**Step 1: Identify the relevant industry**

Terna S.p.A. is the Italian transmission system operator (TSO) for electricity. It operates the high-voltage electricity transmission grid. According to the provided text, this falls under the **Regulated Utilities** sector, specifically the "Electricity National" subsector. The text notes that regulated utilities are shielded from competition and subject to comprehensive regulation. Terna operates as a natural monopoly with regulated tariffs, fitting the description of a regulated utility with a strong regulatory advantage (transparent, predictable framework, cost recovery mechanisms).

**Step 2: Estimate Adjusted_EBITDA**

For regulated utilities, S&P typically uses EBITDA as a key profitability indicator. We need to reconstruct EBITDA from the provided financial data.

*   **Profit Loss From Operating Activities (EBIT):** 1,333,500,000 EUR
*   **Depreciation Amortisation And Impairment Loss:** 725,700,000 EUR

Reported EBITDA = EBIT + Depreciation & Amortization
Reported EBITDA = 1,333,500,000 + 725,700,000 = 2,059,200,000 EUR

*Adjustments:*
*   **Leases:** The provided data does not explicitly list lease liabilities or right-of-use assets separate from PPE, nor does it provide specific lease expense adjustments. In the absence of specific data indicating significant operating lease adjustments required by S&P methodology (which often capitalizes operating leases for non-utilities, but for regulated utilities, the treatment may vary or be immaterial if already capitalized under IFRS 16 which is standard in EU reporting), we assume no additional adjustment is needed or that the reported figures reflect IFRS 16 compliance where depreciation includes ROU assets. However, standard S&P adjustment for leases usually adds back the implied interest and normalizes the depreciation. Without specific lease data, we proceed with the reported EBITDA as a proxy for Adjusted EBITDA, noting that IFRS 16 is already applied.
*   **Non-recurring items:** The data shows "Adjustments For Gain Loss On Disposals Property Plant And Equipment" of -6,900,000 EUR in the cash flow statement. This implies a gain on disposal was included in the operating profit. To get to a normalized EBITDA, we should subtract non-recurring gains.
    *   Gain on disposal = 6,900,000 EUR.
    *   Adjusted EBITDA = Reported EBITDA - Gain on Disposal
    *   Adjusted EBITDA = 2,059,200,000 - 6,900,000 = 2,052,300,000 EUR.
*   **Other adjustments:** There are no explicit mentions of significant pension deficits requiring adjustment in the equity or liability sections that would drastically alter EBITDA (pension costs are included in employee benefits). The "Share Of Profit Loss Of Associates" is -1,000,000 EUR, which is negligible.

Let's refine the EBITDA calculation using the Cash Flow from Operations approach to ensure consistency, as S&P often looks at cash generation.
Cash Flows From Used In Operations Before Changes In Working Capital = 2,072,700,000 EUR.
This figure typically starts from EBITDA and adjusts for non-cash items like provisions and changes in working capital components not yet accounted for.
However, the standard definition is EBIT + D&A.
Let's stick to the reconstructed EBITDA:
EBIT (Profit Loss From Operating Activities) = 1,333,500,000
D&A = 725,700,000
EBITDA = 2,059,200,000

Are there other non-recurring items?
"Adjustments For Gain Loss On Disposals..." is -6.9M. This is a gain, so we subtract it.
"Adjustments For Finance Income Cost" is 101.5M. This is added back to get to EBITDA from Net Income, but we started from Operating Profit.
"Adjustments For Income Tax Expenses" is 356.7M.

So, **Adjusted_EBITDA** ≈ 2,052,300,000 EUR.

**Step 3: Estimate FFO**

Formula: FFO = Adjusted_EBITDA - cash_interest - cash_taxes

*   **Cash Interest:**
    The report provides "Finance Costs" of 121,800,000 EUR.
    It also provides "Interest Paid Classified As Operating Activities" of 154,800,000 EUR.
    S&P methodology typically uses *cash* interest paid for FFO calculations to reflect actual cash outflow.
    Cash Interest = 154,800,000 EUR.
    *Note:* There is "Interest Costs Capitalised" of 24,800,000 EUR. This is a non-cash item in the context of operating cash flow if it's added back, but "Interest Paid" is the actual cash outflow. The cash flow statement shows "Interest Paid Classified As Operating Activities" as 154,800,000. This is the most accurate figure for cash interest.

*   **Cash Taxes:**
    The report provides "Income Tax Expense Continuing Operations" of 355,400,000 EUR.
    It also provides "Income Taxes Paid Refund Classified As Operating Activities" of 380,100,000 EUR.
    S&P methodology uses *cash* taxes paid.
    Cash Taxes = 380,100,000 EUR.

*   **Calculation:**
    FFO = 2,052,300,000 - 154,800,000 - 380,100,000
    FFO = 1,517,400,000 EUR.

