What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2023-02-23 compared with 2022-02-17 · 295 added, 295 removed, 1043 unchanged (36% of the section changed)

7 unchanged sentences

• provide reasonable assurance that the transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of management and/or members of the board of directors;

Index to Financial Statements

• provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.

15 unchanged sentences

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

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.

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, 2022, of the Company and our report dated February 23, 2023, expressed an unqualified opinion on those 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.

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 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.

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;

(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;

(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;

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.

19 unchanged sentences

The information required by Item 13 will be set forth in our definitive proxy statement to be filed with the SEC within 120 days of the end of the fiscal year ended December 31, 2022, and is incorporated herein by reference.

PRINCIPAL ACCOUNTING FEES AND SERVICES

PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by Item 14 will be set forth in our definitive proxy statement to be filed with the SEC within 120 days of the end of the fiscal year ended December 31, 2022, and is incorporated herein by reference.

Index to Financial Statements

EXHIBITS, FINANCIAL STATEMENT SCHEDULES

The financial statements begin on page F-4 of this Annual Report on Form 10-K, and the list of the financial statements contained herein is set forth on page F-1 , which is hereby incorporated by reference.

EXHIBIT AND FINANCIAL STATEMENT SCHEDULES

The financial statements begin on page F-4 of this Annual Report on Form 10-K.

The following financial statements of the Registrant, together with the applicable report of independent registered public accounting firm, are filed as part of this report:

Financial Statements Page

Report of Independent Registered Public Accounting Firm (PCAOB Firm # 34)

Consolidated Balance Sheets as of December 31, 2022 and 2021

Consolidated Statements of Operations for the Years December 31, 2022, 2021, and 2020

Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2022, 2021, and 2020

Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2022, 2021, and 2020

Consolidated Statements of Cash Flows for the Years Ended December 31, 2022, 2021, and 2020

Notes to Consolidated Financial Statements

Schedule III—Real Estate Assets and Accumulated Depreciation.

1 unchanged sentence

Other schedules are omitted because of the absence of conditions under which they are required or because the required information is given in the financial statements or notes thereto.

(b) The Exhibits filed in response to Item 601 of Regulation S-K are listed on the Exhibit Index attached hereto.

Index to Financial Statements

Pursuant to the requirements of Sections 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized this 17 th day of February, 2022.

Piedmont Office Realty Trust, Inc.

B RENT S MITH

Chief Executive Officer, Principal Executive Officer, and Director

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacity as and on the date indicated.

Signature Title Date

/s/ F RANK C.

Chairman, and Director February 17, 2022

Vice-Chairman, and Director February 17, 2022

/s/ K ELLY H.

Director February 17, 2022

/s/ W ESLEY E.

Director February 17, 2022

/s/ G LENN G.

Director February 17, 2022

/s/ B ARBARA B.

Director February 17, 2022

/s/ J EFFREY L.

Director February 17, 2022

B RENT S MITH

Chief Executive Officer and Director February 17, 2022

Brent Smith (Principal Executive Officer)

/s/ R OBERT E.

Chief Financial Officer and Executive Vice-President February 17, 2022

Bowers (Principal Financial Officer)

/s/ L AURA P.

Chief Accounting Officer February 17, 2022

Moon (Principal Accounting Officer)

Index to Financial Statements

EXHIBIT INDEX

2021 FORM 10-K

PIEDMONT OFFICE REALTY TRUST, INC.

(b) The Exhibits filed in response to Item 601 of Regulation S-K are listed on the Exhibit Index listed below.

Exhibit Number Description of Document

13 unchanged sentences

Bank National Association, as trustee (incorporated by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K, filed on March 6, 2014)

Index to Financial Statements

4.5 Form of 4.450% Senior Notes due 2024 (included in Exhibit 4.2 hereto)

8 unchanged sentences

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)

Index to Financial Statements

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)

11 unchanged sentences

10.10* Employment Agreement dated January 1, 2019, by and between the Company and Christopher Kollme (incorporated by reference to Exhibit 10.31 to the Company's Annual Report on Form 10-K for the year ended December 31, 2018, filed on February 20, 2019)

10.11* Retirement Agreement and General Release by and between the Company and Donald A.

Miller (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed on March 19, 2019)

10.11* Employment Agreement, dated as of March 19, 2019, between the Company and C.

4 unchanged sentences

Owens (incorporated by reference to Exhibit 10.30 to the Company's Annual Report on Form 10-K for the year ended December 31, 2016, filed on February 21, 2017)

Index to Financial Statements

10.14 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)

4 unchanged sentences

10.17* 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)

Index to Financial Statements

10.18 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.

16 unchanged sentences

as Parent, Suntrust Robinson Humphrey, Inc., as Lead Arranger and Book Manager, Truist Bank, as Administrative Agent, and the other financial institutions initially signatory hereto and their assignees as Lenders (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on February 12, 2020)

Index to Financial Statements

10.26 Amendment No.

9 unchanged sentences

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)

Index to Financial Statements

10.31* 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)

1 unchanged sentence

10.33* 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)

10.34 Amended and Restated Revolving Credit Agreement, dated as of June 14, 2022, by and among Piedmont Operating Partnership, LP, as Borrower, Piedmont Office Realty Trust, Inc., as Parent, JPMorgan Chase Bank, N.A., Truist Securities, Inc., U.S.

Bank National Association, PNC Capital Markets LLC and Wells Fargo Securities, LLC., as Joint Lead Arrangers, JPMorgan Chase Bank, N.A., as Administrative Agent, Truist Bank, U.S.

Bank National Association, PNC Bank, National Association, and Wells Fargo Bank, N.A.

as Syndication Agents, and the other financial institutions initially signatory thereto and their assignees (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed June 15, 2022)

10.35 Term Loan Agreement dated as of July 22, 2022, by and among Piedmont Operating Partnership, LP, as Borrower, Piedmont Office Realty Trust, Inc., as Parent, Truist Securities, Inc., as Lead Arranger and Book Manager, Truist Bank, as Administrative Agent, and the other financial institutions initially signatory thereto and their assignees (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed July 27, 2022)

10.36 Amendment No.

1 to Term Loan Agreement dated as of December 14, 2022, by and among Piedmont Operating Partnership, LP, as Borrower, Piedmont Office Realty Trust, Inc., as Parent, Truist Securities, Inc., as Lead Arranger and Book Manager, Truist Bank, as Administrative Agent, and the other financial institutions initially signatory thereto and their assignees (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed December 14, 2022)

10.37 Loan Assignment and Assumption Agreement and Omnibus Amendment to Note, Loan Agreement and Other Loan Documents (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed August 16, 2022)

10.38 Loan Agreement dated as of September 10, 2018 by and between 1180 Peachtree Office Investors, LLC, as Borrower, and Metlife Real Estate Lending LLC, as Lender (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed August 16, 2022)

10.39* Piedmont Office Realty Trust, Inc.

Long-Term Incentive Program Award Agreement effective February 17, 2022 (incorporated by reference to Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2022, filed on April 27, 2022)

10.40* Form of Employee Deferred Stock Award Agreement for Second Amended and Restated 2007 Omnibus Incentive Plan of the Company effective February 10, 2022 (incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2022 filed on April 27, 2022)

Index to Financial Statements

10.41* Form of Employee Officer Deferred Stock Award Agreement for Second Amended and Restated 2007 Omnibus Incentive Plan of the Company effective February 10, 2022 (incorporated by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2022 filed on April 27, 2022)

10.42* Employment Agreement dated November 1, 2022, by and between the Company and George M.

Wells (incorporated by reference to Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2022 filed on November 2, 2022)

21.1 List of Subsidiaries of the Company

16 unchanged sentences

Index to Financial Statements

Piedmont Office Realty Trust, Inc.

B RENT S MITH

Chief Executive Officer, Principal Executive Officer, and Director

Signature Title Date

/s/ F RANK C.

Chairman, and Director February 23, 2023

Vice-Chairman, and Director February 23, 2023

/s/ K ELLY H.

Director February 23, 2023

/s/ G LENN G.

Director February 23, 2023

/s/ V ENKATESH S.

Director February 23, 2023

/s/ B ARBARA B.

