15Annual Report

2015 Annual Report Annual 2015 SPINE 20 15 ANNUAL REPORT POWERING PEOPLE. May 3, 2016 Dear Stockholders, It is an honor to write this letter as Vivint Solar’s new Interim Chief Executive Officer. I look forward to leading the company’s strong team as we continue to build on our position as a leader in a rapidly growing distributed solar market. For Vivint Solar, 2015 was a challenging year defined in a large part by our efforts to close the merger with SunEdison. Despite those challenges, the company achieved a number of important accomplishments. Here are a few highlights from the past year: We installed 231 megawatts for over 32,000 customers. This represents 49% growth year-over-year. On a cumulative basis, Vivint Solar has installed 459 megawatts for nearly 69,000 customers. Our estimated nominal contracted payments remaining at the end of the year was $1,872 million, growing 82% from the year ago period and estimated cumulative retained value was $906 million at the end of the year, growing 88% from the year ago period. We finished the year with an annual cost per watt of $3.12, dropping $0.15 per watt from 2014’s cost per watt of $3.27. As we look forward, I am confident in our ability to execute on our vision of building a sustainable business that brings clean, affordable energy to our customers. Consumer demand for cheaper, cleaner energy remains strong and we believe that the addressable market is still large compared to the number of customers who have gone solar thus far. We believe the strengths that propelled us to become a leading residential solar provider position us well for the future. Sincerely, David Bywater Interim Chief Executive Officer THIS PAGE INTENTIONALLY LEFT BLANK UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) _ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2015 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 001-36642 VIVINT SOLAR, INC. (Exact name of Registrant as specified in its Charter) Delaware 45-5605880 ( State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 3301 N. Thanksgiving Way, Suite 500 Lehi, UT 84043 (Address of principal executive offices) (Zip Code) (877) 404-4129 (Registrant’s telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Common Stock, Par Value $0.01 Per Share; Common stock traded on the New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES NO _ Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. YES NO _ Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES _ NO Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files). YES _ NO Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405) is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. _ Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definition of “large accelerated filer”, “accelerated filer”, and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer Accelerated filer _ Non-accelerated filer (Do not check if a small reporting company) Small reporting company Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES NO _ As of June 30, 2015, the last business day of the registrant’s most recently completed second quarter, the aggregate market value of voting stock held by non-affiliates of the registrant based on the closing price of $12.17 for shares of the registrant’s common stock as reported by the New York Stock Exchange, was approximately $264.1 million. As of March 2, 2016, there were 106,595,407 shares of registrant’s common stock outstanding. Portions of the Registrant’s Definitive Proxy Statement relating to the Annual Meeting of Shareholders, scheduled to be held on June 6, 2016, are incorporated by reference into Part III of this report. THIS PAGE INTENTIONALLY LEFT BLANK Table of Contents Page PART I Item 1. Business ................................................................................................................................................................... 1 Item 1A. Risk Factors ............................................................................................................................................................. 8 Item 1B. Unresolved Staff Comments.................................................................................................................................... 35 Item 2. Properties ................................................................................................................................................................. 36 Item 3. Legal Proceedings ................................................................................................................................................... 36 Item 4. Mine Safety Disclosures .......................................................................................................................................... 37 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities ............................................................................................................................................................ 38 Item 6. Selected Financial Data ........................................................................................................................................... 39 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations .................................. 41 Item 7A. Quantitative and Qualitative Disclosures About Market Risk ................................................................................. 67 Item 8. Financial Statements and Supplementary Data ....................................................................................................... 68 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure ................................. 110 Item 9A. Controls and Procedures .......................................................................................................................................... 110 Item 9B. Other Information .................................................................................................................................................... 111 PART III Item 10. Directors, Executive Officers and Corporate Governance ...................................................................................... 112 Item 11. Executive Compensation ......................................................................................................................................... 112 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters ................ 112 Item 13. Certain Relationships and Related Transactions, and Director Independence ........................................................ 112 Item 14. Principal Accounting Fees and Services ................................................................................................................. 112 PART IV Item 15. Exhibits, Financial Statement Schedules ................................................................................................................. 113 i THIS PAGE INTENTIONALLY LEFT BLANK PART I Forward-looking Statements This report, including the sections entitled “Business,” “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and certain information incorporated by reference into this report contain forward- looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are identified by words such as “believe,” “anticipate,” “expect,” “intend,” “plan,” “will,” “may,” “seek” and other similar expressions. You should read these statements carefully because they discuss future expectations, contain projections of future results of operations or financial condition or state other “forward-looking” information. These statements relate to our future plans, objectives, expectations, intentions

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