##### Table of Contents









UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549




---

FORM 10-Q

|           |  |                                                                                                                                                     |  | 
|---------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------- |  | 
|(Mark One) |  |                                                                                                                                                     |  | 
|x          |  | QUARTERLY REPORT PURSUANT TO SECTION 13
    OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934
    For the quarterly period ended June 30, 2003 or |  | 
|          
|o          |  | TRANSITION REPORT PURSUANT TO SECTION 13
    OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
    For the transition period
    from            to   |  | 

Commission File Number: 1-13625

EOP OPERATING LIMITED PARTNERSHIP

(Exact name of registrant as specified in its
charter)


|                                                                                                         |  |                                                   
|-------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------
|Delaware(State or other jurisdiction of
    incorporation or organization)                               |  | 36-4156801(I.R.S. Employer Identification
    No.)
|                                                                                                        
|Two North Riverside Plaza,
    Suite 2100, Chicago, Illinois(Address of principal executive
    offices) |  | 60606(Zip code)                                   

(312) 466-3300

(Registrants telephone number, including
area code)


Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the
past
90 days.     Yes     x     No     o

Indicate by check mark whether the registrant is
an accelerated filer (as defined in Rule 12b-2 of the
Exchange
Act).     Yes     x     No     o

On July 31, 2003, 448,289,533 Units were
outstanding.



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TABLE OF CONTENTS



|                                                                                         |                                                                                                |  |  |  |  |  |  | 
|---------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I. FINANCIAL INFORMATION                                                           
|                                                                                         | ITEM 1. Financial Statements.                                                                 
|EOP OPERATING LIMITED PARTNERSHIP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
|                                                                                         | ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
|                                                                                         | ITEM 3. Quantitative and Qualitative Disclosures About Market Risk.                           
|                                                                                         | ITEM 4. Controls and Procedures.                                                              
|PART II. OTHER INFORMATION                                                              
|                                                                                         | ITEM 1. Legal Proceedings.                                                                    
|APPENDIX A                                                                              
|SIGNATURES                                                                              
|EXHIBIT INDEX                                                                           
|Statement of Earnings                                                                   
|Certifications                                                                          
|Section 1350 Certifications                                                             



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##### Table of Contents






PART I.

FINANCIAL INFORMATION






|        |                      
|------- | ---------------------
|ITEM 1. | Financial Statements.

EOP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED BALANCE SHEETS

|                                                           |                                                                                                                |                                                                                                                                                     |                                                                 |            |              |            |   |            |            |            | 
|---------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------- | ---------- | ------------ | ---------- | - | ---------- | ---------- | ---------- | 
|                                                           |                                                                                                                | June 30,                                                                                                                                            |                                                                 |            | December 31, |           
|(Dollars in thousands, except per unit amounts)            |                                                                                                                | 2003                                                                                                                                                |                                                                 |            | 2002         |           
|                                                           |                                                                                                                |                                                                                                                                                     |                                                                 |            |              |           
|                                                           |                                                                                                                | (Unaudited)                                                                                                                                         |                                                                 |            |             
|Assets:                                                    |                                                                                                                |                                                                                                                                                     |                                                                 |            |              |            |   |           
|                                                           | Investment in real estate                                                                                      |                                                                                                                                                     | $                                                               | 24,456,255 |              |            | $ | 24,625,927 |           
|                                                           | Developments in process                                                                                        |                                                                                                                                                     |                                                                 | 342,338    |              |            |   | 284,737    |           
|                                                           | Land available for development                                                                                 |                                                                                                                                                     |                                                                 | 245,058    |              |            |   | 252,852    |           
|                                                           | Accumulated depreciation                                                                                       |                                                                                                                                                     |                                                                 | (2,379,269 | )            |            |   | (2,077,613 | )         
|                                                           |                                                                                                                |                                                                                                                                                     |                                                                 |            |              |           
|                                                           |                                                                                                                | Investment in real estate, net of accumulated
    depreciation                                                                                      |                                                                 |            | 22,664,382   |            |   |            | 23,085,903 |           
|                                                           | Cash and cash equivalents                                                                                      |                                                                                                                                                     |                                                                 | 57,595     |              |            |   | 58,471     |           
|                                                           | Tenant and other receivables (net of allowance
    for doubtful accounts of $12,586 and $11,695, respectively) |                                                                                                                                                     |                                                                 | 80,399     |              |            |   | 77,597     |           
|                                                           | Deferred rent receivable                                                                                       |                                                                                                                                                     |                                                                 | 355,643    |              |            |   | 331,932    |           
|                                                           | Escrow deposits and restricted cash                                                                            |                                                                                                                                                     |                                                                 | 33,692     |              |            |   | 29,185     |           
|                                                           | Investments in unconsolidated joint ventures                                                                   |                                                                                                                                                     |                                                                 | 1,089,894  |              |            |   | 1,087,815  |           
|                                                           | Deferred financing costs (net of accumulated
    amortization of $42,643 and $48,801, respectively)            |                                                                                                                                                     |                                                                 | 71,229     |              |            |   | 67,151     |           
|                                                           | Deferred leasing costs (net of accumulated
    amortization of $141,366 and $115,710, respectively)            |                                                                                                                                                     |                                                                 | 274,756    |              |            |   | 235,002    |           
|                                                           | Prepaid expenses and other assets (net of
    discounts of $66,378 and $66,557, respectively)                  |                                                                                                                                                     |                                                                 | 307,746    |              |            |   | 273,727    |           
|                                                           |                                                                                                                |                                                                                                                                                     |                                                                 |            |              |           
|                                                           |                                                                                                                |                                                                                                                                                     | Total Assets                                                    |            | $            | 24,935,336 |   |            | $          | 25,246,783 | 
|                                                           |                                                                                                                |                                                                                                                                                     |                                                                 |            |              |           
|Liabilities, Minority Interests and
    Partners Capital: |                                                                                                                |                                                                                                                                                     |                                                                 |            |              |            |   |           
|                                                           | Mortgage debt (including a net discount of
    $(13,230) and $(12,584), respectively)                          |                                                                                                                                                     | $                                                               | 2,470,020  |              |            | $ | 2,507,890  |           
|                                                           | Unsecured notes (including a net premium of
    $25,820 and $41,151, respectively)                             |                                                                                                                                                     |                                                                 | 9,242,320  |              |            |   | 9,057,651  |           
|                                                           | Line of credit                                                                                                 |                                                                                                                                                     |                                                                 | 282,900    |              |            |   | 205,700    |           
|                                                           | Accounts payable and accrued expenses                                                                          |                                                                                                                                                     |                                                                 | 522,905    |              |            |   | 560,101    |           
|                                                           | Distribution payable                                                                                           |                                                                                                                                                     |                                                                 | 227,438    |              |            |   | 5,654      |           
|                                                           | Other liabilities                                                                                              |                                                                                                                                                     |                                                                 | 436,421    |              |            |   | 391,963    |           
|                                                           |                                                                                                                |                                                                                                                                                     |                                                                 |            |              |           
|                                                           |                                                                                                                |                                                                                                                                                     | Total Liabilities                                               |            |              | 13,182,004 |   |            |            | 12,728,959 | 
|                                                           |                                                                                                                |                                                                                                                                                     |                                                                 |            |              |           
|                                                           | Commitments and contingencies                                                                                  |                                                                                                                                                     |                                                                 |           |              |            |   |           |           
|                                                           | Minority interests-partially owned properties                                                                  |                                                                                                                                                     |                                                                 | 184,103    |              |            |   | 185,809    |           
|                                                           | Preferred Units, 100,000,000 authorized:                                                                       |                                                                                                                                                     |                                                                 |            |              |            |   |            |           
|                                                           |                                                                                                                | 5.25% Series B Convertible, Cumulative
    Redeemable Preferred Units, liquidation preference
    $50.00 per unit, 5,990,000 issued and outstanding |                                                                 |            | 299,500      |            |   |            | 299,500    |           
|                                                           |                                                                                                                | 8.625% Series C Cumulative Redeemable
    Preferred Units, liquidation preference $25.00 per unit,
    4,562,900 issued and outstanding             |                                                                 |            | 114,073      |            |   |            | 114,073    |           
|                                                           |                                                                                                                | 7.875% Series E Cumulative Redeemable
    Preferred Units, liquidation preference $25.00 per unit, 0
    and 6,000,000 issued and outstanding       |                                                                 |            |             |            |   |            | 150,000    |           
|                                                           |                                                                                                                | 8.0% Series F Cumulative Redeemable
    Preferred Units, liquidation preference $25.00 per unit, 0
    and 4,000,000 issued and outstanding         |                                                                 |            |             |            |   |            | 100,000    |           
|                                                           |                                                                                                                | 7.75% Series G Cumulative Redeemable
    Preferred Units, liquidation preference $25.00 per unit,
    8,500,000 issued and outstanding              |                                                                 |            | 212,500      |            |   |            | 212,500    |           
|                                                           | General Partners Capital                                                                                       |                                                                                                                                                     |                                                                 | 85,933     |              |            |   | 89,650     |           
|                                                           | Limited Partners Capital                                                                                       |                                                                                                                                                     |                                                                 | 10,934,143 |              |            |   | 11,399,979 |           
|                                                           | Deferred compensation                                                                                          |                                                                                                                                                     |                                                                 | (9,689     | )            |            |   | (15,472    | )         
|                                                           | Accumulated other comprehensive (loss)                                                                         |                                                                                                                                                     |                                                                 | (67,231    | )            |            |   | (18,215    | )         
|                                                           |                                                                                                                |                                                                                                                                                     |                                                                 |            |              |           
|                                                           |                                                                                                                |                                                                                                                                                     | Total Partners Capital                                         |            |              | 11,569,229 |   |            |            | 12,332,015 | 
|                                                           |                                                                                                                |                                                                                                                                                     |                                                                 |            |              |           
|                                                           |                                                                                                                |                                                                                                                                                     | Total Liabilities, Minority Interests and
    Partners Capital |            | $            | 24,935,336 |   |            | $          | 25,246,783 | 
|                                                           |                                                                                                                |                                                                                                                                                     |                                                                 |            |              |           

See accompanying notes.

