Piedmont Office Realty Trust, Inc.

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pdm-20211027

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): October 27, 2021

Piedmont Office Realty Trust, Inc.

(Exact name of registrant as specified in its charter)

Commission File Number: 001-34626


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

5565 Glenridge Connector Ste. 450

Atlanta, Georgia 30342

(Address of principal executive offices, including zip code)

(770) 418-8800

(Registrant's telephone number, including area code)

Not applicable

(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:

☐ 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))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Stock, $0.01 par value

PDM

New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.o

Item 2.02 Results of Operations and Financial Condition.

On October 27, 2021, Piedmont Office Realty Trust, Inc. (the "Registrant") issued a press release announcing its financial results for the third quarter 2021, and published supplemental information for the third quarter 2021 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 October 27, 2021.

99.2						Piedmont Office Realty Trust, Inc. Quarterly Supplemental Information for the Third Quarter 2021.

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

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.

(Registrant)

Dated:

October 27, 2021

By:

/s/ Robert E. Bowers

Robert E. Bowers

Chief Financial Officer and Executive Vice President

Document

EXHIBIT 99.1

https://cdn.kscope.io/4f39fba7d1d2a6db082d312a09a86fbd-image1.jpg

Piedmont Office Realty Trust Reports Third Quarter 2021 Results and Raises Guidance

ATLANTA, October 27, 2021--Piedmont Office Realty Trust, Inc. ("Piedmont" or the "Company") (NYSE:PDM), an owner of Class A office properties located primarily in seven major Eastern U.S. markets with a majority of its revenue being generated from the Sunbelt, today announced its results for the quarter ended September 30, 2021.

Highlights for the Quarter Ended September 30, 2021:

Financial Results:

•The Company reported net income applicable to Piedmont of $11.3 million, or $0.09 per diluted share, for the quarter ended September 30, 2021, as compared to $8.9 million, or $0.07 per diluted share, for the quarter ended September 30, 2020.

•Piedmont reported Core Funds From Operations ("Core FFO") of $62.0 million, or $0.50 per diluted share, for the quarter ended September 30, 2021, as compared to $60.2 million, or $0.48 per diluted share, for the quarter ended September 30, 2020.

•Piedmont reported an 12% and 5% increase in Same Store Net Operating Income ("Same Store NOI") on a cash and accrual basis, respectively, for the quarter ended September 30, 2021 as compared to the quarter ended September 30, 2020.

•The Company has raised and narrowed its 2021 financial guidance to a range of $1.95 to $1.98 per diluted share of Core FFO, as compared to its previously announced range of $1.90 to $1.96 per diluted share of Core FFO.

Leasing:

•The Company completed approximately 509,000 square feet of leasing across all of its major markets, including approximately 221,000 square feet of new tenant leasing.

•Piedmont reported an approximately 11% and 16% roll up in cash and accrual basis rents, respectively, based on leases executed during the quarter ended September 30, 2021 for space vacant one year or less.

•The Company's reported average lease size was approximately 15,000 square feet and the portfolio was approximately 86% leased as of September 30, 2021.

Capital Markets (Including Subsequent Event):

•As previously announced, the Company is under binding contract to sell 225 & 235 Presidential Way in Woburn, MA for $129.0 million, or $293 per square foot, to an investment-grade buyer. The sale is expected to close in early 2022, subject to customary closing conditions.

•On October 22, 2021, Piedmont acquired 999 Peachtree Street, a 622,000 square foot, approximately 77% leased, LEED Platinum, 28-story, office building located in Atlanta, GA for $223.9 million, or $360 psf.

•After the completion of both of the above transactions, approximately 55% of the Company's Annualized Lease Revenue will be generated from the Sunbelt.

Balance Sheet:

•The Company issued $300 million in aggregate principal amount of 2.75% Senior Notes due 2032 and used the proceeds to repay, without penalty, its Amended and Restated $300 million Unsecured 2011 Term Loan that was scheduled to mature in November of 2021.

•The Company's average net debt-to-Core EBITDA ratio as of September 30, 2021 was 5.5 x.

•The Company's Debt-to-Gross Assets ratio was 34.4% as of September 30, 2021.

•As of September 30, 2021, the Company had no secured debt and approximately $422 million of available capacity on its $500 million line of credit.

ESG and Operations:

•Piedmont's entire approximately 17 million square foot portfolio has been submitted to the International WELL Building Institute ("IWBI") for WELL Health-Safety Rating.

•All three of the Dallas Galleria Office Towers obtained Building Owners and Managers Association ("BOMA") 360 Designations.

•Three buildings won regional The Outstanding Building of the Year ("TOBY") awards.

•Piedmont awarded scholarships to two students, one at Howard University in Washington, D.C. and the other at Morehouse College in Atlanta, GA.

•Piedmont was recognized by the Make-a-Wish Georgia chapter for outstanding community involvement through its 2020 annual Make-a-Wish grant.

Commenting on third quarter results, Brent Smith, President and Chief Executive Officer, said, "In addition to reporting strong financial metrics for the quarter, we also made progress on a number of strategic objectives including a sizeable debt refinancing, major capital recycling transaction, and numerous ESG initiatives. Perhaps most encouraging to our business was that new tenant leasing returned to pre-pandemic levels, demonstrating both optimism around the office sector’s recovery and the resiliency of our portfolio." Smith added, "Furthermore, we are extremely excited to announce our acquisition and vision for 999 Peachtree Street, an iconic building located in the heart of midtown Atlanta. This LEED Platinum building provides Piedmont with a foothold in one of the most vibrant, active submarkets in the country at an attractive basis and with immediate scale. We look forward to revitalizing the asset and driving income growth by providing a unique, differentiated product with outdoor amenities that are unmatched in the submarket today."

Results for the Quarter ended September 30, 2021

Piedmont recognized net income applicable to Piedmont for the three months ended September 30, 2021 of $11.3 million, or $0.09 per diluted share, compared to $8.9 million, or $0.07 per diluted share, for the three months ended September 30, 2020, with the $0.02 per share increase primarily attributable to rising rental rates, decreased operating expenses, particularly related to our landlord's portion of real estate taxes, as well as the expiration of operating expense recovery abatements on certain leases. These improvements were partially offset by a 0.9% reduction in our overall leased percentage on a year-to-date basis as a result of reduced new leasing activity in 2020 and the first half of 2021 due to the COVID-19 pandemic.

ended September 30, 2021 as compared to $60.2 million, or $0.48 per diluted share, for the three months ended September 30, 2020. The $0.02 per share increase in both metrics was primarily attributable to the same factors noted in net income above.

Total revenues were $131.1 million for the three months ended September 30, 2021, compared to $131.7 million for the three months ended September 30, 2020, with the loss of revenue related to 2020 disposition activity generally being offset by higher rental rates and reimbursement and other income at certain properties in 2021.

Property operating costs were $51.8 million for the three months ended September 30, 2021, as compared with $53.3 million for the three months ended September 30, 2020, with the decrease primarily related to lower real estate taxes at certain properties, as well as the impact of disposition activity that occurred during 2020.

General and administrative expense was $7.0 million for the third quarter of 2021, as compared to $5.5 million for the same period in 2020, with the three months ended September 30, 2020 primarily reflecting reduced accruals during 2020 for potential performance based compensation tied to operating results, particularly leasing, which was impacted by the COVID-19 pandemic.

Leasing Update

During the three months ended September 30, 2021, Piedmont completed approximately 509,000 square feet of leasing, which was widely dispersed throughout the portfolio and included approximately 221,000 square feet of new tenant leasing. The weighted average lease term for the approximately 50 leases executed during the third quarter was 6.4 years with the largest lease completed during the third quarter being a 10-year renewal and expansion totaling approximately 155,000 square feet at 5&15 Wayside in Burlington, MA. No other individual lease executed during the quarter was as large as 25,000 square feet.

Leases executed during the third quarter of 2021 for recently occupied space reflected a 10.5% and 16.1% roll up in cash and accrual rents, respectively. As of September 30, 2021, the Company's reported leased percentage and weighted average remaining lease term were approximately 86% and 6.1 years, respectively.

Same Store NOI increased 11.6% and 5.0% on a cash and accrual basis, respectively, for the quarter ended September 30, 2021 as compared to the quarter ended September 30, 2020, with the increase in both metrics primarily attributable to rising rental rates and decreased operating expenses, particularly property taxes, as well as the expiration of abatements at certain properties, partially offset by lower overall occupancy (0.9% year-to-date) due to slow leasing in 2020 and the first half of 2021 due to the COVID-19 pandemic. As of September 30, 2021, the Company had approximately 770,000 square feet of executed leases for vacant space yet to commence or under rental abatement.

Financing and Transactional Activity

During the three months ended September 30, 2021, the Company issued $300 million in aggregate principal amount of 2.75% Senior Notes due 2032 and used the proceeds to repay its Amended and Restated $300 million Unsecured 2011 Term Loan that was scheduled to mature in November of 2021.

As previously announced, the Company is under binding contract to sell 225 and 235 Presidential Way in Woburn, MA for $129.0 million, or $293 per square foot, to an investment-grade buyer. The sale is expected to close in early 2022, subject to customary closing conditions.

Subsequent to quarter end, on October 22, 2021, Piedmont acquired 999 Peachtree Street, a 622,000 square foot, approximately 77% leased, LEED-Platinum, 28-story, office building located in Atlanta, GA for $223.9 million, or $360 psf. Located at the corner of Peachtree and 10th Streets in the heart of Midtown, the property offers spectacular views of the Midtown skyline and nearby Piedmont Park. Superior accessibility to the interstate, MARTA (commuter rail system) and the Midtown/ Beltline bike path, along with premier amenities and close proximity to Georgia Tech and more than 30,000 residents within a 1-mile radius, make 999 Peachtree Street a compelling location for prospective tenants. The acquisition marks Piedmont's entry into Midtown Atlanta, one of the most vibrant, active submarkets in the country. Piedmont plans an exciting redevelopment project to revitalize the asset and deliver a premiere tenant experience.

ESG and Other Operational Initiatives

In addition to Piedmont's Atlanta Galleria assets that have already received a WELL Health-Safety rating, the remainder of Piedmont's entire approximately 17 million square foot portfolio has been submitted to the IWBI for WELL Health-Safety Rating. The WELL Health-Safety Rating is an evidence-based, third-party verified rating for all new and existing building and facility types focused on operational policies, maintenance protocols, occupant engagement and emergency plans to prioritize the health and safety of their staff, visitors and stakeholders during the COVID-19 crisis and for the long-term.

All three of the Company's Dallas Galleria Office Towers obtained BOMA 360 Designations during the three months ended September 30, 2021. Consequently, approximately 90% of the Company's portfolio is now designated as BOMA 360. In addition, three buildings - 5 Wall Street in Boston, MA and Norman Pointe I and US Bancorp Center, both in Minneapolis, MN - won regional TOBY awards.

During the three months ended September 30, 2021, Piedmont awarded scholarships to two students, one at Howard University in Washington, D.C. and the other at Morehouse College in Atlanta, GA. The scholarships were awarded pursuant to the Piedmont Office Realty Trust Scholarship Program, whereby Piedmont has partnered with two Historically Black Colleges and Universities to provide need-based, scholastic support to selected rising sophomores interested in pursuing a career related to the real estate industry along with the opportunity to join Piedmont in a summer internship position.

Fourth Quarter 2021 Dividend Declaration

On October 27, 2021, the board of directors of Piedmont declared a dividend for the fourth quarter of 2021 in the amount of $0.21 per share on its common stock to stockholders of record as of the close of business on November 26, 2021, payable on January 4, 2022.

Guidance for 2021

The Company has raised and narrowed its 2021 financial guidance for calendar year 2021 to a range of $1.95 to $1.98 per diluted share of Core FFO, as compared to its previously announced range of $1.90 to $1.96 per diluted share of Core FFO. This guidance is based upon management's assumptions, estimates and expectations based on information available to management as of the date of this release. These estimates reflect year-to-date operating and leasing results, as well as management's view of current market conditions, and incorporate certain economic and operational assumptions and projections, including those related to the pace and strength of the ongoing economic recovery from the COVID-19 pandemic. They also include the effect of the acquisition of 999 Peachtree Street, but no other acquisition or disposition activity that may be completed during the year. Actual results could differ materially from these estimates based on a variety of factors as discussed under "Forward-Looking Statements" below.


(in millions, except per share data)	Low	High
Net Income	$40	$41
Add:
Depreciation	119	121
Amortization	84	85

NAREIT FFO and Core FFO applicable to common stock	$243	$247
NAREIT FFO and Core FFO per diluted share	$1.95	$1.98

Note that individual quarters may fluctuate on both a cash basis and an accrual basis due to the timing of lease commencements and expirations, abatement periods, repairs and maintenance expenses, capital expenditures, capital markets activities, seasonal general and administrative expenses, accrued potential performance-based compensation expenses, and one-time revenue or expense events.

Non-GAAP Financial Measures

To supplement the presentation of the Company’s financial results prepared in accordance with U.S. generally accepted accounting principles ("GAAP"), this release and the accompanying quarterly supplemental information as of and for the period ended September 30, 2021 contain certain financial measures that are not prepared in accordance with GAAP, including FFO, Core FFO, AFFO, Same Store NOI (cash and accrual basis), Property NOI (cash and accrual basis), EBITDAre, and Core EBITDA. Definitions and reconciliations of each of these non-GAAP measures to their most comparable GAAP metrics are included below and in the accompanying quarterly supplemental information.

Each of the non-GAAP measures included in this release and the accompanying quarterly supplemental financial information has limitations as an analytical tool and should not be considered in isolation or as a substitute for an analysis of the Company’s results calculated in accordance with GAAP. In addition, because not all companies use identical calculations, the Company’s presentation of non-GAAP measures in this release and the accompanying quarterly supplemental information may not be comparable to similarly titled measures disclosed by other companies, including other REITs. The Company may also change the calculation of any of the non-GAAP measures included in this news release and the accompanying supplemental financial information from time to time in light of its then existing operations.

Conference Call Information

Piedmont has scheduled a conference call and an audio web cast for Thursday, October 28, 2021 at 11:00 A.M. Eastern daylight time. The live, listen-only, audio web cast of the call may be accessed on the Company's website at http://investor.piedmontreit.com/news-and-events/events-calendar. Dial-in numbers for analysts who plan to actively participate in the call are (888) 506-0062 for participants in the United States and Canada and (973) 528-0011 for international participants. Participant Access Code is 439514. A replay of the conference call will be available through 11:00 A.M. Eastern time on November 11, 2021, and may be accessed by dialing (877) 481-4010 for participants in the United States and Canada and (919) 882-2331 for international participants, followed by conference identification code 43158. A web cast replay will also be available after the conference call in the Investor Relations section of the Company's website. During the audio web cast and conference call, the Company's management team will review third quarter 2021 performance, discuss recent events, and conduct a question-and-answer period.

Supplemental Information

Quarterly supplemental information as of and for the period ended September 30, 2021 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. (NYSE: PDM) is an owner, manager, developer, redeveloper, and operator of high-quality, Class A office properties located primarily in select sub-markets within seven major Eastern U.S. office markets, with the majority of its revenue being generated from the Sunbelt. Its geographically-diversified, approximately $5 billion portfolio is currently comprised of approximately 17 million square feet. The Company is a fully-integrated, self-managed real estate investment trust (REIT) with local management offices in each of its markets and is investment-grade rated by S&P Global Ratings (BBB) and Moody’s (Baa2). Piedmont is a 2021 ENERGY STAR Partner of the Year. For more information, see www.piedmontreit.com.

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"). The Company intends 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 the Company`s 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," "estimate," "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: whether approximately 55% of the Company's Annualized Lease Revenue will be generated from the Sunbelt after completion of the acquisition of 999 Peachtree Street and the disposition of 225 and 235 Presidential Way; whether the Company will revitalize 999 Peachtree Street and drive income growth by providing a unique, differentiated product with outdoor amenities that are unmatched in the Midtown Atlanta submarket today; the expected timing of dispositions; and the Company's estimated range of Net Income, Depreciation, Amortization, NAREIT FFO/Core FFO and NAREIT FFO/Core FFO per diluted share for the year ending December 31, 2021. These statements are based on beliefs and assumptions of Piedmont’s management, which in turn are based on information available at the time the statements are made.

