Guarantor and Non-Guarantor Financial Information

6 Months Ended

Jun. 30, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Guarantor and Non-Guarantor Financial Information

Guarantor and Non-Guarantor Financial Information

The following condensed consolidating financial information for Piedmont Operating Partnership, L.P. (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 Issuer is a wholly-owned subsidiary of the Guarantor, and all guarantees by the Guarantor of securities issued by the Issuer are full and unconditional. The principal elimination entries relate to investments in subsidiaries and intercompany balances and transactions, including transactions with the Non-Guarantor Subsidiaries.

Condensed Consolidated Balance Sheets
As of June 30, 2016
(in thousands)	Issuer			Guarantor			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Assets:
Real estate assets, at cost:
Land	$	48,213		$	—		$	608,027	$	—		$	656,240
Buildings and improvements, less accumulated depreciation	242,179			—			2,538,622		(300		)	2,780,501
Intangible lease assets, less accumulated amortization	997			—			70,797		—			71,794
Construction in progress	387			—			24,800		—			25,187
Real estate assets held for sale, net	69,766			—			—		—			69,766
Total real estate assets	361,542			—			3,242,246		(300		)	3,603,488
Investments in and amounts due from unconsolidated joint ventures	7,413			—			—		—			7,413
Cash and cash equivalents	16,270			150			4,689		—			21,109
Tenant and straight-line rent receivables, net	20,448			—			155,517		—			175,965
Advances to affiliates	6,115,364			1,283,243			—		(7,398,607		)	—
Investment in subsidiary	—			3,691,562			184		(3,691,746		)	—
Notes receivable	89,350			—			14,289		(103,639		)	—
Prepaid expenses, restricted cash, escrows, and other assets	17,069			75			24,839		(1,657		)	40,326
Goodwill	180,097			—			—		—			180,097
Deferred lease costs, net	18,115			—			243,225		—			261,340
Other assets held for sale, net	8,761			—			—		—			8,761
Total assets	$	6,834,429		$	4,975,030		$	3,684,989	$	(11,195,949	)	$	4,298,499
Liabilities:
Debt, net	$	1,522,642		$	—		$	465,311	$	(103,639	)	$	1,884,314
Accounts payable, accrued expenses, and accrued capital expenditures	17,525			573			105,946		(1,657		)	122,387
Advances from affiliates	641,314			5,071,390			1,775,933		(7,488,637		)	—
Deferred income	4,077			—			19,959		—			24,036
Intangible lease liabilities, net	—			—			38,970		—			38,970
Interest rate swaps	22,079			—			—		—			22,079
Total liabilities	2,207,637			5,071,963			2,406,119		(7,593,933		)	2,091,786
Stockholders’ Equity:
Common stock	—			1,452			—		—			1,452
Additional paid-in capital	3,687,562			3,674,348			1,311		(3,691,746		)	3,671,475
Retained/(cumulative distributions in excess of) earnings	950,340			(3,772,733		)	1,276,534		89,730			(1,456,129		)
Other comprehensive loss	(11,110		)	—			—		—			(11,110		)
Piedmont stockholders’ equity	4,626,792			(96,933		)	1,277,845		(3,602,016		)	2,205,688
Noncontrolling interest	—			—			1,025		—			1,025
Total stockholders’ equity	4,626,792			(96,933		)	1,278,870		(3,602,016		)	2,206,713
Total liabilities and stockholders’ equity	$	6,834,429		$	4,975,030		$	3,684,989	$	(11,195,949	)	$	4,298,499