Director February 23, 2023

/s/ J EFFREY L.

Director February 23, 2023

B RENT S MITH

Chief Executive Officer and Director February 23, 2023

Brent Smith (Principal Executive Officer)

/s/ R OBERT E.

Chief Financial Officer and Executive Vice-President February 23, 2023

Bowers (Principal Financial Officer)

/s/ L AURA P.

Chief Accounting Officer February 23, 2023

Moon (Principal Accounting Officer)

Index to Financial Statements

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

20 unchanged sentences

Our responsibility is to express an opinion on the Company's financial statements based on our audits.

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.

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.

7 unchanged sentences

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Revenues—Refer to Note 2 (Revenue Recognition) to the financial statements

Valuation of Goodwill – Refer to Note 2 to the financial statements

Critical Audit Matter Description

Rental and tenant reimbursement revenue consists of revenue from leases with the Company’s tenants, as well as reimbursements for services prescribed by such leases.

The Company recognizes fixed base rental payments, as well as any fixed portions of reimbursement income, on a straight-line basis over the term of the related lease.

The timing of rental revenue recognition is largely dependent on whether the Company is the owner of tenant improvements at the leased property.

In determining whether the Company or the tenant owns such tenant improvements, the Company considers a number of factors, including, among other things:

whether the tenant is obligated by the terms of the lease agreement to construct or install the leasehold improvements as a condition of the lease;

whether the landlord can require the lessee to make specified improvements or otherwise enforce its economic rights to those assets;

whether the tenant is required to provide the landlord with documentation supporting the cost of tenant improvements prior to reimbursement by the landlord;

and whether the leasehold improvements are unique to the tenant or could reasonably be used by other parties.

The Company assesses its goodwill for impairment on an annual basis, or on an interim basis if an event occurs or circumstances change that would indicate it is more likely than not that the fair value of a reporting unit may be less than its carrying value.

If the Company concludes that the fair value of a reporting unit is less than its carrying value, then the Company recognizes an impairment loss equal to the excess of the reporting unit’s carrying amount over its estimated fair value (not to exceed the total goodwill allocated to that reporting unit).

The Company’s estimation of the fair value of each reporting unit involves projections of discounted future cash flows, which are derived using certain assumptions that are subjective in nature.

Total goodwill as of December 31, 2022, was approximately $83 million.

During the year ended December 31, 2022, the Company recorded a goodwill impairment loss of approximately $16 million.

Index to Financial Statements

The determination of whether the Company or its tenant owns the tenant improvements and the timing and amount of revenue recognition requires the exercise of significant judgment by management based on the facts and circumstances of the specific lease arrangement and is not based on any one factor.

Auditing management’s conclusions with respect to these matters often is complex and requires subjective judgment.

Auditing the goodwill impairment assessment required a high degree of auditor judgment and increased extent of effort due to the significant estimation uncertainty in certain assumptions used to determine the fair value of each reporting unit.

Specifically, the capitalization rate and discount rate assumptions selected by the Company to determine the fair value of each reporting unit are inherently subjective, and changes in these assumptions could have a significant impact on a reporting unit’s estimated fair value.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to management’s determination of the owner of the tenant improvements and the related impact on the timing and amount of revenue recognition, included the following, among others:

• We tested the effectiveness of controls over revenue recognition, including the determination of the owner of tenant improvements and the timing and amounts of rental revenues to be recognized over the term of the related lease.

• We selected a sample of lease agreements and performed the following to evaluate the appropriateness of management’s conclusions regarding the owner of the tenant improvements and the timing and amount of revenue recognition:

◦ Evaluated the reasonableness and consistency of the factors considered by management to determine the owner of the tenant improvements and compared such factors to the terms in the lease agreement and other supporting documents.

◦ Tested the timing and amounts recognized as rental revenue, including any amortization of deferred revenue or lease incentives, by independently calculating such rental revenue amounts to be recognized and comparing it to the amounts recorded by the Company.

Our audit procedures related to the capitalization rate and discount rate assumptions used in determining the fair value of each of the Company’s reporting units included the following, among others:

• We tested the effectiveness of internal controls related to management’s goodwill impairment evaluation, including those related to the selection of the capitalization rates and discount rates used in the valuation of each reporting unit.

• We evaluated the reasonableness of the capitalization rates and discount rates used by management to estimate the fair value of its reporting units based on independent market data, focusing on geographic location and other property characteristics.

• We developed independent estimates of capitalization rates and discount rates and compared those to the rates used by management.

• We evaluated whether the assumptions were consistent with evidence obtained in other areas of the audit.

/s/ Deloitte & Touche LLP

23 unchanged sentences

Goodwill 82,937 98,918

Interest rate swaps

Deferred lease costs, less accumulated amortization of $ 221,731 and $ 205,100 as of December 31, 2022 and December 31, 2021, respectively

4 unchanged sentences

$ 1,786,681 $ 1,877,790

Secured debt, inclusive of premiums and unamortized debt issuance costs of $ — and $ 326 as of December 31, 2021 and December 31, 2020, respectively

Accounts payable, accrued expenses, and accrued capital expenditures 110,306 114,453

33 unchanged sentences

Amortization 90,937 85,992 93,294

Impairment loss on real estate assets 41,000 — 8,953

Impairment losses 25,981 41,000 —

General and administrative 29,127 30,252 27,464

24 unchanged sentences

8,202 2,994 ( 26,794 )

Reclassification of net loss/(gain) included in net income (See Note 5 )

Reclassification of net loss included in net income (See Note 5 )

1,273 2,952 1,727

18 unchanged sentences

Share repurchases as part of announced plan ( 2,190 ) ( 22 ) — ( 30,649 ) — — ( 30,671 )

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 )

Offering costs — — ( 55 ) — — — ( 55 )

Dividends to common stockholders ($ 0.84 per share), stockholders of subsidiaries, and dividends reinvested

2 unchanged sentences

Net loss applicable to noncontrolling interest — — — — — ( 14 ) ( 14 )

Net income applicable to Piedmont — — — 232,688 — — 232,688

Other comprehensive loss — — — — ( 25,067 ) — ( 25,067 )

Net loss applicable to Piedmont — — — ( 1,153 ) — — ( 1,153 )

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

Share repurchases as part of announced plan ( 1,060 ) ( 10 ) — ( 18,842 ) — — ( 18,852 )

Offering costs — — ( 460 ) — — — ( 460 )

2 unchanged sentences

Shares issued and amortized under the 2007 Omnibus Incentive Plan, net of tax 363 3 9,667 — — — 9,670

Net loss applicable to noncontrolling interest — — — — — ( 14 ) ( 14 )

Net loss applicable to Piedmont — — — ( 1,153 ) — — ( 1,153 )

Net income applicable to Piedmont — — — 146,830 — — 146,830

Other comprehensive income — — — — 9,475 — 9,475

14 unchanged sentences

Other amortization 81,777 78,657 84,534

Impairment loss on real estate assets 41,000 — 8,953

Impairment losses 25,981 41,000 —

Loss on extinguishment of debt — — 349

General reserve/(recovery) for uncollectible accounts ( 553 ) 4,553 —

General reserve/(reversal) for uncollectible accounts ( 3,000 ) ( 553 ) 4,553

Stock compensation expense 8,968 10,984 9,718

8 unchanged sentences

( 1,590 ) 1,861 6,264

(Decrease)/increase in deferred income

Decrease in deferred income

( 20,006 ) ( 4,690 ) ( 1,814 )

6 unchanged sentences

297,388 — 360,094

Note receivable repayment

Deferred lease costs paid ( 24,868 ) ( 20,295 ) ( 28,334 )

Net cash (used in)/provided by investing activities

Net cash used in investing activities

( 1,247 ) ( 368,932 ) ( 197,876 )

10 unchanged sentences

( 104,374 ) ( 103,905 ) ( 106,309 )

Net cash provided by/(used in) financing activities

Net cash (used in)/provided by financing activities

( 203,228 ) 126,375 ( 1,580 )

Net (decrease)/increase in cash, cash equivalents, and restricted cash and escrows ( 354 ) ( 6,172 ) 9,352

Net increase/(decrease) in cash, cash equivalents, and restricted cash and escrows 10,740 ( 354 ) ( 6,172 )

Cash, cash equivalents, and restricted cash and escrows, beginning of year 8,860 9,214 15,386

7 unchanged sentences

(“Piedmont”) (NYSE:

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.

office markets, with a majority of its revenue being generated from Sunbelt markets.

