Easterly Government Properties (DEA) 8-K Reports Second Quarter 2015 Results

Supplemental Information Package

Second Quarter 2015

Exhibit 99.2

2

Disclaimers

Forward-looking

Statement

We

make

statements

in

this

Supplemental

Information

Package

that

are

considered

“forward-looking

statements”

within

the

meaning

of

Section

27A

of

the

Securities

Act

of

1933,

as

amended,

or

the

Securities

Act,

and

Section

21E

of

the

Securities

Exchange

Act

of

1934,

as

amended,

or

the

Exchange

Act,

which

are

usually

identified

by

the

use

of

words

such

as

“anticipates,”

“believes,”

“estimates,”

“expects,”

“intends,”

“may,”

“plans,”

“projects,”

“seeks,”

“should,”

“will,”

and

variations

of

such

words

or

similar

expressions

and

include

our

guidance

with

respect

to

FFO.

We

intend

these

forward-looking

statements

to

be

covered

by

the

safe

harbor

provisions

for

forward-looking

statements

contained

in

the

Private

Securities

Litigation

Reform

Act

of

1995

and

are

including

in

this

Supplemental

Information

Package

for

purposes

of

complying

with

those

safe

harbor

provisions.

These

forward-looking

statements

reflect

our

current

views

about

our

plans,

intentions,

expectations,

strategies

and

prospects,

which

are

based

on

the

information

currently

available

to

us

and

on

assumptions

we

have

made.

Although

we

believe

that

our

plans,

intentions,

expectations,

strategies

and

prospects

as

reflected

in

or

suggested

by

those

forward-

looking

statements

are

reasonable,

we

can

give

no

assurance

that

the

plans,

intentions,

expectations

or

strategies

will

be

attained

or

achieved.

Furthermore,

actual

results

may

differ

materially

from

those

described

in

the

forward-looking

statements

and

will

be

affected

by

a

variety

of

risks

and

factors

that

are

beyond

our

control

including,

without

limitation:

risks

associated

with

our

dependence

on

the

U.S.

Government

and

its

agencies

for

substantially

all

of

our

revenues;

risks

associated

with

ownership

and

development

of

real

estate;

decreased

rental

rates

or

increased

vacancy

rates;

loss

of

key

personnel;

general

volatility

of

the

capital

and

credit

markets

and

the

market

price

of

our

common

stock;

the

risk

we

may

lose

one

or

more

major

tenants;

failure

of

acquisitions

or

development

projects

to

yield

anticipated

results;

risks

associated

with

actual

or

threatened

terrorist

attacks;

intense

competition

in

the

real

estate

market

that

may

limit

our

ability

to

attract

or

retain

tenants

or

re-lease

space;

insufficient

amounts

of

insurance

or

exposure

to

events

that

are

either

uninsured

or

underinsured;

uncertainties

and

risks

related

to

adverse

weather

conditions,

natural

disasters

and

climate

change;

exposure

to

liability

relating

to

environmental

and

health

and

safety

matters;

limited

ability

to

dispose

of

assets

because

of

the

relative

illiquidity

of

real

estate

investments

and

the

nature

of

our

assets;

exposure

to

litigation

or

other

claims;

risks

associated

with

breaches

of

our

data

security;

risks

associated

with

our

indebtedness;

and

other

risks

and

uncertainties

detailed

in

the

“Risk

Factors”

section

of

our

Form

10-K

for

the

year

ended

December

31,

2014

filed

with

the

Securities

and

Exchange

Commission.

In

addition,

our

anticipated

qualification

as

a

real

estate

investment

trust

involves

the

application

of

highly

technical

and

complex

provisions

of

the

Internal

Revenue

Code

of

1986,

or

the

Code,

and

depends

on

our

ability

to

meet

the

various

requirements

imposed

by

the

Code

through

actual

operating

results,

distribution

levels

and

diversity

of

stock

ownership.

We

assume

no

obligation

to

update

publicly

any

forward

looking

statements,

whether

as

a

result

of

new

information,

future

events

or

otherwise.

Ratings

Ratings

are

not

recommendations

to

buy,

sell

or

hold

the

Company’s

securities.

The

following

discussion

related

to

the

consolidated

financial

statements

of

the

Company

should

be

read

in

conjunction

with

the

financial

statements

for

the

quarter

ended

June

30,

2015

that

will

be

released

on

Form

10-Q

to

be

filed

on

or

about

August

6,

2015.

3

Supplemental Definitions

Annualized lease income is defined as the annualized contractual base rent for the last month in a specified period, plus the annualized straight line rent

adjustments for the last month in such period and the annualized expense reimbursements earned by us for the last month in such period. 

Cash Available for Distribution (CAD) is a non-GAAP financial measure that is not intended to represent cash flow for the period and is not indicative of cash flow

provided by operating activities as determined under GAAP.  CAD is calculated in accordance with the current NAREIT definition as FFO minus normalized recurring

real estate-related expenditures and other non-cash items and nonrecurring expenditures.  CAD is presented solely as a supplemental disclosure with respect to

liquidity because the Company believes it provides useful information regarding the Company’s ability to fund its dividends. Because all companies do not calculate

CAD the same way, the presentation of CAD may not be comparable to similarly titled measures of other companies.

