I'll work through this step-by-step, analyzing VERBUND AG's financial data to estimate the S&P-adjusted FFO-to-debt ratio for 2022.

## Step 1: Identify the Relevant Industry for VERBUND AG

VERBUND AG is an Austrian electricity company. Based on the data:
- Revenue from sale of electricity: €8,747,422,000 (2022)
- Grid revenue: €1,309,254,000 (2022)

The company has both electricity generation/sales and grid operations. Given that:
- Grid operations are regulated utility activities
- Electricity sales in many European markets are increasingly market-based but may have regulated components

Looking at the methodologies, VERBUND AG fits primarily into **"Unregulated Power And Gas"** with significant regulated utility activities (grid operations). However, given the structure and the fact that grid revenue is about 12.7% of total revenue, and electricity sales are the majority, I'll classify this as **Unregulated Power And Gas** with significant regulated components.

Actually, reconsidering: VERBUND is Austria's largest electricity provider, with both generation and grid operations. The grid operations are regulated. Given the methodology descriptions, I'll apply the **Unregulated Power And Gas** methodology as the primary framework, but note that they may qualify for medial volatility table due to regulated activities.

For calculation purposes, I'll use the baseline formulas with appropriate adjustments.

## Step 2: Estimate Adjusted_EBITDA

Baseline formula:
Adjusted_EBITDA = EBITDA (reported or reconstructed) + adjustment_leases (if any) + nonrecurring_losses - nonrecurring_gains ± pension_adjustments ± joint_venture_proportional_EBITDA ± other_normalization_adjustments

From the data:
- EBITDA 2022: €3,160,679,000

Let me check for adjustments needed:

**Lease adjustments:** Looking at right-of-use assets and lease liabilities:
- Right-of-use assets 2022-01-01: €103,826,000; 2023-01-01: €146,613,000
- Payments of lease liabilities in financing activities 2022: €11,447,000

For IFRS 16 leases, EBITDA typically already includes the depreciation of right-of-use assets rather than lease expenses. The reported EBITDA should already reflect this. However, S&P sometimes adjusts to add back lease-related depreciation and subtract hypothetical lease payments. Given the complexity and that IFRS 16 is already in effect, I'll check if further adjustment is needed.

Actually, under IFRS 16, EBITDA includes the full benefit as lease depreciation is below EBITDA line. S&P's standard approach for IFRS 16 is to add back lease-related depreciation to get to a "cash EBITDA" concept, but this is already captured in reported EBITDA for IFRS 16 reporters (since lease depreciation is excluded from EBITDA).

Looking more carefully: Under IFRS 16, operating lease expenses are replaced by depreciation of right-of-use assets and interest on lease liabilities. EBITDA therefore excludes these items entirely. S&P typically makes no further EBITDA adjustment for operating leases under IFRS 16 (the "adjustment_leases" in the formula is mainly for pre-IFRS 16 or US GAAP operating leases).

**Nonrecurring items:** 
- Impairment loss 2022: €197,761,000
- Reversal of impairment loss 2022: €125,973,000
- Net impairment: €197,761,000 - €125,973,000 = €71,788,000 (expense)

Looking at the cash flow statement adjustments:
- "Impairment Losses On Investments Net Of Reversals Of Impairment Losses" 2022: -€11,833,000 (negative means net reversal)
- "Depreciation And Amoritisation Of Property Plant And Equipment And Intangible Assets Net Of Reversals Of Impairment Losses" 2022: €534,483,000

The EBITDA already includes impairment losses. For S&P purposes, we typically add back non-recurring impairment losses to get to a more normalized EBITDA.

However, looking at the detailed data:
- Impairment loss: €197,761,000
- Reversal of impairment loss: €125,973,000

These are already in the operating profit/EBITDA. For normalization, I should add back net impairment losses that are non-recurring.

Net impairment in 2022: €197,761,000 - €125,973,000 = €71,788,000

But wait - the cash flow statement shows "Impairment Losses On Investments Net Of Reversals Of Impairment Losses" as -€11,833,000. This suggests investment-related impairments had net reversals. The PPE impairments are separate.

Looking at "Depreciation And Amoritisation Of Property Plant And Equipment And Intangible Assets Net Of Reversals Of Impairment Losses" = €534,483,000. This is the D&A number after net impairment effects.

Actually, let me re-read: The EBITDA is given as €3,160,679,000. This is before D&A and impairments. EBIT is €2,626,196,000.

EBITDA = EBIT + D&A + Impairments - Reversals
= €2,626,196,000 + €462,694,000 + €197,761,000 - €125,973,000? 

Let me verify: €2,626,196,000 + €462,694,000 = €3,088,890,000. But EBITDA is €3,160,679,000. Difference is €71,789,000, which equals the net impairment (197,761 - 125,973 = 71,788). 

So EBITDA = EBIT + D&A + net impairment losses (expense)
= 2,626,196,000 + 462,694,000 + 71,788,000 = 3,160,678,000 ≈ 3,160,679,000 ✓

For Adjusted_EBITDA, S&P typically normalizes for non-recurring items. The net impairment of €71,788,000 could be considered non-recurring. However, impairments and reversals are somewhat recurring in the utility sector. Given the large jump in 2022 impairment (from €9,869,000 to €197,761,000), this seems partly non-recurring.

Actually, looking more carefully at S&P methodology - for utilities, they generally don't adjust EBITDA for impairments unless clearly non-recurring. The baseline formula mentions "nonrecurring_losses" and "nonrecurring_gains."

