Piedmont Realty Trust, Inc. 10-K

ITEM 9A. CONTROLS AND PROCEDURES Management’s Conclusions Regarding the Effectiveness of Disclosure Controls and Procedures We carried out an evaluation, under the supervision and with the participation of management, including our Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15(e) under the Exchange Act as of the end of the period covered by this report. Based upon that evaluation, the Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this annual report in providing a reasonable level of assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods in SEC rules and forms, including providing a reasonable level of assurance that information required to be disclosed by us in such reports is accumulated and communicated to our management, including our Principal Executive Officer and our Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Report of Management on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining effective internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, as a process designed by, or under the supervision of, the principal executive and principal financial officers, or persons performing similar functions, and effected by the board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP and includes those policies and procedures that: • pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and disposition of our assets; 47 Table of Contents Index to Financial Statements • provide reasonable assurance that the transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of management and/or members of the board of directors; and • provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements. Because of the inherent limitations of internal control over financial reporting, including the possibility of human error and the circumvention or overriding of controls, material misstatements may not be prevented or detected on a timely basis. In addition, projections of any evaluation of effectiveness to future periods are subject to the risks that controls may become inadequate because of changes in conditions or that the degree of compliance with policies or procedures may deteriorate. Accordingly, even internal controls determined to be effective can provide only reasonable assurance that the information required to be disclosed in reports filed under the Exchange Act is recorded, processed, summarized, and represented within the time periods required. Our management has assessed the effectiveness of our internal control over financial reporting at December 31, 2023. To make this assessment, we used the criteria for effective internal control over financial reporting described in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this assessment, our management believes that, as of December 31, 2023, our system of internal control over financial reporting was effective. Piedmont’s independent registered public accounting firm has issued an attestation report on the effectiveness of Piedmont’s internal control over financial reporting, which appears in this Annual Report. Changes in Internal Control Over Financial Reporting There have been no significant changes in our internal control over financial reporting during the quarter ended December 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 48 Table of Contents Index to Financial Statements REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the stockholders and the Board of Directors of Piedmont Office Realty Trust, Inc. Opinion on Internal Control over Financial Reporting We have audited the internal control over financial reporting of Piedmont Office Realty Trust, Inc. and subsidiaries (the “Company”) as of December 31, 2023, based on criteria established in Internal Control —Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, 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, 2023, of the Company and our report dated February 20, 2024, expressed an unqualified opinion on those financial statements. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Report of Management on Internal Control over Financial Reporting. 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 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. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. 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 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. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Deloitte & Touche LLP Atlanta, Georgia February 20, 2024 49 Table of Contents Index to Financial Statements ITEM 9B. OTHER INFORMATION No director or officer has adopted or terminated any contract, instruction, or written plan for the purchase or sale of securities of Piedmont that is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c), or any written trading arrangement for the purchase or sale of securities of Piedmont that meets the requirements of a non-Rule 10b5-1 trading arrangement as defined in Item 408(c), as defined in Regulation S-K of the Exchange Act. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS None. 50 Table of Contents Index to Financial Statements PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE Pursuant to Paragraph G(3) of the General Instructions to Form 10-K, the information required by Part III (Items 10, 11, 12, 13, and 14) is being incorporated by reference herein from our definitive proxy statement to be filed with the SEC within 120 days of the end of the fiscal year ended December 31, 2023 in connection with our 2024 Annual Meeting of Stockholders. We have adopted a Code of Ethics, which is available on Piedmont’s website at www.piedmontreit.com under the “Investor Relations” section. Any amendments to, or waivers of, the Code of Ethics will be disclosed on our website promptly following the date of such amendment or waiver. The information contained on our website is not incorporated herein by reference. ITEM 11. EXECUTIVE COMPENSATION The information required by Item 11 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, 2023, and is incorporated herein by reference. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The information required by Item 12 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, 2023, and is incorporated herein by reference. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE 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, 2023, and is incorporated herein by reference. ITEM 14. 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, 2023, and is incorporated herein by reference. 51 Table of Contents Index to Financial Statements PART IV ITEM 15. EXHIBIT AND FINANCIAL STATEMENT SCHEDULES (a) 1. The financial statements begin on page F-5 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) F- 2 Consolidated Balance Sheets as of December 31, 2023 and 2022 F- 5 Consolidated Statements of Operations for the Years December 31, 2023, 2022, and 2021 F- 6 Consolidated Statements of Comprehensive Income/(Loss) for the Years Ended December 31, 2023, 2022, and 2021 F- 7 Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2023, 2022, and 2021 F- 8 Consolidated Statements of Cash Flows for the Years Ended December 31, 2023, 2022, and 2021 F- 9 Notes to Consolidated Financial Statements F- 10 (a) 2. Schedule III—Real Estate Assets and Accumulated Depreciation. Information with respect to this item begins on page S-1 of this Annual Report on Form 10-K. 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 listed below. Exhibit Number Description of Document 3.1.1 Third Articles of Amendment and Restatement of Piedmont Office Realty Trust, Inc. (the "Company") (incorporated by reference to Exhibit 3.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2009, filed on March 16, 2010) 3.1.2 Articles of Amendment to the Third Articles of Amendment and Restatement of the Company (incorporated by reference to Exhibit 3.2 to the Company's Current Report on Form 8-K filed on July 6, 2011) 3.1.3 Articles Supplementary to the Third Articles of Amendment and Restatement of the Company, as amended (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed on July 6, 2011) 3.1.4 Articles Supplementary to the Third Articles of Amendment and Restatement of the Company, as supplemented and amended (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K, filed on November 14, 2016) 3.1.5 Articles of Amendment to the Third Articles of Amendment and Restatement of the Company, as supplemented and amended (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K, filed on May 23, 2018) 3.2 Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K, filed on March 19, 2019) 4.1.1 Indenture, dated May 9, 2013, by and among Piedmont Operating Partnership, LP (the "Operating Partnership"), the Company and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K, filed on May 13, 2013) 4.1.2 Form of 3.40% Senior Notes due 2023 (incorporated by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K filed on May 13, 2013) 4.2.1 Indenture, dated March 6, 2014, by and among the Operating Partnership, the Company and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K, filed on March 6, 2014) 52 Table of Contents Index to Financial Statements 4.2.2 Supplemental Indenture, dated March 6, 2014, by and among the Operating Partnership, the Company and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K, filed on March 6, 2014) 4.2.3 Form of 4.450% Senior Notes due 2024 (incorporated by reference to Exhibit 4.3 to the Company's Current Report on Form 8-K filed on March 6, 2014) 4.2.4 Supplemental Indenture, dated August 12, 2020, by and among the Operating Partnership, the Company and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K filed on August 12, 2020) 4.2.5 Form of 3.150% Senior Notes due 2030 (incorporated by reference to Exhibit 4.3 to the Company's Current Report on Form 8-K filed on August 12, 2020) 4.2.6 Supplemental Indenture, dated as of September 20, 2021, by and among the Operating Partnership, the Company and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K, filed on September 20, 2021) 4.2.7 Form of 2.750% Senior Notes due 2032 (incorporated by reference to Exhibit 4.3 to the Company's Current Report on Form 8-K filed on September 20, 2021) 4.2.8 Supplemental Indenture, dated as of July 20, 2023, by and among the Operating Partnership, the Company and U.S. Bank Trust Company, National Association, as trustee (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on July 20, 2023) 4.2.9 Form of 9.250% Senior Notes due 2028 (incorporated by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K filed on July 20, 2023) 4.3 Description of Securities registered pursuant to Section 12 of the Exchange Act (incorporated by reference to Exhibit 4.15 to the Company's Annual Report on Form 10-K for the year ended December 31, 2019, filed on February 19, 2020) 10.1.1 Amended and Restated Agreement of Limited Partnership of the Operating Partnership, dated January 1, 2000 (incorporated by reference to Exhibit 10.64 to the Company's Annual Report on Form 10-K for the year ended December 31, 2000, filed on March 28, 2001) 10.1.2 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) 10.1.3 Amendment to Second Amended and Restated Agreement of Limited Partnership of the Operating Partnership, dated August 8, 2007 (incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K, filed on August 10, 2007) 10.2.1* The Piedmont Office Realty Trust, Inc. Executive Nonqualified Deferred Compensation Plan dated December 5, 2013 (incorporated by reference to Exhibit 10.39 to the Company's Annual Report on Form 10-K for the year ended December 31, 2013, filed on February 18, 2014) 10.2.2* The Piedmont Office Realty Trust, Inc. Executive Nonqualified Deferred Compensation Plan Adoption Agreement dated December 5, 2013 (incorporated by reference to Exhibit 10.40 to the Company's Annual Report on Form 10-K for the year ended December 31, 2013, filed on February 18, 2014) 10.3* Employment Agreement dated April 16, 2007, by and between the Company and Robert E. Bowers (incorporated by reference to Exhibit 99.9 to the Company’s Current Report on Form 8-K, filed on April 20, 2007) 10.4* Employment Agreement dated May 14, 2007, by and between the Company and Laura P. Moon (incorporated by reference to Exhibit 99.3 to the Company’s Current Report on Form 8-K, filed on May 14, 2007) 10.5* Offer Letter Dated October 17, 2012 among the Company and Robert K. Wiberg (incorporated by reference to Exhibit 10.41 to the Company's Annual Report on Form 10-K for the year ended December 31, 2012, filed on February 27, 2013) 10.6* 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) 53 Table of Contents Index to Financial Statements 10.7* Employment Agreement, dated as of March 19, 2019, between the Company and C. Brent Smith (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K, filed on March 19, 2019) 10.8* 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) 10.9.1* Piedmont Office Realty Trust, Inc. Amended and Restated 2007 Omnibus Incentive Plan (incorporated by reference to Appendix A to the Company's Proxy Statement for its 2017 Annual Meeting of Stockholders filed with the Commission on March 22, 2017) 10.9.2* Form of Employee Deferred Stock Award Agreement for Amended and Restated 2007 Omnibus Incentive Plan of the Company effective February 19, 2020 (incorporated by reference to Exhibit 10.33 to the Company's Annual Report on Form 10-K for the year ended December 31, 2019, filed on February 19, 2020) 10.9.3* Form of Director Deferred Stock Award Agreement for Amended and Restated 2007 Omnibus Incentive Plan of the Company effective February 19, 2020 (incorporated by reference to Exhibit 10.34 to the Company's Annual Report on Form 10-K for the year ended December 31, 2019, filed on February 19, 2020) 10.9.4* Piedmont Realty Trust, Inc. 