UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
 
FORM 8-K 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 8, 2017
 
Vivint Solar, Inc.
(Exact name of registrant as specified in its charter)

			
  Delaware
(State or other jurisdiction
of incorporation)	001-36642
(Commission
File Number)	45-5605880
(IRS Employer
Identification No.)	
 
1800 West Ashton Blvd.
Lehi, Utah 84043
(Address of principal executive offices, including zip code)
(877) 404-4129
(Registrant’s telephone number, including area code)
(Former name or former address, if changed since last report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company  ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☒

 

Item  2.02	Results of Operations and Financial Condition.	
On August 8, 2017, Vivint Solar, Inc. (the “Company”) issued a press release reporting its financial results for the second quarter ended June 30, 2017. A copy of the press release is furnished herewith as Exhibit 99.1.
The Company makes reference to non-GAAP financial measures in the press release, and includes information regarding such measures in the press release.
The Company also posted a memorandum to the investors section of its website outlining the Company’s methodology for estimating its cost per watt for installing solar energy systems that has been updated for its financial results for the second quarter ended June 30, 2017.
The information furnished in this Current Report under Item 2.02 and the exhibit attached hereto shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

 

Item  9.01	Financial Statements and Exhibits.	
(d) Exhibits.	 	 	
Pursuant to the rules and regulations of the Securities and Exchange Commission, the attached exhibit is deemed to have been furnished to, but not filed with, the Securities and Exchange Commission:	
Exhibit Number	  	Description	
99.1	  	Vivint Solar, Inc. press release dated August 8, 2017	

 

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Vivint Solar, Inc.

 	By:	/s/ DANA RUSSELL
 Dana Russell
Chief Financial Officer	
 		and Executive Vice President	
Date: August 8, 2017

 

EXHIBIT INDEX

Exhibit Number	  	Description	
99.1	  	Vivint Solar, Inc. press release dated August 8, 2017	

Exhibit 99.1

VIVINT SOLAR ANNOUNCES SECOND QUARTER 2017 RESULTS

LEHI, Utah, August 8, 2017 -- Vivint Solar (NYSE: VSLR), today announced financial results for the second quarter ended June 30, 2017.
 
Second Quarter 2017 Operating Highlights
 
Key operating and development highlights for the quarter ended June 30, 2017 include:
 
 	•	MW Booked of approximately 55 MWs for the quarter.	
 
 	•	MW Installed of approximately 47 MWs. Total cumulative MWs installed were approximately 774 MWs.	
 
 	•	Installations were 7,108 for the quarter. Cumulative installations were 113,287.	
 
 	•	Estimated Nominal Contracted Payments Remaining increased by approximately $111 million during the quarter to approximately $2.8 billion.	
 
 	•	Estimated Retained Value increased by approximately $75 million during the quarter to approximately $1.5 billion.	
 
 	•	Estimated Retained Value per Watt was $1.98.	
 
 	•	Cost per Watt was $2.88, a decrease from $2.98 in the first quarter of 2017 and down from $2.94 in the second quarter of 2016.	
 
Second Quarter 2017 GAAP Financial Results
 
Summary GAAP financial results for the quarter ended June 30, 2017 include:
 
 	•	Operating Leases and Incentives Revenue was $43.4 million, up 45% from $30.0 million in the second quarter of the prior year. Total revenue for the quarter was $73.0 million, up 109% from $34.9 million in the second quarter of the prior year.	
 
 	•	Cost of Revenue – Operating Leases and Incentives was $33.8 million, down from $38.5 million in the same period of 2016 .	

 
 
 	•	Total Operating Expenses, including cost of revenue, were $87.3 million, compared to $71.4 million in the second quarter of 2016.	
 
 	•	Loss from Operations was $14.3 million compared to $36.5 million in the same period of 2016.	
 
 	•	GAAP Net Income Available (Loss Attributable) per Diluted Share to Common Stockholders was $0.04, down from $0.11 in the second quarter of 2016.	
 
