I'll work through this step-by-step, analyzing EDP, S.A.'s financial data and applying S&P's methodology.

## Step 1: Identify the Relevant Industry

EDP, S.A. is described as engaged in "generation, transmission, distribution and supply of electricity and supply of gas." This is a **multi-utility** with both regulated and unregulated activities. Given the description mentions regulated activities (transmission, distribution) and the company operates in Portugal and other jurisdictions with regulatory frameworks, I'll primarily apply the **Regulated Utilities** methodology, but note the company also has generation (potentially unregulated/merchant) and supply activities.

However, looking at the data structure and the nature of operations (electricity and gas), this fits best as a **Regulated Utility** with potential unregulated power components. Given the comprehensive regulatory framework described in the methodology for utilities with generation, transmission, distribution and supply, I'll use the **Regulated Utilities** framework as primary, with awareness that some unregulated power elements may exist.

## Step 2: Estimate 2021 Adjusted_EBITDA

First, let me reconstruct EBITDA from the income statement data for 2021:

From the data:
- "Net Of Revenue And Cost Of Energy Sales And Other" 2021: 4,907,162,000 EUR (this is gross margin)
- "Other Income" 2021: 1,023,988,000 EUR
- "Other Income Supplies Ans Services Personnel Costs And Employee Benefits Other Expenses And Impairment Losses On Trade Receivables And Debtors" 2021: -1,292,218,000 EUR (this is operating expenses aggregate)
- "Joint Ventures And Associates" 2021: 108,106,000 EUR
- "Profit Loss Before Provisions Amortisation And Impairment Financial Income And Financial Expenses Income Tax Expense And Extraordinary Contribution To The Energy Sector CESE" 2021: 3,723,050,000 EUR

Let me verify: 
Gross margin (4,907,162) + Other Income (1,023,988) + Operating expenses (-1,292,218) + JVs (108,106) = 4,747,038... This doesn't match 3,723,050. Let me re-read.

Actually, "Profit Loss Before Provisions Amortisation And Impairment..." is EBIT before depreciation/amortization, i.e., EBITDA before provisions. Let me trace through more carefully.

Looking at the structure:
- "Profit Loss Before Provisions Amortisation And Impairment Financial Income And Financial Expenses Income Tax Expense And Extraordinary Contribution To The Energy Sector CESE" 2021: 3,723,050,000 EUR

This appears to be: EBIT before provisions, amortization, impairment, financial items, tax, and CESE = essentially EBITDA before provisions.

Then:
- "Provisions Expenses" 2021: 60,510,000 EUR
- "Depreciation Amortisation And Impairment Loss Reversal Of Impairment Loss Recognised In Profit Or Loss" 2021: 1,731,755,000 EUR

So: 3,723,050,000 - 60,510,000 - 1,731,755,000 = 1,930,785,000 EUR

This matches "Profit Loss Before Financial Income And Financial Expenses Income Tax Expense And Extraordinary Contribution To The Energy Sector CESE" 2021: 1,930,785,000 EUR

So: EBIT = 1,930,785,000 EUR

Therefore: EBITDA = EBIT + Depreciation/Amortization/Impairment = 1,930,785,000 + 1,731,755,000 = 3,662,540,000 EUR

Wait - but 3,723,050,000 - 60,510,000 = 3,662,540,000. Yes, that matches. But this includes provisions. Let me recalculate:

Actually, "Profit Loss Before Provisions Amortisation And Impairment..." = 3,723,050,000. This is before provisions AND before amortization/impairment.

So EBITDA = 3,723,050,000 - 60,510,000 (provisions) = 3,662,540,000? No wait, provisions are an expense.

Let me think again: The line "Profit Loss Before Provisions Amortisation And Impairment..." suggests this profit measure is BEFORE these items. So to get to operating profit (EBIT), we subtract provisions and depreciation/amortization/impairment.

EBIT = 3,723,050,000 - 60,510,000 - 1,731,755,000 = 1,930,785,000 ✓ (matches)

So EBITDA = EBIT + D&A = 1,930,785,000 + 1,731,755,000 = 3,662,540,000

Or equivalently: EBITDA = 3,723,050,000 - 60,510,000 = 3,662,540,000

But wait - is "Provisions Expenses" part of operating expenses that should be in EBITDA? For S&P purposes, we need to assess if provisions are recurring or non-recurring.

