Piedmont Office Realty Trust PDM Q2 2026 earnings

Notice to Readers:

Please refer to page 3 for a discussion of important risks related to the business of Piedmont Realty TrustTM, as well as an investment in its securities, including risks that could cause actual results and events to differ materially from results and events referred to in the forward-looking information. Considering these risks, uncertainties, assumptions, and limitations, the forward-looking statements about leasing, financial operations, leasing prospects, acquisitions, dispositions, etc. contained in this quarterly supplemental information report may differ from actual results.

Certain prior period amounts have been reclassified to conform to the current period financial statement presentation. In addition, many of the schedules herein contain rounding to the nearest thousands or millions and, therefore, the schedules may not total due to this rounding convention.

To supplement the presentation of the Company’s financial results prepared in accordance with U.S. generally accepted accounting principles (GAAP), this report contains certain financial measures that are not prepared in accordance with GAAP, including FFO, Core FFO, AFFO, Same Store NOI, Property NOI, EBITDAre and Core EBITDA. Definitions and reconciliations of these non-GAAP measures to their most comparable GAAP metrics are included beginning on page 38. Each of the non-GAAP measures included in this report has limitations as an analytical tool and should not be considered in isolation or as a substitute for an analysis of the Company’s results calculated in accordance with GAAP. In addition, because not all companies use identical calculations, the Company’s presentation of non-GAAP measures in this report may not be comparable to similarly titled measures disclosed by other companies, including other REITs. The Company may also change the calculation of any of the non-GAAP measures included in this report from time to time in light of its then existing operations.

Forward-Looking Statements

Certain statements contained in this press release constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The Company intends for all such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the Exchange Act, as applicable. Such information is subject to certain known and unknown risks and uncertainties, which could cause actual results to differ materially from those anticipated. Therefore, such statements are not intended to be a guarantee of the Company`s performance in future periods. Such forward-looking statements can generally be identified by the Company's use of forward-looking terminology such as "may," "will," "expect," "intend," "anticipate," "estimate," "believe," "continue" or similar words or phrases that indicate predictions of future events or trends or that do not relate solely to historical matters. Examples of such statements in this press release include the Company's estimated range of Net Income/(Loss), Depreciation, Amortization, NAREIT FFO, Core FFO and Core FFO per diluted share for the year ending December 31, 2025. These statements are based on beliefs and assumptions of Piedmont’s management, which in turn are based on information available at the time the statements are made.

The following are some of the factors that could cause the Company's actual results and its expectations to differ materially from those described in the Company's forward-looking statements:

