investinginthesun withvivint solar....note: the presentation of estimated net retained value changed...

Investing in the Sunwith Vivint Solar.

Q3 2019 Financial ResultsNovember 6, 2019

Forward Looking Statements

This presentation contains forward-looking statements. These statements may relate to, but are not limited to, expectations of future operating results or financial performance, such as estimates of nominal contracted payments remaining, estimated retained value, the capacity of solar energy systems to be installed, the market price of electricity, introduction of new products, the sustainability of our business, expansion into new markets and our projected sales mix, regulatory compliance, plans for growth and future operations, demand for certain products, technological capabilities, strategic relationships as well as assumptions related to the foregoing.

Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “could,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “intend,” “potential,” “would,”

“continue,” “ongoing” or the negative of these terms or other comparable terminology. You should not put undue reliance on any forward-looking statements. 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.

Forward-looking statements are based on information available at the time those statements are made and/or management’s good faith beliefs and assumptions as of that time with respect to future events, and 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 (SRECs) and federal and state incentives, that affect the pricing of our offerings; changes in regulations, tariffs, and other trade barriers and tax policy affecting us and our industry. 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.

Vivint Solar has rights to the trademark “Vivint Solar.” Solely for convenience, trademarks, and trade names referred to in this presentation, including logos, artwork and other visual displays, may appear without the ® or TM symbols, but such references are not intended to indicate in any way that the company will not assert, to the fullest extent under applicable law, the rights of the applicable licensor to these trademarks and trade names.

COPYRIGHT © 2019 VIVINT SOLAR, INC. ALL RIGHTS RESERVED. 2

ROOFTOP SOLAR POWER

ELECTRIC VEHICLES & CHARGERS

RESIDENTIAL BATTERY STORAGE

SMART HOME TECHNOLOGYEmpower families to take control of their energy future.

Our Vision:

How We Do That:

Solutions for the EmergingEnergy Ecosystem

By providing solutions that give consumers a choice in how they create and consume power.


1.

Focused OnThe Long GameOUR OPERATING PRINCIPLES

The Vivint Solar Difference

We believe that being responsible citizens in an unpredictable industry makes us a better option for our customers and our shareholders. Our guiding principles define how we run our business, and we believe that you can see a difference when you compare Vivint Solar to competitors in our industry.

Building the most sustainable business in the industry

2. Delighting our customers

3. Delivering differentiated solutions

4. Accessing capital on favorable terms

5. Growing profitably


MWs Installed


MEASURED IN MEGAWATTS

10.4 11.7 7.2 6.3 7.5 8.9 7.1 8.5 9.4

36.1 32.9 33.2

40.7 46.8 45.4

38.5 47.5

55.7

46.5 44.6 40.4

47.0

54.3 54.3

45.6

56.0

65.1

-

10

20

30

40

50

60

70

Q3 '17 Q4 '17 Q1 '18 Q2 '18 Q3 '18 Q4 '18 Q1 '19 Q2 '19 Q3 '19

System Sale PPA/ Lease

Revenue


$ AMOUNTS IN MILLIONS

Note: Amounts may not add due to rounding.

$29.2 $35.6 $37.1$26.0 $24.3 $28.7 $29.8 $27.4 $33.0

$45.9 $31.2 $31.1 $54.8 $53.5 $34.7

$39.6

$63.4

$70.8

$75.1

$66.8 $68.3

$80.8 $77.8

$63.5 $69.4

$90.8

$103.8

$-

$20

$40

$60

$80

$100

$120

Q3 '17 Q4 '17 Q1 '18 Q2 '18 Q3 '18 Q4 '18 Q1 '19 Q2 '19 Q3 '19

Solar energy system and product sales Operating leases and incentives

Cost per Watt


Cost efficiency is key to sustainability and market expansion.

Lowering cost per watt increases the margin from our system sales at a given price and allows our project funding to cover more of the costs of installation of PPAs and leases. This frees operating cash flows to facilitate faster growth, market expansion, and increased enterprise value.

COPYRIGHT © 2019 VIVINT SOLAR, INC. ALL RIGHTS RESERVED.Note: The cost per watt methodology changed in Q4’18 to use a constant denominator of MWs Installed. Prior periods have been restated to use the new methodology.