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: economic, regulatory, socioeconomic changes, and/or technology changes (including accounting standards) that impact the real estate market generally, or that could affect patterns of use of commercial office space; the impact of competition on our efforts to renew existing leases or re-let space on terms similar to existing leases; changes in the economies and other conditions affecting the office sector in general and specifically the seven markets in which we primarily operate where we have high concentrations of our annualized lease revenue; lease terminations, lease defaults, or changes in the financial condition of our tenants, particularly by one of our large lead tenants; adverse market and economic conditions, including any resulting impairment charges on both our long-lived assets or goodwill resulting therefrom; the success of our real estate strategies and

investment objectives, including our ability to identify and consummate suitable acquisitions and divestitures; the illiquidity of real estate investments, including regulatory restrictions to which REITs are subject and the resulting impediment on our ability to quickly respond to adverse changes in the performance of our properties; the risks and uncertainties associated with our acquisition and disposition of properties, many of which risks and uncertainties may not be known at the time of acquisition or disposition; development and construction delays and resultant increased costs and risks; our real estate development strategies may not be successful; future acts of terrorism, civil unrest, or armed hostilities in any of the major metropolitan areas in which we own properties, or future cybersecurity attacks against any of our tenants; risks related to the occurrence of cyber incidents, or a deficiency in our cybersecurity, which could negatively impact our business by causing a disruption to our operations, a compromise or corruption of our confidential information, and/or damage to our business relationships; costs of complying with governmental laws and regulations; uninsured losses or losses in excess of our insurance coverage, and our inability to obtain adequate insurance coverage at a reasonable cost; additional risks and costs associated with directly managing properties occupied by government tenants, including an increased risk of default by government tenants during periods in which state or federal governments are shut down or on furlough; significant price and volume fluctuations in the public markets, including on the exchange which we listed our common stock; changes in interest rates and changes in the method pursuant to which the LIBOR rates are determined and the planned phasing out of USD LIBOR after June 2023; high interest rates which could affect our ability to finance or refinance properties; the effect of future offerings of debt or equity securities or changes in market interest rates on the value of our common stock; uncertainties associated with environmental and other regulatory matters; potential changes in the political environment and reduction in federal and/or state funding of our governmental tenants; changes in the financial condition of our tenants directly or indirectly resulting from geopolitical developments that could negatively affect international trade, the termination or threatened termination of existing international trade agreements, or the implementation of tariffs or retaliatory tariffs on imported or exported goods; the effect of any litigation to which we are, or may become, subject; additional risks and costs associated with owning properties occupied by tenants in particular industries, such as oil and gas, hospitality, travel, co-working, etc., including risks of default during start-up and during economic downturns; changes in tax laws impacting REITs and real estate in general, as well as our ability to continue to qualify as a REIT under the Internal Revenue Code of 1986, as amended, or other tax law changes which may adversely affect our stockholders; the future effectiveness of our internal controls and procedures; actual or threatened public health epidemics or outbreaks, such as the ongoing COVID-19 pandemic, and governmental and private measures taken to combat such health crises, which may affect our personnel, tenants, tenants' operations and ability to pay lease obligations, demand for office space, and the costs of operating our assets; the adequacy of our general reserve related to tenant lease-related assets established as a result of the COVID-19 pandemic, as well as the impact of any increase in this reserve or the establishment of any other reserve in the future; and other factors, including the risk factors discussed under Item 1A. of Piedmont’s Annual Report on Form 10-K for the year ended December 31, 2020 and Quarterly Report on Form 10-Q for the nine months ended September 30, 2021, 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. The Company cannot guarantee the accuracy of any such forward-looking statements contained in this press release, and the Company does not intend to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Research Analysts/ Institutional Investors Contact:

Eddie Guilbert

770-418-8592

research.analysts@piedmontreit.com

Shareholder Services/Transfer Agent Services Contact:

Computershare, Inc.

866-354-3485

investor.services@piedmontreit.com


Piedmont Office Realty Trust, Inc.
Consolidated Balance Sheets (Unaudited)
(in thousands)

	September 30, 2021		December 31, 2020
Assets:
Real estate assets, at cost:
Land	$	476,717	$	476,716
Buildings and improvements	3,259,369		3,123,042
Buildings and improvements, accumulated depreciation	(829,832)		(751,521)
Intangible lease assets	148,945		158,444
Intangible lease assets, accumulated amortization	(80,072)		(67,850)
Construction in progress	48,226		56,749
Real estate assets held for sale, gross	78,803		76,475
Real estate assets held for sale, accumulated depreciation and amortization	(16,699)		(16,021)
Total real estate assets	3,085,457		3,056,034
Cash and cash equivalents	8,189		7,331
Tenant receivables	8,678		8,448
Straight line rent receivables	159,871		148,797
Notes receivable	118,500		118,500
Restricted cash and escrows	6,093		1,883
Prepaid expenses and other assets	24,915		23,277
Goodwill	98,918		98,918

Deferred lease costs, gross	437,020		444,211
Deferred lease costs, accumulated depreciation	(195,255)		(171,817)
Other assets held for sale, gross	9,258		5,030
Other assets held for sale, accumulated depreciation	(996)		(802)
Total assets	$	3,760,648	$	3,739,810
Liabilities:
Unsecured debt, net of discount and unamortized debt issuance costs of $12,899 and $10,932, respectively	$	1,665,101	$	1,594,068
Secured debt, inclusive of premium and unamortized debt issuance costs of $0 and $326, respectively	—		27,936
Accounts payable, accrued expenses, and accrued capital expenditures	127,675		111,997
Dividends payable	—		25,683
Deferred income	73,614		36,891
Intangible lease liabilities, less accumulated amortization	26,924		35,440
Interest rate swaps	6,715		9,834

Total liabilities	1,900,029		1,841,849
Stockholders' equity:
Common stock	1,241		1,238
Additional paid in capital	3,700,208		3,693,996
Cumulative distributions in excess of earnings	(1,822,441)		(1,774,856)
Other comprehensive income	(20,036)		(24,100)
Piedmont stockholders' equity	1,858,972		1,896,278
Noncontrolling interest	1,647		1,683

Total stockholders' equity	1,860,619		1,897,961
Total liabilities and stockholders' equity	$	3,760,648	$	3,739,810


Number of shares of common stock outstanding as of end of period	124,136	123,839
Net debt (Unsecured and Secured debt, less Cash and cash equivalents)	1,656,912	1,614,673
Total Principal Amount of Debt Outstanding (Unsecured debt plus discount and unamortized debt issuance costs and Secured debt less premium and unamortized debt issuance costs)	1,678,000	1,632,610


Piedmont Office Realty Trust, Inc.
Consolidated Statements of Income
Unaudited (in thousands, except for per share data)

	Three Months Ended				Nine Months Ended
	9/30/2021		9/30/2020		9/30/2021		9/30/2020
Revenues:


Rental and tenant reimbursement revenue	$	127,427	$	128,280	$	380,306	$	391,681
Property management fee revenue	626		751		1,920		2,146
Other property related income	3,018		2,662		8,320		9,668
Total revenues	131,071		131,693		390,546		403,495
Expenses:
Property operating costs	51,767		53,293		154,849		159,631
Depreciation	30,562		28,255		88,663		83,339
Amortization	20,373		22,990		63,978		70,970

General and administrative	6,955		5,469		22,417		20,049
Total operating expenses	109,657		110,007		329,907		333,989

Other income (expense):
Interest expense	(12,450)		(12,725)		(37,375)		(41,942)
Other income	2,337		319		7,324		817


Loss on early extinguishment of debt	—		—		—		(9,336)
Gain/(loss) on sale of real estate assets	—		(340)		—		191,032

Total other income (expense)	(10,113)		(12,746)		(30,051)		140,571
Net income	11,301		8,940		30,588		210,077





Net loss applicable to noncontrolling interest	5		3		9		2
Net income applicable to Piedmont	$	11,306	$	8,943	$	30,597	$	210,079
Weighted average common shares outstanding - diluted	124,627		126,385		124,472		126,302



Net income per share applicable to common stockholders - diluted	$	0.09	$	0.07	$	0.25	$	1.66


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				Nine Months Ended
	9/30/2021		9/30/2020		9/30/2021		9/30/2020
GAAP net income applicable to common stock	$	11,306	$	8,943	$	30,597	$	210,079
Depreciation of real estate assets(1)	30,336		27,960		87,873		82,384
Amortization of lease-related costs	20,362		22,976		63,943		70,930

(Gain)/loss on sale of real estate assets	—		340		—		(191,032)
NAREIT Funds From Operations applicable to common stock*	62,004		60,219		182,413		172,361

Loss on early extinguishment of debt	—		—		—		9,336

Core Funds From Operations applicable to common stock*	62,004		60,219		182,413		181,697
Amortization of debt issuance costs, fair market adjustments on notes payable, and discounts on debt	849		931		2,076		2,180
Depreciation of non real estate assets	216		286		762		930
Straight-line effects of lease revenue	(2,122)		(6,315)		(8,627)		(20,378)
Stock-based compensation adjustments	1,637		1,336		5,152		4,281
Net effect of amortization of above/below-market in-place lease intangibles	(2,731)		(3,240)		(8,192)		(9,517)

Non-incremental capital expenditures(2)	(18,640)		(15,611)		(52,849)		(58,062)		(3)
Adjusted Funds From Operations applicable to common stock*	$	41,213	$	37,606	$	120,735	$	101,131
Weighted average common shares outstanding - diluted	124,627		126,385		124,472		126,302
Funds From Operations per share (diluted)	$	0.50	$	0.48	$	1.47	$	1.36
Core Funds From Operations per share (diluted)	$	0.50	$	0.48	$	1.47	$	1.44

(1)Excludes depreciation of non real estate assets.

(2)Capital expenditures of a recurring nature related to tenant improvements and leasing commissions that do not incrementally enhance the underlying assets' income generating capacity. Tenant improvements, leasing commissions, building capital and deferred lease incentives incurred to lease space that was vacant at acquisition, leasing costs for spaces vacant for greater than one year, leasing costs for spaces at newly acquired properties for which in-place leases expire shortly after acquisition, improvements associated with the expansion of a building and renovations that change the underlying classification of a building are excluded from this measure.

(3) Includes the leasing commission for the approximately 20-year, 520,000-square-foot renewal and expansion of the State of New York's lease at our 60 Broad Street building in New York City that was executed during the fourth quarter of 2019.


Piedmont Office Realty Trust, Inc.
EBITDAre, Core EBITDA, Property Net Operating Income (Cash and Accrual), Same Store Net Operating Income (Cash and Accrual)
Unaudited (in thousands)

	Cash Basis				Accrual Basis
	Three Months Ended				Three Months Ended
	9/30/2021		9/30/2020		9/30/2021			9/30/2020

Net income applicable to Piedmont (GAAP)	$	11,306	$	8,943	$	11,306		$	8,943
Net loss applicable to noncontrolling interest	(5)		(3)		(5)			(3)
Interest expense	12,450		12,725		12,450			12,725
Depreciation	30,552		28,247		30,552			28,247
Amortization	20,362		22,976		20,362			22,976
Depreciation and amortization attributable to noncontrolling interests	21		22		21			22

Loss on sale of real estate assets	—		340		—			340
EBITDAre* and Core EBITDA*	74,686		73,250		74,686			73,250


General & administrative expenses	6,955		5,469		6,955			5,469
Management fee revenue	(309)		(422)		(309)			(422)
Other income	(2,121)		(104)		(2,121)			(104)
Non-cash general reserve for uncollectible accounts	—		(33)
Straight line effects of lease revenue	(2,122)		(6,315)
Straight line effects of lease revenue attributable to noncontrolling interests	1		(5)
Amortization of lease-related intangibles	(2,731)		(3,240)
Property NOI*	74,359		68,600		79,211			78,193
Net operating income from:
Acquisitions	(8,012)		(6,041)		(9,621)			(8,505)
Dispositions	(359)		(3,338)		(359)			(3,191)
Other investments(1)	254		150		311			(286)
Same Store NOI*	$	66,242	$	59,371	$	69,542		$	66,211
Change period over period in Same Store NOI	11.6%		N/A		5.0		%	N/A


Piedmont Office Realty Trust, Inc.
EBITDAre, Core EBITDA, Property Net Operating Income (Cash and Accrual), Same Store Net Operating Income (Cash and Accrual)
Unaudited (in thousands)

	Cash Basis					Accrual Basis
	Nine Months Ended					Nine Months Ended
	9/30/2021			9/30/2020		9/30/2021			9/30/2020

Net income applicable to Piedmont (GAAP)	$	30,597		$	210,079	$	30,597		$	210,079
Net loss applicable to noncontrolling interest	(9)			(2)		(9)			(2)
Interest expense	37,375			41,942		37,375			41,942
Depreciation	88,635			83,315		88,635			83,315
Amortization	63,943			70,930		63,943			70,930
Depreciation and amortization attributable to noncontrolling interests	63			64		63			64

Gain on sale of real estate assets	—			(191,032)		—			(191,032)
EBITDAre*	220,604			215,296		220,604			215,296
Loss on early extinguishment of debt	—			9,336		—			9,336
Core EBITDA*	220,604			224,632		220,604			224,632
General & administrative expenses	22,417			20,049		22,417			20,049
Management fee revenue	(946)			(1,098)		(946)			(1,098)
Other income	(6,423)			(170)		(6,423)			(170)
Non-cash general reserve for uncollectible accounts	412			4,831
Straight line effects of lease revenue	(8,627)			(20,378)
Straight line effects of lease revenue attributable to noncontrolling interests	2			(12)
Amortization of lease-related intangibles	(8,192)			(9,517)
Property NOI*	219,247			218,337		235,652			243,413
Net operating income from:
Acquisitions	(24,214)			(15,320)		(29,244)			(21,246)
Dispositions	(204)			(20,225)		(204)			(21,330)
Other investments(1)	580			388		748			551
Same Store NOI*	$	195,409		$	183,180	$	206,952		$	201,388
Change period over period in Same Store NOI	6.7		%	N/A		2.8		%	N/A

(1)Other investments include active out-of-service redevelopment and development projects, land, and recently completed redevelopment and development projects. The operating results from 222 South Orange Avenue in Orlando, FL, are included in this line item.

*Definitions:

Funds From Operations ("FFO"): The Company calculates FFO in accordance with the current National Association of Real Estate Investment Trusts (“NAREIT”) definition. NAREIT currently defines FFO as net income (calculated in accordance with GAAP), excluding depreciation and amortization related to real estate, gains and losses from the sale of certain real estate assets, gains and losses from change in control, and impairment write-downs of certain real estate assets and investment in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity, along with appropriate adjustments to those reconciling items for joint ventures. These adjustments can vary among owners of identical assets in similar conditions based on historical cost accounting and useful-life estimates. FFO is a non-GAAP financial measure and should not be viewed as an alternative to net income calculated in accordance with GAAP as a measurement of the Company’s operating performance. The Company believes that FFO is helpful to investors as a supplemental performance measure because it excludes the effects of depreciation, amortization and gains or losses from sales of real estate, all of which are based on historical costs, which implicitly assumes that the value of real estate diminishes predictably over time. The Company also believes that FFO can help facilitate comparisons of operating performance between periods and with other REITs. However, other REITs may not define FFO in accordance with the NAREIT definition, or may interpret the current NAREIT definition differently than the Company; therefore, the Company’s computation of FFO may not be comparable to that of such other REITs.

Core Funds From Operations ("Core FFO"): The Company calculates Core FFO by starting with FFO, as defined by NAREIT, and adjusting for gains or losses on the extinguishment of swaps and/or debt and any significant non-recurring items. Core FFO is a non-GAAP financial measure and should not be viewed as an alternative to net income calculated in accordance with GAAP as a measurement of the Company’s operating performance. The Company believes that Core FFO is helpful to investors as a supplemental performance measure because it excludes the effects of certain items which can create significant earnings volatility, but which do not directly relate to the Company’s core business operations. As a result, the Company believes that Core FFO can help facilitate comparisons of operating performance between periods and provides a more meaningful predictor of future earnings potential. Other REITs may not define Core FFO in the same manner as the Company; therefore, the Company’s computation of Core FFO may not be comparable to that of other REITs.

Adjusted Funds From Operations ("AFFO"): The Company calculates AFFO by starting with Core FFO and adjusting for non-incremental capital expenditures and then adding back non-cash items including: non-real estate depreciation, straight-lined rents and fair value lease adjustments, non-cash components of interest expense and compensation expense, and by making similar adjustments for joint ventures. AFFO is a non-GAAP financial measure and should not be viewed as an alternative to net income calculated in accordance with GAAP as a measurement of the Company’s operating performance. The Company believes that AFFO is helpful to investors as a meaningful supplemental comparative performance measure of our ability to make incremental capital investments. Other REITs may not define AFFO in the same manner as the Company; therefore, the Company’s computation of AFFO may not be comparable to that of other REITs.

EBITDAre: The Company calculates EBITDAre in accordance with the current National Association of Real Estate Investment Trusts (“NAREIT”) definition. NAREIT currently defines EBITDAre as net income (computed in accordance with GAAP) adjusted for gains or losses from sales of property, impairment losses, depreciation on real estate assets, amortization on real estate assets, interest expense and taxes, along with the same adjustments for joint ventures. Some of the adjustments mentioned can vary among owners of identical assets in similar conditions based on historical cost accounting and useful-life estimates. EBITDAre is a non-GAAP financial measure and should not be viewed as an alternative to net income calculated in accordance with GAAP as a measurement of the Company’s operating performance. The Company believes that EBITDAre is helpful to investors as a supplemental performance measure because it provides a metric for understanding the Company’s results from ongoing operations without taking into account the effects of non-cash expenses (such as depreciation and amortization) and capitalization and capital structure expenses (such as interest expense and taxes). The Company also believes that EBITDAre can help facilitate comparisons of operating performance between periods and with other REITs. However, other REITs may not define EBITDAre in accordance with the NAREIT definition, or may interpret the current NAREIT definition differently than the Company; therefore, the Company’s computation of EBITDAre may not be comparable to that of such other REITs.

