NexPoint Residential Trust (NXRT) 8-K Results of Operations and Financial Condition

Exhibit 99.1

18 FEBRUARY 2020 | NYSE:NXRT

EARNINGS SUPPLEMENT: FOURTH QUARTER & FULL YEAR 2019

NEXPOINT RESIDENTIAL TRUST, INC.

300 CRESCENT COURT, SUITE 700

DALLAS, TX 75201

PHONE: 972-628-4100

INVESTOR RELATIONS:

JACKIE GRAHAM - 972-419-6213

WWW.NEXPOINTLIVING.COM

NEXPOINT RESIDENTIAL TRUST, INC. [NYSE:NXRT]

TABLE OF CONTENTS

Earnings Release	1
Cautionary Statement Regarding Forward-Looking Statements	3
Overview	4
Highlights of Fourth Quarter and FY 2019 Activity	5
Financial Summary	6
2020 Full Year Guidance Summary	7
Components of Net Asset Value	8
Consolidated Balance Sheets	9
Consolidated Statements of Operations	10
2018-2019 Same Store Results	11
2018-2019 Same Store Properties Operating Metrics	13
2017-2019 Same Store Results	14
Q4 Same Store Results	16
FFO, Core FFO and AFFO	18
Historical Capital Expenditures	19
Value-Add Program Details	20
Outstanding Debt Details	21
Debt Maturity Schedule	23
Historical Acquisition Details	24
Historical Disposition Details	25
Definitions and Reconciliations of Non-GAAP Measures	26

   TORREYANA APARTMENTS: LAS VEGAS, NV

   THE MODEL UNIT LIVING ROOM

   AN OPPORTUNISTIC ACQUISITION IN A NEW MARKET

NEXPOINT RESIDENTIAL TRUST, INC. [NYSE:NXRT]

FOR IMMEDIATE RELEASE

Contact:

Investor Relations

Jackie Graham

JGraham@nexpointadvisors.com

972-419-6213

Media inquiries: MediaRelations@nexpointadvisors.com

NEXPOINT RESIDENTIAL TRUST, INC. REPORTS FOURTH QUARTER AND FULL YEAR 2019 RESULTS

NXRT Recaps Acquisition/Disposition Activity, Value-Add Results and Issues 2020 Full Year Guidance

Dallas, TX, February 18, 2020 – NexPoint Residential Trust, Inc. (NYSE:NXRT) reported financial results for the fourth quarter and year ended December 31, 2019.

Highlights

• NXRT¹ reported net income, FFO², Core FFO² and AFFO² of $99.1M, $40.7M, $47.6M and $54.2M, respectively, attributable to common stockholders for the year ended December 31, 2019, compared to net loss, FFO, Core FFO, and AFFO of $(1.6)M, $32.0M, $35.1M and $40.8M, respectively, attributable to common stockholders for the year ended December 31, 2018.

• For the year ended December 31, 2019, 2018-2019 Same Store properties³ average effective rent, total revenue and NOI² increased 3.6%, 4.3% and 6.7%, respectively, and occupancy decreased 30 bps over the prior year period.

• During the three months ended December 31, 2019, NXRT acquired three properties in Las Vegas, NV (Torreyana, Bloom and Bella Solara) for a combined purchase price of approximately $241.0M.

• The weighted average effective monthly rent per unit across all 40 properties held as of December 31, 2019 (the “Portfolio”), consisting of 14,724 units⁴, was $1,103, while physical occupancy was 94.2%.

• NXRT paid a fourth quarter dividend of $0.3125 per share of common stock on December 31, 2019; this cash dividend represented a $0.0375 per share, or 13.6% increase, over the prior quarter’s dividend.

• During 2019, for the properties in the Portfolio, NXRT completed 2,516 full and partial upgrades, which includes 1,327 new washer and dryer installs, and leased 1,671 upgraded units, achieving an average monthly rent premium of $106 and a 25.3% ROI⁵. Since inception, for the properties in the Portfolio, NXRT has completed 6,927 full and partial upgrades and achieved an average monthly rental increase per unit of $101, equating to a 24.5% ROI on all units leased as of December 31, 2019.

• During the full year 2019, NXRT completed Smart Home Technology installs on 8,546 units, covering 24 properties.

• During the full year 2019, through its at-the-market offering (“ATM program”), NXRT issued approximately 1.6 million shares for approximately $72.0 million in gross proceeds.

(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 Page1

NEXPOINT RESIDENTIAL TRUST, INC. [NYSE:NXRT]

Full Year 2019 Financial Results

• 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.

Fourth Quarter 2019 Financial Results

• 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.

Fourth Quarter Earnings Conference Call

NXRT will host a call on Tuesday, February 18, 2020 at 11:00 a.m. ET to discuss its fourth quarter and full year financial results. The conference call can be accessed live over the phone by dialing 800-353-6461 or, for international callers, +1 334-323-0501, and using passcode Conference ID: 3863655.  A live audio webcast of the call will be available online at the Company's website,http://www.nexpointliving.com(under "Investor Relations").  An online replay will be available shortly after the call on the Company's website and continue to be available for 60 days.

A replay of the conference call will also be available through Tuesday, February 25, 2020, by dialing 888-203-1112 or, for international callers, +1 719-457-0820 and entering passcode 3863655.

About NXRT

NexPoint Residential Trust is a publicly traded REIT, with its shares listed on the New York Stock Exchange under the symbol “NXRT,” primarily focused on acquiring, owning and operating well-located middle-income multifamily properties with “value-add” potential in large cities and suburban submarkets of large cities, primarily in the Southeastern and Southwestern United States. NXRT is externally advised by NexPoint Real Estate Advisors, L.P., an affiliate of NexPoint Advisors, L.P., an SEC-registered investment advisor, which has extensive real estate experience. Our filings with the Securities and Exchange Commission (the “SEC”) are available on our website, www.nexpointliving.com, under the “Investor Relations” tab.

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NEXPOINT RESIDENTIAL TRUST, INC. [NYSE:NXRT]

Cautionary Statement Regarding Forward-Looking Statements

This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are based on management’s current expectations, assumptions and beliefs. Forward-looking statements can often be identified by words such as “expect,” “anticipate,” “estimate,” “may,” “should,” “intend” and similar expressions, and variations or negatives of these words. These forward-looking statements include, but are not limited to, statements regarding NXRT’s business and industry in general, new business metrics relating to the Las Vegas Portfolio, NXRT’s guidance for financial results for the full year 2020 and the related assumptions, net asset value and the related components and assumptions, guidance for the first quarter 2020 and the related assumptions, planned value-add programs, including projected average rent, rent change and return on investment and expected acquisitions and dispositions. They are no guarantees of future results and are subject to risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed in any forward-looking statement. Readers should not place undue reliance on any forward-looking statements and are encouraged to review the Company’s most recent Annual Report on Form 10-K and other filings with the SEC for a more complete discussion of the risks and other factors that could affect any forward-looking statements. The statements made herein speak only as of the date of this release and except as required by law, NXRT does not undertake any obligation to publicly update or revise any forward-looking statements.

www.NexPointLiving.com Page3

NEXPOINT RESIDENTIAL TRUST, INC. [NYSE:NXRT]

NEXPOINT RESIDENTIAL TRUST, INC: FOURTH QUARTER & FULL YEAR 2019 OVERVIEW

Company Profile

(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.

Portfolio Composition by Market

Market	% of Units
Dallas/Fort Worth	19.3%
Nashville	15.7%
South Florida	13.3%
Atlanta	9.9%
Phoenix	9.0%
Houston	8.0%
Orlando	8.0%
Las Vegas	7.9%
Charlotte	3.9%
Tampa	3.9%
D.C. Metro	1.1%
Total	100.0%

Revenue & Average Rent Per Unit	Stock Price Performance (Since Inception; 4/1/2015)

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NEXPOINT RESIDENTIAL TRUST, INC. [NYSE:NXRT]

Highlights of Fourth Quarter and Full Year 2019 Activity

NEW ACQUISITION METRICS

	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

*All of the metrics shown above are based off management estimates.

LEASED REHABS	DIVIDEND GROWTH
CORE FFO GROWTH	NOI GROWTH

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NEXPOINT RESIDENTIAL TRUST, INC. [NYSE:NXRT]

Financial Summary

	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.

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NEXPOINT RESIDENTIAL TRUST, INC. [NYSE:NXRT]

2020 Full Year Guidance Summary

NXRT is providing initial 2020 guidance ranges for earnings (loss) per diluted share, Core FFO per diluted share, Same Store rental income, Same Store total revenue, Same Store total expenses, and Same Store NOI as follows:

	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.

Additional information on 2020 financial and earnings guidance is included in the following sections of this release.

