24 unchanged sentences
In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control—Integrated Framework (2013) issued by COSO.
−Removed: We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2020, of the Company and our report dated February 17, 2021, expressed an unqualified opinion on those financial statements.
+Added: We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2021, of the Company and our report dated February 17, 2022, expressed an unqualified opinion on those consolidated financial statements.
Basis for Opinion
1 unchanged sentence
Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.
−Removed: We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.
−Removed: federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
+Added: We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the US federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB.
5 unchanged sentences
A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
−Removed: (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;
+Added: (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;
and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
6 unchanged sentences
OTHER INFORMATION
+Added: DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Index to Financial Statements
55 unchanged sentences
3.1 Third Articles of Amendment and Restatement of Piedmont Office Realty Trust, Inc.
−Removed: (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)
+Added: (the "Company") (incorporated by reference to Exhibit 3.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2009, filed on March 16, 2010)
3.2 Articles of Amendment of the Company effective June 30, 2011 (incorporated by reference to Exhibit 3.2 to the Company's Current Report on Form 8-K filed on July 6, 2011)
3.3 Articles Supplementary of the Company effective June 30, 2011 (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed on July 6, 2011)
−Removed: 3.4 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)
−Removed: 3.5 Articles of Amendment 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 May 23, 2018)
+Added: 3.4 Articles Supplementary to the Third Articles of Amendment and Restatement of the Company, 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)
+Added: 3.5 Articles of Amendment to the Third Articles of Amendment and Restatement of the Company, as supplemented and amended (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K, filed on May 23, 2018)
3.6 Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K, filed on March 19, 2019)
11 unchanged sentences
4.8 Description of Securities registered pursuant to Section 12 of the Exchange Act (incorporated by reference to Exhibit 4.15 to the Company's Annual Report on Form 10-K for the year ended December 31, 2019, filed on February 19, 2020)
+Added: 4.9 Supplemental Indenture, dated as of September 20, 2021, by and among Piedmont Operating Partnership, LP, Piedmont Office Realty Trust, Inc.
+Added: Bank National Association, as trustee (incorporated by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K, filed on September 20, 2021)
+Added: 4.10 Form of 2.75% Senior Notes due 2023 (included in Exhibit 4.9)
10.1 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)
10.2 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)
−Removed: 10.3 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)
Index to Financial Statements
+Added: 10.3 Amendment to Second Amended and Restated Agreement of Limited Partnership of the Operating Partnership, as Amended and Restated as of January 1, 2000, dated August 8, 2007 (incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K, filed on August 10, 2007)
10.4 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)
−Removed: 10.5* 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)
−Removed: 10.6* Long-Term Incentive Program Award Agreement (incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2011, filed on November 3, 2011)
10.5* The Piedmont Office Realty Trust, Inc.
2 unchanged sentences
Executive Nonqualified Deferred Compensation Plan Adoption Agreement dated December 5, 2013 (incorporated by reference to Exhibit 10.40 to the Company's Annual Report on Form 10-K for the year ended December 31, 2013, filed on February 18, 2014)
−Removed: 10.9* 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)
−Removed: 10.10* Employment Agreement dated February 2, 2007, by and between the Company and Donald A.
−Removed: Miller, CFA (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on February 5, 2007)
−Removed: 10.11* Amendment Number One to Employment Agreement dated February 2, 2007, by and between the Company and Donald A.
−Removed: Miller, CFA (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed on September 14, 2011)
10.7* Employment Agreement dated April 16, 2007, by and between the Company and Robert E.
14 unchanged sentences
10.15 Amended and Restated Term Loan Agreement Dated as Of September 28, 2018 by and among Piedmont Operating Partnership, LP, as Borrower, Piedmont Office Realty Trust, Inc., as Parent, JPMorgan Chase Bank, N.A., and SunTrust Robinson Humphrey, Inc., as Co-Lead Arrangers and Book Managers, JPMorgan Chase Bank, N.A., as Administrative Agent, SunTrust Bank as Syndication Agent, and the other financial institutions initially signatory thereto and their assignees (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed on October 2, 2018)
−Removed: Index to Financial Statements
−Removed: 10.21 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)
−Removed: 10.22 First Amendment to the Loan Agreement between Piedmont 1901 Market LLC, as Borrower and The Prudential Insurance Company of America, as Lender (incorporated by reference to Exhibit 10.42 to the Company's Annual Report on Form 10-K for the year ended December 31, 2017, filed on February 21, 2018)
−Removed: 10.23 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)
10.16* Piedmont Office Realty Trust, Inc.
3 unchanged sentences
10.18* Form of Employee Deferred Stock Award Agreement for Amended and Restated 2007 Omnibus Incentive Plan of the Company effective May 2, 2017 (incorporated by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2017, filed on August 2, 2017)
+Added: Index to Financial Statements
10.19 Term Loan Agreement, dated as of March 29, 2018, by and among Piedmont Operating Partnership, LP, as Borrower, Piedmont Office Realty Trust, Inc., as Parent, U.S.
14 unchanged sentences
10.25 Purchase and Sale Agreement Between SPUS7 Galleria, LP, as Seller and Piedmont Dallas Galleria, LLC, as Purchaser (incorporated by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K filed February 12, 2020)
−Removed: Index to Financial Statements
10.26 Term Loan Agreement, dated February 10, 2020, by and among Piedmont Operating Partnership, LP, as Borrower, Piedmont Office Realty Trust, Inc.
6 unchanged sentences
10.29* Amendment No.
−Removed: 4 to Piedmont Office Realty Trust, Inc.'s Long-Term Incentive Program effective March 19, 2020(incorporated by reference to Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2020, filed on April 29, 2020)
+Added: 4 to Piedmont Office Realty Trust, Inc.'s Long-Term Incentive Program effective March 19, 2020 (incorporated by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2021, filed on July 28, 2021)
10.30* Piedmont Office Realty Trust, Inc.
Long-Term Incentive Program Award Agreement effective March 19, 2020 (incorporated by reference to Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2020, filed on April 29, 2020)
+Added: 10.31* Piedmont Realty Trust, Inc.
+Added: Second Amended and Restated 2007 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed May 12, 2021)
+Added: Index to Financial Statements
+Added: 10.32* Form of Employee Deferred Stock Award Agreement for Second Amended and Restated 2007 Omnibus Incentive Plan of the Company (incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2021 filed on April 28, 2021)
+Added: 10.33* Form of Employee Officer Deferred Stock Award Agreement for Second Amended and Restated 2007 Omnibus Incentive Plan of the Company (incorporated by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2021 filed on April 28, 2021)
+Added: 10.34* Form of Director Deferred Stock Award Agreement for Second Amended and Restated 2007 Omnibus Incentive Plan of the Company (incorporated by reference to Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2021 filed on April 28, 2021)
21.1 List of Subsidiaries of the Company
13 unchanged sentences
* Identifies each management contract or compensatory plan required to be filed.
+Added: ** Filed herewith.
+Added: *** Furnished herewith.
Index to Financial Statements
1 unchanged sentence
Financial Statements Page
−Removed: Report of Independent Registered Public Accounting Firm
+Added: Report of Independent Registered Public Accounting Firm (PCAOB Firm # 34 )
Consolidated Balance Sheets as of December 31, 2021 and 2020
−Removed: Consolidated Statements of Income for the Years December 31, 2020, 2019, and 2018
+Added: Consolidated Statements of Operations for the Years December 31, 2021, 2020, and 2019
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2021, 2020, and 2019
9 unchanged sentences
We have audited the accompanying consolidated balance sheets of Piedmont Office Realty Trust, Inc.
−Removed: and subsidiaries (the "Company") as of December 31, 2020 and 2019, the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows, for each of the three years in the period ended December 31, 2020, and the related notes and the schedule listed in the Index at Item 15(a) (collectively referred to as the "financial statements").
+Added: and subsidiaries (the “Company”) as of December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2021, and the related notes and the schedule listed in the Index at Item 15(a) (collectively referred to as the “financial statements”).
In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.
3 unchanged sentences
Our responsibility is to express an opinion on the Company’s financial statements based on our audits.
−Removed: We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.
−Removed: federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
+Added: We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the US federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB.
58 unchanged sentences
Secured debt, inclusive of premiums and unamortized debt issuance costs of $ — and $ 326 as of December 31, 2021 and December 31, 2020, respectively
−Removed: 27,936 189,030
Accounts payable, accrued expenses, and accrued capital expenditures 114,453 111,997
4 unchanged sentences
Interest rate swaps 4,924 9,834
−Removed: Other liabilities held for sale — 7,657
Total liabilities 2,143,242 1,841,849
8 unchanged sentences
Cumulative distributions in excess of earnings ( 1,899,081 ) ( 1,774,856 )
−Removed: Other comprehensive income/(loss) ( 24,100 ) 967
+Added: Accumulated other comprehensive loss ( 18,154 ) ( 24,100 )
Piedmont stockholders’ equity 1,785,794 1,896,278
5 unchanged sentences
PIEDMONT OFFICE REALTY TRUST, INC.
−Removed: CONSOLIDATED STATEMENTS OF INCOME
+Added: CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per-share amounts)
17 unchanged sentences
( 41,086 ) 143,927 136,987
−Removed: Net income 232,685 229,256 130,291
+Added: Net income/(loss) ( 1,167 ) 232,685 229,256
Net loss applicable to noncontrolling interest 14 3 5
−Removed: Net income applicable to Piedmont $ 232,688 $ 229,261 $ 130,296
+Added: Net income/(loss) applicable to Piedmont $ ( 1,153 ) $ 232,688 $ 229,261
Per share information— basic and diluted:
−Removed: Net income applicable to common stockholders $ 1.85 $ 1.82 $ 1.00
+Added: Net income/(loss) applicable to common stockholders $ ( 0.01 ) $ 1.85 $ 1.82
Weighted-average shares outstanding—basic 123,977,616 125,730,460 125,709,207
7 unchanged sentences
2021 2020 2019
−Removed: Net income applicable to Piedmont $ 232,688 $ 229,261 $ 130,296
+Added: Net income/(loss) applicable to Piedmont $ ( 1,153 ) $ 232,688 $ 229,261
Other comprehensive income/(loss):
14 unchanged sentences
Distributions in
−Removed: Excess of Earnings Other
+Added: Excess of Earnings Accumulated
Comprehensive
4 unchanged sentences
Balance, December 31, 2018 126,219 $ 1,262 $ 3,683,186 $ ( 1,982,542 ) $ 8,462 $ 1,772 $ 1,712,140
−Removed: Cumulative effect of accounting change (adoption of ASU 2016-01) — — — 94 ( 94 ) — —
Share repurchases as part of announced plan ( 728 ) ( 7 ) — ( 12,475 ) — — ( 12,482 )
5 unchanged sentences
Net income applicable to Piedmont — — — 229,261 — — 229,261
−Removed: Other comprehensive income — — — — 392 — 392
+Added: Other comprehensive loss — — — — ( 7,495 ) — ( 7,495 )
Balance, December 31, 2019 125,783 1,258 3,686,398 ( 1,871,375 ) 967 1,726 1,818,974
Share repurchases as part of announced plan ( 2,190 ) ( 22 ) — ( 30,649 ) — — ( 30,671 )
−Removed: Offering costs — — ( 710 ) — — — ( 710 )
Dividends to common stockholders ($ 0.84 per share), stockholders of subsidiaries, and dividends reinvested
6 unchanged sentences
Share repurchases as part of announced plan ( 1,060 ) ( 10 ) — ( 18,842 ) — — ( 18,852 )
−Removed: Dividends to common stockholders ($ 0.84 per share), stockholders of subsidiaries, and dividends reinvested
+Added: Offering costs — — ( 55 ) — — — ( 55 )
+Added: Dividends to common stockholders ($ 0.84 per share) and stockholders of subsidiaries
— — — ( 104,230 ) — ( 40 ) ( 104,270 )
1 unchanged sentence
Net loss applicable to noncontrolling interest — — — — — ( 14 ) ( 14 )
−Removed: Net income applicable to Piedmont — — — 232,688 — — 232,688
−Removed: Other comprehensive loss — — — — ( 25,067 ) — ( 25,067 )
+Added: Net loss applicable to Piedmont — — — ( 1,153 ) — — ( 1,153 )
+Added: Other comprehensive income — — — — 5,946 — 5,946
Balance, December 31, 2021 123,077 $ 1,231 $ 3,701,798 $ ( 1,899,081 ) $ ( 18,154 ) $ 1,629 $ 1,787,423
7 unchanged sentences
Cash Flows from Operating Activities:
−Removed: Net income $ 232,685 $ 229,256 $ 130,291
−Removed: Operating distributions received from unconsolidated joint ventures — — 10
−Removed: Adjustments to reconcile net income to net cash provided by operating activities:
+Added: Net income/(loss) $ ( 1,167 ) $ 232,685 $ 229,256
+Added: Adjustments to reconcile net income/(loss) to net cash provided by operating activities:
Depreciation 120,615 110,575 106,015
−Removed: Amortization of debt issuance costs net of favorable settlement of interest rate swaps
+Added: Amortization of debt issuance costs inclusive of settled interest rate swaps
3,270 2,080 87
2 unchanged sentences
Loss on extinguishment of debt — 349 —
−Removed: General reserve for uncollectible accounts 4,553 — —
+Added: General reserve/(recovery) for uncollectible accounts ( 553 ) 4,553 —
Stock compensation expense 10,984 9,718 15,446
Gain on sale of real estate assets — ( 205,666 ) ( 197,010 )
−Removed: Changes in assets and liabilities:
+Added: Changes in other operating assets and liabilities:
Increase in tenant and straight-line rent receivables
( 9,691 ) ( 30,887 ) ( 15,706 )
−Removed: Decrease/(increase) in prepaid expenses and other assets
+Added: Decrease in prepaid expenses and other assets
1,294 823 309
−Removed: Cash paid upon settlement of interest rate swaps ( 19,930 ) — —
+Added: Cash received/(paid) upon settlement of interest rate swaps 623 ( 19,930 ) —
Increase/(decrease) in accounts payable and accrued expenses
5 unchanged sentences
Cash Flows from Investing Activities:
−Removed: Acquisition of real estate assets and intangibles ( 417,056 ) ( 326,200 ) ( 151,914 )
+Added: Acquisition of real estate assets, intangibles, and undeveloped land parcels ( 226,011 ) ( 417,056 ) ( 326,200 )
Capitalized expenditures ( 122,626 ) ( 112,580 ) ( 103,553 )
1 unchanged sentence
— 360,094 589,767
−Removed: Note receivable issuance
−Removed: — — ( 3,200 )
−Removed: Note receivable repayment
Deferred lease costs paid ( 20,295 ) ( 28,334 ) ( 25,639 )
12 unchanged sentences
( 103,905 ) ( 106,309 ) ( 106,433 )
−Removed: Net cash used in financing activities
+Added: Net cash provided by/(used in) financing activities
126,375 ( 1,580 ) ( 333,507 )
Net (decrease)/increase in cash, cash equivalents, and restricted cash and escrows ( 354 ) ( 6,172 ) 9,352
−Removed: ( 6,172 ) 9,352 ( 2,721 )
Cash, cash equivalents, and restricted cash and escrows, beginning of year 9,214 15,386 6,034
7 unchanged sentences
(“Piedmont”) (NYSE:
−Removed: PDM) is a Maryland corporation that operates in a manner so as to qualify as a real estate investment trust (“REIT”) for federal income tax purposes and engages in the ownership, management, development, redevelopment, and operation of high-quality, Class A office properties located primarily in select sub-markets within seven major Eastern U.S.