Core EBITDA: The Company calculates Core EBITDA as net income (computed in accordance with GAAP) before interest, taxes, depreciation and amortization and incrementally removing any impairment losses, gains or losses from sales of property and other significant infrequent items that create volatility within our earnings and make it difficult to determine the earnings generated by our core ongoing business. Core EBITDA is a non-GAAP financial measure and should not be viewed as an alternative to net income calculated in accordance with GAAP as a measurement of the Company’s operating performance. The Company believes that Core EBITDA is helpful to investors as a supplemental performance measure because it provides a metric for understanding the performance of the Company’s results from ongoing operations without taking into account the effects of non-cash expenses (such as depreciation and amortization), as well as items that are not part of normal day-to-day operations of the Company’s business. Other REITs may not define Core EBITDA in the same manner as the Company; therefore, the Company’s computation of Core EBITDA may not be comparable to that of other REITs.

Property Net Operating Income ("Property NOI"): The Company calculates Property NOI by starting with Core EBITDA and adjusting for general and administrative expense, income associated with property management performed by Piedmont for other organizations and other income or expense items for the Company, such as interest income from loan investments or costs from the pursuit of non-consummated transactions. The Company may present this measure on an accrual basis or a cash basis. When presented on a cash basis, the effects of straight lined rents and fair value lease revenue are also eliminated. Property NOI is a non-GAAP financial measure and should not be viewed as an alternative to net income calculated in accordance with GAAP as a measurement of the Company’s operating performance. The Company believes that Property NOI is helpful to investors as a supplemental comparative performance measure of income generated by its properties alone without the administrative overhead of the Company. Other REITs may not define Property NOI in the same manner as the Company; therefore, the Company’s computation of Property NOI may not be comparable to that of other REITs.

Same Store Net Operating Income ("Same Store NOI"): The Company calculates Same Store NOI as Property NOI attributable to the properties for which the following criteria were met during the entire span of the current and prior year reporting periods: (i) they were owned, (ii) they were not under development / redevelopment, and (iii) none of the operating expenses for which were capitalized. Same Store NOI also excludes amounts attributable to land assets. The Company may present this measure on an accrual basis or a cash basis. When presented on a cash basis, the effects of straight lined rents and fair value lease revenue are also eliminated. Same Store NOI is a non-GAAP financial measure and should not be viewed as an alternative to net income calculated in accordance with GAAP as a measurement of the Company’s operating performance.

The Company believes that Same Store NOI is helpful to investors as a supplemental comparative performance measure of the income generated from the same group of properties from one period to the next. Other REITs may not define Same Store NOI in the same manner as the Company; therefore, the Company’s computation of Same Store NOI may not be comparable to that of other REITs.

Document


			EXHIBIT 99.2

https://cdn.kscope.io/4f39fba7d1d2a6db082d312a09a86fbd-newsuppcoverphoto10-25x21a.jpg

Piedmont Office Realty Trust, Inc.

Quarterly Supplemental Information

Index


	Page		Page

Introduction		Other Investments
Corporate Data	3	Other Investments Detail	35
Investor Information	4	Supporting Information
Earnings Release	5	Definitions	36
Financials		Research Coverage	37
Balance Sheets	9	Non-GAAP Reconciliations	38
Income Statements	10	Property Detail - In-Service Portfolio	40
Key Performance Indicators	12	Risks, Uncertainties and Limitations	42
Funds From Operations / Adjusted Funds From Operations	13
Same Store Analysis	14
Capitalization Analysis	17
Debt Summary	18
Debt Detail	19
Debt Covenant & Ratio Analysis	20
Operational & Portfolio Information - Office Property Investments
Tenant Diversification	21
Tenant Credit Rating & Lease Distribution Information	23
Leased Percentage Information	24
Rental Rate Roll Up / Roll Down Analysis	25
Lease Expiration Schedule	26
Quarterly Lease Expirations	27
Annual Lease Expirations	28
Capital Expenditures	29
Contractual Tenant Improvements & Leasing Commissions	30
Geographic Diversification	31
Geographic Diversification by Location Type	32
Industry Diversification	33
Property Investment Activity	34


Notice to Readers:
Please refer to page 42 for a discussion of important risks related to the business of Piedmont Office Realty Trust, Inc., as well as an investment in its securities, including risks that could cause actual results and events to differ materially from results and events referred to in the forward-looking information. Considering these risks, uncertainties, assumptions, and limitations, the forward-looking statements about leasing, financial operations, leasing prospects, acquisitions, dispositions, etc. contained in this quarterly supplemental information report may differ from actual results.
Certain prior period amounts have been reclassified to conform to the current period financial statement presentation. In addition, many of the schedules herein contain rounding to the nearest thousands or millions and, therefore, the schedules may not total due to this rounding convention.
To supplement the presentation of the Company’s financial results prepared in accordance with U.S. generally accepted accounting principles (GAAP), this report contains certain financial measures that are not prepared in accordance with GAAP, including FFO, Core FFO, AFFO, Same Store NOI, Property NOI, EBITDAre and Core EBITDA. Definitions and reconciliations of these non-GAAP measures to their most comparable GAAP metrics are included beginning on page 36. Each of the non-GAAP measures included in this report has limitations as an analytical tool and should not be considered in isolation or as a substitute for an analysis of the Company’s results calculated in accordance with GAAP. In addition, because not all companies use identical calculations, the Company’s presentation of non-GAAP measures in this report may not be comparable to similarly titled measures disclosed by other companies, including other REITs. The Company may also change the calculation of any of the non-GAAP measures included in this report from time to time in light of its then existing operations.

Piedmont Office Realty Trust, Inc.

Corporate Data

Piedmont Office Realty Trust, Inc. (also referred to herein as "Piedmont" or the "Company") (NYSE: PDM) is an owner, manager, developer, redeveloper and operator of high-quality, Class A office properties in select submarkets located primarily within seven major Eastern U.S. office markets, with over half of its revenue generated from the Sunbelt. Its geographically-diversified, approximately $5 billion portfolio is comprised of approximately 17 million square feet (as of the date of release of this report). The Company is a fully-integrated, self-managed real estate investment trust ("REIT") with local management offices in each of its markets and is investment-grade rated by Standard & Poor’s and Moody’s. The Company was designated an Energy Star Partner of the Year for 2021, and it is the only office REIT headquartered in the Southeast to receive that designation. At the end of the third quarter of 2021, approximately 76% of the Company's portfolio was Energy Star certified and approximately 43% was LEED certified. Piedmont is headquartered in Atlanta, GA.

This data supplements the information provided in our reports filed with the Securities and Exchange Commission and should be reviewed in conjunction with such filings.



	As of		As of
	September 30, 2021		December 31, 2020
Number of consolidated in-service office properties (1)	54		54
Rentable square footage (in thousands) (1)	16,428		16,428
Percent leased (2)	85.9	%	86.8	%
Capitalization (in thousands):
Total debt - principal amount outstanding (excludes premiums, discounts, and deferred financing costs)	$1,678,000		$1,632,610
Equity market capitalization (3)	$2,163,684		$2,009,914
Total market capitalization (3)	$3,841,684		$3,642,524
Total debt / Total market capitalization (3)	43.7	%	44.8	%
Average net debt to Core EBITDA	5.5 x		5.8 x
Total debt / Total gross assets	34.4	%	34.4	%
Common stock data:
High closing price during quarter	$19.40		$16.95
Low closing price during quarter	$16.79		$11.42
Closing price of common stock at period end	$17.43		$16.23
Weighted average fully diluted shares outstanding during quarter (in thousands)	124,627		125,544
Shares of common stock issued and outstanding at period end (in thousands)	124,136		123,839
Annual regular dividend per share (4)	$0.84		$0.84
Rating / Outlook:
Standard & Poor's	BBB / Stable		BBB / Stable
Moody's	Baa2 / Stable		Baa2 / Stable
Employees	130		137


(1)			As of September 30, 2021, our consolidated office portfolio consisted of 54 properties (exclusive of one 127,000 square foot property that was out of service for redevelopment, 222 South Orange Avenue in Orlando, FL).
(2)			Calculated as square footage associated with commenced leases plus square footage associated with executed but uncommenced leases for vacant spaces at our in-service properties, divided by total rentable in-service square footage, all as of the relevant date, expressed as a percentage. Please refer to page 24 for additional analyses regarding Piedmont's leased percentage.
(3)			Reflects common stock closing price, shares outstanding and outstanding debt as of the end of the reporting period, as appropriate.
(4)			Total of the regular dividends per share for which record dates occurred over the prior four quarters.

Piedmont Office Realty Trust, Inc.

Investor Information


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


Executive Management

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


Edward H. Guilbert, III	Christopher A. Kollme	Laura P. Moon	Joseph H. Pangburn
Executive Vice President, Finance,	Executive Vice President,	Chief Accounting Officer and	Executive Vice President,
Assistant Secretary and Treasurer	Strategy	Senior Vice President	Southwest Region
Investor Relations Contact

Thomas R. Prescott	Alex Valente	Robert K. Wiberg
Executive Vice President,	Executive Vice President,	Executive Vice President,
Midwest Region and Co-Head of	Southeast Region	Northeast Region and Co-Head of
Development		Development

Board of Directors

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


Glenn G. Cohen	Barbara B. Lang	C. Brent Smith	Jeffery L. Swope
Director and Member of the Audit and Capital	Director, Chair of the Governance Committee,	Chief Executive Officer, President	Director, Chair of the Capital
Committees	and Member of the Compensation	and Director	Committee, and Member of the
	Committee		Compensation Committee


Transfer Agent	Corporate Counsel	Institutional Analyst Contact	Investor Relations

Computershare	King & Spalding	Phone: 770.418.8592	Phone: 866.354.3485
P.O. Box 30170	1180 Peachtree Street, NE	research.analysts@piedmontreit.com	investor.services@piedmontreit.com
College Station, TX 77842-3170	Atlanta, GA 30309		www.piedmontreit.com
Phone: 866.354.3485	Phone: 404.572.4600

Piedmont Office Realty Trust, Inc.

Earnings Release

Piedmont Office Realty Trust Reports Third Quarter 2021 Results and Raises Guidance

Highlights for the Quarter Ended September 30, 2021:

Financial Results:

•Piedmont reported an approximately 12% and 5% increase in Same Store Net Operating Income ("Same Store NOI") on a cash and accrual basis, respectively, for the quarter ended September 30, 2021 as compared to the quarter ended September 30, 2020.

Leasing:

•The Company completed approximately 509,000 square feet of leasing across all of its major markets, including approximately 221,000 square feet of new tenant leasing.

•The Company's reported average lease size was approximately 15,000 square feet and the portfolio was approximately 86% leased as of September 30, 2021.

Capital Markets (Including Subsequent Event):

•After the completion of both of the above transactions, approximately 55% of the Company's Annualized Lease Revenue will be generated from the Sunbelt.

Balance Sheet:

•The Company's average net debt-to-Core EBITDA ratio as of September 30, 2021 was 5.5 x.

•The Company's Debt-to-Gross Assets ratio was 34.4% as of September 30, 2021.

•As of September 30, 2021, the Company had no secured debt and approximately $422 million of available capacity on its $500 million line of credit.

ESG and Operations:

•Piedmont's entire approximately 17 million square foot portfolio has been submitted to the International WELL Building Institute ("IWBI") for WELL Health-Safety Rating.

•All three of the Dallas Galleria Office Towers obtained Building Owners and Managers Association ("BOMA") 360 Designations.

•Three buildings won regional The Outstanding Building of the Year ("TOBY") awards.

•Piedmont awarded scholarships to two students, one at Howard University in Washington, D.C. and the other at Morehouse College in Atlanta, GA.

•Piedmont was recognized by the Make-a-Wish Georgia chapter for outstanding community involvement through its 2020 annual Make-a-Wish grant.

Results for the Quarter ended September 30, 2021

FFO and Core FFO, which remove the impact of gains and losses on sales of real estate assets, as well as depreciation and amortization, were both $62.0 million, or $0.50 per diluted share, for the three months ended September 30, 2021 as compared to $60.2 million, or $0.48 per diluted share, for the three months ended September 30, 2020. The $0.02 per share increase in both metrics was primarily attributable to the same factors noted in net income above.

Leasing Update

Financing and Transactional Activity

ESG and Other Operational Initiatives

Fourth Quarter 2021 Dividend Declaration

Guidance for 2021


(in millions, except per share data)	Low	High
Net Income	$40	$41
Add:
Depreciation	119	121
Amortization	84	85

NAREIT FFO and Core FFO applicable to common stock	$243	$247
NAREIT FFO and Core FFO per diluted share	$1.95	$1.98

Piedmont Office Realty Trust, Inc.

Consolidated Balance Sheets

Unaudited (in thousands)


	September 30, 2021		June 30, 2021		March 31, 2021		December 31, 2020		September 30, 2020
Assets:
Real estate, at cost:
Land assets	$	476,717	$	476,717	$	476,717	$	476,716	$	497,478
Buildings and improvements	3,259,369		3,203,286		3,170,152		3,123,042		3,215,255
Buildings and improvements, accumulated depreciation	(829,832)		(804,400)		(776,577)		(751,521)		(787,602)
Intangible lease asset	148,945		155,002		155,634		158,444		161,870
Intangible lease asset, accumulated amortization	(80,072)		(79,149)		(72,475)		(67,850)		(63,353)
Construction in progress	48,226		67,033		47,498		56,749		56,393
Real estate assets held for sale, gross	78,803		77,917		76,797		76,475		76,475
Real estate assets held for sale, accumulated depreciation & amortization	(16,699)		(16,699)		(16,487)		(16,021)		(15,558)
Total real estate assets	3,085,457		3,079,707		3,061,259		3,056,034		3,140,958

Cash and cash equivalents	8,189		8,122		10,689		7,331		23,958
Tenant receivables, net of allowance for doubtful accounts	8,678		6,530		4,545		8,448		11,301
Straight line rent receivable	159,871		156,912		153,727		148,797		152,171
Notes receivable	118,500		118,500		118,500		118,500		—
Escrow deposits and restricted cash	6,093		1,578		1,741		1,883		1,781
Prepaid expenses and other assets	24,915		29,469		22,647		23,277		28,074
Goodwill	98,918		98,918		98,918		98,918		98,918


Deferred lease costs, gross	437,020		441,488		439,342		444,211		460,773
Deferred lease costs, accumulated amortization	(195,255)		(191,045)		(181,499)		(171,817)		(169,307)
Other assets held for sale, gross	9,258		9,128		8,941		5,030		5,123
Other assets held for sale, accumulated amortization	(996)		(996)		(936)		(802)		(668)
Total assets	$	3,760,648	$	3,758,311	$	3,737,874	$	3,739,810	$	3,753,082
Liabilities:
Unsecured debt, net of discount	$	1,665,101	$	1,666,570	$	1,633,819	$	1,594,068	$	1,588,411
Secured debt	—		—		27,628		27,936		28,424
Accounts payable, accrued expenses, and accrued capital expenditures	127,675		111,562		92,183		137,680		120,763
Deferred income	73,614		70,594		56,638		36,891		36,613
Intangible lease liabilities, less accumulated amortization	26,924		29,761		32,607		35,440		38,324
Interest rate swaps	6,715		7,316		7,654		9,834		10,618
Other liabilities held for sale	—		—		—		—		—
Total liabilities	$	1,900,029	$	1,885,803	$	1,850,529	$	1,841,849	$	1,823,153
Stockholders' equity:
Common stock	1,241		1,241		1,240		1,238		1,260
Additional paid in capital	3,700,208		3,698,656		3,697,801		3,693,996		3,692,634
Cumulative distributions in excess of earnings	(1,822,441)		(1,807,679)		(1,791,558)		(1,774,856)		(1,740,670)
Other comprehensive loss	(20,036)		(21,368)		(21,813)		(24,100)		(24,993)
Piedmont stockholders' equity	1,858,972		1,870,850		1,885,670		1,896,278		1,928,231
Non-controlling interest	1,647		1,658		1,675		1,683		1,698
Total stockholders' equity	1,860,619		1,872,508		1,887,345		1,897,961		1,929,929
Total liabilities, redeemable common stock and stockholders' equity	$	3,760,648	$	3,758,311	$	3,737,874	$	3,739,810	$	3,753,082
Common stock outstanding at end of period	124,136		124,132		124,029		123,839		126,029

Piedmont Office Realty Trust, Inc.

Consolidated Statements of Income

Unaudited (in thousands except for per share data)


	Three Months Ended
	9/30/2021		6/30/2021		3/31/2021		12/31/2020		9/30/2020
Revenues:
Rental income (1)	$	105,592	$	105,209	$	105,170	$	104,560	$	108,071
Tenant reimbursements (1)	21,835		21,758		20,742		23,712		20,209
Property management fee revenue	626		536		758		721		751
Other property related income	3,018		2,715		2,587		2,536		2,662
	131,071		130,218		129,257		131,529		131,693
Expenses:
Property operating costs	51,767		51,658		51,424		55,302		53,293
Depreciation	30,562		29,998		28,103		27,236		28,255
Amortization	20,373		20,693		22,912		22,324		22,990

General and administrative	6,955		8,211		7,251		7,415		5,469
	109,657		110,560		109,690		112,277		110,007
Other income / (expense):
Interest expense	(12,450)		(12,345)		(12,580)		(13,048)		(12,725)
Other income / (expense)	2,337		2,631		2,356		1,770		319



Gain / (loss) on extinguishment of debt	—		—		—		—		—
Gain / (loss) on sale of real estate (2)	—		—		—		14,634		(340)
Net income	11,301		9,944		9,343		22,608		8,940
Less: Net (income) / loss applicable to noncontrolling interest	5		3		1		1		3
Net income applicable to Piedmont	$	11,306	$	9,947	$	9,344	$	22,609	$	8,943
Weighted average common shares outstanding - diluted	124,627		124,704		124,450		125,544		126,385
Net income per share available to common stockholders - diluted	$	0.09	$	0.08	$	0.08	$	0.18	$	0.07
Common stock outstanding at end of period	124,136		124,132		124,029		123,839		126,029


(1)			The presentation method used for this line is not in conformance with GAAP. To be in conformance with the current GAAP standard, the Company would need to combine amounts presented on the rental income line with amounts presented on the tenant reimbursements line and present that aggregated figure on one line entitled "rental and tenant reimbursement revenue." The amounts presented on this line were determined based upon the Company's interpretation of the rental charges and billing method provisions in each of the Company's lease documents.
(2)			The gain on sale of real estate reflected in the fourth quarter of 2020 was primarily related to the net sale of a three property portfolio in northern New Jersey.

