Piedmont Office Realty Trust, Inc.

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Form 8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) August 10, 2010

Piedmont Office Realty Trust, Inc.

(Exact name of registrant as specified in its charter)

Maryland

(State or other jurisdiction of incorporation)

001-34626

58-2328421

(Commission

File Number)

(IRS Employer

Identification No.)

11695 Johns Creek Parkway, Ste. 350, Johns Creek, Georgia 30097

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code (770) 418-8800

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02

Results of Operations and Financial Condition

On August 10, 2010, Piedmont Office Realty Trust, Inc. (the “Registrant”) issued a press release announcing its financial results for the second quarter 2010 and published supplemental information for the second quarter 2010 to its website. The press release and the supplemental information are attached hereto as Exhibit 99.1 and 99.2, respectively, and are incorporated herein by reference. Pursuant to the rules and regulations of the Securities and Exchange Commission, such exhibits and the information set forth therein are deemed to have been furnished and shall not be deemed to be “filed” under the Securities Exchange Act of 1934.

Item 9.01.

Financial Statements and Exhibits.

(d) Exhibits:


Exhibit No.		Description

99.1		Press release dated August 10, 2010.

99.2		Piedmont Office Realty Trust, Inc. Quarterly Supplemental Information for the Second Quarter 2010.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Current Report on Form 8-K to be signed on its behalf by the undersigned hereunto duly authorized.


PIEDMONT OFFICE REALTY TRUST, INC.

By:		/S/ ROBERT E. BOWERS
		Robert E. Bowers
		Chief Financial Officer and Executive Vice President

Date: August 10, 2010

EXHIBIT INDEX


Exhibit No.		Description

99.1		Press release dated August 10, 2010.

99.2		Piedmont Office Realty Trust, Inc. Quarterly Supplemental Information for the Second Quarter 2010.

Press Release

Exhibit 99.1

LOGO

Piedmont Office Realty Trust Declares Dividend and Reports Quarterly Financial Results

ATLANTA, August 10, 2010—Piedmont Office Realty Trust, Inc. (“Piedmont” or the “Company”) (NYSE:PDM), an owner of primarily Class A properties located predominantly in the ten largest U.S. office markets, today declared its third quarter 2010 dividend in the amount of $0.315 per share and announced its results for the quarter ended June 30, 2010.

Donald A. Miller, CFA, President and Chief Executive Officer, stated, “Our ongoing focus on leasing is evident as we increased activity during the quarter while slightly increasing our occupancy and adding to our roster of high quality tenants. The overall office market remains challenging, but we believe we are well-positioned with high quality assets and a strong, low-leverage balance sheet. In this environment, we continue to control what we can and have kept a tight rein on property operating costs. We plan to remain patient and disciplined with regard to acquisitions, but intend to take advantage of market opportunities to enhance our presence in key strategic markets.”

Dividend

On August 10, 2010, the board of directors of Piedmont declared dividends for the third quarter 2010 in the amount of $0.315 per share on all classes of outstanding common shares of Piedmont to stockholders of record for such shares as shown on the books of Piedmont as of the close of business on September 15, 2010. Such dividends are to be paid on September 22, 2010.

Results for the Second Quarter ended June 30, 2010

All prior period per share amounts have been retroactively restated to reflect the stockholder-approved recapitalization of our common stock and current period per share amounts reflect the issuance of 13.8 million shares of common stock in our recent public offering. Both the recapitalization and issuance of stock occurred during the first quarter of 2010.

Piedmont’s net income available to common stockholders was $19.6 million, or $0.11 per diluted share, for the second quarter of 2010, compared with $28.0 million, or $0.18 per diluted share for the second quarter of 2009. Excluding the previously announced $9.6 million impairment charge associated with adjusting the 111 Sylvan Avenue property to estimated fair value in anticipation of a sale, net income available to stockholders would have been $29.2 million, or $0.17 per diluted share, in the second quarter of 2010. Funds from Operations (FFO) for the quarter totaled $56.6 million, or $0.33 per diluted share. Core Funds from Operations

(which excludes the impairment charge associated with the 111 Sylvan Avenue property) totaled $66.2 million, or $0.38 per diluted share which reflects approximately $.035 in dilution related to the issuance of 13.8 million shares of common stock during first quarter of 2010 when compared to $68.5 million, or $0.43 per diluted share, in Core Funds from Operations that was earned during the second quarter of 2009. Adjusted FFO (AFFO) in the second quarter totaled $52.0 million, or $0.30 per diluted share, as compared to $59.4 million, or $0.38 per diluted share, in the second quarter of 2009.

Revenues for the quarter ended June 30, 2010 totaled $145.2 million compared to $148.0 million in the prior year period. Property operating expenses declined by 23 basis points compared to the second quarter of 2009, and general and administrative expenses remained in line with the second quarter of 2009. Same store net operating income on a cash basis was $87.6 million, down 1.9 percent from $89.3 million in the prior year period, largely attributable to a partial lease expiration and a rent abatement on a recently executed renewal lease, both in Chicago.

Leasing Update

During the second quarter of 2010, the Company executed approximately 557,000 square feet of office leases, the majority of which were completed in the Boston and Dallas markets. Roughly 377,000 square feet or 68 percent were renewals and 180,000 or 32 percent were new leases or lease expansions with existing tenants. On June 30, 2010, the Company’s office portfolio was 89.8 percent leased with a weighted average lease term remaining of 6.0 years.

The Company is actively managing its upcoming lease expirations including several large 2011 lease expirations. As previously announced, Piedmont has entered into a binding purchase and sale agreement to sell 111 Sylvan Avenue, the property with the largest 2010 expiration, and has also recently secured the renewal of State Street Bank at 1200 Crown Colony Drive, one of the largest 2011 expirations. Exclusive of the 111 Sylvan Avenue expiration, as of June 30, 2010, the Company had roughly 620,000 square feet (or 3.1 percent of rentable square footage of its office portfolio) due to expire during the remainder of 2010, with the majority of those expirations scheduled to occur towards the end of the year.

Balance Sheet and Capital Markets Activities

As of June 30, 2010, Piedmont’s total gross real estate assets were $4.5 billion with total debt of $1.4 billion. The Company’s total debt-to-gross assets ratio at the end of the quarter was 26.7 percent and its net debt (total debt less cash and cash equivalents)-to-core EBITDA ratio was 3.9 times. The Company’s fixed charge coverage ratio was 4.5 times. As of June 30, 2010, Piedmont had cash and capacity on its unsecured credit line of approximately $567 million and

no debt maturities in 2010. During the quarter, the one-year extension on Piedmont’s $250 million unsecured term loan became effective, as did the swaps that the Company entered into for the extension period of the loan which effectively fix the rate on this debt at 2.36% for one year.

Subsequent Event

On August 10, 2010, Piedmont entered into a binding contract to purchase two eight-story office buildings comprised of approximately 384,000 rentable square feet located in a suburb of Minneapolis, MN (the “Meridian Crossings Buildings”). The purchase price of the Meridian Crossings Buildings is expected to be approximately $66 million, plus closing costs. The Meridian Crossings Buildings, which were completed in 1997 and 1998, are primarily leased to US Bancorp, an existing tenant within the Piedmont portfolio. The two buildings combined are approximately 96% leased. The transaction is expected to close early in the fourth quarter of 2010.

Guidance for 2010

Excluding the impairment charge related to the planned disposition set forth above, the Company reaffirms financial guidance for full-year 2010 based on management’s expectations as follows:


	Low			High
Net Income (excluding the $9.6 million impairment charge)	$	117	–	$124 million
Add: Depreciation & Amortization	$	152	–	$154 million
Core Funds from Operations (excludes impairment charges)	$	269	–	$278 million
Core FFO per diluted share (excludes impairment charges)	$	1.56	–	$1.62

Note that individual quarters may fluctuate on both a cash and accrual basis due to timing of repairs and maintenance, capital expenditures and one-time revenue or expense events. In addition, the Company’s guidance is based on information available to management as of the date of this release.

Non-GAAP Financial Measures

This release contains certain supplemental non-GAAP financial measures such as FFO, AFFO, Core FFO, Same store net operating income, and Core EBITDA. See below for definitions and reconciliations of these metrics to their most comparable GAAP metric.

Conference Call Information

Piedmont has scheduled a conference call and an audio webcast for Wednesday, August 11th, 2010 at 10:00 am Eastern Time. Dial-in numbers are (877) 407-9039 for participants in the United States and (201) 689-8470 for international participants. The conference identification number is 353008. The live audio webcast of the call may be accessed on the Company’s website at www.piedmontreit.com in the Investor Relations section. A replay of the conference call will be available until Wednesday, August 25, 2010, and can be accessed by dialing (877) 660-6853, or (201) 612-7415 for international participants, followed by account number 3055 and the conference identification number, 353008. A webcast replay will also be available after the conference call in the Investor Relations section of the Company’s website.

Supplemental Information

Quarterly Supplemental Information as of and for the three and six months ended June 30, 2010 can be accessed on the Company’s website under the Investor Relations section at www.piedmontreit.com.

About Piedmont Office Realty Trust

Piedmont Office Realty Trust, Inc. is a fully-integrated and self-managed real estate investment trust (“REIT”) specializing in the acquisition, ownership, management, development and disposition of primarily high-quality Class A office buildings located predominately in large U.S. office markets and leased principally to high-credit-quality tenants. Since its first acquisition in 1998, the Company has acquired $5.5 billion of office and industrial properties. Rated as an investment-grade company by Standard & Poor’s and Moody’s, the Company has maintained a low-leverage strategy while acquiring its properties.

Forward Looking Statements

Certain statements contained in this press release constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We intend for all such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the Exchange Act, as applicable. Such information is subject to certain risks and uncertainties, as well as known and unknown risks, which could cause actual results to differ materially from those projected or anticipated. Therefore, such statements are not intended to be a guarantee of our performance in future periods. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “anticipate,” “believe,” “continue” or similar words or phrases that are predictions of future events or trends and which do not relate solely to historical matters. Examples of such statements in this press release include the quality of the Company’s assets and balance sheet; the strength of the Company’s leasing portfolio and lease renewal activities; the consummation

of the transaction to sell 111 Sylvan Avenue; the consummation of the transaction to purchase Meridian Crossings; and the Company’s anticipated net income, depreciation and amortization, Core FFO, and Core FFO per share (diluted) for the year ending December 31, 2010.

The following are some of the factors that could cause the Company’s actual results and its expectations to differ materially from those described in the Company’s forward-looking statements: the Company’s ability to successfully identify and consummate suitable acquisitions; current adverse market and economic conditions; lease terminations or lease defaults, particularly by one of the Company’s large lead tenants; the impact of competition on the Company’s efforts to renew existing leases or re-let space; changes in the economies and other conditions of the office market in general and of the specific markets in which the Company operates; economic and regulatory changes; additional risks and costs associated with directly managing properties occupied by government tenants; adverse market and economic conditions and related impairments to the Company’s real estate assets and other intangible assets; the success of the Company’s real estate strategies and investment objectives; availability of financing; costs of complying with governmental laws and regulations; uncertainties associated with environmental and other regulatory matters; the Company’s ability to continue to qualify as a REIT under the Internal Revenue Code; and other factors detailed in our most recent Annual Report on Form 10-K and other documents we file with the Securities and Exchange Commission.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. We cannot guarantee the accuracy of any such forward-looking statements contained in this press release, and we do not intend to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

CONTACT:

Piedmont Office Realty Trust

Eddie Guilbert

770-418-8592

research.analysts@piedmontreit.com

Investor Relations

800-557-4830

investor.services@piedmontreit.com

ICR Inc.

Evelyn Infurna

203-682-8346

Evelyn.infurna@icrinc.com

Piedmont Office Realty Trust, Inc.

Consolidated Balance Sheets

Unaudited (in thousands)


	June 30, 2010			December 31, 2009
Assets:
Real estate assets, at cost:
Land	$	641,073		$	641,073
Buildings and improvements		3,612,914			3,600,406
Buildings and improvements, accumulated depreciation		(702,867	)		(653,839	)
Intangible lease asset		224,532			243,312
Intangible lease asset, accumulated amortization		(140,804	)		(147,043	)
Construction in progress		14,909			17,059
Real estate assets held for sale,net		55,000			62,559

Total real estate assets		3,704,757			3,763,527

Investment in unconsolidated joint ventures		43,005			43,940
Cash and cash equivalents		81,066			10,004
Tenant receivables, net of allowance for doubtful accounts		30,986			33,071
Straight line rent receivable		96,750			95,016
Notes receivable		60,101			58,739
Due from unconsolidated joint ventures		1,124			1,083
Prepaid expenses and other assets		24,866			21,456
Goodwill		180,097			180,097
Deferred financing costs, less accumulated amortization		6,467			7,205
Deferred lease costs, less accumulated amortization		176,120			180,832
Other assets held for sale		162			375

Total assets	$	4,405,501		$	4,395,345


Liabilities:
Lines of credit and notes payable	$	1,402,525		$	1,516,525
Accounts payable, accrued expenses, and accrued capital expenditures		99,819			97,747
Deferred income		33,916			34,506
Intangible lease liabilities, less accumulated amortization		54,730			60,655
Interest rate swap		742			3,866
Other liabilities held for sale		2,546			—

Total liabilities		1,594,278			1,713,299

Redeemable common stock		—			75,164

Stockholders’ equity:
Class A common stock		536			397
Class B-1 common stock		397			397
Class B-2 common stock		397			397
Class B-3 common stock		397			398
Additional paid in capital		3,659,910			3,477,168
Cumulative distributions in excess of earnings		(855,631	)		(798,561	)
Redeemable common stock		—			(75,164	)
Other comprehensive loss		(742	)		(3,866	)

Piedmont stockholders’ equity		2,805,264			2,601,166
Non-controlling interest		5,959			5,716

Total stockholders’ equity		2,811,223			2,606,882

Total liabilities, redeemable common stock and stockholders’ equity	$	4,405,501		$	4,395,345


Net Debt (Total debt less cash and cash equivalents)	$	1,321,459		$	1,506,521
Total Gross Assets ⁽¹⁾	$	5,249,172		$	5,196,227

⁽¹⁾	Total assets exclusive of accumulated depreciation and amortization related to real estate assets.