Sunbelt markets.

Piedmont was incorporated in 1997 and commenced operations in 1998.

3 unchanged sentences

References to Piedmont herein shall include Piedmont and all of its subsidiaries, including Piedmont OP and its subsidiaries and joint ventures.

As of December 31, 2021, Piedmont owned 55 in-service office properties and one redevelopment asset in select sub-markets located within seven major U.S.

office markets:

Dallas, Atlanta, Washington, D.C., Minneapolis, Boston, Orlando, and New York.

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.

As of December 31, 2022, Piedmont owned 51 in-service office properties and one redevelopment asset, primarily located in major U.S.

Sunbelt office markets.

As of December 31, 2022, the in-service office properties comprised approximately 16.7 million square feet (unaudited) and were 86.7 % leased.

Summary of Significant Accounting Policies

15 unchanged sentences

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.

The most significant of these estimates includes the underlying cash flows and holding periods used in assessing impairment, judgements regarding the recoverability of goodwill including the assumptions associated with the capitalization rates and discount rates used in valuing the properties in each reporting unit, 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.

7 unchanged sentences

All repairs and maintenance are expensed as incurred.

Additionally, Piedmont capitalizes interest while the development, or redevelopment, of a real estate asset is in progress.

Additionally, Piedmont capitalizes interest and other costs such as taxes and insurance while the development, or redevelopment, of a real estate asset is in progress.

Piedmont’s real estate assets are depreciated or amortized using the straight-line method over the following useful lives:

5 unchanged sentences

Intangible lease assets Lease term

Piedmont continually monitors events and changes in circumstances that could indicate that the carrying amounts of the real estate and related intangible assets of either operating properties or properties under construction in which Piedmont has an ownership interest, either directly or through investments in joint ventures, may not be recoverable.

Piedmont continually monitors events and changes in circumstances that could indicate that the carrying amounts of the real estate and related intangible assets of operating properties in which Piedmont has an ownership interest, either directly or through investments in joint ventures, may not be recoverable.

When indicators of potential impairment are present, management assesses whether the respective carrying values will be recovered from the undiscounted future operating cash flows expected from the use of the asset and its eventual disposition for assets held for use, or from the estimated fair values, less costs to sell, for assets held for sale.

10 unchanged sentences

Management also estimates the cost to execute similar leases including leasing commissions, legal, and other related costs.

The estimated fair values of above-market and below-market in-place leases are recorded based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) management’s estimate of market rates for the corresponding in-place leases, measured over a period equal to the remaining terms of the leases, taking into consideration the probability of renewals for any below-market leases.

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.

Index to Financial Statements

below-market leases.

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.

The amount capitalized as direct costs associated with obtaining a tenant include commissions, tenant improvements, and other direct costs and are estimated based on management’s consideration of current market costs to execute a similar lease.

The amount capitalized as a direct cost associated with obtaining a tenant includes commissions, tenant improvements, and other direct costs and is estimated based on management’s consideration of current market costs to execute a similar lease.

These direct lease origination costs are included in deferred lease costs in the accompanying consolidated balance sheets and are amortized to expense over the remaining terms of the respective leases.

1 unchanged sentence

These lease intangibles are included in intangible lease assets in the accompanying consolidated balance sheets and are amortized to expense over the remaining terms of the respective leases.

Gross intangible assets and liabilities, inclusive of amounts classified as real estate assets held for sale, recorded at acquisition as of December 31, 2021 and 2020, respectively, are as follows (in thousands):

Gross intangible assets and liabilities, inclusive of amounts classified as real estate assets held for sale, recorded as of December 31, 2022 and 2021, respectively, are as follows (in thousands):

December 31, 2022 December 31, 2021

23 unchanged sentences

(1) Included as a component of Deferred Lease Costs in the accompanying consolidated balance sheets.

Index to Financial Statements

Cash and Cash Equivalents

2 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.

Short-term investments consist of investments in money market accounts stated at cost, which approximates estimated fair

Index to Financial Statements

value, and available-for-sale securities associated with Piedmont's non-qualified deferred compensation program carried at estimated fair value.

Short-term investments consist of investments in money market accounts stated at cost, which approximates estimated fair 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

6 unchanged sentences

Details of Piedmont's allowance for doubtful accounts for the years ended December 31, 2022, 2021, and 2020 are as follows:

Balance at Beginning of Period Additions Charged as Reduction of Revenue Deductions and Write-offs Balance at End of Period

Balance at Beginning of Period Additions/Reversals as Decrease/(Increase) to Revenue Write-offs Balance at End of Period

Year Ended December 31,

1 unchanged sentence

2021 $ 4,553 $ 35 $ ( 588 ) $ 4,000

2020 $ — $ 8,734 $ ( 4,181 ) $ 4,553

Restricted Cash and Escrows

13 unchanged sentences

Index to Financial Statements

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.

Such interim circumstances may include, but are not limited to, significant adverse changes in legal factors or in the general business climate, adverse action or assessment by a regulator, unanticipated competition, the loss of key personnel, or persistent declines in an entity’s stock price below carrying value of the entity.

Piedmont first assesses qualitative factors to determine whether the existence of events or circumstances leads to a determination that a material indicator of impairment exists.

If Piedmont concludes, after assessing the totality of events and circumstances during the qualitative analysis, that a material indicator does exist and that it is more likely than not that the goodwill balance in one or more reporting units is impaired, then Piedmont will recognize a goodwill impairment loss equal to the excess of the reporting unit’s carrying amount over its estimated fair value (not to exceed the total goodwill allocated to that reporting unit).

There were no changes in the carrying amount of Piedmont's goodwill during the year ended December 31, 2021.

(See Note 16 below for further detail).

Piedmont tests the carrying value of the goodwill assigned to each of its reporting units for impairment on an annual basis, or on an interim basis if an event occurs or circumstances change that would indicate it is more likely than not that the fair value of a reporting unit may be less than its carrying value.

In performing its goodwill impairment assessment, Piedmont compares the estimated fair value of each of its reporting units to the reporting unit’s carrying value.

If Piedmont concludes that the fair value of a reporting unit is less than its carrying value, then Piedmont would recognize a goodwill impairment loss equal to the excess of the reporting unit’s carrying amount over its estimated fair value (not to exceed the total goodwill allocated to that reporting unit).

Estimation of the fair value of each reporting unit involves projections of discounted future cash flows, which are derived using certain assumptions that are subjective in nature.

Piedmont also makes assumptions about future market rental income amounts subsequent to the expiration of current lease agreements, property operating expenses, and the number of months it takes to re-lease the property, among other factors.

Piedmont determined that its goodwill was impaired during the year ended December 31, 2022, and recorded a goodwill impairment loss equal to the excess of its Washington, D.C/Northern Virginia reporting unit’s carrying amount over its estimated fair value, or approximately $ 16.0 million, in the accompanying consolidated statement of operations.

The fair value measurements used in the evaluation described above are considered to be Level 3 valuations within the fair value hierarchy as defined by GAAP as they involve projections of discounted future cash flows, which are derived from unobservable assumptions, the most subjective of which are capitalization rates and discount rates for each respective reporting unit.

Interest Rate Derivatives

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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.

Additionally, in conjunction with entering into various interest rate swap agreements during the year ended December 31, 2022 which are based upon the Secured Overnight Financing Rate ("SOFR") while the underlying debt is currently based upon LIBOR, Piedmont made an accounting policy election in accordance with Accounting Standards Codification ("ASC") Topic 848 Reference Rate Reform to assert that the hedged forecasted transactions remain probable of occurring and that the LIBOR reference rate is expected to be replaced by SOFR.

Deferred Lease Costs

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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.

Index to Financial Statements

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:

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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.

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.

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.

Amortization of such fair value adjustments was approximately $ 0 , $ 0.3 million, and $ 0.5 million for the years ended December 31, 2022, 2021, and 2020, 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.

