pdm-20240207
0001042776false00010427762024-02-072024-02-07

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):  February 7, 2024
 
Piedmont Office Realty Trust, Inc.
(Exact name of registrant as specified in its charter)
 
Commission File Number:  001-34626
 
Maryland58-2328421
(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 classTrading SymbolName of each exchange on which registered
Common Stock, $0.01 par valuePDMNew 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 February 7, 2024, Piedmont Office Realty Trust, Inc. (the "Registrant") issued a press release announcing its financial results for the fourth quarter 2023, as well as the year ended December 31, 2023, and published supplemental information for the fourth quarter 2023, as well as the year ended December 31, 2023, 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
99.2
104Cover 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:February 7, 2024By:/s/    Robert E. Bowers
  Robert E. Bowers
  Chief Financial Officer and Executive Vice President




Document

EXHIBIT 99.1
https://cdn.kscope.io/d4fd52c4986702d3ac50580a5c7ff29a-image1.jpg

Piedmont Office Realty Trust Reports Fourth Quarter and Annual 2023 Results

ATLANTA, February 7, 2024--Piedmont Office Realty Trust, Inc. ("Piedmont" or the "Company") (NYSE:PDM), an owner of Class A office properties located primarily in major U.S. Sunbelt markets, today announced its results for the quarter ended December 31, 2023.

Highlights for the Three Months and Year Ended December 31, 2023:

Financial Results:
Three Months EndedYear Ended
(in 000s other than per share amounts )December 31, 2023December 31, 2022December 31, 2023December 31, 2022
Net income/(loss) applicable to Piedmont$(28,030)$75,569$(48,387)$146,830
Net income/(loss) per share applicable to common stockholders - diluted $(0.23)$0.61$(0.39)$1.19
Gain on sale of real estate assets$1,946$101,055$1,946$151,729
Interest expense$28,431$20,739$101,258$65,656
Impairment charges$18,489$25,981$29,446$25,981
NAREIT Funds From Operations ("FFO") applicable to common stock$50,624$58,987$214,399$244,822
Core FFO applicable to common stock$50,624$61,235$215,219$247,070
NAREIT FFO per diluted share$0.41$0.48$1.73$1.98
Core FFO per diluted share$0.41$0.50$1.74$2.00
Adjusted FFO applicable to common stock$31,833$47,082$153,008$178,040

Piedmont recognized a net loss of $28.0 million, or $0.23 per diluted share, for the fourth quarter of 2023, as compared to net income of $75.6 million, or $0.61 per diluted share, for the fourth quarter of 2022, with the decrease primarily attributable to:
An approximately $99.1 million decrease in gain on sale of real estate assets;
An approximately $7.7 million increase in interest expense driven by higher interest rates on the Company's debt during the three months ended December 31, 2023 as compared to the three months ended December 31, 2022;
Partially offset by, an approximately $7.5 million decrease in impairment charges.
Core FFO, which removes the impact of the gain on sale of real estate assets and impairment charges above, as well as loss on early extinguishment of debt, prior year severance costs, and depreciation and amortization expense, was $0.41 per diluted share for the fourth quarter of 2023, as compared to $0.50 per diluted share for the fourth quarter of 2022, with the decrease primarily



attributable to the increase in interest expense during the fourth quarter of 2023 noted above, and lower Property NOI as a result of the sale of the Cambridge Portfolio during December of 2022.

Leasing:
Three Months Ended December 31, 2023Year Ended December 31, 2023
# of lease transactions42 182 
Total leasing sf816,4942,243,302
New tenant leasing sf154,755831,033
Cash rent roll up0.0 %4.7 %
Accrual rent roll up11.3 %12.4 %
Retention ratio 84.3 %
Leased Percentage as of period end87.1 %
The Company completed approximately 816,000 square feet of leasing during the fourth quarter, bringing total leasing for the year to 2.2 million square feet.
On an annual basis, the Company completed approximately 831,000 square feet of new tenant leasing, the largest amount of annual new tenant leasing since 2018.
The largest new tenant lease completed during the quarter was with GE Vernova for approximately 77,000 square feet at Galleria 600 in Atlanta, GA through 2036.
The largest renewal completed during the quarter was US Bancorp's entire 447,000 square foot headquarters lease at US Bancorp Center in downtown Minneapolis, MN through 2034, with no roll down in cash rents and no free rent concessions.
Rents on leases executed during the year ended December 31, 2023 for space vacant one year or less increased approximately 4.7% and 12.4% on a cash and accrual basis, respectively.
The Company's leased percentage as of December 31, 2023 increased to 87.1%, up from 86.7% a year earlier.
Same Store NOI - Cash basis and Same Store NOI - Accrual basis increased 4.8% and 1.1%, respectively, for the three months ended December 31, 2023, as compared to the same period in the prior year, as new leases commencing or with expiring abatements outweighed expired leases.
On an annual basis, Same Store NOI - Cash basis increased 2.2% and Same Store NOI - Accrual basis decreased 1%.
Excluding the US Bancorp lease, the average size lease executed during the fourth quarter of 2023 was approximately 12,000 square feet and the weighted average lease term was approximately seven years.
As of December 31, 2023, the Company had approximately 1.1 million square feet of executed leases for vacant space yet to commence or under rental abatement, representing approximately $35 million of future additional annual cash rents.
Thus far during the first quarter of 2024, the Company has executed over 260,000 square feet of total leasing.




Balance Sheet:
(in 000s except for ratios)December 31, 2023December 31, 2022
Total Real Estate Assets$3,512,527$3,500,624
Total Assets$4,057,082$4,085,525
Total Debt$2,054,596$1,983,681
Weighted Average Cost of Debt5.82 %3.89 %
Debt-to-Gross Assets Ratio38.2 %37.6 %
Average Net Debt-to-Core EBITDA (ttm)6.4 x6.0 x
During the three months ended December 31, 2023, the Company's operating partnership, Piedmont Operating Partnership, LP, issued an additional $200 million aggregate principal amount of 9.25% senior unsecured notes at a premium (effective rate 8.75%) due 2028, with the net proceeds used to pay down bank term debt and the Company's revolving credit facility.
Subsequent to December 31, 2023, the Company entered into a new, three year, $200 million unsecured syndicated bank term loan. The Company used the net proceeds and its revolving line of credit to pay off a $100 million bank term loan that was scheduled to mature in December of 2024, and to repay $190 million of a $215 million unsecured term loan that was scheduled to mature on January 31, 2024. The remaining $25 million of the $215 million unsecured term loan was extended to January 31, 2025.
As a result of the above refinancing activity, the Company currently has:
approximately $325 million of debt with final maturities over the next three years as follows:
$50 million in unsecured notes that mature in March of 2024; and,
$275 million in unsecured bank term loans that mature in the first quarter of 2025.
approximately $400 million of capacity on its line of credit.

ESG and Operations:
During the fourth quarter, GRESB® announced that the Company achieved the highest sustainability rating of "5 Star" and a second consecutive "Green Star" recognition based on 2022 performance.
The Exchange at 200 South Orange Avenue in downtown Orlando, FL and 400 & 500 TownPark in Lake Mary, FL all won TOBY awards during the fourth quarter. The annual Outstanding Building of the Year ("TOBY") Awards are the most prestigious awards of their kind in the commercial real estate industry, recognizing excellence in office building management in fourteen different categories based on size and facility type.
One and Two Meridian Crossings in Minneapolis, MN were certified LEED Gold.



