|
x
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Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the fiscal year ended December 31, 2012
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o
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Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from to
to
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Maryland
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58-2328421
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification Number)
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11695 Johns Creek Parkway Ste. 350, Johns Creek, Georgia
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30097
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Name of exchange on which registered
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COMMON STOCK
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NEW YORK STOCK EXCHANGE
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FORM 10-K
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PIEDMONT OFFICE REALTY TRUST, INC.
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TABLE OF CONTENTS
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PART I.
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Page No.
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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PART II.
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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PART III.
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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PART IV.
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Item 15.
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•
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Market and economic conditions remain challenging and the demand for office space, rental rates and property values may continue to lag the general economic recovery causing our business, results of operations, cash flows, financial condition and access to capital to be adversely affected or otherwise impact performance, including the potential recognition of impairment charges;
|
•
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The success of our real estate strategies and investment objectives, including our ability to identify and consummate suitable acquisitions;
|
•
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Lease terminations or lease defaults, particularly by one of our large lead tenants;
|
•
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The impact of competition on our efforts to renew existing leases or re-let space on terms similar to existing leases;
|
•
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Changes in the economies and other conditions of the office market in general and of the specific markets in which we operate, particularly in Chicago, Washington, D.C., and the New York metropolitan area;
|
•
|
Economic and regulatory changes, including accounting standards, that impact the real estate market generally;
|
•
|
Additional risks and costs associated with directly managing properties occupied by government tenants;
|
•
|
Adverse market and economic conditions may continue to adversely affect us and could cause us to recognize impairment charges or otherwise impact our performance;
|
•
|
Availability of financing and our lending banks’ ability to honor existing line of credit commitments;
|
•
|
Costs of complying with governmental laws and regulations;
|
•
|
Uncertainties associated with environmental and other regulatory matters;
|
•
|
Potential changes in political environment and reduction in federal and/or state funding of our governmental tenants;
|
•
|
We may be subject to litigation, which could have a material adverse effect on our financial condition;
|
•
|
Piedmont’s ability to continue to qualify as a REIT under the Internal Revenue Code (the “Code”); and
|
•
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Other factors, including the risk factors discussed under Item 1A. of this Annual Report on Form 10-K.
|
•
|
changes in the national, regional, and local economic climate, particularly in markets in which we have a concentration of properties;
|
•
|
local office market conditions such as changes in the supply of, or demand for, space in properties similar to those that we own within a particular area;
|
•
|
changes in the patterns of office use due to technological advances which may make telecommuting more prevalent;
|
•
|
the attractiveness of our properties to potential tenants;
|
•
|
changes in interest rates and availability of permanent mortgage funds that may render the sale of a property difficult or unattractive or otherwise reduce returns to stockholders;
|
•
|
the financial stability of our tenants, including bankruptcies, financial difficulties, or lease defaults by our tenants;
|
•
|
changes in operating costs and expenses, including costs for maintenance, insurance, and real estate taxes, and our ability to control rents in light of such changes;
|
•
|
the need to periodically fund the costs to repair, renovate, and re-let space;
|
•
|
earthquakes, tornadoes, hurricanes and other natural disasters, civil unrest, terrorist acts or acts of war, which may result in uninsured or under insured losses;
|
•
|
changes in, or increased costs of compliance with, governmental regulations, including those governing usage, zoning, the environment, and taxes; and
|
•
|
changes in accounting standards.
|
•
|
we may acquire properties or other real estate-related investments that are not initially accretive to our results upon acquisition or accept lower cash flows in anticipation of longer term appreciation, and we may not successfully manage and lease those properties to meet our expectations;
|
•
|
we may not achieve expected cost savings and operating efficiencies;
|
•
|
we may be unable to quickly and efficiently integrate new acquisitions, particularly acquisitions of portfolios of properties, into our existing operations;
|
•
|
management attention may be diverted to the integration of acquired properties, which in some cases may turn out to be less compatible with our operating strategy than originally anticipated;
|
•
|
we may not be able to support the acquired property through one of our existing property management offices and may not successfully open new satellite offices to serve additional markets;
|
•
|
the acquired properties may not perform as well as we anticipate due to various factors, including changes in macro-economic conditions and the demand for office space; and
|
•
|
we may acquire properties without any recourse, or with only limited recourse, for liabilities, whether known or unknown, such as clean-up of environmental contamination, claims by tenants, vendors or other persons against the former owners of the properties, and claims for indemnification by general partners, directors, officers, and others indemnified by the former owners of the properties.
|
•
|
in these investments, we do not have exclusive control over the development, financing, leasing, management, and other aspects of the project, which may prevent us from taking actions that are opposed by our joint venture partners;
|
•
|
joint venture agreements often restrict the transfer of a co-venturer’s interest or may otherwise restrict our ability to sell the interest when we desire or on advantageous terms;
|
•
|
we would not be in a position to exercise sole decision-making authority regarding the property or joint venture, which could create the potential risk of creating impasses on decisions, such as acquisitions or sales;
|
•
|
such co-venturer may, at any time, have economic or business interests or goals that are, or that may become, inconsistent with our business interests or goals;
|
•
|
such co-venturer may be in a position to take action contrary to our instructions, requests, policies or objectives, including our current policy with respect to maintaining our qualification as a REIT;
|
•
|
the possibility that our co-venturer in an investment might become bankrupt, which would mean that we and any other remaining co-venturers would generally remain liable for the joint venture’s liabilities;
|
•
|
our relationships with our co-venturers are contractual in nature and may be terminated or dissolved under the terms of the applicable joint venture agreements and, in such event, we may not continue to own or operate the interests or assets underlying such relationship or may need to purchase such interests or assets at a premium to the market price to continue ownership;
|
•
|
disputes between us and our co-venturers may result in litigation or arbitration that would increase our expenses and prevent our officers and directors from focusing their time and efforts on our business and could result in subjecting the properties owned by the applicable joint venture to additional risk; or
|
•
|
we may, in certain circumstances, be liable for the actions of our co-venturers, and the activities of a joint venture could adversely affect our ability to qualify as a REIT, even though we do not control the joint venture.
|
•
|
development projects in which we have invested may be abandoned and the related investment will be impaired;
|
•
|
we may not be able to obtain, or may experience delays in obtaining, all necessary zoning, land-use, building, occupancy and other governmental permits and authorizations;
|
•
|
we may not be able to obtain land on which to develop;
|
•
|
we may not be able to obtain financing for development projects, or obtain financing on favorable terms;
|
•
|
construction costs of a project may exceed the original estimates or construction may not be concluded on schedule, making the project less profitable than originally estimated or not profitable at all (including the possibility of contract default, the effects of local weather conditions, the possibility of local or national strikes and the possibility of shortages in materials, building supplies or energy and fuel for equipment);
|
•
|
upon completion of construction, we may not be able to obtain, or obtain on advantageous terms, permanent financing for activities that we financed through construction loans; and
|
•
|
we may not achieve sufficient occupancy levels and/or obtain sufficient rents to ensure the profitability of a completed project.
|
•
|
within the limits provided in our charter, prevent the ownership, transfer, and/or accumulation of stock in order to protect our status as a REIT or for any other reason deemed to be in our best interest and the interest of our stockholders;
|
•
|
issue additional shares of stock without obtaining stockholder approval, which could dilute the ownership of our then-current stockholders;
|
•
|
amend our charter to increase or decrease the aggregate number of shares of stock or the number of shares of stock of any class or series that we have authority to issue, without obtaining stockholder approval;
|
•
|
classify or reclassify any unissued shares of our common or preferred stock and set the preferences, rights and other terms of such classified or reclassified shares, without obtaining stockholder approval;
|
•
|
employ and compensate affiliates;
|
•
|
direct our resources toward investments that do not ultimately appreciate over time;
|
•
|
change creditworthiness standards with respect to our tenants;
|
•
|
change our investment or borrowing policies;
|
•
|
determine that it is no longer in our best interest to attempt to qualify, or to continue to qualify, as a REIT; and
|
•
|
suspend, modify or terminate the dividend reinvestment plan.
|
•
|
“business combination” provisions that, subject to limitations, prohibit certain business combinations between us and an “interested stockholder” (defined generally as any person who beneficially owns 10% or more of the voting power of our outstanding voting stock or any affiliate or associate of ours who, at any time within the two-year period prior to the date in question, was the beneficial owner of 10% or more of the voting power of our then outstanding stock) or an
|
•
|
“control share” provisions that provide that “control shares” of our company (defined as shares which, when aggregated with other shares controlled by the stockholder, except solely by virtue of a revocable proxy, entitle the stockholder to exercise one of three increasing ranges of voting power in electing directors) acquired in a “control share acquisition” (defined as the direct or indirect acquisition of ownership or control of “control shares”) have no voting rights except to the extent approved by our stockholders by the affirmative vote of at least two-thirds of all the votes entitled to be cast on the matter, excluding all interested shares.
|
•
|
cash available for distribution;
|
•
|
our results of operations;
|
•
|
our financial condition, especially in relation to our anticipated future capital needs of our properties;
|
•
|
the level of reserves we establish for future capital expenditures;
|
•
|
the distribution requirements for REITs under the Code;
|
•
|
the level of distributions paid by comparable listed REITs;
|
•
|
our operating expenses; and
|
•
|
other factors our board of directors deems relevant.
|
•
|
actual or anticipated variations in our quarterly operating results;
|
•
|
changes in our earnings estimates or publication of research reports about us or the real estate industry, although no assurance can be given that any research reports about us will be published;
|
•
|
changes in our dividend policy;
|
•
|
future sales of substantial amounts of our common stock by our existing or future stockholders;
|
•
|
increases in market interest rates, which may lead purchasers of our stock to demand a higher yield;
|
•
|
changes in market valuations of similar companies;
|
•
|
adverse market reaction to any increased indebtedness we incur in the future;
|
•
|
additions or departures of key personnel;
|
•
|
actions by institutional stockholders;
|
•
|
material, adverse litigation judgments;
|
•
|
speculation in the press or investment community; and
|
•
|
general market and economic conditions.
|
Year of Lease Expiration
|
|
Annualized
Lease Revenue
(in thousands)
|
|
Rentable Square
Feet Expiring
(in thousands)
|
|
Percentage of
Annualized
Lease Revenue (%)
|
||||
Vacant
|
|
$
|
—
|
|
|
2,562
|
|
|
—
|
|
2013
|
(1)
|
80,825
|
|
|
1,909
|
|
|
14.6
|
|
|
2014
|
|
35,247
|
|
|
979
|
|
|
6.4
|
|
|
2015
|
|
35,646
|
|
|
1,431
|
|
|
6.4
|
|
|
2016
|
|
30,150
|
|
|
1,038
|
|
|
5.4
|
|
|
2017
|
|
39,901
|
|
|
1,157
|
|
|
7.2
|
|
|
2018
|
|
45,818
|
|
|
1,606
|
|
|
8.3
|
|
|
2019
|
|
52,007
|
|
|
1,961
|
|
|
9.4
|
|
|
2020
|
|
26,892
|
|
|
1,046
|
|
|
4.9
|
|
|
2021
|
|
14,469
|
|
|
502
|
|
|
2.6
|
|
|
2022
|
|
22,453
|
|
|
730
|
|
|
4.1
|
|
|
2023
|
|
37,772
|
|
|
1,638
|
|
|
6.8
|
|
|
2024
|
|
39,490
|
|
|
1,266
|
|
|
7.1
|
|
|
2025
|
|
15,249
|
|
|
636
|
|
|
2.7
|
|
|
2026
|
|
3,240
|
|
|
201
|
|
|
0.6
|
|
|
Thereafter
|
|
74,836
|
|
|
1,838
|
|
|
13.5
|
|
|
|
|
$
|
553,995
|
|
|
20,500
|
|
|
100.0
|
|
(1)
|
Includes leases with an expiration date of
December 31, 2012
aggregating
161,280
square feet and Annualized Lease Revenue of
$2,997,576
.
|
Location
|
|
Annualized
Lease Revenue
(in thousands)
|
|
Rentable Square
Feet
(in thousands)
|
|
Percentage of
Annualized
Lease Revenue (%)
|
||||
Chicago
|
|
$
|
128,078
|
|
|
4,780
|
|
|
23.1
|
|
Washington, D.C.
|
|
121,743
|
|
|
3,056
|
|
|
22.0
|
|
|
New York
|
|
80,970
|
|
|
2,658
|
|
|
14.6
|
|
|
Minneapolis
|
|
43,631
|
|
|
1,613
|
|
|
7.9
|
|
|
Los Angeles
|
|
28,933
|
|
|
999
|
|
|
5.2
|
|
|
Boston
|
|
26,056
|
|
|
1,023
|
|
|
4.7
|
|
|
Dallas
|
|
24,479
|
|
|
1,276
|
|
|
4.4
|
|
|
Detroit
|
|
17,594
|
|
|
930
|
|
|
3.2
|
|
|
Atlanta
|
|
16,809
|
|
|
1,051
|
|
|
3.0
|
|
|
Houston
|
|
14,448
|
|
|
463
|
|
|
2.6
|
|
|
Philadelphia
|
|
14,267
|
|
|
761
|
|
|
2.6
|
|
|
Phoenix
|
|
9,095
|
|
|
564
|
|
|
1.7
|
|
|
Central & South Florida
|
|
8,304
|
|
|
476
|
|
|
1.5
|
|
|
Nashville
|
|
7,275
|
|
|
312
|
|
|
1.3
|
|
|
Other
|
(1)
|
12,313
|
|
|
538
|
|
|
2.2
|
|
|
|
|
$
|
553,995
|
|
|
20,500
|
|
|
100.0
|
|
(1)
|
Not more than
1%
is attributable to any individual geographic region.
|
Industry
|
|
Annualized
Lease Revenue
(in thousands)
|
|
Leased Square
Footage
(in thousands)
|
|
Percentage of
Annualized
Lease Revenue (%)
|
||||
Governmental Entity
|
|
$
|
103,413
|
|
|
2,390
|
|
|
18.7
|
|
Depository Institutions
|
|
50,767
|
|
|
1,773
|
|
|
9.2
|
|
|
Business Services
|
|
42,438
|
|
|
1,471
|
|
|
7.7
|
|
|
Petroleum Refining & Related Industries
|
|
32,681
|
|
|
776
|
|
|
5.9
|
|
|
Engineering, Accounting, Research, Management & Related Services
|
|
31,242
|
|
|
949
|
|
|
5.6
|
|
|
Insurance Carriers
|
|
31,075
|
|
|
1,386
|
|
|
5.6
|
|
|
Nondepository Credit Institutions
|
|
30,472
|
|
|
1,098
|
|
|
5.5
|
|
|
Communications
|
|
18,440
|
|
|
610
|
|
|
3.3
|
|
|
Insurance Agents, Brokers & Services
|
|
17,493
|
|
|
719
|
|
|
3.2
|
|
|
Security & Commodity Brokers, Dealers, Exchanges & Services
|
|
16,174
|
|
|
602
|
|
|
2.9
|
|
|
Educational Services
|
|
15,834
|
|
|
440
|
|
|
2.9
|
|
|
Food & Kindred Products
|
|
14,397
|
|
|
398
|
|
|
2.6
|
|
|
Electronic & Other Electrical Equipment & Components, Except Computer
|
|
14,119
|
|
|
589
|
|
|
2.5
|
|
|
Transportation Equipment
|
|
13,947
|
|
|
518
|
|
|
2.5
|
|
|
Fabricated Metal Products, Except Machinery & Transportation Equipment
|
|
12,456
|
|
|
423
|
|
|
2.2
|
|
|
Other
|
(1)
|
109,047
|
|
|
3,793
|
|
|
19.7
|
|
|
|
|
$
|
553,995
|
|
|
17,935
|
|
|
100.0
|
|
(1)
|
Not more than
2%
is attributable to any individual tenant industry.
|
Location
|
|
Number of
Properties
|
|
Expiration Date(s)
(1)
|
|
Annualized
Lease Revenues
(in thousands)
(2)
|
|
Percentage of
Annualized
Lease Revenues (%)
|
||||
U.S. Government
|
|
9
|
|
|
Various
|
(3)
|
$
|
73,553
|
|
|
13.3
|
|
BP
|
|
1
|
|
|
2013
|
(4)
|
32,681
|
|
|
5.9
|
|
|
US Bancorp
|
|
3
|
|
|
2024
|
(5)
|
27,706
|
|
|
5.0
|
|
|
State of New York
|
|
1
|
|
|
2019
|
|
19,963
|
|
|
3.6
|
|
|
Independence Blue Cross
|
|
1
|
|
|
2023
|
|
14,267
|
|
|
2.6
|
|
|
Nestle
|
|
1
|
|
|
2015
|
|
14,206
|
|
|
2.6
|
|
|
GE
|
|
1
|
|
|
2027
|
|
13,591
|
|
|
2.5
|
|
|
Shaw
|
|
1
|
|
|
2018
|
|
9,836
|
|
|
1.8
|
|
|
City of New York
|
|
1
|
|
|
2020
|
|
9,545
|
|
|
1.7
|
|
|
Lockheed Martin
|
|
3
|
|
|
2019
|
(6)
|
9,405
|
|
|
1.7
|
|
|
KPMG
|
|
2
|
|
|
2027
|
|
8,949
|
|
|
1.6
|
|
|
Gallagher
|
|
1
|
|
|
2018
|
|
8,013
|
|
|
1.4
|
|
|
DDB Needham
|
|
1
|
|
|
2018
|
|
7,617
|
|
|
1.4
|
|
|
Gemini
|
|
1
|
|
|
2021
|
|
7,304
|
|
|
1.3
|
|
|
Caterpillar Financial
|
|
1
|
|
|
2022
|
|
7,275
|
|
|
1.3
|
|
|
Harvard University
|
|
2
|
|
|
2017
|
|
6,652
|
|
|
1.2
|
|
|
Raytheon
|
|
2
|
|
|
2019
|
|
6,555
|
|
|
1.2
|
|
|
Catamaran
|
|
1
|
|
|
2025
|
|
6,530
|
|
|
1.2
|
|
|
KeyBank
|
|
2
|
|
|
2016
|
|
6,374
|
|
|
1.2
|
|
|
Edelman
|
|
1
|
|
|
2024
|
|
6,274
|
|
|
1.1
|
|
|
Harcourt
|
|
1
|
|
|
2016
|
|
6,254
|
|
|
1.1
|
|
|
Qwest Communications
|
|
1
|
|
|
2014
|
|
5,786
|
|
|
1.0
|
|
|
Jones Lang LaSalle
|
|
1
|
|
|
2017
|
|
5,777
|
|
|
1.0
|
|
|
First Data Corporation
|
|
1
|
|
|
2020
|
|
5,691
|
|
|
1.0
|
|
|
Other
|
|
|
|
Various
|
(7)
|
234,191
|
|
|
42.3
|
|
||
|
|
|
|
|
|
$
|
553,995
|
|
|
100.0
|
|
(1)
|
Represents the expiration year of the majority of the square footage leased by the tenant.