EBITDA is calculated as the sum of net income (loss) before interest expense, income taxes, depreciation and amortization. EBITDA is not intended to represent

cash flow for the period, is not presented as an alternative to operating income as an indicator of operating performance, should not be considered in isolation or as a

substitute for measures of performance prepared in accordance with GAAP and is not indicative of operating income or cash provided by operating activities as

determined under GAAP. EBITDA is presented solely as a supplemental disclosure with respect to liquidity because the Company believes it provides useful

information regarding the Company's ability to service or incur debt. Because all companies do not calculate EBITDA the same way, the presentation of EBITDA may

not be comparable to similarly titled measures of other companies.

Fully diluted basis assumes the exchange of all outstanding common units representing limited partnership interests in the Company’s operating partnership, or

common units, the full vesting of all restricted stock units, and the exchange of all earned and outstanding LTIP units in the Company’s operating partnership for

shares of common stock on a one-for-one basis, which is not the same as the meaning of “fully diluted” under GAAP. Fully diluted basis does not include outstanding

LTIP units in the Company’s operating partnership that are subject to performance criteria that have not yet been met.

Funds From Operations (FFO) is defined under the White Paper approved by the Board of Governors of NAREIT, as amended, as net income (loss) (computed in

accordance with GAAP), excluding gains (or losses) from debt restructuring, sales of properties and real estate related impairment charges, plus real estate

depreciation and amortization and after adjustments for unconsolidated partnerships and joint ventures. FFO is a widely recognized measure of REIT

performance. Although FFO is a non-GAAP financial measure, the Company believes that information regarding

FFO is helpful to shareholders and potential

investors.

Net Operating Income (NOI) is calculated as total property revenues (rental income, tenant reimbursements and other income) less property operating expenses

and real estate taxes from the properties owned by the Company. Cash NOI excludes from NOI straight-line rent and amortization of above-/below-market leases.

NOI presented by the Company may not be comparable to NOI reported by other REITs that define NOI differently. NOI should not be considered an alternative to

net income as an indication of our performance or to cash flows as a measure of the Company's liquidity or its ability to make distributions.

Pro forma three months ended June 30, 2015 removes from the Company’s financial results for the three month period ended June 30, 2015 the impact of one-

time, non-recurring expenses related to its initial public offering, including legal and accounting fees and new entity formation costs.  

Pro forma six months ended June 30, 2015 (1) removes from the Company’s financial results for the period from February 11, 2015 (the date of the closing of the

Company’s initial public offering) to June 30, 2015 the impact of one-time, non-recurring expenses related to its initial public offering, including legal and accounting

fees and new entity formation costs and (2) reflects a full quarter of operations for the period from January 1, 2015 to March 31, 2015 on a pro forma basis based on

the financial results of the 49 days of operations between February 11, 2015 and March 31, 2015.

4

Overview

Corporate Information and Analyst Coverage

5

Executive Summary

6

Second Quarter 2015 Results

7

Corporate Financials

Balance Sheet

12

Income Statement

13

Net Operating Income

14

EBITDA, FFO and CAD

15

Debt

Debt Schedules

16

Debt Maturities

17

Properties

Property Overview

18

Tenants

19

Lease Expirations

20

Table of Contents

5

Corporate Information and Analyst Coverage

Corporate Information

Corporate Headquarters

Stock Exchange Listing

Information Requests

Investor Relations

2101 L Street NW       

New York Stock Exchange                  

Evelyn Infurna

Suite 750            

or 202-971-9867 to request an

ICR, Inc.                   

Washington, DC 20037

Ticker     

Investor Relations package

202-595-9500

DEA

Any opinions, estimates, forecasts or predictions regarding Easterly Government Properties’ performance made by these analysts are theirs alone and do not

represent opinions, estimates, forecasts or predictions of Easterly Government Properties or its management. Easterly Government Properties does not by its

reference above or distribution imply its endorsement of or concurrence with such opinions, estimates, forecasts or predictions.

Note: Definitions for commonly used terms in this Supplemental Information Package are on page 3.

Executive Team

William Trimble III, CEO

Michael Ibe, EVP

Darrell Crate, Chairman

F. Joseph Moravec, EVP

Alison Bernard, CFO

Ronald Kendall, SVP

Meghan Baivier, COO

Board of Directors

William Binnie

Michael Ibe

Darrell Crate

James Mead

Cynthia Fisher

William Trimble III

Emil Henry Jr.

Please contact ir@easterlyreit.com

727-567-2594 / 727-567-2253

Equity Research Coverage

Citigroup

Raymond James & Associates

RBC Capital Markets

Michael Bilerman

/ Emmanuel Korchman

Bill Crow / Paul Puryear

Michael Carroll

212-816-1383 / 212-816-1382                                      

440-715-2649

6

Executive Summary

(Unaudited, in thousands except share and per share data)

Price of Common Shares

Three

months ended

June 30, 2015

Earnings

Pro forma three

months ended

June 30, 2015

Pro forma six

months ended

June 30, 2015

High closing price during period

16.43

$                   

Net income available to Easterly Government Properties, Inc.

