Piedmont Office Realty Trust, Inc. (NYSE:PDM) Q3 2021 Earnings Conference Call October 28, 2021 11:00 AM ET Company Participants Eddie Guilbert - EVP, Finance and Treasurer Brent Smith - President and CEO George Wells - COO Bobby Bowers - CFO Conference Call Participants Anthony Paolone - JPMorgan Dave Rodgers - Baird Daniel Ismail - Green Street Michael Lewis - Truist Securities Disclaimer*: This transcript is designed to be used alongside the freely available audio recording on this page. Timestamps withi ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ____________________________________________________ _______________________________________________________________________________________ FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT of 1934 For the Quarterly Period Ended September 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT of 1934 For the Transition Period ...

Piedmont Office Realty Trust, Inc. (NYSE:PDM) Q2 2021 Earnings Conference Call July 29, 2021 11:00 AM ET Company Participants Eddie Guilbert - EVP, Finance and Treasurer Brent Smith - President and CEO George Wells - COO Bobby Bowers - CFO Conference Call Participants Anthony Paolone - JPMorgan Dave Rodgers - Baird Daniel Ismail - Green Street Operator Good day, ladies and gentlemen, and welcome to the Piedmont Office Realty Trust, Inc. Second Quarter 2021 Earnings Call. All lines have been placed in a list ...

Financial Performance - Net income applicable to Piedmont for the quarter ended June 30, 2021, was $9.9 million, or $0.08 per share, compared to $192.4 million, or $1.52 per share, for the same quarter in 2020[15] - Funds from operations (FFO) for the quarter ended June 30, 2021, was $60.4 million, or $0.48 per share, compared to $52.3 million, or $0.41 per share, for the same quarter in 2020[16] - Core funds from operations (Core FFO) for the quarter ended June 30, 2021, was $60.4 million, or $0.48 per share, compared to $61.6 million, or $0.49 per share, for the same quarter in 2020[17] - Adjusted funds from operations (AFFO) for the quarter ended June 30, 2021, was $41.7 million, compared to $45.0 million for the same quarter in 2020[19] Portfolio and Leasing - As of June 30, 2021, the total in-service office portfolio was 85.9% leased, compared to 86.8% at December 31, 2020[20] - The weighted average remaining lease term of the in-service portfolio was 6.1 years as of June 30, 2021, unchanged from December 31, 2020[21] - The weighted average adjusted Annualized Lease Revenue per square foot for the in-service portfolio was $37.21 as of June 30, 2021[21] - During the three months ended June 30, 2021, the Company completed approximately 664,000 square feet of leasing activity, including new tenant leases for approximately 154,000 square feet[24] Capital Activity - Piedmont entered into a binding contract to sell two office buildings in Woburn, MA, for $129.0 million, or $293 per square foot, expected to close around the end of 2021[35] - As of quarter end, Board-approved capacity remaining for additional repurchases totaled approximately $170 million under the stock repurchase plan[40] - The ratio of total debt to total gross assets was 34.6% as of June 30, 2021, compared to 34.4% at December 31, 2020[39]

[PART I Financial Information](index=5&type=section&id=PART%20I%20Financial%20Information) [Item 1. Consolidated Financial Statements](index=5&type=section&id=Item%201.%20Consolidated%20Financial%20Statements) This section presents Piedmont Office Realty Trust's unaudited consolidated financial statements, including balance sheets, income statements, and cash flows, for periods ending June 30, 2021 [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) Total assets increased slightly to **$3.76 billion** as of June 30, 2021, while liabilities rose and equity decreased Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Total Assets** | **$3,758,311** | **$3,739,810** | | Total real estate assets | $3,079,707 | $3,056,034 | | Cash and cash equivalents | $8,122 | $7,331 | | **Total Liabilities** | **$1,885,803** | **$1,841,849** | | Unsecured debt, net | $1,666,570 | $1,594,068 | | Secured debt, net | $— | $27,936 | | **Total Stockholders' Equity** | **$1,872,508** | **$1,897,961** | [Consolidated Statements of Income](index=7&type=section&id=Consolidated%20Statements%20of%20Income) Net income significantly decreased to **$9.9 million** in Q2 2021 due to the absence of a prior-year asset sale gain Consolidated Income