2



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF
OPERATIONS

(Unaudited)


|                                                                                                                                     |                                                             |                                                                      |                |             |                          |         |         |             |         |         |         |             |         |           |         |             |         |           | 
|------------------------------------------------------------------------------------------------------------------------------------ | ----------------------------------------------------------- | -------------------------------------------------------------------- | -------------- | ----------- | ------------------------ | ------- | ------- | ----------- | ------- | ------- | ------- | ----------- | ------- | --------- | ------- | ----------- | ------- | --------- | 
|                                                                                                                                     |                                                             |                                                                      |                |            
|                                                                                                                                     |                                                             | For the three months ended                                           |                |             | For the six months ended |        
|                                                                                                                                     |                                                             | June 30,                                                             |                |             | June 30,                 |        
|                                                                                                                                     |                                                             |                                                                      |                |             |                          |        
|(Dollars in thousands, except per unit amounts)                                                                                      |                                                             | 2003                                                                 |                |             | 2002                     |         |         | 2003        |         |         | 2002    |            
|                                                                                                                                     |                                                             |                                                                      |                |             |                          |         |         |             |         |         |         |            
|Revenues:                                                                                                                            |                                                             |                                                                      |                |             |                          |         |         |             |         |         |         |             |         |           |         |            
|                                                                                                                                     | Rental                                                      |                                                                      | $              | 650,147     |                          |         | $       | 679,310     |         |         | $       | 1,303,096   |         |           | $       | 1,358,731   |        
|                                                                                                                                     | Tenant reimbursements                                       |                                                                      |                | 109,496     |                          |         |         | 123,897     |         |         |         | 214,801     |         |           |         | 244,163     |        
|                                                                                                                                     | Parking                                                     |                                                                      |                | 28,363      |                          |         |         | 28,845      |         |         |         | 55,285      |         |           |         | 57,708      |        
|                                                                                                                                     | Other                                                       |                                                                      |                | 15,732      |                          |         |         | 18,368      |         |         |         | 35,847      |         |           |         | 42,735      |        
|                                                                                                                                     | Fee income                                                  |                                                                      |                | 3,526       |                          |         |         | 3,977       |         |         |         | 8,462       |         |           |         | 8,055       |        
|                                                                                                                                     | Interest/ dividends                                         |                                                                      |                | 3,695       |                          |         |         | 7,492       |         |         |         | 6,954       |         |           |         | 14,332      |        
|                                                                                                                                     | Realized gain on sale of marketable securities              |                                                                      |                |            |                          |         |         |            |         |         |         | 8,143       |         |           |         |            |        
|                                                                                                                                     |                                                             |                                                                      |                |             |                          |         |         |             |         |         |         |            
|                                                                                                                                     |                                                             |                                                                      | Total revenues |             |                          | 810,959 |         |             |         | 861,889 |         |             |         | 1,632,588 |         |             |         | 1,725,724 | 
|                                                                                                                                     |                                                             |                                                                      |                |             |                          |         |         |             |         |         |         |            
|Expenses:                                                                                                                            |                                                             |                                                                      |                |             |                          |         |         |             |         |         |         |             |         |           |         |            
|                                                                                                                                     | Interest:                                                   |                                                                      |                |             |                          |         |         |             |         |         |         |             |         |           |         |             |        
|                                                                                                                                     |                                                             | Expense incurred                                                     |                |             | 206,604                  |         |         |             | 202,741 |         |         |             | 411,927 |           |         |             | 407,761 |          
|                                                                                                                                     |                                                             | Amortization of deferred financing costs and
    prepayment expenses |                |             | 2,091                    |         |         |             | 1,116   |         |         |             | 3,783   |           |         |             | 2,418   |          
|                                                                                                                                     | Depreciation                                                |                                                                      |                | 160,959     |                          |         |         | 158,050     |         |         |         | 319,369     |         |           |         | 312,757     |        
|                                                                                                                                     | Amortization                                                |                                                                      |                | 15,110      |                          |         |         | 12,415      |         |         |         | 29,583      |         |           |         | 24,260      |        
|                                                                                                                                     | Real estate taxes                                           |                                                                      |                | 92,161      |                          |         |         | 94,292      |         |         |         | 183,393     |         |           |         | 189,830     |        
|                                                                                                                                     | Insurance                                                   |                                                                      |                | 6,918       |                          |         |         | 10,701      |         |         |         | 13,471      |         |           |         | 18,434      |        
|                                                                                                                                     | Repairs and maintenance                                     |                                                                      |                | 80,745      |                          |         |         | 85,743      |         |         |         | 160,681     |         |           |         | 166,788     |        
|                                                                                                                                     | Property operating                                          |                                                                      |                | 103,749     |                          |         |         | 105,734     |         |         |         | 202,821     |         |           |         | 202,933     |        
|                                                                                                                                     | Ground rent                                                 |                                                                      |                | 4,870       |                          |         |         | 5,287       |         |         |         | 9,466       |         |           |         | 10,797      |        
|                                                                                                                                     | Corporate general and administrative                        |                                                                      |                | 17,655      |                          |         |         | 18,512      |         |         |         | 31,157      |         |           |         | 35,808      |        
|                                                                                                                                     |                                                             |                                                                      |                |             |                          |         |         |             |         |         |         |            
|                                                                                                                                     |                                                             |                                                                      | Total expenses |             |                          | 690,862 |         |             |         | 694,591 |         |             |         | 1,365,651 |         |             |         | 1,371,786 | 
|                                                                                                                                     |                                                             |                                                                      |                |             |                          |         |         |             |         |         |         |            
|Income before income taxes, allocation to
    minority interests and income from investments in unconsolidated
    joint ventures    |                                                             |                                                                      | 120,097        |             |                          |         | 167,298 |             |         |         | 266,937 |             |         |           | 353,938 |            
|Income taxes                                                                                                                         |                                                             |                                                                      | (1,575         | )           |                          |         | (1,714  | )           |         |         | (2,571  | )           |         |           | (8,720  | )          
|Minority interests-partially owned properties                                                                                        |                                                             |                                                                      | (1,851         | )           |                          |         | (995    | )           |         |         | (4,367  | )           |         |           | (2,401  | )          
|Income from investments in unconsolidated joint
    ventures                                                                         |                                                             |                                                                      | 20,946         |             |                          |         | 22,297  |             |         |         | 41,710  |             |         |           | 79,925  |            
|                                                                                                                                     |                                                             |                                                                      |                |             |                          |         |         |             |         |         |         |            
|Income from continuing operations                                                                                                    |                                                             |                                                                      | 137,617        |             |                          |         | 186,886 |             |         |         | 301,709 |             |         |           | 422,742 |            
|Discontinued operations (including net gain on
    sales of real estate of $44,448 and $5,499, $51,725 and $2,490,
    respectively) |                                                             |                                                                      | 46,166         |             |                          |         | 16,597  |             |         |         | 56,566  |             |         |           | 25,205  |            
|                                                                                                                                     |                                                             |                                                                      |                |             |                          |         |         |             |         |         |         |            
|Net income                                                                                                                           |                                                             |                                                                      | 183,783        |             |                          |         | 203,483 |             |         |         | 358,275 |             |         |           | 447,947 |            
|Preferred distributions                                                                                                              |                                                             |                                                                      | (15,395        | )           |                          |         | (15,831 | )           |         |         | (30,856 | )           |         |           | (31,661 | )          
|                                                                                                                                     |                                                             |                                                                      |                |             |                          |         |         |             |         |         |         |            
|Net income available for Units                                                                                                       |                                                             | $                                                                    | 168,388        |             |                          | $       | 187,652 |             |         | $       | 327,419 |             |         | $         | 416,286 |            
|                                                                                                                                     |                                                             |                                                                      |                |             |                          |         |         |             |         |         |         |            
|Earnings per unit  basic:                                                                                                           |                                                             |                                                                      |                |             |                          |         |         |             |         |         |         |             |         |           |         |            
|                                                                                                                                     | Income from continuing operations                           |                                                                      | $              | 0.31        |                          |         | $       | 0.40        |         |         | $       | 0.66        |         |           | $       | 0.90        |        
|                                                                                                                                     |                                                             |                                                                      |                |             |                          |         |         |             |         |         |         |            
|                                                                                                                                     | Net income available for Units                              |                                                                      | $              | 0.37        |                          |         | $       | 0.40        |         |         | $       | 0.72        |         |           | $       | 0.89        |        
|                                                                                                                                     |                                                             |                                                                      |                |             |                          |         |         |             |         |         |         |            
|                                                                                                                                     | Weighted average Units outstanding                          |                                                                      |                | 450,216,263 |                          |         |         | 470,109,997 |         |         |         | 454,254,440 |         |           |         | 470,132,017 |        
|                                                                                                                                     |                                                             |                                                                      |                |             |                          |         |         |             |         |         |         |            
|Earnings per unit 
    diluted:                                                                                                     |                                                             |                                                                      |                |             |                          |         |         |             |         |         |         |             |         |           |         |            
|                                                                                                                                     | Income from continuing operations                           |                                                                      | $              | 0.30        |                          |         | $       | 0.40        |         |         | $       | 0.66        |         |           | $       | 0.89        |        
|                                                                                                                                     |                                                             |                                                                      |                |             |                          |         |         |             |         |         |         |            
|                                                                                                                                     | Net income available for Units                              |                                                                      | $              | 0.37        |                          |         | $       | 0.40        |         |         | $       | 0.72        |         |           | $       | 0.88        |        
|                                                                                                                                     |                                                             |                                                                      |                |             |                          |         |         |             |         |         |         |            
|                                                                                                                                     | Weighted average Units and unit equivalents
    outstanding |                                                                      |                | 452,010,570 |                          |         |         | 472,610,590 |         |         |         | 455,646,938 |         |           |         | 472,726,956 |        
|                                                                                                                                     |                                                             |                                                                      |                |             |                          |         |         |             |         |         |         |            
|Distributions declared per Unit outstanding                                                                                          |                                                             | $                                                                    | 0.50           |             |                          | $       | 0.50    |             |         | $       | 1.00    |             |         | $         | 1.00    |            
|                                                                                                                                     |                                                             |                                                                      |                |             |                          |         |         |             |         |         |         |            

See accompanying notes.

