NXRT.NEXPOINT.COM

•

NXRT¹ reported net income, FFO², Core FFO² and AFFO² of $23.0M, $63.6M, $62.5M and $70.9M, respectively, attributable to common stockholders for the year ended December 31, 2021, compared to net income, FFO, Core FFO, and AFFO of $44.0M, $57.2M, $55.5M and $62.4M, respectively, attributable to common stockholders for the year ended December 31, 2020.

•

For the year ended December 31, 2021, 2020-2021 Same Store properties³ average effective rent, total revenue and NOI² increased 11.1%, 4.9% and 5.5%, respectively, and occupancy increased 30 bps over the prior year period.

•

During the year ended December 31, 2021, NXRT acquired four properties totaling 1,129 units for a combined purchase price of $289.5 million.

•

The weighted average effective monthly rent per unit across all 39 properties held as of December 31, 2021 (the “Portfolio”), consisting of 14,825 units⁴, was $1,261, while physical occupancy was 94.3%.

•

NXRT paid a fourth quarter dividend of $0.38 per share of common stock on December 30, 2021; this cash dividend represented a $0.0388 per share, or 11.4% increase, over the prior quarter’s dividend.

•

During 2021, for the properties in the Portfolio, NXRT completed 1,264 full and partial upgrades, achieving an average monthly rent premium of $175 and a 21.1% ROI⁵.

•

Since inception, NXRT has completed installation of 6,015 full & partial upgrades, 4,321 kitchen and laundry appliances and 9,624 technology packages, resulting in $136, $47 and $43 average monthly rental increase per unit and 21.6%, 72.0% and 33.5% ROI, respectively.

•

During the full year 2021, through its at-the-market offering (“ATM program”), NXRT issued 350,513 shares of common stock for approximately $26.4 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 33 properties encompassing 13,098 units of apartment space in our Same Store pool for the year ended December 31, 2021  (our “2020-2021” Same Store” properties). There are 33 properties encompassing 13,098 units of apartment space in our Q4 Same Store pool for the three months ended December 31, 2021 (our “Q4 Same Store” properties). The same store unit count excludes 50 units that are currently down due to fires and winter storm Uri (Hollister Place: 19 units, Timber Creek: 15 units, Venue at 8651: 8 units, Atera: 4 units, Preserve at Terrell Mill: 3 units and Old Farm: 1 unit).

(4)

Total number of units owned as of December 31, 2021 is 14,825, however 50 units are currently down due to fires and winter storm Uri (Hollister Place: 19 units, Timber Creek: 15 units, Venue at 8651: 8 units, Atera: 4 units, Preserve at Terrell Mill: 3 units and Old Farm: 1 unit).

(5)

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

NXRT.NEXPOINT.COM

Page 1

•

Total revenues were $219.2 million for the full year 2021, compared to $204.8 million for the full year 2020.

•

Net income for the full year 2021 totaled $23.0 million, or income of $0.89 per diluted share, which included a gain on sales of real estate of $46.2 million and $86.9 million of depreciation and amortization expense. This compared to net income of $44.0 million, or income of $1.74 per diluted share, which included a gain on sales of real estate of $69.2 million and $82.4 million of depreciation and amortization expense for the full year 2020.

•

The change in our net income of $23.1 million for the year ended December 31, 2021 as compared to our net income of $44.2 million for the year ended December 31, 2020 primarily relates to decreases in gains on sales of real estate and increases in depreciation and total property operating expenses, partially offset by an increase in total revenues.

•

For the full year 2021, NOI was $128.4 million on 39 properties, compared to $118.4 million for the full year 2020 on 37 properties.

•

For the full year 2021, Same Store NOI increased 5.5% to $115.3 million, compared to $109.3 million for the full year 2020.

•

For the full year 2021, FFO totaled $63.6 million, or $2.47 per diluted share, compared to $57.2 million, or $2.27 per diluted share, for the full year 2020. For the full year 2021, Core FFO totaled $62.5 million, or $2.43 per diluted share, compared to $55.5 million, or $2.20 per diluted share, for the full year 2020. For the full year 2021, AFFO totaled $70.9 million, or $2.75 per diluted share, compared to $62.4 million, or $2.47 per diluted share, for the full year 2020.

•

Total revenues were $58.5 million for the fourth quarter of 2021, compared to $50.5 million for the fourth quarter of 2020.

•

Net income for the fourth quarter of 2021 totaled $38.8 million, or a gain of $1.50 per diluted share, which included $24.5 million of depreciation and amortization expense and $11.8 million of interest expense. This compared to net loss of $(4.2) million, or a loss of $(0.17) per diluted share, for the fourth quarter of 2020, which included $19.9 million of depreciation and amortization expense and $11.0 million of interest expense.

