Guarantor and Non-Guarantor Financial Information

The following condensed consolidating financial information for Piedmont Operating Partnership, LP (the "Issuer"), Piedmont Office Realty Trust, Inc. (the "Guarantor"), and the other directly and indirectly owned subsidiaries of the Guarantor (the "Non-Guarantor Subsidiaries") is provided pursuant to the requirements of Rule 3-10 of Regulation S-X regarding financial statements of guarantors and issuers of guaranteed registered securities. The principal elimination entries relate to investments in subsidiaries and intercompany balances and transactions, including transactions with the Non-Guarantor Subsidiaries. Additionally, certain reclassifications have been made to the statements presented below to reflect investments in subsidiaries, which had previously been presented on a net basis, on a gross basis. As all investments in subsidiaries are eliminated in consolidation, none of these reclassifications affect the total financial position or net income attributable to Piedmont as presented in previous periods.



Condensed Consolidated Balance Sheets
As of December 31, 2013
(in thousands)	Issuer		Guarantor			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Assets:
Real estate assets, at cost:
Land	$	88,054	$	—		$	600,707	$	—		$	688,761
Buildings and improvements, less accumulated depreciation	477,712		—			2,687,163		(300		)	3,164,575
Intangible lease assets, less accumulated amortization	2,356		—			72,021		—			74,377
Construction in progress	4,627		—			19,643		—			24,270
Total real estate assets	572,749		—			3,379,534		(300		)	3,951,983
Investments in and amounts due from unconsolidated joint ventures	14,388		—			—		—			14,388
Cash and cash equivalents	3,352		150			3,471		—			6,973
Tenant and straight-line receivables, net	36,142		—			134,409		—			170,551
Advances to affiliates	5,312,384		1,288,547			—		(6,600,931		)	—
Investment in subsidiary	—		4,003,806			197		(4,004,003		)	—
Notes receivable	160,000		2,000			23,890		(185,890		)	—
Prepaid expenses, restricted cash, escrows, and other assets	5,319		44			20,779		(977		)	25,165
Goodwill	180,097		—			—		—			180,097
Interest rate swap	24,176		—			—		—			24,176
Deferred financing costs, net	7,764		—			995		—			8,759
Deferred lease costs, net	34,413		—			249,583		—			283,996
Total assets	$	6,350,784	$	5,294,547		$	3,812,858	$	(10,792,101	)	$	4,666,088
Liabilities:
Debt	$	1,038,570	$	—		$	1,149,525	$	(185,890	)	$	2,002,205
Accounts payable, accrued expenses, and accrued capital expenditures	13,824		2,376			113,595		(977		)	128,818
Advances from affiliates	312,881		4,863,672			1,467,334		(6,643,887		)	—
Deferred income	5,086		—			17,181		—			22,267
Intangible lease liabilities, net	—		—			47,113		—			47,113
Interest rate swaps	4,526		—			—		—			4,526
Total liabilities	1,374,887		4,866,048			2,794,748		(6,830,754		)	2,204,929
Stockholders’ Equity:
Common stock	—		1,575			—		—			1,575
Additional paid-in capital	4,003,806		3,668,906			197		(4,004,003		)	3,668,906
Cumulative distributions in excess of earnings	951,813		(3,241,982		)	1,016,304		42,656			(1,231,209		)
Other comprehensive loss	20,278		—			—		—			20,278
Piedmont stockholders’ equity	4,975,897		428,499			1,016,501		(3,961,347		)	2,459,550
Noncontrolling interest	—		—			1,609		—			1,609
Total stockholders’ equity	4,975,897		428,499			1,018,110		(3,961,347		)	2,461,159
Total liabilities and stockholders’ equity	$	6,350,784	$	5,294,547		$	3,812,858	$	(10,792,101	)	$	4,666,088



