APX Group Holdings, Inc. 4th Quarter and Full Year 2015 Results

March 8, 2016

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APX Group Holdings, Inc. (the ”Company”, “Vivint”, “we”, “our”, or “us”) obtained the industry, market and competitive position data included in this

presentation from its estimates and research as well as from industry publications, surveys and studies conducted by third parties. Industry publication

studies and surveys generally state that the information contained therein has been obtained from sources believed to be reliable but there can be no

assurance as to the accuracy or completeness of such information. While APX Group, Inc. believes that each of the publications, studies and surveys is

reliable, We have not independently verified industry, market and competitive position data from third-party sources. While we believe our internal

business research is reliable and the market definitions are appropriate, neither such research nor these definitions have been verified by any

independent sources. Accordingly, you should not place undue weight on the industry and market share data in this presentation.

This presentation includes forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995, including but not limited to,

statements related to the performance of our business, our financial results, our liquidity and capital resources, our plans, strategies and prospects, both

business and financial and other non-historical statements. Forward-looking statements convey the Company’s current expectations or forecasts of

future events. All statements contained in this earnings release other than statements of historical fact are forward-looking statements. These

statements are based on the beliefs and assumptions of our management. Although we believe that our plans, intentions and expectations reflected in

or suggested by these forward-looking statements are reasonable, we cannot assure you that we will achieve or realize these plans, intentions or

expectations. Forward-looking statements are inherently subject to risks, uncertainties and assumptions. These statements may be preceded by,

followed by or include the words “believes,” “estimates,” “expects,” “projects,” “forecasts,” “may,” “will,” “should,” “seeks,” “plans,” “scheduled,”

“anticipates” or “intends” or similar expressions.

Forward-looking statements are not guarantees of performance. You should not put undue reliance on these statements which speak only as of this

date hereof. You should understand that the following important factors, in addition to those discussed in “Risk Factors” in our most recent annual report

on Form 10K, and other reports filed with the Securities Exchange Commission (“SEC”), could affect our future results and could cause those results or

other outcomes to differ materially from those expressed or implied in our forward-looking statements: (1) risks of the security and smart home industry,

including risks of and publicity surrounding the sales, subscriber origination and retention process; (2) the highly competitive nature of the security and

smart home industry and product introductions and promotional activity by our competitors; (3) litigation, complaints or adverse publicity; (4) the impact

of changes in consumer spending patterns, consumer preferences, local, regional, and national economic conditions, crime, weather, demographic

trends and employee availability; (5) adverse publicity and product liability claims; (6) increases and/or decreases in utility and other energy costs,

increased costs related to utility or governmental requirements; and (7) cost increases or shortages in security and smart home technology products or

components. In addition, the origination and retention of new subscribers will depend on various factors, including, but not limited to, market availability,

subscriber interest, the availability of suitable components, the negotiation of acceptable contract terms with subscribers, local permitting, licensing and

regulatory compliance, and our ability to manage anticipated expansion and to hire, train and retain personnel, the financial viability of subscribers and

general economic conditions. These and other factors that could cause actual results to differ from those implied by the forward-looking statements in

this presentation are more fully described in the “Risk Factors” section of our most recent annual report on Form 10-K, as such factors may be updated

from time to time in our periodic filings with the SEC. These risk factors should not be construed as exhaustive. We disclaim any obligations to and do

not intend to update the above list or to announce publicly the results of any revisions to any of the forward-looking statements to reflect future events or

developments. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing

cautionary statements. We undertake no obligations to update or revise publicly any forward-looking statements, whether a result of new information,

future events, or otherwise.

forward-looking statements

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non-GAAP financial measuresThis presentation includes Adjusted EBITDA and Steady-State Free Cash Flow (“SSFCF”), which are supplemental measures that are not required

by, or presented in accordance with, accounting principles generally accepted in the United States (“GAAP”). Adjusted EBITDA and SSFCF are not

measurements of our financial performance under GAAP and should not be considered as an alternative to net income or any other measure

derived in accordance with GAAP or as alternatives to cash flows from operating activities as a measure of our liquidity. We believe the presentation

of Adjusted EBITDA is appropriate to provide useful information about the flexibility we have under our covenants to investors, lenders, financial

analysts and rating agencies since these groups have historically used EBITDA-related measures in our industry, along with other measures, to

estimate the value of a company, to make informed investment decisions, and to evaluate a company’s ability to meet its debt service requirements.