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NEXPOINT RESIDENTIAL TRUST, INC. [NYSE:NXRT]

Components of Net Asset Value

(dollar and share amounts in thousands, except per share and per unit data)

REAL ESTATE VALUE BY MARKET

Property	NOI	Cap Rate Range (1)			Value Range (2)
Market	Contribution	Min	Max		Min		Max
Texas
Dallas/Fort Worth	15.8%	4.7%	5.0%		$	390,007	$	424,986
Houston	7.1%	4.8%	5.1%			171,820		188,965
North Carolina
Charlotte	3.5%	4.7%	5.0%			86,394		94,143
Georgia
Atlanta	9.7%	4.7%	5.0%			239,435		260,909
Tennessee
Nashville	15.6%	4.7%	5.0%			385,070		419,607
Florida
Orlando	8.3%	4.7%	5.0%			204,877		223,252
Tampa	3.2%	4.7%	5.0%			78,989		86,073
West Palm Beach	15.9%	4.7%	5.0%			392,476		427,676
Washington D.C.
Other	1.1%	5.5%	5.8%			23,407		25,516
				��
Nevada
Las Vegas	9.6%	4.8%	5.0%			236,966		255,501
Arizona
Phoenix	10.2%	4.7%	5.0%			254,320		274,358
Total / Ave	100.0%	4.7%	5.0%		$	2,463,761	$	2,680,986

NAV SUMMARY

Component	Min		Max
Tangible Assets
Real Estate (2)	$	2,463,761	$	2,680,986
Cash	25,671
Restricted Cash - Renovation Reserves (4)	21,903
Renovation Capital Expenditures (4)	(21,903)
Cash Adjustments (5)	(1,006)
Fair Market Value of Interest Rate Swaps	4,376
Other Assets	32,229
Value of Assets	$	2,525,031	$	2,742,256
Tangible Liabilities
Credit Facility (6)	$218,000
Mortgage Debt	1,193,528
Total Outstanding Debt	1,411,528
Forward 12-month Principal Payments (5)	(1,006)
Total Outstanding Debt (FY 2020 Est.)	1,410,522
Other Tangible Liabilities (at Book)	32,504
Derivative Liability	902
Value of Liabilities	$1,443,928
Net Leverage (mid-point)	55%
Net Asset Value	$	1,081,103	$	1,298,328
Shares outstanding - diluted (FY 2020 Est.)	25,693
Est. NAV / Share	$	42.08	$	50.53
NAV / Share (mid-point)	$46.31

NOI ESTIMATE

4Q 2019 NOI Actual	28,327
FY 2019 NOI Actual	102,591
	Low		High
Estimated 1Q 2020 NOI Guidance (3)		28,500		30,500
2020 Pro Forma NOI Guidance (3)	$	123,420	$	126,420

IMPLIED VALUATION METRICS

	Min		Max
Implied Real Estate Value	$	2,463,761	$	2,680,986
No. of Units (December 31, 2019 E.) (2)	14,920
Implied Value/Apartment Unit	$	165.1	$	179.7
Implied Value/Apartment Unit (mid-point)	$172.4

(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.

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NEXPOINT RESIDENTIAL TRUST, INC. [NYSE:NXRT]

NEXPOINT RESIDENTIAL TRUST, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

	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

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NEXPOINT RESIDENTIAL TRUST, INC. [NYSE:NXRT]

NEXPOINT RESIDENTIAL TRUST, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME

(in thousands, except per share amounts)

(Unaudited)

	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.

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NEXPOINT RESIDENTIAL TRUST, INC. [NYSE:NXRT]

2018-2019 Same Store Results of Operations for the Years Ended December 31, 2019 and 2018

There are 25 properties encompassing 9,057 units of apartment space, or approximately 62% of our Portfolio, in our same store pool for the years ended December 31, 2019 and 2018 (our “2018-2019 Same Store” properties). Our 2018-2019 Same Store properties exclude the following 15 properties in our Portfolio as of December 31, 2019: Cedar Pointe, Crestmont Reserve, Brandywine I & II, Bella Vista, The Enclave, The Heritage, Summers Landing, Residences at Glenview Reserve, Residences at West Place, Avant at Pembroke Pines, Arbors of Brentwood, Torreyana, Bloom, Bella Solara, and Cutter’s Point, which has suspended operations to undergo reconstruction due to damages sustained.

As of December 31, 2019, our 2018-2019 Same Store properties were approximately 94.5% leased with a weighted average monthly effective rent per occupied apartment unit of $1,038, a year-over-year decrease of 30 bps and an increase of $36, respectively.

The following table reflects the revenues, property operating expenses and NOI for the years ended December 31, 2019 and 2018 for our 2018-2019 Same Store and Non-Same Store properties (dollars in thousands):

	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
Rental income		60,849		32,256		28,593		N/M
Other income		1,580		615		965		N/M
Non-Same Store revenues		62,429		32,871		29,558		N/M
Total revenues		181,066		146,597		34,469			23.5	%
Operating expenses
Same Store
Property operating expenses (1)		28,255		27,676		579			2.1	%
Real estate taxes and insurance		17,317		17,127		190			1.1	%
Property management fees (2)		3,543		3,391		152			4.5	%
Property general and administrative expenses (3)		3,561		3,737		(176	)		-4.7	%
Same Store operating expenses		52,676		51,931		745			1.4	%
Non-Same Store
Property operating expenses (4)		14,471		8,811		5,660		N/M
Real estate taxes and insurance		7,796		3,586		4,210		N/M
Property management fees (2)		1,845		991		854		N/M
Property general and administrative expenses (5)		1,687		1,103		584		N/M
Non-Same Store operating expenses		25,799		14,491		11,308		N/M
Total operating expenses		78,475		66,422		12,053			18.1	%
NOI
Same Store		65,961		61,795		4,166			6.7	%
Non-Same Store		36,630		18,380		18,250		N/M
Total NOI (6)	$	102,591	$	80,175	$	22,416			28.0	%

(1) For the years ended December 31, 2019 and 2018, excludes approximately $48,000 and $752,000, respectively, of casualty-related recoveries.

(2) Fees incurred to an unaffiliated third party that is an affiliate of the noncontrolling limited partner of the OP.

(3) For the years ended December 31, 2019 and 2018, excludes approximately $769,000 and $843,000, respectively, of expenses that are not reflective of the continuing operations of the properties or are incurred on our behalf at the property for expenses such as legal, professional and franchise tax fees.

(4) For the years ended December 31, 2019 and 2018, excludes approximately $14,000 and $89,000, respectively, of casualty-related expenses.

(5) For the years ended December 31, 2019 and 2018, excludes approximately $748,000 and $451,000, respectively, of expenses that are not reflective of the continuing operations of the properties or are incurred on our behalf at the property for expenses such as legal, professional and franchise tax fees.

(6) For additional information regarding NOI, see the “Definitions and Reconciliations of Non-GAAP Measures” section of this release.

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NEXPOINT RESIDENTIAL TRUST, INC. [NYSE:NXRT]

The following table contains additional information about our 2018-2019 Same Store properties rent and occupancy metrics, revenues, operating expenses and NOI for the years ended December 31, 2019 and 2018 (dollars in thousands, except for per unit data):

	FY 2019			FY 2018			% Change
Same Store Total Units		9,057			9,057
Same Store Occupied Units		8,559			8,582
Same Store Ending Occupancy		94.5	%		94.8	%		-0.3	%
Same Store Average Rent per Unit	$	1,038		$	1,002			3.6	%
Same Store Revenues
Same Store Rental Income	$	116,313		$	110,902			4.9	%
Same Store Other Income		2,324			2,824			-17.7	%
Total Same Store Revenues		118,637			113,726			4.3	%
Same Store Operating Expenses
Payroll		11,935			11,404			4.7	%
Repairs & Maintenance		9,937			9,315			6.7	%
Utilities		6,383			6,957			-8.3	%
Real Estate Taxes		15,257			14,756			3.4	%
Insurance		2,060			2,371			-13.1	%
Property Management Fees		3,543			3,391			4.5	%
Office Operations		2,288			2,329			-1.8	%
Marketing		1,273			1,408			-9.6	%
Total Same Store Operating Expenses		52,676			51,931			1.4	%
2018-2019 Same Store NOI	$	65,961		$	61,795			6.7	%

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NEXPOINT RESIDENTIAL TRUST, INC. [NYSE:NXRT]

2018-2019 Same Store Properties Operating Metrics

(dollars in thousands, except for per unit data)