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however, under Piedmont’s charter, it has authority to issue a total of 150,000,000 shares-in-trust, which would be issued only in the event that there is a purported transfer of, or other change in or affecting the ownership of, Piedmont’s capital stock that would result in a violation of the ownership limits that are included in Piedmont’s charter to protect its REIT status.

Index to Financial Statements

Preferred Stock

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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.

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.

Each share of common stock is entitled to one vote and participates in distributions equally.

In February 2020, the board of directors re-authorized the stock repurchase program for up to $ 200 million in share repurchases under which Piedmont may repurchase its own shares from time to time, in accordance with applicable securities laws, in the open market or in privately negotiated transactions.

Under its board-authorized stock repurchase program, Piedmont may repurchase its own shares from time to time, in accordance with applicable securities laws, in the open market or in privately negotiated transactions.

The timing of repurchases is dependent upon market conditions and other factors, and repurchases may be commenced or suspended from time to time in Piedmont's discretion, without prior notice.

As of December 31, 2022, Piedmont had approximately $ 150.5 million of remaining capacity under the program which may be used for share repurchases through February 2024.

On February 17, 2022, Piedmont's board of directors extended the existing stock repurchase authorization through February 2024.

Equity Securities Issued At-The-Market

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Piedmont evaluates contracts at commencement to determine if the contract contains a lease.

If a contract is determined to contain a lease, the lease is evaluated to determine whether it is an operating, sales-type, or a direct financing lease.

If a contract is determined to contain a lease, the lease is evaluated to determine whether it is an operating, sales-type, or a

Index to Financial Statements

direct financing lease.

All of Piedmont's leases where Piedmont is the lessor are for the lessee's use of space in Piedmont's commercial office properties and are classified as operating leases.

In most lease arrangements, Piedmont finances improvements to leased space and is deemed the owner of the tenant improvements.

The determination of who owns the improvements, whether payments to tenants constitute lease incentives or

Index to Financial Statements

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.

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.

When evaluating whether Piedmont or its tenant owns the improvements, management considers a number of factors, including, among other things:

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These tenant improvements are recorded as capital assets by Piedmont and depreciated, typically over the lease term.

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.

Payments made by tenants for tenant improvements owned by Piedmont are treated as deferred income 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.

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Such income is within the scope of ASC 606, Revenue from Contracts with Customers ("ASC 606").

Because property management services represent a performance obligation that are satisfied over the length of the contract, not at any specific point in time, and have the same measure of transfer (time elapsed), property management fee revenue is recognized over time.

Because property management services 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), property management fee revenue is recognized over time.

Any variable consideration transferred as part of these management agreements is recognized in the quarter that the underlying cash receipts are collected, consistent with the allocation objective of allocating the transaction price in an amount that depicts the amount of consideration to which Piedmont expects to be entitled in exchange for transferring the promised service to the customer.

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Gains on the sale of real estate assets, like all non-lease related revenue, are subject to a five-step model requiring that Piedmont identify the contract with the customer, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract, and recognize revenue upon satisfaction of the performance obligations.

In circumstances where Piedmont contracts to sell a property with material post-sale involvement, such involvement must be accounted for as a separate performance obligation in the contract and a portion of the sales price allocated to each performance obligation.

Index to Financial Statements

allocated to each performance obligation.

When the post-sale involvement performance obligation is satisfied, the portion of the sales price allocated to it will be recognized as gain on sale of real estate assets.

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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.

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

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.

The LTIC program is comprised of an annual restricted stock grant component (the "Restricted Stock Award" program) and a multi-year performance share component (the "Performance Share" program).

Awards granted pursuant to the Restricted Stock Award and Performance Share programs, as well as director's awards, are classified as equity awards or liability awards based on the underlying terms of the program agreement.

Awards classified as equity awards are expensed straight-line over the vesting period, with issuances recorded as a reduction to additional paid in capital.

Piedmont has issued stock-based compensation in the form of deferred stock units to its employees and board of directors.

For employees, Piedmont's Long-term Incentive Compensation ("LTIC") program is comprised of an annual deferred stock unit component (the "Annual Deferred Stock Unit" program) and a multi-year performance share component (the "Performance Share" program).

All awards granted during the three years ended December 31, 2022 pursuant to both the Annual Deferred Stock Unit and Performance Share programs, as well as director's awards, were classified as equity awards and expensed on a straight-line basis over the vesting period, with issuances recorded as a reduction to additional paid in capital.

Forfeitures are recorded when they occur.

Awards classified as liability awards are remeasured at each reporting period over the service period, with issuances recorded as a reduction to accrued expense.

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

Piedmont previously offered a non-qualified deferred compensation plan ("NQDC Plan") to certain employees which allowed the employee to elect to defer receipt of compensation, including both cash and stock-based compensation, until future taxable years.

As of December 31, 2019, Piedmont suspended the NQDC Plan so that no additional amounts may be deferred.

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.

Prior to the three years ended December 31, 2022, awards granted pursuant to the Performance Share component of the LTIC program were classified as liability awards and remeasured at fair value as of the end of each reporting period during the service period, with issuances recorded as a reduction to accrued expense.

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.

Net Income/(Loss) Available to Common Stockholders Per Share

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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

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.

During the year ended December 31, 2022, Piedmont acquired 100 % of the ownership interest in 1180 Peachtree Street in Midtown Atlanta, Georgia (part of the Atlanta geographic segment), consisting of 691,092 square feet and 95 % leased.

The net contractual purchase price of $ 465.7 million included the assumption of an existing $ 197 million, 4.10 % mortgage secured by the property.

The remaining cash portion of the purchase price was primarily funded using the $ 200 Million Unsecured 2022 Term Loan Facility (further described in Note 4 below), as well as cash on hand and our $ 600 Million Unsecured 2022 Line of Credit.

Index to Financial Statements

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.

Details are as follows:

Property Metropolitan Statistical Area Date of Acquisition Ownership Percentage Acquired Rentable Square Feet Percentage Leased as of Acquisition Purchase Price

(in millions)

999 Peachtree Street Atlanta, Georgia October 22, 2021 100 % 621,946 77 % $ 223.9

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.

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.

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.

In addition, in conjunction with the issuance, Piedmont settled one forward starting interest rate swap, consisting of a notional amount of $ 50 million.

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).

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.

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.

The $ 300 Million Unsecured Senior Notes due 2032 are fully and unconditionally guaranteed on a senior unsecured basis by Piedmont.

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.

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.

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;

(b) limit the ability of Piedmont and Piedmont OP to merge, consolidate, sell, lease or otherwise dispose of their properties and assets substantially as an entirety;

and (c) require Piedmont to maintain a pool of unencumbered assets.

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.

The purchase price of 1180 Peachtree Street, inclusive of approximately $ 2.2 million of closing costs, was allocated as follows:

1180 Peachtree Street

Land $ 56,932

Building and improvements 336,228

Intangible lease assets (1)

Lease acquisition costs, net of tenant credits received from seller (1)

Intangible lease origination costs (1)

Intangible lease liabilities (1)

Total allocated purchase price $ 467,908

Assumption of secured mortgage note ( 197,000 )

Net cash paid upon acquisition $ 270,908

(1) Amortization of in-place lease intangibles and lease acquisition costs are recognized using the straight-line method over approximately 7.4 years, the average remaining life of in-place leases.

As noted above, in conjunction with the acquisition of 1180 Peachtree Street during the year ended December 31, 2022, Piedmont entered into a Loan Assignment and Assumption Agreement for an existing $ 197 million fixed rate mortgage secured by the property (the “$ 197 Million Fixed Rate Mortgage”).

The $ 197 Million Fixed Rate Mortgage has a remaining term of approximately six years and a final maturity date of October 1, 2028.

Interest only at a fixed rate of 4.10 % per annum is payable until October 1, 2023, at which point the loan becomes amortizing.

During the year ended December 31, 2022, Piedmont also entered into a new $ 200 million, floating-rate, unsecured term loan facility (the “$ 200 Million Unsecured 2022 Term Loan Facility”).