*Alternative Check using Net Income + D&A - Non-Cash Items:*
Net Income Attributable to Owners = 857,000,000
+ D&A = 725,700,000
+ Interest Expense (Cash) = 154,800,000 (Using cash paid)
+ Tax Expense (Cash) = 380,100,000 (Using cash paid)
- Gain on Disposal = 6,900,000
+ Share of Loss in Associates = 1,000,000
FFO ≈ 857,000,000 + 725,700,000 + 154,800,000 + 380,100,000 - 6,900,000 + 1,000,000 = 2,111,700,000?
Wait, the standard FFO definition is Net Income + D&A + Deferred Taxes - Gains on Sales.
Let's stick to the EBITDA - Cash Interest - Cash Taxes formula provided in the prompt instructions, which is a common proxy for Funds From Operations in credit analysis (often called Pre-Tax Cash Flow or similar, but labeled FFO here).

Let's re-verify the "Adjusted_EBITDA" input.
If we use the Cash Flow from Operations before working capital changes (2,072,700,000), this figure usually equals EBITDA +/- changes in provisions/other non-cash operating items.
The difference between 2,072,700,000 and our calculated EBITDA (2,059,200,000) is 13,500,000.
Looking at adjustments:
+ Accruals to provisions: 51,700,000
- Gain on disposal: 6,900,000
+ Other non-cash movements: -24,100,000
Net adjustments to EBITDA to get to CFO before WC = 51.7 - 6.9 - 24.1 = 20.7M.
2,059.2 + 20.7 = 2,079.9M. This is close to 2,072.7M (difference likely due to other minor items or timing).
S&P FFO is generally closer to Operating Cash Flow before working capital changes, but adjusted for cash interest and taxes.
Actually, the prompt defines FFO = Adjusted_EBITDA - cash_interest - cash_taxes.
So we must use the Adjusted_EBITDA we calculated.

Adjusted_EBITDA = 2,052,300,000 EUR.
Cash Interest = 154,800,000 EUR.
Cash Taxes = 380,100,000 EUR.
FFO = 2,052,300,000 - 154,800,000 - 380,100,000 = 1,517,400,000 EUR.

**Step 4: Estimate Adjusted_Debt**

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

*   **Reported Debt:**
    We need to sum interest-bearing debt.
    Long-term Borrowings (2022-01-01 balance sheet date for 2022 fiscal year end? No, the data provides balances at 2022-01-01 and 2023-01-01. The fiscal year ended Dec 31, 2022, corresponds to the balance sheet date of 2023-01-01 in the provided labels?
    Let's check the labels.
    "Longterm Borrowings" 2023-01-01: 8,416,700,000 EUR.
    "Longterm Borrowings" 2022-01-01: 8,835,000,000 EUR.
    The fiscal year is 2022. The ending balance sheet is Dec 31, 2022. The label "2023-01-01" represents the opening of 2023, which is the closing of 2022. So we use the 2023-01-01 column for year-end 2022 figures.
    
    Debt Components at 2023-01-01:
    1. Long-term Borrowings: 8,416,700,000
    2. Short-term Borrowings: 444,100,000
    3. Current Portion of Long-term Borrowings: 1,909,300,000
    4. Noncurrent Financial Liabilities: 247,200,000
    5. Current Financial Liabilities: 44,900,000
    
    Total Reported Debt = 8,416,700,000 + 444,100,000 + 1,909,300,000 + 247,200,000 + 44,900,000
    Total Reported Debt = 11,062,200,000 EUR.

*   **Hybrid Debt Portion:**
    The report lists "Equity Instruments Perpetual Hybrid Bonds" under Equity with a value of 989,000,000 EUR.
    S&P typically treats hybrid bonds as 50% debt and 50% equity for leverage ratios, unless they are fully equity-like (very rare) or fully debt-like. For regulated utilities with strong regulatory frameworks, hybrids are often given 50% debt credit.
    Hybrid Debt Adjustment = 50% of 989,000,000 = 494,500,000 EUR.

*   **Leases:**
    Under IFRS 16, lease liabilities are typically included in borrowings or financial liabilities. The "Long-term Borrowings" and "Short-term Borrowings" likely include these. Without a specific breakdown, we assume they are included in the reported debt figures above. If they were operating leases off-balance sheet, we would add them. Given IFRS 16 adoption in Italy, they are on-balance sheet. We assume no further adjustment is needed unless specified.

*   **Pension Deficit:**
    "Noncurrent Provisions For Employee Benefits" is 48,400,000 EUR.
    S&P adjusts for the underfunded status of defined benefit pension plans. We need to compare the obligation to the assets. The data doesn't explicitly give the fair value of plan assets. However, the provision on the balance sheet usually represents the net deficit (obligation minus assets). So we add the net pension liability.
    Pension Deficit = 48,400,000 EUR.

*   **Eligible Cash:**
    S&P allows netting of cash against debt if it is unrestricted and available to service debt.
    "Cash And Cash Equivalents" 2023-01-01: 2,155,100,000 EUR.
    Are there restrictions? "Cash And Cash Equivalents Of Which Due From Related Parties" is negligible (100,000).
    Typically, for regulated utilities, most cash is considered eligible unless stated otherwise.
    Eligible Cash = 2,155,100,000 EUR.

