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

## Step 1: Identify the Relevant Industry

IBERDROLA SA is a major Spanish multinational electric utility company. Based on the data provided, it operates in:
- Regulated utilities (electricity distribution/transmission)
- Unregulated power (generation, including renewables)
- Some retail/supply activities

Given the mix but with substantial regulated and long-term contracted renewable assets, I'll primarily apply the **Regulated Utilities** methodology, with consideration of **Unregulated Power And Gas** elements. IBERDROLA has significant renewable generation with long-term contracts/PPAs, which aligns with "strongly protected unregulated revenue."

## Step 2: Estimate 2021 Adjusted_EBITDA

From the data:
- "Beneficio Bruto De Explotacion Ebitda" 2021-01-01 - 2022-01-01: **12,006,000,000 EUR**

This is reported EBITDA. Let me check for adjustments needed per S&P methodology:

**Leases:** Under IFRS 16, leases are capitalized. Looking at Right-of-use assets:
- 2022-01-01 (start of 2022, i.e., end of 2021): 2,260,000,000 EUR
- The lease liability would be similar. For EBITDA, IFRS 16 already includes lease depreciation in operating expenses, but EBITDA typically adds back depreciation. Since this is already in reported EBITDA (as EBITDA excludes depreciation), no EBITDA adjustment needed for operating leases under standard S&P approach.

Actually, let me reconsider: S&P typically adjusts for operating leases by adding back lease expense to EBITDA when capitalizing leases. However, under IFRS 16, reported EBITDA already excludes lease depreciation. The "Beneficio Bruto De Explotacion Ebitda" likely already reflects IFRS 16 treatment.

Let me check for nonrecurring items:
- "Other Gains Losses" 2021: 995,000,000 EUR - this could include nonrecurring items
- Looking at cash flow adjustments, there are various items

For S&P purposes, I'll use reported EBITDA as base and make minimal adjustments unless clearly nonrecurring. The "Other Gains Losses" is relatively small compared to EBITDA.

Pension adjustments: Looking at defined benefit plan remeasurements in OCI, these are actuarial gains/losses that S&P may adjust. However, these go through OCI not EBITDA.

Joint ventures: Share of profits from equity method investments is below EBITDA (in operating profit). The EBITDA figure appears to be pre-equity method.

**2021 Adjusted_EBITDA = 12,006,000,000 EUR**

(Using reported EBITDA with minimal adjustments; the company appears to have IFRS 16 already embedded, and no major nonrecurring items clearly identifiable that would require normalization)

## Step 3: Estimate 2021 FFO

Baseline: FFO = Adjusted_EBITDA - cash_interest - cash_taxes

From cash flow statement data:
- Cash taxes paid (operating activities): 832,000,000 EUR
- Interest paid: Need to identify. From financing activities: "Intereses Pagados Excluidos Intereses Capitalizados De Deudas Con Entidades De Credito YObligaciones UOtros Valores Negociables" = 741,000,000 EUR
- Also "Intereses Pagados Excluidos Intereses Capitalizados De Pasivos Financieros Por Arrendamiento" = 49,000,000 EUR
- Also "Intereses Pagados De Obligaciones Perpetuas Subordinadas" = 94,000,000 EUR

Wait - let me look more carefully. The cash flow statement shows interest paid in financing and investing activities. Let me identify total cash interest:

From financing activities:
- Intereses Pagados Excluidos Intereses Capitalizados De Deudas Con Entidades De Credito YObligaciones UOtros Valores Negociables: 741,000,000 EUR
- Intereses Pagados Excluidos Intereses Capitalizados De Pasivos Financieros Por Arrendamiento: 49,000,000 EUR
- Intereses Pagados De Obligaciones Perpetuas Subordinadas: 94,000,000 EUR

From investing activities:
- Interest Paid Classified As Investing Activities: 145,000,000 EUR

Also need to check if interest received offsets:
- Interest Received Classified As Investing Activities: 33,000,000 EUR
- Finance Income: 1,265,000,000 EUR (this includes interest income but also other items)

For FFO calculation, S&P uses cash interest paid (gross, before capitalization), not net of interest received.

Total cash interest paid = 741 + 49 + 94 + 145 = 1,029,000,000 EUR

But wait - the 145M in investing activities might be capitalized interest. Let me check: "Interest Paid Classified As Investing Activities" - this is typically capitalized interest for construction.

S&P typically uses total interest paid before capitalization for FFO. So:
Cash interest = 741 + 49 + 94 + 145 = 1,029,000,000 EUR? 

Actually, let me re-read: "Intereses Pagados Excluidos Intereses Capitalizados" means "interest paid excluding capitalized interest." So the 741M and 49M are already excluding capitalized interest. The 145M in investing is likely the capitalized portion.

For S&P FFO, we typically use interest paid on debt (not capitalized) plus capitalized interest. Or sometimes just use total interest expense on accrual basis and adjust.

Let me use a simpler approach: From P&L, Finance Costs = 2,268,000,000 EUR. This includes interest expense. But cash interest paid is what matters for FFO.

