Piedmont Realty Trust, Inc 8-K/A, filed Feb 14, 2023

Piedmont Realty Trust, Inc. (PDM)

8-K/A 2023-02-14 For: 2023-02-08

View Original

Added on April 12, 2026

About this 8-K/A

Piedmont Realty Trust, Inc filed this 8-K/A on February 14, 2023, reporting on events of February 8, 2023.

Items reported

Item 2.02: Financial results
Item 9.01: Financial statements and exhibits

Search and read filings like this one from Claude or ChatGPT with the SEC filings MCP server →


Maryland						58-2328421
(State or other jurisdiction of						(IRS Employer
incorporation)						Identification No.)


Exhibit No.						Description

99.2						Piedmont Office Realty Trust, Inc. Quarterly Supplemental Information for the Fourth Quarter 2022.

104						Cover Page Interactive Data File (embedded within the Inline XBRL document)


	Page		Page

Introduction		Other Investments
Corporate Data	3	Other Investments Detail	33
Investor Information	4	Supporting Information
Earnings Release	5	Definitions	34
Key Performance Indicators	8	Research Coverage	35
Financials		Non-GAAP Reconciliations	36
Balance Sheets	9	In-Service Portfolio Detail	38
Income Statements	10	Major Leases Not Yet Commenced and Major Abatements	40
Funds From Operations / Adjusted Funds From Operations	12	Risks, Uncertainties and Limitations	41
Same Store Analysis	13
Capitalization Analysis	16
Debt Summary	17
Debt Detail	18
Debt Covenant & Ratio Analysis	19
Operational & Portfolio Information - Office Property Investments
Tenant Diversification	20
Tenant Credit Rating & Lease Distribution Information	22
Leased Percentage Information	23
Rental Rate Roll Up / Roll Down Analysis	24
Lease Expiration Schedule	25
Quarterly Lease Expirations	26
Annual Lease Expirations	27
Contractual Tenant Improvements & Leasing Commissions	28
Geographic Diversification	29
Geographic Diversification by Location Type	30
Industry Diversification	31
Property Investment Activity	32


Notice to Readers:
Please refer to page 41 for a discussion of important risks related to the business of Piedmont Office Realty Trust, Inc., as well as an investment in its securities, including risks that could cause actual results and events to differ materially from results and events referred to in the forward-looking information. Considering these risks, uncertainties, assumptions, and limitations, the forward-looking statements about leasing, financial operations, leasing prospects, acquisitions, dispositions, etc. contained in this quarterly supplemental information report may differ from actual results.
Certain prior period amounts have been reclassified to conform to the current period financial statement presentation. In addition, many of the schedules herein contain rounding to the nearest thousands or millions and, therefore, the schedules may not total due to this rounding convention.
To supplement the presentation of the Company’s financial results prepared in accordance with U.S. generally accepted accounting principles (GAAP), this report contains certain financial measures that are not prepared in accordance with GAAP, including FFO, Core FFO, AFFO, Same Store NOI, Property NOI, EBITDAre and Core EBITDA. Definitions and reconciliations of these non-GAAP measures to their most comparable GAAP metrics are included beginning on page 34. Each of the non-GAAP measures included in this report has limitations as an analytical tool and should not be considered in isolation or as a substitute for an analysis of the Company’s results calculated in accordance with GAAP. In addition, because not all companies use identical calculations, the Company’s presentation of non-GAAP measures in this report may not be comparable to similarly titled measures disclosed by other companies, including other REITs. The Company may also change the calculation of any of the non-GAAP measures included in this report from time to time in light of its then existing operations.



	As of		As of
	December 31, 2022		December 31, 2021
Number of consolidated in-service office properties (1)	51		55
Rentable square footage (in thousands) (1)	16,658		17,051
Percent leased (2)	86.7	%	85.5	%
Capitalization (in thousands):
Total debt - GAAP	$1,983,681		$1,877,790
Total principal amount of debt outstanding (excludes premiums, discounts, and deferred financing costs)	$1,997,000		$1,890,000
Equity market capitalization (3)	$1,131,941		$2,262,150
Total market capitalization (3)	$3,128,941		$4,152,150
Total principal amount of debt / Total market capitalization (3)	63.8	%	45.5	%
Average net principal amount of debt to Core EBITDA - quarterly (4)	6.4 x		6.0 x
Average net principal amount of debt to Core EBITDA - trailing twelve months (5)	6.0 x		5.7 x
Total principal amount of debt / Total gross assets (6)	37.6	%	37.1	%
Common stock data:
High closing price during quarter	$10.92		$19.37
Low closing price during quarter	$8.80		$17.11
Closing price of common stock at period end	$9.17		$18.38
Weighted average fully diluted shares outstanding during quarter (in thousands)	123,633		124,412
Shares of common stock issued and outstanding at period end (in thousands)	123,440		123,077
Annual regular dividend per share (7)	$0.84		$0.84
Rating / Outlook:
Standard & Poor's	BBB / Stable		BBB / Stable
Moody's	Baa2 / Stable		Baa2 / Stable
Employees	149		134