3



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF NET COMPREHENSIVE
INCOME

(Unaudited)


|                                   |                                                                                              |                      |         |         |                    |   |         |      |   |   |         |         |   |   |         |     | 
|---------------------------------- | -------------------------------------------------------------------------------------------- | -------------------- | ------- | ------- | ------------------ | - | ------- | ---- | - | - | ------- | ------- | - | - | ------- | --- | 
|                                   |                                                                                              |                      |         |        
|                                   |                                                                                              | For the three months |         |         | For the six months |  
|                                   |                                                                                              | ended June 30,       |         |         | ended June 30,     |  
|                                   |                                                                                              |                      |         |         |                    |  
|(Dollars in thousands)             |                                                                                              | 2003                 |         |         | 2002               |   |         | 2003 |   |   | 2002    |        
|                                   |                                                                                              |                      |         |         |                    |   |         |      |   |   |         |        
|Net income                         |                                                                                              | $                    | 183,783 |         |                    | $ | 203,483 |      |   | $ | 358,275 |         |   | $ | 447,947 |    
|Other comprehensive income (loss): |                                                                                              |                      |         |         |                    |   |         |      |   |   |         |         |   |   |         |    
|                                   | Unrealized holding loss on forward starting
    interest rate swaps (see Note 13)            |                      |         | (47,899 | )                  |   |         |     |   |   |         | (55,903 | ) |   |         |    | 
|                                   | Reversal of unrealized holding loss on settlement
    of forward starting interest rate swap |                      |         |        |                    |   |         |     |   |   |         | 5,942   |   |   |         |    | 
|                                   | Proceeds from settlement of forward starting
    interest rate swap                          |                      |         |        |                    |   |         |     |   |   |         | 768     |   |   |         |    | 
|                                   | Amortization of proceeds from settlement of
    forward starting interest rate swap          |                      |         | (19     | )                  |   |         |     |   |   |         | (35     | ) |   |         |    | 
|                                   | Unrealized holding gains/(losses) from
    investments arising during the period             |                      |         | 302     |                    |   |         | (152 | ) |   |         | 212     |   |   |         | 109 | 
|                                   | Reclassification adjustment for realized gains
    included in net income                    |                      |         |        |                    |   |         |     |   |   |         |        |   |   |         | 116 | 
|                                   |                                                                                              |                      |         |         |                    |   |         |      |   |   |         |        
|Net comprehensive income           |                                                                                              | $                    | 136,167 |         |                    | $ | 203,331 |      |   | $ | 309,259 |         |   | $ | 448,172 |    
|                                   |                                                                                              |                      |         |         |                    |   |         |      |   |   |         |        

See accompanying notes.

4



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF CASH
FLOWS

(Unaudited)


|                       |                                                                                       |                                                                                                                                            |                                                              |                                           |         |         |         |          |         |         |         | 
|---------------------- | ------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------ | ----------------------------------------- | ------- | ------- | ------- | -------- | ------- | ------- | ------- | 
|                       |                                                                                       |                                                                                                                                           
|                       |                                                                                       | For the six months ended                                                                                                                   |                                                             
|                       |                                                                                       | June 30,                                                                                                                                   |                                                             
|                       |                                                                                       |                                                                                                                                            |                                                             
|(Dollars in thousands) |                                                                                       | 2003                                                                                                                                       |                                                              |                                           | 2002    |        
|                       |                                                                                       |                                                                                                                                            |                                                              |                                           |         |        
|Operating Activities:  |                                                                                       |                                                                                                                                            |                                                              |                                           |         |         |         |         
|                       | Net income                                                                            |                                                                                                                                            | $                                                            | 358,275                                   |         |         | $       | 447,947  |        
|                       | Adjustments to reconcile net income to net cash
    provided by operating activities: |                                                                                                                                            |                                                              |                                           |         |         |         |          |        
|                       |                                                                                       | Amortization of discounts included in
    interest/dividend income                                                                         |                                                              |                                           | (179    | )       |         |          | (193    | )      
|                       |                                                                                       | Depreciation and amortization (including
    discontinued operations)                                                                      |                                                              |                                           | 354,497 |         |         |          | 346,824 |        
|                       |                                                                                       | Amortization of premiums/discounts on unsecured
    notes and settled interest rate protection agreements included
    in interest expense |                                                              |                                           | (10,298 | )       |         |          | (744    | )      
|                       |                                                                                       | Compensation expense related to restricted shares
    and stock options issued to employees by Equity Office                               |                                                              |                                           | 9,436   |         |         |          | 9,154   |        
|                       |                                                                                       | Income from investments in unconsolidated joint
    ventures                                                                               |                                                              |                                           | (41,710 | )       |         |          | (79,925 | )      
|                       |                                                                                       | Net gain on sales of real estate (included in
    discontinued operations)                                                                 |                                                              |                                           | (51,725 | )       |         |          | (2,490  | )      
|                       |                                                                                       | Provision for doubtful accounts                                                                                                            |                                                              |                                           | 11,438  |         |         |          | 13,558  |        
|                       |                                                                                       | Income allocated to minority interests                                                                                                     |                                                              |                                           | 4,367   |         |         |          | 2,401   |        
|                       |                                                                                       | Changes in assets and liabilities:                                                                                                         |                                                              |                                           |         |         |         |          |         |        
|                       |                                                                                       |                                                                                                                                            | (Increase) decrease in rents receivable                      |                                           |         | (8,339  | )       |          |         | 11,509  |        
|                       |                                                                                       |                                                                                                                                            | Increase in deferred rent receivable                         |                                           |         | (29,612 | )       |          |         | (43,278 | )      
|                       |                                                                                       |                                                                                                                                            | Decrease (increase) in prepaid expenses and other
    assets |                                           |         | 7,681   |         |          |         | (5,779  | )      
|                       |                                                                                       |                                                                                                                                            | Decrease in accounts payable and accrued expenses            |                                           |         | (37,086 | )       |          |         | (41,026 | )      
|                       |                                                                                       |                                                                                                                                            | Decrease in other liabilities                                |                                           |         | (16,208 | )       |          |         | (15,738 | )      
|                       |                                                                                       |                                                                                                                                            |                                                              |                                           |         |        
|                       |                                                                                       |                                                                                                                                            |                                                              | Net cash provided by operating activities |         |         | 550,537 |          |         |         | 642,220 | 
|                       |                                                                                       |                                                                                                                                            |                                                              |                                           |         |        
|Investing Activities:  |                                                                                       |                                                                                                                                            |                                                              |                                           |         |         |         |         
|                       | Property acquisitions                                                                 |                                                                                                                                            |                                                              |                                          |         |         |         | (16,458  | )      
|                       | Property dispositions                                                                 |                                                                                                                                            |                                                              | 265,597                                   |         |         |         | 121,632  |        
|                       | Capital and tenant improvements                                                       |                                                                                                                                            |                                                              | (146,587                                  | )       |         |         | (130,441 | )      
|                       | Lease commissions and other costs                                                     |                                                                                                                                            |                                                              | (72,066                                   | )       |         |         | (41,723  | )      
|                       | Decrease in escrow deposits and restricted cash                                       |                                                                                                                                            |                                                              | 14,832                                    |         |         |         | 150,710  |        
|                       | Distributions from unconsolidated joint ventures                                      |                                                                                                                                            |                                                              | 40,751                                    |         |         |         | 140,674  |        
|                       | Investments in unconsolidated joint ventures                                          |                                                                                                                                            |                                                              | (33,144                                   | )       |         |         | (80,902  | )      
|                       | Investments in notes receivable                                                       |                                                                                                                                            |                                                              | (96                                       | )       |         |         |         |        
|                       | Repayments of notes receivable                                                        |                                                                                                                                            |                                                              | 1,395                                     |         |         |         | 1,488    |        
|                       |                                                                                       |                                                                                                                                            |                                                              |                                           |         |        
|                       |                                                                                       |                                                                                                                                            |                                                              | Net cash provided by investing activities |         |         | 70,682  |          |         |         | 144,980 | 
|                       |                                                                                       |                                                                                                                                            |                                                              |                                           |         |        

5



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


CONSOLIDATED STATEMENTS OF CASH
FLOWS  (Continued)

(Unaudited)