|
(2)
|
Approximately
66%
of our ALR is derived from investment grade companies or government agencies.
|
(3)
|
Various expirations ranging from 2013 to 2027.
|
(4)
|
Majority of the space is subleased to Aon Corporation. Approximately 89% of the space currently leased by BP Corporation has been re-leased under long-term leases for the period following the BP Corporation lease expiration.
|
(5)
|
US Bank's lease at One & Two Meridian Crossings located in Richfield, Minnesota, representing approximately 337,000 square feet and $8.9 million of Annualized Lease Revenue, expires in 2023. Of the space leased at US Bancorp Center in Minneapolis, Minnesota, US Bancorp renewed on 395,000 square feet, representing $10.8 million of Annualized Lease Revenue, through 2024 and Piper Jaffray, a current subtenant, leased 124,000 square feet, representing $3.6 million of Annualized Lease Revenue, through 2025. Approximately 120,000 square feet and $4.3 million of Annualized Lease Revenue will expire in 2014.
|
(6)
|
There are three leases with Lockheed Martin. Lockheed Martin's lease at: A) 9221 Corporate Boulevard located in Rockville, Maryland, representing $3.2 million of Annualized Lease Revenue and 115,000 square feet, expires in 2019, B) 9211 Corporate Boulevard, located in Rockville, Maryland, representing $3.2 million of Annualized Lease Revenue and 115,000 square feet, expires in 2014, and C) 400 Virginia Avenue, located in Washington, DC, representing $3.0 million of Annualized Lease Revenue and 52,000 square feet, expires in 2013.
|
(7)
|
Not more than 1% is attributable to any individual tenant.
|
|
2012 Quarters
|
||||||||||||||
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
||||||||
High
|
$
|
18.91
|
|
|
$
|
17.97
|
|
|
$
|
17.98
|
|
|
$
|
18.56
|
|
Low
|
$
|
16.97
|
|
|
$
|
16.10
|
|
|
$
|
16.57
|
|
|
$
|
17.08
|
|
|
|
|
|
|
|
|
|
||||||||
|
2011 Quarters
|
||||||||||||||
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
||||||||
High
|
$
|
20.64
|
|
|
$
|
21.11
|
|
|
$
|
21.32
|
|
|
$
|
17.67
|
|
Low
|
$
|
18.41
|
|
|
$
|
18.82
|
|
|
$
|
15.92
|
|
|
$
|
14.91
|
|
|
2012
|
|||||||||||||||||||||
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
|
Total
|
|
% of Total
Distribution
|
|||||||||||
Total cash distributed
|
$
|
34,526
|
|
|
$
|
34,418
|
|
|
$
|
33,675
|
|
|
$
|
33,549
|
|
|
$
|
136,168
|
|
|
|
|
Per-share investment income
|
$
|
0.1460
|
|
|
$
|
0.1460
|
|
|
$
|
0.1460
|
|
|
$
|
0.1460
|
|
|
$
|
0.5840
|
|
|
73
|
%
|
Per-share return of capital
|
$
|
0.0220
|
|
|
$
|
0.0220
|
|
|
$
|
0.0220
|
|
|
$
|
0.0220
|
|
|
$
|
0.0880
|
|
|
11
|
%
|
Per-share capital gains
|
$
|
0.0320
|
|
|
$
|
0.0320
|
|
|
$
|
0.0320
|
|
|
$
|
0.0320
|
|
|
$
|
0.1280
|
|
|
16
|
%
|
Total per-share distribution
|
$
|
0.2000
|
|
|
$
|
0.2000
|
|
|
$
|
0.2000
|
|
|
$
|
0.2000
|
|
|
$
|
0.8000
|
|
|
100
|
%
|
|
2011
|
|||||||||||||||||||||
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
|
Total
|
|
% of Total
Distribution
|
|||||||||||
Total cash distributed
|
$
|
54,387
|
|
|
$
|
54,440
|
|
|
$
|
54,441
|
|
|
$
|
54,441
|
|
|
$
|
217,709
|
|
|
|
|
Per-share investment income
|
$
|
0.1922
|
|
|
$
|
0.1922
|
|
|
$
|
0.1922
|
|
|
$
|
0.1922
|
|
|
$
|
0.7688
|
|
|
61
|
%
|
Per-share return of capital
|
$
|
0.0366
|
|
|
$
|
0.0366
|
|
|
$
|
0.0366
|
|
|
$
|
0.0366
|
|
|
$
|
0.1464
|
|
|
12
|
%
|
Per-share capital gains
|
$
|
0.0862
|
|
|
$
|
0.0862
|
|
|
$
|
0.0862
|
|
|
$
|
0.0862
|
|
|
$
|
0.3448
|
|
|
27
|
%
|
Total per-share distribution
|
$
|
0.3150
|
|
|
$
|
0.3150
|
|
|
$
|
0.3150
|
|
|
$
|
0.3150
|
|
|
$
|
1.2600
|
|
|
100
|
%
|
|
For the Period from
February 10, 2010
to December 31, 2012
|
|||||||||||
|
2/10/2010
|
12/31/2010
|
12/31/2011
|
12/31/2012
|
||||||||
Piedmont Office Realty Trust Inc.
|
$
|
100.00
|
|
$
|
138.02
|
|
$
|
124.94
|
|
$
|
138.67
|
|
S&P 500
|
$
|
100.00
|
|
$
|
119.36
|
|
$
|
121.88
|
|
$
|
141.38
|
|
FTSE NAREIT Equity REITs
|
$
|
100.00
|
|
$
|
134.99
|
|
$
|
146.19
|
|
$
|
172.59
|
|
FTSE NAREIT Equity Office
|
$
|
100.00
|
|
$
|
124.61
|
|
$
|
123.66
|
|
$
|
141.17
|
|
Period
|
Total Number of
Shares Purchased
(in 000’s)
|
|
Average Price Paid
per Share
|
|
Total Number of
Shares Purchased
as Part of
Publicly Announced
Program
(in 000’s)
(1)
|
|
Maximum Approximate
Dollar Value of Shares
Available That May
Yet Be Purchased
Under the Program
(in 000’s)
(1)
|
|
||||||
October 1, 2012 to October 31, 2012
|
201
|
|
|
$
|
17.33
|
|
|
201
|
|
|
—
|
|
|
|
November 1, 2012 to November 30, 2012
|
117
|
|
|
$
|
17.30
|
|
|
117
|
|
|
—
|
|
|
|
December 1, 2012 to December 31, 2012
|
318
|
|
|
$
|
17.73
|
|
|
174
|
|
|
$
|
208,019
|
|
(1)
|
Total
|
636
|
|
|
$
|
17.53
|
|
|
492
|
|
|
$
|
208,019
|
|
(1)
|
(1)
|
Under our amended and restated DRP, as set forth in a Current Report on Form 8-K filed February 24, 2011, we have the option to either issue shares that we purchase in the open market or issue shares directly from Piedmont from authorized but unissued shares. Such election will take place at the settlement of each quarterly dividend in which there are participants in our DRP, and may change from quarter to quarter based on our judgment of the best use of proceeds for Piedmont. Therefore, the "Maximum Approximate Dollar Value of Shares Available That May Yet Be Purchased Under the Program" relates only to the stock repurchase program. The stock repurchase program was previously announced in our Quarterly Report on Form 10-Q filed November 3, 2011, and authorizes the repurchase of up to $300 million of shares of our common stock, expiring on November 2, 2013. The stock repurchase program is separate from shares purchased for DRP issuance.
|
|
2012
|
|
2011
|
|
2010
|
|
2009
|
|
2008
|
||||||||||
Statement of Income Data
(1)
:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenues
|
$
|
536,382
|
|
|
$
|
533,493
|
|
|
$
|
523,447
|
|
|
$
|
533,170
|
|
|
$
|
552,667
|
|
Property operating costs
|
$
|
212,932
|
|
|
$
|
207,199
|
|
|
$
|
195,368
|
|
|
$
|
205,788
|
|
|
$
|
202,922
|
|
Depreciation and amortization
|
$
|
162,906
|
|
|
$
|
157,289
|
|
|
$
|
132,780
|
|
|
$
|
141,280
|
|
|
$
|
139,877
|
|
Impairment loss on real estate assets
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
35,063
|
|
|
$
|
—
|
|
General and administrative expenses
|
$
|
20,766
|
|
|
$
|
25,074
|
|
|
$
|
28,129
|
|
|
$
|
26,649
|
|
|
$
|
30,398
|
|
Other income/(expense)
|
$
|
(75,937
|
)
|
|
$
|
(58,853
|
)
|
|
$
|
(60,367
|
)
|
|
$
|
(66,953
|
)
|
|
$
|
(66,575
|
)
|
Income from continuing operations
(1)
|
$
|
63,841
|
|
|
$
|
85,078
|
|
|
$
|
106,803
|
|
|
$
|
57,437
|
|
|
$
|
112,895
|
|
Income from discontinued operations
(1)
|
$
|
29,378
|
|
|
$
|
139,978
|
|
|
$
|
13,591
|
|
|
$
|
17,278
|
|
|
$
|
18,434
|
|
Net income attributable to noncontrolling interest
|
$
|
(15
|
)
|
|
$
|
(15
|
)
|
|
$
|
(15
|
)
|
|
$
|
(15
|
)
|
|
$
|
(15
|
)
|
Net income attributable to Piedmont
|
$
|
93,204
|
|
|
$
|
225,041
|
|
|
$
|
120,379
|
|
|
$
|
74,700
|
|
|
$
|
131,314
|
|
Cash Flows:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flows from operations
|
$
|
223,252
|
|
|
$
|
270,343
|
|
|
$
|
275,750
|
|
|
$
|
281,543
|
|
|
$
|
296,515
|
|
Cash flows provided by/(used in) investing activities
|
$
|
(65,803
|
)
|
|
$
|
33,732
|
|
|
$
|
(80,194
|
)
|
|
$
|
(68,666
|
)
|
|
$
|
(191,926
|
)
|
Cash flows used in financing activities (including dividends paid)
|
$
|
(284,182
|
)
|
|
$
|
(221,103
|
)
|
|
$
|
(148,842
|
)
|
|
$
|
(223,206
|
)
|
|
$
|
(149,272
|
)
|
Dividends paid to stockholders and distributions to noncontrolling interest
|
$
|
(136,378
|
)
|
|
$
|
(220,365
|
)
|
|
$
|
(216,988
|
)
|
|
$
|
(198,951
|
)
|
|
$
|
(279,418
|
)
|
Per-Share Data
(1)
:
|
|
|
|
|
|
|
|
|
|
||||||||||
Per weighted-average common share data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Income from continuing operations per share—basic
|
$
|
0.38
|
|
|
$
|
0.49
|
|
|
$
|
0.63
|
|
|
$
|
0.36
|
|
|
$
|
0.71
|
|
Income from continuing operations per share—diluted
|
$
|
0.38
|
|
|
$
|
0.49
|
|
|
$
|
0.62
|
|
|
$
|
0.36
|
|
|
$
|
0.71
|
|
Income from discontinued operations per share—basic and diluted
|
$
|
0.17
|
|
|
$
|
0.81
|
|
|
$
|
0.08
|
|
|
$
|
0.11
|
|
|
$
|
0.11
|
|
Net income attributable to Piedmont per share—basic
|
$
|
0.55
|
|
|
$
|
1.30
|
|
|
$
|
0.70
|
|
|
$
|
0.47
|
|
|
$
|
0.82
|
|
Net income attributable to Piedmont per share—diluted
|
$
|
0.55
|
|
|
$
|
1.30
|
|
|
$
|
0.70
|
|
|
$
|
0.47
|
|
|
$
|
0.82
|
|
Dividends declared
|
$
|
0.8000
|
|
|
$
|
1.2600
|
|
|
$
|
1.2600
|
|
|
$
|
1.2600
|
|
|
$
|
1.7604
|
|
Weighted-average shares outstanding—basic (in thousands)
|
170,312
|
|
|
172,765
|
|
|
170,753
|
|
|
158,419
|
|
|
159,586
|
|
|||||
Weighted-average shares outstanding—diluted (in thousands)
|
170,441
|
|
|
172,981
|
|
|
170,967
|
|
|
158,581
|
|
|
159,722
|
|
|||||
Balance Sheet Data (at period end):
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
$
|
4,254,875
|
|
|
$
|
4,447,834
|
|
|
$
|
4,373,480
|
|
|
$
|
4,395,345
|
|
|
$
|
4,557,330
|
|
Total stockholders’ equity
|
$
|
2,640,495
|
|
|
$
|
2,773,428
|
|
|
$
|
2,773,454
|
|
|
$
|
2,606,882
|
|
|
$
|
2,702,294
|
|
Outstanding debt
|
$
|
1,416,525
|
|
|
$
|
1,472,525
|
|
|
$
|
1,402,525
|
|
|
$
|
1,516,525
|
|
|
$
|
1,523,625
|
|
Funds from Operations Data
(2)
:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income attributable to Piedmont
|
$
|
93,204
|
|
|
$
|
225,041
|
|
|
$
|
120,379
|
|
|
$
|
74,700
|
|
|
$
|
131,314
|
|
Depreciation of real estate assets—wholly-owned properties and unconsolidated partnerships
|
114,340
|
|
|
110,421
|
|
|
105,107
|
|
|
106,878
|
|
|
100,849
|
|
|||||
Amortization of lease costs—wholly-owned properties and unconsolidated partnerships
|
50,410
|
|
|
60,132
|
|
|
45,334
|
|
|
57,708
|
|
|
62,767
|
|
|||||
Gain on consolidation of VIE
|
—
|
|
|
(1,532
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Loss on impairment of real estate assets—wholly-owned properties and unconsolidated partnerships
|
—
|
|
|
—
|
|
|
9,640
|
|
|
37,633
|
|
|
2,088
|
|
|||||
(Gain)/loss on sale—wholly-owned properties
|
(27,577
|
)
|
|
(122,657
|
)
|
|
817
|
|
|
—
|
|
|
—
|
|
|||||
Gain on sale—unconsolidated partnerships
|
—
|
|
|
(116
|
)
|
|
(25
|
)
|
|
—
|
|
|
—
|
|
|||||
Funds From Operations
(2)
|
$
|
230,377
|
|
|
$
|
271,289
|
|
|
$
|
281,252
|
|
|
$
|
276,919
|
|
|
$
|
297,018
|
|
Acquisition costs
|
141
|
|
|
1,347
|
|
|
600
|
|
|
—
|
|
|
—
|
|
|||||
Gain on extinguishment of debt
|
—
|
|
|
(1,039
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Litigation settlement expense
|
7,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net casualty loss
|
5,170
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Core Funds From Operations
(2)
|
$
|
243,188
|
|
|
$
|
271,597
|
|
|
$
|
281,852
|
|
|
$
|
276,919
|
|
|
$
|
297,018
|
|
(1)
|
Prior period amounts have been adjusted to conform with the current period presentation, including classifying revenues from sold properties as discontinued operations for all periods presented.
|
(2)
|
Net income calculated in accordance with GAAP is the starting point for calculating Funds from Operations (“FFO”) and Core Funds From Operations (“Core FFO”). See Item 7.