618

$                       

Low closing price during period

15.43

$                   

Net income available to Easterly Government Properties, Inc. per share:

End of period closing price

15.92

$                   

Basic

0.03

$                      

Diluted

0.02

$                      

Outstanding

Classes

of

Stock

and

Partnership

Units

-

Fully

Diluted

Basis

At June 30, 2015

Net income

1,015

$                    

2,471

$                    

Common shares

24,141,712

Net

income,

per

share

-

fully

diluted

basis

0.03

$                      

0.06

$                      

Unvested restricted shares

26,667

Common partnership units

15,530,939

Funds From Operations

10,166

$                  

20,623

$                  

Total -

fully diluted basis

39,699,318

Funds

From

Operation,

per

share

-

fully

diluted

basis

0.26

$                      

0.52

$                      

Market Capitalization

At June 30, 2015

Cash Available for Distribution

8,760

$                    

17,526

$                  

Total

equity

market

capitalization

-

fully

diluted

basis

632,013

$               

Cash

Available

for

Distribution,

per

share

-

fully

diluted

basis

0.22

$                      

0.44

$                      

Consolidated debt (excluding unamortized premiums & discounts)

102,197

Cash and cash equivalents

(3,409)

Total enterprise value

730,801

$               

Liquidity

At June 30, 2015

Ratios

At June 30, 2015

Cash and cash equivalents

3,409

$                    

Net debt to total enterprise value

13.5%

Net debt to total equity market capitalization

15.6%

Unsecured revolving credit facility

Net debt to annualized pro forma quarterly EBITDA

2.1x

Total current facility size

400,000

$                

Cash interest coverage ratio

10.1x

Less: outstanding balance

(33,417)

Cash fixed charge coverage ratio

6.7x

Available under unsecured revolving credit facility

366,583

$                

7

Second Quarter 2015 Results

EASTERLY GOVERNMENT PROPERTIES

REPORTS SECOND QUARTER 2015 RESULTS

~ Pro Forma FFO of $0.26 per Share on a Fully Diluted Basis ~

WASHINGTON,

D.C.

–

August

6,

2015

–

Easterly

Government

Properties, Inc. (NYSE: DEA) (the “Company” or “Easterly”), a fully

integrated real estate investment trust (“REIT”) focused primarily on the

acquisition, development and management of Class A commercial

properties leased to U.S. Government agencies, today announced its

results of operations for the quarter ended June 30, 2015 which reflects

its first full quarter of operations. 

Highlights for the Quarter Ended June 30, 2015:

•

Acquisition of the 46,979-square foot Thad Cochran U.S. Bankruptcy

Courthouse in Aberdeen, Mississippi, at a purchase price of $14.1

million

•

Acquisition of the 115,650-square foot Department of Energy building

in Lakewood, Colorado, at a purchase price of $20.3 million

•

Pro Forma Funds From Operations of $10.2 million, or $0.26 per share

on a fully diluted basis

•

Pro Forma Cash Available for Distribution of $8.8 million, or $0.22 per

share on a fully diluted basis

•

Portfolio occupancy continued at 100%

•

Introduction of Pro Forma Funds From Operations guidance, based on

a pro forma 12 months ending December 31, 2015, of $1.01 to $1.05

per share on a fully diluted basis

“We continue to grow as a company and are gratified by our second

quarter results,” said William C. Trimble III, President and Chief Executive

Officer.  “Our growth is evidenced by the two acquisitions we completed

since our initial public offering and we have substantial unsecured debt

capacity to continue funding our external growth strategy. Our strong

management with expertise in government relations, commercial real

estate, corporate finance, and asset management enables us to execute

our strategy on behalf of shareholders.”

Financial Results for the Quarter Ended June 30, 2015

Pro Forma Funds From Operations (FFO) was $10.2 million, or

$0.26 per share on a fully diluted basis for the three months ended

June 30, 2015.

Pro Forma Cash Available for Distribution (CAD) was $8.8 million, or

$0.22 per share on a fully diluted basis for the three months ended

June 30, 2015.

Pro Forma Net income was $1.0 million, or $0.03 per share on a fully

diluted basis for the three months ended June 30, 2015.

The Company’s pro forma financial results for the quarter ended

June 30, 2015 removes the impact of one-time, non-recurring

expenses related to its initial public offering, including legal and

accounting fees and new entity formation costs.

Financial Results for the Six Months Ended June 30, 2015

Pro Forma Funds From Operations (FFO) was $20.6 million, or

$0.52 per share on a fully diluted basis for the six months ended

June 30, 2015.

Pro Forma Cash Available for Distribution (CAD) was $17.5 million,

or $0.44 per share on a fully diluted basis for the six months ended

June 30, 2015.

Pro Forma Net income was $2.5 million, or $0.06 per share on a fully

diluted basis for the six months ended June 30, 2015.

The Company’s pro forma financial results for the six months ended

June 30, 2015 (1) removes, for the period from February 11, 2015

(the date of the closing of the Company’s initial public offering) to

June 30, 2015, the impact of one-time, non-recurring expenses

8

related to its initial public offering, including legal and accounting fees and

new entity formation costs and (2) reflects a full quarter of operations for

the period from January 1, 2015 to March 31, 2015 on a pro forma basis

based on the financial results of the 49 days of operations between

February 11, 2015 and March 31, 2015.

Darrell Crate, Chairman of the Board commented, “We are pleased with

both our portfolio performance and our pipeline of acquisition

opportunities.  Easterly offers a differentiated growth story to investors

with our definable edge in sourcing, underwriting, and managing

properties leased to one of the highest quality tenants, the U.S. Federal

Government.”

Portfolio Operations

As of June 30, 2015, the Company wholly owned 31 properties in the

United States, encompassing approximately 2.2 million square feet in the

aggregate, including 28 properties that were leased primarily to U.S.

Government tenant agencies and three properties that were entirely

leased to private tenants. As of June 30, 2015, the portfolio had a

weighted average age of 10.9 years, was 100% occupied, and had a

weighted average lease term of 7.6 years.  With just seven percent of the

leases, by annualized lease income, rolling through the end of 2017,

Easterly expects to continue to provide a highly visible and stable cash-

flow stream.