|                                                 |                                                                                                                                                 |                                                                                                                                                                                 |                                        |            |         |          |   |            |          |          |  
|------------------------------------------------ | ----------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------- | ---------- | ------- | -------- | - | ---------- | -------- | -------- | -
|                                                 |                                                                                                                                                 |                                                                                                                                                                                
|                                                 |                                                                                                                                                 | For the six months ended                                                                                                                                                        |                                       
|                                                 |                                                                                                                                                 | June 30,                                                                                                                                                                        |                                       
|                                                 |                                                                                                                                                 |                                                                                                                                                                                 |                                       
|(Dollars in thousands)                           |                                                                                                                                                 | 2003                                                                                                                                                                            |                                        |            | 2002    |         
|                                                 |                                                                                                                                                 |                                                                                                                                                                                 |                                        |            |         |         
|??xFinancing Activities:                         |                                                                                                                                                 |                                                                                                                                                                                 |                                        |            |         |          |   |           
|                                                 | Principal payments on mortgage debt                                                                                                             |                                                                                                                                                                                 | $                                      | (20,945    | )       |          | $ | (25,566    | )       
|                                                 | Proceeds from unsecured notes                                                                                                                   |                                                                                                                                                                                 |                                        | 494,810    |         |          |   | 239,127    |         
|                                                 | Repayment of unsecured notes                                                                                                                    |                                                                                                                                                                                 |                                        | (300,000   | )       |          |   | (200,000   | )       
|                                                 | Proceeds from lines of credit                                                                                                                   |                                                                                                                                                                                 |                                        | 1,716,400  |         |          |   | 805,050    |         
|                                                 | Principal payments on lines of credit                                                                                                           |                                                                                                                                                                                 |                                        | (1,639,200 | )       |          |   | (1,049,350 | )       
|                                                 | Payments of loan costs                                                                                                                          |                                                                                                                                                                                 |                                        | (8,548     | )       |          |   | (3,906     | )       
|                                                 | Settlement of interest rate swap agreements                                                                                                     |                                                                                                                                                                                 |                                        | 768        |         |          |   | 3,193      |         
|                                                 | Distributions to minority interests in partially
    owned properties                                                                           |                                                                                                                                                                                 |                                        | (5,683     | )       |          |   | (2,993     | )       
|                                                 | Payment of offering costs                                                                                                                       |                                                                                                                                                                                 |                                        | (163       | )       |          |   |           |         
|                                                 | Proceeds from exercise of share options                                                                                                         |                                                                                                                                                                                 |                                        | 7,627      |         |          |   | 36,611     |         
|                                                 | Distributions to unitholders                                                                                                                    |                                                                                                                                                                                 |                                        | (228,683   | )       |          |   | (235,734   | )       
|                                                 | Repurchase of Units through Equity Office Common
    Share repurchase program                                                                   |                                                                                                                                                                                 |                                        | (353,444   | )       |          |   |           |         
|                                                 | Redemption of Units                                                                                                                             |                                                                                                                                                                                 |                                        | (2,209     | )       |          |   | (84,852    | )       
|                                                 | Repurchase of preferred units                                                                                                                   |                                                                                                                                                                                 |                                        | (250,000   | )       |          |   |           |         
|                                                 | Payment of preferred distributions                                                                                                              |                                                                                                                                                                                 |                                        | (32,825    | )       |          |   | (29,661    | )       
|                                                 |                                                                                                                                                 |                                                                                                                                                                                 |                                        |            |         |         
|                                                 |                                                                                                                                                 |                                                                                                                                                                                 | Net cash used for financing activities |            |         | (622,095 | ) |            |          | (548,081 | )
|                                                 |                                                                                                                                                 |                                                                                                                                                                                 |                                        |            |         |         
|                                                 | Net (decrease) increase in cash and cash
    equivalents                                                                                        |                                                                                                                                                                                 |                                        | (876       | )       |          |   | 239,119    |         
|                                                 | Cash and cash equivalents at the beginning of the
    period                                                                                    |                                                                                                                                                                                 |                                        | 58,471     |         |          |   | 61,121     |         
|                                                 |                                                                                                                                                 |                                                                                                                                                                                 |                                        |            |         |         
|                                                 | Cash and cash equivalents at the end of the period                                                                                              |                                                                                                                                                                                 | $                                      | 57,595     |         |          | $ | 300,240    |         
|                                                 |                                                                                                                                                 |                                                                                                                                                                                 |                                        |            |         |         
|Supplemental Information:                        |                                                                                                                                                 |                                                                                                                                                                                 |                                        |            |         |          |   |           
|                                                 | Interest paid during the period, including a
    reduction of interest expense for capitalized interest of $4,799
    and $10,385, respectively |                                                                                                                                                                                 | $                                      | 420,737    |         |          | $ | 420,923    |         
|                                                 |                                                                                                                                                 |                                                                                                                                                                                 |                                        |            |         |         
|Non-Cash Investing and Financing
    Activities: |                                                                                                                                                 |                                                                                                                                                                                 |                                        |            |         |          |   |           
|                                                 | Investing Activities:                                                                                                                           |                                                                                                                                                                                 |                                        |            |         |          |   |            |         
|                                                 |                                                                                                                                                 | Escrow deposits related to property dispositions                                                                                                                                |                                        | $          | (19,339 | )        |   | $          | (21,269  | )       
|                                                 |                                                                                                                                                 |                                                                                                                                                                                 |                                        |            |         |         
|                                                 |                                                                                                                                                 | Mortgage loan repayment as a result of a property
    disposition                                                                                                               |                                        | $          | (16,279 | )        |   | $          |         |         
|                                                 |                                                                                                                                                 |                                                                                                                                                                                 |                                        |            |         |         
|                                                 |                                                                                                                                                 | Escrow deposits used for property acquisition                                                                                                                                   |                                        | $          |        |          |   | $          | 21,269   |         
|                                                 |                                                                                                                                                 |                                                                                                                                                                                 |                                        |            |         |         
|                                                 | Financing Activities:                                                                                                                           |                                                                                                                                                                                 |                                        |            |         |          |   |            |         
|                                                 |                                                                                                                                                 | Mortgage loan repayment as a result of a property
    disposition                                                                                                               |                                        | $          | 16,279  |          |   | $          |         |         
|                                                 |                                                                                                                                                 |                                                                                                                                                                                 |                                        |            |         |         
|                                                 |                                                                                                                                                 | Issuance of unsecured notes at a discount of
    $10,048 in exchange for $250 million MandatOry Par Put
    Remarketed SecuritiesSM                                             |                                        | $          |        |          |   | $          | (254,631 | )       
|                                                 |                                                                                                                                                 |                                                                                                                                                                                 |                                        |            |         |         
|                                                 |                                                                                                                                                 | Exchange of $250 million MandatOry Par Put
    Remarketed SecuritiesSM, including an unamortized
    premium of $4,631, for $264,679 notes due 2012 issued in
    February 2002 |                                        | $          |        |          |   | $          | 254,631  |         
|                                                 |                                                                                                                                                 |                                                                                                                                                                                 |                                        |            |         |         

See accompanying notes.

6



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##### Table of Contents






EOP OPERATING LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

(Unaudited)


The consolidated financial statements of EOP
Partnership have been prepared pursuant to the Securities and
Exchange Commission (SEC) rules and regulations. The
following notes, which present interim disclosures as required
by the SEC, highlight significant changes to the notes to the
December 31, 2002 audited consolidated financial statements
of EOP Partnership and should be read together with the
financial statements and notes thereto included in the
Form 10-K.



|         |                                              
|-------- | ---------------------------------------------
|NOTE 1  | BUSINESS AND FORMATION OF EOP
    PARTNERSHIP

As used herein, EOP Partnership means
EOP Operating Limited Partnership, a Delaware limited
partnership, together with its subsidiaries, except where the
context otherwise requires. EOP Partnership is a subsidiary of
Equity Office Properties Trust (Equity Office), a
Maryland real estate investment trust. EOP Partnership was
organized in 1996 to continue and expand the national office
property business organized by Mr. Samuel Zell, Chairman of
the Board of Trustees of Equity Office, and to complete the
consolidation of the EOP Partnership predecessors. Equity Office
completed its initial public offering (the IPO) on
July 11, 1997, having sold its common shares of beneficial
interest, $0.01 par value per share (Common
Shares). The net proceeds from the IPO were contributed to
EOP Partnership in exchange for units of partnership interest
(Units). Equity Office has elected to be taxed as a
real estate investment trust (REIT) for federal
income tax purposes and generally will not be subject to federal
income tax if it distributes 100% of its taxable income and
complies with a number of organizational and operational
requirements.

EOP Partnership is a fully integrated,
self-administered and self-managed real estate company
principally engaged, through its subsidiaries, in owning,
managing, leasing, acquiring and developing office properties.
At June 30, 2003, EOP Partnership owned or had an interest
in 721 office properties (the Office
Properties) comprising approximately 124.1 million
square feet of office space in 19 states and the District
of Columbia. The Office Properties were, on a weighted average
basis, 87.1% occupied at June 30, 2003, and were located in
133 submarkets and in 30 metropolitan statistical
areas . The Office Properties, by rentable square feet, were
located approximately 41.1% in central business districts and
approximately 58.9% in suburban markets. At June 30, 2003,
EOP Partnership also owned 76 industrial properties (the
Industrial Properties) comprising approximately
5.9 million square feet of industrial space (together with
the Office Properties, the Properties). The
Industrial Properties were, on a weighted average basis, 84.7%
occupied at June 30, 2003.



|         |                                               
|-------- | ----------------------------------------------
|NOTE 2  | SUMMARY OF SIGNIFICANT ACCOUNTING
    POLICIES



| |                      
| | ---------------------
| | Basis of Presentation

The consolidated financial statements represent
the financial condition and results of EOP Partnership and its
subsidiaries. All intercompany transactions and balances have
been eliminated in consolidation.



| |                 
| | ----------------
| | Use of Estimates

The preparation of the consolidated financial
statements in conformity with accounting principles generally
accepted in the United States (GAAP) requires
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses
during the reporting periods. Actual results could differ from
those estimates.



| |                             
| | ----------------------------
| | Unaudited Interim Statements

The consolidated financial statements as of and
for the three and six months ended June 30, 2003 and 2002
and related footnote disclosures are unaudited. In the opinion
of management, such financial statements reflect all adjustments
necessary for a fair presentation of the results of the interim
periods. All such adjustments are of a normal and recurring
nature.

7



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Unaudited)




| |                  
| | -----------------
| | Reclassifications

Certain reclassifications have been made to the
previously reported 2002 statements in order to provide
comparability with the 2003 statements reported herein. These
reclassifications have not changed the 2002 results of
operations or partners capital.

NOTE 3  IMPACT OF NEW
ACCOUNTING STANDARDS



| |                           
| | --------------------------
| | Variable Interest Entities

In January 2003, the Financial Accounting
Standards Board (FASB) issued Interpretation
No. 46 Consolidation of Variable Interest Entities and
Interpretation of Accounting Research Bulletin
(ARB) No. 51 (FIN 46).
FIN 46 introduces a new consolidation model, the variable
interest model, which determines control (and consolidation)
based on potential variability in gains and losses of the entity
being evaluated for consolidation. The consolidation provisions
of FIN 46 apply immediately to variable interests in
variable interest entities created after January 31, 2003.
It applies in the first fiscal year or interim period beginning
after June 15, 2003 to variable interest entities in which
an enterprise that is a public company holds a variable interest
that it acquired before February 1, 2003. Management has
reviewed the provisions of FIN 46 and has determined that
it will not have an impact on EOP Partnerships financial
condition and results of operations.



| |                       
| | ----------------------
| | Derivative Instruments

In April 2003, the FASB issued Statement
No. 149 Amendment of Statement 133 on Derivative
Instruments and Hedging Activities
(SFAS No. 149). SFAS No. 149
amends and clarifies accounting for derivative instruments,
including certain derivative instruments embedded in other
contracts, and for hedging activities under Statement 133.
SFAS No. 149 is effective for contracts entered into
or modified after June 30, 2003, with some exceptions, and
for hedging relationships designated after June 30, 2003.
The guidance should be applied prospectively. Management does
not anticipate that the provisions of SFAS No. 149
will have a material impact on EOP Partnerships financial
condition and results of operations.



| |                      
| | ---------------------
| | Financial Instruments

In May 2003, the FASB issued Statement
No. 150 Accounting for Certain Financial Instruments
with Characteristics of both Liabilities and Equity
(SFAS No. 150). This statement establishes
standards for classifying and measuring as liabilities certain
financial instruments that embody obligations of the issuer and
have characteristics of both liabilities and equity.
SFAS No. 150 is effective for all financial
instruments created or modified after May 31, 2003, and
otherwise is effective at the beginning of the first interim
period beginning after June 15, 2003 (July 1, 2003 for
calendar quarter companies). Management does not anticipate that
the provisions of SFAS No. 150 will have an impact on
EOP Partnerships financial condition and results of
operations.