Properties by Market (1)	Unit Count		Average Effective Rent					Occupancy								Total Rental Income
	Total		2019		2018		% Change	2019			2018			bps ∆		2019		2018		% Change
Texas
Dallas		2,400	$	967	$	932	3.8%		95.1	%		95.3	%		-20	$	29,755	$	28,650	3.9%
Houston		1,184		1,131		1,134	-0.3%		93.3	%		93.7	%		-40		16,214		15,911	1.9%
Average/Total		3,584		1,021		999	2.2%		94.5	%		94.7	%		-20		45,969		44,561	3.2%
North Carolina
Charlotte		577		993		940	5.6%		93.2	%		93.9	%		-70		6,833		6,485	5.4%
Average/Total		577		993		940	5.6%		93.2	%		93.9	%		-70		6,833		6,485	5.4%
Georgia
Atlanta		1,460		1,110		1,049	5.8%		95.1	%		94.7	%		40		19,159		18,060	6.1%
Average/Total		1,460		1,110		1,049	5.8%		95.1	%		94.7	%		40		19,159		18,060	6.1%
Tennessee
Nashville		764		994		969	2.6%		93.5	%		94.2	%		-70		9,680		9,050	7.0%
Average/Total		764		994		969	2.6%		93.5	%		94.2	%		-70		9,680		9,050	7.0%
Florida
Orlando		830		1,156		1,128	2.5%		94.7	%		95.3	%		-60		11,760		11,095	6.0%
Tampa		576		964		921	4.7%		95.8	%		95.1	%		70		6,693		6,366	5.1%
South Florida		439		1,228		1,191	3.1%		93.8	%		95.9	%		-210		6,650		6,333	5.0%
Average/Total		1,845		1,113		1,078	3.2%		94.9	%		95.4	%		-50		25,103		23,794	5.5%
Washington D.C.
D.C. Metro		156		1,152		1,093	5.4%		92.3	%		98.1	%		-580		2,225		2,059	8.1%
Average/Total		156		1,152		1,093	5.4%		92.3	%		98.1	%		-580		2,225		2,059	8.1%
Arizona
Phoenix		671		834		776	7.5%		94.9	%		93.7	%		120		7,344		6,893	6.5%
Average/Total		671		834		776	7.5%		94.9	%		93.7	%		120		7,344		6,893	6.5%
Average/Total		9,057	$	1,038	$	1,002	3.6%		94.5	%		94.8	%		-30	$	116,313	$	110,902	4.9%

(1) This table only includes the 25 properties in our 2018-2019 Same Store pool.

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NEXPOINT RESIDENTIAL TRUST, INC. [NYSE:NXRT]

2017-2019 Same Store Results of Operations for the Years Ended December 31, 2019, 2018 and 2017

There are 22 properties encompassing 7,709 units of apartment space, or approximately 52% of our Portfolio, in our same store pool for the years ended December 31, 2019, 2018 and 2017 (our “2017-2019 Same Store” properties). Our 2017-2019 Same Store properties exclude the following 18 properties in our portfolio as of December 31, 2019: Hollister Place, Rockledge Apartments, Atera Apartments, Cedar Pointe, Crestmont Reserve, Brandywine I & II, Bella Vista, The Enclave, The Heritage, Summers Landing, Residences at Glenview Reserve, Residences at West Place, Avant at Pembroke Pines, Arbors of Brentwood, Torreyana, Bloom, Bella Solara, and Cutter’s Point, which has suspended operations to undergo reconstruction due to damages sustained.

As of December 31, 2019, our 2017-2019 Same Store properties were approximately 94.5% leased with a weighted average monthly effective rent per occupied apartment unit of $1,008. As of December 31, 2018, our 2017-2019 Same Store properties were approximately 94.7% leased with a weighted average monthly effective rent per occupied apartment unit of $974. As of December 31, 2017, our 2017-2019 Same Store properties were approximately 94.2% leased with a weighted average monthly effective rent per occupied apartment unit of $931.

The following table reflects the revenues, property operating expenses and NOI for the years ended December 31, 2019, 2018 and 2017 for our 2017-2019 Same Store and Non-Same Store properties (dollars in thousands):

	For the Year Ended December 31,						2019 compared to 2018						2018 compared to 2017
	2019		2018		2017		$ Change			% Change			$ Change			% Change
Revenues
Same Store
Rental income	$	96,703	$	92,141	$	88,167	$	4,562			5.0	%	$	3,974			4.5	%
Other income		2,003		2,469		2,257		(466	)		-18.9	%		212			9.4	%
Same Store revenues		98,706		94,610		90,424		4,096			4.3	%		4,186			4.6	%
Non-Same Store
Rental income		80,459		51,017		52,715		29,442			57.7	%		(1,698	)		-3.2	%
Other income		1,901		970		1,096		931			96.0	%		(126	)		-11.5	%
Non-Same Store revenues		82,360		51,987		53,811		30,373			58.4	%		(1,824	)		-3.4	%
Total revenues		181,066		146,597		144,235		34,469			23.5	%		2,362			1.6	%
Operating expenses
Same Store
Property operating expenses (1)		24,162		23,573		23,878		589			2.5	%		(305	)		-1.3	%
Real estate taxes and insurance		13,564		13,145		12,505		419			3.2	%		640			5.1	%
Property management fees (2)		2,970		2,840		2,720		130			4.6	%		120			4.4	%
Property general and administrative expenses (3)		3,023		3,162		3,117		(139	)		-4.4	%		45			1.4	%
Same Store operating expenses		43,719		42,720		42,220		999			2.3	%		500			1.2	%
Non-Same Store
Property operating expenses (4)		18,564		12,914		15,259		5,650			43.8	%		(2,345	)		-15.4	%
Real estate taxes and insurance		11,549		7,568		6,656		3,981			52.6	%		912			13.7	%
Property management fees (2)		2,418		1,542		1,610		876			56.8	%		(68	)		-4.2	%
Property general and administrative expenses (5)		2,225		1,678		1,912		547			32.6	%		(234	)		-12.2	%
Non-Same Store operating expenses		34,756		23,702		25,437		11,054			46.6	%		(1,735	)		-6.8	%
Total operating expenses		78,475		66,422		67,657		12,053			18.1	%		(1,235	)		-1.8	%
NOI
Same Store		54,987		51,890		48,204		3,097			6.0	%		3,686			7.6	%
Non-Same Store		47,604		28,285		28,374		19,319			68.3	%		(89	)		-0.3	%
Total NOI (6)	$	102,591	$	80,175	$	76,578	$	22,416			28.0	%	$	3,597			4.7	%

(1) For the years ended December 31, 2019, 2018 and 2017, excludes approximately $72,000, $743,000 and $338,000, respectively, of casualty-related recoveries.

(2) Fees incurred to an unaffiliated third party that is an affiliate of the noncontrolling limited partner of the OP.

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NEXPOINT RESIDENTIAL TRUST, INC. [NYSE:NXRT]

(3) For the years ended December 31, 2019, 2018 and 2017, excludes approximately $658,000, $742,000 and $750,000, respectively, of expenses that are not reflective of the continuing operations of the properties or are incurred on our behalf at the property for expenses such as legal, professional and franchise tax fees.

(4) For the years ended December 31, 2019, 2018 and 2017, excludes approximately $38,000, $80,000 and $51,000, respectively, of casualty-related expenses.

(5) For the years ended December 31, 2019, 2018 and 2017, excludes approximately $859,000, $552,000 and $380,000, respectively, of expenses that are not reflective of the continuing operations of the properties or are incurred on our behalf at the property for expenses such as legal, professional and franchise tax fees.

(6) For additional information regarding NOI, see the “Definitions and Reconciliations of Non-GAAP Measures” section of this release.

The following table contains additional information about our 2017-2019 Same Store properties rent and occupancy metrics, revenues, operating expenses and NOI for the years ended December 31, 2019, 2018 and 2017 (dollars in thousands, except for per unit data):

										2019 vs 2018			2018 vs 2017
	FY 2019			FY 2018			FY 2017			% Change			% Change
Same Store Total Units		7,709			7,709			7,709
Same Store Occupied Units		7,287			7,299			7,262
Same Store Ending Occupancy		94.5	%		94.7	%		94.2	%		-0.2	%		0.5	%
Same Store Average Rent per Unit	$	1,008		$	974		$	931			3.5	%		4.6	%
Same Store Revenues
Same Store Rental Income	$	96,703		$	92,141		$	88,167			5.0	%		4.5	%
Same Store Other Income		2,003			2,469			2,257			-18.9	%		9.4	%
Total Same Store Revenues		98,706			94,610			90,424			4.3	%		4.6	%
Same Store Operating Expenses
Payroll		10,227			9,716			9,475			5.3	%		2.5	%
Repairs & Maintenance		8,552			7,922			7,854			8.0	%		0.9	%
Utilities		5,383			5,936			6,549			-9.3	%		-9.4	%
Real Estate Taxes		11,775			11,082			10,592			6.3	%		4.6	%
Insurance		1,789			2,062			1,913			-13.2	%		7.8	%
Property Management Fees		2,970			2,840			2,720			4.6	%		4.4	%
Office Operations		1,980			2,010			1,972			-1.5	%		1.9	%
Marketing		1,043			1,152			1,145			-9.5	%		0.6	%
Total Same Store Operating Expenses		43,719			42,720			42,220			2.3	%		1.2	%
2017-2019 Same Store NOI	$	54,987		$	51,890		$	48,204			6.0	%		7.6	%

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NEXPOINT RESIDENTIAL TRUST, INC. [NYSE:NXRT]

Q4 Same Store Results of Operations for the Three Months Ended December 31, 2019 and 2018

There are 28 properties encompassing 10,141 units of apartment space, or approximately 69% of our Portfolio, in our same store pool for the three months ended December 31, 2019 and 2018 (our “Q4 Same Store” properties). Our Q4 Same Store properties exclude the following 12 properties in our Portfolio as of December 31, 2019: Bella Vista, The Enclave, The Heritage, Summers Landing, Residences at Glenview Reserve, Residences at West Place, Avant at Pembroke Pines, Arbors of Brentwood, Torreyana, Bloom, Bella Solara, and Cutter’s Point, which has suspended operations to undergo reconstruction due to damages sustained.