Piedmont Office Realty Trust, Inc.

Consolidated Statements of Income

Unaudited (in thousands except for per share data)


	Three Months Ended								Nine Months Ended
	9/30/2021		9/30/2020		Change ($)		Change (%)		9/30/2021		9/30/2020		Change ($)		Change (%)
Revenues:
Rental income (1)	$	105,592	$	108,071	$	(2,479)	(2.3)	%	$	315,971	$	329,281	$	(13,310)	(4.0)	%
Tenant reimbursements (1)	21,835		20,209		1,626		8.0	%	64,335		62,400		1,935		3.1	%
Property management fee revenue	626		751		(125)		(16.6)	%	1,920		2,146		(226)		(10.5)	%
Other property related income	3,018		2,662		356		13.4	%	8,320		9,668		(1,348)		(13.9)	%
	131,071		131,693		(622)		(0.5)	%	390,546		403,495		(12,949)		(3.2)	%
Expenses:
Property operating costs	51,767		53,293		1,526		2.9	%	154,849		159,631		4,782		3.0	%
Depreciation	30,562		28,255		(2,307)		(8.2)	%	88,663		83,339		(5,324)		(6.4)	%
Amortization	20,373		22,990		2,617		11.4	%	63,978		70,970		6,992		9.9	%

General and administrative	6,955		5,469		(1,486)		(27.2)	%	22,417		20,049		(2,368)		(11.8)	%
	109,657		110,007		350		0.3	%	329,907		333,989		4,082		1.2	%
Other income / (expense):
Interest expense	(12,450)		(12,725)		275		2.2	%	(37,375)		(41,942)		4,567		10.9	%
Other income / (expense)	2,337		319		2,018		632.6	%	7,324		817		6,507		796.5	%



Gain / (loss) on extinguishment of debt	—		—		—				—		(9,336)		9,336		100.0	%
Gain / (loss) on sale of real estate (2)	—		(340)		340		100.0	%	—		191,032		(191,032)		(100.0)	%
Net income	11,301		8,940		2,361		26.4	%	30,588		210,077		(179,489)		(85.4)	%
Less: Net (income) / loss applicable to noncontrolling interest	5		3		2		66.7	%	9		2		7		350.0	%
Net income applicable to Piedmont	$	11,306	$	8,943	$	2,363	26.4	%	$	30,597	$	210,079	$	(179,482)	(85.4)	%
Weighted average common shares outstanding - diluted	124,627		126,385						124,472		126,302
Net income per share available to common stockholders - diluted	$	0.09	$	0.07					$	0.25	$	1.66
Common stock outstanding at end of period	124,136		126,029						124,136		126,029


(1)			The presentation method used for this line is not in conformance with GAAP. To be in conformance with the current GAAP standard, the Company would need to combine amounts presented on the rental income line with amounts presented on the tenant reimbursements line and present that aggregated figure on one line entitled "rental and tenant reimbursement revenue." The amounts presented on this line were determined based upon the Company's interpretation of the rental charges and billing method provisions in each of the Company's lease documents.
(2)			The gain on sale of real estate for the nine months ended September 30, 2020 was primarily related to the sale of 1901 Market Street in Philadelphia, PA.

Piedmont Office Realty Trust, Inc.

Key Performance Indicators

Unaudited (in thousands except for per share data)


This section of our supplemental report includes non-GAAP financial measures, including, but not limited to, Earnings Before Interest, Taxes, Depreciation, and Amortization for real estate (EBITDAre), Core Earnings Before Interest, Taxes, Depreciation, and Amortization (Core EBITDA), Funds from Operations (FFO), Core Funds from Operations (Core FFO), and Adjusted Funds from Operations (AFFO). Definitions of these non-GAAP measures are provided on page 36 and reconciliations are provided beginning on page 38.


	Three Months Ended


Selected Operating Data	9/30/2021		6/30/2021		3/31/2021		12/31/2020		9/30/2020

Percent leased (1)	85.9	%	85.9	%	86.0	%	86.8	%	86.9	%
Percent leased - economic (1) (2)	81.6	%	82.6	%	80.6	%	82.0	%	80.7	%
Total revenues	$131,071		$130,218		$129,257		$131,529		$131,693
Net income attributable to Piedmont	$11,306		$9,947		$9,344		$22,609		$8,943
Core EBITDA	$74,686		$72,980		$72,938		$70,582		$73,250
Core FFO applicable to common stock	$62,004		$60,353		$60,056		$57,229		$60,219
Core FFO per share - diluted	$0.50		$0.48		$0.48		$0.46		$0.48
AFFO applicable to common stock	$41,213		$41,661		$37,861		$36,291		$37,606
Gross regular dividends (3)	$26,068		$26,068		$26,046		$26,145		$26,466
Regular dividends per share (3)	$0.21		$0.21		$0.21		$0.21		$0.21
Selected Balance Sheet Data
Total real estate assets, net	$3,085,457		$3,079,707		$3,061,259		$3,056,034		$3,140,958
Total assets	$3,760,648		$3,758,311		$3,737,874		$3,739,810		$3,753,082
Total liabilities	$1,900,029		$1,885,803		$1,850,529		$1,841,849		$1,823,153
Ratios & Information for Debt Holders
Core EBITDA margin (4)	57.0	%	56.0	%	56.4	%	53.7	%	55.6	%
Fixed charge coverage ratio (5)	5.5 x		5.4 x		5.4 x		5.1 x		5.5 x
Average net debt to Core EBITDA (6)	5.5 x		5.7 x		5.6 x		5.8 x		5.5 x
Total gross real estate assets	$4,012,060		$3,979,955		$3,926,798		$3,891,426		$4,007,471
Net debt (7)	$1,663,718		$1,666,300		$1,658,995		$1,623,396		$1,602,237


(1)			Please refer to page 24 for additional leased percentage information.
(2)			Economic leased percentage excludes the square footage associated with executed but not commenced leases for currently vacant spaces and the square footage associated with tenants receiving rental abatements (after proportional adjustments for tenants receiving only partial rental abatements). Due to variations in rental abatement structures, there will be variability to the economic leased percentage over time as abatements commence and expire.
(3)			Dividends are reflected in the quarter in which the record date occurred.
(4)			Core EBITDA margin is calculated as Core EBITDA divided by total revenues.
(5)			The fixed charge coverage ratio is calculated as Core EBITDA divided by the sum of interest expense, principal amortization, capitalized interest and preferred dividends. The Company had no preferred dividends during any of the periods presented; the Company had capitalized interest of $1,009,904 for the quarter ended September 30, 2021, $875,804 for the quarter ended June 30, 2021, $812,649 for the quarter ended March 31, 2021, $368,965 for the quarter ended December 31, 2020, and $236,290 for the quarter ended September 30, 2020; the Company had no principal amortization for the quarter ended September 30, 2021, as its last remaining amortizing loan was repaid during the second quarter of 2021; the Company had principal amortization of $187,087 for the quarter ended June 30, 2021, $185,368 for the quarter ended March 31, 2021, $365,644 for the quarter ended December 31, 2020, and $269,838 for the quarter ended September 30, 2020.
(6)			For the purposes of this calculation, we annualize the period's Core EBITDA and use the average daily balance of debt outstanding during the period, less cash and cash equivalents and escrow deposits and restricted cash as of the end of the period.
(7)			Net debt is calculated as the total principal amount of debt outstanding minus cash and cash equivalents and escrow deposits and restricted cash as of the end of the period.

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				Nine Months Ended
	9/30/2021		9/30/2020		9/30/2021		9/30/2020

GAAP net income applicable to common stock	$	11,306	$	8,943	$	30,597	$	210,079
Depreciation (1) (2)	30,336		27,960		87,873		82,384
Amortization (1)	20,362		22,976		63,943		70,930

Loss / (gain) on sale of properties	—		340		—		(191,032)

NAREIT funds from operations and core funds from operations applicable to common stock	62,004		60,219		182,413		172,361
Adjustments:


Loss / (gain) on extinguishment of debt	—		—		—		9,336

Core funds from operations applicable to common stock	62,004		60,219		182,413		181,697
Adjustments:
Amortization of debt issuance costs, fair market adjustments on notes payable, and discount on senior notes	849		931		2,076		2,180
Depreciation of non real estate assets	216		286		762		930
Straight-line effects of lease revenue (1)	(2,122)		(6,315)		(8,627)		(20,378)
Stock-based compensation adjustments	1,637		1,336		5,152		4,281
Amortization of lease-related intangibles (1)	(2,731)		(3,240)		(8,192)		(9,517)

Non-incremental capital expenditures (3)	(18,640)		(15,611)		(52,849)		(58,062)
Adjusted funds from operations applicable to common stock	$	41,213	$	37,606	$	120,735	$	101,131

Weighted average common shares outstanding - diluted	124,627		126,385		124,472		126,302

Funds from operations per share (diluted)	$	0.50	$	0.48	$	1.47	$	1.36
Core funds from operations per share (diluted)	$	0.50	$	0.48	$	1.47	$	1.44

Common stock outstanding at end of period	124,136		126,029		124,136		126,029


(1)			Includes our proportionate share of amounts attributable to consolidated properties.
(2)			Excludes depreciation of non real estate assets.
(3)			Non-incremental capital expenditures are defined on page 36.

Piedmont Office Realty Trust, Inc.

Same Store Net Operating Income (Cash Basis)

Unaudited (in thousands)


	Three Months Ended					Nine Months Ended
	9/30/2021			9/30/2020		9/30/2021			9/30/2020
Net income attributable to Piedmont	$	11,306		$	8,943	$	30,597		$	210,079
Net income / (loss) attributable to noncontrolling interest	(5)			(3)		(9)			(2)
Interest expense	12,450			12,725		37,375			41,942
Depreciation (1)	30,552			28,247		88,635			83,315
Amortization (1)	20,362			22,976		63,943			70,930
Depreciation and amortization attributable to noncontrolling interests	21			22		63			64

Loss / (gain) on sale of properties	—			340		—			(191,032)

EBITDAre	74,686			73,250		220,604			215,296

(Gain) / loss on extinguishment of debt	—			—		—			9,336


Core EBITDA (2)	74,686			73,250		220,604			224,632
General & administrative expenses	6,955			5,469		22,417			20,049
Non-cash general reserve for uncollectible accounts (3)	—			(33)		412			4,831
Management fee revenue (4)	(309)			(422)		(946)			(1,098)
Other (income) / expense (1) (5)	(2,121)			(104)		(6,423)			(170)
Straight-line effects of lease revenue (1)	(2,122)			(6,315)		(8,627)			(20,378)
Straight-line effects of lease revenue attributable to noncontrolling interests	1			(5)		2			(12)
Amortization of lease-related intangibles (1)	(2,731)			(3,240)		(8,192)			(9,517)
Property net operating income (cash basis)	74,359			68,600		219,247			218,337

Deduct net operating (income) / loss from:
Acquisitions (6)	(8,012)			(6,041)		(24,214)			(15,320)
Dispositions (7)	(359)			(3,338)		(204)			(20,225)
Other investments (8)	254			150		580			388
Same store net operating income (cash basis)	$	66,242		$	59,371	$	195,409		$	183,180
Change period over period	11.6		%	N/A		6.7		%	N/A


(1)			Includes our proportionate share of amounts attributable to consolidated properties.
(2)			The Company has historically recognized approximately $2 to $3 million of termination income on an annual basis. Given the size of its asset base and the number of tenants with which it conducts business, Piedmont considers termination income of that magnitude to be a normal part of its operations and a recurring part of its revenue stream; however, the recognition of termination income is typically variable between quarters and throughout any given year and is dependent upon when during the year the Company receives termination notices from tenants. During the three months ended September 30, 2021, Piedmont recognized $0.1 million of termination income, as compared with $0.4 million during the same quarterly period in 2020. During the nine months ended September 30, 2021, Piedmont recognized $2.8 million in termination income, as compared with $1.5 million during the same period in 2020.
(3)			As a result of COVID-19 and as a precautionary measure, during the second quarter of 2020, the Company established a general reserve for potential future losses on customer accounts. The general reserve is non-cash in nature and, therefore, any changes in the reserve are removed from the calculation of cash basis same store net operating income. No such reserves were made in any periods prior to the second quarter of 2020.
(4)			Presented net of related operating expenses incurred to earn the revenue; therefore, the information presented on this line will not tie to the data presented on the income statements.
(5)			Figures presented on this line may not tie back to the relevant sources as some activity is attributable to property operations and is, therefore, presented in property net operating income.
(6)			Acquisitions include One Galleria Tower, Two Galleria Tower and Three Galleria Tower in Dallas, TX, purchased on February 12, 2020.
(7)			Dispositions include 1901 Market Street in Philadelphia, PA, sold on June 25, 2020, and the New Jersey property portfolio sold on October 28, 2020 (consisting of the Company's final remaining assets in the state, 200 and 400 Bridgewater Crossing in Bridgewater, NJ, and 600 Corporate Drive in Lebanon, NJ).
(8)			Other investments include active out-of-service redevelopment and development projects, land, and recently completed redevelopment and development projects. Additional information on our land holdings can be found on page 35. The operating results from 222 South Orange Avenue in Orlando, FL, are included in this line item.

Piedmont Office Realty Trust, Inc.

Same Store Net Operating Income (Accrual Basis)

Unaudited (in thousands)


	Three Months Ended					Nine Months Ended
	9/30/2021			9/30/2020		9/30/2021			9/30/2020
Net income attributable to Piedmont	$	11,306		$	8,943	$	30,597		$	210,079
Net income / (loss) attributable to noncontrolling interest	(5)			(3)		(9)			(2)
Interest expense	12,450			12,725		37,375			41,942
Depreciation (1)	30,552			28,247		88,635			83,315
Amortization (1)	20,362			22,976		63,943			70,930
Depreciation and amortization attributable to noncontrolling interests	21			22		63			64

Loss / (gain) on sale of properties	—			340		—			(191,032)

EBITDAre	74,686			73,250		220,604			215,296

(Gain) / loss on extinguishment of debt	—			—		—			9,336


Core EBITDA (2)	74,686			73,250		220,604			224,632
General & administrative expenses	6,955			5,469		22,417			20,049
Management fee revenue (3)	(309)			(422)		(946)			(1,098)
Other (income) / expense (1) (4)	(2,121)			(104)		(6,423)			(170)
Property net operating income (accrual basis)	79,211			78,193		235,652			243,413

Deduct net operating (income) / loss from:
Acquisitions (5)	(9,621)			(8,505)		(29,244)			(21,246)
Dispositions (6)	(359)			(3,191)		(204)			(21,330)
Other investments (7)	311			(286)		748			551
Same store net operating income (accrual basis)	$	69,542		$	66,211	$	206,952		$	201,388
Change period over period	5.0		%	N/A		2.8		%	N/A


(1)			Includes our proportionate share of amounts attributable to consolidated properties.
(2)			The Company has historically recognized approximately $2 to $3 million of termination income on an annual basis. Given the size of its asset base and the number of tenants with which it conducts business, Piedmont considers termination income of that magnitude to be a normal part of its operations and a recurring part of its revenue stream; however, the recognition of termination income is typically variable between quarters and throughout any given year and is dependent upon when during the year the Company receives termination notices from tenants. During the three months ended September 30, 2021, Piedmont recognized $0.1 million of termination income, as compared with $0.4 million during the same quarterly period in 2020. During the nine months ended September 30, 2021, Piedmont recognized $2.8 million in termination income, as compared with $1.5 million during the same period in 2020.
(3)			Presented net of related operating expenses incurred to earn the revenue; therefore, the information presented on this line will not tie to the data presented on the income statements.
(4)			Figures presented on this line may not tie back to the relevant sources as some activity is attributable to property operations and is, therefore, presented in property net operating income.
(5)			Acquisitions include One Galleria Tower, Two Galleria Tower and Three Galleria Tower in Dallas, TX, purchased on February 12, 2020.
(6)			Dispositions include 1901 Market Street in Philadelphia, PA, sold on June 25, 2020, and the New Jersey property portfolio sold on October 28, 2020 (consisting of the Company's final remaining assets in the state, 200 and 400 Bridgewater Crossing in Bridgewater, NJ, and 600 Corporate Drive in Lebanon, NJ).
(7)			Other investments include active out-of-service redevelopment and development projects, land, and recently completed redevelopment and development projects. Additional information on our land holdings can be found on page 35. The operating results from 222 South Orange Avenue in Orlando, FL, are included in this line item.