 	•	Non-GAAP Net Loss Attributable Before Non-Controlling Interests and Redeemable Non-Controlling Interests per Share was ($0.33), up from ($0.49) in the same period of 2016. See below for a further discussion of Non-GAAP Loss per Share.	
 
 	•	Cash and Cash Equivalents as of June 30, 2017 were $115.6 million.	
 
Financing Activity
 
As of June 30, 2017, the Company had $15 million in undrawn capacity in the working capital facility, had $308 million in undrawn capacity in the aggregation facility, and had approximately 109 MWs of installation capacity remaining in its tax equity funds.
 
Guidance for Third Quarter 2017
 
The following statements are based on current expectations. These statements are forward-looking, and actual results may differ materially. These statements supersede all prior statements regarding 2017 financial results.
 
For the third quarter of 2017, Vivint Solar expects:
 
 	•	MW Installed: 46 to 52 MWs	
 
 	•	Cost per Watt: $2.80 - $2.90	
 
Earnings Conference Call
 
 Vivint Solar will host an investor conference call and live webcast today, Tuesday, August 8, 2017, at 5:00 p.m. ET to discuss these financial results. To access the conference call, dial 1.844.579.6824 or 1.763.488.9145 for international callers. The conference ID is 5190 5606. A listen-only webcast will be accessible on the investor relations page of the Company’s website at http://investors.vivintsolar.com  and will be archived and available on this site until August 31, 2017. Participants should follow the instructions provided on the website to download and install the necessary audio applications in advance of the call. In addition, the earnings presentation slides will be available on the investor relations page of the site by 5:00 p.m. ET along with this press

 
release and the financial information discussed on today’s conference call at http://investo rs.vivintsolar.com .
 
About Vivint Solar
 
Vivint Solar is a leading full-service residential solar provider in the United States. With Vivint Solar, customers can power their homes with clean, renewable energy and typically achieve significant financial savings over time. Offering integrated residential solar solutions for the entire customer lifecycle, Vivint Solar designs and installs the solar energy systems for its customers, and offers monitoring and maintenance services. In addition to being able to purchase a solar energy system outright, customers may benefit from Vivint Solar's affordable, flexible financing options, power purchase agreements, or lease agreements, where available. Through an exclusive collaboration, Vivint Solar also offers solar plus storage systems with Mercedes-Benz batteries. For more information, visit www.vivintsolar.com or follow @VivintSolar on Twitter.
 
Note on Forward-Looking Statements
 
This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995, including statements regarding Vivint Solar’s guidance for megawatts installed and cost per watt, installation capacity remaining in tax equity funds, growth prospects, and operating and financial results, such as estimates of nominal contracted payments remaining, estimated retained value, estimated retained value per watt, including the assumptions related to the calculation of the foregoing metrics.
 
 Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Forward-looking statements should not be read as a guarantee of future performance or results, and they will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved, if at all. These statements are based on current expectations and assumptions regarding future events and business performance as of the date of this press release, and they are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements, including but not limited to: the availability of additional financing on acceptable terms; changes in the retail price of traditional utility generated electricity; changes in electric utility policies and regulations; the availability of rebates, tax credits and other incentives, including solar renewable energy certificates, or SRECs, and other federal and state incentives; regulations and policies related to net metering; changes in regulations, tariffs and other trade barriers and tax policy affecting us and our industry; our ability to manage our recent and future growth effectively, including attracting, training and retaining sales personnel and solar energy system installers; the availability and price of solar panels and other system components, the assumptions employed in calculating our operating metrics may be inaccurate; and such other risks identified in the registration statements and reports that Vivint Solar files with the U.S. Securities and Exchange Commission, or SEC, from time to time.

 
Although we believe that the expectations reflected in the forwa rd-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in those statements will be achieved or will occur, and actual results could differ materially from tho se anticipated or implied in the forward-looking statements. Except as required by law, Vivint Solar does not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments o r otherwise. You should read the documents Vivint Solar has filed with the SEC for more complete information about the company. These documents are available on both the EDGAR section of the SEC’s website at www.sec.gov and the Investor Relations section o f the Company’s website at http://investors.vivintsolar.com .