Commenting on fourth quarter and annual results, Brent Smith, Piedmont's President and Chief Executive Officer, said, "Fourth quarter leasing activity remained robust at over 800,000 square feet, including the renewal of our largest tenant and approximately 155,000 square feet of new tenant leasing. Annual leasing for 2023 totaled 2.2 million square feet, including 831,000 square feet of new tenant leasing, the largest amount of new tenant leasing we've experienced in the past 5 years, driving positive absorption in the portfolio for the year at attractive economics." Continuing Smith added, "Further, despite a difficult credit environment in 2023, we made big strides in addressing the majority of our '24 and '25 debt maturities, thus improving the liquidity of the company and demonstrating our continued access to the capital markets. Since the onset of the pandemic, we have leased approximately 50% of the portfolio with no material change in occupancy levels. Our current leasing pipeline remains strong, and we believe our portfolio of differentiated, reimagined, professional environments, as well as our balance sheet, are well positioned to continue to drive further leasing success in 2024."

First Quarter 2024 Dividend

As previously announced, on February 1, 2024, the board of directors of Piedmont declared a dividend for the first quarter of 2024 in the amount of $0.125 per share on its common stock to stockholders of record as of the close of business on February 23, 2024, payable on March 15, 2024.

Guidance for 2024

The Company is introducing guidance for the year ending December 31, 2024 (inclusive of the effects of the refinancing activity completed in January 2024 mentioned above) as follows:

(in millions, except per share data)LowHigh
Net loss$(47)$(41)
Add:
Depreciation148 151 
Amortization81 84 
Core FFO applicable to common stock$182 $194 
Core FFO applicable to common stock per diluted share$1.46$1.56

This guidance is based on information available to management as of the date of this release and reflects management's view of current market conditions, including the following specific assumptions and projections:
Executed leasing activity in the range of 1.5 - 2 million square feet with year-end leased percentage for the Company's in-service portfolio anticipated to be approximately 87-88%, before the impacts of any acquisition or disposition activity;
Same Store NOI flat to 2% increase on both a cash and accrual basis, as the Company will experience some downtime between certain lease expirations and new lease commencements during 2024;
Interest expense of approximately $119-121 million, reflecting a full year of higher interest rates as a result of refinancing activity completed by the Company during the latter half of 2023 and early 2024 and utilizing the latest forward yield curve projections; and,
General and administrative expense will remain relatively flat at approximately $29-30 million;




No speculative acquisitions, dispositions, or refinancings are included in the above guidance. The Company will adjust guidance if such transactions occur.

Note that actual results could differ materially from these estimates and individual quarters may fluctuate on both a cash basis and an accrual basis due to the timing of any future dispositions, significant lease commencements and expirations, abatement periods, repairs and maintenance expenses, capital expenditures, capital markets activities, general and administrative expenses, accrued potential performance-based compensation expense, one-time revenue or expense events, and other factors discussed under "Forward Looking Statements" below.

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 December 31, 2023 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 release and the accompanying quarterly 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, February 8, 2024, at 9:00 A.M. Eastern 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 935915. A replay of the conference call will be available through February 22, 2024, 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 49714. 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 fourth quarter and annual 2023 performance, discuss recent events, and conduct a question-and-answer period.

Supplemental Information

Quarterly supplemental information as of and for the period ended December 31, 2023 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 major U.S. Sunbelt markets. Its 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 (Baa3). Piedmont is a 2023 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 known and unknown risks and uncertainties, which could cause actual results to differ materially from those 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 the Company's use of forward-looking terminology such as "may," "will," "expect," "intend," "anticipate," "estimate," "believe," "continue" or similar words or phrases that indicate predictions of future events or trends or that do not relate solely to historical matters. Examples of such statements in this press release include whether the Company's portfolio of differentiated, reimagined, professional environments, as well as balance sheet, will drive further leasing success in 2024; and, the Company's estimated range of Net Income/(Loss), Depreciation, Amortization, Core FFO and Core FFO per diluted share. 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, socio-economic (including work from home), technological (e.g. Metaverse, Zoom, etc), and other changes that impact the real estate market generally, the office sector or the patterns of use of commercial office space in general, or the markets where we primarily operate or have high concentrations of Annualized Lease Revenue;
The impact of competition on our efforts to renew existing leases or re-let space on terms similar to existing leases;
Lease terminations, lease defaults, lease contractions, or changes in the financial condition of our tenants, particularly by one of our large lead tenants;
Impairment charges on our long-lived assets or goodwill resulting therefrom;
The success of our real estate strategies and investment objectives, including our ability to implement successful redevelopment and development strategies or identify and consummate suitable acquisitions and divestitures;
The illiquidity of real estate investments, including economic changes, such as rising interest rates and available financing, which could impact the number of buyers/sellers of our target properties, and 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, including the potential of supply chain disruptions, and resultant increased costs and risks;
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 properties or our tenants;
Risks related to the occurrence of cybersecurity incidents, including cybersecurity incidents against us or any of our properties or tenants, or a deficiency in our identification, assessment or management of cybersecurity threats impacting our operations and the public's reaction to reported cybersecurity incidents;
Costs of complying with governmental laws and regulations, including environmental standards imposed on office building owners;
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, such as potential changes in the political environment, a reduction in federal or state funding of our governmental tenants, or 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;
Risks associated with incurring mortgage and other indebtedness, including changing capital reserve requirements on our lenders and rapidly rising interest rates for new debt financings;
A downgrade in our credit rating, which could, among other effects, trigger an increase in the stated rate of one or more of our unsecured debt instruments;
The effect of future offerings of debt or equity securities on the value of our common stock;
Additional risks and costs associated with inflation and continuing increases in the rate of inflation, including the impact of a possible recession;
Uncertainties associated with environmental and regulatory matters;
Changes in the financial condition of our tenants directly or indirectly resulting from geopolitical developments that could negatively affect important supply chains and 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 (the “Code”), 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 COVID-19 pandemic, as well as governmental and private measures taken to combat such health crises; and
Other factors, including the risk factors described in Item 1A. Risk Factors of our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2023, June 30, 2023, and September 30, 2023, as well as the risk factors discussed under Item 1A. of our Annual Report on Form 10-K for the year ended December 31, 2022.




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:
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)
December 31, 2023December 31, 2022
Assets:
Real estate assets, at cost:
Land
$567,244 $567,244 
Buildings and improvements
3,823,241 3,682,000 
Buildings and improvements, accumulated depreciation
(1,046,512)(915,010)
Intangible lease assets
170,654 205,074 
Intangible lease assets, accumulated amortization
(88,066)(90,694)
Construction in progress
85,966 52,010 
Total real estate assets
3,512,527 3,500,624 
Cash and cash equivalents
825 16,536 
Tenant receivables
7,915 4,762 
Straight line rent receivables
183,839 172,019 
Restricted cash and escrows
3,381 3,064 
Prepaid expenses and other assets
28,466 17,152 
Goodwill
53,491 82,937 
Interest rate swaps
3,032 4,183 
Deferred lease costs
487,519 505,979 
Deferred lease costs, accumulated depreciation
(223,913)(221,731)
Total assets$4,057,082 $4,085,525 
Liabilities:
Unsecured debt, net of discount and unamortized debt issuance costs of $15,437 and $13,319, respectively
$1,858,717 $1,786,681 
        Secured Debt195,879 197,000 
Accounts payable, accrued expenses, and accrued capital expenditures
131,516 110,306 
Dividends payable
15,143 25,357 
Deferred income
89,930 59,977 
Intangible lease liabilities, less accumulated amortization
42,925 56,949 
Total liabilities2,334,110 2,236,270 
Stockholders' equity:
Common stock (123,715,298 and 123,439,558 shares outstanding as of December 31, 2023 and December 31, 2022, respectively)
1,237 1,234 
Additional paid in capital
3,716,742 3,711,005 
Cumulative distributions in excess of earnings
(1,987,147)(1,855,893)
Other comprehensive income
(9,418)(8,679)
Piedmont stockholders' equity1,721,414 1,847,667 
Noncontrolling interest
1,558 1,588 
Total stockholders' equity1,722,972 1,849,255 
Total liabilities and stockholders' equity$4,057,082 $4,085,525 
Net debt (Unsecured and Secured Debt less Cash and cash equivalents)2,053,771 1,967,145 
Total Principal Amount of Debt Outstanding (Unsecured and Secured Debt plus discounts and unamortized debt issuance costs)2,070,033 1,997,000 



