IB/PE Infrastructure Team Interview Question

Fellow chimps and senior monkeys,

I have a second round interview coming up for a large Energy Infrastructure PE fund (investment team intern). Whilst prepping I came across a potential question where I am unsure whether my answer would be correct.

The Q: “What happens to the 3 statements (of a renewable energy provider) if one (ore multiple) wind turbines break down due to natural disaster?”

First to make it easy I would assume that the park consists if 10 wind turbines and 1 is destroyed. And thus the assest would produce 10% less energy (if it’s not fixed)*

So to start with IS: revenue is down 10% (let’s say 10$) D&A/I is up by the value of the turbine (let’s say 10). EBT is this down 20. Tax is 40%. Thus NR is down by 12$.

CF: NR is down by 12$ and 10$ is added so overall cash is down by 2$. I don’t assume any CAPEX or investment.

BS: cash is down by 2$ Non-current assets are down by 10$ so overall the asset side is down by 12$. On the liability side this is balanced by a 12$ decrease in equity.

My questions now are: 1) is that technically correct? 2) is it feasible to assume a revenue loss? 3) should potential insurance coverage also be assumed? 4) is the destruction of a productive asset shown in the IS as an impairment loss?

Thanks for taking your time, I wish y’all a great Sunday 🍌🍌