−Removed: office markets, with a majority of its revenue being generated from the Sunbelt.
+Added: PDM) is a Maryland corporation that operates in a manner so as to qualify as a real estate investment trust (“REIT”) for federal income tax purposes and engages in the ownership, management, development, redevelopment, and operation of high-quality, Class A office properties located primarily in select sub-markets within seven major U.S.
+Added: office markets, with a majority of its revenue being generated from Sunbelt markets.
Piedmont was incorporated in 1997 and commenced operations in 1998.
−Removed: Piedmont conducts business primarily through Piedmont Operating Partnership, L.P.
−Removed: (“Piedmont OP”), a Delaware limited partnership, as well as performing the management of its buildings through two wholly-owned subsidiaries, Piedmont Government Services, LLC and Piedmont Office Management, LLC.
−Removed: Piedmont owns 99.9 % of, and is the sole general partner of, Piedmont OP and as such, possesses full legal control and authority over the operations of Piedmont OP.
−Removed: The remaining 0.1 % ownership interest of Piedmont OP is held indirectly by Piedmont through its wholly-owned subsidiary, Piedmont Office Holdings, Inc.
−Removed: ("POH"), the sole limited partner of Piedmont OP.
+Added: Piedmont conducts business through its wholly-owned subsidiary, Piedmont Operating Partnership, L.P.
+Added: (“Piedmont OP”), a Delaware limited partnership.
Piedmont OP owns properties directly, through wholly-owned subsidiaries, and through various joint ventures which it controls.
3 unchanged sentences
Dallas, Atlanta, Washington, D.C., Minneapolis, Boston, Orlando, and New York.
−Removed: As of December 31, 2020, Piedmont's 54 in-service office properties comprised approximately 16.4 million square feet (unaudited) of primarily Class A commercial office space and were 86.8 % leased.
+Added: As of December 31, 2021, Piedmont's 55 in-service office properties comprised approximately 17.1 million square feet (unaudited) of primarily Class A commercial office space and were approximately 86 % leased.
Summary of Significant Accounting Policies
13 unchanged sentences
The assets owned by these special purpose entities are being reported on a consolidated basis with Piedmont’s assets for financial reporting purposes only.
−Removed: Index to Financial Statements
Use of Estimates
The preparation of the accompanying consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the accompanying consolidated financial statements and notes.
−Removed: The most significant of these estimates include the underlying cash flows and holding periods used in assessing impairment, judgements regarding the recoverability of goodwill, and the assessment of the collectibility of receivables.
−Removed: Future impacts of the COVID-19 pandemic on Piedmont and its tenants may affect these and other estimates used in the preparation of these financial statements.
+Added: The most significant of these estimates includes the underlying cash flows and holding periods used in assessing impairment, judgements regarding the recoverability of goodwill, and the assessment of the collectibility of receivables.
While Piedmont has made, what it believes to be, appropriate accounting estimates based on the facts and circumstances available as of the reporting date, actual results could materially differ from those estimates.
+Added: Index to Financial Statements
Real Estate Assets
24 unchanged sentences
Factors considered by management in performing these analyses include an estimate of carrying costs during the expected lease-up periods considering current market conditions and costs to execute similar leases.
−Removed: Index to Financial Statements
−Removed: estimating carrying costs, management includes real estate taxes, insurance, and other operating expenses and estimates of lost rental revenue during the expected lease-up periods based on current market demand.
+Added: In estimating carrying costs, management includes real estate taxes, insurance, and other operating expenses and estimates of lost rental revenue during the expected lease-up periods based on current market demand.
Management also estimates the cost to execute similar leases including leasing commissions, legal, and other related costs.
1 unchanged sentence
The capitalized above-market and below-market lease values are recorded as intangible lease assets or liabilities and amortized as an adjustment to rental revenues over the remaining terms of the respective leases.
+Added: Index to Financial Statements
The estimated fair values of in-place leases include an estimate of the direct costs associated with obtaining the acquired or "in place" tenant, estimates of opportunity costs associated with lost rentals that are avoided by acquiring an in-place lease.
10 unchanged sentences
Intangible Lease Liabilities (Below-Market In-Place Leases) $ 75,221 $ 62,784
−Removed: For the years ended December 31, 2020, 2019, and 2018, respectively, Piedmont recognized amortization of intangible lease costs, included as a component of Amortization in the accompanying consolidated statements of income, as follows (in thousands):
+Added: For the years ended December 31, 2021, 2020, and 2019, respectively, Piedmont recognized amortization of intangible lease costs in the accompanying consolidated statements of operations, as follows (in thousands):
2021 2020 2019
−Removed: Amortization of Intangible Lease Origination Costs and In-Place Lease Valuation included in amortization expense $ 77,000 $ 62,413 $ 48,940
−Removed: Amortization of Above-Market and Below-Market In-Place Lease intangibles as a net increase to rental revenues $ 12,191 $ 8,322 $ 7,615
−Removed: Index to Financial Statements
+Added: Amortization of Intangible Lease Origination Costs and In-Place Lease Valuation included in Amortization $ 69,388 $ 77,000 $ 62,413
+Added: Amortization of Above-Market and Below-Market In-Place Lease Intangibles as a net increase to Rental and Tenant Reimbursement Revenue $ 11,180 $ 12,191 $ 8,322
Net intangible assets and liabilities as of December 31, 2021 will be amortized as follows (in thousands):
17 unchanged sentences
The majority of Piedmont’s cash and cash equivalents are held at major commercial banks and at times may exceed the Federal Deposit Insurance Corporation limit of $250,000.
−Removed: Short-term investments consist of investments in money market accounts stated at cost, which approximates estimated fair value, and available-for-sale securities resulting from Piedmont's non-qualified deferred compensation program carried at estimated fair value.
+Added: Short-term investments consist of investments in money market accounts stated at cost, which approximates estimated fair
+Added: Index to Financial Statements
+Added: value, and available-for-sale securities associated with Piedmont's non-qualified deferred compensation program carried at estimated fair value.
Tenant Receivables and Straight-line Rent Receivables
Tenant receivables are comprised of rental and reimbursement billings due from tenants, and straight-line rent receivables representing the cumulative amount of future adjustments necessary to present rental income on a straight-line basis.
−Removed: Effective January 1, 2019, Piedmont adopted ASC 842 Leases ("ASC 842"), as well as Accounting Standards Update ("ASU"), ASU No.
−Removed: 2018-19 Codification Improvements to Topic 326, Financial Instruments—Credit Losses ("ASU 2018-19") which clarifies that operating lease receivables are within the scope of ASC 842;
−Removed: therefore, Piedmont has elected to evaluate the collectibility of its operating lease receivables on a tenant/lease-specific basis and, as of January 1, 2019, began recognizing changes in the collectibility assessment of its operating lease receivables as a reduction of rental and tenant reimbursement revenue, rather than as bad debt expense, a component of property operating costs.
−Removed: Prior to the adoption of ASC 842, during the year ended December 31, 2018, Piedmont recognized approximately $ 91,000 of expense related to uncollectible operating lease receivables as additional property operating costs.
−Removed: See further discussion of collectibility assessments of tenant receivables and other lease-related assets due to COVID-19 pandemic during 2020 in Note 8 and in Allowance for Doubtful Accounts below.
+Added: Piedmont evaluates the collectibility of its operating lease receivables on a tenant/lease-specific basis and recognizes changes in the collectibility assessment of its operating lease receivables as a reduction of rental and tenant reimbursement revenues.
Allowance for Doubtful Accounts
−Removed: As detailed above, Piedmont records contra-revenue adjustments for tenant/lease-specific changes in the collectibility assessments of its operating lease receivables as a reduction of rental and tenant reimbursement revenues in accordance with ASC 842.
+Added: As detailed above, Piedmont records contra-revenue adjustments for tenant/lease-specific changes in the collectibility assessments of its operating lease receivables as a reduction of rental and tenant reimbursement revenues.
These charges reduce tenant and straight-line rent receivable to net realizable value upon recognition.
−Removed: However, during the year ended December 31, 2020, Piedmont also established a general reserve, with charges related to the establishment of this reserve recorded as a reduction of rental and tenant reimbursement revenues, and the balance of the reserve is disclosed as allowance for doubtful accounts in the accompanying consolidated balance sheets.
−Removed: Unlike tenant-specific adjustments recorded in accordance with ASC 842, the general reserve is for amounts that may become uncollectible in the future.
−Removed: Index to Financial Statements
+Added: In addition, during the year ended December 31, 2020, Piedmont also established an allowance for doubtful accounts for amounts that may become uncollectible in the future.
+Added: Details of Piedmont's allowance for doubtful accounts for the years ended December 31, 2021, 2020, and 2019 are as follows:
+Added: Balance at Beginning of Period Additions Charged as Reduction of Revenue Deductions and Write-offs Balance at End of Period
+Added: Year Ended December 31,
+Added: 2021 $ 4,553 $ 35 $ ( 588 ) $ 4,000
+Added: 2020 $ — $ 8,734 $ ( 4,181 ) $ 4,553
Restricted Cash and Escrows
12 unchanged sentences
Balances without a future economic benefit are expensed as they are identified.
−Removed: Goodwill is the excess of cost of an acquired entity over the amounts specifically assigned to assets acquired and liabilities assumed in purchase accounting for business combinations.
−Removed: In conjunction with Piedmont's change in segment reporting (see Note 17 ), Piedmont has reallocated its goodwill to each of its seven reporting units on the basis of relative fair value of each reporting unit compared to the total of all reporting units.