• Economic, regulatory, socio-economic, technological (e.g. artificial intelligence and machine learning, virtual meeting platforms, etc.), and other changes that impact the real estate market generally, the office sector or the patterns of use of commercial office space in general, or the markets where we primarily operate or have high concentrations of revenue;
• The impact of competition on our efforts to renew existing leases or re-let space on terms similar to existing leases;
• Lease terminations, lease defaults, lease contractions, or changes in the financial condition of our tenants, particularly by one of our large tenants;
• Impairment charges on our long-lived assets or goodwill resulting therefrom;
• The success of our real estate strategies and investment objectives, including our ability to implement successful redevelopment and development strategies or identify and consummate suitable acquisitions and divestitures;
• The illiquidity of real estate investments, including economic changes, such as fluctuating interest rates, costs of construction, improvements and redevelopments, and available financing, which could impact the number of buyers/sellers of our target properties, and regulatory restrictions to which real estate investment trusts ("REITs") are subject and the resulting impediment on our ability to quickly respond to adverse changes in the performance of our properties;
• The risks and uncertainties associated with our acquisition and disposition of properties, many of which risks and uncertainties may not be known at the time of acquisition or disposition;
• Development and construction delays, including the potential of supply chain disruptions, and resultant increased costs and risks;
• Future acts of terrorism, civil unrest, or armed hostilities in any of the major metropolitan areas in which we own properties;
• Risks related to the occurrence of cybersecurity incidents, including cybersecurity incidents against us or any of our properties, vendors, or tenants, or a deficiency in our identification, assessment or management of cybersecurity threats impacting our operations and the public's reaction to reported cybersecurity incidents, including the reputational impact on our business and value of our common stock;
• Costs of complying with governmental laws, regulations and policies, including environmental standards imposed on office building owners;
• Uninsured losses or losses in excess of our insurance coverage, and our inability to obtain adequate insurance coverage at a reasonable cost;
• Additional risks and costs associated with directly managing properties occupied by government tenants, such as potential changes in the political environment, a reduction in federal or state funding of our governmental tenants, government layoffs or an increased risk of default by government tenants during periods in which state or federal governments are shut down or on furlough;
• Significant price and volume fluctuations in the public markets, including on the exchange on which we listed our common stock;
• Risks associated with incurring mortgage and other indebtedness, including changing capital reserve requirements on our lenders and rising interest rates for new debt financings;
• A downgrade in our credit ratings, the credit ratings of Piedmont Operating Partnership, L.P. ("Piedmont OP") or the credit ratings of our or Piedmont OP's unsecured debt securities, which could, among other effects, trigger an increase in the stated rate of one or more of our unsecured debt instruments;
• The effect of future offerings of debt or equity securities on the value of our common stock;
• Additional risks and costs associated with adverse U.S. global and economic conditions, inflation and potential increases in the rate of inflation, including the impact of a possible recession, uncertainty and volatility in financial markets, and any changes in governmental rules, regulations, and fiscal policies;
• Uncertainties associated with environmental and regulatory matters;
• Changes in the financial condition of our tenants directly or indirectly resulting from geopolitical developments that could negatively affect important supply chains and international trade, the termination or threatened termination of existing international trade agreements, or the implementation of tariffs or retaliatory tariffs on imported or exported goods;
• The effect of any litigation to which we are, or may become, subject;
• Additional risks and costs associated with owning properties occupied by tenants in particular industries, such as oil and gas, hospitality, travel, co-working, etc., including risks of default during start-up and during economic downturns;
• Changes in tax laws impacting REITs and real estate in general, as well as our ability to continue to qualify as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”), or other tax law changes which may adversely affect our stockholders;
• The future effectiveness of our internal controls and procedures; and
• Other factors, including the risk factor described in Item 1A. of our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2025, as well as the risk factors discussed under Item 1A. or our Annual Report on Form 10-K for the year ended December 31, 2024.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company cannot guarantee the accuracy of any such forward-looking statements contained in this press release, and the Company does not intend to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Piedmont Realty TrustTM

Earnings Release

Piedmont Realty Trust Reports Second Quarter 2026 Results

–Increases 2026 Outlook for second quarter in a row –Generated Same Store NOI Cash Growth of 9% –Strong leasing momentum continues with almost 460,000 square feet executed and cash leasing spreads of over 14% –Signed but yet to commence leases total $39 million equivalent to 570 bps of portfolio occupancy ATLANTA, July 28, 2026 — Piedmont Realty Trust, Inc. ("Piedmont" or the "Company") (NYSE:PDM), an owner of Class A office properties located primarily in major U.S. Sunbelt markets, today announced its results for the quarter ended June 30, 2026.

Commenting on operational results for the three months ended June 30, 2026, Brent Smith, our President and Chief Executive Officer, said, "Piedmont continues to experience strong demand for our Piedmont PLACES resulting in our ability to push rental rates to record levels across the portfolio. We achieved the highest quarterly average net effective rent in the Company’s history at $25.56 and during the quarter, we executed almost 460,000 square feet of leasing with rental rate growth of 14% on a cash basis and over 32% on an accrual basis. Additionally, the customer pipeline remains strong, with over 700,000 square feet of leases either already executed or in the legal stage during July. Furthermore, the continued burn off of free rent helped to generate same store cash NOI growth of 9%, and operational outperformance from leasing set to commence in the second half of the year is contributing to an increase in our 2026 annual earnings outlook."