$1.82 $1.85 $1.93 $1.85 $1.77 $1.78 $1.85 $1.79 $1.78

$0.77 $0.76 $0.84 $0.96 $1.03 $1.06 $1.16 $1.27 $1.37$0.38 $0.38

$0.44 $0.42 $0.36 $0.34$0.45 $0.50 $0.33$2.97 $2.99

$3.22 $3.23 $3.16 $3.18$3.46 $3.56 $3.48

$0.00

$1.00

$2.00

$3.00

$4.00

Q3 '17 Q4 '17 Q1 '18 Q2 '18 Q3 '18 Q4 '18 Q1 '19 Q2 '19 Q3 '19

Installation Sales & Marketing G&A

CPW

How does Vivint Solar calculate unit cost?

To derive a consistent unit cost it is imperative that a consistent denominator be used. Vivint Solar uses total MWs Installed during the period. This provides a unit cost that is a weighted average of Vivint Solar’s PPA / Lease business with its system and products sales business. This consistency allows for the accurate calculation of a unit margin.

COPYRIGHT © 2019 VIVINT SOLAR, INC. ALL RIGHTS RESERVED. 8Note: Cost per Watt memo provides detailed explanations for amounts shown above.

Methodology$ amounts in thousands

Q3 '19MW Installed 65.1

InstallationSystem equipment costs (BS Note) 73,363$ Cost of revenue - customer agreements and incentives (IS) 49,077 Cost of revenue - solar energy system and product sale (IS) 19,444 WIP - System equipment costs (BS Note) 723 Less: Stock-based compensation (BS Note) (467) Less: Depreciation and amortization (BS Note) (14,523) Less: Fleet Performance (11,721)

Total Installation costs 115,896$

Sales & MarketingCosts to obtain contracts (BS Note) 51,592$ Customer incentives (BS - Other current & non-current assets) 247 Sales & Marketing (IS) 46,121 WIP - Cost to obtain SPA contracts (BS Note - prepaid assets) 2,041 Residual payments (BS Note) (9,437) Less: One-time expense (809) Less: Stock-based compensation (BS Note) (756)

Total Sales & Marketing Costs 88,999$

General & Administrative

General & Administrative (IS) 32,821$ Less: Stock-based compensation (BS Note) (2,891) Less: One-time expense (8,225)

General & Administrative Costs 21,705$

Total Costs 226,600$

Total Costs / Watt 3.48$

Project Value & What is Project Value per Watt?

Project value per watt represents the estimated 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 proceeds from fund investors.

How does Vivint Solar estimate its margin?

Value created in the period represents the estimated margin created during the period. It is simply the estimated value created during the period net of the costs associated with creating the value. Specifically it is the sum of the project value of PPA/Leases and revenue from system and product sales less the associated cost of creating the value.

COPYRIGHT © 2019 VIVINT SOLAR, INC. ALL RIGHTS RESERVED. 9Note: Totals may not sum due to rounding.

MarginQ3 '19

Project Value per Watt - PPA / Leases (PV6)

Contract Project Value per Watt - PPA / Leases 4.14$

Renewal Project Value per Watt - PPA / Leases 0.57

Project Value per Watt - PPA / Leases 4.71$

MWs Installed - PPA / Lease 55.7

Project Value - PPA / Leases (in millions) 262$

Margin Created (in millions)

Plus: Project Value - PPA / Leases (PV6) 262$

Plus: Project Value - System & Product Sales 33

Less: Cost to Create (227)

Margin Created (PV6) 69$

MWs Installed 65.1

NPV / Watt 1.06$

Gross Retained Value


$ AMOUNTS IN MILLIONS

Note: Totals may not sum due to rounding.

$1,227 $1,284 $1,348 $1,441 $1,483 $1,517 $1,550 $1,587 $1,626

$360 $377 $397$425 $452 $480 $501 $532 $567

$1,586 $1,661$1,744

$1,865 $1,934 $1,997 $2,051 $2,119 $2,193

$0

$500

$1,000

$1,500

$2,000

$2,500

Q3 '17 Q4 '17 Q1 '18 Q2 '18 Q3 '18 Q4 '18 Q1 '19 Q2 '19 Q3 '19

Gross retained value - contract Gross retained value - renewal

MeasuringLong-Term ValueUSING ESTIMATED NET RETAINED VALUE

What is Estimated Net Retained Value?

