8-K

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, 2016

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))

Item  2.02 Results of Operations and Financial Condition.

On August 8, 2016, the Company issued a press release reporting its financial results for the second quarter ended June 30, 2016. 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 provided a memorandum outlining Vivint Solar, Inc.’s methodology for estimating its cost per watt for installing solar energy systems applicable to the Company’s residential segment that was updated for its financial results for the second quarter ended June 30, 2016. The memorandum is available on the Company’s website.

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, 2016

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 C. RUSSELL
Dana C. Russell
Chief Financial Officer

and Executive Vice President

Date: August 8, 2016

EXHIBIT INDEX

Exhibit Number	Description
99.1	Vivint Solar, Inc. press release dated August 8, 2016

EX-99.1

Exhibit 99.1

VIVINT SOLAR ANNOUNCES SECOND QUARTER 2016 FINANCIAL RESULTS

Cost per Watt decreased to $2.94

Retained Value Increased 64% Year-over-Year

Revenue Increased 116% Year-over-Year

LEHI, Utah, August 8, 2016 -- Vivint Solar (NYSE: VSLR), today announced financial results for the second quarter ended June 30, 2016.

Second Quarter 2016 Operating Highlights

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

· MW Booked of approximately 74 MWs for the quarter, approximately flat year-over-year.

· MW Installed of approximately 61 MWs, down 6% year-over-year. Total cumulative MWs installed were approximately 575 MWs.

· Installations were 8,641 for the quarter, down 7% year-over-year. Cumulative installations were 84,872.

· Estimated Nominal Contracted Payments Remaining increased by approximately $191 million during the quarter and was approximately $2.3 billion, up 56% year-over-year.

· Estimated Retained Value increased by approximately $103 million during the quarter to approximately $1.1 billion, up 64% year-over-year.

· Estimated Retained Value per Watt was $1.95.

· Cost per Watt was $2.94, down from $3.34 in the first quarter of 2016 and down from $3.00 in the second quarter of 2015.

SecondQuarter 2016 GAAP Financial Results

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

· Operating Leases and Incentives Revenuewas $30.1 million, up 97% from $15.3 million in the second quarter of the prior year. Total revenue for the quarter was $34.9 million, up 116% from $16.1 million in the second quarter of the prior year.

· Cost of Revenue – Operating Leases and Incentives was $38.5 million, up from $33.3 million in the same period of 2015.

· Total Operating Expenses, including cost of revenue,were $71.4 million, compared to $88.5 million in the second quarter of 2015. Operating expenses included non-cash stock-based compensation expense of $0.8 million, and amortization of intangibles of $0.2 million.

· Loss from Operations was $36.5 million compared to $72.3 million in the same period of 2015.

· GAAP Net Income Available (Loss Attributable) to Stockholders per Diluted Share was $0.11, down from $0.12 in the second quarter of 2015.

· Non-GAAP Loss Before Non-Controlling Interests and Redeemable Non-Controlling Interests per Share was ($0.49), down from ($0.85) in the same period of 2015. See below for a further discussion of Non-GAAP Loss per Share.

· Cash and Cash Equivalentsas of June 30, 2016 were $69.6 million.

Financing Activity

As of June 30, 2016, the Company had $36.5 million in undrawn capacity in the aggregation facility, $125 million in undrawn capacity in the term debt facility, and 32 MWs of installation capacity remaining in our tax equity funds. Subsequent to quarter end, the Company entered into a $313 million term debt facility.

About Vivint Solar

Vivint Solar is a leading provider of distributed solar energy systems – 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 rates 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.