As of December 31, 2019, our Q4 Same Store properties were approximately 94.4% leased with a weighted average monthly effective rent per occupied apartment unit of $1,032, a year-over-year decrease of 30 bps and an increase of $34, respectively.

The following table reflects the revenues, property operating expenses and NOI for the three months ended December 31, 2019 and 2018 for our Q4 Same Store and Non-Same Store properties (dollars in thousands):

	For the Three Months Ended December 31,
	2019		2018		$ Change			% Change
Revenues
Same Store
Rental income	$	33,279	$	31,330	$	1,949			6.2	%
Other income		239		755		(516	)	N/M
Same Store revenues		33,518		32,085		1,433			4.5	%
Non-Same Store
Rental income		15,613		7,178		8,435		N/M
Other income		545		127		418		N/M
Non-Same Store revenues		16,158		7,305		8,853		N/M
Total revenues		49,676		39,390		10,286			26.1	%
Operating expenses
Same Store
Property operating expenses (1)		7,913		7,489		424			5.7	%
Real estate taxes and insurance		4,780		5,389		(609	)		-11.3	%
Property management fees (2)		1,000		956		44			4.6	%
Property general and administrative expenses (3)		1,007		1,037		(30	)		-2.9	%
Same Store operating expenses		14,700		14,871		(171	)		-1.1	%
Non-Same Store
Property operating expenses (4)		3,583		1,957		1,626		N/M
Real estate taxes and insurance		2,280		832		1,448		N/M
Property management fees (2)		449		221		228		N/M
Property general and administrative expenses (5)		337		258		79			30.6	%
Non-Same Store operating expenses		6,649		3,268		3,381		N/M
Total operating expenses		21,349		18,139		3,210			17.7	%
NOI
Same Store		18,818		17,214		1,604			9.3	%
Non-Same Store		9,509		4,037		5,472		N/M
Total NOI (6)	$	28,327	$	21,251	$	7,076			33.3	%

(1) For the three months ended December 31, 2019 and 2018, excludes approximately $(47,000) and $15,000, respectively, of casualty-related expenses/(recoveries).

(2) Fees incurred to an unaffiliated third party that is an affiliate of the noncontrolling limited partner of the OP.

(3) For the three months ended December 31, 2019 and 2018, excludes approximately $290,000 and $306,000, respectively, of expenses that are not reflective of the continuing operations of the properties or are incurred on our behalf at the property for expenses such as legal, professional and franchise tax fees.

(4) For the three months ended December 31, 2019 and 2018, excludes approximately $(13,000) and $24,000, respectively, of casualty-related expenses/(recoveries).

(5) For the three months ended December 31, 2019 and 2018, excludes approximately $158,000 and $58,000, respectively, of expenses that are not reflective of the continuing operations of the properties or are incurred on our behalf at the property for expenses such as legal, professional and franchise tax fees.

(6) For additional information regarding NOI, see the “Definitions and Reconciliations of Non-GAAP Measures” section of this release.

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NEXPOINT RESIDENTIAL TRUST, INC. [NYSE:NXRT]

The following table contains additional information about our Q4 Same Store properties rent and occupancy metrics, revenues, operating expenses and NOI for the three months ended December 31, 2019 and 2018 (dollars in thousands, except for per unit data):

	Q4 2019			Q4 2018			% Change
Same Store Total Units		10,141			10,141
Same Store Occupied Units		9,571			9,605
Same Store Ending Occupancy		94.4	%		94.7	%		-0.3	%
Same Store Average Rent per Unit	$	1,032		$	998			3.4	%
Same Store Revenues
Same Store Rental Income	$	33,279		$	31,330			6.2	%
Same Store Other Income		239			755		N/M
Total Same Store Revenues		33,518			32,085			4.5	%
Same Store Operating Expenses
Payroll		3,389			3,181			6.5	%
Repairs & Maintenance		2,730			2,512			8.7	%
Utilities		1,794			1,796			-0.1	%
Real Estate Taxes		4,235			4,723			-10.3	%
Insurance		545			666			-18.2	%
Property Management Fees		1,000			956			4.6	%
Office Operations		643			659			-2.4	%
Marketing		364			378			-3.7	%
Total Same Store Operating Expenses		14,700			14,871			-1.1	%
Q4 Same Store NOI	$	18,818		$	17,214			9.3	%

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NEXPOINT RESIDENTIAL TRUST, INC. [NYSE:NXRT]

FFO, Core FFO and AFFO

The following table reconciles our calculations of FFO, Core FFO and AFFO to net income (loss), the most directly comparable GAAP financial measure, for the years ended December 31, 2019, 2018 and 2017 and for the three months ended December 31, 2019 and 2018 (in thousands, except per share amounts):

		For the Year Ended December 31,										For the Three Months Ended December 31,
		2019				2018			2017			2019			2018
Net income (loss)		$	99,438			$	(1,614	)	$	56,359		$	(13,306	)	$	(4,782	)
Depreciation and amortization			69,086				47,470			48,752			23,394			13,832
Gain on sales of real estate			(127,684	)			(13,742	)		(78,365	)		16			—
Adjustment for noncontrolling interests			(122	)			(96	)		(1,695	)		(30	)		(26	)
FFO attributable to common stockholders			40,718				32,018			25,051			10,074			9,024
FFO per share - basic		$	1.69			$	1.51		$	1.19		$	0.40		$	0.41
FFO per share - diluted		$	1.66			$	1.48		$	1.17		$	0.39		$	0.40
Loss on extinguishment of debt and modification costs			2,869				3,576			5,719			—			—
Casualty-related expenses/(recoveries)			(34	)			(663	)		(287	)		(60	)		39
Casualty losses			3,488				—			—			3,488			—
Change in fair value on derivative instruments - ineffective portion			—				—			(309	)		—			—
Amortization of deferred financing costs - acquisition term notes			553				159			403			269			138
Adjustment for noncontrolling interests			(21	)			(9	)		(430	)		(11	)		—
Core FFO attributable to common stockholders			47,573				35,081			30,147			13,760			9,201
Core FFO per share - basic		$	1.97			$	1.66		$	1.43		$	0.55		$	0.41
Core FFO per share - diluted		$	1.93			$	1.62		$	1.41		$	0.54		$	0.41
Amortization of deferred financing costs - long term debt			1,530		��		1,491			1,592			87			430
Equity-based compensation expense			5,130				4,198			3,109			1,186			1,095
Adjustment for noncontrolling interests			(20	)			(17	)		(76	)		(4	)		(5	)
AFFO attributable to common stockholders			54,213				40,753			34,772			15,029			10,721
AFFO per share - basic		$	2.25			$	1.92		$	1.65		$	0.60		$	0.48
AFFO per share - diluted		$	2.20			$	1.88		$	1.62		$	0.59		$	0.47
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
Dividends declared per common share		$	1.138			$	1.025		$	0.910		$	0.313		$	0.275
FFO Coverage - diluted	(1)	1.46x				1.44x			1.29x			1.26x			1.45x
Core FFO Coverage - diluted	(1)	1.70x				1.58x			1.55x			1.73x			1.48x
AFFO Coverage - diluted	(1)	1.94x				1.84x			1.79x			1.88x			1.72x

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

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NEXPOINT RESIDENTIAL TRUST, INC. [NYSE:NXRT]

Historical Capital Expenditures

	FY 2019		FY 2018		% Change			Q4 2019		Q4 2018		% Change
($ in thousands)
Capital Expenditures
Acquisition Capital Expenditures	$	876,746	$	130,980		569.4	%	$	241,000	$	—	N/A
Capitalized Rehab Expenditures
Interior		12,044		8,559		40.7	%		3,235		2,421		33.6	%
Exterior and common area		11,242		9,133		23.1	%		2,899		1,819	N/M
Capitalized Maintenance Expenditures
Recurring		5,435		4,954		9.7	%		1,195		1,172		2.0	%
Non-Recurring		5,255		5,805		-9.5	%		1,230		2,540	N/M
Total Capital Expenditures	$	910,722	$	159,431		471.2	%	$	249,559	$	7,952	N/M

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NEXPOINT RESIDENTIAL TRUST, INC. [NYSE:NXRT]

