LEHI, Utah, Nov. 10, 2014 -- Vivint Solar (NYSE: VSLR), today announced financial results for the three and nine months ended September 30, 2014.

“I am pleased with our performance in the third quarter. Vivint Solar continues to build momentum,” said Greg Butterfield, Vivint Solar’s CEO. “This year, the business is on track to more than double the megawatts we installed in all the previous years combined.”

Key operating and development highlights for the quarter ended September 30, 2014 include:

Summary GAAP financial results for the quarter ended September 30, 2014 include:

In October 2014, we closed our initial public offering of common stock that generated net proceeds to the company of approximately $301 million.

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 2014 financial results.

Vivint Solar will host an investor conference call and live webcast today, Monday, November 10, 2014, at 5:00 p.m. ET to discuss these financial results. To access the conference call, dial 1.877.201.0168 or 1.647.788.4901 for international callers. The conference ID is 2508 7674. A listen-only webcast will be accessible on the investor relations page of our website at http://investors.vivintsolar.com and will be archived and available on this site until November 24, 2014. 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 our Investor Relations site by 5:00 p.m. ET. This press release and the financial information discussed on today’s conference call are available on the investor relations page of our website at http://investors.vivintsolar.com.

Vivint Solar is a leading provider of distributed solar energy – electricity generated by a solar energy system installed at a customer’s location – to residential customers in the United States. Vivint Solar’s customers pay little to no money upfront, receive significant savings relative to utility generated electricity and continue to benefit from guaranteed energy prices over the 20-year term of their contracts. Vivint Solar finances, designs, installs, monitors and services the solar energy systems to make things easy for its customers. For more information, visit www.vivintsolar.com or follow @VivintSolar.

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 growth prospects, and operating and financial results such as estimates of nominal contracted payments remaining, the capacity of solar energy systems expected to be installed, estimated total revenue, and estimated total operating expenses 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 that affect the pricing of our offering, including regulations 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 Vivint Solar’s limited operating history, particularly as a new public company. You should read the section captioned “Risk Factors” in the final prospectus dated September 30, 2014 related to our initial public offering, which was filed with the U.S. Securities and Exchange Commission, or SEC, on October 1, 2014, as well as the other reports the company files with the SEC from time to time, which identify certain of these and additional risks and uncertainties associated with the company’s business. 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 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 Investor Relations section of the company’s website at www.vivintsolar.com


Vivint Solar, Inc.
Condensed Consolidated Balance Sheets
(In thousands)

	September 30,			December 31,
	2014			2013
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	66,149		$	6,038
Accounts receivable, net		2,712			608
Inventories, net		559			—
Prepaid expenses and other current assets		16,720			5,938
Total current assets		86,140			12,584
Restricted cash, non-current		6,516			5,000
Solar energy systems, net		467,460			188,058
Property, net		11,034			3,640
Intangible assets, net		22,157			27,364
Goodwill		36,431			29,545
Prepaid tax asset, net		76,555			30,738
Other non-current assets, net		17,912			778
TOTAL ASSETS	$	724,205		$	297,707
LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS AND TOTAL EQUITY
Current liabilities:
Accounts payable	$	54,761		$	25,356
Accounts payable—related party		7			3,068
Distributions payable to non-controlling interests and redeemable non-controlling interests		3,879			1,576
Accrued compensation		15,680			15,491
Current portion of deferred revenue		180			68
Current portion of capital lease obligation		2,915			1,275
Accrued and other current liabilities		21,010			10,307
Total current liabilities		98,432			57,141
Capital lease obligation, net of current portion		5,457			2,486
Revolving lines of credit—related party		58,692			41,412
Long-term debt		87,000			—
Deferred tax liability, net		88,427			41,510
Deferred revenue, net of current portion		2,554			1,272
Total liabilities		340,562			143,821
Commitments and contingencies
Redeemable non-controlling interests		122,955			73,265
Stockholders’ equity:
Common stock		847			750
Additional paid-in capital		199,479			75,049
(Accumulated deficit) retained earnings		(19,710	)		3,034
Total stockholders’ equity		180,616			78,833
Non-controlling interests		80,072			1,788
Total equity		260,688			80,621
TOTAL LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS AND TOTAL EQUITY	$	724,205		$	297,707


Vivint Solar, Inc.
Condensed Consolidated Statements of Operations
(In thousands, except share and per share data)
(Unaudited)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2014			2013			2014			2013
Revenue:
Operating leases and incentives	$	7,131		$	2,123		$	15,798		$	3,916
Solar energy system and product sales		1,202			151			2,600			283
Total revenue		8,333			2,274			18,398			4,199
Operating expenses:
Cost of revenue—operating leases and incentives		19,515			4,811			47,161			12,824
Cost of revenue—solar energy system and product sales		627			32			1,510			108
Sales and marketing		5,220			2,105			16,229			4,995
Research and development		431			—			1,403			—
General and administrative		37,170			5,135			63,276			9,967
Amortization of intangible assets		3,727			3,649			11,155			10,946
Total operating expenses		66,690			15,732			140,734			38,840
Loss from operations		(58,357	)		(13,458	)		(122,336	)		(34,641	)
Interest expense		3,261			963			7,335			1,954
Other expense		297			541			1,462			1,063
Loss before income taxes		(61,915	)		(14,962	)		(131,133	)		(37,658	)
Income tax (benefit) expense		(10,222	)		31			(3,286	)		76
Net loss		(51,693	)		(14,993	)		(127,847	)		(37,734	)
Net loss attributable to non-controlling interests and redeemable non-controlling interests		(16,415	)		(37,848	)		(105,103	)		(40,155	)
Net (loss attributable) income available to common stockholders	$	(35,278	)	$	22,855		$	(22,744	)	$	2,421
Net (loss attributable) income available per share to common stockholders:
Basic	$	(0.45	)	$	0.30		$	(0.30	)	$	0.03
Diluted	$	(0.45	)	$	0.30		$	(0.30	)	$	0.03
Weighted-average shares used in computing net (loss attributable) income available per share to common stockholders:
Basic		78,428,498		75,000,000				76,159,639		75,000,000
Diluted		78,428,498			75,000,912			76,159,639			75,013,624