Condensed Consolidated Balance Sheets
As of December 31, 2015
(in thousands)	Issuer		Guarantor			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Assets:
Real estate assets, at cost:
Land	$	54,459	$	—		$	621,632	$	—		$	676,091
Buildings and improvements, less accumulated depreciation	270,057		—			2,567,706		(300		)	2,837,463
Intangible lease assets, less accumulated amortization	1,268		—			83,395		—			84,663
Construction in progress	240		—			20,735		—			20,975
Real estate assets held for sale, net	76,614		—			—		—			76,614
Total real estate assets	402,638		—			3,293,468		(300		)	3,695,806
Investments in and amounts due from unconsolidated joint ventures	7,577		—			—		—			7,577
Cash and cash equivalents	2,174		150			3,117		—			5,441
Tenant and straight-line rent receivables, net	23,738		—			149,994		—			173,732
Advances to affiliates	6,073,606		1,251,530			—		(7,325,136		)	—
Investment in subsidiary	—		3,752,523			186		(3,752,709		)	—
Notes receivable	134,750		—			23,890		(113,240		)	45,400
Prepaid expenses, restricted cash, escrows, and other assets	7,091		—			24,118		(1,258		)	29,951
Goodwill	180,097		—			—		—			180,097
Deferred lease costs, net	20,939		—			267,102		—			288,041
Other assets held for sale, net	8,490		—			—		—			8,490
Total assets	$	6,861,100	$	5,004,203		$	3,761,875	$	(11,192,643	)	$	4,434,535
Liabilities:
Debt, net	$	1,552,007	$	—		$	590,743	$	(113,240	)	$	2,029,510
Accounts payable, accrued expenses, and accrued capital expenditures	18,954		580			110,189		(1,258		)	128,465
Advances from affiliates	580,526		5,033,266			1,788,840		(7,402,632		)	—
Deferred income	5,905		—			21,365		—			27,270
Intangible lease liabilities, net	—		—			42,853		—			42,853
Interest rate swaps	9,993		—			—		—			9,993
Total liabilities	2,167,385		5,033,846			2,553,990		(7,517,130		)	2,238,091
Stockholders’ Equity:
Common stock	—		1,455			—		—			1,455
Additional paid-in capital	3,748,524		3,672,849			1,314		(3,752,710		)	3,669,977
Retained/(cumulative distributions in excess of) earnings	943,530		(3,703,947		)	1,205,546		77,197			(1,477,674		)
Other comprehensive loss	1,661		—			—		—			1,661
Piedmont stockholders’ equity	4,693,715		(29,643		)	1,206,860		(3,675,513		)	2,195,419
Noncontrolling interest	—		—			1,025		—			1,025
Total stockholders’ equity	4,693,715		(29,643		)	1,207,885		(3,675,513		)	2,196,444
Total liabilities and stockholders’ equity	$	6,861,100	$	5,004,203		$	3,761,875	$	(11,192,643	)	$	4,434,535

Condensed Consolidated Statements of Income
For the three months ended June 30, 2016
(in thousands)	Issuer			Guarantor			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues:
Rental income	$	14,661		$	—		$	97,860		$	(754	)	$	111,767
Tenant reimbursements	3,753			—			19,409			(76		)	23,086
Property management fee revenue	—			—			4,178			(3,724		)	454
	18,414			—			121,447			(4,554		)	135,307
Expenses:
Property operating costs	8,307			—			48,568			(4,595		)	52,280
Depreciation	4,476			—			27,080			—			31,556
Amortization	941			—			16,461			—			17,402
Impairment loss on real estate assets	5,972			—			2,336			—			8,308
General and administrative	8,119			92			10,213			(10,096		)	8,328
	27,815			92			104,658			(14,691		)	117,874
Real estate operating income/(loss)	(9,401		)	(92		)	16,789			10,137			17,433
Other income (expense):
Interest expense	(12,170		)	—			(6,666		)	2,423			(16,413		)
Other income/(expense)	1,735			282			365			(2,423		)	(41		)
Equity in income of unconsolidated joint ventures	111			—			—			—			111
	(10,324		)	282			(6,301		)	—			(16,343		)
Income/(loss) from continuing operations	(19,725		)	190			10,488			10,137			1,090
Discontinued operations:
Operating loss	—			—			(1		)	—			(1		)
Loss from discontinued operations	—			—			(1		)	—			(1		)
Gain on sale of real estate assets	32,017			—			46,970			—			78,987
Net income	12,292			190			57,457			10,137			80,076
Less: Net income applicable to noncontrolling interest	—			—			(4		)	—			(4		)
Net income applicable to Piedmont	$	12,292		$	190		$	57,453		$	10,137		$	80,072