Actually, looking more carefully at S&P methodology: FFO = Adjusted_EBITDA - cash interest - cash taxes. 

Cash taxes = 832,000,000 EUR (from operating activities, "Income Taxes Paid Classified As Operating Activities")

For cash interest, I'll use: 741 + 49 + 94 = 884,000,000 EUR (excluding capitalized interest as it's already in investing capex). Or should I include capitalized interest?

Actually, S&P typically adds back capitalized interest to FFO calculation because it's already deducted in EBITDA through capex. Let me think...

Standard S&P FFO: Funds from operations = EBITDA - cash interest - cash taxes. Capitalized interest is not paid in cash from operations, it's part of investing. So for cash interest paid, we use actual cash outflow for interest.

From financing activities, the interest paid is: 741 + 49 + 94 = 884,000,000 EUR. The 145M is in investing activities and is capitalized interest.

But wait - the subordinated perpetual bonds interest of 94M - are these considered debt-like or equity-like? Perpetual bonds with debt characteristics may be treated as hybrid equity.

Looking at balance sheet: "Instrumentos De Capital Con Caracteristicas De Pasivo Financiero" - these are equity instruments with debt characteristics. The interest on these might be treated as dividend-like.

Let me check: "Devengo De Intereses De Obligaciones Perpetuas Subordinadas" in equity is -155,000,000 EUR (negative to retained earnings). This suggests these are treated as equity distributions, not interest expense.

So cash interest paid on debt = 741 + 49 = 790,000,000 EUR. The 94M is on hybrid equity instruments.

However, for conservatism and standard practice, let me include the perpetual interest as it's still a cash outflow.

Actually, re-reading S&P methodology: for hybrid instruments, they include a portion in debt. But for FFO, we want cash interest on debt and debt-like instruments.

Let me use: Cash interest = 741 + 49 + 94 = 884,000,000 EUR. (excluding capitalized interest of 145M which is in investing)

**2021 FFO = 12,006,000,000 - 884,000,000 - 832,000,000 = 10,290,000,000 EUR**

## Step 4: Estimate 2021 Adjusted_Debt

From balance sheet (2022-01-01, which is end of 2021):
- Noncurrent Financial Liabilities: 37,175,000,000 EUR
- Current Financial Liabilities: 21,297,000,000 EUR
- Total reported debt = 58,472,000,000 EUR

Breakdown of noncurrent financial liabilities:
- Deudas Con Entidades De Credito YObligaciones UOtros Valores Negociables: 31,179,000,000 EUR
- Instrumentos De Capital Con Caracteristicas De Pasivo Financiero No Corriente: 525,000,000 EUR (hybrid)
- Noncurrent Derivative Financial Liabilities: 1,673,000,000 EUR
- Noncurrent Lease Liabilities: 2,253,000,000 EUR
- Other Noncurrent Financial Liabilities: 1,545,000,000 EUR

Current financial liabilities:
- Deudas Con Entidades De Credito YObligaciones UOtros Valores Negociables Corrientes: 9,984,000,000 EUR
- Instrumentos De Capital Con Caracteristicas De Pasivo Financiero Corriente: 100,000,000 EUR (hybrid)
- Current Derivative Financial Liabilities: 2,111,000,000 EUR
- Current Lease Liabilities: 158,000,000 EUR
- Other Current Financial Liabilities: 2,980,000,000 EUR

For S&P Adjusted Debt:
- Reported debt (interest-bearing): 31,179 + 9,984 + 1,545 + 2,980 = 45,688,000,000 EUR? 

Actually, let me be more careful. S&P typically includes:
- Short-term borrowings and current portion of long-term debt
- Long-term debt
- Capitalized leases (already included in IFRS 16 debt)
- Hybrid equity treated as debt (portion)
- Pension deficits
- Guarantees and other debt-like items

From the balance sheet, total financial liabilities = 37,175 + 21,297 = 58,472,000,000 EUR

But this includes derivatives (1,673 + 2,111 = 3,784,000,000 EUR) which are typically not debt but fair value adjustments.

Also includes hybrid instruments: 525 + 100 = 625,000,000 EUR. S&P treats 50% of hybrid equity as debt typically, but these are already classified as financial liabilities with equity characteristics.

For S&P purposes, Adjusted Debt typically excludes:
- Derivative financial liabilities (these are hedging instruments, not debt)
- May exclude certain hybrid instruments or reclassify them

Let me calculate more carefully:
- Debt with credit institutions and bonds (noncurrent): 31,179,000,000
- Debt with credit institutions and bonds (current): 9,984,000,000
- Other noncurrent financial liabilities: 1,545,000,000
- Other current financial liabilities: 2,980,000,000
- Total "hard debt" = 45,688,000,000

Lease liabilities: 2,253 + 158 = 2,411,000,000 EUR (already in IFRS 16, so if using IFRS 16 balance sheet, these are already in the debt figures above or separate)

Actually in IFRS 16, lease liabilities are included in "Deudas Con Entidades De Credito" or separately. Looking at the breakdown, lease liabilities are shown separately: 2,253 + 158 = 2,411,000,000. These are debt-like.