Piedmont Office Realty Trust, Inc.

Consolidated Statements of Income

Unaudited (in thousands)


	Three Months Ended						Six Months Ended
	6/30/2010			6/30/2009			6/30/2010			6/30/2009
Revenues:
Rental income	$	110,623		$	110,400		$	221,134		$	221,752
Tenant reimbursements		33,374			36,059			68,458			76,164
Property management fee revenue		705			744			1,458			1,441
Other rental income		479			782			975			781

Total revenues		145,181			147,985			292,025			300,138

Operating expenses:
Property operating costs		55,497			55,626			110,858			115,716
Depreciation		25,584			26,172			51,275			51,412
Amortization		11,004			13,695			22,390			27,136
General and administrative		7,952			8,077			14,572			15,441

Total operating expenses		100,037			103,570			199,095			209,705


Real estate operating income		45,144			44,415			92,930			90,433

Other income (expense):
Interest expense		(18,933	)		(19,394	)		(38,024	)		(38,736	)
Interest and other income		1,036			1,147			2,005			1,809
Equity in income of unconsolidated joint ventures		647			754			1,384			1,417

Total other income (expense)		(17,250	)		(17,493	)		(34,635	)		(35,510	)


Income from continuing operations		27,894			26,922			58,295			54,923

Operating income, excluding impairment loss		1,454			1,174			2,639			2,329
Impairment loss		(9,587	)		—			(9,587	)		—

Discontinued operations		(8,133	)		1,174			(6,948	)		2,329


Net income		19,761			28,096			51,347			57,252

Less: Net income attributable to noncontrolling interest		(125	)		(120	)		(251	)		(238	)


Net income attributable to Piedmont	$	19,636		$	27,976		$	51,096		$	57,014


Weighted average common shares outstanding - diluted		172,718			158,304			168,912			159,047

Net income per share available to common stockholders - basic and diluted	$	0.11		$	0.18		$	0.30		$	0.36


Reconciliation of Net Income Excluding Impairment Charge:

Net income attributable to Piedmont	$	19,636		$	27,976
Impairment loss		9,587			—

Net income available to stockholders, exclusive of impairment charge	$	29,223		$	27,976


Weighted average common shares outstanding - diluted		172,718			158,304

Net income per share available to stockholders, exclusive of impairment charge - basic and diluted	$	0.17		$	0.18

Piedmont Office Realty Trust, Inc.

Funds From Operations, Core Funds From Operations and Adjusted Funds From Operations

Unaudited (in thousands except for per share data)


	Three Months Ended						Six Months Ended
	6/30/2010			6/30/2009			6/30/2010			6/30/2009
Net income attributable to Piedmont	$	19,636		$	27,976		$	51,096		$	57,014

Depreciation^(1) (2)		25,872			26,773			52,122			52,611
Amortization⁽¹⁾		11,104			13,797			22,592			27,339

Funds from operations		56,612			68,546			125,810			136,964

Impairment loss on real estate assets		9,587			—			9,587			—

Core funds from operations		66,199			68,546			135,397			136,964

Depreciation of non real estate assets		178			154			357			306
Stock-based and other non-cash compensation expense		711			831			1,364			1,835
Loss on extinguishment of debt		—			—			—			—
Deferred financing cost amortization		696			685			1,392			1,394
Straight-line effects of lease revenue⁽¹⁾		(784	)		(1,227	)		289			1,469
Amortization of lease-related intangibles⁽¹⁾		(1,525	)		(1,223	)		(2,951	)		(2,453	)
Income from amortization of discount on purchase of mezzanine loans		(694	)		(929	)		(1,362	)		(1,296	)
Non-incremental capital expenditures ⁽³⁾		(12,752	)		(7,394	)		(21,718	)		(18,804	)

Adjusted funds from operations	$	52,029		$	59,443		$	112,768		$	119,415


Weighted average common shares outstanding - diluted		172,718			158,304			168,912			159,047

Funds from operations per share (diluted)	$	0.33		$	0.43		$	0.74		$	0.86
Core funds from operations per share (diluted)	$	0.38		$	0.43		$	0.80		$	0.86
Adjusted funds from operations per share (diluted)	$	0.30		$	0.38		$	0.67		$	0.75

⁽¹⁾	Includes adjustments for wholly-owned properties and for our proportionate ownership in unconsolidated joint ventures.

⁽²⁾	Excludes depreciation of non real estate assets.

⁽³⁾	Capital expenditures of a recurring nature related to tenant improvements and leasing commissions that do not incrementally enhance the underlying assets’ income generating capacity. We exclude first generation tenant improvements and leasing commissions from this measure.

*Definitions

Funds From Operations (“FFO”): FFO is calculated in accordance with the current National Association of Real Estate Investment Trusts (“NAREIT”) definition. NAREIT currently defines FFO as net income (computed in accordance with GAAP), excluding gains or losses from sales of property plus depreciation and amortization on real estate assets, and after the same adjustments for unconsolidated partnerships and joint ventures. Such factors can vary among owners of identical assets in similar conditions based on historical cost accounting and useful-life estimates. FFO may provide valuable comparisons of operating performance between periods and with other REITs. FFO is a non-GAAP financial measure and should not be viewed as an alternative measurement of our operating performance to net income. We believe that FFO is a beneficial indicator of the performance of an equity REIT. However, other REITs may not define FFO in accordance with the NAREIT definition, or may interpret the current NAREIT definition differently than we do; therefore, our computation of FFO may not be comparable to that of such other REITs.

Core Funds From Operations (“Core FFO”): We calculate Core FFO by starting with FFO, as defined by NAREIT, and adjust for certain non-recurring items such as impairment losses and other extraordinary items. Such items create significant earnings volatility. We believe Core FFO provides a meaningful measure of our operating performance and more predictability regarding future earnings potential. Core FFO is a non-GAAP financial measure and should not be viewed as an alternative measurement of our operating performance to net income; therefore, it should not be compared to other REITs’ equivalent to Core FFO.

Adjusted Funds From Operations (“AFFO”): In addition to FFO and Core FFO, we present AFFO. We calculate this measure by deducting from Core FFO non-incremental capital expenditures and adding back non-cash items including non-real estate depreciation, straight lined rents and fair value lease revenue, non-cash components of interest expense and compensation expense, and making similar adjustments for unconsolidated partnerships and joint ventures. Although AFFO may not be comparable to that of other REITs, we believe it provides a meaningful indicator of our ability to fund cash needs and to make cash distributions to equity owners. AFFO is a non-GAAP financial measure and should not be viewed as an alternative measurement of our operating performance to net income, as an alternative to net cash flows from operating activities or as a measure of our liquidity.

Piedmont Office Realty Trust, Inc.

Same Store Net Operating Income

Unaudited (in thousands)


	Three Months Ended June 30,						Six Months Ended June 30,
	2010			2009			2010			2009
Net income attributable to Piedmont	$	19,636		$	27,976		$	51,096		$	57,014

Non-controlling interest		125			120			251			238
Interest Expense		18,933			19,394			38,024			38,736
Depreciation		26,050			26,927			52,479			52,917
Amortization		11,104			13,797			22,592			27,339
Impairment loss on real estate assets		9,587			—			9,587			—

Core EBITDA*		85,435			88,214			174,029			176,244

General & administrative expenses		7,993			8,102			14,689			15,505
Management fee revenue		(705	)		(744	)		(1,458	)		(1,441	)
Interest and other income		(1,036	)		(1,147	)		(2,005	)		(1,809	)
Lease termination income		(479	)		(782	)		(975	)		(781	)
Lease termination expense - straight line rent & acquisition intangibles write-offs		679			174			746			174
Straight line rent adjustment		(1,462	)		(1,378	)		(457	)		1,318
Net effect of amortization of below-market in-place lease intangibles		(1,525	)		(1,247	)		(2,952	)		(2,477	)

Core net operating income (Cash basis)*		88,900			91,192			181,617			186,733

Acquisitions		—			—			—			—
Industrial Properties		(91	)		(642	)		(365	)		(1,282	)
Unconsolidated joint ventures		(1,187	)		(1,275	)		(2,453	)		(2,467	)


Same Store NOI*	$	87,622		$	89,275		$	178,799		$	182,984


Year over year change in same store NOI		-1.9	%

Fixed Charge Coverage Ratio (Core EBITDA/ Interest Expense)⁽¹⁾		4.5
Annualized Core EBITDA (Core EBITDA x 4)	$	341,740

⁽¹⁾	Piedmont had no capitalized interest, principal amortization or preferred dividends for any of the periods presented.

*Definitions

Core EBITDA: Core EBITDA is defined as net income before interest, taxes, depreciation and amortization as defined above and incrementally adding back any impairment losses and other extraordinary items. We do not include impairment losses in this measure because we feel these types of losses create volatility in our earnings and make it difficult to determine the earnings generated by our ongoing business. We believe Core EBITDA is a better measure of our liquidity. Core EBITDA is a non-GAAP financial measure and should not be viewed as an alternative measurement of cash flows from operating activities or liquidity. Other REITs may calculate Core EBITDA differently and our calculation should not be compared to that of other REITs.

Core Net Operating Income (“Core NOI”): Core NOI is defined as income from property operations with the add-back of corporate general and administrative expense, depreciation and amortization, and casualty and impairment losses and the deduction of income associated with lease terminations. We present this measure on a cash basis which eliminates the effects of straight lined rents and fair value lease revenue. The company uses this measure to assess its operating results and believes it is important in assessing operating performance. Core NOI is a non-GAAP measure which does not have any standard meaning prescribed by GAAP and therefore may not be comparable to similar measures presented by other companies.

Same Store NOI: Same Store NOI is calculated as the Core NOI attributable to the properties owned or placed in service during the entire span of the current and prior year. Same Store NOI excludes amounts attributable to industrial properties. We present this measure on a cash basis which eliminates the effects of straight lined rents and fair value lease revenue. We believe Same Store NOI is an important measure of comparison of our stabilized properties’ operating performance. Other REITs may calculate Same Store NOI differently and our calculation should not be compared to that of other REITs.

Quarterly Supplement Information for the Second Quarter 2010

Exhibit 99.2

LOGO

Quarterly Supplemental Information

June 30, 2010


Corporate Headquarters	Institutional Analyst Contact	Investor Relations

11695 Johns Creek Parkway, Suite 350	Telephone: 770.418.8592	Telephone: 800.557.4830
Johns Creek, GA 30097	research.analysts@piedmontreit.com	Facsimile: 770.243.8198
Telephone: 770.418.8800		investor.services@piedmontreit.com
		www.piedmontreit.com

Piedmont Office Realty Trust, Inc.

Quarterly Supplemental Information

Index


		Page
Introduction
Corporate Data		3
Investor Information		4
Financial Highlights		5-7
Key Performance Indicators		8

Financials
Balance Sheet		9
Income Statements		10-11
Funds From Operations / Adjusted Funds From Operations		12
Same Store Analysis		13-14
Capitalization Analysis		15
Debt Summary		16
Debt Detail		17
Debt Analysis		18

Operational & Portfolio Information - Office Investments
Tenant Diversification		19
Tenant Credit & Lease Distribution Information		20
Leasing Activity		21
Lease Expiration Schedule		22
Annual Lease Expirations		23
Capital Expenditures & Commitments		24
Contractual Tenant Improvements & Leasing Commissions		25
Geographic Diversification		26
Industry Diversification		27

Other Investments
Other Investments Detail		28

Supporting Information
Definitions		29-30
Research Coverage		31
Non-GAAP Reconciliations		32-35
Risks, Uncertainties and Limitations		36

Please refer to page 36 for a discussion of important risks related to the business of Piedmont Office Realty Trust, 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 events contained in this supplemental reporting package might not occur.

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.

Piedmont Office Realty Trust, Inc.

Corporate Data

Piedmont Office Realty Trust, Inc. (“Piedmont” or the “Company”) (NYSE: PDM) is a fully-integrated and self-managed real estate investment trust (“REIT”) specializing in the acquisition, ownership, management, development and disposition of primarily high-quality Class A office buildings located predominately in large U.S. office markets and leased principally to high-credit-quality tenants. Since its first acquisition in 1998, the Company has acquired approximately $5.5 billion of office and industrial properties (inclusive of joint ventures). Rated as an investment-grade company by Standard & Poor’s and Moody’s, Piedmont has maintained a low-leverage strategy while acquiring its properties. Approximately 87% of our Annualized Lease Revenue (“ALR”)⁽¹⁾ is derived from our office properties located within the ten largest U.S. office markets, including Chicago, Washington, D.C., the New York metropolitan area, Boston and greater Los Angeles.

This data supplements the information provided in our reports filed with the Securities and Exchange Commission.


	As of June 30, 2010			As of December 31, 2009
Number of properties⁽²⁾		73			73
Rentable square footage (in thousands)⁽²⁾		20,274			20,229
Percent leased⁽³⁾		89.8	%		90.1	%
Capitalization (in thousands):
Total debt	$	1,402,525		$	1,516,525
Equity market capitalization⁽⁴⁾	$	3,233,893		$	N/A
Total market capitalization⁽⁴⁾	$	4,636,418		$	N/A
Debt / Total market capitalization⁽⁴⁾		30.3	%		N/A
Common stock data
High closing price during quarter ⁽⁴⁾	$	20.36		$	N/A
Low closing price during quarter ⁽⁴⁾	$	17.90		$	N/A
Closing price of Class A common stock at period end⁽⁴⁾	$	18.73		$	N/A
Weighted average fully diluted shares outstanding (in thousands)⁽⁵⁾		168,912			158,581
Shares of common stock issued and outstanding (in thousands)		172,658			158,917
Rating / outlook
Standard & Poor’s		BBB / Stable			BBB / Stable
Moody’s		Baa2 / Stable			Baa3 / Positive
Employees		108			107

⁽¹⁾	The definition for Annualized Lease Revenue can be found on page 29.

