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): November 6, 2019
 
Vivint Solar, Inc.
(Exact name of registrant as specified in its charter)

			
Delaware	001-36642	45-5605880	
(State or other jurisdiction
of incorporation)	(Commission File Number)	(IRS Employer
Identification No.)	
 	 	 	
1800 West Ashton Blvd.
Lehi, UT	 	84043	
(Address of Principal Executive Offices)	 	(Zip Code)	
Registrant’s telephone number, including area code: (877) 404-4129
Not Applicable
(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))
Securities registered pursuant to Section 12(b) of the Act:
 
Title of each class	 	Trading
Symbol	 	Name of each exchange on which registered	
Common Stock, par value $0.01 per share	 	VSLR	 	New York Stock Exchange	
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 November 6, 2019, Vivint Solar, Inc. (the “Company”) issued a press release reporting its financial results for the quarter ended September 30, 2019. 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, which has been updated for its financial results for the quarter ended September 30, 2019.
The information furnished in this Current Report under Item 2.02 and the exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or incorporated by reference in any filing under the Securities Act of 1933, as amended, 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 November 6, 2019	

 

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.	
 	 	 	 	
Date: November 6, 2019	 	By:	/s/ Dana Russell	
 	 	 	Dana Russell	
 	 	 	Chief Financial Officer and Executive Vice President	

Exhibit 99.1

Vivint Solar Reports Third Quarter 2019 Results

LEHI, Utah, November 6, 2019 -- Vivint Solar, Inc. (NYSE: VSLR), today announced financial results for the third quarter ended September 30, 2019.
 
Third Quarter 2019 Operating Highlights
 
Key operating and development highlights include:
 
 	•	MW Installed of approximately 65 MWs for the quarter, up 20% year-over-year. Total cumulative MWs installed were approximately 1,228 MWs.	
 
 	•	Installations were 9,458 for the quarter, up 25% year-over-year. Cumulative installations were 178,733.	
 
 	•	Revenue was $104 million, up 33% over the third quarter of 2018.	
 
 	•	Estimated Gross Retained Value increased by approximately $74 million during the quarter to approximately $2.2 billion. Estimated Gross Retained Value per Watt at quarter end was $1.98.	
 
 	•	Cost per Watt was $3.48, a decrease from $3.56 in the second quarter of 2019 and an increase from $3.16 in the third quarter of 2018.	
 
 	•	Margin created was $69 million, a 23% increase from the third quarter of 2018. Unlevered NPV per Watt was $1.06.	

Financing Activity
 
As of September 30, 2019, the company had approximately $100 million in undrawn capacity in the forward flow loan facilities, $155 million in undrawn capacity in the warehouse facility, and approximately 126 MWs of undeployed tax equity financing capacity.

 
Summary Third Quarter 2019 Financial Results
 
$ amounts in millions, except per share data	 	 	 	 	 	 	 	 	 	 	 	
 	Three Months Ended Sept. 30,	 	
 	2019	 	 	2018	 	 	YoY	 	
Revenue:	 	 	 	 	 	 	 	 	 	 	 	
     Customer agreements and incentives	$	70.8	 	 	$	53.5	 	 	up 32%	 	
     Solar energy system and product sales	 	33.0	 	 	 	24.3	 	 	up 36%	 	
Total Revenue	 	103.8	 	 	 	77.8	 	 	up 33%	 	
Cost of revenue:	 	 	 	 	 	 	 	 	 	 	 	
     Customer agreements and incentives	 	49.0	 	 	 	42.1	 	 	up 16%	 	
     Solar energy system and product sales	 	19.4	 	 	 	17.7	 	 	up 10%	 	
Total cost of revenue	 	68.4	 	 	 	59.8	 	 	up 14%	 	
Gross profit	 	35.4	 	 	 	18.0	 	 	up 97%	 	
Loss from operations	 	(44.0	)	 	 	(28.3	)	 	down 56%	 	
Net loss attributable to common stockholders	$	(13.8	)	 	$	(7.9	)	 	down 76%	 	
Net loss attributable per share to common stockholders	$	(0.11	)	 	$	(0.07	)	 	down 57%	 	
Non-GAAP net loss per share	$	(0.99	)	 	$	(0.61	)	 	down 62%	 	
 
Note: Totals may not sum due to rounding.