Piedmont Office Realty Trust, Inc.
Consolidated Statements of Operations
Unaudited (in thousands, except for per share data)
Three Months EndedYear Ended
12/31/202312/31/202212/31/202312/31/2022
Revenues:
Rental and tenant reimbursement revenue$139,447 $142,106 $555,313 $545,741 
Property management fee revenue389 395 1,729 1,675 
Other property related income5,495 4,707 20,714 16,350 
Total revenues
145,331 147,208 577,756 563,766 
Expenses:
Property operating costs59,085 59,763 235,091 226,058 
Depreciation38,036 34,788 148,458 133,616 
Amortization24,232 23,915 87,756 90,937 
Impairment Charges18,489 25,981 29,446 25,981 
General and administrative7,177 7,915 29,190 29,127 
Total operating expenses
147,019 152,362 529,941 505,719 
Other income (expense):
Interest expense(28,431)(20,739)(101,258)(65,656)
Other income146 408 3,940 2,710 
Loss on early extinguishment of debt— — (820)— 
Gain on sale of real estate assets1,946 101,055 1,946 151,729 
Total other income (expense)
(26,339)80,724 (96,192)88,783 
Net income/(loss)(28,027)75,570 (48,377)146,830 
Net income applicable to noncontrolling interest(3)(1)(10)— 
Net income/(loss) applicable to Piedmont$(28,030)$75,569 $(48,387)$146,830 
Weighted average common shares outstanding - diluted123,714 123,633 123,659 123,524 
Net income/(loss) per share applicable to common stockholders - diluted$(0.23)$0.61 $(0.39)$1.19 



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 EndedYear Ended
12/31/202312/31/202212/31/202312/31/2022
GAAP net income/(loss) applicable to common stock$(28,030)$75,569 $(48,387)$146,830 
Depreciation of real estate assets(1)
37,889 34,587 147,569 132,849 
Amortization of lease-related costs
24,222 23,905 87,717 90,891 
Impairment charges
18,489 25,981 29,446 25,981 
Gain on sale of real estate assets
(1,946)(101,055)(1,946)(151,729)
NAREIT Funds From Operations applicable to common stock*50,624 58,987 214,399 244,822 
Severance costs associated with management reorganization— 2,248 — 2,248 
Loss on early extinguishment of debt
— — 820 — 
Core Funds From Operations applicable to common stock*50,624 61,235 215,219 247,070 
Amortization of debt issuance costs and discounts on debt
1,481 926 5,442 3,389 
Depreciation of non real estate assets
136 191 847 728 
Straight-line effects of lease revenue
(908)(2,356)(7,268)(11,230)
Stock-based compensation adjustments
1,989 1,717 6,337 4,833 
Amortization of lease-related intangibles
(2,869)(3,713)(13,879)(13,426)
Non-incremental capital expenditures(2)
(18,620)(10,918)(53,690)(53,324)
Adjusted Funds From Operations applicable to common stock*$31,833 $47,082 $153,008 $178,040 
Weighted average common shares outstanding - diluted123,846 
(3)
123,633 123,702 
(3)
123,524 
NAREIT Funds From Operations per share (diluted)$0.41 $0.48 $1.73 $1.98 
Core Funds From Operations per share (diluted)$0.41 $0.50 $1.74 $2.00 

(1)Excludes depreciation of non real estate assets.

(2)Capital expenditures of a recurring nature related to tenant improvements, leasing commissions and building capital 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 either enhance the rental rates of a building or change the property’s underlying classification, such as from a Class B to a Class A property, are excluded from this measure.

(3)Includes potential dilution under the treasury stock method that would occur if our remaining unvested and potential stock awards vested and resulted in additional common shares outstanding. Such shares are not included when calculating net loss per diluted share applicable to Piedmont for the three months and year ended December 31, 2023 as they would reduce the loss per share presented.









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 BasisAccrual Basis
Three Months EndedThree Months Ended
12/31/202312/31/202212/31/202312/31/2022
Net income/(loss) applicable to Piedmont (GAAP)$(28,030)$75,569 $(28,030)$75,569 
Net income applicable to noncontrolling interest
33
Interest expense
28,43120,739 28,43120,739 
Depreciation
38,02534,778 38,02534,778 
Amortization
24,22323,905 24,22323,905 
Depreciation and amortization attributable to noncontrolling interests2020 2020 
Impairment charges
18,48925,981 18,48925,981 
Gain on sale of real estate assets
(1,946)(101,055)(1,946)(101,055)
EBITDAre*
79,21579,938 79,21579,938 
Severance costs associated with management reorganization2,248 2,248 
Core EBITDA*79,21582,186 79,21582,186 
General and administrative expenses
7,1775,668 7,1775,668 
Management fee revenue
(247)(261)(247)(261)
Other income
(38)(193)(38)(193)
       Reversal of non-cash general reserve for uncollectible accounts(1,000)
Straight-line effects of lease revenue
(908)(2,356)
Straight-line effects of lease revenue attributable to noncontrolling interests(3)(4)
Amortization of lease-related intangibles
(2,869)(3,713)
Property NOI*82,32780,327 86,10787,400 
Net operating (income)/loss from:
Acquisitions
(6,123)(5,313)(7,784)(7,553)
Dispositions
(37)(2,343)(37)(2,389)
Other investments(1)
241224 143123 
Same Store NOI*$76,408$72,895 $78,429$77,581 
Change period over period in Same Store NOI4.8%N/A1.1 %N/A


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




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 BasisAccrual Basis
Year EndedYear Ended
12/31/202312/31/202212/31/202312/31/2022
Net income/(loss) applicable to Piedmont (GAAP)$(48,387)$146,830 $(48,387)$146,830 
Net income applicable to noncontrolling interest
10— 10— 
Interest expense
101,25865,656 101,25865,656 
Depreciation
148,417133,577 148,417133,577 
Amortization
87,71790,891 87,71790,891 
Depreciation and amortization attributable to noncontrolling interests8085 8085 
Impairment charges
29,44625,981 29,44625,981 
Gain on sale of real estate assets
(1,946)(151,729)(1,946)(151,729)
EBITDAre*
316,595311,291 316,595311,291 
Severance costs associated with management reorganization2,248 2,248 
Loss on early extinguishment of debt820— 820— 
Core EBITDA*317,415313,539 317,415313,539 
General and administrative expenses
29,19026,879 29,19026,879 
Management fee revenue
(1,004)(1,004)(1,004)(1,004)
Other income
(3,256)(1,847)(3,256)(1,847)
Reversal of non-cash general reserve for uncollectible accounts(1,000)(3,000)
Straight-line effects of lease revenue
(7,268)(11,230)
Straight-line effects of lease revenue attributable to noncontrolling interests(10)(10)
Amortization of lease-related intangibles
(13,879)(13,426)
Property NOI*320,188309,901 342,345337,567 
Net operating (income)/loss from:
Acquisitions
(22,907)(8,180)(30,167)(11,717)
Dispositions
65(10,714)65(10,826)
Other investments(1)
790763 387651 
Same Store NOI*$298,136$291,770 $312,630$315,675 
Change period over period in Same Store NOI2.2 %N/A(1.0)%N/A