⁽²⁾	Our office portfolio currently consists of 73 properties (exclusive of our equity interests in eight properties owned through unconsolidated joint ventures and our two industrial properties).

⁽³⁾

Calculated as leased square footage on June 30, 2010 plus square footage associated with new leases signed for currently vacant spaces divided by total rentable square footage, expressed as a percentage. This measure is presented for our 73 office properties and excludes industrial and unconsolidated joint venture properties.

⁽⁴⁾

Our Class A common stock was listed on the New York Stock Exchange on February 10, 2010; there is no market data as of December 31, 2009. Our Class B-1, Class B-2, and Class B-3 common stock (collectively, our “Class B common stock”) are not listed on a national securities exchange and there is no established market for such shares. We have used the closing price of the Class A common stock at the relevant period end for the purposes of the calculations regarding market capitalization herein.

⁽⁵⁾	Weighted average fully diluted shares outstanding are presented on a year-to-date basis for each period.

Piedmont Office Realty Trust, Inc.

Investor Information

Corporate

11695 Johns Creek Parkway, Suite 350, Johns Creek, Georgia 30097

770.418.8800

www.piedmontreit.com

Executive and Senior Management


Donald A. Miller, CFA	Robert E. Bowers	Laura P. Moon
Chief Executive Officer, President and Director	Chief Financial Officer, Executive Vice President, Secretary, and Treasurer	Chief Accounting Officer and Senior Vice President

Raymond L. Owens	Carroll A. Reddic, IV
Executive Vice President - Capital Markets	Executive Vice President - Real Estate Operations, Assistant Secretary

Board of Directors


W. Wayne Woody	Donald A. Miller, CFA	Frank C. McDowell
Director and Chairman of the Board of Directors	Chief Executive Officer, President and Director	Director and Vice Chairman of the Board of Directors

Wesley E. Cantrell	Michael R. Buchanan	Donald S. Moss
Director and Chairman of Governance Committee	Director and Chairman of Capital Committee	Director and Chairman of Compensation Committee

Jeffery L. Swope		William H. Keogler, Jr.
Director		Director


Transfer Agent				Corporate Counsel

Boston Financial Data Services				King & Spalding
2000 Crown Colony Drive				1180 Peachtree Street, NE
Quincy, Massachusetts 02169				Atlanta, GA 30309
Phone: 888.772.2337				Phone: 404.572.4600

Piedmont Office Realty Trust, Inc.

Financial Highlights

As of June 30, 2010

On January 22, 2010, we filed an amendment to our charter to effect a recapitalization of our common stock as described further in our Securities and Exchange Commission (“SEC”) filings. Upon the effectiveness of the recapitalization, each share of our outstanding common stock converted automatically into: (a) 1/12th of a share of our Class A common stock; plus (b) 1/12th of a share of our Class B-1 common stock; plus (c) 1/12th of a share of our Class B-2 common stock; plus (d) 1/12th of a share of our Class B-3 common stock. The recapitalization had the effect of a one-for-three reverse stock split. Prior period share and per share information in this report has been restated to reflect this recapitalization. Class B-1 stock converts automatically into Class A stock on August 9, 2010; Class B-2 stock converts into Class A stock on November 7, 2010; and Class B-3 stock converts to Class A stock on January 30, 2011.

Financial Results ⁽¹⁾

Funds from operations (FFO) for the quarter ended June 30, 2010 was $56.6M, or $0.33 per share (diluted), compared to $68.5M, or $0.43 per share (diluted), for the same quarter in 2009. FFO for the six months ended June 30, 2010 was $125.8M, or $0.74 per share (diluted), compared to $137.0M, or $0.86 per share (diluted), for the same period in 2009. The decrease in FFO from 2009 to 2010 was primarily due to the recognition of a $9.6M impairment charge on 111 Sylvan Avenue to adjust the asset to fair value. 111 Sylvan Avenue is under a binding contract for sale as further described below.

Core funds from operations (Core FFO) for the quarter ended June 30, 2010 was in line with expectations and was $66.2M, or $0.38 per share (diluted), compared to $68.5M, or $0.43 per share (diluted), for the same quarter in 2009. Core FFO for the six months ended June 30, 2010 was $135.4M, or $0.80 per share (diluted), compared to $137.0M, or $0.86 per share (diluted), for the same period in 2009. The decrease in Core FFO per share from 2009 to 2010 was primarily due to the dilutive effect of the 13.8 million shares of Class A common stock issued in February 2010; lower tenant reimbursements also contributed to the decrease.

Adjusted funds from operations (AFFO) for the quarter ended June 30, 2010 was $52.0M, or $0.30 per share (diluted), compared to $59.4M, or $0.38 per share (diluted), for the same quarter in 2009. AFFO for the six months ended June 30, 2010 was $112.8M, or $0.67 per share (diluted), compared to $119.4M, or $0.75 per share (diluted), for the same period in 2009. The decrease in AFFO for the quarter ended June 30, 2010 as compared to that of 2009 was primarily due to increased capital expenditures in 2010 associated with new leases. The decrease in AFFO for the six months ended June 30, 2010 as compared to that of 2009 was primarily due to increased capital expenditures and lower straight line rent adjustments. The AFFO per share results are also lower due to the dilutive effect of the 13.8 million shares of Class A common stock issued in February 2010.

During the quarter ended June 30, 2010, the company paid to stockholders a quarterly dividend in the amount of $0.315 per share for all classes of common stock. The Company’s dividend payout percentage for the six months ended June 30, 2010 was 79.9% of Core FFO and 95.9% of AFFO.

Operations

On a square footage basis, our portfolio was 89.8% leased as of June 30, 2010 as compared to 89.6% and 90.1% at March 31, 2010 and December 31, 2009, respectively. The increase in leased square footage during the quarter is primarily related to new leasing in the Dallas market. The decrease in leased square footage since the prior year end is primarily due to 99,000 square feet being vacated in January 2010 by Kirkland & Ellis in Chicago.

The weighted average remaining lease term of our portfolio was 6.0 years⁽ ²⁾ as of June 30, 2010 as compared to 5.9 years at December 31, 2009.

As noted in our December 31, 2009 Quarterly Supplemental Information, 6.8% of our Annualized Lease Revenue was set to expire in 2010 and a majority of this expiration was to take place in the fourth quarter. During the three months ended June 30, 2010, leasing activity was strong with the company completing over 870,000 square feet of leasing. From an office leasing perspective, we executed renewal leases for 377,000 square feet and new tenant leases for 180,000 square feet, bringing the year-to-date total office leasing activity to 738,000 square feet, with an average committed capital cost of $3.13 per square foot per year of lease term. From an industrial leasing perspective, we executed new tenant leases totaling 313,000 square feet, bringing the year-to-date total industrial leasing activity to 487,000 square feet with an average committed capital cost of $0.21 per square foot per year of lease term.

⁽¹⁾	FFO, Core FFO and AFFO are supplemental non-GAAP financial measures. See pages 29-30 for definitions of non-GAAP financial measures. See pages 12 and 33 for reconciliations of FFO, Core FFO and AFFO to Net Income.

⁽²⁾	Remaining lease term (after taking into account leases which had been executed but not commenced as of June 30, 2010) is weighted based on Annualized Lease Revenue, as defined on page 29.

Piedmont Office Realty Trust, Inc.

Financial Highlights

As of June 30, 2010

During the six months ended June 30, 2010, we retained tenants for 78% of the square footage associated with expiring leases, as compared to 78% for the year ended December 31, 2009.

During the three months ended June 30, 2010, we executed five office leases greater than 20,000 SF. Please see information on those leases in the following chart.


Tenant Name	Property	Property Location	Square Feet Leased	Expiration Year	Lease Type
State Street Bank	1200 Crown Colony Drive	Quincy, MA	234,668	2021	Renewal
Advanced Micro Devices	90 Central Street	Boxborough, MA	132,857	2015	Renewal / Expansion
Oracle America, Inc.	6031 Connection Drive	Irving, TX	55,760	2017	New
Carr Workplaces	Aon Center	Chicago, IL	26,914	2022	New
American Family Mutual Insurance Company	Eastpointe Corporate Center	Issaquah, WA	21,739	2015	New

Leasing Update

Five leases were scheduled to expire in 2010 or 2011 that contribute greater than 1% of Annualized Lease Revenue. Information regarding the leasing status of the spaces associated with those leases is as follows:

Tenant Name

Property

Property Location

Square
Footage

Percentage of Annualized
Lease Revenue (%)

Expiration ⁽¹⁾

Leasing Status

Citicorp

111 Sylvan Avenue

Englewood Cliffs, NJ

409,604

1.2

Q4 2010

Discussions with the current tenant for renewal of a portion of the space leased were terminated because the property is under contract to be sold in December 2010.

State Street Bank

1200 Crown Colony Drive

Quincy, MA

234,668

1.6

Q1 2011

Lease renewed with tenant through 2021.

U.S. Government, Comptroller of the Currency

One Independence Square

Washington, D.C.

322,984

3.1

Q2 2011

In discussions with the current tenant for a renewal of the entire space leased by the tenant.

Zurich American Insurance Company

Windy Point II

Schaumburg, IL

300,034

1.8

Q3 2011

Space has been substantially sublet by the tenant. In discussions with sublessees for direct leases in addition to actively marketing the space for lease.

Kirkland & Ellis

Aon Center

Chicago, IL

331,887

1.8

Q4 2011

Kirkland & Ellis is vacating; 260,641 SF of the space associated with their lease has been relet to KPMG beginning in August 2012.

⁽¹⁾	The lease expiration date presented is that of the majority of the space leased to the tenant at the building.

Piedmont Office Realty Trust, Inc.

Financial Highlights

As of June 30, 2010

Financing and Capital Activity

As of June 30, 2010, our ratio of debt to total market capitalization was 30.3%; our ratio of debt to gross real estate assets was 30.8%; and our ratio of debt to total gross assets was 26.7%.

During the second quarter of 2010, the Company did not acquire or sell any properties. However, on May 5, 2010, Piedmont entered into a binding contract to sell the 111 Sylvan Avenue property in Englewood Cliffs, NJ. The purchaser has completed its due diligence study of the asset and its deposit of 10% of the agreed upon purchase price of $55 million is non-refundable. The transaction is scheduled to close in December 2010, which will allow Piedmont to recognize the cash flow of the existing lease with Citicorp through its current expiration in November 2010. Piedmont has reclassified 111 Sylvan Avenue from real estate assets held-for-use to real estate assets held-for-sale as of May 5, 2010. Our operating results for the quarter reflect a $9.6 million impairment charge as a result of adjusting the asset to fair value. We now present the results from operations for the asset in discontinued operations.

On May 14, 2010, Piedmont filed a Form S-3 containing a prospectus for a dividend reinvestment plan. Shareholders participating in the reinvestment plan will be able to purchase additional shares of Piedmont at a 2% discount to the then current market price.

On April 9, 2010, Moody’s upgraded Piedmont’s credit rating from Baa3 to Baa2.

The $250 Million Unsecured Term Loan was extended by one year to June 28, 2011. During the first quarter of 2010, Piedmont entered into several swap agreements which effectively fix the interest rate on this loan at 2.36% for the one-year extension period.

Subsequent Events

Piedmont has entered into a binding agreement to purchase Meridian Crossings in suburban Minneapolis, MN. The project is comprised of two buildings totaling approximately 384,000 square feet. The buildings, well located at the intersection of Interstates 35W and 494, were constructed in 1997 and 1998. The primary tenant in the project is U.S. Bancorp, a tenant with which Piedmont has significant existing business relationships. U.S. Bancorp’s lease extends through 2023. Piedmont anticipates completing the purchase of Meridian Crossings in October 2010.

On August 9, 2010, all of Piedmont’s 39.7 million shares of Class B-1 common stock converted to Class A common stock.

On August 10, 2010, the board of directors of Piedmont declared dividends for the third quarter of 2010 in the amount of $0.315 per share on all classes of outstanding common shares of Piedmont to stockholders of record for such shares as of the close of business on September 15, 2010. The dividends are to be paid on September 22, 2010.

Guidance for 2010

The following financial guidance is unchanged for full-year 2010 and is based on management’s expectations at this time:


	Low		High
Net Income (before the $9.6 million impairment charge)	$117	-	124 million
Add: Depreciation & Amortization	$152	-	154 million
Core Funds from Operations (excludes impairment charges)	$269	-	278 million
Core Funds from Operations per diluted share (excludes impairment charges)	$1.56	-	1.62

Our $9.6 million charge on the 111 Sylvan Avenue property does not have an impact on our reported Core FFO, but it does impact FFO as originally estimated by roughly $0.055 per share. The opportunity to sell 111 Sylvan Avenue was not contemplated in our original FFO guidance. Note that individual quarters may fluctuate on both a cash and accrual basis due to timing of repairs and maintenance, capital expenditures and one-time revenue or expense events. In addition, the Company’s guidance is based on information available to management as of the date of this supplemental report.

Piedmont Office Realty Trust, Inc.

Key Performance Indicators

Unaudited (in thousands, except for per share data)

This section includes non-GAAP financial measures, including, but not limited to, 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), Same Store NOI, and NOI from Unconsolidated Joint Ventures. Definitions of these non-GAAP measures are provided on pages 29-30 and reconciliations are provided on pages 32-35.