Piedmont Office Realty Trust, Inc.

Same Store Net Operating Income (Financial Components)

Unaudited (in thousands)



		Three Months Ended								Nine Months Ended
		9/30/2021		9/30/2020		Change ($)		Change (%)		9/30/2021		9/30/2020		Change ($)		Change (%)

Revenue
	Cash rental income (1)	$	92,043	$	86,487	$	5,556	6.4	%	$	272,632	$	256,212	$	16,420	6.4	%
	Tenant reimbursements (2)	18,638		16,511		2,127		12.9	%	53,990		53,641		349		0.7	%
	Straight line effects of lease revenue (3)	1,784		5,389		(3,605)		(66.9)	%	7,566		18,049		(10,483)		(58.1)	%
	Amortization of lease-related intangibles	1,516		1,418		98		6.9	%	4,389		4,990		(601)		(12.0)	%
	Total rents	113,981		109,805		4,176		3.8	%	338,577		332,892		5,685		1.7	%

	Other property related income (4)	2,820		2,569		251		9.8	%	7,887		9,626		(1,739)		(18.1)	%
Total revenue		116,801		112,374		4,427		3.9	%	346,464		342,518		3,946		1.2	%

Property operating expense		47,475		46,378		(1,097)		(2.4)	%	140,159		141,776		1,617		1.1	%

Property other income / (expense)		216		215		1.0		0.5	%	647		646		1.0		0.2	%

Same store net operating income (accrual)		$	69,542	$	66,211	$	3,331	5.0	%	$	206,952	$	201,388	$	5,564	2.8	%

Less:
	Straight line effects of lease revenue	(1,784)		(5,389)		3,605		66.9	%	(7,566)		(18,049)		10,483		58.1	%
	Amortization of lease-related intangibles	(1,516)		(1,418)		(98)		(6.9)	%	(4,389)		(4,990)		601		12.0	%
	Non-cash general reserve for uncollectible accounts	—		(33)		33		100.0	%	412		4,831		(4,419)		(91.5)	%

Same store net operating income (cash)		$	66,242	$	59,371	$	6,871	11.6	%	$	195,409	$	183,180	$	12,229	6.7	%


(1)			The increase in cash rental income for the three months and the nine months ended September 30, 2021 as compared to the same periods in 2020 was primarily due to the burn off of significant rental abatements at several properties in the portfolio, including Enclave Place in Houston, TX.
(2)			The increase in tenant reimbursements for the three months ended September 30, 2021 as compared to the same period in 2020 was primarily the result of the expiration of an operating expense reimbursement abatement at Enclave Place in Houston, TX.
(3)			The decrease in straight line effects of lease revenue for the three months and the nine months ended September 30, 2021 as compared to the same periods in 2020 was primarily due to the expiration of the rental abatement periods of several large new and renewal leases in the portfolio.
(4)			The decrease in other property related income for the nine months ended September 30, 2021 as compared to the same period in 2020 was primarily the result of pandemic-related decreased transient parking activity across the portfolio.

Piedmont Office Realty Trust, Inc.

Capitalization Analysis

Unaudited (in thousands except for per share data)



	As of		As of
	September 30, 2021		December 31, 2020

Market Capitalization
Common stock price	$17.43		$16.23
Total shares outstanding	124,136		123,839
Equity market capitalization (1)	$2,163,684		$2,009,914
Total debt - principal amount outstanding (excludes premiums, discounts, and deferred financing costs)	$1,678,000		$1,632,610
Total market capitalization (1)	$3,841,684		$3,642,524
Total debt / Total market capitalization (1)	43.7	%	44.8	%
Ratios & Information for Debt Holders
Total gross assets (2)	$4,883,502		$4,747,821
Total debt / Total gross assets (2)	34.4	%	34.4	%
Average net debt to Core EBITDA (3)	5.5 x		5.8 x


(1)			Reflects common stock closing price, shares outstanding, and outstanding debt as of the end of the reporting period, as appropriate.
(2)			Total gross assets is defined as total assets with the add-back of accumulated depreciation and accumulated amortization related to real estate assets and accumulated amortization related to deferred lease costs.
(3)			For the purposes of this calculation, we annualize the Core EBITDA for the quarter and use the average daily balance of debt outstanding during the quarter, less cash and cash equivalents and escrow deposits and restricted cash as of the end of the quarter.

Piedmont Office Realty Trust, Inc.

Debt Summary

As of September 30, 2021

Unaudited ($ in thousands)

Floating Rate & Fixed Rate Debt

https://cdn.kscope.io/4f39fba7d1d2a6db082d312a09a86fbd-chart1.gif

Debt (1)

Principal Amount

Outstanding

Weighted Average Stated

Interest Rate (2)

Weighted Average

Maturity

Floating Rate

$228,000

(3)

1.02%

35.8 months

Fixed Rate

1,450,000

3.51%

64.0 months

Total

$1,678,000

3.18%

60.2 months

Unsecured & Secured Debt

https://cdn.kscope.io/4f39fba7d1d2a6db082d312a09a86fbd-chart2.gif

Debt (1)

Principal Amount

Outstanding

Weighted Average Stated

Interest Rate (2)

Weighted Average

Maturity

Unsecured

$1,678,000

3.18%

60.2 months

Secured

—

—%

N/A

Total

$1,678,000

3.18%

60.2 months


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

2021	—	N/A	—%
2022	—	N/A	—%
2023	428,000	2.96%	25.5%
2024	400,000	4.45%	23.8%
2025	250,000	2.04%	14.9%
2026 +	600,000	2.95%	35.8%

Total	$1,678,000	3.18%	100.0%


(1)			All of Piedmont's outstanding debt as of September 30, 2021, was unsecured, interest-only debt.
(2)			Weighted average stated interest rate is calculated based upon the principal amounts outstanding.
(3)			The amount of floating rate debt is comprised of the $78 million outstanding balance as of September 30, 2021 on the $500 million unsecured revolving credit facility and $150 million in principal amount of the $250 million unsecured term loan that closed in 2018 that remained unhedged as of September 30, 2021. The $250 million unsecured term loan that closed in 2018 has a stated variable rate. However, Piedmont entered into $100 million in notional amount of seven-year interest rate swap agreements resulting in an effectively fixed interest rate for $100 million in principal amount of the term loan (at 3.56% as of September 30, 2021; this rate can change only with a credit rating change for the Company) through the loan's maturity date of March 31, 2025. Additional details regarding the floating rate debt can be found on the following page.
(4)			For loans which provide extension options that are conditional solely upon the Company providing proper notice to the loan's administrative agent and the payment of an extension fee, the final extended maturity date is reflected herein.

Piedmont Office Realty Trust, Inc.

Debt Detail

Unaudited ($ in thousands)


Facility (1)	Stated Rate			Maturity	Principal Amount Outstanding as of September 30, 2021

$350.0 Million Unsecured 2013 Senior Notes	3.40	%	(2)	6/1/2023	$	350,000
$500.0 Million Unsecured Line of Credit (3)	0.99	%	(4)	9/29/2023	78,000
$400.0 Million Unsecured 2014 Senior Notes	4.45	%	(5)	3/15/2024	400,000
$250.0 Million Unsecured 2018 Term Loan	2.04	%	(6)	3/31/2025	250,000
$300.0 Million Unsecured 2020 Senior Notes	3.15	%	(7)	8/15/2030	300,000
$300.0 Million Unsecured 2021 Senior Notes	2.75	%	(8)	4/1/2032	300,000
Total Debt - Principal Amount Outstanding / Weighted Average Stated Rate (9)	3.18	%			$	1,678,000
GAAP Accounting Adjustments (10)					(12,899)
Total Debt - GAAP Amount Outstanding					$	1,665,101


(1)			All of Piedmont’s outstanding debt as of September 30, 2021, was unsecured, interest-only debt.
(2)			The $350 million unsecured senior notes were offered for sale at 99.601% of the principal amount. The resulting effective cost of the financing is approximately 3.45% before the consideration of transaction costs and proceeds from interest rate hedges. After the application of proceeds from interest rate hedges, the effective cost of the financing is approximately 3.43%.
(3)			All of Piedmont’s outstanding debt as of September 30, 2021, was term debt with the exception of $78 million outstanding on our unsecured revolving credit facility. The $500 million unsecured revolving credit facility has an initial maturity date of September 30, 2022; however, there are two, six-month extension options available under the facility providing for a total extension of up to one year to September 29, 2023. The final extended maturity date is presented on this schedule.
(4)			The interest rate presented for the $500 million unsecured revolving credit facility is the weighted average interest rate for all outstanding draws as of September 30, 2021. Piedmont may select from multiple interest rate options with each draw under the facility, including the prime rate and various length LIBOR locks. The all-in interest rate associated with each LIBOR interest period selection is comprised of the relevant base LIBOR interest rate plus a credit spread (0.90% as of September 30, 2021) based on Piedmont's then current credit rating.
(5)			The $400 million unsecured senior notes were offered for sale at 99.791% of the principal amount. The resulting effective cost of the financing is approximately 4.48% before the consideration of transaction costs and proceeds from interest rate hedges. After the application of proceeds from interest rate hedges, the effective cost of the financing is approximately 4.10%.
(6)			The $250 million unsecured term loan that closed in 2018 has a stated variable interest rate; however, Piedmont entered into $100 million in notional amount of seven-year interest rate swap agreements that effectively fixed the interest rate on $100 million of the term loan (at 3.56% as of September 30, 2021; this rate can change only with a credit rating change for the Company) through the loan's maturity date of March 31, 2025. For the portion of the loan that continues to have a variable interest rate, Piedmont may select from multiple interest rate options, including the prime rate and various length LIBOR locks. The all-in interest rate associated with each LIBOR interest period selection is comprised of the relevant base LIBOR interest rate plus a credit spread (0.95% as of September 30, 2021) based on Piedmont's then current credit rating.
(7)			The $300 million unsecured senior notes were offered for sale at 99.236% of the principal amount. The resulting effective cost of the financing is approximately 3.24% before the consideration of transaction costs and the impact of interest rate hedges. After incorporating the results of the related interest rate hedging activity, the effective cost of the financing is approximately 3.90%.
(8)			The $300 million unsecured senior notes were offered for sale at 99.510% of the principal amount. The resulting effective cost of the financing is approximately 2.80% before the consideration of transaction costs and the impact of interest rate hedges. After incorporating the results of the related interest rate hedging activity, the effective cost of the financing is approximately 2.78%.
(9)			Weighted average is based on the principal amounts outstanding and interest rates at September 30, 2021.
(10)			The GAAP accounting adjustments relate to original issue discounts, third-party fees, and lender fees resulting from the procurement processes for our various debt facilities. The original issue discounts and fees are amortized to interest expense over the contractual term of the related debt.

Piedmont Office Realty Trust, Inc.

Debt Covenant & Ratio Analysis (for Debt Holders)

As of September 30, 2021

Unaudited


		Three Months Ended
Bank Debt Covenant Compliance (1)	Required	9/30/2021	6/30/2021	3/31/2021	12/31/2020	9/30/2020

Maximum leverage ratio	0.60	0.35	0.35	0.36	0.35	0.35
Minimum fixed charge coverage ratio (2)	1.50	5.28	5.15	4.96	4.71	4.54
Maximum secured indebtedness ratio	0.40	—	—	0.01	0.01	0.01
Minimum unencumbered leverage ratio	1.60	2.74	2.74	2.72	2.77	2.85
Minimum unencumbered interest coverage ratio (3)	1.75	5.49	5.48	5.44	5.26	5.13


		Three Months Ended
Bond Covenant Compliance (4)	Required	9/30/2021	6/30/2021	3/31/2021	12/31/2020	9/30/2020

Total debt to total assets	60% or less	40.4%	40.8%	41.1%	40.6%	40.3%
Secured debt to total assets	40% or less	—%	—%	0.7%	0.7%	0.7%
Ratio of consolidated EBITDA to interest expense	1.50 or greater	6.11	6.06	5.93	5.66	5.52
Unencumbered assets to unsecured debt	150% or greater	248%	245%	243%	247%	249%


	Three Months Ended	Nine Months Ended	Twelve Months Ended
Other Debt Coverage Ratios for Debt Holders	September 30, 2021	September 30, 2021	December 31, 2020

Average net debt to core EBITDA (5)	5.5 x	5.6 x	5.8 x
Fixed charge coverage ratio (6)	5.5 x	5.5 x	5.2 x
Interest coverage ratio (7)	5.5 x	5.5 x	5.3 x


(1)			Bank debt covenant compliance calculations relate to specific calculations detailed in the relevant credit agreements.
(2)			Defined as EBITDA for the trailing four quarters (including the Company's share of EBITDA from unconsolidated interests), excluding one-time or non-recurring gains or losses, less a $0.15 per square foot capital reserve, and excluding the impact of straight line rent leveling adjustments and amortization of intangibles divided by the Company's share of fixed charges, as more particularly described in the credit agreements. This definition of fixed charge coverage ratio as prescribed by our credit agreements is different from the fixed charge coverage ratio definition employed elsewhere within this report.
(3)			Defined as net operating income for the trailing four quarters for unencumbered assets (including the Company's share of net operating income from partially-owned entities and subsidiaries that are deemed to be unencumbered) less a $0.15 per square foot capital reserve divided by the Company's share of interest expense associated with unsecured financings only, as more particularly described in the credit agreements.
(4)			Bond covenant compliance calculations relate to specific calculations prescribed in the relevant debt agreements. Please refer to the Indenture dated May 9, 2013, the Indenture and the First Supplemental Indenture dated March 6, 2014, the Second Supplemental Indenture dated August 12, 2020, and the Third Supplemental Indenture dated September 20, 2021 for detailed information about the calculations.
(5)			For the purposes of this calculation, we use the average daily balance of debt outstanding during the identified period, less cash and cash equivalents and escrow deposits and restricted cash as of the end of the period.
(6)			Fixed charge coverage ratio is calculated as Core EBITDA divided by the sum of interest expense, principal amortization, capitalized interest and preferred dividends. The Company had no preferred dividends during the periods ended September 30, 2021 and December 31, 2020. The Company had capitalized interest of $1,009,904 for the three months ended September 30, 2021, $2,698,357 for the nine months ended September 30, 2021 and $965,142 for the twelve months ended December 31, 2020. The Company had no principal amortization for the three months ended September 30, 2021, as it repaid its last remaining amortizing loan during the second quarter of 2021; the Company had principal amortization of $372,455 for the nine months ended September 30, 2021 and $1,076,993 for the twelve months ended December 31, 2020.
(7)			Interest coverage ratio is calculated as Core EBITDA divided by the sum of interest expense and capitalized interest. The Company had capitalized interest of $1,009,904 for the three months ended September 30, 2021, $2,698,357 for the nine months ended September 30, 2021 and $965,142 for the twelve months ended December 31, 2020.

Piedmont Office Realty Trust, Inc.

Tenant Diversification (1)

As of September 30, 2021

(in thousands except for number of properties)


Tenant	Credit Rating (2)	Number of Properties	Lease Expiration (3)	Annualized Lease Revenue	Percentage of Annualized Lease Revenue (%)		Leased Square Footage	Percentage of Leased Square Footage (%)
US Bancorp	A+ / A2	3	2023 / 2024		$27,000	5.2		787	5.6
State of New York	AA+ / Aa2	1	2024 / 2039		26,996	5.2		502	3.6
City of New York	AA / Aa2	1	2026		14,602	2.8		313	2.2
Amazon	AA / A1	4	2024 / 2025		14,431	2.8		337	2.4
Transocean	CCC / Caa3	1	2036		10,902	2.1		301	2.1
Harvard University	AAA / Aaa	2	2032 / 2033		8,778	1.7		129	0.9
Raytheon	A- / Baa1	2	2031		8,115	1.6		440	3.1
Schlumberger Technology	A / A2	1	2028		7,820	1.5		254	1.8
Gartner	BB+ / Ba2	2	2034		7,522	1.5		207	1.5
Salesforce.com	A+ / A2	1	2029		7,096	1.4		182	1.3
Fiserv	BBB / Baa2	1	2027		6,980	1.3		195	1.4
VMware, Inc.	BBB- / Baa2	1	2027		6,917	1.3		215	1.5
Nuance Communications	BB- / Ba3	1	2030		6,907	1.3		201	1.4
Epsilon Data Management / subsidiary of Publicis	BBB / Baa2	1	2026		6,668	1.3		222	1.6
Applied Predictive Technologies / subsidiary of MasterCard	A+ / A1	1	2028		6,316	1.2		133	1.0
CVS Caremark	BBB / Baa2	1	2022		6,261	1.2		208	1.5
International Food Policy Research Institute	No Rating Available	1	2029		6,194	1.2		102	0.7
Ryan	No Rating Available	1	2023		6,012	1.2		170	1.2
Cargill	A / A2	1	2023		5,370	1.0		268	1.9
Bank of America	A- / A2	5	2024 / 2025		5,193	1.0		100	0.7
NCS Pearson, Inc.	Baa3	1	2027		4,980	1.0		147	1.0


Other			Various		317,193	61.2		8,693	61.6
Total					$518,253	100.0		14,106	100.0


(1)			This schedule presents all tenants contributing 1.0% or more to Annualized Lease Revenue.
(2)			Credit rating may reflect the credit rating of the parent or a guarantor. When available, both the Standard & Poor's credit rating and the Moody's credit rating are provided. The absence of a credit rating for a tenant is not an indication of the creditworthiness of the tenant; in most cases, the lack of a credit rating reflects that the tenant has not sought such a rating.
(3)			Unless otherwise indicated, Lease Expiration represents the expiration year of the majority of the square footage leased by the tenant.