(1)Other investments consist of our investments in active redevelopment and development projects, land, and recently completed redevelopment and development projects for which some portion of operating expenses were capitalized during the current or prior reporting periods. 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/(loss) (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, goodwill, 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, if any. 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 infrequent or non-recurring 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, if any. 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/(loss) (computed in accordance with GAAP) adjusted for gains or losses from sales of property, impairment charges, 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/(loss) (computed in accordance with GAAP) before interest, taxes, depreciation and amortization and removing any impairment charges, 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 non-cash general reserve for uncollectible accounts, 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. 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/d4fd52c4986702d3ac50580a5c7ff29a-q4_2023supplementalcover.jpg



Piedmont Office Realty Trust, Inc.
Quarterly Supplemental Information
Index
PagePage
IntroductionOther Investments
Corporate DataOther Investments Detail
Investor InformationSupporting Information
Earnings ReleaseDefinitions
Key Performance IndicatorsResearch Coverage
FinancialsNon-GAAP Reconciliations
Balance SheetsIn-Service Portfolio Detail
Income StatementsMajor Leases Not Yet Commenced and Major Abatements
Funds From Operations / Adjusted Funds From OperationsRisks, Uncertainties and Limitations
Same Store Analysis
Capitalization Analysis
Debt Summary
Debt Detail
Debt Covenant & Ratio Analysis
Operational & Portfolio Information - Office Property Investments
Tenant Diversification
Tenant Credit Rating & Lease Distribution Information
Leased Percentage Information
Rental Rate Roll Up / Roll Down Analysis
Lease Expiration Schedule
Quarterly Lease Expirations
Annual Lease Expirations
Contractual Tenant Improvements & Leasing Commissions
Geographic Diversification
Geographic Diversification by Location Type
Industry Diversification
Property Investment Activity
Notice to Readers:
Please refer to page 41 for a discussion of important risks related to the business of Piedmont Office Realty Trust, Inc., as well as an investment in its securities, including risks that could cause actual results and events to differ materially from results and events referred to in the forward-looking information. Considering these risks, uncertainties, assumptions, and limitations, the forward-looking statements about leasing, financial operations, leasing prospects, acquisitions, dispositions, etc. contained in this quarterly supplemental information report may differ from actual results.
Certain prior period amounts have been reclassified to conform to the current period financial statement presentation. In addition, many of the schedules herein contain rounding to the nearest thousands or millions and, therefore, the schedules may not total due to this rounding convention.
To supplement the presentation of the Company’s financial results prepared in accordance with U.S. generally accepted accounting principles (GAAP), this report contains certain financial measures that are not prepared in accordance with GAAP, including FFO, Core FFO, AFFO, Same Store NOI, Property NOI, EBITDAre and Core EBITDA. Definitions and reconciliations of these non-GAAP measures to their most comparable GAAP metrics are included beginning on page 34. Each of the non-GAAP measures included in this report has limitations as an analytical tool and should not be considered in isolation or as a substitute for an analysis of the Company’s results calculated in accordance with GAAP. In addition, because not all companies use identical calculations, the Company’s presentation of non-GAAP measures in this report may not be comparable to similarly titled measures disclosed by other companies, including other REITs. The Company may also change the calculation of any of the non-GAAP measures included in this report from time to time in light of its then existing operations.




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 located primarily in major U.S. Sunbelt markets. 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, 2022 and 2023, and it was the only office REIT headquartered in the Southeast to receive those designations. Approximately 85% of the Company's square footage is Energy Star certified and nearly 70% is 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 ofAs of
December 31, 2023December 31, 2022
Number of consolidated in-service office properties (1)
5151
Rentable square footage (in thousands) (1)
16,56316,658
Percent leased (2)
87.1 %86.7 %
Capitalization (in thousands):
Total debt - GAAP$2,054,596$1,983,681
Total principal amount of debt outstanding (excludes premiums, discounts, and deferred financing costs)$2,070,033$1,997,000
Equity market capitalization (3)
$879,616$1,131,941
Total market capitalization (3)
$2,949,649$3,128,941
Average net principal amount of debt to Core EBITDA - quarterly (4)
6.5 x6.4 x
Average net principal amount of debt to Core EBITDA - trailing twelve months (5)
6.4 x6.0 x
Total principal amount of debt / Total gross assets (6)
38.2 %37.6 %
Common stock data:
High closing price during quarter$7.50$10.92
Low closing price during quarter$5.07$8.80
Closing price of common stock at period end$7.11$9.17
Weighted average fully diluted shares outstanding during quarter (in thousands)123,846123,633
Shares of common stock issued and outstanding at period end (in thousands)123,715123,440
Annualized current dividend per share (7)
$0.50$0.84
Ratings (Standard & Poor's / Moody's)BBB- / Baa3BBB / Baa2
Employees150149
(1)As of December 31, 2023, our consolidated office portfolio consisted of 51 properties (exclusive of one 127,000 square foot property that was out of service for redevelopment, 222 South Orange Avenue in Orlando, FL).
(2)
Calculated as square footage associated with commenced leases plus square footage associated with executed but uncommenced leases for vacant spaces at our in-service properties, divided by total rentable in-service square footage, all as of the relevant date, expressed as a percentage. Please refer to page 23 for additional analyses regarding Piedmont's leased percentage.
(3)Reflects common stock closing price, shares outstanding and principal amount of debt outstanding as of the end of the reporting period, as appropriate.
(4)For the purposes of this calculation, we annualize the Core EBITDA for the quarter and use the average daily principal balance of debt outstanding during the quarter, less cash and cash equivalents and escrow deposits and restricted cash as of the end of each month of the quarter.
(5)For the purposes of this calculation, we use the sum of Core EBITDA for the trailing four quarters and the average daily principal balance of debt outstanding for the trailing four quarters, less the average of cash and cash equivalents and escrow deposits and restricted cash as of the end of each month in the trailing four quarter period.
(6)Total gross assets is defined as total assets with the add-back of accumulated depreciation and accumulated amortization related to real estate assets and accumulated amortization related to deferred lease costs.
(7)Annualized amount based on the regular dividends per share recorded for the most recent quarter.