Guidance for the Fourth Quarter 2019
 
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 projected 2019 financial results.
 
For the fourth quarter of 2019, Vivint Solar expects:
 
 	•	MW Installed: 64 - 67 MWs	
 
 	•	Cost per Watt: $3.46 - $3.54	
 
 	•	NPV/W: $1.04 - $1.08	

Earnings Conference Call
 
Vivint Solar will host an investor conference call and live webcast today, Wednesday, November 6, 2019, at 5:00 p.m. ET to discuss these financial results. To access the conference call, dial 1.833.286.5799 or 1.647.689.4443 for international callers. The conference ID is 817 9606. A listen-only webcast will be accessible on the investor relations page of the company’s website at investors.vivintsolar.com/. 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 investors.vivintsolar.com/.

 
 
About Vivint Solar
 
Vivint Solar is a leading full-service residential solar provider in the United States. With the help of Vivint Solar, homeowners can power their homes with clean, renewable energy, typically achieving significant financial savings over time. Vivint Solar designs and installs solar energy systems for homeowners and offers monitoring and maintenance services. In addition to being able to purchase a solar energy system outright, homeowners may benefit from Vivint Solar's affordable, flexible financing options, including power purchase agreements, or lease agreements, where available. Vivint Solar also offers solar plus storage systems with LG Chem home batteries and electric vehicle chargers with ChargePoint Home. 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, but not limited to, Vivint Solar’s guidance for Megawatts Installed and Cost per Watt, undeployed tax equity financing capacity, growth prospects, and operating and financial results, such as estimates of nominal contracted payments remaining, estimated retained value, estimated retained value per watt, margin created and unlevered NPV per Watt and 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, product offering mix, and costs effectively, including attracting, training and retaining sales professionals and solar energy system installers; the availability and price of solar panels and other system components; the potential inaccuracy of the assumptions employed in calculating our operating metrics; the course and outcome of litigation, regulatory investigations and other disputes; 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 forward-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 those anticipated or implied in the forward-looking statements. Except as required by law, Vivint Solar does not undertake and expressly disclaims any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or 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 Investors section of the company’s website at investors.vivintsolar.com/.

 

Vivint Solar, Inc.	 	
Condensed Consolidated Unaudited Balance Sheets	 	
(In thousands)	 	
 	 	 	 	 	 	 	 	