NOTE 4  DISCONTINUED
OPERATIONS

During the three months ended June 30, 2003,
EOP Partnership disposed of seven office properties and one
vacant land parcel in various transactions to unaffiliated
parties for approximately $229.3 million. The total gain on
the sale of these properties was approximately
$44.4 million. The sold office properties consisted of
approximately 1,316,192 square feet.

The net income and gain/(loss) on sales of real
estate for properties sold subsequent to December 31, 2001
are reflected in the consolidated statements of operations as
Discontinued Operations for the periods

8



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Unaudited)


presented. Below is a summary of the results of
operations of these properties through their respective
disposition dates:

|                                                                    |                |                      |        |       |                    |   |        |        |  |   |        |        |  |   |        |        | 
|------------------------------------------------------------------- | -------------- | -------------------- | ------ | ----- | ------------------ | - | ------ | ------ |  | - | ------ | ------ |  | - | ------ | ------ | 
|                                                                    |                |                      |        |      
|                                                                    |                | For the three months |        |       | For the six months |  
|                                                                    |                | ended June 30,       |        |       | ended June 30,     |  
|                                                                    |                |                      |        |       |                    |  
|(Dollars in thousands)                                              |                | 2003                 |        |       | 2002               |   |        | 2003   |  |   | 2002   |       
|                                                                    |                |                      |        |       |                    |   |        |        |  |   |        |       
|Property revenues                                                   |                | $                    | 3,373  |       |                    | $ | 22,640 |        |  | $ | 12,679 |        |  | $ | 46,166 |       
|Interest income                                                     |                |                      | 1      |       |                    |   | 21     |        |  |   | 7      |        |  |   | 24     |       
|                                                                    |                |                      |        |       |                    |   |        |        |  |   |        |       
|                                                                    | Total revenues |                      |        | 3,374 |                    |   |        | 22,661 |  |   |        | 12,686 |  |   |        | 46,190 | 
|                                                                    |                |                      |        |       |                    |   |        |        |  |   |        |       
|Interest expense                                                    |                |                      |       |       |                    |   | (58    | )      |  |   | 236    |        |  |   | (257   | )     
|Depreciation and amortization                                       |                |                      | 126    |       |                    |   | 3,507  |        |  |   | 1,762  |        |  |   | 7,389  |       
|Property operating expenses                                         |                |                      | 1,528  |       |                    |   | 7,883  |        |  |   | 5,827  |        |  |   | 16,052 |       
|Ground rent                                                         |                |                      |       |       |                    |   | 44     |        |  |   | 18     |        |  |   | 104    |       
|                                                                    |                |                      |        |       |                    |   |        |        |  |   |        |       
|                                                                    | Total expenses |                      |        | 1,654 |                    |   |        | 11,376 |  |   |        | 7,843  |  |   |        | 23,288 | 
|                                                                    |                |                      |        |       |                    |   |        |        |  |   |        |       
|Income before income taxes and net gain on sales
    of real estate |                |                      | 1,720  |       |                    |   | 11,285 |        |  |   | 4,843  |        |  |   | 22,902 |       
|Income taxes                                                        |                |                      | (2     | )     |                    |   | (187   | )      |  |   | (2     | )      |  |   | (187   | )     
|Net gain on sales of real estate                                    |                |                      | 44,448 |       |                    |   | 5,499  |        |  |   | 51,725 |        |  |   | 2,490  |       
|                                                                    |                |                      |        |       |                    |   |        |        |  |   |        |       
|Net income                                                          |                | $                    | 46,166 |       |                    | $ | 16,597 |        |  | $ | 56,566 |        |  | $ | 25,205 |       
|                                                                    |                |                      |        |       |                    |   |        |        |  |   |        |       
|Property net operating income from discontinued
    operations      |                | $                    | 1,845  |       |                    | $ | 14,757 |        |  | $ | 6,852  |        |  | $ | 30,114 |       
|                                                                    |                |                      |        |       |                    |   |        |        |  |   |        |       



| |                  
| | -----------------
| | Segment Reporting

For segment reporting purposes, the office
properties, apartment properties and the land parcels that were
sold are included in the Office Properties segment
and the industrial properties and parking facilities that were
sold are included in the Corporate and Other segment.

NOTE 5  OTHER ASSETS

In May 2003, EOP Partnership acquired
approximately 8.1% of the equity in the joint venture that owns
The John Hancock Complex in Boston, Massachusetts for
approximately $25.0 million. The investment in the joint
venture is accounted for under the cost method of accounting and
is included in Other Assets on the consolidated balance sheet.

9



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Unaudited)


NOTE 6  INVESTMENT IN
UNCONSOLIDATED JOINT VENTURES

EOP Partnership has several investments in
unconsolidated joint ventures consisting of Office Properties, a
property management and development company and a company that
provides fully furnished office space to tenants. Combined
summarized financial information of the unconsolidated joint
ventures is as follows:

|                                                                                                                                                                 |                                              |                                                              |           |           |                   |   |           |           |           | 
|---------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------- | ------------------------------------------------------------ | --------- | --------- | ----------------- | - | --------- | --------- | --------- | 
|(Dollars in thousands)                                                                                                                                           |                                              | June 30, 2003                                                |           |           | December 31, 2002 |  
|                                                                                                                                                                 |                                              |                                                              |           |           |                   |  
|Balance Sheets:                                                                                                                                                  |                                              |                                                              |           |           |                   |   |           |          
|                                                                                                                                                                 | Real estate, net of accumulated depreciation |                                                              | $         | 2,725,097 |                   |   | $         | 2,757,699 |          
|                                                                                                                                                                 | Other assets                                 |                                                              |           | 233,626   |                   |   |           | 207,740   |          
|                                                                                                                                                                 |                                              |                                                              |           |           |                   |  
|                                                                                                                                                                 |                                              | Total Assets                                                 |           | $         | 2,958,723         |   |           | $         | 2,965,439 | 
|                                                                                                                                                                 |                                              |                                                              |           |           |                   |  
|                                                                                                                                                                 | Mortgage debt                                |                                                              | $         | 1,307,949 |                   |   | $         | 1,312,404 |          
|                                                                                                                                                                 | Other liabilities                            |                                                              |           | 116,511   |                   |   |           | 112,968   |          
|                                                                                                                                                                 | Partners and shareholders equity           |                                                              |           | 1,534,263 |                   |   |           | 1,540,067 |          
|                                                                                                                                                                 |                                              |                                                              |           |           |                   |  
|                                                                                                                                                                 |                                              | Total Liabilities and Partners and
    Shareholders Equity |           | $         | 2,958,723         |   |           | $         | 2,965,439 | 
|                                                                                                                                                                 |                                              |                                                              |           |           |                   |  
|EOP Partnerships share of equity                                                                                                                                |                                              | $                                                            | 970,946   |           |                   | $ | 966,773   |          
|Net excess of cost of investments over the net
    book value of underlying net assets, net of accumulated
    depreciation of $22,446 and $20,704, respectively |                                              |                                                              | 118,948   |           |                   |   | 121,042   |          
|                                                                                                                                                                 |                                              |                                                              |           |           |                   |  
|Carrying value of investments in unconsolidated
    joint ventures                                                                                               |                                              | $                                                            | 1,089,894 |           |                   | $ | 1,087,815 |          
|                                                                                                                                                                 |                                              |                                                              |           |           |                   |  
|EOP Partnerships share of unconsolidated
    non-recourse mortgage debt                                                                                         |                                              | $                                                            | 815,667   |           |                   | $ | 818,975   |          
|                                                                                                                                                                 |                                              |                                                              |           |           |                   |  

|                            |                                                         |                               |                |         |                    |         |   |         |        |        |      |         |         |         |   |         |         |         | 
|--------------------------- | ------------------------------------------------------- | ----------------------------- | -------------- | ------- | ------------------ | ------- | - | ------- | ------ | ------ | ---- | ------- | ------- | ------- | - | ------- | ------- | ------- | 
|                            |                                                         |                               |                |        
|                            |                                                         | For the three months          |                |         | For the six months |        
|                            |                                                         | ended June 30,                |                |         | ended June 30,     |        
|                            |                                                         |                               |                |         |                    |        
|(Dollars in thousands)      |                                                         | 2003                          |                |         | 2002               |         |   | 2003    |        |        | 2002 |        
|                            |                                                         |                               |                |         |                    |         |   |         |        |        |      |        
|Statements of Operations:   |                                                         |                               |                |         |                    |         |   |         |        |        |      |         |         |         |   |        
|                            | Revenues                                                |                               | $              | 126,420 |                    |         | $ | 126,730 |        |        | $    | 242,035 |         |         | $ | 336,572 |        
|                            |                                                         |                               |                |         |                    |         |   |         |        |        |      |        
|                            | Expenses:                                               |                               |                |         |                    |         |   |         |        |        |      |         |         |         |   |         |        
|                            |                                                         | Interest expense              |                |         | 17,615             |         |   |         | 19,390 |        |      |         | 34,970  |         |   |         | 38,907  |        
|                            |                                                         | Depreciation and amortization |                |         | 26,911             |         |   |         | 20,683 |        |      |         | 48,709  |         |   |         | 41,801  |        
|                            |                                                         | Operating expenses            |                |         | 58,826             |         |   |         | 44,659 |        |      |         | 102,008 |         |   |         | 101,177 |        
|                            |                                                         |                               |                |         |                    |         |   |         |        |        |      |        
|                            |                                                         |                               | Total expenses |         |                    | 103,352 |   |         |        | 84,732 |      |         |         | 185,687 |   |         |         | 181,885 | 
|                            |                                                         |                               |                |         |                    |         |   |         |        |        |      |        
|                            | Net income before gain on sale of real estate           |                               |                | 23,068  |                    |         |   | 41,998  |        |        |      | 56,348  |         |         |   | 154,687 |        
|                            | Gain on sale of real estate                             |                               |                |        |                    |         |   | 140     |        |        |      |        |         |         |   | 3,693   |        
|                            |                                                         |                               |                |         |                    |         |   |         |        |        |      |        
|                            | Net income                                              |                               | $              | 23,068  |                    |         | $ | 42,138  |        |        | $    | 56,348  |         |         | $ | 158,380 |        
|                            |                                                         |                               |                |         |                    |         |   |         |        |        |      |        
|EOP Partnerships share of: |                                                         |                               |                |         |                    |         |   |         |        |        |      |         |         |         |   |        
|                            | Net income                                              |                               | $              | 20,946  |                    |         | $ | 22,297  |        |        | $    | 41,710  |         |         | $ | 79,925  |        
|                            |                                                         |                               |                |         |                    |         |   |         |        |        |      |        
|                            | Interest expense and loan cost amortization             |                               | $              | 12,377  |                    |         | $ | 13,407  |        |        | $    | 24,626  |         |         | $ | 26,661  |        
|                            |                                                         |                               |                |         |                    |         |   |         |        |        |      |        
|                            | Depreciation and amortization (real estate
    related) |                               | $              | 14,331  |                    |         | $ | 12,138  |        |        | $    | 26,934  |         |         | $ | 24,948  |        
|                            |                                                         |                               |                |         |                    |         |   |         |        |        |      |        

NOTE 7  LINE OF
CREDIT

In May 2003, EOP Partnerships existing line
of credit matured and EOP Partnership obtained a new
$1.0 billion revolving credit facility. The new line of
credit bears interest at LIBOR plus 60 basis points and

10



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Unaudited)


matures in May 2006. The financial covenants and
restrictions under the new line of credit are substantially
similar to those EOP Partnership was subject to under the
previous line of credit.

