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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, 2016
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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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Economic, regulatory, and/or socio-economic changes (including accounting standards) that impact the real estate market generally, or that could affect patterns of use of commercial office space;
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•
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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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•
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Changes in the economies and other conditions affecting the office sector in general and the specific markets in which we operate, particularly in Washington, D.C., the New York metropolitan area, and Chicago where we have high concentrations of our Annualized Lease Revenue (see definition in
Item 1. Business
of this Annual Report on Form 10-K);
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•
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Lease terminations or lease defaults, particularly by one of our large lead tenants;
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•
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The effect on us of adverse market and economic conditions, including any resulting impairment charges on both our long-lived assets or goodwill;
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•
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The success of our real estate strategies and investment objectives, including our ability to identify and consummate suitable acquisitions and divestitures;
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•
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The illiquidity of real estate investments, including the resulting impediment on our ability to quickly respond to adverse changes in the performance of our properties;
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•
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The risks and uncertainties associated with our acquisition of properties, many of which risks and uncertainties may not be known at the time of acquisition;
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•
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Development and construction delays and resultant increased costs and risks;
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•
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Our real estate development strategies may not be successful;
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•
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Future acts of terrorism in any of the major metropolitan areas in which we own properties, or future cybersecurity attacks against us or any of our tenants;
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•
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Costs of complying with governmental laws and regulations;
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•
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Additional risks and costs associated with directly managing properties occupied by government tenants;
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•
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The effect of future offerings of debt or equity securities or changes in market interest rates on the value of our common stock;
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•
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Uncertainties associated with environmental and other regulatory matters;
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•
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Potential changes in political environment and reduction in federal and/or state funding of our governmental tenants;
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•
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Any change in the financial condition of any of our large lead tenants;
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•
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The effect of any litigation to which we are, or may become, subject;
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•
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Changes in tax laws impacting REITs and real estate in general, as well as our ability to continue to qualify as a REIT under the Internal Revenue Code of 1986 (the “Code”); and
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•
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Other factors, including the risk factors discussed under
Item 1A
. of this Annual Report on Form 10-K.
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•
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changes in the national, regional, and local economic climate, particularly in markets in which we have a concentration of properties;
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•
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local office market conditions such as employment rates and changes in the supply of, or demand for, space in properties similar to those that we own within a particular area;
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•
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changes in the patterns of office use due to technological advances which may make telecommuting more prevalent;
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•
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the attractiveness of our properties to potential tenants;
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•
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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;
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•
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the financial stability of our tenants, including bankruptcies, financial difficulties, or lease defaults by our tenants;
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•
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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;
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•
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the need to periodically fund the costs to repair, renovate, and re-let space;
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•
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earthquakes, tornadoes, hurricanes and other natural disasters, civil unrest, terrorist acts or acts of war, which may result in uninsured or under insured losses;
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•
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changes in, or increased costs of compliance with, governmental regulations, including those governing usage, zoning, the environment, and taxes; and
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•
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significant changes in accounting standards and tax laws.
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•
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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;
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•
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we may not achieve expected cost savings and operating efficiencies;
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•
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we may be unable to quickly and efficiently integrate new acquisitions, particularly acquisitions of portfolios of properties, into our existing operations;
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•
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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;
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•
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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;
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•
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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
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•
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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, unknown/undisclosed latent structural issues or maintenance problems, 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.
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•
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development projects in which we have invested may be abandoned and the related investment will be impaired;
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•
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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;
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•
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we may not be able to obtain land on which to develop;
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•
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we may not be able to obtain financing for development projects, or obtain financing on favorable terms;
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•
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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 errors or omissions in the project's design, contract default, contractor or subcontactor default, performance bond surety 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);
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•
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tenants which pre-lease space or contract with us for a build-to-suit project may default prior to occupying the project;
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•
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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
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•
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we may not achieve sufficient occupancy levels and/or obtain sufficient rents to ensure the profitability of a completed project.
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•
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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;
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•
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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;
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•
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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;
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•
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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;
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•
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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;
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•
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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;
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•
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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;
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•
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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
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•
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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.
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•
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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;
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•
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issue additional shares of stock without obtaining stockholder approval, which could dilute the ownership of our then-current stockholders;
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•
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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;
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•
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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;
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•
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employ and compensate affiliates;
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•
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direct our resources toward investments, which ultimately may not appreciate over time;
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•
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change creditworthiness standards with respect to our tenants;
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•
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change our investment or borrowing policies;
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•
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determine that it is no longer in our best interest to attempt to qualify, or to continue to qualify, as a REIT; and
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•
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suspend, modify or terminate the dividend reinvestment plan.
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•
|
“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 affiliate thereof for five years after the most recent date on which the stockholder becomes an interested stockholder and thereafter impose supermajority voting requirements on these combinations; and
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•
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“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.
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•
|
cash available for distribution;
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•
|
our results of operations and anticipated future 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;
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•
|
the level of distributions paid by comparable listed REITs;
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•
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our operating expenses; and
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•
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other factors our board of directors deems relevant.
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•
|
actual or anticipated variations in our quarterly operating results;
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•
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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 or the accuracy of such reports;
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•
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changes in our dividend policy;
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•
|
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;
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•
|
additions or departures of key personnel;
|
•
|
actions by institutional stockholders;
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•
|
material, adverse litigation judgments;
|
•
|
speculation in the press or investment community; and
|
•
|
general market and economic conditions.
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(1)
|
Includes leases with an expiration date of
December 31, 2016
aggregating approximately
64,000
square feet and ALR of
$1.9 million
.
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Industry
|
|
Annualized
Lease Revenue
(in thousands)
|
|
Leased Square
Footage
(in thousands)
|
|
Percentage of
Annualized
Lease Revenue (%)
|
||||
Governmental Entity
|
|
$
|
83,170
|
|
|
1,674
|
|
|
14.4
|
|
Business Services
|
|
57,851
|
|
|
2,069
|
|
|
10.0
|
|
|
Depository Institutions
|
|
41,396
|
|
|
1,398
|
|
|
7.2
|
|
|
Engineering, Accounting, Research, Management & Related Services
|
|
39,039
|
|
|
1,106
|
|
|
6.8
|
|
|
Insurance Carriers
|
|
30,033
|
|
|
1,192
|
|
|
5.2
|
|
|
Nondepository Credit Institutions
|
|
29,385
|
|
|
951
|
|
|
5.1
|
|
|
Insurance Agents, Brokers & Services
|
|
28,936
|
|
|
963
|
|
|
5.0
|
|
|
Security & Commodity Brokers, Dealers, Exchanges & Services
|
|
22,488
|
|
|
720
|
|
|
3.9
|
|
|
Legal Services
|
|
21,609
|
|
|
706
|
|
|
3.8
|
|
|
Communications
|
|
20,198
|
|
|
630
|
|
|
3.5
|
|
|
Electronic & Other Electrical Equipment & Components, Except Computer
|
|
19,959
|
|
|
581
|
|
|
3.5
|
|
|
Educational Services
|
|
15,115
|
|
|
386
|
|
|
2.6
|
|
|
Real Estate
|
|
14,601
|
|
|
467
|
|
|
2.5
|
|
|
Eating & Drinking Places
|
|
14,164
|
|
|
459
|
|
|
2.5
|
|
|
Food & Kindred Products
|
|
11,995
|
|
|
408
|
|
|
2.1
|
|
|
Other
|
(1)
|
126,191
|
|
|
4,079
|
|
|
21.9
|
|
|
|
|
$
|
576,130
|
|
|
17,789
|
|
|
100.0
|
|
(1)
|
Not more than
2%
is attributable to any individual industry.
|
Tenant
|
|
Number of
Properties
|
|
Expiration Date(s)
(1)
|
|
Annualized
Lease Revenues
(in thousands)
(2)
|
|
Percentage of
Annualized
Lease Revenues (%)
|
||||
U.S. Government
|
|
5
|
|
|
Various
|
(3)
|
$
|
47,121
|
|
|
8.2
|
|
State of New York
|
|
1
|
|
|
2019
|
|
25,242
|
|
|
4.4
|
|
|
US Bancorp
|
|
3
|
|
|
2023 / 2024
|
|
22,061
|
|
|
3.8
|
|
|
Independence Blue Cross
|
|
1
|
|
|
2033
|
|
18,370
|
|
|
3.2
|
|
|
GE
|
|
1
|
|
|
2027
|
|
16,394
|
|
|
2.8
|
|
|
Nestle
|
|
1
|
|
|
2021
|
|
11,752
|
|
|
2.0
|
|
|
City of New York
|
|
1
|
|
|
2020
|
|
10,846
|
|
|
1.9
|
|
|
Gallagher
|
|
2
|
|
|
2018
|
|
9,624
|
|
|
1.7
|
|
|
Nuance Communications
|
|
2
|
|
|
2018 / 2030
|
|
9,088
|
|
|
1.6
|
|
|
Catamaran
|
|
1
|
|
|
2025
|
|
8,713
|
|
|
1.5
|
|
|
Motorola
|
|
1
|
|
|
2028
|
|
8,154
|
|
|
1.4
|
|
|
Caterpillar Financial
|
|
1
|
|
|
2022
|
|
8,137
|
|
|
1.4
|
|
|
Harvard University
|
|
2
|
|
|
2032 / 2033
|
|
7,343
|
|
|
1.3
|
|
|
District of Columbia
|
|
2
|
|
|
2028
|
|
6,903
|
|
|
1.2
|
|
|
Raytheon
|
|
2
|
|
|
2019
|
|
6,389
|
|
|
1.1
|
|
|
Goldman Sachs
|
|
2
|
|
|
2018
|
|
6,325
|
|
|
1.1
|
|
|
Towers Watson
|
|
1
|
|
|
2017
|
|
6,008
|
|
|
1.0
|
|
|
Henry M Jackson
|
|
2
|
|
|
2022
|
|
5,830
|
|
|
1.0
|
|
|
Schlumberger Technology
|
|
1
|
|
|
2020
|
|
5,774
|
|
|
1.0
|
|
|
First Data Corporation
|
|
1
|
|
|
2027
|
|
5,705
|
|
|
1.0
|
|
|
Epsilon Data Management
|
|
1
|
|
|
2026
|
|
5,677
|
|
|
1.0
|
|
|
Other
|
|
|
|
|
Various
|
(4)
|
324,674
|
|
|
56.4
|
|
|
|
|
|
|
|
|
$
|
576,130
|
|
|
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 or nationally recognized companies or government agencies.
|
(3)
|
Various expirations ranging from 2016 to 2031.
|
(4)
|
Not more than
1%
of ALR is attributable to any individual tenant.
|
|
2016 Quarters
|
||||||||||||||
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
||||||||
High
|
$
|
20.49
|
|
|
$
|
21.54
|
|
|
$
|
22.28
|
|
|
$
|
21.76
|
|
Low
|
$
|
16.93
|
|
|
$
|
19.36
|
|
|
$
|
20.34
|
|
|
$
|
18.61
|
|
Dividend per common share
|
$
|
0.21
|
|
|
$
|
0.21
|
|
|
$
|
0.21
|
|
|
$
|
0.21
|
|
|
|
|
|
|
|
|
|
||||||||
|
2015 Quarters
|
||||||||||||||
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
||||||||
High
|
$
|
20.15
|
|
|
$
|
19.04
|
|
|
$
|
18.95
|
|
|
$
|
19.85
|
|
Low
|
$
|
17.61
|
|
|
$
|
16.83
|
|
|
$
|
16.54
|
|
|
$
|
17.77
|
|
Dividend per common share
|
$
|
0.21
|
|
|
$
|
0.21
|
|
|
$
|
0.21
|
|
|
$
|
0.21
|
|
|
As of the year ended December 31,
|
|||||||||||||||||
|
2011
|
2012
|
2013
|
2014
|
2015
|
2016
|
||||||||||||
Piedmont Office Realty Trust, Inc.
|
$
|
100.00
|
|
$
|
110.98
|
|
$
|
106.13
|
|
$
|
126.45
|
|
$
|
132.74
|
|
$
|
153.47
|
|
S&P 500
|
$
|
100.00
|
|
$
|
116.00
|
|
$
|
153.58
|
|
$
|
174.60
|
|
$
|
177.01
|
|
$
|
198.18
|
|
FTSE NAREIT Equity REITs
|
$
|
100.00
|
|
$
|
118.06
|
|
$
|
120.97
|
|
$
|
157.43
|
|
$
|
162.46
|
|
$
|
176.30
|
|
FTSE NAREIT Equity Office
|
$
|
100.00
|
|
$
|
114.15
|
|
$
|
120.52
|
|
$
|
151.68
|
|
$
|
152.11
|
|
$
|
172.14
|
|
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)
|
|
||||||
October 1, 2016 to October 31, 2016
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
70,238
|
|
|
November 1, 2016 to November 30, 2016
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
70,238
|
|
|
December 1, 2016 to December 31, 2016
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
70,238
|
|
(1)
|
Total
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
|
|
|
(1)
|
Amounts available for purchase relate only to our stock repurchase plan, which was announced on June 24, 2015. Our board of directors authorized the repurchase of up to $200 million of shares of our common stock pursuant to the stock repurchase plan through June 23, 2017. The share repurchase plan is separate from shares purchased for DRP issuance.
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Statement of Income Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenues
|
$
|
555,715
|
|
|
$
|
584,769
|
|
|
$
|
566,252
|
|
|
$
|
549,610
|
|
|
$
|
520,704
|
|
Property operating costs
(1)
|
$
|
218,934
|
|
|
$
|
242,022
|
|
|
$
|
239,431
|
|
|
$
|
220,965
|
|
|
$
|
206,162
|
|
Depreciation and amortization
|
$
|
202,852
|
|
|
$
|
195,389
|
|
|
$
|
195,175
|
|
|
$
|
166,070
|
|
|
$
|
158,277
|
|
Impairment loss on real estate assets
|
$
|
30,898
|
|
|
$
|
40,169
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
General and administrative expenses
(1)
|
$
|
29,244
|
|
|
$
|
30,346
|
|
|
$
|
23,825
|
|
|
$
|
21,695
|
|
|
$
|
20,794
|
|
Other income/(expense)
|
$
|
(64,477
|
)
|
|
$
|
(72,158
|
)
|
|
$
|
(67,742
|
)
|
|
$
|
(68,682
|
)
|
|
$
|
(75,937
|
)
|
Income from continuing operations
|
$
|
9,310
|
|
|
$
|
4,685
|
|
|
$
|
40,079
|
|
|
$
|
72,198
|
|
|
$
|
59,534
|
|
Income and gain on sale of real estate assets from discontinued operations
|
$
|
—
|
|
|
$
|
83
|
|
|
$
|
2,152
|
|
|
$
|
26,545
|
|
|
$
|
33,685
|
|
Gain on sale of real estate assets not classified as discontinued operations
|
$
|
98,562
|
|
|
$
|
168,237
|
|
|
$
|
1,132
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Net loss/(income) applicable to noncontrolling interest
|
$
|
15
|
|
|
$
|
(15
|
)
|
|
$
|
(15
|
)
|
|
$
|
(15
|
)
|
|
$
|
(15
|
)
|
Net income applicable to Piedmont
|
$
|
107,887
|
|
|
$
|
172,990
|
|
|
$
|
43,348
|
|
|
$
|
98,728
|
|
|
$
|
93,204
|
|
Per-Share Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Per weighted-average common share data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Income from continuing operations per share—basic and diluted
|
$
|
0.74
|
|
|
$
|
1.15
|
|
|
$
|
0.27
|
|
|
$
|
0.44
|
|
|
$
|
0.35
|
|
Income from discontinued operations per share—basic and diluted
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.01
|
|
|
$
|
0.16
|
|
|
$
|
0.20
|
|
Net income applicable to Piedmont per share—basic and diluted
|
$
|
0.74
|
|
|
$
|
1.15
|
|
|
$
|
0.28
|
|
|
$
|
0.60
|
|
|
$
|
0.55
|
|
Cash dividends declared per common share
|
$
|
0.84
|
|
|
$
|
0.84
|
|
|
$
|
0.81
|
|
|
$
|
0.80
|
|
|
$
|
0.80
|
|
Weighted-average shares outstanding—basic (in thousands)
|
145,230
|
|
|
150,538
|
|
|
154,452
|
|
|
165,013
|
|
|
170,312
|
|
|||||
Weighted-average shares outstanding—diluted (in thousands)
|
145,635
|
|
|
150,880
|
|
|
154,585
|
|
|
165,137
|
|
|
170,441
|
|
|||||
Balance Sheet Data (at period end):
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
$
|
4,449,347
|
|
|
$
|
4,434,535
|
|
|
$
|
4,787,834
|
|
|
$
|
4,657,329
|
|
|
$
|
4,248,421
|
|
Total stockholders’ equity
|
$
|
2,178,882
|
|
|
$
|
2,196,444
|
|
|
$
|
2,312,015
|
|
|
$
|
2,461,159
|
|
|
$
|
2,640,495
|
|
Outstanding debt
|
$
|
2,020,475
|
|
|
$
|
2,029,510
|
|
|
$
|
2,269,922
|
|
|
$
|
1,993,446
|
|
|
$
|
1,410,071
|
|
Ratio of Earnings to Fixed Charges
|
2.6
|
|
|
3.2
|
|
|
1.5
|
|
|
2.1
|
|
|
1.9
|
|
|||||
NAREIT Funds from Operations Data
(2)
:
|
|
|
|
|
|
|
|
|
|
||||||||||
GAAP net income applicable to common stock
|
$
|
107,887
|
|
|
$
|
172,990
|
|
|
$
|
43,348
|
|
|
$
|
98,728
|
|
|
$
|
93,204
|
|
Depreciation and amortization
|
202,268
|
|
|
194,943
|
|
|
195,345
|
|
|
170,158
|
|
|
164,750
|
|
|||||
Loss on consolidation
|
—
|
|
|
—
|
|
|
—
|
|
|
898
|
|
|
—
|
|
|||||
Impairment loss
|
30,898
|
|
|
40,169
|
|
|
—
|
|
|
12,046
|
|
|
—
|
|
|||||
Gain on sale- wholly-owned properties and unconsolidated partnerships
|
(98,562
|
)
|
|
(168,236
|
)
|
|
(2,161
|
)
|
|
(31,292
|
)
|
|
(27,577
|
)
|
|||||
NAREIT Funds From Operations applicable to common stock
(2)
|
$
|
242,491
|
|
|
$
|
239,866
|
|
|
$
|
236,532
|
|
|
$
|
250,538
|
|
|
$
|
230,377
|
|
Acquisition costs
|
976
|
|
|
919
|
|
|
560
|
|
|
1,763
|
|
|
141
|
|
|||||
Loss on settlement of swaps
|
—
|
|
|
38
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net loss/(recoveries) of casualty loss and litigation settlements
|
(34
|
)
|
|
278
|
|
|
(6,992
|
)
|
|
(11,828
|
)
|
|
12,670
|
|
|||||
Core Funds From Operations applicable to common stock
(2)
|
$
|
243,433
|
|
|
$
|
241,101
|
|
|
$
|
230,100
|
|
|
$
|
240,473
|
|
|
$
|
243,188
|
|
Amortization of debt issuance costs, fair market adjustments on notes payable, and discount on Senior Notes
|
2,610
|
|
|
2,547
|
|
|
2,632
|
|
|
2,664
|
|
|
2,648
|
|
|||||
Depreciation of non real estate assets
|
841
|
|
|
755
|
|
|
508
|
|
|
406
|
|
|
502
|
|
|||||
Straight-line effects of lease revenue and net effect of amortization of below-market in-place lease intangibles
|
(26,609
|
)
|
|
(20,305
|
)
|
|
(33,848
|
)
|
|
(23,375
|
)
|
|
(22,831
|
)
|
|||||
Stock-based and other non-cash compensation
|
5,620
|
|
|
7,090
|
|
|
3,975
|
|
|
1,590
|
|
|
2,246
|
|
|||||
Acquisition costs
|
(976
|
)
|
|
(919
|
)
|
|
(560
|
)
|
|
(1,763
|
)
|
|
(141
|
)
|
|||||
Non-incremental capital expenditures
|
(35,568
|
)
|
|
(44,136
|
)
|
|
(84,630
|
)
|
|
(102,977
|
)
|
|
(87,657
|
)
|
|||||
Adjusted Funds From Operations applicable to common stock
(2)
|
$
|
189,351
|
|
|
$
|
186,133
|
|
|
$
|
118,177
|
|
|
$
|
117,018
|
|
|
$
|
137,955
|
|
(1)
|
Prior period amounts have been adjusted to conform with the current period presentation.