Estimated Net Retained Value represents the asset value that would remain after repaying all debt. It is calculated by taking Estimated Gross Retained Value, subtracting all debt, and adding back any debt associated with forward flow arrangements, cash & cash equivalents, and restricted cash.

Why does Vivint Solar use Estimated Net Retained Value to measure long-term value creation?

Estimated net retained value captures the residual asset value that is available to equity holders at a given point in time. As Vivint Solar continues to develop and retain ownership of solar systems, we believe that estimated net retained value will increase over time, resulting in increasing value to our shareholders.

ESTIMATED NET RETAINED VALUE:

ESTIMATED NET RETAINED VALUE PER SHARE:

COPYRIGHT © 2019 VIVINT SOLAR, INC. ALL RIGHTS RESERVED. 11Note: The presentation of estimated net retained value changed to include contracted SREC value for all periods.

$0.82 B $0.86 B $0.88 B $0.96 B $1.02 B $1.11 B $1.14 B $1.17 B $1.26 B

Q3 '17 Q4 '17 Q1 '18 Q2 '18 Q3 '18 Q4 '18 Q1 '19 Q2 '19 Q3 '19

$7.15 $7.47 $7.65 $8.13 $8.57 $9.20 $9.48 $9.62 $10.32

Q3 '17 Q4 '17 Q1 '18 Q2 '18 Q3 '18 Q4 '18 Q1 '19 Q2 '19 Q3 '19

Appendices

634 681 727 774 820 865 905 952 1,007

1,061 1,107 1,163

1,228

Q3 '16 Q4 '16 Q1 '17 Q2 '17 Q3 '17 Q4 '17 Q1 '18 Q2 '18 Q3 '18 Q4 '18 Q1 '19 Q2 '19 Q3 '19

MEASURED IN MEGAWATTS

CumulativeInstalled Capacity

CAGR: 25%

PPA / Lease 55.0 39.8 37.3 36.5 36.1 32.9 33.2 40.7 46.8 45.4 38.5 47.5 55.7

System Sales 3.8 7.3 8.5 10.4 10.4 11.7 7.2 6.3 7.5 8.9 7.1 8.5 9.4

Total Cumulative MWs Installed 634.0 681.1 726.9 773.8 820.3 864.9 905.3 952.3 1,006.6 1,060.9 1,106.5 1,162.5 1,227.6


Estimated Retained Value

Retained ValueSensitivities


Estimated Retained Value per Watt$ amounts in mi l l ions

Note: Sums may not total due to rounding. Note: Sums may not total due to rounding.

4% 6% 8% 4% 6% 8%

Contracted 1,909$ 1,626$ 1,401$ Contracted 1.73$ 1.47$ 1.27$

Renewal 870$ 567$ 373$ Renewal 0.79$ 0.51$ 0.34$

Total 2,780$ 2,193$ 1,774$ Total 2.52$ 1.98$ 1.61$


Operating MetricsQ1 17 Q2 17 Q3 17 Q4 17 FY2017 Q1 18 Q2 18 Q3 18 Q4 18 FY2018 Q1 19 Q2 19 Q3 19

PPA/ Lease 37.3 36.5 36.1 32.9 142.8 33.2 40.7 46.8 45.4 166.1 38.5 47.5 55.7 System Sale 8.5 10.4 10.4 11.7 41.0 7.2 6.3 7.5 8.9 29.9 7.1 8.5 9.4

MW Installed 45.8 46.9 46.5 44.6 183.8 40.4 47.0 54.3 54.3 196.0 45.6 56.0 65.1 Sequential growth rate (3)% 2% (1)% (4)% (9)% 16% 16% 0% (16)% 23% 16%

Period over period growth rate (17)% (24)% (21)% (5)% (17)% (12)% 0% 17% 22% 7% 13% 19% 20%

PPA/Lease 704.1 740.6 776.7 809.6 809.6 842.8 883.5 930.3 975.8 975.8 1,014.3 1,061.8 1,117.5 System sale 22.8 33.2 43.6 55.3 55.3 62.5 68.8 76.3 85.1 85.1 92.2 100.7 110.1

Cumulative MW Installed 726.9 773.8 820.3 864.9 864.9 905.3 952.3 1,006.6 1,060.9 1,060.9 1,106.5 1,162.5 1,227.6 Sequential growth rate 7% 6% 6% 5% 5% 5% 6% 5% 4% 5% 6%

Period over period growth rate 41% 35% 29% 27% 27% 25% 23% 23% 23% 23% 22% 22% 22%