	Three Months Ended
	6/30/2010			3/31/2010			12/31/2009			9/30/2009			6/30/2009
Selected Operating Data
Percent leased⁽¹⁾		89.8	%		89.6	%		90.1	%		90.1	%		90.1	%
Rental income	$	110,623		$	110,511		$	110,405		$	111,279		$	110,400
Total revenues	$	145,181		$	146,844		$	149,423		$	148,943		$	147,985
Total operating expenses ⁽²⁾	$	100,037		$	99,058		$	106,373		$	138,705		$	103,570
Real estate operating income ⁽²⁾	$	45,144		$	47,786		$	43,050		$	10,238		$	44,415
Impairment losses on real estate assets⁽³⁾	$	9,587		$	0		$	0		$	37,633		$	0
Core EBITDA⁽⁴⁾	$	85,435		$	88,592		$	89,260		$	90,266		$	88,214
Core FFO	$	66,199		$	69,197		$	69,482		$	70,472		$	68,546
Core FFO per share - diluted	$	0.38		$	0.42		$	0.44		$	0.45		$	0.43
AFFO⁽⁴⁾	$	52,029		$	60,737		$	48,511		$	61,152		$	59,443
AFFO per share - diluted	$	0.30		$	0.37		$	0.31		$	0.39		$	0.38
Gross dividends	$	54,388		$	53,777		$	49,733		$	49,565		$	49,389
Dividends per share	$	0.315		$	0.315		$	0.315		$	0.315		$	0.315
Selected Balance Sheet Data
Total real estate assets	$	3,704,757		$	3,737,478		$	3,763,527		$	3,785,458		$	3,850,625
Total gross real estate assets	$	4,548,428		$	4,560,219		$	4,564,409		$	4,590,995		$	4,626,300
Total assets	$	4,405,501		$	4,428,410		$	4,395,345		$	4,431,851		$	4,494,484
Net debt⁽⁵⁾	$	1,321,459		$	1,325,531		$	1,506,521		$	1,515,186		$	1,542,996
Total liabilities	$	1,594,278		$	1,584,781		$	1,713,299		$	1,743,415		$	1,761,748
Ratios
Core EBITDA margin ⁽⁶⁾		58.2	%		59.7	%		59.1	%		60.0	%		59.0	%

Fixed charge coverage ratio ⁽⁷⁾		4.5	x		4.6	x		4.6	x		4.6	x		4.5	x
Net debt to core EBITDA⁽⁸⁾		3.9	x		3.7	x		4.2	x		4.2	x		4.4	x

⁽¹⁾	Percent leased represents 73 office properties and excludes industrial and unconsolidated joint venture properties. Percent leased decreased in the first quarter of 2010 as compared to the prior period primarily due to Kirkland & Ellis vacating 99,000 square feet at Aon Center in Chicago, IL.

⁽²⁾	Total operating expenses and real estate operating income in the third quarter of 2009 include $35.1 million in impairment charges recognized on three wholly-owned assets.

⁽³⁾	Impairment losses include both wholly owned and unconsolidated joint ventures.

⁽⁴⁾	Core EBITDA and AFFO have been adjusted to exclude impairments on real estate assets as shown on pages 32 and 33.

⁽⁵⁾	Net debt is calculated as total debt minus cash and cash equivalents.

⁽⁶⁾	Core EBITDA margin is calculated as Core EBITDA divided by total revenues.

⁽⁷⁾	Fixed charge coverage is calculated as Core EBITDA divided by the sum of interest expense, principal amortization, capitalized interest and preferred dividends. We had no capitalized interest, principal amortization or preferred dividends during the three months ended June 30, 2010.

⁽⁸⁾	Core EBITDA is annualized for the purposes of this calculation.

Piedmont Office Realty Trust, Inc.

Consolidated Balance Sheets

Unaudited (in thousands)


	June 30, 2010			March 31, 2010			December 31, 2009			September 30, 2009			June 30, 2009
Assets:
Real estate, at cost:
Land assets	$	641,073		$	641,073		$	641,073		$	641,073		$	648,834
Buildings and improvements		3,612,914			3,609,608			3,600,406			3,591,403			3,613,440
Buildings and improvements, accumulated depreciation		(702,867	)		(677,499	)		(653,839	)		(631,120	)		(605,215	)
Intangible lease asset		224,532			235,022			243,312			280,087			284,292
Intangible lease asset, accumulated amortization		(140,804	)		(145,242	)		(147,043	)		(174,417	)		(170,460	)
Construction in progress		14,909			12,345			17,059			15,483			16,396
Real estate assets held for sale, net		55,000			62,171			62,559			62,949			63,338

Total real estate assets		3,704,757			3,737,478			3,763,527			3,785,458			3,850,625

Investment in unconsolidated joint ventures		43,005			43,482			43,940			44,350			47,408
Cash and cash equivalents		81,066			76,994			10,004			17,339			17,529
Tenant receivables, net of allowance for doubtful accounts		30,986			33,152			33,071			38,818			32,105
Straight line rent receivable		96,750			94,906			95,016			92,406			90,537
Notes receivable		60,101			59,407			58,739			58,523			57,990
Due from unconsolidated joint ventures		1,124			1,202			1,083			1,072			1,198
Prepaid expenses and other assets		24,866			18,600			21,456			22,220			20,448
Goodwill		180,097			180,097			180,097			180,097			180,097
Deferred financing costs, less accumulated amortization		6,467			6,509			7,205			7,901			8,547
Deferred lease costs, less accumulated amortization		176,120			176,290			180,832			183,214			187,451
Other assets held for sale		162			293			375			453			549

Total assets	$	4,405,501		$	4,428,410		$	4,395,345		$	4,431,851		$	4,494,484


Liabilities:
Lines of credit and notes payable	$	1,402,525		$	1,402,525		$	1,516,525		$	1,532,525		$	1,560,525
Accounts payable, accrued expenses, and accrued capital expenditures		99,819			83,172			97,747			111,345			98,803
Deferred income		33,916			39,079			34,506			29,788			28,412
Intangible lease liabilities, less accumulated amortization		54,730			57,689			60,655			64,082			67,143
Interest rate swap		742			2,316			3,866			5,675			6,865
Other liabilities held for sale		2,546			—			—			—			—

Total liabilities		1,594,278			1,584,781			1,713,299			1,743,415			1,761,748

Redeemable common stock ⁽¹⁾		—			—			75,164			61,716			52,230

Stockholder’s equity ⁽²⁾ :
Class A common stock		536			534			397			395			394
Class B-1 common stock		397			397			397			395			394
Class B-2 common stock		397			397			397			396			394
Class B-3 common stock		397			397			398			396			395
Additional paid in capital		3,659,910			3,659,257			3,477,168			3,461,698			3,449,489
Cumulative distributions in excess of earnings		(855,631	)		(820,878	)		(798,561	)		(774,774	)		(716,949	)
Redeemable common stock ⁽¹⁾		—			—			(75,164	)		(61,716	)		(52,230	)
Other comprehensive loss		(742	)		(2,316	)		(3,866	)		(5,675	)		(6,865	)

Piedmont stockholders’ equity		2,805,264			2,837,788			2,601,166			2,621,115			2,675,022
Non-controlling interest		5,959			5,841			5,716			5,605			5,484

Total stockholders’ equity		2,811,223			2,843,629			2,606,882			2,626,720			2,680,506

Total liabilities, redeemable common stock and stockholders’ equity	$	4,405,501		$	4,428,410		$	4,395,345		$	4,431,851		$	4,494,484


All classes of common stock outstanding at end of period ⁽²⁾		172,658			172,517			158,917			158,215			157,668

(1)	During the three months ended March 31, 2010, the board of directors terminated the share redemption plan. We are no longer required by GAAP to reclassify any of our common stock outstanding as redeemable common stock.

(2)

On January 22, 2010, we filed an amendment to our charter to effect a recapitalization of our common stock as described further in our SEC filings. Upon the effectiveness of the recapitalization, each share of our outstanding common stock converted automatically into: (a) 1/12th of a share of our Class A common stock; plus (b) 1/12th of a share of our Class B-1 common stock; plus (c) 1/12th of a share of our Class B-2 common stock; plus (d) 1/12th of a share of our Class B-3 common stock. The recapitalization had the effect of a one-for-three reverse stock split. Prior period share and per share information in this report has been restated to reflect this recapitalization.

Piedmont Office Realty Trust, Inc.

Consolidated Statements of Income

Unaudited (in thousands)


	Three Months Ended
	6/30/2010			3/31/2010			12/31/2009			9/30/2009			6/30/2009
Revenues:
Rental income	$	110,623		$	110,511		$	110,405		$	111,279		$	110,400
Tenant reimbursements		33,374			35,084			36,108			36,922			36,059
Property management fee revenue		705			753			928			742			744
Other rental income		479			496			1,982			—			782

Total revenues		145,181			146,844			149,423			148,943			147,985

Operating expenses:
Property operating costs		55,497			55,361			57,281			57,592			55,626
Depreciation		25,584			25,691			26,701			26,403			26,172
Amortization		11,004			11,386			16,172			13,991			13,695
Impairment loss on real estate assets		—			—			—			35,063			—
General and administrative		7,952			6,620			6,219			5,656			8,077

Total operating expenses		100,037			99,058			106,373			138,705			103,570


Real estate operating income		45,144			47,786			43,050			10,238			44,415

Other income (expense):
Interest expense		(18,933	)		(19,091	)		(19,488	)		(19,518	)		(19,394	)
Interest and other income		1,036			969			652			1,989			1,147
Equity in income of unconsolidated joint ventures		647			737			672			(1,985	)		754

Total other income (expense)		(17,250	)		(17,385	)		(18,164	)		(19,514	)		(17,493	)


Income from continuing operations		27,894			30,401			24,886			(9,276	)		26,922

Operating income, excluding impairment loss		1,454			1,185			1,179			1,137			1,174
Impairment loss		(9,587	)		—			—			—			—

Discontinued operations ⁽¹⁾		(8,133	)		1,185			1,179			1,137			1,174


Net income		19,761			31,586			26,065			(8,139	)		28,096

Less: Net income attributable to noncontrolling interest		(125	)		(126	)		(119	)		(121	)		(120	)


Net income attributable to Piedmont	$	19,636		$	31,460		$	25,946		$	(8,260	)	$	27,976


Weighted average common shares outstanding - diluted		172,718			165,200			158,393			157,760			158,304

Net income per share available to common stockholders - basic and diluted	$	0.11		$	0.19		$	0.16		$	(0.05	)	$	0.18

⁽¹⁾	Reflects operating results for 111 Sylvan Avenue, which is now under a binding sale contract.

Piedmont Office Realty Trust, Inc.

Consolidated Statements of Income `

Unaudited (in thousands)


	Three Months Ended											Six Months Ended
	6/30/2010			6/30/2009			Change			Change		6/30/2010			6/30/2009			Change			Change
Revenues:
Rental income	$	110,623		$	110,400		$	223		0.2	%	$	221,134		$	221,752		$	(618	)	-0.3	%
Tenant reimbursements		33,374			36,059			(2,685	)	-7.4	%		68,458			76,164			(7,706	)	-10.1	%
Property management fee revenue		705			744			(39	)	-5.2	%		1,458			1,441			17		1.2	%
Other rental income		479			782			(303	)	-38.7	%		975			781			194		24.8	%

Total revenues		145,181			147,985			(2,804	)	-1.9	%		292,025			300,138			(8,113	)	-2.7	%

Operating expenses:
Property operating costs		55,497			55,626			129		0.2	%		110,858			115,716			4,858		4.2	%
Depreciation		25,584			26,172			588		2.2	%		51,275			51,412			137		0.3	%
Amortization		11,004			13,695			2,691		19.6	%		22,390			27,136			4,746		17.5	%
General and administrative		7,952			8,077			125		1.5	%		14,572			15,441			869		5.6	%

Total operating expenses		100,037			103,570			3,533		3.4	%		199,095			209,705			10,610		5.1	%


Real estate operating income		45,144			44,415			729		1.6	%		92,930			90,433			2,497		2.8	%

Other income (expense):
Interest expense		(18,933	)		(19,394	)		461		2.4	%		(38,024	)		(38,736	)		712		1.8	%
Interest and other income		1,036			1,147			(111	)	-9.7	%		2,005			1,809			196		10.8	%
Equity in income of unconsolidated joint ventures		647			754			(107	)	-14.2	%		1,384			1,417			(33	)	-2.3	%

Total other income (expense)		(17,250	)		(17,493	)		243		1.4	%		(34,635	)		(35,510	)		875		2.5	%


Income from continuing operations		27,894			26,922			972		3.6	%		58,295			54,923			3,372		6.1	%

Operating income, excluding impairment loss		1,454			1,174			280		23.9	%		2,639			2,329			310		13.3	%
Impairment loss		(9,587	)		—			(9,587	)	0.0	%		(9,587	)		—			(9,587	)	0.0	%

Discontinued operations ⁽¹⁾		(8,133	)		1,174			(9,307	)	-792.8	%		(6,948	)		2,329			(9,277	)	-398.3	%


Net income		19,761			28,096			(8,335	)	-29.7	%		51,347			57,252			(5,905	)	-10.3	%

Less: Net income attributable to noncontrolling interest		(125	)		(120	)		(5	)	-4.2	%		(251	)		(238	)		(13	)	-5.5	%


Net income attributable to Piedmont	$	19,636		$	27,976		$	(8,340	)	-29.8	%	$	51,096		$	57,014		$	(5,918	)	-10.4	%


Weighted average common shares outstanding - diluted		172,718			158,304								168,912			159,047

Net income per share available to common stockholders - basic and diluted	$	0.11		$	0.18							$	0.30		$	0.36

⁽¹⁾	Reflects operating results for 111 Sylvan Avenue, which is now under a binding sale contract.

Piedmont Office Realty Trust, Inc.