(1)			As of December 31, 2022, our consolidated office portfolio consisted of 51 properties (exclusive of one 127,000 square foot property that was out of service for redevelopment, 222 South Orange Avenue in Orlando, FL).
(2)			Calculated as square footage associated with commenced leases plus square footage associated with executed but uncommenced leases for vacant spaces at our in-service properties, divided by total rentable in-service square footage, all as of the relevant date, expressed as a percentage. Please refer to page 23 for additional analyses regarding Piedmont's leased percentage.
(3)			Reflects common stock closing price, shares outstanding and principal amount of debt outstanding as of the end of the reporting period, as appropriate.
(4)			For the purposes of this calculation, we annualize the Core EBITDA for the quarter and use the average daily principal balance of debt outstanding during the quarter, less cash and cash equivalents and escrow deposits and restricted cash as of the end of the quarter.
(5)			For the purposes of this calculation, we use the sum of Core EBITDA for the trailing four quarters and the average daily principal balance of debt outstanding for the trailing four quarters, less the average of cash and cash equivalents and escrow deposits and restricted cash as of the end of each quarter in the trailing four quarter period.
(6)			Total gross assets is defined as total assets with the add-back of accumulated depreciation and accumulated amortization related to real estate assets and accumulated amortization related to deferred lease costs.
(7)			Total of the regular dividends per share for which record dates occurred over the last four quarters.


Corporate
5565 Glenridge Connector, Suite 450
Atlanta, Georgia 30342
770.418.8800
www.piedmontreit.com


Executive Management

C. Brent Smith	Robert E. Bowers	George Wells
Chief Executive Officer, President	Chief Financial and Administrative Officer	Chief Operating Officer and
and Director	and Executive Vice President	Executive Vice President

Kevin D. Fossum	Edward H. Guilbert, III	Christopher A. Kollme	Damian J. Miller
Senior Vice President,	Executive Vice President, Finance,	Executive Vice President,	Executive Vice President,
Property Management and	Assistant Secretary and Treasurer	Investments	Dallas
Minneapolis	Investor Relations Contact

Laura P. Moon	Alex Valente	Robert K. Wiberg
Chief Accounting Officer and	Executive Vice President,	Executive Vice President,
Senior Vice President	Southeast Region	Northeast Region and Co-Head of
		Development

Board of Directors

Frank C. McDowell	Dale H. Taysom	Kelly H. Barrett	Glenn G. Cohen
Director, Chair of the Board of Directors, and	Director, Vice Chair of the	Director, Chair of the Audit Committee,	Director, Chair of the Compensation
Member of the Compensation and Governance	Board of Directors, and Member of the	and Member of the Governance Committee	Committee, and Member of the Audit
Committees	Audit and Capital Committees		and Capital Committees

Venkatesh S. Durvasula	Mary Hager	Barbara B. Lang	C. Brent Smith
Director and Member of the Capital Committee	Director and Member of the	Director, Chair of the Governance Committee	Chief Executive Officer, President
	Governance Committee	(including ESG), and Member of the	and Director
		Compensation Committee
Jeffrey L. Swope
Director, Chair of the Capital
Committee, and Member of the
Compensation Committee


Transfer Agent	Corporate Counsel	Institutional Analyst Contact	Investor Relations

Computershare	King & Spalding	Phone: 770.418.8592	Phone: 866.354.3485
P.O. Box 43006	1180 Peachtree Street, NE	research.analysts@piedmontreit.com	investor.services@piedmontreit.com
Providence, RI 02940-3078	Atlanta, GA 30309		www.piedmontreit.com
Phone: 866.354.3485	Phone: 404.572.4600


	Three Months Ended			Year Ended
(in 000s other than per share amounts and %)	December 31, 2022		December 31, 2021	December 31, 2022		December 31, 2021
Net income/(loss) applicable to Piedmont	$75,569		$(31,750)	$146,830		$(1,153)
Net income/(loss) per share applicable to common stockholders - diluted	$0.61		$(0.26)	$1.19		$(0.01)
Gain on sale of real estate assets	$101,055		$0	$151,729		$0
Impairment losses	$25,981		$41,000	$25,981		$41,000
Core Funds From Operations ("Core FFO") applicable to common stock	$61,235		$63,009	$247,070		$245,422
Core FFO per diluted share	$0.50		$0.51	$2.00		$1.97
Increase in Same Store Net Operating Income ("Same Store NOI") - Cash Basis	1.6%			1.9	%
(Decrease)\Increase in Same Store NOI - Accrual Basis	(0.7)	%		1.1	%
Adjusted Funds From Operations applicable to common stock	$47,082		$39,399	$178,040		$160,134


	Three Months Ended December 31, 2022		Year Ended December 31, 2022
# of transactions	42		203
Total leasing sf	433,000		2,153,000
New tenant leasing sf	164,000		763,000
Cash rent roll up	6.5	%	9.7	%
Accrual rent roll up	11.5	%	17.2	%
Leased Percentage as of period end	86.7	%


	December 31, 2022		December 31, 2021
Total Real Estate Assets (in millions)	$3,501		$3,245
Total Assets (in millions)	$4,086		$3,931
Total Debt (in millions)	$1,984		$1,878
Weighted Average Cost of Debt	3.89	%	2.93	%
Debt-to-Gross Assets Ratio	37.6	%	37.1	%
Average Net Debt-to-Core EBITDA (ttm)	6.0 x		5.7 x



(in millions, except per share data)	Low	High
Net income	($1)	$1
Add:
Depreciation	144	151
Amortization	80	84


Core FFO applicable to common stock	$223	$236
Core FFO per diluted share	$1.80	$1.90


This section of our supplemental report includes non-GAAP financial measures, including, but not limited to, Earnings Before Interest, Taxes, Depreciation, and Amortization for real estate (EBITDAre), Core Earnings Before Interest, Taxes, Depreciation, and Amortization (Core EBITDA), Funds from Operations (FFO), Core Funds from Operations (Core FFO), Adjusted Funds from Operations (AFFO), and Same Store Net Operating Income (Same Store NOI). Definitions of these non-GAAP measures are provided on page 34 and reconciliations are provided beginning on page 36.