Installation 1.94$ 1.81$ 1.82$ 1.85$ 1.86$ 1.93$ 1.85$ 1.77$ 1.78$ 1.83$ 1.85$ 1.79$ 1.78$ Sales & Marketing 0.68 0.72 0.77 0.76 0.73 0.84 0.96 1.03 1.06 0.94 1.16 1.27 1.37 General & Administrative 0.39 0.38 0.38 0.38 0.38 0.44 0.42 0.36 0.34 0.43 0.45 0.50 0.33

Cost per watt 3.00$ 2.92$ 2.97$ 2.99$ 2.97$ 3.22$ 3.23$ 3.16$ 3.18$ 3.20$ 3.46$ 3.56$ 3.48$

Estimated retained value - contract ($ in millions) 1,125.9$ 1,176.5$ 1,226.8$ 1,283.9$ 1,283.9$ 1,347.9$ 1,440.7$ 1,482.7$ 1,517.0$ 1,517.0$ 1,549.7$ 1,587.0$ 1,626.2$ Estimated retained value - renewal 317.4 339.0 359.7 377.1 377.1 396.6 424.7 451.8 479.7 479.7 501.0 531.6 566.5

Estimated retained value 1,443.3$ 1,515.5$ 1,586.5$ 1,661.0$ 1,661.0$ 1,744.5$ 1,865.4$ 1,934.5$ 1,996.7$ 1,996.7$ 2,050.7$ 2,118.6$ 2,192.8$ Sequential growth rate 5% 5% 5% 5% 5% 7% 4% 3% 3% 3% 4%


Estimated retained value per watt - contract 1.60$ 1.59$ 1.58$ 1.59$ 1.59$ 1.61$ 1.64$ 1.61$ 1.57$ 1.57$ 1.54$ 1.51$ 1.47$ Estimated retained value per watt - renewal 0.45 0.46 0.46 0.47 0.47 0.47 0.48 0.49 0.50 0.50 0.50 0.51 0.51

Estimated retained value per watt 2.05$ 2.06$ 2.04$ 2.06$ 2.06$ 2.08$ 2.13$ 2.09$ 2.06$ 2.06$ 2.04$ 2.02$ 1.98$

Project value - contracted 3.26$ 3.28$ 3.32$ 3.28$ 3.29$ 3.41$ 3.60$ 3.82$ 3.87$ 3.70$ 3.95$ 4.10$ 4.14$ Project value - renewal 0.39 0.40 0.42 0.42 0.41 0.44 0.49 0.53 0.55 0.51 0.56 0.57 0.57

Project value - PPA / Leases 3.66$ 3.67$ 3.74$ 3.70$ 3.69$ 3.85$ 4.09$ 4.35$ 4.42$ 4.20$ 4.51$ 4.67$ 4.71$

Plus: Project value - PPA / Leases ($ in millions) 136.4$ 134.1$ 134.9$ 121.7$ 527.2$ 127.7$ 166.4$ 203.5$ 200.8$ 698.4$ 173.6$ 221.8$ 262.3$ Plus: Revenue - System sales & product sales 22.7 29.6 29.2 35.6 117.2 37.1 26.0 24.3 28.7 116.3 29.7 27.4 33.0 Less: Cost to create (137.6) (136.8) (138.0) (133.2) (545.6) (129.9) (151.8) (171.9) (173.0) (626.6) (158.4) (200.1) (226.6)

Margin created 21.5$ 26.9$ 26.2$ 24.1$ 98.7$ 34.9$ 40.6$ 56.0$ 56.6$ 188.1$ 45.1$ 49.2$ 68.8$

NPV / Watt 0.47$ 0.57$ 0.56$ 0.54$ 0.54$ 0.86$ 0.86$ 1.03$ 1.04$ 0.96$ 0.99$ 0.88$ 1.06$

Estimated retained value ($ in millions) 1,443$ 1,515$ 1,586$ 1,661$ 1,661$ 1,744$ 1,865$ 1,934$ 1,997$ 1,997$ 2,051$ 2,119$ 2,193$ Less: debt - non-recourse (748) (765) (792) (820) (820) (852) (1,006) (1,044) (1,104) (1,104) (1,160) (1,222) (1,322) Less: debt - recourse (137) (122) (122) (137) (137) (137) (137) (137) (136) (136) (136) (131) (131) Plus: forward flow loan agreement - - - - - - - 12 58 58 100 127 175 Plus: cash, cash equivalents & restricted cash 197 159 147 155 155 126 241 257 291 291 288 278 344