Hybrid instruments: 525 + 100 = 625,000,000 EUR. S&P typically treats 50% as equity, 50% as debt for hybrid capital. But these are "instruments with equity characteristics classified as financial liabilities" - so they're already in liabilities. S&P may treat them as 100% debt or apply equity credit.

For S&P, standard approach:
- Reported debt = 58,472,000,000 total financial liabilities
- Less derivatives: 3,784,000,000
- Plus pension deficit if any: Need to check

Pension provisions: Noncurrent provisions for employee benefits: 1,592,000,000 EUR. Current: 27,000,000 EUR. Total = 1,619,000,000 EUR.

For funded status, we'd need plan assets vs obligations. The provision is the balance sheet liability. S&P typically adds unfunded pension deficit to debt.

From the data, we have "Noncurrent Provisions For Employee Benefits" = 1,592,000,000 and "Current Provisions For Employee Benefits" = 27,000,000. These are likely net liabilities.

Also "Other Longterm Provisions" = 3,738,000,000 EUR - may include decommissioning, etc.

For S&P Adjusted Debt:
- Start with total financial liabilities: 58,472,000,000
- Less derivatives (not debt): 3,784,000,000 → 54,688,000,000
- Add pension deficit: The provision is 1,619,000,000, but this may already be net of plan assets. If we assume this is the net liability, add to debt: 1,619,000,000
- Less cash and equivalents: 4,033,000,000

Wait - I need to check if lease liabilities are already in the total. Looking at the breakdown:
Noncurrent Financial Liabilities 37,175 = 31,179 + 525 + 1,673 + 2,253 + 1,545
= 31,179 (debt/bonds) + 525 (hybrid) + 1,673 (derivatives) + 2,253 (leases) + 1,545 (other)
= 37,175 ✓

Current Financial Liabilities 21,297 = 9,984 + 100 + 2,111 + 158 + 2,980 + 2,111? Let me check:
Actually: 9,984 + 100 + 2,111 + 158 + 2,980 = 15,333? That doesn't sum to 21,297.

Wait, let me re-read: "Current Financial Liabilities" 21,297,000,000
Components listed:
- Deudas Con Entidades De Credito YObligaciones UOtros Valores Negociables Corrientes: 9,984,000,000
- Instrumentos De Capital Con Caracteristicas De Pasivo Financiero Corriente: 100,000,000
- Current Derivative Financial Liabilities: 2,111,000,000? No wait, that's 2,111 but I need to check.
Actually: "Current Derivative Financial Liabilities" 2022-01-01: 2,111,000,000? Let me check: "Previously Stated Member" 2022-01-01: 2,111,000,000 EUR - yes.

Wait, I see: "Current Derivative Financial Liabilities" "Previously Stated Member" 2022-01-01: 2111000000 EUR

And "Current Lease Liabilities" "Previously Stated Member" 2022-01-01: 158000000 EUR

And "Trade And Other Payables To Trade Suppliers": 5,964,000,000 - this is trade payables, not financial liability

And "Other Current Financial Liabilities": 2,980,000,000

Hmm, 9,984 + 100 + 2,111 + 158 + 2,980 = 15,333, not 21,297. There's a gap of about 5,964.

Looking again: "Trade And Other Payables To Trade Suppliers" is 5,964,000,000. Is this included in Current Financial Liabilities? Actually trade payables are typically not financial liabilities in the narrow sense, but in IFRS they are financial liabilities.

Actually, looking at IAS 32, trade payables are financial liabilities. So likely:
Current Financial Liabilities = 9,984 + 100 + 2,111 + 158 + 2,980 + 5,964? = 21,297? Let me check: 9,984+100=10,084; +2,111=12,195; +158=12,353; +2,980=15,333; +5,964=21,297. Yes! ✓

So trade payables of 5,964 are included in current financial liabilities per this classification.

For S&P Adjusted Debt, we exclude trade payables (operating liabilities, not debt).

So debt components:
- Noncurrent: 31,179 (debt/bonds) + 525 (hybrid) + 1,673 (derivatives) + 2,253 (leases) + 1,545 (other) = 37,175
- Current: 9,984 (debt/bonds) + 100 (hybrid) + 2,111 (derivatives) + 158 (leases) + 2,980 (other financial) = 15,333 (excluding 5,964 trade payables)

Total financial debt-like = 37,175 + 15,333 = 52,508,000,000? But total financial liabilities including trade payables is 58,472.

Actually 37,175 + 15,333 = 52,508, and 52,508 + 5,964 = 58,472. ✓

For S&P Adjusted Debt:
- Start with debt/bonds: 31,179 + 9,984 = 41,163,000,000
- Add hybrid instruments (treated as debt): 525 + 100 = 625,000,000
- Add lease liabilities: 2,253 + 158 = 2,411,000,000
- Add other financial liabilities: 1,545 + 2,980 = 4,525,000,000
- Less derivatives (not debt): exclude 1,673 + 2,111 = 3,784,000,000

Actually, "other financial liabilities" may include various items. Let me think about what's debt-like.

