formula: `- eligible_cash`. So Adjusted Debt = (13,365 + 2,605) - 5,736 = 10,234,000,000 EUR. **Step 4: Calculate FFO / Adjusted Debt** FFO = 3,584,000,000 Adjusted Debt = 10,234,000,000 FFO / Adjusted Debt = 3,584 / 10,234 = 0.350205... Rounding to four decimal places: 0.3502. **Final Review of Adjustments:** There's a specific note in the baseline: `adjustment_leases`. S&P methodology for IFRS 16 often adds back depreciation of ROU and Lease Interest, then subtracts Lease Payments to get FFO. Or simply treats cash lease payments as part of FFO. Wait. The standard S&P approach: FFO = EBITDA - Cash Interest - Cash Taxes - Cash Lease Payments? No, FFO = Adjusted_EBITDA - Cash Interest - Cash Taxes. We used cash interest = Interest Paid (260 M) and cash taxes = Tax Paid (518 M). Interest paid includes interest on lease liabilities (62 M). Is FFO calculation correct? FFO = 4,362 - 260 - 518 = 3,584. Yes, this follows the baseline formula exactly. The cash interest already includes lease interest. The Adjusted Debt includes lease liabilities. The Adjusted EBITDA includes depreciation add-back but not lease interest add-back. Wait, is Adjusted_EBITDA correct? EBITDA = 1,872 + 2,228 + 172 = 4,272. Add back non-recurring losses: +183 Subtract non-recurring gains: -93 Adjusted EBITDA = 4,362 M. The formula is `Adjusted_EBITDA - cash_interest - cash_taxes`. Cash interest = 260 M. Cash taxes = 518 M. FFO = 3,584 M. Adjusted Debt = 13,365 + 2,605 - 5,736 = 10,234 M. Ratio = 0.3502.0.3502