NOTE 8  DERIVATIVE FINANCIAL
INSTRUMENTS

In May 2003, EOP Partnership entered into several
forward starting interest rate swap agreements for a combined
notional amount of $500 million at rates (which consist of
the 10-year Treasury rate, a swap spread and other costs)
ranging from 4.1375% to 4.75% with start dates of June 2,
2004 and end dates of June 2, 2014. The swaps will hedge
the future interest payments of debt anticipated to be issued in
June 2004. The market value of these forward-starting interest
rate swaps represented a liability to EOP Partnership of
approximately $11.4 million at June 30, 2003 and is
included in other liabilities and in other comprehensive income.
As of August 7, 2003, the market value of these
forward-starting interest rate swaps represented an asset to EOP
Partnership of approximately $21.3 million. The market
value of the forward-starting interest rate swaps is dependent
upon changes in market interest rates and swap spreads over time
and is subject to change.

Upon settlement of the swaps, EOP Partnership may
be obligated to pay the counterparties a settlement payment, or
alternatively to receive settlement proceeds from the
counterparties. In accordance with FASB Statement No. 133
Accounting for Derivative Instruments and Hedging
Activities, if the swaps are deemed to be effective hedges
upon settlement, any monies paid or received will be amortized
to interest expense over the term of the respective note
offering. If the swaps are deemed to be only partially effective
hedges upon settlement, a portion of the monies paid or received
will be immediately recognized in earnings and the remainder
will be amortized to interest expense over the term of the
respective note offering. If the swaps are deemed to be
completely ineffective hedges upon settlement, any monies paid
or received will be immediately recognized in earnings.

NOTE 9  PARTNERS
CAPITAL



| |      
| | -----
| | Units

The following table presents the changes in the
issued and outstanding Units since March 31, 2003:

|                              |                                                                                                        |  |             |            |  
|----------------------------- | ------------------------------------------------------------------------------------------------------ |  | ----------- | ---------- | -
|Outstanding at March 31, 2003 |                                                                                                        |  | 456,160,247 |           
|                              | Repurchases/retired(a)                                                                                 |  |             | (7,644,900 | )
|                              | Units redeemed for cash                                                                                |  |             | (81,185    | )
|                              | Issued to Equity Office related to common shares
    issued for share options exercised                |  |             | 269,273    |  
|                              | Issued to Equity Office related to restricted
    shares and share awards issued, net of cancellations |  |             | 12,744     |  
|                              |                                                                                                        |  |            
|Outstanding at June 30, 2003  |                                                                                                        |  | 448,716,179 |           
|                              |                                                                                                        |  |            






|    |  |                                                                                                                                                                                                                                                                                                                                                                                                       
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Equity Office repurchased 7,644,900 Common Shares
    at an average price of $26.37 per share for a total of
    $201.6 million in the aggregate. In connection with the
    repurchases, EOP Partnership purchased from Equity Office and
    retired a corresponding number of Units for an aggregate
    purchase price equal to the aggregate purchase price for all
    Common Share repurchases.

11



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Unaudited)




| |              
| | -------------
| | Distributions

|                         |  |              |          |  |           |                |                        |  |                | 
|------------------------ |  | ------------ | -------- |  | --------- | -------------- | ---------------------- |  | -------------- | 
|                         |  | Quarterly    |          |  |           |                |                       
|                         |  | Distribution |          |  |           |                |                       
|                         |  | Amount       |          |  |           |                |                       
|                         |  | Per Unit     |          |  | Date Paid |                | Unitholder Record Date | 
|                         |  |              |          |  |           |                |                        | 
|Units                    |  | $            | .50      |  |           | July 15, 2003  |                        |  | June 30, 2003  | 
|Series B Preferred Units |  | $            | .65625   |  |           | May 15, 2003   |                        |  | May 1, 2003    | 
|Series C Preferred Units |  | $            | .5390625 |  |           | June 16, 2003  |                        |  | June 2, 2003   | 
|Series E Preferred Units |  | $            | .4921875 |  |           | April 30, 2003 |                        |  | April 15, 2003 | 
|Series F Preferred Units |  | $            | .50      |  |           | June 30, 2003  |                        |  | June 16, 2003  | 
|Series G Preferred Units |  | $            | .484375  |  |           | June 16, 2003  |                        |  | June 2, 2003   | 



| |                
| | ---------------
| | Preferred Units

On June 27, 2003, Equity Office redeemed its
6,000,000 outstanding 7.875% Series E Cumulative
Redeemable Preferred Shares at a redemption price of
$25.00 per share for an aggregate redemption price of
approximately $151.9 million, which includes approximately
$1.9 million of accrued and unpaid distributions.

On June 30, 2003, Equity Office redeemed its
4,000,000 outstanding 8.0% Series F Cumulative
Redeemable Preferred Shares at a redemption price of
$25.00 per share for an aggregate redemption price of
$100.0 million.

In connection with such redemptions, EOP
Partnership redeemed all of the Series E and F Preferred
Units from Equity Office.

12



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Unaudited)




|          |                  
|--------- | -----------------
|NOTE 10  | EARNINGS PER UNIT

The following table sets forth the computation of
basic and diluted earnings per unit and unit equivalent:

|                                             |                                                                                                                                   |                                                                                                    |   |             |                          |  |   |             |           |  |      |             |           |  |   |             |           | 
|-------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------- | - | ----------- | ------------------------ |  | - | ----------- | --------- |  | ---- | ----------- | --------- |  | - | ----------- | --------- | 
|                                             |                                                                                                                                   |                                                                                                    |   |            
|                                             |                                                                                                                                   | For the three months ended                                                                         |   |             | For the six months ended | 
|                                             |                                                                                                                                   | June 30,                                                                                           |   |             | June 30,                 | 
|                                             |                                                                                                                                   |                                                                                                    |   |             |                          | 
|(Dollars in thousands, except per unit data) |                                                                                                                                   | 2003                                                                                               |   |             | 2002                     |  |   | 2003        |           |  | 2002 |            
|                                             |                                                                                                                                   |                                                                                                    |   |             |                          |  |   |             |           |  |      |            
|Numerator:                                   |                                                                                                                                   |                                                                                                    |   |             |                          |  |   |             |           |  |      |             |           |  |   |            
|                                             | Income from continuing operations                                                                                                 |                                                                                                    | $ | 137,617     |                          |  | $ | 186,886     |           |  | $    | 301,709     |           |  | $ | 422,742     |          
|                                             | Discontinued operations (including net gain on
    sales of real estate of $44,448, $5,499, $51,725 and $2,490,
    respectively) |                                                                                                    |   | 46,166      |                          |  |   | 16,597      |           |  |      | 56,566      |           |  |   | 25,205      |          
|                                             | Preferred distributions                                                                                                           |                                                                                                    |   | (15,395     | )                        |  |   | (15,831     | )         |  |      | (30,856     | )         |  |   | (31,661     | )        
|                                             |                                                                                                                                   |                                                                                                    |   |             |                          |  |   |             |           |  |      |            
|                                             | Numerator for basic and diluted earnings per
    unit  net income available for Units and unit
    equivalents                   |                                                                                                    | $ | 168,388     |                          |  | $ | 187,652     |           |  | $    | 327,419     |           |  | $ | 416,286     |          
|                                             |                                                                                                                                   |                                                                                                    |   |             |                          |  |   |             |           |  |      |            
|Denominator:                                 |                                                                                                                                   |                                                                                                    |   |             |                          |  |   |             |           |  |      |             |           |  |   |            
|                                             | Denominator for net income available per weighted
    average Unit outstanding  basic                                            |                                                                                                    |   | 450,216,263 |                          |  |   | 470,109,997 |           |  |      | 454,254,440 |           |  |   | 470,132,017 |          
|                                             |                                                                                                                                   |                                                                                                    |   |             |                          |  |   |             |           |  |      |            
|                                             | Effect of dilutive securities:                                                                                                    |                                                                                                    |   |             |                          |  |   |             |           |  |      |             |           |  |   |             |          
|                                             |                                                                                                                                   | Units issuable upon exercise of Equity Office
    share options, put options and restricted shares |   |             | 1,794,307                |  |   |             | 2,500,593 |  |      |             | 1,392,498 |  |   |             | 2,594,939 | 
|                                             |                                                                                                                                   |                                                                                                    |   |             |                          |  |   |             |           |  |      |            
|                                             | Denominator for net income available per weighted
    average Units and unit equivalent outstanding  diluted                     |                                                                                                    |   | 452,010,570 |                          |  |   | 472,610,590 |           |  |      | 455,646,938 |           |  |   | 472,726,956 |          
|                                             |                                                                                                                                   |                                                                                                    |   |             |                          |  |   |             |           |  |      |            
|Earnings per unit  basic                    |                                                                                                                                   |                                                                                                    |   |             |                          |  |   |             |           |  |      |             |           |  |   |            
|                                             | Income from continuing operations                                                                                                 |                                                                                                    | $ | 0.31        |                          |  | $ | 0.40        |           |  | $    | 0.66        |           |  | $ | 0.90        |          
|                                             | Discontinued operations                                                                                                           |                                                                                                    |   | 0.10        |                          |  |   | 0.04        |           |  |      | 0.12        |           |  |   | 0.05        |          
|                                             | Preferred distributions                                                                                                           |                                                                                                    |   | (0.03       | )                        |  |   | (0.03       | )         |  |      | (0.07       | )         |  |   | (0.07       | )        
|                                             |                                                                                                                                   |                                                                                                    |   |             |                          |  |   |             |           |  |      |            
|                                             | Net income available for Units(a)                                                                                                 |                                                                                                    | $ | 0.37        |                          |  | $ | 0.40        |           |  | $    | 0.72        |           |  | $ | 0.89        |          
|                                             |                                                                                                                                   |                                                                                                    |   |             |                          |  |   |             |           |  |      |            
|Earnings per unit 
    diluted              |                                                                                                                                   |                                                                                                    |   |             |                          |  |   |             |           |  |      |             |           |  |   |            
|                                             | Income from continuing operations                                                                                                 |                                                                                                    | $ | 0.30        |                          |  | $ | 0.40        |           |  | $    | 0.66        |           |  | $ | 0.89        |          
|                                             | Discontinued operations                                                                                                           |                                                                                                    |   | 0.10        |                          |  |   | 0.04        |           |  |      | 0.12        |           |  |   | 0.05        |          
|                                             | Preferred distributions                                                                                                           |                                                                                                    |   | (0.03       | )                        |  |   | (0.03       | )         |  |      | (0.07       | )         |  |   | (0.07       | )        
|                                             |                                                                                                                                   |                                                                                                    |   |             |                          |  |   |             |           |  |      |            
|                                             | Net income available for Units(a)                                                                                                 |                                                                                                    | $ | 0.37        |                          |  | $ | 0.40        |           |  | $    | 0.72        |           |  | $ | 0.88        |          
|                                             |                                                                                                                                   |                                                                                                    |   |             |                          |  |   |             |           |  |      |            