3


Piedmont Office Realty Trust, Inc.
Investor Information
Corporate Office
5565 Glenridge Connector, Suite 450
Atlanta, Georgia 30342
770.418.8800
www.piedmontreit.com
Executive Management
C. Brent SmithRobert E. BowersGeorge WellsLaura P. Moon
Chief Executive Officer, PresidentChief Financial and Administrative OfficerChief Operating Officer andChief Accounting Officer and Treasurer
and Directorand Executive Vice PresidentExecutive Vice Presidentand Senior Vice President
Kevin D. FossumChristopher A. KollmeDamian J. MillerAlex Valente
Executive Vice President,Executive Vice President,Executive Vice President,Executive Vice President,
Property ManagementInvestmentsDallasSoutheast Region
Robert K. Wiberg
Executive Vice President,
Northeast Region and Head of Development
Board of Directors
Frank C. McDowellDale H. TaysomKelly H. BarrettGlenn G. Cohen
Director, Chair of the Board of Directors,Director, Vice Chair of the Director, Chair of the Audit Committee, Director, Chair of the Compensation
and Member of the Compensation andBoard of Directors, and Member of theand Member of the GovernanceCommittee, and Member of the Audit
Governance CommitteesAudit and Capital CommitteesCommitteeand Capital Committees
Venkatesh S. DurvasulaMary HagerBarbara B. LangC. Brent Smith
Director and Member of the CapitalDirector and Member of the Director, Chair of the GovernanceChief Executive Officer, President
CommitteeGovernance CommitteeCommittee (including ESG), andand Director
Member of the Compensation Committee
Jeffrey L. Swope
Director, Chair of the Capital
Committee, and Member of the
Compensation Committee

Transfer AgentCorporate CounselInstitutional Analyst ContactInvestor Relations
ComputershareKing & SpaldingPhone: 770.418.8592Phone: 866.354.3485
P.O. Box 430061180 Peachtree Street, NEresearch.analysts@piedmontreit.cominvestor.services@piedmontreit.com
Providence, RI 02940-3078Atlanta, GA 30309www.piedmontreit.com
Phone: 866.354.3485Phone: 404.572.4600

4


Piedmont Office Realty Trust, Inc.
Earnings Release
Piedmont Office Realty Trust Reports Fourth Quarter 2023 Results

ATLANTA, February 7, 2024--Piedmont Office Realty Trust, Inc. ("Piedmont" or the "Company") (NYSE:PDM), an owner of Class A office properties located primarily in major U.S. Sunbelt markets, today announced its results for the quarter ended December 31, 2023.


Highlights for the Three Months and Year Ended December 31, 2023:

Financial Results:
Three Months EndedYear Ended
(in 000s other than per share amounts)December 31, 2023December 31, 2022December 31, 2023December 31, 2022
Net income/(loss) applicable to Piedmont$(28,030)$75,569$(48,387)$146,830
Net income/(loss) per share applicable to common stockholders - diluted$(0.23)$0.61$(0.39)$1.19
Gain on sale of real estate assets$1,946$101,055$1,946$151,729
Interest expense$28,431$20,739$101,258$65,656
Impairment charges$18,489$25,981$29,446$25,981
NAREIT Funds From Operations ("FFO") applicable to common stock$50,624$58,987$214,399$244,822
Core FFO applicable to common stock$50,624$61,235$215,219$247,070
NAREIT FFO per diluted share$0.41$0.48$1.73$1.98
Core FFO per diluted share$0.41$0.50$1.74$2.00
Adjusted FFO applicable to common stock$31,833$47,082$153,008$178,040
Piedmont recognized a net loss of $28.0 million, or $0.23 per diluted share, for the fourth quarter of 2023, as compared to net income of $75.6 million, or $0.61 per diluted share, for the fourth quarter of 2022, with the decrease primarily attributable to:
An approximately $99.1 million decrease in gain on sale of real estate assets;
An approximately $7.7 million increase in interest expense driven by higher interest rates on the Company's debt during the three months ended December 31, 2023 as compared to the three months ended December 31, 2022;
Partially offset by, an approximately $7.5 million decrease in impairment charges.
Core FFO, which removes the impact of the gain on sale of real estate assets and impairment charges above, as well as loss on early extinguishment of debt, prior year severance costs, and depreciation and amortization expense, was $0.41 per diluted share for the fourth quarter of 2023, as compared to $0.50 per diluted share for the fourth quarter of 2022, with the decrease primarily attributable to the increase in interest expense during the fourth quarter of 2023 noted above, and lower Property NOI as a result of the sale of the Cambridge Portfolio during December of 2022.




5


Leasing:
Three Months Ended December 31, 2023Year Ended December 31, 2023
# of lease transactions42182
Total leasing sf816,4942,243,302
New tenant leasing sf154,755831,033
Cash rent roll up0.0%4.7%
Accrual rent roll up11.3%12.4%
Retention ratio84.3%
Leased percentage as of period end87.1%
The Company completed approximately 816,000 square feet of leasing during the fourth quarter, bringing total leasing for the year to 2.2 million square feet.
On an annual basis, the Company completed approximately 831,000 square feet of new tenant leasing, the largest amount of annual new tenant leasing since 2018.
The largest new tenant lease completed during the quarter was with GE Vernova for approximately 77,000 square feet at Galleria 600 in Atlanta, GA through 2036.
The largest renewal completed during the quarter was US Bancorp's entire 447,000 square foot headquarters lease at US Bancorp Center in downtown Minneapolis, MN through 2034, with no roll down in cash rents and no free rent concessions.
Rents on leases executed during the year ended December 31, 2023 for space vacant one year or less increased approximately 4.7% and 12.4% on a cash and accrual basis, respectively.
The Company's leased percentage as of December 31, 2023 increased to 87.1%, up from 86.7% a year earlier.
Same Store NOI - Cash basis and Same Store NOI - Accrual basis increased 4.8% and 1.1%, respectively, for the three months ended December 31, 2023, as compared to the same period in the prior year, as new leases commencing or with expiring abatements outweighed expired leases.
On an annual basis, Same Store NOI - Cash basis increased 2.2% and Same Store NOI - Accrual basis decreased 1%.
Excluding the US Bancorp lease, the average size lease executed during the fourth quarter of 2023 was approximately 12,000 square feet and the weighted average lease term was approximately seven years.
As of December 31, 2023, the Company had approximately 1.1 million square feet of executed leases for vacant space yet to commence or under rental abatement, representing approximately $35 million of future additional annual cash rents.
Thus far during the first quarter of 2024, the Company has executed over 260,000 square feet of total leasing.

Balance Sheet:
(in 000s except for ratios)December 31, 2023December 31, 2022
Total Real Estate Assets$3,512,527$3,500,624
Total Assets$4,057,082$4,085,525
Total Debt$2,054,596$1,983,681
Weighted Average Cost of Debt5.82 %3.89%
Debt-to-Gross Assets Ratio38.2 %37.6%
Average Net Debt-to-Core EBITDA (ttm)6.4 x6.0 x

6


During the three months ended December 31, 2023, the Company's operating partnership, Piedmont Operating Partnership, LP, issued an additional $200 million aggregate principal amount of 9.25% senior unsecured notes at a premium (effective rate 8.75%) due 2028, with the net proceeds used to pay down bank term debt and the Company's revolving credit facility.
Subsequent to December 31, 2023, the Company entered into a new, three year, $200 million unsecured syndicated bank term loan. The Company used the net proceeds and its revolving line of credit to pay off a $100 million bank term loan that was scheduled to mature in December of 2024, and to repay $190 million of a $215 million unsecured term loan that was scheduled to mature on January 31, 2024. The remaining $25 million of the $215 million unsecured term loan was extended to January 31, 2025.
As a result of the above refinancing activity, the Company currently has:
approximately $325 million of debt with final maturities over the next three years as follows:
$50 million in unsecured notes that mature in March of 2024; and,
$275 million in unsecured bank term loans that mature in the first quarter of 2025.
approximately $400 million of capacity on its line of credit.

ESG and Operations:
During the fourth quarter, GRESB® announced that the Company achieved the highest sustainability rating of "5 Star" and a second consecutive "Green Star" recognition based on 2022 performance.
The Exchange at 200 South Orange Avenue in downtown Orlando, FL and 400 & 500 TownPark in Lake Mary, FL all won TOBY awards during the fourth quarter. The annual Outstanding Building of the Year ("TOBY") Awards are the most prestigious awards of their kind in the commercial real estate industry, recognizing excellence in office building management in fourteen different categories based on size and facility type.
One and Two Meridian Crossings in Minneapolis, MN were certified LEED Gold.