Given the data, I'll use reported EBITDA as the base and make minimal adjustments. The 2022 impairment loss of €197,761,000 includes €125,973,000 reversal, net €71,788,000. This seems elevated compared to 2021 (net impairment €9,869,000 - €115,009,000 = -€105,140,000, i.e., net reversal).

For conservative approach, I'll add back the net impairment as non-recurring:
Adjustment = €71,788,000

But actually, S&P typically views utility impairments as part of normal operations unless clearly one-time. Let me check if there are clearer non-recurring items.

Looking at "Adjustments For Losses Gains On Disposal Of Noncurrent Assets" in cash flow: €4,914,000 (gain in 2022). This is a non-recurring gain to subtract.

Also "Other Adjustments For Noncash Items": €31,340,000

For joint ventures: "Share Of Profit Loss Of Associates And Joint Ventures" = €4,293,000 (profit). For proportional EBITDA, we'd need to add this back and then include proportional share. But we don't have separate EBITDA for JVs.

Let me use a simplified approach consistent with S&P utility practice:

Adjusted_EBITDA = Reported EBITDA + lease adjustments (if pre-IFRS 16) + nonrecurring losses - nonrecurring gains

For IFRS 16, no lease adjustment needed to EBITDA.

Nonrecurring items to consider:
- Gains/losses on disposal: €4,914,000 gain in 2022 → subtract
- Other noncash items that are non-recurring: need to evaluate

Actually, looking at S&P's typical approach for utilities with IFRS 16: they often use reported EBITDA with minimal adjustments. The main adjustments would be for clearly non-recurring items.

Given complexity and limited data on JV EBITDA, I'll use:
Adjusted_EBITDA = €3,160,679,000 + €0 (leases) + €0 (nonrecurring losses, conservatively) - €0 (nonrecurring gains, conservatively) = €3,160,679,000

But let me add back the net impairment as it's significantly higher than normal:
Adjusted_EBITDA = €3,160,679,000 + €71,788,000 = €3,232,467,000

Hmm, but this is debatable. Let me check S&P guidance more carefully. They typically say "nonrecurring" means truly one-time, not just volatile. Given utility asset impairments can recur, I'll be conservative and use reported EBITDA.

Actually, re-reading: "nonrecurring_losses - nonrecurring_gains". The disposal gain of €4,914,000 seems non-recurring. I'll subtract that.

Adjusted_EBITDA = €3,160,679,000 - €4,914,000 = €3,155,765,000

Wait - is this gain already in EBITDA? Looking at operating profit: "Adjustments For Losses Gains On Disposal Of Noncurrent Assets" is in the cash flow from operations section, suggesting it's an adjustment to net income, meaning it was included in net income/operating profit. But was it in EBITDA? EBITDA is before operating profit, so gains on disposal are typically below EBITDA line (in operating profit). 

Actually, in standard presentation, gains/losses on disposal of PPE are typically in operating profit, hence below EBITDA. So EBITDA already excludes this. No adjustment needed.

Let me reconsider: EBITDA = Earnings Before Interest, Taxes, Depreciation and Amortization. Gains on disposal are typically part of operating profit but not part of EBIT in some presentations. Actually, they are usually in EBIT.

Looking at the structure: "Profit Loss From Operating Activities" = €2,626,196,000. This is EBIT. Gains on disposal would be in this or below. The cash flow adjustment suggests it's an adjustment from net income to operating cash flow, so it's likely in net income but not in operating profit, or it's a non-cash adjustment.

Actually, "Adjustments For Losses Gains On Disposal Of Noncurrent Assets" of €4,914,000 (positive means gain) is added back in cash flow, meaning it was subtracted to get to net income. So it's in the income statement above net income. Given it's a gain, it increased profit, so we subtract it to get to FFO.

For EBITDA, if the gain is in operating profit (EBIT), then EBITDA = EBIT + D&A already includes it. But wait - gains on disposal are not part of EBIT typically; they're usually below EBIT or in EBIT depending on classification.

In IFRS, gains on disposal of PPE can be in operating profit or financing depending on the asset. For PPE used in operations, it's typically in operating profit/EBIT.

Given the complexity, let me use reported EBITDA and make minimal adjustments. S&P for utilities often uses reported EBITDA with adjustments only for clearly anomalous items.

Let me use: **Adjusted_EBITDA = €3,160,679,000**

With possible adjustment for proportional JV EBITDA. "Share Of Profit Loss Of Associates And Joint Ventures" = €4,293,000. This is equity method income, already in pre-tax profit but not in operating profit. So it's below EBIT. EBITDA doesn't include this. For proportional consolidation, we'd add proportional EBITDA of JVs, but we don't have that data.

I'll stick with: **Adjusted_EBITDA = €3,160,679,000**

## Step 3: Estimate FFO

Baseline formula: FFO = Adjusted_EBITDA - cash_interest - cash_taxes

From the data:
- Interest Expense 2022: €101,703,000 (accrual)
- Interest Paid Classified As Operating Activities 2022: €36,100,000 (cash)
- Income Tax Expense Continuing Operations 2022: €583,352,000 (accrual)
- Income Taxes Paid Classified As Operating Activities 2022: €343,100,000 (cash)

For S&P FFO:
- Cash interest = interest paid = €36,100,000
- Cash taxes = income taxes paid = €343,100,000

FFO = €3,160,679,000 - €36,100,000 - €343,100,000 = €2,781,479,000

But wait - S&P typically uses "cash interest" as interest paid, and may adjust for capitalized interest or other items. We have "Interest Expense" of €101,703,000 and "Interest Paid" of €36,100,000. The difference may be capitalized interest or timing differences.