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) 10.9.5* 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) 10.9.6* Form of Employee Officer Deferred Stock Award Agreement for Second Amended and Restated 2007 Omnibus Incentive Plan of the Company (incorporated by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2021, filed on April 28, 2021) 10.9.7* 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) 10.9.8* 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) 10.9.9* 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) 10.9.10* Form of Employee Deferred Stock Award Agreement for Second Amended and Restated 2007 Omnibus Incentive Plan of the Company effective February 23, 2023 (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q, filed on May 1, 2023) 10.9.11* Form of Employee Deferred Stock Award Agreement for Second Amended and Restated 2007 Omnibus Incentive Plan of the Company effective February 20, 2024 10.9.12* Form of Employee Officer Deferred Stock Award Agreement for Second Amended and Restated 2007 Omnibus Incentive Plan of the Company effective February 20, 2024 10.9.13* Form of Director Deferred Stock Award Agreement for Second Amended and Restated 2007 Omnibus Incentive Plan of the Company effective F ebruary 20, 2024 10.9.14* Form of Performance Share Award Agreement for Second Amended and Restated 2007 Omnibus Incentive Plan of the Company effective February 20, 2024 10.10.1* Amendment Number Three to the Piedmont Office Realty Trust, Inc. Long-Term Incentive Program effective May 2, 2017 (incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2017, filed on August 2, 2017) 54 Table of Contents Index to Financial Statements 10.10.2* Piedmont Office Realty Trust, Inc. Long-Term Incentive Program Award Agreement, dated May 3, 2019 (incorporated by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2020, filed on April 29, 2020) 10.10.3* Amendment No. 4 to Piedmont Office Realty Trust, Inc. Long-Term Incentive Program effective March 19, 2020 (incorporated by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2021, filed on July 28, 2021) 10.10.4* Piedmont Office Realty Trust, Inc. Long-Term Incentive Program Award Agreement effective March 19, 2020 (incorporated by reference to Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2020, filed on April 29, 2020) 10.10.5* 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) 10.10.6* Amendment No. 5 to Piedmont Office Realty Trust, Inc.'s Long-Term Incentive Program effective February 23, 2023 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2023, filed on May 1, 2023) 10.11 Amended and Restated Term Loan Agreement Dated as of September 28, 2018 by and among the Operating Partnership, as Borrower, the Company, 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) 10.12.1 Term Loan Agreement, dated as of March 29, 2018, by and among the Operating Partnership, as Borrower, the Company, as Parent, U.S. Bank National Association, PNC Capital Markets LLC, and SunTrust Robinson Humphrey, Inc., as Joint Lead Arrangers and Joint Book Runners, U.S. Bank National Association, as Administrative Agent, PNC Bank, National Association and SunTrust Bank as Syndication Agents, and the other banks signatory thereto as Lenders (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed April 3, 2018) 10.12.2 Amendment No. 1, dated as of September 28, 2018, to the Term Loan Agreement between the Operating Partnership, as Borrower and U.S. Bank National Association as Administrative Agent dated as of March 29, 2018 (incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2018, filed on October 30, 2018) 10.12.3 Amendment No. 2, dated as of March 3, 2020, to the Term Loan Agreement dated March 29, 2018, between the Operating Partnership, as Borrower and U.S. Bank National Association as Administrative Agent (incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2020, filed on April 29, 2020) 10.12.4 Amendment No. 3, dated as of March 29, 2023, to the Term Loan Agreement, dated March 29, 2018, between the Operating Partnership, as Borrower and U.S. Bank National Association as Administrative Agent (incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2023, filed on May 1, 2023) 10.13 Revolving Credit Agreement dated as of September 28, 2018 by and among the Operating Partnership, as Borrower, the Company, as Parent, JPMorgan Chase Bank, N.A., SunTrust Robinson Humphrey, Inc., U.S. Bank National Association and PNC Capital Markets LLC, as Joint Lead Arrangers and Joint Bookrunners, JPMorgan Chase Bank, N.A., as Administrative Agent, SunTrust Bank, U.S. Bank National Association and PNC Bank, National Association, as Syndication Agents, Bank Of America, N.A., BMO Harris Bank, N.A., Branch Banking and Trust Company, Morgan Stanley Senior Funding, Inc., TD Bank, N.A., The Bank Of Nova Scotia and Wells Fargo Bank, N.A. as Documentation 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 October 2, 2018) 10.14 Purchase and Sale Agreement Between SPUS7 Galleria, LP, as Seller and Piedmont Dallas Galleria, LLC, as Purchaser (incorporated by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K filed February 12, 2020) 10.15.1 Term Loan Agreement, dated February 10, 2020, by and among the Operating Partnership, as Borrower, the Company, 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) 55 Table of Contents Index to Financial Statements 10.15.2 Amendment No. 1 to Term Loan Agreement, dated March 24, 2020, by and among the Operating Partnership, as Borrower, Truist Bank, as administrative agent and lender, and JPMorgan Chase Bank, N.A. and U.S. Bank National Association, as new Lenders (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on March 30, 2020) 10.16 Amended and Restated Revolving Credit Agreement, dated as of June 14, 2022, by and among the Operating Partnership, as Borrower, the Company, 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) 10.17.1 Term Loan Agreement, dated as of July 22, 2022, by and among the Operating Partnership, as Borrower, the Company, 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) 10.17.2 Amendment No. 1 to Term Loan Agreement dated as of December 14, 2022, by and among the Operating Partnership, as Borrower, the Company, 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) 10.18 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) 10.19 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) 10.20.1 Term Loan Agreement, dated as of January 31, 2023, by and among the Operating Partnership, as Borrower, the Company, as Parent, BofA Securities, Inc., JPMorgan Chase Bank, N.A., and TD Securities (USA) LLC, as Joint Lead Arrangers and Joint Bookrunners, Bank of America, N.A., 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 on February 3, 2023) 10.20.2 Waiver, Agent Resignation, Extension, and Amendment No. 1 to Term Loan Agreement dated as of January 31, 2023 10.21 Term Loan Agreement, dated as of January 30, 2024, by and among the Operating Partnership, as Borrower, the Company, as Parent, Truist Securities, Inc,. as Joint Lead Arranger and Sole Book Manager, JP Morgan Chase Bank, N.A. and TD Bank, N.A,. as Joint Lead Arrangers, Truist Bank as Administrative Agent, JP Morgan Chase Bank, N.A. and TD Bank, N.A,. as Co-Syndication Agents, and Wells Fargo Bank, N.A,. as Documentation Agent, and the other financial institutions signatory thereto and their assignees, as Lenders (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on January 30, 2024). 21.1 List of Subsidiaries of the Company 22.1 Subsidiary Issuer of Guaranteed Securities 23.1 Consent of Deloitte & Touche LLP 31.1 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 31.2 Certification of Chief Financial Officer pursuant to Section 302 of Sarbanes-Oxley Act of 2002 32.1** Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 32.2** Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 97.1 Policy Relating to Recovery of Erroneously Awarded Compensation 101.INS XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document 101.SCH XBRL Taxonomy Extension Schema 101.CAL XBRL Taxonomy Extension Calculation Linkbase 56 Table of Contents Index to Financial Statements 101.DEF XBRL Taxonomy Extension Definition Linkbase 101.LAB XBRL Taxonomy Extension Label Linkbase 101.PRE XBRL Taxonomy Extension Presentation Linkbase 104.1 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) * Identifies each management contract or compensatory plan required to be filed. ** Furnished herewith. ITEM 16. FORM 10-K SUMMARY None. 57 Table of Contents Index to Financial Statements SIGNATURES 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 20 th day of February, 2024. Piedmont Office Realty Trust, Inc. (Registrant) By: /s/ C. B RENT S MITH C. Brent Smith 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. M C D OWELL Chairman, and Director February 20, 2024 Frank C. McDowell /s/ D ALE H. T AYSOM Vice-Chairman, and Director February 20, 2024 Dale H. Taysom /s/ K ELLY H. B ARRETT Director February 20, 2024 Kelly H. Barrett /s/ G LENN G. C OHEN Director February 20, 2024 Glenn G. Cohen /s/ V ENKATESH S. D URVASULA Director February 20, 2024 Venkatesh S. Durvasula /s/ M ARY M. H AGER Director February 20, 2024 Mary M. Hager /s/ B ARBARA B. L ANG Director February 20, 2024 Barbara B. Lang /s/ J EFFREY L. S WOPE Director February 20, 2024 Jeffrey L. Swope /s/ C. B RENT S MITH Chief Executive Officer and Director February 20, 2024 C. Brent Smith (Principal Executive Officer) /s/ R OBERT E. B OWERS Chief Financial Officer and Executive Vice-President February 20, 2024 Robert E. Bowers (Principal Financial Officer) /s/ L AURA P. M OON Chief Accounting Officer February 20, 2024 Laura P. Moon (Principal Accounting Officer) 58 Table of Contents Index to Financial Statements INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Financial Statements Page Report of Independent Registered Public Accounting Firm (PCAOB Firm # 34 ) F- 2 Consolidated Balance Sheets as of December 31, 2023 and 2022 F- 5 Consolidated Statements of Operations for the Years December 31, 2023, 2022, and 2021 F- 6 Consolidated Statements of Comprehensive Income/(Loss) for the Years Ended December 31, 2023, 2022, and 2021 F- 7 Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2023, 2022, and 2021 F- 8 Consolidated Statements of Cash Flows for the Years Ended December 31, 2023, 2022, and 2021 F- 9 Notes to Consolidated Financial Statements F- 10 Financial Statement Schedule Schedule III - Real Estate Assets and Accumulated Depreciation S- 1 F-1 Table of Contents Index to Financial Statements REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the stockholders and the Board of Directors of Piedmont Office Realty Trust, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Piedmont Office Realty Trust, Inc. and subsidiaries (the "Company") as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows, for each of the three years in the period ended December 31, 2023, and the related notes and the schedule listed in the Index at Item 15(a) (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 20, 2024, expressed an unqualified opinion on the Company's internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company's management. 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. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. 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 matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Revenues - Refer to Note 2 to the financial statements Critical Audit Matter Description Rental and tenant reimbursement income 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; whether the landlord is obligated to fund cost overruns for the construction of leasehold improvements; whether the leasehold improvements are unique F-2 Table of Contents Index to Financial Statements to the tenant or could reasonably be used by other parties; and whether the estimated economic life of the leasehold improvements is long enough to allow for significant residual value that could benefit the landlord at the end of the lease term. 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. 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 or other supporting documents. ◦ Tested tenant improvement costs (including the amounts funded by the Company or the tenant) by reconciling the amounts recorded by the Company to invoices or other supporting documents and evaluated whether the costs were consistent with the terms of the lease agreement and the Company’s ownership determination. ◦ Tested the timing and amounts recognized as rental income, including any amortization of deferred revenue or lease incentives, by independently calculating such rental income amounts to be recognized and comparing it to the amounts recorded by the Company. Valuation of Goodwill – Refer to Note 2 to the financial statements Critical Audit Matter Description 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, 2023, was approximately $53 million. During the year ended December 31, 2023, the Company recorded a goodwill impairment loss of approximately $29 million. 