Highlights for the Three and Six Months Ended June 30, 2026:

Financial Results:

• Piedmont recognized a net loss of $11.1 million, or $0.09 per diluted share, for the second quarter of 2026, as compared to a net loss of $16.8 million, or $0.14 per diluted share, for the second quarter of 2025. Both periods reflect elevated interest expense, net of interest income, as a result of refinancing activity completed over the past several years in a higher interest rate environment. The three months ended June 30, 2025 also included a $7.5 million loss on early extinguishment of debt, as well as a $1.2 million gain on sale of real estate assets.
• Core FFO, which removes gain/loss on sale of real estate assets and loss on early extinguishment of debt, as well as depreciation and amortization, was $0.38 per diluted share for the second quarter of 2026 as compared to $0.36 per diluted share for the second quarter of 2025, with the increase attributable to rental rate growth and new leases commencing during the twelve months ended June 30, 2026, partially offset by the sale of 80/90 Central in Boxborough, MA during the same period.
• During the three months ended June 30, 2026, Same Store NOI on a cash and accrual basis increased by 9.0% and 2.8%, respectively, as rental rates increased and the commencement or burn off of abatements on new leases outweighed expiring leases.

Leasing:

• The Company completed approximately 459,000 square feet of leasing during the second quarter, including approximately 262,000 square feet of new tenant leasing, approximately 68% of which related to previously vacant space.
• The average size lease executed during the second quarter was approximately 11,000 square feet and the weighted average lease term was approximately eight years.
• Rental rates on leases executed during the three months ended June 30, 2026 for space vacant one year or less increased approximately 14.1% and 32.4% on a cash and accrual basis, respectively.
• The Company's leased percentage for its in-service portfolio as of June 30, 2026 was 88.9%, as compared to 89.3% as of March 31, 2026.
• The Company's leased percentage for its out-of-service portfolio, comprised of two projects in Minneapolis that have recently undergone extensive redevelopment, was 82.9% leased as of June 30, 2026. 222 South Orange Avenue was placed back into service during the three months ended June 30, 2026.
• As of June 30, 2026, the Company had approximately 0.9 million square feet of executed leases for vacant space that are yet to commence representing approximately $39 million of future additional annual cash rents, and approximately 1.0 million square feet of executed leases currently under rental abatement, representing approximately $28 million of future additional annual cash rents.
• Leases representing over 700,000 square feet have either already been executed or are in the legal stage thus far in the third quarter of 2026.

Transactional Activity:

• The Company remains under binding contract to sell a 10.6 acre undeveloped land parcel known as Royal Lane located in the Las Colinas submarket of Dallas, TX for $12.0 million. The transaction is subject to several extension options, however, is expected to close later in 2026.

Balance Sheet:

• During the three months ended June 30, 2026, the Company amended its $325 Million Unsecured Term Loan to, among other things, increase the principal from $325 million to $400 million and extend the maturity date to May 28, 2031. The net proceeds from the increased principal were used to repay the balance outstanding under the Company's $600 million revolving line of credit and for general corporate purposes.
• As of June 30, 2026, the Company had $16.8 million of cash on hand, the full capacity on its $600 million revolving line of credit available and no debt maturity requirements until 2028.

Corporate Responsibility and Operations:

• During the three months ended June 30, 2026, the Minneapolis Real Estate Journal recognized the Company as Owner/Landlord of the Year and awarded the Company's Meridian project the Most Significant Lease Transaction in 2025 and Meridian Two the Office Renovation Project of the Year in the Suburban category.
• Also during the second quarter, nine projects throughout the portfolio won either local or regional TOBY (The Outstanding Building of the Year) Awards in their respective size categories: 400 & 500 TownPark and CNL I & II in Orlando, FL; 4250 North Fairfax in Arlington, VA; 999 Peachtree in Atlanta, GA; Crescent Ridge II and Norman Pointe I in Minneapolis, MN; Galleria Towers and Interlink II in Dallas, TX; and Enclave Place in Houston, TX. These awards are presented by the Building Owners and Managers Association ("BOMA") and recognize excellence in building management.
• As of June 30, 2026, approximately 83% and 72% of the Company's portfolio was ENERGY STAR rated and LEED certified, respectively, and 67% of its portfolio was certified LEED gold.