For conservative S&P approach, cash interest paid is €36,100,000. However, sometimes they use accrued interest expense if it's more representative of ongoing obligations. But the formula specifies "cash_interest."

Actually, re-reading the formula: "FFO = Adjusted_EBITDA - cash_interest - cash_taxes". This clearly uses cash amounts.

So: **FFO = €2,781,479,000**

Let me verify with cash flow statement approach. S&P FFO can also be calculated as:
FFO = Net income + D&A + deferred taxes + other non-cash items - nonrecurring gains + nonrecurring losses - working capital changes (sometimes)

Actually, the standard S&P FFO is: Funds From Operations = Net income from continuing operations + depreciation & amortization + deferred income taxes + other non-cash items.

From data:
- Profit Loss (net income) 2022: €1,948,767,000
- Depreciation And Amortisation Expense 2022: €462,694,000
- D&A net of impairment reversals: €534,483,000

Using cash flow "Subtotal" which is essentially net income + non-cash adjustments:
Subtotal 2022: €2,516,130,000

This includes:
- Net income: €1,948,767,000
- D&A etc.: €534,483,000
- Other adjustments: various

The subtotal €2,516,130,000 is after adding back D&A, impairments, undistributed profits, gains/losses on disposal, changes in provisions, etc.

Then FFO from cash flow approach = Subtotal + interest expense - interest paid + taxes - taxes paid? No, that's not right.

Actually, S&P FFO is typically calculated from EBITDA minus cash interest minus cash taxes, or from operating cash flow plus working capital changes minus interest paid minus taxes paid.

Let me use: FFO = Operating cash flow before working capital changes - cash interest - cash taxes? No.

Standard S&P FFO = Net income + D&A + deferred taxes + other non-cash items. This equals roughly: Operating cash flow + working capital changes (i.e., before working capital changes).

From cash flow: "Subtotal" €2,516,130,000 is after various non-cash adjustments but before working capital changes. Then working capital changes bring it to "Cash Flows From Used In Operating Activities" of €2,019,859,000.

Actually, looking at the structure:
- Subtotal: €2,516,130,000
- Less: working capital adjustments (inventories, receivables, payables, derivatives, etc.)
- Equals: Cash Flows From Used In Operating Activities: €2,019,859,000
- Then: interest paid, taxes paid, interest received, dividends received are shown separately? No, looking again...

Actually the cash flow shows:
- Cash Flows From Used In Operating Activities: €2,019,859,000
- Then separately: Income Taxes Paid: €343,100,000; Interest Paid: €36,100,000; Interest Received: €6,100,000; Dividends Received: €29,900,000

Wait, this suggests the €2,019,859,000 is after these items, or these are additional disclosures? Looking at typical IFRS cash flow, operating cash flow is usually shown before interest and taxes, or after. The presentation here seems to show main operating cash flow then supplementary disclosures.

Actually, in many European presentations, "Cash flows from operating activities" includes interest and taxes paid. The separate lines might be additional detail. But €2,019,859,000 + €343,100,000 + €36,100,000 - €6,100,000 - €29,900,000 doesn't match anything obvious.

Let me check: 2,019,859,000 + 343,100,000 + 36,100,000 = 2,399,059,000. This is close to subtotal minus working capital changes.

Actually, I think the €2,019,859,000 is the net operating cash flow after all operating items including interest and taxes. The separate disclosures are breakdowns.

For S&P FFO, the standard is:
FFO = Funds from operations = Net income + depreciation & amortization + deferred income taxes + other non-cash items

Or equivalently: FFO = Operating cash flow before changes in working capital - cash interest paid - cash taxes paid + interest received? No, that's getting confused.

Let me use the direct S&P formula: FFO = Adjusted_EBITDA - cash interest - cash taxes

With Adjusted_EBITDA = €3,160,679,000, cash interest = €36,100,000, cash taxes = €343,100,000:

**FFO = €2,781,479,000**

But I want to cross-check. The "Subtotal" of €2,516,130,000 in the cash flow is essentially net income plus non-cash adjustments (like D&A, impairments, etc.). This is close to what S&P calls "funds from operations before interest and taxes" or similar.

Actually, S&P FFO is typically: Net income + D&A + deferred taxes + other non-cash items - nonrecurring gains + nonrecurring losses. This is essentially the "Subtotal" adjusted for any items below EBIT and for interest/taxes.

Subtotal €2,516,130,000 includes adjustments for:
- D&A net of impairments: €534,483,000
- Impairment losses on investments net: -€11,833,000
- Undistributed profits of equity method investments: -€17,259,000
- Gains/losses on disposal: €4,914,000
- Changes in noncurrent provisions and deferred tax: €35,247,000
- Changes in contributions to building costs: €2,782,000
- Other noncash items: €31,340,000

Plus net income of €1,948,767,000... let me verify: 1,948,767,000 + 534,483,000 - 11,833,000 - 17,259,000 + 4,914,000 + 35,247,000 + 2,782,000 + 31,340,000 = 2,528,441,000. Hmm, doesn't match €2,516,130,000 exactly. Close but not exact.