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 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. F-3 Table of Contents Index to Financial Statements • We selected a sample of properties and performed the following to evaluate the appropriateness of management’s conclusions regarding the discount rate and terminal cap rate assumptions: ◦ 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. /s/ Deloitte & Touche LLP Atlanta, Georgia February 20, 2024 We have served as the Company's auditor since 2018. F-4 Table of Contents Index to Financial Statements PIEDMONT OFFICE REALTY TRUST, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except share and per-share amounts) December 31, 2023 December 31, 2022 Assets: Real estate assets, at cost: Land $ 567,244 $ 567,244 Buildings and improvements, less accumulated depreciation of $ 1,046,512 and $ 915,010 as of December 31, 2023 and December 31, 2022, respectively 2,776,729 2,766,990 Intangible lease assets, less accumulated amortization of $ 88,066 and $ 90,694 as of December 31, 2023 and December 31, 2022, respectively 82,588 114,380 Construction in progress 85,966 52,010 Total real estate assets 3,512,527 3,500,624 Cash and cash equivalents 825 16,536 Tenant receivables, net of allowance for doubtful accounts of $ 0 and $ 1,000 as of December 31, 2023 and December 31, 2022, respectively 7,915 4,762 Straight-line rent receivables 183,839 172,019 Restricted cash and escrows 3,381 3,064 Prepaid expenses and other assets 28,466 17,152 Goodwill 53,491 82,937 Interest rate swaps 3,032 4,183 Deferred lease costs, less accumulated amortization of $ 223,913 and $ 221,731 as of December 31, 2023 and December 31, 2022, respectively 263,606 284,248 Total assets $ 4,057,082 $ 4,085,525 Liabilities: Unsecured debt, net of discount and unamortized debt issuance costs of $ 15,437 and $ 13,319 as of December 31, 2023 and December 31, 2022, respectively $ 1,858,717 $ 1,786,681 Secured debt 195,879 197,000 Accounts payable, accrued expenses, and accrued capital expenditures 131,516 110,306 Dividends payable 15,143 25,357 Deferred income 89,930 59,977 Intangible lease liabilities, less accumulated amortization of $ 35,811 and $ 36,423 as of December 31, 2023 and December 31, 2022, respectively 42,925 56,949 Total liabilities 2,334,110 2,236,270 Commitments and Contingencies ( Note 7 ) — — Stockholders’ Equity: Shares-in-trust, 150,000,000 shares authorized, none outstanding as of December 31, 2023 or December 31, 2022 — — Preferred stock, no par value, 100,000,000 shares authorized, none outstanding as of December 31, 2023 or December 31, 2022 — — Common stock, $ 0.01 par value; 750,000,000 shares authorized, 123,715,298 shares issued and outstanding as of December 31, 2023; and 123,439,558 shares issued and outstanding at December 31, 2022 1,237 1,234 Additional paid-in capital 3,716,742 3,711,005 Cumulative distributions in excess of earnings ( 1,987,147 ) ( 1,855,893 ) Accumulated other comprehensive loss ( 9,418 ) ( 8,679 ) Piedmont stockholders’ equity 1,721,414 1,847,667 Noncontrolling interest 1,558 1,588 Total stockholders’ equity 1,722,972 1,849,255 Total liabilities and stockholders’ equity $ 4,057,082 $ 4,085,525 See accompanying notes. F-5 Table of Contents Index to Financial Statements PIEDMONT OFFICE REALTY TRUST, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except share and per-share amounts) Years Ended December 31, 2023 2022 2021 Revenues: Rental and tenant reimbursement revenue $ 555,313 $ 545,741 $ 514,619 Property management fee revenue 1,729 1,675 2,496 Other property related income 20,714 16,350 11,595 577,756 563,766 528,710 Expenses: Property operating costs 235,091 226,058 210,932 Depreciation 148,458 133,616 120,615 Amortization 87,756 90,937 85,992 Impairment charges 29,446 25,981 41,000 General and administrative 29,190 29,127 30,252 529,941 505,719 488,791 Other income (expense): Interest expense ( 101,258 ) ( 65,656 ) ( 51,292 ) Other income 3,940 2,710 10,206 Loss on early extinguishment of debt ( 820 ) — — Gain on sale of real estate assets 1,946 151,729 — ( 96,192 ) 88,783 ( 41,086 ) Net income/(loss) ( 48,377 ) 146,830 ( 1,167 ) Net (income)/loss applicable to noncontrolling interest ( 10 ) — 14 Net income/(loss) applicable to Piedmont $ ( 48,387 ) $ 146,830 $ ( 1,153 ) Per share information— basic and diluted: Net income/(loss) applicable to common stockholders $ ( 0.39 ) $ 1.19 $ ( 0.01 ) Weighted-average shares outstanding—basic 123,658,622 123,351,187 123,977,616 Weighted-average shares outstanding—diluted 123,658,622 123,523,881 123,977,616 See accompanying notes. F-6 Table of Contents Index to Financial Statements PIEDMONT OFFICE REALTY TRUST, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS) (in thousands) Years Ended December 31, 2023 2022 2021 Net income/(loss) applicable to Piedmont $ ( 48,387 ) $ 146,830 $ ( 1,153 ) Other comprehensive income/(loss): Effective portion of gain on derivative instruments that are designated and qualify as cash flow hedges (See Note 4 ) 2,626 8,202 2,994 Plus: Reclassification of net (gain)/loss included in net income (See Note 4 ) ( 3,365 ) 1,273 2,952 Other comprehensive income/(loss) ( 739 ) 9,475 5,946 Comprehensive income/(loss) applicable to Piedmont $ ( 49,126 ) $ 156,305 $ 4,793 See accompanying notes. F-7 Table of Contents Index to Financial Statements PIEDMONT OFFICE REALTY TRUST, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (in thousands, except per-share amounts) Common Stock Additional Paid-In Capital Cumulative Distributions in Excess of Earnings Accumulated Other Comprehensive Income/(Loss) Noncontrolling Interest Total Stockholders’ Equity Shares Amount Balance, December 31, 2020 123,839 $ 1,238 $ 3,693,996 $ ( 1,774,856 ) $ ( 24,100 ) $ 1,683 $ 1,897,961 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) and stockholders of subsidiaries — — — ( 104,230 ) — ( 40 ) ( 104,270 ) Shares issued and amortized under the 2007 Omnibus Incentive Plan, net of tax 298 3 7,857 — — — 7,860 Net loss applicable to noncontrolling interest — — — — — ( 14 ) ( 14 ) 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 Offering costs — — ( 460 ) — — — ( 460 ) Dividends to common stockholders ($ 0.84 per share) and stockholders of subsidiaries — — — ( 103,642 ) — ( 41 ) ( 103,683 ) Shares issued and amortized under the 2007 Omnibus Incentive Plan, net of tax 363 3 9,667 — — — 9,670 Net income applicable to Piedmont — — — 146,830 — — 146,830 Other comprehensive income — — — — 9,475 — 9,475 Balance, December 31, 2022 123,440 1,234 3,711,005 ( 1,855,893 ) ( 8,679 ) 1,588 1,849,255 Dividends to common stockholders ($ 0.67 per share) and stockholders of subsidiaries — — — ( 82,867 ) — ( 40 ) ( 82,907 ) Shares issued and amortized under the 2007 Omnibus Incentive Plan, net of tax 275 3 5,737 — — — 5,740 Net income applicable to noncontrolling interest — — — — — 10 10 Net loss applicable to Piedmont — — — ( 48,387 ) — — ( 48,387 ) Other comprehensive loss — — — — ( 739 ) — ( 739 ) Balance, December 31, 2023 123,715 $ 1,237 $ 3,716,742 $ ( 1,987,147 ) $ ( 9,418 ) $ 1,558 $ 1,722,972 See accompanying notes. F-8 Table of Contents Index to Financial Statements PIEDMONT OFFICE REALTY TRUST, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Years Ended December 31, 2023 2022 2021 Cash Flows from Operating Activities: Net income/(loss) $ ( 48,377 ) $ 146,830 $ ( 1,167 ) Adjustments to reconcile net income/(loss) to net cash provided by operating activities: Depreciation 148,458 133,616 120,615 Amortization of debt issuance costs inclusive of settled interest rate swaps 5,854 3,757 3,270 Other amortization 78,388 81,777 78,657 Impairment losses 29,446 25,981 41,000 Loss on early extinguishment of debt 287 — — Reduction of general reserve for uncollectible accounts ( 1,000 ) ( 3,000 ) ( 553 ) Stock compensation expense 8,093 8,968 10,984 Gain on sale of real estate assets ( 1,946 ) ( 151,729 ) — Changes in other operating assets and liabilities: Increase in tenant and straight-line rent receivables ( 14,120 ) ( 14,163 ) ( 9,691 ) Decrease/(increase) in prepaid expenses and other assets ( 10,693 ) 4,774 1,294 Cash received upon settlement of interest rate swaps — — 623 Increase/(decrease) in accounts payable and accrued expenses 19,260 ( 1,590 ) 1,861 Decrease in deferred income ( 3,519 ) ( 20,006 ) ( 4,690 ) Net cash provided by operating activities 210,131 215,215 242,203 Cash Flows from Investing Activities: Acquisition of real estate assets, intangibles, and undeveloped land parcels — ( 270,908 ) ( 226,011 ) Capitalized expenditures ( 158,191 ) ( 121,359 ) ( 122,626 ) Sales proceeds from wholly-owned properties 1,946 297,388 — Note receivable repayment — 118,500 — Deferred lease costs paid ( 39,775 ) ( 24,868 ) ( 20,295 ) Net cash used in investing activities ( 196,020 ) ( 1,247 ) ( 368,932 ) Cash Flows from Financing Activities: Debt issuance and other costs paid ( 2,318 ) ( 374 ) ( 1,038 ) Proceeds from debt 1,412,659 803,420 789,580 Repayments of debt ( 1,344,967 ) ( 897,000 ) ( 535,610 ) Discount paid due to loan modification — ( 500 ) — Costs of issuance of common stock — ( 460 ) ( 55 ) Value of shares withheld for payment of taxes related to employee stock compensation ( 1,757 ) ( 3,940 ) ( 3,060 ) Repurchases of common stock as part of announced plan — — ( 19,537 ) Dividends paid ( 93,122 ) ( 104,374 ) ( 103,905 ) Net cash (used in)/provided by financing activities ( 29,505 ) ( 203,228 ) 126,375 Net increase/(decrease) in cash, cash equivalents, and restricted cash and escrows ( 15,394 ) 10,740 ( 354 ) Cash, cash equivalents, and restricted cash and escrows, beginning of year 19,600 8,860 9,214 Cash, cash equivalents, and restricted cash and escrows, end of year $ 4,206 $ 19,600 $ 8,860 See accompanying notes. F-9 Table of Contents Index to Financial Statements PIEDMONT OFFICE REALTY TRUST, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2023, 2022, AND 2021 1. Organization Piedmont Office Realty Trust, Inc. (“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 major U.S. Sunbelt markets. Piedmont was incorporated in 1997 and commenced operations in 1998. Piedmont conducts business through its wholly-owned subsidiary, Piedmont Operating Partnership, L.P. (“Piedmont OP”), a Delaware limited partnership. Piedmont OP owns properties directly, through wholly-owned subsidiaries, and through various joint ventures which it controls. 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, 2023, Piedmont owned 51 in-service office properties and one redevelopment asset, primarily located in major U.S. Sunbelt office markets. As of December 31, 2023, the in-service office properties comprised approximately 16.6 million square feet (unaudited) and were 87.1 % leased. 2. Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation The consolidated financial statements of Piedmont are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and include the accounts of Piedmont, Piedmont’s wholly-owned subsidiaries, any variable interest entity ("VIE") of which Piedmont or any of its wholly-owned subsidiaries is considered to have the power to direct the activities of the entity and the obligation to absorb losses/right to receive benefits, or any entity in which Piedmont or any of its wholly-owned subsidiaries owns a controlling interest. In determining whether Piedmont or Piedmont OP has a controlling interest, the following factors, among others, are considered: equity ownership, voting rights, protective rights of investors, and participatory rights of investors. Piedmont owns a majority interest in four properties through three joint ventures. Two of these joint ventures, 1201 and 1225 Eye Street, NW Associates, own the 1201 and 1225 Eye Street buildings, respectively, in Washington, D.C. The other joint venture, Piedmont-CNL Towers Orlando, LLC, owns CNL Center I and II, in Orlando, Florida. All three joint venture investments are consolidated under the voting model. Accordingly, Piedmont’s consolidated financial statements include the accounts of 1201 Eye Street, NW Associates, LLC, 1225 Eye Street, NW Associates, LLC, and Piedmont-CNL Towers Orlando, LLC. All inter-company balances and transactions have been eliminated upon consolidation. Further, Piedmont has formed special purpose entities to acquire and hold real estate. Each special purpose entity is a separate legal entity and consequently the assets of the special purpose entities are not available to all creditors of Piedmont. The assets owned by these special purpose entities are being reported on a consolidated basis with Piedmont’s assets for financial reporting purposes only. Use of Estimates The preparation of the accompanying consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the accompanying consolidated financial statements and notes. 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. F-10 Table of Contents Index to Financial Statements Real Estate Assets Piedmont classifies its real estate assets as long-lived assets held for use or as long-lived assets held for sale. Held for use assets are stated at cost, as adjusted for any impairment loss, less accumulated depreciation. Held for sale assets are carried at lower of depreciated cost or estimated fair value, less estimated costs to sell. Piedmont generally reclassifies assets as held for sale once a sales contract has been executed and earnest money has become non-refundable. Amounts capitalized to real estate assets consist of the cost of acquisition or construction, any tenant improvements or major improvements, betterments that extend the useful life of the related asset, and transaction costs associated with the acquisition of an individual asset that does not qualify as a business combination. All repairs and maintenance are expensed as incurred. 