Outlook for 2026:

For the second quarter in a row, the Company is increasing its outlook for the year ending December 31, 2026, as follows:

This outlook is based on information available to management as of the date of this release and reflects management's view of current market conditions, including the following specific assumptions and projections:

Property Operation Assumptions:

• Executed leasing for the year of approximately 1.7 to 2.0 million square feet resulting in an increase in the anticipated year-end leased percentage for the Company's in-service portfolio to approximately 89.5% to 90.5%, exclusive of any speculative acquisition or disposition activity;
• Stabilization of the Company's out of service assets, resulting in an approximately 85-90% year-end leased percentage for the out of service portfolio and the placement of these assets back into the in-service population around the end of 2026;
• Same Store NOI increase of 5% to 8% on both a cash and accrual basis for the year, a 2% increase from our initial estimate;

Financing Assumptions:

• Interest expense (net of interest income) of approximately $128-$130 million;

Other Assumptions:

• General and administrative expense of approximately $31-$33 million; and
• Weighted average shares outstanding of approximately 126-127 million.

No speculative acquisitions, dispositions, or refinancing are included in the above outlook. The Company will adjust its outlook if such transactions occur.

Note that actual results could differ materially from these estimates and individual quarters may fluctuate on both a cash basis and an accrual basis due to the timing of any future dispositions, significant lease commencements and expirations, abatement periods, repairs and maintenance expenses, capital expenditures, capital markets activities, seasonal general and administrative expenses, accrued potential performance-based compensation expense, one-time revenue or expense events, and other factors discussed under "Forward-Looking Statements" above.

Conference Call Information:

Piedmont has scheduled a conference call and an audio webcast for Wednesday, July 29, 2026, at 9:00 A.M. Eastern time. The live, listen-only, audio webcast of the call may be accessed on the Company's website at https://investor.piedmontreit.com/news-and-events/event-calendar. Dial-in numbers for analysts who plan to actively participate in the call are (888) 506-0062 for participants in the United States and Canada and (973) 528-0011 for international participants. Participant Access Code is 788056. A replay of the conference call will be available through August 12, 2026, and may be accessed by dialing (877) 481-4010 for participants in the United States and Canada and (919) 882-2331 for international participants, followed by conference identification code 54246. A webcast replay will also be available after the conference call in the Investor Relations section of the Company's website. During the audio webcast and conference call, the Company's management team will review second quarter 2026 performance, discuss recent events, and conduct a question-and-answer period.

Piedmont Realty TrustTM

Company Information

Piedmont Realty TrustTM (NYSE: PDM), also referred to herein as "Piedmont" or the "Company", is a fully integrated, self-managed real estate company focused on delivering an exceptional office environment. As an owner, manager, developer and operator of 16 million square feet of Class A properties across major U.S. Sunbelt markets, Piedmont is known for its hospitality-driven approach and commitment to transforming buildings into premier "Piedmont PLACEs" that enhance each client's workplace experience. The Company is headquartered in Atlanta, Georgia with local management offices in each of its markets. The Company's senior unsecured notes are investment-grade rated by Moody's, Standard & Poor's and Fitch Ratings.

For more information, please visit www.piedmontreit.com.

Executive Management

Brent Smith

Sherry Rexroad

Laura Moon

George Wells

Alex Valente

President, Chief Executive Officer

Chief Financial Officer

Chief Accounting Officer

Co-Chief Operating Officer

Co-Chief Operating Officer

and Director

and Executive Vice President

and Executive Vice President

and Executive Vice President

and Executive Vice President

Kevin Fossum

Christopher Kollme

Damian Miller

Pierre Dait

Wade Grace

Executive Vice President,

Executive Vice President,

Executive Vice President,

Senior Vice President,

Senior Vice President,

Property Management

Investments

Central Region

Risk Management

Controller

Jennifer Heneisen

Lisa Tyler

Senior Vice President,

Senior Vice President,

Financial Planning & Analysis

Human Resources

Board of Directors

Kelly H. Barrett

Dale H. Taysom

Glenn G. Cohen

Jeffrey J. Donnelly

Deneen L. Donnley

Chair of the Board

Vice Chair of the Board

Chair of the Compensation

Director

Director

Chair of the Audit Committee

Committee

Mary Hager

Barbara B. Lang

Stephen E. Lewis

Brent Smith

Director

Chair of the Nominating &

Director

President, Chief Executive Officer

Corporate Governance

and Director

Committee

Piedmont Realty TrustTM

Research Coverage

Fixed Income Research Coverage

Mark S. Streeter, CFA

JP Morgan

383 Madison Avenue, 3rd Floor

New York, NY 10179

Phone: (212) 834-5086

Credit Ratings

Issuer Credit Ratings:

Senior Unsecured Notes Ratings:

Baa3 (Moody's)

Baa3 (Moody's)

BB+ (Standard & Poor's) BBB- (Standard & Poor's)

BBB- (Fitch)

BBB- (Fitch)

Piedmont Realty TrustTM

Portfolio Statistics & Key Performance Indicators

Unaudited (in thousands except for per share data and ratios)

This section of our supplemental report includes non-GAAP financial measures, including, but not limited to, Earnings Before Interest, Taxes, Depreciation, and Amortization for real estate (EBITDAre), Core Earnings Before Interest, Taxes, Depreciation, and Amortization (Core EBITDA), Funds from Operations (FFO), Core Funds from Operations (Core FFO), Adjusted Funds from Operations (AFFO), and Same Store Net Operating Income (Same Store NOI). Definitions of these non-GAAP measures are provided on page 38 and reconciliations are provided beginning on page 39.

Piedmont Realty TrustTM

Consolidated Balance Sheets

Unaudited (in thousands)

Piedmont Realty TrustTM

Consolidated Statements of Income

Unaudited (in thousands except for per share data)

Piedmont Realty TrustTM

Consolidated Statements of Income

Unaudited (in thousands except for per share data)

(1)

To be in conformance with GAAP presentation, the Company would combine "Rental income" and "Tenant reimbursements" amounts and present an aggregated figure on one line entitled "Rental and tenant reimbursement revenue."

(2)

As Piedmont recognized a net loss for the periods presented, earnings per share is computed using basic weighted-average common shares outstanding.

Piedmont Realty TrustTM

Funds From Operations, Core Funds From Operations and Adjusted Funds From Operations

Unaudited (in thousands except for per share data)

(1)

Non-incremental capital expenditures are defined on page 38.

(2)

Includes potential share dilution using the treasury stock method. Such shares are not included when calculating net loss per share applicable to Piedmont as presented on the Consolidated Statements of Income, as they would reduce the loss per share presented.

Piedmont Realty TrustTM

Same Store Net Operating Income (Cash Basis)

Unaudited (in thousands)

(1)

Refer to page 37 for information on recent acquisitions and dispositions.

(2)

Includes projects currently held out-of-service, recently completed redevelopment projects in which a portion of operating expenses was capitalized during the current and/or prior reporting periods, and various land holdings.

Refer to pages 36 and 37 for detailed information on these entities.

Piedmont Realty TrustTM

Same Store Net Operating Income (Accrual Basis)

Unaudited (in thousands)

(1)

Refer to page 37 for detailed information on recent acquisitions and dispositions.

(2)

Includes projects currently held out-of-service, recently completed redevelopment projects in which a portion of operating expenses was capitalized during the current and/or prior reporting periods, and various land holdings.

Refer to pages 36 and 37 for detailed information on these entities.

Piedmont Realty TrustTM

Same Store Net Operating Income (Financial Components)

Unaudited (in thousands)

Piedmont Realty TrustTM

Debt Summary

As of June 30, 2026

Unaudited ($ in thousands)

Piedmont Realty TrustTM

Debt Detail

As of June 30, 2026

Unaudited ($ in thousands)

Piedmont Realty TrustTM`

Debt Covenants & Ratios for Debt Holders

As of June 30, 2026

Unaudited

Piedmont Realty TrustTM

Leased Percentage

(in thousands)

Piedmont Realty TrustTM

Rental Rate Roll Up / Roll Down

Piedmont Realty TrustTM

Contractual Tenant Improvements and Leasing Commissions

Piedmont Realty TrustTM

Net Effective Rents

Piedmont Realty TrustTM

Future Contractual Income Sources

As of June 30, 2026

(1)

Includes leasing activity for the total portfolio, including assets currently out of service.