 	September 30,	 	 	December 31,	 	
 	2019	 	 	2018	 	
ASSETS	 	 	 	 	 	 	 	
Current assets:	 	 	 	 	 	 	 	
Cash and cash equivalents	$	260,753	 	 	$	219,591	 	
Accounts receivable, net	 	27,203	 	 	 	14,207	 	
Inventories	 	13,727	 	 	 	13,257	 	
Prepaid expenses and other current assets	 	31,895	 	 	 	31,201	 	
Total current assets	 	333,578	 	 	 	278,256	 	
Restricted cash and cash equivalents	 	83,743	 	 	 	71,305	 	
Solar energy systems, net	 	1,696,129	 	 	 	1,938,874	 	
Property and equipment, net	 	14,332	 	 	 	10,730	 	
Other non-current assets, net	 	567,872	 	 	 	28,090	 	
TOTAL ASSETS	$	2,695,654	 	 	$	2,327,255	 	
LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS AND EQUITY	 	 	 	 	 	 	 	
Current liabilities:	 	 	 	 	 	 	 	
Accounts payable	$	48,118	 	 	$	45,929	 	
Distributions payable to non-controlling interests and redeemable non-controlling interests	 	17,328	 	 	 	7,846	 	
Accrued compensation	 	40,647	 	 	 	25,520	 	
Current portion of long-term debt	 	144,532	 	 	 	12,155	 	
Current portion of deferred revenue	 	28,684	 	 	 	30,199	 	
Current portion of finance lease obligation	 	1,529	 	 	 	1,921	 	
Accrued and other current liabilities	 	70,238	 	 	 	42,860	 	
Total current liabilities	 	351,076	 	 	 	166,430	 	
Long-term debt, net of current portion	 	1,282,868	 	 	 	1,203,282	 	
Deferred revenue, net of current portion	 	16,450	 	 	 	13,524	 	
Finance lease obligation, net of current portion	 	4,308	 	 	 	505	 	
Deferred tax liability, net	 	539,190	 	 	 	437,120	 	
Other non-current liabilities	 	81,740	 	 	 	24,610	 	
Total liabilities	 	2,275,632	 	 	 	1,845,471	 	
Commitments and contingencies	 	 	 	 	 	 	 	
Redeemable non-controlling interests	 	118,251	 	 	 	119,572	 	
Stockholders’ equity:	 	 	 	 	 	 	 	
Common stock	 	1,221	 	 	 	1,201	 	
Additional paid-in capital	 	586,517	 	 	 	574,248	 	
Accumulated other comprehensive loss	 	(24,388	)	 	 	(7,223	)	
Accumulated deficit	 	(348,430	)	 	 	(279,631	)	
Total stockholders’ equity	 	214,920	 	 	 	288,595	 	
Non-controlling interests	 	86,851	 	 	 	73,617	 	
Total equity	 	301,771	 	 	 	362,212	 	
TOTAL LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS AND EQUITY	$	2,695,654	 	 	$	2,327,255	 	

 
Vivint Solar, Inc.	 	
Condensed Consolidated Unaudited Statements of Operations	 	
(In thousands, except per share data)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Three Months Ended	 	 	Nine Months Ended	 	
 	September 30,	 	 	September 30,	 	
 	2019	 	 	2018	 	 	2019	 	 	2018	 	
Revenue:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Customer agreements and incentives	$	70,819	 	 	$	53,470	 	 	$	173,777	 	 	$	139,349	 	
Solar energy system and product sales	 	33,030	 	 	 	24,346	 	 	 	90,200	 	 	 	87,515	 	
Total revenue	 	103,849	 	 	 	77,816	 	 	 	263,977	 	 	 	226,864	 	
Cost of revenue:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cost of revenue—customer agreements and incentives	 	48,993	 	 	 	42,135	 	 	 	132,258	 	 	 	122,188	 	
Cost of revenue—solar energy system and product sales	 	19,444	 	 	 	17,700	 	 	 	52,498	 	 	 	62,735	 	
Total cost of revenue	 	68,437	 	 	 	59,835	 	 	 	184,756	 	 	 	184,923	 	
Gross profit	 	35,412	 	 	 	17,981	 	 	 	79,221	 	 	 	41,941	 	
Operating expenses:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Sales and marketing	 	46,121	 	 	 	15,841	 	 	 	112,792	 	 	 	40,999	 	
Research and development	 	510	 	 	 	475	 	 	 	1,503	 	 	 	1,472	 	
General and administrative	 	32,760	 	 	 	29,945	 	 	 	87,014	 	 	 	71,941	 	
Total operating expenses	 	79,391	 	 	 	46,261	 	 	 	201,309	 	 	 	114,412	 	
Loss from operations	 	(43,979	)	 	 	(28,280	)	 	 	(122,088	)	 	 	(72,471	)	
Interest expense, net	 	22,804	 	 	 	18,715	 	 	 	61,403	 	 	 	46,973	 	
Other expense (income), net	 	3,907	 	 	 	(1	)	 	 	6,657	 	 	 	(6,371	)	
Loss before income taxes	 	(70,690	)	 	 	(46,994	)	 	 	(190,148	)	 	 	(113,073	)	
Income tax expense	 	50,410	 	 	 	25,698	 	 	 	107,847	 	 	 	79,693	 	
Net loss	 	(121,100	)	 	 	(72,692	)	 	 	(297,995	)	 	 	(192,766	)	
Net loss attributable to non-controlling interests and redeemable
   non-controlling interests	 	(107,265	)	 	 	(64,824	)	 	 	(229,351	)	 	 	(190,038	)	
Net loss attributable to common stockholders	$	(13,835	)	 	$	(7,868	)	 	$	(68,644	)	 	$	(2,728	)	
Net loss attributable per share to common stockholders:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic and diluted	$	(0.11	)	 	$	(0.07	)	 	$	(0.57	)	 	$	(0.02	)	
Weighted-average shares used in computing net loss attributable
   per share to common stockholders:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic and diluted	 	121,730	 	 	 	118,767	 	 	 	120,974	 	 	 	116,871	 	