Piedmont Office Realty Trust, Inc.

Tenant Diversification

As of September 30, 2021

Percentage of Annualized Leased Revenue (%)

September 30, 2021 as compared to December 31, 2020

https://cdn.kscope.io/4f39fba7d1d2a6db082d312a09a86fbd-chart-6ce507348cd64697954.jpg

Piedmont Office Realty Trust, Inc.

Tenant Credit Rating & Lease Distribution Information

As of September 30, 2021

Tenant Credit Rating (1)


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

AAA / Aaa	$21,505	4.1
AA / Aa	60,315	11.6
A / A	96,174	18.6
BBB / Baa	53,441	10.3
BB / Ba	29,102	5.6
B / B	9,943	1.9
Below	17,401	3.4
Not rated (2)	230,372	44.5
Total	$518,253	100.0

Lease Distribution


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

2,500 or Less	354	37.3	$21,935	4.3	255	1.8
2,501 - 10,000	335	35.3	63,362	12.2	1,723	12.2
10,001 - 20,000	106	11.2	54,976	10.6	1,479	10.5
20,001 - 40,000	80	8.4	81,466	15.7	2,248	15.9
40,001 - 100,000	43	4.5	99,030	19.1	2,598	18.4
Greater than 100,000	31	3.3	197,484	38.1	5,803	41.2
Total	949	100.0	$518,253	100.0	14,106	100.0


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

Piedmont Office Realty Trust, Inc.

Leased Percentage Information

(in thousands)


	Three Months Ended				Three Months Ended
	September 30, 2021				September 30, 2020
	Leased Square Footage	Rentable Square Footage	Percent Leased (1)		Leased Square Footage	Rentable Square Footage	Percent Leased (1)
As of June 30, 20xx	14,117	16,435	85.9	%	15,215	17,164	88.6	%
Properties placed in service	—	—			—	—
Restated As of June 30, 20xx	14,117	16,435	85.9	%	15,215	17,164	88.6	%
Leases signed during the period	509				229
Less:
Lease renewals signed during period	(288)				(151)
New leases signed during period for currently occupied space	(64)				(10)
Leases expired during period and other	(168)	(7)			(371)	1
Subtotal	14,106	16,428	85.9	%	14,912	17,165	86.9	%
Acquisitions during period (2)	—	—			—	—
Dispositions during period (2)	—	—			—	—
As of September 30, 20xx	14,106	16,428	85.9	%	14,912	17,165	86.9	%



	Nine Months Ended				Nine Months Ended
	September 30, 2021				September 30, 2020
	Leased Square Footage	Rentable Square Footage	Percent Leased (1)		Leased Square Footage	Rentable Square Footage	Percent Leased (1)
As of December 31, 20xx	14,260	16,428	86.8	%	14,633	16,046	91.2	%
Properties placed in service	—	—			204	487
Restated As of December 31, 20xx	14,260	16,428	86.8	%	14,837	16,533	89.7	%
Leases signed during the period	1,851				917
Less:
Lease renewals signed during period	(1,323)				(707)
New leases signed during period for currently occupied space	(108)				(47)
Leases expired during period and other	(574)	—			(654)	(2)
Subtotal	14,106	16,428	85.9	%	14,346	16,531	86.8	%
Acquisitions and properties placed in service during period (2)	—	—			1,367	1,435
Dispositions and properties taken out of service during period (2)	—	—			(801)	(801)
As of September 30, 20xx	14,106	16,428	85.9	%	14,912	17,165	86.9	%


Same Store Analysis
Less acquisitions / dispositions after September 30, 2020 and developments / out-of-service redevelopments (2) (3)	—	—	—	%	(552)	(739)	74.7	%
Same Store Leased Percentage	14,106	16,428	85.9	%	14,360	16,426	87.4	%


(1)			Calculated as square footage associated with commenced leases as of period end with the addition of square footage associated with uncommenced leases for spaces vacant as of period end at our in-service properties, divided by total rentable in-service square footage as of period end, expressed as a percentage.
(2)			For additional information on acquisitions and dispositions completed during the last year and current developments and out-of-service redevelopments, please refer to pages 34 and 35, respectively.
(3)			Dispositions completed during the previous twelve months are deducted from the previous period data and acquisitions completed during the previous twelve months are deducted from the current period data. Redevelopments that commenced during the previous twelve months that were taken out of service are deducted from the previous period data and developments and redevelopments placed in service during the previous twelve months are deducted from the current period data.

Piedmont Office Realty Trust, Inc.

Rental Rate Roll Up / Roll Down Analysis (1)

(in thousands)


	Three Months Ended
	September 30, 2021
	Square Feet	% of Total Signed During Period	% of Rentable Square Footage	% Change Cash Rents (2)	% Change Accrual Rents (3) (4)

Leases executed for spaces vacant one year or less	253	49.7%	1.5%	10.5%	16.1%
Leases executed for spaces excluded from analysis (5)	256	50.3%



	Nine Months Ended
	September 30, 2021
	Square Feet	% of Total Signed During Period	% of Rentable Square Footage	% Change Cash Rents (2)	% Change Accrual Rents (3) (4)

Leases executed for spaces vacant one year or less	1,241	67.0%	7.6%	8.2%	17.0%
Leases executed for spaces excluded from analysis (5)	610	33.0%


(1)			The populations analyzed for this analysis consist of consolidated leases executed during the relevant period with lease terms of greater than one year. Leases associated with storage spaces, retail spaces, management offices, and newly acquired assets for which there is less than one year of operating history, along with percentage rent leases, are excluded from this analysis.
(2)			For the purposes of this analysis, the last twelve months of cash paying rents of the previous leases are compared to the first twelve months of cash paying rents of the new leases in order to calculate the percentage change.
(3)			For the purposes of this analysis, the accrual basis rents of the previous leases are compared to the accrual basis rents of the new leases in order to calculate the percentage change. For newly signed leases which have variations in accrual basis rents, whether because of known future expansions, contractions, lease expense recovery structure changes, or other similar reasons, the weighted average of such varying accrual basis rents is used for the purposes of this analysis.
(4)			For leases under which a tenant may use, at its discretion, a portion of its tenant improvement allowance for expenses other than those related to improvements to its space, an assumption is made that the tenant elects to use any such portion of its tenant improvement allowance for improvements to its space prior to the commencement of its lease, unless the Company is notified otherwise by the tenant. This assumption is made based upon historical usage patterns of tenant improvement allowances by the Company's tenants.

(5)			Represents leases signed at our consolidated office assets that do not qualify for inclusion in the analysis, primarily because the spaces for which the new leases were signed had been vacant for more than one year.

Piedmont Office Realty Trust, Inc.

Lease Expiration Schedule

As of September 30, 2021

(in thousands)



Expiration Year	Annualized Lease Revenue (1)	Percentage of Annualized Lease Revenue (%)	Rentable Square Footage	Percentage of Rentable Square Footage (%)
Vacant	$—	—	2,322	14.1




2021 (2)	8,208	1.6	256	1.6
2022 (3)	34,615	6.7	1,030	6.3
2023	54,732	10.6	1,666	10.1
2024	56,827	11.0	1,701	10.4
2025	56,581	10.9	1,583	9.6
2026	51,221	9.9	1,378	8.4
2027	49,789	9.6	1,357	8.3
2028	46,273	8.9	1,283	7.8
2029	30,664	5.9	781	4.7
2030	20,903	4.0	570	3.5
2031	14,567	2.8	646	3.9
2032	20,183	3.9	464	2.8
2033	9,339	1.8	176	1.1
Thereafter	64,351	12.4	1,215	7.4
Total / Weighted Average	$518,253	100.0	16,428	100.0


Average Lease Term Remaining
9/30/2021			6.1 years
12/31/2020			6.1 years

https://cdn.kscope.io/4f39fba7d1d2a6db082d312a09a86fbd-chart-e6302a6582a84ad6b1d.jpg


(1)			Annualized rental income associated with each newly executed lease for currently occupied space is incorporated herein only at the expiration date for the current lease. Annualized rental income associated with each such new lease is removed from the expiry year of the current lease and added to the expiry year of the new lease. These adjustments effectively incorporate known roll ups and roll downs into the expiration schedule.
(2)			Includes leases with an expiration date of September 30, 2021, comprised of approximately 102,000 square feet and Annualized Lease Revenue of $3.6 million.
(3)			Leases and other revenue-producing agreements on a month-to-month basis, comprised of approximately 18,000 square feet and Annualized Lease Revenue of $0.6 million, are assigned a lease expiration date of a year and a day beyond the period end date.

Piedmont Office Realty Trust, Inc.

Lease Expirations by Quarter

As of September 30, 2021

(in thousands)


	Q4 2021 (1)		Q1 2022		Q2 2022		Q3 2022
Location	Expiring Square Footage	Expiring Lease Revenue (2)	Expiring Square Footage	Expiring Lease Revenue (2)	Expiring Square Footage	Expiring Lease Revenue (2)	Expiring Square Footage	Expiring Lease Revenue (2)

Atlanta	121	$3,554	58	$1,804	152	$4,816	64	$2,048
Boston	—	—	2	95	8	349	34	1,908
Dallas	53	1,884	26	1,052	85	3,050	55	1,968
Minneapolis	47	1,681	12	412	—	1	28	1,154
New York	—	8	2	94	2	79	3	169
Orlando	5	149	12	455	2	202	5	259
Washington, D.C.	28	1,339	5	199	17	829	15	642
Other	2	44	—	25	—	6	2	6
Total / Weighted Average (3)	256	$8,659	117	$4,136	266	$9,332	206	$8,154


(1)			Includes leases with an expiration date of September 30, 2021, comprised of approximately 102,000 square feet and expiring lease revenue of $3.5 million. No such adjustments are made to other periods presented.
(2)			Expiring Lease Revenue is calculated as expiring square footage multiplied by the gross rent per square foot of the tenant currently leasing the space.
(3)			Total expiring lease revenue in any given year will not tie to the expiring Annualized Lease Revenue presented on the Lease Expiration Schedule on the previous page as the Lease Expiration Schedule accounts for the revenue effects of newly signed leases. Reflected herein are expiring revenues based on in-place rental rates.

Piedmont Office Realty Trust, Inc.

Lease Expirations by Year

As of September 30, 2021

(in thousands)


	12/31/2021 (1)		12/31/2022		12/31/2023		12/31/2024		12/31/2025
Location	Expiring Square Footage	Expiring Lease Revenue (2)	Expiring Square Footage	Expiring Lease Revenue (2)	Expiring Square Footage	Expiring Lease Revenue (2)	Expiring Square Footage	Expiring Lease Revenue (2)	Expiring Square Footage	Expiring Lease Revenue (2)
Atlanta	121	$3,554	324	$10,128	205	$6,912	276	$9,089	425	$13,160
Boston	—	—	53	3,518	124	4,912	39	2,723	148	5,050
Dallas	53	1,884	475	15,662	461	16,098	222	8,064	414	16,403
Minneapolis	47	1,681	52	1,845	701	20,047	531	18,911	260	10,151
New York	—	8	7	364	3	607	69	3,706	7	374
Orlando	5	149	65	2,324	100	3,261	379	8,588	244	7,364
Washington, D.C.	28	1,339	52	2,409	68	3,475	172	8,503	44	2,963
Other	2	44	2	37	4	137	13	413	41	1,096
Total / Weighted Average (3)	256	$8,659	1,030	$36,287	1,666	$55,449	1,701	$59,997	1,583	$56,561


(1)			Includes leases with an expiration date of September 30, 2021, comprised of approximately 102,000 square feet and expiring lease revenue of $3.5 million. No such adjustments are made to other periods presented.
(2)			Expiring Lease Revenue is calculated as expiring square footage multiplied by the gross rent per square foot of the tenant currently leasing the space.
(3)			Total expiring lease revenue in any given year will not tie to the expiring Annualized Lease Revenue presented on the Lease Expiration Schedule on page 26 as the Lease Expiration Schedule accounts for the revenue effects of newly signed leases. Reflected herein are expiring revenues based on in-place rental rates.

Piedmont Office Realty Trust, Inc.

Capital Expenditures

For the quarter ended September 30, 2021

Unaudited (in thousands)


	For the Three Months Ended
	9/30/2021		6/30/2021		3/31/2021		12/31/2020		9/30/2020
Non-incremental
Building / construction / development	$	8,598	$	4,231	$	12,921	$	9,334	$	6,665
Tenant improvements	5,941		9,504		3,225		9,839		7,396
Leasing costs	4,101		3,127		1,201		447		1,550
Total non-incremental	18,640		16,862		17,347		19,620		15,611
Incremental
Building / construction / development	10,348		9,757		7,065		9,913		9,343
Tenant improvements	4,282		4,835		2,544		2,014		2,225
Leasing costs	1,471		2,484		618		444		1,330
Total incremental	16,101		17,076		10,227		12,371		12,898
Total capital expenditures	$	34,741	$	33,938	$	27,574	$	31,991	$	28,509


NOTE:			The information presented on this page is for our consolidated assets.

Piedmont Office Realty Trust, Inc.

Contractual Tenant Improvements and Leasing Commissions


		Three Months Ended September 30, 2021	Nine Months Ended September 30, 2021	For the Year Ended								2016 to 2021 (Weighted Average Total)
				2020		2019		2018		2017	2016
Renewal Leases
	Square feet	286,504	1,321,295	841,020		2,032,452		735,969		1,198,603	880,289	7,009,628
	Tenant improvements per square foot per year of lease term (1)	$1.60	$1.45	$3.15		$4.28		$4.15		$1.84	$1.35	$2.98
	Leasing commissions per square foot per year of lease term	$1.72	$1.45	$1.75		$1.63		$1.69		$1.12	$1.05	$1.47
	Total per square foot per year of lease term	$3.32	$2.90	$4.90		$5.91	(2)	$5.84	(3)	$2.96	$2.40	$4.45
New Leases
	Square feet	220,904	528,659	262,228		697,880		864,113		855,069	1,065,630	4,273,579
	Tenant improvements per square foot per year of lease term (1)	$4.34	$3.93	$6.22		$4.07		$4.58		$4.73	$5.01	$4.62
	Leasing commissions per square foot per year of lease term	$1.98	$1.98	$2.13		$1.85		$1.73		$1.83	$1.86	$1.85
	Total per square foot per year of lease term	$6.32	$5.91	$8.35	(4)	$5.92		$6.31	(3)	$6.56	$6.87	$6.47
Total
	Square feet	507,408	1,849,954	1,103,248		2,730,332		1,600,082		2,053,672	1,945,919	11,283,207
	Tenant improvements per square foot per year of lease term (1)	$3.22	$2.47	$4.30		$4.21		$4.46		$3.55	$3.70	$3.80
	Leasing commissions per square foot per year of lease term	$1.87	$1.67	$1.89		$1.70		$1.72		$1.54	$1.57	$1.66
	Total per square foot per year of lease term	$5.09	$4.14	$6.19	(4)	$5.91	(2)	$6.18	(3)	$5.09	$5.27	$5.46
Less Adjustment for Commitment Expirations (5)
	Expired tenant improvements (not paid out) per square foot per year of lease term	-$0.17	-$0.19	-$0.40		-$0.05		-$0.54		-$0.44	-$0.16	-$0.27

	Adjusted total per square foot per year of lease term	$4.92	$3.95	$5.79		$5.86		$5.64		$4.65	$5.11	$5.19


NOTE:			This information is presented for our consolidated office assets only and excludes activity associated with storage and license spaces.
(1)			For leases under which a tenant may use, at its discretion, a portion of its tenant improvement allowance for expenses other than those related to improvements to its space, an assumption is made that the tenant elects to use any such portion of its tenant improvement allowance for improvements to its space prior to the commencement of its lease, unless the Company is notified otherwise by the tenant. This assumption is made based upon historical usage patterns of tenant improvement allowances by the Company's tenants.
(2)			During 2019, we completed three large lease renewals with significant capital commitments: VMware at 1155 Perimeter Center West in Atlanta, GA, Siemens at Crescent Ridge II in Minnetonka, MN, and the State of New York at 60 Broad Street in New York, NY. If the costs associated with those leases were to be removed from the average committed capital cost calculation, the average committed capital cost per square foot per year of lease term for renewal leases and total leases completed during the twelve months ended December 31, 2019 would be $3.41 and $5.04, respectively.
(3)			During 2018, we completed two large leasing transactions in the Houston, TX market with large capital commitments: a 254,000 square foot lease renewal and expansion with Schlumberger Technology Corporation at 1430 Enclave Parkway and a 301,000 square foot, full-building lease with Transocean Offshore Deepwater Drilling at Enclave Place. If the costs associated with those leases were to be removed from the average committed capital cost calculation, the average committed capital cost per square foot per year of lease term for renewal leases, new leases and total leases completed during the twelve months ended December 31, 2018 would be $5.27, $6.02, and $5.70, respectively.
(4)			During 2020, we completed five new leasing transactions (amounting to 93,000 square feet in total) in the Washington, DC market with large capital commitments. If the costs associated with those leases were to be removed from the average committed capital cost calculation, the average committed capital cost per square foot per year of lease term for new leases and total leases completed during the twelve months ended December 31, 2020 would be $5.62 and $5.06, respectively.
(5)			The Company has historically reported the maximum amount of capital to which it committed in leasing transactions as of the signing of the leases with no subsequent updates for variations and/or changes in tenants' uses of tenant improvement allowances. Many times, tenants do not fully use the allowances provided in their leases or let portions of their tenant improvement allowances expire. In an effort to provide additional clarity on the actual costs of completed leasing transactions, tenant improvement allowances that expired or became no longer available to tenants are disclosed in this section and are deducted from the capital commitments per square foot of leased space in the periods in which they expired in an effort to provide a better estimation of leasing transaction costs over time.