Net retained value 756$ 788$ 820$ 860$ 860$ 882$ 963$ 1,023$ 1,106$ 1,106$ 1,143$ 1,170$ 1,259$ Sequential growth rate 4% 4% 4% 5% 3% 9% 6% 8% 3% 2% 8%


Shares outstanding (in thousands) 110,498 114,192 114,763 115,099 115,099 115,329 118,477 119,316 120,114 120,114 120,612 121,606 122,088

Net retained value per share 6.84$ 6.90$ 7.15$ 7.47$ 7.47$ 7.65$ 8.13$ 8.57$ 9.20$ 9.20$ 9.48$ 9.62$ 10.32$

Note: Amounts may not add due to rounding.


Consolidated Financial Statement SummariesAll numbers in $ thousands, except per share amounts

Q1 17 Q2 17 Q3 17 Q4 17 FY2017 Q1 18 Q2 18 Q3 18 Q4 18 FY2018 Q1 19 Q2 19 Q3 19Statement of Operations

RevenueCustomer agreements and incentives 30,389$ 43,413$ 45,909$ 31,151$ 150,862$ 31,114$ 54,765$ 53,470$ 34,717$ 174,066$ 39,603$ 63,355$ 70,819$ Solar energy system and product sales 22,725 29,582 29,230 35,629 117,166 37,136 26,033 24,346 28,740 116,255 29,768 27,402 33,030

Total Revenue 53,114$ 72,995$ 75,139$ 66,780$ 268,028$ 68,250$ 80,798$ 77,816$ 63,457$ 290,321$ 69,371$ 90,757$ 103,849$

Cost of RevenueCost of revenue - customer agreements and incentives 35,070 33,763 34,731 37,741 141,305 38,687 41,366 42,135 42,732 164,920 40,191 43,074 48,993 Cost of revenue - solar energy system and product sales 18,665 22,831 22,168 25,313 88,977 26,045 18,990 17,700 20,640 83,375 17,263 15,791 19,444

Total cost of revenue 53,735 56,594 56,899 63,054 230,282 64,732 60,356 59,835 63,372 248,295 57,454 58,865 68,437

Gross profit (loss) (621) 16,401 18,240 3,726 37,746 3,518 20,442 17,981 85 42,026 11,917 31,892 35,412 Operating expenses

Sales and marketing 8,818 9,411 9,808 10,659 38,696 11,125 14,033 15,841 17,951 58,950 29,634 37,037 46,121 Research and development 896 895 896 653 3,340 486 511 475 395 1,867 469 524 510 General and administrative 20,579 20,301 19,379 19,140 79,399 19,851 21,879 29,803 21,762 93,703 23,049 31,205 32,760 Amortization of intangible assets 140 139 139 140 558 136 130 142 - - - - -

Total operating expenses 30,433 30,746 30,222 30,592 121,993 31,598 36,553 46,261 40,108 154,520 53,152 68,766 79,391

Loss from operations (31,054) (14,345) (11,982) (26,866) (84,247) (28,080) (16,111) (28,280) (40,023) (112,494) (41,235) (36,874) (43,979) Interest expense 14,721 16,838 16,148 16,557 64,264 16,922 11,336 18,715 18,335 65,308 19,127 19,472 22,804 Other expense (income), net 276 715 195 (834) 352 (2,261) (4,109) (1) 1,833 (4,538) 1,385 1,365 3,907

Loss before income taxes (46,051) (31,898) (28,325) (42,589) (148,863) (42,741) (23,338) (46,994) (60,191) (173,264) (61,747) (57,711) (70,690) Income tax provision 9,401 (5,156) 9,375 (181,265) (157,333) 18,773 35,352 25,698 26,606 106,299 27,487 29,950 50,410

Net loss (55,452) (37,054) (37,700) 138,676 8,470 (61,514) (58,690) (72,692) (86,797) (279,563) (89,234) (87,661) (121,100) Net income available (loss attributable) to NCI (68,744) (42,034) (44,605) (45,245) (200,628) (48,886) (76,806) (64,824) (73,933) (263,971) (62,992) (59,094) (107,265)

