**Step 1: Identify the relevant industry**

REN - REDES ENERGÉTICAS NACIONAIS, SGPS, S.A. is a Portuguese energy transmission company. The facts provided indicate it operates in the electricity and gas transmission sectors ("Revenue From Rendering Of Services", "Costs With Construction Of Concession Assets", "Intangible Assets" related to concessions). The provided text includes a section for **Regulated Utilities**. Given that REN operates national transmission grids which are natural monopolies subject to regulatory oversight (tariff setting, cost recovery), it falls under the **Regulated Utilities** sector.

**Step 2: Estimate Adjusted Debt**

According to the S&P methodology for Regulated Utilities and the general baseline:
`Adjusted_Debt = (reported_debt + leases + pension_deficit + guarantees + hybrid_debt_portion + other_debt_like_items) - eligible_cash`

*   **Reported Debt:**
    *   Long-term Borrowings (2023-01-01, representing year-end 2022): 1,695,362,000 EUR
    *   Current Borrowings And Current Portion Of Noncurrent Borrowings (2023-01-01): 638,944,000 EUR
    *   Total Reported Debt = 1,695,362,000 + 638,944,000 = 2,334,306,000 EUR

*   **Leases:**
    *   The cash flow statement shows "Payments Of Lease Liabilities Classified As Financing Activities" of 2,157,000 EUR. This implies the existence of lease liabilities. However, the balance sheet does not explicitly list "Lease Liabilities" as a separate line item distinct from borrowings or payables. In many IFRS reports, lease liabilities are included within "Borrowings" or "Other Provisions/Payables". Without a specific breakdown of the debt portion attributable to leases in the debt lines, and given the small magnitude of payments relative to total debt, we assume the reported borrowings capture the financial obligation or the impact is negligible for this high-level estimation if not explicitly broken out in debt. However, standard S&P adjustment adds lease liabilities if not in debt. Let's look for "Lease Liabilities" in liabilities. They are not explicitly listed. We will assume they are either included in borrowings or immaterial/not explicitly adjustable without more data. We will proceed with Reported Debt as the primary debt component. *Correction*: S&P typically adds operating leases if capitalized differently, but under IFRS 16, they are on the balance sheet. If they are in "Other Longterm Provisions" or "Trade Payables", they might need adding. Given the lack of explicit "Lease Liability" line, and the small payment size (~2M EUR), we will treat the reported borrowings as the core debt.

*   **Pension Deficit:**
    *   "Noncurrent Provisions For Employee Benefits" is 64,939,000 EUR. This is a provision, not necessarily a net pension deficit requiring debt-like treatment unless specified as underfunded. S&P usually adjusts for the underfunded status of defined benefit plans. The OCI shows "Gains Losses On Remeasurements Of Defined Benefit Plans". Without explicit net deficit data (Plan Assets vs Obligations), we typically do not add the full provision as debt. We will assume no significant pension debt adjustment beyond what's in provisions, or that it's not material enough to change the ratio significantly compared to the billions in debt.

*   **Other Debt-like Items:**
    *   "Trade And Other Non Current Payables": 450,297,000 EUR. These are typically operating liabilities, not debt.
    *   "Liability Related To The Transitional Gas Price Stabilization Regime": 1,000,000,000 EUR. This is a regulatory liability. The corresponding asset is also 1,000,000,000 EUR. This is a pass-through mechanism. S&P methodology for regulated utilities often excludes regulatory assets/liabilities from debt/EBITDA if they are true pass-throughs with no equity risk. Since there is a matching asset, the net impact on leverage is zero. We will exclude this from debt and EBITDA.

*   **Eligible Cash:**
    *   "Cash And Cash Equivalents" (2023-01-01): 365,292,000 EUR.
    *   S&P allows deducting unrestricted cash. There is no indication of restricted cash.

*   **Calculation of Adjusted Debt:**
    *   Gross Debt = 2,334,306,000 EUR
    *   Less Cash = 365,292,000 EUR
    *   Adjusted Debt = 2,334,306,000 - 365,292,000 = 1,969,014,000 EUR

**Step 3: Estimate Adjusted EBITDA**

Formula: `Adjusted_EBITDA = EBITDA + adjustment_leases + nonrecurring_losses - nonrecurring_gains ...`

First, we calculate Reported EBITDA for the fiscal year 2022 (period 2022-01-01 to 2023-01-01).

