(1)

In this release, “we,” “us,” “our,” the “Company,” “NexPoint Residential Trust,” and “NXRT” each refer to NexPoint Residential Trust, Inc., a Maryland corporation.

(2)

FFO, Core FFO, AFFO and NOI are non-GAAP measures. For a discussion of why we consider these non-GAAP measures useful and reconciliations of FFO, Core FFO, AFFO and NOI to net income (loss), see the “Definitions and Reconciliations of Non-GAAP Measures” and “FFO, Core FFO and AFFO” sections of this release.

(3)

We define “Same Store” properties as properties that were in our Portfolio for the entirety of the periods being compared. There are 25 properties encompassing 9,057 units of apartment space in our Same Store pool for the year ended December 31, 2019  (our “2018-2019” Same Store” properties). There are 28 properties encompassing 10,141 units of apartment space in our Q4 Same Store pool for the three months ended December 31, 2019 (our “Q4 Same Store” properties).

(4)

Total number of units owned as of December 31, 2019 is 14,920, but all 196 units at Cutter’s Point were not operating due to damage caused by a tornado on October 20, 2019.

(5)

We define Return on Investment (“ROI”) as the sum of the actual rent premium divided by the sum of the total cost.

www.NexPointLiving.com

Page 1

•

Total revenues were $181.1 million for the full year 2019, compared to $146.6 million for the full year 2018.

•

Net income for the full year 2019 totaled $99.4 million, or income of $4.03 per diluted share, which included a gain on sales of real estate of $127.7 million and $69.1 million of depreciation and amortization expense. This compared to net loss of $(1.6) million, or a loss of $(0.08) per diluted share, for the full year 2018, which included $47.5 million of depreciation and amortization expense.

•

The change in our net income of $99.4 million for the year ended December 31, 2019 as compared to our net loss of $(1.6) million for the year ended December 31, 2018 primarily relates to increases in gains on sales of real estate and total revenues, partially offset by increases in depreciation and total property operating expenses.

•

For the full year 2019, NOI was $102.6 million on 40 properties, compared to $80.2 million for the full year 2018 on 35 properties.

•

For the full year 2019, Same Store NOI increased 6.7% to $66.0 million, compared to $61.8 million for the full year 2018.

•

For the full year 2019, FFO totaled $40.7 million, or $1.66 per diluted share, compared to $32.0 million, or $1.48 per diluted share, for the full year 2018. For the full year 2019, Core FFO totaled $47.6 million, or $1.93 per diluted share, compared to $35.1 million, or $1.62 per diluted share, for the full year 2018. For the full year 2019, AFFO totaled $54.2 million, or $2.20 per diluted share, compared to $40.8 million, or $1.88 per diluted share, for the full year 2018.

•

Total revenues were $49.7 million for the fourth quarter of 2019, compared to $39.4 million for the fourth quarter of 2018.

•

Net loss for the fourth quarter of 2019 totaled $(13.3) million, or a loss of $(0.53) per diluted share, which included $23.4 million of depreciation and amortization expense and $10.7 million of interest expense. This compared to net loss of $(4.8) million, or a loss of $(0.21) per diluted share, for the fourth quarter of 2018, which included $13.8 million of depreciation and amortization expense and $7.8 million of interest expense.

•

The change in our net loss between the periods primarily relates to increases in interest expense and depreciation and amortization expense, partially offset by an increase in total revenues.

•

For the fourth quarter of 2019, NOI was $28.3 million on 40 properties, compared to $21.3 million for the fourth quarter of 2018 on 35 properties.

•

For the fourth quarter of 2019, Q4 Same Store NOI¹ increased 9.3% to $18.8 million, compared to $17.2 million for the fourth quarter of 2018, which was impacted by a 10.3% decrease in real estate taxes.

•

For the fourth quarter of 2019, FFO totaled $10.1 million, or $0.39 per diluted share, compared to $9.0 million, or $0.40 per diluted share, for the fourth quarter of 2018. For the fourth quarter of 2019, Core FFO totaled $13.8 million, or $0.54 per diluted share, compared to $9.2 million, or $0.41 per diluted share, for the fourth quarter of 2018. For the fourth quarter of 2019, AFFO totaled $15.0 million, or $0.59 per diluted share, compared to $10.7 million, or $0.47 per diluted share, for the fourth quarter of 2018.

www.NexPointLiving.com

Page 2

www.NexPointLiving.com

Page 3

(share counts in thousands)

Exchange/Ticker

NYSE: NXRT

Share Price (1)

$52.00

Insider Ownership

19.71%

2020 Q1 Dividend Per Share

$0.3125

Dividend Yield (1)

2.40%

Shares outstanding - basic (2)

24,116

Shares outstanding - diluted (2)

24,593

(1)

As of the close of market trading on February 14, 2020.