+Added: Index to Financial Statements
+Added: Goodwill is the excess of cost of an acquired entity over the amounts specifically assigned to assets acquired and liabilities assumed in purchase accounting for business combinations, and is allocated to each of Piedmont's seven reporting units.
Piedmont tests the carrying value of the goodwill assigned to each of its seven reporting units for impairment on an annual basis, or on an interim basis if an event occurs or circumstances change that would indicate that a material indicator of impairment exists.
10 unchanged sentences
The estimated fair value of the interest rate derivative agreement is recorded as interest rate derivative asset or as interest rate derivative liability in the accompanying consolidated balance sheets.
−Removed: Amounts received or paid under interest rate derivative agreements are recorded as reductions or additions to interest expense in the consolidated statements of income as incurred.
+Added: Amounts received or paid under interest rate derivative agreements are recorded as reductions or additions to interest expense in the consolidated statements of operations as incurred.
Additionally, when Piedmont settles forward starting swap agreements, any gain or loss is recorded as accumulated other comprehensive income and is amortized to interest expense over the term of the respective notes on a straight line basis (which approximates the effective interest method).
Further, Piedmont classifies cash flows from the settlement of hedging derivative instruments in the same category as the underlying exposure which is being hedged.
−Removed: Settlements resulting from the hedge of
−Removed: Index to Financial Statements
−Removed: Piedmont's exposure to interest rate changes are classified as operating cash flows in the accompanying consolidated statements of cash flows.
+Added: Settlements resulting from the hedge of Piedmont's exposure to interest rate changes are classified as operating cash flows in the accompanying consolidated statements of cash flows.
Deferred Lease Costs
1 unchanged sentence
In addition to direct costs, deferred lease costs also include intangible lease origination costs related to in-place leases acquired as part of a property acquisition.
−Removed: Prior to the adoption of ASC 842, Piedmont capitalized direct payroll costs incurred related to negotiating and executing specific leases of approximately $ 0.3 million for the year ended December 31, 2018.
−Removed: ASC 842 prohibited the capitalization of such costs beginning January 1, 2019.
−Removed: Deferred lease costs are amortized on a straight-line basis over the terms of the related underlying leases in the accompanying consolidated statements of income as follows:
−Removed: • Approximately $ 60.2 million, $ 50.3 million, and $ 43.6 million of deferred lease costs for the years ended December 31, 2020, 2019, and 2018, respectively, are included in amortization expense;
−Removed: • Approximately $ 3.4 million, $ 3.2 million, and $ 2.6 million, of deferred lease costs related to lease incentives granted to tenants for the years ended December 31, 2020, 2019, and 2018, respectively, was included as an offset to rental and tenant reimbursement revenue.
−Removed: Upon receipt of a lease termination notice, Piedmont adjusts the amortization of any unamortized deferred lease costs to be recognized ratably over the revised remaining term of the lease after giving effect to the termination notice.
−Removed: If there is no remaining lease term and no other obligation to provide the tenant space in the property, then any unamortized tenant-specific costs are recognized immediately upon termination.
+Added: Deferred lease costs are amortized on a straight-line basis over the terms of the related underlying leases in the accompanying consolidated statements of operations as follows:
+Added: • Approximately $ 56.4 million, $ 60.2 million, and $ 50.3 million of deferred lease costs are included in amortization expense for the years ended December 31, 2021, 2020, and 2019, respectively;
+Added: • Approximately $ 3.9 million, $ 3.4 million, and $ 3.2 million, of deferred lease costs related to lease incentives granted to tenants are included as an offset to rental and tenant reimbursement revenue for the years ended December 31, 2021, 2020, and 2019, respectively.
+Added: Upon receipt of an early lease termination notice, Piedmont recognizes any unamortized deferred lease costs ratably over the revised remaining term of the lease after giving effect to the termination notice.
+Added: If there is no remaining lease term and no other obligation to provide the tenant space in the property, then any unamortized tenant-specific costs are recognized immediately.
+Added: Index to Financial Statements
When mortgage debt is assumed upon the acquisition of real property, Piedmont adjusts the loan to relative fair value with a corresponding adjustment to building and other intangible assets assumed as part of the purchase.
The fair value adjustment is amortized to interest expense over the term of the loan using the effective interest method.
−Removed: Amortization of such fair value adjustments was approximately $ 0.5 million for each of the years ended December 31, 2020, 2019, and 2018, respectively.
+Added: Amortization of such fair value adjustments was approximately $ 0.3 million, $ 0.5 million, and $ 0.5 million for the years ended December 31, 2021, 2020, and 2019, respectively.
Piedmont records premiums and discounts on debt issuances as an increase/decrease to the principal amount of the loan in the accompanying consolidated balance sheets, and amortizes such premiums or discounts as a component of interest expense over the life of the underlying loan facility using the effective interest method.
7 unchanged sentences
• tenant reimbursements related to operating expense or property tax expenses which may be due to tenants as part of an annual operating expense reconciliation;
−Removed: • tenant improvement allowance overages where Piedmont owns the underlying improvements.
−Removed: Deferred income related to prepaid rents from tenants will be recognized as income in the period it is earned.
+Added: • tenant improvement allowance overages or improvements funded by the tenant where Piedmont owns the underlying improvements.
+Added: Deferred income related to prepaid rents from tenants will be recognized as rental income in the period it is earned.
Amounts related to operating expense reconciliations or property tax expense are relieved when the tenant's reconciliation is completed in accordance with the underlying lease, and payment is issued to the tenant.
−Removed: Tenant improvement allowance overages paid by the tenant, where Piedmont owns all of the underlying improvements, are recorded as deferred income and amortized on a straight-line basis into rental and tenant reimbursement revenue over the term of the respective leases.
−Removed: Index to Financial Statements
+Added: Tenant improvement allowance overages or improvements paid for by the tenant, where Piedmont owns all of the underlying improvements, are recorded as deferred income and amortized on a straight-line basis into rental and tenant reimbursement revenue over the term of the respective leases.
Shares-in-trust
5 unchanged sentences
Piedmont’s board of directors may determine the relative rights, preferences, and privileges of any class or series of preferred stock that may be issued, and can be more beneficial than the rights, preferences, and privileges attributable to Piedmont’s common stock.
+Added: Index to Financial Statements
Under Piedmont’s charter, it has authority to issue a total of 750,000,000 shares of common stock with a par value of $ 0.01 per share.
3 unchanged sentences
As of December 31, 2021, Piedmont had approximately $ 150.5 million of remaining capacity under the program which may be used for share repurchases through February 2022.
+Added: On February 17, 2022, Piedmont's board of directors extended the existing stock repurchase authorization through February 2024.
Equity Securities Issued At-The-Market
8 unchanged sentences
As a REIT, Piedmont is required by the Internal Revenue Code of 1986, as amended (the “Code”), to make distributions to stockholders each taxable year equal to at least 90% of its annual taxable income, computed without regard to the dividends-paid deduction and by excluding net capital gains attributable to stockholders (“REIT taxable income”).
−Removed: Historically, Piedmont sponsored a dividend reinvestment plan ("DRP") pursuant to which common stockholders could elect (if their brokerage agreements allowed) to reinvest an amount equal to the dividends declared on their common shares into additional shares of Piedmont’s common stock in lieu of receiving cash dividends.
+Added: Piedmont previously sponsored a dividend reinvestment plan ("DRP") pursuant to which common stockholders could elect (if their brokerage agreements allowed) to reinvest an amount equal to the dividends declared on their common shares into additional shares of Piedmont’s common stock in lieu of receiving cash dividends.
During the year ended December 31, 2020, the board of directors terminated the company-funded DRP offered through its transfer agent.
2 unchanged sentences
Noncontrolling interest is adjusted for the noncontrolling partners' share of contributions, distributions, and earnings (losses) in accordance with the respective partnership agreement.
−Removed: Earnings allocated to such noncontrolling partners are recorded as income applicable to noncontrolling interest in the accompanying consolidated statements of income.
−Removed: Index to Financial Statements
+Added: Earnings allocated to such noncontrolling partners are recorded as income applicable to noncontrolling interest in the accompanying consolidated statements of operations.
Revenue Recognition
5 unchanged sentences
In most lease arrangements, Piedmont finances improvements to leased space and is deemed the owner of the tenant improvements.
−Removed: The determination of who owns the improvements, whether payments to tenants constitute lease incentives or tenant improvements, and the timing of revenue recognition requires the exercise of significant judgment based on the facts and circumstances of the specific lease arrangement and is not based on any one factor.
+Added: The determination of who owns the improvements, whether payments to tenants constitute lease incentives or
+Added: Index to Financial Statements
+Added: tenant improvements, and the timing of revenue recognition requires the exercise of significant judgment based on the facts and circumstances of the specific lease arrangement and is not based on any one factor.
When evaluating whether Piedmont or its tenant owns the improvements, management considers a number of factors, including, among other things:
6 unchanged sentences
These tenant improvements are recorded as capital assets by Piedmont and depreciated, typically over the lease term.
−Removed: Payments made by the tenants for tenant improvements owned by Piedmont are treated as deferred revenues and amortized into rental and tenant reimbursement revenue over the lease term.
+Added: Payments made by tenants for tenant improvements owned by Piedmont are treated as deferred revenues and amortized into rental and tenant reimbursement revenue over the lease term.
The timing of rental revenue recognition is largely dependent on our conclusion as to whether Piedmont, or its tenant, is the owner of tenant improvements at the leased property.
1 unchanged sentence
In some instances, Piedmont may cede control of the leased space to the tenant to be responsible for tenant-owned improvements for the space.
−Removed: In such arrangements, payments made by Piedmont to its tenant are treated as lease incentives, amortized as a reduction to rental and tenant reimbursement revenue over the lease term, which typically begins once the tenant takes possession of the unimproved space.
+Added: In such arrangements, payments made by Piedmont to its tenant are treated as lease incentives and amortized as a reduction to rental and tenant reimbursement revenue over the lease term, which typically begins once the tenant takes possession of the unimproved space.
Lease payments are typically comprised of both fixed base rental payments and separately billed variable lease payments for reimbursement of services performed by Piedmont for the tenant as prescribed by the lease.
8 unchanged sentences
Examples of such income include parking revenue and income from licenses with unrelated third-parties to place antennae and/or fiber optic cables in or on Piedmont's buildings.
−Removed: These services also represent a performance obligation that is satisfied over the length of
−Removed: Index to Financial Statements
−Removed: the contract, not at any specific point in time, and has the same measure of transfer (time elapsed);
+Added: These services also represent a performance obligation that is satisfied over the length of the contract, not at any specific point in time, and has the same measure of transfer (time elapsed);
therefore, revenue related to these licenses is also recognized over time.
4 unchanged sentences
In circumstances where Piedmont extends seller financing as part of a sale of real estate assets, Piedmont assesses the collectibility of the notes receivable as of each reporting period end.
+Added: Index to Financial Statements
Notes receivable that are deemed to be uncollectible or fully in default are reduced to their net realizable value, which approximates their fair value.
Stock-based Compensation
−Removed: Piedmont has issued stock-based compensation in the form of restricted stock to its employees and directors.
+Added: Piedmont has issued stock-based compensation in the form of restricted stock to its employees and board of directors.
For employees, such compensation has been issued pursuant to Piedmont's Long-term Incentive Compensation ("LTIC") program.
4 unchanged sentences
Awards classified as liability awards are remeasured at each reporting period over the service period, with issuances recorded as a reduction to accrued expense.
−Removed: The compensation expense recognized related to both of these award types is recorded as property operating costs for those employees whose job is related to property operations and as general and administrative expense for all other employees and directors in the accompanying consolidated statements of income.
+Added: The compensation expense recognized related to both of these award types is recorded as property operating costs for those employees whose job is related to property operations and as general and administrative expense for all other employees and board of directors in the accompanying consolidated statements of operations.
Non-qualified Deferred Compensation Plan
1 unchanged sentence
As of December 31, 2019, Piedmont suspended the NQDC Plan so that no additional amounts may be deferred.
−Removed: Amounts deferred prior to the suspension of the NQDC Plan are invested in trading securities held in a "rabbi trust" and are measured using quoted market prices as of the reporting date, with changes in fair value recognized in net income.
+Added: Amounts deferred prior to the suspension of the NQDC Plan are invested in trading securities held in a "rabbi trust" and are measured using quoted market prices as of the reporting date, with changes in fair value recognized in net income/(loss).
As of December 31, 2021 and 2020, Piedmont held approximately $ 0.9 million and $ 0.8 million, respectively, of these trading securities.