 
Vivint Solar, Inc.	 	
Condensed Consolidated Unaudited Statements of Cash Flows	 	
(In thousands)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Three Months Ended	 	 	Nine Months Ended	 	
 	September 30,	 	 	September 30,	 	
 	2019	 	 	2018	 	 	2019	 	 	2018	 	
CASH FLOWS FROM OPERATING ACTIVITIES:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net loss	$	(121,100	)	 	$	(72,692	)	 	$	(297,995	)	 	$	(192,766	)	
Adjustments to reconcile net loss to net cash used in operating
   activities:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Depreciation and amortization	 	21,926	 	 	 	17,807	 	 	 	61,243	 	 	 	51,247	 	
Deferred income taxes	 	50,666	 	 	 	25,948	 	 	 	108,344	 	 	 	80,121	 	
Stock-based compensation	 	4,150	 	 	 	3,103	 	 	 	11,985	 	 	 	9,884	 	
Loss on solar energy systems and property and equipment	 	5,097	 	 	 	1,414	 	 	 	9,254	 	 	 	4,439	 	
Noncash interest and other expense	 	3,986	 	 	 	1,661	 	 	 	7,288	 	 	 	15,317	 	
Reduction in lease pass-through financing obligation	 	(1,630	)	 	 	(1,385	)	 	 	(3,662	)	 	 	(3,549	)	
(Gains) losses on interest rate swaps	 	(1,904	)	 	 	—	 	 	 	846	 	 	 	(1,279	)	
Changes in operating assets and liabilities:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Accounts receivable, net	 	983	 	 	 	4,444	 	 	 	(12,996	)	 	 	(245	)	
Inventories	 	(656	)	 	 	(2,645	)	 	 	(470	)	 	 	6,817	 	
Prepaid expenses and other current assets	 	(75	)	 	 	655	 	 	 	741	 	 	 	8,931	 	
Other non-current assets, net	 	(61,770	)	 	 	(1,429	)	 	 	(126,402	)	 	 	(8,042	)	
Accounts payable	 	1,516	 	 	 	(957	)	 	 	2,032	 	 	 	941	 	
Accrued compensation	 	15,408	 	 	 	6,719	 	 	 	14,409	 	 	 	4,390	 	
Deferred revenue	 	694	 	 	 	4,073	 	 	 	1,411	 	 	 	(6,441	)	
Accrued and other liabilities	 	8,871	 	 	 	9,092	 	 	 	9,050	 	 	 	7,177	 	
Net cash used in operating activities	 	(73,838	)	 	 	(4,192	)	 	 	(214,922	)	 	 	(23,058	)	
CASH FLOWS FROM INVESTING ACTIVITIES:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Payments for the cost of solar energy systems	 	(62,928	)	 	 	(87,301	)	 	 	(187,328	)	 	 	(233,548	)	
Payments for property and equipment	 	(225	)	 	 	(64	)	 	 	(1,219	)	 	 	(129	)	
Proceeds from disposals of solar energy systems and property and
   equipment	 	897	 	 	 	492	 	 	 	2,025	 	 	 	2,335	 	
Purchase of intangible assets	 	(974	)	 	 	(223	)	 	 	(1,089	)	 	 	(223	)	
Net cash used in investing activities	 	(63,230	)	 	 	(87,096	)	 	 	(187,611	)	 	 	(231,565	)	
CASH FLOWS FROM FINANCING ACTIVITIES:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Proceeds from investment by non-controlling interests and
   redeemable non-controlling interests	 	124,417	 	 	 	86,634	 	 	 	284,055	 	 	 	194,921	 	
Distributions paid to non-controlling interests and redeemable
   non-controlling interests	 	(15,258	)	 	 	(13,171	)	 	 	(33,309	)	 	 	(41,729	)	
Proceeds from long-term debt	 	218,808	 	 	 	41,748	 	 	 	351,972	 	 	 	917,748	 	
Payments on long-term debt	 	(118,167	)	 	 	(4,462	)	 	 	(139,080	)	 	 	(693,782	)	
Payments for debt issuance and deferred offering costs	 	(6,420	)	 	 	(3,494	)	 	 	(9,382	)	 	 	(21,209	)	
Proceeds from lease pass-through financing obligation	 	1,009	 	 	 	994	 	 	 	2,527	 	 	 	2,491	 	
Principal payments on finance lease obligations	 	(377	)	 	 	(732	)	 	 	(954	)	 	 	(2,663	)	
Proceeds from issuance of common stock	 	34	 	 	 	39	 	 	 	304	 	 	 	876	 	
Net cash provided by financing activities	 	204,046	 	 	 	107,556	 	 	 	456,133	 	 	 	356,653	 	
NET INCREASE IN CASH AND CASH EQUIVALENTS,
   INCLUDING RESTRICTED AMOUNTS	 	66,978	 	 	 	16,268	 	 	 	53,600	 	 	 	102,030	 	
CASH AND CASH EQUIVALENTS, INCLUDING RESTRICTED
   AMOUNTS—Beginning of period	 	277,518	 	 	 	240,700	 	 	 	290,896	 	 	 	154,938	 	
CASH AND CASH EQUIVALENTS, INCLUDING RESTRICTED
   AMOUNTS—End of period	$	344,496	 	 	$	256,968	 	 	$	344,496	 	 	$	256,968	 	