—
"Management's Discussion and Analysis of Financial Condition and Results of Operations" below for a complete definition of the calculations as presented.
|
|
December 31, 2012
|
|
%
|
|
December 31, 2011
|
|
%
|
|
$ Increase
(Decrease)
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
||||||||
Rental income
|
$
|
425.2
|
|
|
|
|
$
|
412.1
|
|
|
|
|
$
|
13.1
|
|
||
Tenant reimbursements
|
107.8
|
|
|
|
|
115.1
|
|
|
|
|
(7.3
|
)
|
|||||
Property management fee revenue
|
2.3
|
|
|
|
|
1.6
|
|
|
|
|
0.7
|
|
|||||
Other rental income
|
1.0
|
|
|
|
|
4.8
|
|
|
|
|
(3.8
|
)
|
|||||
Total revenues
|
536.3
|
|
|
100
|
%
|
|
533.6
|
|
|
100
|
%
|
|
2.7
|
|
|||
Expense:
|
|
|
|
|
|
|
|
|
|
||||||||
Property operating costs
|
212.9
|
|
|
40
|
%
|
|
207.2
|
|
|
39
|
%
|
|
5.7
|
|
|||
Depreciation
|
112.8
|
|
|
21
|
%
|
|
102.8
|
|
|
19
|
%
|
|
10.0
|
|
|||
Amortization
|
50.1
|
|
|
9
|
%
|
|
54.5
|
|
|
10
|
%
|
|
(4.4
|
)
|
|||
General and administrative expense
|
20.7
|
|
|
4
|
%
|
|
25.1
|
|
|
5
|
%
|
|
(4.4
|
)
|
|||
Real estate operating income
|
139.8
|
|
|
26
|
%
|
|
144.0
|
|
|
27
|
%
|
|
(4.2
|
)
|
|||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
(65.0
|
)
|
|
12
|
%
|
|
(65.8
|
)
|
|
12
|
%
|
|
0.8
|
|
|||
Interest and other income
|
0.8
|
|
|
—
|
%
|
|
2.8
|
|
|
1
|
%
|
|
(2.0
|
)
|
|||
Litigation settlement agreement
|
(7.5
|
)
|
|
1
|
%
|
|
—
|
|
|
—
|
%
|
|
(7.5
|
)
|
|||
Net casualty loss
|
(5.2
|
)
|
|
1
|
%
|
|
—
|
|
|
—
|
%
|
|
(5.2
|
)
|
|||
Equity in income of unconsolidated joint ventures
|
0.9
|
|
|
—
|
%
|
|
1.6
|
|
|
—
|
%
|
|
(0.7
|
)
|
|||
Gain on consolidation of variable interest entity
|
—
|
|
|
—
|
%
|
|
1.5
|
|
|
—
|
%
|
|
(1.5
|
)
|
|||
Gain on extinguishment of debt
|
—
|
|
|
—
|
%
|
|
1.0
|
|
|
—
|
%
|
|
(1.0
|
)
|
|||
Income from continuing operations
|
$
|
63.8
|
|
|
12
|
%
|
|
$
|
85.1
|
|
|
16
|
%
|
|
$
|
(21.3
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||
Income from discontinued operations
|
$
|
29.4
|
|
|
|
|
$
|
140.0
|
|
|
|
|
$
|
(110.6
|
)
|
|
December 31, 2011
|
|
%
|
|
December 31, 2010
|
|
%
|
|
$ Increase
(Decrease)
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
||||||||
Rental income
|
$
|
412.1
|
|
|
|
|
$
|
401.2
|
|
|
|
|
$
|
10.9
|
|
||
Tenant reimbursements
|
115.1
|
|
|
|
|
114.1
|
|
|
|
|
1.0
|
|
|||||
Property management fee revenue
|
1.6
|
|
|
|
|
3.2
|
|
|
|
|
(1.6
|
)
|
|||||
Other rental income
|
4.8
|
|
|
|
|
5.0
|
|
|
|
|
(0.2
|
)
|
|||||
Total revenues
|
533.6
|
|
|
100
|
%
|
|
523.5
|
|
|
100
|
%
|
|
10.1
|
|
|||
Expense:
|
|
|
|
|
|
|
|
|
|
||||||||
Property operating costs
|
207.2
|
|
|
39
|
%
|
|
195.4
|
|
|
37
|
%
|
|
11.8
|
|
|||
Depreciation
|
102.8
|
|
|
19
|
%
|
|
95.3
|
|
|
18
|
%
|
|
7.5
|
|
|||
Amortization
|
54.5
|
|
|
10
|
%
|
|
37.5
|
|
|
7
|
%
|
|
17.0
|
|
|||
General and administrative expense
|
25.1
|
|
|
5
|
%
|
|
28.1
|
|
|
6
|
%
|
|
(3.0
|
)
|
|||
Real estate operating income
|
144.0
|
|
|
27
|
%
|
|
167.2
|
|
|
32
|
%
|
|
(23.2
|
)
|
|||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
(65.8
|
)
|
|
12
|
%
|
|
(66.5
|
)
|
|
13
|
%
|
|
0.7
|
|
|||
Interest and other income
|
2.8
|
|
|
1
|
%
|
|
3.5
|
|
|
1
|
%
|
|
(0.7
|
)
|
|||
Equity in income of unconsolidated joint ventures
|
1.6
|
|
|
—
|
%
|
|
2.6
|
|
|
—
|
%
|
|
(1.0
|
)
|
|||
Gain on consolidation of variable interest entity
|
1.5
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
1.5
|
|
|||
Gain on extinguishment of debt
|
1.0
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
1.0
|
|
|||
Income from continuing operations
|
$
|
85.1
|
|
|
16
|
%
|
|
$
|
106.8
|
|
|
20
|
%
|
|
$
|
(21.7
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||
Income from discontinued operations
|
$
|
140.0
|
|
|
|
|
$
|
13.6
|
|
|
|
|
$
|
126.4
|
|
|
2012
|
|
Per
Share
(1)
|
|
2011
|
|
Per
Share
(1)
|
|
2010
|
|
Per
Share
(1)
|
||||||||||||
Net income attributable to Piedmont
|
$
|
93,204
|
|
|
$
|
0.55
|
|
|
$
|
225,041
|
|
|
$
|
1.30
|
|
|
$
|
120,379
|
|
|
$
|
0.70
|
|
Depreciation of real assets
(2)
|
114,340
|
|
|
0.67
|
|
|
110,421
|
|
|
0.64
|
|
|
105,107
|
|
|
0.62
|
|
||||||
Amortization of lease-related costs
(2)
|
50,410
|
|
|
0.29
|
|
|
60,132
|
|
|
0.35
|
|
|
45,334
|
|
|
0.27
|
|
||||||
Gain on consolidation of VIE
|
—
|
|
|
—
|
|
|
(1,532
|
)
|
|
(0.01
|
)
|
|
—
|
|
|
—
|
|
||||||
Impairment loss on real estate assets
(2)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,640
|
|
|
0.06
|
|
||||||
(Gain)/loss on sale- wholly-owned properties
|
(27,577
|
)
|
|
(0.16
|
)
|
|
(122,657
|
)
|
|
(0.71
|
)
|
|
817
|
|
|
—
|
|
||||||
Gain on sale- unconsolidated partnerships
|
—
|
|
|
—
|
|
|
(116
|
)
|
|
—
|
|
|
(25
|
)
|
|
—
|
|
||||||
Funds From Operations
|
$
|
230,377
|
|
|
$
|
1.35
|
|
|
$
|
271,289
|
|
|
$
|
1.57
|
|
|
$
|
281,252
|
|
|
$
|
1.65
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Acquisition costs
|
141
|
|
|
—
|
|
|
1,347
|
|
|
0.01
|
|
|
600
|
|
|
—
|
|
||||||
Gain on extinguishment of debt
|
—
|
|
|
—
|
|
|
(1,039
|
)
|
|
(0.01
|
)
|
|
—
|
|
|
—
|
|
||||||
Litigation settlement expense
|
7,500
|
|
|
0.05
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net casualty loss
|
5,170
|
|
|
0.03
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Core Funds From Operations
|
$
|
243,188
|
|
|
$
|
1.43
|
|
|
$
|
271,597
|
|
|
$
|
1.57
|
|
|
$
|
281,852
|
|
|
$
|
1.65
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Deferred financing cost amortization
|
2,648
|
|
|
0.01
|
|
|
3,195
|
|
|
0.02
|
|
|
2,608
|
|
|
0.01
|
|
||||||
Amortization of fair market adjustments on notes payable
|
—
|
|
|
—
|
|
|
1,413
|
|
|
0.01
|
|
|
—
|
|
|
—
|
|
||||||
Depreciation of non real estate assets
|
502
|
|
|
—
|
|
|
499
|
|
|
—
|
|
|
707
|
|
|
—
|
|
||||||
Straight-line effects of lease revenue
(2)
|
(17,153
|
)
|
|
(0.10
|
)
|
|
(9,507
|
)
|
|
(0.06
|
)
|
|
(6,088
|
)
|
|
(0.04
|
)
|
||||||
Stock-based and other non-cash compensation
|
2,246
|
|
|
0.01
|
|
|
4,705
|
|
|
0.03
|
|
|
3,681
|
|
|
0.02
|
|
||||||
Net effect of amortization of below-market in-place lease intangibles
(2)
|
(5,678
|
)
|
|
(0.03
|
)
|
|
(7,065
|
)
|
|
(0.04
|
)
|
|
(5,793
|
)
|
|
(0.03
|
)
|
||||||
Income from amortization of discount on purchase of mezzanine loans
|
—
|
|
|
—
|
|
|
(484
|
)
|
|
—
|
|
|
(2,405
|
)
|
|
(0.01
|
)
|
||||||
Acquisition costs
|
(141
|
)
|
|
—
|
|
|
(1,347
|
)
|
|
(0.01
|
)
|
|
(600
|
)
|
|
—
|
|
||||||
Non-incremental capital expenditures
(3)
|
(87,657
|
)
|
|
(0.51
|
)
|
|
(60,401
|
)
|
|
(0.35
|
)
|
|
(45,286
|
)
|
|
(0.26
|
)
|
||||||
Adjusted Funds From Operations
|
$
|
137,955
|
|
|
$
|
0.81
|
|
|
$
|
202,605
|
|
|
$
|
1.17
|
|
|
$
|
228,676
|
|
|
$
|
1.34
|
|
Weighted-average shares outstanding – diluted
|
170,441
|
|
|
|
|
172,981
|
|
|
|
|
170,967
|
|
|
|
(1)
|
Based on weighted-average shares outstanding—diluted.
|
(2)
|
Includes adjustments for wholly-owned properties (including discontinued operations), as well as such adjustments for our proportionate ownership in unconsolidated joint ventures.
|
(3)
|
Effective July 1, 2011, Piedmont defines non-incremental capital expenditures as 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 change the underlying classification from a Class B to a Class A property or enhance the marketability of a building are excluded from this measure. All prior periods presented have been recalculated in accordance with the new definition for comparability.
|
|
December 31,
2012 |
|
December 31,
2011 |
||||
|
|
|
|
||||
Net income attributable to Piedmont
|
$
|
93,204
|
|
|
$
|
225,041
|
|
|
|
|
|
||||
Net income attributable to noncontrolling interest
|
15
|
|
|
468
|
|
||
Interest expense
|
65,023
|
|
|
71,749
|
|
||
(Gain) / loss on extinguishment of debt
|
—
|
|
|
(1,039
|
)
|
||
Depreciation
(1)
|
114,842
|
|
|
110,920
|
|
||
Amortization
(1)
|
50,410
|
|
|
60,132
|
|
||
Litigation settlement expense
|
7,500
|
|
|
—
|
|
||
Net casualty (gain)/loss
|
5,170
|
|
|
—
|
|
||
(Gain) / loss on sale of properties
(1)
|
(27,577
|
)
|
|
(122,773
|
)
|
||
(Gain) / loss on consolidation of VIE
|
—
|
|
|
(1,532
|
)
|
||
General & administrative expenses
(1)
|
20,939
|
|
|
25,085
|
|
||
Management fee revenue
|
(2,318
|
)
|
|
(1,584
|
)
|
||
Interest and other income
(1)
|
(853
|
)
|
|
(2,775
|
)
|
||
Lease termination income
|
(999
|
)
|
|
(5,038
|
)
|
||
Lease termination expense - straight line rent & acquisition intangibles write-offs
|
1,003
|
|
|
924
|
|
||
Straight line rent adjustment
(1)
|
(18,178
|
)
|
|
(10,143
|
)
|
||
Net effect of amortization of below-market in-place lease intangibles
(1)
|
(5,655
|
)
|
|
(7,354
|
)
|
||
Property NOI (cash basis)
|
302,526
|
|
|
342,081
|
|
||
|
|
|
|
||||
Acquisitions
(2)
|
(12,357
|
)
|
|
(11,326
|
)
|
||
Dispositions
(3)
|
(2,491
|
)
|
|
(29,415
|
)
|
||
Unconsolidated joint ventures
|
(2,499
|
)
|
|
(3,185
|
)
|
||
|
|
|
|
||||
Same Store NOI
|
$
|
285,179
|
|
|
$
|
298,155
|
|
|
|
|
|
||||
Change period over period in Same Store NOI
|
(4.4
|
)%
|
|
N/A
|
|
(1)
|
Includes amounts attributable to consolidated properties, including discontinued operations, and our proportionate share of amounts attributable to unconsolidated joint ventures.
|
(2)
|
Acquisitions consist of the 1200 Enclave Parkway building in Houston, Texas, purchased on March 30, 2011; the 500 West Monroe building in Chicago, Illinois, acquired on March 31, 2011; The Dupree in Atlanta, Georgia, purchased on April 29, 2011; The Medici in Atlanta, Georgia, purchased on June 7, 2011; the 225 and 235 Presidential Way buildings in Woburn, Massachusetts, purchased on September 13, 2011; the 400 TownPark building in Lake Mary, Florida purchased on November 10, 2011; Gavitello Land in Atlanta, Georgia, purchased on June 28, 2012; and Glenridge Highlands III Land in Atlanta, Georgia purchased on October 15, 2012.
|
(3)
|
Dispositions consist of the Eastpointe Corporate Center building, sold on July 1, 2011; the 5000 Corporate Court building, sold on August 31, 2011; the 35 West Wacker Drive building, sold on December 15, 2011; the Portland Portfolio, sold on March 19, 2012; the 26200 Enterprise Way building, sold on May 31, 2012; and 110 and 112 Hidden Lake Circle buildings, sold on September 21, 2012.
|
|
|
Payments Due by Period
|
||||||||||||||||||
Contractual Obligations
|
|
Total
|
|
Less than
1 year
|
|
1-3 years
|
|
3-5 years
|
|
More than
5 years
|
||||||||||
Long-term debt
(1)
|
|
$
|
1,416,525
|
|
|
$
|
—
|
|
|
$
|
680,000
|
|
|
$
|
736,525
|
|
(2)
|
$
|
—
|
|
Operating lease obligations
|
|
77,869
|
|
|
750
|
|
|
1,500
|
|
|
1,500
|
|
|
74,119
|
|
|||||
Total
|
|
$
|
1,494,394
|
|
|
$
|
750
|
|
|
$
|
681,500
|
|
|
$
|
738,025
|
|
|
$
|
74,119
|
|
(1)
|
Amounts include principal payments only. We made interest payments of
$62.6 million
, including interest rate swap cash settlements related to various interest rate swap agreements in force, during the year ended
December 31, 2012
and expect to pay interest in future periods on outstanding debt obligations based on the rates and terms disclosed herein and in Note 6 of our accompanying consolidated financial statements.
|
(2)
|
Includes the $300 Million Unsecured Term Loan which has a stated variable rate; however, we entered into interest rate swap agreements which effectively fix, exclusive of changes to our credit rating, the rate on this facility to
2.69%
through maturity. As such, we estimate incurring, exclusive of changes to our credit rating, approximately $8.1 million per annum in total interest (comprised of combination of variable contractual rate and settlements under interest rate swap agreements) through maturity in November 2016.