*   **Profit Loss From Operating Activities (EBIT):** 239,721,000 EUR
*   **Add: Depreciation And Amortisation Expense:** 249,276,000 EUR
*   **Reported EBITDA** = 239,721,000 + 249,276,000 = 488,997,000 EUR

*   **Adjustments:**
    *   **Leases:** Under IFRS 16, depreciation and interest are separated. EBITDA adds back depreciation. The interest portion of lease payments is in Finance Costs. S&P often adds back the operating lease rent expense (pre-IFRS 16) or adjusts EBITDA to include the implied rent. However, with IFRS 16, EBITDA is already higher than it was under operating lease accounting (because rent expense is replaced by depreciation + interest, and depreciation is added back). The "Payments Of Lease Liabilities" includes principal and interest. The interest part is in Finance Costs (67,394,000 EUR total finance costs). The principal repayment is financing cash flow. The depreciation of right-of-use assets is in Depreciation. So Reported EBITDA includes the D&A of leases. S&P may adjust for the difference between straight-line rent and actual, but without specific data, we assume Reported EBITDA is the base.
    *   **Non-recurring items:**
        *   "Impairment Loss Reversal...": 1,437,000 EUR (Gain). This is included in Operating Profit. We should subtract this non-recurring gain.
        *   "Energy Sector Extraordinary Contribution": 28,019,000 EUR. This is an expense. Is it non-recurring? It's labeled "Extraordinary". In regulatory contexts, these might be considered part of the normal regulatory environment or non-recurring. S&P often normalizes for extraordinary taxes if they are truly one-off. However, in Portugal, this has been a recurring feature. Let's look at the previous year: 27,041,000 EUR. Since it occurred in both years, it is likely recurring/structural for the sector. We will leave it in EBITDA (i.e., do not add it back).
        *   "Share Of Profit Loss Of Associates...": 11,812,000 EUR. This is equity income, usually below EBIT. It is not in EBITDA. If we were doing a proportional consolidation, we would add it. S&P often uses proportional EBITDA for JVs if they are core. REN has "Investment Accounted For Using Equity Method". The share of profit is 11.8M. We don't have the EBITDA of the associates. We will stick to the consolidated EBITDA and not adjust for JV EBITDA due to lack of data, or assume it's minor.
        *   "Revenue Recognised On Exchanging Construction Services For Intangible Asset": 197,420,000 EUR. This is non-cash revenue associated with construction (IFRIC 12). The corresponding cost is "Costs With Construction Of Concession Assets": 175,095,000 EUR.
            *   Operating Profit includes this revenue and cost.
            *   Gross Margin from construction = 197,420,000 - 175,095,000 = 22,325,000 EUR.
            *   This profit is non-cash (it creates an intangible asset).
            *   Depreciation on these assets will happen later.
            *   S&P methodology for regulated utilities often excludes the EBITDA impact of construction services if it's a pass-through or non-cash accounting entry that doesn't reflect operational cash generation capability in the same way. However, it is part of the regulated return.
            *   Let's check the cash flow. "Cash Flows From Used In Investing Activities" includes purchases of intangibles. The construction is capitalized.
            *   Usually, for pure network companies, the "construction" revenue is an accounting artifact of building your own assets. The cash flow comes from the regulated tariff later.
            *   If we exclude the non-cash profit:
                *   Adjusted EBITDA = Reported EBITDA - Non-cash Profit from Construction.
                *   Non-cash Profit = Revenue (197,420,000) - Cost (175,095,000) = 22,325,000 EUR.
                *   However, the Depreciation added back (249M) relates to existing assets. The new assets aren't depreciated yet.
                *   Many analysts exclude this "self-constructed" margin from EBITDA to better reflect cash operating performance. Let's subtract this non-cash gain.
    
    *   **Re-evaluating EBITDA Calculation from Top Line:**
        *   Revenue from Services: 588,130,000
        *   Revenue from Goods: 96,000
        *   Revenue from Construction: 197,420,000
        *   Total Revenue: ~785,646,000 (Note: "Revenue And Operating Income" is 824,683,000. The difference includes Misc Other Operating Income 27,225,000 and Share of Profit 11,812,000? No, Share of profit is usually below operating. Let's trust the "Profit Loss From Operating Activities" line).
        
        Let's stick to the bottom-up EBITDA:
        EBIT (Operating Profit) = 239,721,000
        + Depreciation & Amortization = 249,276,000
        = 488,997,000
        
        Adjustments:
        - Non-cash construction profit: 22,325,000 (Revenue 197,420,000 - Cost 175,095,000). This profit is included in EBIT. It is non-cash. We subtract it.
        - Impairment Reversal: 1,437,000. This is a gain included in EBIT. We subtract it.
        