Funds From Operations, Core Funds From Operations and Adjusted Funds From Operations

Unaudited (in thousands except for per share data)


	Three Months Ended						Six Months Ended
	6/30/2010			6/30/2009			6/30/2010			6/30/2009
Net income attributable to Piedmont	$	19,636		$	27,976		$	51,096		$	57,014

Depreciation^(1) (2)		25,872			26,773			52,122			52,611
Amortization⁽¹⁾		11,104			13,797			22,592			27,339


Funds from operations		56,612			68,546			125,810			136,964

Impairment loss on real estate assets⁽¹⁾		9,587			—			9,587			—

Core funds from operations		66,199			68,546			135,397			136,964

Depreciation of non real estate assets		178			154			357			306
Stock-based and other non-cash compensation expense		711			831			1,364			1,835
Deferred financing cost amortization		696			685			1,392			1,394
Add/(deduct) straight-line effects of lease revenue⁽¹⁾		(784	)		(1,227	)		289			1,469
Amortization of lease-related intangibles⁽¹⁾		(1,525	)		(1,223	)		(2,951	)		(2,453	)
Income from amortization of discount on purchase of mezzanine loans		(694	)		(929	)		(1,362	)		(1,296	)
Non-incremental capital expenditures ⁽³⁾		(12,752	)		(7,394	)		(21,718	)		(18,804	)

Adjusted funds from operations	$	52,029		$	59,443		$	112,768		$	119,415


Weighted average common shares outstanding - diluted		172,718			158,304			168,912			159,047

Funds from operations per share (diluted)	$	0.33		$	0.43		$	0.74		$	0.86
Core funds from operations per share (diluted)	$	0.38		$	0.43		$	0.80		$	0.86
Adjusted funds from operations per share (diluted)	$	0.30		$	0.38		$	0.67		$	0.75

⁽¹⁾	Includes adjustments for wholly-owned properties and for our proportionate ownership in unconsolidated joint ventures.

⁽²⁾	Excludes depreciation of non real estate assets.

⁽³⁾	Non-incremental capital expenditures are defined on page 30.

Piedmont Office Realty Trust, Inc.

Same Store Net Operating Income (Cash Basis)

Unaudited (in thousands)


	Three Months Ended						Six Months Ended
	6/30/2010			6/30/2009			6/30/2010			6/30/2009
Net income attributable to Piedmont	$	19,636		$	27,976		$	51,096		$	57,014

Non-controlling interest		125			120			251			238
Interest expense		18,933			19,394			38,024			38,736
Depreciation ⁽¹⁾		26,050			26,927			52,479			52,917
Amortization ⁽¹⁾		11,104			13,797			22,592			27,339
Impairment loss on real estate assets		9,587			—			9,587			—

Core EBITDA		85,435			88,214			174,029			176,244

General & administrative expenses ⁽¹⁾		7,993			8,102			14,689			15,505
Management fee revenue		(705	)		(744	)		(1,458	)		(1,441	)
Interest and other income		(1,036	)		(1,147	)		(2,005	)		(1,809	)
Lease termination income		(479	)		(782	)		(975	)		(781	)
Lease termination expense - straight line rent & acquisition intangible write-offs		679			174			746			174
Straight line rent adjustment ⁽¹⁾		(1,462	)		(1,378	)		(457	)		1,318
Net effect of amortization of above/(below) market in-place lease intangibles ⁽¹⁾		(1,525	)		(1,247	)		(2,952	)		(2,477	)

Core net operating income		88,900			91,192			181,617			186,733

Acquisitions		—			—			—			—
Industrial properties		(91	)		(642	)		(365	)		(1,282	)
Unconsolidated joint ventures		(1,187	)		(1,275	)		(2,453	)		(2,467	)

Same Store NOI	$	87,622		$	89,275		$	178,799		$	182,984

Change period over period		-1.9	%		N/A			-2.3	%		N/A



Same Store Net Operating Income
Top Seven Markets
	Three Months Ended						Six Months Ended
	6/30/2010			6/30/2009			6/30/2010			6/30/2009
	$		%	$		%	$		%	$		%
Washington, D.C.	$	18,448	21.1	$	18,213	20.4	$	37,320	20.9	$	36,686	20.0
Chicago⁽²⁾		17,599	20.1		19,638	22.0		35,343	19.8		40,599	22.2
New York ⁽³⁾		14,886	17.0		15,912	17.8		28,601	16.0		31,231	17.1
Minneapolis		5,416	6.2		5,331	6.0		10,675	6.0		10,174	5.6
Los Angeles ⁽⁴⁾		5,086	5.8		5,489	6.1		10,089	5.6		11,441	6.3
Dallas		3,962	4.5		3,972	4.4		7,807	4.4		7,975	4.4
Boston		3,927	4.5		3,825	4.3		7,656	4.3		7,622	4.2
Other ⁽⁵⁾		18,298	20.8		16,895	19.0		41,308	23.0		37,256	20.2

Total	$	87,622	100.0	$	89,275	100.0	$	178,799	100.0	$	182,984	100.0

⁽¹⁾	Includes amounts attributable to our unconsolidated joint venture assets.

⁽²⁾

The decrease in Chicago Same Store Net Operating Income for the three months ended and six months ended June 30, 2010 as compared to the same periods in 2009 is primarily related to a rental abatement concession associated with a lease renewal at Windy Point I in Schaumburg, IL, as well as the previously announced 99,000 square foot partial lease expiration with Kirkland & Ellis at Aon Center in Chicago, IL.

⁽³⁾

The decrease in New York Same Store Net Operating Income for the three months ended June 30, 2010 as compared to the same period in 2009 is primarily related to utility credits to tenants for prior year charges at 60 Broad Street in New York, NY in addition to a one-time payment for utilities in 2009 by a tenant at 5000 Corporate Court in Holtsville, NY. The decrease in New York Same Store Net Operating Income for the six months ended June 30, 2010 as compared to the same period in 2009 is primarily related to a rental abatement associated with the lease restructure/extension with the State of New York as well as the previously mentioned credits to tenants at 60 Broad Street, in addition to tenant reimbursements received in 2009 for prior year expenses at 1111 Durham Avenue in South Plainfield, NJ.

⁽⁴⁾

The decrease in Los Angeles Same Store Net Operating Income for the six months ended June 30, 2010 as compared to the same period in 2009 is due to a number of factors, including holdover rent recognized in 2009 for a lease that terminated in 2008 and a lease default by a bank that leased over 25,000 square feet at our 1901 Main Street building in Irvine, CA.

⁽⁵⁾

The increase in Other Same Store Net Operating Income for the three months ended June 30, 2010 and the six months ended June 30, 2010 is due to a number of factors, the largest of which is the lease commencement for over 94,000 square feet of the 184,000 square foot First Data Corporation lease in July 2009 at Glenridge Highlands Two in Atlanta, GA in addition to the expiration of the rent abatement period in mid-2009 for the initial space occupied by First Data Corporation comprised of approximately 90,000 square feet. First Data Corporation’s lease for 184,000 square feet allowed for a phased occupancy of that space.

Piedmont Office Realty Trust, Inc.

Same Store Net Operating Income (Accrual Basis)

Unaudited (in thousands)


	Three Months Ended						Six Months Ended
	6/30/2010			6/30/2009			6/30/2010			6/30/2009
Net income attributable to Piedmont	$	19,636		$	27,976		$	51,096		$	57,014
Non-controlling interest		125			120			251			238
Interest expense		18,933			19,394			38,024			38,736
Depreciation ⁽¹⁾		26,050			26,927			52,479			52,917
Amortization ⁽¹⁾		11,104			13,797			22,592			27,339
Impairment loss on real estate assets		9,587			—			9,587			—

Core EBITDA		85,435			88,214			174,029			176,244
General & administrative expenses ⁽¹⁾		7,993			8,102			14,689			15,505
Management fee revenue		(705	)		(744	)		(1,458	)		(1,441	)
Interest and other income		(1,036	)		(1,147	)		(2,005	)		(1,809	)
Lease termination income		(479	)		(782	)		(975	)		(781	)
Lease termination expense - straight line rent & acquisition intangibles write-offs		679			174			746			174

Core net operating income		91,887			93,817			185,026			187,892
Acquisitions		—			—			—			—
Industrial properties		(104	)		(641	)		(385	)		(1,280	)
Unconsolidated joint ventures		(1,124	)		(1,229	)		(2,376	)		(2,385	)

Same Store NOI	$	90,659		$	91,947		$	182,265		$	184,227

Change period over period		-1.4	%		N/A			-1.1	%		N/A


Same Store Net Operating Income Top Seven Markets

	Three Months Ended						Six Months Ended
	6/30/2010			6/30/2009			6/30/2010			6/30/2009
	$		%	$		%	$		%	$		%
Chicago⁽²⁾	$	19,657	21.7	$	20,925	22.8	$	38,939	21.4	$	43,224	23.5
Washington, D.C.		18,602	20.5		18,770	20.4		37,569	20.6		37,761	20.5
New York ⁽³⁾		15,033	16.6		15,715	17.1		30,439	16.7		30,934	16.8
Minneapolis		5,272	5.8		5,246	5.7		10,351	5.7		10,006	5.4
Los Angeles ⁽⁴⁾		5,057	5.6		5,480	6.0		10,177	5.6		11,479	6.2
Dallas		3,682	4.1		3,951	4.3		7,532	4.1		7,944	4.3
Boston		3,600	4.0		3,486	3.8		7,128	3.9		6,956	3.8
Other ⁽⁵⁾		19,756	21.7		18,374	19.9		40,130	22.0		35,923	19.5

Total	$	90,659	100.0	$	91,947	100.0	$	182,265	100.0	$	184,227	100.0

⁽¹⁾	Includes amounts attributable to our unconsolidated joint venture assets.

⁽²⁾

The decrease in Chicago Same Store Net Operating Income for the three months ended June 30, 2010 as compared to the same period in 2009 is primarily related to the previously announced 99,000 square foot partial lease expiration with Kirkland & Ellis at Aon Center in Chicago, IL; the decrease for the six months ended June 30, 2010 as compared to the same period in 2009 is primarily related to the same lease expiration at Aon Center, as well as a lower rental rate associated with a lease renewal at Windy Point I in Schaumburg, IL.

⁽³⁾

The decrease in New York Same Store Net Operating Income for the three months ended June 30, 2010 and the six months ended June 30, 2010 as compared to the same periods in 2009 is primarily related to a one-time payment for utilities in 2009 by a tenant at 5000 Corporate Court in Holtsville, NY as well as tenant reimbursements received in 2009 for prior year expenses at 1111 Durham Avenue in South Plainfield, NJ.

⁽⁴⁾

⁽⁵⁾

The increase in Other Same Store Net Operating Income for the three months ended June 30, 2010 and the six months ended June 30, 2010 is due to a number of factors, the largest of which is the lease commencement for over 94,000 square feet of the 184,000 square foot First Data Corporation lease in July 2009 at Glenridge Highlands Two in Atlanta, GA. The lease for the balance of the First Data Corporation space commenced in first quarter 2009. First Data Corporation’s lease for 184,000 square feet allowed for a phased occupancy of that space.

Piedmont Office Realty Trust, Inc.

Capitalization Analysis

Unaudited ($ and shares in thousands)


	As of June 30, 2010			As of December 31, 2009
	As of June 30, 2010			As of December 31, 2009
Common stock price ⁽¹⁾	$	18.73		$	N/A

Total shares outstanding⁽²⁾		172,658			158,917

Class A common stock		53,552			39,729
Class B-1 common stock		39,702			39,729
Class B-2 common stock		39,702			39,729
Class B-3 common stock		39,702			39,729

Equity market capitalization ⁽³⁾	$	3,233,893		$	N/A

Total consolidated debt	$	1,402,525		$	1,516,525

Total market capitalization ⁽¹⁾	$	4,636,418		$	N/A

Total debt / Total market capitalization		30.3	%		N/A

Total gross real estate assets	$	4,548,428		$	4,564,409

Total debt / Total gross real estate assets⁽⁴⁾		30.8	%		33.1	%

Total debt / Total gross assets⁽⁵⁾		26.7	%		29.1	%

⁽¹⁾	Reflects closing common stock price as of the end of the reporting period. The company was not listed on a public exchange as of December 31, 2009. Our Class A common stock initially listed on the New York Stock Exchange on February 10, 2010.

⁽²⁾

⁽³⁾	Market value of common shares is defined as the total number of shares of all classes of our common stock outstanding multiplied by the closing price of our Class A common stock at the end of the reporting period, as further qualified in footnote (1) above.

⁽⁴⁾

Total debt to total gross real estate assets ratio for the current period is defined as total debt divided by Piedmont’s gross real estate assets. Gross real estate assets is defined as total real estate assets with the add back of accumulated depreciation and accumulated amortization related to real estate assets.

⁽⁵⁾	Total debt to total gross assets ratio for the current period is defined as total debt divided by gross assets. Gross assets is defined as total assets with the add back of accumulated depreciation and accumulated amortization related to real estate assets.

Piedmont Office Realty Trust, Inc.

Debt Summary

Unaudited ($ in thousands)


Floating Rate & Fixed Rate Debt

Debt ⁽¹⁾	Amount			Weighted Average Interest Rate			Weighted Average Maturity
Floating Rate	$	0	⁽²⁾		0.0	%⁽³⁾	26.0 months
Fixed Rate⁽⁴⁾		1,402,525			4.7	%	47.3 months

Total	$	1,402,525			4.7	%	47.3 months


Unsecured & Secured Debt

Debt ⁽¹⁾	Amount			Weighted Average Interest Rate			Weighted Average Maturity
Unsecured	$	250,000			2.4	%⁽⁴⁾	11.9 months
Secured		1,152,525			5.2	%	54.9 months

Total	$	1,402,525			4.7	%	47.3 months


Debt Maturities

Maturity Year	Secured Debt⁽¹⁾			Unsecured Debt⁽¹⁾			Weighted Average Interest Rate		Percentage of Total
2010	$	0		$	0		N/A		N/A
2011		0			250,000		2.4	%	17.8	%
2012		45,000			0	⁽²⁾	5.2	%	3.2	%
2013		0			0		N/A		N/A
2014		695,000			0		4.9	%	49.6	%
2015		105,000			0		5.3	%	7.5	%
2016		167,525			0		5.6	%	11.9	%
2017		140,000			0		5.8	%	10.0	%

TOTAL	$	1,152,525		$	250,000		4.7	%	100.0	%

⁽¹⁾	All of Piedmont’s outstanding debt as of June 30, 2010 is interest-only debt.