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
Thereafter
|
|
Total
|
||||||||||||||
Maturing debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Variable rate repayments
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
129,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
129,000
|
|
Variable rate average interest rate
|
—
|
|
|
—
|
|
|
—
|
|
|
1.39
|
%
|
|
—
|
|
|
—
|
|
|
1.39
|
%
|
|||||||
Fixed rate repayments
|
$
|
—
|
|
|
$
|
575,000
|
|
|
$
|
105,000
|
|
|
$
|
467,525
|
|
(2)
|
$
|
140,000
|
|
|
$
|
—
|
|
|
$
|
1,287,525
|
|
Fixed rate average interest rate
(1)
|
—
|
|
|
4.89
|
%
|
|
5.29
|
%
|
|
3.72
|
%
|
|
5.76
|
%
|
|
—
|
|
|
4.59
|
%
|
(1)
|
See Note 6 of our accompanying consolidated financial statements for further details on our debt structure.
|
(2)
|
The amount includes the $300 Million Unsecured Term Loan which has a stated variable rate; however, Piedmont entered into an interest rate swap agreement which effectively fixes the rate on this loan to
2.69%
through
November 22, 2016
(provided that we maintain our corporate credit rating).
|
|
2012
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
Thereafter
|
|
Total
|
||||||||||||||
Maturing debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Variable rate repayments
|
$
|
140,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
140,000
|
|
Variable rate average interest rate
|
1.29
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.29
|
%
|
|||||||
Fixed rate repayments
|
$
|
45,000
|
|
|
$
|
—
|
|
|
$
|
575,000
|
|
|
$
|
105,000
|
|
|
$
|
467,525
|
|
(1)
|
$
|
140,000
|
|
|
$
|
1,332,525
|
|
Fixed rate average interest rate
|
5.20
|
%
|
|
—
|
%
|
|
4.89
|
%
|
|
5.29
|
%
|
|
3.72
|
%
|
|
5.76
|
%
|
|
4.61
|
%
|
(1)
|
The amount includes the $300 Million Unsecured Term Loan which has a stated variable rate; however, Piedmont entered into an interest rate swap agreement which effectively fixes the rate on this loan to
2.69%
through
November 22, 2016
(provided that we maintain our corporate credit rating).
|
•
|
pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and disposition of our assets;
|
•
|
provide reasonable assurance that the transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of management and/or members of the board of directors; and
|
•
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.
|
(a)
|
1. The financial statements begin on page F-4 of this Annual Report on Form 10-K, and the list of the financial statements contained herein is set forth on page F-1, which is hereby incorporated by reference.
|
(a)
|
2. Schedule III—Real Estate Assets and Accumulated Depreciation
|
(b)
|
The Exhibits filed in response to Item 601 of Regulation S-K are listed on the Exhibit Index attached hereto.
|
(c)
|
See (a) 2 above.
|
Piedmont Office Realty Trust, Inc.
|
||
(Registrant)
|
||
|
|
|
By:
|
|
/s/ D
ONALD
A. M
ILLER
, CFA
|
|
|
Donald A. Miller, CFA
|
|
|
President, Principal Executive Officer, and Director
|
Signature
|
|
Title
|
Date
|
|
|
|
|
/s/ M
ICHAEL
R. B
UCHANAN
|
|
Director
|
February 27, 2013
|
Michael R. Buchanan
|
|
|
|
|
|
|
|
/s/ D
ONALD
S. M
OSS
|
|
Director
|
February 27, 2013
|
Donald S. Moss
|
|
|
|
|
|
|
|
/s/ W
ESLEY
E. C
ANTRELL
|
|
Director
|
February 27, 2013
|
Wesley E. Cantrell
|
|
|
|
|
|
|
|
/s/ W
ILLIAM
H. K
EOGLER
, J
R
.
|
|
Director
|
February 27, 2013
|
William H. Keogler, Jr.
|
|
|
|
|
|
|
|
/s/ J
EFFREY
L. S
WOPE
|
|
Director
|
February 27, 2013
|
Jeffrey L. Swope
|
|
|
|
|
|
|
|
/s/ F
RANK
C. M
C
D
OWELL
|
|
Director
|
February 27, 2013
|
Frank C. McDowell
|
|
|
|
|
|
|
|
/s/ R
AYMOND
G. M
ILNES
, J
R
.
|
|
Director
|
February 27, 2013
|
Raymond G. Milnes, Jr.
|
|
|
|
|
|
|
|
/s/ W. W
AYNE
W
OODY
|
|
Chairman, and Director
|
February 27, 2013
|
W. Wayne Woody
|
|
|
|
|
|
|
|
/s/ D
ONALD
A. M
ILLER
, CFA
|
|
President and Director
|
February 27, 2013
|
Donald A. Miller, CFA
|
|
(Principal Executive Officer)
|
|
|
|
|
|
/s/ R
OBERT
E. B
OWERS
|
|
Chief Financial Officer and
Executive Vice-President
|
February 27, 2013
|
Robert E. Bowers
|
|
(Principal Financial Officer)
|
|
|
|
|
|
/s/ L
AURA
P. M
OON
|
|
Chief Accounting Officer
|
February 27, 2013
|
Laura P. Moon
|
|
(Principal Accounting Officer)
|
|
|
|
|
|
Exhibit Number
|
|
Description of Document
|
2.1
|
|
Agreement and Plan of Merger dated as of February 2, 2007, by and among Piedmont Office Realty Trust, Inc. (f/k/a Wells Real Estate Investment Trust, Inc.) (the “Company”), WRT Acquisition Company, LLC, WGS Acquisition Company, LLC, Wells Real Estate Funds, Inc., Wells Capital, Inc., Wells Management Company, Inc., Wells Advisory Services I, LLC, Wells Real Estate Advisory Services, Inc. and Wells Government Services, Inc. (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K, filed on February 5, 2007)
|
|
|
|
3.1
|
|
Third Articles of Amendment and Restatement of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2009, filed on March 16, 2010)
|
|
|
|
3.2
|
|
Articles of Amendment of the Company effective June 30, 2011 (incorporated by reference to Exhibit 3.2 to the Company's Current Report on Form 8-K filed on July 6, 2011)
|
|
|
|
3.3
|
|
Articles Supplementary of the Company effective June 30, 2011 (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed on July 6, 2011)
|
|
|
|
3.4
|
|
Amended and Restated Bylaws of Piedmont Office Realty Trust, Inc. (incorporated by reference to Exhibit 3.2 to the Company's Current Report on Form 8-K, filed on January 22, 2010)
|
|
|
|
10.1
|
|
Amended and Restated Joint Venture Partnership Agreement of Fund XI-Fund XII-REIT Joint Venture dated June 21, 1999, by and among Wells Real Estate Fund XI, L.P., Wells Real Estate Fund XII, L.P. and the Operating Partnership (incorporated by reference to Exhibit 10.29 to Amendment No. 1 to the Company’s Form S-11 Registration Statement (Commission File No. 333-83933), filed on November 17, 1999)
|
|
|
|
10.2
|
|
Joint Venture Partnership Agreement of Wells Fund XII-REIT Joint Venture Partnership dated April 10, 2000, by and between the Operating Partnership and Wells Real Estate Fund XII, L.P. (incorporated by reference to Exhibit 10.11 to Post-Effective Amendment No. 2 to the Company’s Form S-11 Registration Statement (Commission File No. 333-66657), filed on April 25, 2000)
|
|
|
|
10.3
|
|
Joint Venture Partnership Agreement of Wells Fund XIII-REIT Joint Venture Partnership dated June 27, 2001, by and between the Operating Partnership and Wells Real Estate Investment Fund XIII, L.P. (incorporated by reference to Exhibit 10.85 to Post-Effective Amendment No. 3 to the Company’s Form S-11 Registration Statement (Commission File No. 333-44900), filed on July 23, 2001)
|
|
|
|
10.4
|
|
Amended and Restated Promissory Note dated November 1, 2007, by 1201 Eye Street, N.W. Associates LLC in favor of Metropolitan Life Insurance Company (incorporated by reference to Exhibit 10.9 to the Company’s Form 10-K for the fiscal year ended December 31, 2007 filed on March 26, 2008)
|
|
|
|
10.5
|
|
Amended and Restated Deed of Trust, Security Agreement and Fixture Filing dated November 1, 2007, by 1201 Eye Street, N.W. Associates LLC for the benefit of Metropolitan Life Insurance Company (incorporated by reference to Exhibit 10.10 to the Company’s Form 10-K for the fiscal year ended December 31, 2007 filed on March 26, 2008)
|
|
|
|
10.6
|
|
Amended and Restated Promissory Note dated November 1, 2007, by 1225 Eye Street, N.W. Associates LLC in favor of Metropolitan Life Insurance Company (incorporated by reference to Exhibit 10.11 to the Company’s Form 10-K for the fiscal year ended December 31, 2007 filed on March 26, 2008)
|
|
|
|
10.7
|
|
Amended and Restated Deed of Trust, Security Agreement and Fixture Filing dated October 24, 2002, by 1225 Eye Street, N.W. Associates LLC for the benefit of Metropolitan Life Insurance Company (incorporated by reference to Exhibit 10.12 to the Company’s Form 10-K for the fiscal year ended December 31, 2007 filed on March 26, 2008)
|
|
|
|
10.8
|
|
Limited Liability Company Agreement of 1201 Eye Street, N.W. Associates, LLC dated September 27, 2002 (incorporated by reference to Exhibit 10.119 to Post-Effective Amendment No. 6 to the Company’s Form S-11 Registration Statement (Commission File No. 333-85848), filed on December 17, 2003)
|
|
|
|
10.9
|
|
First Amendment to Limited Liability Company Agreement of 1201 Eye Street, N.W. Associates, LLC (incorporated by reference to Exhibit 10.120 to Post-Effective Amendment No. 6 to Company’s Form S-11 Registration Statement (Commission File No. 333-85848), filed on December 17, 2003)
|
|
|
|
10.10
|
|
Limited Liability Company Agreement of 1225 Eye Street, N.W. Associates, LLC dated September 27, 2002 (incorporated by reference to Exhibit 10.121 to Post-Effective Amendment No. 6 to the Company’s Form S-11 Registration Statement (Commission File No. 333-85848), filed on December 17, 2003)
|
|
|
|
10.11
|
|
First Amendment to Limited Liability Company Associates of 1225 Eye Street, N.W. Associates, LLC (incorporated by reference to Exhibit 10.122 to Post-Effective Amendment No. 6 to the Company’s Form S-11 Registration Statement (Commission File No. 333-85848), filed on December 17, 2003)
|
|
|
|
10.12
|
|
Promissory Note dated April 20, 2004, by Wells REIT-Chicago Center Owner, LLC in favor of Metropolitan Life Insurance Company (incorporated by reference to Exhibit 10.174 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2004, filed on August 6, 2004)
|
|
|
|
10.13
|
|
Mortgage, Security Agreement and Fixture Filing by Wells REIT-Chicago Center Owner, LLC to Metropolitan Life Insurance Company (incorporated by reference to Exhibit 10.175 to the Company’s Form 10-Q for the quarterly period ended June 30, 2004, filed on August 6, 2004)
|
|
|
|
10.14
|
|
Loan Agreement (Multi-State) dated May 21, 2004, between Wells REIT-Austin, TX, L.P., Wells REIT—Multi-State Owner, LLC, Wells REIT-Nashville, TN, LLC and Wells REIT—Bridgewater, NJ, LLC; and Morgan Stanley Mortgage Capital Inc. (incorporated by reference to Exhibit 10.176 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2004, filed on August 6, 2004)
|
|
|
|
10.15
|
|
Loan Agreement (D.C. Properties) dated May 21, 2004, between Wells REIT-Independence Square, LLC and Morgan Stanley Mortgage Capital Inc. (incorporated by reference to Exhibit 10.177 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2004, filed on August 6, 2004)
|
|
|
|
10.16
|
|
Promissory Note dated May 5, 2005, by Wells REIT-800 Nicollett Avenue Owner, LLC. in favor of Wachovia Bank, N.A. (incorporated by reference to Exhibit 10.70 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2005, filed on August 5, 2005)
|
|
|
|
10.17
|
|
Fixed Rate Note dated May 4, 2005, by 4250 N. Fairfax Owner, LLC in favor of JPMorgan Chase Bank, N.A. (incorporated by reference to Exhibit 10.71 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2005, filed on August 5, 2005)
|
|
|
|
10.18
|
|
Amended and Restated Dividend Reinvestment Plan of the Company adopted February 24, 2011 (incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K, filed on February 24, 2011)
|
|
|
|
10.19*
|
|
Employment Agreement dated February 2, 2007, by and between the Company and Donald A. Miller, CFA (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on February 5, 2007)
|
|
|
|
10.20*
|
|
Amendment Number One to Employment Agreement dated February 2, 2007, by and between the Company and Donald A. Miller, CFA (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed on September 14, 2011)
|
|
|
|
10.21
|
|
Escrow Agreement dated April 16, 2007, by and among the Company, Wells Advisory Services I, LLC and SunTrust Bank (incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K, filed on April 20, 2007)
|
|
|
|
10.22
|
|
Pledge and Security Agreement dated April 16, 2007, by and between the Company, Wells Advisory Services I, LLC, WRT Acquisition Company, LLC and WGS Acquisition Company, LLC (incorporated by reference to Exhibit 99.2 to the Company’s Current Report on Form 8-K, filed on April 20, 2007)
|
|
|
|
10.23
|
|
Registration Rights Agreement dated April 16, 2007, by and among the Company, Wells Advisory Services I, LLC and Wells Capital, Inc. (incorporated by reference to Exhibit 99.5 to the Company’s Current Report on Form 8-K, filed on April 20, 2007)
|
|
|
|
10.24*
|
|
Piedmont Office Realty Trust, Inc. 2007 Omnibus Incentive Plan (f/k/a the Wells Real Estate Investment Trust, Inc. 2007 Omnibus Incentive Plan) (incorporated by reference to Exhibit 99.7 to the Company’s Current Report on Form 8-K, filed on April 20, 2007)
|
|
|
|
10.25*
|
|
Amendment Number One to the Piedmont Office Realty Trust, Inc. 2007 Omnibus Incentive Plan (f/k/a the Wells Real Estate Investment Trust, Inc. 2007 Omnibus Incentive Plan) (incorporated by reference to Exhibit 10.12 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2011, filed on August 9, 2011)
|
|
|
|
10.26
|
|
Amendment to Agreement of Limited Partnership of the Operating Partnership, as Amended and Restated as of January 1, 2000, dated April 16, 2007 (incorporated by reference to Exhibit 99.8 to the Company’s Current Report on Form 8-K, filed on April 20, 2007)
|
|
|
|
10.27*
|
|
Employment Agreement dated April 16, 2007, by and between the Company and Robert E. Bowers (incorporated by reference to Exhibit 99.9 to the Company’s Current Report on Form 8-K, filed on April 20, 2007)
|
|
|
|
10.28*
|
|
Employment Agreement dated May 14, 2007, by and between the Company and Carroll A. “Bo” Reddic, IV (incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K, filed on May 14, 2007)
|
|
|
|
10.29*
|
|
Employment Agreement dated May 14, 2007, by and between the Company and Raymond L. Owens (incorporated by reference to Exhibit 99.2 to the Company’s Current Report on Form 8-K, filed on May 14, 2007)
|
|
|
|
10.30*
|
|
Employment Agreement dated May 14, 2007, by and between the Company and Laura P. Moon (incorporated by reference to Exhibit 99.3 to the Company’s Current Report on Form 8-K, filed on May 14, 2007)
|
|
|
|
10.31
|
|
Master Property Management, Leasing, and Construction Management Agreement dated April 16, 2007 by and among the Company, the Operating Partnership, and Wells Management Company, Inc. (incorporated by reference to Exhibit 99.10 to the Company’s Current Report on Form 8-K, filed on April 20, 2007)
|
|
|
|
10.32*
|
|
Form of Employee Deferred Stock Award Agreement for 2007 Omnibus Incentive Plan of the Company effective May 18, 2007 (incorporated by reference to Exhibit 10.82 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2007, filed on August 7, 2007)
|
|
|
|
10.33
|
|
Amendment to Second Amended and Restated Agreement of Limited Partnership of the Operating Partnership, as Amended and Restated as of January 1, 2000, dated August 8, 2007 (incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K, filed on August 10, 2007)
|
|
|
|
10.34
|
|
Term Loan Agreement, dated as of November 22, 2011, among the Operating Partnership, as Borrower, the Company, as Parent, JP Morgan Securities, LLC, and Suntrust Robinson Humphrey, Inc., as Joint-Lead Arrangers and Book Runners, JPMorgan Chase Bank as Administrative Agent, Suntrust Bank as Syndication Agent, Wells Fargo Bank as Documentation Agent, the other banks signatory thereto as Lenders (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed on November 29, 2011)
|
|
|
|
10.35*
|
|
2010 Long-Term Incentive Program Award Agreement (incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2011, filed on November 3, 2011)
|
|
|
|
10.36*
|
|
2010 Long-Term Incentive Program (incorporated by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2011, filed on November 3, 2011)
|
|
|
|
10.37*
|
|
Long-Term Incentive Program Award Agreement (incorporated by reference to Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2011, filed on November 3, 2011)
|
|
|
|
10.38*
|
|
Long-Term Incentive Program (incorporated by reference to Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2011, filed on November 3, 2011)
|
|
|
|
10.39
|
|
Revolving Credit Agreement dated August 21, 2012, by and among Piedmont Operating Partnership, LP, the Company, J.P. Morgan Securities LLC, RBC Capital Markets LLC, JPMorgan Chase Bank, N. A., Royal Bank of Canada, PNC Bank, National Association, SunTrust Bank, and U.S. Bank National Association, and the other financial institutions initially signatory thereto and their assignees (incorporated by reference to Exhibit 10.1 to the Company's current report on Form 8-K filed on August 23, 2012)
|
|
|
|
10.40
|
|
Amendment No. 1 to Term Loan Agreement, dated as of August 21, 2012, among Piedmont Operating Partnership, LP, as Borrower, Piedmont Office Realty Trust, Inc., as Parent, JPMorgan Chase Bank as Administrative Agent, and the other banks party thereto as Lenders (incorporated by reference to Exhibit 10.2 to the Company's current report on Form 8-K filed on August 23, 2012)
|
|
|
|
10.41*
|
|
Offer Letter Dated October 17, 2012 among the Company and Robert K. Wiberg
|
|
|
|
21.1
|
|
List of Subsidiaries of the Company
|
|
|
|
23.1
|
|
Consent of Ernst & Young LLP
|
|
|
|
31.1
|
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
31.2
|
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
32.1
|
|
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
32.2
|
|
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
101.INS **
|
|
XBRL Instance Document **
|
|