 
Vivint Solar, Inc.	 	
Key Operating Metrics	 	
 	 	 	 	 	 	 	 	 	 	 	 	
 	Three Months Ended	 	
 	September 30,	 	 	June 30,	 	 	September 30,	 	
 	2019	 	 	2019	 	 	2018	 	
Installations	 	9,458	 	 	 	8,163	 	 	 	7,547	 	
Megawatts installed	 	65.1	 	 	 	56.0	 	 	 	54.3	 	
 	 	 	 	 	 	 	 	 	 	 	 	
 	As of	 	
 	September 30,	 	 	June 30,	 	 	September 30,	 	
 	2019	 	 	2019	 	 	2018	 	
Cumulative installations	 	178,733	 	 	 	169,275	 	 	 	146,868	 	
Cumulative megawatts installed	 	1,227.6	 	 	 	1,162.5	 	 	 	1,006.6	 	
Estimated nominal contracted payments remaining (in millions)	$	4,200.3	 	 	$	3,976.2	 	 	$	3,444.4	 	
      Estimated retained value under energy contracts (in millions)	$	1,626.3	 	 	$	1,587.0	 	 	$	1,482.7	 	
      Estimated retained value of renewal (in millions)	$	566.5	 	 	$	531.6	 	 	$	451.8	 	
Estimated gross retained value (in millions)	$	2,192.8	 	 	$	2,118.6	 	 	$	1,934.5	 	
Estimated gross retained value per watt	$	1.98	 	 	$	2.02	 	 	$	2.09	 	
Sensitivity Analysis for Retained Value
The following table provides quantitative sensitivity analysis of our estimate of retained value of solar energy systems under contracts as of September 30, 2019, including both the contracted and estimated renewal portion, at a range of discount rates (retained value amounts in millions):