Condensed Consolidated Statements of Income
For the three months ended June 30, 2015
(in thousands)	Issuer			Guarantor			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues:
Rental income	$	17,046		$	—		$	101,137		$	(729	)	$	117,454
Tenant reimbursements	3,557			—			25,427			(171		)	28,813
Property management fee revenue	—			—			4,501			(4,034		)	467
	20,603			—			131,065			(4,934		)	146,734
Expenses:
Property operating costs	9,550			—			57,046			(5,117		)	61,479
Depreciation	5,159			—			30,880			—			36,039
Amortization	1,096			—			13,859			—			14,955
Impairment loss on real estate assets	5,354			—			—			—			5,354
General and administrative	7,904			84			9,263			(9,168		)	8,083
	29,063			84			111,048			(14,285		)	125,910
Real estate operating income/(loss)	(8,460		)	(84		)	20,017			9,351			20,824
Other income (expense):
Interest expense	(13,441		)	—			(7,769		)	3,038			(18,172		)
Other income/(expense)	3,392			—			242			(3,038		)	596
Equity in income of unconsolidated joint ventures	124			—			—			—			124
	(9,925		)	—			(7,527		)	—			(17,452		)
Income/(loss) from continuing operations	(18,385		)	(84		)	12,490			9,351			3,372
Discontinued operations:
Operating loss	(2		)	—			(1		)	—			(3		)
Loss from discontinued operations	(2		)	—			(1		)	—			(3		)
Gain on sale of real estate assets	26,611			—			—			—			26,611
Net income/(loss)	8,224			(84		)	12,489			9,351			29,980
Less: Net income applicable to noncontrolling interest	—			—			(4		)	—			(4		)
Net income/(loss) applicable to Piedmont	$	8,224		$	(84	)	$	12,485		$	9,351		$	29,976

Condensed Consolidated Statements of Income
For the six months ended June 30, 2016
(in thousands)	Issuer			Guarantor			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues:
Rental income	$	30,127		$	—		$	197,896		$	(1,518	)	$	226,505
Tenant reimbursements	7,026			—			38,980			(169		)	45,837
Property management fee revenue	—			—			8,495			(7,518		)	977
	37,153			—			245,371			(9,205		)	273,319
Expenses:
Property operating costs	16,659			—			99,083			(9,274		)	106,468
Depreciation	9,376			—			53,962			—			63,338
Amortization	1,991			—			33,217			—			35,208
Impairment loss on real estate assets	5,972			—			2,336			—			8,308
General and administrative	15,718			168			19,864			(19,558		)	16,192
	49,716			168			208,462			(28,832		)	229,514
Real estate operating income/(loss)	(12,563		)	(168		)	36,909			19,627			43,805
Other income (expense):
Interest expense	(24,360		)	—			(13,404		)	4,966			(32,798		)
Other income/(expense)	4,400			282			537			(4,966		)	253
Equity in income of unconsolidated joint ventures	226			—			—			—			226
	(19,734		)	282			(12,867		)	—			(32,319		)
Income/(loss) from continuing operations	(32,297		)	114			24,042			19,627			11,486
Discontinued operations:
Operating loss	—			—			(1		)	—			(1		)
Loss from discontinued operations	—			—			(1		)	—			(1		)
Gain on sale of real estate assets	32,012			—			46,955			—			78,967
Net income/(loss)	(285		)	114			70,996			19,627			90,452
Less: Net income applicable to noncontrolling interest	—			—			(8		)	—			(8		)
Net income/(loss) applicable to Piedmont	$	(285	)	$	114		$	70,988		$	19,627		$	90,444

Condensed Consolidated Statements of Income
For the six months ended June 30, 2015
(in thousands)	Issuer			Guarantor			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues:
Rental income	$	35,983		$	—		$	200,714		$	(1,436	)	$	235,261
Tenant reimbursements	7,802			—			52,700			(299		)	60,203
Property management fee revenue	—			—			8,940			(7,911		)	1,029
	43,785			—			262,354			(9,646		)	296,493
Expenses:
Property operating costs	20,211			—			115,541			(10,037		)	125,715
Depreciation	10,961			—			61,310			—			72,271
Amortization	2,350			—			27,275			—			29,625
Impairment loss of real estate assets	5,354			—			—			—			5,354
General and administrative	14,104			195			16,988			(16,797		)	14,490
	52,980			195			221,114			(26,834		)	247,455
Real estate operating income/(loss)	(9,195		)	(195		)	41,240			17,188			49,038
Other income (expense):
Interest expense	(26,630		)	—			(16,717		)	6,159			(37,188		)
Other income/(expense)	6,159			—			415			(6,159		)	415
Equity in income of unconsolidated joint ventures	283			—			—			—			283
	(20,188		)	—			(16,302		)	—			(36,490		)
Income/(loss) from continuing operations	(29,383		)	(195		)	24,938			17,188			12,548
Discontinued operations:
Operating loss	(2		)	—			(1		)	—			(3		)
Loss from discontinued operations	(2		)	—			(1		)	—			(3		)
Gain on sale of real estate assets	36,684			—			—			—			36,684
Net income/(loss)	7,299			(195		)	24,937			17,188			49,229
Less: Net income applicable to noncontrolling interest	—			—			(8		)	—			(8		)
Net income/(loss) applicable to Piedmont	$	7,299		$	(195	)	$	24,929		$	17,188		$	49,221