Statement Highlights (in thousands, except per share data) | Metric | Q2 2021 | Q2 2020 | H1 2021 | H1 2020 | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $130,218 | $134,631 | $259,475 | $271,802 | | Net Income Applicable to Piedmont | $9,947 | $192,427 | $19,291 | $201,136 | | Diluted EPS | $0.08 | $1.52 | $0.15 | $1.59 | - The significant decrease in net income for both the three and six months ended June 30, 2021, compared to 2020, is primarily driven by the absence of a large gain on the sale of real estate assets that occurred in 2020[23](index=23&type=chunk) [Consolidated Statements of Cash Flows](index=11&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow increased to **$100.2 million** for H1 2021, while investing and financing activities used cash Cash Flow Summary for the Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2021 | 2020 | | :--- | :--- | :--- | | Net cash provided by operating activities | $100,192 | $90,580 | | Net cash used in investing activities | ($61,577) | ($124,017) | | Net cash (used in)/provided by financing activities | ($38,129) | $56,289 | | **Net increase in cash** | **$486** | **$22,852** | [Condensed Notes to Consolidated Financial Statements](index=12&type=section&id=Condensed%20Notes%20to%20Consolidated%20Financial%20Statements) Notes detail accounting policies, debt, and commitments, with **54 properties** totaling **16.4 million sq ft** and **85.9% leased** - As of June 30, 2021, Piedmont owned **54 in-service office properties** and one redevelopment asset, comprising approximately **16.4 million square feet**, with an occupancy rate of **85.9%**[33](index=33&type=chunk) - The company has one individually significant unrecorded tenant allowance commitment of approximately **$28.1 million** for a 20-year, 520,000 square foot renewal and expansion for the State of New York at 60 Broad Street[53](index=53&type=chunk) - The 225 and 235 Presidential Way assets in Woburn, Massachusetts met the criteria for held for sale classification as of June 30, 2021, with the sale expected to close near the end of 2021[56](index=56&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial condition, liquidity, and operations, noting COVID-19's impact on leasing but not material financial condition - The COVID-19 pandemic has not materially impacted the company's financial condition or liquidity, but the related slowdown in 2020 leasing activity has negatively impacted occupancy levels and slowed earnings growth[73](index=73&type=chunk) - Primary sources of liquidity include cash on hand, cash flow from operations, proceeds from dispositions, and the **$500 million Unsecured 2018 Line of Credit**, which had **$425 million** of available capacity as of the filing date[74](index=74&type=chunk) [Liquidity and Capital Resources](index=23&type=section&id=Liquidity%20and%20Capital%20Resources) Capital expenditures totaled **$54.7 million** for H1 2021, with a **$300 million** term loan maturing soon Capital Expenditures (in thousands) | Category | H1 2021 | H1 2020 | | :--- | :--- | :--- | | Redevelopment/renovations | $23,882 | $16,440 | | Other capital expenditures | $30,824 | $38,512 | | **Total capital expenditures** | **$54,706** | **$54,952** | - As of June 30, 2021, the company had approximately **$169.3 million** of board-authorized capacity remaining for future stock repurchases[79](index=79&type=chunk) [Results of Operations](index=24&type=section&id=Results%20of%20Operations) Net income significantly declined in Q2 2021 due to prior-year asset sales; rental revenue decreased in H1 2021 - Q2 2021 vs Q2 2020: Rental revenue decreased by **$4.2 million** due to dispositions and lower occupancy. Amortization expense decreased by **$3.7 million** as certain lease intangibles became fully amortized. General and administrative expense increased by **$2.3 million** due to higher accruals for performance-based compensation[84](index=84&type=chunk)[87](index=87&type=chunk)[88](index=88&type=chunk) - H1 2021 vs H1 2020: Rental revenue decreased by **$10.5 million**. Property operating costs decreased by **$3.3 million**, partly due to reduced building utilization from COVID-19. Interest expense decreased by **$4.3 million** following a mortgage repayment in June 2020[95](index=95&type=chunk)[97](index=97&type=chunk)[101](index=101&type=chunk) [Net Operating Income by Geographic Segment](index=30&type=section&id=Net%20Operating%20Income%20by%20Geographic%20Segment) Total NOI decreased to **$156.4 million** for H1 2021, with Dallas increasing and New York/Corporate decreasing NOI by Geographic Segment - Six Months Ended June 30 (in thousands) | Segment | 2021 | 2020 | | :--- | :--- | :--- | | Dallas | $34,020 | $28,389 | | Atlanta | $29,598 | $29,934 | | Washington, D.C. | $17,659 | $19,435 | | Minneapolis | $16,467 | $16,766 | | Boston | $21,771 | $21,249 | | Orlando | $18,088 | $16,972 | | New York | $15,133 | $22,457 | | **Total NOI** | **$156,441** | **$165,218** | [Funds From Operations (FFO), Core FFO, and AFFO](index=31&type=section&id=Funds%20From%20Operations%20(FFO)%2C%20Core%20FFO%2C%20and%20AFFO) Core FFO for Q2 2021 was **$60.4 million** ($0.48/share), slightly down from Q2 2020 FFO and Core FFO Reconciliation Highlights (in thousands, except per share) | Metric | Q2 2021 | Q2 2020 | H1 2021 | H1 2020 | | :--- | :--- | :--- | :--- | :--- | | GAAP net income | $9,947 | $192,427 | $19,291 | $201,136 | | NAREIT FFO | $60,353 | $52,267 | $120,409 | $112,142 | | Core FFO | $60,353 | $61,603 | $120,409 | $121,478 | | Core FFO per share | $0.48 | $0.49 | $0.97 | $0.96 | [Property and Same Store Net Operating Income](index=33&type=section&id=Property%20and%20Same%20Store%20Net%20Operating%20Income) Same Store NOI increased by **4.3%** (cash basis) and **1.7%** (accrual basis) for H1 2021, with **85.9%** leased occupancy Same Store NOI Growth (YoY) | Period | Cash Basis | Accrual Basis | | :--- | :--- | :--- | | Three Months Ended June 30, 2021 | 4.8% | 4.7% | | Six Months Ended June 30, 2021 | 4.3% | 1.7% | - The portfolio's leased percentage was **85.9%** as of June 30, 2021, compared to **86.8%** as of December 31, 2020[134](index=134&type=chunk) - For leases executed in H1 2021 for space vacant one year or less, the company experienced a **17.3%** roll-up in accrual rents and a **7.7%** roll-up in cash rents[136](index=136&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=39&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Primary market risk is interest rate fluctuations on variable-rate debt; a **1.0%** increase would raise annual interest expense by **$5.3 million** - The primary market risk is interest rate risk associated with variable-rate debt, including the **$500M Line of Credit** and two unsecured term loans[144](index=144&type=chunk) - As of June 30, 2021, a hypothetical **1.0%** increase in variable interest rates on existing outstanding borrowings would increase annual interest expense by approximately **$5.3 million**[148](index=148&type=chunk) - The company is monitoring the planned phase-out of USD LIBOR after June 2023 and notes its credit agreements contain 'fallback' language for establishing an alternate interest rate[144](index=144&type=chunk) [Item 4. Controls and Procedures](index=40&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were effective as of June 30, 2021, with no material changes in internal control - The Principal Executive Officer and Principal Financial Officer concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[149](index=149&type=chunk) - No changes in internal control over financial reporting occurred during the quarter ended June 30, 2021, that have materially affected, or are reasonably likely to materially affect, internal controls[150](index=150&type=chunk) [PART II. Other Information](index=41&type=section&id=PART%20II.%20Other%20Information) [Item 1. Legal Proceedings](index=41&type=section&id=Item%201.%20Legal%20Proceedings) The company is not subject to any material pending legal proceedings, with routine litigation covered by insurance - Piedmont is not subject to any material pending legal proceedings and expects routine litigation to be covered by insurance without material adverse effect[152](index=152&type=chunk) [Item 1A. Risk Factors](index=41&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors were reported since the 2020 Annual Report on Form 10-K - No material changes to risk factors were reported since the 2020 Form 10-K[153](index=153&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=41&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered equity sales or common stock repurchases occurred in Q2 2021; **$169.3 million** remains for repurchases - No unregistered sales of equity securities occurred in Q2 2021[158](index=158&type=chunk) - No shares of common stock were repurchased during Q2 2021. Approximately **$169.3 million** remains available under the stock repurchase program as of June 30, 2021[158](index=158&type=chunk) [Item 3. Defaults Upon Senior Securities](index=41&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section is not applicable to the company's current reporting - This item is not applicable[155](index=155&type=chunk) [Item 4. Mine Safety Disclosures](index=41&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable to the company's current reporting - This item is not applicable[156](index=156&type=chunk) [Item 5. Other Information](index=41&type=section&id=Item%205.