Acquisitions

Since the completion of the Company’s IPO on February 11, 2015 the

Company has acquired two properties for an aggregate purchase price of

$34.3 million.

On April 1, 2015, Easterly acquired the Department of Energy (“DOE”)

building in Lakewood, Colorado for $20.3 million, its first acquisition since

its IPO. The 115,650-square foot building serves as the headquarters for

the DOE’s Western Area Power Administration (“WAPA”) and represents

the Company’s second asset in Lakewood, Colorado, a major federal

agency center in the Rocky Mountain region. Built in 1999, the Lakewood

building is a Class A facility leased to the General Services Administration

(“GSA”) on behalf of the DOE until 2029. The building is 100% occupied

by WAPA and provides engineering, accounting, human resources, legal

and training support to four regional offices that operate and maintain the

DOE’s Western Transmission System which covers a 1.3 million square

mile service area.

On June 17, 2015, Easterly acquired the Thad Cochran U.S. Bankruptcy

Courthouse in Aberdeen, Mississippi for $14.1 million, its second

acquisition since its IPO. This acquisition is demonstrative of Easterly’s

core strategy of investing in mission critical properties occupied by

essential functions of the U.S. Government. The 46,979-square foot

building is a modern building in terms of court functionality and security,

expressed in the stately form of a Greco-Roman classical design. Built in

2005 based on the exacting standards of the U.S. Courts Design Guide,

the Company believes it is fully compliant with the Judiciary’s needs in

terms of security, space sizes and function, and circulation patterns for

the public and judicial officers. The property is leased to the GSA with 10

years remaining on an initial 20-year lease.

Balance Sheet

Easterly believes that its strong balance sheet and borrowing ability under

its unsecured revolving credit facility provides ample capacity to pursue

and fund its growth plan.  As of June 30, 2015, the Company had total

indebtedness of $102.2 million comprised of $33.4 million on its

unsecured revolving credit facility and $68.8 million of mortgage debt

(excluding unamortized premiums and discounts). At June 30, 2015,

Easterly had a net debt to total enterprise value of 13.5% and a net debt

to annualized pro forma quarterly EBITDA ratio of 2.1x. Easterly’s

outstanding debt has a weighted average maturity of 9.7 years and a

weighted average interest rate of 3.3%. The Company has roughly $366.6

million of remaining capacity on its $400 million revolver, before

consideration for the facility’s $250 million accordion feature.  

Dividend

On August 4, 2015 the Board of Directors of Easterly approved a cash

dividend for the second quarter of 2015 in the amount of $0.21 per

common share. The dividend will be payable September 3, 2015 to

shareholders of record on August 18, 2015. 

Second Quarter 2015 Results

9

Outlook for 2015

Based on management's expectations, the Company is introducing

its financial guidance based on a pro forma 12 months ending

December 31, 2015 as follows:

Pro

Forma

Outlook

for

the

12

Months

Ending

December

31,

2015

Low

High

Pro Forma Net income (loss), per share

–

fully diluted basis

Plus: real estate depreciation and amortization

Pro

Forma

FFO,

per

share

–

fully

diluted

basis

The Company’s pro forma outlook for the 12 months ending

December 31, 2015 (1) removes, for the period from February 11,

2015 (the date of the closing of the Company’s initial public offering)

to December 31, 2015, the impact of one-time, non-recurring

expenses related to its initial public offering, including legal and

accounting fees and new entity formation costs and (2) reflects a full

quarter of operations for the period from January 1, 2015 to March

31, 2015 on a pro forma basis based on the financial results of the

49 days of operations between February 11, 2015 and March 31,

2015.

This guidance, for the pro forma 12 months ending December 31,

2015, is consistent with the following outlook for the period February

11, 2015 to December 31, 2015.  The Company commenced its

operations on February 11, 2015 upon completion of its initial public

offering.

$0.09

$0.13

$0.92

$0.92

$1.05

$1.01

Outlook

for

the

Period

February

11,

2015

to

December

31,

2015      

Net

income

(loss),

per

share

–

fully

diluted

basis

Plus: real estate depreciation and amortization

FFO,

per

share

–

fully

diluted

basis

The guidance provided does not contemplate dispositions, future

acquisitions or additional capital markets activities but does reflect

the impact of completed acquisitions as of June 30, 2015. This

guidance is forward-looking and reflect management's view of

current and future market conditions. The Company's actual results

may differ materially from this guidance.

Non-GAAP Supplemental Financial Measures

Cash Available for Distribution (CAD)

is a non-GAAP financial

measure that is not intended to represent cash flow for the period

and is not indicative of cash flow provided by operating activities as

determined under GAAP. CAD is calculated in accordance with the

current NAREIT definition as FFO minus normalized recurring real

estate-related expenditures and other non-cash items and

nonrecurring expenditures. CAD is presented solely as a

supplemental disclosure with respect to liquidity because the

Company believes it provides useful information regarding the

Company’s ability to fund its dividends. Because all companies do

not calculate CAD the same way, the presentation of CAD may not

be comparable to similarly titled measures of other companies.

$0.07

$0.11

$0.82

$0.82

$0.93

$0.89

Low

High

Second Quarter 2015 Results

10

EBITDA

is calculated as the sum of net income (loss) before

interest expense, income taxes, depreciation and amortization.

EBITDA is not intended to represent cash flow for the period, is not

presented as an alternative to operating income as an indicator of

operating performance, should not be considered in isolation or as

a substitute for measures of performance prepared in accordance

with GAAP and is not indicative of operating income or cash

provided by operating activities as determined under GAAP.