Net income available (loss attributable) to stockholders 13,292$ 4,980$ 6,905$ 183,921$ 209,098$ (12,628)$ 18,116$ (7,868)$ (12,864)$ (15,592)$ (26,242)$ (28,567)$ (13,835)$

Weighted average shares - diluted 116,398 117,570 119,465 119,578 118,268 115,155 121,753 118,767 119,626 117,565 120,307 120,869 121,730 Diluted earnings per share 0.11$ 0.04$ 0.06$ 1.54$ 1.77$ (0.11)$ 0.15$ (0.07)$ (0.11)$ (0.13)$ (0.22)$ (0.24)$ (0.11)$

Balance SheetCash & cash equivalents 150,477$ 115,612$ 101,755$ 108,452$ 108,452$ 78,466$ 174,006$ 188,627$ 219,591$ 219,591$ 213,474$ 198,951$ 260,753$ Solar energy systems, net 1,514,197 1,567,598 1,622,561 1,673,532 1,673,532 1,727,479 1,784,800 1,858,743 1,938,874 1,938,874 1,590,888 1,637,905 1,696,129 Non-recourse debt 747,943 764,798 792,167 819,607 819,607 851,859 1,006,286 1,043,573 1,104,289 1,104,289 1,160,051 1,221,540 1,322,181 Recourse debt 136,500 121,500 121,500 136,500 136,500 136,500 136,500 136,500 136,100 136,100 136,100 131,100 131,100

Cash Flow

Cash flows from operating activities 3,398$ (16,822)$ (11,250)$ (9,180)$ (33,854)$ (14,171)$ (4,695)$ (4,192)$ (22,597)$ (45,655)$ (69,993)$ (141,084)$ (214,922)$ Cash flows from investing activities (95,004) (65,993) (65,472) (64,339) (290,808) (71,473) (72,996) (87,096) (97,538) (329,103) (64,168) (124,381) (187,611) Cash flows from financing activities 145,497 47,950 62,865 80,216 336,528 56,945 192,152 107,556 154,063 510,716 131,749 252,087 456,133

Proceeds from NCI 58,560 56,954 46,777 51,437 213,728 42,771 65,516 86,634 105,821 300,742 84,368 159,638 284,055 Net proceeds from non-recourse debt 112,591 16,855 27,369 27,440 184,255 32,252 154,428 37,286 60,716 284,682 55,762 61,489 100,641

Recast Financials Summary

Adoption of ASC 842

Commencing with first quarter 2019 reporting, Vivint Solar adopted the FASB’s new accounting standard for lease accounting rules (ASC 842). The additional transition method permitted by ASU 2018-11 was utilized for the adoption of this standard. Therefore, a modified retrospective method has been utilized with a cumulative-effect adjustment to accumulated deficit as of January 1, 2019. As such, comparative periods ending prior to January 1, 2019 are presented in accordance with ASC 840 and periods ending after January 1, 2019 are presented in accordance with Topic 842.

• The Company’s PPAs, Solar Leases, and associated rebates and incentives no longer meet the definition of a lease under ASC 842. Accordingly, they are accounted for in accordance with ASC 606 beginning January 1, 2019. Under ASC 606 there are no changes to PPA revenue recognition. The impact to revenue recognition for Solar Leases and associated rebates and incentives is considered immaterial.

• Under ASC 842 the Company no longer capitalizes sales commissions and other miscellaneous sales expenses as “initial direct costs” in “solar energy systems, net.” Instead, those costs are capitalized as “cost of obtaining contracts” and in “other non-current assets” on the balance sheet.

• For comparative purposes, the tables on the following pages provide unaudited, recast 2018 financial statements as if ASC 842 had been adopted on January 1, 2018.

• Please see Note 2 to the condensed consolidated Financial Statements in the Company’s Form 10-Q for the quarter ended September 30, 2019 filed with the SEC for a more detailed explanation.

Summary of changes and impacts to financial statements:


Pro Forma


Income Statement

N o t e : P r o f o r m a f i n a n c i a l s t a t e m e n t s a r e u n a u d i t e d a n d m a y c h a n g e . R e c a s t f i n a n c i a l s r e p r e s e n t o u r b e s t e s t i m a t e a s o f t h e d a t e o f t h i s p r e s e n t a t i o n .