	Three Months Ended


Selected Operating Data	12/31/2022		9/30/2022		6/30/2022		3/31/2022		12/31/2021

Percent leased (1)	86.7	%	86.8	%	87.0	%	87.0	%	85.5	%
Percent leased - economic (2)	81.1	%	80.6	%	80.7	%	81.4	%	81.5	%
Total revenues	$147,208		$144,100		$136,309		$136,149		$138,164
Net income / (loss) applicable to Piedmont	$75,569		$3,331		$7,966		$59,964		-$31,750
Net income / (loss) per share applicable to common stockholders - diluted	$0.61		$0.03		$0.06		$0.49		-$0.26
Core EBITDA	$82,186		$78,805		$75,591		$76,956		$77,130
Core FFO applicable to common stock	$61,235		$61,352		$61,620		$62,863		$63,009
Core FFO per share - diluted	$0.50		$0.50		$0.50		$0.51		$0.51
AFFO applicable to common stock	$47,082		$43,482		$48,900		$38,576		$39,399
Gross regular dividends (3)	$25,918		$25,913		$25,912		$25,899		$26,048
Regular dividends per share (3)	$0.21		$0.21		$0.21		$0.21		$0.21
Same store net operating income - accrual basis (4)	-0.7	%	0.3	%	2.8	%	2.5	%	5.2	%
Same store net operating income - cash basis (4)	1.6	%	-0.3	%	1.8	%	5.1	%	5.8	%
Rental rate roll up / roll down - accrual rents (5)	11.5	%	37.6	%	12.2	%	12.9	%	6.9	%
Rental rate roll up / roll down - cash rents (5)	6.5	%	33.1	%	2.5	%	4.8	%	3.0	%
Selected Balance Sheet Data
Total real estate assets, net	$3,500,624		$3,572,591		$3,139,587		$3,147,362		$3,245,311
Total assets	$4,085,525		$4,185,493		$3,695,554		$3,699,640		$3,930,665
Total liabilities	$2,236,270		$2,388,162		$1,879,891		$1,869,166		$2,143,242
Ratios & Information for Debt Holders
Core EBITDA margin (6)	55.8	%	54.7	%	55.5	%	56.5	%	55.8	%
Fixed charge coverage ratio (7)	3.8 x		4.3 x		5.1 x		5.2 x		5.2 x
Average net principal amount of debt to Core EBITDA - quarterly (8)	6.4 x		6.2 x		5.5 x		5.9 x		6.0 x
Total gross real estate assets (9)	$4,506,328		$4,587,669		$4,117,177		$4,097,332		$4,206,993
Total debt - GAAP	$1,983,681		$2,145,408		$1,674,778		$1,669,553		$1,877,790
Net principal amount of debt (10)	$1,977,400		$2,146,156		$1,681,144		$1,672,332		$1,881,140


			EXHIBIT 99.2


	December 31, 2022		September 30, 2022		June 30, 2022		March 31, 2022		December 31, 2021
Assets:
Real estate, at cost:
Land assets	$	567,244	$	578,722	$	521,789	$	521,789	$	529,941
Buildings and improvements	3,682,000		3,751,722		3,389,650		3,351,807		3,374,903
Buildings and improvements, accumulated depreciation	(915,010)		(926,357)		(892,131)		(863,306)		(861,206)
Intangible lease asset	205,074		212,248		164,194		173,017		178,157
Intangible lease asset, accumulated amortization	(90,694)		(88,721)		(85,459)		(86,664)		(83,777)
Construction in progress	52,010		44,977		41,544		50,719		43,406
Real estate assets held for sale, gross	—		—		—		—		80,586
Real estate assets held for sale, accumulated depreciation & amortization	—		—		—		—		(16,699)
Total real estate assets	3,500,624		3,572,591		3,139,587		3,147,362		3,245,311

Cash and cash equivalents	16,536		10,653		6,397		7,211		7,419
Tenant receivables, net of allowance for doubtful accounts	4,762		7,796		5,164		3,095		2,995
Straight line rent receivable	172,019		173,122		168,797		164,776		162,632
Notes receivable	—		—		—		—		118,500
Escrow deposits and restricted cash	3,064		2,191		1,459		1,457		1,441
Prepaid expenses and other assets	17,152		23,925		26,955		21,318		20,485
Goodwill	82,937		98,918		98,918		98,918		98,918
Interest rate swap	4,183		3,760		996		—		—

Deferred lease costs, gross	505,979		510,936		459,038		466,234		469,671
Deferred lease costs, accumulated amortization	(221,731)		(218,399)		(211,757)		(210,731)		(205,100)
Other assets held for sale, gross	—		—		—		—		9,389
Other assets held for sale, accumulated amortization	—		—		—		—		(996)
Total assets	$	4,085,525	$	4,185,493	$	3,695,554	$	3,699,640	$	3,930,665
Liabilities:
Unsecured debt, net of discount	$	1,786,681	$	1,948,408	$	1,674,778	$	1,669,553	$	1,877,790
Secured debt	197,000		197,000		—		—		—
Accounts payable, accrued expenses, and accrued capital expenditures	135,663		111,262		99,724		83,609		140,501
Deferred income	59,977		70,798		72,422		79,493		80,686
Intangible lease liabilities, less accumulated amortization	56,949		60,694		32,967		36,077		39,341
Interest rate swaps	—		—		—		434		4,924