EBITDA is presented solely as a supplemental disclosure with

respect to liquidity because the Company believes it provides

useful information regarding the Company's ability to service or

incur debt. Because all companies do not calculate EBITDA the

same way, the presentation of EBITDA may not be comparable to

similarly titled measures of other companies.

Funds From Operations (FFO)

is defined under the White Paper

approved by the Board of Governors of NAREIT, as amended, as

net income (loss) (computed in accordance with GAAP), excluding

gains (or losses) from debt restructuring, sales of properties and

real estate related impairment charges, plus real estate

depreciation and amortization and after adjustments for

unconsolidated partnerships and joint ventures. FFO is a widely

recognized measure of REIT performance. Although FFO is a non-

GAAP financial measure, the Company believes that information

regarding FFO is helpful to shareholders and potential investors.

Other Definitions

Fully diluted basis

assumes the exchange of all outstanding

common units representing limited partnership interests in the

Company’s operating partnership, or common units, the full vesting

of all restricted stock units, and the exchange of all earned and

outstanding LTIP units in the Company’s operating partnership for

shares of common stock on a one-for-one basis, which is not the

same as the meaning of “fully diluted” under GAAP. Fully diluted

basis does not include outstanding LTIP units in the Company’s

operating partnership that are subject to performance criteria that

have not yet been met.

Conference Call Information

The Company will host a webcast and conference call at 10:00

a.m. Eastern Daylight time on August 6, 2015 to review the second

quarter 2015 performance, discuss recent events and conduct a

question-and-answer session. The number to call is 1-877-705-

6003 (domestic) and 1-201-493-6725 (international). A live

webcast will be available in the Investor Relations section of the

Company’s website.  A replay of the conference call will be

available through August 20, 2015 by dialing 1-877-870-5176

(domestic) and 1-858-384-5517 (international) and entering the

passcode 13611650.  Please note that the full text of the press

release and supplemental information package are available

through

the

Company’s

website

at

ir.easterlyreit.com.

About Easterly Government Properties, Inc.

Easterly Government Properties, Inc. (NYSE:DEA) is based in

Washington, D.C., and focuses primarily on the acquisition,

development and management of Class A commercial properties

that are leased to the U.S. Government. Easterly’s experienced

management team brings specialized insight into the strategy and

needs of mission-critical U.S. Government agencies for properties

leased primarily through the U.S. General Services Administration

(GSA). For further information on the company and its properties,

please visit www.easterlyreit.com.

Second Quarter 2015 Results

11

Second Quarter 2015 Results

Contact:

Easterly Government Properties, Inc.

Alison M. Bernard

Chief Financial Officer

202-971-9867

ir@easterlyreit.com

Forward Looking Statements

We make statements in this press release that are considered

“forward-looking statements” within the meaning of Section 27A of

the Securities Act of 1933, as amended, or the Securities Act, and

Section 21E of the Securities Exchange Act of 1934, as amended,

or the Exchange Act, which are usually identified by the use of

words such as “anticipates,” “believes,” “estimates,” “expects,”

“intends,” “may,” “plans,” “projects,” “seeks,” “should,” “will,” and

variations of such words or similar expressions and include our

guidance with respect to FFO.

We intend these forward-looking

statements to be covered by the safe harbor provisions for

forward-looking statements contained in the Private Securities

Litigation Reform Act of 1995 and are including in this press

release for purposes of complying with those safe harbor

provisions.

These forward-looking statements reflect our current

views about our plans, intentions, expectations, strategies and

prospects, which are based on the information currently available

to us and on assumptions we have made.

Although we believe

that our plans, intentions, expectations, strategies and prospects

as reflected in or suggested by those forward-looking statements

are reasonable, we can give no assurance that the plans,

intentions, expectations or strategies will be attained or

achieved.

Furthermore, actual results may differ materially from

those described in the forward-looking statements and will be

affected by a variety of risks and factors that are beyond our

control including, without limitation: risks associated with our

dependence on the U.S. Government and its agencies for

substantially all of our revenues; risks associated with ownership

and development of real estate; decreased rental rates or

increased vacancy rates; loss of key personnel; general volatility of

the capital and credit markets and the market price of our common

stock; the risk we may lose one or more major tenants; failure of

acquisitions or development projects to yield anticipated results;

risks associated with actual or threatened terrorist attacks; intense

competition in the real estate market that may limit our ability to

attract or retain tenants or re-lease space; insufficient amounts of

insurance or exposure to events that are either uninsured or

underinsured; uncertainties and risks related to adverse weather

conditions, natural disasters and climate change; exposure to

liability relating to environmental and health and safety matters;

limited ability to dispose of assets because of the relative illiquidity

of real estate investments and the nature of our assets; exposure

to litigation or other claims; risks associated with breaches of our

data security; risks associated with our indebtedness; and other

risks and uncertainties detailed in the “Risk Factors” section of our

Form 10-K for the year ended December 31, 2014 filed with the

Securities and Exchange Commission.

In addition, our anticipated

qualification as a real estate investment trust involves the

application of highly technical and complex provisions of the

Internal Revenue Code of 1986, or the Code, and depends on our

ability to meet the various requirements imposed by the Code

through actual operating results, distribution levels and diversity of

stock ownership.

We assume no obligation to update publicly any

forward looking statements, whether as a result of new information,

future events or otherwise.