|
(2)
|
Net income calculated in accordance with GAAP is the starting point for calculating Funds from Operations, Core Funds From Operations, and Adjusted Funds From Operations. See "
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
—
Funds from Operations, Core Funds from Operations, and Adjusted Funds From Operations" below for a description and reconciliation of the calculations as presented.
|
|
December 31, 2016
|
|
|
December 31, 2015
|
|
||
Capital expenditures for new development
|
$
|
18,886
|
|
|
$
|
34,466
|
|
Capital expenditures for redevelopment/ renovations
|
8,532
|
|
|
17,283
|
|
||
Other capital expenditures, including tenant improvements
|
82,810
|
|
|
66,922
|
|
||
Total capital expenditures
(1)
|
$
|
110,228
|
|
|
$
|
118,671
|
|
(1)
|
Of the total amounts paid, approximately
$7.1 million
and
$6.0 million
related to soft costs such as capitalized interest, payroll, and other general and administrative expenses for the year ended
December 31, 2016
and
2015
, respectively.
|
|
December 31, 2016
|
|
%
|
|
December 31, 2015
|
|
%
|
|
Variance
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
||||||||
Rental income
|
$
|
459.9
|
|
|
|
|
$
|
468.9
|
|
|
|
|
$
|
(9.0
|
)
|
||
Tenant reimbursements
|
93.9
|
|
|
|
|
113.9
|
|
|
|
|
(20.0
|
)
|
|||||
Property management fee revenue
|
1.9
|
|
|
|
|
2.0
|
|
|
|
|
(0.1
|
)
|
|||||
Total revenues
|
555.7
|
|
|
100
|
%
|
|
584.8
|
|
|
100
|
%
|
|
(29.1
|
)
|
|||
Expense:
|
|
|
|
|
|
|
|
|
|
||||||||
Property operating costs
|
218.9
|
|
|
39
|
%
|
|
242.0
|
|
|
41
|
%
|
|
(23.1
|
)
|
|||
Depreciation
|
127.7
|
|
|
23
|
%
|
|
134.5
|
|
|
23
|
%
|
|
(6.8
|
)
|
|||
Amortization
|
75.1
|
|
|
15
|
%
|
|
60.9
|
|
|
11
|
%
|
|
14.2
|
|
|||
Impairment losses on real estate assets
|
30.9
|
|
|
5
|
%
|
|
40.2
|
|
|
7
|
%
|
|
(9.3
|
)
|
|||
General and administrative
|
29.3
|
|
|
5
|
%
|
|
30.4
|
|
|
5
|
%
|
|
(1.1
|
)
|
|||
Real estate operating income
|
73.8
|
|
|
13
|
%
|
|
76.8
|
|
|
13
|
%
|
|
(3.0
|
)
|
|||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
(64.9
|
)
|
|
12
|
%
|
|
(74.0
|
)
|
|
12
|
%
|
|
9.1
|
|
|||
Other income/(expense)
|
—
|
|
|
—
|
%
|
|
1.6
|
|
|
—
|
%
|
|
(1.6
|
)
|
|||
Net loss from casualty events and litigation settlements
|
—
|
|
|
—
|
%
|
|
(0.3
|
)
|
|
—
|
%
|
|
0.3
|
|
|||
Equity in income of unconsolidated joint ventures
|
0.4
|
|
|
—
|
%
|
|
0.6
|
|
|
—
|
%
|
|
(0.2
|
)
|
|||
Income from continuing operations
|
$
|
9.3
|
|
|
2
|
%
|
|
$
|
4.7
|
|
|
1
|
%
|
|
$
|
4.6
|
|
Income from discontinued operations
|
$
|
—
|
|
|
|
|
$
|
0.1
|
|
|
|
|
$
|
(0.1
|
)
|
||
Gain on sale of real estate assets
|
$
|
98.6
|
|
|
|
|
$
|
168.2
|
|
|
|
|
$
|
(69.6
|
)
|
|
December 31, 2015
|
|
%
|
|
December 31, 2014
|
|
%
|
|
Variance
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
||||||||
Rental income
|
$
|
468.9
|
|
|
|
|
$
|
454.6
|
|
|
|
|
$
|
14.3
|
|
||
Tenant reimbursements
|
113.9
|
|
|
|
|
109.6
|
|
|
|
|
4.3
|
|
|||||
Property management fee revenue
|
2.0
|
|
|
|
|
2.1
|
|
|
|
|
(0.1
|
)
|
|||||
Total revenues
|
584.8
|
|
|
100
|
%
|
|
566.3
|
|
|
100
|
%
|
|
18.5
|
|
|||
Expense:
|
|
|
|
|
|
|
|
|
|
||||||||
Property operating costs
|
242.0
|
|
|
41
|
%
|
|
239.5
|
|
|
42
|
%
|
|
2.5
|
|
|||
Depreciation
|
134.5
|
|
|
23
|
%
|
|
138.6
|
|
|
25
|
%
|
|
(4.1
|
)
|
|||
Amortization
|
60.9
|
|
|
11
|
%
|
|
56.6
|
|
|
10
|
%
|
|
4.3
|
|
|||
Impairment loss on real estate assets
|
40.2
|
|
|
7
|
%
|
|
—
|
|
|
—
|
%
|
|
40.2
|
|
|||
General and administrative expense
|
30.4
|
|
|
5
|
%
|
|
23.8
|
|
|
4
|
%
|
|
6.6
|
|
|||
Real estate operating income
|
76.8
|
|
|
13
|
%
|
|
107.8
|
|
|
19
|
%
|
|
(31.0
|
)
|
|||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
(74.0
|
)
|
|
12
|
%
|
|
(74.4
|
)
|
|
13
|
%
|
|
0.4
|
|
|||
Other income/(expense)
|
1.6
|
|
|
—
|
%
|
|
0.1
|
|
|
—
|
%
|
|
1.5
|
|
|||
Net recoveries/(loss) from casualty events and litigation settlements
|
(0.3
|
)
|
|
—
|
%
|
|
7.0
|
|
|
1
|
%
|
|
(7.3
|
)
|
|||
Equity in income/(loss) of unconsolidated joint ventures
|
0.6
|
|
|
—
|
%
|
|
(0.4
|
)
|
|
—
|
%
|
|
1.0
|
|
|||
Income from continuing operations
|
$
|
4.7
|
|
|
1
|
%
|
|
$
|
40.1
|
|
|
7
|
%
|
|
$
|
(35.4
|
)
|
Income from discontinued operations
|
$
|
0.1
|
|
|
|
|
$
|
2.2
|
|
|
|
|
$
|
(2.1
|
)
|
||
Gain on sale of real estate assets
|
$
|
168.2
|
|
|
|
|
$
|
1.1
|
|
|
|
|
$
|
167.1
|
|
|
2016
|
|
Per
Share
(1)
|
|
2015
|
|
Per
Share
(1)
|
|
2014
|
|
Per
Share
(1)
|
||||||||||||
GAAP net income applicable to common stock
|
$
|
107,887
|
|
|
$
|
0.74
|
|
|
$
|
172,990
|
|
|
$
|
1.15
|
|
|
$
|
43,348
|
|
|
$
|
0.28
|
|
Depreciation of real assets
(2)
|
127,129
|
|
|
0.87
|
|
|
133,992
|
|
|
0.89
|
|
|
138,497
|
|
|
0.90
|
|
||||||
Amortization of lease-related costs
(2)
|
75,139
|
|
|
0.52
|
|
|
60,951
|
|
|
0.40
|
|
|
56,848
|
|
|
0.37
|
|
||||||
Impairment loss on real estate assets
|
30,898
|
|
|
0.21
|
|
|
40,169
|
|
|
0.27
|
|
|
—
|
|
|
—
|
|
||||||
Gain on sale- wholly-owned properties
|
(98,562
|
)
|
|
(0.67
|
)
|
|
(168,236
|
)
|
|
(1.12
|
)
|
|
(2,330
|
)
|
|
(0.02
|
)
|
||||||
Loss on sale- unconsolidated partnerships
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
169
|
|
|
—
|
|
||||||
NAREIT Funds From Operations applicable to common stock
|
$
|
242,491
|
|
|
$
|
1.67
|
|
|
$
|
239,866
|
|
|
$
|
1.59
|
|
|
$
|
236,532
|
|
|
$
|
1.53
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Acquisition costs
|
976
|
|
|
—
|
|
|
919
|
|
|
0.01
|
|
|
560
|
|
|
—
|
|
||||||
Loss on settlement of swaps
|
—
|
|
|
—
|
|
|
38
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net loss/(recoveries) from casualty events and litigation settlements
|
(34
|
)
|
|
—
|
|
|
278
|
|
|
—
|
|
|
(6,992
|
)
|
|
(0.04
|
)
|
||||||
Core Funds From Operations applicable to common stock
|
$
|
243,433
|
|
|
$
|
1.67
|
|
|
$
|
241,101
|
|
|
$
|
1.60
|
|
|
$
|
230,100
|
|
|
$
|
1.49
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Amortization of debt issuance costs, fair market adjustments on notes payable, and discount on Unsecured Senior Notes
|
2,610
|
|
|
|
|
2,547
|
|
|
|
|
2,632
|
|
|
|
|||||||||
Depreciation of non real estate assets
|
841
|
|
|
|
|
755
|
|
|
|
|
508
|
|
|
|
|||||||||
Straight-line effects of lease revenue
(2)
|
(21,544
|
)
|
|
|
|
(15,734
|
)
|
|
|
|
(29,121
|
)
|
|
|
|||||||||
Stock-based and other non-cash compensation
|
5,620
|
|
|
|
|
7,090
|
|
|
|
|
3,975
|
|
|
|
|||||||||
Net effect of amortization of below-market in-place lease intangibles
|
(5,065
|
)
|
|
|
|
(4,571
|
)
|
|
|
|
(4,727
|
)
|
|
|
|||||||||
Acquisition costs
|
(976
|
)
|
|
|
|
(919
|
)
|
|
|
|
(560
|
)
|
|
|
|||||||||
Non-incremental capital expenditures
(3)
|
(35,568
|
)
|
|
|
|
(44,136
|
)
|
|
|
|
(84,630
|
)
|
|
|
|||||||||
Adjusted Funds From Operations applicable to common stock
|
$
|
189,351
|
|
|
|
|
$
|
186,133
|
|
|
|
|
$
|
118,177
|
|
|
|
||||||
Weighted-average shares outstanding – diluted
|
145,635
|
|
|
|
|
150,880
|
|
|
|
|
154,585
|
|
|
|
(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)
|
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 enhance the rental rates of a building or change the property's underlying classification, such as from a Class B to a Class A property, are excluded from this measure.
|
|
December 31,
2016 |
|
December 31,
2015 |
||||
|
|
|
|
||||
Net income attributable to Piedmont (GAAP Basis)
|
$
|
107,887
|
|
|
$
|
172,990
|
|
|
|
|
|
||||
Net loss/(income) attributable to noncontrolling interest
|
(15
|
)
|
|
15
|
|
||
Interest expense
(1)
|
64,860
|
|
|
73,998
|
|
||
Depreciation
(1)
|
127,970
|
|
|
134,747
|
|
||
Amortization
(1)
|
75,139
|
|
|
60,951
|
|
||
Acquisition costs
|
976
|
|
|
919
|
|
||
Impairment loss on real estate assets
(1)
|
30,898
|
|
|
40,169
|
|
||
Net loss/(recoveries) from casualty events and litigation settlements
(1)
|
(34
|
)
|
|
278
|
|
||
Gain on sale of real estate assets
(1)
|
(98,562
|
)
|
|
(168,236
|
)
|
||
General & administrative expenses
(1)
|
29,306
|
|
|
30,388
|
|
||
Management fee revenue
|
(1,034
|
)
|
|
(1,115
|
)
|
||
Other (income)/expense
(1)
|
(458
|
)
|
|
(2,484
|
)
|
||
Straight line rent adjustment
(1)
|
(21,544
|
)
|
|
(15,734
|
)
|
||
Net effect of amortization of below-market in-place lease intangibles
(1)
|
(5,065
|
)
|
|
(4,571
|
)
|
||
Property NOI (Cash Basis)
|
310,324
|
|
|
322,315
|
|
||
|
|
|
|
||||
Acquisitions
(2)
|
(28,140
|
)
|
|
(5,070
|
)
|
||
Dispositions
(3)
|
(9,161
|
)
|
|
(56,276
|
)
|
||
Unconsolidated joint ventures
|
(461
|
)
|
|
(793
|
)
|
||
|
|
|
|
||||
Same Store Cash NOI (Cash Basis)
|
$
|
272,562
|
|
|
$
|
260,176
|
|
|
|
|
|
||||
Change period over period in Same Store Cash NOI
|
4.8
|
%
|
|
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 Park Place on Turtle Creek in Dallas, Texas, purchased on January 16, 2015; 80 Central Street in Boxborough, Massachusetts, purchased on July 24, 2015; SunTrust Center in Orlando, Florida, purchased on November 4, 2015; Galleria 300 in Atlanta, Georgia, purchased on November 4, 2015; Glenridge Highlands One in Atlanta, Georgia, purchased on November 24, 2015; CNL Center I and CNL Center II in Orlando, Florida, purchased on August 1, 2016; One Wayside Road in Burlington, Massachusetts, purchased on August 10, 2016; Galleria 200 in Atlanta, Georgia, purchased on October 7, 2016; and 750 West John Carpenter Freeway in Irving, Texas, purchased on November 30, 2016.
|
(3)
|
Dispositions consist of 3900 Dallas Parkway in Plano, Texas, sold on January 30, 2015; 5601 Headquarters Drive in Plano, Texas, sold on April 28, 2015; River Corporate Center in Tempe, Arizona, sold on April 29, 2015; Copper Ridge Center in Lyndhurst, New Jersey, sold on May 1, 2015; Eastpoint I & II in Mayfield Heights, Ohio, sold on July 28, 2015; 3750 Brookside Parkway in Alpharetta, Georgia, sold on August 10, 2015; Chandler Forum in Chandler, Arizona, sold on September 1, 2015; Aon Center in Chicago, Illinois, sold on October 29, 2015; 2 Gatehall Drive in Parsippany, New Jersey, sold on December 21, 2015; 1055 East Colorado Boulevard in Pasadena, California, sold on April 21, 2016; Fairway Center II in Brea, California, sold on April 28, 2016; 1901 Main Street in Irvine, California, sold on May 2, 2016; 9221 Corporate Boulevard in Rockville, Maryland, sold on July 27, 2016; 150 West Jefferson in Detroit, Michigan, sold on July 29, 2016; 9200 and 9211 Corporate Boulevard in Rockville, Maryland, sold on September 28, 2016; 11695 Johns Creek Parkway in Johns Creek, Georgia, sold on December 22, 2016; and Braker Pointe III in Austin, Texas, sold on December 29, 2016.
|
Buildings
|
40 years
|
Building improvements
|
5-25 years
|
Land improvements
|
20-25 years
|
Tenant allowances
|
Lease term
|
Furniture, fixtures, and equipment
|
3-5 years
|
Intangible lease assets
|
Lease term
|
|
|
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)
|
|
$
|
2,029,582
|
|
|
$
|
140,834
|
|
|
$
|
649,974
|
|
(2) (3)
|
$
|
328,774
|
|
(4)
|
$
|
910,000
|
|
Operating lease obligations
(5)
|
|
2,904
|
|
|
93
|
|
|
186
|
|
|
186
|
|
|
2,439
|
|
|||||
Total
|
|
$
|
2,032,486
|
|
|
$
|
140,927
|
|
|
$
|
650,160
|
|
|
$
|
328,960
|
|
|
$
|
912,439
|
|
(1)
|
Amounts include principal payments only and balances outstanding as of
December 31, 2016
, not including unamortized issuance discounts, debt issuance costs paid to lenders, or estimated fair value adjustments. We made interest payments, including payments under our interest rate swaps, of approximately
$69.0 million
during the year ended
December 31, 2016
, and expect to pay interest in future periods on outstanding debt obligations based on the rates and terms disclosed herein and in
Note 5
of our accompanying consolidated financial statements.
|
(2)
|
Includes the balance outstanding as of
December 31, 2016
of the $500 Million Unsecured 2015 Line of Credit. However, Piedmont may extend the term for up to one additional year (through two available six month extensions to a final extended maturity date of June 18, 2020) provided Piedmont is not then in default and upon payment of extension fees.
|
(3)
|
Includes the $300 Million Unsecured 2013 Term Loan which has a stated variable rate; however, we have entered into interest rate swap agreements which effectively fix, exclusive of changes to our credit rating, the rate on this facility to
2.78%
through maturity.
|
(4)
|
Includes the $300 Million Unsecured 2011 Term Loan which has a stated variable rate; however, we have entered into interest rate swap agreements which effectively fix, exclusive of changes to our credit rating, the rate on this facility to
3.35%
through maturity As such, we estimate incurring, exclusive of changes to our credit rating, approximately $10.1million per annum in total interest (comprised of combination of variable contractual rate and settlements under interest rate swap agreements) through maturity in January 2020.
|
(5)
|
The 2001 NW 64th Street building in Ft. Lauderdale, Florida is subject to a ground lease with an expiration date in
2048
. The aggregate remaining payments required under the terms of this operating lease as of
December 31, 2016
is presented above.
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
Thereafter
|
|
Total
|
||||||||||||||
Maturing debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Variable rate repayments
|
$
|
—
|
|
|
$
|
170,000
|
|
|
$
|
178,000
|
|
(2)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
348,000
|
|
Variable rate average interest rate
(1)
|
—
|
%
|
|
1.78
|
%
|
|
1.74
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
1.76
|
%
|
|||||||
Fixed rate repayments
|
$
|
140,834
|
|
|
$
|
960
|
|
|
$
|
301,014
|
|
(3)
|
$
|
301,072
|
|
(4)
|
$
|
27,702
|
|
|
$
|
910,000
|
|
|
$
|
1,681,582
|
|
Fixed rate average interest rate
(1)
|
5.76
|
%
|
|
5.55
|
%
|
|
2.79
|
%
|
|
3.36
|
%
|
|
5.55
|
%
|
|
3.88
|
%
|
|
3.77
|
%
|
(1)
|
See
Note 5
of our accompanying consolidated financial statements for further details on our debt structure.
|
(2)
|
Includes the balance of our $500 Million Unsecured 2015 Line of Credit. However, we may extend the term for up to
one
additional year (through
two
available
six
month extensions to a final extended maturity date of June 18, 2020), provided we are not then in default and upon payment of extension fees.
|
(3)
|
The amount includes the $300 Million Unsecured 2013 Term Loan which has a stated variable rate; however, Piedmont has entered into interest rate swap agreements which effectively fix, absent any changes to Piedmont's credit rating, the rate on this facility to 2.78% through maturity.
|
(4)
|
The amount includes the $300 Million Unsecured 2011 Term Loan which has a stated variable rate; however, Piedmont has entered into interest rate swap agreements which effectively fix, exclusive of changes to Piedmont's credit rating, the rate on this facility to 3.35% through maturity.
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
Thereafter
|
|
Total
|
||||||||||||||
Maturing debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Variable rate repayments
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
170,000
|
|
|
$
|
21,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
191,000
|
|
Variable rate average interest rate
(1)
|
—
|
%
|
|
—
|
%
|
|
1.37
|
%
|
|
1.39
|
%
|
|
—
|
%
|
|
—
|
%
|
|
1.37
|
%
|
|||||||
Fixed rate repayments
|
$
|
168,314
|
|
|
$
|
140,908
|
|
|
$
|
960
|
|
|
$
|
301,014
|
|
(2)
|
$
|
301,072
|
|
(3)
|
$
|
937,702
|
|
|
$
|
1,849,970
|
|
Fixed rate average interest rate
(1)
|
5.55
|
%
|
|
5.76
|
%
|
|
5.55
|
%
|
|
2.79
|
%
|
|
2.40
|
%
|
|
3.93
|
%
|
|
3.78
|
%
|
(1)
|
See
Note 5
of our accompanying consolidated financial statements for further details on our debt structure.
|
(2)
|
The amount includes the $300 Million Unsecured 2013 Term Loan which has a stated variable rate; however, Piedmont has entered into interest rate swap agreements which effectively fix, absent any changes to Piedmont's credit rating, the rate on this facility to 2.78%.
|
(3)
|
The amount includes the $300 Million Unsecured 2011 Term Loan which has a stated variable rate; however, Piedmont has entered into interest rate swap agreements which effectively fix, exclusive of changes to Piedmont's credit rating, the rate on this facility to 3.35% through January 15, 2020.
|
•
|
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
|
|
Chairman, and Director
|
February 21, 2017
|
Michael R. Buchanan
|
|
|
|
|
|
|
|
/s/ F
RANK
C. M
C
D
OWELL
|
|
Vice-Chairman, and Director
|
February 21, 2017
|
Frank C. McDowell
|
|
|
|
|
|
|
|
/s/ W
ESLEY
E. C
ANTRELL
|
|
Director
|
February 21, 2017
|
Wesley E. Cantrell
|
|
|
|
|
|
|
|
/s/ B
ARBARA
B.