Actually, the subtotal might start from a different base or include other items. Let me not get bogged down and use the standard EBITDA-based approach.

FFO = €3,160,679,000 - €36,100,000 - €343,100,000 = **€2,781,479,000**

## Step 4: Estimate Adjusted_Debt

Baseline formula: Adjusted_Debt = (reported_debt + leases + pension_deficit + guarantees + hybrid_debt_portion + other_debt_like_items) - eligible_cash

From balance sheet 2022-01-01 (start of 2022, which is end of 2021):
- Noncurrent Financial Liabilities: €1,834,155,000
- Current Financial Liabilities: €1,462,453,000
- Total reported debt = €3,296,608,000

From balance sheet 2023-01-01 (end of 2022):
- Noncurrent Financial Liabilities: €2,844,559,000
- Current Financial Liabilities: €1,109,297,000
- Total reported debt = €3,953,856,000

For 2022 fiscal year, S&P typically uses year-end debt or average debt. Let me use year-end 2022 (i.e., 2023-01-01): €3,953,856,000.

But wait - we need to check what "reported_debt" includes. The financial liabilities likely include both debt and possibly other items. Let me assume this is primarily interest-bearing debt.

**Lease adjustments:** Under IFRS 16, lease liabilities are included in financial liabilities or separately. Looking at the data:
- Right-of-use assets: €103,826,000 (2022 start), €146,613,000 (2022 end)
- Payments of lease liabilities: €11,447,000

Lease liabilities are likely included in financial liabilities. Under S&P methodology for IFRS 16, they typically include lease liabilities in debt. But we need to check if they're already in "Financial Liabilities" or separate.

Looking at the liability structure, there's no separate "lease liabilities" line. Under IFRS 16, lease liabilities are typically included in "financial liabilities" or shown separately. Given the structure here, they might be in the financial liabilities or in other categories.

Actually, looking more carefully at the balance sheet items, there's no explicit lease liability. The "Right-of-use assets" are shown, suggesting IFRS 16 is applied. Lease liabilities could be within financial liabilities or noncurrent payables.

For S&P purposes, if lease liabilities are already in financial liabilities, no further adjustment needed. If not, we need to add them. Given uncertainty, I'll assume financial liabilities include lease liabilities or they're not material enough to require separate identification.

**Pension deficit:** Looking at the data, there's "Reserve Of Remeasurements Of Defined Benefit Plans Member" in equity of -€327,822,000 (negative, meaning deficit). But this is in equity, not a liability. Under IAS 19, pension deficits can be liabilities or net of assets.

Looking for pension-related items: "Other Comprehensive Income Before Tax Gains Losses On Remeasurements Of Defined Benefit Plans" = €172,041,000 in 2022. This suggests defined benefit plans exist.

The negative reserve in equity suggests a net deficit. However, under IFRS, pension deficits are typically recognized as liabilities if there's a net liability. Looking at the balance sheet, I don't see a separate "pension liability" line. The provisions include "Noncurrent Provisions" and "Current Provisions" which might include pension items.

Actually, looking at typical IFRS presentation, pension deficits are often in provisions or separate. Given the data structure, it's hard to identify. Let me check if there's any pension-related liability.

The "Reserve Of Remeasurements Of Defined Benefit Plans" in equity is -€327,822,000 at start of 2022 and -€205,455,000 at end of 2022. This is an equity reserve, not a liability. The actual pension deficit might be recognized elsewhere or netted against plan assets.

For S&P, pension deficit adjustment is made when there's a net underfunded status not fully recognized. Given limited data, I'll assume no additional pension deficit adjustment is needed beyond what's in the balance sheet, or that it's already captured.

Actually, S&P typically adds the full pension deficit (funded status) to debt. From the equity reserve, we can't directly infer the liability. Let me assume no separate adjustment or that it's immaterial for this exercise.

**Guarantees, hybrid debt, other debt-like items:** No specific data on these. I'll assume none or immaterial.

**Eligible cash:** Cash And Cash Equivalents 2022 end: €409,252,000. S&P typically subtracts a portion of cash, often all "excess" cash or a percentage. Standard approach is to subtract most or all cash unless it's clearly required for operations.

For utilities, S&P may leave some operating cash. But standard practice is:
Adjusted_Debt = Gross debt - cash & equivalents (or a portion)

Let me use: subtract all cash = €409,252,000

Adjusted_Debt = €3,953,856,000 - €409,252,000 = €3,544,604,000

But wait - I need to check if there are other debt-like items. Looking at derivative financial liabilities:
- Noncurrent Derivative Financial Liabilities: €1,069,177,000
- Current Derivative Financial Liabilities: €1,491,588,000

These are derivative liabilities, likely from energy trading/hedging. S&P typically does NOT include derivative liabilities in "debt" for the FFO/debt ratio unless they're clearly debt-like (e.g., embedded derivatives in debt). For energy companies, trading derivatives are typically operating liabilities, not debt.

However, looking at the methodology for unregulated power and gas: "For unregulated power and gas companies that enter into long-term power purchase agreements (PPAs), we make adjustments to account for those obligations, as we do for regulated utilities under our ratios and adjustments criteria."

VERBUND has significant energy derivatives. The "Valuation And Realisationof Energyderivatives" shows -€857,961,000 in 2022 (negative expense, meaning gain). The derivative assets and liabilities are large.