S&P Adjusted Debt typically includes:
- Bank loans and bonds
- Capitalized leases
- Hybrid equity (portion treated as debt)
- Pension deficits
- Less cash and equivalents

Excludes:
- Derivatives
- Trade payables
- Other operating liabilities

From above:
- Bank loans and bonds: 41,163,000,000
- Hybrid: 625,000,000 (S&P may give 50% equity credit, so include 312,500,000 or all 625,000,000)
- Leases: 2,411,000,000
- Other financial liabilities: 4,525,000,000 - need to analyze

Actually, let me use a cleaner approach. S&P typically uses:
Adjusted Debt = (Total Debt per financial statements) + adjustments

From the balance sheet, let me identify total interest-bearing debt. The "Deudas Con Entidades De Credito YObligaciones UOtros Valores Negociables" is clearly debt: 31,179 + 9,984 = 41,163,000,000.

Lease liabilities: 2,253 + 158 = 2,411,000,000 - these are debt-like and typically included.

Hybrid instruments: 525 + 100 = 625,000,000 - these are "capital instruments with debt characteristics." S&P typically treats these as 50% debt, 50% equity for hybrid capital. But they're classified as liabilities, so maybe 100% is already in debt. I'll include 100% for now or apply 50% equity credit.

Other financial liabilities: 1,545 + 2,980 = 4,525,000,000. These could include various items. Some may be debt-like (deposits, etc.), some not.

For conservatism and given the complexity, let me use a simplified approach that S&P might use:

Adjusted Debt = Total Financial Liabilities - Derivatives - Trade Payables - Working capital items + Pension deficit - Cash

= 58,472 - 3,784 - 5,964 + pension adjustment - 4,033

But this gets complicated. Let me try another approach using common S&P practice.

Actually, looking at this more practically, let me use:
- Debt = 41,163 (bank loans and bonds)
- Plus lease liabilities = 2,411
- Plus hybrid treated as debt (50%) = 312.5
- Plus other financial liabilities (debt-like portion, assume 50%) = 2,262.5
- Plus pension deficit = need to estimate

Total ≈ 41,163 + 2,411 + 313 + 2,263 = 46,150,000,000

Less cash: 4,033,000,000

Adjusted Debt ≈ 42,117,000,000

But this is very rough. Let me try to be more precise by looking at what S&P typically does for European utilities.

For European utilities with IFRS 16, S&P typically:
- Includes all interest-bearing debt
- Includes lease liabilities (already in IFRS 16 debt or separate)
- Adjusts for hybrid equity (50% equity credit for certain hybrids)
- Adjusts for pension deficit (add to debt)
- Less cash and liquid investments

Let me recalculate with available data:

Reported debt items (clearly debt):
- Deudas Con Entidades De Credito YObligaciones UOtros Valores Negociables: 31,179 + 9,984 = 41,163

Lease liabilities (debt-like):
- 2,253 + 158 = 2,411

Hybrid instruments (treat 50% as debt for S&P):
- 525 + 100 = 625 × 50% = 312.5, or if already counted as 100% debt, then 0 additional

Actually, the hybrids are already in financial liabilities. If we count them as 100% debt, we need to add nothing. If S&P gives 50% equity credit, we subtract 312.5 from debt.

Other financial liabilities - these could include:
- Customer deposits
- Derivative-related settlements
- Other items

From noncurrent: 1,545; current: 2,980. Total 4,525. Some of this may be debt-like.

Let me use a simplified but reasonable approach:

**Adjusted Debt 2021 = 41,163 (bank debt and bonds) + 2,411 (leases) + 625 (hybrids, 100%) + 4,525 (other financial, assume debt-like) - 3,784 (derivatives, not debt) - 4,033 (cash)**

= 41,163 + 2,411 + 625 + 4,525 - 3,784 - 4,033 = 40,907,000,000

Hmm, this seems high. Let me reconsider.

Actually, the 41,163 already includes current portion. And the other items...

Let me try: Total financial liabilities 58,472 - derivatives 3,784 - trade payables 5,964 = 48,724. Then less cash 4,033 = 44,691.

But trade payables might not be the only operating item in "Other Current Financial Liabilities."

Actually, looking at the structure again, I think "Other Current Financial Liabilities" of 2,980 likely includes items that are debt-like (accruals, accrued interest, etc.).

For a cleaner approach, let me use what S&P often does: take total debt from the notes, which is clearly 41,163 for bank loans and bonds, add leases 2,411, and adjust from there.

Let me also check if there's securitized debt or other items.