|
|
101.SCH **
|
|
XBRL Taxonomy Extension Schema **
|
|
|
|
101.CAL **
|
|
XBRL Taxonomy Extension Calculation Linkbase **
|
|
|
|
101.DEF **
|
|
XBRL Taxonomy Extension Definition Linkbase **
|
|
|
|
101.LAB **
|
|
XBRL Taxonomy Extension Label Linkbase **
|
|
|
|
101.PRE **
|
|
XBRL Taxonomy Extension Presentation Linkbase **
|
|
|
|
Financial Statements
|
Page
|
|
|
Financial Statement Schedule
|
|
|
December 31, 2012
|
|
December 31, 2011
|
||||
Assets:
|
|
|
|
||||
Real estate assets, at cost:
|
|
|
|
||||
Land
|
$
|
629,536
|
|
|
$
|
640,196
|
|
Buildings and improvements, less accumulated depreciation of $883,957 and $792,342 as of December 31, 2012 and December 31, 2011, respectively
|
2,908,078
|
|
|
2,967,254
|
|
||
Intangible lease assets, less accumulated amortization of $67,940 and $119,419 as of December 31, 2012 and December 31, 2011, respectively
|
54,745
|
|
|
79,248
|
|
||
Construction in progress
|
20,373
|
|
|
17,353
|
|
||
Total real estate assets
|
3,612,732
|
|
|
3,704,051
|
|
||
Investments in unconsolidated joint ventures
|
37,226
|
|
|
38,181
|
|
||
Cash and cash equivalents
|
12,957
|
|
|
139,690
|
|
||
Tenant receivables, net of allowance for doubtful accounts of $346 and $631 as of December 31, 2012 and December 31, 2011, respectively
|
147,337
|
|
|
129,523
|
|
||
Due from unconsolidated joint ventures
|
463
|
|
|
788
|
|
||
Restricted cash and escrows
|
334
|
|
|
9,039
|
|
||
Prepaid expenses and other assets
|
13,022
|
|
|
9,911
|
|
||
Goodwill
|
180,097
|
|
|
180,097
|
|
||
Interest rate swap
|
1,075
|
|
|
—
|
|
||
Deferred financing costs, less accumulated amortization of $10,479 and $9,214 as of December 31, 2012 and December 31, 2011, respectively
|
6,454
|
|
|
5,977
|
|
||
Deferred lease costs, less accumulated amortization of $112,496 and $120,358 as of December 31, 2012 and December 31, 2011, respectively
|
243,178
|
|
|
230,577
|
|
||
Total assets
|
$
|
4,254,875
|
|
|
$
|
4,447,834
|
|
Liabilities:
|
|
|
|
||||
Line of credit and notes payable
|
$
|
1,416,525
|
|
|
$
|
1,472,525
|
|
Accounts payable, accrued expenses, and accrued capital expenditures
|
127,263
|
|
|
122,986
|
|
||
Deferred income
|
21,552
|
|
|
27,321
|
|
||
Intangible lease liabilities, less accumulated amortization of $40,931 and $63,981 as of December 31, 2012 and December 31, 2011, respectively
|
40,805
|
|
|
49,037
|
|
||
Interest rate swaps
|
8,235
|
|
|
2,537
|
|
||
Total liabilities
|
1,614,380
|
|
|
1,674,406
|
|
||
Commitments and Contingencies
|
—
|
|
|
—
|
|
||
Stockholders’ Equity:
|
|
|
|
||||
Shares-in-trust, 150,000,000 shares authorized, none outstanding as of December 31, 2012 or December 31, 2011
|
—
|
|
|
—
|
|
||
Preferred stock, no par value, 100,000,000 shares authorized, none outstanding as of December 31, 2012 or December 31, 2011
|
—
|
|
|
—
|
|
||
Common stock, $.01 par value; 750,000,000 shares authorized, 167,556,001 shares issued and outstanding as of December 31, 2012; and 172,629,748 shares issued and outstanding at December 31, 2011
|
1,676
|
|
|
1,726
|
|
||
Additional paid-in capital
|
3,667,051
|
|
|
3,663,662
|
|
||
Cumulative distributions in excess of earnings
|
(1,022,681
|
)
|
|
(891,032
|
)
|
||
Other comprehensive loss
|
(7,160
|
)
|
|
(2,537
|
)
|
||
Piedmont stockholders’ equity
|
2,638,886
|
|
|
2,771,819
|
|
||
Noncontrolling interest
|
1,609
|
|
|
1,609
|
|
||
Total stockholders’ equity
|
2,640,495
|
|
|
2,773,428
|
|
||
Total liabilities and stockholders’ equity
|
$
|
4,254,875
|
|
|
$
|
4,447,834
|
|
|
Years Ended December 31,
|
||||||||||
|
2012
|
|
2011
|
|
2010
|
||||||
Revenues:
|
|
|
|
|
|
||||||
Rental income
|
$
|
425,232
|
|
|
$
|
412,093
|
|
|
$
|
401,163
|
|
Tenant reimbursements
|
107,833
|
|
|
115,082
|
|
|
114,039
|
|
|||
Property management fee revenue
|
2,318
|
|
|
1,584
|
|
|
3,212
|
|
|||
Other rental income
|
999
|
|
|
4,734
|
|
|
5,033
|
|
|||
|
536,382
|
|
|
533,493
|
|
|
523,447
|
|
|||
Expenses:
|
|
|
|
|
|
||||||
Property operating costs
|
212,932
|
|
|
207,199
|
|
|
195,368
|
|
|||
Depreciation
|
112,801
|
|
|
102,804
|
|
|
95,267
|
|
|||
Amortization
|
50,105
|
|
|
54,485
|
|
|
37,513
|
|
|||
General and administrative
|
20,766
|
|
|
25,074
|
|
|
28,129
|
|
|||
|
396,604
|
|
|
389,562
|
|
|
356,277
|
|
|||
Real estate operating income
|
139,778
|
|
|
143,931
|
|
|
167,170
|
|
|||
Other income (expense):
|
|
|
|
|
|
||||||
Interest expense
|
(65,023
|
)
|
|
(65,817
|
)
|
|
(66,486
|
)
|
|||
Interest and other income
|
833
|
|
|
2,774
|
|
|
3,486
|
|
|||
Litigation settlement expense
|
(7,500
|
)
|
|
—
|
|
|
—
|
|
|||
Net casualty loss
|
(5,170
|
)
|
|
—
|
|
|
—
|
|
|||
Equity in income of unconsolidated joint ventures
|
923
|
|
|
1,619
|
|
|
2,633
|
|
|||
Gain on consolidation of variable interest entity
|
—
|
|
|
1,532
|
|
|
—
|
|
|||
Gain on extinguishment of debt
|
—
|
|
|
1,039
|
|
|
—
|
|
|||
|
(75,937
|
)
|
|
(58,853
|
)
|
|
(60,367
|
)
|
|||
Income from continuing operations
|
63,841
|
|
|
85,078
|
|
|
106,803
|
|
|||
Discontinued operations:
|
|
|
|
|
|
||||||
Operating income, excluding impairment loss
|
1,801
|
|
|
17,321
|
|
|
23,995
|
|
|||
Impairment loss
|
—
|
|
|
—
|
|
|
(9,587
|
)
|
|||
Gain/(loss) on sale of real estate assets
|
27,577
|
|
|
122,657
|
|
|
(817
|
)
|
|||
Income from discontinued operations
|
29,378
|
|
|
139,978
|
|
|
13,591
|
|
|||
Net income
|
93,219
|
|
|
225,056
|
|
|
120,394
|
|
|||
Less: Net income attributable to noncontrolling interest
|
(15
|
)
|
|
(15
|
)
|
|
(15
|
)
|
|||
Net income attributable to Piedmont
|
$
|
93,204
|
|
|
$
|
225,041
|
|
|
$
|
120,379
|
|
Per share information—basic:
|
|
|
|
|
|
||||||
Income from continuing operations
|
$
|
0.38
|
|
|
$
|
0.49
|
|
|
$
|
0.63
|
|
Income from discontinued operations
|
0.17
|
|
|
0.81
|
|
|
0.08
|
|
|||
Income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net income available to common stockholders
|
$
|
0.55
|
|
|
$
|
1.30
|
|
|
$
|
0.71
|
|
Per share information—diluted:
|
|
|
|
|
|
||||||
Income from continuing operations
|
$
|
0.38
|
|
|
$
|
0.49
|
|
|
$
|
0.62
|
|
Income from discontinued operations
|
0.17
|
|
|
0.81
|
|
|
0.08
|
|
|||
Income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net income available to common stockholders
|
$
|
0.55
|
|
|
$
|
1.30
|
|
|
$
|
0.70
|
|
Weighted-average shares outstanding—basic
|
170,312,328
|
|
|
172,764,838
|
|
|
170,752,520
|
|
|||
Weighted-average shares outstanding—diluted
|
170,441,223
|
|
|
172,980,947
|
|
|
170,967,324
|
|
|
Years Ended December 31,
|
|||||||||||||||||||
|
2012
|
|
2011
|
|
2010
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net income attributable to Piedmont
|
|
|
$
|
93,204
|
|
|
|
|
$
|
225,041
|
|
|
|
|
$
|
120,379
|
|
|||
Other comprehensive (loss)/income:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Effective portion of loss on derivative instruments that are designated and qualify as cash flow hedges (See Note 8)
|
(7,656
|
)
|
|
|
|
(3,064
|
)
|
|
|
|
(1,529
|
)
|
|
|
||||||
Less: reclassification of previously recorded loss included in net income (See Note 8)
|
3,033
|
|
|
|
|
1,218
|
|
|
|
|
4,704
|
|
|
|
||||||
Other comprehensive (loss)/income
|
|
|
(4,623
|
)
|
|
|
|
(1,846
|
)
|
|
|
|
3,175
|
|
||||||
Comprehensive income attributable to Piedmont
|
|
|
$
|
88,581
|
|
|
|
|
$
|
223,195
|
|
|
|
|
$
|
123,554
|
|
|
Common Stock
|
|
Additional
Paid-In
Capital
|
|
Cumulative
Distributions in
Excess of Earnings
|
|
Redeemable
Common
Stock
|
|
Other
Comprehensive
Loss
|
|
Noncontrolling
Interest
|
|
Total
Stockholders’
Equity
|
|||||||||||||||||
Shares
|
|
Amount
|
|
|||||||||||||||||||||||||||
Balance, December 31, 2009
|
158,917
|
|
|
$
|
1,589
|
|
|
$
|
3,477,168
|
|
|
$
|
(798,561
|
)
|
|
$
|
(75,164
|
)
|
|
$
|
(3,866
|
)
|
|
$
|
5,716
|
|
|
$
|
2,606,882
|
|
Net proceeds from issuance of common stock
|
13,800
|
|
|
138
|
|
|
184,266
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
184,404
|
|
|||||||
Redemptions of fractional shares of common stock at offering
|
(200
|
)
|
|
(2
|
)
|
|
(2,900
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,902
|
)
|
|||||||
Change in redeemable common stock outstanding
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
75,164
|
|
|
—
|
|
|
—
|
|
|
75,164
|
|
|||||||
Dividends to common stockholders($1.26 per share), distributions to noncontrolling interest, and dividends reinvested
|
—
|
|
|
—
|
|
|
(33
|
)
|
|
(216,940
|
)
|
|
—
|
|
|
—
|
|
|
(15
|
)
|
|
(216,988
|
)
|
|||||||
Shares issued under the 2007 Omnibus Incentive Plan, net of tax
|
141
|
|
|
2
|
|
|
2,807
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,809
|
|
|||||||
Net income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
531
|
|
|
531
|
|
|||||||
Net income attributable to Piedmont
|
—
|
|
|
—
|
|
|
—
|
|
|
120,379
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
120,379
|
|
|||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,175
|
|
|
—
|
|
|
3,175
|
|
|||||||
Balance, December 31, 2010
|
172,658
|
|
|
1,727
|
|
|
3,661,308
|
|
|
(895,122
|
)
|
|
—
|
|
|
(691
|
)
|
|
6,232
|
|
|
2,773,454
|
|
|||||||
Share repurchases as part of announced program
|
(199
|
)
|
|
(2
|
)
|
|
—
|
|
|
(3,242
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,244
|
)
|
|||||||
Offering costs associated with issuance of common stock
|
—
|
|
|
—
|
|
|
(479
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(479
|
)
|
|||||||
Attribution of asset sales proceeds to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,684
|
)
|
|
(2,684
|
)
|
|||||||
Dividends to common stockholders ($1.26 per share), distributions to noncontrolling interest, and dividends reinvested
|
—
|
|
|
—
|
|
|
(249
|
)
|
|
(217,709
|
)
|
|
—
|
|
|
—
|
|
|
(2,407
|
)
|
|
(220,365
|
)
|
|||||||
Shares issued under the 2007 Omnibus Incentive Plan, net of tax
|
171
|
|
|
1
|
|
|
3,082
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,083
|
|
|||||||
Net income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
468
|
|
|
468
|
|
|||||||
Net income attributable to Piedmont
|
—
|
|
|
—
|
|
|
—
|
|
|
225,041
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
225,041
|
|
|||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,846
|
)
|
|
—
|
|
|
(1,846
|
)
|
|||||||
Balance, December 31, 2011
|
172,630
|
|
|
1,726
|
|
|
3,663,662
|
|
|
(891,032
|
)
|
|
—
|
|
|
(2,537
|
)
|
|
1,609
|
|
|
2,773,428
|
|
|||||||
Share repurchases as part of an announced program
|
(5,255
|
)
|
|
(52
|
)
|
|
—
|
|
|
(88,685
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(88,737
|
)
|
|||||||
Dividends to common stockholders ($0.80 per share), distributions to noncontrolling interest, and dividends reinvested
|
—
|
|
|
—
|
|
|
(195
|
)
|
|
(136,168
|
)
|
|
—
|
|
|
—
|
|
|
(15
|
)
|
|
(136,378
|
)
|
|||||||
Offering costs associated with issuance of common stock
|
—
|
|
|
—
|
|
|
567
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
567
|
|
|||||||
Shares issued under the 2007 Omnibus Incentive Plan, net of tax
|
181
|
|
|
2
|
|
|
3,017
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,019
|
|
|||||||
Net income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15
|
|
|
15
|
|
|||||||
Net income attributable to Piedmont
|
—
|
|
|
—
|
|
|
—
|
|
|
93,204
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
93,204
|
|
|||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,623
|
)
|
|
—
|
|
|
(4,623
|
)
|
|||||||
Balance, December 31, 2012
|
167,556
|
|
|
$
|
1,676
|
|
|
$
|
3,667,051
|
|
|
$
|
(1,022,681
|
)
|
|
$
|
—
|
|
|
$
|
(7,160
|
)
|
|
$
|
1,609
|
|
|
$
|
2,640,495
|
|
|
Years Ended December 31,
|
||||||||||
|
2012
|
|
2011
|
|
2010
|
||||||
Cash Flows from Operating Activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
93,219
|
|
|
$
|
225,056
|
|
|
$
|
120,394
|
|
Operating distributions received from unconsolidated joint ventures
|
2,338
|
|
|
2,932
|
|
|
4,463
|
|
|||
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Income attributable to noncontrolling interest- discontinued operations
|
—
|
|
|
453
|
|
|
516
|
|
|||
Depreciation
|
113,649
|
|
|
109,730
|
|
|
104,490
|
|
|||
Amortization of deferred financing costs and fair market value adjustments on notes payable
|
2,648
|
|
|
4,777
|
|
|
2,608
|
|
|||
Other amortization
|
48,840
|
|
|
57,969
|
|
|
43,358
|
|
|||
Impairment loss on real estate assets
|
—
|
|
|
—
|
|
|
7,041
|
|
|||
Gain on extinguishment of debt
|
—
|
|
|
(1,041
|
)
|
|
—
|
|
|||
Accretion of discount on notes receivable
|
—
|
|
|
(482
|
)
|
|
(2,400
|
)
|
|||
Stock compensation expense
|
2,246
|
|
|
4,705
|
|
|
3,681
|
|
|||
Reduction of long-lived assets due to casualty event
|
1,980
|
|
|
—
|
|
|
—
|
|
|||
Equity in income of unconsolidated joint ventures
|
(923
|
)
|
|
(1,609
|
)
|
|
(2,633
|
)
|
|||
Gain on consolidation of variable interest entity
|
—
|
|
|
(1,532
|
)
|
|
—
|
|
|||
(Gain)/loss on sale of real estate assets
|
(27,577
|
)
|
|
(122,657
|
)
|
|
817
|
|
|||
Changes in assets and liabilities:
|
|
|
|
|
|
||||||
Increase in tenant receivables, net
|
(21,720
|
)
|
|
(13,295
|
)
|
|
(5,564
|
)
|
|||
Decrease/(increase) in restricted cash and escrows
|
8,705
|
|
|
18,720
|
|
|
(11,818
|
)
|
|||
Increase in prepaid expenses and other assets
|
(2,870
|
)
|
|
(760
|
)
|
|
(1,958
|
)
|
|||
Increase in accounts payable and accrued expenses
|
8,486
|
|
|
3,511
|
|
|
12,058
|
|
|||
(Decrease)/increase in deferred income
|
(5,769
|
)
|
|
(16,134
|
)
|
|
697
|
|
|||
Net cash provided by operating activities
|
223,252
|
|
|
270,343
|
|
|
275,750
|
|
|||
Cash Flows from Investing Activities:
|
|
|
|
|
|
||||||
Investment in real estate assets and real estate related intangibles, net of accruals
|
(108,487
|
)
|
|
(215,609
|
)
|
|
(114,147
|
)
|
|||
Cash assumed upon consolidation of variable interest entity
|
—
|
|
|
5,063
|
|
|
—
|
|
|||
Net sale proceeds from wholly-owned properties and consolidated joint venture
|
93,839
|
|
|
291,785
|
|
|
51,637
|
|
|||
Net sale proceeds received from unconsolidated joint ventures
|
—
|
|
|
3,036
|
|
|
189
|
|
|||
Investments in unconsolidated joint ventures
|
(136
|
)
|
|
(151
|
)
|
|
(173
|
)
|
|||
Liquidation of noncontrolling interest upon sale of consolidated joint venture
|
—
|
|
|
(95
|
)
|
|
—
|
|
|||
Deferred lease costs paid
|
(51,019
|
)
|
|
(50,297
|
)
|
|
(17,700
|
)
|
|||
Net cash (used in)/provided by investing activities
|
(65,803
|
)
|
|
33,732
|
|
|
(80,194
|
)
|
|||
Cash Flows from Financing Activities:
|
|
|
|
|
|
||||||
Deferred financing costs paid
|
(3,125
|
)
|
|
(3,367
|
)
|
|
(710
|
)
|
|||
Proceeds from line of credit and notes payable
|
409,000
|
|
|
829,000
|
|
|
25,000
|
|
|||
Repayments of line of credit and notes payable
|
(465,000
|
)
|
|
(822,875
|
)
|
|
(139,000
|
)
|
|||
Net (costs of)/proceeds from issuance of common stock
|
(229
|
)
|
|
(252
|
)
|
|
185,774
|
|
|||
Repurchases of common stock as part of announced program
|
(88,450
|
)
|
|
(3,244
|
)
|
|
—
|
|
|||
Redemptions of common stock
|
—
|
|
|
—
|
|
|
(2,918
|
)
|
|||
Dividends paid to stockholders and distributions to noncontrolling interest
|
(136,378
|
)
|
|
(220,365
|
)
|
|
(216,988
|
)
|
|||
Net cash used in financing activities
|
(284,182
|
)
|
|
(221,103
|
)
|
|
(148,842
|
)
|
|||
Net (decrease)/increase in cash and cash equivalents
|
(126,733
|
)
|
|
82,972
|
|
|
46,714
|
|
|||
Cash and cash equivalents, beginning of year
|
139,690
|
|
|
56,718
|
|
|
10,004
|
|
|||
Cash and cash equivalents, end of year
|
$
|
12,957
|
|
|
$
|
139,690
|
|
|
$
|
56,718
|
|
|
December 31, 2012
|
|
December 31, 2011
|
||||
Intangible Lease Assets:
|
|
|
|
||||
Above-Market In-Place Lease Assets
|
$
|
21,468
|
|
|
$
|
33,707
|
|
Absorption Period Costs
|
$
|
101,217
|
|
|
$
|
164,960
|
|
Intangible Lease Origination Costs (included in Deferred Lease Costs)
|
$
|
116,995
|
|
|
$
|
146,375
|
|
Intangible Lease Liabilities (Below-Market In-Place Leases)
|
$
|
81,736
|
|
|
$
|
113,018
|
|
|
2012
|
|
2011
|
|
2010
|
||||||
Amortization expense related to Intangible Lease Origination Costs and Absorption Period Costs
|
$
|
36,151
|
|
|
$
|
48,013
|
|
|
$
|
34,660
|
|
Amortization of Above-Market and Below-Market In-Place Lease intangibles as a net increase to rental revenues
|
$
|
5,678
|
|
|
$
|
7,065
|
|
|
$
|
5,788
|
|
|
Intangible Lease Assets
|
|
|
|
Liabilities
|
||||||||||
|
Above-Market
In-place
Lease Assets
|
|
Absorption
Period Costs
|
|
Intangible Lease
Origination Costs
|
|
Below-Market
In-place Lease
Liabilities
|
||||||||
For the year ending December 31:
|
|
|
|
|
|
|
|
||||||||
2013
|
$
|
1,772
|
|
|
$
|
8,292
|
|
|
$
|
9,606
|
|
|
$
|
6,192
|
|
2014
|
1,581
|
|
|
6,897
|
|
|
8,180
|
|
|
5,280
|
|
||||
2015
|
1,480
|
|
|
6,545
|
|
|
7,543
|
|
|
4,769
|
|
||||
2016
|
1,418
|
|
|
6,152
|
|
|
7,124
|
|
|
4,718
|
|
||||
2017
|
770
|
|
|
5,502
|
|
|
6,820
|
|
|
4,685
|
|
||||
Thereafter
|
324
|
|
|
14,012
|
|
|
19,863
|
|
|
15,161
|
|
||||
|
$
|
7,345
|
|
|
$
|
47,400
|
|
|
$
|
59,136
|
|
|
$
|
40,805
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-Average Amortization Period (in years)
|
5
|
|
|
8
|
|
|
8
|
|
|
8
|
|
•
|
escrow accounts held by lenders to pay future real estate taxes, insurance, debt service, and tenant improvements;
|
•
|
net sales proceeds from property sales held by qualified intermediary for potential Section 1031 exchange;
|
•
|
earnest money paid in connection with future acquisitions; and
|
•
|
security and utility deposits paid by tenants per the terms of their respective leases.