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; Vivint Solar’s limited operating history, particularly as a new public company; 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)
	June 30,			December 31,
	2016			2015
ASSETS
Current assets:
Cash and cash equivalents	$	69,614		$	92,213
Accounts receivable, net		11,940			3,636
Inventories		3,867			631
Prepaid expenses and other current assets		16,000			17,078
Total current assets		101,421			113,558
Restricted cash and cash equivalents		19,552			15,035
Solar energy systems, net		1,303,904			1,102,157
Property and equipment, net		28,743			48,168
Intangible assets, net		1,901			2,031
Goodwill		—			36,601
Prepaid tax asset, net		364,536			277,496
Other non-current assets, net		15,034			14,024
TOTAL ASSETS	$	1,835,091		$	1,609,070
LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS AND EQUITY
Current liabilities:
Accounts payable	$	54,268		$	49,986
Accounts payable—related party		493			1,905
Distributions payable to non-controlling interests and redeemable non-controlling interests		9,820			11,347
Accrued compensation		19,111			13,758
Current portion of deferred revenue		11,674			4,968
Current portion of capital lease obligation		5,706			5,489
Accrued and other current liabilities		32,792			29,017
Total current liabilities		133,864			116,470
Capital lease obligation, net of current portion		7,962			10,055
Long-term debt		550,572			415,850
Deferred tax liability, net		299,870			216,033
Deferred revenue, net of current portion		37,772			43,304
Other non-current liabilities		9,171			28,565
Total liabilities		1,039,211			830,277
Commitments and contingencies
Redeemable non-controlling interests		150,686			169,541
Stockholders' equity:
Common stock		1,077			1,066
Additional paid-in capital		532,611			530,646
Accumulated deficit		(31,617	)		(12,769	)
Total stockholders' equity		502,071			518,943
Non-controlling interests		143,123			90,309
Total equity		645,194			609,252
TOTAL LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS AND EQUITY	$	1,835,091		$	1,609,070

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,
	2016			2015			2016			2015
Revenue:
Operating leases and incentives	$	30,061		$	15,301		$	46,639		$	23,881
Solar energy system and product sales		4,843			834			5,495			1,799
Total revenue		34,904			16,135			52,134			25,680
Operating expenses:
Cost of revenue—operating leases and incentives		38,538			33,295			76,298			57,175
Cost of revenue—solar energy system and product sales		3,716			476			4,138			914
Sales and marketing		10,813			18,697			23,461			25,130
Research and development		144			920			1,376			1,502
General and administrative		18,064			31,364			40,984			49,994
Amortization of intangible assets		155			3,721			420			7,484
Impairment of goodwill and intangible assets		—			—			36,601			4,506
Total operating expenses		71,430			88,473			183,278			146,705
Loss from operations		(36,526	)		(72,338	)		(131,144	)		(121,025	)
Interest expense		7,413			2,730			13,178			4,857
Other expense		309			60			339			373
Loss before income taxes		(44,248	)		(75,128	)		(144,661	)		(126,255	)
Income tax expense		8,055			14,577			13,204			23,425
Net loss		(52,303	)		(89,705	)		(157,865	)		(149,680	)
Net loss attributable to non-controlling interests and redeemable    non-controlling interests		(64,674	)		(103,358	)		(139,017	)		(175,482	)
Net income available (loss attributable) to common stockholders	$	12,371		$	13,653		$	(18,848	)	$	25,802
Net income available (loss attributable) per share to common    stockholders:
Basic	$	0.12		$	0.13		$	(0.18	)	$	0.24
Diluted	$	0.11		$	0.12		$	(0.18	)	$	0.24
Weighted-average shares used in computing net income available    (loss attributable) per share to common stockholders:
Basic		107,226			105,988			106,922			105,647
Diluted		111,380			109,794			106,922			109,424