(2)

Weighted average for the year ended December 31, 2019.

Revenue & Average Rent Per Unit

Stock Price Performance (Since Inception; 4/1/2015)

www.NexPointLiving.com

Page 4

Torreyana

Bloom

Bella Solara

Total/ Average

New Unit Interior Upgrade Inventory

57

117

218

392

Average Interior Upgrade Cost

$

12,466

$

12,092

$

8,162

$

9,961

Underwritten Average Rent Premium (monthly)

$

120

$

157

$

115

$

128

Forecast Return on Investment (annual)

11.6

%

15.6

%

16.8

%

15.4

%

New Smart Home Technology Packages

158

270

160

588

Rental Revenue Growth, Next Three Years Avg.

4.9

%

6.8

%

8.0

%

6.6

%

Total Revenue Growth, Next Three Years Avg.

3.7

%

5.1

%

6.0

%

4.9

%

NOI Growth, Next Three Years Avg.

3.8

%

5.6

%

8.0

%

5.8

%

Cap Rate Expansion, Next Three Years Total (basis points)

56

80

111

82

Cap Rate Expansion, Seven Year Hold (basis points)

118

145

189

151

LEASED REHABS

DIVIDEND GROWTH

CORE FFO GROWTH

NOI GROWTH

www.NexPointLiving.com

Page 5

FY 2019

FY 2018

FY 2017

Q4 2019

Q4 2018

(in thousands, except for per share and unit data)

Company Profile

Market Capitalization

$

1,136,000

$

824,000

$

588,000

Share Price (as of the last day of the period)

$

45.00

$

35.05

$

27.94

Weighted average common shares outstanding - basic

24,116

21,189

21,057

25,073

22,207

Weighted average common shares outstanding - diluted

24,593

21,667

21,399

25,520

22,672

Earnings Profile

Total revenues

$

181,066

$

146,597

$

144,235

$

49,676

$

39,390

Net income (loss) attributable to common stockholders

99,140

(1,609

)

53,374

(13,266

)

(4,767

)

NOI (1)

102,591

80,175

76,578

28,327

21,251

Same Store NOI (2)

65,961

61,795

18,818

17,214

Same Store NOI Growth (%) (2)

6.7

%

9.3

%

Earnings Metrics Per Common Share (diluted basis)

Earnings (loss)

$

4.03

$

(0.08

)

$

2.49

$

(0.53

)

$

(0.21

)

FFO (1)

$

1.66

$

1.48

$

1.17

$

0.39

$

0.40

Core FFO (1)

$

1.93

$

1.62

$

1.41

$

0.54

$

0.41

AFFO (1)

$

2.20

$

1.88

$

1.62

$

0.59

$

0.47

Dividends declared per common share

$

1.138

$

1.025

$

0.910

$

0.313

$

0.275

     FFO Coverage (3)

1.46x

1.44x

1.29x

1.26x

1.45x

     Core FFO Coverage (3)

1.70x

1.58x

1.55x

1.73x

1.48x

     AFFO Coverage (3)

1.94x

1.84x

1.79x

1.88x

1.72x

Portfolio

Total Properties

40

35

33

Total Units

14,724

12,555

11,775

     Occupancy

94.2

%

94.6

%

93.8

%

     Average Effective Monthly Rent per Unit

$

1,103

$

985

$

948

Same Store Portfolio Metrics (2)

Total Same Store Properties

25

25

28

28

Total Same Store Units

9,057

9,057

10,141

10,141

     Occupancy

94.5

%

94.8

%

94.4

%

94.7

%

     Average Effective Monthly Rent per Unit

$

1,038

$

1,002

$

1,032

$

998

Value-Add Program

Completed Rehab Units

2,516

1,432

1,588

533

316

Cumulative Completed Rehab Units (4)

6,927

     Average Increase to Effective Monthly Rent

     per Unit (Post-Rehab)

$

101

     ROI on Post-Rehab Units

24.5

%

Outstanding Debt Summary

Total Mortgage Debt

$

1,193,528

$

845,713

$

762,404

Credit Facilities

218,000

—

30,000

Bridge Facility

—

—

8,597

Total Debt Outstanding

$

1,411,528

$

845,713

$

801,001

     Leverage Ratio (Net Debt to Enterprise Value) (5)

55

%

50

%

57

%

(1)

For more information and reconciliations of NOI, FFO, Core FFO and AFFO, see the “FFO, Core FFO and AFFO” and “Definitions and Reconciliations of Non-GAAP Measures” sections of this release.