 

Vivint Solar, Inc.	 	
Condensed Consolidated Unaudited Balance Sheets	 	
(In thousands)	 	
 	 	 	 	 	 	 	 	
 	June 30,	 	 	December 31,	 	
 	2017	 	 	2016	 	
ASSETS	 	 	 	 	 	 	 	
Current assets:	 	 	 	 	 	 	 	
Cash and cash equivalents	$	115,612	 	 	$	96,586	 	
Accounts receivable, net	 	21,673	 	 	 	12,658	 	
Inventories	 	16,141	 	 	 	11,285	 	
Prepaid expenses and other current assets	 	26,516	 	 	 	46,683	 	
Total current assets	 	179,942	 	 	 	167,212	 	
Restricted cash and cash equivalents	 	43,284	 	 	 	26,853	 	
Solar energy systems, net	 	1,567,598	 	 	 	1,458,355	 	
Property and equipment, net	 	18,934	 	 	 	23,199	 	
Intangible assets, net	 	1,141	 	 	 	1,420	 	
Prepaid tax asset, net	 	462,580	 	 	 	419,474	 	
Other non-current assets, net	 	38,186	 	 	 	29,843	 	
TOTAL ASSETS	$	2,311,665	 	 	$	2,126,356	 	
LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS AND EQUITY	 	 	 	 	 	 	 	
Current liabilities:	 	 	 	 	 	 	 	
Accounts payable	$	38,830	 	 	$	46,630	 	
Accounts payable—related party	 	138	 	 	 	191	 	
Distributions payable to non-controlling interests and redeemable non-controlling interests	 	9,455	 	 	 	16,176	 	
Accrued compensation	 	18,276	 	 	 	20,003	 	
Current portion of long-term debt	 	12,940	 	 	 	6,252	 	
Current portion of deferred revenue	 	27,173	 	 	 	19,911	 	
Current portion of capital lease obligation	 	4,684	 	 	 	5,163	 	
Accrued and other current liabilities	 	24,890	 	 	 	19,364	 	
Total current liabilities	 	136,386	 	 	 	133,690	 	
Long-term debt, net of current portion	 	854,838	 	 	 	750,728	 	
Deferred revenue, net of current portion	 	33,786	 	 	 	34,379	 	
Capital lease obligation, net of current portion	 	3,262	 	 	 	5,476	 	
Deferred tax liability, net	 	458,865	 	 	 	395,218	 	
Other non-current liabilities	 	13,679	 	 	 	10,355	 	
Total liabilities	 	1,500,816	 	 	 	1,329,846	 	
Commitments and contingencies	 	 	 	 	 	 	 	
Redeemable non-controlling interests	 	132,392	 	 	 	129,676	 	
Stockholders' equity:	 	 	 	 	 	 	 	
Common stock	 	1,142	 	 	 	1,102	 	
Additional paid-in capital	 	551,807	 	 	 	542,348	 	
Accumulated other comprehensive income	 	6,430	 	 	 	7,631	 	
Retained earnings	 	22,281	 	 	 	5,217	 	
Total stockholders' equity	 	581,660	 	 	 	556,298	 	
Non-controlling interests	 	96,797	 	 	 	110,536	 	
Total equity	 	678,457	 	 	 	666,834	 	
TOTAL LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS AND EQUITY	$	2,311,665	 	 	$	2,126,356	 	