For **Adjusted_EBITDA**, per S&P methodology for regulated utilities, we typically:
- Start with reported EBITDA
- Add back non-recurring losses, subtract non-recurring gains
- Make lease adjustments (add back lease expense, or handle right-of-use assets)
- Make pension adjustments
- Consider JV proportional EBITDA

For 2021:
- Reported EBITDA: 3,662,540,000 EUR
- Provisions: 60,510,000 EUR - need to assess if recurring. Given small amount, likely treated as recurring for regulated utility.
- Leases: "Rightofuse Assets" 2022-01-01: 1,007,029,000 EUR. The amortization of right-of-use assets would be in D&A. For S&P, we typically add back lease-related depreciation and subtract lease payments, or use a different treatment. Actually, for IFRS 16, S&P typically adds back the lease depreciation and interest, then subtracts lease payments to get to a "debt-like" treatment.

Actually, let me re-read the S&P formula: "Adjusted_EBITDA = EBITDA (reported or reconstructed) + adjustment_leases (if any) + nonrecurring_losses - nonrecurring_gains ± pension_adjustments ± joint_venture_proportional_EBITDA ± other_normalization_adjustments"

For regulated utilities, S&P notes: "Where substantial seasonal working capital requirements--for example, at natural gas distribution utilities--distort leverage measures, we adjust inventory and debt balances by netting the value of inventory against outstanding short-term borrowings."

For EBITDA adjustment for leases under IFRS 16: S&P typically adjusts by adding back the lease depreciation component and treating leases as debt-like. The adjustment to EBITDA is typically to add back the lease expense (which under IFRS 16 is split between depreciation and interest).

Looking at cash flow statement: "Payments Of Lease Liabilities Classified As Financing Activities" 2021: 98,772,000 EUR

For 2021, I need to estimate lease depreciation. Right-of-use assets 2022-01-01: 1,007,029,000; 2021-01-01 not directly given but we can estimate.

Actually, let me look at this differently. For regulated utilities, S&P may not make significant lease adjustments if the utility already capitalizes certain infrastructure. But for IFRS 16 right-of-use assets, there is typically an adjustment.

Given complexity, let me use a pragmatic approach: For regulated utilities with significant rate-regulated assets, the lease adjustment may be modest. Let me check if there are significant operating leases.

From balance sheet: Right-of-use assets are 1,007,029,000 at start of 2022 (end of 2021). This grew to 1,320,270,000 by end of 2022.

For 2021 EBITDA, I'll estimate lease depreciation as roughly the change in ROU assets plus lease payments, or use a simple approximation. Given ROU assets of ~1B and typical 5-10 year lease life, annual depreciation might be ~100-200M.

Actually, let me look at cash flows more carefully. The financing lease payments were 98,772,000 in 2021. If we assume this is principal + interest, and interest portion is small, the depreciation might be similar magnitude.

For S&P purposes, the typical adjustment is: add back lease depreciation to EBITDA (since we're treating leases as debt-like and will add lease debt to total debt). 

Given limited data, let me approximate: lease depreciation in 2021 ≈ 100,000,000 EUR (rough estimate based on ROU asset level and financing lease payments).

But actually, for many regulated utilities, S&P accepts IFRS 16 treatment or makes modest adjustments. Let me proceed with reported EBITDA and note lease adjustments.

For **2021 Adjusted_EBITDA baseline**:
- Reported EBITDA: 3,662,540,000 EUR
- Nonrecurring items: Provisions of 60,510,000 - likely recurring for utility
- JVs: "Joint Ventures And Associates" income of 108,106,000 - this is equity method income, not proportional EBITDA. For S&P, we might add proportional EBITDA if significant.

Actually, re-reading: "± joint_venture_proportional_EBITDA" - we add proportional EBITDA and subtract equity income. The equity income is 108,106,000. We need proportional EBITDA, not just equity income.

From balance sheet: "Investment Accounted For Using Equity Method" 2022-01-01: 1,350,445,000 EUR. This is the carrying value.

We don't have proportional EBITDA directly. For approximation, if JVs earn similar returns, proportional EBITDA might be 2-3x equity income. But this is speculative.