Piedmont Office Realty Trust, Inc.

Geographic Diversification

As of September 30, 2021

($ and square footage in thousands)


Location	Number of Properties	Annualized Lease Revenue	Percentage of Annualized Lease Revenue (%)	Rentable Square Footage	Percentage of Rentable Square Footage (%)	Leased Square Footage	Percent Leased (%)
Dallas	13	$103,400	20.0	3,544	21.6	2,971	83.8
Atlanta	9	93,983	18.1	3,393	20.6	2,890	85.2
Washington, D.C.	6	68,144	13.2	1,620	9.8	1,327	81.9
Minneapolis	6	65,432	12.6	2,104	12.8	1,934	91.9
Boston	10	61,352	11.8	1,885	11.5	1,739	92.3
Orlando	6	53,587	10.3	1,754	10.7	1,589	90.6
New York	1	48,657	9.4	1,029	6.3	930	90.4
Other	3	23,698	4.6	1,099	6.7	726	66.1

Total / Weighted Average	54	$518,253	100.0	16,428	100.0	14,106	85.9

https://cdn.kscope.io/4f39fba7d1d2a6db082d312a09a86fbd-chart-4dd383944e6842489be.jpg

Piedmont Office Realty Trust, Inc.

Geographic Diversification by Location Type

As of September 30, 2021

(square footage in thousands)


		CBD				URBAN INFILL / SUBURBAN				TOTAL
Location	State	Number of Properties	Percentage of Annualized Lease Revenue (%)	Rentable Square Footage	Percentage of Rentable Square Footage (%)	Number of Properties	Percentage of Annualized Lease Revenue (%)	Rentable Square Footage	Percentage of Rentable Square Footage (%)	Number of Properties	Percentage of Annualized Lease Revenue (%)	Rentable Square Footage	Percentage of Rentable Square Footage (%)
Dallas	TX	—	—	—	—	13	20.0	3,544	21.6	13	20.0	3,544	21.6
Atlanta	GA	—	—	—	—	9	18.1	3,393	20.6	9	18.1	3,393	20.6
Washington, D.C.	DC, VA	3	5.9	722	4.4	3	7.3	898	5.4	6	13.2	1,620	9.8
Minneapolis	MN	1	6.5	937	5.7	5	6.1	1,167	7.1	6	12.6	2,104	12.8
Boston	MA	—	—	—	—	10	11.8	1,885	11.5	10	11.8	1,885	11.5
Orlando	FL	4	8.5	1,445	8.8	2	1.8	309	1.9	6	10.3	1,754	10.7
New York	NY	1	9.4	1,029	6.3	—	—	—	—	1	9.4	1,029	6.3
Other		—	—	—	—	3	4.6	1,099	6.7	3	4.6	1,099	6.7

Total / Weighted Average		9	30.3	4,133	25.2	45	69.7	12,295	74.8	54	100.0	16,428	100.0

Piedmont Office Realty Trust, Inc.

Industry Diversification

As of September 30, 2021

($ and square footage in thousands)


				Percentage of
	Number of	Percentage of Total	Annualized Lease	Annualized Lease	Leased Square	Percentage of Leased
Industry	Tenants	Tenants (%)	Revenue	Revenue (%)	Footage	Square Footage (%)
Business Services	94	13.3	$83,970	16.2	2,342	16.6
Engineering, Accounting, Research, Management & Related Services	100	14.1	65,803	12.7	1,729	12.3
Governmental Entity	6	0.8	48,973	9.4	970	6.9
Depository Institutions	18	2.5	37,524	7.2	1,021	7.2
Legal Services	70	9.9	28,133	5.4	780	5.5
Miscellaneous Retail	9	1.3	22,258	4.3	590	4.2
Real Estate	40	5.7	21,875	4.2	687	4.9
Oil and Gas Extraction	3	0.4	18,805	3.6	557	3.9
Security & Commodity Brokers, Dealers, Exchanges & Services	49	6.9	17,265	3.3	471	3.3
Holding and Other Investment Offices	31	4.4	15,882	3.1	426	3.0
Health Services	26	3.7	15,615	3.0	416	2.9
Measuring, Analyzing, And Controlling Instruments; Medical and Other Goods	5	0.7	12,471	2.4	587	4.2
Educational Services	6	0.8	11,858	2.3	206	1.5
Communications	46	6.5	11,238	2.2	263	1.9
Insurance Agents, Brokers & Services	17	2.4	10,897	2.1	332	2.4
Other	187	26.6	95,686	18.6	2,729	19.3
Total	707	100.0	$518,253	100.0	14,106	100.0

https://cdn.kscope.io/4f39fba7d1d2a6db082d312a09a86fbd-chart-35027b2ed4924699a7b.jpg

Piedmont Office Realty Trust, Inc.

Property Investment Activity

As of September 30, 2021

($ and square footage in thousands)

Acquisitions Over Previous Eighteen Months

Property

Market / Submarket

Acquisition Date

Percent
Ownership (%)

Year Built

Purchase Price

Rentable Square
Footage

Percent Leased at
Acquisition (%)

222 South Orange Avenue

Orlando / CBD

10/29/2020

100

1959

$20,000

127

—

Dispositions Over Previous Eighteen Months


Property	Market / Submarket	Disposition Date	Percent Ownership (%)	Year Built	Sale Price	Rentable Square Footage	Percent Leased at Disposition (%)
1901 Market Street	Philadelphia / Market Street West	6/25/2020	100	1987	$360,000	801	100
New Jersey Portfolio (1)	New York / Route 78	10/28/2020	100	Various	130,000	739	75
Total / Weighted Average					$490,000	1,540	88

Acquisitions Subsequent to Quarter End

Property

Market / Submarket

Acquisition Date

Percent
Ownership (%)

Year Built

Purchase Price

Rentable Square
Footage

Percent Leased at
Acquisition (%)

999 Peachtree Street

Atlanta / Midtown

10/22/2021

100

1987

$223,900

622


(1)			The New Jersey Portfolio was comprised of Piedmont's remaining three assets in New Jersey: 200 Bridgewater Crossing and 400 Bridgewater Crossing in Bridgewater, NJ; and 600 Corporate Drive in Lebanon, NJ.

Piedmont Office Realty Trust, Inc.

Other Investments

As of September 30, 2021

($ and square footage in thousands)

Developable Land Parcels

Property

Market / Submarket

Adjacent Piedmont Property

Acres

Real Estate Book Value

Gavitello

Atlanta / Buckhead

The Medici

2.0

$2,626

Glenridge Highlands Three

Atlanta / Central Perimeter

Glenridge Highlands One and Two

3.0

2,015

Galleria Atlanta

Atlanta / Northwest

Galleria 100, 200, 300, 400 and 600

11.7

21,904

State Highway 161

Dallas / Las Colinas

Las Colinas Corporate Center I and II, 161 Corporate Center

4.5

3,320

Royal Lane

Dallas / Las Colinas

6011, 6021 and 6031 Connection Drive

10.6

2,837

John Carpenter Freeway

Dallas / Las Colinas

750 West John Carpenter Freeway

3.5

1,000

Galleria Dallas

Dallas / Lower North Tollway

One Galleria Tower, Two Galleria Tower, Three Galleria Tower

1.9

4,117

TownPark

Orlando / Lake Mary

400 and 500 TownPark

18.9

8,031

Total

56.1

$45,850

Redevelopment

Property

Market / Submarket

Adjacent Piedmont Property

Construction Type

Percent Leased (%)

Square Feet

Current Asset Basis (Accrual)

222 South Orange Avenue (1)

Orlando / CBD

200 South Orange Avenue

Redevelopment

—

127

$21.7 million

Loan Investments

Loan Type

Collateral

Location of Collateral

Maturity Date

Book Value ($'s in thousands)

Interest Rate

Senior Loan (2)

200 and 400 Bridgewater Crossing

Bridgewater, NJ

10/31/2023

$102,800

6.0%

Mezzanine Loan (2)

Equity interests in 200 and 400 Bridgewater Crossing

Bridgewater, NJ

10/31/2023

$15,700

13.6%

Total / Weighted Average

$118,500

7.0%


(1)			The property was acquired on October 29, 2020 and shares a common lobby and atrium with the Company's 200 South Orange Avenue property. The redevelopment will include an enhanced window line, allowing more light and air into tenant spaces, along with renovations to the lobby, common areas and restrooms.
(2)			Piedmont provided seller financing with the sale of 200 and 400 Bridgewater Crossing in Bridgewater, NJ, on October 28, 2020.

Piedmont Office Realty Trust, Inc.

Supplemental Definitions


Included below are definitions of various terms used throughout this supplemental report, including definitions of certain non-GAAP financial measures and the reasons why the Company’s management believes these measures provide useful information to investors about the Company’s financial condition and results of operations. Reconciliations of any non-GAAP financial measures defined below are included beginning on page 38.
Adjusted Funds From Operations ("AFFO"): The Company calculates AFFO by starting with Core FFO and adjusting for non-incremental capital expenditures and then adding back non-cash items including: non-real estate depreciation, straight-lined rents and fair value lease adjustments, non-cash components of interest expense and compensation expense, and by making similar adjustments for joint ventures. AFFO is a non-GAAP financial measure and should not be viewed as an alternative to net income calculated in accordance with GAAP as a measurement of the Company’s operating performance. The Company believes that AFFO is helpful to investors as a meaningful supplemental comparative performance measure of our ability to make incremental capital investments. Other REITs may not define AFFO in the same manner as the Company; therefore, the Company’s computation of AFFO may not be comparable to that of other REITs.
Annualized Lease Revenue ("ALR"): ALR is calculated by multiplying (i) rental payments (defined as base rent plus operating expense reimbursements, if payable by the tenant on a monthly basis under the terms of a lease that has been executed, but excluding a) rental abatements and b) 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 or operating expense reimbursements 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) the monthly base rental payment (excluding abatements) plus any operating expense reimbursements for the initial month of the lease term, by (ii) 12. Unless stated otherwise, this measure excludes revenues associated with development properties and properties taken out of service for redevelopment, if any.
Core EBITDA: The Company calculates Core EBITDA as net income (computed in accordance with GAAP) before interest, taxes, depreciation and amortization and incrementally removing any impairment losses, gains or losses from sales of property and other significant infrequent items that create volatility within our earnings and make it difficult to determine the earnings generated by our core ongoing business. Core EBITDA is a non-GAAP financial measure and should not be viewed as an alternative to net income calculated in accordance with GAAP as a measurement of the Company’s operating performance. The Company believes that Core EBITDA is helpful to investors as a supplemental performance measure because it provides a metric for understanding the performance of the Company’s results from ongoing operations without taking into account the effects of non-cash expenses (such as depreciation and amortization), as well as items that are not part of normal day-to-day operations of the Company’s business. Other REITs may not define Core EBITDA in the same manner as the Company; therefore, the Company’s computation of Core EBITDA may not be comparable to that of other REITs.
Core Funds From Operations ("Core FFO"): The Company calculates Core FFO by starting with FFO, as defined by NAREIT, and adjusting for gains or losses on the extinguishment of swaps and/or debt and any significant non-recurring items. Core FFO is a non-GAAP financial measure and should not be viewed as an alternative to net income calculated in accordance with GAAP as a measurement of the Company’s operating performance. The Company believes that Core FFO is helpful to investors as a supplemental performance measure because it excludes the effects of certain items which can create significant earnings volatility, but which do not directly relate to the Company’s core business operations. As a result, the Company believes that Core FFO can help facilitate comparisons of operating performance between periods and provides a more meaningful predictor of future earnings potential. Other REITs may not define Core FFO in the same manner as the Company; therefore, the Company’s computation of Core FFO may not be comparable to that of other REITs.
EBITDA: EBITDA is defined as net income before interest, taxes, depreciation and amortization.
EBITDAre: The Company calculates EBITDAre in accordance with the current National Association of Real Estate Investment Trusts (“NAREIT”) definition. NAREIT currently defines EBITDAre as net income (computed in accordance with GAAP) adjusted for gains or losses from sales of property, impairment losses, depreciation on real estate assets, amortization on real estate assets, interest expense and taxes, along with the same adjustments for joint ventures. Some of the adjustments mentioned can vary among owners of identical assets in similar conditions based on historical cost accounting and useful-life estimates. EBITDAre is a non-GAAP financial measure and should not be viewed as an alternative to net income calculated in accordance with GAAP as a measurement of the Company’s operating performance. The Company believes that EBITDAre is helpful to investors as a supplemental performance measure because it provides a metric for understanding the Company’s results from ongoing operations without taking into account the effects of non-cash expenses (such as depreciation and amortization) and capitalization and capital structure expenses (such as interest expense and taxes). The Company also believes that EBITDAre can help facilitate comparisons of operating performance between periods and with other REITs. However, other REITs may not define EBITDAre in accordance with the NAREIT definition, or may interpret the current NAREIT definition differently than the Company; therefore, the Company’s computation of EBITDAre may not be comparable to that of such other REITs.
Funds From Operations ("FFO"): The Company calculates FFO in accordance with the current National Association of Real Estate Investment Trusts (“NAREIT”) definition. NAREIT currently defines FFO as net income (calculated in accordance with GAAP), excluding depreciation and amortization related to real estate, gains and losses from the sale of certain real estate assets, gains and losses from change in control, and impairment write-downs of certain real estate assets and investment in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity, along with appropriate adjustments to those reconciling items for joint ventures. These adjustments can vary among owners of identical assets in similar conditions based on historical cost accounting and useful-life estimates. FFO is a non-GAAP financial measure and should not be viewed as an alternative to net income calculated in accordance with GAAP as a measurement of the Company’s operating performance. The Company believes that FFO is helpful to investors as a supplemental performance measure because it excludes the effects of depreciation, amortization and gains or losses from sales of real estate, all of which are based on historical costs, which implicitly assumes that the value of real estate diminishes predictably over time. The Company also believes that FFO can help facilitate comparisons of operating performance between periods and with other REITs. However, other REITs may not define FFO in accordance with the NAREIT definition, or may interpret the current NAREIT definition differently than the Company; therefore, the Company’s computation of FFO may not be comparable to that of such other REITs.
Gross Assets: Gross Assets is defined as total assets with the add-back of accumulated depreciation and accumulated amortization related to real estate assets and accumulated amortization related to deferred lease costs.
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.
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 ("Leasing Costs") incurred to lease space that was vacant at acquisition, Leasing Costs for spaces vacant for greater than one year, Leasing Costs for spaces at newly acquired properties for which in-place leases expire shortly after acquisition, improvements associated with the expansion of a building, renovations that change the underlying classification of a building, and deferred building maintenance capital identified at and completed shortly after acquisition are included in this measure.
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, in addition to other capital expenditures that qualify as Incremental Capital Expenditures, as defined above.
Property Net Operating Income ("Property NOI"): The Company calculates Property NOI by starting with Core EBITDA and adjusting for general and administrative expense, income associated with property management performed by Piedmont for other organizations and other income or expense items for the Company, such as interest income from loan investments or costs from the pursuit of non-consummated transactions. The Company may present this measure on an accrual basis or a cash basis. When presented on a cash basis, the effects of straight lined rents and fair value lease revenue are also eliminated. Property NOI is a non-GAAP financial measure and should not be viewed as an alternative to net income calculated in accordance with GAAP as a measurement of the Company’s operating performance. The Company believes that Property NOI is helpful to investors as a supplemental comparative performance measure of income generated by its properties alone without the administrative overhead of the Company. Other REITs may not define Property NOI in the same manner as the Company; therefore, the Company’s computation of Property NOI may not be comparable to that of other REITs.
Same Store Net Operating Income ("Same Store NOI"): The Company calculates Same Store NOI as Property NOI attributable to the properties for which the following criteria were met during the entire span of the current and prior year reporting periods: (i) they were owned, (ii) they were not under development / redevelopment, and (iii) none of the operating expenses for which were capitalized. Same Store NOI also excludes amounts attributable to land assets. The Company may present this measure on an accrual basis or a cash basis. When presented on a cash basis, the effects of straight lined rents and fair value lease revenue are also eliminated. Same Store NOI is a non-GAAP financial measure and should not be viewed as an alternative to net income calculated in accordance with GAAP as a measurement of the Company’s operating performance. The Company believes that Same Store NOI is helpful to investors as a supplemental comparative performance measure of the income generated from the same group of properties from one period to the next. Other REITs may not define Same Store NOI in the same manner as the Company; therefore, the Company’s computation of Same Store NOI may not be comparable to that of other REITs.
Same Store Properties: Same Store Properties is defined as those properties for which the following criteria were met during the entire span of the current and prior year reporting periods: (i) they were owned, (ii) they were not under development / redevelopment, and (iii) none of the operating expenses for which were capitalized. Same Store Properties excludes land assets.