|    |  |                                                                                        
|--- |  | ---------------------------------------------------------------------------------------
|(a) |  | Earnings per unit may not total the sum of the
    per unit components due to rounding.

The following securities were not included in the
computation of diluted earnings per Unit and unit equivalent
since they would have an antidilutive effect:

|                                        |       |                  |        |                            |      |  |                          |            |  |  |           |            |  |      |            |            |  |  |           |            | 
|--------------------------------------- | ----- | ---------------- | ------ | -------------------------- | ---- |  | ------------------------ | ---------- |  |  | --------- | ---------- |  | ---- | ---------- | ---------- |  |  | --------- | ---------- | 
|                                        |       |                  |        |                            |      | 
|                                        |       |                  |        | For the three months ended |      |  | For the six months ended |           
|                                        |       |                  |        | June 30,                   |      |  | June 30,                 |           
|                                        |       | Weighted Average |        |                            |      |  |                          |            | 
|Antidilutive Securities                 |       | Exercise Price   |        |                            | 2003 |  |                          | 2002       |  |  | 2003      |            |  | 2002 |           
|                                        |       |                  |        |                            |      |  |                          |            |  |  |           |            |  |      |           
|Share options                           |       | $                | 29.210 |                            |      |  | 13,487,257               |            |  |  |          |            |  |      |           |            |  |  |          |           
|Share options                           |       | $                | 29.170 |                            |      |  |                         |            |  |  |          |            |  |      | 13,760,992 |            |  |  |          |           
|Share options                           |       | $                | 30.320 |                            |      |  |                         |            |  |  | 5,107,942 |            |  |      |           |            |  |  | 5,190,424 |           
|Series B Preferred Units                |       | $                | 35.700 |                            |      |  | 5,990,000                |            |  |  | 5,990,000 |            |  |      | 5,990,000  |            |  |  | 5,990,000 |           
|Warrants (expired on December 17, 2002) |       | $                | 39.375 |                            |      |  |                         |            |  |  | 5,000,000 |            |  |      |           |            |  |  | 5,000,000 |           
|                                        |       |                  |        |                            |      |  |                          |            |  |  |           |            |  |      |           
|                                        | Total |                  |        |                            |      |  |                          | 19,477,257 |  |  |           | 16,097,942 |  |      |            | 19,750,992 |  |  |           | 16,180,424 | 
|                                        |       |                  |        |                            |      |  |                          |            |  |  |           |            |  |      |           

13



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Unaudited)




|          |                    
|--------- | -------------------
|NOTE 11  | SEGMENT INFORMATION

As discussed in Note 1, EOP
Partnerships primary business is the ownership and
operation of Office Properties. Management accounts for each
Office Property as an individual operating segment and has
aggregated these operating accounts into a single operating
segment for financial reporting purposes due to the fact that
the individual operating segments have similar economic
characteristics. EOP Partnerships long-term tenants are in
a variety of businesses, and no single tenant is significant to
EOP Partnerships business. The property operating revenues
generated at the Corporate and Other segment consist
primarily of revenues earned by the Industrial Properties. The
Other revenues generated at the Corporate and
Other segment consist primarily of fee income from the
management of office properties owned by third parties, interest
and dividend income from various investments and a realized gain
on sale of marketable securities.

For segment reporting purposes, the office
properties, apartment properties and the land parcels that were
sold are included in the Office Properties segment
and the industrial properties and parking facilities that were
sold are included in the Corporate and Other segment.

|                                                                                                                                  |                                                              |                                     |          |          |           |   |          |              |   |        |            |          |           |           |          |          |              |   |          |          |   |   |          |          |  
|--------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------ | ----------------------------------- | -------- | -------- | --------- | - | -------- | ------------ | - | ------ | ---------- | -------- | --------- | --------- | -------- | -------- | ------------ | - | -------- | -------- | - | - | -------- | -------- | -
|                                                                                                                                  |                                                              |                                    
|                                                                                                                                  |                                                              | As of or for the three months ended |         
|                                                                                                                                  |                                                              | June 30,                            |         
|                                                                                                                                  |                                                              |                                     |         
|                                                                                                                                  |                                                              |                                     |          |         
|                                                                                                                                  |                                                              | 2003                                |          |          | 2002      |  
|                                                                                                                                  |                                                              |                                     |          |          |           |  
|                                                                                                                                  |                                                              | Office                              |          |          | Corporate |   |          |              |   | Office |            |          | Corporate |           |          |         
|(Dollars in thousands)                                                                                                            |                                                              | Properties                          |          |          | and Other |   |          | Consolidated |   |        | Properties |          |           | and Other |          |          | Consolidated |  
|                                                                                                                                  |                                                              |                                     |          |          |           |   |          |              |   |        |            |          |           |           |          |          |              |  
|Property operating revenues                                                                                                       |                                                              | $                                   | 791,767  |          |           | $ | 11,971   |              |   | $      | 803,738    |          |           | $         | 837,071  |          |              | $ | 13,349   |          |   | $ | 850,420  |         
|Property operating expenses                                                                                                       |                                                              |                                     | (281,008 | )        |           |   | (2,565   | )            |   |        | (283,573   | )        |           |           | (293,959 | )        |              |   | (2,511   | )        |   |   | (296,470 | )       
|                                                                                                                                  |                                                              |                                     |          |          |           |   |          |              |   |        |            |          |           |           |          |          |              |  
|                                                                                                                                  | Property net operating income from continuing
    operations |                                     |          | 510,759  |           |   |          | 9,406        |   |        |            | 520,165  |           |           |          | 543,112  |              |   |          | 10,838   |   |   |          | 553,950  |  
|                                                                                                                                  |                                                              |                                     |          |          |           |   |          |              |   |        |            |          |           |           |          |          |              |  
|Adjustments to arrive at net income:                                                                                              |                                                              |                                     |          |          |           |   |          |              |   |        |            |          |           |           |          |          |              |   |          |          |   |   |          |         
|                                                                                                                                  | Other revenues                                               |                                     |          | 573      |           |   |          | 6,648        |   |        |            | 7,221    |           |           |          | 795      |              |   |          | 10,674   |   |   |          | 11,469   |  
|                                                                                                                                  | Interest expense(a)                                          |                                     |          | (45,936  | )         |   |          | (160,668     | ) |        |            | (206,604 | )         |           |          | (48,764  | )            |   |          | (153,977 | ) |   |          | (202,741 | )
|                                                                                                                                  | Depreciation and amortization                                |                                     |          | (170,077 | )         |   |          | (8,083       | ) |        |            | (178,160 | )         |           |          | (165,476 | )            |   |          | (6,105   | ) |   |          | (171,581 | )
|                                                                                                                                  | Ground rent                                                  |                                     |          | (4,870   | )         |   |          |             |   |        |            | (4,870   | )         |           |          | (5,287   | )            |   |          |         |   |   |          | (5,287   | )
|                                                                                                                                  | Corporate general and administrative                         |                                     |          |         |           |   |          | (17,655      | ) |        |            | (17,655  | )         |           |          |         |              |   |          | (18,512  | ) |   |          | (18,512  | )
|                                                                                                                                  |                                                              |                                     |          |          |           |   |          |              |   |        |            |          |           |           |          |          |              |  
|                                                                                                                                  | Total adjustments to arrive at net income                    |                                     |          | (220,310 | )         |   |          | (179,758     | ) |        |            | (400,068 | )         |           |          | (218,732 | )            |   |          | (167,920 | ) |   |          | (386,652 | )
|                                                                                                                                  |                                                              |                                     |          |          |           |   |          |              |   |        |            |          |           |           |          |          |              |  
|Income before income taxes, allocation to
    minority interests and income from investments in unconsolidated
    joint ventures |                                                              |                                     | 290,449  |          |           |   | (170,352 | )            |   |        | 120,097    |          |           |           | 324,380  |          |              |   | (157,082 | )        |   |   | 167,298  |         
|Income taxes                                                                                                                      |                                                              |                                     | (207     | )        |           |   | (1,368   | )            |   |        | (1,575     | )        |           |           | (1,940   | )        |              |   | 226      |          |   |   | (1,714   | )       
|Minority interests                                                                                                                |                                                              |                                     | (1,841   | )        |           |   | (10      | )            |   |        | (1,851     | )        |           |           | (975     | )        |              |   | (20      | )        |   |   | (995     | )       
|Income from investments in unconsolidated joint
    ventures                                                                      |                                                              |                                     | 19,478   |          |           |   | 1,468    |              |   |        | 20,946     |          |           |           | 21,520   |          |              |   | 777      |          |   |   | 22,297   |         
|                                                                                                                                  |                                                              |                                     |          |          |           |   |          |              |   |        |            |          |           |           |          |          |              |  
|Income from continuing operations                                                                                                 |                                                              |                                     | 307,879  |          |           |   | (170,262 | )            |   |        | 137,617    |          |           |           | 342,985  |          |              |   | (156,099 | )        |   |   | 186,886  |         
|Discontinued operations (including net gain on
    sales of real estate of $44,448 and $5,499, respectively)                      |                                                              |                                     | 46,173   |          |           |   | (7       | )            |   |        | 46,166     |          |           |           | 16,331   |          |              |   | 266      |          |   |   | 16,597   |         
|                                                                                                                                  |                                                              |                                     |          |          |           |   |          |              |   |        |            |          |           |           |          |          |              |  
|Net income                                                                                                                        |                                                              | $                                   | 354,052  |          |           | $ | (170,269 | )            |   | $      | 183,783    |          |           | $         | 359,316  |          |              | $ | (155,833 | )        |   | $ | 203,483  |         
|                                                                                                                                  |                                                              |                                     |          |          |           |   |          |              |   |        |            |          |           |           |          |          |              |  