Let me use a simpler approach: for regulated utilities, if JVs are not material to the overall structure, we may use reported EBITDA with minimal adjustment.

Given data limitations, let me define:
**2021 Adjusted_EBITDA = 3,662,540,000 EUR** (reported EBITDA, with minimal adjustments)

Actually, let me reconsider. The S&P formula says "EBITDA (reported or reconstructed)". For regulated utilities, we want EBITDA before non-recurring items.

Looking more carefully at the income statement structure, let me verify my EBITDA:

Revenue: 14,982,909,000
Cost Of Energy Sales And Other: 10,075,747,000
= Net margin: 4,907,162,000

Other Income: 1,023,988,000
Services Expense: 888,954,000
Employee Benefits Expense: 666,459,000
Other Expense By Nature: 727,965,000
Impairment (IFRS9): 32,828,000

Total of these operating items: 1,023,988 - 888,954 - 666,459 - 727,965 - 32,828 = -1,292,218,000

This matches "Other Income Supplies Ans Services Personnel Costs And Employee Benefits Other Expenses And Impairment Losses On Trade Receivables And Debtors" = -1,292,218,000

So: 4,907,162 + 1,023,988 - 888,954 - 666,459 - 727,965 - 32,828 = 3,615,944,000

Then + Joint Ventures 108,106 = 3,724,050,000? But reported is 3,723,050,000. Close but 1M off - rounding or the JVs are already in one of the lines.

Actually the line "Profit Loss Before Provisions Amortisation And Impairment..." is 3,723,050,000. So my calculation has a small discrepancy. Let me accept 3,723,050,000 as the pre-provision, pre-D&A figure.

Then EBITDA = 3,723,050,000 - 60,510,000 (provisions) = 3,662,540,000? No wait - provisions are already subtracted to get to 1,930,785,000.

Let me trace: 3,723,050,000 - 60,510,000 - 1,731,755,000 = 1,930,785,000. Yes.

So 3,723,050,000 is before provisions and before D&A. Therefore:
- EBITDA = 3,723,050,000 - 60,510,000 = 3,662,540,000? 
- Or is EBITDA = 3,723,050,000 (before provisions, before D&A, so add back nothing)?

Actually, standard definition: EBITDA = Earnings Before Interest, Taxes, Depreciation, Amortization.

"Profit Loss Before Provisions Amortisation And Impairment Financial Income And Financial Expenses Income Tax Expense And Extraordinary Contribution To The Energy Sector CESE"

This is: before provisions, before amortization/impairment, before financial income/expenses, before tax, before CESE.

So this is essentially: Operating Profit before Provisions and before D&A = EBITDAP (Earnings Before Interest, Taxes, Depreciation, Amortization, and Provisions)

For EBITDA, we need to decide about provisions. If provisions are recurring operating items, they should be in EBITDA. If non-recurring, exclude.

For regulated utilities, bad debt provisions and similar are typically recurring. So:
EBITDA = 3,723,050,000 - 60,510,000 = 3,662,540,000? No, that subtracts provisions.

Wait: 3,723,050,000 is BEFORE provisions. So if provisions are operating, we need to subtract them. If non-operating, we don't.

Actually, looking at standard construction: Revenue - COGS = Gross Profit. Gross Profit - OpEx = EBITDA. OpEx includes normal operating expenses but typically not D&A.

From the detailed data:
- Services Expense, Employee Benefits, Other Expense By Nature, Impairment IFRS9 = operating expenses
- These sum to: 888,954 + 666,459 + 727,965 + 32,828 = 2,316,206

Plus Other Income: 1,023,988

Net: 1,023,988 - 2,316,206 = -1,292,218 (matches the combined line)

So: 4,907,162 (gross margin) + 1,023,988 (other income) - 2,316,206 (operating expenses) = 3,614,944

Plus JVs 108,106 = 3,723,050 ✓

So 3,723,050 is after all operating items except provisions and D&A. Therefore:
- EBITDAP = 3,723,050,000
- Less: Provisions = 60,510,000 → EBIT before D&A = 3,662,540,000? No, that's wrong too.

Actually: 3,723,050 - 60,510 - 1,731,755 = 1,930,785. So 3,723,050 is before all of these.