For S&P, if derivatives are part of normal operations (hedging, trading), they're not debt. But if they represent off-market positions or speculative trading, they might be adjusted. Given this is a utility with normal hedging, I'll exclude derivatives from debt.

What about other payables? "Noncurrent Payables" = €563,379,000, "Trade And Other Current Payables" = €1,035,805,000. These are operating payables, not debt.

"Contributions To Building Costs And Grants" = €791,160,000. These are like deferred income/grants, not debt.

So Adjusted_Debt = Financial liabilities - cash = €3,953,856,000 - €409,252,000 = €3,544,604,000

But I need to reconsider: should I use average debt or year-end debt? S&P typically uses year-end or latest available. For 2022 fiscal year, year-end 2022 (shown as 2023-01-01) is appropriate.

However, I should also consider if "Financial Liabilities" includes all debt-like items. Let me check the 2021 start vs 2022 end:

2021-01-01 (start 2021):
- Noncurrent Financial Liabilities: €1,202,154,000
- Current Financial Liabilities: €84,056,000
- Total: €1,286,210,000

2022-01-01 (start 2022):
- Noncurrent Financial Liabilities: €1,834,155,000
- Current Financial Liabilities: €1,462,453,000
- Total: €3,296,608,000

2023-01-01 (end 2022):
- Noncurrent Financial Liabilities: €2,844,559,000
- Current Financial Liabilities: €1,109,297,000
- Total: €3,953,856,000

Debt increased significantly during 2022. For ratio calculations, S&P sometimes uses average debt to smooth: (€3,296,608,000 + €3,953,856,000) / 2 = €3,625,232,000.

But more commonly for year-end ratios, they use year-end debt. Let me use year-end 2022: €3,953,856,000 gross, €3,544,604,000 net of cash.

Actually, I realize I should double-check the cash treatment. S&P's standard formula says "eligible_cash" not all cash. They typically only subtract "excess cash" beyond operating needs. For utilities, minimum cash might be 2-5% of revenue or similar. 

Revenue 2022: €10,346,088,000. 2% = €206,921,760. So excess cash might be €409,252,000 - €206,922,000 = €202,330,000.

But S&P has become more flexible, often subtracting all cash unless clearly restricted. Let me use full cash subtraction for simplicity, or perhaps 75% of cash.

Actually, looking at recent S&P practices, they often use "gross debt" metrics or subtract most cash. Let me use: Adjusted_Debt = Gross debt - 0.75 × cash (as a rough estimate for "eligible" cash).

Adjusted_Debt = €3,953,856,000 - 0.75 × €409,252,000 = €3,953,856,000 - €306,939,000 = €3,646,917,000

Or with full cash subtraction: €3,544,604,000

Let me use a more conservative approach with full cash subtraction: **Adjusted_Debt = €3,544,604,000**

But wait - I need to check if there are lease liabilities embedded in other categories. Under IFRS 16, lease liabilities should be recognized. If they're in financial liabilities, good. If not, I need to add them.

Looking at the balance sheet, there's no "lease liabilities" line. They might be in "Noncurrent Financial Liabilities" or "Current Financial Liabilities" or "Noncurrent Payables" or "Trade And Other Current Payables".

Given payments of lease liabilities are €11,447,000 and right-of-use assets are €146,613,000, lease liabilities are likely in the €100-150 million range. This is relatively small compared to total financial liabilities of €3.95 billion. So even if missed, it's ~3-4% error.

Let me also check if there are any "debt-like" items in the derivatives. The company has large derivative positions. If these are "normal purchase normal sale" or hedging, they're not debt. But if they represent speculative positions or off-market contracts, they might need adjustment.

Given VERBUND is a utility with regulated and unregulated operations, and the large derivative values are typical for energy companies (hedging, forward contracts), I'll treat them as operating items, not debt.

Final Adjusted_Debt calculation:
- Gross debt (financial liabilities): €3,953,856,000
- Less: Cash and equivalents: €409,252,000
- Adjusted_Debt = **€3,544,604,000**

## Step 5: Calculate FFO / Adjusted_Debt

FFO = €2,781,479,000
Adjusted_Debt = €3,544,604,000

FFO / Adjusted_Debt = 2,781,479,000 / 3,544,604,000 = 0.7847...

Let me calculate more precisely:
2,781,479,000 ÷ 3,544,604,000 = 0.784736...

Rounded to four decimal places: **0.7847**

Wait - let me double-check my FFO calculation. I used cash interest of €36,100,000 and cash taxes of €343,100,000. But is "cash interest" the right number?

Looking at the data:
- Interest Expense (accrual): €101,703,000
- Interest Paid (cash): €36,100,000
- Interest Received: €40,132,000 (revenue) / €6,100,000 (cash flow, operating)

For S&P FFO, the formula is "Adjusted_EBITDA - cash_interest - cash_taxes". Cash interest typically means interest paid, not interest expense. So €36,100,000 seems right.

But wait - is the interest paid of €36,100,000 the gross interest paid, or net of capitalized interest? And is it the full cash outflow?

Also, I should check if dividends received should be added to FFO. S&P sometimes includes dividends received from investments in FFO. The cash flow shows "Dividends Received Classified As Operating Activities" = €29,900,000.

Standard S&P FFO includes dividends received from equity investments if they're part of normal operations. For a utility with equity investments, this might be included.

If I add dividends received:
FFO = €3,160,679,000 - €36,100,000 - €343,100,000 + €29,900,000 = €2,811,379,000

Then FFO/Debt = 2,811,379,000 / 3,544,604,000 = 0.7931...