Adjusted EBITDA eliminates the effect of non-cash depreciation of tangible assets and amortization of intangible assets, much of which results from

acquisitions accounted for under the purchase method of accounting. Adjusted EBITDA also eliminates the effects of interest rates and changes in

capitalization which management believes may not necessarily be indicative of a company’s underlying operating performance. Adjusted EBITDA is

also used by us to measure covenant compliance under the indenture governing our senior secured notes, the indenture governing our senior

unsecured notes and the credit agreement governing our revolving credit facility.

We believe that SSFCF is a useful measure of pre-levered cash that is generated by the business after the cost of replacing recurring revenue lost

to attrition, but before the cost of new subscribers driving recurring revenue growth. The use of SSFCF is subject to certain limitations. For

example, SSFCF adjusts for cash items that are ultimately within management’s discretion to direct and therefore the measure may imply that there

is less or more cash that is available for the Company’s operations than the most comparable GAAP measure.

We caution investors that amounts presented in accordance with our definition of Adjusted EBITDA and SSFCF may not be comparable to similar

measures disclosed by other issuers, because not all issuers and analysts calculate Adjusted EBITDA and SSFCF in the same manner.

See Annex A of this presentation for a reconciliation of Adjusted EBITDA and SSFCF to net loss for the Company, which we believe is the most

closely comparable financial measure calculated in accordance with GAAP. Adjusted EBITDA and SSFCF should be considered in addition to and

not as a substitute for, or superior to, financial measures presented in accordance with GAAP.

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participants

Todd Pedersen

Chief Executive Officer

Alex Dunn

President

Mark Davies

Chief Financial Officer

Dale R. Gerard

SVP, Finance & Treasurer

5

Cloud

StorageAcquired 2014

Wireless

InternetLaunched 2014

Smart

HomeLaunched 2010

Residential

SolarLaunched 2011

IPO 2014

REDEFINING THE

HOME EXPERIENCETHROUGH INTELLIGENTLY DESIGNED PRODUCTS & SERVICES

DELIVERED TO EVERY HOME BY PEOPLE WHO CARE

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the winning smart home model

1) Lack of clear and compelling consumer use cases

2) Difficulty educating consumer through typical sales

channels

3) Burden on consumer to understand interoperability

4) High up-front pricing

5) Difficulty of installation

6) Poor product and system reliability

7) Lack of post-install service

8) Security and privacy concerns

Proprietary cloud based expandable platform that

integrates smart home products & services and

eliminates interoperability challenges

• 280+ million daily inbound data points

• 200+ million daily Smart Home analytics

• 20+ million daily video clips

• Space Monkey: 88+ petabytes cloud storage

Vivint’s vertically-integrated Smart Home solution

Eight barriers to smart home mass adoption

“Vivint is one company that I think really gets it.“

- Forbes

“We Found the Ultimate All in One Smart Home Service Provider.“

- Coldwell Banker

• Highly trained Direct-to-Home and Inside Sales

professionals producing record sales rep average,

best in class Smart Home adoption and Industry

leading RMR

• In-home design and professional installation by

Vivint Smart Home Pros

• Best-in-class product innovation: Doorbell Camera,

Ping 2-way talk camera & Element thermostat

• Regular customer usage drives value & retention

“Think of it like Nest’s smart thermostat feature, except on

steroids.”- Entrepreneur

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6,590 7,196 11,197

13,849 14,349

21,965

2013 2014 2015

168,031 155,395 170,691

51,003 49,069

65,871

2013 2014 2015

204,464

236,562219,034

new smart home subscriber originations(1)

21,545

33,162

20,439

Quarters ended December 31, Years ended December 31,

(1) All subscriber data presented excludes wireless internet business

(2) RMR is stated as of the end of each period

(3) Increase in Smart home adoption rates offset $4 price reduction on base security packages

Avg. RMR(2)

per New Subscriber Smart Home Adoption Rate

D2HIS

60.8%69.6%

78.0%

2013 2014 2015

$58.35

$61.89 $61.43

2013 2014 2015

Growth: Total 5.4% 53.9%

IS 3.6% 53.1%

D2H 9.2% 55.6%

Growth: Total (6.7%) 15.7%

IS (3.8%) 34.2%

D2H (7.5%) 9.8%

(3)

D2HIS

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$48.7

2013 2014 2015

subscriber portfolio data(1)

(1) All subscriber portfolio data presented excludes wireless internet business

(2) RMR is stated as of the end of each period

As of December 31,

2013 2014 2015

$42.6

$49.1

$55.8

$54.92

$54.50

$53.05

803,413

901,226

1,015,267($ in Millions)