The $ 200 Million Unsecured 2022 Term Loan Facility has a maturity date of December 16, 2024, and Piedmont may extend the term for six months through an available extension provided Piedmont is not then in default and all representations and warranties are true and correct in all material respects and upon payment of applicable extension fees.

Piedmont may prepay the loan in whole or in part, at any time without premium or penalty.

The stated interest rate spread over Adjusted SOFR can vary from 0.80 % to 1.65 % based upon the then current credit rating of Piedmont.

As of December 31, 2022, the applicable interest rate spread on the loan was 1.00 %.

During the year ended December 31, 2022, Piedmont amended and restated its $ 500 Million Unsecured 2018 Line of Credit which had an initial maturity date of September 30, 2022.

As amended and restated, the capacity of the line of credit has been expanded to $ 600 million (the "$ 600 Million Unsecured 2022 Line of Credit").

The term of the new $ 600 Million Unsecured 2022 Line of Credit was extended to June 30, 2026, and Piedmont may extend the term for up to one additional year (through two available six-month extensions) provided Piedmont is not then in default and all representations and warranties are true and correct in all material respects and upon payment of applicable extension fees.

Under certain terms of the agreement, Piedmont may increase the new facility by up to an additional $ 500 million, to an aggregate size of $ 1.1 billion, provided that no existing bank has any obligation to participate in such increase.

Piedmont paid customary arrangement and upfront fees to the lenders in connection with the closing of the new facility.

The $ 600 Million Unsecured 2022 Line of Credit has the option to bear interest at varying levels (determined with reference to the greater of the credit rating for Piedmont or Piedmont OP) based on the Adjusted SOFR Rate, Adjusted Daily Effective SOFR Rate, or the Base Rate, all as defined in the facility agreement.

Further, the Base Rate is defined as the greater of the prime rate, the federal funds rate plus 0.5 %, or the Adjusted SOFR Rate for a one-month period plus 1.0 %.

The term SOFR loans are available with interest periods selected by Piedmont of one , three , or six months .

The stated interest rate spread over Adjusted SOFR can vary from 0.725 % to 1.4 % based upon the greater of the then current credit rating of Piedmont or Piedmont OP.

As of December 31, 2022, based upon Piedmont’s current BBB credit rating, the current stated Adjusted SOFR spread on the loan is 0.85 %.

Index to Financial Statements

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Secured (Fixed)

$ 35 Million Fixed-Rate Loan

$ 197 Million Fixed Rate Mortgage

4.10 % 10/1/2028 $ 197,000 $ —

Net premium and unamortized debt issuance costs

Unsecured (Variable and Fixed)

Amended and Restated $ 300 Million Unsecured 2011 Term Loan

LIBOR + 1.00 %

11/30/2021 (4)

$ 500 Million Unsecured 2018 Line of Credit (5)

LIBOR + 0.90 %

$ 350 Million Unsecured Senior Notes due 2023

3.40 % 3.43 % 6/01/2023 (3)

350,000 350,000

$ 350 Million Unsecured Senior Notes due 2023

$ 200 Million Unsecured 2022 Term Loan Facility

SOFR + 1.00 %

12/16/2024 (5)

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4.54 % 3/31/2025 250,000 250,000

$ 300 Million Unsecured Senior Notes due 2030

$ 600 Million Unsecured 2022 Line of Credit (6)

SOFR + 0.85 %

6/30/2026 (7)

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3.15 % 3.90 % 8/15/2030 300,000 300,000

$ 300 Million Unsecured Senior Notes due 2032

2.75 % 2.78 % 4/1/2032 300,000 300,000

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3.87 % 1,786,681 1,877,790

Total/Weighted Average (8)

3.89 % $ 1,983,681 $ 1,877,790

(1) All of Piedmont’s outstanding debt as of December 31, 2021 is interest-only until maturity.

(1) All of Piedmont’s outstanding debt as of December 31, 2022 is interest-only until maturity, except for the $ 197 Million Fixed Rate Mortgage, secured by 1180 Peachtree Street, which will begin amortizing principal in October 2023.

(2) Effective rate after consideration of settled or in-place interest rate swap agreements and issuance discounts.

(3) Repaid on June 1, 2021 without penalty.

(4) Repaid on September 20, 2021 without penalty.

(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.

All LIBOR selections are subject to an additional spread over the selected rate based on Piedmont’s current credit rating.

(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;

however, Piedmont has entered into interest rate swap agreements which effectively fix, exclusive of changes to Piedmont's credit rating, $ 100 million of the principal balance to 3.56 % through the maturity date of the loan.

For the remaining variable portion of the loan, Piedmont may periodically select from multiple interest rate options, including the prime rate and various-length LIBOR locks on all or a portion of the principal.

All LIBOR selections are subject to an additional spread over the selected rate based on Piedmont’s current credit rating.

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).

(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 %.

(3) Piedmont currently intends to repay the $ 350 Million Unsecured Senior Notes due 2023 using proceeds from a new $ 215 million term loan (see Note 17 ), and a combination of cash on hand, proceeds from select property dispositions, and borrowings under our $ 600 Million Unsecured 2022 Line of Credit.

(4) On a periodic basis, Piedmont may select from multiple interest rate options, including the prime rate and various-length SOFR locks on all or a portion of the principal.

All SOFR selections are subject to an additional spread over the selected rate based on Piedmont’s current credit rating.

(5) Piedmont may extend the term for six additional months to a final extended maturity date of June 18, 2025, provided Piedmont is not then in default and all representations and warranties are true and correct in all material respects and upon payment of extension fees.

(6) The $ 500 Million Unsecured 2018 Line of Credit was amended and restated during the year ended December 31, 2022 and is now reflected as the $ 600 Million Unsecured 2022 Line of Credit.

The $ 500 Million Unsecured 2018 Line of Credit had a stated rate of LIBOR + 0.90 % as of December 31, 2021.

(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 June 30, 2027) provided Piedmont is not then in default and all representations and warranties are true and correct in all material respects and upon payment of extension fees.

(8) Weighted average is based on contractual balance of outstanding debt and the stated or effectively fixed interest rates as of December 31, 2022.

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Total $ 1,997,000

(1) Includes the balance outstanding as of December 31, 2021 on the $ 500 million Unsecured 2018 Line of Credit of $ 290 million.

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, 2022 and 2021, for the aforementioned borrowings was approximately 3.89 % and 2.93 %, respectively.

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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.

As of December 31, 2022, Piedmont was party to a total of eight interest rate swap agreements which are designated as effective cash flow hedges and fully hedge the variable cash flows covering the entire outstanding balance of the $ 250 Million Unsecured 2018 Term Loan through the maturity of the loan in March 2025.

The maximum length of time over which Piedmont is hedging its exposure to the variability in future cash flows related to these interest rate swap agreements is 27 months.

Of the eight swaps outstanding as of December 31, 2022, six swaps, each with a notional value of $ 25 million, were entered into during the year ended December 31, 2022.

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 ).

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 .

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.

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.

The maximum length of time over which Piedmont is hedging its exposure to the variability in future cash flows related to these interest rate swap agreements is 39 months.

Index to Financial Statements

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$ 100 3/29/2018 3/31/2025

Interest rate swaps 3 $ 250 Million Unsecured 2018 Term Loan

75 12/2/2022 3/31/2025

Interest rate swaps 3 $ 250 Million Unsecured 2018 Term Loan

75 12/12/2022 3/31/2025

Piedmont presents its interest rate derivatives on its consolidated balance sheets on a gross basis as interest rate swap assets and interest rate swap liabilities.

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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.

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.

However, as of December 31, 2022, all of Piedmont's interest rate swap agreements are in an asset position.

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.

Index to Financial Statements

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$ 3,064 $ 3,064 Level 1 $ 1,441 $ 1,441 Level 1

Interest rate swaps $ 4,183 $ 4,183 Level 2 $ — $ — Level 2

Accounts payable and accrued expenses (1)

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(1) For the periods presented, the carrying value of these financial instruments approximates estimated fair value due to its short-term maturity.

Piedmont's notes receivable and debt were carried at book value as of December 31, 2021 and 2020;

Piedmont's debt was carried at book value as of December 31, 2022 and 2021, and its notes receivable were carried at book value as of December 31, 2021;

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.