Piedmont Realty TrustTM

Lease Expiration Schedule

As of June 30, 2026

(in thousands)

Piedmont Realty TrustTM

Lease Expirations by Quarter

As of June 30, 2026

(in thousands)

(1)

Includes leases with an expiration date of June 30, 2026, comprised of approximately 207,000 square feet and Annualized Lease Revenue of $7.5 million. Also included is the New York City 313,000 square foot lease at 60 Broad Street, which is now in holdover status following the tenant's June 4, 2026 expiration date. Annualized lease revenue reflects the maximum holdover penalty that could be assessed per the lease agreement. No such adjustments are made to other periods presented.

Piedmont Realty TrustTM

Lease Expirations by Year

As of June 30, 2026

(in thousands)

(1)

Includes leases with an expiration date of June 30, 2026, comprised of approximately 207,000 square feet and Annualized Lease Revenue of $7.5 million. Also included is the New York City 313,000 square foot lease at 60 Broad Street, which is now in holdover status following the tenant's June 4, 2026 expiration date. Annualized lease revenue reflects the maximum holdover penalty that could be assessed per the lease agreement. No such adjustments are made to other periods presented.

Piedmont Realty TrustTM

Tenant Diversification

As of June 30, 2026

Piedmont Realty TrustTM

Tenant Credit Rating & Lease Distribution

As of June 30, 2026

Tenant Credit Rating

Lease Distribution

(1)

Credit rating may reflect the credit rating of the parent or a guarantor. Where differences exist between the Standard & Poor's credit rating and the Moody's credit rating for a tenant, the higher credit rating is selected for this analysis.

(2)

The classification of a tenant as "not rated" is not an indication of the creditworthiness of the tenant; in most cases, the lack of a credit rating reflects that the tenant has not sought such a rating.

Piedmont Realty TrustTM

Industry Diversification

As of June 30, 2026

($ and square footage in thousands)

(1)

Comprised of all levels of governmental entities, including federal (0.7% of ALR), state (4.8% of ALR), and city / local (4.5% of ALR).

Piedmont Realty TrustTM

Geographic Diversification

As of June 30, 2026

($ and square footage in thousands)

Piedmont Realty TrustTM

Geographic Diversification by Location Type

As of June 30, 2026

(square footage in thousands)

Piedmont Realty TrustTM

Portfolio Detail

As of June 30, 2026

(in thousands)

Total Portfolio

15,737

88.6

%

82.9

%

78.6

%

621,818

Piedmont Realty TrustTM

Property Investment Activity and Land Holdings

As of June 30, 2026

Acquisitions Completed During Prior Year and Current Year

None

(1)

During the first quarter of 2026, the Company entered into a binding contract to sell this undeveloped land parcel for $12.0 million. The transaction is expected to close in the second half of 2026.

Piedmont Realty TrustTM

Definitions

Included below are definitions of various terms used throughout this supplemental report, including definitions of certain non-GAAP financial measures and the reasons why the Company’s management believes these measures provide useful information to investors about the Company’s financial condition and results of operations. Reconciliations of any non-GAAP financial measures defined below are included beginning on page 39.

Adjusted Funds From Operations ("AFFO"): The Company calculates AFFO by starting with Core FFO and adjusting for non-incremental capital expenditures and then adding back non-cash items including: non-real estate depreciation, straight-lined rents and fair value lease adjustments, non-cash components of interest expense and compensation expense, and by making similar adjustments for joint ventures, if any. AFFO is a non-GAAP financial measure and should not be viewed as an alternative to net income calculated in accordance with GAAP as a measurement of the Company’s operating performance. The Company believes that AFFO is helpful to investors as a meaningful supplemental comparative performance measure of our ability to make incremental capital investments. Other REITs may not define AFFO in the same manner as the Company; therefore, the Company’s computation of AFFO may not be comparable to that of other REITs.

Annualized Lease Revenue ("ALR"): ALR is calculated by multiplying (i) current rental payments (defined as base rent plus operating expense reimbursements, if payable by the tenant on a monthly basis under the terms of a lease that has been executed, but excluding a) rental abatements and b) rental payments related to executed but not commenced leases for space that was covered by an existing lease), by (ii) 12. In instances in which contractual rents or operating expense reimbursements are collected on an annual, semi-annual, or quarterly basis, such amounts are multiplied by a factor of 1, 2, or 4, respectively, to calculate the annualized figure. For leases that have been executed but not commenced relating to unleased space, ALR is calculated by multiplying (i) the monthly base rental payment (excluding abatements) plus any operating expense reimbursements for the initial month of the lease term, by (ii) 12. Unless stated otherwise, this measure excludes revenues associated with development properties and properties taken out of service for redevelopment, if any.