•

The change in our net income (loss) between the periods primarily relates to increases in total revenues and gains on sales of real estate, partially offset by increases in total property operating expenses and depreciation and amortization expense.

•

For the fourth quarter of 2021, NOI was $34.8 million on 39 properties, compared to $28.5 million for the fourth quarter of 2020 on 37 properties.

•

For the fourth quarter of 2021, Q4 Same Store NOI increased 14.7% to $30.7 million, compared to $26.7 million for the fourth quarter of 2020.

•

For the fourth quarter of 2021, FFO totaled $17.1 million, or $0.66 per diluted share, compared to $15.7 million, or $0.62 per diluted share, for the fourth quarter of 2020. For the fourth quarter of 2021, Core FFO totaled $17.8 million, or $0.69 per diluted share, compared to $14.2 million, or $0.56 per diluted share, for the fourth quarter of 2020. For the fourth quarter of 2021, AFFO totaled $19.9 million, or $0.77 per diluted share, compared to $15.9 million, or $0.63 per diluted share, for the fourth quarter of 2020.

NXRT.NEXPOINT.COM

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NXRT.NEXPOINT.COM

Page 3

(share counts in thousands)

Exchange/Ticker

NYSE: NXRT

Share Price (1)

$78.54

Insider Ownership (2)

12.25%

2022 Q1 Dividend Per Share

$0.38

Dividend Yield (1)

1.94%

Shares outstanding - basic (3)

25,170

Shares outstanding - diluted (3)

25,760

(1)

As of the close of market trading on February 14, 2022.

(2)

As of the close of market trading on December 31, 2021.

(3)

Weighted average for the year ended December 31, 2021.

Revenue & Average Rent Per Unit

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

NXRT.NEXPOINT.COM

Page 4

Property Name

Location

Date of Acquisition

Purchase Price

Mortgage Debt

# Units

The Verandas at Lake Norman

Charlotte, North Carolina

June 30, 2021

$

63,500

$

34,925

264

Creekside at Matthews

Charlotte, North Carolina

June 30, 2021

58,000

31,900

240

Six Forks Station

Raleigh, North Carolina

September 10, 2021

74,760

41,180

323

Hudson High House

Cary, North Carolina

December 7, 2021

93,250

46,625

302

$

289,510

$

154,630

1,129

Property Name

Location

Date of Sale

Sales Price

IRR

Multiple on

Invested Capital

Net Cash Proceeds

Beechwood Terrace

Antioch, Tennessee

November 1, 2021

$

53,600

38.6

%

5.82x

$

29,478

Cedar Pointe

Antioch, Tennessee

November 1, 2021

37,650

26.7

%

2.06x

19,606

$

91,250

36.1

%

3.55x

$

49,084

Market

New Leases

% Increase

Rent Increase

Renewals

% Increase

Rent Increase

Dallas/Fort Worth

244

24.2%

$250

262

15.4%

$147

Houston

91

17.8%

$209

132

9.3%

$106

Charlotte

118

12.7%

$136

121

11.4%

$126

Nashville

154

17.0%

$189

178

12.6%

$134

Atlanta

132

22.6%

$270

161

16.7%

$188

Orlando

102

34.9%

$400

150

19.0%

$217

Tampa

70

39.6%

$399

57

24.4%

$248

South Florida

196

31.8%

$482

226

17.5%

$262

Phoenix

187

28.5%

$327

176

17.2%

$195

Las Vegas

120

19.5%

$242

152

16.1%

$188

Raleigh

25

17.2%

$196

53

14.1%

$158

TOTAL

1,439

24.5%

$291

1,668

15.6%

$179

CORE FFO GROWTH*

NOI GROWTH*

nxrt.nexpoint.com

Page 5

FY 2021

FY 2020

FY 2019

Q4 2021

Q4 2020

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

Company Profile

Market Capitalization

$

2,138,000

$

1,058,000

$

1,136,000

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

$

83.83

$

42.31

$

45.00

Weighted average common shares outstanding - basic

25,170

24,715

24,116

25,293

24,797

Weighted average common shares outstanding - diluted

25,760

25,234

24,593

25,882

25,350

Earnings Profile

Total revenues

$

219,240

$

204,800

$

181,066

$

58,497

$

50,548

Net income attributable to common stockholders

23,037

44,018

99,140

38,715

(4,199

)

NOI (1)

128,389

118,396

103,600

34,789

28,545

Same Store NOI (2)

115,332

109,286

30,687

26,747

Same Store NOI Growth (%) (2)