(2)

We define “Same Store” properties as properties that were in our Portfolio for the entirety of the periods being compared. Full year results are shown for the 2018-2019 Same Store properties; Q4 results are shown for the Q4 Same Store properties. For additional information regarding our Q4 and 2018-2019 Same Store properties, see the “Q4 Same Store Results” and “2018-2019 Same Store Results” section of this release.

(3)

Indicates coverage ratio of FFO/Core FFO/AFFO per common share (diluted) over dividends declared per common share during the period.

(4)

Inclusive of all full and partial interior upgrades completed through. Cumulative results exclude rehabs completed for properties sold through December 31, 2019.

(5)

For more information and a reconciliation of debt to net debt, see the “Definitions and Reconciliations of Non-GAAP Measures” section of this release.

www.NexPointLiving.com

Page 6

Guidance Range (1)

Low-End

Mid-Point

High-End

Earnings (loss) per diluted share (2)

$

0.73

$

0.78

$

0.85

Core FFO per diluted share (2) (3)

$

2.15

$

2.21

$

2.27

Same Store Growth: (4)

Rental Income

4.8

%

5.3

%

5.8

%

Total Revenue

5.0

%

5.5

%

6.0

%

Total Operating Expenses

5.3

%

5.8

%

6.3

%

Same Store NOI (3)

5.0

%

6.0

%

7.0

%

Other Considerations: (5)

Acquisitions

$

50.0

$

75.0

$

100.0

Dispositions (6)

$

50.0

$

75.0

$

100.0

(1)

Full Year 2020 guidance forecast includes Same Store growth projections presented above, which takes into effect the tornado damage at Cutter’s Point and the forecast dispositions of Willow Grove, Woodbridge and Southpoint Reserve at Stoney Creek, and assumes no further acquisition or disposition activity for the remainder of the year.

(2)

Weighted average diluted share count estimate for full year 2020 is approximately 26.5 million.

(3)

Same Store NOI and Core FFO are non-GAAP measures. For reconciliations of Full Year 2020 Same Store NOI and Core FFO guidance to net loss guidance, and a discussion of why we consider these non-GAAP measures useful, see the “Definitions and Reconciliations of Non-GAAP Measures” section of this release.

(4)

Year-over-year growth for the Full Year 2020 pro forma Same Store pool (25 properties).

(5)

We continue to evaluate our portfolio for capital recycling opportunities. Transaction volumes presented are not incorporated into the EPS and CFFO guidance above. Actual acquisitions and dispositions could vary significantly from our projections. We undertake no duty to update these assumptions, except as required by law.

(6)

Includes the forecast dispositions of Willow Grove, Woodbridge and Southpoint Reserve at Stoney Creek.

www.NexPointLiving.com

Page 7

(1)

Management estimates based on independent third-party review of our properties.

(2)

Estimated value ranges are presented for the existing portfolio (40 properties at December 31, 2019).

(3)

The Company anticipates net income will be in the range between approximately $19.3 million and $22.6 million for the full year of 2020 and between $27.0 million and $27.8 million for the first quarter of 2020. FY 2020 Pro Forma NOI Guidance does not consider any additional acquisition or disposition activity for the remainder of the year.

(4)

Includes approximately $21.9 million that is held for value-add upgrades; reduced by $21.9 million for estimated 2020 rehab expenditures.

(5)

Includes approximately $1.0 million in forward 12-month principal payments.