 
Vivint Solar, Inc.	 	
Condensed Consolidated Unaudited Statements of Operations	 	
(In thousands, except per share data)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Three Months Ended	 	 	Six Months Ended	 	
 	June 30,	 	 	June 30,	 	
 	2017	 	 	2016	 	 	2017	 	 	2016	 	
Revenue:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating leases and incentives	$	43,413	 	 	$	30,061	 	 	$	73,802	 	 	$	46,639	 	
Solar energy system and product sales	 	29,582	 	 	 	4,843	 	 	 	52,307	 	 	 	5,495	 	
Total revenue	 	72,995	 	 	 	34,904	 	 	 	126,109	 	 	 	52,134	 	
Operating expenses:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cost of revenue—operating leases and incentives	 	33,763	 	 	 	38,538	 	 	 	68,833	 	 	 	76,298	 	
Cost of revenue—solar energy system and product sales	 	22,831	 	 	 	3,716	 	 	 	41,496	 	 	 	4,138	 	
Sales and marketing	 	9,411	 	 	 	10,813	 	 	 	18,229	 	 	 	23,461	 	
Research and development	 	895	 	 	 	144	 	 	 	1,791	 	 	 	1,376	 	
General and administrative	 	20,301	 	 	 	18,064	 	 	 	40,880	 	 	 	40,984	 	
Amortization of intangible assets	 	139	 	 	 	155	 	 	 	279	 	 	 	420	 	
Impairment of goodwill	 	—	 	 	 	—	 	 	 	—	 	 	 	36,601	 	
Total operating expenses	 	87,340	 	 	 	71,430	 	 	 	171,508	 	 	 	183,278	 	
Loss from operations	 	(14,345	)	 	 	(36,526	)	 	 	(45,399	)	 	 	(131,144	)	
Interest expense	 	16,838	 	 	 	7,413	 	 	 	31,559	 	 	 	13,178	 	
Other expense, net	 	715	 	 	 	309	 	 	 	991	 	 	 	339	 	
Loss before income taxes	 	(31,898	)	 	 	(44,248	)	 	 	(77,949	)	 	 	(144,661	)	
Income tax expense	 	5,156	 	 	 	8,055	 	 	 	14,557	 	 	 	13,204	 	
Net loss	 	(37,054	)	 	 	(52,303	)	 	 	(92,506	)	 	 	(157,865	)	
Net loss attributable to non-controlling interests and redeemable
   non-controlling interests	 	(42,034	)	 	 	(64,674	)	 	 	(110,778	)	 	 	(139,017	)	
Net income available (loss attributable) to common stockholders	$	4,980	 	 	$	12,371	 	 	$	18,272	 	 	$	(18,848	)	
Net income available (loss attributable) per share to common
   stockholders:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic	$	0.04	 	 	$	0.12	 	 	$	0.16	 	 	$	(0.18	)	
Diluted	$	0.04	 	 	$	0.11	 	 	$	0.16	 	 	$	(0.18	)	
Weighted-average shares used in computing net income available
   (loss attributable) per share to common stockholders:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic	 	112,351	 	 	 	107,226	 	 	 	111,562	 	 	 	106,922	 	
Diluted	 	117,570	 	 	 	111,380	 	 	 	116,988	 	 	 	106,922	 	