Value-Add Program Details

Property Name (1)	Units		Rehab Units Completed (2)		Average Rent Pre-Rehab		Average Rent Post-Rehab		Avg. Rehab Cost Per Unit (3)		Post-Rehab Rent Change %			ROI (3)
Completed Value-Add Programs
Southpoint Reserve at Stoney Creek (4)		156		63		990	$	1,096	$	7,428		10.7	%		17.1	%
Willow Grove (4)		244		174		906		1,005		4,497		10.9	%		26.4	%
Woodbridge (4)		220		188		933		1,032		5,586		10.6	%		21.3	%
Total/Weighted Average		620		425		933	$	1,034	$	5,309		10.8	%		21.5	%
Value-Add Programs In Progress
Arbors of Brentwood		346		47		1,092	$	1,142	$	807		4.6	%		74.3	%
Arbors on Forest Ridge		210		244		809		887		3,076		9.6	%		30.2	%
Atera Apartments		380		185		1,130		1,279		3,072		13.2	%		58.2	%
Avant at Pembroke Pines		1,520		5		1,473		1,636		5,245		11.0	%		37.1	%
Beechwood Terrace		300		309		868		958		4,527		10.3	%		23.7	%
Bella Vista		248		33		1,209		1,360		11,326		12.5	%		16.0	%
Brandywine I & II		632		89		967		1,125		8,868		16.4	%		21.4	%
Cedar Pointe		210		96		1,004		1,135		3,861		13.0	%		40.6	%
Courtney Cove		324		158		815		918		4,825		12.6	%		25.6	%
Crestmont Reserve		242		105		861		958		6,822		11.3	%		17.1	%
Cutter's Point		196		216		1,004		1,100		4,428		9.6	%		26.1	%
Eagle Crest		447		152		849		909		1,925		7.1	%		37.6	%
Hollister Place		260		367		931		1,043		4,440		12.0	%		30.3	%
Madera Point		256		197		806		905		3,967		12.3	%		29.9	%
Parc500		217		138		1,161		1,340		14,683		15.4	%		14.6	%
Radbourne Lake		225		297		996		1,041		928		4.6	%		58.9	%
Residences at Glenview Reserve		360		9		960		1,098		9,219		14.3	%		17.9	%
Residences at West Place		342		34		1,228		1,333		3,820		8.5	%		32.8	%
Rockledge Apartments		708		449		1,161		1,289		6,577		11.0	%		23.3	%
Sabal Palm at Lake Buena Vista		400		234		1,136		1,221		599		7.5	%		171.8	%
Seasons 704 Apartments		222		154		1,031		1,129		5,851		9.6	%		20.2	%
Silverbrook		642		633		818		885		2,766		8.2	%		29.0	%
Summers Landing		196		35		950		1,020		2,010		7.4	%		41.8	%
Summit at Sabal Park		252		315		883		963		4,177		9.0	%		22.9	%
The Cornerstone		430		291		924		1,014		5,417		9.7	%		19.9	%
The Enclave		204		26		1,193		1,338		9,677		12.1	%		17.9	%
The Heritage		204		31		1,141		1,287		11,861		12.8	%		14.8	%
The Preserve at Terrell Mill		752		485		784		927		9,200		18.3	%		18.7	%
The Venue on Camelback		415		108		636		894		10,884		40.4	%		28.4	%
Timber Creek		352		224		898		1,010		5,848		12.4	%		22.9	%
Venue at 8651		333		383		840		922		4,514		9.7	%		21.7	%
Versailles		388		453		820		896		4,135		9.3	%		22.1	%
Total/Weighted Average		12,213		6,502	$	916	$	1,017	$	4,896		11.0	%		24.6	%
Total/Weighted Average Completed		12,833		6,927	$	917	$	1,018	$	4,920		11.0	%		24.5	%
Planned Value-Add Programs					Projected Avg. Rent						Rent Change & ROI (Projections)
Old Farm		734		—	$	1,226	$	1,316	TBD			7.3	%	TBD
Stone Creek at Old Farm		190		—		1,261		1,305	TBD			3.5	%	TBD
Torreyana Apartments		315		—		1,163		1,283	TBD			10.3	%	TBD
Bloom		528		—		1,095		1,252	TBD			14.3	%	TBD
Bella Solara		320		—		1,136		1,320	TBD			16.2	%	TBD
Total/Weighted Average Planned		2,087		—	$	1,301	$	1,455	TBD			11.9	%	TBD

(1) We do not plan to upgrade 100% of the units at each of our properties.

(2) Inclusive of all full and partial interior upgrades completed through December 31, 2019.

(3) Inclusive of all full and partial interior upgrades completed and leased through December 31, 2019.

(4) Properties were classified as held for sale as of December 31, 2019.

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NEXPOINT RESIDENTIAL TRUST, INC. [NYSE:NXRT]

Outstanding Debt Details

Mortgage Debt

The following table contains summary information concerning the mortgage debt of the Company as of December 31, 2019 (dollars in thousands):

Operating Properties	Type	Term (months)		Outstanding Principal (1)			Interest Rate (2)	Maturity Date
Arbors on Forest Ridge	Floating		84	$	13,130		3.44%	7/1/2024
Cutter's Point	Floating		84		16,640		3.44%	7/1/2024
Eagle Crest	Floating		84		29,510		3.44%	7/1/2024
Silverbrook	Floating		84		30,590		3.44%	7/1/2024
Beechwood Terrace	Floating		84		23,365		3.20%	9/1/2025
The Summit at Sabal Park	Floating		84		13,560		3.38%	7/1/2024
Courtney Cove	Floating		84		13,680		3.38%	7/1/2024
The Preserve at Terrell Mill	Floating		84		42,480		3.38%	7/1/2024
Versailles	Floating		84		23,880		3.38%	7/1/2024
Seasons 704 Apartments	Floating		84		17,460		3.38%	7/1/2024
Madera Point	Floating		84		15,150		3.38%	7/1/2024
Venue at 8651	Floating		84		13,734		3.54%	7/1/2024
The Venue on Camelback	Floating		84		28,093		3.44%	7/1/2024
Old Farm	Floating		84		52,886		3.44%	7/1/2024
Stone Creek at Old Farm	Floating		84		15,274		3.44%	7/1/2024
Timber Creek	Floating		84		24,100		3.02%	10/1/2025
Radbourne Lake	Floating		84		20,000		3.05%	10/1/2025
Sabal Palm at Lake Buena Vista	Floating		84		42,100		3.06%	9/1/2025
Cornerstone	Fixed		120		21,772		4.24%	3/1/2023
Parc500	Fixed		120		15,221		4.49%	8/1/2025
Hollister Place	Floating		84		14,811		3.10%	10/1/2025
Rockledge Apartments	Floating		84		68,100		3.33%	7/1/2024
Atera Apartments	Floating		84		29,500		3.24%	11/1/2024
Cedar Pointe	Floating		84		17,300		3.11%	9/1/2025
Crestmont Reserve	Floating		84		12,061		2.94%	10/1/2025
Brandywine I & II	Floating		84		43,835		2.94%	10/1/2025
Bella Vista	Floating		84		29,040		3.08%	2/1/2026
The Enclave	Floating		84		25,322		3.08%	2/1/2026
The Heritage	Floating		84		24,625		3.08%	2/1/2026
Summers Landing	Floating		84		10,109		2.94%	10/1/2025
Residences at Glenview Reserve	Floating		84		26,560		3.20%	10/1/2025
Residences at West Place	Fixed		120		33,817		4.24%	10/1/2028
Avant at Pembroke Pines	Floating		84		177,100		3.19%	9/1/2026
Arbors of Brentwood	Floating		84		34,237		3.19%	10/1/2026
Torreyana Apartments	Floating		84		37,400		3.46%	12/1/2026
Bloom	Floating		84		58,850		3.46%	12/1/2026
Bella Solara	Floating		84		36,575		3.46%	12/1/2026
				$	1,151,867
Fair market value adjustment					1,463
Deferred financing costs, net of accumulated amortization of $2,494					(7,959	)
				$	1,145,371
Held For Sale Properties
Southpoint Reserve at Stoney Creek	Floating		84	$	13,166		3.87%	1/1/2022
Woodbridge	Floating		84		13,677		3.54%	7/1/2024
Willow Grove	Floating		84		14,818		3.54%	7/1/2024
				$	41,661
Deferred financing costs, net of accumulated amortization of $362					(485	)
				$	41,176

(1) Mortgage debt that is non-recourse to the Company and encumbers the multifamily properties.

(2) Interest rate is based on one-month LIBOR plus an applicable margin, except for fixed rate mortgage debt. One-month LIBOR as of December 31, 2019 was 1.7625%.

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NEXPOINT RESIDENTIAL TRUST, INC. [NYSE:NXRT]

Credit Facility

The following table contains summary information concerning the Company’s credit facility as of December 31, 2019 (dollars in thousands):

	Type	Term(months)		Outstanding Principal			Interest Rate (1)	Maturity Date
Corporate Credit Facility	Floating		24	$	41,700		3.69%	1/28/2021
Corporate Credit Facility	Floating		24		19,000		3.74%	1/28/2021
Corporate Credit Facility	Floating		24		111,000		3.76%	1/28/2021
Corporate Credit Facility	Floating		24		46,300		3.80%	1/28/2021
Deferred financing costs, net of accumulated amortization of $553					(1,499	)
				$	216,501

(1) Interest rate is based on one-month LIBOR plus an applicable margin. One-month LIBOR as of December 31, 2019 was 1.7625%.