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: Buildings 40 years Building improvements 5 - 25 years Land improvements 20 - 25 years Tenant allowances Lease term Furniture, fixtures, and equipment 3 - 10 years 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 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. In the event that the expected undiscounted future cash flows for assets held for use or the estimated fair value, less costs to sell, for assets held for sale do not exceed the respective asset carrying value, management adjusts such assets to the respective estimated fair values and recognizes an impairment loss. Estimated fair values are calculated based on the following information, depending upon availability, in order of preference: (i) recently quoted market prices, (ii) market prices for comparable properties, or (iii) the present value of undiscounted cash flows, including estimated sales value (which is based on key assumptions such as estimated market rents, lease-up periods, estimated lease terms, and capitalization and discount rates) less estimated selling costs. Fair Value of Assets and Liabilities of Acquired Properties Upon the acquisition of real properties, Piedmont records the fair value of properties (plus any related acquisition costs) allocated based on relative fair value as tangible assets, consisting of land and building, and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases and the value of in-place leases, based on their estimated fair values. Piedmont's property acquisitions typically qualify as asset acquisitions under Accounting Standards Codification ("ASC") 805, Business Combinations . The estimated fair values of the tangible assets of an acquired property are determined by valuing the property as if it were vacant, and the “as-if-vacant” value is then allocated to land and building based on management’s determination of the estimated fair value of these assets. Management relies on a sales comparison approach using closed land sales and listings in determining the land value, and determines the as-if-vacant estimated fair value of a property using methods similar to those used by independent appraisers. Factors considered by management in performing these analyses include an estimate of carrying costs during the expected lease-up periods considering current market conditions and costs to execute similar leases. In estimating carrying costs, management includes real estate taxes, insurance, and other operating expenses and estimates of lost rental revenue during the expected lease-up periods based on current market demand. Management also estimates the cost to execute similar leases including leasing commissions, legal, and other related costs. 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 F-11 Table of Contents Index to Financial Statements 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. 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 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. The value of opportunity costs is calculated using the contractual amounts to be paid pursuant to the in-place leases over a market absorption period for a similar lease. 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 as of December 31, 2023 and 2022, respectively, are as follows (in thousands): December 31, 2023 December 31, 2022 Intangible Lease Assets: Above-Market In-Place Lease Assets $ 868 $ 1,147 In-Place Lease Valuation $ 169,786 $ 203,927 Intangible Lease Origination Costs (included as component of Deferred Lease Costs) $ 235,820 $ 285,777 Intangible Lease Liabilities (Below-Market In-Place Leases) $ 78,736 $ 93,372 For the years ended December 31, 2023, 2022, and 2021, respectively, Piedmont recognized amortization of intangible lease costs in the accompanying consolidated statements of operations, as follows (in thousands): 2023 2022 2021 Amortization of Intangible Lease Origination Costs and In-Place Lease Valuation included in Amortization $ 68,642 $ 74,167 $ 69,388 Amortization of Above-Market and Below-Market In-Place Lease Intangibles as a net increase to Rental and Tenant Reimbursement Revenue $ 13,830 $ 13,426 $ 11,180 Net intangible assets and liabilities as of December 31, 2023 will be amortized as follows (in thousands): Intangible Lease Assets Above-Market In-place Lease Assets In-Place Lease Valuation Intangible Lease Origination Costs (1) Below-Market In-place Lease Liabilities For the year ending December 31: 2024 $ 109 $ 21,570 $ 26,305 $ 9,756 2025 31 16,194 20,999 8,152 2026 14 12,739 17,740 6,623 2027 13 10,061 14,552 5,535 2028 13 7,934 11,748 4,724 Thereafter 17 13,893 21,015 8,135 $ 197 $ 82,391 $ 112,359 $ 42,925 Weighted-Average Amortization Period (in years) 3 5 6 6 (1) Included as a component of Deferred Lease Costs in the accompanying consolidated balance sheets. F-12 Table of Contents Index to Financial Statements Cash and Cash Equivalents Piedmont considers all highly-liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash equivalents include cash and short-term investments. 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 value, and available-for-sale securities associated with Piedmont's non-qualified deferred compensation program carried at estimated fair value. Tenant Receivables and Straight-line Rent Receivables Tenant receivables are comprised of rental and reimbursement billings due from tenants, and straight-line rent receivables representing the cumulative amount of future adjustments necessary to present rental income on a straight-line basis. Piedmont evaluates the collectibility of its operating lease receivables on a tenant/lease-specific basis and recognizes changes in the collectibility assessment of its operating lease receivables as a reduction of rental and tenant reimbursement revenues. Allowance for Doubtful Accounts As detailed above, Piedmont records contra-revenue adjustments to reduce tenant and straight-line rent receivables to their net realizable value when collectibility is in question. During the year ended December 31, 2020 Piedmont also established an allowance for doubtful accounts due to the general uncertainty regarding collectibility of certain tenant receivables during the COVID-19 pandemic. The majority of this allowance was ultimately not used and was reversed during the two years ended December 31, 2023. A roll forward of the allowance for doubtful accounts for the years ended December 31, 2023, 2022, and 2021 is as follows: Balance at Beginning of Period Additions/Reversals as Decrease/(Increase) to Revenue Write-offs Balance at End of Period Year Ended December 31, 2023 $ 1,000 $ ( 1,000 ) $ — $ — 2022 $ 4,000 $ ( 3,000 ) $ — $ 1,000 2021 $ 4,553 $ 35 $ ( 588 ) $ 4,000 Restricted Cash and Escrows Restricted cash and escrows principally relate to the following types of items: • escrow accounts held by lenders to pay future real estate taxes, insurance, debt service, and tenant improvements; • net sales proceeds from property sales held by qualified intermediary for potential Section 1031 exchange; • earnest money paid in connection with future acquisitions; and • security and utility deposits paid by tenants per the terms of their respective leases. Restricted cash and escrows are generally reclassified to other asset or liability accounts upon being used to purchase assets, satisfy obligations, or settle tenant obligations. Prepaid Expenses and Other Assets Prepaid expenses and other assets are primarily comprised of the following items: • prepaid property taxes, insurance and operating costs; • receivables which are unrelated to tenants, for example, insurance proceeds receivable from insurers related to casualty losses; and • equipment, furniture and fixtures, and tenant improvements for Piedmont’s corporate office and property management office space, net of accumulated depreciation. Prepaid expenses and other assets will be expensed as utilized or depreciated in the case of Piedmont's corporate assets. Balances without a future economic benefit are expensed as they are identified. F-13 Table of Contents Index to Financial Statements Goodwill 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 reporting units. (See Note 14 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. 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 the carrying value of the entity. 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. As a result of impairment assessments performed during the years ended December 31, 2023 and 2022 Piedmont determined that portions of its goodwill related to various reporting units were impaired, and recorded goodwill impairment charges in each period as further described in Note 6 below. Interest Rate Derivatives Piedmont has periodically entered into interest rate derivative agreements to hedge its exposure to changing interest rates. As of December 31, 2023 and 2022, all of Piedmont's interest rate derivatives were designated as effective cash flow hedges and carried on the balance sheet at estimated fair value. Piedmont reassesses the effectiveness of its derivatives designated as cash flow hedges on a regular basis to determine if they continue to be highly effective and if the forecasted transactions remain highly probable. Piedmont does not use derivatives for trading or speculative purposes. The changes in estimated fair value of interest rate swap agreements designated as effective cash flow hedges are recorded in other comprehensive income (“OCI”), and subsequently reclassified to earnings when the hedged transactions occur. The estimated fair value of the interest rate derivative agreement is recorded as interest rate derivative asset or as interest rate derivative liability in the accompanying consolidated balance sheets. Amounts received or paid under interest rate derivative agreements are recorded as reductions or additions to interest expense in the consolidated statements of operations as incurred. Additionally, when Piedmont settles forward starting swap agreements, any gain or loss is recorded as accumulated other comprehensive income and is amortized to interest expense over the term of the respective notes on a straight line basis (which approximates the effective interest method). Further, Piedmont classifies cash flows from the settlement of hedging derivative instruments in the same category as the underlying exposure which is being hedged. Settlements resulting from the hedge of Piedmont's exposure to interest rate changes are classified as operating cash flows in the accompanying consolidated statements of cash flows. Deferred Lease Costs Deferred lease costs are comprised of costs and incentives incurred to acquire operating leases. 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. 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: • Approximately $ 56.1 million, $ 57.9 million, and $ 56.4 million of deferred lease costs are included in amortization expense for the years ended December 31, 2023, 2022, and 2021, respectively; and • Approximately $ 4.4 million, $ 4.2 million, and $ 3.9 million, of deferred lease costs related to lease incentives granted to tenants are included as an offset to rental and tenant reimbursement revenue for the years ended December 31, 2023, 2022, and 2021, respectively. F-14 Table of Contents Index to Financial Statements Upon receipt of an early lease termination notice, Piedmont recognizes any unamortized deferred lease costs ratably over the revised remaining term of the lease after giving effect to the termination notice. 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. Debt 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 , $ 0 , and $ 0.3 million for the years ended December 31, 2023, 2022, and 2021, 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. Piedmont recorded discount amortization of approximately $ 0.7 million, $ 0.6 million and $ 0.5 million for the years ended December 31, 2023, 2022, and 2021, respectively. Piedmont presents all debt issuance costs as an offset to the principal amount of debt in the accompanying consolidated balance sheets. Piedmont amortizes these costs to interest expense on a straight-line basis (which approximates the effective interest rate method) over the terms of the related financing arrangements. Piedmont recognized amortization of such costs for the years ended December 31, 2023, 2022, and 2021 of approximately $ 4.7 million, $ 2.8 million, and $ 2.7 million, respectively. Deferred income Deferred income is primarily comprised of the following items: • prepaid rent from tenants; • tenant reimbursements related to operating expense or property tax expenses which may be due to tenants as part of an annual operating expense reconciliation; and • tenant improvement allowance overages or improvements funded by the tenant where Piedmont owns the underlying improvements. Deferred income related to prepaid rents from tenants will be recognized as rental income in the period it is earned. Amounts related to operating expense reconciliations or property tax expense are relieved when the tenant's reconciliation is completed in accordance with the underlying lease, and payment is issued to the tenant. Tenant improvement allowance overages or improvements paid for by the tenant, where Piedmont owns all of the underlying improvements, are recorded as deferred income and amortized on a straight-line basis into rental and tenant reimbursement revenue over the term of the respective leases. Shares-in-trust To date, Piedmont has not issued any shares-in-trust; 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. Preferred Stock To date, Piedmont has not issued any shares of preferred stock; however, Piedmont is authorized to issue up to 100,000,000 shares of one or more classes or series of preferred stock. 