12

Balance Sheet

(Unaudited, in thousands)

June 30, 2015

Assets

Real estate properties, net

657,957

$                       

Cash and cash equivalents

3,409

Restricted cash

1,529

Rents receivable

6,139

Accounts receivable

2,764

Deferred financing, net

3,068

Intangible assets, net

107,254

Prepaid expenses and other assets

1,107

Total assets

783,227

$                       

Liabilities

Revolving credit facility

33,417

Mortgage notes payable

69,369

Intangible liabilities, net

41,015

Accounts payable and accrued liabilities

4,967

Total liabilities

148,768

Equity

Common stock, par value $0.01, 200,000,000 shares authorized,

24,168,379 shares issued and outstanding

241

Additional paid-in capital

391,922

Retained (deficit)

(2,297)

Cumulative dividends

(2,659)

Total stockholders' equity

387,207

Non-controlling interest in operating partnership

247,252

Total

equity

634,459

Total liabilities and equity

783,227

$                       

13

Income Statement

(Unaudited, in thousands, except share and per share data)

Three

months ended

June 30, 2015

Less: one time

charges related to

IPO

Pro forma three 

months ended

June 30, 2015

Pro forma six

months ended

June 30, 2015

Revenues

Rental income

17,626

$               

-

$                    

17,626

$               

34,716

$               

Tenant reimbursements

1,572

-

1,572

2,998

Other income

58

-

58

78

Total revenues

19,256

-

19,256

37,792

Operating Expenses

Property operating

3,558

45

3,513

6,691

Real estate taxes

1,755

-

1,755

3,517

Depreciation and amortization

9,151

-

9,151

18,152

Acquisition costs

195

(125)

320

418

Formation expenses

72

72

-

-

Corporate general and administrative

2,239

58

2,181

3,935

Total expenses

16,970

50

16,920

32,713

Operating income (loss)

2,286

(50)

2,336

5,079

Other (expenses)

Interest expense, net

(1,321)

-

(1,321)

(2,608)

Net income (loss)

965

(50)

1,015

2,471

Non-controlling interest in operating partnership

(377)

20

(397)

(967)

Net income (loss) available to Easterly Government

Properties, Inc.

588

$                   

(30)

$                    

618

$                   

1,504

$                

Net income (loss) available to Easterly Government

Properties, Inc. per share:

Basic

0.02

$                  

(0.00)

$                 

0.03

$                  

Diluted

0.02

$                  

(0.00)

$                 

0.02

$                  

Weighted-average common shares outstanding:

Basic

24,141,712

24,141,712

24,141,712

Diluted

25,435,010

25,435,010

25,435,010

0.03

$                  

0.06

$                  

39,699,318

39,699,318

Net income, per share - fully diluted basis

Weighted average common shares outstanding - fully diluted basis

14

Net Operating Income

(Unaudited, in thousands)

Pro forma three 

months ended

June 30, 2015

Pro forma six

months ended

June 30, 2015

Revenue

Rental income

17,626

$               

34,716

$               

Tenant reimbursements

1,572

2,998

Other income

58

78

Total revenues

19,256

37,792

Operating Expenses

Property operating

3,513

6,691

Real estate taxes

1,755

3,517

Total expenses

5,268

10,208

Net Operating Income

13,988

27,584

Adjustments to Net Operating Income:

Straight-line rent

(65)

(131)

Above-/below-market leases

(1,300)

(2,541)

Cash Net Operating Income

12,623

$               

24,912

$               

$                

$                

15

EBITDA, FFO and CAD

(Unaudited, in thousands, except share and per share data)

Three

months ended

June 30, 2015

Less: one time

charges related to

IPO

Pro forma three

months ended

June 30, 2015

Pro forma six

months ended

June 30, 2015

Net income (loss)

965

$                   

(50)

$                    

1,015

$                

2,471

$                

Depreciation and amortization

9,151

-

9,151

18,152

Interest expense

1,321

-

1,321

2,608

EBITDA

11,437

(50)

11,487

23,231

Net income (loss)

965

$                   

(50)

$                    

1,015

$                

2,471

$                

Depreciation and amortization

9,151

-

9,151

18,152

Funds From Operations (FFO)

10,116

$               

(50)

$                    

10,166

$               

20,623

$               

Adjustments to FFO:

Acquisition costs

195

(125)

320

418

Formation expenses

72

72

-

-

Straight-line rent

(65)

-

(65)

(131)

Above-/below-market leases

(1,300)

-

(1,300)

(2,541)

Non-cash interest expense

187

-

187

377

Non-cash compensation

457

-

457

558

Funds From Operations, as Adjusted

9,662

$                

(103)

$                  

9,765

$                

19,304

$               

FFO, per share -

fully diluted basis

0.26

$                  

0.52

$                  

FFO,

as

Adjusted,

per

share

-

fully

diluted

basis

0.25

$                  

0.49

$                  

Funds From Operations, as Adjusted

9,662

$                

(103)

$                  

9,765

$                

19,304

$               

Acquisition costs

(195)

125

(320)

(418)

Principal amortization

(586)

-

(586)

(1,200)

Maintenance capital expenditures

(65)

-

(65)

(126)

Contractual tenant improvements

(34)

-

(34)

(34)

Cash Available for Distribution (CAD)

8,782

$                

22

$                     

8,760

$                

17,526

$               

CAD, per share -

fully diluted basis

0.22

$                  

0.44

$                  

39,699,318

39,699,318

$                   

$                     

$                 

$                 

Weighted average common shares outstanding - fully diluted basis

16

Debt Schedules

(Unaudited, in thousands)

(1)

Credit facility has available capacity of $366,583.