Interest Rate Swap Agreements

As of December 31, 2019, the Company had the following outstanding interest rate swaps that were designated as cash flow hedges of interest rate risk (dollars in thousands):

Effective Date	Termination Date	Counterparty	Notional		Fixed Rate (1)
July 1, 2016	June 1, 2021	KeyBank	$	100,000		1.1055	%
July 1, 2016	June 1, 2021	KeyBank		100,000		1.0210	%
July 1, 2016	June 1, 2021	KeyBank		100,000		0.9000	%
September 1, 2016	June 1, 2021	KeyBank		100,000		0.9560	%
April 1, 2017	April 1, 2022	KeyBank		100,000		1.9570	%
May 1, 2017	April 1, 2022	KeyBank		50,000		1.9610	%
July 1, 2017	July 1, 2022	KeyBank		100,000		1.7820	%
June 1, 2019	June 1, 2024	KeyBank		50,000		2.0020	%
June 1, 2019	June 1, 2024	SunTrust		50,000		2.0020	%
September 1, 2019	September 1, 2026	KeyBank		100,000		1.4620	%
September 1, 2019	September 1, 2026	KeyBank		125,000		1.3020	%
			$	975,000		1.4147	%	(2)

(1) The floating rate option for the interest rate swaps is one-month LIBOR. As of December 31, 2019, one-month LIBOR was 1.7625%.

(2) Represents the weighted average fixed rate of the interest rate swaps.

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NEXPOINT RESIDENTIAL TRUST, INC. [NYSE:NXRT]

Debt Maturity Schedule

The following table summarizes our contractual obligations and commitments as of December 31, 2019 for the next five calendar years subsequent to December 31, 2019 and thereafter. We used one-month LIBOR as of December 31, 2019 to calculate interest expense due by period on our floating rate debt and net interest expense due by period on our interest rate swaps.

		Payments Due by Period (in thousands)
		Total		2020		2021		2022		2023		2024		Thereafter
Operating Properties Mortgage Debt
Principal payments		$	1,151,867	$	744	$	872	$	1,367	$	21,155	$	424,558	$	703,171
Interest expense	(1)		209,545		35,561		37,244		38,249		37,392		30,154		30,945
Total		$	1,361,412	$	36,305	$	38,116	$	39,616	$	58,547	$	454,712	$	734,116
Held For Sale Property Mortgage Debt
Principal payments		$	41,661	$	262	$	281	$	12,622	$	—	$	28,496	$	—
Interest expense			5,619		1,539		1,524		1,023		1,023		510		—
Total		$	47,280	$	1,801	$	1,805	$	13,645	$	1,023	$	29,006	$	—
Credit Facility
Principal payments		$	218,000	$	—	$	218,000	$	—	$	—	$	—	$	—
Interest expense			9,570		8,913		657		—		—		—		—
Total		$	227,570	$	8,913	$	218,657	$	—	$	—	$	—	$	—
Total contractual obligations and commitments		$	1,636,262	$	47,019	$	258,578	$	53,261	$	59,570	$	483,718	$	734,116

(1) Interest expense obligations includes the impact of expected settlements on interest rate swaps which have been entered into in order to fix the interest rate on the hedged portion of our floating rate debt obligations. As of December 31, 2019, we had entered into 11 interest rate swap transactions with a combined notional amount of $975.0 million. We have allocated the total impact of expected settlements on the $975.0 million notional amount of interest rate swaps to ‘Operating Properties Mortgage Debt.’ We used one-month LIBOR as of December 31, 2019 to determine our expected settlements through the terms of the interest rate swaps.

 

(1) As of December 31, 2019, we had total indebtedness of $1.4 billion at an adjusted weighted average interest rate of 3.45%, of which $1.3 billion was debt with a floating interest rate. The interest rate swap agreements we have entered into effectively fix the interest rate on $975.0 million, or 87%, of our $1.1 billion of floating rate mortgage debt outstanding. For purposes of calculating the adjusted weighted average interest rate of the total indebtedness, we have included the weighted average fixed rate of 1.4147% for one-month LIBOR on the $975.0 million notional amount of interest rate swap agreements that we have entered into as of December 31, 2019, which effectively fix the interest rate on $975.0 million of our floating rate mortgage debt outstanding.

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NEXPOINT RESIDENTIAL TRUST, INC. [NYSE:NXRT]

Historical Acquisition Details

(in thousands, except for unit and per unit amounts)
Property Name (1)	Location	Units	Transaction Date	Purchase Price	Rehab Budget (2)	Total Investment	Per Unit
Arbors on Forest Ridge	Bedford, TX	210	1/31/2014	$12,805	$1,449	$14,254	$67,876
Cutter's Point (3)	Richardson, TX	—	1/31/2014	15,845	1,379	17,224	N/A
Eagle Crest	Irving, TX	447	1/31/2014	27,325	1,129	28,454	63,655
Silverbrook	Grand Prairie, TX	642	1/31/2014	30,400	1,662	32,062	49,941
Beechwood Terrace	Antioch, TN	300	7/21/2014	21,400	1,796	23,196	77,320
Willow Grove (4)	Nashville, TN	244	7/21/2014	13,750	2,102	15,852	64,967
Woodbridge (4)	Nashville, TN	220	7/21/2014	16,000	1,646	17,646	80,209
The Summit at Sabal Park	Tampa, FL	252	8/20/2014	19,050	1,655	20,705	82,163
Courtney Cove	Tampa, FL	324	8/20/2014	18,950	1,635	20,585	63,534
Radbourne Lake	Charlotte, NC	225	9/30/2014	24,250	1,437	25,687	114,164
Timber Creek	Charlotte, NC	352	9/30/2014	22,750	3,947	26,697	75,844
Sabal Palm at Lake Buena Vista	Orlando, FL	400	11/5/2014	49,500	1,346	50,846	127,115
Southpoint Reserve at Stoney Creek (4)	Fredericksburg, VA	156	12/18/2014	17,000	1,737	18,737	120,109
Cornerstone	Orlando, FL	430	1/15/2015	31,550	2,610	34,160	79,442
The Preserve at Terrell Mill	Marietta, GA	752	2/6/2015	58,000	6,688	64,688	86,021
Versailles	Dallas, TX	388	2/26/2015	26,165	3,997	30,162	77,737
Seasons 704 Apartments	West Palm Beach, FL	222	4/15/2015	21,000	1,900	22,900	103,153
Madera Point	Mesa, AZ	256	8/5/2015	22,525	1,808	24,333	95,051
Venue at 8651	Fort Worth, TX	333	10/30/2015	19,250	4,626	23,876	71,700
Parc500	West Palm Beach, FL	217	7/27/2016	22,421	5,082	27,503	126,742
The Venue on Camelback	Phoenix, AZ	415	10/11/2016	44,600	6,018	50,618	121,971
Old Farm	Houston, TX	734	12/29/2016	84,721	1,135	85,856	116,970
Stone Creek at Old Farm	Houston, TX	190	12/29/2016	23,332	462	23,794	125,232
Hollister Place	Houston, TX	260	2/1/2017	24,500	2,961	27,461	105,619
Rockledge Apartments	Marietta, GA	708	6/30/2017	113,500	7,685	121,185	171,165
Atera Apartments	Dallas, TX	380	10/25/2017	59,200	3,721	62,921	165,582
Cedar Pointe	Antioch, TN	210	8/24/2018	26,500	2,352	28,852	137,390
Crestmont Reserve	Dallas, TX	242	9/26/2018	24,680	2,843	27,523	113,731
Brandywine I & II	Nashville, TN	632	9/26/2018	79,800	7,787	87,587	138,587
Bella Vista	Phoenix, AZ	248	1/28/2019	48,400	3,414	51,814	208,927
The Enclave	Tempe, AZ	204	1/28/2019	41,800	2,608	44,408	217,686
The Heritage	Phoenix, AZ	204	1/28/2019	41,900	2,660	44,560	218,431
Summers Landing	Fort Worth, TX	196	6/7/2019	19,396	2,980	22,376	114,163
Residences at Glenview Reserve	Nashville, TN	360	7/17/2019	45,000	5,695	50,695	140,819
Residences at West Place	Orlando, FL	342	7/17/2019	55,000	4,129	59,129	172,892
Avant at Pembroke Pines	Pembroke Pines, FL	1,520	8/30/2019	322,000	32,583	354,583	233,278
Arbors of Brentwood	Nashville, TN	346	9/10/2019	62,250	4,248	66,498	192,191
Torreyana Apartments	Las Vegas, NV	315	11/22/2019	68,000	2,771	70,771	224,670
Bloom	Las Vegas, NV	528	11/22/2019	106,500	4,786	111,286	210,769
Bella Solara	Las Vegas, NV	320	11/22/2019	66,500	3,642	70,142	219,194
Total/Weighted Average		14,724		$1,847,515	$154,111	$2,001,626	$135,943

(1) Only includes properties owned as of December 31, 2019.

(2) Includes interior and exterior rehab.

(3) All 196 units at Cutter’s Point are currently not operating, and are therefore excluded from the unit count.

(4) Properties were classified as held for sale as of December 31, 2019.