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. F-15 Table of Contents Index to Financial Statements Common Stock 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. Piedmont previously had a board-authorized stock repurchase program, which expired in February 2024, under which it repurchased its own shares from time to time in the open market, in accordance with applicable securities laws. Equity Securities Issued At-The-Market Under Piedmont's at-the-market stock offering program ("ATM program"), Piedmont may offer and sell shares of its common stock from time to time in “at-the-market” offerings with an aggregate gross sales price of up to $ 250 million. In connection with the ATM Program, Piedmont may, at its discretion, enter into forward equity sale agreements. The use of a forward equity sale agreement would allow Piedmont to lock in a share price on the sale of shares of its common stock at the time the agreement is executed, but defer receiving the proceeds from the sale of shares until a later date, allowing Piedmont to better align such funding with its capital needs. Sales of shares of Piedmont’s common stock through its banking relationships, if any, will be made in amounts and at times to be determined by Piedmont from time to time, but Piedmont has no obligation to sell any of the shares in the offering and may suspend sales in connection with the offering at any time. Sales of Piedmont's common stock under forward equity sale agreements, if undertaken, meet the derivatives and hedging guidance scope exception to be accounted for as equity instruments based on the following assessments: (i) none of the agreements’ exercise contingencies were based on observable markets or indices besides those related to the market for Piedmont's own stock price and operations; and (ii) none of the settlement provisions precluded the agreements from being indexed to Piedmont's own stock. Underwriting commissions and offering costs incurred in connection with all common equity offerings, including any potential issuances under Piedmont's ATM Program, are reflected as a reduction of additional paid-in capital. Dividends As a REIT, Piedmont is required by the Internal Revenue Code of 1986, as amended (the “Code”), to make distributions to stockholders each taxable year equal to at least 90% of its annual taxable income, computed without regard to the dividends-paid deduction and by excluding net capital gains attributable to stockholders (“REIT taxable income”). Noncontrolling Interest Noncontrolling interest is the equity interest of consolidated entities that is not owned by Piedmont. Noncontrolling interest is adjusted for the noncontrolling partners' share of contributions, distributions, and earnings (losses) in accordance with the respective partnership agreement. Earnings allocated to such noncontrolling partners are recorded as income applicable to noncontrolling interest in the accompanying consolidated statements of operations. Revenue Recognition Piedmont's revenues consist of the following: Rental and tenant reimbursement income - consists of revenue from leases with Piedmont's tenants, as well as reimbursements for services prescribed by such leases. 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. 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 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: • 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; F-16 Table of Contents Index to Financial Statements • whether the tenant is required to provide the landlord with documentation supporting the cost of tenant improvements prior to reimbursement by the landlord; • whether the landlord is obligated to fund cost overruns for the construction of leasehold improvements; • whether the leasehold improvements are unique to the tenant or could reasonably be used by other parties; and • whether the estimated economic life of the leasehold improvements is long enough to allow for a significant residual value that could benefit the landlord at the end of the lease term. 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 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. When Piedmont owns the tenant improvements, rental revenue recognition begins when the tenant takes possession of or controls the finished space, which is typically when the improvements being recorded as Piedmont's asset are substantially complete. In some instances, Piedmont may cede control of the leased space to the tenant to be responsible for tenant-owned improvements for the space. In such arrangements, payments made by Piedmont to its tenant are treated as lease incentives and amortized as a reduction to rental and tenant reimbursement revenue over the lease term, which typically begins once the tenant takes possession of the unimproved space. Lease payments are typically comprised of both fixed base rental payments and separately billed variable lease payments for reimbursement of services performed by Piedmont for the tenant as prescribed by the lease. Fixed base rental payments, as well as any fixed portion of reimbursement income, are recognized on a straight-line basis over the lease term. Tenant reimbursements are recognized as revenue in the period that the related operating cost is incurred. Rents and tenant reimbursements collected in advance are recorded as deferred income in the accompanying consolidated balance sheets. Property management fee revenue - consists of revenue earned by Piedmont related to operating and managing office properties owned by other third-parties. 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 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. Other property related income - consists of all other property related income from Piedmont's customers (tenants) that is not derived from a contract meeting the definition of a lease and is therefore also within the scope of ASC 606. Examples of such income include parking revenue and income from licenses with unrelated third-parties to place antennae and/or fiber optic cables in or on Piedmont's buildings. These services also represent a performance obligation that is satisfied over the length of the contract, not at any specific point in time, and has the same measure of transfer (time elapsed); therefore, revenue related to these licenses is also recognized over time. 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. 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. Property dispositions with no continuing involvement will continue to be recognized upon closing of the sale. 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. Notes receivable that are deemed to be uncollectible or fully in default are reduced to their net realizable value, which approximates their fair value. F-17 Table of Contents Index to Financial Statements Stock-based Compensation 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, 2023 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 granted prior to the three-year service period (2020-2022) 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 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 outstanding during the period, including the dilutive effect of nonvested restricted stock. The dilutive effect of nonvested restricted stock is calculated using the treasury stock method to determine the number of additional common shares that would become outstanding if the remaining unvested restricted stock awards vested. Further, Piedmont has elected to use the "end of the reporting period" convention when using the treasury stock method to calculate the dilutive effect of any shares issued pursuant to forward equity sale agreements in connection with Piedmont's ATM Program described above. Under this methodology, the assumed sale proceeds are calculated using the closing price of Piedmont's stock as of the end of the respective reporting period. Income Taxes Piedmont has elected to be taxed as a REIT under the Code, and has operated as such, beginning with its taxable year ended December 31, 1998. To qualify as a REIT, Piedmont must meet certain organizational and operational requirements, including a requirement to distribute at least 90% of its annual REIT taxable income. As a REIT, Piedmont is generally not subject to federal income taxes, subject to fulfilling, among other things, its taxable income distribution requirement. However, Piedmont is subject to federal income taxes related to the operations conducted by its taxable REIT subsidiary which have been provided for in the financial statements. These operations resulted in approximately $ 39,000 , $ 10,000 , and $ 379,000 in income tax recoveries for the years ended December 31, 2023, 2022, and 2021, respectively, as a component of other income/(expense) in the accompanying consolidated statements of operations. 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. Recent Accounting Pronouncements Segment Expense Disclosure The Financial Accounting Standards Board (the "FASB") has issued Accounting Standards Update ("ASU") No. 2023-07, Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures ("ASU 2023-07). ASU 2023-07 requires expanded disclosure of significant segment expenses which are regularly provided to the chief operating decision maker ("CODM"); all entities that have a single reportable segment must provide existing segment disclosures; disclosure of the title and position of the CODM; and entities must disclose the amounts and a qualitative description of "other segment items", representing the difference between segment revenue less segment expenses reported in segment profit or loss. ASU 2023-07 is effective for Piedmont beginning with the Form 10-K for the year ended December 31, 2024, and subsequent interim periods thereafter. Piedmont is currently evaluating the potential impact of adoption; however, Piedmont does not anticipate any material impact to its consolidated financial statements as a result of adoption of ASU 2023-07. Income Tax Disclosure The FASB has issued ASU No. 2023-09, Income Taxes (Topic 740), Improvements to Income Tax Disclosures ("ASU 2023-09). ASU 2023-09 requires expanded disclosure of tax information, including a rate reconciliation and the amounts of F-18 Table of Contents Index to Financial Statements annual income taxes paid (net of refunds received), segregated by federal, state, and local jurisdictions. The amendments of ASU 2023-09 also require disclosure of income from continuing operations before income tax separated by domestic and foreign income, and eliminate the requirement to disclose the nature and estimates of the range of reasonable possible changes to unrecognized tax benefits within the following twelve months of the reporting period end. ASU 2023-09 is effective for Piedmont beginning with the filing of the Form 10-K for the year ended December 31, 2025. Piedmont is currently evaluating the potential impact of adoption; however, Piedmont does not anticipate any material impact to its consolidated financial statements as a result of adoption of ASU 2023-09. 