 
Vivint Solar, Inc.	 	
Condensed Consolidated Unaudited Statements of Cash Flows	 	
(In thousands)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Three Months Ended	 	 	Six Months Ended	 	
 	June 30,	 	 	June 30,	 	
 	2017	 	 	2016	 	 	2017	 	 	2016	 	
CASH FLOWS FROM OPERATING ACTIVITIES:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net loss	$	(37,054	)	 	$	(52,303	)	 	$	(92,506	)	 	$	(157,865	)	
Adjustments to reconcile net loss to net cash used in operating
   activities:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Depreciation and amortization	 	14,877	 	 	 	10,773	 	 	 	29,039	 	 	 	19,876	 	
Amortization of intangible assets	 	139	 	 	 	155	 	 	 	279	 	 	 	420	 	
Impairment of goodwill	 	—	 	 	 	—	 	 	 	—	 	 	 	36,601	 	
Deferred income taxes	 	29,130	 	 	 	39,466	 	 	 	65,255	 	 	 	83,837	 	
Stock-based compensation	 	3,330	 	 	 	842	 	 	 	7,252	 	 	 	2,467	 	
Loss on solar energy systems and property and equipment	 	1,741	 	 	 	(185	)	 	 	3,766	 	 	 	259	 	
Non-cash interest and other expense	 	3,185	 	 	 	1,567	 	 	 	5,311	 	 	 	2,997	 	
Reduction in lease pass-through financing obligation	 	(1,346	)	 	 	(1,228	)	 	 	(1,995	)	 	 	(1,666	)	
Losses on interest rate swaps	 	717	 	 	 	—	 	 	 	993	 	 	 	—	 	
Excess tax detriment from stock-based compensation	 	—	 	 	 	(588	)	 	 	—	 	 	 	(981	)	
Changes in operating assets and liabilities:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Accounts receivable, net	 	(4,534	)	 	 	(4,915	)	 	 	(9,015	)	 	 	(8,304	)	
Inventories	 	(2,741	)	 	 	(2,337	)	 	 	(4,856	)	 	 	(3,236	)	
Prepaid expenses and other current assets	 	(6,528	)	 	 	4,449	 	 	 	21,373	 	 	 	2,307	 	
Prepaid tax asset, net	 	(18,925	)	 	 	(45,043	)	 	 	(43,106	)	 	 	(87,040	)	
Other non-current assets, net	 	(2,164	)	 	 	(1,587	)	 	 	(6,025	)	 	 	(3,294	)	
Accounts payable	 	(358	)	 	 	(623	)	 	 	(62	)	 	 	(1,078	)	
Accounts payable—related party	 	(398	)	 	 	(393	)	 	 	(53	)	 	 	(1,412	)	
Accrued compensation	 	(259	)	 	 	308	 	 	 	(2,022	)	 	 	4,638	 	
Deferred revenue	 	4,560	 	 	 	116	 	 	 	6,669	 	 	 	1,174	 	
Accrued and other liabilities	 	(194	)	 	 	3,293	 	 	 	6,279	 	 	 	1,578	 	
Net cash used in operating activities	 	(16,822	)	 	 	(48,233	)	 	 	(13,424	)	 	 	(108,722	)	
CASH FLOWS FROM INVESTING ACTIVITIES:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Payments for the cost of solar energy systems	 	(69,893	)	 	 	(104,925	)	 	 	(145,033	)	 	 	(211,622	)	
Payments for property and equipment	 	(355	)	 	 	(496	)	 	 	(633	)	 	 	(1,888	)	
Proceeds from disposals of solar energy systems and property
   and equipment	 	929	 	 	 	374	 	 	 	1,100	 	 	 	374	 	
Change in restricted cash and cash equivalents	 	3,326	 	 	 	(1,904	)	 	 	(16,431	)	 	 	(4,517	)	
Purchase of intangible assets	 	—	 	 	 	—	 	 	 	—	 	 	 	(291	)	
Net cash used in investing activities	 	(65,993	)	 	 	(106,951	)	 	 	(160,997	)	 	 	(217,944	)	
CASH FLOWS FROM FINANCING ACTIVITIES:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Proceeds from investment by non-controlling interests and
   redeemable non-controlling interests	 	56,954	 	 	 	93,277	 	 	 	115,514	 	 	 	183,263	 	
Distributions paid to non-controlling interests and redeemable
   non-controlling interests	 	(7,453	)	 	 	(5,419	)	 	 	(22,480	)	 	 	(11,813	)	
Proceeds from long-term debt	 	20,000	 	 	 	50,204	 	 	 	273,750	 	 	 	144,706	 	
Payments on long-term debt	 	(18,145	)	 	 	—	 	 	 	(159,304	)	 	 	(4,150	)	
Payments for debt issuance costs	 	(2,980	)	 	 	—	 	 	 	(13,410	)	 	 	(6,230	)	
Proceeds from lease pass-through financing obligation	 	635	 	 	 	579	 	 	 	1,487	 	 	 	860	 	
Principal payments on capital lease obligations	 	(1,147	)	 	 	(1,497	)	 	 	(2,343	)	 	 	(3,059	)	
Proceeds from issuance of common stock	 	86	 	 	 	490	 	 	 	233	 	 	 	490	 	
Net cash provided by financing activities	 	47,950	 	 	 	137,634	 	 	 	193,447	 	 	 	304,067	 	
NET (DECREASE) INCREASE IN CASH AND CASH
   EQUIVALENTS	 	(34,865	)	 	 	(17,550	)	 	 	19,026	 	 	 	(22,599	)	
CASH AND CASH EQUIVALENTS—Beginning of period	 	150,477	 	 	 	87,164	 	 	 	96,586	 	 	 	92,213	 	
CASH AND CASH EQUIVALENTS—End of period	$	115,612	 	 	$	69,614	 	 	$	115,612	 	 	$	69,614	 	