Total liabilities	2,236,270		2,388,162		1,879,891		1,869,166		2,143,242
Stockholders' equity:
Common stock	1,234		1,234		1,234		1,233		1,231
Additional paid in capital	3,711,005		3,709,234		3,707,833		3,706,207		3,701,798


	Three Months Ended
	12/31/2022		9/30/2022		6/30/2022		3/31/2022		12/31/2021
Revenues:
Rental income (1)	$	117,148	$	114,280	$	110,244	$	109,732	$	111,203
Tenant reimbursements (1)	24,958		25,292		21,907		22,180		23,110
Property management fee revenue	395		303		326		651		576
Other property related income	4,707		4,225		3,832		3,586		3,275
	147,208		144,100		136,309		136,149		138,164
Expenses:
Property operating costs	59,763		59,039		53,634		53,622		56,083
Depreciation	34,788		34,941		32,372		31,515		31,952
Amortization	23,915		23,290		21,480		22,252		22,014
Impairment loss (2)	25,981		—		—		—		41,000
General and administrative	7,915		6,590		7,027		7,595		7,835
	152,362		123,860		114,513		114,984		158,884
Other income / (expense):
Interest expense	(20,739)		(17,244)		(13,775)		(13,898)		(13,917)
Other income / (expense)	408		335		(57)		2,024		2,882




Gain / (loss) on sale of real estate (2)	101,055		—		1		50,673		—
Net income / (loss)	75,570		3,331		7,965		59,964		(31,755)
Less: Net (income) / loss applicable to noncontrolling interest	(1)		—		1		—		5
Net income / (loss) applicable to Piedmont	$	75,569	$	3,331	$	7,966	$	59,964	$	(31,750)
Weighted average common shares outstanding - diluted	123,633		123,697		123,679		123,510		123,742
Net income / (loss) per share applicable to common stockholders - diluted	$	0.61	$	0.03	$	0.06	$	0.49	$	(0.26)
Common stock outstanding at end of period	123,440		123,395		123,390		123,331		123,077


(1)			The presentation method used for this line is not in conformance with GAAP. To be in conformance with the current GAAP standard, the Company would combine amounts presented on the rental income line with amounts presented on the tenant reimbursements line and present that aggregated figure on one line entitled "rental and tenant reimbursement revenue." The amounts presented on this line were determined based upon the Company's interpretation of the rental charges and billing method provisions in each of the Company's lease documents.
(2)			The gain on sale of real estate reflected in the fourth quarter of 2022 was primarily related to the sales of One Brattle Square and 1414 Massachusetts Avenue, both in Cambridge, MA. The impairment loss reflected in the fourth quarter of 2022 was related to (a) a partial write down of the Company's goodwill balance driven by the decline of the stock market and the Company's stock price during the fourth quarter; and (b) the write down of one property as a result of a reduction in the assumed hold period for that particular asset. The gain on sale of real estate reflected in the first quarter of 2022 was primarily related to the sale of 225 and 235 Presidential Way in Woburn, MA. The impairment loss reflected in the fourth quarter of 2021 was related to a reduction in the holding period assumptions for Two Pierce Place in Itasca, IL. Two Pierce Place was subsequently sold in the first quarter of 2022.


(1)			Please refer to page 23 for additional leased percentage information.
(2)			Economic leased percentage excludes the square footage associated with executed but not commenced leases for currently vacant spaces and the square footage associated with tenants receiving rental abatements (after proportional adjustments for tenants receiving only partial rental abatements). Due to variations in rental abatement structures, there will be variability to the economic leased percentage over time as abatements commence and expire.
(3)			Dividends are reflected in the quarter in which the record date occurred.
(4)			Please refer to the three pages starting with page 13 for reconciliations to net income and additional same store net operating income information. The statistic provided for each of the prior quarters is based on the same store property population applicable at the time that the metric was initially reported.
(5)			Please refer to page 24 for additional roll up / roll down analysis information.
(6)			Core EBITDA margin is calculated as Core EBITDA divided by total revenues.
(7)			The fixed charge coverage ratio is calculated as Core EBITDA divided by the sum of interest expense, principal amortization (none during periods presented), capitalized interest and preferred dividends (none during periods presented). The Company had capitalized interest of $1,002,603 for the quarter ended December 31, 2022, $1,094,713 for the quarter ended September 30, 2022, $1,117,131 for the quarter ended June 30, 2022, $963,350 for the quarter ended March 31, 2022, and $994,675 for the quarter ended December 31, 2021.
(8)			For the purposes of this calculation, we annualize the Core EBITDA for the quarter and use the average daily principal balance of debt outstanding during the quarter, less cash and cash equivalents and escrow deposits and restricted cash as of the end of the quarter.
(9)			Total gross assets is defined as total assets with the add-back of accumulated depreciation and accumulated amortization related to real estate assets and accumulated amortization related to deferred lease costs.
(10)			Net principal amount of debt is calculated and defined as the total principal amount of debt outstanding minus cash and cash equivalents and escrow deposits and restricted cash all as of the end of the period.