3. Debt During the year ended December 31, 2023 , Piedmont entered into a new, one-year , $ 215 million, floating-rate, unsecured term loan facility (the “$ 215 Million Unsecured 2023 Term Loan”) and issued $ 600 million in aggregate principal amount of 9.250 % senior notes due July 20, 2028 (the “$ 600 Million Unsecured Senior Notes due 2028”). The $ 600 Million Unsecured Senior Notes due 2028 are fully and unconditionally guaranteed by Piedmont. Interest is payable semi-annually on January 20 and July 20 of each year commencing January 20, 2024, and is subject to adjustment if Piedmont's corporate credit rating with either Moody’s Investors Services Inc. or S&P Global Ratings falls below investment grade (i.e. BBB-/Baa3). The $ 600 Million Unsecured Senior Notes due 2028 are subject to typical covenants that, subject to certain exceptions, include: (a) a limitation on the ability of Piedmont and Piedmont OP to, among other things, incur additional secured and unsecured indebtedness; (b) a limitation on 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) a requirement that Piedmont maintain a pool of unencumbered assets. Also during the year ended December 31, 2023 , Piedmont: • fully repaid its $ 350 Million Unsecured Senior Notes that matured on June 1, 2023; • redeemed and repaid (using proceeds from the $ 600 Million Unsecured Senior Notes due 2028) approximately $ 350 million of its $ 400 Million Senior Notes due 2024 through a tender offer, resulting in the recognition of an approximately $ 0.8 million of loss on early extinguishment of debt; and, • repaid $ 100 million of the $ 200 Million Unsecured 2022 Term Loan Facility, scheduled to mature in December 2024. On January 30, 2024, Piedmont: • entered into a new, three-year , $ 200 Million unsecured syndicated bank term loan, due January 30, 2027 at Adjusted Daily Secured Overnight Financing Rate ("SOFR") plus 130 basis points; • paid off the remaining $ 100 million of the $ 200 Million Unsecured 2022 Term Loan Facility; • repaid $ 190 million of the $ 215 Million Unsecured 2023 Term Loan that was scheduled to mature on January 31, 2024; and, • extended the remaining $ 25 million of the $ 215 Million Unsecured 2023 Term Loan to January 31, 2025. As a result of the above refinancing activity, as of the date of this filing, Piedmont has approximately $ 325 million of unsecured debt with final maturities over the next three years . Finally, during the year ended December 31, 2023 , Piedmont amended its $ 250 million, floating-rate, unsecured term loan facility (the "$ 250 Million Unsecured 2018 Term Loan") to convert the reference interest rate from LIBOR to SOFR, along with the various other related amendments necessary to affect this conversion. F-19 Table of Contents Index to Financial Statements The following table summarizes the terms of Piedmont’s indebtedness outstanding as of December 31, 2023 and 2022, including net discounts/premiums and unamortized debt issuance costs (in thousands): Facility (1) Stated Rate Effective Rate (2) Maturity Amount Outstanding as of 2023 2022 Secured (Fixed) $ 197 Million Fixed-Rate Mortgage 4.10 % 4.10 % 10/1/2028 $ 195,879 $ 197,000 195,879 197,000 Unsecured (Variable and Fixed) $ 350 Million Unsecured Senior Notes due 2023 3.40 % 3.43 % 6/01/2023 — 350,000 $ 215 Million Unsecured 2023 Term Loan SOFR + 1.30 % 6.71 % (3) 1/31/2024 (4) 215,000 — $ 400 Million Unsecured Senior Notes due 2024 4.45 % 4.10 % 3/15/2024 (5) 50,154 400,000 $ 200 Million Unsecured 2022 Term Loan Facility SOFR + 1.25 % 6.70 % (3) 12/16/2024 (6) 100,000 200,000 $ 250 Million Unsecured 2018 Term Loan SOFR + 1.20 % 4.79 % 3/31/2025 250,000 250,000 $ 600 Million Unsecured 2022 Line of Credit (6) SOFR + 1.04 % 6.45 % (3) 6/30/2026 (7) 59,000 — $ 600 Million Unsecured Senior Notes due 2028 9.25 % 9.25 % 7/20/2028 600,000 — $ 300 Million Unsecured Senior Notes due 2030 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 Discounts and unamortized debt issuance costs ( 15,437 ) ( 13,319 ) Subtotal/Weighted Average (8) 5.99 % 1,858,717 1,786,681 Total/Weighted Average (8) 5.82 % $ 2,054,596 $ 1,983,681 (1) All of Piedmont’s outstanding debt as of December 31, 2023 is unsecured and interest-only until maturity, except for the $ 197 Million Fixed Rate Mortgage secured by 1180 Peachtree Street. (2) Effective rate after consideration of settled or in-place interest rate swap agreements and issuance discounts. (3) 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. The all-in interest rate associated with each SOFR interest period selection is comprised of the relevant adjusted SOFR rate (comprised of the relevant base SOFR interest rate plus a fixed adjustment of 0.10 %) and is subject to an additional spread over the selected rate based on Piedmont’s current credit rating. (4) On January 30, 2024, Piedmont repaid $ 190 million of the $ 215 Million Unsecured 2023 Term Loan and extended the remaining balance to January 31, 2025. (5) Piedmont currently intends to repay the outstanding $ 50.2 million balance on the $ 400 Million Unsecured Senior Notes due 2024 through selective property dispositions, cash on hand from operations, and/or borrowings under its existing $ 600 Million Unsecured 2022 Line of Credit. (6) On January 30, 2024, Piedmont repaid the $ 100 million balance. (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 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, 2023. F-20 Table of Contents Index to Financial Statements A summary of Piedmont's consolidated principal outstanding for aggregate debt maturities of its indebtedness as of December 31, 2023, is provided below (in thousands): 2024 $ 368,317 2025 253,588 2026 62,738 2027 3,895 2028 781,495 Thereafter 600,000 Total $ 2,070,033 Piedmont’s weighted-average interest rate as of December 31, 2023 and 2022, for the aforementioned borrowings was approximately 5.82 % and 3.89 %, respectively. Piedmont made interest payments on all indebtedness, including interest rate swap cash settlements, of approximately $ 81.0 million, $ 66.1 million, and $ 49.4 million during the years ended December 31, 2023, 2022, and 2021, respectively. Also, Piedmont capitalized interest of approximately $ 7.0 million, $ 4.2 million, and $ 3.7 million for the years ended December 31, 2023, 2022, and 2021, respectively. As of December 31, 2023, Piedmont believes it was in compliance with all financial covenants associated with its debt instruments. See Note 5 for a description of Piedmont’s estimated fair value of debt as of December 31, 2023. 4. Derivative Instruments Risk Management Objective of Using Derivatives In addition to operational risks which arise in the normal course of business, Piedmont is exposed to economic risks such as interest rate, liquidity, and credit risk. In certain situations, Piedmont has entered into derivative financial instruments, specifically interest rate swap agreements, to manage interest rate risk exposure arising from current or future variable rate debt transactions. Interest rate swap agreements involve the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. Piedmont’s objective in using interest rate derivatives is to add stability to interest expense and to manage its exposure to interest rate movements. Cash Flow Hedges of Interest Rate Risk 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, 2023, 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 15 months. 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 3 ). 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 . F-21 Table of Contents Index to Financial Statements A detail of Piedmont’s interest rate derivatives outstanding as of December 31, 2023 is as follows: Interest Rate Derivatives: Number of Swap Agreements Associated Debt Instrument Notional Amount (in millions) Effective Date Maturity Date Interest rate swaps 2 $ 250 Million Unsecured 2018 Term Loan $ 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 Total $ 250 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. A detail of Piedmont’s interest rate derivatives on a gross and net basis as of December 31, 2023 and 2022, respectively, is as follows (in thousands): Interest rate swaps classified as: December 31, 2023 December 31, 2022 Gross derivative assets $ 3,032 $ 4,183 Gross derivative liabilities — — Net derivative assets $ 3,032 $ 4,183 The gain/(loss) on Piedmont's interest rate derivatives, including previously settled forward starting interest rate swaps, that was recorded in OCI and the accompanying consolidated statements of operations as a component of interest expense for the years ended December 31, 2023, 2022, and 2021, respectively, was as follows (in thousands): Interest Rate Swaps in Cash Flow Hedging Relationships: 2023 2022 2021 Amount of gain recognized in OCI $ 2,626 $ 8,202 $ 2,994 Amount of previously recorded gain/(loss) reclassified from OCI into Interest Expense $ 3,365 $ ( 1,273 ) $ ( 2,952 ) Total amount of Interest Expense presented in the consolidated statements of operations $ ( 101,258 ) $ ( 65,656 ) $ ( 51,292 ) Total amount of Loss on Early Extinguishment of Debt presented in the consolidated statements of operations $ ( 820 ) $ — $ — Piedmont estimates that approximately $ 1.3 million will be reclassified from OCI as a decrease in interest expense over the next twelve months. Piedmont did not recognize any hedge ineffectiveness on its cash flow hedges during the three years ended December 31, 2023. See Note 5 for fair value disclosures of Piedmont's derivative instruments. Credit-risk-related Contingent Features 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. However, as of December 31, 2023, 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. F-22 Table of Contents Index to Financial Statements 5. Fair Value Measurements of Financial Instruments Piedmont considers its cash and cash equivalents, tenant receivables, notes receivable, restricted cash and escrows, accounts payable and accrued expenses, interest rate swap agreements, and debt to meet the definition of financial instruments. The following table sets forth the carrying and estimated fair value for each of Piedmont’s financial instruments, as well as its level within the GAAP fair value hierarchy, as of December 31, 2023 and 2022, respectively (in thousands): December 31, 2023 December 31, 2022 Financial Instrument Carrying Value Estimated Fair Value Level Within Fair Value Hierarchy Carrying Value Estimated Fair Value Level Within Fair Value Hierarchy Assets: Cash and cash equivalents (1) $ 825 $ 825 Level 1 $ 16,536 $ 16,536 Level 1 Tenant receivables, net (1) $ 7,915 $ 7,915 Level 1 $ 4,762 $ 4,762 Level 1 Restricted cash and escrows (1) $ 3,381 $ 3,381 Level 1 $ 3,064 $ 3,064 Level 1 Interest rate swaps $ 3,032 $ 3,032 Level 2 $ 4,183 $ 4,183 Level 2 Liabilities: Accounts payable and accrued expenses (1) $ 49,706 $ 49,706 Level 1 $ 63,225 $ 63,225 Level 1 Debt, net $ 2,054,596 $ 1,953,447 Level 2 $ 1,983,681 $ 1,825,723 Level 2 (1) For the periods presented, the carrying value of these financial instruments approximates estimated fair value due to their short-term maturity. Piedmont's debt was carried at book value as of December 31, 2023 and 2022; however, Piedmont's estimate of its fair value is disclosed in the table above. Piedmont uses widely accepted valuation techniques including discounted cash flow analysis based on the contractual terms of the debt facilities, including the period to maturity of each instrument, and uses observable market-based inputs for similar debt facilities which have transacted recently in the market. Therefore, the estimated fair values determined are considered to be based on significant other observable inputs (Level 2). Scaling adjustments are made to these inputs to make them applicable to the remaining life of Piedmont's outstanding debt. Piedmont has not changed its valuation technique for estimating the fair value of its debt. Piedmont’s interest rate swap agreements presented above, and as further discussed in Note 4 , are classified as “Interest rate swaps” in the accompanying consolidated balance sheets and were carried at estimated fair value as of December 31, 2023 and 2022. 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 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, 2023 and 2022, 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 derivatives to be Level 3 financial instruments. F-23 Table of Contents Index to Financial Statements 6. Impairment Charges Goodwill Impairment Charges During the years ended December 31, 2023 and 2022, Piedmont considered the decline in its stock price to be an indicator of impairment and performed several interim impairment assessments of its goodwill balance. These assessments involved comparing the estimated fair value of each of its reporting units (see Note 14 ) to the reporting unit’s carrying value, inclusive of the goodwill balance allocated to the reporting unit. Estimation of the fair value of each reporting unit involved the projection of discounted future cash flows using certain assumptions that are subjective in nature, including assumptions regarding future market rental rates and the number of months it may take to re-lease a property subsequent to the expiration of current lease agreements, as well as future property operating expenses, among other factors. Based on the interim impairment assessments performed during the years ended December 31, 2023 and 2022, Piedmont determined that the carrying values of its Boston, Minneapolis, New York, and Northern Virginia/Washington D.C. reporting units (inclusive of each segment's assigned goodwill balance) exceeded the estimated fair value of each respective reporting unit and recorded goodwill impairment charges of approximately $ 29.4 million and $ 16.0 million, respectively, in the accompanying consolidated statement of operations. As the carrying value (inclusive of the assigned goodwill balance) of the Boston, Minneapolis, and Northern Virginia/Washington D.C. reporting units exceeded the estimated fair value of each respective reporting unit by an amount greater than the goodwill balance assigned to each unit, the charges for the Boston, Minneapolis, and Northern Virginia/Washington D.C. reporting units were equal to the goodwill balance that had been assigned to each segment. As this was not the case for the New York segment, the charge related to the New York reporting unit, was calculated based on the amount by which the carrying amount of the New York segment (inclusive of the assigned goodwill balance) exceeded the fair value of the New York reporting unit. The fair value measurements used in the evaluations described above are considered to be Level 3 valuations within the fair value hierarchy as defined by GAAP as the measurements 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. The ranges of discount rates and the capitalization rate used for each segment in the above analyses, at the respective time the analyses were performed, were as follows: Range of Discount Rates Range of Capitalization Rates Reporting Unit Valuation Date Low High Low High Boston December 31, 2023 8.25 % 9.75 % 8.25 % 9.00 % Minneapolis September 30, 2023 8.50 % 9.25 % 8.50 % 9.00 % New York December 31, 2023 9.50 % 9.50 % 9.00 % 9.00 % Northern Virginia/Washington D.C. December 31, 2022 8.50 % 9.50 % 8.25 % 9.25 % Impairment Losses on Real Estate Assets Piedmont recorded the following impairment losses on real estate assets for the years ended December 31, 2023, 2022, and 2021 (in thousands): 2023 2022 2021 9320 Excelsior Boulevard $ — $ 10,000 $ — Two Pierce Place — — 41,000 Total impairment loss on real estate assets $ — $ 10,000 $ 41,000 Management shortened the intended hold period for each of the above buildings 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 values were determined based on net contract prices with unrelated, third-party purchasers for each respective building. 