Standard EBITDA would include provisions if they're operating, or exclude if non-recurring. For S&P Adjusted EBITDA, we typically normalize.

Given 60,510 is small relative to 3.7B, and likely includes recurring items like bad debt provisions, I'll treat as recurring. But for "Adjusted" EBITDA, S&P wants normalized, so if any non-recurring, adjust.

Let me use: **Reported EBITDA = 3,662,540,000** (after provisions, before D&A)

Or equivalently: EBIT 1,930,785 + D&A 1,731,755 = 3,662,540,000

For **Adjusted_EBITDA 2021**, applying S&P methodology:
- Start: 3,662,540,000
- Lease adjustment: Add back lease depreciation, subtract lease payments? Actually for IFRS 16, S&P often adds back the depreciation portion of leases and includes lease liabilities in debt.

Looking at right-of-use assets: 1,007,029,000 at 2022-01-01. Assuming 5-10 year life, annual depreciation ~100-200M. Let's estimate ~120M for 2021.

Add back lease depreciation: +120,000,000
Subtract lease payments (financing): already in financing activities, not in EBITDA

Actually, the standard S&P adjustment for IFRS 16 leases in EBITDA is to add back the depreciation of right-of-use assets (since we're treating as debt and will add lease liability to debt).

Estimated lease depreciation 2021: ~100,000,000 (rough estimate)

Adjusted_EBITDA 2021 = 3,662,540,000 + 100,000,000 = **3,762,540,000 EUR**

Wait - I need to be more careful. Let me check if lease depreciation is already in the 1,731,755 D&A. Yes, IFRS 16 requires ROU asset amortization, which is included in D&A.

For S&P, the adjustment is: add back ROU depreciation, subtract lease payments (or part thereof). But actually, looking at current S&P practice, they often accept IFRS 16 EBITDA and add lease liabilities to debt.

Let me use a simpler approach: minimal lease adjustment, focus on core operations.

**2021 Adjusted_EBITDA = 3,662,540,000 EUR** (reported EBITDA, with JVs equity income already reflected)

Actually, for joint ventures, S&P says "± joint_venture_proportional_EBITDA". This means: add proportional EBITDA, subtract equity income. We have equity income of 108,106,000. If JVs are material, we need proportional EBITDA.

From cash flow: "Adjustments For Joint Ventures And Associates" 2021: -108,106,000. This is subtracting equity income to get to cash flow (i.e., removing non-cash equity income).

This suggests JVs are not consolidated. For credit analysis, proportional EBITDA would be higher than equity income. If we assume JVs have similar margins, proportional EBITDA might be 200-400M. But we lack data.

Given this is complex, let me use reported EBITDA as proxy, noting JVs are relatively small (108M on 3.7B = ~3%).

**Final 2021 Adjusted_EBITDA estimate: 3,662,540,000 EUR** (or ~3.66B with rounding)

Let me also consider: should we add back CESE? The "Extraordinary Contribution To The Energy Sector CESE" is 53,314,000 in 2021. This is a tax-like item but extraordinary. For EBITDA purposes, it's after operating profit. So no adjustment needed for EBITDA.

Actually wait - let me check: "Profit Before Income Tax And CESE" = 1,419,852,000. So CESE is after EBIT. Correct.

## Step 3: Estimate 2021 FFO

FFO = Adjusted_EBITDA - cash_interest - cash_taxes

From data:
- "Finance Income" 2021: 364,883,000
- "Finance Costs" 2021: 875,816,000
- Net finance cost: 510,933,000

Cash interest: Finance Costs 875,816,000 (assuming mostly cash; we need to adjust for non-cash items if any)

Cash taxes: "Income Tax Expense Continuing Operations" 2021: 261,892,000. But we need cash taxes paid.

From cash flow: "Income Tax And CESE" 2021: -89,845,000 (negative = outflow). This includes CESE of 53,314,000.

So cash taxes = 89,845,000 - 53,314,000 = 36,531,000? Or is CESE separate?

Actually "Income Tax And CESE" combined cash outflow: 89,845,000. Tax expense was 261,892,000 + CESE 53,314,000 = 315,206,000 total tax/CESE expense. Cash paid was only 89,845,000, suggesting timing differences.

For S&P FFO, we typically use: Adjusted_EBITDA - cash interest paid - cash taxes paid.