Given the complexity and time, let me use a pragmatic estimate:

**2021 Adjusted_Debt ≈ 44,000,000,000 EUR** (rough estimate: 41,163 debt + 2,411 leases + other adjustments - cash, or approximately total financial liabilities less derivatives less trade payables less cash)

Actually, let me be more precise. I'll calculate:
- Gross debt (loans, bonds, leases, hybrids): 41,163 + 2,411 + 625 = 44,199
- Plus other financial liabilities (debt-like): say 2,262 (half of 4,525)
- Less cash: 4,033
- Adjusted Debt = 44,199 + 2,262 - 4,033 = 42,428

Or using total financial liabilities approach:
- Total financial liabilities: 58,472
- Less derivatives: 3,784
- Less trade payables (operating): 5,964
- Less other operating items in other financial liabilities: hard to say, assume 2,262 are operating
- Plus pension deficit: add ~1,000,000 (rough estimate of underfunding)
- Less cash: 4,033

This gets too speculative. Let me use a simpler benchmark.

For European utilities, S&P often reports debt figures in their research. Given the data, I'll estimate:

Adjusted Debt 2021 = Total Debt (excluding derivatives, trade payables) - Cash
= (58,472 - 3,784 - 5,964) - 4,033 + pension adjustments
= 48,724 - 4,033 + ~1,000 pension = ~45,691

Or roughly **45,000,000,000 EUR** as a round number.

Let me try yet another approach using the cash flow statement for debt movements.

Actually, I realize I need to be more careful. Let me look at what "Noncurrent Financial Assets" and other items tell us.

Given time constraints, let me use a reasonable estimate based on standard S&P adjustments:

**2021 Adjusted_Debt = 44,000,000,000 EUR** (approximately)

This is: 41,163 (bank loans and bonds) + 2,411 (leases) + 625 (hybrids, treated as debt) + ~3,000 (other debt-like items, net of derivatives and some other) - 4,033 (cash) ≈ 43,166, rounded to 44,000.

Hmm, let me recalculate more carefully one more time.

From balance sheet at 2022-01-01 (end 2021):
Total Assets = 141,752,000,000
Equity = 56,126,000,000 (previously stated, or 56,051,000,000 restated)
Total Liabilities = 141,752 - 56,126 = 85,626,000,000

Noncurrent liabilities = 61,272,000,000
Current liabilities = 24,354,000,000
Total = 85,626,000,000 ✓

Financial liabilities = 37,175 + 21,297 = 58,472,000,000
Non-financial liabilities = 85,626 - 58,472 = 27,154,000,000

Non-financial includes:
- Deferred tax: 11,364,000,000
- Noncurrent provisions: 5,330,000,000
- Current provisions: 789,000,000
- Trade payables: 5,964,000,000
- Tax payables: 227,000,000 + 300,000,000 = 527,000,000
- Other noncurrent nonfinancial: 418,000,000
- Other current nonfinancial: 2,268,000,000
- Other current liabilities: 836,000,000
- Liabilities held for sale: 0

Sum: 11,364 + 5,330 + 789 + 5,964 + 527 + 418 + 2,268 + 836 = 27,496? Not exactly 27,154. Close but not exact, likely rounding or I missed something.

Anyway, for S&P debt, we want interest-bearing obligations. The clearly interest-bearing items are:
- Bank loans and bonds: 41,163,000,000
- Lease liabilities: 2,411,000,000
- Hybrid instruments: 625,000,000 (interest-bearing but equity-like)

Total clearly interest-bearing = 44,199,000,000

Other financial liabilities (4,525,000,000) may or may not be interest-bearing. Derivatives (3,784,000,000) are not debt.

For S&P Adjusted Debt, I'll use:
= 41,163 (loans/bonds) + 2,411 (leases) + 625 (hybrids) + 2,262 (50% of other financial, assumed interest-bearing) - 4,033 (cash)
= 42,428,000,000

Or approximately **42,000,000,000 EUR**

Let me also consider pension deficit. The provision is 1,619,000,000 but this is balance sheet liability, likely already net. If plans are underfunded, add to debt. Assume roughly 1,000,000,000 underfunding.

Adjusted Debt = 42,428 + 1,000 = 43,428,000,000

I'll use **43,000,000,000 EUR** as my estimate for 2021.

## Step 5: Calculate 2021 Adjusted_Debt / Adjusted_EBITDA

= 43,000 / 12,006 = **3.58x**

## Step 6: Calculate 2021 FFO / Adjusted_Debt

= 10,290 / 43,000 = **0.239 or 23.9%**

## Step 7: Estimate 2022 Adjusted_EBITDA

"Beneficio Bruto De Explotacion Ebitda" 2022-01-01 - 2023-01-01: **13,228,000,000 EUR**

**2022 Adjusted_EBITDA = 13,228,000,000 EUR**

## Step 8: Estimate 2022 FFO

Cash taxes: 1,055,000,000 EUR
Cash interest: 741 + 49 + 94 + 145? Let me check 2022 figures.

From financing activities 2022:
- Intereses Pagados Excluidos Intereses Capitalizados De Deudas Con Entidades De Credito YObligaciones UOtros Valores Negociables: 1,495,000,000
- Intereses Pagados Excluidos Intereses Capitalizados De Pasivos Financieros Por Arrendamiento: 61,000,000
- Intereses Pagados De Obligaciones Perpetuas Subordinadas: 169,000,000

From investing activities 2022:
- Interest Paid Classified As Investing Activities: 189,000,000

Total cash interest = 1,495 + 61 + 169 + 189 = 1,914,000,000? Or exclude capitalized interest of 189?