Commenting on fourth quarter and annual results, Brent Smith, Piedmont's President and Chief Executive Officer, said, "Fourth quarter leasing activity remained robust at over 800,000 square feet, including the renewal of our largest tenant and approximately 155,000 square feet of new tenant leasing. Annual leasing for 2023 totaled 2.2 million square feet, including 831,000 square feet of new tenant leasing, the largest amount of new tenant leasing we've experienced in the past 5 years, driving positive absorption in the portfolio for the year at attractive economics." Continuing Smith added, "Further, despite a difficult credit environment in 2023, we made big strides in addressing the majority of our '24 and '25 debt maturities, thus improving the liquidity of the company and demonstrating our continued access to the capital markets. Since the onset of the pandemic, we have leased approximately 50% of the portfolio with no material change in occupancy levels. Our current leasing pipeline remains strong, and we believe our portfolio of differentiated, reimagined, professional environments, as well as our balance sheet, are well positioned to continue to drive further leasing success in 2024."

First Quarter 2024 Dividend:

As previously announced, on February 1, 2024, the board of directors of Piedmont declared a dividend for the first quarter of 2024 in the amount of $0.125 per share on its common stock to stockholders of record as of the close of business on February 23, 2024, payable on March 15, 2024.


Guidance for 2024:

The Company is introducing guidance for the year ending December 31, 2024 (inclusive of the effects of the refinancing activity completed in January 2024 mentioned above) as follows:

(in millions, except per share data)LowHigh
Net income/(loss)$(47)$(41)
Add:
Depreciation148 151 
Amortization81 84 
Core FFO applicable to common stock$182 $194 
Core FFO applicable to common stock per diluted share$1.46$1.56


7


This guidance is based on information available to management as of the date of this release and reflects management's view of current market conditions, including the following specific assumptions and projections:
Executed leasing activity in the range of 1.5 - 2 million square feet with year-end leased percentage for the Company's in-service portfolio anticipated to be approximately 87-88%, before the impacts of any acquisition or disposition activity;
Same Store NOI flat to 2% increase on both a cash and accrual basis, as the Company will experience some downtime between certain lease expirations and new lease commencements during 2024;
Interest expense of approximately $119-121 million, reflecting a full year of higher interest rates as a result of refinancing activity completed by the Company during the latter half of 2023 and early 2024 and utilizing the latest forward yield curve projections; and,
General and administrative expense will remain relatively flat at approximately $29-30 million;

No speculative acquisitions, dispositions, or refinancings are included in the above guidance. The Company will adjust guidance if such transactions occur.

Note that actual results could differ materially from these estimates and individual quarters may fluctuate on both a cash basis and an accrual basis due to the timing of any future dispositions, significant 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 expense, one-time revenue or expense events, and other factors discussed under "Risks, Uncertainties & Limitations" below.

8


Piedmont Office Realty Trust, Inc.
Key Performance Indicators
Unaudited (in thousands except for per share data and ratios)
This section of our supplemental report includes non-GAAP financial measures, including, but not limited to, Earnings Before Interest, Taxes, Depreciation, and Amortization for real estate (EBITDAre), Core Earnings Before Interest, Taxes, Depreciation, and Amortization (Core EBITDA), Funds from Operations (FFO), Core Funds from Operations (Core FFO), Adjusted Funds from Operations (AFFO), and Same Store Net Operating Income (Same Store NOI). Definitions of these non-GAAP measures are provided on page 34 and reconciliations are provided beginning on page 36.
Three Months Ended
Selected Operating Data12/31/20239/30/20236/30/20233/31/202312/31/2022
Percent leased
87.1 %86.7 %86.2 %86.1 %86.7 %
Percent leased - economic (1)
81.5 %80.8 %80.0 %79.6 %81.1 %
Total revenues$145,331$146,986$143,072$142,367$147,208
Net income / (loss) applicable to Piedmont-$28,030-$17,002-$1,988-$1,367$75,569
Net income / (loss) per share applicable to common stockholders - diluted-$0.23-$0.14-$0.02-$0.01$0.61
Core EBITDA$79,215$80,448$79,212$78,541$82,186
Core FFO applicable to common stock$50,624$52,716$55,535$56,344$61,235
Core FFO per share - diluted$0.41$0.43$0.45$0.46$0.50
AFFO applicable to common stock$31,833$39,939$44,444$36,792$47,082
Gross regular dividends (2)
$15,464$15,462$25,975$25,965$25,918
Regular dividends per share (2)
$0.125$0.125$0.210$0.210$0.210
Same store net operating income - accrual basis (3)
1.1 %1.7 %-3.7 %-2.8 %-0.7 %
Same store net operating income - cash basis (3)
4.8 %5.3 %0.2 %-1.5 %1.6 %
Rental rate roll up / roll down - accrual rents
11.3 %10.3 %19.6 %9.9 %11.5 %
Rental rate roll up / roll down - cash rents
0.0 %11.7 %14.3 %5.7 %6.5 %
Selected Balance Sheet Data
Total real estate assets, net$3,512,527$3,502,576$3,512,128$3,486,797$3,500,624
Total assets$4,057,082$4,073,778$4,094,349$4,237,460$4,085,525
Total liabilities$2,334,110$2,306,713$2,297,015$2,417,363$2,236,270
Ratios & Information for Debt Holders
Core EBITDA to total revenues
54.5 %54.7 %55.4 %55.2 %55.8 %
Fixed charge coverage ratio (4)
2.5 x2.7 x3.2 x3.4 x3.8 x
Average net principal amount of debt to Core EBITDA - quarterly (5)
6.5 x6.4 x6.4 x6.3 x6.4 x
Total gross real estate assets$4,647,105$4,601,792$4,576,943$4,518,003$4,506,328
Total debt - GAAP$2,054,596$2,050,319$2,049,236$2,197,955$1,983,681
Net principal amount of debt (6)
$2,065,827$2,057,848$2,051,778$2,037,224$1,977,400
(1)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.
(2)Dividends are reflected in the quarter in which the record date occurred.
(3)
Please refer to the three pages starting with page 13 for reconciliations to net income and additional same store net operating income information. The statistic provided for each of the prior quarters is based on the same store property population applicable at the time that the metric was initially reported.
(4)The fixed charge coverage ratio is calculated as Core EBITDA divided by the sum of interest expense, principal amortization, capitalized interest and preferred dividends (none during periods presented). The Company had principal amortization of $0.8 million for the quarter ended December 31, 2023, $0.3 million for the quarter ended September 30, 2023 and no principal amortization for prior periods presented. The Company had capitalized interest of $2.5 million for the quarter ended December 31, 2023, $1.9 million for the quarter ended September 30, 2023, $1.4 million for the quarter ended June 30, 2023, $1.2 million for the quarter ended March 31, 2023, and $1.0 million for the quarter ended December 31, 2022.
(5)For the purposes of this calculation, we annualize the Core EBITDA for the quarter and use the average daily principal balance of debt outstanding during the quarter, less cash and cash equivalents and escrow deposits and restricted cash as of the end of each month of the quarter.
(6)Net principal amount of debt is calculated and defined as the total principal amount of debt outstanding minus cash and cash equivalents and escrow deposits and restricted cash all as of the end of the period.