Cash interest: From cash flow, "Interest And Similar Costs Of Financial Debt Including Hedge Derivatives" = 481,329,000. Also "Interest And Similar Costs Relating To Loans From Non Controlling Interests" = 18,244,000. Total cash interest ~500M.

Actually, looking at financing activities:
- "Interest And Similar Costs Of Financial Debt Including Hedge Derivatives": 481,329,000
- "Interest And Similar Costs Relating To Loans From Non Controlling Interests": 18,244,000
- Total: 499,573,000

But wait - are these paid or received? The financing activities show outflows for dividends, etc. The interest lines are positive numbers in the cash flow statement presentation, but in context they might be outflows.

Actually, looking at "Adjustments For Finance Income Cost" in operating activities: 510,933,000. This is adding back net finance cost (875,816 - 364,883 = 510,933) to reconcile profit to operating cash flow.

For cash interest paid, I need to look at actual cash outflows. In financing activities, the interest lines are likely cash paid (positive number = outflow in S&P convention, or inflow if received).

Let me assume: Cash interest paid ≈ Finance Costs - non-cash interest ≈ 875,816,000 (mostly cash for regulated utility)

Cash taxes paid: From "Income Tax And CESE" = 89,845,000 (but this includes CESE). From tax expense 261,892,000, cash paid might differ.

For S&P FFO, using: Adjusted_EBITDA - cash interest - cash taxes

Cash interest: ~500,000,000 (approximate, using financing activity interest paid)
Cash taxes: ~90,000,000 (from cash flow, or tax expense 262M if using accrual)

S&P typically uses cash taxes. Let me use 89,845,000 as cash outflow for tax and CESE combined, or separate out.

Actually, looking more carefully: "Income Tax And CESE" in cash flow is -89,845,000 (negative in operating activities = outflow). But in the line items, it's shown as adjustment to profit, so negative means cash outflow.

Wait, in the cash flow statement format given:
"Other Adjustments To Reconcile Profit Loss" 2021: -1,184,866,000
"Income Tax And CESE" 2021: -89,845,000

These are adjustments to get from profit to operating cash flow. Negative means cash outflow or adjustment direction.

Actually, let me look at "Cash Flows From Used In Operations" 2021: 2,595,519,000. This is after working capital changes but before other operating cash flows.

And "Cash Flows From Used In Operating Activities" 2021: 2,019,909,000 (after other inflows/outflows).

For FFO (Funds From Operations), S&P defines as: Cash generated from operations before working capital changes, or equivalently: EBITDA - cash interest - cash taxes (with adjustments).

From cash flow: "Cash Flows From Used In Operations" 2021: 2,595,519,000. This is essentially EBITDA with adjustments, before working capital and other items.

Actually, let me recalculate FFO more carefully using S&P's approach:
FFO = Net Income + D&A + deferred taxes + other non-cash items - working capital changes... 

Or simpler: FFO = Operating Cash Flow before working capital changes.

From data: "Cash Flows From Used In Operations" = 2,595,519,000. This appears to be after working capital changes (since there are separate working capital lines).

Let me trace through:
- Start with Profit Loss: 1,104,646,000
- Add D&A: 1,731,755,000
- Add provisions: 60,510,000
- Add JV adjustment: -108,106,000 (subtract equity income)
- Add finance cost adjustment: 510,933,000
- Other adjustments: -1,184,866,000
- Working capital adjustments: various

Sum of adjustments to profit: 1,731,755 + 60,510 - 108,106 + 510,933 - 1,184,866 = 1,010,226

Plus profit 1,104,646 = 2,114,872... not matching 2,595,519.

Let me add other items: "Gains Losses On Disposal And Scope Effects Except Asset Rotation" = 0
"Adjustments For Decrease Increase In Trade And Other Receivables" = -1,267,111,000
"Adjustments For Increase Decrease In Trade And Other Payables" = 785,560,000
"Changes In Working Capital To Personnel" = -170,055,000
"Changes In Working Capital For Regulatory Assets" = 906,892,000
"Other Adjustments To Reconcile Profit Loss" = -1,184,866,000

These sum to: -1,267,111 + 785,560 - 170,055 + 906,892 - 1,184,866 = -929,580,000

Plus earlier: 1,104,646 + 1,010,226,000 = 2,114,872,000
Plus working capital: -929,580,000 = 1,185,292,000... still not 2,595,519.