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NEXPOINT RESIDENTIAL TRUST, INC. [NYSE:NXRT]

Historical Disposition Details

(in thousands, except unit and per unit amounts)
Property Name	Location	Units		Purchase Price		Sale Price		Sales Price Per Unit		Sale Date	Net Cash Proceeds (1)		Gain on Sale
Meridian	Austin, TX		200	$	12,300	$	17,250	$	86,250	5/10/2016	$	16,981	$	4,786
Park at Regency and Mandarin Reserve	Jacksonville, FL		679		34,500		47,000		69,219	6/6/2016		46,239		11,584
Park at Blanding and Colonial Forest	Jacksonville, FL		291		12,000		14,500		49,828	8/31/2016		14,259		2,007
Willowdale Crossings	Frederick, MD		432		41,000		45,200		104,630	9/15/2016		44,439		5,576
Jade Park	Dayton Beach, FL		144		7,800		10,000		69,444	9/30/2016		9,868		1,979
The Miramar Apartments	Dallas, TX		314		8,875		16,550		52,707	4/3/2017		16,326		6,368
Toscana	Dallas, TX		192		8,875		13,250		69,010	4/3/2017		13,040		4,283
The Grove at Alban	Frederick, MD		290		23,050		27,500		94,828	4/3/2017		27,021		4,514
Twelve 6 Ten at the Park	Dallas, TX		402		20,984		26,600		66,169	4/27/2017		26,349		4,731
Regatta Bay	Seabrook, TX		240		18,200		28,200		117,500	7/14/2017		27,670		10,423
NAVA Portfolio (2)	Atlanta, GA		1,100		66,200		116,000		105,455	9/27/2017		114,010		48,046
Timberglen	Dallas, TX		304		16,950		30,000		98,684	1/31/2018		29,553		13,742
Edgewater at Sandy Springs	Atlanta, GA		760		58,000		101,250		133,224	8/28/2019		100,219		47,329
Belmont at Duck Creek	Garland, TX		240		18,525		29,500		122,917	8/28/2019		29,148		11,985
The Ashlar	Dallas, TX		264		16,235		29,400		111,364	8/28/2019		29,050		13,205
Heatherstone	Dallas, TX		152		9,450		16,275		107,072	8/28/2019		16,054		6,368
The Pointe at the Foothills	Mesa, AZ		528		52,275		85,400		161,742	8/28/2019		84,663		37,925
Abbington Heights	Antioch, TN		274		17,900		28,050		102,372	8/30/2019		27,630		10,888
Total/Weighted Average			6,806	$	443,119	$	681,925	$	100,195		$	672,519	$	245,739

(1) Represents sales price, net of closing costs.

(2) The NAVA Portfolio consists of The Arbors, The Crossings, The Crossings at Holcomb Bridge and The Knolls.

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NEXPOINT RESIDENTIAL TRUST, INC. [NYSE:NXRT]

Definitions and Reconciliations of Non-GAAP Measures

Definitions

This presentation contains non-GAAP financial measures. A “non-GAAP financial measure” is defined as a numerical measure of a company’s financial performance that excludes or includes amounts so as to be different than the most directly comparable measure calculated and presented in accordance with GAAP in the statements of income, balance sheets or statements of cash flows of the Company. The non-GAAP financial measures used within this presentation are net operating income (“NOI”), funds from operations attributable to common stockholders (“FFO”), FFO per diluted share, Core FFO, Core FFO per diluted share, adjusted FFO (“AFFO”), AFFO per diluted share and net debt.

NOI is used by investors and our management to evaluate and compare the performance of our properties to other comparable properties, to determine trends in earnings and to compute the fair value of our properties. NOI is calculated by adjusting net income (loss) to add back (1) the cost of funds, (2) acquisition costs, (3) advisory and administrative fees, (4) the impact of depreciation and amortization expenses as well as gains or losses from the sale of operating real estate assets that are included in net income computed in accordance with GAAP and gains or losses on extinguishment of debt and modification costs, (5) corporate general and administrative expenses, (6) other gains and losses that are specific to us, (7) casualty-related expenses/(recoveries) and casualty losses, (8) property general and administrative expenses that are not reflective of the continuing operations of the properties or are incurred on behalf of the Company at the property for expenses such as legal, professional and franchise tax fees and (9) miscellaneous income. We define “Same Store NOI” as NOI for our properties that are comparable between periods. We view Same Store NOI as an important measure of the operating performance of our properties because it allows us to compare operating results of properties owned for the entirety of the current and comparable periods and therefore eliminates variations caused by acquisitions or dispositions during the periods.

FFO is defined by the National Association of Real Estate Investment Trusts (“NAREIT”), as net income (loss) computed in accordance with GAAP, excluding gains or losses from real estate dispositions, plus real estate depreciation and amortization and impairment charges. We compute FFO in accordance with NAREIT’s definition. Our presentation differs slightly in that we begin with net income (loss) before adjusting for amounts attributable to redeemable noncontrolling interests in the OP and we show the combined amounts attributable to such noncontrolling interests as an adjustment to arrive at FFO attributable to common stockholders.

Core FFO makes certain adjustments to FFO, which are either not likely to occur on a regular basis or are otherwise not representative of the ongoing operating performance of our Portfolio. Core FFO adjusts FFO to remove items such as losses on extinguishment of debt and modification costs (includes prepayment penalties and defeasance costs incurred and the write-off of unamortized deferred financing costs and fair market value adjustments of assumed debt related to the retirement of debt and costs incurred in connection with a debt modification that are expensed), casualty-related expenses and recoveries and casualty losses, changes in fair value on derivative instruments – ineffective portion, the amortization of deferred financing costs incurred in connection with obtaining short-term debt financing and the noncontrolling interests related to these items.

AFFO makes certain adjustments to Core FFO. There is no industry standard definition of AFFO and practice is divergent across the industry. AFFO adjusts Core FFO to remove items such as equity-based compensation expense and the amortization of deferred financing costs incurred in connection with obtaining long-term debt financing, and the noncontrolling interests related to these items.

Net debt is calculated by subtracting cash and cash equivalents and restricted cash held for value-add upgrades and green improvements from total debt outstanding.

We believe that the use of NOI, FFO, Core FFO, AFFO and net debt, combined with the required GAAP presentations, improves the understanding of operating results and debt levels of real estate investment trusts (“REITs”) among investors and makes comparisons of operating results and debt levels among such companies more meaningful. While NOI, FFO, Core FFO, AFFO and net debt are relevant and widely used measures of operating performance and debt levels of REITs, they do not represent cash flows from operations, net income (loss) or total debt as defined by GAAP and should not be considered an alternative to those measures in evaluating our liquidity, operating performance and debt levels. NOI, FFO, Core FFO and AFFO do not purport to be indicative of cash available to fund our future cash requirements. We present net debt because we believe it provides our investors a better understanding of our leverage ratio. Net debt should not be considered an alternative to total debt, as we may not always be able to use our available cash to repay debt. Our computation of NOI, FFO, Core FFO, AFFO and net debt may not be comparable to NOI, FFO, Core FFO, AFFO and net debt reported by other REITs. For a more complete discussion of NOI, FFO, Core FFO and AFFO, see our most recent Annual Report on Form 10-K and our other filings with the SEC.

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NEXPOINT RESIDENTIAL TRUST, INC. [NYSE:NXRT]

Reconciliations

NOI and 2018-2019 Same Store NOI for the Years Ended December 31, 2019 and 2018

The following table, which has not been adjusted for the effects of noncontrolling interests, reconciles NOI and our 2018-2019 Same Store NOI for the years ended December 31, 2019 and 2018 to net income (loss), the most directly comparable GAAP financial measure (in thousands):

		For the Year Ended December 31,
		2019			2018
Net income (loss)		$	99,438		$	(1,614	)
Adjustments to reconcile net income (loss) to NOI:
Advisory and administrative fees			7,500			7,474
Corporate general and administrative expenses			9,613			7,808
Casualty-related recoveries	(1)		(34	)		(663	)
Casualty losses			3,488			—
Miscellaneous income			(587	)		—
Property general and administrative expenses	(2)		1,517			1,294
Depreciation and amortization			69,086			47,470
Interest expense			37,385			28,572
Loss on extinguishment of debt and modification costs			2,869			3,576
Gain on sales of real estate			(127,684	)		(13,742	)
NOI		$	102,591		$	80,175
Less Non-Same Store
Revenues			(62,429	)		(32,871	)
Operating expenses			25,799			14,491
Same Store NOI		$	65,961		$	61,795

(1) Adjustment to net income (loss) to exclude certain property operating expenses that are casualty-related expenses/(recoveries).

(2) Adjustment to net income (loss) to exclude certain property general and administrative expenses that are not reflective of the continuing operations of the properties or are incurred on our behalf at the property for expenses such as legal, professional and franchise tax fees.

NOI and 2017-2019 Same Store NOI for the Years Ended December 31, 2019, 2018 and 2017

The following table, which has not been adjusted for the effects of noncontrolling interests, reconciles our NOI and our 2017-2019 Same Store NOI for the years ended December 31, 2019, 2018 and 2017 to net income (loss), the most directly comparable GAAP financial measure (in thousands):

		For the Year Ended December 31,
		2019			2018			2017
Net income (loss)		$	99,438		$	(1,614	)	$	56,359
Adjustments to reconcile net income (loss) to NOI:
Advisory and administrative fees			7,500			7,474			7,419
Corporate general and administrative expenses			9,613			7,808			6,275
Casualty-related recoveries	(1)		(34	)		(663	)		(287	)
Casualty losses			3,488			—			—
Miscellaneous income			(587	)		—			—
Property general and administrative expenses	(2)		1,517			1,294			1,130
Depreciation and amortization			69,086			47,470			48,752
Interest expense			37,385			28,572			29,576
Loss on extinguishment of debt and modification costs			2,869			3,576			5,719
Gain on sales of real estate			(127,684	)		(13,742	)		(78,365	)
NOI		$	102,591		$	80,175		$	76,578
Less Non-Same Store
Revenues			(82,360	)		(51,987	)		(53,811	)
Operating expenses			34,756			23,702			25,437
Same Store NOI		$	54,987		$	51,890		$	48,204

(1) Adjustment to net income (loss) to exclude certain property operating expenses that are casualty-related expenses/(recoveries).