Unaudited, Recast Income Statementin thousands

As Reported Adjustments Recast

(Unaudited) As Reported Adjustments Recast



(Unaudited)

Revenue

Customer agreements and incentives 31,114$ 31,114$ 54,765$ 54,765$ 53,470$ 53,470$ 34,717$ 34,717$

Solar energy system and product sales 37,136 37,136 26,033 26,033 24,346 24,346 28,740 28,740

Total revenue 68,250 68,250 80,798 80,798 77,816 77,816 63,457 63,457

Cost of revenue

Cost of revenue - customer agreements and incentives 38,687 (4,080) 34,607 41,366 (4,510) 36,856 42,135 (4,625) 37,510 42,732 (4,949) 37,783

Cost of revenue - solar energy system and product sales 26,045 (5,857) 20,188 18,990 (4,397) 14,593 17,700 (3,804) 13,896 20,640 (5,002) 15,638

Total cost of revenue 64,732 (9,937) 54,795 60,356 (8,907) 51,449 59,835 (8,429) 51,406 63,372 (9,951) 53,421

Gross profit 3,518 9,937 13,455 20,442 8,907 29,349 17,981 8,429 26,410 85 9,951 10,036

Operating expenses:

Sales and marketing 11,125 9,937 21,062 14,033 8,907 22,940 15,841 8,429 24,270 17,951 9,951 27,902

Research and development 486 486 511 511 475 475 395 395

General and administrative 19,987 19,987 22,009 22,009 29,945 29,945 21,762 21,762

Total operating expenses 31,598 9,937 41,535 36,533 8,907 45,460 46,261 8,429 54,690 40,108 9,951 50,059

Income (loss) from operations (28,080) (28,080) (16,111) (16,111) (28,280) (28,280) (40,023) (40,023)

Interest expense, net 16,922 16,922 11,336 11,336 18,715 18,715 18,335 18,335

Other expense, net (2,261) (2,261) (4,109) (4,109) (1) (1) 1,833 1,833

Loss before income taxes (42,741) (42,741) (23,338) (23,338) (46,994) (46,994) (60,191) (60,191)

Income tax provision 18,643 18,643 35,352 35,352 25,698 25,698 26,606 26,606

Net loss (61,384) (61,384) (58,690) (58,690) (72,692) (72,692) (86,797) (86,797)

(48,408) (48,408) (76,806) (76,806) (64,824) (64,824) (73,933) (73,933)

Net loss attributable to stockholder (12,976)$ (12,976)$ 18,116$ 18,116$ (7,868)$ (7,868)$ (12,864)$ (12,864)$

Three months ended March 31, 2018 Three months ended June 30, 2018 Three months ended Sept. 30, 2018 Three months ended Dec. 31, 2018

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

Pro Forma


Balance Sheet

N o t e : P r o f o r m a f i n a n c i a l s t a t e m e n t s a r e u n a u d i t e d a n d m a y c h a n g e . R e c a s t f i n a n c i a l s r e p r e s e n t o u r b e s t e s t i m a t e a s o f t h e d a t e o f t h i s p r e s e n t a t i o n .

Unaudited, Recast Balance Sheetin thousands

As Reported Adjustments Recast




(Unaudited)

ASSETSCurrent assets:

Cash and cash equivalents 78,466$ 78,466$ 174,006$ 174,006$ 188,627$ 188,627$ 219,591$ 219,591$

Accounts receivable, net 18,236 18,236 24,354 24,354 19,910 19,910 14,207 14,207

Inventories 15,790 15,790 13,135 13,135 15,780 15,780 13,257 13,257

Prepaid expenses and other current assets 22,234 22,234 25,620 25,620 24,662 24,662 31,201 31,201

Total current assets 134,726 134,726 237,115 237,115 248,979 248,979 278,256 278,256

Restricted cash and cash equivalents 47,773 47,773 66,694 66,694 68,341 68,341 71,305 71,305

Solar energy systems, net 1,727,479 (321,711) 1,405,768 1,784,800 (338,084) 1,446,716 1,858,743 (362,650) 1,496,093 1,938,874 (388,087) 1,550,787

Property and equipment, net 13,315 13,315 12,018 12,018 11,082 11,082 10,730 10,730

Other non-current assets, net 42,488 321,711 364,199 28,659 338,084 366,743 29,372 362,650 392,022 28,090 388,087 416,177