But the baseline formula says "FFO = Adjusted_EBITDA - cash_interest - cash_taxes". It doesn't mention dividends. Let me stick to the formula.

Actually, looking more carefully at S&P's standard FFO definition for utilities: FFO = net income + depreciation & amortization + deferred taxes + other non-cash items. This would include dividends received (as they're in net income).

Let me recalculate FFO using the "Subtotal" approach:
Subtotal (net income + non-cash adjustments) = €2,516,130,000

But this subtotal is before working capital changes and includes various items. To get to S&P FFO from here, I'd need to adjust for items that aren't truly "funds from operations."

Actually, S&P FFO is typically defined as:
FFO = Net income + D&A + deferred income taxes + other non-cash expenses - nonrecurring gains + nonrecurring losses

From the cash flow subtotal of €2,516,130,000, this seems to already include these adjustments. But then S&P FFO also typically subtracts cash interest and cash taxes from a different starting point, or includes them in the definition.

I'm getting confused with different FFO definitions. Let me stick to the formula provided in the instructions:

"FFO = Adjusted_EBITDA - cash_interest - cash_taxes"

This is clear: €3,160,679,000 - €36,100,000 - €343,100,000 = €2,781,479,000

But let me also consider: should "cash_interest" be interest paid minus interest received? The term is "cash_interest" not "net cash interest". S&P typically uses gross interest paid.

However, looking at some S&P presentations, they use "cash interest paid" as a deduction. The interest received is sometimes added back or not, depending on whether it was in EBITDA. Since EBITDA doesn't include interest income (it's before interest), and we're subtracting cash interest paid, we might need to add cash interest received to be consistent if it was in the starting point.

Actually, EBITDA is Earnings Before Interest, Taxes, Depreciation, Amortization. "Interest" here means net interest expense typically, or just all interest-related items. In standard EBITDA, interest income and expense are both excluded.

So if we start with EBITDA that excludes all interest, then:
FFO = EBITDA - cash interest paid + cash interest received - cash taxes paid

This would give: €3,160,679,000 - €36,100,000 + €6,100,000 - €343,100,000 = €2,787,579,000

But the formula says "- cash_interest" not "- net cash interest". Hmm.

Let me check the data again: "Interest Received Classified As Operating Activities" = €6,100,000. This is cash interest received.

If I use net cash interest = €36,100,000 - €6,100,000 = €30,000,000:
FFO = €3,160,679,000 - €30,000,000 - €343,100,000 = €2,787,579,000

FFO/Debt = 2,787,579,000 / 3,544,604,000 = 0.7864...

Actually, I think "cash_interest" in S&P terminology typically means "cash interest paid" (gross), not net. But they sometimes present "cash interest coverage" as (FFO + cash interest paid) / cash interest paid, suggesting FFO is before interest paid.

Let me re-read the formula: "FFO = Adjusted_EBITDA - cash_interest - cash_taxes"

If FFO is meant to be comparable to "funds from operations" available to service debt, then it should be after all cash outflows for interest and taxes. Interest received would be a source of funds, not a use.

Actually, in standard financial analysis, "funds from operations" or "operating cash flow before working capital changes" typically includes interest received (as part of operating cash flows) and then subtracts interest paid. 

Let me think about this differently. If EBITDA excludes all interest (both income and expense), then to get to FFO available for debt service, we should:
- Subtract cash interest paid (use of cash)
- Add cash interest received (source of cash, if operating)
- Subtract cash taxes paid

So: FFO = EBITDA - cash interest paid + cash interest received - cash taxes paid
= €3,160,679,000 - €36,100,000 + €6,100,000 - €343,100,000
= €2,787,579,000

But the formula says "- cash_interest", not "- cash interest paid + cash interest received". 

Hmm, maybe "cash_interest" means net cash interest (paid minus received)? Or maybe the formula assumes interest received is already in EBITDA?

Actually, in some EBITDA calculations, interest income is included in "Earnings" before backing it out. Let me check: EBIT is Earnings Before Interest and Taxes. If "Earnings" is net income before tax, then it includes interest income and excludes interest expense. So EBIT = Net income before tax + interest expense - interest income. Then EBITDA = EBIT + D&A.

So EBITDA includes interest income (it's part of "Earnings"). Wait no - EBIT is before interest, so it excludes both interest income and expense.

Let me verify: EBIT = Operating profit + non-operating income/expenses excluding interest. Actually, standard EBIT includes non-operating items like interest income.

Actually, there are two common definitions:
1. EBIT = Operating profit (strictly from operations, excludes all non-operating items)
2. EBIT = Net income + interest expense - interest income + taxes (includes all non-operating except interest and taxes)

In practice, "EBITDA" can vary. Looking at VERBUND's data:
- "Profit Loss From Operating Activities" = €2,626,196,000 (this is operating profit/EBIT from operations)
- Then "Share Of Profit Loss Of Associates" = €4,293,000
- "Other Income Expense From Subsidiaries" = €8,013,000
- "Revenue From Interest" = €40,132,000
- "Interest Expense" = €101,703,000
- "Other Finance Income Cost" = €1,642,000
- "Wertminderungen" = €46,455,000
- "Wertaufholungen" = €0
- "Finance Income Cost" = €94,077,000 (this seems to be net finance cost)

Profit before tax = €2,532,119,000

Let me verify: 2,626,196,000 + 4,293,000 + 8,013,000 + 40,132,000 - 101,703,000 + 1,642,000 - 46,455,000 + 0 - 94,077,000... hmm, this doesn't add cleanly.

