Press Release Details

Vivint Solar Reports Fourth Quarter And Full Year 2017 Results

Mar, 07 2018

LEHI, Utah, March 7, 2018 /PRNewswire/ -- Vivint Solar (NYSE: VSLR), today announced financial results for the fourth quarter and full year ended December 31, 2017.

Fourth Quarter 2017 Operating Highlights

Key operating and development highlights include:

  • MW Booked of approximately 55 MWs for the quarter.
  • MW Installed of approximately 45 MWs for the quarter. Total cumulative MWs installed were approximately 865 MWs.
  • Installations were 6,467 for the quarter. Cumulative installations were 126,830.
  • Estimated Retained Value increased by approximately $80 million during the quarter to approximately $1.6 billion. Estimated Retained Value per Watt at quarter end was $2.00.
  • Cost per Watt was $2.95, an increase from $2.94 in the third quarter of 2017 and down from $3.08 in the fourth quarter of 2016.

Financing Activity

As of December 31, 2017, the company had $240 million in undrawn capacity in the aggregation facility and approximately 17 MWs of available installation capacity remaining in its tax equity funds. Subsequent to quarter end, the company closed a new tax equity partnership with a $75 million commitment that will fund the installation of approximately 52 MWs. In addition, the company received $401 million of non-binding tax equity term sheets for five tax equity partnerships. The company estimates that these tax equity partnerships will enable the company to install approximately 265 MWs of residential solar energy systems. These tax equity partnerships are subject to customary conditions and the execution of definitive documents.

Summary Fourth Quarter 2017 Financial Results

$ amounts in millions, except per share data













Three Months Ended December 31,



2017



2016



YoY


Revenue:












     Operating leases and incentives

$

31.2



$

25.3



up 23%


     Solar energy system and product sales


35.6




16.5



up 116%


Total Revenue


66.8




41.8



up 60%


Cost of revenue:












     Operating leases and incentives


37.7




35.2



up 7%


     Solar energy system and product sales


25.3




12.6



up 101%


Total cost of revenue


63.1




47.8



up 32%


Gross profit (loss)


3.7




(6.0)



up 162%


Loss from Operations


(26.9)




(38.1)



up 29%


Net income1

$

183.9



$

20.1



up 815%


Net income per diluted share1

$

1.54



$

0.18



up 756%


Non-GAAP net loss per share

$

(0.43)



$

(0.41)



down 5%



(1) In December 2017, the 2017 Tax Cuts and Jobs Act was enacted and significantly impacted U.S. tax law. As a result of this legislation, our fourth quarter provision for income taxes included a benefit of $188 million, which affected our net income and net income per diluted share.

Summary Full Year 2017 Financial Results

$ amounts in millions, except per share data













Year Ended December 31,



2017



2016



YoY


Revenue:












     Operating leases and incentives

$

150.9



$

105.4



up 43%


     Solar energy system and product sales


117.2




29.8



up 293%


Total Revenue


268.0




135.2



up 98%


Cost of revenue:












     Operating leases and incentives


141.3




150.8



down 6%


     Solar energy system and product sales


89.0




23.2



up 284%


Total cost of revenue


230.3




174.0



up 32%


Gross profit (loss)


37.7




(38.8)



up 197%


Loss from Operations


(84.2)




(202.5)



up 58%


Net income1

$

209.1



$

18.0



up 1062%


Net income per diluted share1

$

1.77



$

0.16



up 1006%


Non-GAAP net loss per share

$

(1.58)



$

(1.90)



up 17%



(1) In December 2017, the 2017 Tax Cuts and Jobs Act was enacted and significantly impacted U.S. tax law. As a result of this legislation, our full year provision for income taxes included a benefit of $188 million which, affected our net income and net income per diluted share.


Note: Totals may not sum due to rounding.

Guidance for the First Quarter 2018

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 2018 financial results.

For the first quarter of 2018, Vivint Solar expects:

  • MW Installed: 40 MWs
  • Cost per Watt: $3.15 - $3.20

Earnings Conference Call

Vivint Solar will host an investor conference call and live webcast today, Wednesday, March 7, 2018, at 5:00 p.m. ET to discuss these financial results. To access the conference call, dial 1.866.393.4306 or 1.734.385.2616 for international callers. The conference ID is 537 6536. A listen-only webcast will be accessible on the investor relations page of the company's website at investors.vivintsolar.com/ and will be archived and available on this site until April 30, 2018. Participants should follow the instructions provided on the website to download and install the necessary audio applications in advance of the call. In addition, the earnings presentation slides will be available on the investor relations page of the site by 5:00 p.m. ET along with this press release and the financial information discussed on today's conference call at investors.vivintsolar.com/.