Condensed Consolidated Balance Sheets
As of December 31, 2012
(in thousands)	Issuer			Guarantor			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Assets:
Real estate assets, at cost:
Land	$	93,967		$	—		$	535,569		$	—		$	629,536
Buildings and improvements, less accumulated depreciation	528,548			—			2,379,530			—			2,908,078
Intangible lease assets, less accumulated amortization	3,266			—			51,479			—			54,745
Construction in progress	1,056			—			19,317			—			20,373
Total real estate assets	626,837			—			2,985,895			—			3,612,732
Investments in and amounts due from unconsolidated joint ventures	37,689			—			—			—			37,689
Cash and cash equivalents	62,371			239			(49,653		)	—			12,957
Tenant and straight-line rent receivables, net	34,288			—			113,049			—			147,337
Advances to affiliates	4,623,173			1,300,158			—			(5,923,331		)	—
Investment in subsidiary	—			4,068,844			200			(4,069,044		)	—
Notes receivable	160,000			2,500			23,890			(186,390		)	—
Prepaid expenses, restricted cash, escrows, and other assets	5,149			14			17,402			(948		)	21,617
Goodwill	180,097			—			—			—			180,097
Interest rate swap	1,075			—			—			—			1,075
Deferred financing costs, net	4,292			—			2,162			—			6,454
Deferred lease costs, net	30,426			—			204,491			—			234,917
Total assets	$	5,765,397		$	5,371,755		$	3,297,436		$	(10,179,713	)	$	4,254,875
Liabilities:
Debt	$	452,890		$	—		$	1,150,025		$	(186,390	)	$	1,416,525
Accounts payable, accrued expenses, and accrued capital expenditures	20,443			645			107,123			(948		)	127,263
Advances from affiliates	274,159			4,636,936			1,044,446			(5,955,541		)	—
Deferred income	5,991			—			15,561			—			21,552
Intangible lease liabilities, net	24			—			40,781			—			40,805
Interest rate swaps	8,235			—			—			—			8,235
Total liabilities	761,742			4,637,581			2,357,936			(6,142,879		)	1,614,380
Stockholders’ Equity:
Common stock	—			1,676			—			—			1,676
Additional paid-in capital	4,068,844			3,667,051			200			(4,069,044		)	3,667,051
Cumulative distributions in excess of earnings	941,971			(2,934,553		)	937,691			32,210			(1,022,681		)
Other comprehensive loss	(7,160		)	—			—			—			(7,160		)
Piedmont stockholders’ equity	5,003,655			734,174			937,891			(4,036,834		)	2,638,886
Noncontrolling interest	—			—			1,609			—			1,609
Total stockholders’ equity	5,003,655			734,174			939,500			(4,036,834		)	2,640,495
Total liabilities and stockholders’ equity	$	5,765,397		$	5,371,755		$	3,297,436		$	(10,179,713	)	$	4,254,875



Condensed Consolidated Statements of Income
For the year ended December 31, 2013
(in thousands)	Issuer			Guarantor			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues:
Rental income	$	77,200		$	—		$	375,769		$	(5,282	)	$	447,687
Tenant reimbursements	16,526			—			88,461			(420		)	104,567
Property management fee revenue	—			—			15,360			(13,109		)	2,251
	93,726			—			479,590			(18,811		)	554,505
Expenses:
Property operating costs	41,833			—			200,472			(19,326		)	222,979
Depreciation	23,857			—			98,705			—			122,562
Amortization	5,297			—			40,354			—			45,651
Impairment loss	1,242			—			—			—			1,242
General and administrative	21,011			337			24,927			(24,392		)	21,883
	93,240			337			364,458			(43,718		)	414,317
Real estate operating income/(loss)	486			(337		)	115,132			24,907			140,188
Other income (expense):
Interest expense	(22,242		)	—			(63,900		)	12,559			(73,583		)
Interest income and other income/(expense)	10,630			164			(587		)	(12,559		)	(2,352		)
Litigation settlement recovery	1,250			—			—			—			1,250
Net casualty recoveries/(loss)	(567		)	—			11,128			—			10,561
Equity in loss of unconsolidated joint ventures	(3,676		)	—			—			—			(3,676		)
Loss on consolidation	(898		)	—			—			—			(898		)
	(15,503		)	164			(53,359		)	—			(68,698		)
Income/(loss) from continuing operations	(15,017		)	(173		)	61,773			24,907			71,490
Discontinued operations:
Operating income, excluding impairment loss	1,755			—			608			—			2,363
Impairment loss	(6,402		)	—			—			—			(6,402		)
Gain on sale of real estate assets	15,046			—			16,246			—			31,292
Income from discontinued operations	10,399			—			16,854			—			27,253
Net income/(loss)	(4,618		)	(173		)	78,627			24,907			98,743
Less: Net income attributable to noncontrolling interest	—			—			(15		)	—			(15		)
Net income/(loss) attributable to Piedmont	$	(4,618	)	$	(173	)	$	78,612		$	24,907		$	98,728