Such investments are included in cash equivalents due to their short-term, liquid nature, with the corresponding liability included in accounts payable, accrued expenses, and accrued capital expenditures in the accompanying consolidated balance sheets.
−Removed: Index to Financial Statements
−Removed: Net Income Available to Common Stockholders Per Share
−Removed: Net income per share-basic is calculated as net income available to common stockholders divided by the weighted average number of common shares outstanding during the period.
−Removed: Net income per share-diluted is calculated as net income available to common stockholders divided by the diluted weighted average number of common shares outstanding during the period, including the dilutive effect of nonvested restricted stock.
+Added: Net Income/(Loss) Available to Common Stockholders Per Share
+Added: Net income/(loss) per share-basic is calculated as net income/(loss) available to common stockholders divided by the weighted average number of common shares outstanding during the period.
+Added: Net income/(loss) per share-diluted is calculated as net income/(loss) available to common stockholders divided by the diluted weighted average number of common shares outstanding during the period, including the dilutive effect of nonvested restricted stock.
The dilutive effect of nonvested restricted stock is calculated using the treasury stock method to determine the number of additional common shares that would become outstanding if the remaining unvested restricted stock awards vested.
4 unchanged sentences
As a REIT, Piedmont is generally not subject to federal income taxes, subject to fulfilling, among other things, its taxable income distribution requirement.
−Removed: However, Piedmont is subject to federal income taxes related to the operations conducted by its taxable REIT subsidiary, POH, which have been provided for in the financial statements.
−Removed: Accordingly, the only provision for federal income taxes in the accompanying consolidated financial statements relates to POH.
−Removed: POH does not have significant tax provisions or deferred income tax items.
−Removed: These operations resulted in approximately $ 4,000 , $ 160,000 , and $( 97,000 ) in income tax expense/(recoveries) for the years ended December 31, 2020, 2019, and 2018, respectively, as a component of other income/(expense) in the accompanying consolidated statements of income.
−Removed: Further, Piedmont is subject to certain state and local taxes related to the operations of properties in certain locations, which have been provided for in general and administrative expenses in the accompanying consolidated financial statements.
+Added: However, Piedmont is subject to federal income taxes related to the operations conducted by its taxable REIT subsidiary which have been provided for in the financial statements.
+Added: These operations resulted in approximately $( 379,000 ), $ 4,000 , and $ 160,000 in income tax expense/(recoveries) for the years ended December 31, 2021, 2020, and 2019, respectively, as a component of other income/(expense) in the accompanying consolidated statements of operations.
+Added: Further, Piedmont is subject to certain state and local taxes related to the operations of properties in certain locations, which have been provided for in property operating costs in the accompanying consolidated financial statements.
Reclassifications
−Removed: Certain prior period amounts presented in the accompanying consolidated balance sheets have been reclassified as of December 31, 2019 to conform to the current period financial statement presentation related to the 1901 Market Street building, which was classified as held for sale as of March 31, 2020, and sold on June 25, 2020.
−Removed: (see Note 13 ).
−Removed: Accounting Pronouncements and Amendments Adopted during the year ended December 31, 2020
−Removed: Reference Rate Reform Relief
−Removed: Accounting Standards Update No.
−Removed: 2020-04, Reference Rate Reform (Topic 848) ("ASU 2020-04"), was issued in March 2020.
−Removed: ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts.
−Removed: The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur.
−Removed: During the year ended December 31, 2020, Piedmont elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives.
−Removed: Application of these expedients preserves the presentation of derivatives consistent with past presentation.
−Removed: Piedmont continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.
−Removed: Financial Instruments- Credit Loss Amendments
−Removed: On January 1, 2020, Piedmont adopted ASU No.
−Removed: 2016-13, Financial Instruments—Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments , as well as ASU No.
−Removed: 2019-04, Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments, and ASU No.
−Removed: 2019-05, Financial Instruments- Credit Losses:
−Removed: Targeted Transition Relief (collectively the "Credit Loss Amendments").
−Removed: The provisions of the Credit Loss Amendments replace the "incurred loss" approach with an "expected loss" model for impairing trade and other receivables, held-to-maturity debt securities, net investment in leases, and off-balance-sheet credit exposures, which will generally result in earlier recognition of allowances for credit losses.
−Removed: However, the Financial Accounting Standards Board (the "FASB") also issued ASU No.
−Removed: 2018-19 Codification Improvements to Topic 326, Financial Instruments - Credit Losses, which is effective concurrent with the Credit Loss Amendments, and excludes receivables arising from operating leases from the scope of the Credit Loss Amendments and affirms that such receivables should be evaluated for collectibility as prescribed by ASC 842 Leases .
−Removed: As s ubstantially all of Piedmont's receivables are operating lease receivables there was no
+Added: Certain prior period amounts presented in the accompanying consolidated balance sheets related to the 225 and 235 Presidential Way buildings, which were classified as held for sale as of June 30, 2021 and sold in January 2022 (see Note 13 ) have been reclassified as of December 31, 2020 to conform to the current period financial statement presentation.
Index to Financial Statements
−Removed: material impact to Piedmont's accompanying consolidated financial statements or disclosures as a result of adoption of the Credit Loss Amendments.
−Removed: During the year December 31, 2020, the FASB issued a Staff Q&A on Topic 842 and Topic 840 (lease accounting guidance):
−Removed: Accounting for lease concessions related to the effects of the COVID-19 pandemic .
−Removed: Generally, changes to payment terms not contemplated by the lease contract should be accounted for under Topic 842 as a lease modification.
−Removed: The FASB staff has provided relief from this modification guidance through an accounting policy election, provided that changes to the payment terms do not result in a substantial increase in the rights of either the lessee or the lessor under the lease.
−Removed: Piedmont has elected not to apply the relief provided by the FASB Staff, and has instead accounted for all rent relief agreements as result of COVID-19 as lease modifications.
−Removed: See further details concerning rent relief agreements with Piedmont's tenants in Note 8 below.
−Removed: During the year ended December 31, 2020, Piedmont acquired three properties and adjacent developable land (collectively the "Dallas Galleria Office Towers"), as well as the 222 South Orange Avenue building, using cash on hand and available funds from the $ 500 Million Unsecured 2018 Line of Credit, as noted below:
−Removed: Property Metropolitan Statistical Area Date of Acquisition Ownership Percentage Acquired Rentable Square Feet Percentage Leased as of Acquisition Net Contractual Purchase Price
+Added: During the year ended December 31, 2021, Piedmont acquired the 999 Peachtree Street building, using cash on hand and available funds from the $ 500 Million Unsecured 2018 Line of Credit.
+Added: Details are as follows:
+Added: Property Metropolitan Statistical Area Date of Acquisition Ownership Percentage Acquired Rentable Square Feet Percentage Leased as of Acquisition Purchase Price
(in millions)
−Removed: Dallas Galleria Office Towers Dallas, Texas February 12, 2020 100 % 1,435,466 95 % $ 396.2 (1)
−Removed: 222 South Orange Avenue Orlando, Florida October 29, 2020 100 % 127,248 — % $ 20.0 (2)
−Removed: (1) Dallas Galleria Office Towers price includes the purchase of an adjacent parcel of approximately 1.9 acres of developable land.
−Removed: (2) Piedmont allocated the purchase price amongst land of approximately $ 1.9 million and building of approximately $ 18.1 million.
−Removed: The purchase price of the Dallas Galleria Office Towers and undeveloped land, inclusive of approximately $ 0.6 million of closing costs, was allocated as follows (in thousands):
−Removed: Dallas Galleria Office Towers and Undeveloped Land
−Removed: Land $ 19,674
−Removed: Building and improvements 293,760
−Removed: Intangible lease assets (1)
−Removed: Lease acquisition costs, net of tenant credits received from seller (1)
−Removed: Intangible lease origination costs (1)
−Removed: Intangible lease liabilities (1)
−Removed: Total purchase price
−Removed: (1) Amortization of in-place lease intangibles and lease acquisition costs are recognized using the straight-line method over approximately 5.2 years, the average remaining life of in-place leases.
−Removed: Index to Financial Statements
−Removed: During the year ended December 31, 2020, Piedmont issued, through Piedmont OP, $ 300 million in aggregate principal amount of 3.15 % Senior Notes due 2030 (the “$ 300 Million Unsecured Senior Notes”), which mature on August 15, 2030.
−Removed: Upon issuance of the $ 300 Million Unsecured Senior Notes, Piedmont OP received proceeds of approximately $ 297.7 million, reflecting a discount of approximately $ 2.3 million which will be amortized as interest expense under the effective interest method over the ten-year term of the $ 300 Million Unsecured Senior Notes.
−Removed: In addition, in conjunction with the issuance, Piedmont settled four forward starting interest rate swaps, consisting of notional amounts of $ 200 million.
−Removed: These swaps were settled at a loss of approximately $ 19.9 million that was recorded as accumulated other comprehensive income and is being amortized as an increase in interest expense over the ten-year term of the $ 300 Million Unsecured Senior Notes.
−Removed: See Note 5 for further detail.
−Removed: The proceeds from the $ 300 Million Unsecured Senior Notes were used to fully repay the $ 300 Million Unsecured 2020 Term Loan that was obtained earlier during the year ended December 31, 2020 to provide interim financing for the purchase of the Dallas Galleria Office Towers.
−Removed: Additionally, during the year ended December 31, 2020, Piedmont amended the $ 250 Million Unsecured 2018 Term Loan to reduce the applicable interest rate spread from LIBOR plus 160 basis points to LIBOR plus 95 basis points, based on Piedmont's current credit rating.
−Removed: Interest on the $ 300 Million Unsecured Senior Notes is payable semi-annually in arrears on February 15 and August 15 of each year, beginning on February 15, 2021.
−Removed: The $ 300 Million Unsecured Senior Notes are fully and unconditionally guaranteed on a senior unsecured basis by Piedmont.
−Removed: Piedmont OP may, at its option, redeem the $ 300 Million Unsecured Senior Notes, in whole or in part, prior to May 15, 2030, at a redemption price equal to the greater of (i) 100 % of the principal amount of the $ 300 Million Unsecured Senior Notes to be redeemed and (ii) a “make-whole” amount, plus any unpaid accrued interest.
−Removed: In addition, at any time on or after May 15, 2030, Piedmont OP may, at its option, redeem the $ 300 Million Unsecured Senior Notes, in whole or in part, at a redemption price equal to 100 % of the principal amount of the $ 300 Million Unsecured Senior Notes to be redeemed plus unpaid accrued interest.
−Removed: The $ 300 Million Unsecured Senior Notes are subject to certain typical covenants that, subject to certain exceptions:
+Added: 999 Peachtree Street Atlanta, Georgia October 22, 2021 100 % 621,946 77 % $ 223.9
+Added: Further, Piedmont purchased the remaining undeveloped land parcels and common areas within the Galleria Atlanta development in November 2021 for approximately $ 4.0 million, giving Piedmont total control of all aspects of the office park.
+Added: During the year ended December 31, 2021, Piedmont issued, through Piedmont OP, $ 300 million in aggregate principal amount of 2.75 % Senior Notes due 2032 (the “$ 300 Million Unsecured Senior Notes due 2032”), which mature on April 1, 2032.
+Added: Upon issuance of the $ 300 Million Unsecured Senior Notes due 2032, Piedmont OP received proceeds of approximately $ 298.5 million, reflecting a discount of approximately $ 1.5 million which is amortized as interest expense using the effective interest method over the 10-year and 6-month term of the $ 300 Million Unsecured Senior Notes due 2032.
+Added: In addition, in conjunction with the issuance, Piedmont settled one forward starting interest rate swap, consisting of a notional amount of $ 50 million.
+Added: The settlement of the swap resulted in a gain of approximately $ 0.6 million that was recorded as accumulated other comprehensive income and will be amortized as a decrease in interest expense over 10 years (see Note 5 for further detail).
+Added: The proceeds from the $ 300 Million Unsecured Senior Notes due 2032 were used to fully repay, without penalty, the Amended and Restated $ 300 Million Unsecured 2011 Term Loan.
+Added: Interest on the $ 300 Million Unsecured Senior Notes due 2032 is payable semi-annually in arrears on April 1 and October 1 of each year, beginning on April 1, 2022.
+Added: The $ 300 Million Unsecured Senior Notes due 2032 are fully and unconditionally guaranteed on a senior unsecured basis by Piedmont.
+Added: Piedmont OP may, at its option, redeem the $ 300 Million Unsecured Senior Notes due 2032, in whole or in part, prior to January 1, 2032, at a redemption price equal to the greater of (i) 100 % of the principal amount of the $ 300 Million Unsecured Senior Notes due 2032 to be redeemed and (ii) a “make-whole” amount, plus any unpaid accrued interest.