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. The Two Pierce Place building was subsequently sold during the year ended December 31, 2022. F-24 Table of Contents Index to Financial Statements 7. Commitments and Contingencies Commitments Under Existing Lease Agreements As a recurring part of its business, Piedmont is typically required under its executed lease agreements to fund tenant improvements, leasing commissions, and building improvements. 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, 2023, Piedmont had one individually significant unrecorded tenant allowance commitment greater than $ 10 million. These commitments will be capitalized as the related expenditures are incurred. 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, 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, 2023. Litigation Piedmont is from time to time a party to legal proceedings, which arise in the ordinary course of its business. None of these ordinary course legal proceedings are reasonably likely to have a material adverse effect on results of operations or financial condition. Piedmont is not aware of any such legal proceedings contemplated by governmental authorities. 8. Stock Based Compensation Annually, the Compensation Committee of Piedmont's Board of Directors has granted deferred stock award units to certain employees at its discretion. Employee awards typically vest ratably over three or four 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. Certain management employees' long-term equity incentive program is split between these 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 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. 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 and is recognized ratably over the performance period. F-25 Table of Contents Index to Financial Statements A rollforward of Piedmont's equity based award activity for the year ended December 31, 2023 is as follows: Shares Weighted-Average Grant Date Fair Value Unvested and Potential Stock Awards as of December 31, 2022 729,424 $ 19.21 Deferred Stock Awards Granted 987,094 $ 9.60 Performance Stock Awards Granted 424,922 $ 12.37 Change in Estimated Potential Share Awards based on TSR Performance ( 573,729 ) $ 14.48 Performance Stock Awards Vested ( 90,064 ) $ 25.83 Deferred Stock Awards Vested ( 366,466 ) $ 14.87 Deferred Stock Awards Forfeited ( 16,884 ) $ 11.26 Unvested and Potential Stock Awards as of December 31, 2023 1,094,297 $ 11.35 The following table provides additional information regarding stock award activity during the years ended 2023, 2022, and 2021 (in thousands except for per share amounts): 2023 2022 2021 Weighted-Average Grant Date Fair Value per share of Deferred Stock Granted During the Period $ 9.60 $ 16.30 $ 17.24 Total Grant Date Fair Value of Deferred Stock Vested During the Period $ 5,448 $ 6,414 $ 5,242 Share-based Liability Awards Paid During the Period (1) $ — $ 5,481 $ 3,610 (1) Amounts reflect the issuance of performance share awards related to the 2019-21 and 2018-20 Performance Share Plans during the years ended December 31, 2022, and 2021, respectively. F-26 Table of Contents Index to Financial Statements A detail of Piedmont’s outstanding stock awards and programs as of December 31, 2023 is as follows: Date of grant Type of Award Net Shares Granted (1) Grant Date Fair Value Vesting Schedule Unvested and Potential Shares as of December 31, 2023 May 3, 2019 Deferred Stock Award 26,385 (2) $ 21.04 Of the shares granted, 20 % vested or will vest on July 1, 2020, 2021, 2022, 2023 and 2024, respectively. 9,505 February 17, 2021 Deferred Stock Award 211,595 $ 17.15 Of the shares granted, 25 % vested on the date of grant, and 25 % vested or will vest on February 17, 2022, 2023, and 2024, respectively. 54,088 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. — (3) February 10, 2022 Deferred Stock Award 170,369 $ 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. 106,472 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. 91,136 (3) February 13, 2023 Deferred Stock Award 392,991 $ 10.55 Of the shares granted, 25 % vested on the date of grant, and 25 % vested or will vest on February 13, 2024, 2025, 2026, respectively. 314,629 February 23, 2023 Fiscal Year 2023-2025 Performance Share Program — $ 12.37 Shares awarded, if any, will vest immediately upon determination of award in 2026. — (3) February 23, 2023 Deferred Stock Award 413,433 $ 9.47 Of the shares granted, 25 % vested or will vest on February 23, 2024, 2025, 2026, and 2027 respectively. 396,707 May 10, 2023 Deferred Stock Award-Board of Directors 121,760 $ 6.57 Of the shares granted, 100 % will vest on the earlier of the 2024 Annual Meeting or May 10, 2024. 121,760 Total 1,094,297 (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, 2023. (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, 2023. Share estimates are subject to change in future periods based upon Piedmont's relative TSR performance compared to its peer group of office REITs. During the years ended December 31, 2023, 2022, and 2021, Piedmont recognized approximately $ 8.1 million, $ 8.8 million and $ 11.0 million of compensation expense related to stock awards, of which approximately $ 8.1 million, $ 7.7 million and $ 9.7 million related to the amortization of unvested shares and potential stock awards and the fair value adjustment for liability awards, respectively. During the year ended December 31, 2023, a total of 275,740 shares (net of shares surrendered upon vesting to satisfy required minimum tax withholding obligations) were issued to employees and independent directors. As of December 31, 2023, approximately $ 11.4 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 . F-27 Table of Contents Index to Financial Statements 9. 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 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. Unvested and potential stock awards which are determined to be anti-dilutive are not included in the calculation of diluted weighted average common shares. For each of the years ended December 31, 2023, 2022, and 2021, Piedmont calculated and excluded weighted average outstanding anti-dilutive shares of approximately 1,030,824 , 421,005 , and 1,114,025 , respectively. 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, 2023, 2022, and 2021, respectively (in thousands): 2023 2022 2021 Weighted-average common shares—basic 123,659 123,351 123,978 Plus: Incremental weighted-average shares from time-vested deferred and performance stock awards — 173 — Weighted-average common shares—diluted 123,659 123,524 123,978 10. Operating Leases Piedmont’s real estate assets are leased to tenants under operating leases for which the terms vary, including certain provisions to extend the lease term, options for early terminations subject to specified penalties, and other terms and conditions as negotiated. Piedmont retains substantially all of the risks and benefits of ownership of the real estate assets leased to tenants. Amounts required as security deposits vary depending upon the terms of the respective leases and the creditworthiness of the tenant; however, generally they are not significant. 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. The future minimum rental income from Piedmont’s investment in real estate assets under non-cancelable operating leases as of December 31, 2023 is presented below (in thousands): Years ending December 31: 2024 $ 424,131 2025 401,657 2026 362,576 2027 322,114 2028 275,559 Thereafter 1,079,279 Total $ 2,865,316 F-28 Table of Contents Index to Financial Statements Piedmont recognized the following fixed and variable lease payments, which together comprised rental and tenant reimbursement revenue in the accompanying consolidated statements of operations for the years ended December 31, 2023, 2022, and 2021, respectively, as follows (in thousands): 2023 2022 2021 Fixed payments $ 454,405 $ 451,403 $ 427,174 Variable payments 100,908 94,338 87,445 Total Rental and Tenant Reimbursement Revenue $ 555,313 $ 545,741 $ 514,619 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 $ 0.1 million for the year ended December 31, 2023 and approximately $ 0.2 million for the year ended December 31, 2022 . For the three years ended December 31, 2023, Piedmont recognized approximately $ 0.1 million of operating lease costs, respectively. As of December 31, 2023, the lease term of Piedmont's right of use asset is one year , and the discount rate is 3.86 %. 11. Property Dispositions and Assets Held for Sale Property Dispositions None of Piedmont's property dispositions during the three years ended December 31, 2023 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. Details of such properties sold are presented below (in thousands): Buildings Sold Location Reportable Segment Date of Sale Gain on Sale of Real Estate Assets Net Sales Proceeds 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 (1) Cambridge, Massachusetts Boston December 2022 $ 102,570 $ 155,307 (2) (1) 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. (2) During the year ended December 31, 2023, Piedmont recorded additional gain on sale as a result of receiving $ 1.9 million in previously escrowed sales proceeds. 12. Supplemental Disclosures for the Statement of Consolidated Cash Flows Certain noncash investing and financing activities for the years ended December 31, 2023, 2022, and 2021 (in thousands) are outlined below: 2023 2022 2021 Tenant improvements funded by tenants $ 33,472 $ 2,961 $ 48,842 Accrued capital expenditures and deferred lease costs $ 28,173 $ 24,379 $ 24,817 Change in accrued dividends $ ( 10,215 ) $ ( 691 ) $ ( 365 ) Change in accrued share repurchases as part of an announced plan $ — $ — $ ( 685 ) Change in accrued deferred financing costs $ ( 189 ) $ 44 $ — F-29 Table of Contents Index to Financial Statements 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, 2023, 2022, and 2021 to the consolidated balance sheets for the respective period (in thousands): 2023 2022 2021 Cash and cash equivalents, beginning of period $ 16,536 $ 7,419 $ 7,331 Restricted cash and escrows, beginning of period 3,064 1,441 1,883 Total cash, cash equivalents, and restricted cash and escrows as presented in the accompanying consolidated statement of cash flows, beginning of period $ 19,600 $ 8,860 $ 9,214 Cash and cash equivalents, end of period $ 825 $ 16,536 $ 7,419 Restricted cash and escrows, end of period 3,381 3,064 1,441 Total cash, cash equivalents, and restricted cash and escrows as presented in the accompanying consolidated statement of cash flows, end of period $ 4,206 $ 19,600 $ 8,860 Amounts in restricted cash and escrows typically represent: escrow accounts required for future property repairs; escrow accounts for the payment of real estate taxes as required under certain of Piedmont's debt agreements; earnest money deposited by a buyer to secure the purchase of one of Piedmont's properties; or security or utility deposits held for tenants as a condition of their lease agreement. 13. Income Taxes Piedmont’s income tax basis net income/(loss) for the years ended December 31, 2023, 2022, and 2021, is calculated as follows (in thousands): 2023 2022 2021 GAAP basis financial statement net income/(loss) $ ( 48,387 ) $ 146,830 $ ( 1,153 ) Increase/(decrease) in net income/(loss) resulting from: Depreciation and amortization expense recognized for financial reporting purposes in excess of amounts recognized for income tax purposes 93,791 96,694 75,969 Rental income accrued for income tax purposes less than amounts for financial reporting purposes ( 18,817 ) ( 26,211 ) ( 18,798 ) Net amortization of above/below-market lease intangibles for income tax purposes in excess of amounts for financial reporting purposes ( 12,049 ) ( 13,022 ) ( 9,465 ) Gain on disposal of property for financial reporting purposes in excess of amounts for income tax purposes — ( 137,871 ) — Taxable income or loss of Piedmont Washington Properties, Inc., in excess of amount for financial reporting purposes 6,212 3,111 3,518 Other expenses, including impairment charges, for financial reporting purposes in excess of amounts for income tax purposes 40,173 30,310 51,095 Taxable income for POH in excess of/(less than) amount for financial reporting purposes 61 — ( 654 ) Income tax basis net income, prior to dividends paid deduction $ 60,984 $ 99,841 $ 100,512 For income tax purposes, dividends to common stockholders are characterized as ordinary income, capital gains, or as a return of a stockholder’s invested capital. The composition of Piedmont’s distributions per common share is presented below: 2023 2022 2021 Ordinary income 63.22 % 82.85 % 96.34 % Return of capital 34.69 % 3.79 % 3.66 % Capital gains 2.08 % 13.36 % — % 100 % 100 % 100 % F-30 Table of Contents Index to Financial Statements Piedmont had no uncertain tax positions as of December 31, 2023 or 2022. 