⁽²⁾

Amount represents the outstanding balance as of June 30, 2010 on the $500M Unsecured Line of Credit, which matures August 2011. Management intends to exercise the one-year extension option to extend the maturity date to August 2012. The payment of a 15 bp fee will be required to extend the term of this facility.

⁽³⁾

Rate is equal to the weighted average interest on all outstanding draws as of June 30, 2010. Piedmont may select from multiple interest rate options with each draw, including the prime rate and various length LIBOR locks. All LIBOR selections are subject to an additional spread of .475% over the selected rate based on Piedmont’s current credit rating.

⁽⁴⁾	The $250 Million Unsecured Term Loan has a stated variable rate; however, Piedmont entered into several interest rate swap agreements which effectively fix the interest rate on this loan at 2.36% through June 28, 2011.

Piedmont Office Realty Trust, Inc.

Debt Detail

Unaudited ($ in thousands)


Facility	Property	Rate⁽¹⁾	Maturity		Principal Balance Outstanding as of June 30, 2010
*Secured (Fixed)*
$45.0 Million Fixed-Rate Loan	4250 North Fairfax	5.20%	6/1/2012		$	45,000
35 West Wacker Building Mortgage Note	35 West Wacker Drive	5.10%	1/1/2014			120,000
Aon Center Chicago Mortgage Note	Aon Center	4.87%	5/1/2014			200,000
Aon Center Chicago Mortgage Note	Aon Center	5.70%	5/1/2014			25,000
Secured Pooled Facility	Nine Property Collateralized Pool ⁽²⁾	4.84%	6/7/2014			350,000
$105.0 Million Fixed-Rate Loan	US Bancorp Center	5.29%	5/11/2015			105,000
$125.0 Million Fixed-Rate Loan	Four Property Collateralized Pool ⁽³⁾	5.50%	4/1/2016			125,000
$42.5 Million Fixed-Rate Loan	Las Colinas Corporate Center I & II	5.70%	10/11/2016			42,525
WDC Mortgage Notes	1201 & 1225 Eye Street	5.76%	11/1/2017			140,000

Subtotal/Weighted Average ⁽⁴⁾		5.16%			$	1,152,525

*Unsecured (Variable)*
$250 Million Unsecured Term Loan ⁽⁵⁾	N/A	LIBOR + 1.50%⁽⁵⁾	6/28/2011		$	250,000
$500 Million Unsecured Facility ⁽⁶⁾	N/A	0%⁽⁷⁾	8/30/2011	⁽⁸⁾		0

Subtotal/Weighted Average ⁽⁴⁾		2.36%			$	250,000

Total/ Weighted Average ⁽⁴⁾		4.66%			$	1,402,525

(1)	All of Piedmont’s outstanding debt as of June 30, 2010 is interest-only debt.

(2)	The nine property collateralized pool includes 1200 Crown Colony Drive, Braker Pointe III, 2 Gatehall Drive, One and Two Independence Square, 2120 West End Avenue, 111 Sylvan Avenue, 200 Bridgewater Crossing, and Fairway Center II.

(3)	The four property collateralized pool includes 1430 Enclave Parkway, Windy Point I and II, and 1055 East Colorado Boulevard.

(4)	Weighted average is based on the total balance outstanding and interest rate at June 30, 2010.

(5)	The $250 Million Unsecured Term Loan has a stated variable rate; however, Piedmont entered into several interest rate swap agreements which effectively fix the interest rate on this loan at 2.36% through June 28, 2011.

(6)	All of Piedmont’s outstanding debt as of June 30, 2010 is term debt with the exception of the $500 Million Unsecured Facility.

(7)

Rate is equal to the weighted-average interest rate on all outstanding draws as of June 30, 2010. Piedmont may select from multiple interest rate options with each draw, including the prime rate and various length LIBOR locks. All LIBOR selections are subject to an additional spread (0.475% as of June 30, 2010) over the selected rate based on Piedmont’s current credit rating.

(8)	Piedmont may extend the term for one additional year provided Piedmont is not then in default and upon the payment of a 15 basis point extension fee.

Piedmont Office Realty Trust, Inc.

Debt Analysis

As of June 30, 2010

Unaudited


Debt Covenant Compliance ⁽¹⁾	Required	Actual
Maximum Leverage Ratio	0.60	0.29
Minimum Fixed Charge Coverage Ratio⁽²⁾	1.50	4.60
Maximum Secured Indebtedness Ratio	0.40	0.24
Minimum Unencumbered Leverage Ratio	1.60	8.80
Minimum Unencumbered Interest Coverage Ratio ⁽³⁾	1.75	10.80
Maximum Certain Permitted Investments Ratio ⁽⁴⁾	0.35	0.03

⁽¹⁾	Debt covenant compliance calculations relate to specific calculations detailed in our term loan and line of credit agreements.

⁽²⁾

Defined as EBITDA for the trailing four quarters (including the company’s share of EBITDA from unconsolidated interests), less 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.

⁽³⁾

Defined as net operating income for the trailing four quarters for unencumbered assets (including the company’s share of net operating income from unconsolidated interests that are 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⁾	Permitted investments are defined as unconsolidated interests, debt investments, unimproved land, and development projects. Investments in permitted investments shall not exceed 35% of total asset value.


Other Debt Coverage Ratios	Three months ended June 30, 2010	Six months ended June 30, 2010	Year ended December 31, 2009
Other Debt Coverage Ratios	Three months ended June 30, 2010	Six months ended June 30, 2010	Year ended December 31, 2009
Net debt / Core EBITDA	3.9x	3.8x	4.2x
Fixed charge coverage ratio ⁽⁵⁾	4.5x	4.6x	4.6x
Interest coverage ratio ⁽⁶⁾	4.5x	4.6x	4.6x

⁽⁵⁾	Fixed charge coverage is calculated as Core EBITDA divided by the sum of interest expense, principal amortization, capitalized interest and preferred dividends. We had no capitalized interest, principal amortization or preferred dividends during the period ending June 30, 2010.

⁽⁶⁾	Interest coverage ratio is calculated as Core EBITDA divided by the sum of interest expense and capitalized interest. We had no capitalized interest during the period ending June 30, 2010.

Piedmont Office Realty Trust, Inc.

Tenant Diversification

As of June 30, 2010

(in thousands)


	Credit Rating ⁽¹⁾	Number of Properties	Lease Expiration(s) ⁽²⁾	Annualized Lease Revenue⁽³⁾		Percentage of Annualized Lease Revenue (%)	Leased Square Footage	Percentage of Leased Square Footage (%)
U.S. Government	AAA	10	⁽⁴⁾	$	75,950	13.0	1,684	9.3
BP ⁽⁵⁾	A	1	2013		32,184	5.5	784	4.3
Leo Burnett	BBB+	2	2019		28,171	4.8	695	3.8
US Bancorp	A+	1	2014		21,575	3.7	715	3.9
State of New York	AA	1	2019		18,769	3.2	481	2.6
Nestle	AA	1	2015		18,714	3.2	480	2.6
Winston & Strawn	No rating available⁽⁶⁾	1	2024		18,654	3.2	417	2.3
Sanofi-aventis	AA-	2	2012		17,338	3.0	454	2.5
Independence Blue Cross	No rating available	1	2023		14,897	2.5	761	4.2
Kirkland & Ellis	No rating available⁽⁶⁾	1	2011		11,612	2.0	366	2.0
Zurich American	AA-	1	2011		10,685	1.8	300	1.6
Shaw	BB+	1	2018		9,546	1.6	313	1.7
State Street Bank	AA-	1	2021		9,414	1.6	235	1.3
Lockheed Martin	A-	3	2014		8,796	1.5	284	1.6
DDB Needham	A-	1	2018		8,721	1.5	244	1.3
City of New York	AA	1	2020		7,863	1.3	313	1.7
Citigroup	A	2	2010		7,555	1.3	415	2.3
Gemini	A+	1	2013		7,532	1.3	205	1.1
Gallagher	No rating available	1	2018		6,995	1.2	307	1.7
Caterpillar Financial	A	1	2022		6,975	1.2	312	1.7
Other			Various		244,259	41.6	8,433	46.5

Total				$	586,205	100.0	18,198	100.0

LOGO

⁽¹⁾	Credit rating may reflect credit rating of parent or guarantor.

⁽²⁾	Represents the expiration year of the majority of the square footage leased by the tenant.

⁽³⁾	Please refer to page 29 for the definition of Annualized Lease Revenue.

⁽⁴⁾	There are several leases with several different agencies of the U.S. Government with expiration years ranging from 2011 to 2025.

⁽⁵⁾	Majority of space is subleased to Aon Corporation.

⁽⁶⁾	While no ratings are available for Winston & Strawn and Kirkland & Ellis, these tenants are ranked #33 and #5, respectively, in the 2010 AmLaw 100 ranking (based on 2009 financial data), a publication of The American Lawyer Magazine, which annually ranks the top-grossing, most profitable law firms.

Piedmont Office Realty Trust, Inc.

Credit Rating & Lease Distribution Information

As of June 30, 2010


Tenant Credit Rating ⁽¹⁾	Annualized Lease Revenue ($’s in thousands)		Percentage of Annualized Lease Revenue (%)
AAA	$	82,676	14.1
AA		96,053	16.4
A		128,113	21.9
BBB		70,252	12.0
BB		26,693	4.5
B		16,823	2.9
Below		1,401	0.2
Not rated		164,194	28.0

Total	$	586,205	100.0

Lease Distribution

As of June 30, 2010


	Number of Leases	Percentage of Leases (%)	Annualized Lease Revenue ($’s in thousands)		Percentage of Annualized Lease Revenue (%)	Leased Square Footage (in thousands)	Percentage of Leased Square Footage (%)
2,500 or Less	156	34.1	$	12,673	2.2	124	0.7
2,501 - 10,000	119	26.0		22,608	3.9	616	3.4
10,001 - 20,000	49	10.7		22,770	3.9	704	3.9
20,001 - 40,000	46	10.0		42,478	7.2	1,309	7.2
40,001 - 100,000	33	7.2		64,146	10.9	2,072	11.4
Greater than 100,000	55	12.0		421,530	71.9	13,373	73.4

Total	458	100.0	$	586,205	100.0	18,198	100.0

⁽¹⁾	Credit rating may reflect credit rating of parent or guarantor.

Piedmont Office Realty Trust, Inc.

Office Leasing Activity

(in thousands)

Three Months Ended June 30, 2010

Six Months Ended June 30, 2010

Leased Square
Footage

Rentable Square
Footage

Percent Leased ⁽¹⁾

Leased
Square
Footage

Rentable Square
Footage

Percent Leased ⁽¹⁾

As of March 31, 2010

18,116

20,230

89.6

As of December 31,
2009

18,221

20,229

90.1

New Leases

618

New Leases

1,153

Expired Leases

(537

)

Expired Leases

(1,177

)

Other

As of June 30, 2010 ⁽²⁾

18,198

20,274

89.8

As of June 30,
2010 ⁽²⁾

18,198

20,274

89.8

Rental Rate Roll Up / Roll Down⁽³⁾


	Square Feet		% Change Cash Rents		% Change Accrual Rents
*For the three months ended June 30, 2010:*

New, renewal, and expansion leases executed for spaces vacant less than one year	453		(21.6	%)	(22.4	%)
Percentage of rentable square footage	2.2	%

Leases executed for spaces excluded from analysis ⁽⁴⁾	104

*For the six months ended June 30, 2010:*

New, renewal, and expansion leases executed for spaces vacant less than one year	569		(21.5	%)	(21.2	%)
Percentage of rentable square footage	2.8	%

Leases executed for spaces excluded from analysis ⁽⁴⁾	168

⁽¹⁾

⁽²⁾

The square footage associated with leases with end of period expiration dates is included in the end of the period leased square footage.

⁽³⁾

The population analyzed consists of office leases executed during the quarter (retail leases as well as leases associated with our industrial properties and our unconsolidated joint venture assets were excluded from this analysis). For spaces that had been vacant for less than 1 year, the rents last in effect for the previous lease were compared to the initial rents of the new lease. Spaces that had been vacant for greater than 1 year were excluded from this analysis.

⁽⁴⁾	Represents leases signed at our consolidated office assets that do not qualify for inclusion in the analysis primarily because the space had been vacant for greater than one year.

Piedmont Office Realty Trust, Inc.

Lease Expiration Schedule

As of June 30, 2010

(in thousands)


	OFFICE PORTFOLIO					GOVERNMENTAL ENTITIES
	Annualized Lease Revenue ⁽¹⁾		Percentage of Annualized Lease Revenue (%)	Rentable Square Footage	Percentage of Rentable Square Footage (%)	Annualized Lease Revenue ⁽¹⁾		Percentage of Annualized Lease Revenue (%)
Vacant	$	0	0.0	2,076	10.2	$	0	0.0
2010⁽²⁾		28,256	4.8	1,029	5.1		542	0.1
2011		71,869	12.3	2,120	10.5		19,359	3.3
2012		81,474	13.9	2,216	10.9		36,687	6.3
2013		63,708	10.9	1,716	8.5		1,294	0.2
2014		51,866	8.8	1,668	8.2		3,601	0.6
2015		45,833	7.8	1,597	7.9		0	0.0
2016		29,961	5.1	1,060	5.2		1,029	0.2
2017		17,309	3.0	504	2.5		1,248	0.2
2018		43,712	7.5	1,455	7.2		8,604	1.5
2019		54,005	9.2	1,409	6.9		18,768	3.2
2020		26,548	4.5	996	4.9		10,463	1.8
2021		10,516	1.8	386	1.9		0	0.0
2022		8,631	1.5	341	1.7		0	0.0
2023		14,897	2.5	761	3.8		0	0.0
Thereafter		37,620	6.4	940	4.6		1,323	0.2


Total / Weighted Average	$	586,205	100.0	20,274	100.0	$	102,918	17.6

LOGO

⁽¹⁾	Annualized Lease Revenue for purposes of this schedule includes the revenue effects of leases executed but not commenced as of June 30, 2010.