+Added: In addition, at any time on or after January 1, 2032, Piedmont OP may, at its option, redeem the $ 300 Million Unsecured Senior Notes due 2032, in whole or in part, at a redemption price equal to 100 % of the principal amount of the $ 300 Million Unsecured Senior Notes due 2032 to be redeemed plus unpaid accrued interest.
+Added: The $ 300 Million Unsecured Senior Notes due 2032 are subject to certain typical covenants that, subject to certain exceptions:
(a) limit the ability of Piedmont and Piedmont OP to, among other things, incur additional secured and unsecured indebtedness;
1 unchanged sentence
and (c) require Piedmont to maintain a pool of unencumbered assets.
−Removed: The $ 300 Million Unsecured Senior Notes are also subject to customary events of default which, if any of them occurs, would permit or require the principal of and accrued interest on the $ 300 Million Unsecured Senior Notes to become or to be declared due and payable.
−Removed: Finally, during the year ended December 31, 2020, Piedmont sold the 1901 Market Street building for a substantial gain (see Note 13 for further details) and used the majority of the net sales proceeds to repay the $ 160 Million Fixed-Rate Loan that was secured by the property and all remaining outstanding borrowings under the $ 500 Million Unsecured 2018 Line of Credit.
−Removed: As a result of repaying the $ 160 Million Fixed-Rate Loan in advance of its stated maturity, Piedmont recognized a $ 9.3 million loss on early extinguishment of debt comprised of a prepayment penalty and the write-off of unamortized debt issuance costs and discounts associated with the loan.
+Added: The $ 300 Million Unsecured Senior Notes due 2032 are also subject to customary events of default which, if any of them occurs, would permit or require the principal of and accrued interest on the $ 300 Million Unsecured Senior Notes due 2032 to become or to be declared due and payable.
Index to Financial Statements
5 unchanged sentences
5.55 % — % 9/1/2021 (3)
−Removed: $ 160 Million Fixed-Rate Loan (4)
−Removed: 3.48 % 3.58 % 7/5/2022 — 160,000
Net premium and unamortized debt issuance costs
−Removed: Subtotal/Weighted Average (5)
−Removed: 5.55 % 27,936 189,030
Unsecured (Variable and Fixed)
5 unchanged sentences
1.01 % 9/30/2022 (6)
−Removed: $ 350 Million Unsecured Senior Notes
290,000 5,000
−Removed: $ 400 Million Unsecured Senior Notes
+Added: $ 350 Million Unsecured Senior Notes due 2023
3.40 % 3.43 % 6/01/2023 350,000 350,000
+Added: $ 400 Million Unsecured Senior Notes due 2024
+Added: 4.45 % 4.10 % 3/15/2024 400,000 400,000
$ 250 Million Unsecured 2018 Term Loan
1 unchanged sentence
3/31/2025 250,000 250,000
−Removed: $ 300 Million Unsecured Senior Notes
+Added: $ 300 Million Unsecured Senior Notes due 2030
3.15 % 3.90 % 8/15/2030 300,000 300,000
+Added: $ 300 Million Unsecured Senior Notes due 2032
2.75 % 2.78 % (8)
+Added: 4/1/2032 300,000 —
Discounts and unamortized debt issuance costs
2 unchanged sentences
2.93 % 1,877,790 1,594,068
−Removed: Total/Weighted Average (5)
$ 1,877,790 $ 1,622,004
−Removed: (1) Other than the $ 35 Million Fixed-Rate Loan, all of Piedmont’s outstanding debt as of December 31, 2020 and 2019 is interest-only until maturity.
−Removed: (2) Effective rate after consideration of settled or in-place interest rate swap agreements, issuance premiums/discounts, and/or fair market value adjustments upon assumption of debt.
−Removed: (3) Collateralized by the 5 Wall Street building in Burlington, Massachusetts.
−Removed: (4) Previously collateralized by the 1901 Market Street building in Philadelphia, Pennsylvania.
−Removed: (5) Weighted average is based on contractual balance of outstanding debt and the stated or effectively fixed interest rates as of December 31, 2020.
−Removed: (6) On a periodic basis, Piedmont may select from multiple interest rate options, including the prime rate and various-length LIBOR
−Removed: locks on all or a portion of the principal.
−Removed: All LIBOR selections are subject to an additional spread over the selected rate based on
−Removed: Piedmont’s current credit rating.
−Removed: (7) Piedmont may extend the term for up to one additional year (through two available six month extensions to a final extended maturity date of September 29, 2023) provided Piedmont is not then in default and upon payment of extension fees.
+Added: (1) All of Piedmont’s outstanding debt as of December 31, 2021 is interest-only until maturity.
+Added: (2) Effective rate after consideration of settled or in-place interest rate swap agreements and issuance discounts.
+Added: (3) Repaid on June 1, 2021 without penalty.
+Added: (4) Repaid on September 20, 2021 without penalty.
+Added: (5) On a periodic basis, Piedmont may select from multiple interest rate options, including the prime rate and various-length LIBOR locks on all or a portion of the principal.
+Added: All LIBOR selections are subject to an additional spread over the selected rate based on Piedmont’s current credit rating.
+Added: (6) Piedmont may extend the term for up to one additional year (through two available six months extensions to a final extended maturity date of September 29, 2023) provided Piedmont is not then in default and upon payment of extension fees.
(7) The facility has a stated variable rate;
3 unchanged sentences
The rate presented is the weighted-average rate for the effectively fixed and variable portions of the debt outstanding as of December 31, 2021 (see Note 5 for more detail).
−Removed: (9) The $ 300 Million Unsecured Senior Notes have a fixed coupon rate of 3.15 %, however, as a result of the issuance of the notes at a discount, Piedmont recognizes an effective interest rate on this debt issuance of 3.24 %.
−Removed: After consideration of the impact of settled interest rate swap agreements, in addition to the issuance discount, the effective interest rate on this debt is 3.90 %.
+Added: (8) The $ 300 Million Unsecured Senior Notes due 2032 have a fixed coupon rate of 2.75 %, however, as a result of the issuance of the notes at a discount and after consideration of the impact of a settled interest rate swap agreement, the effective interest rate on this debt is 2.78 %.
+Added: (9) Weighted average is based on contractual balance of outstanding debt and the stated or effectively fixed interest rates as of December 31, 2021.
Index to Financial Statements
3 unchanged sentences
Total $ 1,890,000
+Added: (1) Includes the balance outstanding as of December 31, 2021 on the $ 500 million Unsecured 2018 Line of Credit of $ 290 million.
+Added: However, Piedmont may extend the term for up to one additional year (through two available six months extensions to a final extended maturity date of September 29, 2023) provided Piedmont is not then in default and upon payment of extension fees.
Piedmont’s weighted-average interest rate as of December 31, 2021 and 2020, for the aforementioned borrowings was approximately 2.93 % and 3.03 %, respectively.
11 unchanged sentences
Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for Piedmont making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.
−Removed: During the year ended December 31, 2020, Piedmont entered into and subsequently settled four forward starting interest rate swap agreements with a total notional value of $ 200 million to hedge the risk of changes in the interest-related cash flows associated with the issuance of the $ 300 Million Unsecured Senior Notes (see Note 4 ).
−Removed: The settlement resulted in a loss of approximately $ 19.9 million, which was recorded as accumulated OCI and is being amortized as additional interest expense over the ten-year term of the $ 300 Million Unsecured Senior Notes.
−Removed: During the year ended December 31, 2018, Piedmont repaid the $ 300 Million Unsecured 2013 Term Loan in advance of its maturity without penalty.
−Removed: In connection with this early debt prepayment, six interest rate swap agreements which were identified as cash flow hedges were also terminated, resulting in a receipt of approximately $ 0.8 million from Piedmont's counterparties for the settlement of the swaps.
−Removed: These proceeds were recorded in accumulated OCI and were amortized as an offset to interest expense in the consolidated statement of income over the original term of the terminated interest rate swaps through January 2019.
−Removed: In connection with this termination Piedmont also recognized a non-cash loss of approximately $ 1.3 million due to it becoming probable that the hedged forecasted transactions would not occur, offset by a mark-to-market gain on these cash flow hedges of approximately $ 0.1 million for the year ended December 31, 2018.
+Added: During the year ended December 31, 2021, Piedmont entered into, and subsequently settled, one forward starting interest rate swap agreement with a notional value of $ 50 million to hedge the risk of changes in the interest-related cash flows associated with the issuance of the $ 300 Million Unsecured Senior Notes due 2032 (see Note 4 ).
+Added: The settlement resulted in a gain of approximately $ 0.6 million, which was recorded as accumulated OCI and is being amortized as an offset to interest expense over the following ten years .
+Added: During the year ended December 31, 2020, Piedmont entered into and subsequently settled four forward starting interest rate swap agreements with a total notional value of $ 200 million to hedge the risk of changes in the interest-related cash flows associated with the issuance of the $ 300 Million Unsecured Senior Notes due 2030.
+Added: The settlement resulted in a loss of approximately $ 19.9 million, which was recorded as accumulated OCI and is being amortized as additional interest expense over the ten-year term of the $ 300 Million Unsecured Senior Notes due 2030.
Finally, as of December 31, 2021, Piedmont was party to two other interest rate swap agreements, which are designated as effective cash flow hedges and hedge the variable cash flows covering $ 100 million of the $ 250 Million Unsecured 2018 Term Loan.
14 unchanged sentences
Net derivative liability $ ( 4,924 ) $ ( 9,834 )
−Removed: The gain/(loss) on Piedmont's interest rate derivatives, including previously settled forward starting interest rate swaps, that was recorded in OCI and the accompanying consolidated statements of income as a component of interest expense for the years ended December 31, 2020, 2019, and 2018, respectively, was as follows (in thousands):
+Added: The gain/(loss) on Piedmont's interest rate derivatives, including previously settled forward starting interest rate swaps, that was recorded in OCI and the accompanying consolidated statements of operations as a component of interest expense for the years ended December 31, 2021, 2020, and 2019, respectively, was as follows (in thousands):
Interest Rate Swaps in Cash Flow Hedging Relationships:
3 unchanged sentences
$ ( 2,952 ) $ ( 1,727 ) $ 1,836
−Removed: Amount of loss recognized on derivatives reclassified from OCI into Loss on Extinguishment of Debt
−Removed: $ — $ — $ ( 1,258 )
−Removed: Total amount of Interest Expense presented in the consolidated statements of income
+Added: Total amount of Interest Expense presented in the consolidated statements of operations
$ ( 51,292 ) $ ( 54,990 ) $ ( 61,594 )
−Removed: Total amount of Loss on Extinguishment of Debt presented in the consolidated statements of income
+Added: Total amount of Loss on Extinguishment of Debt presented in the consolidated statements of operations
$ — $ ( 9,336 ) $ —
3 unchanged sentences
Credit-risk-related Contingent Features
−Removed: Piedmont has agreements with its derivative counterparties that contain a provision whereby if Piedmont defaults on any of its indebtedness, including a default where repayment of the indebtedness has not been accelerated by the lender, then Piedmont could also be declared in default on its derivative obligations.
+Added: Piedmont has agreements with its derivative counterparties that contain a provision whereby if Piedmont defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then Piedmont could also be declared in default on its derivative obligations.
If Piedmont were to breach any of the contractual provisions of the derivative contracts, it could be required to settle its liability obligations under the agreements at their termination value of the estimated fair values plus accrued interest, or approximately $ 5.0 million as of December 31, 2021.
−Removed: Additionally, Piedmont has rights of set-off under certain of its derivative agreements related to potential termination fees and amounts payable under the agreements, if a termination were to occur.
+Added: Additionally, Piedmont has rights of set-off under certain of its derivative agreements related to potential te rmination fees and amounts payable under the agreements, if a termination were to occur.
Index to Financial Statements
19 unchanged sentences
(1) For the periods presented, the carrying value of these financial instruments approximates estimated fair value due to its short-term maturity.
−Removed: Piedmont's notes receivable were carried at book value as of December 31, 2020, and were issued in conjunction with the sale of properties to an unrelated third-party buyer on October 28, 2020 (see Note 13 ).
−Removed: Piedmont has evaluated the facts and circumstances present at the time of issuance of the notes receivable as compared to those same circumstances as of December 31, 2020 and determined that the book value approximates its estimated fair value.
−Removed: Piedmont's debt was carried at book value as of December 31, 2020 and 2019;
−Removed: however, Piedmont's estimate of its fair value is disclosed in the table above.