|
•
|
prepaid property taxes, insurance and operating costs;
|
•
|
receivables which are unrelated to tenants, for example, insurance proceeds receivable from insurers related to casualty losses; and
|
•
|
equipment, furniture and fixtures, and tenant improvements for Piedmont’s corporate office space, net of accumulated depreciation.
|
•
|
Piedmont amortized deferred lease costs of approximately
$29.8 million
,
$30.0 million
, and
$26.8 million
for the years ended
December 31, 2012
,
2011
, and
2010
, respectively, of which approximately
$1.6 million
,
$1.3 million
, and
$0.7 million
are related to the amortization of deferred common area maintenance costs which are recorded as property operating costs in the accompanying consolidated statements of income. The remaining amortization of deferred lease costs are recorded as amortization expense.
|
•
|
Piedmont recognized amortization of lease incentives classified as deferred lease costs of
$2.5 million
,
$3.7 million
, and
$3.4 million
, which was recorded as an adjustment to rental income for the years ended
December 31, 2012
,
2011
, and
2010
, respectively.
|
•
|
prepaid rent from tenants; and
|
•
|
tenant reimbursements related to operating expense or property tax expenses which may be due to tenants as part of an annual operating expense reconciliation.
|
|
2012
|
|
2011
|
||||
Tenant receivables, net of allowance for doubtful accounts of $346 and $631 as of December 31, 2012 and 2011, respectively
|
$
|
25,038
|
|
|
$
|
24,722
|
|
Cumulative rental revenue recognized on a straight-line basis in excess of cash received in accordance with lease terms
|
122,299
|
|
|
104,801
|
|
||
Tenant receivables
|
$
|
147,337
|
|
|
$
|
129,523
|
|
Name of Joint Venture
|
|
Properties Held by Joint Venture
|
|
Piedmont’s
Approximate
Ownership
Percentage
|
|
Net Book Value
|
|||||||
|
|
|
|
|
|
2012
|
|
2011
|
|||||
Fund XIII and REIT Joint Venture
|
|
8560 Upland Drive
Two Park Center |
|
72
|
%
|
|
$
|
18,814
|
|
|
$
|
19,180
|
|
Fund XII REIT and Joint Venture
|
|
4685 Investment Drive
5301 Maryland Way |
|
55
|
%
|
|
15,813
|
|
|
16,329
|
|
||
Fund XI, XII and REIT Joint Venture
|
|
20/20
|
|
57
|
%
|
|
2,599
|
|
|
2,672
|
|
||
|
|
|
|
|
|
$
|
37,226
|
|
|
$
|
38,181
|
|
Facility
|
|
Collateral
|
|
Rate
(1)
|
|
Maturity
|
|
Amount Outstanding
as of December 31,
|
|||||||
2012
|
|
2011
|
|||||||||||||
Secured (Fixed)
|
|
|
|
|
|
|
|
|
|
|
|||||
$45.0 Million Fixed-Rate Loan
|
|
4250 N. Fairfax
|
|
5.20
|
%
|
|
6/1/2012
|
|
$
|
—
|
|
|
$
|
45,000
|
|
$200.0 Million Mortgage Note
|
|
Aon Center
|
|
4.87
|
%
|
|
5/1/2014
|
|
200,000
|
|
|
200,000
|
|
||
$25.0 Million Mortgage Note
|
|
Aon Center
|
|
5.70
|
%
|
|
5/1/2014
|
|
25,000
|
|
|
25,000
|
|
||
$350.0 Million Secured Pooled Facility
|
|
Nine Property Collateralized Pool
(2)
|
|
4.84
|
%
|
|
6/7/2014
|
|
350,000
|
|
|
350,000
|
|
||
$105.0 Million Fixed-Rate Loan
|
|
US Bancorp Center
|
|
5.29
|
%
|
|
5/11/2015
|
|
105,000
|
|
|
105,000
|
|
||
$125.0 Million Fixed-Rate Loan
|
|
Four Property Collateralized Pool
(3)
|
|
5.50
|
%
|
|
4/1/2016
|
|
125,000
|
|
|
125,000
|
|
||
$42.5 Million Fixed-Rate Loan
|
|
Las Colinas Corporate Center I & II
|
|
5.70
|
%
|
|
10/11/2016
|
|
42,525
|
|
|
42,525
|
|
||
$140.0 Million WDC Mortgage Notes
|
|
1201 & 1225 Eye Street
|
|
5.76
|
%
|
|
11/1/2017
|
|
140,000
|
|
|
140,000
|
|
||
$140.0 Million 500 W. Monroe Mortgage Loan
|
|
500 W. Monroe
|
|
LIBOR + 1.008%
|
|
|
8/9/2012
|
|
—
|
|
|
140,000
|
|
||
Subtotal/Weighted Average
(4)
|
|
|
|
5.17
|
%
|
|
|
|
987,525
|
|
|
1,172,525
|
|
||
Unsecured (Variable)
|
|
|
|
|
|
|
|
|
|
|
|||||
$300 Million Unsecured Term Loan
|
|
|
|
LIBOR + 1.45%
|
|
(5)
|
11/22/2016
|
|
300,000
|
|
|
300,000
|
|
||
$500 Million Unsecured Line of Credit
|
|
|
|
1.39
|
%
|
(6)
|
8/19/2016
|
|
129,000
|
|
|
—
|
|
||
Subtotal/Weighted Average
(4)
|
|
|
|
2.30
|
%
|
|
|
|
429,000
|
|
|
300,000
|
|
||
Total/ Weighted Average
(4)
|
|
|
|
4.30
|
%
|
|
|
|
$
|
1,416,525
|
|
|
$
|
1,472,525
|
|
(1)
|
All of Piedmont’s outstanding debt as of
December 31, 2012
and
2011
is interest-only debt.
|
(2)
|
Nine
property collateralized pool includes:1200 Crown Colony Drive in Quincy, Massachusetts, Braker Pointe III in Austin, Texas, 2 Gatehall Drive in Parsippany, New Jersey, the One and Two Independence Square buildings in Washington, DC, 2120 West End Avenue in Nashville, Tennessee, 400 Bridgewater Crossing in Bridgewater, New Jersey, 200 Bridgewater Crossing in Bridgewater, New Jersey, and Fairway Center II in Brea, California.
|
(3)
|
Four
property collateralized pool includes 1430 Enclave Parkway in Houston, Texas, Windy Point I and II in Schaumburg, Illinois, and 1055 East Colorado Boulevard in Pasadena, California.
|
(4)
|
Weighted average is based on contractual balance of outstanding debt and interest rates in the table as of
December 31, 2012
.
|
(5)
|
The
$300 Million
Unsecured Term Loan has a stated variable rate; however, Piedmont entered into interest rate swap agreements which effectively fix, exclusive of changes to Piedmont's credit rating, the rate on this facility to
2.69%
through maturity.
|
(6)
|
Piedmont may select from multiple interest rate options with each draw, including the prime rate and various length LIBOR locks. All LIBOR selections are subject to an additional spread (
1.175%
as of
December 31, 2012
) over the selected rate based on Piedmont’s current credit rating. The outstanding balance as of
December 31, 2012
consists of LIBOR draws at an average rate of
0.22%
(subject to the additional spread mentioned above).
|
2013
|
$
|
—
|
|
|
2014
|
575,000
|
|
|
|
2015
|
105,000
|
|
|
|
2016
|
596,525
|
|
|
|
2017
|
140,000
|
|
|
|
Thereafter
|
—
|
|
|
|
Total
|
$
|
1,416,525
|
|
|
Entity
|
Piedmont’s
%
Ownership
of Entity
|
|
Related
Building
|
|
Consolidated/
Unconsolidated
|
|
Net Carrying Amount as of
December 31,
2012
|
|
Net Carrying Amount as of
December 31,
2011
|
|
Primary Beneficiary
Considerations
|
|||||
1201 Eye Street NW Associates, LLC
|
49.5
|
%
|
|
1201 Eye
Street
|
|
Consolidated
|
|
$
|
(5.7
|
)
|
|
$
|
(3.4
|
)
|
|
In accordance with the partnership’s governing documents, Piedmont is entitled to 100% of the cash flow of the entity and has sole discretion in directing the management and leasing activities of the building.
|
1225 Eye Street NW Associates, LLC
|
49.5
|
%
|
|
1225 Eye
Street
|
|
Consolidated
|
|
$
|
(0.1
|
)
|
|
$
|
0.6
|
|
|
In accordance with the partnership’s governing documents, Piedmont is entitled to 100% of the cash flow of the entity and has sole discretion in directing the management and leasing activities of the building.
|
Piedmont Multi-State Owner, LLC
|
100
|
%
|
|
1200 Crown Colony Drive
|
|
Consolidated
|
|
$
|
33.2
|
|
|
$
|
28.0
|
|
|
In accordance with a tenant's lease, if Piedmont sells the property on or before March 2013, then the tenant would be entitled to an equity participation fee; however, Piedmont has sole decision making authority and is entitled to the economic benefits of the property until such returns are met.
|
Piedmont 500 W. Monroe Fee, LLC
|
100
|
%
|
|
500 W. Monroe
|
|
Consolidated
|
|
$
|
194.0
|
|
|
$
|
76.9
|
|
|
The Omnibus Agreement with the previous owner includes equity participation rights for the previous owner, if certain financial returns are achieved; however, Piedmont has sole decision making authority and is entitled to the economic benefits of the property until such returns are met.
|
Suwanee Gateway One, LLC
|
100
|
%
|
|
Suwanee
Gateway
One
|
|
Consolidated
|
|
$
|
7.6
|
|
|
$
|
7.7
|
|
|
The fee agreement includes equity participation rights for the incentive manager, if certain returns on investment are achieved; however, Piedmont has sole decision making authority and is entitled to the economic benefits of the property until such returns are met.
|
Medici Atlanta, LLC
|
100
|
%
|
|
The Medici
|
|
Consolidated
|
|
$
|
13.7
|
|
|
$
|
13.0
|
|
|
The fee agreement includes equity participation rights for the incentive manager, if certain returns on investment are achieved; however, Piedmont has sole decision making authority and is entitled to the economic benefits of the property until such returns are met.
|
400 TownPark, LLC
|
100
|
%
|
|
400 TownPark
|
|
Consolidated
|
|
$
|
23.5
|
|
|
$
|
23.7
|
|
|
The fee agreement includes equity participation rights for the incentive manager, if certain returns on investment are achieved; however, Piedmont has sole decision making authority and is entitled to the economic benefits of the property until such returns are met.
|
Interest Rate Derivatives:
|
Notional Amount
(in millions)
|
|
Effective Date
|
|
Maturity Date
|
|
||
Interest rate swap
|
$
|
125
|
|
|
11/22/2011
|
|
11/22/2016
|
|
Interest rate swap
|
$
|
75
|
|
|
11/22/2011
|
|
11/22/2016
|
|
Interest rate swap
|
$
|
50
|
|
|
11/22/2011
|
|
11/22/2016
|
|
Interest rate swap
|
$
|
50
|
|
|
11/22/2011
|
|
11/22/2016
|
|
Interest rate swap
|
$
|
70
|
|
|
3/3/2014
|
|
3/3/2024
|
|
Total
|
$
|
370
|
|
|
|
|
|
|
Derivative in
Cash Flow Hedging
Relationships (Interest Rate Swaps and Caps)
|
2012
|
|
2011
|
|
2010
|
||||||
Amount of loss recognized in OCI on derivatives
|
$
|
7,656
|
|
|
$
|
3,064
|
|
|
$
|
1,529
|
|
Amount of previously recorded loss reclassified from accumulated OCI into interest expense
|
$
|
(3,033
|
)
|
|
$
|
(1,218
|
)
|
|
$
|
(4,704
|
)
|
|
2012
|
|
2011
|
||||||||||||
Financial Instrument
|
Carrying Value
|
Estimated Fair Value
|
Level Within Fair Value Hierarchy
|
|
Carrying Value
|
|
Estimated Fair Value
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
(1)
|
$
|
12,957
|
|
$
|
12,957
|
|
Level 1
|
|
$
|
139,690
|
|
|
$
|
139,690
|
|
Tenant and notes receivables, net
(1)
|
$
|
147,337
|
|
$
|
147,337
|
|
Level 1
|
|
$
|
129,523
|
|
|
$
|
129,523
|
|
Restricted cash and escrows
(1)
|
$
|
334
|
|
$
|
334
|
|
Level 1
|
|
$
|
9,039
|
|
|
$
|
9,039
|
|
Interest rate swap asset
|
$
|
1,075
|
|
$
|
1,075
|
|
Level 2
|
|
$
|
—
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Accounts payable and accrued expenses
(1)
|
$
|
23,113
|
|
$
|
23,113
|
|
Level 1
|
|
$
|
14,637
|
|
|
$
|
14,637
|
|
Interest rate swap liability
|
$
|
8,235
|
|
$
|
8,235
|
|
Level 2
|
|
$
|
2,537
|
|
|
$
|
2,537
|
|
Line of credit and notes payable
|
$
|
1,416,525
|
|
$
|
1,470,002
|
|
Level 2
|
|
$
|
1,472,525
|
|
|
$
|
1,529,811
|
|
(1)
|
For the periods presented, the carrying value approximates estimated fair value due to its short-term maturity.