Piedmont issued notes receivable in conjunction with the sale of properties to an unrelated third-party buyer in October 2020.

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.

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.

Scaling adjustments are made to these inputs to make them applicable to the remaining life of Piedmont's notes receivables and outstanding debt.

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.

Consequently, the estimated fair values of the notes receivable and debt as of December 31, 2021 and the estimated fair value of debt as of December 31, 2022 are considered to be based on significant other observable inputs (Level 2).

Piedmont has not changed its valuation technique for estimating the fair value of its notes receivable or debt.

Piedmont’s interest rate swap agreements presented above, and as further discussed in Note 5 , are classified as “Interest rate swaps” in the accompanying consolidated balance sheets and were carried at estimated fair value as of December 31, 2022 and 2021.

The valuation of these derivative instruments was determined using widely accepted valuation techniques including discounted cash flow analysis based on the contractual terms of the derivatives, including the period to maturity of each instrument, and uses observable market-based inputs, including interest rate curves and implied volatilities.

Therefore, the estimated fair values determined are considered to be based on significant other observable inputs (Level 2).

In addition, Piedmont considered both its own and the respective counterparties’ risk of nonperformance in determining the estimated fair value of its derivative financial instruments by estimating the current and potential future exposure under the derivative financial instruments that both Piedmont and the counterparties were at risk for as of the valuation date.

The credit risk of Piedmont and its counterparties was factored into the calculation of the estimated fair value of the interest rate swaps;

however, as of December 31, 2022 and 2021, this credit valuation adjustment did not comprise a material portion of the estimated fair value.

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.

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

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2022 2021 2020

Two Pierce Place (1)

9320 Excelsior Boulevard (1)

$ 10,000 $ — $ —

The Dupree (2)

600 Corporate Drive (3)

Two Pierce Place (1)

Total impairment loss on real estate assets

$ 10,000 $ 41,000 $ —

(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.

(1) Management shortened the intended hold period for the building 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.

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.

The estimated fair value was determined based on the net contract price subsequently entered into with an unrelated, third-party purchaser.

The estimated fair values were determined based on net contract prices with unrelated, third-party purchasers.

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.

(3) Management shortened the intended hold period for the property, 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.

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.

The estimated fair value was determined using widely available market quotations for similar properties, as well as discounted cash flow analysis.

Key assumptions used in the analysis were a capitalization and discount rate of 14 % and estimated selling costs of 0.75 %.

Commitments and Contingencies

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In addition, certain agreements contain provisions that require Piedmont to issue corporate or property guarantees to provide funding for capital improvements or other financial obligations.

As of December 31, 2021, Piedmont had one individually significant unrecorded tenant allowance commitment of approximately $ 18.4 million for the approximately 20-year , approximately 520,000 square foot renewal and expansion on behalf of Piedmont's largest tenant, the State of New York at the 60 Broad Street building in New York City.

This commitment will be capitalized as the related expenditures are incurred.

Such commitments are accrued and capitalized as the related expenditures are incurred.

In addition to the amounts that Piedmont has already committed to as a part of executed leases, Piedmont also anticipates continuing to incur similar market-based tenant improvement allowances and leasing commissions in conjunction with procuring future leases for its existing portfolio of properties.

Both the timing and magnitude of expenditures related to future leasing activity can vary due to a number of factors and are highly dependent on the size of the leased square footage and the competitive market conditions of the particular office market at the time a lease is being negotiated.

Contingencies Related to Tenant Audits/Disputes

Certain lease agreements include provisions that grant tenants the right to engage independent auditors to audit their annual operating expense reconciliations.

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.

There were no reductions in rental and reimbursement revenues related to such tenant audits/disputes during the year ended December 31, 2021 or 2020.

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

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

Such audits may result in different interpretations of language in the lease agreements from that made by Piedmont, whic h could result in requests for refunds of previously recognized tenant reimbursement revenues, resulting in financial loss to Piedmont.

There were no such reductions during the three years ended December 31, 2022.

Piedmont is from time to time a party to legal proceedings, which arise in the ordinary course of its business.

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Related-Party Transactions

During the year ended December 31, 2019, Piedmont entered into employment or retirement agreements with certain of its current and former executive officers as more fully described in its Definitive Proxy Statement and Current Report on Form 8-K filed on March 19, 2019.

Further, during the years ended December 31, 2021, 2020, and 2019, Piedmont recognized approximately $ 0.0 million , $ 0.1 million, and $ 0.2 million, respectively, of expense related to a consulting agreement with its former Chief Investment Officer.

There were no other related-party transactions during the three years ended December 31, 2021 .

There were no related-party transactions during the three years ended December 31, 2022 other than d uring the year ended December 31, 2020, Piedmont recognized approximately $ 0.1 million of expense related to a consulting agreement with its former Chief Investment Officer.

Stock Based Compensation

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.

The Compensation Committee of Piedmont's Board of Directors has granted deferred stock award units to eligible employees at its discretion based upon the previous year's financial results measured against various board approved performance metrics.

Most employee awards vest ratably over three years .

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.

Index to Financial Statements

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.

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.

None of the shares potentially earned are awarded until the end of the multi-year performance period and vest upon award.

The number of shares earned, if any, are determined at the end of the multi-year performance period (or upon termination) and vest immediately.

In the event that a participant's employment is terminated prior to the end of the multi-year period, in certain circumstances the participant may be entitled to a pro-rated award based on Piedmont's TSR relative performance as of the termination date.

The grant date fair value of the multi-year performance share awards is estimated using the Monte Carlo valuation method.

Index to Financial Statements

A rollforward of Piedmont's equity based award activity for the year ended December 31, 2022 is as follows:

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311,050 $ 16.30

Increase in Estimated Potential Share Awards based on relative TSR Performance for the performance period to date

Change in Estimated Potential Share Awards based on TSR Performance

( 74,487 ) $ 21.84

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2022 2021 2020

Weighted-Average Grant Date Fair Value of Deferred Stock Granted During the Period

Weighted-Average Grant Date Fair Value per share of Deferred Stock Granted During the Period

$ 16.30 $ 17.24 $ 22.39

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$ 5,481 $ 3,610 $ 4,116

(1) Amounts reflect the issuance of performance share awards related to the 2018-20, 2017-19, and 2016-18 Performance Share Plans during the years ended December 31, 2021, 2020, and 2019, respectively, as well as performance share award liabilities settled in cash in July 2019 for retirement and separation associated with the senior management transition on June 30, 2019.

(1) Amounts reflect the issuance of performance share awards related to the 2019-21, 2018-20, and 2017-19 Performance Share Plans during the years ended December 31, 2022, 2021, and 2020, respectively.

Index to Financial Statements

A detail of Piedmont’s outstanding employee restricted stock awards and programs as of December 31, 2021 is as follows:

A detail of Piedmont’s outstanding stock awards and programs as of December 31, 2022 is as follows:

Date of grant Type of Award Net Shares

Value Vesting Schedule Unvested and Potential Shares as of December 31, 2022

May 3, 2019 Deferred Stock Award 250,643 $ 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.

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.

May 3, 2019 Deferred Stock Award 30,958 (2)

$ 21.04 Of the shares granted, 20 % vested or will vest on July 1, 2020, 2021, 2022, 2023 and 2024, respectively.

February 19, 2020 Deferred Stock Award 141,018 $ 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.

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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.

February 10, 2022 Deferred Stock Award 227,436 $ 16.85 Of the shares granted, 25 % vested on the date of grant, and 25 % vested or will vest on February 10, 2023, 2023, and 2025, respectively.

February 17, 2022 Fiscal Year 2022-2024 Performance Share Program — $ 17.77 Shares awarded, if any, will vest immediately upon determination of award in 2025.

May 11, 2022 Deferred Stock Award-Board of Directors 52,762 $ 13.61 Of the shares granted, 100 % will vest on the earlier of the 2023 Annual Meeting or May 11, 2023.

Total 729,424

(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, 2022.

(2) Includes a special, one-time deferred stock award to Piedmont's Chief Executive Officer effective July 1, 2019, the date of his promotion to the position, which vests in ratable installments over a five year period beginning July 1, 2020.

