LEHI, Utah , Nov. 8, 2016 /PRNewswire/ -- Vivint Solar (NYSE: VSLR) today announced financial results for the third quarter ended September 30, 2016 .

In addition, yesterday the company announced future tax equity commitments of $200 million representing approximately 123 MWs in new solar energy systems installations.

Third Quarter 2016 Operating Highlights

Key operating and development highlights for the quarter ended September 30, 2016 include:

MW Booked of approximately 59 megawatts (MWs) for the quarter.

MW Installed of approximately 59 MWs. Total cumulative MWs installed were approximately 634 MWs.

Installations were 8,266 for the quarter. Cumulative installations were 93,138.

Estimated Nominal Contracted Payments Remaining increased by approximately $177 million during the quarter and was approximately $2.4 billion .

during the quarter and was approximately . Estimated Retained Value increased by approximately $113 million during the quarter to approximately $1.2 billion .

during the quarter to approximately . Estimated Retained Value per Watt was $1.96 .

. Cost per Watt was $2.85 , improved from $2.94 in the second quarter of 2016 and improved from $3.12 in the third quarter of 2015.

Third Quarter 2016 GAAP Financial Results

Summary GAAP financial results for the quarter ended September 30, 2016 include:

Operating Leases and Incentives Revenue was $33.4 million , up from $21.8 million in the third quarter of the prior year. Total revenue for the quarter was $41.3 million , up from $22.5 million in the third quarter of the prior year.

was , up from in the third quarter of the prior year. Total revenue for the quarter was , up from in the third quarter of the prior year. Cost of Revenue – Operating Leases and Incentives was $39.3 million , up from $37.6 million in the same period of 2015 .

, up from in the same period of 2015 Total Operating Expenses, including cost of revenue, were $74.6 million , compared to $76.9 million in the third quarter of 2015.

were , compared to in the third quarter of 2015. Loss from Operations was $33.3 million compared to $54.4 million in the same period of 2015.

compared to in the same period of 2015. GAAP Net Income Available (Loss Attributable) to Stockholders per Diluted Share was $0.15 , up from $0.00 in the third quarter of 2015.

, up from in the third quarter of 2015. Non-GAAP Loss Before Non-Controlling Interests and Redeemable Non-Controlling Interests per Share was ($0.36) , up from ($0.47) in the same period of 2015. See below for a further discussion of Non-GAAP Loss per Share.

, up from in the same period of 2015. See below for a further discussion of Non-GAAP Loss per Share. Cash and Cash Equivalents as of September 30, 2016 were $113.0 million .

Financing Activity

As of September 30, 2016 , the company had $226.5 million in undrawn capacity in the aggregation facility, $100 million in undrawn capacity in the Subordinated HoldCo credit facility, and approximately 10 MWs of installation capacity remaining in its investment funds. Subsequent to quarter end, the company received $200 million of tax equity commitments for three new tax equity partnerships. The company estimates that these tax equity commitments will support investments in solar energy systems with a total value of over $480 million and will enable the company to install approximately 123 megawatts of residential solar energy systems. These tax equity commitments are subject to customary conditions.

About Vivint Solar

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, typically 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 for its customers. Vivint Solar also sells solar energy systems; customers can pay cash or finance the purchase through one of Vivint Solar's industry-leading finance partners. 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 growth prospects, and operating and financial results such as estimates of nominal contracted payments remaining, estimated retained value, estimated retained value per watt, estimated shares outstanding, 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, including solar renewable energy certificates, or SRECs and state incentives, that affect the pricing of our offering; 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 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 Unaudited Balance Sheets

(In thousands)



















September 30,



December 31,



2016



2015

ASSETS













Current assets:













Cash and cash equivalents $ 113,037



$ 92,213

Accounts receivable, net

12,080





3,636

Inventories

6,522





631

Prepaid expenses and other current assets

19,422





17,078

Total current assets

151,061





113,558

Restricted cash and cash equivalents

23,469





15,035

Solar energy systems, net

1,389,946





1,102,157

Property and equipment, net

26,176





48,168

Intangible assets, net

1,559





2,031

Goodwill

—





36,601

Prepaid tax asset, net

399,809





277,496

Other non-current assets, net

15,823





14,024

TOTAL ASSETS $ 2,007,843



$ 1,609,070

LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS AND EQUITY













Current liabilities:













Accounts payable $ 48,775



$ 49,986

Accounts payable—related party

425





1,905

Distributions payable to non-controlling interests and redeemable non-controlling interests