Condensed Consolidated Statements of Cash Flows
For the six months ended June 30, 2016
(in thousands)	Issuer			Guarantor			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net Cash Provided by Operating Activities	$	(14,105	)	$	3,075		$	94,146		$	19,628		$	102,744
Cash Flows from Investing Activities:
Investment in real estate assets and real estate related intangibles, net of accruals	(13,062		)	—			(51,360		)	—			(64,422		)
Intercompany note receivable	—			—			9,600			(9,600		)	—
Net sales proceeds from wholly-owned properties	108,550			—			93,140			—			201,690
Deferred lease costs paid	(1,712		)	—			(4,554		)	—			(6,266		)
Net cash provided by/(used in) investing activities	93,776			—			46,826			(9,600		)	131,002
Cash Flows from Financing Activities:
Debt issuance costs paid	(138		)	—			—			—			(138		)
Proceeds from debt	211,000			—			—			—			211,000
Repayments of debt	(232,000		)	—			(125,597		)	—			(357,597		)
Intercompany note payable	(9,600		)	—			—			9,600			—
Costs of issuance of common stock	—			(42		)	—			—			(42		)
Shares withheld to pay tax obligations related to employee stock compensation	—			(2,283		)	—			—			(2,283		)
Repurchases of common stock as part of announced plan	—			(7,943		)	—			—			(7,943		)
(Distributions to)/repayments from affiliates	(34,837		)	68,259			(13,794		)	(19,628		)	—
Dividends paid and discount on dividend reinvestments	—			(61,066		)	(9		)	—			(61,075		)
Net cash provided by/(used in) financing activities	(65,575		)	(3,075		)	(139,400		)	(10,028		)	(218,078		)
Net decrease in cash and cash equivalents	14,096			—			1,572			—			15,668
Cash and cash equivalents, beginning of period	2,174			150			3,117			—			5,441
Cash and cash equivalents, end of period	$	16,270		$	150		$	4,689		$	—		$	21,109

Condensed Consolidated Statements of Cash Flows
For the six months ended June 30, 2015
(in thousands)	Issuer			Guarantor			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net Cash Provided by Operating Activities	$	(15,322	)	$	2,869		$	91,753		$	17,187		$	96,487
Cash Flows from Investing Activities:
Investment in real estate assets and real estate related intangibles, net of accruals	(10,269		)	—			(97,503		)	—			(107,772		)
Intercompany note receivable	72,000			—			—			(72,000		)	—
Redemption of noncontrolling interest in unconsolidated variable interest entity	—			—			(4,000		)	—			(4,000		)
Net sales proceeds from wholly-owned properties	87,925			—			—			—			87,925
Deferred lease costs paid	(2,027		)	—			(8,651		)	—			(10,678		)
Net cash provided by/(used in) investing activities	147,629			—			(110,154		)	(72,000		)	(34,525		)
Cash Flows from Financing Activities:
Debt issuance costs paid	(423		)	—			(407		)	—			(830		)
Proceeds from debt	895,578			—			159,279			—			1,054,857
Repayments of debt	(907,000		)	—			(177,576		)	72,000			(1,012,576		)
Costs of issuance of common stock	—			(326		)	—			—			(326		)
Shares withheld to pay tax obligations related to employee stock compensation	—			(1,654		)	—			—			(1,654		)
Repurchases of common stock as part of announced plan	—			(39,914		)	—			—			(39,914		)
(Distributions to)/repayments from affiliates	(122,441		)	102,205			37,423			(17,187		)	—
Dividends paid and discount on dividend reinvestments	—			(64,820		)	(8		)	—			(64,828		)
Net cash provided/(used in) by financing activities	(134,286		)	(4,509		)	18,711			54,813			(65,271		)
Net increase/(decrease) in cash and cash equivalents	(1,979		)	(1,640		)	310			—			(3,309		)
Cash and cash equivalents, beginning of period	8,143			1,790			2,373			—			12,306
Cash and cash equivalents, end of period	$	6,164		$	150		$	2,683		$	—		$	8,997