|
Amount
|
|
|
Expiration of Letter of Credit
(1)
|
|
$
|
10,000,000
|
|
|
July 2013
|
$
|
9,033,164
|
|
|
July 2013
|
$
|
382,556
|
|
|
July 2013
|
(1)
|
These letter of credit agreements contain an “evergreen” clause, which automatically renews for consecutive, one-year periods each anniversary, subject to certain limitations.
|
|
2013
|
|
$
|
750
|
|
|
2014
|
|
750
|
|
|
|
2015
|
|
750
|
|
|
|
2016
|
|
750
|
|
|
|
2017
|
|
750
|
|
|
|
Thereafter
|
|
74,119
|
|
|
|
Total
|
|
$
|
77,869
|
|
|
Unvested Deferred Stock Awards as of January 1, 2012
|
|
Deferred Stock Awards Granted During Fiscal Year 2012
|
|
Adjustment to Estimated Future Grants of Performance Share Awards During the 2012
|
|
Deferred Stock Awards Vested During Fiscal Year 2012
|
|
Deferred Stock Awards Forfeited During Fiscal Year 2012
|
|
Unvested Deferred Stock Awards as of December 31, 2012
|
||||||||||||
Shares
|
511,203
|
|
|
229,135
|
|
|
(159,474
|
)
|
|
(255,258
|
)
|
|
(6,713
|
)
|
|
318,893
|
|
||||||
Weighted-Average Grant Date Fair Value
|
$
|
21.67
|
|
|
$
|
17.53
|
|
|
$
|
23.64
|
|
|
$
|
20.89
|
|
|
$
|
18.52
|
|
|
$
|
18.41
|
|
|
2012
|
|
2011
|
|
2010
|
||||||
Weighted-Average Grant Date Fair Value for Shares Granted During the Year
|
$
|
17.53
|
|
|
$
|
19.03
|
|
|
$
|
22.54
|
|
Total Grant Date Fair Value of Shares Vested During the Year
|
$
|
5,331
|
|
|
$
|
5,405
|
|
|
$
|
4,789
|
|
Share-based Liabilities Paid
(1)
|
$
|
798
|
|
|
$
|
851
|
|
|
$
|
—
|
|
(1)
|
Amounts reflect the issuance of performance share awards during the period.
|
Date of grant
|
|
Type of Award
|
|
Net Shares
Granted
(1)
|
|
Grant
Date Fair
Value
|
|
Vesting Schedule
|
|
Unvested Shares as of
December 31, 2012
|
|
||||
May 11, 2010
|
|
2010-2012 Performance Share Program
|
|
56,875
|
|
(2)
|
$
|
28.44
|
|
|
Shares vest immediately upon determination of award in 2013.
|
|
5,266
|
|
(3)
|
May 24, 2010
|
|
Annual Deferred Stock Award
|
|
161,148
|
|
|
$
|
18.71
|
|
|
Of the shares granted, 25% vested on the date of grant, and 25% vested or will vest on May 24, 2011, 2012, and 2013, respectively.
|
|
52,964
|
|
|
May 24, 2010
|
|
One-Time, Special Deferred Stock Award in Recognition of Piedmont's Initial Public Offering
|
|
40,085
|
|
|
$
|
18.71
|
|
|
Of the shares granted, 33.33% vested or will vest on May 24, 2011, 2012, and 2013, respectively.
|
|
17,457
|
|
|
April 5, 2011
|
|
Annual Deferred Stock Award
|
|
128,986
|
|
|
$
|
19.40
|
|
|
Of the shares granted, 25% vested on the date of grant, and 25% will vest on April 5, 2012, 2013, and 2014, respectively.
|
|
74,496
|
|
|
April 5, 2011
|
|
2011-2013 Performance Share Program
|
|
—
|
|
|
$
|
18.27
|
|
|
Shares vest immediately upon award in 2014.
|
|
—
|
|
(3)
|
April 4, 2012
|
|
Annual Deferred Stock Award
|
|
209,876
|
|
|
$
|
17.49
|
|
|
Of the shares granted, 25% vested on the date of grant, and 25% will vest on April 4, 2013, 2014, and 2015, respectively.
|
|
168,710
|
|
|
April 4, 2012
|
|
2012-2014 Performance Share Program
|
|
—
|
|
|
$
|
17.42
|
|
|
Shares vest immediately upon determination of award in 2015.
|
|
—
|
|
(3)
|
Total
|
|
318,893
|
|
|
(1)
|
Amounts reflect the total grant, net of shares surrendered upon vesting to satisfy required minimum tax withholding obligations through
December 31, 2012
.
|
(2)
|
Represents shares granted pursuant to the first and second interim performance periods ended
December 31, 2010
and
2011
, respectively.
|
(3)
|
Estimated based on Piedmont's cumulative total stockholder return relative to a predetermined peer group's cumulative total stockholder return for the respective performance period as of
December 31, 2012
. Such estimates are subject to change in future periods based on both Piedmont's and its peers' stock performance and dividends paid.
|
|
2012
|
|
2011
|
|
2010
|
|||
Weighted-average common shares—basic
|
170,312
|
|
|
172,765
|
|
|
170,753
|
|
Plus incremental weighted-average shares resulting from the assumed conversion of time-vested restricted stock awards
|
129
|
|
|
216
|
|
|
214
|
|
Weighted-average common shares—diluted
|
170,441
|
|
|
172,981
|
|
|
170,967
|
|
Building Sold
|
|
Location
|
|
Date of Sale
|
|
Gain/(Loss) on Sale
|
|
Net Sales Proceeds
|
||||
111 Sylvan Avenue
|
(1)
|
Englewood Cliffs, New Jersey
|
|
December 8, 2010
|
|
$
|
(817
|
)
|
|
$
|
51,637
|
|
Eastpointe Corporate Center
|
|
Issaquah, Washington
|
|
July 1, 2011
|
|
$
|
12,152
|
|
|
$
|
31,704
|
|
5000 Corporate Court
|
|
Holtsville, New York
|
|
August 31, 2011
|
|
$
|
14,367
|
|
|
$
|
36,100
|
|
35 West Wacker Drive
|
(2)
|
Chicago, Illinois
|
|
December 15, 2011
|
|
$
|
96,138
|
|
|
$
|
223,981
|
|
Portland Portfolio
|
(3)
|
Beaverton, Oregon
|
|
March 19, 2012
|
|
$
|
17,823
|
|
|
$
|
43,832
|
|
26200 Enterprise Way
|
|
Lake Forest, California
|
|
May 31, 2012
|
|
$
|
10,013
|
|
|
$
|
24,412
|
|
110 & 112 Hidden Lake Circle Buildings
|
|
Duncan, South Carolina
|
|
September 21, 2012
|
|
$
|
(259
|
)
|
|
$
|
25,595
|
|
(1)
|
Piedmont reclassified the operational results of the property, including a
$9.6 million
impairment charge that resulted from adjusting the assets to fair value, as discontinued operations in the accompanying 2010 statement of operations. The fair value measurement used in the evaluation of this non-financial asset was considered to be a Level 1 valuation within the fair value hierarchy as defined by GAAP, as there were direct observations and transactions involving the asset (i.e. the asset was sold to a third-party purchaser).
|
(2)
|
Piedmont sold its approximate
96.5%
ownership in the property. Transaction data above is presented at Piedmont's ownership percentage.
|
(3)
|
The Portland Portfolio consisted of
four
office properties known as the Deschutes building, the Rhein building, the Rogue building, and the Willamette building, as well as
18.19
acres of adjoining, undeveloped land.
|
|
Years Ended December 31,
|
||||||||||
|
2012
|
|
2011
|
|
2010
|
||||||
Revenues:
|
|
|
|
|
|
||||||
Rental income
|
$
|
2,955
|
|
|
$
|
37,887
|
|
|
$
|
47,370
|
|
Tenant reimbursements
|
451
|
|
|
19,363
|
|
|
21,105
|
|
|||
Lease termination income
|
—
|
|
|
304
|
|
|
2,761
|
|
|||
|
3,406
|
|
|
57,554
|
|
|
71,236
|
|
|||
Expenses:
|
|
|
|
|
|
||||||
Property operating costs
|
564
|
|
|
21,576
|
|
|
23,305
|
|
|||
Depreciation
|
848
|
|
|
6,926
|
|
|
9,223
|
|
|||
Amortization of deferred leasing costs
|
148
|
|
|
5,517
|
|
|
7,418
|
|
|||
General and administrative expenses
|
45
|
|
|
(170
|
)
|
|
507
|
|
|||
|
1,605
|
|
|
33,849
|
|
|
40,453
|
|
|||
Other income (expense):
|
|
|
|
|
|
||||||
Interest expense
|
—
|
|
|
(5,932
|
)
|
|
(6,274
|
)
|
|||
Interest and other income
|
—
|
|
|
1
|
|
|
2
|
|
|||
Net income attributable to noncontrolling interest
|
—
|
|
|
(453
|
)
|
|
(516
|
)
|
|||
|
—
|
|
|
(6,384
|
)
|
|
(6,788
|
)
|
|||
Operating income, excluding impairment loss and gain/(loss) on sale of real estate assets
|
1,801
|
|
|
17,321
|
|
|
23,995
|
|
|||
Impairment loss
|
—
|
|
|
—
|
|
|
(9,587
|
)
|
|||
Gain/(loss) on sale of real estate assets
|
27,577
|
|
|
122,657
|
|
|
(817
|
)
|
|||
Income from discontinued operations
|
$
|
29,378
|
|
|
$
|
139,978
|
|
|
$
|
13,591
|
|
|
2012
|
|
2011
|
|
2010
|
||||||
Accrued capital expenditures and deferred lease costs
|
$
|
12,598
|
|
|
$
|
8,218
|
|
|
$
|
8,047
|
|
Change in accrued offering costs related to issuance of common stock
|
$
|
(567
|
)
|
|
$
|
227
|
|
|
$
|
1,370
|
|
Net assets assumed upon consolidation of variable interest entity, net of notes receivable previously recorded
|
$
|
—
|
|
|
$
|
188,283
|
|
|
$
|
—
|
|
Liabilities assumed upon consolidation of variable interest entity
|
$
|
—
|
|
|
$
|
191,814
|
|
|
$
|
—
|
|
Redeemable common stock
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
75,164
|
|
|
2012
|
|
2011
|
|
2010
|
|
||||||
GAAP basis financial statement net income
|
$
|
93,204
|
|
|
$
|
225,041
|
|
|
$
|
120,379
|
|
|
Increase (decrease) in net income resulting from:
|
|
|
|
|
|
|
||||||
Depreciation and amortization expense for financial reporting purposes in excess of amounts for income tax purposes
|
35,125
|
|
|
47,346
|
|
|
29,892
|
|
|
|||
Rental income accrued for income tax purposes less than amounts for financial reporting purposes
|
(10,422
|
)
|
|
(9,380
|
)
|
|
(528
|
)
|
|
|||
Net amortization of above/below-market lease intangibles for financial reporting purposes in excess of amounts for income tax purposes
|
(5,324
|
)
|
|
(6,605
|
)
|
|
(5,573
|
)
|
|
|||
Gain on disposal of property for financial reporting purposes in excess of amounts for income tax purposes
|
(7,967
|
)
|
|
(66,410
|
)
|
|
(9,254
|
)
|
|
|||
Taxable income of Piedmont Washington Properties, Inc., in excess of amount for financial reporting purposes
|
2,662
|
|
|
4,515
|
|
|
5,096
|
|
|
|||
Other expenses for financial reporting purposes in excess of amounts for income tax purposes
|
14,361
|
|
|
(2,072
|
)
|
|
9,570
|
|
|
|||
Income tax basis net income, prior to dividends paid deduction
|
$
|
121,639
|
|
|
$
|
192,435
|
|
|
$
|
149,582
|
|
|
|
2012
|
|
2011
|
|
2010
|
|||
Ordinary income
|
73
|
%
|
|
61
|
%
|
|
69
|
%
|
Capital gains
|
16
|
%
|
|
27
|
%
|
|
—
|
|
Return of capital
|
11
|
%
|
|
12
|
%
|
|
31
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
2012
|
|
||||||||||||||
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
|
||||||||
Revenues
|
$
|
132,320
|
|
|
$
|
133,092
|
|
|
$
|
134,891
|
|
|
$
|
136,079
|
|
|
Real estate operating income
|
$
|
34,542
|
|
|
$
|
35,624
|
|
|
$
|
33,947
|
|
|
$
|
35,665
|
|
|
Income from continuing operations
|
$
|
18,272
|
|
|
$
|
20,212
|
|
|
$
|
10,905
|
|
(1)
|
$
|
14,452
|
|
(2)
|
Income from discontinued operations
|
$
|
18,959
|
|
|
$
|
10,499
|
|
|
$
|
(70
|
)
|
|
$
|
(10
|
)
|
|
Net income attributable to Piedmont
|
$
|
37,227
|
|
|
$
|
30,708
|
|
|
$
|
10,831
|
|
|
$
|
14,438
|
|
|
Basic earnings per share
|
$
|
0.22
|
|
|
$
|
0.18
|
|
|
$
|
0.06
|
|
|
$
|
0.09
|
|
|
Diluted earnings per share
|
$
|
0.22
|
|
|
$
|
0.18
|
|
|
$
|
0.06
|
|
|
$
|
0.09
|
|
|
Dividends per share
|
$
|
0.2000
|
|
|
$
|
0.2000
|
|
|
$
|
0.2000
|
|
|
$
|
0.2000
|
|
|
(1)
|
Includes
$7.5 million
of litigation settlement expense related to agreements in principle to settle Piedmont's two outstanding class action lawsuits.
|
(2)
|
Includes
$5.2 million
in net casualty loss due to damage and related expenses incurred as a result of Hurricane Sandy.