Vivint Solar, Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)

	Three Months Ended
	September 30,
	2014			2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(51,693	)	$	(14,993	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		2,426			304
Amortization of intangible assets		3,769			3,649
Stock-based compensation		20,030			336
Amortization of deferred financing costs		855			—
Noncash contributions for services		62			40
Noncash interest expense		1,403			963
Deferred income taxes		9,702			15,091
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable, net		(192	)		(306	)
Inventories, net		5			—
Prepaid expenses and other current assets		(2,682	)		(364	)
Prepaid tax asset, net		(22,017	)		(14,714	)
Other non-current assets, net		(5,079	)		(241	)
Accounts payable		(3,848	)		1,322
Accounts payable—related party		(2,300	)		930
Accrued compensation		565			2,333
Deferred revenue		660			109
Accrued and other current liabilities		1,680			765
Net cash used in operating activities		(46,654	)		(4,776	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for the cost of solar energy systems		(99,163	)		(43,652	)
Payments for property		(2,908	)		—
Change in restricted cash		84			—
Purchase of intangible assets		(269	)		—
Proceeds from U.S. Treasury grants		—			2,232
Net cash used in investing activities		(102,256	)		(41,420	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from investment by non-controlling interests and redeemable non-controlling interests		83,417			62,019
Proceeds from issuance of common stock		103,500			—
Distributions paid to non-controlling interests and redeemable non-controlling interests		(3,552	)		(591	)
Proceeds from long-term debt		87,000			—
Payments on short-term debt		(75,500	)		—
Proceeds from revolving lines of credit—related party		40,500			40,000
Payments on revolving lines of credit—related party		(40,500	)		(40,000	)
Principal payments on capital lease obligations		(695	)		(267	)
Payments for deferred offering costs		(4,341	)		—
Net cash provided by financing activities		189,829			61,161
NET INCREASE IN CASH AND CASH EQUIVALENTS		40,919			14,965
CASH AND CASH EQUIVALENTS—Beginning of period		25,230			—
CASH AND CASH EQUIVALENTS—End of period	$	66,149		$	14,965


Vivint Solar, Inc.
Key Operating Metrics


	Three Months Ended
	September 30,		June 30,		September 30,
	2014		2014		2013

Installations		6,935		5,406		2,921
Megawatts installed		48.6		36.8		16.4
Cumulative installations		28,856		21,921		10,375
Cumulative megawatts installed		178.2		129.7		55.6
Estimated nominal contracted payments remaining (in millions)	$	842.3	$	647.5	$	306.8
Estimated retained value under energy contract (in millions)	$	316.7	$	246.2	$	116.1
Estimated retained value of renewal (in millions)	$	81.8	$	63.7	$	30.2
Estimated retained value (in millions)	$	398.6	$	309.9	$	146.3
Estimated retained value per watt	$	2.24	$	2.39	$	2.64

While GAAP EPS is based upon net (loss attributable) income to common stockholders, we also report non-GAAP based upon net loss. The only difference between GAAP EPS and non-GAAP EPS is the sole line item net (loss attributable) income to non-controlling interests and redeemable non-controlling interests.

Under GAAP accounting, we report net (loss attributable) income 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 financing funds. Net (loss attributable) income 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 funds may differ significantly from the amounts calculated under the HLBV method. Accordingly, we also report non-GAAP EPS based on earnings before net (loss attributable) income to non-controlling interests and redeemable non-controlling interests per share, which we view as a better measure of our operating performance. The use of 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, non-GAAP earnings before the allocation of loss attributable to non-controlling interests and redeemable non-controlling interests per share was ($0.66) in the third quarter of 2014 and ($1.68) year-to-date.

Vivint Solar, Inc.
Non-GAAP Net Loss per Share
(In thousands, except share and per share data)


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2014			2013			2014			2013
Net loss	$	(51,693	)	$	(14,993	)	$	(127,847	)	$	(37,734	)
Net loss per share:
Basic	$	(0.66	)	$	(0.20	)	$	(1.68	)	$	(0.50	)
Diluted	$	(0.66	)	$	(0.20	)	$	(1.68	)	$	(0.50	)
Weighted-average shares used in computing net loss per share:
Basic		78,428,498		75,000,000				76,159,639		75,000,000
Diluted		78,428,498			75,000,912			76,159,639			75,013,624

“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 that have been installed during the applicable 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.