%20Other%20Information) No other information was reported under this item - No other information was reported under this item[157](index=157&type=chunk) [Item 6. Exhibits](index=42&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including corporate governance documents and certifications - The exhibits include certifications from the Principal Executive Officer and Principal Financial Officer pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002[159](index=159&type=chunk)

Piedmont Office Realty Trust, Inc. (NYSE:PDM) Q1 2021 Earnings Conference Call April 29, 2021 10:00 AM ET Participants Eddie Guilbert - Executive Vice President of Finance and Treasurer, Piedmont Office Realty Trust, Inc. Brent Smith - President and Chief Executive Officer, Piedmont Office Realty Trust, Inc. Bobby Bowers - Chief Financial Officer, Piedmont Office Realty Trust, Inc. Analysts Anthony Paolone - JPMorgan Dave Rodgers - Robert W. Baird Michael Lewis - SunTrust Securities Daniel Ishmael - Green S ...

[Part I: Financial Information](index=6&type=section&id=PART%20I%20Financial%20Information) [Item 1. Consolidated Financial Statements](index=6&type=section&id=Item%201.%20Consolidated%20Financial%20Statements.) Piedmont's unaudited consolidated financial statements for Q1 2021 and 2020 are presented, including key financial statements and notes [Consolidated Balance Sheets](index=7&type=section&id=Consolidated%20Balance%20Sheets) Total assets slightly decreased to **$3.738 billion** as of March 31, 2021, with liabilities increasing and equity decreasing Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Total Assets** | **$3,737,874** | **$3,739,810** | | Total real estate assets | $3,061,259 | $3,056,034 | | Cash and cash equivalents | $10,689 | $7,331 | | **Total Liabilities** | **$1,850,529** | **$1,841,849** | | Unsecured debt, net | $1,633,819 | $1,594,068 | | **Total Stockholders' Equity** | **$1,887,345** | **$1,897,961** | [Consolidated Statements of Income](index=8&type=section&id=Consolidated%20Statements%20of%20Income) Net income increased to **$9.3 million** in Q1 2021, or **$0.08 per diluted share**, primarily due to lower interest expense Consolidated Income Statement Highlights (in thousands) | Account | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :--- | :--- | :--- | | Total Revenues | $129,257 | $137,171 | | Total Expenses | $109,690 | $113,348 | | Interest Expense | $(12,580) | $(15,264) | | **Net Income Applicable to Piedmont** | **$9,344** | **$8,709** | | **Net Income per Share - diluted** | **$0.08** | **$0.07** | [Consolidated Statements of Comprehensive Income/(Loss)](index=9&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%2F%28Loss%29) Comprehensive income reached **$11.6 million** in Q1 2021, a turnaround from a **$13.2 million** loss in Q1 2020, driven by derivative instruments Comprehensive Income/(Loss) (in thousands) | Item | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :--- | :--- | :--- | | Net income applicable to Piedmont | $9,344 | $8,709 | | Other comprehensive income/(loss) | $2,287 | $(21,943) | | **Comprehensive income/(loss) applicable to Piedmont** | **$11,631** | **$(13,234)** | [Consolidated Statements of Stockholders' Equity](index=10&type=section&id=Consolidated%20Statements%20of%20Stockholders%27%20Equity) Total stockholders' equity decreased to **$1.887 billion** due to **$26.1 million** in dividends, partially offset by net income and other comprehensive income - Key changes in stockholders' equity for Q1 2021 included **$26.0 million** in dividends paid to common stockholders, **$9.3 million** in net income, and **$2.3 million** in other comprehensive income[29](index=29&type=chunk) [Consolidated Statements of Cash Flows](index=11&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations remained stable at **$46.8 million** in Q1 2021, with investing and financing activities using **$27.8 million** and **$15.8 million** respectively Cash Flow Summary (in thousands) | Activity | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :--- | :--- | :--- | | Net cash provided by operating activities | $46,820 | $46,797 | | Net cash used in investing activities | $(27,813) | $(448,807) | | Net cash (used in)/provided by financing activities | $(15,791) | $396,302 | | **Net increase/(decrease) in cash** | **$3,216** | **$(5,708)** | [Condensed Notes to Consolidated Financial Statements](index=12&type=section&id=Condensed%20Notes%20to%20Consolidated%20Financial%20Statements) The notes detail Piedmont's organization, accounting policies, debt, derivatives, and commitments, with the company owning **54** properties totaling **16.4 million** square feet - As of March 31, 2021, Piedmont owned **54** in-service office properties and one redevelopment asset, comprising approximately **16.4 million** square feet, which were **86.0%** leased[34](index=34&type=chunk) - Total outstanding debt as of March 31, 2021 was approximately **$1.66 billion**, with a weighted average interest rate of **2.97%**[41](index=41&type=chunk) - The company has a significant unrecorded tenant allowance commitment of approximately **$37.2 million** for a 20-year, 520,000 square foot renewal and expansion for the State of New York at 60 Broad Street[53](index=53&type=chunk) - On April 28, 2021, the Board declared a Q2 2021 dividend of **$0.21** per common share[69](index=69&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) Management discusses financial condition, liquidity, capital resources, and operations, noting limited COVID-19 impact, increased net income, and non-GAAP measures [Liquidity and Capital Resources](index=24&type=section&id=Liquidity%20and%20Capital%20Resources) Piedmont's liquidity relies on cash, operating cash flow, and a **$500 million** credit line, with capital primarily used for property expenditures and stock repurchases - Primary sources of liquidity include cash from operations and a **$500 million** line of credit, which had **$460 million** of capacity available as of the filing date[74](index=74&type=chunk) Capital Expenditures (in thousands) | Category | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :--- | :--- | :--- | | Capital expenditures for redevelopment/renovations | $11,235 | $8,539 | | Other capital expenditures | $14,524 | $23,779 | | **Total capital expenditures** | **$25,759** | **$32,318** | - As of March 31, 2021, the company had approximately **$169.3 million** of board-authorized capacity remaining for future stock repurchases[80](index=80&type=chunk) [Results of Operations](index=27&type=section&id=Results%20of%20Operations) Net income increased to **$9.3 million** in Q1 2021, driven by lower interest expense and higher other income, despite decreased rental and property income - Rental and tenant reimbursement revenue decreased by **$6.3 million** in Q1 2021 compared to Q1 2020, primarily due to capital transaction activity and decreased portfolio occupancy[85](index=85&type=chunk) - Interest expense decreased by **$2.7 million** year-over-year due to debt repayment and lower interest rates[92](index=92&type=chunk) - Other income increased by **$2.2 million** year-over-year, attributable to interest income from notes receivable related to the October 2020 sale of the New Jersey Portfolio[93](index=93&type=chunk) [Net Operating Income by Geographic Segment](index=30&type=section&id=Net%20Operating%20Income%20by%20Geographic%20Segment) Total NOI decreased to **$77.7 million** in Q1 2021, with Dallas increasing due to acquisitions, offset by decreases in New York, Corporate, and Washington D.C NOI by Geographic Segment (in thousands) | Segment | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :--- | :--- | :--- | | Dallas | $16,877 | $12,490 | | Atlanta | $14,996 | $14,912 | | Washington, D.C. | $8,573 | $10,129 | | Minneapolis | $8,155 | $8,699 | | Boston | $10,824 | $10,697 | | Orlando | $10,350 | $8,976 | | New York | $7,296 | $11,114 | | Corporate and other | $587 | $6,785 | | **Total NOI** | **$77,658** | **$83,802** | [Non-GAAP Financial Measures (FFO, AFFO, NOI)](index=31&type=section&id=Non-GAAP%20Financial%20Measures) This section defines and reconciles non-GAAP measures, with NAREIT FFO at **$60.1 million** and Same Store NOI increasing **3.9%** on a cash basis FFO Reconciliation (in thousands, except per share) | Metric | Q1 2021 | Q1 2020 | | :--- | :--- | :--- | | GAAP net income | $9,344 | $8,709 | | Depreciation of real estate assets | $27,812 | $27,551 | | Amortization of lease-related costs | $22,900 | $23,618 | | **NAREIT FFO** | **$60,056** | **$59,875** | | **FFO per diluted share** | **$0.48** | **$0.47** | - Same Store NOI for Q1 2021 increased by **3.9%** on a cash basis and decreased by **1.2%** on an accrual basis compared to Q1 2020[117](index=117&type=chunk)[124](index=124&type=chunk) [Portfolio and Leasing Activity](index=34&type=section&id=Portfolio%20and%20Leasing%20Activity) Portfolio leased percentage was **86.0%** as of March 31, 2021, with Q1 2021 leases showing a **7.0%** accrual rent roll-up and **2.8%** cash rent roll-down - The portfolio was **86.0%** leased as of March 31, 2021, compared to **86.8%** at December 31, 2020[120](index=120&type=chunk) - In Q1 2021, new and renewal leases for space vacant one year or less experienced a **7.0%** roll-up in accrual rents and a **2.8%** roll-down in cash rents[123](index=123&type=chunk) - As of March 31, 2021, the company had almost **1 million** square feet of executed leases for vacant space that had yet to commence or were under rental abatement[121](index=121&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=36&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) The primary market risk is interest rate risk from variable-rate debt, managed through fixed-rate debt and swaps, with **$1.2 billion** effectively fixed - The company's primary market risk is interest rate risk from its variable-rate debt facilities[131](index=131&type=chunk) - The company is monitoring the phase-out of USD LIBOR after June 2023; its credit agreements contain 'fallback' language to establish an alternate interest rate[131](index=131&type=chunk) - As of March 31, 2021, a **1.0%** increase in variable interest rates would increase annual interest expense by approximately **$4.9 million**[135](index=135&type=chunk) [Item 4. Controls and Procedures](index=37&type=section&id=Item%204.%20Controls%20and%20Procedures.) Management concluded that disclosure controls and procedures were effective as of March 31, 2021, with no material changes in internal control - The Principal Executive Officer and Principal Financial Officer concluded that disclosure controls and procedures were effective as of the end of the quarter[136](index=136&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[137](index=137&type=chunk) [Part II: Other Information](index=38&type=section&id=PART%20II.%20Other%20Information) [Item 1. Legal Proceedings](index=38&type=section&id=Item%201.%20Legal%20Proceedings.) The company is not subject to any material pending legal proceedings, with routine litigation expected to be covered by insurance - Piedmont is not subject to any material pending legal proceedings[139](index=139&type=chunk) [Item 1A. Risk Factors](index=38&type=section&id=Item%201A.%20Risk%20Factors.) No material changes to risk factors were reported from the company's 2020 Annual Report on Form 10-K - No material changes to risk factors were reported from the 2020 Form 10-K[140](index=140&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=38&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) No unregistered equity sales or common stock repurchases occurred in Q1 2021, with **$169.3 million** remaining for future repurchases - No common stock repurchases were made in Q1 2021. Approximately **$169.3 million** remains available under the stock repurchase program[145](index=145&type=chunk) [Item 6. Exhibits](index=39&type=section&id=Item%206.%20Exhibits.) This section lists all exhibits filed with the Form 10-Q, including corporate governance documents and required certifications - Lists all exhibits filed with the report, including corporate governance documents, compensation agreements, and required certifications[146](index=146&type=chunk)

FEBRUARY INVESTOR UPDATE February 2021 INTRODUCTION 1 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 sub-markets located primarily within seven major eastern U.S. office markets, with over half of its revenue generated from the Sunbelt. The Company's geographically-diversified portfolio is comprised of approximately $5 billion in gross assets ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _________________________________________________________ _________________________________________________________ FORM 10-K (Mark One) ☒ Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 2020 ☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to to Commission file number 001-34626 ___________ ...