5.5

%

14.7

%

Earnings Metrics Per Common Share (diluted basis)

Earnings (loss)

$

0.89

$

1.74

$

4.03

$

1.50

$

(0.17

)

FFO (1)

$

2.47

$

2.27

$

1.66

$

0.66

$

0.62

Core FFO (1)

$

2.43

$

2.20

$

1.93

$

0.69

$

0.56

AFFO (1)

$

2.75

$

2.47

$

2.20

$

0.77

$

0.63

Dividends declared per common share

$

1.404

$

1.279

$

1.138

$

0.380

$

0.341

     FFO Coverage (3)

1.76x

1.77x

1.46x

1.74x

1.81x

     Core FFO Coverage (3)

1.73x

1.72x

1.70x

1.81x

1.64x

     AFFO Coverage (3)

1.96x

1.94x

1.94x

2.03x

1.84x

Portfolio

Total Properties

39

37

40

Total Units (4)

14,825

14,205

14,724

     Occupancy

94.3

%

94.1

%

94.2

%

     Average Effective Monthly Rent per Unit

$

1,261

$

1,128

$

1,103

Same Store Portfolio Metrics (2)

Total Same Store Properties

33

33

33

33

Total Same Store Units

13,098

13,148

13,098

13,148

     Occupancy

94.2

%

93.9

%

94.2

%

93.9

%

     Average Effective Monthly Rent per Unit

$

1,255

$

1,130

$

1,255

$

1,130

Value-Add Program

Completed Full/Partial Interior Rehab Units

1,264

1,679

2,516

353

311

Cumulative Completed Rehab Units (5)

6,015

     Average Increase to Effective Monthly Rent

     per Unit (Post-Rehab)

$

136

     ROI on Post-Rehab Units

21.6

%

Outstanding Debt Summary

Total Mortgage Debt

$

1,281,146

$

1,168,078

$

1,193,528

Credit Facilities

280,000

183,000

218,000

Total Debt Outstanding

$

1,561,146

$

1,351,078

$

1,411,528

     Leverage Ratio (Net Debt to Enterprise Value) (6)

41

%

55

%

55

%

(1)

For more information and reconciliations of NOI, FFO, Core FFO and AFFO, see the “FFO, Core FFO and AFFO,” “NOI and Same Store NOI” 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 2020-2021 Same Store properties; Q4 results are shown for the Q4 Same Store properties. For additional information regarding our Q4 and 2020-2021 Same Store properties, see the “Q4 Same Store Results” and “2020-2021 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)

Total units owned is 14,825, however 50 units are currently down due to fires and winter storm Uri in February 2021.

(5)

Inclusive of all full and partial interior upgrades completed through December 31, 2021. Cumulative results exclude rehabs completed for properties sold through December 31, 2021.

(6)

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

nxrt.nexpoint.com

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Guidance Range (1)

Low-End

Mid-Point

High-End

Earnings per diluted share (2)

$

4.05

$

4.15

$

4.25

Core FFO per diluted share (2) (3)

$

2.87

$

2.97

$

3.07

Same Store Growth: (4)

Rental Income

10.0

%

10.9

%

11.7

%

Total Revenue

9.4

%

10.2

%

11.1

%

Total Operating Expenses

7.2

%

6.3

%

5.5

%

Same Store NOI (3)

11.0

%

13.0

%

15.0

%

Other Considerations: (5)

Acquisitions

$

150.0

$

225.0

$

300.0

Dispositions

$

150.0

$

225.0

$

300.0

(1)

Full Year 2022 guidance forecast includes Same Store growth projections presented above, which takes into effect the forecast dispositions of Old Farm, Stone Creek at Old Farm and Hollister Place, thereby removing those assets from the Full Year 2022 pro forma Same Store pool.

(2)

Weighted average diluted share count estimate for full year 2022 is approximately 26.3 million.

(3)

Same Store NOI and Core FFO are non-GAAP measures. For reconciliations of Full Year 2022 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 2022 pro forma Same Store pool (31 properties).

(5)

We continue to evaluate our Portfolio for capital recycling opportunities. Transaction volumes presented are 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.

nxrt.nexpoint.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 (39 properties at December 31, 2021).

(3)

The Company anticipates net income (loss) will be in the range between approximately $106.9 million and $112.2 million for the full year 2022 and between $(7.0) million and $(7.8) million for the first quarter of 2022. FY 2022 NOI Guidance considers the forecast dispositions of Old Farm, Stone Creek at Old Farm, and Hollister Place, and considers a commensurate volume of capital recycling.