I think "Cash Flows From Used In Operations" includes more items or my interpretation is off.

Let me try: "Cash Flows From Used In Operations" = 2,595,519,000 is the subtotal before "Other Inflows Outflows Of Cash Classified As Operating Activities" (-575,610,000) to get to "Cash Flows From Used In Operating Activities" (2,019,909,000).

Actually, looking at structure, "Cash Flows From Used In Operations" likely means "Cash flows from (used in) operations" i.e., operating cash flow before certain items.

For S&P FFO, I'll use: Adjusted_EBITDA - cash interest - cash taxes

Cash interest paid: From financing activities, interest paid = 481,329,000 + 18,244,000 = 499,573,000. But wait, "Interest And Similar Costs Of Financial Debt Including Hedge Derivatives" might be the expense, not cash paid.

From cash flow statement, in operating activities: "Adjustments For Finance Income Cost" = 510,933,000. This adds back non-cash finance costs to profit.

For cash interest, I need actual cash outflow. In financing activities, we see:
- "Interest And Similar Costs Of Financial Debt Including Hedge Derivatives" = 481,329,000
- "Interest And Similar Costs Relating To Loans From Non Controlling Interests" = 18,244,000

These appear to be cash payments (positive = outflow in this presentation).

Cash taxes: "Income Tax And CESE" = 89,845,000 cash outflow.

But S&P FFO typically uses: EBITDA - cash interest - cash taxes. Let me approximate:

FFO 2021 = 3,662,540,000 - 500,000,000 - 90,000,000 = **3,072,540,000 EUR**

Or using a tighter estimate: 3,662,540 - 499,573 - 89,845 = 3,073,122,000

Let me use **FFO 2021 ≈ 3,073,000,000 EUR**

## Step 4: Estimate 2021 Adjusted_Debt

Adjusted_Debt = reported_debt + leases + pension_deficit + guarantees + hybrid_debt_portion + other_debt_like_items - eligible_cash

Reported debt 2021 (end of year = 2022-01-01):
- "Longterm Borrowings" 2022-01-01: 15,299,588,000
- "Current Borrowings And Current Portion Of Noncurrent Borrowings" 2022-01-01: 1,518,348,000
- Total reported debt: 16,817,936,000

Leases: Right-of-use assets 2022-01-01: 1,007,029,000. Under IFRS 16, lease liabilities are already in debt. But S&P may add operating leases if not fully captured. Given IFRS 16, likely already included.

Pension deficit: "Noncurrent Provisions For Employee Benefits" 2022-01-01: 940,266,000; "Current Provisions For Employee Benefits" 2022-01-01: 179,534,000. Total: 1,119,800,000. These are likely pension and other benefits.

For S&P, pension deficit = liability - plan assets. We don't have plan assets. The "Non Current Tax Assets" might include some pension-related, but not clear.

Guarantees: Not separately disclosed.
Hybrid debt: Not identified.
Other debt-like: "Institutional Partnerships In North America" 2022-01-01: 2,259,741,000 - this might be non-controlling interests or debt-like.

Actually, "Institutional Partnerships In North America" is listed in noncurrent liabilities. This could be debt-like or equity-like. For S&P, if these are structured as debt or have fixed returns, they might be debt-like.

Also: "Other Noncurrent Financial Liabilities" 2022-01-01: 3,039,975,000
"Other Current Financial Liabilities" 2022-01-01: 2,781,101,000

These need scrutiny. "Other Noncurrent Financial Liabilities" could include derivatives, deferred payments, etc.

For conservative approach:
- Reported debt: 16,817,936,000
- Add pension deficit (full provisions as proxy): 1,119,800,000
- Add institutional partnerships (if debt-like): 2,259,741,000
- Less eligible cash: "Cash And Cash Equivalents" 2022-01-01: 3,222,409,000

Adjusted_Debt 2021 = 16,817,936 + 1,119,800 + 2,259,741 - 3,222,409 = **16,975,068,000 EUR**

Or without institutional partnerships (if equity):
= 16,817,936 + 1,119,800 - 3,222,409 = 14,715,327,000

Given uncertainty, let me use a moderate approach: include half of institutional partnerships or treat as debt-like since they're in liabilities section.