Actually "Intereses Pagados Excluidos Intereses Capitalizados" means excluding capitalized interest. So total interest paid = 1,495 + 61 + 169 = 1,725,000,000 (excluding 189 capitalized). Or include 189 for total = 1,914,000,000.

For FFO, use cash interest actually paid: 1,725,000,000 (or 1,914 if including capitalized). I'll use 1,725 as the capitalized portion is in investing.

Wait - actually for S&P FFO, capitalized interest is typically added back because it's already deducted in EBITDA through higher capex. But in cash flow terms, it's still a cash outflow.

Standard approach: FFO = EBITDA - cash interest - cash taxes, where cash interest includes all interest paid (capitalized or not).

So cash interest = 1,495 + 61 + 169 + 189 = 1,914,000,000 EUR

But wait, the 189 is "Interest Paid Classified As Investing Activities" - this is capitalized interest. Is it included in EBITDA? No, EBITDA excludes interest entirely. So for FFO, we subtract cash interest paid, which includes capitalized interest as it's a cash outflow.

Actually, no - capitalized interest is not an expense in EBITDA (it's capitalized into assets). So it's not deducted in EBITDA. For FFO, we want to subtract cash interest that was deducted in EBITDA. Capitalized interest was not deducted in EBITDA, so we don't subtract it for FFO.

Hmm, but S&P's FFO formula is: EBITDA - cash interest - cash taxes. This assumes interest was already deducted to get to EBIT, but EBITDA is before interest. Actually, the standard derivation is:

Net Income + Depreciation + Deferred Taxes + Other non-cash items - Working capital changes = Operating Cash Flow
Then FFO = Operating Cash Flow before working capital changes, or EBITDA - cash interest - cash taxes.

Actually, standard S&P FFO = Net income from continuing operations + depreciation + deferred taxes + other non-cash items - gain on sale + other adjustments. Or more simply: EBITDA - cash interest - cash taxes.

For this to work, "cash interest" means interest actually paid on debt (not capitalized). Capitalized interest is part of capex, not operating cash flow.

So cash interest for FFO = 1,495 + 61 + 169 = 1,725,000,000 EUR

**2022 FFO = 13,228,000,000 - 1,725,000,000 - 1,055,000,000 = 10,448,000,000 EUR**

## Step 9: Estimate 2022 Adjusted_Debt

Using same methodology as 2021:

End 2022 (2023-01-01):
- Deudas Con Entidades De Credito YObligaciones UOtros Valores Negociables: 36,129 + 10,458 = 46,587,000,000
- Lease liabilities: 2,287 + 151 = 2,438,000,000
- Hybrid instruments: 576 + 87 = 663,000,000
- Total clearly interest-bearing = 49,688,000,000

Other financial liabilities: 1,534 + 5,058 = 6,592,000,000
Derivatives: 3,690 + 3,398 = 7,088,000,000

Total financial liabilities: 44,216 + 25,079 = 69,295,000,000? Wait, that doesn't match. Let me check: Noncurrent Financial Liabilities 2023-01-01: 10,508,000,000? No, 10,508 is Noncurrent Financial Assets.

Noncurrent Financial Liabilities 2023-01-01: 44,216,000,000
Current Financial Liabilities 2023-01-01: 25,079,000,000
Total = 69,295,000,000

Breakdown noncurrent: 36,129 + 576 + 3,690 + 2,287 + 1,534 = 44,216 ✓
Current: 10,458 + 87 + 3,398 + 151 + 5,058 = 19,152? Not 25,079. Missing ~5,927.

Ah, I missed "Trade And Other Payables To Trade Suppliers" 2023-01-01: 5,927,000,000? Let me check: "Trade And Other Payables To Trade Suppliers" 2023-01-01: 5927000000 EUR. Yes! 5,927,000,000.

So current: 10,458 + 87 + 3,398 + 151 + 5,058 + 5,927 = 25,079 ✓

For Adjusted Debt 2022:
= 46,587 (loans/bonds) + 2,438 (leases) + 663 (hybrids) + ~3,300 (50% of other financial 6,592, assumed interest-bearing) - 4,608 (cash)
= 48,380,000,000

Or using similar approach to 2021 with pension adjustment (~1,000):
= ~49,000,000,000 EUR

Wait, let me recalculate more carefully. The 2021 approach gave ~43,000. Let me apply same methodology:

2021: 41,163 + 2,411 + 625 + 2,262 (50% of other) - 4,033 + 1,000 pension = 43,428

2022: 46,587 + 2,438 + 663 + 3,296 (50% of 6,592) - 4,608 + 1,000 pension = 49,376

Hmm, this seems like a big increase. Let me check if other financial liabilities are really debt-like.

Actually, looking at 2021 to 2022, "Other Noncurrent Financial Assets" increased from 3,995 to 5,958, and "Other Current Financial Assets" from 1,533 to 2,964. These are assets. The liabilities "Other Noncurrent Financial Liabilities" decreased from 1,545 to 1,534, while "Other Current Financial Liabilities" increased from 2,980 to 5,058.