16,439





11,347

Accrued compensation

24,490





13,758

Current portion of deferred revenue

14,754





4,968

Current portion of capital lease obligation

5,451





5,489

Accrued and other current liabilities

27,378





29,017

Total current liabilities

137,712





116,470

Capital lease obligation, net of current portion

6,756





10,055

Long-term debt

675,978





415,850

Deferred tax liability, net

341,231





216,033

Deferred revenue, net of current portion

36,914





43,304

Other non-current liabilities

9,824





28,565

Total liabilities

1,208,415





830,277

Commitments and contingencies













Redeemable non-controlling interests

137,931





169,541

Stockholders' equity:













Common stock

1,099





1,066

Additional paid-in capital

538,123





530,646

Accumulated other comprehensive income

429





—

Accumulated deficit

(14,921)





(12,769)

Total stockholders' equity

524,730





518,943

Non-controlling interests

136,767





90,309

Total equity

661,497





609,252

TOTAL LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS AND EQUITY $ 2,007,843



$ 1,609,070



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,



2016



2015



2016



2015

Revenue:





























Operating leases and incentives $ 33,394



$ 21,781



$ 80,033



$ 45,662

Solar energy system and product sales

7,868





693





13,363





2,492

Total revenue

41,262





22,474





93,396





48,154

Operating expenses:





























Cost of revenue—operating leases and incentives

39,268





37,624





115,566





94,799

Cost of revenue—solar energy system and product sales

6,468





470





10,606





1,384

Sales and marketing

8,617





12,051





32,078





37,181

Research and development

842





1,047





2,218





2,549

General and administrative

19,022





21,954





60,006





71,948

Amortization of intangible assets

342





3,711





762





11,195

Impairment of goodwill and intangible assets

—





—





36,601





4,506

Total operating expenses

74,559





76,857





257,837





223,562

Loss from operations

(33,297)





(54,383)





(164,441)





(175,408)

Interest expense

9,361





3,351





22,539





8,208

Other (income) expense

(434)





26





(95)





399

Loss before income taxes

(42,224)





(57,760)





(186,885)





(184,015)

Income tax (benefit) expense

(2,959)





(7,448)





10,245





15,977

Net loss

(39,265)





(50,312)





(197,130)





(199,992)

Net loss attributable to non-controlling interests and redeemable non-controlling interests

(55,961)





(50,780)





(194,978)





(226,262)

Net income available (loss attributable) to common stockholders $ 16,696



$ 468



$ (2,152)



$ 26,270

Net income available (loss attributable) per share to common stockholders:





























Basic $ 0.15



$ 0.00



$ (0.02)



$ 0.25

Diluted $ 0.15



$ 0.00



$ (0.02)



$ 0.24

Weighted-average shares used in computing net income available (loss attributable) per share to common stockholders:





























Basic

108,692





106,492





107,516





105,932

Diluted

113,344





110,223





107,516





109,694



Vivint Solar, Inc.

Condensed Consolidated Unaudited Statements of Cash Flows

(In thousands)



































Three Months Ended



Nine Months Ended



September 30,



September 30,



2016



2015



2016



2015

CASH FLOWS FROM OPERATING ACTIVITIES:





























Net loss $ (39,265)



$ (50,312)



$ (197,130)



$ (199,992)

Adjustments to reconcile net loss to net cash used in operating activities:





























Depreciation and amortization

12,500





7,018





32,376





16,771

Amortization of intangible assets

342





3,711





762





11,195

Impairment of goodwill and intangible assets

—





—





36,601





4,506

Deferred income taxes

41,075





23,277





124,912





77,480

Stock-based compensation

3,678





2,596





6,145





23,206

Loss on solar energy systems and property and equipment

4,317





1,169





4,576





1,169

Non-cash interest and other expense

1,966





885





4,963





2,557

Gain on ineffective portion of cash flow hedge

(258)





—





(258)





—

Reduction in lease pass-through financing obligation

(1,613)





—





(3,279)





—

Excess tax effects from stock-based compensation

(299)





—





(1,280)





—

Changes in operating assets and liabilities:





























Accounts receivable, net

(140)





(41)





(8,444)





(3,627)

Inventories

(2,655)





(130)





(5,891)





302

Prepaid expenses and other current assets

(2,209)





1,246





98





1,498

Prepaid tax asset, net

(35,273)





(48,758)





(122,313)





(135,951)

Other non-current assets, net

(961)





(762)





(4,255)





(990)

Accounts payable

1,742





5,519





664





6,570

Accounts payable—related party

(68)