Actually, looking at S&P methodology for regulated utilities: "Where substantial seasonal working capital requirements...distort leverage measures, we adjust inventory and debt balances by netting the value of inventory against outstanding short-term borrowings."

Also: "We deconsolidate securitized debt (and associated revenue and expense) that has been accorded specialized recovery provisions."

For EDP, let me use:
- Debt: 16,817,936,000
- Plus: Pension provisions (1,119,800,000) as debt-like
- Less: Cash (3,222,409,000)
- Plus/Minus: Other adjustments

Adjusted_Debt 2021 = 16,817,936 + 1,119,800 - 3,222,409 = **14,715,327,000 EUR**

I'll exclude institutional partnerships as they may be equity-like (partnerships with non-controlling interests).

## Step 5: Calculate 2021 Ratios

Adjusted_Debt / Adjusted_EBITDA = 14,715,327 / 3,662,540 = **4.02x**

FFO / Adjusted_Debt = 3,073,000 / 14,715,327 = **20.9%** or 0.209

## Step 6: Verify 2021 FFO/Debt

3,073,000 / 14,715,327 = 0.2088 = **20.9%**

## Step 7: Estimate 2022 Adjusted_EBITDA

Following same approach for 2022:

From 2022 data:
- "Profit Loss Before Provisions Amortisation And Impairment Financial Income And Financial Expenses Income Tax Expense And Extraordinary Contribution To The Energy Sector CESE" 2022: 4,523,539,000
- "Provisions Expenses" 2022: 14,539,000
- "Depreciation Amortisation And Impairment Loss Reversal Of Impairment Loss Recognised In Profit Or Loss" 2022: 1,979,007,000

EBITDA = 4,523,539,000 - 14,539,000 = 4,509,000,000? No wait:

EBIT = 4,523,539 - 14,539 - 1,979,007 = 2,529,993 (matches "Profit Loss Before Financial Income...")

So EBITDA = EBIT + D&A = 2,529,993 + 1,979,007 = 4,509,000,000

Or: 4,523,539 - 14,539 = 4,509,000,000

Reported EBITDA 2022: **4,509,000,000 EUR**

Lease adjustment: ROU assets 2023-01-01: 1,320,270,000. Estimate lease depreciation ~130,000,000.

Adjusted_EBITDA 2022 = 4,509,000,000 + 130,000,000 = **4,639,000,000 EUR** (with lease add-back)

Or using reported: **4,509,000,000 EUR**

## Step 8: Estimate 2022 FFO

Cash interest 2022:
- "Interest And Similar Costs Of Financial Debt Including Hedge Derivatives" 2022: 716,454,000
- "Interest And Similar Costs Relating To Loans From Non Controlling Interests" 2022: 12,885,000
- Total: 729,339,000

Cash taxes 2022: "Income Tax And CESE" 2022: -258,849,000 (outflow)

FFO 2022 = 4,509,000,000 - 729,339,000 - 258,849,000 = **3,520,812,000 EUR**

Or using Adjusted_EBITDA with lease add-back: 4,639,000 - 729,339 - 258,849 = 3,650,812,000

Let me use **FFO 2022 ≈ 3,521,000,000 EUR** (based on reported EBITDA)

## Step 9: Estimate 2022 Adjusted_Debt

End of 2022 (2023-01-01):
- "Longterm Borrowings": 15,782,604,000
- "Current Borrowings And Current Portion Of Noncurrent Borrowings": 4,239,869,000
- Total reported debt: 20,022,473,000

Pension provisions:
- "Noncurrent Provisions For Employee Benefits": 644,299,000
- "Current Provisions For Employee Benefits": 126,767,000
- Total: 771,066,000

Cash: "Cash And Cash Equivalents" 2023-01-01: 4,900,205,000

Adjusted_Debt 2022 = 20,022,473 + 771,066 - 4,900,205 = **15,893,334,000 EUR**

Note: Debt increased significantly due to higher current borrowings (from 1.5B to 4.2B), while long-term debt was relatively stable.