Total RMR(2)Total Subscribers Avg. RMR Per Subscriber(2)

Growth: 15.4% 14.3% Growth: 12.4% 13.4% Growth: 2.7% 0.8%

795,500

894,175

1,013,917

2013 2014 2015

$55.7

$42.2

Normalized for FX impacts:

Total RMR up 16.2% ($56.6 million)

Avg. RMR Per Subscriber up 2.5% to $55.87

Avg. RMR per New Subscriber continues to be accretive to portfolio RMR

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revenue and adjusted EBITDA(1)

Years ended December 31,

Years ended December 31, Quarters ended December 31,

Quarters ended December 31, Revenue

Adjusted EBITDA

(1) A reconciliation of Adjusted EBITDA to GAAP is included in Annex A of this presentation

$500.9 $563.7

$653.7

2013 2014 2015

$132.7 $152.4

$175.0

2013 2014 2015

$292.3 $309.4

$387.1

2013 2014 2015

$79.8 $84.1

$101.5

2013 2014 2015

Growth: 14.8% 14.8% Growth: 12.5% 16.0%

Growth: 5.4% 20.7% Growth: 5.9% 25.1%

Normalized for FX:

4th Quarter – up 16.4%

($2.4 million)

FY – up 17.4%

($8.3 million)

Recurring Revenue:

95.6% of Total Revenue

Full Year EBITDA Margins:

Improved 430 bps to

59.2% in 2015

G&A and service costs

are scaling nicely

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31.3x30.9x

2014 2015

service and creation costs(1)

Net Creation Cost MultipleYears Ended December 31,

Net Service Cost and Margin per SubscriberYears Ended December 31,

(1) Excludes wireless internet business

Differentiated Results of an Integrated Smart

Home Platform

Revenue per Sub

Service cost and contribution margin

Customer Usage and NPS

Attrition

Reduction of entry level package from

$53.99 to $49.99

Improvement: Equipment and

Installations, Commissions, Sales

Support Services

0.4x

(0.8x)

$15.65

$14.33

$13.50

$14.00

$14.50

$15.00

$15.50

$16.00

Net Service

Margin

Net S

erv

ice

Costs

71.3% 73.8%

2014 2015

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671,818

219,034 (95,352)

795,500

204,464 (105,789)

894,175

236,562 (116,820)

1,013,917

12.2%

Annualized

Attrition

12.8%

Annualized

Attrition

(# of Subscriber Accounts)

12.5%

Annualized

Attrition

subscriber account attrition(1)

~ 15% of portfolio reaching initial end

of contract term in 2016

2012 42-mo contracts (4Q15 – 1Q16)

2013 42-mo contracts (4Q16 – 1Q17)

(1) All subscriber attrition data presented excludes the wireless internet business for all periods presented

LTM Quarterly Attrition

13.6% 13.7%

12.8%

12.5% 12.5%

12.0% 12.0%12.2%

Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015

30bps Improvement

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moving into 2016 with market and operational momentum

• Expect to continue market share gains

• Direct to Home… both PRA

productivity and rep growth

• Inside Sales seeing strong demand

and conversion ratio

• Product offerings continue to expand and

strengthen

• Launching new award winning

hardware line-up

• Cloud and platform enhancements:

use-case, functionality and

intelligence

• Considering new channel

opportunities (DIY and ecommerce)

• 2016 key areas of focus

• Creation cost multiple

• Developing strong industry

partnerships (e.g.. Amazon, Google

Nest and more)

• Commercialization: Big Data,

commerce disintermediation

"At a time when connected devices all too often smack of "we did it because we can," Vivint's Ping actually brings justification along with its gadgetry.”

SlashGear’s Best of CES 2016

Q&A

APX Group Holdings, Inc.

Quarters and Years Ended December 31, 2015 and 2014

Consolidated Financial Statements

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condensed consolidated balance sheetsAPX Group Holdings, Inc. and Subsidiaries

(In thousands)

December 31, December 31,

2015 2014

ASSETS (unaudited) (audited)

Current Assets:

Cash and cash equivalents 2,559$ 10,807$

Restricted cash and cash equivalents - 14,214

Accounts receivable, net 8,060 8,739

Inventories 26,321 36,157

Prepaid expenses and other current assets 10,626 15,454

Total current assets 47,566 85,371

Property and equipment, net 55,274 62,790

Subscriber acquisition costs, net 790,644 548,073

Deferred financing costs, net 46,700 52,158

Intangible assets, net 558,395 703,226

Goodwill 834,416 841,522

Long-term investments and other assets, net 10,893 10,533

Total assets 2,343,888$ 2,303,673$

LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY

Current Liabilities:

Accounts payable 52,207$ 31,324$

Accrued payroll and commissions 38,247 37,979

Accrued expenses and other current liabilities 35,573 28,862

Deferred revenue 34,875 33,226

Current portion of capital lease obligations 7,616 5,549

Total current liabilities 168,518 136,940

Notes payable, net 2,158,356 1,863,155

Revolving line of credit 20,000 20,000

Capital lease obligations, net of current portion 11,171 10,655

Deferred revenue, net of current portion 44,782 32,504

Other long-term obligations 10,530 6,906

Deferred income tax liabilities 7,524 9,027

Total liabilities 2,420,881 2,079,187

Total stockholders’ (deficit) equity (76,993) 224,486

Total liabilities and stockholders’ (deficit) equity 2,343,888$ 2,303,673$

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consolidated statements of operationsAPX Group Holdings, Inc. and Subsidiaries

(In thousands)

Years Ended December 31,

2015 2014 2015 2014

(unaudited) (unaudited) (unaudited) (audited)

Revenues:

Recurring revenue 168,342$ 144,313$ 624,989$ 537,695$

Service and other sales revenue 4,980 6,910 22,700 21,980

Activation fees 1,712 1,207 6,032 4,002

Total revenues 175,034 152,430 653,721 563,677

Costs and expenses:

Operating expenses 56,870 61,466 228,315 202,769

Selling expenses 33,229 26,168 122,948 107,370

General and administrative expenses 36,440 33,830 107,212 126,083

Depreciation and amortization 63,218 59,762 244,724 221,324

Restructuring and asset impairment charges 1,206 - 59,197 -

Total costs and expenses 190,963 181,226 762,396 657,546

Loss from operations (15,929) (28,796) (108,675) (93,869)

Other expenses (income):

Interest expense 44,403 38,033 161,339 147,511

Interest income (81) - (90) (1,455)

Other (income) expenses, net 2,108 (2,017) 8,832 (1,779)

Gain on 2GIG Sale

Total other expenses 46,430 36,016 170,081 144,277

Loss before income taxes (62,359) (64,812) (278,756) (238,146)

Income tax expense (benefit) 16 833 351 514

Net loss (62,375)$ (65,645)$ (279,107)$ (238,660)$

Three Months Ended December 31,

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summary of consolidated statements of cash flowsAPX Group Holdings, Inc. and Subsidiaries

(In thousands)

2015 2014

(unudited) (audited)

Net cash used in operating activities (255,307)$ (309,637)$

Net cash used in investing activities (35,615) (36,284)

Net cash provided by (used in) financing activities 284,400 95,057

Effect of exchange rate changes on cash (1,726) (234)

Net increase (decrease) in cash (8,248) (251,098)

Cash:

Beginning of period 10,807 261,905

End of period 2,559$ 10,807$

Years Ended December 31,

APX Group Holdings, Inc.

Annex A

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reconciliation of non-GAAP financial measures – APX Group($ in Millions)

1. Adjustment based on management’s estimated G&A savings in Steady State is 50% of last quarter annualized G&A.

2.

(i) Reflects costs related to the restructuring charges and asset impairments related to the transition of our Wireless Internet business.

(ii) Excludes loan amortization costs that are included in interest expense.

(iii) Reflects subscriber acquisition costs that are expensed as incurred because they are not directly related to the acquisition of specific

subscribers. Certain other industry participants purchase subscribers through subscriber contract purchases, and as a result, may capitalize

the full cost to purchase these subscribers contracts, as compared to our organic generation of new subscribers, which requires us to expense

a portion of our subscriber acquisition costs under GAAP.

(iv) Reflects non-cash compensation costs related to employee and director stock and stock option plans.

(v) Non-recurring gain on the 2GIG sale.

(vi) Bonuses and transaction related costs associated with the 2GIG sale.

(vii) Other adjustments including items such as product development costs, fire related expenses, subcontracted monitoring fee savings and other

similar adjustments.