(434)





(1,480)





(588)

Accrued compensation

3,696





102





8,334





3,713

Deferred revenue

2,222





23,010





3,396





25,761

Accrued and other liabilities

(3,955)





10,858





(2,377)





21,785

Net cash used in operating activities

(15,158)





(21,046)





(123,880)





(144,635)

CASH FLOWS FROM INVESTING ACTIVITIES:





























Payments for the cost of solar energy systems

(106,651)





(149,624)





(318,273)





(383,674)

Payments for property and equipment, net

(490)





(1,880)





(2,004)





(5,282)

Change in restricted cash and cash equivalents

(3,917)





(524)





(8,434)





(6,656)

Purchase of intangible assets

—





(1,346)





(291)





(1,675)

Net cash used in investing activities

(111,058)





(153,374)





(329,002)





(397,287)

CASH FLOWS FROM FINANCING ACTIVITIES:





























Proceeds from investment by non-controlling interests and redeemable non-controlling interests

53,885





63,288





237,148





232,071

Distributions paid to non-controlling interests and redeemable non-controlling interests

(10,417)





(6,457)





(22,230)





(17,146)

Proceeds from long-term debt

355,551





44,500





500,257





148,000

Payments on long-term debt

(220,250)





—





(224,400)





—

Payments for debt issuance costs

(10,544)





—





(16,774)





(3,078)

Proceeds from lease pass-through financing obligation

557





4,005





1,417





4,005

Principal payments on capital lease obligations

(1,298)





(1,530)





(4,357)





(3,600)

Proceeds from issuance of common stock

2,155





60





2,645





648

Excess tax effects from stock-based compensation

—





85





—





1,717

Payments for deferred offering costs

—





—





—





(589)

Net cash provided by financing activities

169,639





103,951





473,706





362,028

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

43,423





(70,469)





20,824





(179,894)

CASH AND CASH EQUIVALENTS—Beginning of period

69,614





152,224





92,213





261,649

CASH AND CASH EQUIVALENTS—End of period $ 113,037



$ 81,755



$ 113,037



$ 81,755



Vivint Solar, Inc.

Key Operating Metrics



















































Three Months Ended



September 30,



June 30,



September 30,



2016



2016



2015

























Installations

8,266





8,641





8,658

Megawatts installed

58.8





61.4





60.5

Cumulative installations

93,138





84,872





60,116

Cumulative megawatts installed

634.0





575.2





400.4

Estimated nominal contracted payments remaining (in millions) $ 2,432.2



$ 2,255.3



$ 1,656.5

Estimated retained value under energy contract (in millions) $ 948.3



$ 862.0



$ 616.6

Estimated retained value of renewal (in millions) $ 280.0



$ 252.9



$ 176.0

Estimated retained value (in millions) $ 1,228.3



$ 1,115.0



$ 792.6

Estimated retained value per watt $ 1.96



$ 1.95



$ 1.98



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 September 30, 2016 , 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 contract $ 1,142.2



$ 948.3



$ 797.5

Estimated retained value of renewal

444.2





280.0





178.4

Total estimated retained value $ 1,586.4



$ 1,228.3



$ 975.9



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 nine months ended September 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 ($0.36) and ($1.49) for the three and nine months ended September 30, 2016 .

Vivint Solar, Inc.

Reconciliation from GAAP EPS to Non-GAAP EPS

(In thousands, except per share data)



































































Three Months Ended



September 30, 2016



September 30, 2015



Net Loss



EPS



Net Loss



EPS

Net income available (loss attributable) to common stockholders $ 16,696



$ 0.15



$ 468



$ 0.00

Net loss attributable to non-controlling interests and redeemable non-controlling interests

(55,961)





(0.51)





(50,780)





(0.47)

Non-GAAP net loss $ (39,265)



$ (0.36)



$ (50,312)



$ (0.47)

Weighted-average shares used in computing net loss per share









108,692













106,492





Nine Months Ended



September 30, 2016



September 30, 2015



Net Loss



EPS



Net Loss



EPS

Net income available (loss attributable) to common stockholders $ (2,152)



$ (0.02)



$ 26,270



$ 0.25

Net loss attributable to non-controlling interests and redeemable non-controlling interests

(194,978)



$ (1.81)





(226,262)



$ (2.14)

Impairment of goodwill

36,601



$ 0.34





—



$ —

Non-GAAP net loss $ (160,529)



$ (1.49)



$ (199,992)



$ (1.89)

Weighted-average shares used in computing net loss per share:









107,516













105,932



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

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