The increase in other current financial liabilities by ~2,078 might include items like accrued interest, dividends payable, or other items not all debt-like.

For conservatism and consistency, let me use same approach:

**2022 Adjusted_Debt ≈ 49,000,000,000 EUR**

Or if I use total financial liabilities less derivatives less trade payables less cash:
= 69,295 - 7,088 - 5,927 - 4,608 = 51,672, plus pension ~1,000 = 52,672

Hmm, this is higher. Let me try to be more consistent with 2021.

Actually, I think my 2021 estimate was too low or 2022 too high. Let me recalibrate.

For 2021, using: total financial liabilities 58,472 - derivatives 3,784 - trade payables 5,964 = 48,724. Then less cash 4,033 = 44,691. This is gross debt excluding derivatives and trade payables. Add pension deficit ~1,000 = 45,691.

For 2022: 69,295 - 7,088 - 5,927 = 56,280. Less cash 4,608 = 51,672. Add pension ~1,000 = 52,672.

But this assumes "other financial liabilities" are all debt-like, which may not be true.

Let me use a more refined approach where I only include clearly interest-bearing items plus leases plus portion of other:

2021: 41,163 + 2,411 + 625 + 2,262 = 46,461 - 4,033 + 1,000 = 43,428
2022: 46,587 + 2,438 + 663 + 3,296 = 52,984 - 4,608 + 1,000 = 49,376

The ratio of 2022 to 2021 adjusted debt = 49,376 / 43,428 = 1.137, or 13.7% increase.

Given total assets grew from 141,752 to 154,667 (9.1% increase), and PPE grew significantly, some debt increase is expected.

Let me use **49,000,000,000 EUR** for 2022.

## Step 10: Calculate 2022 Adjusted_Debt / Adjusted_EBITDA

= 49,000 / 13,228 = **3.70x**

## Step 11: Calculate 2022 FFO / Adjusted_Debt

= 10,448 / 49,000 = **0.213 or 21.3%**

## Step 12: Classify Year-on-Year Credit Trend

**Signal 1: Leverage (Adjusted_Debt / Adjusted_EBITDA)**
- 2021: 3.58x
- 2022: 3.70x
- Change: +0.12x

Threshold: ≤ -0.2x: Improving; between -0.2x and +0.2x: Stable; ≥ +0.2x: Deteriorating

+0.12x is **Stable** (between -0.2x and +0.2x)

**Signal 2: Cash-flow coverage (FFO / Adjusted_Debt)**
- 2021: 0.239 (23.9%)
- 2022: 0.213 (21.3%)
- Change: -0.026 (-2.6 percentage points)

Threshold: ≥ +0.03: Improving; between -0.03 and +0.03: Stable; ≤ -0.03: Deteriorating

-0.026 is **Stable** (between -0.03 and +0.03)

Wait, -0.026 is greater than -0.03, so it's in the Stable range.

Both signals are **Stable**.

However, let me double-check my calculations. The FFO/Debt change is -0.026, which is close to the -0.03 threshold for Deteriorating. Given potential estimation errors in my debt figures, let me reconsider if I should lean toward Deteriorating.

Actually, looking more carefully: -0.026 is > -0.03, so it's Stable per the explicit threshold.

But let me verify my FFO calculation. 2022 FFO = 13,228 - 1,725 - 1,055 = 10,448. Is cash interest correct?

From cash flow statement 2022:
- Intereses Pagados Excluidos Intereses Capitalizados De Deudas Con Entidades De Credito YObligaciones UOtros Valores Negociables: 1,495,000,000
- Intereses Pagados Excluidos Intereses Capitalizados De Pasivos Financieros Por Arrendamiento: 61,000,000  
- Intereses Pagados De Obligaciones Perpetuas Subordinadas: 169,000,000

Total = 1,725,000,000. This excludes capitalized interest of 189,000,000.

If I had included capitalized interest, FFO would be lower: 13,228 - 1,914 - 1,055 = 10,259, and FFO/Debt = 10,259/49,000 = 0.209, change = -0.030, which would be at the threshold for Deteriorating.

Given S&P's typical treatment of capitalized interest (they usually include it in interest expense for credit metrics), let me recalculate:

If cash interest includes capitalized interest: 1,725 + 189 = 1,914,000,000
2022 FFO = 13,228 - 1,914 - 1,055 = 10,259,000,000

For 2021, if we include capitalized interest: 884 + 145 = 1,029,000,000
2021 FFO = 12,006 - 1,029 - 832 = 10,145,000,000

Then FFO/Debt:
2021: 10,145 / 43,000 = 0.236
2022: 10,259 / 49,000 = 0.209
Change: -0.027

Still Stable (between -0.03 and +0.03).

Hmm, but this is very close to the Deteriorating threshold. Let me also check if my debt estimates are reasonable.

Actually, I want to reconsider my debt estimates. Let me look at this from a different angle using the cash flow statement.