RMR 55.7$ 48.7$ 42.2$

Normalized RMR Attrition Rate 11.0% 11.0% 11.0%

RMR Attrited 6.1$ 5.4$ 4.6$

Normalized Net Creation Multiple 29.0x 29.0x 29.0x

Attrition Replacement Cost 177.6$ 155.4$ 134.6$

2015 2014 2013 2015 2014 2013

Net loss $ (279.1) $ (238.7) $ (124.5) $ (62.4) $ (65.6) $ (37.2)

Interest expense, net 161.2 146.1 113.0 44.3 38.0 30.8

Other (income) expense, net 8.8 (1.8) (0.1) 2.1 - 0.2

Income tax expense (benefit) 0.4 0.5 3.6 0.0 0.8 (8.0)

Restructuring and asset impairment (i)

59.2 - - 0.9 - -

Depreciation and amortization (ii)

151.7 162.6 173.3 37.2 41.4 43.1

Amortization of capitalized creation costs 93.0 58.7 22.2 26.0 18.4 9.4

Non-capitalized subscriber acquisition costs (iii)

164.0 135.0 101.0 40.9 38.3 22.9

Non-cash compensation (iv)

2.5 1.9 1.9 0.6 0.5 0.6

Gain on 2GIG Sale (v)

- - (46.9) - - -

Transaction costs related to 2GIG Sale (vi)

- - 5.5 - - -

Transaction related costs - - 0.8 - - -

Other Adjustments (vii)

25.3 45.1 42.5 11.8 12.3 18.0

Adjusted EBITDA $ 387.1 $ 309.4 $ 292.3 $ 101.5 $ 84.1 $ 79.8

LQA Adjusted EBITDA 319.3$ 336.4$ 406.1$

Add: G&A Pro Forma Adjustment (1)

62.5 67.7 72.9

Less: Attrition Replacement Costs (2)

(134.6) (155.4) (177.6)

Annualized SSFCF 247.3$ 248.7$ 301.4$

Years Ended December 31, Three Months Ended December 31,

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certain definitionsTotal Subscribers – The aggregate number of active security and home automation subscribers at the end of a given period

RMR – The recurring monthly revenue billed to a security and home automation subscriber

Total RMR – The aggregate RMR billed for all security and home automation subscribers

Average RMR per Subscriber – The Total RMR divided by Total Subscribers. This is also commonly referred to as Average Revenue per User, or

ARPU

Average RMR per New Subscriber – The aggregate RMR for new subscribers originated during a period divided by the number of new subscribers

originated during such period

Attrition – The aggregate number of canceled security and home automation subscribers during a period divided by the monthly weighted average

number of total security and home automation subscribers for such period. Subscribers are considered canceled when they terminate in accordance

with the terms of their contract, are terminated by us, or if payment from such subscribers is deemed uncollectible (when at least four monthly billings

become past due). Sales of contracts to third parties and moves are excluded from the attrition calculation

Net Subscriber Acquisition Costs – Defined as direct and indirect costs to create a new security and home automation subscriber. These include

commissions, equipment, installation, marketing and other allocations (G&A and overhead), less activation fees and up sell revenue. These costs also

exclude residuals and long-term equity expenses associated with the direct-to-home sales channel.

Net Creation Cost Multiple – Defined as Net Subscriber Acquisition Costs, divided by the number of net new subscribers originated, and then divided

by the Average RMR per New Subscriber

Adjusted EBITDA – Net Income (loss) before interest expense (net of interest income), income and franchise taxes and depreciation and amortization

(including amortization of capitalized subscriber acquisition costs), further adjusted to exclude the effects of certain contract sales to third parties, non-

capitalized subscriber acquisition costs, stock-based compensation, the historical results of the Company’s Solar variable interest entity and certain

unusual, non-cash, non-recurring and other items permitted in certain covenant calculations under the indentures governing the notes

Last Quarter Annualized Adjusted EBITDA (“LQA Adjusted EBITDA”) – A common industry measure used to reflect the step-function in earnings

during the sales season related to the subscribers generated from April to August. LQA Adjusted EBITDA, calculated by multiplying Adjusted EBITDA

for the most recent fiscal quarter by 4, represents the ongoing earnings power of Vivint’s current subscriber base and is potentially a more relevant

metric than LTM due to the recurring nature of the revenue and expected earnings

Net Service Cost – Defined as total service costs, including monitoring, customer service, field service and other allocations (G&A and overhead)

costs, less total service revenue divided by total service subscribers

Net Service Margin – Defined as Average RMR per subscriber less Net Service Costs divided by Average RMR per subscriber

Steady State Free Cash Flow (“SSFCF”) – Provides an estimate of the cash flow of a company, if it were to invest in new RMR only to the extent

required to replace attrition. SSFCF is defined as LQA Adjusted EBITDA less cost to replace RMR attrited, plus an add-back for pro forma G&A

expenses. Cost to replace RMR attrited is calculated by multiplying RMR by the attrition rate in steady state by the Net Creation Cost Multiple