Debt Instrument

Maturity Date

Stated Rate

June 30, 2015

Balance

June 30, 2015

Percent of

Total Indebtedness

Unsecured revolving credit facility

Unsecured revolving credit facility

(1)

11-Feb-19

LIBOR + 1.40%

33,417

$             

32.7%

3.6 years

(wtd-avg maturity)

Secured mortgage debt

ICE -

Charleston

15-Jan-27

4.21%

22,511

$             

22.0%

USFS II -

Albuquerque

14-Jul-26

4.46%

17,500

17.1%

CBP -

Savannah

10-Jul-33

3.40%

15,908

15.6%

MEPCOM -

Jacksonville

14-Oct-25

4.41%

12,861

12.6%

12.7 years

4.12%

(wtd-avg maturity)

(wtd-avg rate)

Debt Statistics

June 30, 2015

Variable

rate

debt

-

unhedged

33,417

$                          

Fixed rate debt

68,780

Total debt (excluding unamortized premiums & discounts)

102,197

$                       

%

Variable

rate

debt

-

unhedged

32.7%

% Fixed rate debt

67.3%

Weighted average maturity

9.7 years

Weighted average interest rate

3.3%

Total secured mortgage debt

68,780

$             

67.3%

Total unsecured revolving credit facility

33,417

$             

32.7%

17

Debt Maturities

(Unaudited, in thousands)