 	4%	 	 	6%	 	 	8%	 	
Estimated retained value under energy contracts	$	1,909.4	 	 	$	1,626.3	 	 	$	1,401.3	 	
Estimated retained value of renewal	 	870.1	 	 	 	566.5	 	 	 	373.0	 	
Total estimated gross retained value	$	2,779.5	 	 	$	2,192.8	 	 	$	1,774.3	 	

 
Non-GAAP Earnings per Share (EPS) Before Non-controlling Interests
We report GAAP EPS, which is based upon net 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. 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 ($0.99) and ($2.46) for the three and nine months ended September 30, 2019.

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

 	Three Months Ended	 	
 	September 30, 2019	 	 	September 30, 2018	 	
 	Net Loss	 	 	EPS	 	 	Net Loss	 	 	EPS	 	
Net loss attributable to common stockholders	$	(13,835	)	 	$	(0.11	)	 	$	(7,868	)	 	$	(0.07	)	
Net loss attributable to non-controlling interests and
   redeemable non-controlling interests	 	(107,265	)	 	 	(0.88	)	 	 	(64,824	)	 	 	(0.54	)	
Non-GAAP net loss	$	(121,100	)	 	$	(0.99	)	 	$	(72,692	)	 	$	(0.61	)	
Weighted-average shares used in computing net loss per share	 	 	 	 	 	121,730	 	 	 	 	 	 	 	118,767	 	
 
 	Nine Months Ended	 	
 	September 30, 2019	 	 	September 30, 2018	 	
 	Net Loss	 	 	EPS	 	 	Net Loss	 	 	EPS	 	
Net loss attributable to common stockholders	$	(68,644	)	 	$	(0.57	)	 	$	(2,728	)	 	$	(0.02	)	
Net loss attributable to non-controlling interests and
   redeemable non-controlling interests	 	(229,351	)	 	$	(1.89	)	 	 	(190,038	)	 	$	(1.63	)	
Non-GAAP net loss	$	(297,995	)	 	$	(2.46	)	 	$	(192,766	)	 	$	(1.65	)	
Weighted-average shares used in computing net loss per share:	 	 	 	 	 	120,974	 	 	 	 	 	 	 	116,871	 	

 
 
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 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.
 
“Estimated 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, or PPA, 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.
 
“Estimated Gross Retained Value” represents the net cash flows, discounted at 6%, that Vivint Solar expects to receive from customers pursuant to long-term customer contracts plus the value of contracted SRECs net of estimated cash distributions to fund investors, debt associated with our forward flow facilities, 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 plus the value of contracted SRECs, 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.
 
“Estimated Gross 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.
 
“Project Value” represents the net cash flows, discounted at 6% that Vivint Solar expects to receive from customers net of estimated distributions to fund investors and operating expenses, estimated utility and state incentives, and estimated finance proceeds from fund investors.

 
“NPV per watt” represents the estimated weighted average unit margin of Vivint Solar’s PPA and customer lease business and its system sales business. It is calculated by dividing Margin Created during the period by the total MWs Installed during the period.
 
“Margin Created” represents the estimated margin created during the period. It is the estimated value of Vivint Solar’s PPA and customer lease agreements and the value of the system sales less the costs required to create the value. Specifically, it is the sum of the project value per watt multiplied by “MWs Installed – PPA/Lease” and “Revenue – solar energy system and product sales” less total creation costs.
 
“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
 
Press Contact:
 
Heather Hurst
Senior Director of Communications
385-202-6577
pr@vivintsolar.com