(6)

Includes outstanding balance of December 31, 2019.

www.NexPointLiving.com

Page 8

December 31, 2019

December 31, 2018

ASSETS

Operating Real Estate Investments

Land

$

317,886

$

202,347

Buildings and improvements

1,472,319

935,604

Intangible lease assets

12,414

3,049

Construction in progress

4,375

1,881

Furniture, fixtures, and equipment

81,038

61,456

Total Gross Operating Real Estate Investments

1,888,032

1,204,337

Accumulated depreciation and amortization

(152,552

)

(134,124

)

Total Net Operating Real Estate Investments

1,735,480

1,070,213

Real estate held for sale, net of accumulated depreciation of $7,859 and $897, respectively

46,330

17,329

Total Net Real Estate Investments

1,781,810

1,087,542

Cash and cash equivalents

25,671

19,864

Restricted cash

45,511

23,265

Accounts receivable

6,285

3,340

Prepaid and other assets

2,336

9,058

Fair market value of interest rate swaps

4,376

18,141

TOTAL ASSETS

$

1,865,989

$

1,161,210

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:

Mortgages payable, net

$

1,145,371

$

824,702

Mortgages payable held for sale, net

41,176

13,318

Credit facility, net

216,501

—

Accounts payable and other accrued liabilities

11,971

5,765

Accrued real estate taxes payable

12,206

12,607

Accrued interest payable

3,691

2,852

Security deposit liability

2,977

1,889

Prepaid rents

1,658

1,482

Fair market value of interest rate swaps

902

—

Total Liabilities

1,436,453

862,615

Redeemable noncontrolling interests in the Operating Partnership

3,295

2,567

Stockholders' Equity:

Preferred stock, $0.01 par value: 100,000,000 shares authorized; 0 shares issued

—

—

Common stock, $0.01 par value: 500,000,000 shares authorized; 25,245,740 and 23,499,635 shares issued and outstanding, respectively

251

234

Additional paid-in capital

359,748

285,511

Accumulated earnings (loss) less dividends

63,776

(6,764

)

Accumulated other comprehensive income

2,466

17,047

Total Stockholders' Equity

426,241

296,028

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

1,865,989

$

1,161,210

www.NexPointLiving.com

Page 9

For the Year Ended December 31,

2019

2018

2017

Revenues

Rental income

$

177,162

$

143,158

$

140,882

Other income

3,904

3,439

3,353

Total revenues

181,066

146,597

144,235

Expenses

Property operating expenses

42,692

35,824

38,850

Real estate taxes and insurance

25,113

20,713

19,161

Property management fees (1)

5,388

4,382

4,330

Advisory and administrative fees (2)

7,500

7,474

7,419

Corporate general and administrative expenses

9,613

7,808

6,275

Property general and administrative expenses

6,765

6,134

6,159

Depreciation and amortization

69,086

47,470

48,752

Total expenses

166,157

129,805

130,946

Operating income before gain on sales of real estate

14,909

16,792

13,289

Gain on sales of real estate

127,684

13,742

78,365

Operating income

142,593

30,534

91,654

Interest expense

(37,385

)

(28,572

)

(29,576

)

Loss on extinguishment of debt and modification costs

(2,869

)

(3,576

)

(5,719

)

Casualty losses (3)

(3,488

)

—

—

Miscellaneous income

587

—

—

Net income (loss)

99,438

(1,614

)

56,359

Net income attributable to noncontrolling interests

—

—

2,836

Net income (loss) attributable to redeemable noncontrolling interests in the Operating Partnership

298

(5

)

149

Net income (loss) attributable to common stockholders

$

99,140

$

(1,609

)

$

53,374

Other comprehensive income (loss)

Unrealized gains (losses) on interest rate derivatives

(14,625

)

1,931

4,568

Total comprehensive income

84,813

317

60,927

Comprehensive income attributable to noncontrolling interests

—

—

2,720

Comprehensive income attributable to redeemable noncontrolling interests in the Operating Partnership

254

1

166

Comprehensive income attributable to common stockholders

$

84,559

$

316

$

58,041

Weighted average common shares outstanding - basic

24,116

21,189

21,057

Weighted average common shares outstanding - diluted

24,593

21,667

21,399

Earnings (loss) per share - basic

$

4.11

$

(0.08

)

$

2.53

Earnings (loss) per share - diluted

$

4.03

$

(0.08

)

$

2.49

(1)

Fees incurred to an unaffiliated third party that is an affiliate of the noncontrolling limited partner of the Operating Partnership (the “OP”).

(2)

Fees incurred to the Company’s adviser.

(3)

Casualty losses for the year ended December 31, 2019 is related to tornado damage incurred at Cutter’s Point.

www.NexPointLiving.com

Page 10

For the Year Ended December 31,

2019

2018

$ Change

% Change

Revenues

Same Store

Rental income

$

116,313

$

110,902

$

5,411

4.9

%

Other income

2,324

2,824

(500

)

-17.7

%

Same Store revenues

118,637

113,726

4,911

4.3

%

Non-Same Store