(3) Estimated based on Piedmont's cumulative TSR for the respective performance period through December 31, 2022.

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As of December 31, 2022, approximately $ 5.5 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 .

Index to Financial Statements

Earnings Per Share

There are no adjustments to “Net income/(loss) applicable to Piedmont” for the diluted earnings per share computations.

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.

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

outstanding during the period, including unvested deferred stock awards.

Net income/(loss) 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.

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 deferred stock awards.

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.

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For each of the years ended December 31, 2022, 2021, and 2020, Piedmont calculated and excluded weighted average outstanding anti-dilutive shares of approximately 421,005 , 1,114,025 , and 289,681 , respectively.

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):

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, 2022, 2021, and 2020, respectively (in thousands):

2022 2021 2020

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however, generally they are not significant.

Exposure to credit risk is limited to the extent that tenant receivables exceed this amount.

Exposure to credit risk exists to the extent that tenant receivables exceed this amount.

Security deposits liabilities related to tenant leases are included in accounts payable, accrued expenses, and accrued capital expenditures in the accompanying consolidated balance sheets.

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$ 545,741 $ 514,619 $ 519,953

Operating leases where Piedmont is the lessee relat e primarily to office space in buildings owned by third parties.

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.

For both the years ended December 31, 2021 and December 31, 2020, Piedmont recognized approximately

Index to Financial Statements

$ 0.1 million of operating lease costs.

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 %.

Operating leases where Piedmont is the lessee relat e primarily to office space in buildings owned by third parties and managed by Piedmont.

Piedmont's right to use asset and corresponding lease liability , using Piedmont's incremental borrowing rate as the lease discount rate, was approximately $ 0.2 million for the year ended December 31, 2022 and approximately $ 0.1 million for the year ended December 31, 2021 .

For both the years ended December 31, 2022 and December 31, 2021, Piedmont recognized approximately $ 0.1 million of operating lease costs.

As of December 31, 2022, the lease term of Piedmont's right of use asset is two years , and the discount rate is 3.86 %.

Property Dispositions and Assets Held for Sale

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None of Piedmont's property dispositions during the three years ended December 31, 2022 met the criteria to be reported as discontinued operations.

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.

The operational results and gain on sale of real estate assets are presented as continuing operations in the accompanying consolidated statements of operations.

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

One Independence Square Washington, D.C.

February 28, 2019 $ 33,176 $ 163,623

The Dupree Atlanta, Georgia September 4, 2019 $ — (1)

500 West Monroe Street Chicago, Illinois October 28, 2019 $ 157,739 $ 408,851

1901 Market Street Philadelphia, Pennsylvania June 25, 2020 $ 191,030 $ 350,805

Buildings Sold Location Reportable Segment Date of Sale Gain on Sale of Real Estate Assets Net Sales Proceeds

1901 Market Street Philadelphia, Pennsylvania Other June 25, 2020 $ 191,030 $ 350,805

New Jersey Portfolio Various (1)

October 28, 2020 $ 14,636 $ 9,289 (3)

(1) As discussed in Note 7 above, Piedmont recognized an impairment loss prior to the sale of the property.

New York October 28, 2020 $ 14,636 $ 9,289 (2)

Two Pierce Place Itasca, Illinois Other January 25, 2022 $ 1,741 $ 24,272

225 and 235 Presidential Way Boston, Massachusetts Boston January 28, 2022 $ 49,218 $ 119,609

Cambridge Portfolio (3)

Cambridge, Massachusetts Boston December 2022 (3)

$ 102,570 $ 155,307

(1) The New Jersey Portfolio is comprised of the following three properties:

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and 600 Corporate Drive in Lebanon, New Jersey.

(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.

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.

Index to Financial Statements

(2) Excludes $ 118.5 million in proceeds received by Piedmont during the year ended December 31, 2022 resulting from the payoff of two notes receivable that Piedmont had received in late 2020 from the buyer of the New Jersey Portfolio.

Additionally, during the year ended December 31, 2022, Piedmont reduced the gain on sale previously recognized as a result of returning $ 1.8 million in previously escrowed sales proceeds to the purchaser.

(3) The Cambridge Portfolio is comprised of the One Brattle Square building and the 1414 Massachusetts Avenue building in Cambridge, Massachusetts.

The closing date for One Brattle Square was December 13, 2022, and the sale of 1414 Massachusetts Avenue closed on December 20, 2022.

Assets Held for Sale

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.

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):

December 31, 2021 December 31, 2020

The 225 and 235 Presidential Way assets met the criteria to be presented in the accompanying consolidated balance sheet as held for sale assets as of December 31, 2021.

Details of such amounts as of December 31, 2021 are as follows (in thousands):

December 31, 2021

Real estate assets held for sale, net:

$ 7,750 $ 7,750

Building and improvements, less accumulated depreciation of $ 16,699 and $ 16,021 as of December 31, 2021, and 2020, respectively

55,110 52,704

Building and improvements, less accumulated depreciation of $ 16,699 as of December 31, 2021

Construction in progress

Total real estate assets held for sale, net

$ 63,887 $ 60,454

Other assets held for sale, net:

Straight-line rent receivables

$ 2,966 $ 2,356

Deferred lease costs, less accumulated amortization of $ 996 and $ 802 as of December 31, 2021 and 2020, respectively

Deferred lease costs, less accumulated amortization of $ 996 as of December 31, 2021

Total other assets held for sale, net

$ 8,393 $ 4,228

Index to Financial Statements

Supplemental Disclosures for the Statement of Consolidated Cash Flows

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Notes receivable issued in conjunction with property dispositions $ — $ — $ 118,500

Accrued deferred financing costs $ 44 $ — $ —

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, 2022, 2021, and 2020 to the consolidated balance sheets for the respective period (in thousands):

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Total cash, cash equivalents, and restricted cash and escrows as presented in the accompanying consolidated statement of cash flows, end of period $ 19,600 $ 8,860 $ 9,214

Index to Financial Statements

Amounts in restricted cash and escrows typically represent:

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or security or utility deposits held for tenants as a condition of their lease agreement.

Index to Financial Statements

Piedmont’s income tax basis net income/(loss) for the years ended December 31, 2022, 2021, and 2020, is calculated as follows (in thousands):

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Piedmont has no uncertain tax positions as of December 31, 2022 and 2021, respectively.

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.

Piedmont recognized approximately $ 0 , $ 0 , and $ 1.0 million of recoveries of previously recorded estimated accrued interest and penalties for the years ended December 31, 2022, 2021 and 2020.

The tax years 2019 to 2021 remain open to examination by various federal and state taxing authorities.

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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.

Atlanta, Dallas, Washington, D.C./Northern Virginia, Boston, Orlando, Minneapolis, and New York.

These operating segments are also Piedmont’s reportable segments.

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.

Subsequent to December 31, 2021, Piedmont sold the last remaining asset owned in the Chicago office market (see Note 17 ).

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.

As of December 31, 2022, Piedmont also owned two properties in Houston 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.

Further, Piedmont does not maintain a significant presence or anticipate further investment in this market.

These two properties are the primary contributors to accrual-based net operating income ("NOI") included in "Other" below.

During the periods presented, there have been no material inter segment transactions.

The accounting policies of the reportable segments are the same as Piedmont's accounting policies.

Index to Financial Statements

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.

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.

NOI reflects property acquisitions and dispositions, occupancy levels, rental rate increases or decreases, and the

Index to Financial Statements

recoverability of operating expenses.

Piedmont's calculation of NOI may not be directly comparable to similarly titled measures calculated by other REITs.

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2022 2021 2020

Dallas $ 110,729 $ 101,727 $ 55,346

Atlanta $ 131,230 $ 98,330 $ 95,403

Washington, D.C.

60,329 59,760 64,481

Dallas 109,298 110,729 101,727

Washington, D.C./Northern Virginia 63,534 60,329 59,760

Minneapolis 61,530 61,563 61,465

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Total reportable segments 539,196 503,453 504,406

Corporate and other 25,257 30,618 75,924

Other 24,570 25,257 30,618

Total Revenues $ 563,766 $ 528,710 $ 535,024

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2022 2021 2020

Dallas $ 66,155 $ 59,845 $ 29,438

Atlanta $ 82,878 $ 62,772 $ 60,276

Washington, D.C.