9


Piedmont Office Realty Trust, Inc.
Consolidated Balance Sheets
Unaudited (in thousands)
12/31/20239/30/20236/30/20233/31/202312/31/2022
Assets:
Real estate, at cost:
Land assets$567,244 $567,244 $567,244 $567,244 $567,244 
Buildings and improvements3,823,241 3,782,385 3,768,456 3,714,572 3,682,000 
Buildings and improvements, accumulated depreciation(1,046,512)(1,013,019)(981,052)(947,209)(915,010)
Intangible lease asset170,654 177,584 182,127 190,180 205,074 
Intangible lease asset, accumulated amortization(88,066)(86,197)(83,763)(83,997)(90,694)
Construction in progress85,966 74,579 59,116 46,007 52,010 
Total real estate assets3,512,527 3,502,576 3,512,128 3,486,797 3,500,624 
Cash and cash equivalents825 5,044 5,167 170,593 16,536 
Tenant receivables, net of allowance for doubtful accounts7,915 8,806 5,387 6,280 4,762 
Straight line rent receivable183,839 181,843 180,339 176,320 172,019 
Escrow deposits and restricted cash3,381 5,983 5,055 4,183 3,064 
Prepaid expenses and other assets28,466 26,156 23,566 26,810 17,152 
Goodwill53,491 71,980 82,937 82,937 82,937 
Interest rate swap3,032 5,841 5,693 2,899 4,183 
Deferred lease costs, gross487,519 483,353 482,149 486,694 505,979 
Deferred lease costs, accumulated amortization(223,913)(217,804)(208,072)(206,053)(221,731)
Total assets$4,057,082 $4,073,778 $4,094,349 $4,237,460 $4,085,525 
Liabilities:
Unsecured debt, net of discount$1,858,717 $1,853,598 $1,852,236 $2,000,955 $1,786,681 
Secured debt195,879 196,721 197,000 197,000 197,000 
Accounts payable, accrued expenses, and accrued capital expenditures146,659 120,579 107,629 98,464 135,663 
Deferred income89,930 89,990 89,815 67,056 59,977 
Intangible lease liabilities, less accumulated amortization42,925 45,825 50,335 53,494 56,949 
Interest rate swaps— — — 394 — 
Total liabilities2,334,110 2,306,713 2,297,015 2,417,363 2,236,270 
Stockholders' equity:
Common stock1,237 1,237 1,237 1,236 1,234 
Additional paid in capital3,716,742 3,714,629 3,712,688 3,710,767 3,711,005 
Cumulative distributions in excess of earnings(1,987,147)(1,943,652)(1,911,188)(1,883,225)(1,855,893)
Other comprehensive loss(9,418)(6,718)(6,977)(10,266)(8,679)
Piedmont stockholders' equity1,721,414 1,765,496 1,795,760 1,818,512 1,847,667 
Non-controlling interest1,558 1,569 1,574 1,585 1,588 
Total stockholders' equity1,722,972 1,767,065 1,797,334 1,820,097 1,849,255 
Total liabilities, redeemable common stock and stockholders' equity$4,057,082 $4,073,778 $4,094,349 $4,237,460 $4,085,525 
Common stock outstanding at end of period123,715 123,696 123,692 123,643 123,440 


10


Piedmont Office Realty Trust, Inc.
Consolidated Statements of Income
Unaudited (in thousands except for per share data)
Three Months Ended
12/31/20239/30/20236/30/20233/31/202312/31/2022
Revenues:
Rental income (1)
$114,357 $115,250 $112,238 $112,560 $117,148 
Tenant reimbursements (1)
25,090 26,284 25,265 24,269 24,958 
Property management fee revenue389 396 437 507 395 
Other property related income5,495 5,056 5,132 5,031 4,707 
145,331 146,986 143,072 142,367 147,208 
Expenses:
Property operating costs59,085 59,847 58,368 57,791 59,763 
Depreciation38,036 38,150 36,475 35,797 34,788 
Amortization24,232 20,160 21,333 22,031 23,915 
Impairment charges (2)
18,489 10,957 — — 25,981 
General and administrative7,177 7,043 7,279 7,691 7,915 
147,019 136,157 123,455 123,310 152,362 
Other income / (expense):
Interest expense(28,431)(27,361)(23,389)(22,077)(20,739)
Other income / (expense)146 351 1,787 1,656 408 
Loss on early extinguishment of debt (3)
— (820)— — — 
Gain on sale of real estate (4)
1,946 — — — 101,055 
Net income / (loss)(28,027)(17,001)(1,985)(1,364)75,570 
Less: Net (income) / loss applicable to noncontrolling interest(3)(1)(3)(3)(1)
Net income / (loss) applicable to Piedmont$(28,030)$(17,002)$(1,988)$(1,367)$75,569 
Weighted average common shares outstanding - diluted123,714 123,696 123,671 123,550 123,633 
Net income / (loss) per share applicable to common stockholders - diluted$(0.23)$(0.14)$(0.02)$(0.01)$0.61 
Common stock outstanding at end of period123,715 123,696 123,692 123,643 123,440 






(1)The presentation method used for this line is not in conformance with GAAP. To be in conformance with the current GAAP standard, the Company would combine amounts presented on the rental income line with amounts presented on the tenant reimbursements line and present that aggregated figure on one line entitled "rental and tenant reimbursement revenue."
(2)
The impairment charge in the fourth quarter of 2023 was related to the write down of the Company's goodwill balance allocated to its Boston and New York markets. The impairment charge reflected in the third quarter of 2023 was related to the write down of the Company's goodwill balance allocated to its Minneapolis market. The impairment charge reflected in the fourth quarter of 2022 was related to (a) the write down of the Company's goodwill balance of $16.0 million allocated to the Washington, D.C. market; and (b) the write down of the book value of one property.
(3)The loss on early extinguishment of debt in the third quarter of 2023 was related to the pro-rata write-off of unamortized debt issuance costs and discounts associated with the repurchase of approximately $350 million of the $400 Million Unsecured Senior Notes due 2024, as well as fees paid, pursuant to a tender offer during the quarter.
(4)The gain on sale of real estate reflected in the fourth quarter of 2022 was primarily related to the sales of One Brattle Square and 1414 Massachusetts Avenue, both in Cambridge, MA.

11


Piedmont Office Realty Trust, Inc.
Consolidated Statements of Income
Unaudited (in thousands except for per share data)
Three Months EndedTwelve Months Ended
12/31/202312/31/2022Change ($)Change (%)12/31/202312/31/2022Change ($)Change (%)
Revenues:
Rental income (1)
$114,357 $117,148 $(2,791)(2.4)%$454,405 $451,404 $3,001 0.7 %
Tenant reimbursements (1)
25,090 24,958 132 0.5 %100,908 94,337 6,571 7.0 %
Property management fee revenue389 395 (6)(1.5)%1,729 1,675 54 3.2 %
Other property related income5,495 4,707 788 16.7 %20,714 16,350 4,364 26.7 %
145,331 147,208 (1,877)(1.3)%577,756 563,766 13,990 2.5 %
Expenses:
Property operating costs59,085 59,763 678 1.1 %235,091 226,058 (9,033)(4.0)%
Depreciation38,036 34,788 (3,248)(9.3)%148,458 133,616 (14,842)(11.1)%
Amortization24,232 23,915 (317)(1.3)%87,756 90,937 3,181 3.5 %
Impairment charges (2)
18,489 25,981 7,492 28.8 %29,446 25,981 (3,465)(13.3)%
General and administrative7,177 7,915 738 9.3 %29,190 29,127 (63)(0.2)%
147,019 152,362 5,343 3.5 %529,941 505,719 (24,222)(4.8)%
Other income / (expense):
Interest expense(28,431)(20,739)(7,692)(37.1)%(101,258)(65,656)(35,602)(54.2)%
Other income / (expense)146 408 (262)(64.2)%3,940 2,710 1,230 45.4 %
Loss on early extinguishment of debt (3)
— — — (820)— (820)(100.0)%
Gain on sale of real estate (4)
1,946 101,055 (99,109)(98.1)%1,946 151,729 (149,783)(98.7)%
Net income / (loss)(28,027)75,570 (103,597)(137.1)%(48,377)146,830 (195,207)(132.9)%
Less: Net (income) / loss applicable to noncontrolling interest(3)(1)(2)(200.0)%(10)— (10)(100.0)%
Net income / (loss) applicable to Piedmont$(28,030)$75,569 $(103,599)(137.1)%$(48,387)$146,830 $(195,217)(133.0)%
Weighted average common shares outstanding - diluted123,714 123,633 123,659 123,524 
Net income / (loss) per share applicable to common stockholders - diluted$(0.23)$0.61 $(0.39)$1.19 
Common stock outstanding at end of period123,715 123,440 123,715 123,440 