14. Segment Information Piedmont's President and Chief Executive Officer has been identified as Piedmont's chief operating decision maker ("CODM"), as defined by GAAP. The CODM evaluates Piedmont's portfolio and assesses the ongoing operations and performance of its properties utilizing the following geographic segments: Atlanta, Dallas, Orlando, Northern Virginia/Washington, D.C., Minneapolis, New York, and Boston. These operating segments are also Piedmont’s reportable segments. As of December 31, 2023, 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. 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. Piedmont's calculation of NOI may not be directly comparable to similarly titled measures calculated by other REITs. Asset value information and capital expenditures by segment are not reported because the CODM does not use these measures to assess performance. The following table presents accrual-based lease revenue and other property related income included in NOI by geographic reportable segment (in thousands): Years Ended December 31, 2023 2022 2021 Atlanta $ 161,310 $ 131,230 $ 98,330 Dallas 111,592 109,298 110,729 Orlando 61,688 58,203 54,603 Northern Virginia/Washington, D.C. 60,324 63,534 60,329 Minneapolis 63,713 61,530 61,563 New York 54,040 56,189 52,454 Boston 42,847 59,212 65,445 Total reportable segments 555,514 539,196 503,453 Other 22,242 24,570 25,257 Total Revenues $ 577,756 $ 563,766 $ 528,710 F-31 Table of Contents Index to Financial Statements The following table presents NOI by geographic reportable segments (in thousands): Years Ended December 31, 2023 2022 2021 Atlanta $ 103,475 $ 82,878 $ 62,772 Dallas 64,566 62,444 66,155 Orlando 36,639 35,327 33,449 Northern Virginia/Washington, D.C. 36,334 39,994 36,914 Minneapolis 33,302 31,886 32,538 New York 29,357 31,252 30,049 Boston 25,703 39,101 45,587 Total reportable segments 329,376 322,882 307,464 Other 12,969 14,685 10,163 Total NOI $ 342,345 $ 337,567 $ 317,627 A reconciliation of Net income/(loss) applicable to Piedmont to NOI is presented below (in thousands): Years Ended December 31, 2023 2022 2021 Net income/(loss) applicable to Piedmont $ ( 48,387 ) $ 146,830 $ ( 1,153 ) Management fee revenue (1) ( 1,004 ) ( 1,004 ) ( 1,269 ) Depreciation and amortization 236,214 224,553 206,608 Impairment charges 29,446 25,981 41,000 General and administrative expenses 29,190 29,127 30,252 Interest expense 101,258 65,656 51,292 Other income ( 3,256 ) ( 1,847 ) ( 9,089 ) Loss on early extinguishment of debt 820 — — Gain on sale of real estate assets ( 1,946 ) ( 151,729 ) — Net loss applicable to noncontrolling interests 10 — ( 14 ) NOI $ 342,345 $ 337,567 $ 317,627 (1) Presented net of related operating expenses incurred to earn such management fee revenue. Such operating expenses are a component of property operating costs in the accompanying consolidated statements of operations. 15. Subsequent Events Refinancing Activity On January 30, 2024, Piedmont entered into a new $ 200 million syndicated bank term loan maturing in January 2027; paid off the remaining $ 100 million outstanding under the $ 200 Million Unsecured 2022 Term Loan Facility; repaid $ 190 million of the $ 215 Million Unsecured 2023 Term Loan and extended the remaining balance to January of 2025. See Note 3 above for further details. Declaration of Dividend for the First Quarter 2024 On February 1, 2024, the board of directors declared a dividend for the first quarter 2024 in the amount of $ 0.125 per share on its common stock to stockholders of record as of the close of business on February 23, 2024, payable on March 15, 2024. F-32 Table of Contents Index to Financial Statements Piedmont Office Realty Trust, Inc. Schedule III - Real Estate and Accumulated Depreciation December 31, 2023 (dollars in thousands) Initial Cost to Piedmont Gross Amount of Which Carried at December 31, 2023 Description (1) Location Ownership Percentage Encumbrances Land Buildings and Improvements Total (2) Costs Capitalized Subsequent to Acquisition (3) Land Buildings and Improvements Total (4) Accumulated Depreciation and Amortization Date of Construction Date Acquired Life on which Depreciation and Amortization in Latest Statements of Comprehensive Income is Computed (in years) (5) 1430 ENCLAVE PARKWAY Houston, TX 100 % None 7,100 37,915 45,015 7,248 5,506 46,757 52,263 26,315 1994 12/21/2000 0 - 40 CRESCENT RIDGE II Minnetonka, MN 100 % None 7,700 45,154 52,854 16,771 8,021 61,604 69,625 32,336 2000 12/21/2000 0 - 40 90 CENTRAL STREET Boxborough, MA 100 % None 3,642 29,497 33,139 3,386 3,642 32,883 36,525 17,524 2001 5/3/2002 0 - 40 6031 CONNECTION DRIVE Irving, TX 100 % None 3,157 43,656 46,813 16,000 3,157 59,656 62,813 27,455 1999 8/15/2002 0 - 40 6021 CONNECTION DRIVE Irving, TX 100 % None 3,157 42,662 45,819 12,169 3,157 54,831 57,988 31,848 2000 8/15/2002 0 - 40 6011 CONNECTION DRIVE Irving, TX 100 % None 3,157 29,034 32,191 18,524 3,157 47,558 50,715 20,540 1999 8/15/2002 0 - 40 US BANCORP CENTER Minneapolis, MN 100 % None 11,138 175,629 186,767 38,695 11,138 214,324 225,462 111,336 2000 5/1/2003 0 - 40 GLENRIDGE HIGHLANDS TWO Atlanta, GA 100 % None 6,662 69,031 75,693 ( 231 ) 6,662 68,800 75,462 32,759 2000 8/1/2003 0 - 40 400 VIRGINIA AVE Washington, DC 100 % None 22,146 49,740 71,886 6,646 22,146 56,386 78,532 26,510 1985 11/19/2003 0 - 40 4250 NORTH FAIRFAX DRIVE Arlington, VA 100 % None 13,636 70,918 84,554 19,047 13,636 89,965 103,601 46,206 1998 11/19/2003 0 - 40 1225 EYE STREET Washington, DC 98.1 % None 21,959 47,602 69,561 10,084 21,959 57,686 79,645 31,747 1986 11/19/2003 0 - 40 1201 EYE STREET Washington, DC 98.6 % None 31,985 63,139 95,124 13,756 31,985 76,895 108,880 37,854 2001 11/19/2003 0 - 40 60 BROAD STREET New York, NY 100 % None 32,522 168,986 201,508 99,451 60,708 240,251 300,959 84,807 1962 12/31/2003 0 - 40 3100 CLARENDON BOULEVARD Arlington, VA 100 % None 11,700 69,705 81,405 52,948 11,791 122,562 134,353 53,705 1987 12/9/2004 0 - 40 LAS COLINAS CORPORATE CENTER I Irving, TX 100 % None 3,912 18,830 22,742 2,487 2,543 22,686 25,229 7,329 1998 8/31/2006 0 - 40 LAS COLINAS CORPORATE CENTER II Irving, TX 100 % None 4,496 29,881 34,377 987 2,543 32,821 35,364 14,931 1998 8/31/2006 0 - 40 ONE MERIDIAN CROSSINGS Richfield, MN 100 % None 2,919 24,398 27,317 ( 160 ) 2,919 24,238 27,157 8,058 1997 10/1/2010 0 - 40 S-1 Table of Contents Index to Financial Statements Initial Cost Gross Amount of Which Carried at December 31, 2023 Description (1) Location Ownership Percentage Encumbrances Land Buildings and Improvements Total (2) Costs Capitalized Subsequent to Acquisition (3) Land Buildings and Improvements Total (4) Accumulated Depreciation and Amortization Date of Construction Date Acquired Life on which Depreciation and Amortization in Latest Statements of Comprehensive Income is Computed (in years) (5) TWO MERIDIAN CROSSINGS Richfield, MN 100 % None 2,661 25,742 28,403 1,930 2,661 27,672 30,333 8,579 1998 10/1/2010 0 - 40 THE MEDICI Atlanta, GA 100 % None 1,780 11,510 13,290 5,927 1,780 17,437 19,217 7,780 2008 6/7/2011 0 - 40 400 TOWNPARK Lake Mary, FL 100 % None 2,570 20,555 23,125 4,865 2,570 25,420 27,990 10,495 2008 11/10/2011 0 - 40 ARLINGTON GATEWAY Arlington, VA 100 % None 36,930 129,070 166,000 6,235 36,930 135,305 172,235 39,897 2005 3/4/2013 0 - 40 5 & 15 WAYSIDE ROAD Burlington, MA 100 % None 7,190 55,445 62,635 34,682 7,190 90,127 97,317 22,155 1999 / 2001 3/22/2013 0 - 40 6565 MACARTHUR BOULEVARD Irving, TX 100 % None 4,820 37,767 42,587 6,458 4,820 44,225 49,045 13,607 1998 12/5/2013 0 - 40 ONE LINCOLN PARK Dallas, TX 100 % None 6,640 44,810 51,450 12,098 6,640 56,908 63,548 13,849 1999 12/20/2013 0 - 40 161 CORPORATE CENTER Irving, TX 100 % None 2,020 10,680 12,700 499 2,020 11,179 13,199 2,922 1998 12/30/2013 0 - 40 5 WALL STREET Burlington, MA 100 % None 9,560 50,276 59,836 6,108 9,560 56,384 65,944 15,390 2008 6/27/2014 0 - 40 1155 PERIMETER CENTER WEST Atlanta, GA 100 % None 5,870 66,849 72,719 23,884 5,870 90,733 96,603 21,694 2000 8/28/2014 0 - 40 500 TOWNPARK Lake Mary, FL 100 % None 2,147 21,925 24,072 5,123 2,147 27,048 29,195 6,667 2016 N/A 0 - 40 PARK PLACE ON TURTLE CREEK Dallas, TX 100 % None 4,470 38,048 42,518 8,766 4,470 46,814 51,284 11,589 1986 1/16/2015 0 - 40 80 CENTRAL STREET Boxborough, MA 100 % None 1,980 8,930 10,910 3,168 1,980 12,098 14,078 2,632 1988 7/24/2015 0 - 40 ENCLAVE PLACE Houston, TX 100 % None 1,890 60,094 61,984 35,319 1,890 95,413 97,303 21,135 2015 N/A 0 - 40 200 SOUTH ORANGE AVENUE Orlando, FL 100 % None 11,660 139,015 150,675 46,241 11,660 185,256 196,916 40,236 1988 11/4/2015 0 - 40 GALLERIA 300 Atlanta, GA 100 % None 4,000 73,554 77,554 11,030 4,000 84,584 88,584 21,884 1987 11/4/2015 0 - 40 GLENRIDGE HIGHLANDS ONE Atlanta, GA 100 % None 5,960 50,013 55,973 8,070 5,960 58,083 64,043 12,862 1998 11/24/2015 0 - 40 CNL CENTER I Orlando, FL 99 % None 6,470 77,858 84,328 5,780 6,470 83,638 90,108 19,367 1999 8/1/2016 0 - 40 CNL CENTER II Orlando, FL 99 % None 4,550 55,609 60,159 2,157 4,550 57,766 62,316 14,573 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 13,200 1997 / 2008 8/10/2016 0 - 40 S-2 Table of Contents Index to Financial Statements Initial Cost Gross Amount of Which Carried at December 31, 2023 Description (1) Location Ownership Percentage Encumbrances Land Buildings and Improvements Total (2) Costs Capitalized Subsequent to Acquisition (3) Land Buildings and Improvements Total (4) Accumulated Depreciation and Amortization Date of Construction Date Acquired Life on which Depreciation and Amortization in Latest Statements of Comprehensive Income is Computed (in years) (5) GALLERIA 200 Atlanta, GA 100 % None 6,470 55,825 62,295 23,490 6,470 79,315 85,785 17,637 1984 10/7/2016 0 - 40 750 WEST JOHN CARPENTER FREEWAY Irving, TX 100 % None 7,860 36,303 44,163 ( 584 ) 7,860 35,719 43,579 7,376 1999 11/30/2016 0 - 40 NORMAN POINTE I Bloomington, MN 100 % None 4,358 22,322 26,680 5,275 4,361 27,594 31,955 7,937 2000 12/28/2017 0 - 40 501 WEST CHURCH STREET Orlando, FL 100 % None 2,805 28,119 30,924 277 2,805 28,396 31,201 6,937 2003 2/23/2018 0 - 40 9320 EXCELSIOR BOULEVARD Hopkins, MN 100 % None 3,760 35,289 39,049 ( 10,466 ) 3,707 24,876 28,583 10,716 2010 10/25/2018 0 - 40 25 BURLINGTON MALL ROAD Burlington, MA 100 % None 10,230 54,787 65,017 4,480 10,230 59,267 69,497 8,398 1987 12/12/2018 0 - 40 GALLERIA 100 Atlanta, GA 100 % None 7,285 72,449 79,734 5,556 7,285 78,005 85,290 13,634 1982 5/6/2019 0 - 40 GALLERIA 400 Atlanta, GA 100 % None 5,687 92,915 98,602 3,124 5,687 96,039 101,726 13,071 1999 8/23/2019 0 - 40 GALLERIA 600 Atlanta, GA 100 % None 5,418 81,003 86,421 11,452 5,418 92,455 97,873 11,522 2002 8/23/2019 0 - 40 ONE GALLERIA TOWER Dallas, TX 100 % None 5,286 107,767 113,053 16,150 5,286 123,917 129,203 24,254 1982 2/12/2020 0 40 TWO GALLERIA TOWER Dallas, TX 100 % None 3,835 109,605 113,440 7,140 3,836 116,744 120,580 21,200 1985 2/12/2020 0 40 THREE GALLERIA TOWER Dallas, TX 100 % None 6,541 125,490 132,031 2,637 6,541 128,127 134,668 14,521 1991 2/12/2020 0 40 222 SOUTH ORANGE AVENUE Orlando, FL 100 % None 1,899 18,417 20,316 10,798 1,899 29,215 31,114 136 1959 10/29/2020 0 40 999 PEACHTREE STREET Atlanta, GA 100 % None 49,067 156,109 205,176 29,572 49,067 185,681 234,748 21,236 1987 10/22/2021 0 40 1180 PEACHTREE STREET Atlanta, GA 100 % $ 195,879 56,932 389,654 446,586 3,129 56,932 392,783 449,715 24,047 2005 8/10/2022 0 40 UNDEVELOPED LAND PARCELS Various 100 % None 48,667 — 48,667 3,697 45,782 6,582 52,364 183 N/A Various N/A Total—All Properties $ 546,496 $ 3,436,705 $ 3,983,201 $ 663,904 $ 567,244 $ 4,079,861 $ 4,647,105 $ 1,134,578 (1) All of Piedmont's properties are office buildings, except for the separately described Undeveloped Land Parcels. (2) Total initial cost excludes purchase price allocated to intangible lease origination costs and intangible lease liabilities. (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. (4) The net carrying value of Piedmont’s total assets for federal income tax purposes is approximately $ 3.9 billion. (5) Piedmont’s assets are depreciated or amortized using the straight-line method over the useful lives of the assets by class. Generally, Tenant Improvements and Lease Intangibles are amortized over the lease term. Generally, Building Improvements are depreciated over 5 - 25 years, Land Improvements are depreciated over 20 - 25 years, and Buildings are depreciated over 40 years. S-3 Table of Contents Index to Financial Statements Piedmont Office Realty Trust, Inc. Schedule III - Real Estate and Accumulated Depreciation December 31, 2023 (dollars in thousands) 2023 2022 2021 Real Estate: Balance at the beginning of the year $ 4,506,328 $ 4,206,993 $ 3,891,426 Additions to/improvements of real estate 191,305 565,552 379,516 Assets disposed — ( 214,728 ) — Assets impaired (1) — ( 10,000 ) ( 41,000 ) Write-offs of fully amortized intangible assets ( 34,419 ) ( 26,430 ) ( 13,646 ) Write-offs of fully depreciated assets ( 16,109 ) ( 15,059 ) ( 9,303 ) Balance at the end of the year $ 4,647,105 $ 4,506,328 $ 4,206,993 Accumulated Depreciation and Amortization: Balance at the beginning of the year $ 1,005,704 $ 961,682 $ 835,392 Depreciation and amortization expense 179,402 166,234 149,239 Assets disposed — ( 80,723 ) — Write-offs of fully amortized intangible assets ( 34,419 ) ( 26,430 ) ( 13,646 ) Write-offs of fully depreciated assets ( 16,109 ) ( 15,059 ) ( 9,303 ) Balance at the end of the year $ 1,134,578 $ 1,005,704 $ 961,682 (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 6 to the accompanying consolidated financial statements). S-4