TOTAL ASSETS 1,965,781$ 1,965,781$ 2,129,286$ 2,129,286$ 2,216,517$ 2,216,517$ 2,327,255$ 2,327,255$

LIABILITIES, REDEEMABLE NON-CONTROLLINGINTERESTS AND EQUITYCurrent liabilities:

Accounts payable 41,280$ 41,280$ 44,508$ 44,508$ 44,992$ 44,992$ 45,929$ 45,929$

7,501 7,501 10,114 10,114 11,236 11,236 7,846 7,846

Accrued compensation 19,890 19,890 18,015 18,015 25,789 25,789 25,520 25,520

Current portion of long-term debt 13,566 13,566 10,018 10,018 10,515 10,515 12,155 12,155

Current portion of deferred revenue 24,255 24,255 22,108 22,108 25,480 25,480 30,199 30,199

Current portion of capital lease obligation 3,439 3,439 2,758 2,758 2,305 2,305 1,921 1,921

Accrued and other current liabilities 25,989 25,989 26,090 26,090 37,328 37,328 42,860 42,860

Total current liabilities 135,920 135,920 133,611 133,611 157,645 157,645 166,430 166,430

Long-term debt, net of current portion 959,187 959,187 1,110,044 1,110,044 1,143,957 1,143,957 1,203,282 1,203,282

Deferred revenue, net of current portion 11,311 11,311 12,027 12,027 12,728 12,728 13,524 13,524

Capital lease obligation, net of current portion 1,226 1,226 957 957 648 648 505 505

Deferred tax liability, net 356,984 356,984 385,907 385,907 413,076 413,076 437,120 437,120

Other non-current liabilities 12,623 12,623 16,870 16,870 12,522 12,522 24,610 24,610

TOTAL LIABILITIES 1,477,251 1,477,251 1,659,416 1,659,416 1,740,576 1,740,576 1,845,471 1,845,471

Commitments and contingencies

Redeemable non-controlling interestes 130,107 130,107 122,647 122,647 121,820 121,820 119,572 119,572

Stockholders' equity:

Common stock 1,153 1,153 1,185 1,185 1,193 1,193 1,201 1,201

Additional paid-in capital 562,962 562,962 567,372 567,372 570,506 570,506 574,248 574,248

Accumulated other comprehensive (loss) income 13,694 13,694 (3,185) (3,185) 95 95 (7,223) (7,223)

Accumulated deficit (277,015) (277,015) (258,899) (258,899) (266,767) (266,767) (279,631) (279,631)

Total stockholders equity 300,794 300,794 306,473 306,473 305,027 305,027 288,595 288,595

Non-Controlling interests 57,629 57,629 40,750 40,750 49,094 49,094 73,617 73,617

Total equity 358,423 358,423 347,223 347,223 354,121 354,121 362,212 362,212

TOTAL LIABILITIES, REDEEMABLE NON-CONTROLLING

INTERESTS AND EQUITY 1,965,781$ 1,965,781$ 2,129,286$ 2,129,286$ 2,216,517$ 2,216,517$ 2,327,255$ 2,327,255$

Three months ended March 31, 2018 Three months ended June 30, 2018 Three months ended Sept. 30, 2018 Three months ended Dec. 31, 2018

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

Glossary

Represents the number ofsolar energy systems installed on customer premises.

Installations

Represents the DC nameplate megawatt productioncapacity.

Megawatts (MWs)

Represents the aggregate megawatt nameplatecapacity of solar energy systems for which panels, inverters, and mounting and racking hardware have been installed on customer premises in the period.

MW Installed

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 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, 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


Glossary

Represents the estimated margin created during the period. It is the estimated expected value of PPA / Lease agreements and the value of system sales less the costs required to create the value. Specifically it is the sum of project value per Watt multiplied by MWs Installed – PPA/Lease and Revenue – solar energy system and product sales less total creation costs.

Margin Created

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.

Project Value

Represents the estimated weighted average unit margin of Vivint Solar’s PPA / Lease business and its systems sales business. It is calculated by dividing Margin Created during the period by the total MWs Installed during the period.

NPV / Watt


Glossary

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.

Estimated Nominal Contracted Payments Remaining

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.

Estimated Gross Retained Value per Watt

Represents a forecast at the amount of megawatts that can be deployed based on committed available tax equity financing for Energy Contracts.

Undeployed Tax Equity Financing Capacity


investinginthesun withvivint solar....note: the presentation of estimated net retained value changed...

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