L
ANG
|
|
Director
|
February 21, 2017
|
Barbara B. Lang
|
|
|
|
|
|
|
|
/s/ R
AYMOND
G. M
ILNES
, J
R
.
|
|
Director
|
February 21, 2017
|
Raymond G. Milnes, Jr.
|
|
|
|
|
|
|
|
/s/ J
EFFREY
L. S
WOPE
|
|
Director
|
February 21, 2017
|
Jeffrey L. Swope
|
|
|
|
|
|
|
|
/s/ D
ALE
H. T
AYSOM
|
|
Director
|
February 21, 2017
|
Dale H. Taysom
|
|
|
|
|
|
|
|
/s/ K
ELLY
H. B
ARRETT
|
|
Director
|
February 21, 2017
|
Kelly H. Barrett
|
|
|
|
|
|
|
|
/s/ D
ONALD
A. M
ILLER
, CFA
|
|
President and Director
|
February 21, 2017
|
Donald A. Miller, CFA
|
|
(Principal Executive Officer)
|
|
|
|
|
|
/s/ R
OBERT
E. B
OWERS
|
|
Chief Financial Officer and Executive Vice-President
|
February 21, 2017
|
Robert E. Bowers
|
|
(Principal Financial Officer)
|
|
|
|
|
|
/s/ L
AURA
P. M
OON
|
|
Chief Accounting Officer
|
February 21, 2017
|
Laura P. Moon
|
|
(Principal Accounting Officer)
|
|
|
|
|
|
Exhibit Number
|
|
Description of Document
|
3.1
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Third Articles of Amendment and Restatement of Piedmont Office Realty Trust, Inc. (f/k/a Wells Real Estate Investment Trust, Inc.) (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)
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3.2
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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)
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3.3
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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)
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3.4
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Articles Supplementary to the Third Articles of Amendment and Restatement of Piedmont Office Realty Trust, Inc., as supplemented and amended (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K, filed on November 14, 2016)
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3.5
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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)
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4.1
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Indenture, dated May 9, 2013, by and among Piedmont Operating Partnership, LP (the "Operating Partnership"), the Company and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K, filed on May 13, 2013)
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4.2
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Form of 3.40% Senior Notes due 2023 (included in Exhibit 4.1 hereto)
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4.3
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Indenture, dated March 6, 2014, by and among the Operating Partnership, Piedmont Office Realty Trust, Inc. and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K, filed on March 6, 2014)
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4.4
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Supplemental Indenture, dated March 6, 2014, by and among the Operating Partnership, Piedmont Office Realty Trust, Inc. and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K, filed on March 6, 2014)
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4.5
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Form of 4.450% Senior Notes due 2024 (included in Exhibit 4.4 hereto)
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10.1
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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)
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10.2
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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)
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10.3
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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)
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10.4
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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)
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10.5
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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)
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10.6
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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)
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10.7
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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)
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10.8
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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)
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10.9
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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)
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10.10
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Amended and Restated Agreement of Limited Partnership of the Operating Partnership, dated January 1, 2000 (incorporated by reference to Exhibit 10.64 to the Company's Annual Report on Form 10-K for the year ended December 31, 2000, filed on March 28, 2001)
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10.11
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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)
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10.12
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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)
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10.13
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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)
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10.14*
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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)
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10.15*
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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)
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10.16*
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Long-Term Incentive Program (as amended and restated effective April 27, 2016) (incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2016, filed on August 3, 2016)
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10.17*
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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)
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10.18*
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The Piedmont Office Realty Trust, Inc. Executive Nonqualified Deferred Compensation Plan dated December 5, 2013 (incorporated by reference to Exhibit 10.39 to the Company's Annual Report on Form 10-K for the year ended December 31, 2013, filed on February 18, 2014)
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10.19*
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The Piedmont Office Realty Trust, Inc. Executive Nonqualified Deferred Compensation Plan dated December 5, 2013 (incorporated by reference to Exhibit 10.39 to the Company's Annual Report on Form 10-K for the year ended December 31, 2013, filed on February 18, 2014)
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10.20*
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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)
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10.21*
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Form of Employee Deferred Stock Award Agreement for 2007 Omnibus Incentive Plan of the Company effective April 28, 2015 (incorporated by reference to Exhibit 10.5 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2015, filed on July 29, 2015)
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10.22*
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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)
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10.23*
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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)
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10.24*
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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)
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10.25*
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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)
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10.26*
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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)
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10.27*
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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)
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10.28*
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Offer Letter Dated October 17, 2012 among the Company and Robert K. Wiberg (incorporated by reference to Exhibit 10.41 to the Company's Annual Report of Form 10-K for the year ended December 31, 2012, filed on February 27, 2013)
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10.29*
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Consulting Agreement, dated as of November 28, 2016, by and between the Company and Raymond L. Owens
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10.30*
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Confidential Retirement Agreement and General Release, dated as of November 28, 2016, by and between the Company and Raymond L. Owens
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10.31
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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)
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10.32
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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)
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10.33
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Amendment No. 2 To Term Loan Agreement, dated as of August 21, 2014, among the Operating Partnership, as Borrower, the Company, as Parent, J.P. Morgan Securities, LLC and SunTrust Robinson Humphrey, Inc., as Co-Lead Arrangers and Joint Book Runners, JPMorgan Chase Bank, N.A., as Administrative Agent, SunTrust Bank as Syndication Agent, and the financial institutions party thereto as Lenders (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on August 22, 2014)
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10.34
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Term Loan Agreement, dated as of December 18, 2013, among Piedmont Operating Partnership, LP, as Borrower, Piedmont Office Realty Trust, Inc., as Parent, U.S. Bank, N.A., and SunTrust Robinson Humphrey, Inc., as Joint Book Runners and Joint Lead Arrangers, U.S. Bank, N.A., as Agent, SunTrust Bank as Syndication 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 December 19, 2013)
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10.35
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Term Loan Agreement, dated as of March 27, 2015, among Piedmont Operating Partnership, LP, as Borrower, Piedmont Office Realty Trust, Inc., as Parent, JP Morgan Securities, LLC, U.S. Bank National Association and SunTrust Robinson Humphrey, Inc., as Co-Lead Arrangers and Book Managers; JPMorgan Chase Bank, as Agent; U.S. Bank National Association, as Syndication Agent; SunTrust Bank, as Documentation Agent; and the financial institutions initially signatory thereto and their assignees, as Lenders (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on April 2, 2015)
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10.36
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Revolving Credit Agreement dated June 18, 2015, by and among Piedmont Operating Partnership, LP, the Registrant, Suntrust Robinson Humphrey, Inc., U.S. Bank National Association, PNC Capital Markets LLC, Suntrust Bank, 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 June 24, 2015)
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10.37
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Loan Agreement dated as of June 23, 2015 between Piedmont 1901 Market LLC, as Borrower and The Prudential Insurance Company of America, as Lender (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed on June 24, 2015)
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10.38
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Open-End Mortgage and Security Agreement (incorporated by reference to Exhibit 10.3 to the Company's Current Report on Form 8-K filed on June 24, 2015)
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12.1
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Calculation of Ratio of Earnings to Fixed Charges
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21.1
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List of Subsidiaries of the Company
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23.1
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Consent of Ernst & Young LLP
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31.1
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Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
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31.2
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Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
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32.1
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Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
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32.2
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Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
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101.INS
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XBRL Instance Document
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101.SCH
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XBRL Taxonomy Extension Schema
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101.CAL
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XBRL Taxonomy Extension Calculation Linkbase
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101.DEF
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XBRL Taxonomy Extension Definition Linkbase
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101.LAB
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XBRL Taxonomy Extension Label Linkbase
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase
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Financial Statements
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Page
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Financial Statement Schedule
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December 31, 2016
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December 31, 2015
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Assets:
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Real estate assets, at cost:
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Land
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$
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669,848
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$
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676,091
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Buildings and improvements, less accumulated depreciation of $944,573 and $889,857 as of December 31, 2016 and December 31, 2015, respectively
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2,927,324
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2,837,463
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Intangible lease assets, less accumulated amortization of $109,152 and $93,012 as of December 31, 2016 and December 31, 2015, respectively
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99,695
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84,663
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Construction in progress
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34,825
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20,975
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Real estate assets held for sale, net
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—
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76,614
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Total real estate assets
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3,731,692
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3,695,806
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Investment in and amounts due from unconsolidated joint venture
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7,360
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7,577
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Cash and cash equivalents
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6,992
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5,441
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Tenant receivables, net of allowance for doubtful accounts of $197 and $83 as of December 31, 2016 and December 31, 2015, respectively
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26,494
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26,339
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Straight-line rent receivables
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165,848
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147,393
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Notes receivable
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—
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45,400
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Restricted cash and escrows
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1,212
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5,174
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Prepaid expenses and other assets
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23,655
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24,777
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Goodwill
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180,097
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180,097
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Deferred lease costs, less accumulated amortization of $178,468 and $146,700 as of December 31, 2016 and December 31, 2015, respectively
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305,997
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288,041
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Other assets held for sale, net
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—
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8,490
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Total assets
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$
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4,449,347
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$
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4,434,535
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Liabilities:
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Unsecured debt, net of discount and unamortized debt issuance costs of $10,269 and $12,779 as of December 31, 2016 and December 31, 2015, respectively
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$
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1,687,731
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$
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1,528,221
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Secured debt, net of premiums and unamortized debt issuance costs of $1,161 and $1,319 as of December 31, 2016 and December 31, 2015, respectively
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332,744
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501,289
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Accounts payable, accrued expenses, dividends payable, and accrued capital expenditures
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165,410
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128,465
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Deferred income
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28,406
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27,270
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Intangible lease liabilities, less accumulated amortization of $49,225 and $42,315 as of December 31, 2016 and December 31, 2015, respectively
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48,005
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42,853
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Interest rate swaps
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8,169
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9,993
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Total liabilities
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2,270,465
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2,238,091
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Commitments and Contingencies
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—
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—
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Stockholders’ Equity:
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Shares-in-trust, 150,000,000 shares authorized, none outstanding as of December 31, 2016 or December 31, 2015
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—
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—
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Preferred stock, no par value, 100,000,000 shares authorized, none outstanding as of December 31, 2016 or December 31, 2015
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—
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—
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Common stock, $.01 par value; 750,000,000 shares authorized, 145,235,313 shares issued and outstanding as of December 31, 2016; and 145,511,644 shares issued and outstanding at December 31, 2015
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1,452
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1,455
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Additional paid-in capital
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3,673,128
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3,669,977
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Cumulative distributions in excess of earnings
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(1,499,684
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)
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(1,477,674
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)
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Other comprehensive income
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2,104
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1,661
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Piedmont stockholders’ equity
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2,177,000
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2,195,419
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Noncontrolling interest
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1,882
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1,025
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Total stockholders’ equity
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2,178,882
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2,196,444
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Total liabilities and stockholders’ equity
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$
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4,449,347
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$
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4,434,535
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Years Ended December 31,
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2016
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2015
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2014
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Revenues:
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Rental income
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$
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459,890
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$
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468,872
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$
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454,635
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Tenant reimbursements
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93,961
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113,881
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109,548
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Property management fee revenue
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1,864
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2,016
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2,069
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555,715
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584,769
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566,252
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Expenses:
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Property operating costs
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218,934
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242,022
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239,431
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Depreciation
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127,733
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134,503
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138,596
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Amortization