About Vivint Solar

Vivint Solar is a leading full-service residential solar provider in the United States. With Vivint Solar, customers can power their homes with clean, renewable energy and typically achieve significant financial savings over time. Offering integrated residential solar solutions for the entire customer lifecycle, Vivint Solar designs and installs the solar energy systems for its customers and offers monitoring and maintenance services. In addition to being able to purchase a solar energy system outright, customers may benefit from Vivint Solar's affordable, flexible financing options, power purchase agreements, or lease agreements, where available. Through an exclusive collaboration, Vivint Solar also offers solar plus storage systems with Mercedes-Benz Energy home batteries. 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 guidance for Megawatts Installed and Cost per Watt, installation capacity remaining in tax equity funds, growth prospects, and operating and financial results, such as estimates of nominal contracted payments remaining, estimated retained value, and estimated retained value per watt, including the assumptions related to the calculation of the foregoing metrics.

Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Forward-looking statements should not be read as a guarantee of future performance or results, and they will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved, if at all. These statements are based on current expectations and assumptions regarding future events and business performance as of the date of this press release, and they are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements, including but not limited to: the availability of additional financing on acceptable terms; changes in the retail price of traditional utility generated electricity; changes in electric utility policies and regulations; the availability of rebates, tax credits and other incentives, including solar renewable energy certificates, or SRECs, and other federal and state incentives; regulations and policies related to net metering; changes in regulations, tariffs and other trade barriers and tax policy affecting us and our industry; our ability to manage our recent and future growth 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 and expressly disclaims any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise. You should read the documents Vivint Solar has filed with the SEC for more complete information about the company. These documents are available on both the EDGAR section of the SEC's website at www.sec.gov and the Investor Relations section of the company's website at investors.vivintsolar.com/.



Vivint Solar, Inc.


Consolidated Unaudited Balance Sheets


(In thousands)











December 31,



December 31,



2017



2016


ASSETS








Current assets:








Cash and cash equivalents

$

108,452



$

96,586


Accounts receivable, net


19,665




12,658


Inventories


22,597




11,285


Prepaid expenses and other current assets


34,049




46,683


Total current assets


184,763




167,212


Restricted cash and cash equivalents


46,486




26,853


Solar energy systems, net


1,673,532




1,458,355


Property and equipment, net


15,078




23,199


Intangible assets, net


862




1,420


Prepaid tax asset, net


505,883




419,474


Other non-current assets, net


37,325




29,843


TOTAL ASSETS

$

2,463,929



$

2,126,356


LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS AND EQUITY








Current liabilities:








Accounts payable

$

40,736



$

46,630


Accounts payable—related party


163




191


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


16,437




16,176


Accrued compensation


20,992




20,003


Current portion of long-term debt


13,585




6,252


Current portion of deferred revenue


41,846




19,911


Current portion of capital lease obligation


4,166




5,163


Accrued and other current liabilities


29,675




19,364


Total current liabilities


167,600




133,690


Long-term debt, net of current portion


925,964




750,728


Deferred revenue, net of current portion


29,200




34,379


Capital lease obligation, net of current portion


1,599




5,476


Deferred tax liability, net


342,382




395,218


Other non-current liabilities


13,674




10,355


Total liabilities


1,480,419




1,329,846


Commitments and contingencies








Redeemable non-controlling interests


122,444




129,676


Stockholders' equity:








Common stock


1,151




1,102


Additional paid-in capital


559,788




542,348


Accumulated other comprehensive income


6,905




7,631


Retained earnings


213,107




5,217


Total stockholders' equity


780,951




556,298


Non-controlling interests


80,115




110,536


Total equity


861,066




666,834


TOTAL LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS AND EQUITY

$

2,463,929



$

2,126,356


 


Vivint Solar, Inc.