Piedmont Office Realty Trust, Inc.

Research Coverage

Equity Research Coverage


Daniel Ismail	Anthony Paolone, CFA	David Rodgers, CFA	Michael Lewis, CFA
Green Street Advisors	JP Morgan	Robert W. Baird & Co.	Truist Securities
100 Bayview Circle, Suite 400	383 Madison Avenue	200 Public Square	711 Fifth Avenue, 4th Floor
Newport Beach, CA 92660	32nd Floor	Suite 1650	New York, NY 10022
Phone: (949) 640-8780	New York, NY 10179	Cleveland, OH 44139	Phone: (212) 319-5659
	Phone: (212) 622-6682	Phone: (216) 737-7341

Fixed Income Research Coverage


Mark S. Streeter, CFA
JP Morgan
383 Madison Avenue
3rd Floor
New York, NY 10179
Phone: (212) 834-5086

Piedmont Office Realty Trust, Inc.

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

Unaudited (in thousands)


	Three Months Ended										Nine Months Ended
	9/30/2021		6/30/2021		3/31/2021		12/31/2020		9/30/2020		9/30/2021		9/30/2020

GAAP net income applicable to common stock	$	11,306	$	9,947	$	9,344	$	22,609	$	8,943	$	30,597	$	210,079
Depreciation	30,336		29,725		27,812		26,942		27,960		87,873		82,384
Amortization	20,362		20,681		22,900		22,312		22,976		63,943		70,930

Loss / (gain) on sale of properties	—		—		—		(14,634)		340		—		(191,032)

NAREIT funds from operations applicable to common stock	62,004		60,353		60,056		57,229		60,219		182,413		172,361
Adjustments:


Loss / (gain) on extinguishment of debt	—		—		—		—		—		—		9,336

Core funds from operations applicable to common stock	62,004		60,353		60,056		57,229		60,219		182,413		181,697
Adjustments:
Amortization of debt issuance costs, fair market adjustments on notes payable, and discount on senior notes	849		573		654		653		931		2,076		2,180
Depreciation of non real estate assets	216		264		282		286		286		762		930
Straight-line effects of lease revenue	(2,122)		(2,402)		(4,103)		(2,223)		(6,315)		(8,627)		(20,378)
Stock-based compensation adjustments	1,637		2,404		1,111		2,733		1,336		5,152		4,281
Amortization of lease-related intangibles	(2,731)		(2,669)		(2,792)		(2,767)		(3,240)		(8,192)		(9,517)

Non-incremental capital expenditures	(18,640)		(16,862)		(17,347)		(19,620)		(15,611)		(52,849)		(58,062)
Adjusted funds from operations applicable to common stock	$	41,213	$	41,661	$	37,861	$	36,291	$	37,606	$	120,735	$	101,131

Piedmont Office Realty Trust, Inc.

Same Store Net Operating Income (Cash Basis)

Unaudited (in thousands)


	Three Months Ended										Nine Months Ended
	9/30/2021		6/30/2021		3/31/2021		12/31/2020		9/30/2020		9/30/2021		9/30/2020

Net income attributable to Piedmont	$	11,306	$	9,947	$	9,344	$	22,609	$	8,943	$	30,597	$	210,079
Net income / (loss) attributable to noncontrolling interest	(5)		(3)		(1)		(1)		(3)		(9)		(2)
Interest expense	12,450		12,345		12,580		13,048		12,725		37,375		41,942
Depreciation	30,552		29,989		28,094		27,228		28,247		88,635		83,315
Amortization	20,362		20,681		22,900		22,312		22,976		63,943		70,930
Depreciation and amortization attributable to noncontrolling interests	21		21		21		20		22		63		64

Loss / (gain) on sale of properties	—		—		—		(14,634)		340		—		(191,032)

EBITDAre	74,686		72,980		72,938		70,582		73,250		220,604		215,296

(Gain) / loss on extinguishment of debt	—		—		—		—		—		—		9,336


Core EBITDA	74,686		72,980		72,938		70,582		73,250		220,604		224,632
General & administrative expenses	6,955		8,211		7,251		7,415		5,469		22,417		20,049
Non-cash general reserve for uncollectible accounts	—		—		412		(278)		(33)		412		4,831
Management fee revenue	(309)		(247)		(390)		(397)		(422)		(946)		(1,098)
Other (income) / expense	(2,121)		(2,162)		(2,141)		(1,554)		(104)		(6,423)		(170)
Straight-line effects of lease revenue	(2,122)		(2,402)		(4,103)		(2,223)		(6,315)		(8,627)		(20,378)
Straight-line effects of lease revenue attributable to noncontrolling interests	1		—		1		(4)		(5)		2		(12)
Amortization of lease-related intangibles	(2,731)		(2,669)		(2,792)		(2,767)		(3,240)		(8,192)		(9,517)
Property net operating income (cash basis)	74,359		73,711		71,176		70,774		68,600		219,247		218,337
Deduct net operating (income) / loss from:
Acquisitions	(8,012)		(8,761)		(7,440)		(7,795)		(6,041)		(24,214)		(15,320)
Dispositions	(359)		(258)		413		(824)		(3,338)		(204)		(20,225)
Other investments	254		182		144		162		150		580		388
Same store net operating income (cash basis)	$	66,242	$	64,874	$	64,293	$	62,317	$	59,371	$	195,409	$	183,180

Piedmont Office Realty Trust, Inc.

Property Detail - In-Service Portfolio (1)

As of September 30, 2021

(in thousands)



Property	City	State	Percent Ownership	Year Built / Renovation	Rentable Square Footage Owned	Leased Percentage		Commenced Leased Percentage		Economic Leased Percentage (2)

Atlanta
Glenridge Highlands One	Atlanta	GA	100.0%	1998 / 2021	288	93.1	%	91.3	%	89.6	%
Glenridge Highlands Two	Atlanta	GA	100.0%	2000	424	99.5	%	97.9	%	86.1	%
1155 Perimeter Center West	Atlanta	GA	100.0%	2000	377	76.4	%	76.4	%	76.4	%
Galleria 100	Atlanta	GA	100.0%	1982 / 2019	415	83.1	%	81.4	%	81.2	%
Galleria 200	Atlanta	GA	100.0%	1984 / 2021	432	86.6	%	80.1	%	79.2	%
Galleria 300	Atlanta	GA	100.0%	1987	437	88.6	%	88.1	%	88.1	%
Galleria 400	Atlanta	GA	100.0%	1999	430	92.6	%	92.1	%	88.8	%
Galleria 600	Atlanta	GA	100.0%	2002	434	60.4	%	59.9	%	57.6	%
The Medici	Atlanta	GA	100.0%	2008	156	93.6	%	93.6	%	93.6	%
Metropolitan Area Subtotal / Weighted Average					3,393	85.2	%	83.6	%	81.1	%
Boston
1414 Massachusetts Avenue	Cambridge	MA	100.0%	1873 / 1956	78	100.0	%	100.0	%	100.0	%
One Brattle Square	Cambridge	MA	100.0%	1991	96	97.9	%	97.9	%	97.9	%
One Wayside Road	Burlington	MA	100.0%	1997	201	100.0	%	100.0	%	100.0	%
5 & 15 Wayside Road	Burlington	MA	100.0%	1999 & 2001	272	100.0	%	86.4	%	86.4	%
5 Wall Street	Burlington	MA	100.0%	2008	182	100.0	%	100.0	%	100.0	%
25 Burlington Mall Road	Burlington	MA	100.0%	1987 / 2021	291	83.8	%	80.8	%	61.9	%
225 Presidential Way	Woburn	MA	100.0%	2001	202	100.0	%	100.0	%	100.0	%
235 Presidential Way	Woburn	MA	100.0%	2000	238	100.0	%	100.0	%	100.0	%
80 Central Street	Boxborough	MA	100.0%	1988	150	35.3	%	35.3	%	35.3	%
90 Central Street	Boxborough	MA	100.0%	2001	175	100.0	%	100.0	%	100.0	%
Metropolitan Area Subtotal / Weighted Average					1,885	92.3	%	89.8	%	86.9	%
Dallas
161 Corporate Center	Irving	TX	100.0%	1998	105	80.0	%	80.0	%	80.0	%
750 West John Carpenter Freeway	Irving	TX	100.0%	1999	316	93.4	%	91.5	%	91.5	%
6011 Connection Drive	Irving	TX	100.0%	1999	152	100.0	%	100.0	%	100.0	%
6021 Connection Drive	Irving	TX	100.0%	2000	222	100.0	%	100.0	%	100.0	%
6031 Connection Drive	Irving	TX	100.0%	1999 / 2018	232	56.0	%	56.0	%	56.0	%
6565 North MacArthur Boulevard	Irving	TX	100.0%	1998	255	72.9	%	69.0	%	66.7	%
Las Colinas Corporate Center I	Irving	TX	100.0%	1998 / 2021	161	38.5	%	38.5	%	38.5	%
Las Colinas Corporate Center II	Irving	TX	100.0%	1998 / 2021	225	72.4	%	72.4	%	67.6	%
One Lincoln Park	Dallas	TX	100.0%	1999	262	82.4	%	65.3	%	64.1	%
Park Place on Turtle Creek	Dallas	TX	100.0%	1986 / 2018	177	83.1	%	83.1	%	83.1	%
One Galleria Tower	Dallas	TX	100.0%	1982 / 2018	470	88.5	%	88.5	%	87.7	%
Two Galleria Tower	Dallas	TX	100.0%	1985 / 2018	435	89.7	%	89.7	%	88.5	%
Three Galleria Tower	Dallas	TX	100.0%	1991	532	95.5	%	95.5	%	95.5	%
Metropolitan Area Subtotal / Weighted Average					3,544	83.8	%	82.1	%	81.3	%


Property	City	State	Percent Ownership	Year Built / Renovation	Rentable Square Footage Owned	Leased Percentage		Commenced Leased Percentage		Economic Leased Percentage (2)
Minneapolis
US Bancorp Center	Minneapolis	MN	100.0%	2000	937	93.2	%	93.2	%	92.2	%
Crescent Ridge II	Minnetonka	MN	100.0%	2000 / 2021	301	80.4	%	80.4	%	61.1	%
Norman Pointe I	Bloomington	MN	100.0%	2000 / 2020	214	85.0	%	85.0	%	84.1	%
9320 Excelsior Boulevard	Hopkins	MN	100.0%	2010	268	100.0	%	100.0	%	100.0	%
One Meridian Crossings	Richfield	MN	100.0%	1997	195	100.0	%	100.0	%	100.0	%
Two Meridian Crossings	Richfield	MN	100.0%	1998	189	92.1	%	92.1	%	92.1	%
Metropolitan Area Subtotal / Weighted Average					2,104	91.9	%	91.9	%	88.6	%
New York
60 Broad Street	New York	NY	100.0%	1962	1,029	90.4	%	90.4	%	77.2	%
Metropolitan Area Subtotal / Weighted Average					1,029	90.4	%	90.4	%	77.2	%
Orlando
400 TownPark	Lake Mary	FL	100.0%	2008	175	94.3	%	94.3	%	94.3	%
500 TownPark	Lake Mary	FL	100.0%	2016	134	100.0	%	100.0	%	100.0	%
200 South Orange Avenue	Orlando	FL	100.0%	1988 / 2021	646	80.7	%	78.0	%	76.9	%
501 West Church Street	Orlando	FL	100.0%	2003	182	100.0	%	100.0	%	100.0	%
CNL Center I	Orlando	FL	99.0%	1999	347	98.3	%	87.6	%	87.6	%
CNL Center II	Orlando	FL	99.0%	2006	270	91.1	%	91.1	%	91.1	%
Metropolitan Area Subtotal / Weighted Average					1,754	90.6	%	87.5	%	87.1	%
Washington, D.C.
400 Virginia Avenue	Washington	DC	100.0%	1985	226	82.7	%	63.7	%	63.7	%
1201 Eye Street	Washington	DC	98.6% (3)	2001	271	57.9	%	54.6	%	54.6	%
1225 Eye Street	Washington	DC	98.1% (3)	1986	225	85.3	%	85.3	%	83.6	%
3100 Clarendon Boulevard	Arlington	VA	100.0%	1987 / 2015	261	81.2	%	76.2	%	70.5	%
4250 North Fairfax Drive	Arlington	VA	100.0%	1998	308	93.8	%	93.8	%	85.7	%
Arlington Gateway	Arlington	VA	100.0%	2005	329	88.1	%	88.1	%	88.1	%
Metropolitan Area Subtotal / Weighted Average					1,620	81.9	%	77.9	%	75.2	%
Other
1430 Enclave Parkway	Houston	TX	100.0%	1994	313	82.7	%	82.7	%	82.7	%
Enclave Place	Houston	TX	100.0%	2015	301	100.0	%	100.0	%	100.0	%
Two Pierce Place	Itasca	IL	100.0%	1991 / 2018	485	34.2	%	34.2	%	33.8	%
Subtotal/Weighted Average					1,099	66.1	%	66.1	%	65.9	%

Grand Total					16,428	85.9	%	84.2	%	81.6	%



(1)			This schedule includes information for Piedmont's in-service portfolio of properties only. Information on investments excluded from this schedule can be found on page 35.
(2)			Economic leased percentage excludes the square footage associated with executed but not commenced leases for currently vacant spaces and the square footage associated with tenants receiving rental abatements (after proportional adjustments for tenants receiving only partial rental abatements).
(3)			Although Piedmont owns 98.6% of 1201 Eye Street and 98.1% of 1225 Eye Street, it is entitled to 100% of the cash flows for each asset pursuant to the terms of each property ownership entity's joint venture agreement.

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,” "estimate," “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 supplemental package include: the estimated financial impacts associated with, and the general business and economic recovery from, the COVID-19 pandemic; estimated Core FFO and Core FFO per diluted share for calendar year 2021; expected future capital expenditures; and potential future acquisition, disposition and financing activity.

The following are some of the factors that could cause our actual results and expectations to differ materially from those described in our forward-looking statements: economic, regulatory, socio-economic changes, and/or technology changes (including accounting standards) that impact the real estate market generally, or that could affect patterns of use of commercial office space; the impact of competition on our efforts to renew existing leases or re-let space on terms similar to existing leases; changes in the economies and other conditions affecting the office sector in general and specifically the seven markets in which we primarily operate where we have high concentrations of our annualized lease revenue; lease terminations, lease defaults, or changes in the financial condition of our tenants, particularly by one of our large lead tenants; adverse market and economic conditions, including any resulting impairment charges on both our long-lived assets or goodwill resulting therefrom; the success of our real estate strategies and investment objectives, including our ability to identify and consummate suitable acquisitions and divestitures; the illiquidity of real estate investments, including regulatory restrictions to which real estate investment trusts ("REITs") are subject and the resulting impediment on our ability to quickly respond to adverse changes in the performance of our properties; the risks and uncertainties associated with our acquisition and disposition of properties, many of which risks and uncertainties may not be known at the time of acquisition or disposition; development and construction delays and resultant increased costs and risks; our real estate development strategies may not be successful; future acts of terrorism, civil unrest, or armed hostilities in any of the major metropolitan areas in which we own properties, or future cybersecurity attacks against any of our tenants; risks related to the occurrence of cyber incidents, or a deficiency in our cybersecurity, which could negatively impact our business by causing a disruption to our operations, a compromise or corruption of our confidential information, and/or damage to our business relationships; costs of complying with governmental laws and regulations; uninsured losses or losses in excess of our insurance coverage, and our inability to obtain adequate insurance coverage at a reasonable cost; additional risks and costs associated with directly managing properties occupied by government tenants, including an increased risk of default by government tenants during periods in which state or federal governments are shut down or on furlough; significant price and volume fluctuations in the public markets, including on the exchange which we listed our common stock; changes in interest rates and changes in the method pursuant to which the LIBOR rates are determined and the planned phasing out of USD LIBOR after June 2023; high interest rates which could affect our ability to finance or refinance properties; the effect of future offerings of debt or equity securities or changes in market interest rates on the value of our common stock; uncertainties associated with environmental and other regulatory matters; potential changes in the political environment and reduction in federal and/or state funding of our governmental tenants; changes in the financial condition of our tenants directly or indirectly resulting from geopolitical developments that could negatively affect international trade, the termination or threatened termination of existing international trade agreements, or the implementation of tariffs or retaliatory tariffs on imported or exported goods; the effect of any litigation to which we are, or may become, subject; additional risks and costs associated with owning properties occupied by tenants in particular industries, such as oil and gas, hospitality, travel, co-working, etc., including risks of default during start-up and during economic downturns; changes in tax laws impacting REITs and real estate in general, as well as our ability to continue to qualify as a REIT under the Internal Revenue Code of 1986, as amended, or other tax law changes which may adversely affect our stockholders; the future effectiveness of our internal controls and procedures; actual or threatened public health epidemics or outbreaks, such as the ongoing COVID-19 pandemic, and governmental and private measures taken to combat such health crises, which may affect our personnel, tenants, tenants' operations and ability to pay lease obligations, demand for office space, and the costs of operating our assets; the adequacy of our general reserve related to tenant lease-related assets established as a result of the COVID-19 pandemic, as well as the impact of any increase in this reserve or the establishment of any other reserve in the future; and other factors, including the risk factors discussed under Item 1A. of Piedmont’s 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 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.

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