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75,119
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60,886
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56,579
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Impairment loss on real estate assets
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30,898
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40,169
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—
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|
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General and administrative
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29,244
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30,346
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23,825
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481,928
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507,926
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458,431
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Real estate operating income
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73,787
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76,843
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107,821
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|
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Other income (expense):
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Interest expense
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(64,860
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)
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(73,998
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)
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(74,446
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)
|
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Other income/(expense)
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(13
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)
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1,565
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62
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Net recoveries/(loss) from casualty events and litigation settlements
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34
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(278
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)
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6,992
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Equity in income/(loss) of unconsolidated joint ventures
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362
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553
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(350
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)
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(64,477
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)
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(72,158
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)
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(67,742
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)
|
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Income from continuing operations
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9,310
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4,685
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40,079
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|
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Discontinued operations:
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|
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Operating income
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—
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84
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|
|
954
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|
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Gain/(loss) on sale of real estate assets
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—
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(1
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)
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1,198
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|
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Income from discontinued operations
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—
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|
|
83
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|
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2,152
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|
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Gain on sale of real estate assets
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98,562
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168,237
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1,132
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|
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Net income
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107,872
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173,005
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43,363
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|
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Less: Net loss/(income) applicable to noncontrolling interest
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15
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(15
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)
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(15
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)
|
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Net income applicable to Piedmont
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$
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107,887
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$
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172,990
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$
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43,348
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Per share information— basic and diluted:
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|
||||||
Income from continuing operations and gain on sale of real estate assets
|
$
|
0.74
|
|
|
$
|
1.15
|
|
|
$
|
0.27
|
|
Income from discontinued operations
|
—
|
|
|
—
|
|
|
0.01
|
|
|||
Net income applicable to common stockholders
|
$
|
0.74
|
|
|
$
|
1.15
|
|
|
$
|
0.28
|
|
Weighted-average shares outstanding—basic
|
145,230,382
|
|
|
150,537,757
|
|
|
154,452,121
|
|
|||
Weighted-average shares outstanding—diluted
|
145,634,953
|
|
|
150,880,116
|
|
|
154,585,273
|
|
|
Years Ended December 31,
|
|||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net income applicable to Piedmont
|
|
|
$
|
107,887
|
|
|
|
|
$
|
172,990
|
|
|
|
|
$
|
43,348
|
|
|||
Other comprehensive income/(loss):
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Effective portion of loss on derivative instruments that are designated and qualify as cash flow hedges (See
Note 7
)
|
(4,126
|
)
|
|
|
|
(12,509
|
)
|
|
|
|
(17,122
|
)
|
|
|
||||||
Reclassification of previously recorded loss included in net income (See
Note 7
)
|
4,548
|
|
|
|
|
5,875
|
|
|
|
|
5,145
|
|
|
|
||||||
Gain/(loss) on investment in available for sale securities
|
21
|
|
|
|
|
(6
|
)
|
|
|
|
—
|
|
|
|
||||||
Other comprehensive income/(loss)
|
|
|
443
|
|
|
|
|
(6,640
|
)
|
|
|
|
(11,977
|
)
|
||||||
Comprehensive income applicable to Piedmont
|
|
|
$
|
108,330
|
|
|
|
|
$
|
166,350
|
|
|
|
|
$
|
31,371
|
|
|
Common Stock
|
|
Additional
Paid-In
Capital
|
|
Cumulative
Distributions in
Excess of Earnings
|
|
Other
Comprehensive
Income/(Loss)
|
|
Noncontrolling
Interest
|
|
Total
Stockholders’
Equity
|
|||||||||||||||
Shares
|
|
Amount
|
|
|||||||||||||||||||||||
Balance, December 31, 2013
|
157,461
|
|
|
$
|
1,575
|
|
|
$
|
3,668,906
|
|
|
$
|
(1,231,209
|
)
|
|
$
|
20,278
|
|
|
$
|
1,609
|
|
|
$
|
2,461,159
|
|
Share repurchases as part of announced plan
|
(3,190
|
)
|
|
(32
|
)
|
|
—
|
|
|
(52,764
|
)
|
|
—
|
|
|
—
|
|
|
(52,796
|
)
|
||||||
Retirement of shares returned from escrow
|
(85
|
)
|
|
(1
|
)
|
|
(1,478
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,479
|
)
|
||||||
Redemption of noncontrolling interest in consolidated variable interest entity
|
|
|
|
|
(4,054
|
)
|
|
|
|
|
|
|
|
(4,054
|
)
|
|||||||||||
Dividends to common stockholders ($0.81 per share), dividends to preferred stockholders of subsidiary, and dividends reinvested
|
—
|
|
|
—
|
|
|
(188
|
)
|
|
(124,995
|
)
|
|
—
|
|
|
(15
|
)
|
|
(125,198
|
)
|
||||||
Shares issued and amortized under the 2007 Omnibus Incentive Plan, net of tax
|
138
|
|
|
1
|
|
|
2,996
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,997
|
|
||||||
Net income applicable to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15
|
|
|
15
|
|
||||||
Net income applicable to Piedmont
|
—
|
|
|
—
|
|
|
—
|
|
|
43,348
|
|
|
—
|
|
|
—
|
|
|
43,348
|
|
||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,977
|
)
|
|
—
|
|
|
(11,977
|
)
|
||||||
Balance, December 31, 2014
|
154,324
|
|
|
1,543
|
|
|
3,666,182
|
|
|
(1,365,620
|
)
|
|
8,301
|
|
|
1,609
|
|
|
2,312,015
|
|
||||||
Share repurchases as part of an announced plan
|
(8,980
|
)
|
|
(90
|
)
|
|
—
|
|
|
(158,770
|
)
|
|
—
|
|
|
—
|
|
|
(158,860
|
)
|
||||||
Offering costs
|
—
|
|
|
—
|
|
|
(326
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(326
|
)
|
||||||
Redemption of noncontrolling interest in consolidated variable interest entity
|
—
|
|
|
—
|
|
|
54
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
54
|
|
||||||
Reallocation of noncontrolling interest of subsidiary
|
—
|
|
|
—
|
|
|
1,128
|
|
|
—
|
|
|
—
|
|
|
(584
|
)
|
|
544
|
|
||||||
Dividends to common stockholders ($0.84 per share), dividends to preferred stockholders of subsidiary, and dividends reinvested
|
—
|
|
|
—
|
|
|
(242
|
)
|
|
(126,274
|
)
|
|
—
|
|
|
(15
|
)
|
|
(126,531
|
)
|
||||||
Shares issued and amortized under the 2007 Omnibus Incentive Plan, net of tax
|
168
|
|
|
2
|
|
|
3,181
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,183
|
|
||||||
Net income applicable to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15
|
|
|
15
|
|
||||||
Net income applicable to Piedmont
|
—
|
|
|
—
|
|
|
—
|
|
|
172,990
|
|
|
—
|
|
|
—
|
|
|
172,990
|
|
||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,640
|
)
|
|
—
|
|
|
(6,640
|
)
|
||||||
Balance, December 31, 2015
|
145,512
|
|
|
1,455
|
|
|
3,669,977
|
|
|
(1,477,674
|
)
|
|
1,661
|
|
|
1,025
|
|
|
2,196,444
|
|
||||||
Share repurchases as part of an announced plan
|
(462
|
)
|
|
(5
|
)
|
|
—
|
|
|
(7,938
|
)
|
|
—
|
|
|
—
|
|
|
(7,943
|
)
|
||||||
Offering costs
|
—
|
|
|
—
|
|
|
(342
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(342
|
)
|
||||||
Noncontrolling interest in consolidated joint venture
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
888
|
|
|
888
|
|
||||||
Dividends to common stockholders ($0.84 per share), dividends to preferred stockholders of subsidiary, and dividends reinvested
|
—
|
|
|
—
|
|
|
(173
|
)
|
|
(121,959
|
)
|
|
—
|
|
|
(16
|
)
|
|
(122,148
|
)
|
||||||
Shares issued and amortized under the 2007 Omnibus Incentive Plan, net of tax
|
185
|
|
|
2
|
|
|
3,666
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,668
|
|
||||||
Net loss applicable to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15
|
)
|
|
(15
|
)
|
||||||
Net income applicable to Piedmont
|
—
|
|
|
—
|
|
|
—
|
|
|
107,887
|
|
|
—
|
|
|
—
|
|
|
107,887
|
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
443
|
|
|
—
|
|
|
443
|
|
||||||
Balance, December 31, 2016
|
145,235
|
|
|
$
|
1,452
|
|
|
$
|
3,673,128
|
|
|
$
|
(1,499,684
|
)
|
|
$
|
2,104
|
|
|
$
|
1,882
|
|
|
$
|
2,178,882
|
|
|
Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Cash Flows from Operating Activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
107,872
|
|
|
$
|
173,005
|
|
|
$
|
43,363
|
|
Operating distributions received from unconsolidated joint ventures
|
579
|
|
|
774
|
|
|
266
|
|
|||
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation
|
127,733
|
|
|
134,503
|
|
|
138,679
|
|
|||
Amortization of debt issuance costs
|
1,702
|
|
|
1,768
|
|
|
1,578
|
|
|||
Gain/(loss) on settlement of forward starting interest rate swaps
|
—
|
|
|
(1,284
|
)
|
|
14,960
|
|
|||
Other amortization
|
74,373
|
|
|
61,221
|
|
|
56,327
|
|
|||
Impairment loss on real estate assets
|
30,898
|
|
|
40,169
|
|
|
—
|
|
|||
Stock compensation expense
|
7,928
|
|
|
8,789
|
|
|
5,250
|
|
|||
Equity in loss/(income) of unconsolidated joint ventures
|
(362
|
)
|
|
(553
|
)
|
|
350
|
|
|||
Gain on sale of real estate assets, net
|
(98,562
|
)
|
|
(168,237
|
)
|
|
(2,330
|
)
|
|||
Retirement of shares returned from escrow
|
—
|
|
|
—
|
|
|
(1,479
|
)
|
|||
Changes in assets and liabilities:
|
|
|
|
|
|
||||||
Increase in tenant and straight-line rent receivables, net
|
(26,747
|
)
|
|
(29,478
|
)
|
|
(40,505
|
)
|
|||
Decrease/(increase) in restricted cash and escrows
|
3,229
|
|
|
(5,256
|
)
|
|
(135
|
)
|
|||
Decrease/(increase) in prepaid expenses and other assets
|
1,996
|
|
|
(828
|
)
|
|
(1,884
|
)
|
|||
Increase/(decrease) in accounts payable and accrued expenses
|
3,729
|
|
|
(162
|
)
|
|
2,995
|
|
|||
Increase/(decrease) in deferred income
|
1,441
|
|
|
4,613
|
|
|
(277
|
)
|
|||
Net cash provided by operating activities
|
235,809
|
|
|
219,044
|
|
|
217,158
|
|
|||
Cash Flows from Investing Activities:
|
|
|
|
|
|
||||||
Acquisition of real estate assets, net of related debt assumed, and intangibles
|
(349,668
|
)
|
|
(382,773
|
)
|
|
(117,418
|
)
|
|||
Net cash held in escrow for acquisitions
|
—
|
|
|
—
|
|
|
(5,150
|
)
|
|||
Capitalized expenditures, net of accruals
|
(110,228
|
)
|
|
(118,671
|
)
|
|
(168,891
|
)
|
|||
Redemption of noncontrolling interest in unconsolidated variable interest entity
|
—
|
|
|
(4,000
|
)
|
|
—
|
|
|||
Net sale proceeds from wholly-owned properties
|
365,918
|
|
|
848,169
|
|
|
46,232
|
|
|||
Net sale proceeds received from unconsolidated joint ventures
|
—
|
|
|
—
|
|
|
6,017
|
|
|||
Investments in unconsolidated joint ventures
|
—
|
|
|
—
|
|
|
(42
|
)
|
|||
Deferred lease costs paid
|
(25,896
|
)
|
|
(37,683
|
)
|
|
(27,694
|
)
|
|||
Net cash provided by/(used in) investing activities
|
(119,874
|
)
|
|
305,042
|
|
|
(266,946
|
)
|
|||
Cash Flows from Financing Activities:
|
|
|
|
|
|
||||||
Debt issuance costs paid
|
(264
|
)
|
|
(1,081
|
)
|
|
(1,294
|
)
|
|||
Proceeds from debt
|
695,000
|
|
|
1,301,858
|
|
|
1,052,527
|
|
|||
Repayments of debt
|
(706,875
|
)
|
|
(1,544,301
|
)
|
|
(813,702
|
)
|
|||
Discount paid due to loan modification
|
—
|
|
|
—
|
|
|
(1,135
|
)
|
|||
Costs of issuance of common stock
|
(342
|
)
|
|
(326
|
)
|
|
—
|
|
|||
Shares withheld to pay tax obligations related to employee stock compensation
|
(2,344
|
)
|
|
(1,710
|
)
|
|
(1,275
|
)
|
|||
Repurchases of common stock as part of announced plan
|
(7,943
|
)
|
|
(158,860
|
)
|
|
(54,802
|
)
|
|||
Dividends paid and discount on dividend reinvestments
|
(91,616
|
)
|
|
(126,531
|
)
|
|
(125,198
|
)
|
|||
Net cash provided by/(used in) financing activities
|
(114,384
|
)
|
|
(530,951
|
)
|
|
55,121
|
|
|||
Net increase/(decrease) in cash and cash equivalents
|
1,551
|
|
|
(6,865
|
)
|
|
5,333
|
|
|||
Cash and cash equivalents, beginning of year
|
5,441
|
|
|
12,306
|
|
|
6,973
|
|
|||
Cash and cash equivalents, end of year
|
$
|
6,992
|
|
|
$
|
5,441
|
|
|
$
|
12,306
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||
Intangible Lease Assets:
|
|
|
|
||||
Above-Market In-Place Lease Assets
|
$
|
25,425
|
|
|
$
|
23,684
|
|
In-Place Lease Valuation
|
$
|
183,422
|
|
|
$
|
153,991
|
|
Intangible Lease Origination Costs (included as component of Deferred Lease Costs)
|
$
|
261,075
|
|
|
$
|
208,497
|
|
Intangible Lease Liabilities (Below-Market In-Place Leases)
|
$
|
97,230
|
|
|
$
|
85,168
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Amortization of Intangible Lease Origination Costs and In-Place Lease Valuation included in amortization expense
|
$
|
58,150
|
|
|
$
|
42,278
|
|
|
$
|
36,007
|
|
Amortization of Above-Market and Below-Market In-Place Lease intangibles as a net increase to rental revenues
|
$
|
5,066
|
|
|
$
|
4,571
|
|
|
$
|
4,727
|
|
|
Intangible Lease Assets
|
|
|
|
|
||||||||||
|
Above-Market
In-place Lease Assets |
|
In-Place Lease Valuation
|
|
Intangible Lease
Origination Costs
(1)
|
|
Below-Market
In-place Lease
Liabilities
|
||||||||
For the year ending December 31:
|
|
|
|
|
|
|
|
||||||||
2017
|
$
|
2,590
|
|
|
$
|
24,511
|
|
|
$
|
33,791
|
|
|
$
|
9,138
|
|
2018
|
1,600
|
|
|
17,980
|
|
|
27,156
|
|
|
8,470
|
|
||||
2019
|
910
|
|
|
13,646
|
|
|
22,205
|
|
|
7,270
|
|
||||
2020
|
156
|
|
|
9,614
|
|
|
16,786
|
|
|
5,670
|
|
||||
2021
|
104
|
|
|
8,447
|
|
|
14,731
|
|
|
5,468
|
|
||||
Thereafter
|
227
|
|
|
19,910
|
|
|
36,451
|
|
|
11,989
|
|
||||
|
$
|
5,587
|
|
|
$
|
94,108
|
|
|
$
|
151,120
|
|
|
$
|
48,005
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-Average Amortization Period (in years)
|
3
|
|
|
6
|
|
|
7
|
|
|
7
|
|
(1)
|
Included as a component of Deferred Lease Costs in the accompanying consolidated balance sheets.
|
•
|
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;
|
•
|
deferred common area maintenance costs which will be reimbursed by tenants over specified time periods;
|
•
|
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 and property management office space, net of accumulated depreciation.
|
•
|
Approximately
$50.1 million
,
$42.5 million
, and
$40.9 million
of deferred lease costs for the years ended
December 31, 2016
,
2015
, and
2014
, respectively, are included in amortization expense; and
|
•
|
Approximately
$3.9 million
,
$4.7 million
, and
$4.2 million
, of deferred lease costs related to lease incentives granted to tenants for the years ended
December 31, 2016
,
2015
, and
2014
, respectively, was included as an offset to rental income.
|
•
|
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.
|
Property
|
|
Metropolitan Statistical Area
|
|
Date of Acquisition
|
|
Ownership Percentage Acquired
|
|
Rentable Square Feet (Unaudited)
|
|
Percentage Leased as of Acquisition (Unaudited)
|
|
Net Contractual Purchase Price
(in millions)
|
|||||
CNL Center I and CNL Center II
|
|
Orlando, Florida
|
|
August 1, 2016
|
|
99
|
%
|
|
622,488
|
|
|
95
|
%
|
|
$
|
166.7
|
|
One Wayside Road
|
|
Boston, Massachusetts
|
|
August 10, 2016
|
|
100
|
%
|
|
200,605
|
|
|
100
|
%
|
|
$
|
62.9
|
|
Galleria 200
|
|
Atlanta, Georgia
|
|
October 7, 2016
|
|
100
|
%
|
|
431,614
|
|
|
89
|
%
|
|
$
|
69.6
|
|
750 West John Carpenter Freeway
|
(1)
|
Dallas, Texas
|
|
November 30, 2016
|
|
100
|
%
|
|
314,714
|
|
|
78
|
%
|
|
$
|
50.6
|
|
(1)
|
Including
3.5
acres of adjacent developable land.
|
Joint Venture
|
|
Property Held by Joint Venture
|
|
Piedmont’s
Ownership
|
|
Piedmont's Investment in Unconsolidated Joint Venture
|
||||||
|
|
|
|
|
|
2016
|
|
2015
|
||||
Fund XIII and REIT Joint Venture
|
|
8560 Upland Drive
|
|
72%
|
|
$
|
7,360
|
|
|
$
|
7,368
|
|
Facility
(1)
|
|
Stated Rate
|
|
Effective Rate
(2)
|
|
Maturity
|
|
Amount Outstanding as of
|
||||||||
|
2016
|
|
2015
|
|||||||||||||
Secured (Fixed)
|
|
|
|
|
|
|
|
|
|
|
||||||
$125 Million Fixed-Rate Loan
|
|
5.50
|
%
|
|
5.50
|
%
|
|
4/1/2016
|
|
$
|
—
|
|
|
$
|
125,000
|
|
$42.5 Million Fixed-Rate Loan
|
|
5.70
|
%
|
|
5.70
|
%
|
|
10/11/2016
|
|
—
|
|
|
42,525
|
|
||
$140 Million WDC Fixed-Rate Loans
(3)
|
|
5.76
|
%
|
|
5.76
|
%
|
|
11/1/2017
|
|
140,000
|
|
|
140,000
|
|
||
$35 Million Fixed-Rate Loan
(4)
|
|
5.55
|
%
|
|
3.75
|
%
|
|
9/1/2021
|
|
31,583
|
|
|
32,445
|
|
||
$160 Million Fixed-Rate Loan
(5)
|
|
3.48
|
%
|
|
3.58
|
%
|
|
7/5/2022
|
|
160,000
|
|
|
160,000
|
|
||
Net premium and unamortized debt issuance costs
|
|
|
|
|
|
|
|
1,161
|
|
|
1,319
|
|
||||
Subtotal/Weighted Average
(6)
|
|
4.64
|
%
|
|
|
|
|
|
332,744
|
|
|
501,289
|
|
|||
Unsecured (Variable and Fixed)
|
|
|
|
|
|
|
|
|
|
|
||||||
$170 Million Unsecured 2015 Term Loan
(7)
|
|
LIBOR + 1.125%
|
|
|
1.78
|
%
|
|
5/15/2018
|
|
170,000
|
|
|
170,000
|
|
||
$300 Million Unsecured 2013 Term Loan
|
|
LIBOR + 1.20%
|
|
|
2.78
|
%
|
|
1/31/2019
|
|
300,000
|
|
|
300,000
|
|
||
$500 Million Unsecured 2015 Line of Credit
(7)
|
|
LIBOR + 1.00%
|
|
|
1.74
|
%
|
|
6/18/2019
|
(8)
|
178,000
|
|
|
21,000
|
|
||
$300 Million Unsecured 2011 Term Loan
|
|
LIBOR + 1.15%
|
|
|
3.35
|
%
|
|
1/15/2020
|
|
300,000
|
|
|
300,000
|
|
||
$350 Million Unsecured Senior Notes
|
|
3.40
|
%
|
|
3.43
|
%
|
|
6/01/2023
|
|
350,000
|
|
|
350,000
|
|
||
$400 Million Unsecured Senior Notes
|
|
4.45
|
%
|
|
4.10
|
%
|
|
3/15/2024
|
|
400,000
|
|
|
400,000
|
|
||
Discounts and unamortized debt issuance costs
|
|
|
|
|
|
|
|
(10,269)
|
|
|
(12,779)
|
|
||||
Subtotal/Weighted Average
(6)
|
|
3.19
|
%
|
|
|
|
|
|
1,687,731
|
|
|
1,528,221
|
|
|||
Total/Weighted Average
(6)
|
|
3.43
|
%
|
|
|
|
|
|
$
|
2,020,475
|
|
|
$
|
2,029,510
|
|
(1)
|
Other than the
$35 Million
Fixed-Rate Loan, all of Piedmont’s outstanding debt as of
December 31, 2016
and
2015
is interest-only.
|
(2)
|
Effective rate after consideration of settled or in place interest rate swap agreements and/or issuance premiums or discounts.
|
(3)
|
Collateralized by the 1201 and 1225 Eye Street buildings in Washington, D.C.
|
(4)
|
Collateralized by the 5 Wall Street building in Burlington, Massachusetts.
|
(5)
|
Collateralized by the 1901 Market Street building in Philadelphia, Pennsylvania.
|
(6)
|
Weighted average is based on contractual balance of outstanding debt and the stated or effectively fixed interest rates in the table as of
December 31, 2016
.
|
(7)
|
On a periodic basis, Piedmont may select from multiple interest rate options, including the prime rate and various-length LIBOR locks. All LIBOR selections are subject to an additional spread over the selected rate based on Piedmont’s current credit rating.
|
(8)
|
Piedmont may extend the term for up to
one
additional year (through
two
available
six
month extensions to a final extended maturity date of June 18, 2020) provided Piedmont is not then in default and upon payment of extension fees.
|
2017
|
$
|
140,834
|
|
|
2018
|
170,960
|
|
|
|
2019
|
479,014
|
|
(1)
|
|
2020
|
301,072
|
|
|
|
2021
|
27,702
|
|
|
|
Thereafter
|
910,000
|
|
|
|
Total
|
$
|
2,029,582
|
|
|
(1)
|
Includes the balance outstanding as of
December 31, 2016
of the
$500 Million
Unsecured 2015 Line of Credit. However, Piedmont may extend the term for up to
one
additional year (through
two
available
six
month extensions to a final extended maturity date of June 18, 2020) provided Piedmont is not then in default and upon payment of extension fees.
|
Entity
|
Piedmont’s
%
Ownership
of Entity
|
|
Related
Building
|
|
Consolidated/
Unconsolidated
|
|
Net Carrying Amount as of
December 31,
2016
|
|
Net Carrying Amount as of
December 31,
2015
|
|
Primary Beneficiary
Considerations
|
|||||
1201 Eye Street N.W. Associates, LLC
|
49.5
|
%
|
|
1201 Eye
Street
|
|
Consolidated
|
|
$
|
(6.7
|
)
|
|
$
|
(7.4
|
)
|
|
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 N.W. Associates, LLC
|
49.5
|
%
|
|
1225 Eye
Street
|
|
Consolidated
|
|
$
|
9.9
|
|
|
$
|
3.8
|
|
|
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 500 W. Monroe Fee, LLC
|
100
|
%
|
|
500 W. Monroe
|
|
Consolidated
|
|
$
|
262.4
|
|
|
$
|
251.4
|
|
|
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 100% of the economic benefits of the property until such returns are met.
|
Interest Rate Derivatives:
|
|
Number of Swap Agreements
|
|
Associated Debt Instrument
|
|
Notional Amount
(in millions)
|
|
Effective Date
|
|
Maturity Date
|
||
Interest rate swaps
|
|
4
|
|
$300 Million Unsecured 2013 Term Loan
|
|
200
|
|
|
1/30/2014
|
|
1/31/2019
|
|
Interest rate swaps
|
|
2
|
|
$300 Million Unsecured 2013 Term Loan
|
|
100
|
|
|
8/29/2014
|
|
1/31/2019
|
|
Interest rate swaps
|
|
3
|
|
$300 Million Unsecured 2011 Term Loan
|
|
300
|
|
|
11/22/2016
|
|
1/15/2020
|
|
Total
|
|
|
|
|
|
$
|
600
|
|
|
|
|
|
Interest rate swaps classified as:
|
2016
|
|
2015
|
||||
Gross derivative assets
|
$
|
—
|
|
|
$
|
—
|
|
Gross derivative liabilities
|
8,169
|
|
|
9,993
|
|
||
Net derivative liability
|
$
|
8,169
|
|
|
$
|
9,993
|
|
Interest Rate Swaps in Cash Flow Hedging Relationships
|
2016
|
|
2015
|
|
2014
|
||||||
Amount of gain/(loss) recognized in OCI on derivatives
|
$
|
(4,126
|
)
|
|
$
|
(12,509
|
)
|
|
$
|
(17,122
|
)
|
Amount of previously recorded loss reclassified from accumulated OCI into interest expense
|
$
|
4,548
|
|
|
$
|
5,875
|
|
|
$
|
5,145
|
|
|
2016
|
|
2015
|
||||||||||||||||
Financial Instrument
|
Carrying Value
|
|
Estimated
Fair Value
|
|
Level Within Fair Value Hierarchy
|
|
Carrying Value
|
|
Estimated
Fair Value
|
|
Level Within Fair Value Hierarchy
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
(1)
|
$
|
6,992
|
|
|
$
|
6,992
|
|
|
Level 1
|
|
$
|
5,441
|
|
|
$
|
5,441
|
|
|
Level 1
|
Tenant receivables, net
(1)
|
$
|
26,494
|
|
|
$
|
26,494
|
|
|
Level 1
|
|
$
|
26,339
|
|
|
$
|
26,339
|
|
|
Level 1
|
Notes receivable
(1)
|
$
|
—
|
|
|
$
|
—
|
|
|
Level 1
|
|
$
|
45,400
|
|
|
$
|
45,400
|
|
|
Level 1
|
Restricted cash and escrows
(1)
|
$
|
1,212
|
|
|
$
|
1,212
|
|
|
Level 1
|
|
$
|
5,174
|
|
|
$
|
5,174
|
|
|
Level 1
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Accounts payable and accrued expenses
(1)
|
$
|
44,733
|
|
|
$
|
44,733
|
|
|
Level 1
|
|
$
|
13,188
|
|
|
$
|
13,188
|
|
|
Level 1
|
Interest rate swap liability
|
$
|
8,169
|
|
|
$
|
8,169
|
|
|
Level 2
|
|
$
|
9,993
|
|
|
$
|
9,993
|
|
|
Level 2
|
Debt, net
|
$
|
2,020,475
|
|
|
$
|
2,027,436
|
|
|
Level 2
|
|
$
|
2,029,510
|
|
|
$
|
2,039,139
|
|
|
Level 2
|
(1)
|
For the periods presented, the carrying value of these financial instruments approximates estimated fair value due to its short-term maturity.