−Removed: Piedmont uses widely accepted valuation techniques including discounted cash flow analysis based on the contractual terms of the debt facilities, including the period to maturity of each instrument, and uses observable market-based inputs for similar debt facilities which have transacted recently in the market.
−Removed: Therefore, the estimated fair values determined are considered to be based on significant other observable inputs (Level 2).
−Removed: Scaling adjustments are made to these inputs to make them applicable to the remaining life of Piedmont's outstanding debt.
−Removed: Piedmont has not changed its valuation technique for estimating the fair value of its debt.
+Added: Piedmont's notes receivable and debt were carried at book value as of December 31, 2021 and 2020;
+Added: however, Piedmont's estimate of the fair value of each of these financial instruments as of each period end is disclosed in the table above.
+Added: Piedmont issued notes receivable in conjunction with the sale of properties to an unrelated third-party buyer in October 2020.
+Added: As the facts and circumstances as of December 31, 2020 were substantially unchanged since the issuance of the notes receivable in October 2020, Piedmont determined that the book value of the notes approximated their estimated fair value as of December 31, 2020.
+Added: Piedmont uses widely accepted valuation techniques including discounted cash flow analysis based on the contractual terms of its notes receivables and debt, including the period to maturity of each note receivable and debt facility, and uses observable market-based inputs for similar loan and debt facilities which have transacted recently in the market.
+Added: Scaling adjustments are made to these inputs to make them applicable to the remaining life of Piedmont's notes receivables and outstanding debt.
+Added: Consequently, the estimated fair values of the notes receivable as of December 31, 2021 and debt as of both December 31, 2020 and December 31, 2021 are considered to be based on significant other observable inputs (Level 2).
Piedmont’s interest rate swap agreements presented above, and as further discussed in Note 5 , are classified as “Interest rate swap” liabilities in the accompanying consolidated balance sheets and were carried at estimated fair value as of December 31, 2021 and 2020.
4 unchanged sentences
however, as of December 31, 2021 and 2020, this credit valuation adjustment did not comprise a material portion of the estimated fair value.
−Removed: Therefore, Piedmont believes that any unobservable inputs used to determine the estimated fair values of its derivative financial instruments are not significant to the fair value measurements in their entirety, and does not consider any of its derivative financial instruments to be Level 3 assets or liabilities.
+Added: Therefore, Piedmont believes that any unobservable inputs used to determine the estimated fair values of its derivative financial instruments are not significant to the fair value measurements in their entirety, and does not consider any of its derivative financial instruments to be Level 3 measurements.
+Added: Piedmont has not changed its valuation technique for estimating the fair value of its notes receivable, debt, or interest rate swap agreements.
Index to Financial Statements
2 unchanged sentences
2021 2020 2019
−Removed: The Dupree (1)
+Added: Two Pierce Place (1)
$ 41,000 $ — $ —
+Added: The Dupree (2)
600 Corporate Drive (3)
1 unchanged sentence
$ 41,000 $ — $ 8,953
+Added: (1) Management shortened the intended hold period for the property during the quarter ended December 31, 2021, and in doing so 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.
+Added: As a result, Piedmont recognized a loss on impairment calculated as the difference between the carrying value of the asset and the estimated fair value less costs to sell.
+Added: The estimated fair value was determined based on the net contract price subsequently entered into with an unrelated, third-party purchaser.
+Added: 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.
(2) The impairment loss recognized was the result of reducing the asset's carrying value to reflect its fair value, estimated based on the net contract price negotiated with a unrelated, third-party purchaser.
12 unchanged sentences
Such audits may result in different interpretations of language in the lease agreements from that made by Piedmont, which could result in requests for refunds of previously recognized tenant reimbursement revenues, resulting in financial loss to Piedmont.
−Removed: There were no reductions in rental and reimbursement revenues related to such tenant audits/disputes during the year ended December 31, 2020.
−Removed: However, Piedmont recorded net recoveries of previously recognized reductions in rental and reimbursement revenues of $ 0.6 million related to tenant audits/disputes during the year ended December 31, 2019, and approximately $ 0.5 million of reductions in rental and reimbursement revenues related to such tenant audits/disputes during the years ended December 31, 2018.
+Added: There were no reductions in rental and reimbursement revenues related to such tenant audits/disputes during the year ended December 31, 2021 or 2020.
+Added: However, Piedmont recorded net recoveries of previously recognized reductions in rental and reimbursement revenues of $ 0.6 million related to tenant audits/disputes during the year ended December 31, 2019.
Contingencies Related to the COVID-19 Pandemic
−Removed: During the year ended December 31, 2020, Piedmont continued to experience the repercussions of the COVID-19 pandemic including forced closures and other restrictions that have had a material adverse effect on the global economy and the regional U.S.
−Removed: economies in which Piedmont operates.
−Removed: Specifically, the pandemic and its impact on the U.S., as well as the global economy, has negatively impacted the trading price of Piedmont's common stock and some of Piedmont's tenants' ability to pay their rent.
−Removed: We have entered into approximately 70 agreements with various tenants that primarily deferred approximately $ 7.1 million of 2020 rent payments into fourth quarter of 2020 or the year ending December 31, 2021.
−Removed: Piedmont has already collected approximately $ 1.3 million of the $ 7.1 million deferred.
−Removed: Nonetheless, Piedmont has established an approximately $ 4.6 million general reserve for potential collectibility issues.
−Removed: There can be no assurances that this amount will be sufficient to cover any future losses of rental income should these tenants be unable to pay back deferred rents when such rents become due.
−Removed: Piedmont’s financial statements as of and for the year ended December 31, 2020 have been prepared in light of these circumstances.
−Removed: Piedmont has continued to follow the policies described in Note 2 above, including those related to impairment of real estate assets and goodwill and estimates of the likelihood of collectibility of amounts due from tenants.
+Added: The long-term impacts of the COVID-19 pandemic on our tenants and the global economy remain unclear and any adverse effect on certain of Piedmont's tenant's operating results or future leasing decisions could, in turn, adversely impact Piedmont's business, financial condition and results of operations.
Index to Financial Statements
−Removed: While the long-term impacts of the COVID-19 pandemic remain unknown, a prolonged economic downturn or recession resulting from the pandemic could adversely affect many of Piedmont's tenants which could, in turn, adversely impact Piedmont's business, financial condition and results of operations.
−Removed: Piedmont will continue to work closely with its tenants and address their concerns on a case-by-case basis, seeking solutions that address immediate cash flow interruptions while maintaining long term lease obligations.
Piedmont is from time to time a party to legal proceedings, which arise in the ordinary course of its business.
6 unchanged sentences
Stock Based Compensation
−Removed: Deferred Stock Awards
−Removed: The Compensation Committee of Piedmont's Board of Directors has periodically granted deferred stock award units to all of Piedmont's employees and independent directors.
−Removed: Most employee awards are time-vested and typically vest ratably over a multi-year period and independent director awards vest over one year .
−Removed: Certain management employees' long-term equity incentive program is split equally between the time-vested award units and a multi-year performance share program whereby the actual awards are contingent upon Piedmont's total stockholder return ("TSR") relative to a peer group of office REITs' TSR.
−Removed: The long-term equity incentives for these certain employees, as well as the peer group, is predetermined by the Board of Directors, advised by an outside compensation consultant.
−Removed: Any shares earned are awarded at the end of the multi-year performance period and vest upon award.
−Removed: The fair values of the multi-year performance share awards are estimated using a Monte Carlo valuation method.
+Added: The Compensation Committee of Piedmont's board of directors has typically granted deferred stock award units to all of Piedmont's employees based upon the previous year's financial results measured against various board approved performance metrics.
+Added: Most employee awards vest ratably over three years .
+Added: In addition, Piedmont's independent directors receive an annual grant of deferred stock award units for services rendered and such awards vest over a one year service period.
+Added: Certain management employees' long-term equity incentive program is split equally between the deferred stock award units described above and a multi-year performance share program whereby actual awards are contingent upon Piedmont's total stockholder return ("TSR") performance relative to the TSR of a peer group of office REITs.
+Added: The target incentives for these certain employees, as well as the peer group to be used for comparative purposes, are predetermined by the board of directors, advised by an outside compensation consultant.
+Added: None of the shares potentially earned are awarded until the end of the multi-year performance period and vest upon award.
+Added: The grant date fair value of the multi-year performance share awards is estimated using the Monte Carlo valuation method.
Index to Financial Statements
5 unchanged sentences
331,354 $ 17.24
−Removed: Increase in Estimated Potential Share Awards based on TSR Performance
+Added: Increase in Estimated Potential Share Awards based on relative TSR Performance for the performance period to date
272,297 $ 24.47
18 unchanged sentences
Index to Financial Statements
−Removed: A detail of Piedmont’s outstanding employee restricted stock awards as of December 31, 2020 is as follows:
+Added: A detail of Piedmont’s outstanding employee restricted stock awards and programs as of December 31, 2021 is as follows:
Date of grant Type of Award Net Shares
2 unchanged sentences
May 3, 2019 Fiscal Year 2019-2021 Performance Share Program — $ 29.43 Shares awarded, if any, will vest immediately upon determination of award in 2022.
−Removed: May 3, 2019 Deferred Stock Award 274,904 $ 21.04 Of the shares granted, 25 % vested on the date of grant, and 25 % vested or will vest on May 3, 2020, 2021, and 2022, respectively.
−Removed: May 3, 2019 Fiscal Year 2019-2021 Performance Share Program — $ 29.43 Shares awarded, if any, will vest immediately upon determination of award in 2022.
February 19, 2020 Deferred Stock Award 158,960 $ 24.41 Of the shares granted, 25 % vested on the date of grant, and 25 % vested or will vest on February 19, 2021, 2022, and 2023, respectively.
March 19, 2020 Fiscal Year 2020-2022 Performance Share Program — $ 25.83 Shares awarded, if any, will vest immediately upon determination of award in 2023.
+Added: February 17, 2021 Deferred Stock Award 266,172 $ 17.15 Of the shares granted, 25 % vested on the date of grant, and 25 % vested or will vest on February 17, 2022, 2023, and 2024, respectively.
+Added: February 18, 2021 Fiscal Year 2021-2023 Performance Share Program — $ 23.04 Shares awarded, if any, will vest immediately upon determination of award in 2024.
May 11, 2021 Deferred Stock Award-Board of Directors 35,077 $ 17.96 Of the shares granted, 100 % will vest by May 11, 2022.
Total 1,099,181
−Removed: (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, 2020.
+Added: (1) Amounts reflect the total original grant to employees and independent directors, net of shares surrendered upon vesting to satisfy required minimum tax withholding obligations through December 31, 2021.
(2) Estimated based on Piedmont's cumulative TSR for the respective performance period through December 31, 2021.
−Removed: Share estimates are subject to change in future periods based upon Piedmont's relative performance compared to its peer group of office REITs' TSR.
−Removed: During the years ended December 31, 2020, 2019, and 2018, Piedmont recognized approximately $ 9.7 million, $ 15.1 million and $ 9.7 million of compensation expense related to stock awards, of which approximately $ 8.5 million, $ 13.6 million and $ 8.6 million, related to the amortization of unvested shares, respectively.
−Removed: During the year ended December 31, 2020, a total of 245,875 shares were issued to employees, net of shares surrendered for income tax obligations.
−Removed: As of December 31, 2020, approximately $ 6.1 million of unrecognized compensation cost related to unvested, annual restricted stock awards remained, which Piedmont will record in its consolidated statements of income over a weighted-average vesting period of approximately one year .
+Added: Share estimates are subject to change in future periods based upon Piedmont's relative TSR performance compared to its peer group of office REITs.
+Added: During the years ended December 31, 2021, 2020, and 2019, Piedmont recognized approximately $ 11.0 million, $ 9.7 million and $ 15.1 million of compensation expense related to stock awards, of which approximately $ 9.7 million, $ 8.5 million and $ 13.6 million related to the amortization of unvested shares and potential stock awards and the fair value adjustment for liability awards, respectively.
+Added: During the year ended December 31, 2021, a total of 297,403 shares (net of shares surrendered upon vesting to satisfy required minimum tax withholding obligations) were issued to employees and independent directors.
+Added: As of December 31, 2021, approximately $ 6.8 million of unrecognized compensation cost related to unvested and potential stock awards remained, which Piedmont will record in its consolidated statements of operations over a weighted-average vesting period of approximately one year .
Earnings Per Share
−Removed: There are no adjustments to “Net income applicable to Piedmont” for the diluted earnings per share computations.