Condensed Consolidated Statements of Income
For the year ended December 31, 2012
(in thousands)	Issuer			Guarantor			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues:
Rental income	$	72,072		$	—		$	348,713		$	(4,813	)	$	415,972
Tenant reimbursements	17,100			—			89,937			(283		)	106,754
Property management fee revenue	—			—			14,350			(12,032		)	2,318
	89,172			—			453,000			(17,128		)	525,044
Expenses:
Property operating costs	36,486			—			189,665			(17,871		)	208,280
Depreciation	23,456			—			86,903			—			110,359
Amortization	5,524			—			44,038			—			49,562
General and administrative	19,804			294			23,574			(22,907		)	20,765
	85,270			294			344,180			(40,778		)	388,966
Real estate operating income/(loss)	3,902			(294		)	108,820			23,650			136,078
Other income (expense):
Interest expense	(12,530		)	—			(65,001		)	12,508			(65,023		)
Interest income and other income/(expense)	12,226			15			1,100			(12,508		)	833
Litigation settlement expense	(7,500		)	—			—			—			(7,500		)
Net casualty recoveries/(loss)	(5,195		)	—			25			—			(5,170		)
Equity in income of unconsolidated joint ventures	923			—			—			—			923
	(12,076		)	15			(63,876		)	—			(75,937		)
Income/(loss) from continuing operations	(8,174		)	(279		)	44,944			23,650			60,141
Discontinued operations:
Operating income	5,220			—			281			—			5,501
Gain on sale of real estate assets	27,577			—			—			—			27,577
Income from discontinued operations	32,797			—			281			—			33,078
Net income/(loss)	24,623			(279		)	45,225			23,650			93,219
Less: Net income attributable to noncontrolling interest	—			—			(15		)	—			(15		)
Net income/(loss) attributable to Piedmont	$	24,623		$	(279	)	$	45,210		$	23,650		$	93,204



Condensed Consolidated Statements of Income
For the year ended December 31, 2011
(in thousands)	Issuer			Guarantor			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues:
Rental income	$	67,669		$	—		$	343,492		$	(1,450	)	$	409,711
Tenant reimbursements	18,539			—			95,313			(39		)	113,813
Property management fee revenue	—			—			14,474			(12,890		)	1,584
	86,208			—			453,279			(14,379		)	525,108
Expenses:
Property operating costs	40,311			—			177,566			(15,346		)	202,531
Depreciation	21,148			—			79,538			—			100,686
Amortization	4,860			—			49,148			—			54,008
General and administrative	25,029			(50		)	24,570			(24,477		)	25,072
	91,348			(50		)	330,822			(39,823		)	382,297
Real estate operating income/(loss)	(5,140		)	50			122,457			25,444			142,811
Other income (expense):
Interest expense	(8,991		)	—			(70,526		)	13,700			(65,817		)
Interest income and other income/(expense)	11,975			—			4,591			(13,700		)	2,866
Equity in income of unconsolidated joint ventures	1,619			—			—			—			1,619
Gain on consolidation	—			—			1,532			—			1,532
Gain on extinguishment of debt	—			—			1,039			—			1,039
	4,603			—			(63,364		)	—			(58,761		)
Income/(loss) from continuing operations	(537		)	50			59,093			25,444			84,050
Discontinued operations:
Operating income	6,842			—			11,507			—			18,349
Gain on sale of real estate assets	12,152			—			110,505			—			122,657
Income from discontinued operations	18,994			—			122,012			—			141,006
Net income	18,457			50			181,105			25,444			225,056
Less: Net income attributable to noncontrolling interest	—			—			(15		)	—			(15		)
Net income attributable to Piedmont	$	18,457		$	50		$	181,090		$	25,444		$	225,041



Condensed Consolidated Statements of Cash Flows
For the year ended December 31, 2013
(in thousands)	Issuer			Guarantor			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net Cash Provided by Operating Activities	$	15,327		$	1,853		$	172,992		$	24,907		$	215,079

Cash Flows from Investing Activities:
Acquisition of real estate assets, related intangibles and capitalized expenditures, net of accruals	(10,382		)	—			(532,088		)	300			(542,170		)
Intercompany note receivable	—			500			—			(500		)	—
Acquisition of unconsolidated joint ventures, net of cash assumed	18,045			—			(32,287		)	—			(14,242		)
Net sales proceeds from wholly-owned properties	50,118			—			45,553			—			95,671
Investments in unconsolidated joint ventures	(793		)	—			—			—			(793		)
Deferred lease costs paid	(10,980		)	—			(23,318		)	—			(34,298		)
Net cash provided by/(used in) investing activities	46,008			500			(542,140		)	(200		)	(495,832		)
Cash Flows from Financing Activities:
Deferred financing costs paid	(4,892		)	—			—			—			(4,892		)
Proceeds from debt	1,085,604			—			—			—			1,085,604
Repayments of debt	(500,000		)	—			—			—			(500,000		)
Intercompany note payable	—			—			(500		)	500			—
Net costs of issuance of common stock	—			(91		)	—			—			(91		)
Repurchases of common stock as part of announced plan	—			(173,551		)	—			—			(173,551		)
Intercompany distributions	(701,066		)	303,486			422,787			(25,207		)	—
Dividends paid and discount on dividend reinvestments	—			(132,286		)	(15		)	—			(132,301		)
Net cash provided by/(used in) financing activities	(120,354		)	(2,442		)	422,272			(24,707		)	274,769
Net increase/(decrease) in cash and cash equivalents	(59,019		)	(89		)	53,124			—			(5,984		)
Cash and cash equivalents, beginning of year	62,371			239			(49,653		)	—			12,957
Cash and cash equivalents, end of year	$	3,352		$	150		$	3,471		$	—		$	6,973