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Eastpoint I & II
(1)
|
|
$
|
—
|
|
|
$
|
5,354
|
|
|
$
|
—
|
|
2 Gatehall Drive
(1)
|
|
—
|
|
|
34,815
|
|
|
—
|
|
|||
150 West Jefferson
(1)
|
|
5,972
|
|
|
—
|
|
|
—
|
|
|||
9221 Corporate Boulevard
(2)
|
|
2,336
|
|
|
—
|
|
|
—
|
|
|||
9200 and 9211 Corporate Boulevard
(3)
|
|
22,590
|
|
|
—
|
|
|
—
|
|
|||
Total impairment loss on real estate assets
(4)
|
|
$
|
30,898
|
|
|
$
|
40,169
|
|
|
$
|
—
|
|
(1)
|
Piedmont recognized an impairment loss on real estate assets based upon the difference between the carrying value of the asset and the contracted sales price, less estimated selling costs.
|
(2)
|
Piedmont, using a probability-weighted model heavily weighted towards the short-term sale of the 9221 Corporate Boulevard building in Rockville, Maryland, determined that the carrying value would not be recovered from the undiscounted future operating cash flows expected from the use of the asset and its eventual disposition. As a result, Piedmont recognized a loss on impairment of approximately
$2.3 million
during the year ended December 31, 2016 calculated as the difference between the carrying value of the asset and the anticipated contract sales price, less estimated selling costs.
|
(3)
|
Piedmont elected to sell its remaining
two
assets and exit the Rockville, Maryland sub-market of Washington, D.C, after selling the 9221 Corporate Boulevard building in July 2016 (mentioned above). Upon management's change in its hold period assumption for the assets from a long-term hold to a near-term sale, Piedmont recognized an impairment loss of approximately
$22.6 million
. The impairment loss was calculated as the difference between the carrying value of the asset and the anticipated contracted sales price, less estimated selling costs.
|
(4)
|
The fair value measurements used in the evaluation of the non-financial assets above are considered to be Level 1 valuations within the fair value hierarchy as defined by GAAP, as there are direct observations and transactions involving the assets by unrelated, third-party purchasers.
|
|
2017
|
$
|
93
|
|
|
2018
|
93
|
|
|
|
2019
|
93
|
|
|
|
2020
|
93
|
|
|
|
2021
|
93
|
|
|
|
Thereafter
|
2,439
|
|
|
|
Total
|
$
|
2,904
|
|
|
Shares
|
|
Weighted-Average Grant Date Fair Value
|
|||
Unvested and Potential Stock Awards as of December 31, 2015
|
959,446
|
|
|
$
|
18.67
|
|
Deferred Stock Awards Granted
|
319,083
|
|
|
$
|
19.96
|
|
Decrease in Estimated Potential Future Performance Share Awards, net of forfeitures
|
(2,358
|
)
|
|
$
|
21.22
|
|
Performance Stock Awards Vested
|
(53,287
|
)
|
|
$
|
18.91
|
|
Deferred Stock Awards Vested
|
(258,776
|
)
|
|
$
|
18.57
|
|
Deferred Stock Awards Forfeited
|
(19,885
|
)
|
|
$
|
18.29
|
|
Unvested and Potential Stock Awards as of December 31, 2016
|
944,223
|
|
|
$
|
19.44
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Weighted-Average Grant Date Fair Value of Deferred Stock Granted During the Period (per share)
|
$
|
19.96
|
|
|
$
|
17.59
|
|
|
$
|
17.78
|
|
Total Grant Date Fair Value of Deferred Stock Vested During the Period
|
$
|
4,806
|
|
|
$
|
4,239
|
|
|
$
|
3,353
|
|
Share-based Liability Awards Paid During the Period
(1)
|
$
|
1,127
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(1)
|
Amounts reflect the issuance of performance share awards related to the 2013-15 Performance Share Plan during the period.
|
(1)
|
Amounts reflect the total grant to employees and independent directors, net of shares surrendered upon vesting to satisfy required minimum tax withholding obligations through
December 31, 2016
.
|
(2)
|
Estimated based on Piedmont's cumulative TSR for the respective performance period through
December 31, 2016
. Share estimates are subject to change in future periods based on both Piedmont's and its peers' stock performance and dividends paid.
|
|
2016
|
|
2015
|
|
2014
|
|||
Weighted-average common shares—basic
|
145,230
|
|
|
150,538
|
|
|
154,452
|
|
Plus incremental weighted-average shares from time-vested conversions:
|
|
|
|
|
|
|||
Deferred and performance stock awards
|
405
|
|
|
342
|
|
|
133
|
|
Weighted-average common shares—diluted
|
145,635
|
|
|
150,880
|
|
|
154,585
|
|
|
|
|
|
|
|
|||
Common stock issued and outstanding as of period end
|
145,235
|
|
|
145,512
|
|
|
154,324
|
|
Buildings Sold
|
|
Location
|
|
Date of Sale
|
|
Gain/(Loss) on Sale
|
|
Net Sales Proceeds
|
|
||||
2020 West 89th Street
|
|
Leawood, Kansas
|
|
May 19, 2014
|
|
$
|
1,132
|
|
|
$
|
5,515
|
|
|
Two Park Center
(1)
|
|
Hoffman Estates, Illinois
|
|
May 29, 2014
|
|
$
|
(169
|
)
|
|
$
|
6,017
|
|
|
3900 Dallas Parkway
|
|
Plano, Texas
|
|
January 30, 2015
|
|
$
|
10,073
|
|
|
$
|
25,803
|
|
|
5601 Headquarters Drive
|
|
Plano, Texas
|
|
April 28, 2015
|
|
$
|
7,959
|
|
|
$
|
33,326
|
|
|
River Corporate Center
|
|
Tempe, Arizona
|
|
April 29, 2015
|
|
$
|
5,297
|
|
|
$
|
24,223
|
|
|
Copper Ridge Center
|
|
Lyndhurst, New Jersey
|
|
May 1, 2015
|
|
$
|
13,727
|
|
|
$
|
50,372
|
|
(2)
|
Eastpoint I & II
|
|
Mayfield Heights, Ohio
|
|
July 28, 2015
|
|
$
|
(177
|
)
|
(4)
|
$
|
17,342
|
|
|
3750 Brookside Parkway
|
|
Alpharetta, Georgia
|
|
August 10, 2015
|
|
$
|
1,406
|
|
|
$
|
13,624
|
|
|
Chandler Forum
|
|
Chandler, Arizona
|
|
September 1, 2015
|
|
$
|
15,506
|
|
|
$
|
32,267
|
|
|
Aon Center
|
|
Chicago, Illinois
|
|
October 29, 2015
|
|
$
|
114,202
|
|
|
$
|
646,243
|
|
|
2 Gatehall Drive
|
|
Parsippany, New Jersey
|
|
December 21, 2015
|
|
$
|
162
|
|
(4)
|
$
|
50,369
|
|
|
1055 East Colorado Boulevard
|
|
Pasadena, California
|
|
April 21, 2016
|
|
$
|
31,501
|
|
|
$
|
60,076
|
|
|
Fairway Center II
|
|
Brea, California
|
|
April 28, 2016
|
|
$
|
15,468
|
|
|
$
|
33,062
|
|
|
1901 Main Street
|
|
Irvine, California
|
|
May 2, 2016
|
|
$
|
32,015
|
|
|
$
|
63,149
|
|
(3)
|
9221 Corporate Boulevard
|
|
Rockville, Maryland
|
|
July 27, 2016
|
|
$
|
(192
|
)
|
(4)
|
$
|
12,035
|
|
|
150 West Jefferson
|
|
Detroit, Michigan
|
|
July 29, 2016
|
|
$
|
(664
|
)
|
(4)
|
$
|
77,844
|
|
|
9200 and 9211 Corporate Boulevard
|
|
Rockville, Maryland
|
|
September 28, 2016
|
|
$
|
(41
|
)
|
(4)
|
$
|
12,519
|
|
|
11695 Johns Creek Parkway
|
|
Johns Creek, Georgia
|
|
December 22, 2016
|
|
$
|
1,978
|
|
|
$
|
13,827
|
|
|
Braker Pointe III
|
|
Austin, Texas
|
|
December 29, 2016
|
|
$
|
18,579
|
|
|
$
|
48,006
|
|
|
(1)
|
Property was owned as part of the unconsolidated joint venture, Fund XIII and REIT Joint Venture. As such, the loss on sale was presented as equity in income/(loss) of unconsolidated joint ventures.
|
(2)
|
As part of the transaction, Piedmont accepted a secured promissory note from the buyer for the remaining
$45.4 million
owed on the sale. During the year ended December 31, 2016, the note receivable was repaid in full and such proceeds are reflected in the accompanying consolidated statements of cash flows as net sales proceeds from the sale of wholly-owned properties.
|
(3)
|
As part of the transaction, Piedmont accepted a secured promissory note from the buyer for
$33.0 million
, and the note receivable was repaid in full during the year ended December 31, 2016. As such, the full proceeds from the sale of the property are reflected in the accompanying consolidated statements of cash flows as net sales proceeds from the sale of wholly-owned properties.
|
(4)
|
As discussed in
Note 9
above, Piedmont recognized an impairment loss prior to, or in conjunction with, the sale of the property. Therefore, any gain/(loss) recognized upon the consummation of the sale consists solely of adjustments made subsequent to the sale for closing cost estimates or post-closing prorations.
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||
Real estate assets held for sale, net:
|
|
|
|
|
||||
Land
|
|
$
|
—
|
|
|
$
|
9,759
|
|
Building and improvements, less accumulated depreciation of $0 and $32,162 as of December 31, 2016, and 2015, respectively
|
|
—
|
|
|
66,840
|
|
||
Construction in progress
|
|
—
|
|
|
15
|
|
||
Total real estate assets held for sale, net
|
|
$
|
—
|
|
|
$
|
76,614
|
|
|
|
|
|
|
||||
Other assets held for sale, net:
|
|
|
|
|
||||
Straight-line rent receivables
|
|
$
|
—
|
|
|
$
|
4,729
|
|
Prepaid expenses and other assets
|
|
—
|
|
|
66
|
|
||
Deferred lease costs, less accumulated amortization of $0 and $1,162 as of December 31, 2016 and 2015, respectively
|
|
—
|
|
|
3,695
|
|
||
Total other assets held for sale, net
|
|
$
|
—
|
|
|
$
|
8,490
|
|
Building Sold
|
|
Location
|
|
Date of Sale
|
|
Gain/(Loss) on Sale
|
|
Net Sales Proceeds
|
||||
11107 and 11109 Sunset Hills Road
|
|
Reston, Virginia
|
|
March 19, 2014
|
|
$
|
(102
|
)
|
|
$
|
22,326
|
|
1441 West Long Lake Road
|
|
Troy, Michigan
|
|
April 30, 2014
|
|
$
|
562
|
|
|
$
|
7,202
|
|
4685 Investment Drive
|
|
Troy, Michigan
|
|
April 30, 2014
|
|
$
|
747
|
|
|
$
|
11,198
|
|
|
Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Revenues:
|
|
|
|
|
|
||||||
Rental income
|
$
|
—
|
|
|
$
|
19
|
|
|
$
|
1,365
|
|
Tenant reimbursements
|
—
|
|
|
64
|
|
|
125
|
|
|||
Property management fee revenue
|
—
|
|
|
—
|
|
|
1
|
|
|||
|
—
|
|
|
83
|
|
|
1,491
|
|
|||
Expenses:
|
|
|
|
|
|
||||||
Property operating costs
|
—
|
|
|
(1
|
)
|
|
225
|
|
|||
Depreciation
|
—
|
|
|
—
|
|
|
83
|
|
|||
Amortization
|
—
|
|
|
—
|
|
|
223
|
|
|||
|
—
|
|
|
(1
|
)
|
|
531
|
|
|||
Other income (expense):
|
|
|
|
|
|
||||||
Other income/(expense)
|
—
|
|
|
—
|
|
|
(6
|
)
|
|||
|
—
|
|
|
—
|
|
|
(6
|
)
|
|||
Operating income, excluding gain/(loss) on sale of real estate assets
|
—
|
|
|
84
|
|
|
954
|
|
|||
Gain/(loss) on sale of real estate assets
|
—
|
|
|
(1
|
)
|
|
1,198
|
|
|||
Income from discontinued operations
|
$
|
—
|
|
|
$
|
83
|
|
|
$
|
2,152
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Accrued capital expenditures and deferred lease costs
|
$
|
14,427
|
|
|
$
|
20,630
|
|
|
$
|
19,896
|
|
Accrued dividends and discount on dividend reinvestments
|
$
|
30,532
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Escrowed cash from prior year applied to acquisitions in the current year
|
$
|
—
|
|
|
$
|
(5,050
|
)
|
|
$
|
—
|
|
Change in accrued share repurchases as part of an announced plan
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(2,006
|
)
|
|
2016
|
|
2015
|
|
2014
|
||||||
GAAP basis financial statement net income
|
$
|
107,887
|
|
|
$
|
172,990
|
|
|
$
|
43,348
|
|
Increase (decrease) in net income resulting from:
|
|
|
|
|
|
||||||
Depreciation and amortization expense recognized for financial reporting purposes in excess of amounts recognized for income tax purposes
|
69,214
|
|
|
(1,717
|
)
|
|
50,810
|
|
|||
Rental income accrued for income tax purposes less than amounts for financial reporting purposes
|
(18,964
|
)
|
|
(12,123
|
)
|
|
(28,504
|
)
|
|||
Net amortization of above/below-market lease intangibles for income tax purposes in excess of amounts for financial reporting purposes
|
(4,895
|
)
|
|
(4,614
|
)
|
|
(4,705
|
)
|
|||
Gain on disposal of property for financial reporting purposes in excess of amounts for income tax purposes
|
(123,865
|
)
|
|
(82,047
|
)
|
|
(29,558
|
)
|
|||
Taxable income/(loss) of Piedmont Washington Properties, Inc., in excess of amount for financial reporting purposes
|
(1,042
|
)
|
|
2,491
|
|
|
(468
|
)
|
|||
Other expenses, including impairment loss on real estate assets, for financial reporting purposes in excess of amounts for income tax purposes
|
39,016
|
|
|
51,293
|
|
|
5,727
|
|
|||
Taxable income for Piedmont Office Holdings, Inc. in excess of amount for financial reporting purposes
|
648
|
|
|
—
|
|
|
—
|
|
|||
Income tax basis net income, prior to dividends paid deduction
|
$
|
67,999
|
|
|
$
|
126,273
|
|
|
$
|
36,650
|
|
|
2016
|
|
2015
|
|
2014
|
|||
Ordinary income
|
81.77
|
%
|
|
31.75
|
%
|
|
29.32
|
%
|
Return of capital
|
18.23
|
%
|
|
—
|
%
|
|
70.68
|
%
|
Capital gains
|
—
|
%
|
|
68.25
|
%
|
|
—
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
2016
|
||||||||||||||
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
||||||||
Revenues
|
$
|
138,012
|
|
|
$
|
135,307
|
|
|
$
|
138,485
|
|
|
$
|
143,911
|
|
Real estate operating income
|
$
|
26,372
|
|
|
$
|
17,433
|
|
|
$
|
3,349
|
|
|
$
|
26,633
|
|
Income/(loss) from continuing operations
|
$
|
10,396
|
|
|
$
|
1,090
|
|
|
$
|
(12,705
|
)
|
|
$
|
10,529
|
|
Income/(loss) from discontinued operations
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
1
|
|
|
$
|
—
|
|
Gain/(loss) on sale of real estate assets
|
$
|
(20
|
)
|
|
$
|
78,987
|
|
|
$
|
(57
|
)
|
|
$
|
19,652
|
|
Net income/(loss) applicable to Piedmont
|
$
|
10,372
|
|
|
$
|
80,072
|
|
|
$
|
(12,746
|
)
|
|
$
|
30,189
|
|
Basic and diluted earnings/(loss) per share
|
$
|
0.07
|
|
|
$
|
0.55
|
|
|
$
|
(0.09
|
)
|
|
$
|
0.21
|
|
Dividends declared per share
|
$
|
0.21
|
|
|
$
|
0.21
|
|
|
$
|
0.21
|
|
|
$
|
0.21
|
|
|
2015
|
||||||||||||||
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
||||||||
Revenues
|
$
|
149,759
|
|
|
$
|
146,734
|
|
|
$
|
148,815
|
|
|
$
|
139,461
|
|
Real estate operating income/(loss)
|
$
|
28,214
|
|
|
$
|
20,824
|
|
|
$
|
(1,133
|
)
|
|
$
|
28,938
|
|
Income/(loss) from continuing operations
|
$
|
9,176
|
|
|
$
|
3,372
|
|
|
$
|
(19,027
|
)
|
|
$
|
11,164
|
|
Income/(loss) from discontinued operations
|
$
|
—
|
|
|
$
|
(3
|
)
|
|
$
|
14
|
|
|
$
|
72
|
|
Gain on sale of real estate assets
|
$
|
10,073
|
|
|
$
|
26,611
|
|
|
$
|
17,142
|
|
|
$
|
114,411
|
|
Net income/(loss) applicable to Piedmont
|
$
|
19,245
|
|
|
$
|
29,976
|
|
|
$
|
(1,875
|
)
|
|
$
|
125,644
|
|
Basic and diluted earnings/(loss) per share
|
$
|
0.12
|
|
|
$
|
0.20
|
|
|
$
|
(0.01
|
)
|
|
$
|
0.84
|
|
Dividends declared per share
|
$
|
0.21
|
|
|
$
|
0.21
|
|
|
$
|
0.21
|
|
|
$
|
0.21
|
|
Condensed Consolidated Balance Sheets
|
|||||||||||||||||||
As of December 31, 2016
|
|||||||||||||||||||
(in thousands)
|
Issuer
|
|
Guarantor
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Real estate assets, at cost:
|
|
|
|
|
|
|
|
|
|
||||||||||
Land
|
$
|
46,133
|
|
|
$
|
—
|
|
|
$
|
623,715
|
|
|
$
|
—
|
|
|
$
|
669,848
|
|
Buildings and improvements, less accumulated depreciation
|
228,194
|
|
|
—
|
|
|
2,699,430
|
|
|
(300
|
)
|
|
2,927,324
|
|
|||||
Intangible lease assets, less accumulated amortization
|
725
|
|
|
—
|
|
|
98,970
|
|
|
—
|
|
|
99,695
|
|
|||||
Construction in progress
|
145
|
|
|
—
|
|
|
34,680
|
|
|
—
|
|
|
34,825
|
|
|||||
Total real estate assets
|
275,197
|
|
|
—
|
|
|
3,456,795
|
|
|
(300
|
)
|
|
3,731,692
|
|
|||||
Investments in and amounts due from unconsolidated joint ventures
|
7,360
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,360
|
|
|||||
Cash and cash equivalents
|
3,674
|
|
|
150
|
|
|
3,168
|
|
|
—
|
|
|
6,992
|
|
|||||
Tenant and straight-line receivables, net
|
20,159
|
|
|
—
|
|
|
172,183
|
|
|
—
|
|
|
192,342
|
|
|||||
Advances to affiliates
|
6,406,581
|
|
|
1,315,616
|
|
|
—
|
|
|
(7,722,197
|
)
|
|
—
|
|
|||||
Investment in subsidiary
|
—
|
|
|
3,630,564
|
|
|
181
|
|
|
(3,630,745
|
)
|
|
—
|
|
|||||
Notes receivable
|
88,910
|
|
|
—
|
|
|
95,790
|
|
|
(184,700
|
)
|
|
—
|
|
|||||
Prepaid expenses, restricted cash, escrows, and other assets
|
6,189
|
|
|
—
|
|
|
20,575
|
|
|
(1,897
|
)
|
|
24,867
|
|
|||||
Goodwill
|
180,097
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
180,097
|
|
|||||
Deferred lease costs, net
|
16,550
|
|
|
—
|
|
|
289,447
|
|
|
—
|
|
|
305,997
|
|
|||||
Total assets
|
$
|
7,004,717
|
|
|
$
|
4,946,330
|
|
|
$
|
4,038,139
|
|
|
$
|
(11,539,839
|
)
|
|
$
|
4,449,347
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Debt, net
|
$
|
1,701,933
|
|
|
$
|
—
|
|
|
$
|
503,242
|
|
|
$
|
(184,700
|
)
|
|
$
|
2,020,475
|
|
Accounts payable, accrued expenses, dividends payable, and accrued capital expenditures
|
17,365
|
|
|
31,230
|
|
|
118,712
|
|
|
(1,897
|
)
|
|
165,410
|
|