$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

Scheduled Amortization

Balloon Payments

Credit Facility

$

$

Unsecured Debt

Year

Scheduled

Amortization

Balloon Payments

Credit

Facility

Total

Percent of

Debt Maturing

Weighted Average Interest

Rate of Maturing Debt

2015

$

1,242

-

$

-

1,242

1.2%

4.1%

2016

2,857

-

-

2,857

2.8%

4.1%

2017

2,977

-

-

2,977

2.9%

4.1%

2018

3,100

-

-

3,100

3.0%

4.1%

2019

3,229

-

33,417

36,646

35.8%

1.8%

2020

3,395

-

-

3,395

3.3%

4.1%

2021

4,054

-

-

4,054

4.0%

4.2%

2022

5,109

-

-

5,109

5.0%

4.2%

2023

5,388

-

-

5,388

5.3%

4.2%

2024

5,679

-

-

5,679

5.6%

4.2%

2025

5,633

1,917

-

7,550

7.4%

4.3%

2026

3,686

6,368

-

10,054

9.7%

4.3%

2027

1,093

7,140

-

8,233

8.1%

4.1%

2028

983

-

-

983

1.0%

3.4%

2029

1,016

-

-

1,016

1.0%

3.4%

2030

1,049

-

-

1,049

1.0%

3.4%

2031

1,081

-

-

1,081

1.1%

3.4%

2032

1,116

-

-

1,116

1.1%

3.4%

2033

668

-

-

668

0.7%

3.4%

Total

$

53,355

15,425

$

33,417

102,197

100.0%

Secured Debt

18

Property Name

Location

Property Type

Tenant Lease

Expiration

Year

Year Built /

Renovated

Rentable

Square Feet

Annualized

Lease Income

Percentage

of Total

Annualized

Lease Income

Annualized

Lease Income

per Leased

Square Foot

U.S Government Leased Properties

IRS - Fresno

Fresno, CA

Office

2018

2003

180,481

$7,299,318

10.2%

$40.44

PTO - Arlington

Arlington, VA

Office

2019 / 2020

2009

189,871

6,501,704

9.0%

34.24

FBI - San Antonio

San Antonio, TX

Office

2021

2007

148,584

4,914,920

6.8%

33.08

FBI - Omaha

Omaha, NE

Office

2024

2009

112,196

4,620,820

6.4%

41.19

ICE - Charleston

North Charleston, SC

Office

2019 / 2027

1994 / 2012

86,733

3,529,464

4.9%

40.69

DOT - Lakewood

Lakewood, CO

Office

2024

2004

122,225

3,347,481

4.7%

27.39

AOC - El Centro

El Centro, CA

Courthouse/Office

2019

2004

46,813

3,037,113

4.2%

64.88

DEA - Vista

Vista, CA

Laboratory

2020

2002

54,119

2,752,689

3.8%

50.86

USFS II - Albuquerque

Albuquerque, NM

Office

2026

2011

98,720

2,683,241

3.7%

27.18

USFS I - Albuquerque

Albuquerque, NM

Office

2021

2006

92,455

2,585,443

3.6%

27.96

AOC - Del Rio

Del Rio, TX

Courthouse/Office

2024

1992 / 2004

89,880

2,550,224

3.5%

28.37

MEPCOM - Jacksonville

Jacksonville, FL

Office

2025

2010

30,000

2,146,411

3.0%

71.55

FBI - Little Rock

Little Rock, AR

Office

2021

2001

101,977

2,135,642

3.0%

20.94

CBP - Savannah

Savannah, GA

Laboratory

2033

2013

35,000

2,108,803

2.9%

60.25

DEA - Santa Ana

Santa Ana, CA

Office

2024

2004

39,905

2,094,234

2.9%

52.48

DOE - Lakewood

Lakewood, CO

Office

2029

1999

115,650

2,058,570

2.9%

17.80

CBP - Chula Vista

Chula Vista, CA

Office

2018

1998

59,397

1,773,525

2.5%

29.86

DEA - Dallas

Dallas, TX

Office

2021

2001

71,827

1,771,449

2.5%

24.66

DEA - North Highlands

Sacramento, CA

Office

2017

2002

37,975

1,709,542

2.4%

45.02

USCG - Martinsburg

Martinsburg, WV

Office

2027

2007

59,547

1,569,666

2.2%

26.36

CBP - Sunburst

Sunburst, MT

Office

2028

2008

33,000

1,568,287

2.2%

47.52

AOC - Aberdeen

Aberdeen, MS

Courthouse/Office

2025

2005

46,979

1,454,521

2.0%

30.96

DEA - Albany

Albany, NY

Office

2025

2004

31,976

1,353,477

1.9%

42.33

DEA - Riverside

Riverside, CA

Office

2017

1997

34,354

1,272,856

1.8%

37.05

DEA - Otay

San Diego, CA

Office

2017

1997

32,560

1,263,872

1.8%

38.82

SSA - Mission Viejo

Mission Viejo, CA

Office

2020

2005

11,590

529,257

0.7%

45.66

SSA - San Diego

San Diego, CA

Office

2015

2003

11,743

441,041

0.6%

37.56

DEA - San Diego

San Diego, CA

Warehouse

2016

1999

16,100

394,239

0.5%

24.49

Subtotal

1,991,657

$69,467,809

96.6%

$34.88

Privately Leased Properties

2650 SW 145th Avenue - Parbel of Florida

Miramar, FL

Warehouse/Distribution

2022

2007

81,721

1,473,430

2.0%

18.03

5998 Osceola Court - United Technologies

Midland, GA

Manufacturing/Warehouse

2023

2014

105,641

545,004

0.8%

5.16

501 East Hunter Street - Lummus Corporation

Lubbock, TX

Warehouse/Distribution

2028

2013

70,078

400,380

0.6%

5.71

Subtotal

257,440

$2,418,814

3.4%

$9.40

Total / Weighted Average

2,249,097

$71,886,623

100.0%

$31.96

Property Overview

19

Tenant

Number of

Properties

Number

of

Leases

Weighted

Average

Remaining

Lease Term

Leased

Square Feet

Percentage

of Leased

Square Feet

Annualized

Lease Income

Percentage

of Total

Annualized

Lease

Income

U.S. Government

Drug Enforcement Agency

8

8

5.1

313,003

13.9%

$12,386,716

17.2%

Federal Bureau of Investigation

3

3

7.1

362,757

16.3%

11,671,382

16.2%

Internal Revenue Service

1

1

3.4

180,481

8.0%

7,299,318

10.2%

Administrative Office of the United States Courts

3

3

7.9

183,672

8.2%

7,041,858

9.8%

U.S. Patent and Trademark Office

1

2

3.8

189,871

8.4%

6,501,704

9.0%

Bureau of Customs and Border Protection

3

3

9.7

127,397

5.7%

5,450,615

7.6%

U.S. Forest Service

2

2

8.6

191,175

8.5%

5,268,684

7.3%

Department of Transportation

1

1

9.0

122,225

5.4%

3,347,481

4.7%

U.S. Immigration and Customs Enforcement

1

1

10.8

70,937

3.2%

3,299,901

4.6%

U.S. Military Entrance Processing Command

1

1

10.3

30,000

1.3%

2,146,411

3.0%

Department of Energy

1

1

14.4

115,650

5.1%

2,058,570

2.9%

U.S. Coast Guard

1

1

12.5

59,547

2.6%

1,569,666

2.2%

Social Security Administration

2

2

2.9

23,333

1.0%

970,298

1.3%

Subtotal

28

29

7.3

1,970,048

87.6%

$69,012,604

96.0%

Private Tenants

Parbel of Florida

1

1

7.4

81,721

3.6%

$1,473,430

2.0%

United Technologies / P&W

1

1

8.5

105,641

4.7%

$545,004

0.8%

LifePoint, Inc.

0

1

4.3

21,609

1.0%

$455,205

0.6%

Lummus Corporation

1

1

13.1

70,078

3.1%

$400,380

0.6%

Subtotal

3

4

9.0

279,049

12.4%

$2,874,019

4.0%

Total / Weighted Average

31

33

7.6

2,249,097

100.0%

$71,886,623

100.0%

Tenants

20

Year of Lease Expiration

Number of

Leases

Expiring

Square Footage

of Leases

Expiring

Percent of

Portfolio

Square

Footage of

Leases

Expiring

Annualized

Lease Income

Percentage

of Total

Annualized

Lease

Income

Annualized

Lease Income

per Leased

Square Foot

Available

0

N/A

N/A

N/A

N/A

N/A

Signed leases not commenced

0

N/A

N/A

N/A

N/A

N/A

2015

1

11,743

0.5%

441,041

0.6%

37.56

2016

1

16,100

0.7%

394,239

0.6%

24.49

2017

3

104,889

4.7%

4,246,270

5.9%

40.48

2018

2

239,878

10.7%

9,072,843

12.6%

37.82

2019

3

236,890

10.5%

9,228,702

12.8%

38.96

2020

3

87,112

3.9%

4,047,266

5.6%

46.46

2021

4

414,843

18.4%

11,407,454

15.9%

27.50

2022

1

81,721

3.6%

1,473,430

2.1%

18.03

2023

1

105,641

4.7%

545,004

0.8%

5.16

2024

4

364,206

16.2%

12,612,759

17.5%

34.63

2025

3

108,955

4.9%

4,954,409

6.9%

45.47

Thereafter

7

477,119

21.2%

13,463,206

18.7%

28.22

Total / Weighted Average

33

2,249,097

100.0%

$71,886,623

100.0%

$31.96

Lease Expirations

$

$