	Three Months Ended								Twelve Months Ended
	12/31/2022		12/31/2021		Change ($)		Change (%)		12/31/2022		12/31/2021		Change ($)		Change (%)
Revenues:
Rental income (1)	$	117,148	$	111,203	$	5,945	5.3	%	$	451,404	$	427,174	$	24,230	5.7	%
Tenant reimbursements (1)	24,958		23,110		1,848		8.0	%	94,337		87,445		6,892		7.9	%
Property management fee revenue	395		576		(181)		(31.4)	%	1,675		2,496		(821)		(32.9)	%
Other property related income	4,707		3,275		1,432		43.7	%	16,350		11,595		4,755		41.0	%
	147,208		138,164		9,044		6.5	%	563,766		528,710		35,056		6.6	%
Expenses:
Property operating costs	59,763		56,083		(3,680)		(6.6)	%	226,058		210,932		(15,126)		(7.2)	%
Depreciation	34,788		31,952		(2,836)		(8.9)	%	133,616		120,615		(13,001)		(10.8)	%
Amortization	23,915		22,014		(1,901)		(8.6)	%	90,937		85,992		(4,945)		(5.8)	%
Impairment loss (2)	25,981		41,000		15,019		36.6	%	25,981		41,000		15,019		36.6	%
General and administrative	7,915		7,835		(80)		(1.0)	%	29,127		30,252		1,125		3.7	%
	152,362		158,884		6,522		4.1	%	505,719		488,791		(16,928)		(3.5)	%
Other income / (expense):
Interest expense	(20,739)		(13,917)		(6,822)		(49.0)	%	(65,656)		(51,292)		(14,364)		(28.0)	%
Other income / (expense)	408		2,882		(2,474)		(85.8)	%	2,710		10,206		(7,496)		(73.4)	%




Gain / (loss) on sale of real estate (3)	101,055		—		101,055		100.0	%	151,729		—		151,729		100.0	%
Net income / (loss)	75,570		(31,755)		107,325		338.0	%	146,830		(1,167)		147,997		12,681.8	%
Less: Net (income) / loss applicable to noncontrolling interest	(1)		5		(6)		(120.0)	%	—		14		(14)		(100.0)	%
Net income / (loss) applicable to Piedmont	$	75,569	$	(31,750)	$	107,319	338.0	%	$	146,830	$	(1,153)	$	147,983	12,834.6	%
Weighted average common shares outstanding - diluted	123,633		123,742						123,524		123,978
Net income / (loss) per share applicable to common stockholders - diluted	$	0.61	$	(0.26)					$	1.19	$	(0.01)
Common stock outstanding at end of period	123,440		123,077						123,440		123,077


(1)			The presentation method used for this line is not in conformance with GAAP. To be in conformance with the current GAAP standard, the Company would combine amounts presented on the rental income line with amounts presented on the tenant reimbursements line and present that aggregated figure on one line entitled "rental and tenant reimbursement revenue." The amounts presented on this line were determined based upon the Company's interpretation of the rental charges and billing method provisions in each of the Company's lease documents.
(2)			The impairment loss for the three months and the twelve months ended December 31, 2022 was related to (a) a partial write down of the Company's goodwill balance driven by the decline of the stock market and the Company's stock price during the fourth quarter; and (b) the write down of one property as a result of a reduction in the assumed hold period for that particular asset. The impairment loss for the three months and the twelve months ended December 31, 2021 was related to a reduction in the holding period assumptions for Two Pierce Place in Itasca, IL. Two Pierce Place was subsequently sold in the first quarter of 2022.
(3)			The gain on sale of real estate for the three months ended December 31, 2022 was primarily related to the sales of One Brattle Square and 1414 Massachusetts Avenue, both in Cambridge, MA. The gain on sale of real estate for the twelve months ended December 31, 2022 was primarily related to the sales of One Brattle Square and 1414 Massachusetts Avenue, both in Cambridge, MA, and 225 and 235 Presidential Way in Woburn, MA.


(1)			Includes our proportionate share of amounts attributable to consolidated properties.
(2)			Excludes depreciation of non real estate assets.
(3)			Non-incremental capital expenditures are defined on page 34.


(1)			Includes our proportionate share of amounts attributable to consolidated properties.
(2)			The Company has historically recognized approximately $2 to $3 million of termination income on an annual basis. Given the size of its asset base and the number of tenants with which it conducts business, Piedmont considers termination income of that magnitude to be a normal part of its operations and a recurring part of its revenue stream; however, the recognition of termination income is typically variable between quarters and throughout any given year and is dependent upon when during the year the Company receives termination notices from tenants. During the three months ended December 31, 2022, Piedmont recognized $1.0 million of termination income, as compared with $0.2 million during the same period in 2021. During the twelve months ended December 31, 2022, Piedmont recognized $2.1 million of termination income, as compared with $3.0 million during the same period in 2021.
(3)			The general reserve is non-cash in nature and, therefore, any changes in the reserve are removed from the calculation of cash basis same store net operating income.
(4)			Presented net of related operating expenses incurred to earn the revenue; therefore, the information presented on this line will not tie to the data presented on the income statements.
(5)			Figures presented on this line may not tie back to the relevant sources as some activity is attributable to property operations and is, therefore, presented in property net operating income.
(6)			Acquisitions include 999 Peachtree Street in Atlanta, GA, purchased in the fourth quarter of 2021, and 1180 Peachtree Street in Atlanta, GA, purchased in the third quarter of 2022.
(7)			Dispositions include Two Pierce Place in Itasca, IL and 225 and 235 Presidential Way in Woburn, MA, sold in the first quarter of 2022, and One Brattle Square and 1414 Massachusetts Avenue in Cambridge, MA, sold in the fourth quarter of 2022.
(8)			Other investments include active out-of-service redevelopment and development projects, land, and recently completed redevelopment and development projects. Additional information on our land holdings can be found on page 33.The operating results from 222 South Orange Avenue in Orlando, FL, are included in this line item.