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NEXPOINT RESIDENTIAL TRUST, INC. [NYSE:NXRT]

(2) Adjustment to net income (loss) to exclude certain property general and administrative expenses that are not reflective of the continuing operations of the properties or are incurred on our behalf at the property for expenses such as legal, professional and franchise tax fees.

NOI and Q4 Same Store NOI for the Three Months Ended December 31, 2019 and 2018

The following table, which has not been adjusted for the effects of noncontrolling interests, reconciles our NOI and our Q4 Same Store NOI for the three months ended December 31, 2019 and 2018 to net loss, the most directly comparable GAAP financial measure (in thousands):

		For the Three Months Ended December 31,
		2019			2018
Net loss		$	(13,306	)	$	(4,782	)
Adjustments to reconcile net loss to NOI:
Advisory and administrative fees			1,887			1,888
Corporate general and administrative expenses			2,300			2,077
Casualty-related expenses/(recoveries)	(1)		(60	)		39
Casualty losses			3,488			—
Miscellaneous income			(587	)		—
Property general and administrative expenses	(2)		448			364
Depreciation and amortization			23,394			13,832
Interest expense			10,747			7,833
Loss on extinguishment of debt and modification costs			—			—
Gain on sales of real estate			16			—
NOI		$	28,327		$	21,251
Less Non-Same Store
Revenues	(3)		(16,158	)		(7,305	)
Operating expenses	(3)		6,649			3,268
Same Store NOI	(3)	$	18,818		$	17,214

(1) Adjustment to net loss to exclude certain property operating expenses that are casualty-related expenses.

(2) Adjustment to net loss to exclude certain property general and administrative expenses that are not reflective of the continuing operations of the properties or are incurred on our behalf at the property for expenses such as legal, professional and franchise tax fees.

(3) Amounts for the three months ended December 31, 2019 and 2018 are derived from the operations of our Q4 Same Store and Non-Same Store properties.

Reconciliation of Debt to Net Debt

(dollar amounts in thousands)	FY 2019			FY 2018			FY 2017
Total mortgage debt	$	1,193,528		$	845,713		$	762,404
Credit facilities		218,000			—			30,000
Bridge facility		—			—			8,597
Adjustments to arrive at net debt:
Cash and cash equivalents		(25,671	)		(19,864	)		(16,036	)
Restricted cash held for value-add upgrades and green improvements		(21,903	)		(5,209	)		(9,052	)
Net Debt	$	1,363,954		$	820,640		$	775,913
Enterprise Value (1)	$	2,499,954		$	1,644,640		$	1,363,913
Leverage Ratio		55	%		50	%		57	%

(1) Enterprise Value is calculated as Market Capitalization as of December 31, 2019 plus Net Debt.

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NEXPOINT RESIDENTIAL TRUST, INC. [NYSE:NXRT]

Guidance Reconciliations of NOI, Same Store NOI, Pro Forma NOI, FFO, Core FFO and AFFO

The following table, which has not been adjusted for the effects of noncontrolling interests, reconciles our 2020 NOI guidance to our net income (the most directly comparable GAAP financial measure) guidance for the year ended December 31, 2020 and for the three months ended March 31, 2020 (in thousands):

		For the Year Ended December 31, 2020			For the Three Months Ended March 31, 2020
		Mid-Point (1)			Mid-Point (1)
Net income		$	20,806		$	27,333
Adjustments to reconcile net loss to NOI:
Advisory and administrative fees			7,500			1,875
Corporate general and administrative expenses			9,534			2,384
Property general and administrative expenses	(2)		1,500			375
Depreciation and amortization			75,000			18,750
Interest expense			46,734			12,097
Loss on extinguishment of debt and modification costs			871			701
Gain on sales of real estate			(39,695	)		(33,918	)
NOI		$	122,250		$	29,597
Less Non-Same Store
Revenues	(3)		(83,269	)
Operating expenses	(3)		34,335
Same Store NOI	(3)	$	73,316

(1) Mid-Point estimates shown for full year and first quarter 2020 guidance. Assumptions made for full year and first quarter 2020 NOI guidance include the Same Store operating growth projections included in the “2020 Full Year Guidance Summary” section of this release and the effect of the acquisition and dispositions throughout the fiscal year.

(2) Adjustment to net income to exclude certain property general and administrative expenses that are not reflective of the continuing operations of the properties or are incurred on our behalf at the property for expenses such as legal, professional and franchise tax fees.

(3) Amounts are derived from the results of operations of our pro forma Full Year 2020 Same Store properties and Non-Same Store properties. There are 25 properties in our pro forma Full Year 2020 Same Store pool.

The following table reconciles our 2020 NOI guidance to our 2020 Pro Forma NOI guidance (in thousands):

	For the Year Ended December 31, 2020
	Mid-Point
2020 NOI guidance	$	122,250
Adjustments to reconcile Guidance NOI to Pro Forma NOI:
NOI lost on forecast assets for sale		3,310
Pro Forma Cutter's Point NOI		1,200
NOI gained on forecast acquisitions		(1,840	)
2020 Pro Forma NOI guidance	$	124,920

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NEXPOINT RESIDENTIAL TRUST, INC. [NYSE:NXRT]

The following table reconciles our FFO, Core FFO and AFFO guidance to our net income (the most directly comparable GAAP financial measure) guidance for the year ended December 31, 2020 (in thousands, except per share data):

	For the Year Ended December 31, 2020
	Mid-Point
Net income	$	20,806
Depreciation and amortization		75,000
Gain on sales of real estate		(39,695	)
Adjustment for noncontrolling interests		(168	)
FFO attributable to common stockholders		55,943
FFO per share - diluted (1)	$	2.11
Loss on extinguishment of debt and modification costs		871
Amortization of deferred financing costs - acquisition term notes		1,573
Adjustment for noncontrolling interests		(7	)
Core FFO attributable to common stockholders		58,380
Core FFO per share - diluted (1)	$	2.21
Amortization of deferred financing costs - long term debt		1,584
Equity-based compensation expense		4,934
Adjustment for noncontrolling interests		(20	)
AFFO attributable to common stockholders		64,878
AFFO per share - diluted (1)	$	2.45
Weighted average common shares outstanding - diluted		26,463

(1) For purposes of calculating per share data, we assume a weighted average diluted share count of approximately 26.5 million for the full year 2020.

The following table reconciles our NOI to our net income (loss) for the years ended December 31, 2016 and 2015 (in thousands):

	For the Year Ended December 31,
	2016			2015
Net income (loss)	$	25,888		$	(10,992	)
Adjustments to reconcile net income (loss) to NOI:
Advisory and administrative fees		6,802			5,565
Corporate general and administrative expenses		4,014			2,455
Casualty-related expenses/(recoveries)		151			25
Property general and administrative expenses		879			1,109
Depreciation and amortization		35,643			40,801
Interest expense		20,167			17,817
Loss on extinguishment of debt and modification costs		1,722	��		652
Gain on sales of real estate		(25,932	)		—
Acquisition costs		386			2,975
NOI	$	69,720		$	60,407

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NEXPOINT RESIDENTIAL TRUST, INC. [NYSE:NXRT]

The following table reconciles our FFO to our net income (loss) for the years ended December 31, 2016 and 2015 (in thousands):

	For the Year Ended December 31,
	2016			2015
Net income (loss)	$	25,888		$	(10,992	)
Depreciation and amortization		35,643			40,801
Gain on sales of real estate		(25,932	)		—
Adjustment for noncontrolling interests		(4,583	)		(4,170	)
FFO attributable to common stockholders		31,016			25,639
FFO per share - basic	$	1.46		$	1.20
FFO per share - diluted	$	1.46		$	1.20
Acquisition costs		386			2,975
Loss on extinguishment of debt and modification costs		1,722			652
Change in fair value on derivative instruments - ineffective portion		(1,683	)		—
Amortization of deferred financing costs - acquisition term notes		—			—
Adjustment for noncontrolling interests		(94	)		(322	)
Core FFO attributable to common stockholders		31,347			28,944
Core FFO per share - basic	$	1.48		$	1.36
Core FFO per share - diluted	$	1.47		$	1.36
Amortization of deferred financing costs - long term debt		1,423			1,081
Equity-based compensation expense		825			—
Adjustment for noncontrolling interests		(140	)		(92	)
AFFO attributable to common stockholders		33,455			29,933
AFFO per share - basic	$	1.58		$	1.41
AFFO per share - diluted	$	1.57		$	1.41
Weighted average common shares outstanding - basic		21,232			21,294
Weighted average common shares outstanding - diluted		21,314			21,294

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