Actually "Finance Income Cost" of €94,077,000 might be the net finance cost. Then:
Profit before tax = Operating profit + share of associates + other + finance income/cost
= 2,626,196,000 + 4,293,000 + 8,013,000 - 94,077,000? = 2,544,425,000. Not matching 2,532,119,000.

There are other items I'm missing. Let me not try to reconstruct.

The key point: "EBITDA" given is €3,160,679,000. This is the starting point. Whether it includes interest income or not depends on the company's presentation. Typically, utility EBITDA includes non-operating income if it's from normal business activities.

Given the formula in the instructions is explicit: "FFO = Adjusted_EBITDA - cash_interest - cash_taxes", I should follow it literally. "cash_interest" likely means cash interest paid (the outflow), not net interest.

So: FFO = €3,160,679,000 - €36,100,000 - €343,100,000 = €2,781,479,000

But I want to check if interest received should be added. If EBITDA already includes interest income (as revenue), then we should account for the cash received. However, the formula doesn't mention it.

Let me try a different approach: use the cash flow "Subtotal" which represents cash flow before working capital changes, and adjust from there.

Subtotal = €2,516,130,000
This includes net income + non-cash adjustments.

To get to S&P FFO, I need to add back after-tax interest expense and subtract cash interest paid? No, that's confusing.

Actually, S&P FFO from cash flow approach:
Start with Cash Flow from Operating Activities: €2,019,859,000
Add back: changes in working capital (to get to pre-working-capital cash flow)
Add back: cash interest paid (to get to pre-interest cash flow)
Add back: cash taxes paid (to get to pre-tax cash flow)

Working capital changes from the data:
- Inventories: -€73,079,000
- Trade and other receivables: -€192,271,000
- Trade and other payables: +€339,687,000
- Derivative financial assets: +€548,678,000
- Derivative financial liabilities: -€1,360,527,000
- Current provisions and current tax liabilities: +€241,241,000

Sum of working capital changes: -73,079 - 192,271 + 339,687 + 548,678 - 1,360,527 + 241,241 = -496,271,000

Check: Subtotal 2,516,130,000 - working capital changes 496,271,000 = 2,019,859,000. Yes! Matches operating cash flow.

So pre-working-capital, pre-interest, pre-tax operating cash flow (Subtotal) = €2,516,130,000

Now, this subtotal includes non-cash adjustments but is based on net income, which is after interest expense and tax expense. To get to a pre-interest, pre-tax measure comparable to EBITDA-based FFO:

Subtotal
+ interest expense (accrual)
+ tax expense
- interest paid (cash)
- taxes paid (cash)
= ?

= 2,516,130,000 + 101,703,000 + 583,352,000 - 36,100,000 - 343,100,000
= 2,821,985,000

This should approximate EBITDA - cash interest - cash taxes, but it's higher than my €2,781,479,000. Difference is €40,506,000.

Why? Because the subtotal starts from net income which includes interest income (€40,132,000 revenue from interest). When I add back interest expense and subtract interest paid, I'm not accounting for interest received.

Let me adjust:
+ interest expense (€101,703,000) includes interest paid and maybe other items
- interest paid (€36,100,000) is cash outflow
+ interest received (€40,132,000 accrual or €6,100,000 cash)

Actually, the €101,703,000 interest expense is accrual-based. The €36,100,000 is cash paid. The difference (€65,603,000) might be capitalized interest, accrual timing, or other.

If I use cash basis throughout:
Subtotal (accrual-based) + non-cash interest adjustments - cash interest paid + cash interest received - cash taxes paid

This is getting too complex. Let me just use the formula as given: FFO = Adjusted_EBITDA - cash_interest - cash_taxes.

With Adjusted_EBITDA = €3,160,679,000, cash_interest = €36,100,000, cash_taxes = €343,100,000:

**FFO = €2,781,479,000**

Now, let me also verify my Adjusted_EBITDA. Should I make any normalization adjustments?

Looking at the 2022 results, they're significantly higher than 2021 due to energy crisis/high prices. This might not be "normalized." But S&P typically uses reported numbers unless making forward-looking adjustments. For a historical ratio, we use actuals.

One adjustment I should consider: the "Valuation And Realisationof Energyderivatives" shows -€857,961,000 in 2022 (negative expense = gain). This is a large gain from energy derivatives. Is this in EBITDA?

Looking at the income statement structure, this item appears to be in operating profit/EBITDA. If it's a mark-to-market gain, it might be non-recurring or non-cash.

For S&P purposes, they often normalize out large mark-to-market gains/losses that are non-cash or non-recurring. However, for energy companies, these can be recurring.

Actually, looking at 2021: this item was -€269,667,000 (also a gain). So it's consistently negative (gains) in both years, suggesting it might be a normal part of operations or accounting presentation.

Given the baseline formula mentions "± other_normalization_adjustments", I could adjust for this. But without clear guidance on what's "normal," I'll use reported EBITDA.

However, let me check if this derivative gain is already in the "EBITDA" figure. The EBITDA is €3,160,679,000 and operating profit is €2,626,196,000. The difference is €534,483,000 which equals "Depreciation And Amoritisation Of Property Plant And Equipment And Intangible Assets Net Of Reversals Of Impairment Losses."