        Adjusted EBITDA = 488,997,000 - 22,325,000 - 1,437,000 = 465,235,000 EUR.

        Let's consider if the "Energy Sector Extraordinary Contribution" (28M) should be added back. It is an operating expense. If it is considered non-recurring, we add it back. Given it appeared in the prior year (27M), it is likely recurring. We keep it as an expense.

        Let's consider the "Share of profit of associates" (11.8M). This is likely included in "Profit Loss From Operating Activities" or just below? The line "Profit Loss From Operating Activities" is usually EBIT. Share of associates is usually *after* operating profit in IFRS, or sometimes included if defined as such. Looking at the structure:
        Revenue and Operating Income: 824,683,000
        Operating Expense: 584,962,000
        Profit Loss From Operating Activities: 239,721,000.
        824,683,000 - 584,962,000 = 239,721,000.
        So "Revenue and Operating Income" includes the Share of Profit?
        Let's check the components of Revenue and Operating Income:
        Rev Goods: 96,000
        Rev Services: 588,130,000
        Rev Construction: 197,420,000
        Misc Other Operating Income: 27,225,000
        Sum = 96k + 588.13M + 197.42M + 27.225M = 812,871,000.
        The reported "Revenue And Operating Income" is 824,683,000.
        Difference = 11,812,000.
        This matches exactly the "Share Of Profit Loss Of Associates...".
        So, the Share of Associates IS included in the Operating Profit line.
        Since this is equity income, it is not EBITDA of the parent's operations. It is cash flow (dividends) potentially, but not EBITDA. We should subtract this equity income from EBITDA to get operational EBITDA.
        
        Revised Adjustments:
        Base EBITDA: 488,997,000
        - Non-cash construction profit: 22,325,000
        - Impairment Reversal: 1,437,000
        - Share of Associates (Equity Income): 11,812,000
        
        Adjusted EBITDA = 488,997,000 - 22,325,000 - 1,437,000 - 11,812,000
        Adjusted EBITDA = 453,423,000 EUR.

        Let's double check the construction profit logic.
        The revenue is 197.4M. The cost is 175.1M.
        These are both in the Operating Income/Expense lines.
        So the 22.3M profit is in the 239.7M EBIT.
        And the D&A (249M) does *not* include depreciation on these new assets yet (they are just built).
        So the EBITDA includes 22.3M of non-cash profit. Subtracting it is correct.

        Let's double check the Share of Associates.
        It is in Operating Income. It is not cash from operations (usually dividends are investing). It is not EBITDA. Subtracting it is correct.

        Let's double check Impairment Reversal.
        It is a non-cash gain. Subtracting it is correct.

        So, Adjusted EBITDA ≈ 453.42 million EUR.

**Step 4: Calculate Ratio**

Adjusted Debt = 1,969,014,000 EUR
Adjusted EBITDA = 453,423,000 EUR

Ratio = 1,969,014,000 / 453,423,000
Ratio ≈ 4.3425

Let's review if any other debt adjustments are needed.
"Noncurrent Derivative Financial Liabilities": 73,464,000.
"Current Derivative Financial Liabilities": Not explicitly listed, but "Current Derivative Financial Assets" exists.
Derivatives are generally not debt unless they are in a liability position and S&P deems them debt-like (e.g., synthetic debt). Usually, they are excluded from debt but marked to market. We will exclude them from debt.

What about the "Liability Related To The Transitional Gas Price Stabilization Regime"?
We excluded it from debt. We also excluded the matching asset.
Did we exclude the P&L impact?
The regime likely has no P&L impact if it's a pure pass-through (Asset = Liability). If there were costs/revenues associated, they would be in Operating Income. Assuming neutral.

Is there any other debt?
"Trade And Other Non Current Payables" 450M. This is large. Is it debt?
Usually, trade payables are operating. However, in some utility contexts, if these are deferred revenues or regulatory liabilities, they might be treated differently. But "Payables" suggests suppliers. We treat as operating.

Let's refine the EBITDA calculation.
Is the "Energy Sector Extraordinary Contribution" (ESEC) added back?
S&P often adds back extraordinary taxes if they are non-recurring.
2022: 28M. 2021: 27M.
It seems recurring. We leave it.

Is the "Share of Profit" really non-EBITDA?
Yes, equity income is not EBITDA.

Is the construction profit really non-cash?
Yes, it capitalizes into Intangible Assets. The cash outflow is in Investing Activities (Purchase of Intangible Assets 201M vs Construction Costs 175M - close enough, difference might be timing or other assets). The *profit* margin is non-cash.