 
Vivint Solar, Inc.	 	
Key Operating Metrics	 	

 	Three Months Ended	 	
 	June 30,	 	 	March 31,	 	 	June 30,	 	
 	2017	 	 	2017	 	 	2016	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Installations	 	7,108	 	 	 	6,581	 	 	 	8,641	 	
Megawatts installed	 	46.9	 	 	 	45.8	 	 	 	61.4	 	
Cumulative installations	 	113,287	 	 	 	106,179	 	 	 	84,872	 	
Cumulative megawatts installed	 	773.8	 	 	 	726.9	 	 	 	575.2	 	
Estimated nominal contracted payments remaining (in millions)	$	2,802.4	 	 	$	2,691.9	 	 	$	2,255.3	 	
      Estimated retained value under energy contract (in millions)	$	1,121.6	 	 	$	1,068.3	 	 	$	862.0	 	
      Estimated retained value of renewal (in millions)	$	339.0	 	 	$	317.4	 	 	$	252.9	 	
Estimated retained value (in millions)	$	1,460.6	 	 	$	1,385.7	 	 	$	1,115.0	 	
Estimated retained value per watt	$	1.98	 	 	$	1.97	 	 	$	1.95	 	
Sensitivity Analysis for Retained Value
The following table provides quantitative sensitivity analysis of our estimate of retained value of solar energy systems under contract as of June 30, 2017, including both the contracted and estimated renewal portion, at a range of discount rates (retained value amounts in million):

 	 	4%	 	 	 	6%	 	 	 	8%	 	
Estimated retained value under energy contract	$	1,342.6	 	 	$	1,121.6	 	 	$	948.6	 	
Estimated retained value of renewal	 	532.2	 	 	 	339.0	 	 	 	218.4	 	
Total estimated retained value	$	1,874.8	 	 	$	1,460.6	 	 	$	1,167.0	 	

 
Non-GAAP Earnings per Share (EPS) Before Noncontrolling Interests
We report GAAP EPS, which is based upon net income available (loss attributable) to common stockholders. We also report non-GAAP EPS. The difference between GAAP EPS and non-GAAP EPS is that non-GAAP EPS is based on net loss, which excludes net loss attributable to non-controlling interests and redeemable non-controlling interests. Additionally, we have excluded the effect of the goodwill impairment for the six months ended June 30, 2016 as it is a non-cash, non-recurring event that is not representative of our ongoing business. As we are in a net loss position for all periods reported, potentially issuable shares are excluded from the diluted EPS calculation since the effect would be antidilutive. Therefore, basic and diluted non-GAAP EPS are the same in each period presented.
Under GAAP accounting, we report net loss attributable to non-controlling interests and redeemable non-controlling interests to reflect our joint venture fund investors’ allocable share in the results of these joint venture investment funds. Net loss attributable to non-controlling interests and redeemable non-controlling interests is calculated based primarily on the hypothetical liquidation at book value, or HLBV, method, which assumes that the joint venture funds are liquidated at the reporting date, even though liquidation may or may not ever occur. Additionally, the returns that will be allocated to the investors over the expected terms of the investment funds may differ significantly from the amounts calculated under the HLBV method. Accordingly, we also report non-GAAP EPS based on our losses before net loss attributable to non-controlling interests and redeemable non-controlling interests per share, which we view as a better measure of our operating performance.  Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP.
According to this definition, the non-GAAP loss before the allocation of loss attributable to non-controlling interests and redeemable non-controlling interests per share was ($0.33) and ($0.83) for the three and six months ended June 30, 2017.