Core EBITDA: The Company calculates Core EBITDA as net income/(loss) (computed in accordance with GAAP) before interest, taxes, depreciation and amortization and removing any impairment charges, gains or losses from sales of property and other significant infrequent items that create volatility within our earnings and make it difficult to determine the earnings generated by our core ongoing business. Core EBITDA is a non-GAAP financial measure and should not be viewed as an alternative to net income calculated in accordance with GAAP as a measurement of the Company’s operating performance. The Company believes that Core EBITDA is helpful to investors as a supplemental performance measure because it provides a metric for understanding the performance of the Company’s results from ongoing operations without taking into account the effects of non-cash expenses (such as depreciation and amortization), as well as items that are not part of normal day-to-day operations of the Company’s business. Other REITs may not define Core EBITDA in the same manner as the Company; therefore, the Company’s computation of Core EBITDA may not be comparable to that of other REITs.

Core Funds From Operations ("Core FFO"): The Company calculates Core FFO by starting with FFO, as defined by NAREIT, and adjusting for gains or losses on the extinguishment of swaps and/or debt and any significant non-recurring items. Core FFO is a non-GAAP financial measure and should not be viewed as an alternative to net income calculated in accordance with GAAP as a measurement of the Company’s operating performance. The Company believes that Core FFO is helpful to investors as a supplemental performance measure because it excludes the effects of certain infrequent or non-recurring items which can create significant earnings volatility, but which do not directly relate to the Company’s core business operations. As a result, the Company believes that Core FFO can help facilitate comparisons of operating performance between periods and provides a more meaningful predictor of future earnings potential. Other REITs may not define Core FFO in the same manner as the Company; therefore, the Company’s computation of Core FFO may not be comparable to that of other REITs.

EBITDA: EBITDA is defined as net income/(loss) before interest, taxes, depreciation and amortization.

EBITDAre: The Company calculates EBITDAre in accordance with the current National Association of Real Estate Investment Trusts (“NAREIT”) definition. NAREIT currently defines EBITDAre as net income/(loss) (computed in accordance with GAAP) adjusted for gains or losses from sales of property, impairment charges, depreciation on real estate assets, amortization on real estate assets, interest expense and taxes, along with the same adjustments for joint ventures. Some of the adjustments mentioned can vary among owners of identical assets in similar conditions based on historical cost accounting and useful-life estimates. EBITDAre is a non-GAAP financial measure and should not be viewed as an alternative to net income calculated in accordance with GAAP as a measurement of the Company’s operating performance. The Company believes that EBITDAre is helpful to investors as a supplemental performance measure because it provides a metric for understanding the Company’s results from ongoing operations without taking into account the effects of non-cash expenses (such as depreciation and amortization) and capitalization and capital structure expenses (such as interest expense and taxes). The Company also believes that EBITDAre can help facilitate comparisons of operating performance between periods and with other REITs. However, other REITs may not define EBITDAre in accordance with the NAREIT definition, or may interpret the current NAREIT definition differently than the Company; therefore, the Company’s computation of EBITDAre may not be comparable to that of such other REITs.

Funds From Operations ("FFO"): The Company calculates FFO in accordance with the current National Association of Real Estate Investment Trusts (“NAREIT”) definition. NAREIT currently defines FFO as net income/(loss) (calculated in accordance with GAAP), excluding depreciation and amortization related to real estate, gains and losses from the sale of certain real estate assets, gains and losses from change in control, and impairment write-downs of certain real estate assets, goodwill, and investment in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity, along with appropriate adjustments to those reconciling items for joint ventures, if any. These adjustments can vary among owners of identical assets in similar conditions based on historical cost accounting and useful-life estimates. FFO is a non-GAAP financial measure and should not be viewed as an alternative to net income calculated in accordance with GAAP as a measurement of the Company’s operating performance. The Company believes that FFO is helpful to investors as a supplemental performance measure because it excludes the effects of depreciation, amortization and gains or losses from sales of real estate, all of which are based on historical costs, which implicitly assumes that the value of real estate diminishes predictably over time. The Company also believes that FFO can help facilitate comparisons of operating performance between periods and with other REITs. However, other REITs may not define FFO in accordance with the NAREIT definition, or may interpret the current NAREIT definition differently than the Company; therefore, the Company’s computation of FFO may not be comparable to that of such other REITs.