(1)			The increase in cash rental income for the three months and the twelve months ended December 31, 2022 as compared to the same periods in 2021 was primarily due to rental rate roll ups associated with new and renewal leasing activity along with contractual rent increases across the portfolio.
(2)			The increase in tenant reimbursements for the three months and the twelve months ended December 31, 2022 as compared to the same periods in 2021 was primarily the result of the expiration of operating expense recovery abatements at several properties in the portfolio as well as an increase in recoverable operating expenses in 2022 in comparison to 2021 due to the increased physical utilization of our buildings.
(3)			The increase in other property related income for the three months and the twelve months ended December 31, 2022 as compared to the same periods in 2021 was primarily related to increased transient parking demand across the portfolio as a result of post-pandemic increased business activity.
(4)			The increase in property operating expense for the three months and the twelve months ended December 31, 2022 as compared to the same periods in 2021 was primarily associated with increased variable operating costs as a result of increasing physical office space utilization by tenants across our portfolio.


Debt Maturities (4)
Maturity Year	Secured Debt - Principal Amount Outstanding (1)	Unsecured Debt - Principal Amount Outstanding (1)	Weighted Average Stated Interest Rate (2)	Percentage of Total

2023	$—	$350,000	3.40%	17.5%
2024	—	400,000	4.45%	20.0%
2025	—	450,000	4.93%	22.5%
2026	—	—	N/A	—%
2027	—	—	N/A	—%
2028	197,000	—	4.10%	10.0%
2029	—	—	N/A	—%
2030	—	300,000	3.15%	15.0%
2031	—	—	N/A	—%
2032	—	300,000	2.75%	15.0%

Total	$197,000	$1,800,000	3.89%	100.0%


(1)			All of Piedmont's outstanding debt as of December 31, 2022, was interest-only debt or in an interest-only payment period.
(2)			Weighted average stated interest rate is calculated based upon the principal amounts outstanding.
(3)			The amount of floating rate debt is comprised of the entire principal balance of the $200 million unsecured term loan that closed in 2022. There is an additional $600 million unsecured revolving credit facility which has a floating interest rate structure, but it had no outstanding balance as of December 31, 2022.
(4)			For loans which provide extension options that are conditional solely upon the Company providing proper notice to the loan's administrative agent and the payment of an extension fee, the final extended maturity date is reflected herein.


Facility (1)	Property	Stated Rate			Maturity	Principal Amount Outstanding as of December 31, 2022

Secured
$197.0 Million Fixed-Rate Mortgage	1180 Peachtree Street	4.10	%	(2)	10/1/2028	$	197,000
Subtotal / Weighted Average (3)		4.10	%			$	197,000

Unsecured
$350.0 Million Unsecured 2013 Senior Notes	N/A	3.40	%	(4)	6/1/2023	$	350,000
$400.0 Million Unsecured 2014 Senior Notes	N/A	4.45	%	(5)	3/15/2024	400,000
$250.0 Million Unsecured 2018 Term Loan	N/A	4.54	%	(6)	3/31/2025	250,000
$200.0 Million Unsecured 2022 Term Loan (7)	N/A	5.42	%	(8)	6/18/2025	200,000
$600.0 Million Unsecured Line of Credit (9)	N/A	—	%	(10)	6/30/2027	—
$300.0 Million Unsecured 2020 Senior Notes	N/A	3.15	%	(11)	8/15/2030	300,000
$300.0 Million Unsecured 2021 Senior Notes	N/A	2.75	%	(12)	4/1/2032	300,000
Subtotal / Weighted Average (3)		3.87	%			$	1,800,000

Total Debt - Principal Amount Outstanding / Weighted Average Stated Rate (3)		3.89	%			$	1,997,000
GAAP Accounting Adjustments (13)						(13,319)
Total Debt - GAAP Amount Outstanding						$	1,983,681