(1)The presentation method used for this line is not in conformance with GAAP. To be in conformance with the current GAAP standard, the Company would combine amounts presented on the rental income line with amounts presented on the tenant reimbursements line and present that aggregated figure on one line entitled "rental and tenant reimbursement revenue."
(2)
The impairment charge for the three months ended December 31, 2023 was related to the write down of the Company's goodwill balance allocated to its Boston and New York markets. The impairment charge for the twelve months ended December 31, 2023 was related to the write down of the Company's goodwill balance to its Minneapolis, Boston, and New York markets. The impairment charge reflected in the three and twelve months ended 2022 was related to (a) the write down of the Company's goodwill balance of $16.0 million allocated to the Washington, D.C. market; and (b) the write down of the book value of one property.
(3)The loss on early extinguishment of debt for the twelve months ended December 31, 2023 was related to the pro-rata write-off of unamortized debt issuance costs and discounts associated with the repurchase of approximately $350 million of the $400 Million Unsecured Senior Notes due 2024, as well as fees paid, pursuant to a tender offer during the quarter.
(4)The gain on sale of real estate for the twelve months ended December 31, 2022 was primarily related to the sales of 225 and 235 Presidential Way in Woburn, MA and One Brattle Square and 1414 Massachusetts Avenue in Cambridge, MA.

12


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 EndedTwelve Months Ended
12/31/202312/31/202212/31/202312/31/2022
GAAP net income / (loss) applicable to common stock$(28,030)$75,569 $(48,387)$146,830 
Depreciation of real estate assets (1)
37,889 34,587 147,569 132,849 
Amortization of lease-related costs (1)
24,222 23,905 87,717 90,891 
Impairment charges
18,489 25,981 29,446 25,981 
Gain on sale of properties
(1,946)(101,055)(1,946)(151,729)
NAREIT Funds From Operations applicable to common stock50,624 58,987 214,399 244,822 
Adjustments:
Severance costs associated with management reorganization— 2,248 — 2,248 
Loss on early extinguishment of debt— — 820 — 
Core Funds From Operations applicable to common stock50,624 61,235 215,219 247,070 
Adjustments:
Amortization of debt issuance costs and discounts on debt
1,481 926 5,442 3,389 
Depreciation of non real estate assets136 191 847 728 
Straight-line effects of lease revenue (1)
(908)(2,356)(7,268)(11,230)
Stock-based compensation adjustments1,989 1,717 6,337 4,833 
Amortization of lease-related intangibles (1)
(2,869)(3,713)(13,879)(13,426)
Non-incremental capital expenditures (2)
   Base Building Costs(5,554)(3,967)(20,305)(19,118)
   Tenant Improvement Costs(2,664)(2,934)(13,278)(20,989)
   Leasing Costs(10,402)(4,017)(20,107)(13,217)
Adjusted Funds From Operations applicable to common stock$31,833 $47,082 $153,008 $178,040 
Weighted average common shares outstanding - diluted123,846 123,633 123,702 123,524 
Funds From Operations per share (diluted)$0.41 $0.48 $1.73 $1.98 
Core Funds From Operations per share (diluted)$0.41 $0.50 $1.74 $2.00 
Common stock outstanding at end of period123,715 123,440 123,715 123,440 

(1)Includes our proportionate share of amounts attributable to consolidated properties.
(2)
Non-incremental capital expenditures are defined on page 34.


13


Piedmont Office Realty Trust, Inc.
Same Store Net Operating Income (Cash Basis)
Unaudited (in thousands)
Three Months EndedTwelve Months Ended
12/31/202312/31/202212/31/202312/31/2022
Net income / (loss) applicable to Piedmont$(28,030)$75,569 $(48,387)$146,830 
Net income / (loss) applicable to noncontrolling interest10 — 
Interest expense
28,431 20,739 101,258 65,656 
Depreciation (1)
38,025 34,778 148,417 133,577 
Amortization (1)
24,223 23,905 87,717 90,891 
Depreciation and amortization attributable to noncontrolling interests20 20 80 85 
Impairment charges
18,489 25,981 29,446 25,981 
Gain on sale of properties
(1,946)(101,055)(1,946)(151,729)
EBITDAre
79,215 79,938 316,595 311,291 
Severance costs associated with management reorganization— 2,248 — 2,248 
Loss on early extinguishment of debt— — 820 — 
Core EBITDA (2)
79,215 82,186 317,415 313,539 
General and administrative expense
7,177 5,668 29,190 26,879 
Non-cash general reserve for uncollectible accounts— (1,000)(1,000)(3,000)
Management fee revenue (3)
(247)(261)(1,004)(1,004)
Other (income) / expense (1) (4)
(38)(193)(3,256)(1,847)
Straight-line effects of lease revenue (1)
(908)(2,356)(7,268)(11,230)
Straight-line effects of lease revenue attributable to noncontrolling interests(3)(4)(10)(10)
Amortization of lease-related intangibles (1)
(2,869)(3,713)(13,879)(13,426)
Property net operating income (cash basis)82,327 80,327 320,188 309,901 
Deduct net operating (income) / loss from:
Acquisitions (5)
(6,123)(5,313)(22,907)(8,180)
Dispositions (6)
(37)(2,343)65 (10,714)
Other investments (7)
241 224 790 763 
Same store net operating income (cash basis)$76,408 $72,895 $298,136 $291,770 
Change period over period4.8 %N/A2.2 %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 twelve months ended December 31, 2023, Piedmont recognized $3.4 million of termination income, as compared with $2.1 million during the same period in 2022.
(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 1180 Peachtree Street in Atlanta, GA, purchased in the third quarter of 2022.
(6)Dispositions include Two Pierce Place in Itasca, IL and 225 and 235 Presidential Way in Woburn, MA, sold in the first quarter of 2022, and One Brattle Square and 1414 Massachusetts Avenue in Cambridge, MA, sold in the fourth quarter of 2022.
(7)
Other investments include various land holdings and 222 South Orange Avenue in Orlando, FL, which is an out-of-service redevelopment project. Additional information on these entities can be found on page 33.

14


Piedmont Office Realty Trust, Inc.
Same Store Net Operating Income (Accrual Basis)
Unaudited (in thousands)
Three Months EndedTwelve Months Ended
12/31/202312/31/2022