Vivint Solar, Inc.
Condensed Consolidated Unaudited Statements of Cash Flows
(In thousands)
	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2016			2015			2016			2015
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(52,303	)	$	(89,705	)	$	(157,865	)	$	(149,680	)
Adjustments to reconcile net loss to net cash used in operating    activities:
Depreciation and amortization		10,773			5,545			19,876			9,753
Amortization of intangible assets		155			3,721			420			7,484
Impairment of goodwill and intangible assets		—			—			36,601			4,506
Deferred income taxes		39,466			37,179			83,837			54,203
Stock-based compensation		842			17,903			2,467			20,610
Loss on removal of solar energy systems and property and    equipment		(185	)		—			259			—
Non-cash interest and other expense		1,567			877			2,997			1,672
Reduction in lease pass-through financing obligation		(1,228	)		—			(1,666	)		—
Excess tax effects from stock-based compensation		(588	)		—			(981	)		—
Changes in operating assets and liabilities:
Accounts receivable, net		(4,915	)		(2,049	)		(8,304	)		(3,586	)
Inventories		(2,337	)		430			(3,236	)		432
Prepaid expenses and other current assets		4,449			476			2,307			252
Prepaid tax asset, net		(45,043	)		(50,756	)		(87,040	)		(87,193	)
Other non-current assets, net		(1,587	)		(324	)		(3,294	)		(228	)
Accounts payable		(623	)		1,022			(1,078	)		1,051
Accounts payable—related party		(393	)		154			(1,412	)		(154	)
Accrued compensation		308			4,080			4,638			3,611
Deferred revenue		116			1,262			1,174			2,751
Accrued and other liabilities		3,293			(9,344	)		1,578			10,927
Net cash used in operating activities		(48,233	)		(79,529	)		(108,722	)		(123,589	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for the cost of solar energy systems		(104,925	)		(125,865	)		(211,622	)		(234,050	)
Payments for property and equipment, net		(122	)		(2,226	)		(1,514	)		(3,402	)
Change in restricted cash and cash equivalents		(1,904	)		(488	)		(4,517	)		(6,132	)
Purchase of intangible assets		—			(307	)		(291	)		(329	)
Net cash used in investing activities		(106,951	)		(128,886	)		(217,944	)		(243,913	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from investment by non-controlling interests and    redeemable non-controlling interests		93,277			87,565			183,263			168,783
Distributions paid to non-controlling interests and redeemable non-    controlling interests		(5,419	)		(8,324	)		(11,813	)		(10,689	)
Proceeds from long-term debt		50,204			86,000			144,706			103,500
Payments on long-term debt		—			—			(4,150	)		—
Payments for debt issuance costs		—			—			(6,230	)		(3,078	)
Proceeds from lease pass-through financing obligation		579			—			860			—
Principal payments on capital lease obligations		(1,497	)		(1,057	)		(3,059	)		(2,070	)
Proceeds from issuance of common stock		490			588			490			588
Excess tax effects from stock-based compensation		—			1,632			—			1,632
Payments for deferred offering costs		—			—			—			(589	)
Net cash provided by financing activities		137,634			166,404			304,067			258,077
NET DECREASE IN CASH AND CASH EQUIVALENTS		(17,550	)		(42,011	)		(22,599	)		(109,425	)
CASH AND CASH EQUIVALENTS—Beginning of period		87,164			194,235			92,213			261,649
CASH AND CASH EQUIVALENTS—End of period	$	69,614		$	152,224		$	69,614		$	152,224

Vivint Solar, Inc.
Key Operating Metrics
	Three Months Ended
	June 30,		December 31,		June 30,
	2016		2015		2015
Installations		8,641		8,411		9,312
Megawatts installed		61.4		58.6		65.5
Cumulative installations		84,872		68,527		51,458
Cumulative megawatts installed		575.2		458.9		339.9
Estimated nominal contracted payments remaining (in millions)	$	2,255.3	$	1,871.9	$	1,442.5
Estimated retained value under energy contract (in millions)	$	862.0	$	705.6	$	531.3
Estimated retained value of renewal (in millions)	$	252.9	$	200.5	$	148.7
Estimated retained value (in millions)	$	1,115.0	$	906.1	$	680.0
Estimated retained value per watt	$	1.95	$	1.98	$	2.00

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 ($0.49) and ($1.13) for the three and six months ended June 30, 2016.

Vivint Solar, Inc.
Non-GAAP Net Loss per Share
(In thousands, except per share data)
	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2016			2015			2016			2015
Net loss	$	(52,303	)	$	(89,705	)	$	(121,264	)	$	(149,680	)
Net loss per share:
Basic and diluted	$	(0.49	)	$	(0.85	)	$	(1.13	)	$	(1.42	)
Weighted-average shares used in computing net loss per share:
Basic and diluted		107,226			105,988			106,922			105,647

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:

Vivint Solar
Rob Kain
Vice President of Investor Relations
855-842-1844

ir@vivintsolar.com

Media Contact:

Vivint Solar
Casey Briggs
Public Relations
801-229-6443

pr@vivintsolar.com