Incremental Capital Expenditures: Incremental Capital Expenditures are defined as capital expenditures of a non-recurring nature that incrementally enhance the underlying assets' income generating capacity. Tenant improvements, leasing commissions, building capital and deferred lease incentives ("Leasing Costs") incurred to lease space that was vacant at acquisition, Leasing Costs for spaces vacant for greater than one year, Leasing Costs for spaces at newly acquired properties for which in-place leases expire shortly after acquisition, improvements associated with the expansion of a building, renovations that change the underlying classification of a building, and deferred building maintenance capital identified at and completed shortly after acquisition are included in this measure.

Non-Incremental Capital Expenditures: Non-Incremental Capital Expenditures are defined as capital expenditures of a recurring nature related to tenant improvements and leasing commissions that do not incrementally enhance the underlying assets' income generating capacity. We exclude first generation tenant improvements and leasing commissions from this measure, in addition to other capital expenditures that qualify as Incremental Capital Expenditures, as defined above.

Property Net Operating Income ("Property NOI"): The Company calculates Property NOI by starting with Core EBITDA and adjusting for general and administrative expense, income associated with property management performed by Piedmont for other organizations and other income or expense items for the Company, such as interest income from loan investments or costs from the pursuit of non-consummated transactions. The Company may present this measure on an accrual basis or a cash basis. When presented on a cash basis, the effects of non-cash general reserve for uncollectible accounts, straight-lined rents and fair value lease revenue are also eliminated. Property NOI is a non-GAAP financial measure and should not be viewed as an alternative to net income calculated in accordance with GAAP as a measurement of the Company’s operating performance. The Company believes that Property NOI is helpful to investors as a supplemental comparative performance measure of income generated by its properties alone without the administrative overhead of the Company. Other REITs may not define Property NOI in the same manner as the Company; therefore, the Company’s computation of Property NOI may not be comparable to that of other REITs.

Same Store Net Operating Income ("Same Store NOI"): The Company calculates Same Store NOI as Property NOI attributable to the properties for which the following criteria were met during the entire span of the current and prior year reporting periods: (i) they were owned, (ii) they were not under development / redevelopment, and (iii) none of the operating expenses for which were capitalized. Same Store NOI also excludes amounts attributable to land assets. The Company may present this measure on an accrual basis or a cash basis. Same Store NOI is a non-GAAP financial measure and should not be viewed as an alternative to net income calculated in accordance with GAAP as a measurement of the Company’s operating performance. The Company believes that Same Store NOI is helpful to investors as a supplemental comparative performance measure of the income generated from the same group of properties from one period to the next. Other REITs may not define Same Store NOI in the same manner as the Company; therefore, the Company’s computation of Same Store NOI may not be comparable to that of other REITs.

Same Store Properties: Same Store Properties is defined as those properties for which the following criteria were met during the entire span of the current and prior year reporting periods: (i) they were owned, (ii) they were not under development / redevelopment, and (iii) none of the operating expenses for which were capitalized. Same Store Properties excludes land assets.

Total Gross Assets: Total Gross Assets is defined as total assets with the add-back of accumulated depreciation and accumulated amortization related to real estate assets and accumulated amortization related to deferred lease costs.

Total Gross Real Estate Assets: Total Gross Real Estate Assets is defined as total real estate assets with the add-back of accumulated depreciation and accumulated amortization related to real estate assets.

Piedmont Realty TrustTM

Non-GAAP Reconciliation:

GAAP Net Income / (Loss) to FFO, Core FFO, and AFFO

Unaudited (in thousands)

Piedmont Realty TrustTM

Non-GAAP Reconciliation:

GAAP Net Income/(Loss) to Core EBITDA and Same Store Net Operating Income (Cash Basis)

Unaudited (in thousands)