Vivint Solar, Inc.	 	
Reconciliation from GAAP EPS to Non-GAAP EPS	 	
(In thousands, except per share data)	 	

 	Three Months Ended	 	
 	June 30, 2017	 	 	June 30, 2016	 	
 	Net Loss	 	 	EPS	 	 	Net Loss	 	 	EPS	 	
Net income available (loss attributable) to common stockholders	$	4,980	 	 	$	0.04	 	 	$	12,371	 	 	$	0.12	 	
Net loss attributable to non-controlling interests and
   redeemable non-controlling interests	 	(42,034	)	 	 	(0.37	)	 	 	(64,674	)	 	 	(0.61	)	
Non-GAAP net loss	$	(37,054	)	 	$	(0.33	)	 	$	(52,303	)	 	$	(0.49	)	
Weighted-average shares used in computing net loss per share	 	 	 	 	 	112,351	 	 	 	 	 	 	 	107,226	 	
 
 	Six Months Ended	 	
 	June 30, 2017	 	 	June 30, 2016	 	
 	Net Loss	 	 	EPS	 	 	Net Loss	 	 	EPS	 	
Net income available (loss attributable) to common stockholders	$	18,272	 	 	$	0.16	 	 	$	(18,848	)	 	$	(0.18	)	
Net loss attributable to non-controlling interests and
   redeemable non-controlling interests	 	(110,778	)	 	$	(0.99	)	 	 	(139,017	)	 	$	(1.29	)	
Impairment of goodwill	 	—	 	 	$	—	 	 	 	36,601	 	 	$	0.34	 	
Non-GAAP net loss	$	(92,506	)	 	$	(0.83	)	 	$	(121,264	)	 	$	(1.13	)	
Weighted-average shares used in computing net loss per share:	 	 	 	 	 	111,562	 	 	 	 	 	 	 	106,922	 	

 
Glossary of Definitions
 
“ Installations ” represents the number of solar energy systems installed on customers’ premises.
 
“ MWs or megawatts ” represents the DC nameplate megawatt production capacity.
 
“ MW Booked ” represents the aggregate megawatt nameplate capacity of solar energy systems that were permitted during the period net of cancellations in the period.
 
“ MW Installed ” represents the aggregate megawatt nameplate capacity of solar energy systems for which panels, inverters, and mounting and racking hardware have been installed on customer premises in the period.
 
“ Nominal Contracted Payments Remaining ” equals the sum of the remaining cash payments that Vivint Solar’s customers are expected to pay over the term of their agreements for systems installed as of the measurement date. For a power purchase agreement, Vivint Solar multiplies the contract price per kilowatt-hour by the estimated annual energy output of the associated solar energy system to determine the estimated nominal contracted payments. For a customer lease, Vivint Solar includes the monthly fees and upfront fee, if any, as set forth in the lease.
 
“ Retained Value ” represents the net cash flows, discounted at 6%, that Vivint Solar expects to receive from customers pursuant to long-term customer contracts net of estimated cash distributions to fund investors and estimated operating expenses for systems installed as of the measurement date. For purposes of the calculation, Vivint Solar aggregates the estimated retained value from the solar energy systems during the typical 20-year term of Vivint Solar’s contracts, which Vivint Solar refers to as estimated retained value under energy contracts, and the estimated retained value associated with an assumed 10-year renewal term following the expiration of the initial contract term, which Vivint Solar refers to as estimated retained value of renewal. To calculate estimated retained value of renewal, Vivint Solar assumes all contracts are renewed at 90% of the contractual price in effect at the expiration of the initial term.
 
“ Retained Value per Watt ” is calculated by dividing the estimated retained value as of the measurement date by the aggregate nameplate capacity of solar energy systems under long-term customer contracts that have been installed as of such date, and is subject to the same assumptions and uncertainties as estimated retained value.
 
“ Undeployed Tax Equity Financing Capacity ” represents a forecast of the amount of megawatts that can be deployed based on committed available tax equity financing for energy contracts.

 
 
Investor Contact:
 
Rob Kain
Vice President of Investor Relations
855-842-1844
ir@vivintsolar.com
 
Media Contact:

Helen Langan
Director of Public Relations
385-202-6577
pr@vivintsolar.com
 
Agency Contact:
 
Ashlyn Hewlett
Method Communications
801-461-9772
ashlyn@methodcommunications.com