|||||
Advances from affiliates
|
708,340
|
|
|
5,071,521
|
|
|
2,040,592
|
|
|
(7,820,453
|
)
|
|
—
|
|
|||||
Deferred income
|
5,206
|
|
|
—
|
|
|
23,200
|
|
|
—
|
|
|
28,406
|
|
|||||
Intangible lease liabilities, net
|
—
|
|
|
—
|
|
|
48,005
|
|
|
—
|
|
|
48,005
|
|
|||||
Interest rate swaps
|
8,169
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,169
|
|
|||||
Total liabilities
|
2,441,013
|
|
|
5,102,751
|
|
|
2,733,751
|
|
|
(8,007,050
|
)
|
|
2,270,465
|
|
|||||
Stockholders’ Equity:
|
|
|
|
|
|
|
|
|
|
||||||||||
Common stock
|
—
|
|
|
1,452
|
|
|
—
|
|
|
—
|
|
|
1,452
|
|
|||||
Additional paid-in capital
|
3,626,564
|
|
|
3,676,000
|
|
|
1,309
|
|
|
(3,630,745
|
)
|
|
3,673,128
|
|
|||||
Retained/(cumulative distributions in excess of) earnings
|
935,036
|
|
|
(3,833,873
|
)
|
|
1,301,197
|
|
|
97,956
|
|
|
(1,499,684
|
)
|
|||||
Other comprehensive loss
|
2,104
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,104
|
|
|||||
Piedmont stockholders’ equity
|
4,563,704
|
|
|
(156,421
|
)
|
|
1,302,506
|
|
|
(3,532,789
|
)
|
|
2,177,000
|
|
|||||
Noncontrolling interest
|
—
|
|
|
—
|
|
|
1,882
|
|
|
—
|
|
|
1,882
|
|
|||||
Total stockholders’ equity
|
4,563,704
|
|
|
(156,421
|
)
|
|
1,304,388
|
|
|
(3,532,789
|
)
|
|
2,178,882
|
|
|||||
Total liabilities and stockholders’ equity
|
$
|
7,004,717
|
|
|
$
|
4,946,330
|
|
|
$
|
4,038,139
|
|
|
$
|
(11,539,839
|
)
|
|
$
|
4,449,347
|
|
Condensed Consolidated Balance Sheets
|
|||||||||||||||||||
As of December 31, 2015
|
|||||||||||||||||||
(in thousands)
|
Issuer
|
|
Guarantor
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Real estate assets, at cost:
|
|
|
|
|
|
|
|
|
|
||||||||||
Land
|
$
|
54,459
|
|
|
$
|
—
|
|
|
$
|
621,632
|
|
|
$
|
—
|
|
|
$
|
676,091
|
|
Buildings and improvements, less accumulated depreciation
|
270,057
|
|
|
—
|
|
|
2,567,706
|
|
|
(300
|
)
|
|
2,837,463
|
|
|||||
Intangible lease assets, less accumulated amortization
|
1,268
|
|
|
—
|
|
|
83,395
|
|
|
—
|
|
|
84,663
|
|
|||||
Construction in progress
|
240
|
|
|
—
|
|
|
20,735
|
|
|
—
|
|
|
20,975
|
|
|||||
Real estate assets held for sale, net
|
76,614
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
76,614
|
|
|||||
Total real estate assets
|
402,638
|
|
|
—
|
|
|
3,293,468
|
|
|
(300
|
)
|
|
3,695,806
|
|
|||||
Investments in and amounts due from unconsolidated joint ventures
|
7,577
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,577
|
|
|||||
Cash and cash equivalents
|
2,174
|
|
|
150
|
|
|
3,117
|
|
|
—
|
|
|
5,441
|
|
|||||
Tenant and straight-line rent receivables, net
|
23,738
|
|
|
—
|
|
|
149,994
|
|
|
—
|
|
|
173,732
|
|
|||||
Advances to affiliates
|
6,073,606
|
|
|
1,251,530
|
|
|
—
|
|
|
(7,325,136
|
)
|
|
—
|
|
|||||
Investment in subsidiary
|
—
|
|
|
3,752,523
|
|
|
186
|
|
|
(3,752,709
|
)
|
|
—
|
|
|||||
Notes receivable
|
134,750
|
|
|
—
|
|
|
23,890
|
|
|
(113,240
|
)
|
|
45,400
|
|
|||||
Prepaid expenses, restricted cash, escrows, and other assets
|
7,091
|
|
|
—
|
|
|
24,118
|
|
|
(1,258
|
)
|
|
29,951
|
|
|||||
Goodwill
|
180,097
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
180,097
|
|
|||||
Deferred lease costs, net
|
20,939
|
|
|
—
|
|
|
267,102
|
|
|
—
|
|
|
288,041
|
|
|||||
Other assets held for sale, net
|
8,490
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,490
|
|
|||||
Total assets
|
$
|
6,861,100
|
|
|
$
|
5,004,203
|
|
|
$
|
3,761,875
|
|
|
$
|
(11,192,643
|
)
|
|
$
|
4,434,535
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Debt, net
|
$
|
1,552,007
|
|
|
$
|
—
|
|
|
$
|
590,743
|
|
|
$
|
(113,240
|
)
|
|
$
|
2,029,510
|
|
Accounts payable, accrued expenses, and accrued capital expenditures
|
18,954
|
|
|
580
|
|
|
110,189
|
|
|
(1,258
|
)
|
|
128,465
|
|
|||||
Advances from affiliates
|
580,526
|
|
|
5,033,266
|
|
|
1,788,840
|
|
|
(7,402,632
|
)
|
|
—
|
|
|||||
Deferred income
|
5,905
|
|
|
—
|
|
|
21,365
|
|
|
—
|
|
|
27,270
|
|
|||||
Intangible lease liabilities, net
|
—
|
|
|
—
|
|
|
42,853
|
|
|
—
|
|
|
42,853
|
|
|||||
Interest rate swaps
|
9,993
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,993
|
|
|||||
Total liabilities
|
2,167,385
|
|
|
5,033,846
|
|
|
2,553,990
|
|
|
(7,517,130
|
)
|
|
2,238,091
|
|
|||||
Stockholders’ Equity:
|
|
|
|
|
|
|
|
|
|
||||||||||
Common stock
|
—
|
|
|
1,455
|
|
|
—
|
|
|
—
|
|
|
1,455
|
|
|||||
Additional paid-in capital
|
3,748,524
|
|
|
3,672,849
|
|
|
1,314
|
|
|
(3,752,710
|
)
|
|
3,669,977
|
|
|||||
Retained/(cumulative distributions in excess of) earnings
|
943,530
|
|
|
(3,703,947
|
)
|
|
1,205,546
|
|
|
77,197
|
|
|
(1,477,674
|
)
|
|||||
Other comprehensive loss
|
1,661
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,661
|
|
|||||
Piedmont stockholders’ equity
|
4,693,715
|
|
|
(29,643
|
)
|
|
1,206,860
|
|
|
(3,675,513
|
)
|
|
2,195,419
|
|
|||||
Noncontrolling interest
|
—
|
|
|
—
|
|
|
1,025
|
|
|
—
|
|
|
1,025
|
|
|||||
Total stockholders’ equity
|
4,693,715
|
|
|
(29,643
|
)
|
|
1,207,885
|
|
|
(3,675,513
|
)
|
|
2,196,444
|
|
|||||
Total liabilities and stockholders’ equity
|
$
|
6,861,100
|
|
|
$
|
5,004,203
|
|
|
$
|
3,761,875
|
|
|
$
|
(11,192,643
|
)
|
|
$
|
4,434,535
|
|
Condensed Consolidated Statements of Income
|
|||||||||||||||||||
For the year ended December 31, 2016
|
|||||||||||||||||||
(in thousands)
|
Issuer
|
|
Guarantor
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
||||||||||
Rental income
|
$
|
55,007
|
|
|
$
|
—
|
|
|
$
|
407,514
|
|
|
$
|
(2,631
|
)
|
|
$
|
459,890
|
|
Tenant reimbursements
|
14,081
|
|
|
—
|
|
|
80,378
|
|
|
(498
|
)
|
|
93,961
|
|
|||||
Property management fee revenue
|
—
|
|
|
—
|
|
|
16,897
|
|
|
(15,033
|
)
|
|
1,864
|
|
|||||
|
69,088
|
|
|
—
|
|
|
504,789
|
|
|
(18,162
|
)
|
|
555,715
|
|
|||||
Expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Property operating costs
|
31,967
|
|
|
—
|
|
|
205,344
|
|
|
(18,377
|
)
|
|
218,934
|
|
|||||
Depreciation
|
16,657
|
|
|
—
|
|
|
111,076
|
|
|
—
|
|
|
127,733
|
|
|||||
Amortization
|
3,715
|
|
|
—
|
|
|
71,404
|
|
|
—
|
|
|
75,119
|
|
|||||
Impairment loss on real estate assets
|
5,972
|
|
|
—
|
|
|
24,926
|
|
|
—
|
|
|
30,898
|
|
|||||
General and administrative
|
28,314
|
|
|
311
|
|
|
36,065
|
|
|
(35,446
|
)
|
|
29,244
|
|
|||||
|
86,625
|
|
|
311
|
|
|
448,815
|
|
|
(53,823
|
)
|
|
481,928
|
|
|||||
Real estate operating income/(loss)
|
(17,537
|
)
|
|
(311
|
)
|
|
55,974
|
|
|
35,661
|
|
|
73,787
|
|
|||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
(49,108
|
)
|
|
—
|
|
|
(27,636
|
)
|
|
11,884
|
|
|
(64,860
|
)
|
|||||
Other income/(expense)
|
9,560
|
|
|
282
|
|
|
2,029
|
|
|
(11,884
|
)
|
|
(13
|
)
|
|||||
Net recoveries from casualty events and litigation settlements
|
—
|
|
|
—
|
|
|
34
|
|
|
—
|
|
|
34
|
|
|||||
Equity in income of unconsolidated joint ventures
|
362
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
362
|
|
|||||
|
(39,186
|
)
|
|
282
|
|
|
(25,573
|
)
|
|
—
|
|
|
(64,477
|
)
|
|||||
Income/(loss) from continuing operations
|
(56,723
|
)
|
|
(29
|
)
|
|
30,401
|
|
|
35,661
|
|
|
9,310
|
|
|||||
Gain on sale of real estate assets
|
33,326
|
|
|
—
|
|
|
65,236
|
|
|
—
|
|
|
98,562
|
|
|||||
Net income/(loss)
|
(23,397
|
)
|
|
(29
|
)
|
|
95,637
|
|
|
35,661
|
|
|
107,872
|
|
|||||
Less: Net loss applicable to noncontrolling interest
|
—
|
|
|
—
|
|
|
15
|
|
|
—
|
|
|
15
|
|
|||||
Net income/(loss) applicable to Piedmont
|
$
|
(23,397
|
)
|
|
$
|
(29
|
)
|
|
$
|
95,652
|
|
|
$
|
35,661
|
|
|
$
|
107,887
|
|
Condensed Consolidated Statements of Income
|
|||||||||||||||||||
For the year ended December 31, 2015
|
|||||||||||||||||||
(in thousands)
|
Issuer
|
|
Guarantor
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
||||||||||
Rental income
|
$
|
67,317
|
|
|
$
|
—
|
|
|
$
|
404,460
|
|
|
$
|
(2,905
|
)
|
|
$
|
468,872
|
|
Tenant reimbursements
|
13,340
|
|
|
—
|
|
|
100,955
|
|
|
(414
|
)
|
|
113,881
|
|
|||||
Property management fee revenue
|
—
|
|
|
—
|
|
|
17,801
|
|
|
(15,785
|
)
|
|
2,016
|
|
|||||
|
80,657
|
|
|
—
|
|
|
523,216
|
|
|
(19,104
|
)
|
|
584,769
|
|
|||||
Expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Property operating costs
|
36,380
|
|
|
—
|
|
|
225,428
|
|
|
(19,786
|
)
|
|
242,022
|
|
|||||
Depreciation
|
20,891
|
|
|
—
|
|
|
113,612
|
|
|
—
|
|
|
134,503
|
|
|||||
Amortization
|
4,598
|
|
|
—
|
|
|
56,288
|
|
|
—
|
|
|
60,886
|
|
|||||
Impairment loss on real estate assets
|
5,354
|
|
|
—
|
|
|
34,815
|
|
|
—
|
|
|
40,169
|
|
|||||
General and administrative
|
29,645
|
|
|
341
|
|
|
35,923
|
|
|
(35,563
|
)
|
|
30,346
|
|
|||||
|
96,868
|
|
|
341
|
|
|
466,066
|
|
|
(55,349
|
)
|
|
507,926
|
|
|||||
Real estate operating income/(loss)
|
(16,211
|
)
|
|
(341
|
)
|
|
57,150
|
|
|
36,245
|
|
|
76,843
|
|
|||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
(51,704
|
)
|
|
—
|
|
|
(33,540
|
)
|
|
11,246
|
|
|
(73,998
|
)
|
|||||
Other income/(expense)
|
12,600
|
|
|
—
|
|
|
211
|
|
|
(11,246
|
)
|
|
1,565
|
|
|||||
Net recoveries/(loss) from casualty events and litigation settlements
|
23
|
|
|
—
|
|
|
(301
|
)
|
|
—
|
|
|
(278
|
)
|
|||||
Equity in income of unconsolidated joint ventures
|
553
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
553
|
|
|||||
|
(38,528
|
)
|
|
—
|
|
|
(33,630
|
)
|
|
—
|
|
|
(72,158
|
)
|
|||||
Income/(loss) from continuing operations
|
(54,739
|
)
|
|
(341
|
)
|
|
23,520
|
|
|
36,245
|
|
|
4,685
|
|
|||||
Discontinued operations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating income
|
15
|
|
|
—
|
|
|
69
|
|
|
—
|
|
|
84
|
|
|||||
Loss on sale of real estate assets
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|||||
Income from discontinued operations
|
14
|
|
|
—
|
|
|
69
|
|
|
—
|
|
|
83
|
|
|||||
Gain on sale of real estate assets
|
53,795
|
|
|
—
|
|
|
114,442
|
|
|
—
|
|
|
168,237
|
|
|||||
Net income/(loss)
|
(930
|
)
|
|
(341
|
)
|
|
138,031
|
|
|
36,245
|
|
|
173,005
|
|
|||||
Less: Net income applicable to noncontrolling interest
|
—
|
|
|
—
|
|
|
(15
|
)
|
|
—
|
|
|
(15
|
)
|
|||||
Net income/(loss) applicable to Piedmont
|
$
|
(930
|
)
|
|
$
|
(341
|
)
|
|
$
|
138,016
|
|
|
$
|
36,245
|
|
|
$
|
172,990
|
|
Condensed Consolidated Statements of Income
|
|||||||||||||||||||
For the year ended December 31, 2014
|
|||||||||||||||||||
(in thousands)
|
Issuer
|
|
Guarantor
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
||||||||||
Rental income
|
$
|
72,843
|
|
|
$
|
—
|
|
|
$
|
386,995
|
|
|
$
|
(5,203
|
)
|
|
$
|
454,635
|
|
Tenant reimbursements
|
16,566
|
|
|
—
|
|
|
93,516
|
|
|
(534
|
)
|
|
109,548
|
|
|||||
Property management fee revenue
|
—
|
|
|
—
|
|
|
16,516
|
|
|
(14,447
|
)
|
|
2,069
|
|
|||||
|
89,409
|
|
|
—
|
|
|
497,027
|
|
|
(20,184
|
)
|
|
566,252
|
|
|||||
Expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Property operating costs
|
42,621
|
|
|
—
|
|
|
217,786
|
|
|
(20,976
|
)
|
|
239,431
|
|
|||||
Depreciation
|
23,512
|
|
|
—
|
|
|
115,084
|
|
|
—
|
|
|
138,596
|
|
|||||
Amortization
|
4,754
|
|
|
—
|
|
|
51,825
|
|
|
—
|
|
|
56,579
|
|
|||||
General and administrative
|
23,235
|
|
|
300
|
|
|
28,232
|
|
|
(27,942
|
)
|
|
23,825
|
|
|||||
|
94,122
|
|
|
300
|
|
|
412,927
|
|
|
(48,918
|
)
|
|
458,431
|
|
|||||
Real estate operating income/(loss)
|
(4,713
|
)
|
|
(300
|
)
|
|
84,100
|
|
|
28,734
|
|
|
107,821
|
|
|||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
(47,355
|
)
|
|
—
|
|
|
(39,625
|
)
|
|
12,534
|
|
|
(74,446
|
)
|
|||||
Other income/(expense)
|
11,944
|
|
|
—
|
|
|
652
|
|
|
(12,534
|
)
|
|
62
|
|
|||||
Net recoveries from casualty events and litigation settlements
|
1,322
|
|
|
1,479
|
|
|
4,191
|
|
|
—
|
|
|
6,992
|
|
|||||
Equity in loss of unconsolidated joint ventures
|
(350
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(350
|
)
|
|||||
|
(34,439
|
)
|
|
1,479
|
|
|
(34,782
|
)
|
|
—
|
|
|
(67,742
|
)
|
|||||
Income/(loss) from continuing operations
|
(39,152
|
)
|
|
1,179
|
|
|
49,318
|
|
|
28,734
|
|
|
40,079
|
|
|||||
Discontinued operations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating income
|
913
|
|
|
—
|
|
|
41
|
|
|
—
|
|
|
954
|
|
|||||
Gain on sale of real estate assets
|
450
|
|
|
—
|
|
|
748
|
|
|
—
|
|
|
1,198
|
|
|||||
Income from discontinued operations
|
1,363
|
|
|
—
|
|
|
789
|
|
|
—
|
|
|
2,152
|
|
|||||
Gain on sale of real estate assets
|
—
|
|
|
—
|
|
|
1,132
|
|
|
—
|
|
|
1,132
|
|
|||||
Net income/(loss)
|
(37,789
|
)
|
|
1,179
|
|
|
51,239
|
|
|
28,734
|
|
|
43,363
|
|
|||||
Less: Net income applicable to noncontrolling interest
|
—
|
|
|
—
|
|
|
(15
|
)
|
|
—
|
|
|
(15
|
)
|
|||||
Net income/(loss) applicable to Piedmont
|
$
|
(37,789
|
)
|
|
$
|
1,179
|
|
|
$
|
51,224
|
|
|
$
|
28,734
|
|
|
$
|
43,348
|
|
Condensed Consolidated Statements of Cash Flows
|
|||||||||||||||||||
For the year ended December 31, 2016
|
|||||||||||||||||||
(in thousands)
|
Issuer
|
|
Guarantor
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net Cash Provided By/(Used In) Operating Activities
|
$
|
(26,260
|
)
|
|
$
|
5,214
|
|
|
$
|
221,195
|
|
|
$
|
35,660
|
|
|
$
|
235,809
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash Flows from Investing Activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Investment in real estate assets, consolidated joint venture, and real estate related intangibles, net of accruals
|
(5,060
|
)
|
|
—
|
|
|
(454,836
|
)
|
|
—
|
|
|
(459,896
|
)
|
|||||
Intercompany note receivable
|
440
|
|
|
—
|
|
|
(71,900
|
)
|
|
71,460
|
|
|
—
|
|
|||||
Net sales proceeds from wholly-owned properties
|
200,220
|
|
|
—
|
|
|
165,698
|
|
|
—
|
|
|
365,918
|
|
|||||
Deferred lease costs paid
|
(2,758
|
)
|
|
—
|
|
|
(23,138
|
)
|
|
—
|
|
|
(25,896
|
)
|
|||||
Net cash provided by/(used in) investing activities
|
192,842
|
|
|
—
|
|
|
(384,176
|
)
|
|
71,460
|
|
|
(119,874
|
)
|
|||||
Cash Flows from Financing Activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Debt issuance costs paid
|
(264
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(264
|
)
|
|||||
Proceeds from debt
|
695,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
695,000
|
|
|||||
Repayments of debt
|
(538,000
|
)
|
|
—
|
|
|
(168,875
|
)
|
|
—
|
|
|
(706,875
|
)
|
|||||
Intercompany note payable
|
(9,600
|
)
|
|
—
|
|
|
81,060
|
|
|
(71,460
|
)
|
|
—
|
|
|||||
Costs of issuance of common stock
|
—
|
|
|
(342
|
)
|
|
—
|
|
|
—
|
|
|
(342
|
)
|
|||||
Shares withheld to pay tax obligations related to employee stock compensation
|
—
|
|
|
(2,344
|
)
|
|
—
|
|
|
—
|
|
|
(2,344
|
)
|
|||||
Repurchases of common stock as part of announced plan
|
—
|
|
|
(7,943
|
)
|
|
—
|
|
|
—
|
|
|
(7,943
|
)
|
|||||
(Distributions to)/repayments from affiliates
|
(312,218
|
)
|
|
97,016
|
|
|
250,862
|
|
|
(35,660
|
)
|
|
—
|
|
|||||
Dividends paid and discount on dividend reinvestments
|
—
|
|
|
(91,601
|
)
|
|
(15
|
)
|
|
—
|
|
|
(91,616
|
)
|
|||||
Net cash provided by/(used in) financing activities
|
(165,082
|
)
|
|
(5,214
|
)
|
|
163,032
|
|
|
(107,120
|
)
|
|
(114,384
|
)
|
|||||
Net increase in cash and cash equivalents
|
1,500
|
|
|
—
|
|
|
51
|
|
|
—
|
|
|
1,551
|
|
|||||
Cash and cash equivalents, beginning of year
|
2,174
|
|
|
150
|
|
|
3,117
|
|
|
—
|
|
|
5,441
|
|
|||||
Cash and cash equivalents, end of year
|
$
|
3,674
|
|
|
$
|
150
|
|
|
$
|
3,168
|
|
|
$
|
—
|
|
|
$
|
6,992
|
|
Condensed Consolidated Statements of Cash Flows
|
|||||||||||||||||||
For the year ended December 31, 2015
|
|||||||||||||||||||
(in thousands)
|
Issuer
|
|
Guarantor
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net Cash Provided By/(Used In) Operating Activities
|
$
|
(27,077
|
)
|
|
$
|
4,699
|
|
|
$
|
205,177
|
|
|
$
|
36,245
|
|
|
$
|
219,044
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash Flows from Investing Activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Investment in real estate assets, consolidated joint venture, and real estate related intangibles, net of accruals