## Step 10: Calculate 2022 Ratios

Adjusted_Debt / Adjusted_EBITDA = 15,893,334 / 4,509,000 = **3.52x**

FFO / Adjusted_Debt = 3,521,000 / 15,893,334 = **22.2%** or 0.222

## Step 11: Verify 2022 Ratios

Leverage: 15,893,334 / 4,509,000 = 3.524x
Coverage: 3,521,000 / 15,893,334 = 0.2216 = 22.2%

## Step 12: Determine Credit Trend

**Signal 1: Leverage (Adjusted_Debt / Adjusted_EBITDA)**
- 2021: 4.02x
- 2022: 3.52x
- Change: 3.52 - 4.02 = **-0.50x**

Threshold: ≤ -0.2x = Improving
**Signal 1: IMPROVING** (change of -0.50x is well beyond -0.2x threshold)

**Signal 2: Cash-flow coverage (FFO / Adjusted_Debt)**
- 2021: 20.9% = 0.209
- 2022: 22.2% = 0.222
- Change: 0.222 - 0.209 = **+0.013** or +1.3 percentage points

Threshold: ≥ +0.03 = Improving; between -0.03 and +0.03 = Stable
**Signal 2: STABLE** (change of +0.013 is within -0.03 to +0.03 range)

**Combining signals:**
- Signal 1: Improving
- Signal 2: Stable

Per instructions: "If one is Stable and the other is Improving or Deteriorating, return the non-Stable category."

Therefore: **IMPROVING**

However, let me double-check my calculations and consider if any adjustments would change this.

**Re-checking 2021 leverage:**
- Debt: 16,817,936 + 1,119,800 - 3,222,409 = 14,715,327
- EBITDA: 3,662,540
- Ratio: 4.02x

**Re-checking 2022 leverage:**
- Debt: 20,022,473 + 771,066 - 4,900,205 = 15,893,334
- EBITDA: 4,509,000
- Ratio: 3.52x

The leverage improvement is robust (-0.5x), driven by:
1. Higher EBITDA (+23% from 3.66B to 4.51B)
2. Debt increase was modest in absolute terms (14.7B to 15.9B = +8%), much less than EBITDA growth

**Re-checking coverage:**
- 2021 FFO: ~3,073M / 14,715M = 20.9%
- 2022 FFO: ~3,521M / 15,893M = 22.2%

Coverage improvement is modest (+1.3pp), within stable threshold.

**Materiality consideration:**
The leverage improvement (-0.5x) is very material, more than 2x the threshold for improvement. The coverage change is small and within stable range. The company's profitability improved significantly (EBITDA up 23%), while debt grew only modestly. This is a clear credit improvement.

Even if I used slightly different assumptions (e.g., including institutional partnerships in debt, or different lease treatments), the direction would likely remain:
- If I add institutional partnerships to 2021 debt (+2.3B): 17.0B / 3.66B = 4.64x
- For 2022, similar treatment might apply if partnerships decreased to 2.2B

Actually, institutional partnerships decreased from 2,259,741 to 2,216,162. If included:
- 2021: 16,817,936 + 1,119,800 + 2,259,741 - 3,222,409 = 16,975,068 / 3,662,540 = 4.63x
- 2022: 20,022,473 + 771,066 + 2,216,162 - 4,900,205 = 18,109,496 / 4,509,000 = 4.02x
- Change: -0.61x, still strongly improving

Coverage with this debt measure:
- 2021: 3,073 / 16,975 = 18.1%
- 2022: 3,521 / 18,109 = 19.4%
- Change: +1.3pp, still stable

The conclusion remains: **IMPROVING**

One more check: What if EBITDA should include JVs proportional? The equity income increased from 108M to 239M, suggesting JVs performed better. If we added proportional EBITDA back, both years' EBITDA would increase, but 2022 more so (since JVs grew more). This would amplify the improvement.

What if I used stricter cash tax treatment? 2021 tax expense was 262M vs cash 90M; 2022 tax expense was 398M vs cash 259M. The 2022 cash tax was higher proportionally. If I used tax expense instead of cash tax for FFO:
- 2021 FFO: 3,662 - 500 - 262 = 2,900; coverage 2,900/14,715 = 19.7%
- 2022 FFO: 4,509 - 729 - 398 = 3,382; coverage 3,382/15,893 = 21.3%
- Change: +1.6pp, still stable

Conclusion remains robust.

<answer>Improving</answer>