|
|
2011
|
||||||||||||||
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
||||||||
Revenues
|
$
|
130,216
|
|
|
$
|
135,176
|
|
|
$
|
132,478
|
|
|
$
|
135,623
|
|
Real estate operating income
|
$
|
39,710
|
|
|
$
|
35,452
|
|
|
$
|
36,341
|
|
|
$
|
32,428
|
|
Income from continuing operations
|
$
|
29,658
|
|
|
$
|
17,403
|
|
|
$
|
20,499
|
|
|
$
|
17,518
|
|
Income from discontinued operations
|
$
|
4,313
|
|
|
$
|
3,628
|
|
|
$
|
30,531
|
|
|
$
|
101,506
|
|
Net income attributable to Piedmont
|
$
|
33,967
|
|
|
$
|
21,028
|
|
|
$
|
51,026
|
|
|
$
|
119,020
|
|
Basic earnings per share
|
$
|
0.20
|
|
|
$
|
0.12
|
|
|
$
|
0.30
|
|
|
$
|
0.68
|
|
Diluted earnings per share
|
$
|
0.20
|
|
|
$
|
0.12
|
|
|
$
|
0.29
|
|
|
$
|
0.69
|
|
Dividends per share
|
$
|
0.3150
|
|
|
$
|
0.3150
|
|
|
$
|
0.3150
|
|
|
$
|
0.3150
|
|
|
|
|
|
|
|
|
Initial Cost
|
|
|
|
Gross Amount at Which
Carried at December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||
Description
|
Location
|
|
Ownership
Percentage
|
|
Encumbrances
|
|
Land
|
|
Buildings and
Improvements
|
|
Total
|
|
Costs
Capitalized
Subsequent
to
Acquisition
|
|
Land
|
|
Buildings and
Improvements
|
|
Total
|
|
Accumulated
Depreciation
and
Amortization
|
|
Date of
Construction
|
|
Date
Acquired
|
|
Life on
which
Depreciation
and
Amortization
is Computed (in years)
(f)
|
||||||||||||||||||||
225 PRESIDENTIAL WAY
|
Boston, MA
|
|
100
|
%
|
|
None
|
|
|
3,626
|
|
|
36,916
|
|
|
40,542
|
|
|
(764
|
)
|
|
3,612
|
|
|
36,166
|
|
|
39,778
|
|
|
2,038
|
|
|
2000
|
|
9/13/2011
|
|
0
|
-
|
40
|
||||||||
235 PRESIDENTIAL WAY
|
Boston, MA
|
|
100
|
%
|
|
None
|
|
|
4,154
|
|
|
44,048
|
|
|
48,202
|
|
|
(911
|
)
|
|
4,138
|
|
|
43,153
|
|
|
47,291
|
|
|
2,421
|
|
|
2001
|
|
9/13/2011
|
|
0
|
-
|
40
|
||||||||
400 TOWNPARK
|
Lake Mary, FL
|
|
100
|
%
|
|
None
|
|
|
2,570
|
|
|
20,555
|
|
|
23,125
|
|
|
580
|
|
|
2,570
|
|
|
21,135
|
|
|
23,705
|
|
|
1,029
|
|
|
2008
|
|
11/10/2011
|
|
0
|
-
|
40
|
||||||||
PIEDMONT POWER, LLC (g)
|
Bridgewater, NJ
|
|
100
|
%
|
|
None
|
|
|
—
|
|
|
79
|
|
|
79
|
|
|
3,079
|
|
|
—
|
|
|
3,158
|
|
|
3,158
|
|
|
—
|
|
|
N/A
|
|
12/20/2011
|
|
0
|
-
|
40
|
||||||||
UNDEVELOPED LAND PARCELS (b)
|
Various
|
|
100
|
%
|
|
None
|
|
|
6,021
|
|
|
427
|
|
|
6,448
|
|
|
2,987
|
|
|
9,435
|
|
|
—
|
|
|
9,435
|
|
|
—
|
|
|
N/A
|
|
Various
|
|
|
|
N/A
|
||||||||
Total—Consolidated REIT Properties
|
|
|
|
|
|
|
$
|
599,677
|
|
|
$
|
3,834,947
|
|
|
$
|
4,434,624
|
|
|
$
|
130,001
|
|
|
$
|
629,536
|
|
|
$
|
3,935,093
|
|
|
$
|
4,564,629
|
|
|
$
|
951,897
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Initial Cost
|
|
|
|
Gross Amount at Which Carried at
December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Description
|
Location
|
|
Ownership
Percentage
|
|
Encumbrances
|
|
Land
|
|
Buildings and
Improvements
|
|
Total
|
|
Costs
Capitalized
Subsequent
to
Acquisition
|
|
Land
|
|
Buildings and
Improvements
|
|
Total
|
|
Accumulated
Depreciation
and
Amortization
|
|
Date of
Construction
|
|
Date
Acquired
|
|
Life on
which
Depreciation
and
Amortization
is Computed (in years)
(f)
|
|||||||||||||||||||
20/20
|
Leawood, KS
|
|
57
|
%
|
|
None
|
|
1,696
|
|
|
7,851
|
|
|
9,547
|
|
|
(1,259
|
)
|
|
1,767
|
|
|
6,521
|
|
|
8,288
|
|
|
3,906
|
|
|
1992
|
|
7/2/1999
|
|
0
|
-
|
40
|
||||||||
4685 INVESTMENT DRIVE
|
Troy, MI
|
|
55
|
%
|
|
None
|
|
2,144
|
|
|
9,984
|
|
|
12,128
|
|
|
2,902
|
|
|
2,233
|
|
|
12,797
|
|
|
15,030
|
|
|
6,029
|
|
|
2000
|
|
5/10/2000
|
|
0
|
-
|
40
|
||||||||
5301 MARYLAND WAY
|
Brentwood, TN
|
|
55
|
%
|
|
None
|
|
4,300
|
|
|
20,702
|
|
|
25,002
|
|
|
1,360
|
|
|
4,479
|
|
|
21,883
|
|
|
26,362
|
|
|
7,242
|
|
|
1989
|
|
5/15/2001
|
|
0
|
-
|
40
|
||||||||
8560 UPLAND DRIVE
|
Parker, CO
|
|
72
|
%
|
|
None
|
|
1,954
|
|
|
11,216
|
|
|
13,170
|
|
|
1,084
|
|
|
2,048
|
|
|
12,206
|
|
|
14,254
|
|
|
3,612
|
|
|
2001
|
|
12/21/2001
|
|
0
|
-
|
40
|
||||||||
TWO PARK CENTER
|
Hoffman Estates, IL
|
|
72
|
%
|
|
None
|
|
600
|
|
|
22,682
|
|
|
23,282
|
|
|
(2,941
|
)
|
|
624
|
|
|
19,717
|
|
|
20,341
|
|
|
5,082
|
|
|
1999
|
|
9/19/2003
|
|
0
|
-
|
40
|
||||||||
Total – Unconsolidated JV Properties
|
|
|
|
|
|
|
$
|
10,694
|
|
|
$
|
72,435
|
|
|
$
|
83,129
|
|
|
$
|
1,146
|
|
|
$
|
11,151
|
|
|
$
|
73,124
|
|
|
$
|
84,275
|
|
|
$
|
25,871
|
|
|
|
|
|
|
|
|
|
|
Total – All Properties
|
|
|
|
|
|
|
$
|
610,371
|
|
|
$
|
3,907,382
|
|
|
$
|
4,517,753
|
|
|
$
|
131,147
|
|
|
$
|
640,687
|
|
|
$
|
4,008,217
|
|
|
$
|
4,648,904
|
|
|
$
|
977,768
|
|
|
|
|
|
|
|
|
|
(a)
|
Property is owned subject to a long-term ground lease.
|
(b)
|
Undeveloped Land Parcels are not included in Piedmont’s total building count.
|
(c)
|
These properties collateralize the
$350 Million
Secured Pooled Facility.
|
(d)
|
Piedmont purchased all of the membership interest in 1225 Equity, LLC, which own a
49.5%
membership interest in 1225 Eye Street, N.W. Associates, which owns the 1225 Eye Street building. As a result of its ownership of 1225 Equity, LLC, Piedmont owns an approximate
49.5%
in the 1225 Eye Street building. As the controlling member, Piedmont is deemed to have control of the entities and, as such, consolidates the joint ventures.
|
(e)
|
Piedmont purchased all of the membership interest in 1201 Equity, LLC, which own a
49.5%
membership interest in 1201 Eye Street, N.W. Associates, which owns the 1201 Eye Street building. As a result of its ownership of 1201 Equity, LLC, Piedmont owns an approximate
49.5%
in the 1201 Eye Street building. As the controlling member, Piedmont is deemed to have control of the entities and, as such, consolidates the joint ventures.
|
(f)
|
Piedmont’s assets are depreciated or amortized using the straight-lined method over the useful lives of the assets by class. Generally, Tenant Improvements are amortized over the shorter of economic life or lease term, and Lease Intangibles are amortized over the lease term. Generally, Building Improvements are depreciated over
5
-
25
years, Land Improvements are depreciated over
20
-
25
years, and Buildings are depreciated over
40
years.
|
(g)
|
Represents solar panels at the 400 Bridgewater Crossing building, which are not included in Piedmont’s total building count.
|
|
2012
|
|
2011
|
|
2010
|
|
||||||
Real Estate:
|
|
|
|
|
|
|
||||||
Balance at the beginning of the year
|
$
|
4,699,311
|
|
|
$
|
4,666,188
|
|
|
$
|
4,681,313
|
|
|
Additions to/improvements of real estate
|
108,131
|
|
|
440,141
|
|
|
105,282
|
|
|
|||
Assets disposed
|
(77,768
|
)
|
|
(361,397
|
)
|
|
(72,586
|
)
|
|
|||
Assets impaired
|
—
|
|
|
—
|
|
|
(8,489
|
)
|
(2)
|
|||
Write-offs of intangible assets
(1)
|
(73,632
|
)
|
|
(35,916
|
)
|
|
—
|
|
|
|||
Write-offs of fully depreciated/amortized assets
|
(7,138
|
)
|
|
(9,705
|
)
|
|
(39,332
|
)
|
|
|||
Balance at the end of the year
|
$
|
4,648,904
|
|
|
$
|
4,699,311
|
|
|
$
|
4,666,188
|
|
|
Accumulated Depreciation and Amortization:
|
|
|
|
|
|
|
||||||
Balance at the beginning of the year
|
$
|
935,716
|
|
|
$
|
918,578
|
|
|
$
|
840,545
|
|
|
Depreciation and amortization expense
|
139,196
|
|
|
147,440
|
|
|
131,000
|
|
|
|||
Assets disposed
|
(16,374
|
)
|
|
(84,681
|
)
|
|
(13,519
|
)
|
|
|||
Write-offs of intangible assets
(1)
|
(73,632
|
)
|
|
(35,916
|
)
|
|
—
|
|
|
|||
Write-offs of fully depreciated/amortized assets
|
(7,138
|
)
|
|
(9,705
|
)
|
|
(39,448
|
)
|
|
|||
Balance at the end of the year
|
$
|
977,768
|
|
|
$
|
935,716
|
|
|
$
|
918,578
|
|
|
(1)
|
Consists of write-offs of intangible lease assets related to lease restructurings, amendments and terminations.
|
(2)
|
Piedmont recorded an impairment charge against real estate assets of approximately
$7.0 million
related to the 111 Sylvan Avenue building at the time it was classified as held-for-sale in May 2010. This wholly-owned asset was subsequently sold in December 2010. In addition, the Fund IX, Fund XI, and REIT Joint Venture recorded an impairment loss on real estate assets of approximately
$1.4 million
during 2010 related to the 360 Interlocken building; however, Piedmont recorded its proporationate share of the charge (approximately
$53,000
) in the accompanying consolidated statements of income with other such net property operations as equity in income of unconsolidated joint ventures.
|
Subsidiary
|
|
State of Organization
|
Piedmont Operating Partnership, LP
|
|
Delaware
|
Piedmont Washington Properties, Inc.
|
|
Maryland
|
Piedmont Office Holdings, Inc.
|
|
Georgia
|
Piedmont Office Management, LLC
|
|
Georgia
|
Piedmont Government Services, LLC
|
|
Georgia
|
Piedmont Leasing, LLC
|
|
Delaware
|
Piedmont Power, LLC
|
|
Delaware
|
Piedmont-Las Colinas Springing Member, LLC (f/k/a Wells REIT-Springing Member, LLC)
|
|
Delaware
|
Piedmont 1901 Market Business Trust (f/k/a Wells 1901 Market Business Trust)
|
|
Delaware
|
Piedmont 1901 Market LLC (f/k/a Wells 1901 Market LLC)
|
|
Delaware
|
1055 East Colorado-Pasadena, CA GP, LLC (f/k/a Wells REIT-Pasadena, CA GP, LLC)
|
|
Delaware
|
1055 East Colorado-Pasadena, CA, L.P. (f/k/a Wells REIT-Pasadena, CA, L.P.)
|
|
Delaware
|
Piedmont-Montgomery, LLC (f/k/a Wells REIT-Montgomery, LLC)
|
|
Delaware
|
Piedmont Bridgewater I, LLC (f/k/a Wells Bridgewater I, LLC)
|
|
Delaware
|
Piedmont-Bridgewater, NJ, LLC (f/k/a Wells REIT-Bridgewater, NJ, LLC)
|
|
Delaware
|
Piedmont-Independence Square, LLC (f/k/a Wells REIT - Independence Square, LLC)
|
|
Delaware
|
Piedmont-3100 Clarendon LLC (f/k/a Wells REIT I-3100 Clarendon LLC)
|
|
Delaware
|
Piedmont-Shady Grove V LLC (f/k/a Wells REIT I-Shady Grove V LLC)
|
|
Delaware
|
Piedmont-1075 West Entrance, LLC (f/k/a Wells REIT I-1075 West Entrance, LLC)
|
|
Delaware
|
Piedmont-Multi-State Owner, LLC (f/k/a Wells REIT-Multi-State Owner, LLC)
|
|
Delaware
|
Piedmont-Nashville, TN, LLC (f/k/a Wells REIT-Nashville, TN, LLC)
|
|
Delaware
|
Piedmont-Braker Pointe Austin, TX, L.P. (f/k/a Wells REIT-Austin, TX, L.P.)
|
|
Delaware
|
Piedmont-Braker Pointe Austin, TX GP, LLC (f/k/a Wells REIT-Austin, TX, LLC)
|
|
Delaware
|
Fairway Center II-Orange County, CA, L.P. (f/k/a Wells REIT-Orange County, CA, L.P.)
|
|
Delaware
|
Fairway Center II-Orange County, CA, GP LLC (f/k/a Wells REIT-Orange County, CA, LLC)
|
|
Delaware
|
Piedmont-One Brattle Square I, LLC (f/k/a Wells REIT-One Brattle Square I, LLC)
|
|
Delaware
|
Piedmont-One Brattle Square II, LLC (f/k/a Wells REIT-One Brattle Square II, LLC)
|
|
Delaware
|
4250 North Fairfax Property LLC
|
|
Delaware
|
4250 N. Fairfax Owner, LLC
|
|
Delaware
|
400 Virginia Avenue LLC
|
|
Delaware
|
1200 Enclave Parkway, LLC
|
|
Delaware
|
1201 Eye Street, N.W. Associates LLC
|
|
Delaware
|
1215 ESDI, LLC
|
|
Delaware
|
1225 Equity LLC
|
|
Delaware
|
1225 Eye Street, N.W. Associates LLC
|
|
Delaware
|
1201 Equity LLC
|
|
Delaware
|
TTF Lending LLC
|
|
Delaware
|
TZO Lending LLC
|
|
Delaware
|
Piedmont-Two Pierce Place, LLC (f/k/a Wells REIT-Two Pierce Place, LLC)
|
|
Delaware
|
Piedmont-Las Colinas Corporate Center I, LP (f/k/a Wells REIT-Las Colinas Corporate Center I, LP)
|
|
Delaware
|
Piedmont-Las Colinas Corporate Center I, GP, LLC (f/k/a Wells REIT-Las Colinas Corporate Center I, LLC)
|
|
Delaware
|
Piedmont-Las Colinas Corporate Center II, LP (f/k/a Wells REIT-Las Colinas Corporate Center II, LP)
|
|
Delaware
|
Piedmont-Las Colinas Corporate Center II, GP, LLC (f/k/a Wells REIT-Las Colinas Corporate Center II, LLC)
|
|
Delaware
|
Cypress Concourse A, LLC
|
|
Delaware
|
Piedmont 60 Broad Street, LLC (f/k/a Wells 60 Broad Street, LLC)
|
|
Delaware
|
Piedmont-800 Nicollett Avenue, LLC (f/k/a Wells REIT-800 Nicollett Avenue, LLC)
|
|
Delaware
|
Piedmont-800 Nicollett Avenue Owner, LLC (f/k/a Wells REIT-800 Nicollett Avenue Owner, LLC)
|
|
Delaware
|
Piedmont-800 Nicollett Avenue Springing Member, LLC (f/k/a Wells REIT-800 Nicollett Avenue Springing Member, LLC)
|
|
Delaware
|
Piedmont-Chicago Center Owner, LLC (f/k/a Wells REIT-Chicago Center Owner, LLC)
|
|
Delaware
|
Piedmont-Chicago Center, Chicago, LLC (f/k/a Wells REIT-Chicago Center, Chicago, LLC)
|
|
Delaware
|
Piedmont-Holtsville, NY, LLC (f/k/a Wells REIT-Holtsville, NY, LLC)
|
|
Georgia
|
800 North Brand Glendale, GA, LLC (f/k/a Wells REIT Glendale, CA, LLC)
|
|
Delaware
|
Piedmont-1430 Enclave Parkway, L.P. (f/k/a Wells REIT-1430 Enclave Parkway, L.P.)
|
|
Delaware
|
Piedmont-1430 Enclave Parkway, GP, LLC (f/k/a Wells REIT-1430 Enclave Parkway, LLC)
|
|
Delaware
|
Enclave Parkway Development, LLC
|
|
Delaware
|
Enclave Parkway Development, L.P.
|
|
Delaware
|
Piedmont-Windy Point I, LLC (f/k/a Wells REIT-Windy Point I, LLC)
|
|
Delaware
|
Piedmont-Windy Point II, LLC (f/k/a Wells REIT-Windy Point II, LLC)
|
|
Delaware
|
Piedmont-2300 Cabot Drive, LLC (f/k/a Wells REIT-2300 Cabot Drive, LLC)
|
|
Delaware
|
Rock Spring, L.L.C.
|
|
Delaware
|
Rock Spring II, L.L.C.
|
|
Delaware
|
500 W Monroe Mezz II, LLC
|
|
Delaware
|
500 W Monroe Mezz I-B, LLC
|
|
Delaware
|
500 W Monroe Chicago, LLC
|
|
Delaware
|
150 West Jefferson, LLC
|
|
Delaware
|
Piedmont 500 West Monroe Mezz I, LLC
|
|
Delaware
|
Piedmont 500 West Monroe Fee, LLC
|
|
Delaware
|
Suwanee Gateway One, LLC
|
|
Delaware
|
Meridian Crossings, LLC
|
|
Delaware
|
Dupree Atlanta, LLC
|
|
Delaware
|
Medici Atlanta, LLC
|
|
Delaware
|
Presidential Way Woburn, LLC
|
|
Delaware
|
400 TownPark, LLC
|
|
Delaware
|
Piedmont Office REIT, Inc.
|
|
Michigan
|
Gavitello, Atlanta, LLC
|
|
Delaware
|
Glenridge Highlands III, LLC
|
|
Delaware
|
1.
|
I have reviewed this annual report on Form 10-K of Piedmont Office Realty Trust, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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By:
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/s/ D
ONALD
A. M
ILLER
, CFA
|
|
|
Donald A. Miller, CFA
|
|
|
Principal Executive Officer
|
1.
|
I have reviewed this annual report on Form 10-K of Piedmont Office Realty Trust, Inc.;
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2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
By:
|
|
/s/ R
OBERT
E. B
OWERS
|
|
|
Robert E. Bowers
|
|
|
Principal Financial Officer
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.
|
By:
|
|
/s/ D
ONALD
A. M
ILLER
, CFA
|
|
|
Donald A. Miller, CFA
|
|
|
Chief Executive Officer
|
|
|
February 27, 2013
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.
|
By:
|
|
/s/ R
OBERT
E. B
OWERS
|
|
|
Robert E. Bowers
|
|
|
Chief Financial Officer
|
|
|
February 27, 2013
|