|
(12,203
|
)
|
|
—
|
|
|
(489,241
|
)
|
|
—
|
|
|
(501,444
|
)
|
|||||
Intercompany note receivable
|
72,000
|
|
|
—
|
|
|
—
|
|
|
(72,000
|
)
|
|
—
|
|
|||||
Redemption of noncontrolling interest in unconsolidated variable interest entity
|
—
|
|
|
—
|
|
|
(4,000
|
)
|
|
—
|
|
|
(4,000
|
)
|
|||||
Net sales proceeds from wholly-owned properties
|
151,557
|
|
|
—
|
|
|
696,612
|
|
|
—
|
|
|
848,169
|
|
|||||
Deferred lease costs paid
|
(3,792
|
)
|
|
—
|
|
|
(33,891
|
)
|
|
—
|
|
|
(37,683
|
)
|
|||||
Net cash provided by/(used in) investing activities
|
207,562
|
|
|
—
|
|
|
169,480
|
|
|
(72,000
|
)
|
|
305,042
|
|
|||||
Cash Flows from Financing Activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Debt issuance costs paid
|
(575
|
)
|
|
—
|
|
|
(506
|
)
|
|
—
|
|
|
(1,081
|
)
|
|||||
Proceeds from debt
|
1,142,577
|
|
|
—
|
|
|
159,281
|
|
|
—
|
|
|
1,301,858
|
|
|||||
Repayments of debt
|
(1,438,000
|
)
|
|
—
|
|
|
(106,301
|
)
|
|
—
|
|
|
(1,544,301
|
)
|
|||||
Intercompany note payable
|
—
|
|
|
—
|
|
|
(72,000
|
)
|
|
72,000
|
|
|
—
|
|
|||||
Costs of issuance of common stock
|
—
|
|
|
(326
|
)
|
|
—
|
|
|
—
|
|
|
(326
|
)
|
|||||
Shares withheld to pay tax obligations related to employee stock compensation
|
—
|
|
|
(1,710
|
)
|
|
—
|
|
|
—
|
|
|
(1,710
|
)
|
|||||
Repurchases of common stock as part of announced plan
|
—
|
|
|
(158,860
|
)
|
|
—
|
|
|
—
|
|
|
(158,860
|
)
|
|||||
(Distributions to)/repayments from affiliates
|
109,544
|
|
|
281,073
|
|
|
(354,372
|
)
|
|
(36,245
|
)
|
|
—
|
|
|||||
Dividends paid and discount on dividend reinvestments
|
—
|
|
|
(126,516
|
)
|
|
(15
|
)
|
|
—
|
|
|
(126,531
|
)
|
|||||
Net cash provided by/(used in) financing activities
|
(186,454
|
)
|
|
(6,339
|
)
|
|
(373,913
|
)
|
|
35,755
|
|
|
(530,951
|
)
|
|||||
Net increase/(decrease) in cash and cash equivalents
|
(5,969
|
)
|
|
(1,640
|
)
|
|
744
|
|
|
—
|
|
|
(6,865
|
)
|
|||||
Cash and cash equivalents, beginning of year
|
8,143
|
|
|
1,790
|
|
|
2,373
|
|
|
—
|
|
|
12,306
|
|
|||||
Cash and cash equivalents, end of year
|
$
|
2,174
|
|
|
$
|
150
|
|
|
$
|
3,117
|
|
|
$
|
—
|
|
|
$
|
5,441
|
|
Condensed Consolidated Statements of Cash Flows
|
|||||||||||||||||||
For the year ended December 31, 2014
|
|||||||||||||||||||
(in thousands)
|
Issuer
|
|
Guarantor
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net Cash Provided by Operating Activities
|
$
|
5,448
|
|
|
$
|
4,088
|
|
|
$
|
178,889
|
|
|
$
|
28,733
|
|
|
$
|
217,158
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash Flows from Investing Activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Investment in real estate assets, consolidated joint venture, and real estate related intangibles, net of accruals
|
(23,541
|
)
|
|
—
|
|
|
(267,918
|
)
|
|
—
|
|
|
(291,459
|
)
|
|||||
Intercompany note receivable
|
650
|
|
|
—
|
|
|
—
|
|
|
(650
|
)
|
|
—
|
|
|||||
Net sales proceeds from wholly-owned properties
|
29,519
|
|
|
—
|
|
|
16,713
|
|
|
—
|
|
|
46,232
|
|
|||||
Net sales proceeds received from unconsolidated joint ventures
|
6,017
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,017
|
|
|||||
Investments in unconsolidated joint ventures
|
(42
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(42
|
)
|
|||||
Deferred lease costs paid
|
(4,472
|
)
|
|
—
|
|
|
(23,222
|
)
|
|
—
|
|
|
(27,694
|
)
|
|||||
Net cash provided by/(used in) investing activities
|
8,131
|
|
|
—
|
|
|
(274,427
|
)
|
|
(650
|
)
|
|
(266,946
|
)
|
|||||
Cash Flows from Financing Activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Debt issuance costs paid
|
(1,294
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,294
|
)
|
|||||
Proceeds from debt
|
1,052,527
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,052,527
|
|
|||||
Repayments of debt
|
(238,000
|
)
|
|
—
|
|
|
(575,702
|
)
|
|
—
|
|
|
(813,702
|
)
|
|||||
Discount due to loan modification
|
(1,135
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,135
|
)
|
|||||
Intercompany note payable
|
—
|
|
|
—
|
|
|
(650
|
)
|
|
650
|
|
|
—
|
|
|||||
Shares withheld to pay tax obligations related to employee stock compensation
|
—
|
|
|
(1,275
|
)
|
|
—
|
|
|
|
|
(1,275
|
)
|
||||||
Repurchases of common stock as part of announced plan
|
—
|
|
|
(54,802
|
)
|
|
—
|
|
|
—
|
|
|
(54,802
|
)
|
|||||
(Distributions to)/repayments from affiliates
|
(820,795
|
)
|
|
178,812
|
|
|
670,716
|
|
|
(28,733
|
)
|
|
—
|
|
|||||
Dividends paid and discount on dividend reinvestments
|
—
|
|
|
(125,183
|
)
|
|
(15
|
)
|
|
—
|
|
|
(125,198
|
)
|
|||||
Net cash provided by/(used in) financing activities
|
(8,697
|
)
|
|
(2,448
|
)
|
|
94,349
|
|
|
(28,083
|
)
|
|
55,121
|
|
|||||
Net increase/(decrease) in cash and cash equivalents
|
4,882
|
|
|
1,640
|
|
|
(1,189
|
)
|
|
—
|
|
|
5,333
|
|
|||||
Cash and cash equivalents, beginning of year
|
3,261
|
|
|
150
|
|
|
3,562
|
|
|
—
|
|
|
6,973
|
|
|||||
Cash and cash equivalents, end of year
|
$
|
8,143
|
|
|
$
|
1,790
|
|
|
$
|
2,373
|
|
|
$
|
—
|
|
|
$
|
12,306
|
|
|
|
|
|
|
|
|
Initial Cost
|
|
|
|
Gross Amount at Which
Carried at December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Description
|
Location
|
|
Ownership
Percentage
|
|
Encumbrances
|
|
Land
|
|
Buildings and
Improvements
|
|
Total
(a) |
|
Costs Capitalized Subsequent
to Acquisition
(b)
|
|
Land
|
|
Buildings and
Improvements
|
|
Total
(c) |
|
Accumulated
Depreciation
and
Amortization
|
|
Date of
Construction
|
|
Date
Acquired
|
|
Life on
which
Depreciation
and
Amortization
is Computed (in years)
(d)
|
|||||||||||||||||||||
CNL CENTER I
|
Orlando, FL
|
|
99
|
%
|
|
None
|
|
|
6,470
|
|
|
77,858
|
|
|
84,328
|
|
|
(263
|
)
|
|
6,470
|
|
|
77,595
|
|
|
84,065
|
|
|
1,505
|
|
|
1999
|
|
|
8/1/2016
|
|
0
|
|
40
|
||||||||
CNL CENTER II
|
Orland, FL
|
|
99
|
%
|
|
None
|
|
|
4,550
|
|
|
55,609
|
|
|
60,159
|
|
|
754
|
|
|
4,550
|
|
|
56,363
|
|
|
60,913
|
|
|
1,106
|
|
|
2006
|
|
|
8/1/2016
|
|
0
|
|
40
|
||||||||
ONE WAYSIDE ROAD
|
Boston, MA
|
|
100
|
%
|
|
None
|
|
|
6,240
|
|
|
57,124
|
|
|
63,364
|
|
|
—
|
|
|
6,240
|
|
|
57,124
|
|
|
63,364
|
|
|
1,643
|
|
|
1997 / 2008
|
|
|
8/10/2016
|
|
0
|
|
40
|
||||||||
GALLERIA 200
|
Atlanta, GA
|
|
100
|
%
|
|
None
|
|
|
6,470
|
|
|
55,825
|
|
|
62,295
|
|
|
(24
|
)
|
|
6,470
|
|
|
55,801
|
|
|
62,271
|
|
|
768
|
|
|
1984
|
|
|
10/7/2016
|
|
0
|
|
40
|
||||||||
750 WEST JOHN CARPENTER FREEWAY (h)
|
Irving, TX
|
|
100
|
%
|
|
None
|
|
|
7,860
|
|
|
36,303
|
|
|
44,163
|
|
|
—
|
|
|
7,860
|
|
|
36,303
|
|
|
44,163
|
|
|
219
|
|
|
1999
|
|
|
11/30/2016
|
|
0
|
|
40
|
||||||||
PIEDMONT POWER, LLC (i)
|
Bridgewater, NJ
|
|
100
|
%
|
|
None
|
|
|
—
|
|
|
79
|
|
|
79
|
|
|
2,740
|
|
|
—
|
|
|
2,819
|
|
|
2,819
|
|
|
534
|
|
|
N/A
|
|
|
12/20/2011
|
|
0
|
-
|
40
|
||||||||
UNDEVELOPED LAND PARCELS (j)
|
Various
|
|
100
|
%
|
|
None
|
|
|
18,061
|
|
|
—
|
|
|
18,061
|
|
|
24,904
|
|
|
18,061
|
|
|
24,904
|
|
|
42,965
|
|
|
6
|
|
|
N/A
|
|
|
Various
|
|
|
|
N/A
|
||||||||
Total—Consolidated REIT Properties
|
|
|
|
|
|
|
$
|
632,277
|
|
|
$
|
3,792,292
|
|
|
$
|
4,424,569
|
|
|
$
|
360,848
|
|
|
$
|
669,848
|
|
|
$
|
4,115,569
|
|
|
$
|
4,785,417
|
|
|
$
|
1,053,725
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Initial Cost
|
|
|
|
Gross Amount at Which Carried at
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Description
|
Location
|
|
Ownership
Percentage
|
|
Encumbrances
|
|
Land
|
|
Buildings and
Improvements
|
|
Total
(a) |
|
Costs Capitalized Subsequent
to Acquisition
(b)
|
|
Land
|
|
Buildings and
Improvements
|
|
Total
(c) |
|
Accumulated
Depreciation
and
Amortization
|
|
Date of
Construction
|
|
Date
Acquired
|
|
Life on
which
Depreciation
and
Amortization
is Computed (in years)
(d)
|
|||||||||||||||||||
8560 UPLAND DRIVE
|
Englewood, CO
|
|
72
|
%
|
|
None
|
|
1,954
|
|
|
11,216
|
|
|
13,170
|
|
|
1,438
|
|
|
2,048
|
|
|
12,560
|
|
|
14,608
|
|
|
4,979
|
|
|
2001
|
|
12/21/2001
|
|
0
|
-
|
40
|
||||||||
Total – Unconsolidated JV Properties
|
|
|
|
|
|
|
$
|
1,954
|
|
|
$
|
11,216
|
|
|
$
|
13,170
|
|
|
$
|
1,438
|
|
|
$
|
2,048
|
|
|
$
|
12,560
|
|
|
$
|
14,608
|
|
|
$
|
4,979
|
|
|
|
|
|
|
|
|
|
|
Total – All Properties
|
|
|
|
|
|
|
$
|
634,231
|
|
|
$
|
3,803,508
|
|
|
$
|
4,437,739
|
|
|
$
|
362,286
|
|
|
$
|
671,896
|
|
|
$
|
4,128,129
|
|
|
$
|
4,800,025
|
|
|
$
|
1,058,704
|
|
|
|
|
|
|
|
|
|
(a)
|
Total initial cost excludes purchase price allocated to intangible lease origination costs and intangible lease liabilities.
|
(b)
|
Includes write-offs of fully depreciated/amortized capitalized assets.
|
(c)
|
The net carrying value of Piedmont’s total assets for federal income tax purposes is approximately
$4.4 billion
.
|
(d)
|
Piedmont’s assets are depreciated or amortized using the straight-lined method over the useful lives of the assets by class. Generally, Tenant Improvements 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.
|
(e)
|
Property is owned subject to a long-term ground lease.
|
(f)
|
As a result of its
49.5%
membership interest in 1225 Eye Street, N.W. Associates, LLC, Piedmont owns
49.5%
of the 1225 Eye Street building. Piedmont is deemed to have control over the joint venture and, as such, consolidates the joint venture, including the building.
|
(g)
|
As a result of its
49.5%
membership interest in 1201 Eye Street, N.W. Associates, LLC, Piedmont owns
49.5%
of the 1201 Eye Street building. Piedmont is deemed to have control over the joint venture and, as such, consolidates the joint venture, including the building.
|
(h)
|
As part of the acquisition of the property, Piedmont purchased an adjoining, developable land parcel of
3.5
acres for
$1.0 million
.
|
(i)
|
Represents solar panels at the 400 Bridgewater Crossing building.
|
(j)
|
Undeveloped Land Parcels includes land parcels which Piedmont may develop in the future, as well as the initial development costs of the 500 TownPark building.
|
|
2016
|
|
2015
|
|
2014
|
||||||
Real Estate:
|
|
|
|
|
|
||||||
Balance at the beginning of the year
|
$
|
4,725,096
|
|
|
$
|
5,267,615
|
|
|
$
|
5,038,005
|
|
Additions to/improvements of real estate
|
422,908
|
|
|
452,106
|
|
|
316,991
|
|
|||
Assets disposed
|
(296,319
|
)
|
|
(926,592
|
)
|
|
(71,627
|
)
|
|||
Assets impaired
|
(30,898
|
)
|
|
(40,169
|
)
|
|
—
|
|
|||
Write-offs of intangible assets
(1)
|
(11,896
|
)
|
|
(7,768
|
)
|
|
(9,723
|
)
|
|||
Write-offs of fully depreciated/amortized assets
|
(8,866
|
)
|
|
(20,096
|
)
|
|
(6,031
|
)
|
|||
Balance at the end of the year
|
$
|
4,800,025
|
|
|
$
|
4,725,096
|
|
|
$
|
5,267,615
|
|
Accumulated Depreciation and Amortization:
|
|
|
|
|
|
||||||
Balance at the beginning of the year
|
$
|
1,019,663
|
|
|
$
|
1,182,556
|
|
|
$
|
1,060,885
|
|
Depreciation and amortization expense
|
155,274
|
|
|
155,009
|
|
|
156,808
|
|
|||
Assets disposed
|
(95,471
|
)
|
|
(290,038
|
)
|
|
(19,383
|
)
|
|||
Write-offs of intangible assets
(1)
|
(11,896
|
)
|
|
(7,768
|
)
|
|
(9,723
|
)
|
|||
Write-offs of fully depreciated/amortized assets
|
(8,866
|
)
|
|
(20,096
|
)
|
|
(6,031
|
)
|
|||
Balance at the end of the year
|
$
|
1,058,704
|
|
|
$
|
1,019,663
|
|
|
$
|
1,182,556
|
|
(1)
|
Consists of write-offs of intangible lease assets related to lease restructurings, amendments and terminations.
|
To the Company:
|
Piedmont Office Realty Trust, Inc.
Attention: Robert Bowers
Facsimile: 770-418-8702
Email: robert.bowers@piedmontreit.com
|
To Consultant:
|
Raymond L. Owens
______________________
______________________
Facsimile:_______________________
Email:______________________
|
1.
|
Presentation of Company information to the various rating agencies;
|
2.
|
Negotiation of terms for various bank lender financings;
|
3.
|
Assistance with underwriters for various public and private debt placements;
|
4.
|
Introduction of the Company to various acquisition and disposition investors;
|
5.
|
Preparation, scheduling and assistance in equity investor presentations; and
|
6.
|
Consulting with and participation in specific acquisition and disposition negotiations.
|
A.
|
ADEA Release and Waiver
. By entering into this Supplemental Release, Consultant is giving up important rights, including, but not limited to, any rights and claims that may exist under the Age Discrimination in Employment Act of 1967, as amended (the “
ADEA
”).
|
B.
|
Acknowledgments.
Consultant acknowledges and agrees that (a) Consultant has read and understands the terms of this Supplemental Release; (b) Consultant has been advised in writing, by this Consulting Agreement, to consult with an attorney before executing this Supplemental Release; (c) Consultant has obtained and considered such legal counsel as Consultant deems necessary; and (d) by signing this Supplemental Release, Consultant acknowledges that Consultant does so freely, knowingly, and voluntarily.
|
C.
|
Time to Consider
. Consultant has had at least 21 days to consider whether or not to enter into this Supplemental Release and return a signed copy to Company.
Consultant may not sign this Supplemental Release earlier than June 30, 2017, nor later than July 7, 2017.
|
D.
|
Revocation Right.
For a period of seven (7) calendar days following Consultant’s execution of this Supplemental Release, Consultant may revoke this Supplemental Release by delivering a written notice of revocation to Company’s Chief Financial Officer, by 5:00 p.m. EST. This Supplemental Release shall not become effective or enforceable until the eighth (8
th
) day after the Consultant has signed this Supplemental Release without having revoked it, and the Consulting Agreement shall not become effective or enforceable until such time.
|
E.
|
Effect of Revocation.
If Consultant exercises Consultant’s right to revoke this Supplemental Release, the Consulting Agreement shall be null and void and Consultant shall not be entitled to any Fees payable under the Consulting Agreement.
|
F.
|
Preserved Rights of Employee.
This Supplemental Release does not waive or release any rights or claims that arise after the execution of this Supplemental Release by Employee. In
|
1.
|
Retirement.
Effective as of the Retirement Date, Employee’s status as an employee of Employer shall cease in its entirety. On and after the Retirement Date, Employee will not hold himself out as an employee, agent, or authorized representative of Employer, and shall not negotiate or enter into any agreements on behalf of the Employer, or otherwise attempt to bind Employer, except as specifically permitted pursuant to the terms of the Consulting Agreement. Pursuant to the terms of Employee’s employment agreement dated May 14, 2007 (the “
Employment Agreement
”), Employer will pay Employee the following amounts in connection with Employee’s retirement:
|
(i)
|
any accrued but unpaid Base Salary (as defined in the Employment Agreement) through the Retirement Date;
|
(ii)
|
a payment in respect of unpaid, but accrued and unused vacation/PTO through the Retirement Date in accordance with Employer’s vacation/PTO policy;
|
(iii)
|
any annual bonus or other bonuses earned but unpaid as of the Retirement Date for any previously completed fiscal year;
|
(iv)
|
reimbursement for any unreimbursed business expenses properly incurred by the Employee through the Retirement Date; and
|
(v)
|
equity-based awards to the extent Employee is entitled to payment under the terms of the governing plans and applicable award agreements, including pro-rata performance share plan participation, (items (i) through (v) above collectively referred to as the “Accrued Benefits”).
|
2.
|
Benefits Termination
. Employee’s coverage under the benefit plans of Employer and his participation in and eligibility for any compensation, bonus, or equity plans or practices of Employer will cease on the Retirement Date. Employee may elect such insurance continuation or conversion as may be
|
3.
|
Separation Benefits.