Financial Data and Key Metrics Changes - For Q4 2020, the company reported core FFO of $0.46 per diluted share, consistent with Q4 2019, while annual core FFO for 2020 was $1.89, up from $1.79 in 2019, reflecting a $0.10 increase [31] - AFFO for Q4 was approximately $36 million, exceeding the current quarterly dividend level [31] - Same-store net operating income (NOI) was slightly down on a cash basis and relatively flat on an accrual basis, with cash-based same-store NOI impacted by rental payment deferrals [32][33] Business Line Data and Key Metrics Changes - The company executed over 1.1 million square feet of leasing in 2020, primarily renewals, with a cash roll-up of 3.5% on second-generation leases [11] - Approximately 190,000 square feet of leasing occurred in Q4, with notable activity in Atlanta, Washington, D.C., Minneapolis, and Dallas [12] - The weighted average lease term for the entire portfolio is now over six years [11] Market Data and Key Metrics Changes - Utilization of the portfolio remains at approximately 25% to 40% on average, varying by city and tenant profile [8] - Smaller tenants (less than 10,000 square feet) are making leasing decisions, while larger tenants (over 50,000 square feet) are also executing leases to take advantage of favorable rates [13] - The company is witnessing increased leasing activity in Sunbelt markets and Boston, driven by corporate relocations and expanding technology companies [15][17] Company Strategy and Development Direction - The company aims to focus on lower-cost, higher-quality life markets, emphasizing amenity-rich workplaces and robust tenant engagement [17] - Plans include recycling capital from non-core markets into healthier markets, with an expected recycling of $200 million to $400 million in 2021 [43] - The company is also focused on redevelopment projects, including the Galleria in Atlanta and the 200 South Orange Avenue campus in Orlando [45] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about the vaccine rollout and its impact on business operations, expecting a gradual return to normalcy in 2021 [7][16] - The company anticipates core FFO for 2021 to be in the range of $1.86 to $1.96 per diluted share, with same-store NOI growth expected between 3% and 5% [35][37] - Management noted that the current portfolio's overall occupancy is expected to improve by 1% to 2% by year-end [38] Other Important Information - The company collected 99% of its billed receivables during Q4 2020, indicating strong credit quality among tenants [20] - Approximately 70 tenant workout agreements were entered into, deferring about $7 million in rent, which is less than 1% of total annual revenues [21] - The company repurchased approximately 2.2 million shares of common stock at an average price of $14 per share, totaling about $30.6 million [29] Q&A Session Summary Question: Can you provide additional color on the mix between renewals and new leasing for the 500,000 square feet of leasing? - Management indicated that the split between new and renewal leases is consistent with prior quarters, with activity spread across various markets including Boston, Dallas, and Atlanta [40] Question: What industries or tenant sizes are returning to the office more than others? - Smaller tenants have returned more forcefully, while larger national corporates are more hesitant [41] Question: What are the plans for monetizing assets in stronger markets? - The company plans to continue monetizing mature assets, with potential recycling of $200 million to $400 million in 2021, focusing on Sunbelt and Boston markets [43][44] Question: How does the 500,000 square feet of leasing affect the expiration schedule? - Very little of the leasing activity reduces the 2021 expirations, which remain at about 5.8% [48] Question: What are the net effective rents compared to pre-COVID levels? - Net effective rents have declined by 5% to 10% due to increased concessions, while rates have held steady [50][51] Question: Is the $2.6 million termination fee from WeWork included in the guidance? - Yes, it is included in the guidance and is expected to be recognized primarily in the first quarter [53] Question: What is the G&A guidance for 2021? - The total G&A is estimated to be around $28 million for the year [56]