So EBITDA = Operating profit + D&A. The derivative valuation is presumably in operating profit (or above it). So yes, it's in EBITDA.

For a more "normalized" EBITDA, I might subtract the derivative gain of €857,961,000, but this would make EBITDA much lower. However, this gain might be offset by losses elsewhere or might be a normal part of hedging operations.

Given I don't have enough information to normalize, I'll use reported EBITDA.

Final calculation:
FFO / Adjusted_Debt = 2,781,479,000 / 3,544,604,000 = 0.784736...

Rounded to four decimal places: **0.7847**

Wait, let me recalculate: 2,781,479,000 ÷ 3,544,604,000

2,781,479,000 / 3,544,604,000 = ?

Let me do long division:
3,544,604,000 × 0.7 = 2,481,222,800
3,544,604,000 × 0.8 = 2,835,683,200

So it's between 0.7 and 0.8, closer to 0.8.

2,781,479,000 - 2,481,222,800 = 300,256,200
300,256,200 / 3,544,604,000 = 0.0847...

So 0.7847...

More precisely: 2,781,479,000 / 3,544,604,000 = 0.78473607...

Rounded to four decimal places: **0.7847**

Actually, let me double-check my debt calculation. Should I use gross debt or net debt? The formula says "Adjusted_Debt" and includes "- eligible_cash". So it's net of some cash.

But what if S&P uses gross debt for this ratio? The formula explicitly subtracts eligible cash. I used all cash as eligible. If I used no cash subtraction:
Adjusted_Debt = €3,953,856,000
FFO/Debt = 2,781,479,000 / 3,953,856,000 = 0.7035...

This is quite different. Let me think about what's standard.

In S&P's corporate methodology, "adjusted debt" typically means debt net of certain items, but "FFO to debt" is often calculated against gross debt or debt net of cash. The formula given explicitly says "- eligible_cash", so I should subtract some cash.

For "eligible_cash", S&P typically considers cash that is truly available to pay down debt. They might not subtract all cash if some is restricted or needed for operations.

Given VERBUND's cash increased from €318,562,000 to €409,252,000 during 2022, and operations generated significant cash, most of this cash seems available.

Let me use 100% of cash as eligible: Adjusted_Debt = €3,544,604,000

But actually, looking at S&P's typical utility practice, they often report both "FFO to gross debt" and "FFO to net debt." The formula given specifies "Adjusted_Debt" with cash subtraction, so I'll follow it.

However, I want to check one more thing: are there any "hybrid debt" or "noncontrolling interests" that should be included?

Looking at equity, there's noncontrolling interests of €1,047,033,000 at end 2022. These are equity, not debt.

Is there any preferred stock or hybrid instruments? Not visible in the data.

What about the "Contributions To Building Costs And Grants" of €791,160,000? These are like deferred income, not debt.

"Deferred Tax Liabilities" = €800,452,000. These are not debt-like for S&P purposes (they don't require cash payment).

"Noncurrent Provisions" = €619,486,000. These could include decommissioning, environmental, etc. S&P sometimes treats certain provisions as debt-like if they're related to asset retirement obligations. But typically not for standard FFO/debt.

Given all this, I'll stick with my calculation.

One more check: should I use average debt for the year rather than year-end? S&P sometimes uses "latest" or "average." For annual ratios, year-end is common. But if debt changed significantly, average might be more representative.

Average debt = (3,296,608,000 + 3,953,856,000) / 2 = 3,625,232,000
Less average cash = (318,562,000 + 409,252,000) / 2 = 363,907,000
Average Adjusted_Debt = 3,261,325,000

FFO/Average Adjusted_Debt = 2,781,479,000 / 3,261,325,000 = 0.8529...

This is higher. But year-end is more conservative and commonly used for point-in-time ratios.

I'll use year-end: **0.7847**

Actually, let me reconsider one more aspect. The formula says "Adjusted_EBITDA = EBITDA (reported or reconstructed)". Should I reconstruct EBITDA to exclude certain items?

Looking at the income statement items, "Revenue From Sale Of Electricity" is €8,747,422,000 and "Grid Revenue" is €1,309,254,000, totaling €10,056,676,000. But total "Revenue" is €10,346,088,000. The difference is €289,412,000, which equals "Other Revenue."

For a utility, S&P sometimes adjusts revenue and EBITDA to exclude pass-through costs or third-party revenues that don't contribute to margin. But I don't have enough detail on this.

Also, "Expenses For Electricity Grid Gas And Certificates Purchases" is €6,802,383,000. These are likely pass-through purchases. If revenue includes these pass-throughs, EBITDA margin might be distorted. But EBITDA already reflects the net margin.

Given the complexity and limited data, I'll use reported EBITDA.

Final answer: FFO / Adjusted_Debt = 0.7847

Let me do a final verification of the arithmetic:
- EBITDA: 3,160,679,000
- Cash interest paid: 36,100,000
- Cash taxes paid: 343,100,000
- FFO: 3,160,679,000 - 36,100,000 - 343,100,000 = 2,781,479,000 ✓

- Gross debt (financial liabilities): 2,844,559,000 + 1,109,297,000 = 3,953,856,000 ✓
- Cash: 409,252,000
- Adjusted Debt: 3,953,856,000 - 409,252,000 = 3,544,604,000 ✓

- Ratio: 2,781,479,000 / 3,544,604,000 = 0.78473607... ≈ 0.7847 ✓

<answer>0.7847</answer>