In exchange for Employee entering into and not revoking this Agreement and his continued compliance with the terms and conditions of this Agreement and his other obligations, Employer will pay or provide to Employee the following additional benefits:
|
i.
|
On May 24, 2016, Employee was granted 10,130 time-vested deferred stock units (“Units”) under the Piedmont Office Realty Trust, Inc. 2007 Omnibus Incentive Plan (the “
Incentive Plan
”). Pursuant to this Section 3, any of the 7,598 Units that remain unvested on the Retirement Date shall become fully vested on the Retirement Date and shall be paid in accordance with the terms of the award agreement.
|
ii.
|
On May 1, 2015, Employee was granted 11,352 Units under the Incentive Plan. Pursuant to this Section 3, any of the 5,676 Units that remain unvested on the Retirement Date shall become fully vested on the Retirement Date and shall be paid in accordance with the terms of the award agreement.
|
iii.
|
On May 9, 2014, Employee was granted 6,280 Units under the Incentive Plan. Pursuant to this Section 3, any of the 1,570 Units that remained unvested on the Retirement Date shall become fully vested on the Retirement Date and shall be paid in accordance with the terms of the award agreement.
|
iv.
|
Any grant of Units under the Incentive Plan made during 2017 shall become fully vested on the Retirement Date and shall be paid in accordance with the terms of the award agreement.
|
v.
|
The Employer agrees to pay the entire COBRA premium for Employee’s continued medical coverage for the twelve (12) months following Employee’s Retirement Date, provided that Employee makes a valid COBRA election. Employee acknowledges that such benefit continuation is intended, and shall be deemed, to satisfy the obligations of the Employer and any of its subsidiaries and affiliates to provide continuation of benefits under COBRA for such period. Employee’s entitlement to benefits pursuant to this paragraph shall cease if, during such period, Employee is employed by or otherwise is rendering services to a third party for which Employee is entitled to receive medical benefits.
|
4.
|
General Release
.
|
A.
|
Employee unconditionally, irrevocably and absolutely releases and discharges Employer, and any and all parent and subsidiary corporations, divisions and affiliated corporations, partnerships or other affiliated entities of Employer, past and present, as well as Employer’s past and present employees, officers, directors, partners, members, shareholders, insurers, employee benefit plans and fiduciaries, attorneys, agents, successors and assigns (collectively, “
Released Parties
”), from all claims related in any way to the transactions or occurrences between them at any time up to and including the date of Employee’s execution of this Agreement, to the fullest extent permitted by law, including, but not limited to, Employee’s employment with Employer, the termination of Employee’s employment, and all other losses, liabilities, claims, charges, demands and causes of action, known or unknown, suspected or unsuspected, arising directly or indirectly out of or in any way connected with Employee’s employment with Employer that may be released under applicable law (the “
Released Claims
”). This release is intended to have the broadest possible application and includes, but is not limited to, any tort, contract, common law, constitutional or other statutory claims, including, but not limited to alleged violations of federal, state or local law (including, without limitation, Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, the Age Discrimination in Employment Act of 1967, the Family and Medical Leave Act, the Civil Rights Act of 1866, the Employee Retirement Income Security Act (with respect to unvested benefits), and all claims for attorneys’ fees, costs and expenses.
|
B.
|
Notwithstanding the broad scope of the release set forth in this
Section 4
, this Agreement is not intended to bar, and the defined term “Released Claims” does not include, any claims that, as a matter of law, whether by statute or otherwise, may not be waived, such as claims for workers’ compensation benefits or unemployment insurance benefits or Employee’s right to provide information to, participate in a proceeding before, or pursue relief from the National Labor Relations Board, the Equal Employment Opportunity Commission (the “
EEOC
”), or the Securities and Exchange Commission (“
SEC
”), and other similar federal, state, or local government agencies (collectively, “
Government Agencies
”). Provided, however, that if Employee does pursue an administrative claim that may not be waived as a matter of law, or such a claim is pursued on Employee’s behalf, Employee expressly waives Employee’s individual right to recovery of any type, including monetary damages or reinstatement, for any such claim, except that this limitation on monetary recovery will not apply to claims for workers’ compensation, unemployment insurance benefits, or proceedings before the SEC.
|
C.
|
Employee acknowledges that Employee may discover facts or law different from, or in addition to, the facts or law that Employee knows or believes to be true with respect to the Released Claims and agrees, nonetheless, that this Agreement and the release contained in it shall be and remain effective in all respects notwithstanding such different or additional facts or the discovery of them.
|
D.
|
Employee declares and represents that Employee intends this Agreement to be complete and not subject to any claim of mistake, and that the release herein expresses a full and complete release of the Released Claims and Employee intends the release herein to be final and complete. Employee executes this Agreement with the full knowledge that the release herein covers all Released Claims against the Released Parties, to the fullest extent permitted by law.
|
E.
|
By execution of this Agreement, Employee represents that (a) Employee has been paid or otherwise received all wages, vacation, bonuses, or other amounts owed to Employee by Employer, other than those specifically addressed in this Agreement, and (b) Employee has not been denied any request for leave or accommodation to which Employee believes Employee was legally entitled, and Employee was not otherwise deprived of any of Employee’s rights under the Family and Medical Leave Act, the Americans with Disabilities Act, or any similar state or local statute.
|
5.
|
Covenant Not to Sue.
Except as otherwise provided in this Agreement, Employee agrees that Employee is precluded from and is waiving all rights to sue based on the Released Claims or to obtain equitable, remedial or punitive relief from any or all of the Released Parties of any kind whatsoever based on the Released Claims, including, without limitation, reinstatement, back pay, front pay, attorneys’ fees and any form of injunctive relief. Employee represents that, as of the date of Employee’s signing this Agreement, Employee has not filed any lawsuits, charges, complaints, petitions, claims or other accusatory pleadings against the Employer or any of the other Released Parties in any court or with any governmental agency and, to the best of Employee’s knowledge, no person or entity has filed any such lawsuits, charges, complaints, petitions, claims or other accusatory pleadings against the Employer or any of the other Released Parties on Employee’s behalf. Employee further represents that Employee has not assigned, or purported to assign, Employee’s right to file any such lawsuits, charges, complaints, petitions, claims or other accusatory pleadings against the Employer or any of the other Released Parties to any other person or entity.
|
6.
|
Older Workers’ Benefit Protection Act
. This Agreement is intended to satisfy the requirements of the Older Workers’ Benefit Protection Act, 29 U.S.C. sec. 626(f). Employee is advised to consult with an attorney before executing this Agreement.
|
A.
|
ADEA Release and Waiver
. By entering into this Agreement, Employee is giving up important rights, including, but not limited to, any rights and claims that may exist under the Age Discrimination in Employment Act of 1967, as amended (the “
ADEA
”).
|
B.
|
Acknowledgments.
Employee acknowledges and agrees that (a) Employee has read and understands the terms of this Agreement; (b) Employee has been advised in writing, by this Agreement, to consult with an attorney before executing this Agreement; (c) Employee has obtained and considered such legal counsel as Employee deems necessary; and (d) by signing this Agreement, Employee acknowledges that Employee does so freely, knowingly, and voluntarily.
|
C.
|
Time to Consider
. Employee has 21 days to consider whether or not to enter into this Agreement and return a signed copy to Employer (although Employee may elect not to use the full 21 day period at Employee’s option). Any change(s) made to this Agreement by the parties during the 21-day consideration period will not restart the running of the 21-day consideration period. Employer’s offer will expire at the end of the 21-day consideration period.
|
D.
|
Revocation Right.
For a period of seven (7) calendar days following Employee’s execution of this Agreement, Employee may revoke this Agreement by delivering a written notice of revocation to the Employer’s Chief Financial Officer, by 5:00 p.m. EST. This Agreement shall not become effective or enforceable until the eighth (8
th
) day after the Employee has signed this Agreement without having revoked it.
|
E.
|
Effect of Revocation.
If Employee exercises Employee’s right to revoke this Agreement, the Employee shall not be entitled to the Separation Benefits as detailed above.
|
F.
|
Preserved Rights of Employee.
This Agreement does not waive or release any rights or claims that arise after the execution of this Agreement by Employee. In addition, this Agreement does not prohibit Employee from challenging the validity of this Agreement’s waiver and release of claims under the ADEA.
|
7.
|
Restrictive Covenants.
This Agreement does not supersede any prior agreement or promise between Employee and any of the Released Parties regarding confidentiality, non-competition, non-disclosure or non-solicitation, and any and all such agreements and promises shall remain in full force and effect, and Employee acknowledges and reaffirms his post-employment obligations and other restrictive covenants that are set forth in the Employment Agreement (Sections 5.1, 5.2, 5.3, 5.4, 5.5, 5.6 and 5.7);
provided
,
however
, that notwithstanding any provision contained in the Employment Agreement, Employee is not restricted in any way from communicating with Government Agencies or otherwise participating in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice to Employer. If Employee breaches any of such covenants, Employee must repay to Employer the amounts described in
Section 3
of this Agreement within 10 days after demand by Employer, and Employer shall be entitled, upon application to a court of competent jurisdiction, to obtain injunctive or other relief to enforce such promises and covenants.
|
8.
|
No Admissions.
By entering into this Agreement, the Released Parties make no admission that they have engaged, or are now engaging, in any unlawful conduct. The parties understand and acknowledge that this Agreement is not an admission of liability and shall not be used or construed as such in any legal or administrative proceeding.
|
9.
|
Full Defense.
This Agreement may be pled as a full and complete defense to, and may be used as a basis for an injunction against, any action, suit or other proceeding that may be prosecuted, instituted or attempted by Employee in breach hereof.
|
10.
|
No Waiver.
Any failure or forbearance by Employer or Employee to exercise any right or remedy with respect to enforcement of this Agreement shall not be construed as a waiver of Employer’s or Employee’s rights or remedies, nor shall such failure or forbearance operate to modify this Agreement or such instruments in the absence of a writing. No waiver of any of the terms of this Agreement shall be valid unless in writing and signed by both parties to this Agreement. The waiver by Employer or Employee of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach, nor shall any waiver operate or be construed as a rescission of this Agreement.
|
11.
|
Successors.
The provisions of this Agreement shall inure to the benefit of Employer, its successors and assigns, and shall be binding upon Employee and his heirs, administrators and assigns.
|
12.
|
Acknowledgement
. The parties represent that they have read this Agreement, that they understand all of its terms, and that in executing this Agreement they do not rely and have not relied upon any representations or statements made by the other with regard to the subject matter, basis, or effect of the Agreement.
|
13.
|
Severability; Modification
. Employee and Employer further agree that if any provision of this Agreement is held to be unenforceable, such provision shall be considered to be separate, distinct,
|
14.
|
Section
409A
. This Agreement is intended to comply with Section 409 of the Internal Revenue Code of 1986, as amended (“
Section 409A
”), or an exemption thereunder and shall be construed and administered in accordance with Section 409A. Notwithstanding any other provision of this Agreement, payments provided under this Agreement may only be made upon an event and in a manner that complies with Section 409A or an applicable exemption. Any payments under this Agreement that may be excluded from Section 409A either as separation pay due to an involuntary separation from service or as a short-term deferral shall be excluded from Section 409A to the maximum extent possible. Any payments to be made under this Agreement upon a termination of employment shall only be made upon a “separation from service” under Section 409A. To the extent that any reimbursement of expenses or in-kind benefits constitutes “deferred compensation” under Section 409A, (i) such reimbursement or benefit will be provided no later than December 31 of the year following the year in which the expense was incurred; (ii) the amount of expenses reimbursed in one year will not affect the amount eligible for reimbursement in any subsequent year; and (iii) the right to reimbursement of expenses or in-kind benefits may not be liquidated or exchanged for any other benefit. Any provision of this Agreement to the contrary notwithstanding, if the Employee is deemed to be a “specified employee” (within the meaning of Section 409A), then with regard to any payment or benefit under this Agreement that is “deferred compensation” (within the meaning of Section 409A) and which is paid as a result of the Employee’s “separation from service” (within the meaning of Section 409A), such payment or benefit shall be made or provided at the date which is the earlier of (A) six (6) months and one (1) day following the date of the Employee’s separation from service, and (B) the Employee’s death (the “
Delay Period
”). Upon the expiration of the Delay Period, all payments and benefits delayed pursuant to the preceding sentence (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid to the Employee in a lump sum without interest, and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein. The Employer makes no representation or warranty and shall have no liability to you or any other person if any provision of this Agreement are determined to constitute deferred compensation subject to Section 409A, but do not satisfy an exemption from, or the conditions of, Section 409A.
|
15.
|
Entire Agreement.
Except for the provisions of the Consulting Agreement, this Agreement: (i) contains and constitutes the entire understanding and agreement between them with respect to its subject matter; (ii) supersedes and cancels any previous negotiations, agreements, commitments, and writings with respect to that subject matter; (iii) may not be released, discharged, abandoned, supplemented, changed or modified in any manner except by a writing of concurrent or subsequent date signed by both parties; and (iv) shall be construed and enforced in accordance with the laws of the State of Georgia, without regard to its conflicts of laws provisions.
|
|
Year ended December 31,
|
||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Fixed Charges:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest Expense
|
$
|
69,415
|
|
|
$
|
77,764
|
|
|
$
|
76,520
|
|
|
$
|
73,614
|
|
|
$
|
65,023
|
|
Interest Expense Included in Discontinued Operations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
69,415
|
|
|
77,764
|
|
|
76,520
|
|
|
73,614
|
|
|
65,023
|
|
|||||
Earnings:
|
|
|
|
|
|
|
|
|
|
||||||||||
Income from Continuing Operations
|
107,872
|
|
|
172,922
|
|
|
41,211
|
|
|
72,198
|
|
|
59,534
|
|
|||||
Less Equity in (Income)/Loss of Unconsolidated Joint Ventures
|
(362
|
)
|
|
(553
|
)
|
|
350
|
|
|
3,676
|
|
|
(923
|
)
|
|||||
Operating Distributions Received from Unconsolidated Joint Ventures
|
579
|
|
|
774
|
|
|
266
|
|
|
1,475
|
|
|
2,338
|
|
|||||
Fixed Charges
|
69,415
|
|
|
77,764
|
|
|
76,520
|
|
|
73,614
|
|
|
65,023
|
|
|||||
Less Preferred Dividends of Consolidated Subsidiaries
|
(15
|
)
|
|
(15
|
)
|
|
(15
|
)
|
|
(15
|
)
|
|
(15
|
)
|
|||||
Total
|
$
|
177,489
|
|
|
$
|
250,892
|
|
|
$
|
118,332
|
|
|
$
|
150,948
|
|
|
$
|
125,957
|
|
Ratio of Earnings to Fixed Charges:
(1)
|
2.6
|
|
3.2
|
|
1.5
|
|
2.1
|
|
1.9
|
(1)
|
There was no preferred stock outstanding for any of the periods shown above. Accordingly, the ratio of earnings to combined fixed charges and preferred stock dividends was identical to the ratio of earnings to fixed charges for each period.
|
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
|
|
Delaware
|
Piedmont 1901 Market Business Trust
|
|
Delaware
|
Piedmont 1901 Market LLC
|
|
Delaware
|
Piedmont Bridgewater I, LLC
|
|
Delaware
|
Piedmont-Bridgewater, NJ, LLC
|
|
Delaware
|
Piedmont-Independence Square, LLC
|
|
Delaware
|
Piedmont-3100 Clarendon LLC
|
|
Delaware
|
Piedmont-1075 West Entrance, LLC
|
|
Delaware
|
Piedmont-Multi-State Owner, LLC
|
|
Delaware
|
Piedmont-Nashville, TN, LLC
|
|
Delaware
|
Piedmont-One Brattle Square I, LLC
|
|
Delaware
|
Piedmont-One Brattle Square II, LLC
|
|
Delaware
|
4250 North Fairfax Property LLC
|
|
Delaware
|
4250 N. Fairfax Owner, LLC
|
|
Delaware
|
400 Virginia Avenue 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
|
|
Delaware
|
Piedmont-Las Colinas Corporate Center I, LP
|
|
Delaware
|
Piedmont-Las Colinas Corporate Center I, GP, LLC
|
|
Delaware
|
Piedmont-Las Colinas Corporate Center II, LP
|
|
Delaware
|
Piedmont-Las Colinas Corporate Center II, GP, LLC
|
|
Delaware
|
Cypress Concourse A, LLC
|
|
Delaware
|
Piedmont 60 Broad Street, LLC
|
|
Delaware
|
Piedmont-800 Nicollet Avenue, LLC
|
|
Delaware
|
Piedmont-800 Nicollet Avenue Owner, LLC
|
|
Delaware
|
Piedmont-800 Nicollet Avenue Springing Member, LLC
|
|
Delaware
|
Piedmont-Chicago Center Owner, LLC
|
|
Delaware
|
Piedmont-Chicago Center, Chicago, LLC
|
|
Delaware
|
800 North Brand Glendale, CA, LLC
|
|
Delaware
|
Piedmont-1430 Enclave Parkway, L.P.
|
|
Delaware
|
Piedmont-1430 Enclave Parkway, GP, LLC
|
|
Delaware
|
Enclave Parkway Development, LLC
|
|
Delaware
|
Enclave Parkway Development, L.P.
|
|
Delaware
|
Piedmont-Windy Point I, LLC
|
|
Delaware
|
Piedmont-Windy Point II, LLC
|
|
Delaware
|
Piedmont-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
|
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
|
Gavitello, Atlanta, LLC
|
|
Delaware
|
Glenridge Highlands III, LLC
|
|
Delaware
|
Piedmont - 901 N. Glebe, LLC
|
|
Delaware
|
Piedmont 5 & 15 Wayside, LLC
|
|
Delaware
|
Piedmont JV Partnership Interests, LLC
|
|
Delaware
|
Piedmont OP - Piedmont JV Partnership Interests, LLC Joint Venture (MI/TN)
|
|
Georgia
|
Piedmont Royal Lane, LP
|
|
Delaware
|
Piedmont Royal Lane GP, LLC
|
|
Delaware
|
Piedmont 6565 MacArthur Boulevard, LP
|
|
Delaware
|
Piedmont 6565 MacArthur Boulevard GP, LLC
|
|
Delaware
|
Piedmont One Lincoln Park, LP
|
|
Delaware
|
Piedmont One Lincoln Park GP, LLC
|
|
Delaware
|
Piedmont 161 Corporate Center, LP
|
|
Delaware
|
Piedmont 161 Corporate Center GP, LLC
|
|
Delaware
|
Piedmont 5 Wall Street Burlington, LLC
|
|
Delaware
|
Piedmont 1155 PCW, LLC
|
|
Delaware
|
Piedmont - Two Pierce Place Land, LLC
|
|
Delaware
|
Piedmont TownPark Land, LLC
|
|
Delaware
|
Piedmont Park Place, LP
|
|
Delaware
|
Piedmont Park Place, GP, LLC
|
|
Delaware
|
Piedmont HBC, LLC
|
|
Delaware
|
Piedmont 500 TownPark, LLC
|
|
Delaware
|
Piedmont 80 Central, LLC
|
|
Delaware
|
Piedmont 300 Galleria, LLC
|
|
Delaware
|
Piedmont 200 & 250 South Orange Avenue, LLC
|
|
Delaware
|
Piedmont Glenridge Highlands One, LLC
|
|
Delaware
|
Piedmont Suwanee Gateway Land, LLC
|
|
Delaware
|
Piedmont Lending I, LLC
|
|
Delaware
|
Piedmont Lending II, LLC
|
|
Delaware
|
Piedmont Towers Orlando Member, LLC
|
|
Delaware
|
Piedmont-CNL Towers Orlando, LLC
|
|
Delaware
|
Piedmont-CNL Towers Orlando Owner, LLC
|
|
Delaware
|
Piedmont One Wayside, LLC
|
|
Delaware
|
Piedmont 200 Galleria, LLC
|
|
Delaware
|
Piedmont 200 Galleria Owner, LLC
|
|
Delaware
|
Piedmont 750 W John Carpenter, 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):
|
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/ 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.;
|
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 21, 2017
|
(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 21, 2017
|