36,914 36,696 41,167

Minneapolis 32,538 33,588 35,610

Dallas 62,444 66,155 59,845

Washington, D.C./Northern Virginia 39,994 36,914 36,696

Boston 39,101 45,587 41,722

Orlando 35,327 33,449 34,427

Minneapolis 31,886 32,538 33,588

New York 31,252 30,049 38,990

Total reportable segments 322,882 307,464 305,544

Corporate and other 10,163 13,915 43,637

Other 14,685 10,163 13,915

Total NOI $ 337,567 $ 317,627 $ 319,459

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Depreciation and amortization 224,553 206,608 203,869

Impairment loss on real estate assets 41,000 — 8,953

Impairment losses 25,981 41,000 —

General and administrative expenses 29,127 30,252 27,464

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On February 1, 2023, the board of directors declared a dividend for the first quarter 2023 in the amount of $ 0.21 per share on its common stock to stockholders of record as of the close of business on February 24, 2023, payable on March 17, 2023.

Sale of Two Pierce Place

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.

Sale of 225/235 Presidential Way

On January 28, 2022, Piedmont sold the 225 and 235 Presidential Way assets in Woburn, Massachusetts for $ 129.0 million.

Term Loan Facility

On January 31, 2023, Piedmont entered into an additional new $ 215 million term loan facility priced at Adjusted SOFR + 105 basis points with a final extended maturity date of January 31, 2025, inclusive of a one year extension option.

Piedmont intends to use the proceeds from the facility, along with a combination of cash on hand, proceeds from select property dispositions, and/or a draw on its $ 600 Million Unsecured 2022 Line of Credit to repay its $ 350 Million Unsecured Senior Notes due 2023 that mature June 1, 2023.

Index to Financial Statements

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60 BROAD STREET New York, NY 100 % None 32,522 168,986 201,508 94,553 60,708 235,353 296,061 77,272 1962 12/31/2003 0 - 40

1414 MASSACHUSETTS AVENUE Cambridge, MA 100 % None 4,210 35,821 40,031 ( 5,837 ) 4,365 29,829 34,194 12,625 1873 1/8/2004 0 - 40

ONE BRATTLE SQUARE Cambridge, MA 100 % None 6,974 64,940 71,914 ( 20,120 ) 7,113 44,681 51,794 20,315 1991 2/26/2004 0 - 40

3100 CLARENDON BOULEVARD Arlington, VA 100 % None 11,700 69,705 81,405 52,362 11,791 121,976 133,767 48,497 1987 12/9/2004 0 - 40

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LAS COLINAS CORPORATE CENTER II Irving, TX 100 % None 4,496 29,881 34,377 ( 826 ) 2,543 31,008 33,551 14,532 1998 8/31/2006 0 - 40

ONE MERIDIAN CROSSINGS Richfield, MN 100 % None 2,919 24,398 27,317 931 2,919 25,329 28,248 8,620 1997 10/1/2010 0 - 40

Index to Financial Statements

14 unchanged sentences

(in years) (5)

TWO PIERCE PLACE (6)

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

TWO MERIDIAN CROSSINGS Richfield, MN 100 % None 2,661 25,742 28,403 1,027 2,661 26,769 29,430 8,903 1998 10/1/2010 0 - 40

THE MEDICI Atlanta, GA 100 % None 1,780 11,510 13,290 5,193 1,780 16,703 18,483 7,013 2008 6/7/2011 0 - 40

225 PRESIDENTIAL WAY (7)

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

235 PRESIDENTIAL WAY (7)

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 4,824 2,570 25,379 27,949 9,360 2008 11/10/2011 0 - 40

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GALLERIA 300 Atlanta, GA 100 % None 4,000 73,554 77,554 8,916 4,000 82,470 86,470 18,462 1987 11/4/2015 0 - 40

GLENRIDGE HIGHLANDS ONE Atlanta, GA 100 % None 5,960 50,013 55,973 4,778 5,960 54,791 60,751 11,258 1998 11/24/2015 0 - 40

CNL CENTER I Orlando, FL 99 % None 6,470 77,858 84,328 1,191 6,470 79,049 85,519 16,141 1999 8/1/2016 0 - 40

CNL CENTER II Orlando, FL 99 % None 4,550 55,609 60,159 1,748 4,550 57,357 61,907 13,095 2006 8/1/2016 0 - 40

ONE WAYSIDE ROAD Boston, MA 100 % None 6,240 57,124 63,364 2,029 6,240 59,153 65,393 10,909 1997 / 2008 8/10/2016 0 - 40

Index to Financial Statements

14 unchanged sentences

(in years) (5)

GLENRIDGE HIGHLANDS ONE Atlanta, GA 100 % None 5,960 50,013 55,973 3,835 5,960 53,848 59,808 10,211 1998 11/24/2015 0 - 40

CNL CENTER I Orlando, FL 99 % None 6,470 77,858 84,328 2,131 6,470 79,989 86,459 14,759 1999 8/1/2016 0 - 40

CNL CENTER II Orlando, FL 99 % None 4,550 55,609 60,159 494 4,550 56,103 60,653 11,268 2006 8/1/2016 0 - 40

ONE WAYSIDE ROAD Boston, MA 100 % None 6,240 57,124 63,364 1,900 6,240 59,024 65,264 8,622 1997 / 2008 8/10/2016 0 - 40

GALLERIA 200 Atlanta, GA 100 % None 6,470 55,825 62,295 20,446 6,470 76,271 82,741 14,027 1984 10/7/2016 0 - 40

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501 WEST CHURCH STREET Orlando, FL 100 % None 2,805 28,119 30,924 — 2,805 28,119 30,924 5,756 2003 2/23/2018 0 - 40

9320 EXCELSIOR BOULEVARD Hopkins, MN 100 % None 3,760 35,289 39,049 ( 553 ) 3,707 34,789 38,496 6,593 2010 10/25/2018 0 - 40

9320 EXCELSIOR BOULEVARD (6)

Hopkins, MN 100 % None 3,760 35,289 39,049 ( 10,553 ) 3,707 24,789 28,496 8,654 2010 10/25/2018 0 - 40

25 BURLINGTON MALL ROAD Burlington, MA 100 % None 10,230 54,787 65,017 7,314 10,230 62,101 72,331 10,554 1987 12/12/2018 0 - 40

7 unchanged sentences

999 PEACHTREE STREET Atlanta, GA 100 % None 49,067 156,109 205,176 6,422 49,067 162,531 211,598 13,123 1987 10/22/2021 0 40

1180 PEACHTREE STREET Atlanta, GA 100 % $ 197,000 56,932 389,654 446,586 ( 2 ) 56,932 389,652 446,584 7,524 2005 8/10/2022 0 40

UNDEVELOPED LAND PARCELS (7)

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(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.

Index to Financial Statements

(4) The net carrying value of Piedmont’s total assets for federal income tax purposes is approximately $ 3.9 billion.

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Generally, Building Improvements are depreciated over 5 - 25 years, Land Improvements are depreciated over 20 - 25 years, and Buildings are depreciated over 40 years.

(6) During the year ended December 31, 2021, Piedmont recognized a $ 41.0 million impairment charge on the Two Pierce Place asset.

See Note 7 for further detail.

(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.

See N ote 13 for further information.

The sale of the assets closed on January 28, 2022.

Index to Financial Statements

(6) During the year ended December 31, 2022, Piedmont recognized a $ 10.0 million impairment charge on the 9320 Excelsior Boulevard asset.

See Note 7 to the accompanying consolidated financial statements for further detail.

(7) Undeveloped Land Parcels includes land parcels that Piedmont may develop in the future.

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Balance at the end of the year $ 1,005,704 $ 961,682 $ 835,392

(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 ).

(1) Piedmont recognized an impairment loss on the 9320 Excelsior Building during the year ended December 31, 2022, as well as the Two Pierce Place building during the year ended December 31, 2021.

(see Note 7 to the accompanying consolidated financial statements).

(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.

What changed 10-K

Item 9A. Controls and Procedures