Consolidated Unaudited Statements of Operations


(In thousands, except per share data)



















Three Months Ended



Year Ended



December 31,



December 31,



2017



2016



2017



2016


Revenue:
















Operating leases and incentives

$

31,151



$

25,320



$

150,862



$

105,353


Solar energy system and product sales


35,629




16,451




117,166




29,814


Total revenue


66,780




41,771




268,028




135,167


Cost of revenue:
















Cost of revenue—operating leases and incentives


37,741




35,230




141,305




150,796


Cost of revenue—solar energy system and product sales


25,313




12,579




88,977




23,185


Total cost of revenue


63,054




47,809




230,282




173,981


Gross profit (loss)


3,726




(6,038)




37,746




(38,814)


Operating expenses:
















Sales and marketing


10,659




9,358




38,696




41,436


Research and development


653




761




3,340




2,979


General and administrative


19,140




21,796




79,399




81,802


Amortization of intangible assets


140




139




558




901


Impairment of goodwill











36,601


Total operating expenses


30,592




32,054




121,993




163,719


Loss from operations


(26,866)




(38,092)




(84,247)




(202,533)


Interest expense


16,557




11,469




64,264




34,008


Other (income) expense, net


(834)




(1,342)




352




(1,437)


Loss before income taxes


(42,589)




(48,219)




(148,863)




(235,104)


Income tax (benefit) expense


(181,265)




(2,812)




(157,333)




7,433


Net income (loss)


138,676




(45,407)




8,470




(242,537)


Net loss attributable to non-controlling interests and redeemable

non-controlling interests


(45,245)




(65,545)




(200,628)




(260,523)


Net income available to common stockholders

$

183,921



$

20,138



$

209,098



$

17,986


Net income available per share to common stockholders:
















Basic

$

1.60



$

0.18



$

1.85



$

0.17


Diluted

$

1.54



$

0.18



$

1.77



$

0.16


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
















Basic


114,847




110,198




113,132




108,190


Diluted


119,578




114,898




118,268




112,538


 


Vivint Solar, Inc.


Consolidated Unaudited Statements of Cash Flows


(In thousands)



















Three Months Ended



Year Ended



December 31,



December 31,



2017



2016



2017



2016


CASH FLOWS FROM OPERATING ACTIVITIES:
















Net income (loss)

$

138,676



$

(45,407)



$

8,470



$

(242,537)


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
















Depreciation and amortization


15,935




14,445




60,606




46,821


Amortization of intangible assets


140




139




558




901


Impairment of goodwill and intangible assets











36,601


Deferred income taxes


(151,321)




49,178




(52,828)




174,090


Stock-based compensation


3,416




4,469




12,917




10,614


Loss on solar energy systems and property and equipment


1,834




1,856




6,858




6,432


Noncash interest and other expense


2,067




2,198




9,422




7,161


Reduction in lease pass-through financing obligation


(970)




(960)




(4,515)




(4,239)


Losses (gains) on interest rate swaps


(834)




(1,333)




359




(1,591)


Excess tax detriment from stock-based compensation





(433)







(1,713)


Changes in operating assets and liabilities:
















Accounts receivable, net


9,852




(578)




(7,007)




(9,022)


Inventories


(2,795)




(4,763)




(11,312)




(10,654)


Prepaid expenses and other current assets


(5,425)




(32,624)




10,864




(32,526)


Prepaid tax asset, net


(23,437)




(19,665)




(86,409)




(141,978)


Other non-current assets, net


419




(1,823)




(5,502)




(6,078)


Accounts payable


(967)




2,034




(93)




2,698


Accounts payable—related party


(312)




(234)




(192)




(1,714)


Accrued compensation


(1,005)




(2,767)




495




5,567


Deferred revenue


5,083




2,622




16,756




6,018


Accrued and other liabilities


464




(8,164)




6,699




(10,541)


Net cash used in operating activities


(9,180)




(41,810)




(33,854)




(165,690)


CASH FLOWS FROM INVESTING ACTIVITIES:
















Payments for the cost of solar energy systems


(65,426)




(87,362)




(276,651)




(405,635)


Payments for property and equipment





(88)




(672)




(2,785)


Proceeds from disposals of solar energy systems and property and equipment


476




220




2,428




913


Change in restricted cash and cash equivalents


(893)




(3,384)




(19,633)




(11,818)


Proceeds from state tax credits


1,504




5,169




3,720




5,169


Purchase of intangible assets











(291)


Net cash used in investing activities


(64,339)




(85,445)




(290,808)




(414,447)


CASH FLOWS FROM FINANCING ACTIVITIES:
