*   **Calculation of Adjusted Debt:**
    Adjusted_Debt = Total Reported Debt + Hybrid Debt Portion + Pension Deficit - Eligible Cash
    Adjusted_Debt = 11,062,200,000 + 494,500,000 + 48,400,000 - 2,155,100,000
    
    Sum of Debt + Hybrids + Pension = 11,062,200,000 + 494,500,000 + 48,400,000 = 11,605,100,000 EUR.
    Adjusted_Debt = 11,605,100,000 - 2,155,100,000 = 9,450,000,000 EUR.

**Step 5: Calculate FFO / Adjusted_Debt**

FFO = 1,517,400,000 EUR
Adjusted_Debt = 9,450,000,000 EUR

Ratio = 1,517,400,000 / 9,450,000,000
Ratio ≈ 0.1605714...

Rounding to four decimal places: 0.1606

Let's double check the Hybrid treatment. S&P Global Ratings' criteria for regulated utilities often treat hybrids as 50% debt for leverage calculations.
Let's double check the Cash treatment. S&P nets unrestricted cash against debt.
Let's double check the FFO calculation.
EBITDA = 2,059.2M.
Less Gain on Disposal = 6.9M.
Adj EBITDA = 2,052.3M.
Cash Interest = 154.8M.
Cash Tax = 380.1M.
FFO = 2,052.3 - 154.8 - 380.1 = 1,517.4M.

Debt:
LT Borrowings: 8,416.7
ST Borrowings: 444.1
Current LT: 1,909.3
Noncurrent Fin Liab: 247.2
Current Fin Liab: 44.9
Total Debt = 11,062.2M.

Hybrids: 989.0M * 50% = 494.5M.
Pension: 48.4M.
Cash: 2,155.1M.

Adj Debt = 11,062.2 + 494.5 + 48.4 - 2,155.1 = 9,450.0M.

Ratio = 1,517.4 / 9,450.0 = 0.16057...

One potential adjustment: S&P might not net *all* cash. However, without information on restricted cash, standard procedure is to net reported cash.
Another potential adjustment: "Noncurrent Financial Liabilities" and "Current Financial Liabilities" might include derivatives or other items not considered debt. However, in the absence of a breakdown, they are typically treated as debt-like.
Also, check if "Finance Costs" includes non-cash items. The cash flow statement adds back "Adjustments For Finance Income Cost" of 101.5M.
Finance Costs (P&L) = 121.8M.
Finance Income (P&L) = 22.7M (implied from "Finance Income Cost" 22.7M? No, "Finance Income Cost" is likely net. Wait.
"Finance Income Cost" 2022: 22,700,000.
"Finance Costs" 2022: 121,800,000.
This implies Finance Income was roughly 99.1M? Or is "Finance Income Cost" a net line item?
Usually, "Finance Costs" is an expense. "Finance Income" is income.
If "Finance Income Cost" is a net line, it's positive 22.7M? That would mean net income.
But "Finance Costs" is 121.8M.
Let's look at the Cash Flow adjustments.
"Adjustments For Finance Income Cost" = 101,500,000.
This adjustment is added to Operating Profit to get to Cash Flow from Operations?
Operating Profit = 1,333.5M.
If we add back Finance Costs (121.8M) and subtract Finance Income, we get the adjustment.
If the adjustment is 101.5M, and Finance Costs are 121.8M, then Finance Income must be around 20.3M.
121.8 - 20.3 = 101.5.
This matches the "Finance Income Cost" line if it represents Net Finance Income? No, 22.7M is listed separately.
Let's assume the Cash Interest Paid (154.8M) is the correct cash outflow for interest. This figure is explicit in the Cash Flow statement.

Final check on FFO.
Some definitions of FFO for utilities include "Cash Flow from Operations" before working capital changes, minus cash interest and taxes?
CFO before WC = 2,072.7M.
If we use this as the starting point (which is effectively EBITDA + non-cash operating items):
FFO = 2,072.7M - Cash Interest (154.8M) - Cash Taxes (380.1M) = 1,537.8M.
The difference between using EBITDA (2,052.3M) and CFO before WC (2,072.7M) is the non-cash operating items (provisions, etc.).
S&P's definition of FFO is generally: Net Income + Depreciation + Deferred Taxes + Other Non-Cash Items.
Or: EBITDA - Cash Interest - Cash Taxes + Change in Working Capital? No, FFO is usually pre-working capital or includes sustainable working capital.
However, the prompt *explicitly* gives the formula: `FFO = Adjusted_EBITDA - cash_interest - cash_taxes`.
I must follow the prompt's formula.
So I will use FFO = 1,517,400,000.

Ratio = 1,517,400,000 / 9,450,000,000 = 0.160571...

<answer>0.1606</answer>