−Removed: Net income per share-basic is calculated as net income available to common stockholders divided by the weighted average number of common shares outstanding during the period.
−Removed: Net income per share-diluted is calculated as net income available to common stockholders divided by the diluted weighted average number of common shares outstanding during the period, including unvested restricted stock awards.
−Removed: Diluted weighted average number of common shares reflects the potential dilution
+Added: There are no adjustments to “Net income/(loss) applicable to Piedmont” for the diluted earnings per share computations.
+Added: Net income/(loss) per share-basic is calculated as net income/(loss) available to common stockholders divided by the weighted average number of common shares outstanding during the period.
+Added: Net income/(loss) per share-diluted is calculated as net income/(loss) available to common stockholders divided by the diluted weighted average number of common shares
Index to Financial Statements
−Removed: under the treasury stock method that would occur if the remaining unvested restricted stock awards vested and resulted in additional common shares outstanding.
−Removed: Unvested restricted stock awards which are determined to be anti-dilutive are not included in the calculation of diluted weighted average common shares.
−Removed: For each of the years ended December 31, 2020, 2019, and 2018, Piedmont excluded approximately 289,681 , 156,317 , and 170,128 of such anti-dilutive shares, respectively.
−Removed: The following table reconciles the denominator for the basic and diluted earnings per share computations shown on the consolidated statements of income for the years ended December 31, 2020, 2019, and 2018, respectively (in thousands):
+Added: outstanding during the period, including unvested deferred stock awards.
+Added: Diluted weighted average number of common shares reflects the potential dilution under the treasury stock method that would occur if the remaining unvested and potential stock awards vested and resulted in additional common shares outstanding.
+Added: Unvested and potential stock awards which are determined to be anti-dilutive are not included in the calculation of diluted weighted average common shares.
+Added: For each of the years ended December 31, 2021, 2020, and 2019, Piedmont calculated and excluded weighted average outstanding anti-dilutive shares of approximately 1,114,025 , 289,681 , and 156,317 , respectively.
+Added: The following table reconciles the denominator for the basic and diluted earnings per share computations shown on the consolidated statements of operations for the years ended December 31, 2021, 2020, and 2019, respectively (in thousands):
2021 2020 2019
14 unchanged sentences
Total $ 2,898,460
−Removed: Piedmont recognized the following fixed and variable lease payments, which together comprised rental and tenant reimbursement revenue in the accompanying consolidated statements of income for the years ended December 31, 2020, 2019, and 2018, respectively, as follows (in thousands):
+Added: Piedmont recognized the following fixed and variable lease payments, which together comprised rental and tenant reimbursement revenue in the accompanying consolidated statements of operations for the years ended December 31, 2021, 2020, and 2019, respectively, as follows (in thousands):
2021 2020 2019
4 unchanged sentences
Operating leases where Piedmont is the lessee relat e primarily to office space in buildings owned by third parties.
−Removed: For both the years ended December 31, 2020 and December 31, 2019, Piedmont's right to use asset and corresponding lease liability is approximately $ 0.2 million, using Piedmont's incremental borrowing rate as the lease discount rate.
−Removed: For both the years ended December 31, 2020 and December 31, 2019, Piedmont recognized approximately $ 0.1 million of operating lease costs.
−Removed: As of December 31, 2020, the weighted-average lease term of Piedmont's right of use assets is 2 years, and the weighted-average discount rate is 1.60 %.
+Added: Piedmont's right to use asset and corresponding lease liability , using Piedmont's incremental borrowing rate as the lease discount rate, was approximately $ 0.1 million for the year ended December 31, 2021 and approximately $ 0.2 million for the year ended December 31, 2020.
+Added: For both the years ended December 31, 2021 and December 31, 2020, Piedmont recognized approximately
Index to Financial Statements
+Added: $ 0.1 million of operating lease costs.
+Added: As of December 31, 2021, the lease term of Piedmont's right of use asset is less than 1 year, and the discount rate is 1.06 %.
Property Dispositions and Assets Held for Sale
1 unchanged sentence
None of Piedmont's property dispositions during the three years ended December 31, 2021 met the criteria to be reported as discontinued operations.
−Removed: The operational results and gain on sale of real estate assets are presented as continuing operations in the accompanying consolidated statements of income, unless otherwise indicated below.
+Added: The operational results and gain on sale of real estate assets are presented as continuing operations in the accompanying consolidated statements of operations, unless otherwise indicated below.
Details of such properties sold are presented below (in thousands):
Buildings Sold Location Date of Sale Gain on Sale of Real Estate Assets Net Sales Proceeds
−Removed: 2017 Disposition Portfolio
−Removed: January 4, 2018 $ 45,275 $ 419,644 (2)
−Removed: 800 North Brand Boulevard Glendale, California November 29, 2018 $ 30,416 $ 155,583
One Independence Square Washington, D.C.
5 unchanged sentences
October 28, 2020 $ 14,636 $ 9,289 (3)
−Removed: (1) The 2017 Disposition Portfolio is comprised of the following properties:
−Removed: Desert Canyon 300 in Phoenix, Arizona;
−Removed: Windy Point I & II in Schaumburg, Illinois;
−Removed: 2300 Cabot Drive in Lisle, Illinois;
−Removed: 1075 West Entrance Drive in Auburn Hills, Michigan;
−Removed: Auburn Hills Corporate Center in Auburn Hills, Michigan;
−Removed: 5301 Maryland Way in Brentwood, Tennessee;
−Removed: Suwanee Gateway One in Suwanee, Georgia;
−Removed: 5601 Hiatus Road in Tamarac, Florida;
−Removed: Piedmont Pointe I & II in Bethesda, Maryland;
−Removed: 1200 Crown Colony Drive in Quincy, Massachusetts;
−Removed: 64th Street in Fort Lauderdale, Florida, and 2120 West End Avenue in Nashville, Tennessee.
−Removed: (2) Piedmont accepted a secured $ 3.2 million promissory note from the buyer for a portion of the sales price, which was subsequently paid in full by the borrower.
(1) As discussed in Note 7 above, Piedmont recognized an impairment loss prior to the sale of the property.
4 unchanged sentences
(3) Piedmont accepted a secured $ 102.8 million promissory note from the buyer, which matures on October 31, 2023 and bears interest at 6 % per annum.
−Removed: The note may not be prepaid without penalty until January 2022, and may be extended for three available one-year periods upon payment of applicable extension fees.
+Added: The note may be extended for three available one-year periods upon payment of applicable extension fees.
Further, Piedmont also accepted a mezzanine note for $ 15.7 million, bearing interest at 13.55 % per annum, which may be repaid any time before the October 31, 2023 maturity without penalty.
−Removed: Assets Held for Sale
−Removed: As of December 31, 2020, no properties met the criteria for held for sale classification;
−Removed: however, as of March 31, 2020, the 1901 Market Street building in Philadelphia, Pennsylvania, which sold June 2020, met the criteria for held for sale classification.
−Removed: Consequently its assets and liabilities as of December 31, 2019 were presented as held for sale for comparability in the accompanying consolidated balance sheets.
Index to Financial Statements
+Added: Assets Held for Sale
+Added: On January 28, 2022, Piedmont sold the 225 and 235 Presidential Way assets in Woburn, Massachusetts for $ 129.0 million, or $ 293 per square foot.
+Added: The assets, which were assigned to the Boston geographic reportable segment, met the criteria for held for sale classification in the accompanying consolidated balance sheets both as of December 31, 2021, as well as December 31, 2020 for comparability.
Details of amounts held for sale as of December 31, 2021 and 2020 are presented below (in thousands):
1 unchanged sentence
Real estate assets held for sale, net:
+Added: $ 7,750 $ 7,750
Building and improvements, less accumulated depreciation of $ 16,699 and $ 16,021 as of December 31, 2021, and 2020, respectively
−Removed: Intangible lease assets, less accumulated amortization of $ 0 and $ 27,438 as of December 31, 2020 and 2019, respectively
+Added: 55,110 52,704
+Added: Construction in progress
Total real estate assets held for sale, net
2 unchanged sentences
Straight-line rent receivables
+Added: $ 2,966 $ 2,356
Deferred lease costs, less accumulated amortization of $ 996 and $ 802 as of December 31, 2021 and 2020, respectively
Total other assets held for sale, net
−Removed: Other liabilities held for sale, net:
−Removed: Intangible lease liabilities, less accumulated amortization of $ 0 and $ 31,959 as of December 31, 2020 and 2019, respectively
+Added: $ 8,393 $ 4,228
Supplemental Disclosures for the Statement of Consolidated Cash Flows
2 unchanged sentences
Accrued capital expenditures and deferred lease costs $ 24,817 $ 20,103 $ 38,366
−Removed: Change in accrued dividends and discount on dividend reinvestments
+Added: Change in accrued dividends
$ ( 365 ) $ ( 744 ) $ ( 545 )
1 unchanged sentence
Notes receivable issued in conjunction with property dispositions $ — $ 118,500 $ —
−Removed: The following table provides a reconciliation of cash, cash equivalents, and restricted cash and escrows as presented in the accompanying consolidated statement of cash flows for the years ended December 31, 2020, 2019, and 2018 to the consolidated balance sheets for the respective period (in thousands):
+Added: The following table provides a reconciliation of cash, cash equivalents, and restricted cash and escrows as presented in the accompanying consolidated statements of cash flows for the years ended December 31, 2021, 2020, and 2019 to the consolidated balance sheets for the respective period (in thousands):
2021 2020 2019
1 unchanged sentence
Restricted cash and escrows, beginning of period 1,883 1,841 1,463
−Removed: Total cash, cash equivalents, and restricted cash and escrows shown in the consolidated statement of cash flows, beginning of period
+Added: Total cash, cash equivalents, and restricted cash and escrows as presented in the accompanying consolidated statement of cash flows, beginning of period
$ 9,214 $ 15,386 $ 6,034
3 unchanged sentences
1,441 1,883 1,841
−Removed: Total cash, cash equivalents, and restricted cash and escrows shown in the consolidated statement of cash flows, end of period
−Removed: $ 9,214 $ 15,386 $ 6,034
−Removed: Amounts in restricted cash and escrows typically represent escrow accounts for the payment of real estate taxes which are required under certain of Piedmont's debt agreements;
−Removed: earnest money deposited by a buyer to secure the purchase of one of our properties;
−Removed: or security or utility deposits held for tenants as a condition of their lease agreement.
+Added: Total cash, cash equivalents, and restricted cash and escrows as presented in the accompanying consolidated statement of cash flows, end of period $ 8,860 $ 9,214 $ 15,386
Index to Financial Statements
−Removed: Piedmont’s income tax basis net income for the years ended December 31, 2020, 2019, and 2018, is calculated as follows (in thousands):
+Added: Amounts in restricted cash and escrows typically represent:
+Added: escrow accounts required for future property repairs;
+Added: escrow accounts for the payment of real estate taxes as required under certain of Piedmont's debt agreements;
+Added: earnest money deposited by a buyer to secure the purchase of one of Piedmont's properties;
+Added: or security or utility deposits held for tenants as a condition of their lease agreement.
+Added: Piedmont’s income tax basis net income/(loss) for the years ended December 31, 2021, 2020, and 2019, is calculated as follows (in thousands):
2021 2020 2019
−Removed: GAAP basis financial statement net income $ 232,688 $ 229,261 $ 130,296
−Removed: Increase/(decrease) in net income resulting from:
+Added: GAAP basis financial statement net income/(loss) $ ( 1,153 ) $ 232,688 $ 229,261
+Added: Increase/(decrease) in net income/(loss) resulting from:
Depreciation and amortization expense recognized for financial reporting purposes in excess of amounts recognized for income tax purposes
4 unchanged sentences
( 9,465 ) ( 11,625 ) ( 7,698 )
−Removed: Gain on disposal of property for financial reporting purposes less than/(in excess of) amounts for income tax purposes
+Added: Gain on disposal of property for financial reporting purposes in excess of amounts for income tax purposes
— ( 222,037 ) ( 85,463 )
−Removed: Taxable income or loss of Piedmont Washington Properties, Inc., in excess of/(less than) amount for financial reporting purposes
+Added: Taxable income or loss of Piedmont Washington Properties, Inc., in excess of amount for financial reporting purposes
3,518 1,345 411
−Removed: Other expenses, including impairment loss on real estate assets, for financial reporting purposes in excess of/ (less than) amounts for income tax purposes
+Added: Other expenses, including impairment loss on real estate assets, for financial reporting purposes in excess of amounts for income tax purposes
51,095 10,970 23,127
9 unchanged sentences
100 % 100 % 100 %
−Removed: Piedmont has $ 0 and approximately $ 1.0 million of uncertain tax positions included in accounts payable, accrued expenses, and accrued capital expenditures in the accompanying consolidated balance sheets as of December 31, 2020 and 2019, respectively.