⁽²⁾	Includes leases with an expiration date of June 30, 2010 aggregating 3,487 square feet and Annualized Lease Revenue of $77,288 for which no new leases were signed.

Piedmont Office Realty Trust, Inc.

Annual Lease Expirations

As of June 30, 2010

(in thousands)


	12/31/2010			12/31/2011			12/31/2012			12/31/2013
	Expiring Square Footage	Expiring Lease Revenue ⁽¹⁾		Expiring Square Footage	Expiring Lease Revenue ⁽¹⁾		Expiring Square Footage	Expiring Lease Revenue ⁽¹⁾		Expiring Square Footage	Expiring Lease Revenue ⁽¹⁾
Atlanta	55	$	1,783	84	$	2,019	34	$	602	46	$	1,068
Austin	0		0	0		0	0		0	0		0
Boston	1		32	0		2	7		332	0		29
Central & South Florida	6		195	124		2,736	16		439	55		1,353
Chicago	104		4,716	406		15,883	42		1,585	829		32,444
Cleveland	0		0	22		477	112		1,915	14		337
Dallas	19		334	286		6,117	86		2,246	9		230
Denver	0		0	0		0	0		0	0		0
Detroit	80		2,577	263		5,706	84		2,285	196		5,633
Houston	0		0	0		0	0		0	0		0
Los Angeles	76		3,620	100		3,619	191		4,048	59		2,150
Minneapolis	6		195	225		7,409	20		715	44		1,395
Nashville	0		0	0		0	0		0	0		0
New York	412		6,865	6		304	623		21,342	232		8,567
Philadelphia	0		0	0		0	0		0	0		0
Phoenix	91		1,890	45		789	0		0	0		0
Portland	73		1,305	105		1,502	73		1,279	0		0
Seattle	87		2,246	38		1,494	0		0	0		0
Washington, D.C.	19		1,571	416		22,757	928		44,416	232		10,151


Total / Weighted Average ⁽²⁾	1,029	$	27,329	2,120	$	70,814	2,216	$	81,204	1,716	$	63,357

⁽¹⁾	Expiring lease revenue is calculated as expiring square footage multiplied by the rent per square foot of the tenant currently leasing the space.

⁽²⁾

Total expiring lease revenue in any given year will not tie to the expiring Annualized Lease Revenue presented on the Lease Expiration Schedule as the Lease Expiration Schedule accounts for revenue effects of newly signed leases. Expirations in the Lease Expiration Schedule reflect rental rates of newly executed leases, effectively incorporating known roll ups and roll downs.

Piedmont Office Realty Trust, Inc.

Capital Expenditures by Type

For the quarter ended June 30, 2010

Unaudited (in thousands)


	For the Three Months Ended
	June 30, 2010		March 31, 2010		December 31, 2009		September 30, 2009		June 30, 2009
Non-incremental ⁽¹⁾
Bldg / construction / dev	$	3,606	$	2,638	$	2,539	$	458	$	969
Tenant improvements		6,117		3,591		10,278		3,527		5,232
Leasing costs		3,029		2,737		6,076		4,080		1,193

Total non-incremental		12,752		8,966		18,893		8,065		7,394

Incremental ⁽¹⁾
Bldg / construction / dev		439		250		1,559		741		326
Tenant improvements		0		0		19		0		0
Leasing costs		0		0		0		0		0

Total incremental		439		250		1,578		741		326


Total capital expenditures	$	13,191	$	9,216	$	20,471	$	8,806	$	7,720


Tenant improvement commitments ⁽²⁾
Tenant improvement commitments outstanding as of March 31, 2010	$	118,895
New tenant improvement commitments related to leases executed during period		14,436
Tenant improvement commitments fulfilled or expired ⁽³⁾		(20,915	)

Total as of June 30, 2010	$	112,416

NOTE: The information presented on this page is for all consolidated assets, inclusive of our industrial properties.

⁽¹⁾	Definitions for non-incremental and incremental capital expenditures can be found on pages 29 and 30.

⁽²⁾	Commitments are unexpired contractual tenant improvement obligations for leases executed in current and prior periods that have not yet been fulfilled. The three largest commitments total approximately $65.6 million, or 58% of total outstanding commitments.

⁽³⁾	Includes items that are presented on Piedmont’s financial statements through accrual entries for deferred tenant allowance items, including portions of tenant improvement allowances that can be used for moving costs or free rent or other similar expenditures.

Piedmont Office Realty Trust, Inc.

Contractual Tenant Improvements and Leasing Commissions


	For the Six Months Ended June 30, 2010		For the Year Ended
	For the Six Months Ended June 30, 2010		2009		2008		2007
Renewal Leases
Number of leases		14		34		34		39
Square feet		463,487		1,568,895		967,959		1,672,383
Tenant improvements per square foot	$	10.04	$	12.01	$	8.28	$	13.19
Leasing commissions per square foot	$	6.61	$	5.51	$	7.17	$	7.18

Total per square foot	$	16.65	$	17.52	$	15.45	$	20.37

Tenant improvements per square foot per year of lease term	$	1.37	$	1.44	$	1.39	$	1.85
Leasing commissions per square foot per year of lease term	$	0.90	$	0.66	$	1.20	$	1.01

Total per square foot per year of lease term	$	2.27	$	2.10	$	2.59	$	2.86


New Leases
Number of leases		17		28		37		44
Square feet		274,026		700,295		747,919		508,605
Tenant improvements per square foot	$	25.59	$	45.04	$	30.59	$	24.93
Leasing commissions per square foot	$	9.14	$	17.12	$	15.95	$	10.39

Total per square foot	$	34.73	$	62.16	$	46.54	$	35.32

Tenant improvements per square foot per year of lease term	$	3.31	$	4.05	$	3.24	$	3.29
Leasing commissions per square foot per year of lease term	$	1.18	$	1.54	$	1.69	$	1.37

Total per square foot per year of lease term	$	4.49	$	5.59	$	4.93	$	4.66


Total
Number of leases		31		62		71		83
Square feet		737,513		2,269,190		1,715,878		2,180,988
Tenant improvements per square foot	$	15.82	$	22.21	$	18.01	$	15.93
Leasing commissions per square foot	$	7.55	$	9.09	$	11.00	$	7.93

Total per square foot	$	23.37	$	31.30	$	29.01	$	23.86

Tenant improvements per square foot per year of lease term	$	2.12	$	2.42	$	2.41	$	2.21
Leasing commissions per square foot per year of lease term	$	1.01	$	0.99	$	1.47	$	1.10

Total per square foot per year of lease term	$	3.13	$	3.41	$	3.88	$	3.31

NOTE: This information is presented for our consolidated office assets only.

Piedmont Office Realty Trust, Inc.

Geographic Diversification

As of June 30, 2010


Location	Number of Properties	Annualized Lease Revenue ($’s in thousands)		Percentage of Annualized Lease Revenue (%)	Rentable Square Footage (in Thousands)	Percentage of Rentable Square Footage (%)	Leased Square Footage (in thousands)	Percent Leased (%)
Chicago	6	$	153,783	26.2	4,885	24.1	4,282	87.7
Washington, D.C.	14		116,115	19.8	3,045	15.0	2,590	85.1
New York	9		96,036	16.4	3,330	16.4	3,120	93.7
Minneapolis	2		37,056	6.3	1,228	6.1	1,211	98.6
Los Angeles	5		34,124	5.8	1,133	5.6	963	85.0
Dallas	7		26,783	4.6	1,275	6.3	1,167	91.5
Boston	4		23,783	4.1	583	2.9	562	96.4
Detroit	4		20,256	3.5	929	4.6	757	81.5
Philadelphia	1		14,897	2.5	761	3.8	761	100.0
Atlanta	3		11,800	2.0	607	3.0	467	76.9
Houston	1		9,562	1.6	313	1.5	313	100.0
Phoenix	4		7,732	1.3	557	2.7	434	77.9
Nashville	1		6,975	1.2	312	1.5	312	100.0
Central & South Florida	3		6,158	1.1	297	1.5	261	87.9
Austin	1		5,668	1.0	195	1.0	195	100.0
Portland	4		5,109	0.9	325	1.6	325	100.0
Seattle	1		4,318	0.7	156	0.8	147	94.2
Cleveland	2		3,338	0.6	187	0.9	175	93.6
Denver	1		2,712	0.4	156	0.7	156	100.0


Total/Weighted Average	73	$	586,205	100.0	20,274	100.0	18,198	89.8

LOGO

Piedmont Office Realty Trust, Inc.

Industry Diversification

As of June 30, 2010


Industry Diversification	Number of Tenants	Percentage of Total Tenants (%)	Annualized Lease Revenue ($’s in thousands)		Percentage of Annualized Lease Revenue (%)	Leased Square Footage (in thousands)	Percentage of Leased Square Footage (%)
Governmental Entity	5	1.3	$	102,918	17.6	2,486	13.6
Business Services	59	15.2		72,061	12.3	2,262	12.4
Depository Institutions	16	4.1		55,407	9.4	1,856	10.2
Legal Services	10	2.6		39,317	6.7	1,055	5.8
Insurance Carriers	21	5.4		35,908	6.1	1,460	8.0
Petroleum Refining & Related Industries	1	0.2		32,184	5.5	784	4.3
Chemicals & Allied Products	8	2.0		24,631	4.2	736	4.0
Nondepository Credit Institutions	9	2.3		21,506	3.7	824	4.5
Engineering, Accounting, Research, Management & Related Services	24	6.2		19,909	3.4	545	3.0
Food & Kindred Products	3	0.8		19,455	3.3	509	2.8
Communications	35	9.0		17,380	3.0	607	3.3
Security & Commodity Brokers, Dealers, Exchanges & Services	18	4.6		15,056	2.6	532	2.9
Electronic & Other Electrical Equipment & Components, Except Computer	9	2.3		13,918	2.4	615	3.4
Educational Services	8	2.1		11,974	2.0	279	1.5
Transportation Equipment	3	0.8		10,394	1.8	325	1.8
Other	160	41.1		94,187	16.0	3,323	18.5

Total	389	100.0	$	586,205	100.0	18,198	100.0

LOGO

Piedmont Office Realty Trust, Inc.

Other Investments

As of June 30, 2010


INDUSTRIAL PROPERTIES	Location	Percent Ownership (%)	Year Built			Real Estate Net Book Value ($’s in thousands)		Rentable Square Footage (in thousands)	Percent Leased (%)
112 Hidden Lake Circle	Duncan, SC	100	1987			$	9,198	313.4	100.0
110 Hidden Lake Circle	Duncan, SC	100	1987				13,408	473.4	36.8

						$	22,606	786.8	61.9


UNCONSOLIDATED JOINT VENTURE PROPERTIES	Location	Percent Ownership (%)	Year Built	Piedmont Share of Real Estate Net Book Value ($’s in thousands)		Real Estate Net Book Value ($’s in thousands)		Rentable Square Footage (in thousands)	Percent Leased (%)
14400 Hertz Quail Springs Parkway	Oklahoma City, OK	4	1997	$	151	$	4,101	57.2	100.0
360 Interlocken	Broomfield, CO	4	1996		238		6,456	51.7	22.3
47300 Kato Road	Fremont, CA	78	1982		2,684		3,464	58.4	0.0
20/20 Building	Leawood, KS	57	1992		2,692		4,743	68.2	90.8
4685 Investment Drive	Troy, MI	55	2000		5,262		9,565	77.1	100.0
5301 Maryland Way	Brentwood, TN	55	1989		11,220		20,396	201.2	100.0
8560 Upland Drive	Parker, CO	72	2001		7,786		10,830	148.2	100.0
Two Park Center	Hoffman Estates, IL	72	1999		11,816		16,436	193.7	83.0

				$	41,849	$	75,991	855.7	83.9


LAND PARCELS	Location							Acres
Portland Land Parcels	Beaverton, OR							18.2
Enclave Parkway	Houston, TX							4.5
Durham Avenue	South Plainfield, NJ							8.9
Corporate Court	Holtsville, NY							10.0
State Highway 161	Irving, TX							4.5
Sylvan Avenue	Englewood Cliffs, NJ							2.4

								48.5


STRUCTURED FINANCE	Location					Book Value ($’s in thousands)
Mezzanine Loan⁽¹⁾	Chicago, IL					$	48,054
Mezzanine Loan⁽¹⁾	Chicago, IL						12,047

						$	60,101

⁽¹⁾	Secured by a pledge of the equity interest of the entity owning a 46-story, Class A commercial office building located in downtown Chicago.

Piedmont Office Realty Trust, Inc.

Supplemental Definitions

Included in this section are management’s statements regarding certain non-GAAP financial measures provided in this supplemental package and reasons why management believes that these measures provide useful information to investors about the Company’s financial condition and results of operations. Reconciliations of these non-GAAP measures are presented on pages 32-35.

Adjusted Funds From Operations (“AFFO”): AFFO is calculated by deducting from Core FFO non-incremental capital expenditures and adding back non-cash items including non-real estate depreciation, straight lined rents and fair value lease revenue, non-cash components of interest expense and compensation expense, and by making similar adjustments for unconsolidated partnerships and joint ventures. Although AFFO may not be comparable to that of other REITs, we believe it provides a meaningful indicator of our ability to fund cash needs and to make cash distributions to equity owners. AFFO is a non-GAAP financial measure and should not be viewed as an alternative measurement of our operating performance to net income, as an alternative to net cash flows from operating activities or as a measure of our liquidity.

