Piedmont Office Realty Trust(US:PDM)2024-07-31 20:24Financial Performance - Net loss applicable to Piedmont for the six months ended June 30, 2024, was $(37,572) thousand, compared to a net loss of $(3,355) thousand for the same period in 2023, representing a significant increase in losses[20] - The company reported a net loss per share applicable to common stockholders of $(0.30) for the six months ended June 30, 2024, compared to $(0.03) for the same period in 2023[18] - For the six months ended June 30, 2024, Piedmont reported a net loss of $37.568 million, compared to a net loss of $3.349 million for the same period in 2023[33] - Net loss applicable to common stockholders for the three months ended June 30, 2024, was approximately $9.8 million, or $0.08 per diluted share, compared to a net loss of $2.0 million, or $0.02 per diluted share, for the same period in 2023[114] - Piedmont recognized approximately $4.1 million in compensation expense related to unvested and potential stock awards, compared to $3.9 million for the same period in 2023[89] Revenue and Income - Rental and tenant reimbursement revenue for the six months ended June 30, 2024, was $275,751 thousand, slightly up from $274,332 thousand for the same period in 2023, indicating a growth of 0.5%[18] - Piedmont's total revenues for the six months ended June 30, 2024, were $287,800,000, compared to $285,439,000 for the same period in 2023[97] - Total revenue for the three months ended June 30, 2024, was $143.3 million, a slight increase from $143.1 million in the same period of 2023[115] - Other property-related income increased by approximately $1.0 million for the three months ended June 30, 2024, primarily due to higher transient parking revenue[117] Expenses and Costs - Property operating costs for the six months ended June 30, 2024, totaled $118,009 thousand, up from $116,159 thousand in the prior year, reflecting an increase of 1.6%[18] - Interest expense for the six months ended June 30, 2024, was $(59,283) thousand, compared to $(45,466) thousand for the same period in 2023, indicating an increase of 30.3%[18] - Depreciation expense increased by approximately $5.4 million to $77.7 million for the six months ended June 30, 2024, due to additional building and tenant improvements[128] - General and administrative expenses increased by approximately $1.1 million for the three months ended June 30, 2024, reflecting increased accruals for potential performance-based compensation[120] Assets and Liabilities - Total assets increased to $4,158,643 thousand as of June 30, 2024, compared to $4,057,082 thousand at December 31, 2023, reflecting a growth of approximately 2.5%[16] - Total liabilities rose to $2,500,319 thousand as of June 30, 2024, from $2,334,110 thousand at December 31, 2023, marking an increase of approximately 7.1%[16] - The company’s total stockholders' equity decreased to $1,658,324 thousand as of June 30, 2024, down from $1,722,972 thousand at December 31, 2023, a decline of approximately 3.7%[16] Cash Flow and Financing - Cash and cash equivalents increased to $138,454 thousand as of June 30, 2024, compared to $825 thousand at December 31, 2023, showing a substantial increase[16] - Piedmont's cash flows from operating activities for the six months ended June 30, 2024, were $90.187 million, slightly down from $95.218 million in the prior year[33] - The company issued $400 million in senior notes with a stated interest rate of 6.875%, maturing on July 15, 2029, and received net proceeds of $396 million[46] - Piedmont's net cash provided by financing activities was $116.951 million for the six months ended June 30, 2024, compared to a net cash used of $16.006 million in the prior year[33] Real Estate Portfolio - As of June 30, 2024, Piedmont owned and operated a portfolio of 31 in-service projects totaling approximately 15.7 million square feet, with a leasing rate of 87.3%[36] - The leased percentage of the in-service portfolio increased to 87.3%, up from 87.1% as of December 31, 2023, with over 1.5 million square feet of leasing completed[167] - Scheduled lease expirations for the remainder of 2024 represent approximately 3.4% of the company's annual lease revenue (ALR), with potential for some renewals[167] Debt and Interest Rate Management - Piedmont's total outstanding debt as of June 30, 2024, was approximately $2.22 billion, with a weighted average effective interest rate of 6.08%[54] - The company has total outstanding debt of approximately $2.1 billion subject to fixed or effectively fixed interest rates, with an average effective interest rate of approximately 6.04% per annum[178] - The company aims to limit the impact of interest rate changes on earnings and cash flow through a low-to-moderate level of overall borrowings[176] - A 1.0% increase in variable interest rates on existing borrowings would increase annual interest expense by approximately $1.2 million[179] Impairments and Sales - Piedmont recorded an impairment charge of approximately $17.5 million for the 750 West John Carpenter Freeway building due to a shortened intended hold period[70] - The company sold the One Lincoln Park building for net proceeds of approximately $53.3 million, which were used to repay $50.2 million of outstanding unsecured senior notes due 2024[74] - The company reported impairment charges of $18,432 thousand for the six months ended June 30, 2024[154]