−Removed: Piedmont recognized approximately $ 1.0 million of recoveries of previously recorded estimated accrued interest and penalties for the year ended December 31, 2020, and approximately $ 1.4 million of such recoveries for both the years ended December 31, 2019 and 2018.
+Added: Piedmont has no uncertain tax positions as of December 31, 2021 and 2020, respectively.
+Added: Piedmont recognized approximately $ 0 , $ 1.0 million, $ 1.4 million of recoveries of previously recorded estimated accrued interest and penalties for the years ended December 31, 2021, 2020 and 2019.
The tax years 2018 to 2020 remain open to examination by various federal and state taxing authorities.
−Removed: Quarterly Results (unaudited)
−Removed: A summary of the unaudited quarterly financial information for the years ended December 31, 2020 and 2019, is presented below (in thousands, except per-share data):
−Removed: First Second Third Fourth
−Removed: Revenues $ 137,171 $ 134,631 $ 131,693 $ 131,529
−Removed: Gain/(loss) on sale of real estate assets $ 3 $ 191,369 $ ( 340 ) $ 14,634
−Removed: Net income $ 8,711 $ 192,426 $ 8,940 $ 22,608
−Removed: Net income applicable to Piedmont $ 8,709 $ 192,427 $ 8,943 $ 22,609
−Removed: Basic earnings per share $ 0.07 $ 1.53 $ 0.07 $ 0.18
−Removed: Diluted earnings per share $ 0.07 $ 1.52 $ 0.07 $ 0.18
−Removed: Dividends declared per share $ 0.21 $ 0.21 $ 0.21 $ 0.21
−Removed: Index to Financial Statements
−Removed: First Second Third Fourth
−Removed: Revenues $ 132,936 $ 130,668 $ 135,421 $ 134,153
−Removed: Gain on sale of real estate assets $ 37,887 $ 1,451 $ 32 $ 157,640
−Removed: Net income $ 50,209 $ 8,152 $ 8,419 $ 162,476
−Removed: Net income applicable to Piedmont $ 50,208 $ 8,153 $ 8,422 $ 162,478
−Removed: Basic and diluted earnings per share $ 0.40 $ 0.06 $ 0.07 $ 1.29
−Removed: Dividends declared per share $ 0.21 $ 0.21 $ 0.21 $ 0.21
Segment Information
−Removed: Piedmont’s accelerated disposition program has narrowed the geographic footprint of the portfolio, with a concentration on Sunbelt properties.
−Removed: During the year ended December 31, 2020, Piedmont disposed of its only asset in Philadelphia, Pennsylvania and its remaining assets in New Jersey (see Note 13 ).
−Removed: As a result of this concentration of Piedmont's portfolio, the chief operating decision maker ("CODM"), who is Piedmont's President and Chief Executive Officer, began to evaluate Piedmont's portfolio and assess the ongoing operations and performance of its properties utilizing the following geographic segments:
+Added: Piedmont's President and Chief Executive Officer has been identified as Piedmont's chief operating decision maker ("CODM"), as defined by GAAP.
+Added: The CODM evaluates Piedmont's portfolio and assesses the ongoing operations and performance of its properties utilizing the following geographic segments:
Dallas, Atlanta, Washington, D.C., Minneapolis, Boston, Orlando, and New York.
These operating segments are also Piedmont’s reportable segments.
−Removed: Additionally, as of December 31, 2020, Piedmont owns two properties in Houston and one property in Chicago that do not meet the definition of an operating or reportable segment as the CODM does not regularly review these properties for purposes of allocating resources or assessing performance, and Piedmont does not maintain a significant presence or anticipate further investment in these markets.
+Added: As of December 31, 2021, Piedmont also owned two properties in Houston and one property in Chicago that do not meet the definition of an operating or reportable segment as the CODM does not regularly review these properties for purposes of allocating resources or assessing performance.
+Added: Subsequent to December 31, 2021, Piedmont sold the last remaining asset owned in the Chicago office market (see Note 17 ).
+Added: Further, Piedmont does not maintain a significant presence or anticipate further investment in these markets.
These three properties are included in "Corporate and other" below.
−Removed: During the periods presented, there have been no material intersegment transactions.
−Removed: The accounting policies of the reportable segments are the same as Piedmont.
−Removed: NOI by geographic segment is the primary performance measure reviewed by the CODM to assess operating performance and is calculated by deducting operating expenses from revenues.
−Removed: Revenues include lease revenues and other property income;
−Removed: and operating expenses include property operating costs.
−Removed: The NOI consists only of revenues and expenses directly related to real estate rental operations.
+Added: During the periods presented, there have been no material inter segment transactions.
+Added: The accounting policies of the reportable segments are the same as Piedmont's accounting policies.
+Added: Index to Financial Statements
+Added: Accrual-based net operating income ("NOI") by geographic segment is the primary performance measure reviewed by Piedmont's CODM to assess operating performance and consists only of revenues and expenses directly related to real estate rental operations.
+Added: NOI is calculated by deducting property operating costs from lease revenues and other property related income.
NOI reflects property acquisitions and dispositions, occupancy levels, rental rate increases or decreases, and the recoverability of operating expenses.
−Removed: NOI, as Piedmont calculates it, may not be directly comparable to similarly titled, but differently calculated, measures for other REITs.
+Added: Piedmont's calculation of NOI may not be directly comparable to similarly titled measures calculated by other REITs.
Asset value information and capital expenditures by segment are not reported because the CODM does not use these measures to assess performance.
−Removed: The following table presents revenues included in NOI by geographic reportable segments (in thousands):
+Added: The following table presents accrual-based lease revenue and other property related income included in NOI by geographic reportable segment (in thousands):
Years Ended December 31,
11 unchanged sentences
Total Revenues $ 528,710 $ 535,024 $ 533,178
−Removed: Index to Financial Statements
The following table presents NOI by geographic reportable segments (in thousands):
12 unchanged sentences
Total NOI $ 317,627 $ 319,459 $ 320,624
−Removed: A reconciliation of Net income applicable to Piedmont to NOI is presented below (in thousands):
+Added: Index to Financial Statements
+Added: A reconciliation of Net income/(loss) applicable to Piedmont to NOI is presented below (in thousands):
Years Ended December 31,
2021 2020 2019
−Removed: Net income applicable to Piedmont $ 232,688 $ 229,261 $ 130,296
+Added: Net income/(loss) applicable to Piedmont $ ( 1,153 ) $ 232,688 $ 229,261
Management fee revenue (1)
10 unchanged sentences
(1) Presented net of related operating expenses incurred to earn such management fee revenue.
−Removed: Such operating expenses are a component of property operating costs in the accompanying consolidated statements of income.
+Added: Such operating expenses are a component of property operating costs in the accompanying consolidated statements of operations.
Subsequent Events
1 unchanged sentence
On February 2, 2022, the board of directors declared a dividend for the first quarter 2022 in the amount of $ 0.21 per share on its common stock to stockholders of record as of the close of business on February 25, 2022, payable on March 18, 2022.
+Added: Sale of Two Pierce Place
+Added: On January 25, 2022, Piedmont sold the Two Pierce Place building in Itasca, Illinois, the last remaining asset owned in the Chicago office market, for a sales price of approximately $ 24.0 million.
+Added: Sale of 225/235 Presidential Way
+Added: On January 28, 2022, Piedmont sold the 225 and 235 Presidential Way assets in Woburn, Massachusetts for $ 129.0 million.
Index to Financial Statements
52 unchanged sentences
(in years) (5)
−Removed: TWO PIERCE PLACE Itasca, IL 100 % None 4,370 70,632 75,002 12,528 8,156 79,374 87,530 25,018 1991 12/7/2006 0 - 40
+Added: TWO PIERCE PLACE (6)
+Added: Itasca, IL 100 % None 4,370 70,632 75,002 ( 26,780 ) 8,156 40,066 48,222 28,288 1991 12/7/2006 0 - 40
ONE MERIDIAN CROSSINGS Richfield, MN 100 % None 2,919 24,398 27,317 629 2,919 25,027 27,946 7,891 1997 10/1/2010 0 - 40
1 unchanged sentence
THE MEDICI Atlanta, GA 100 % None 1,780 11,510 13,290 5,830 1,780 17,340 19,120 7,150 2008 6/7/2011 0 - 40
−Removed: 225 PRESIDENTIAL WAY Boston, MA 100 % None 3,626 36,916 40,542 ( 5,419 ) 3,612 31,511 35,123 7,363 2001 9/13/2011 0 - 40
−Removed: 235 PRESIDENTIAL WAY Boston, MA 100 % None 4,154 44,048 48,202 ( 6,851 ) 4,138 37,213 41,351 8,659 2000 9/13/2011 0 - 40
+Added: 225 PRESIDENTIAL WAY (7)
+Added: Boston, MA 100 % None 3,626 36,916 40,542 ( 3,534 ) 3,612 33,396 37,008 7,686 2001 9/13/2011 0 - 40
+Added: 235 PRESIDENTIAL WAY (7)
+Added: Boston, MA 100 % None 4,154 44,048 48,202 ( 4,624 ) 4,138 39,440 43,578 9,012 2000 9/13/2011 0 - 40
400 TOWNPARK Lake Mary, FL 100 % None 2,570 20,555 23,125 5,635 2,570 26,190 28,760 9,198 2008 11/10/2011 0 - 40
4 unchanged sentences
161 CORPORATE CENTER Irving, TX 100 % None 2,020 10,680 12,700 ( 714 ) 2,020 9,966 11,986 2,485 1998 12/30/2013 0 - 40
−Removed: 5 WALL STREET Burlington, MA 100 % 27,610 9,560 50,276 59,836 ( 2,212 ) 9,560 48,064 57,624 8,813 2008 6/27/2014 0 - 40
+Added: 5 WALL STREET Burlington, MA 100 % None 9,560 50,276 59,836 6,108 9,560 56,384 65,944 10,311 2008 6/27/2014 0 - 40
1155 PERIMETER CENTER WEST Atlanta, GA 100 % None 5,870 66,849 72,719 15,433 5,870 82,282 88,152 16,320 2000 8/28/2014 0 - 40
38 unchanged sentences
222 SOUTH ORANGE AVENUE Orlando, FL 100 % None 1,899 18,417 20,316 1,756 1,899 20,173 22,072 15 1959 10/29/2020 0 40
+Added: 999 PEACHTREE STREET Atlanta, GA 100 % None 49,067 156,109 205,176 178 49,067 156,287 205,354 2,191 1987 10/22/2021 0 40
UNDEVELOPED LAND PARCELS (6)
4 unchanged sentences
(3) Includes improvements and carrying costs capitalized subsequent to acquisition, as well as reductions related to write-offs of fully depreciated/amortized capitalized assets and impairment losses on real estate assets.
−Removed: (4) The net carrying value of Piedmont’s total assets for federal income tax purposes is approximately $ 3.3 billion.
Index to Financial Statements
+Added: (4) The net carrying value of Piedmont’s total assets for federal income tax purposes is approximately $ 3.7 billion.
(5) Piedmont’s assets are depreciated or amortized using the straight-line method over the useful lives of the assets by class.
1 unchanged sentence
Generally, Building Improvements are depreciated over 5 - 25 years, Land Improvements are depreciated over 20 - 25 years, and Buildings are depreciated over 40 years.
+Added: (6) During the year ended December 31, 2021, Piedmont recognized a $ 41.0 million impairment charge on the Two Pierce Place asset.
+Added: See Note 7 for further detail.
+Added: (7) As of December 31, 2021, the 225 and 235 Presidential Way assets were under a binding contract to be sold, and were presented as held for sale in the accompanying consolidated balance sheets.
+Added: See N ote 13 for further information.
+Added: The sale of the assets closed on January 28, 2022.
(8) Undeveloped Land Parcels includes land parcels that Piedmont may develop in the future.
21 unchanged sentences
Balance at the end of the year $ 961,682 $ 835,392 $ 875,777
−Removed: (1) Piedmont recognized an impairment loss on the Dupree building, as well as the 600 Corporate Drive building (see Note 7 ).
+Added: (1) Piedmont recognized an impairment loss on the Two Pierce Place building during the year ended December 31, 2021, as well as the Dupree building and the 600 Corporate Drive building during the year ended December 31, 2019 (see Note 7 ).
(2) Consists of write-offs of intangible lease assets related to lease restructurings, amendments, and terminations.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.