Condensed Consolidated Statements of Cash Flows
For the year ended December 31, 2012
(in thousands)	Issuer			Guarantor			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net Cash Provided by Operating Activities	$	32,260		$	2,215		$	162,800		$	23,650		$	220,925

Cash Flows from Investing Activities:
Acquisition of real estate assets, related intangibles and capitalized expenditures, net of accruals	(20,763		)	—			(87,724		)	—			(108,487		)
Intercompany note receivable	—			(2,500		)	—			2,500			—
Net sales proceeds from wholly-owned properties	93,839			—			—			—			93,839
Investments in unconsolidated joint ventures	(136		)	—			—			—			(136		)
Deferred lease costs paid	(4,164		)	—			(44,528		)	—			(48,692		)
Net cash provided by/(used in) investing activities	68,776			(2,500		)	(132,252		)	2,500			(63,476		)
Cash Flows from Financing Activities:
Deferred financing costs paid	(3,125		)	—			—			—			(3,125		)
Proceeds from debt	409,000			—			—			—			409,000
Repayments of debt	(280,000		)	—			(185,000		)	—			(465,000		)
Intercompany note payable	—			—			2,500			(2,500		)	—
Net costs of issuance of common stock	—			(229		)	—			—			(229		)
Repurchases of common stock as part of announced plan	—			(88,450		)	—			—			(88,450		)
Intercompany distributions	(331,460		)	225,427			129,683			(23,650		)	—
Dividends paid and discount on dividend reinvestments	—			(136,363		)	(15		)	—			(136,378		)
Net cash provided by/(used in) financing activities	(205,585		)	385			(52,832		)	(26,150		)	(284,182		)
Net increase/(decrease) in cash and cash equivalents	(104,549		)	100			(22,284		)	—			(126,733		)
Cash and cash equivalents, beginning of year	166,920			139			(27,369		)	—			139,690
Cash and cash equivalents, end of year	$	62,371		$	239		$	(49,653	)	$	—		$	12,957



Condensed Consolidated Statements of Cash Flows
For the year ended December 31, 2011
(in thousands)	Issuer			Guarantor			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net Cash Provided by Operating Activities	$	34,362		$	2,375		$	204,913		$	25,445		$	267,095

Cash Flows from Investing Activities:
Acquisition of real estate assets, related intangibles and capitalized expenditures, net of accruals	(15,856		)	—			(199,753		)	—			(215,609		)
Intercompany note receivable	—			—			53,000			(53,000		)	—
Cash assumed upon consolidation of variable interest entity	—			—			5,063			—			5,063
Net sales proceeds from wholly-owned properties and consolidated joint venture	31,704			—			260,081			—			291,785
Net sales proceeds received from unconsolidated joint ventures	3,036			—			—			—			3,036
Investments in unconsolidated joint ventures	(151		)	—			—			—			(151		)
Liquidation of noncontrolling interest upon sale of consolidated joint venture	—			—			(95		)	—			(95		)
Deferred lease costs paid	(10,695		)	—			(36,354		)	—			(47,049		)
Net cash provided by/(used in) investing activities	8,038			—			81,942			(53,000		)	36,980
Cash Flows from Financing Activities:
Deferred financing costs paid	(2,717		)	—			(650		)	—			(3,367		)
Proceeds from debt	829,000			—			—			—			829,000
Repayments of debt	(779,000		)	—			(43,875		)	—			(822,875		)
Intercompany note payable	(53,000		)	—			—			53,000			—
Net costs of issuance of common stock	—			(252		)	—			—			(252		)
Repurchases of common stock as part of announced plan	—			(3,244		)	—			—			(3,244		)
Intercompany distributions	68,721			218,322			(261,598		)	(25,445		)	—
Dividends paid and discount on dividend reinvestments	—			(217,958		)	(2,407		)	—			(220,365		)
Net cash provided by/(used in) financing activities	63,004			(3,132		)	(308,530		)	27,555			(221,103		)
Net increase/(decrease) in cash and cash equivalents	105,404			(757		)	(21,675		)	—			82,972
Cash and cash equivalents, beginning of year	61,516			896			(5,694		)	—			56,718
Cash and cash equivalents, end of year	$	166,920		$	139		$	(27,369	)	$	—		$	139,690