So, Adjusted EBITDA = 453.42 M.
Adjusted Debt = 1,969.01 M.

Ratio = 4.34.

Let's consider if "Eligible Cash" should be reduced.
S&P deducts unrestricted cash.
Cash = 365M.
Is any restricted? No info.

Let's consider if Debt should include the "Lease Liabilities".
If we assume the "Payments Of Lease Liabilities" of 2.1M implies a total liability.
If the payment is 2.1M, and it's mostly principal/interest.
If we assume a 10-year lease, the liability might be ~15-20M.
Adding 20M to Debt increases Debt to ~1,989M.
Ratio becomes 1,989 / 453.4 = 4.38.
Given the ambiguity and small size, 4.34 is a robust estimate based on explicit lines.

However, there is a potential adjustment for **Pension Deficit**.
"Noncurrent Provisions For Employee Benefits" = 64.9M.
If this is a defined benefit plan deficit, S&P adds it to debt.
The OCI shows "Gains Losses On Remeasurements Of Defined Benefit Plans" of 27.2M (gain) and tax 8.1M.
This suggests the plan is active.
Usually, the provision on the balance sheet *is* the net deficit (or surplus, if asset).
If it is a provision (liability), it represents the underfunded amount.
S&P adds the underfunded status of pension plans to debt.
So we should add 64,939,000 to Debt.

Revised Adjusted Debt:
1,969,014,000 + 64,939,000 = 2,033,953,000 EUR.

Revised Ratio:
2,033,953,000 / 453,423,000 = 4.4857...

Let's check if the pension provision is indeed a deficit.
"Noncurrent Provisions For Employee Benefits" is a liability.
In IFRS, the net defined benefit liability is presented.
So yes, it is the deficit.
S&P adds this to debt.

Are there any other adjustments?
"Noncurrent Derivative Financial Liabilities" 73M.
If these are hedges, they are not debt.

So, Adjusted Debt = 2,033.95 M.
Adjusted EBITDA = 453.42 M.

Ratio = 4.49.

Let's double check the EBITDA adjustments.
Some analysts might NOT subtract the Share of Associates if they consider it part of recurring cash flow (dividends). But strictly, EBITDA is earnings before interest, tax, depreciation, amortization. Equity income is not operating earnings in the EBITDA sense (it's investment income). S&P typically uses "Consolidated EBITDA" and then adjusts. If the JV is proportional, they add proportional EBITDA. We don't have JV EBITDA. We have JV Net Income (11.8M).
If we assume the JV EBITDA is higher than Net Income (due to D&A and Interest in the JV), we might be understating EBITDA by removing the 11.8M net income without adding back the gross EBITDA.
However, without JV financials, we can't add proportional EBITDA.
Standard practice when data is missing: Use consolidated EBITDA.
Consolidated EBITDA includes the 11.8M equity pick-up?
Yes, it's in Operating Profit.
Equity pick-up is non-cash (until dividends).
So removing it is conservative/correct for cash-flow based leverage.

What about the Construction Profit?
If we don't subtract it, EBITDA is higher.
488.99M - 1.4M (impairment) = 487.5M.
Ratio with Debt 2034M: 2034 / 487.5 = 4.17.
If we subtract Construction Profit (22.3M) and Equity Income (11.8M):
EBITDA = 453.4M.
Ratio = 4.49.

S&P methodology for Regulated Utilities:
"We do not adjust GAAP earnings... to remove the effects of regulatory accounting."
The construction revenue (IFRIC 12) is a form of regulatory accounting/economic substance.
However, the cash flow is not realized yet.
Leverage ratios are often based on Funds From Operations (FFO) or Debt/EBITDA.
S&P often uses "Adjusted EBITDA" which normalizes for non-cash items.
The construction margin is non-cash.
I will stick with the adjusted EBITDA of 453.42M.

One more check: "Revenue From Sale Of Goods" 96,000. "Cost Of Sales" 901,000.
Gross Loss on goods?
This is negligible.

Final Calculation:
Adjusted Debt = (1,695,362,000 + 638,944,000 + 64,939,000) - 365,292,000
= 2,399,245,000 - 365,292,000
= 2,033,953,000 EUR

Adjusted EBITDA = 239,721,000 (EBIT) + 249,276,000 (D&A) - 1,437,000 (Impairment Gain) - 11,812,000 (Equity Income) - 22,325,000 (Non-cash Construction Margin)
= 488,997,000 - 35,574,000
= 453,423,000 EUR

Ratio = 2,033,953,000 / 453,423,000 = 4.48577...

Rounding to two decimal places: 4.49

<answer>4.49</answer>