(4)

2022 Pro Forma NOI Guidance takes into effect the forecast dispositions of Old Farm, Stone Creek at Old Farm, and Hollister Place as if they were disposed of on December 31, 2022, which we estimate would have contributed approximately an additional $2,000, $500, and $700, respectively, to NOI. Additionally, 2022 Pro Forma NOI Guidance excludes NOI for projected acquisitions in 2022, which we estimate would have contributed approximately an additional $5,400 to NOI.

(5)

Includes approximately $11.9 million that is held for value-add upgrades; reduced by $11.9 million for estimated 2022 rehab expenditures.

(6)

Includes approximately $1.5 million in forward 12-month principal payments.

(7)

Includes outstanding balance as of December 31, 2021.

NXRT.NEXPOINT.COM

Page 8

December 31, 2021

December 31, 2020

ASSETS

Operating Real Estate Investments

Land

$

375,857

$

323,429

Buildings and improvements

1,743,866

1,544,115

Intangible lease assets

2,576

1,675

Construction in progress

6,078

10,796

Furniture, fixtures, and equipment

120,419

96,228

Total Gross Operating Real Estate Investments

2,248,796

1,976,243

Accumulated depreciation and amortization

(287,096

)

(215,494

)

Total Net Real Estate Investments

1,961,700

1,760,749

Cash and cash equivalents

49,450

24,457

Restricted cash

39,246

32,558

Accounts receivable, net

4,844

9,045

Prepaid and other assets

4,701

2,405

Fair market value of interest rate swaps

3,526

—

TOTAL ASSETS

$

2,063,467

$

1,829,214

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:

Mortgages payable, net

$

1,276,285

$

1,162,855

Credit facility, net

278,215

182,323

Accounts payable and other accrued liabilities

12,590

10,058

Accrued real estate taxes payable

13,182

12,822

Accrued interest payable

2,491

2,274

Security deposit liability

2,945

2,688

Prepaid rents

1,775

1,639

Fair market value of interest rate swaps

—

43,530

Total Liabilities

1,587,483

1,418,189

Redeemable noncontrolling interests in the Operating Partnership

6,139

3,098

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; 25,500,567 and 25,016,957 shares issued and outstanding, respectively

255

250

Additional paid-in capital

407,803

376,710

Accumulated earnings less dividends

59,209

75,321

Accumulated other comprehensive income (loss)

2,578

(44,354

)

Total Stockholders' Equity

469,845

407,927

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

2,063,467

$

1,829,214

NXRT.NEXPOINT.COM

Page 9

For the Year Ended December 31,

2021

2020

2019

Revenues

Rental income

$

213,505

$

199,237

$

177,162

Other income

5,735

5,563

3,904

Total revenues

219,240

204,800

181,066

Expenses

Property operating expenses

47,739

47,201

42,692

Real estate taxes and insurance

33,152

31,709

25,113

Property management fees (1)

6,334

5,971

5,388

Advisory and administrative fees (2)

7,631

7,670

7,500

Corporate general and administrative expenses

11,966

10,035

9,613

Property general and administrative expenses

7,332

6,239

6,765

Depreciation and amortization

86,878

82,411

69,086

Total expenses

201,032

191,236

166,157

Operating income before gain on sales of real estate

18,208

13,564

14,909

Gain on sales of real estate

46,214

69,151

127,684

Operating income

64,422

82,715

142,593

Interest expense

(44,623

)

(44,753

)

(37,385

)

Loss on extinguishment of debt and modification costs

(912

)

(1,470

)

(2,869

)

Casualty gain (loss)

2,595

5,886

(3,488

)

Miscellaneous income

1,624

1,772

587

Net income

23,106

44,150

99,438

Net income attributable to redeemable noncontrolling interests in the Operating Partnership

69

132

298

Net income attributable to common stockholders

$

23,037

$

44,018

$

99,140

Other comprehensive income (loss)

Unrealized gains (losses) on interest rate derivatives

47,073

(46,961

)

(14,625

)

Total comprehensive income (loss)

70,179

(2,811

)

84,813

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

210

(9

)

254

Comprehensive income (loss) attributable to common stockholders

$

69,969

$

(2,802

)

$

84,559

Weighted average common shares outstanding - basic

25,170

24,715

24,116

Weighted average common shares outstanding - diluted

25,760

25,234

24,593

Earnings per share - basic

$

0.92

$

1.78

$

4.11

Earnings per share - diluted

$

0.89

$

1.74

$

4.03

(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.

NXRT.NEXPOINT.COM

Page 10

For the Year Ended December 31,

For the Three Months Ended December 31,

2021

2020

2021

2020

Net income (loss)

$

23,106

$

44,150

$