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


51,437




40,700




213,728




277,848


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


(13,515)




(9,904)




(47,289)




(32,134)


Proceeds from long-term debt


50,000




88,989




356,750




589,246


Payments on long-term debt


(7,560)




(8,844)




(172,495)




(233,244)


Payments for debt issuance and deferred offering costs


(240)







(13,917)




(16,774)


Proceeds from lease pass-through financing obligation


1,114




971




3,581




2,388


Principal payments on capital lease obligations


(1,054)




(1,300)




(4,467)




(5,657)


Proceeds from issuance of common stock


34




192




637




2,837


Net cash provided by financing activities


80,216




110,804




336,528




584,510


NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS


6,697




(16,451)




11,866




4,373


CASH AND CASH EQUIVALENTS—Beginning of period


101,755




113,037




96,586




92,213


CASH AND CASH EQUIVALENTS—End of period

$

108,452



$

96,586



$

108,452



$

96,586


 

Vivint Solar, Inc.


Key Operating Metrics



























Three Months Ended



December 31,



September 30,



December 31,



2017



2017



2016














 Installations


6,467




7,076




6,460


 Megawatts installed


44.6




46.5




47.1


 Cumulative installations


126,830




120,363




99,598


 Cumulative megawatts installed


864.9




820.3




681.1


 Estimated nominal contracted payments remaining (in millions)

$

3,021.6



$

2,913.2



$

2,568.6


      Estimated retained value under energy contract (in millions)

$

1,238.0



$

1,175.5



$

1,015.1


      Estimated retained value of renewal (in millions)

$

377.1



$

359.7



$

299.4


 Estimated retained value (in millions)

$

1,615.1



$

1,535.2



$

1,314.5


 Estimated retained value per watt

$

2.00



$

1.98



$

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 contracts as of December 31, 2017, 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

$

1,476.1



$

1,238.0



$

1,051.0


 Estimated retained value of renewal


588.5




377.1




244.2


 Total estimated retained value

$

2,064.6



$

1,615.1



$

1,295.2


Non-GAAP Earnings per Share (EPS) Before Non-controlling Interests

We report GAAP EPS, which is based upon net income available 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 effects of the federal tax rate reduction from 35% to 21% from the quarter and year ended December 31, 2017 and the goodwill impairment from the year ended December 31, 2016 as they are non-cash, non-recurring events that are not representative of our ongoing business. We believe that presenting non-GAAP EPS provides a meaningful supplemental measure of operating performance. 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 diluted non-GAAP loss before the allocation of loss attributable to non-controlling interests and redeemable non-controlling interests per share was ($0.43) and ($1.58) for the three months and year ended December 31, 2017.

Vivint Solar, Inc.


Reconciliation from GAAP EPS to Non-GAAP EPS


(In thousands, except per share data)



















Three Months Ended



December 31, 2017



December 31, 2016



Net Loss



EPS



Net Loss



EPS


Net income available to common stockholders

$

183,921



$

1.60



$

20,138



$

0.18


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


(45,245)




(0.40)




(65,545)




(0.59)


Effect of federal tax rate reduction from 35% to 21%


(187,501)




(1.63)








Non-GAAP net loss

$

(48,825)



$

(0.43)



$

(45,407)



$

(0.41)


Weighted-average shares used in computing net loss per share






114,847








110,198







Year Ended



December 31, 2017



December 31, 2016



Net Loss



EPS



Net Loss



EPS


Net income available to common stockholders

$

209,098



$

1.85



$

17,986



$

0.17


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


(200,628)




(1.77)




(260,523)




(2.41)


Effect of federal tax rate reduction from 35% to 21%


(187,501)




(1.66)








Impairment of goodwill








36,601




0.34


Non-GAAP net loss

$

(179,031)



$

(1.58)



$

(205,936)



$

(1.90)


Weighted-average shares used in computing net loss per share






113,132








108,190


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
855-842-1844
ir@vivintsolar.com

Press Contact:

Helen Langan
385-202-6577
pr@vivintsolar.com

 

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SOURCE Vivint Solar

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Contact

Investors

Rob Kain
Vice President, Investor Relations
855-842-1844
ir@vivintsolar.com

Press

Helen Langan
Director, Public Relations
385-202-6577
pr@vivintsolar.com

Government Affairs

Erica Dahl
Vice President, Government Affairs
385-455-5501
erica.dahl@vivintsolar.com