Annualized Lease Revenue (“ALR”): ALR is calculated by multiplying (i) rental payments (defined as base rent plus operating expenses, if payable by the tenant on a monthly basis under the terms of a lease that have been executed, but excluding rental abatements and rental payments related to executed but not commenced leases for space that was covered by an existing lease), by (ii) 12. In instances in which contractual rents and operating expenses are collected on an annual, semi-annual, or quarterly basis, such amounts are multiplied by a factor of 1, 2, or 4, respectively, to calculate the annualized figure. For leases that have been executed but not commenced relating to un-leased space, ALR is calculated by multiplying (i) monthly base rental payments for the initial month of the lease term, by (ii) 12. Unless stated otherwise, this measure excludes our industrial properties and unconsolidated joint venture interests.

Core EBITDA: Core EBITDA is defined as net income before interest, taxes, depreciation and amortization and incrementally adding back any impairment losses and other extraordinary items. We do not include impairment losses in this measure because we feel these types of losses create volatility in our earnings and make it difficult to determine the earnings generated by our ongoing business. We believe Core EBITDA is a reasonable measure of our liquidity. Core EBITDA is a non-GAAP financial measure and should not be viewed as an alternative measurement of cash flows from operating activities or liquidity. Other REITs may calculate Core EBITDA differently and our calculation should not be compared to that of other REITs.

Core Funds From Operations (“Core FFO”): We calculate Core FFO by starting with FFO, as defined by NAREIT, and adjust for certain non-recurring items such as impairment losses and other extraordinary items. Such items create significant earnings volatility. We believe Core FFO provides a meaningful measure of our operating performance and more predictability regarding future earnings potential. Core FFO is a non-GAAP financial measure and should not be viewed as an alternative measurement of our operating performance to net income; therefore, it should not be compared to other REITs’ equivalent to Core FFO.

Core Net Operating Income (“Core NOI”): Core NOI is defined as real estate operating income with the add-back of corporate general and administrative expense, depreciation and amortization, and casualty and impairment losses and the deduction of income and expense associated with lease terminations. We present this measure on an accrual basis and a cash basis, which eliminates the effects of straight lined rents and fair value lease revenue. The company uses this measure to assess its operating results and believes it is important in assessing operating performance. Core NOI is a non-GAAP measure which does not have any standard meaning prescribed by GAAP and therefore may not be comparable to similar measures presented by other companies.

EBITDA: EBITDA is defined as net income before interest, taxes, depreciation and amortization. We believe EBITDA is an appropriate measure of our ability to incur and service debt. EBITDA should not be considered as an alternative to cash flows from operating activities, as a measure of our liquidity or as an alternative to net income as an indicator of our operating activities. Other REITs may calculate EBITDA differently and our calculation should not be compared to that of other REITs.

Funds From Operations (“FFO”): FFO is calculated in accordance with the current National Association of Real Estate Investment Trusts (“NAREIT”) definition. NAREIT currently defines FFO as net income (computed in accordance with GAAP), excluding gains or losses from sales of property, plus depreciation and amortization on real estate assets, and after the same adjustments for unconsolidated partnerships and joint ventures. Such factors can vary among owners of identical assets in similar conditions based on historical cost accounting and useful-life estimates. FFO may provide valuable comparisons of operating performance between periods and with other REITs. FFO is a non-GAAP financial measure and should not be viewed as an alternative measurement of our operating performance to net income. We believe that FFO is a beneficial indicator of the performance of an equity REIT. However, other REITs may not define FFO in accordance with the NAREIT definition, or may interpret the current NAREIT definition differently than we do; therefore, our computation of FFO may not be comparable to that of such other REITs.

Incremental Capital Expenditures: Incremental Capital Expenditures are defined as capital expenditures of a non-recurring nature that incrementally enhance the underlying assets’ income generating capacity. Tenant improvements, leasing commissions, building capital and deferred lease incentives incurred to lease space that was dark at acquisition, improvements associated with the expansion of a building and renovations that change the underlying classification of a building are included in this measure.

Piedmont Office Realty Trust, Inc.

Supplemental Definitions

NOI from Unconsolidated Joint Ventures: NOI from Unconsolidated Joint Ventures is defined as Core NOI attributable to our interest in eight properties owned through unconsolidated partnerships. We present this measure on a cash basis which eliminates the effects of straight lined rents and fair value lease revenue. NOI from Unconsolidated Joint Ventures is a non-GAAP measure and therefore may not be comparable to similarly defined data provided by other REITs.

Non-Incremental Capital Expenditures: Non-Incremental Capital Expenditures are defined as capital expenditures of a recurring nature related to tenant improvements and leasing commissions that do not incrementally enhance the underlying assets’ income generating capacity. We exclude first generation tenant improvements and leasing commissions from this measure.

Same Store NOI: Same Store NOI is calculated as the Core NOI attributable to the properties owned or placed in service during the entire span of the current and prior year reporting periods. Same Store NOI excludes amounts attributable to industrial properties. We present this measure on an accrual basis and a cash basis, which eliminates the effects of straight lined rents and fair value lease revenue. We believe Same Store NOI is an important measure of comparison of our stabilized properties’ operating performance. Other REITs may calculate Same Store NOI differently and our calculation should not be compared to that of other REITs.

Same Store Properties: Same Store Properties is defined as properties owned or placed in service during the entire span of the current and prior year reporting periods. Same Store Properties excludes industrial properties. We believe Same Store Properties is an important measure of comparison of our stabilized portfolio performance.

Piedmont Office Realty Trust, Inc.

Research Coverage


Paul E. Adornato, CFA	John W. Guinee, III	Brendon Maiorana
BMO Capital Markets	Stifel, Nicolaus & Company	Wells Fargo
3 Time Square	One South Street	7 St. Paul Street
New York, New York 10036	16th Floor	MAC R1230-011
Phone: (212) 885-4170	Baltimore, MD 21202	Baltimore, MD 21202
	Phone: (443) 224-1307	Phone: (443) 263-6516

Anthony Paolone, CFA	David B. Rodgers, CFA
JP Morgan	RBC Capital Markets
277 Park Avenue	Arbor Court
New York, NY 10172	30575 Bainbridge Road, Suite 250
Phone: (212) 622-6682	Solon, OH 44139
	Phone: (440) 715-2647

Piedmont Office Realty Trust, Inc.

Same Store Net Operating Income (Cash Basis)

Unaudited (in thousands)


	Three Months Ended															Six Months Ended
	6/30/2010			3/31/2010			12/31/2009			9/30/2009			6/30/2009			6/30/2010			6/30/2009
Net income attributable to Piedmont	$	19,636		$	31,460		$	25,946		$	(8,260	)	$	27,976		$	51,096		$	57,014

Non-controlling interest		125			126			119			121			120			251			238
Interest expense		18,933			19,091			19,488			19,518			19,394			38,024			38,736
Depreciation		26,050			26,428			27,434			27,159			26,927			52,479			52,917
Amortization		11,104			11,487			16,273			14,095			13,797			22,592			27,339
Impairment loss on real estate assets		9,587			—			—			37,633			—			9,587			—

Core EBITDA		85,435			88,592			89,260			90,266			88,214			174,029			176,244

General & administrative expenses		7,993			6,696			6,297			5,757			8,102			14,689			15,505
Management fee revenue		(705	)		(753	)		(928	)		(742	)		(744	)		(1,458	)		(1,441	)
Interest and other income		(1,036	)		(969	)		(652	)		(1,989	)		(1,147	)		(2,005	)		(1,809	)
Lease termination income		(479	)		(496	)		(1,982	)		—			(782	)		(975	)		(781	)
Lease termination expense - straight line rent & acquisition intangibles write-offs		679			67			552			627			174			746			174
Straight line rent adjustment		(1,462	)		1,006			(2,619	)		(1,508	)		(1,378	)		(457	)		1,318
Net effect of amortization of above/(below) market in-place lease intangibles		(1,525	)		(1,426	)		(1,212	)		(1,249	)		(1,247	)		(2,952	)		(2,477	)

Core net operating income		88,900			92,717			88,716			91,162			91,192			181,617			186,733

Acquisitions		—			—			—			—			—			—			—
Industrial properties		(91	)		(273	)		(638	)		(638	)		(642	)		(365	)		(1,282	)
Unconsolidated joint ventures		(1,187	)		(1,268	)		(1,156	)		(1,171	)		(1,275	)		(2,453	)		(2,467	)

Same Store NOI	$	87,622		$	91,176		$	86,922		$	89,353		$	89,275		$	178,799		$	182,984

Piedmont Office Realty Trust, Inc.

Net Income/ FFO/ Core FFO/ AFFO Reconciliations

Unaudited (in thousands)


	Three Months Ended															Six Months Ended
	6/30/2010			3/31/2010			12/31/2009			9/30/2009			6/30/2009			6/30/2010			6/30/2009
NET INCOME/ (LOSS) ATTRIBUTABLE TO PIEDMONT	$	19,636		$	31,460		$	25,946			($ 8,260	)	$	27,976		$	51,096		$	57,014

Depreciation		25,872			26,250			27,263			27,004			26,773			52,122			52,611
Amortization		11,104			11,487			16,273			14,095			13,797			22,592			27,339


FUNDS FROM OPERATIONS (FFO)	$	56,612		$	69,197		$	69,482		$	32,839		$	68,546		$	125,810		$	136,964


Impairment loss		9,587			0			0			37,633			0			9,587			0

CORE FUNDS FROM OPERATIONS	$	66,199		$	69,197		$	69,482		$	70,472		$	68,546		$	135,397		$	136,964


Depreciation of non real estate assets		178			178			171			155			154			357			306
Stock-based and other non-cash compensation expense		711			653			671			671			831			1,364			1,835
Deferred financing cost amortization		696			696			696			696			685			1,392			1,394
Straight-line effects of lease revenue		(784	)		1,073			(1,619	)		(846	)		(1,227	)		289			1,469
Amortization of lease related intangibles		(1,525	)		(1,426	)		(1,663	)		(1,283	)		(1,223	)		(2,951	)		(2,453	)
Income from amortization of discount on purchase of mezzanine loans		(694	)		(668	)		(334	)		(648	)		(929	)		(1,362	)		(1,296	)

Non-incremental capital expenditures		(12,752	)		(8,966	)		(18,893	)		(8,065	)		(7,394	)		(21,718	)		(18,804	)

ADJUSTED FUNDS FROM OPERATIONS	$	52,029		$	60,737		$	48,511		$	61,152		$	59,443		$	112,768		$	119,415

Piedmont Office Realty Trust, Inc.

Unconsolidated Joint Venture NOI Reconciliation

Pro-rata (in thousands)


	Three Months Ended															Six Months Ended
	6/30/2010			3/31/2010			12/31/2009			9/30/2009			6/30/2009			6/30/2010			6/30/2009
Equity in Income of Unconsolidated JVs	$	647		$	737		$	672		($	1,985	)	$	754		$	1,384		$	1,417

Interest expense
Depreciation		337			348			344			367			366			685			727
Amortization		101			101			101			104			102			202			203
Impairment loss		—			—			—			2,570			—			—			—

Core EBITDA		1,085			1,186			1,117			1,056			1,222			2,271			2,347

General & administrative expenses		39			66			71			56			7			105			38

Interest and other income		—			—			—			—			—			—			—


Core net operating income (accrual basis)		1,124			1,252			1,188			1,112			1,229			2,376			2,385
Straight-line effects of lease revenue		64			17			(31	)		60			47			80			85
Net effect of amortization of above/(below) market in-place lease intangibles		(1	)		(1	)		(1	)		(1	)		(1	)		(3	)		(3	)

Core net operating income (cash basis)	$	1,187		$	1,268		$	1,156		$	1,171		$	1,275		$	2,453		$	2,467

Piedmont Office Realty Trust, Inc.

Discontinued Operations

Unaudited (in thousands)


	Three Months Ended												Six Months Ended
	6/30/2010			3/31/2010			12/31/2009		9/30/2009		6/30/2009		6/30/2010			6/30/2009
Revenues:
Rental income	$	1,594		$	1,595		$	1,594	$	1,595	$	1,594	$	3,189		$	3,188
Tenant reimbursements		—			(2	)		—		2		—		(2	)		—
Property management fee revenue		—			—			—		—		—		—			—
Other rental income		—			—			—		—		—		—			—

Total revenues		1,594			1,593			1,594		1,597		1,594		3,187			3,188

Operating expenses:
Property operating costs		8			9			19		26		13		17			55
Depreciation		130			389			389		389		389		519			778
Amortization		—			—			—		—		—		—			—
General and administrative		2			10			7		45		18		12			26

Total operating expenses		140			408			415		460		420		548			859


Operating income, excluding impairment loss		1,454			1,185			1,179		1,137		1,174		2,639			2,329

Impairment loss		(9,587	)		—			—		—		—		(9,587	)		—


(Loss)/income from discontinued operations	$	(8,133	)	$	1,185		$	1,179	$	1,137	$	1,174	$	(6,948	)	$	2,329

Piedmont Office Realty Trust, Inc.

Supplemental Operating & Financial Data

Risks, Uncertainties and Limitations

Certain statements contained in this supplemental package constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We intend for all such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the Exchange Act, as applicable. Such information is subject to certain risks and uncertainties, as well as known and unknown risks, which could cause actual results to differ materially from those projected or anticipated. Therefore, such statements are not intended to be a guarantee of our performance in future periods. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “anticipate,” “believe,” “continue” or similar words or phrases that are predictions of future events or trends and which do not relate solely to historical matters.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this supplemental report. We cannot guarantee the accuracy of any such forward-looking statements contained in this supplemental report, and we do not intend to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.