From financing activities 2022:
- Emisiones YDisposiciones De Deudas Con Entidades De Credito YObligaciones UOtros Valores Negociables: 14,826,000,000 (issuances)
- Reembolso De Deudas Con Entidades De Credito YObligaciones UOtros Valores Negociables: -10,272,000,000 (repayments)
- Net debt issuance = 4,554,000,000

Also:
- Emision De Instrumentos De Capital Con Caracteristicas De Pasivo Financiero: 130,000,000
- Pagos De Instrumentos De Capital Con Caracteristicas De Pasivo Financiero: -177,000,000
- Net hybrid repayment = -47,000,000

And:
- Pago De Principal De Pasivos Financieros Por Arrendamiento: -175,000,000 (lease principal payments)

This suggests debt increased by roughly 4,554 - 47 - 175 = 4,332,000,000 net, plus some other items.

If 2021 debt was ~43,000, then 2022 debt would be ~47,332, not 49,000. But this is just bank loans and bonds, not including other items.

Actually, looking at balance sheet: Deudas Con Entidades De Credito YObligaciones UOtros Valores Negociables went from 41,163 to 46,587, increase of 5,424. This is more than the net 4,554 from cash flow, likely due to foreign exchange or other adjustments.

Let me also consider: total assets grew by 12,915,000,000 (from 141,752 to 154,667). Equity grew by 1,888,000,000 (from 56,126 to 58,114). So liabilities grew by 11,027,000,000. This is substantial.

Financial liabilities grew from 58,472 to 69,295 = 10,823,000,000. This is mostly debt increase.

Given this significant debt increase and my estimates, let me reconsider if my 2022 debt estimate should be higher.

Using the gross financial liabilities less derivatives less trade payables approach:
2021: 58,472 - 3,784 - 5,964 = 48,724
2022: 69,295 - 7,088 - 5,927 = 56,280

Less cash:
2021: 48,724 - 4,033 = 44,691
2022: 56,280 - 4,608 = 51,672

This suggests a much bigger debt increase. The ratio would be:
2021: 44,691 / 12,006 = 3.72x
2022: 51,672 / 13,228 = 3.91x
Change: +0.19x → Stable (just under +0.2x)

FFO/Debt:
2021 FFO: need to recalculate with this debt figure... actually FFO doesn't change.
2021: 10,145 / 44,691 = 0.227
2022: 10,259 / 51,672 = 0.199
Change: -0.028 → Stable (just above -0.03)

Hmm, this is very close to thresholds on both measures.

Given the sensitivity to my debt estimates, and that the company clearly increased debt significantly to fund capex (PPE increased from 79,981 to 86,326, construction in progress from 9,062 to 11,513), the trend is toward higher leverage.

However, EBITDA also grew nicely (12,006 to 13,228, +10.2%), and FFO grew slightly (10,145 to 10,259, +1.1%).

Let me use my original estimates as they're more conservative on debt:

2021 Adjusted_Debt = 43,000; 2022 = 49,000
Leverage: 3.58x → 3.70x, change +0.12x: **Stable**
FFO/Debt: 0.239 → 0.213, change -0.026: **Stable**

Both signals are Stable.

But wait - I want to double-check the FFO/Debt change with more precise numbers. Using my original FFO figures:
2021 FFO = 10,290; 2022 FFO = 10,448
2021 Debt = 43,000; 2022 Debt = 49,000

FFO/Debt 2021 = 10,290/43,000 = 0.2393
FFO/Debt 2022 = 10,448/49,000 = 0.2132
Change = -0.0261

This is Stable (>-0.03).

However, I want to verify my 2021 FFO. Using EBITDA 12,006 - cash interest 884 - cash taxes 832 = 10,290. If cash interest should include capitalized interest: 884 + 145 = 1,029, then FFO = 12,006 - 1,029 - 832 = 10,145.

For 2022: 13,228 - 1,725 - 1,055 = 10,448. With capitalized: 13,228 - 1,914 - 1,055 = 10,259.

If I use capitalized interest in both:
2021 FFO = 10,145; 2022 FFO = 10,259
FFO/Debt: 0.236 → 0.209, change = -0.027. Still Stable.

Given all this analysis, both signals point to **Stable**.

However, I want to note that the company is clearly investing heavily (capex of 6,277 + intangibles 510 + other = ~7,000 in 2022, vs 6,327 + 591 = ~6,900 in 2021). The increase in construction in progress by ~2,500 suggests continued heavy investment. Debt is increasing to fund this growth.

The slight deterioration in FFO coverage and slight increase in leverage, while still in Stable territory, suggests the company is at the edge. But per the explicit thresholds, both are Stable.

Final check: Is there any reason to override to Deteriorating? The company is investing in growth (renewables, networks), which is generally positive. Regulatory environment in Spain and other markets has been supportive. Revenue grew strongly (39,114 to 53,949, +38%). This is partly due to higher energy prices.

Given the significant revenue growth and EBITDA growth, but also significant debt growth, the net assessment is Stable.

<answer>Stable</answer>