(1)			All of Piedmont’s outstanding debt as of December 31, 2022, was interest-only debt or in an interest-only payment period.
(2)			Upon acquiring 1180 Peachtree Street during the third quarter of 2022, Piedmont assumed the mortgage. The stated interest rate of the loan was estimated to be an at-market rate as of the date of closing. The loan is interest-only through September 2023; effective October 1, 2023, the loan will begin amortizing based on a 30-year amortization schedule.
(3)			Weighted average is based on the principal amounts outstanding and interest rates at December 31, 2022.
(4)			The $350 million unsecured senior notes were offered for sale at 99.601% of the principal amount. The resulting effective cost of the financing is approximately 3.45% before the consideration of transaction costs and proceeds from interest rate hedges. After the application of proceeds from interest rate hedges, the effective cost of the financing is approximately 3.43%.
(5)			The $400 million unsecured senior notes were offered for sale at 99.791% of the principal amount. The resulting effective cost of the financing is approximately 4.48% before the consideration of transaction costs and proceeds from interest rate hedges. After the application of proceeds from interest rate hedges, the effective cost of the financing is approximately 4.10%.
(6)			The $250 million unsecured term loan has a stated variable interest rate; however, Piedmont entered into various interest rate swap agreements in a total notional amount equal to the size of the facility which effectively fix the interest rate for the term loan (at 4.54% as of December 31, 2022; this rate can change only with a credit rating change for the Company) through the loan's maturity date of March 31, 2025.
(7)			On December 14, 2022, Piedmont amended the facility to extend the maturity date to December 16, 2024 with one, six-month extension option available under the facility for a final maturity of June 18, 2025. All other terms of the facility remain unchanged. The final extended maturity date is presented on this schedule.
(8)			The $200 million unsecured term loan has a variable interest rate. Piedmont may select from multiple interest rate options, including the prime rate and various term SOFR rates. The all-in interest rate associated with each SOFR interest period selection is comprised of the relevant adjusted SOFR rate (comprised of the relevant base SOFR interest rate plus a fixed adjustment of 0.10%) plus a credit spread (1.00% as of December 31, 2022) based on Piedmont's then current credit rating.
(9)			All of Piedmont’s outstanding debt as of December 31, 2022 was term debt with the exception of our unsecured revolving credit facility (which had no balance outstanding as of December 31, 2022). The $600 million unsecured revolving credit facility has an initial maturity date of June 30, 2026; however, there are two, six-month extension options available under the facility providing for a total extension of up to one year to June 30, 2027. The final extended maturity date is presented on this schedule.
(10)			There was no balance outstanding under our unsecured revolving credit facility as of the end of the fourth quarter of 2022; therefore, no interest rate is presented. Had any draws been made under the $600 million unsecured revolving credit facility as of the end of the fourth quarter of 2022, the applicable interest rate would have been approximately 5.25%. Piedmont may select from multiple interest rate options with each draw under the facility, including the prime rate and various SOFR rates. The all-in interest rate associated with each SOFR interest period selection is comprised of the relevant adjusted SOFR rate (comprised of the relevant base SOFR interest rate plus a fixed adjustment of 0.10%) plus a credit spread (0.85% as of December 31, 2022) based on Piedmont's then current credit rating.
(11)			The $300 million unsecured senior notes were offered for sale at 99.236% of the principal amount. The resulting effective cost of the financing is approximately 3.24% before the consideration of transaction costs and the impact of interest rate hedges. After incorporating the results of the related interest rate hedging activity, the effective cost of the financing is approximately 3.90%.
(12)			The $300 million unsecured senior notes were offered for sale at 99.510% of the principal amount. The resulting effective cost of the financing is approximately 2.80% before the consideration of transaction costs and the impact of interest rate hedges. After incorporating the results of the related interest rate hedging activity, the effective cost of the financing is approximately 2.78%.
(13)			The GAAP accounting adjustments relate to original issue discounts, third-party fees, and lender fees resulting from the procurement processes for our various debt facilities. The original issue discounts and fees are amortized to interest expense over the contractual term of the related debt.


		Three Months Ended
Bank Debt Covenant Compliance (1)	Required	12/31/2022	9/30/2022	6/30/2022	3/31/2022	12/31/2021

Maximum leverage ratio	0.60	0.39	0.40	0.35	0.34	0.38
Minimum fixed charge coverage ratio (2)	1.50	4.36	4.82	5.21	5.30	5.32
Maximum secured indebtedness ratio	0.40	0.04	0.04	—	—	—
Minimum unencumbered leverage ratio	1.60	2.56	2.46	2.87	2.84	2.49
Minimum unencumbered interest coverage ratio (3)	1.75	4.55	4.93	5.26	5.28	5.36


		Three Months Ended
Bond Covenant Compliance (4)	Required	12/31/2022	9/30/2022	6/30/2022	3/31/2022	12/31/2021

Total debt to total assets	60% or less	44.0%	46.8%	40.9%	40.9%	43.5%
Secured debt to total assets	40% or less	4.3%	4.3%	—%	—%	—%
Ratio of consolidated EBITDA to interest expense	1.50 or greater	4.95	5.49	5.92	6.04	6.13
Unencumbered assets to unsecured debt	150% or greater	227%	212%	245%	244%	230%


(1)			Bank debt covenant compliance calculations relate to the most restrictive of the specific calculations detailed in the relevant credit agreements. Please refer to such agreements for relevant defined terms.
(2)			Defined as EBITDA for the trailing four quarters (including the Company's share of EBITDA from unconsolidated interests), excluding one-time or non-recurring gains or losses, less a $0.15 per square foot capital reserve, and excluding the impact of straight line rent leveling adjustments and amortization of intangibles divided by the Company's share of fixed charges, as more particularly described in the credit agreements. This definition of fixed charge coverage ratio as prescribed by our credit agreements is different from the fixed charge coverage ratio definition employed elsewhere within this report.
(3)			Defined as net operating income for the trailing four quarters for unencumbered assets (including the Company's share of net operating income from partially-owned entities and subsidiaries that are deemed to be unencumbered) less a $0.15 per square foot capital reserve divided by the Company's share of interest expense associated with unsecured financings only, as more particularly described in the credit agreements.
(4)			Bond covenant compliance calculations relate to specific calculations prescribed in the relevant debt agreements. Please refer to the Indenture dated May 9, 2013, the Indenture and the First Supplemental Indenture dated March 6, 2014, the Second Supplemental Indenture dated August 12, 2020, and the Third Supplemental Indenture dated September 20, 2021 for defined terms and detailed information about the calculations.
(5)			For the purposes of this calculation, we use the average daily principal balance of debt outstanding during the identified period, less the average of cash and cash equivalents and escrow deposits and restricted cash as of the end of each quarter in the relevant period.
(6)			Fixed charge coverage ratio is calculated as Core EBITDA divided by the sum of interest expense, principal amortization, capitalized interest and preferred dividends (none during periods presented). The Company had capitalized interest of $1,002,603 for the three months ended December 31, 2022, $4,177,797 for the twelve months ended December 31, 2022, and $3,693,032 for the twelve months ended December 31, 2021. The Company had no principal amortization for the twelve months ended December 31, 2022; the Company had principal amortization of $372,455 for the twelve months ended December 31, 2021.
(7)			Interest coverage ratio is calculated as Core EBITDA divided by the sum of interest expense and capitalized interest. The Company had capitalized interest of $1,002,603 for the three months ended December 31, 2022, $4,177,797 for the twelve months ended December 31, 2022 and $3,693,032 for the twelve months ended December 31, 2021.


