I'll work through this step-by-step for Iberdrola SA.

## Step 1: Identify the Relevant Industry

Iberdrola SA is a major utility company with both regulated and unregulated operations (electricity generation, transmission, distribution). It's a multi-utility that spans **Regulated Utilities** and **Unregulated Power and Gas**. For S&P purposes, I'll apply utility-sector adjustments.

## Step 2: Estimate Adjusted Debt

**Reported Debt (Financial Liabilities excluding derivatives and trade payables):**

From the balance sheet (FY2022, dates labeled 2023-01-01):

**Noncurrent financial debt:**
- Deudas Con Entidades De Credito Y Obligaciones U Otros Valores Negociables (NC): 36,129M
- Instrumentos De Capital Con Caracteristicas De Pasivo Financiero NC: 576M
- Other Noncurrent Financial Liabilities: 1,534M

**Current financial debt:**
- Deudas Con Entidades De Credito Y Obligaciones U Otros Valores Negociables (C): 10,458M
- Instrumentos De Capital Con Caracteristicas De Pasivo Financiero C: 87M
- Other Current Financial Liabilities: 5,058M

Core reported debt = 36,129 + 576 + 1,534 + 10,458 + 87 + 5,058 = **53,842M**

**Lease Liabilities:**
- Noncurrent Lease Liabilities: 2,287M
- Current Lease Liabilities: 151M
- Total leases = **2,438M**

**Pension Deficit:**
- Noncurrent Provisions For Employee Benefits: 1,226M
- Current Provisions For Employee Benefits: 42M
- Total pension = **1,268M**

**Hybrid Debt Portion:**
The "Instrumentos de Capital con Caracteristicas de Pasivo Financiero" (576M NC + 87M = 663M) are already included in reported debt. Additionally, there appear to be perpetual subordinated bonds mentioned in equity movements (interest of 169M paid). S&P typically treats hybrid instruments with partial equity/debt content. The noncontrolling interests include perpetual subordinated obligations (€2,750M issued in prior year). S&P typically assigns 50% debt content to such hybrids. However, since these are already in equity as NCI, I need to add the debt portion. Looking at the accrued interest of 169M on perpetual subordinated bonds charged to retained earnings, these hybrids are equity-accounted. Estimating the outstanding amount from cumulative issuances: ~2,740M. S&P 50% debt content = ~1,370M.

**Eligible Cash Deduction:**
- Cash and Cash Equivalents: 4,608M
- S&P typically allows partial netting. For utilities, conservative approach: deduct modest portion. I'll assume ~75% accessible = 3,456M. However, a simpler approach is to not deduct surplus cash for utilities. I'll use a conservative deduction of about 2,000M (keeping operational cash on hand).

**Adjusted Debt Calculation:**
Adjusted_Debt = 53,842 + 2,438 + 1,268 + 1,370 - 2,000 = **56,918M**

Rounding and reconsidering: S&P often excludes derivatives from debt. The core bonds/loans = 36,129 + 10,458 = 46,587M. Adding other financial liabilities (1,534 + 5,058) = 6,592M. Adding hybrids with liability features (663M). Total reported debt = ~53,842M. With leases already in, pension, hybrid adjustments, minus cash:

Adjusted_Debt ≈ **56,918M**

## Step 3: Estimate Adjusted EBITDA

**Reported EBITDA (FY2022):** 13,228M (explicitly stated as "Beneficio Bruto De Explotacion Ebitda")

**Lease adjustments:** S&P adds back lease depreciation and interest. Lease payments (principal 175M + interest 61M = 236M). The ROU depreciation is roughly similar. Net adjustment is approximately adding lease interest back (~61M, but EBITDA already excludes interest). Under S&P, EBITDA typically already captures operating leases. Minimal net adjustment ~+61M for lease interest.

**Pension adjustments:** Service cost is typically already in EBITDA. Minimal adjustment.

**Adjusted_EBITDA ≈ 13,228 + 61 ≈ 13,289M**

## Step 4: Calculate the Ratio

Adjusted_Debt / Adjusted_EBITDA = 56,918 / 13,289 ≈ **4.28**

<answer>4.28</answer>