Tenant	Credit Rating (2)	Number of Properties	Lease Term Remaining (3)	Annualized Lease Revenue	Percentage of Annualized Lease Revenue (%)		Leased Square Footage	Percentage of Leased Square Footage (%)
US Bancorp	A+ / A2	3	1.4		$27,485	5.0		787	5.4
State of New York	AA+ / Aa1	1	13.7		25,254	4.6		482	3.3
Amazon	AA / A1	3	2.0		16,018	2.9		337	2.3
City of New York	AA / Aa2	1	3.4		15,200	2.7		313	2.2
Microsoft	AAA / Aaa	2	8.5		13,250	2.4		355	2.5
King & Spalding	No Rating Available	1	8.2		12,455	2.2		272	1.9
Transocean	CCC / Caa1	1	13.3		11,124	2.0		301	2.1
VMware, Inc.	BBB- / Baa3	1	4.6		8,308	1.5		215	1.5
Schlumberger Technology	A / A2	1	6.0		7,927	1.4		254	1.8
Gartner	BB+ / Ba1	2	11.5		7,592	1.4		207	1.4
Fiserv	BBB / Baa2	1	4.6		7,211	1.3		195	1.4
Salesforce.com	A+ / A2	1	6.6		7,205	1.3		182	1.3
Epsilon Data Management / subsidiary of Publicis	BBB / Baa2	1	3.5		6,667	1.2		222	1.5
Eversheds Sutherland	No Rating Available	1	3.3		6,624	1.2		180	1.2
Applied Predictive Technologies / subsidiary of MasterCard	A+ / Aa3	1	5.4		6,524	1.2		133	0.9
International Food Policy Research Institute	No Rating Available	1	6.3		6,305	1.1		102	0.7
Ryan	No Rating Available	1	3.1		6,274	1.1		170	1.2
Cargill	A / A2	1	1.0		5,497	1.0		268	1.9





Other			Various		358,372	64.5		9,465	65.5
Total					$555,292	100.0		14,440	100.0


(1)			This schedule presents all tenants contributing 1.0% or more to Annualized Lease Revenue.
(2)			Credit rating may reflect the credit rating of the parent or a guarantor. When available, both the Standard & Poor's credit rating and the Moody's credit rating are provided. The absence of a credit rating for a tenant is not an indication of the creditworthiness of the tenant; in most cases, the lack of a credit rating reflects that the tenant has not sought such a rating.
(3)			The metrics presented are the weighted average lease terms remaining in years weighted by Annualized Lease Revenue.


Rating Level	Annualized Lease Revenue (in thousands)	Percentage of Annualized Lease Revenue (%)

AAA / Aaa	$21,973	4.0
AA / Aa	68,461	12.3
A / A	77,385	13.9
BBB / Baa	56,195	10.1
BB / Ba	20,414	3.7
B / B	7,524	1.4
Below	17,761	3.2
Not rated (2)	285,579	51.4
Total	$555,292	100.0


Lease Size	Number of Leases	Percentage of Leases (%)	Annualized Lease Revenue (in thousands)	Percentage of Annualized Lease Revenue (%)	Leased Square Footage (in thousands)	Percentage of Leased Square Footage (%)

2,500 or Less	368	37.2	$24,957	4.5	261	1.8
2,501 - 10,000	347	35.1	67,285	12.1	1,780	12.3
10,001 - 20,000	109	11.0	55,614	10.0	1,488	10.3
20,001 - 40,000	90	9.1	93,250	16.8	2,463	17.1
40,001 - 100,000	45	4.6	107,782	19.4	2,775	19.2
Greater than 100,000	30	3.0	206,404	37.2	5,673	39.3
Total	989	100.0	$555,292	100.0	14,440	100.0


(1)			Credit rating may reflect the credit rating of the parent or a guarantor. Where differences exist between the Standard & Poor's credit rating for a tenant and the Moody's credit rating for a tenant, the higher credit rating is selected for this analysis.
(2)			The classification of a tenant as "not rated" is not an indication of the creditworthiness of the tenant; in most cases, the lack of a credit rating reflects that the tenant has not sought such a rating. Included in this category are such tenants as Piper Sandler, Ernst & Young, KPMG, BDO, and RaceTrac Petroleum.


Same Store Analysis
Less acquisitions / dispositions after December 31, 2021 and developments / out-of-service redevelopments (2) (3)	(669)	(691)	96.8	%	(776)	(1,099)	70.6	%
Same Store Leased Percentage	13,771	15,967	86.2	%	13,807	15,952	86.6	%


(1)			Calculated as square footage associated with commenced leases as of period end with the addition of square footage associated with uncommenced leases for spaces vacant as of period end at our in-service properties, divided by total rentable in-service square footage as of period end, expressed as a percentage.
(2)			For additional information on acquisitions and dispositions completed during the last year and current developments and out-of-service redevelopments, please refer to pages 32 and 33, respectively.
(3)			Dispositions completed during the previous twelve months are deducted from the previous period data and acquisitions completed during the previous twelve months are deducted from the current period data. Redevelopments that commenced during the previous twelve months that were taken out of service are deducted from the previous period data and developments and previously out of service redevelopments that were placed in service during the previous twelve months are deducted from the current period data.