14



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Unaudited)


|                                                                                                      |  |                                     |            |  |           |   |         |              |  |        |            |   |           |           |         |  |              |   |        |  |  |   |         |  
|----------------------------------------------------------------------------------------------------- |  | ----------------------------------- | ---------- |  | --------- | - | ------- | ------------ |  | ------ | ---------- | - | --------- | --------- | ------- |  | ------------ | - | ------ |  |  | - | ------- | -
|                                                                                                      |  |                                    
|                                                                                                      |  | As of or for the three months ended |           
|                                                                                                      |  | June 30,                            |           
|                                                                                                      |  |                                     |           
|                                                                                                      |  |                                     |            | 
|                                                                                                      |  | 2003                                |            |  | 2002      |  
|                                                                                                      |  |                                     |            |  |           |  
|                                                                                                      |  | Office                              |            |  | Corporate |   |         |              |  | Office |            |   | Corporate |           |         | 
|(Dollars in thousands)                                                                                |  | Properties                          |            |  | and Other |   |         | Consolidated |  |        | Properties |   |           | and Other |         |  | Consolidated |  
|                                                                                                      |  |                                     |            |  |           |   |         |              |  |        |            |   |           |           |         |  |              |  
|Property net operating income from continuing
    operations                                          |  | $                                   | 510,759    |  |           | $ | 9,406   |              |  | $      | 520,165    |   |           | $         | 543,112 |  |              | $ | 10,838 |  |  | $ | 553,950 |  
|Property net operating income from discontinued
    operations (see Note 4  Discontinued Operations) |  |                                     | 1,852      |  |           |   | (7      | )            |  |        | 1,845      |   |           |           | 14,423  |  |              |   | 334    |  |  |   | 14,757  |  
|                                                                                                      |  |                                     |            |  |           |   |         |              |  |        |            |   |           |           |         |  |              |  
|Total property net operating income from
    continuing and discontinued operations                   |  | $                                   | 512,611    |  |           | $ | 9,399   |              |  | $      | 522,010    |   |           | $         | 557,535 |  |              | $ | 11,172 |  |  | $ | 568,707 |  
|                                                                                                      |  |                                     |            |  |           |   |         |              |  |        |            |   |           |           |         |  |              |  
|Property operating margin from continuing and
    discontinued operations(b)                          |  |                                     |            |  |           |   |         |              |  |        | 64.7       | % |           |           |         |  |              |   |        |  |  |   | 65.1    | %
|                                                                                                      |  |                                     |            |  |           |   |         |              |  |        |            |   |           |           |         |  |              |  
|Property operating margin from continuing
    operations(b)                                           |  |                                     |            |  |           |   |         |              |  |        | 64.7       | % |           |           |         |  |              |   |        |  |  |   | 65.1    | %
|                                                                                                      |  |                                     |            |  |           |   |         |              |  |        |            |   |           |           |         |  |              |  
|Capital and tenant improvements                                                                       |  | $                                   | 81,550     |  |           | $ | 7,259   |              |  | $      | 88,809     |   |           | $         | 70,792  |  |              | $ | 1,434  |  |  | $ | 72,226  |  
|                                                                                                      |  |                                     |            |  |           |   |         |              |  |        |            |   |           |           |         |  |              |  
|Investments in unconsolidated joint ventures                                                          |  | $                                   | 1,081,843  |  |           | $ | 8,051   |              |  | $      | 1,089,894  |   |           |           |         |  |              |   |        |  |  |   |         |  
|                                                                                                      |  |                                     |            |  |           |   |         |              |  |        |            |   |           |           |         |  |              |  
|Total Assets                                                                                          |  | $                                   | 24,051,346 |  |           | $ | 883,990 |              |  | $      | 24,935,336 |   |           |           |         |  |              |   |        |  |  |   |         |  
|                                                                                                      |  |                                     |            |  |           |   |         |              |  |        |            |   |           |           |         |  |              |  




|    |  |                                                                                                                                                                                                         
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Interest expense for the Office Properties
    represents interest expense on property secured mortgage debt
    and does not include interest expense on the unsecured notes or
    the line of credit.
|   
|(b) |  | Property operating margin represents property
    operating revenues less property operating expenses as a
    percentage of property operating revenues.                                               

15



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Unaudited)


|                                                                                                                                  |                                                              |                                   |            |           |           |   |          |              |   |        |            |           |           |           |           |           |              |   |          |          |   |   |           |           |  
|--------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------ | --------------------------------- | ---------- | --------- | --------- | - | -------- | ------------ | - | ------ | ---------- | --------- | --------- | --------- | --------- | --------- | ------------ | - | -------- | -------- | - | - | --------- | --------- | -
|                                                                                                                                  |                                                              |                                  
|                                                                                                                                  |                                                              | As of or for the six months ended |           
|                                                                                                                                  |                                                              | June 30,                          |           
|                                                                                                                                  |                                                              |                                   |           
|                                                                                                                                  |                                                              |                                   |            |          
|                                                                                                                                  |                                                              | 2003                              |            |           | 2002      |  
|                                                                                                                                  |                                                              |                                   |            |           |           |  
|                                                                                                                                  |                                                              | Office                            |            |           | Corporate |   |          |              |   | Office |            |           | Corporate |           |           |          
|(Dollars in thousands)                                                                                                            |                                                              | Properties                        |            |           | and Other |   |          | Consolidated |   |        | Properties |           |           | and Other |           |           | Consolidated |  
|                                                                                                                                  |                                                              |                                   |            |           |           |   |          |              |   |        |            |           |           |           |           |           |              |  
|Property operating revenues                                                                                                       |                                                              | $                                 | 1,584,825  |           |           | $ | 24,204   |              |   | $      | 1,609,029  |           |           | $         | 1,675,668 |           |              | $ | 27,669   |          |   | $ | 1,703,337 |          
|Property operating expenses                                                                                                       |                                                              |                                   | (555,163   | )         |           |   | (5,203   | )            |   |        | (560,366   | )         |           |           | (572,543  | )         |              |   | (5,442   | )        |   |   | (577,985  | )        
|                                                                                                                                  |                                                              |                                   |            |           |           |   |          |              |   |        |            |           |           |           |           |           |              |  
|                                                                                                                                  | Property net operating income from continuing
    operations |                                   |            | 1,029,662 |           |   |          | 19,001       |   |        |            | 1,048,663 |           |           |           | 1,103,125 |              |   |          | 22,227   |   |   |           | 1,125,352 |  
|                                                                                                                                  |                                                              |                                   |            |           |           |   |          |              |   |        |            |           |           |           |           |           |              |  
|Adjustments to arrive at net income:                                                                                              |                                                              |                                   |            |           |           |   |          |              |   |        |            |           |           |           |           |           |              |   |          |          |   |   |           |          
|                                                                                                                                  | Other revenues                                               |                                   |            | 1,075     |           |   |          | 22,484       |   |        |            | 23,559    |           |           |           | 1,313     |              |   |          | 21,074   |   |   |           | 22,387    |  
|                                                                                                                                  | Interest expense(a)                                          |                                   |            | (89,565   | )         |   |          | (322,362     | ) |        |            | (411,927  | )         |           |           | (97,397   | )            |   |          | (310,364 | ) |   |           | (407,761  | )
|                                                                                                                                  | Depreciation and amortization                                |                                   |            | (337,405  | )         |   |          | (15,330      | ) |        |            | (352,735  | )         |           |           | (326,813  | )            |   |          | (12,622  | ) |   |           | (339,435  | )
|                                                                                                                                  | Ground rent                                                  |                                   |            | (9,466    | )         |   |          |             |   |        |            | (9,466    | )         |           |           | (10,797   | )            |   |          |         |   |   |           | (10,797   | )
|                                                                                                                                  | Corporate general and administrative                         |                                   |            |          |           |   |          | (31,157      | ) |        |            | (31,157   | )         |           |           |          |              |   |          | (35,808  | ) |   |           | (35,808   | )
|                                                                                                                                  |                                                              |                                   |            |           |           |   |          |              |   |        |            |           |           |           |           |           |              |  
|                                                                                                                                  | Total adjustments to arrive at net income                    |                                   |            | (435,361  | )         |   |          | (346,365     | ) |        |            | (781,726  | )         |           |           | (433,694  | )            |   |          | (337,720 | ) |   |           | (771,414  | )
|                                                                                                                                  |                                                              |                                   |            |           |           |   |          |              |   |        |            |           |           |           |           |           |              |  
|Income before income taxes, allocation to
    minority interests and income from investments in unconsolidated
    joint ventures |                                                              |                                   | 594,301    |           |           |   | (327,364 | )            |   |        | 266,937    |           |           |           | 669,431   |           |              |   | (315,493 | )        |   |   | 353,938   |          
|Income taxes                                                                                                                      |                                                              |                                   | (385       | )         |           |   | (2,186   | )            |   |        | (2,571     | )         |           |           | (1,985    | )         |              |   | (6,735   | )        |   |   | (8,720    | )        
|Minority interests                                                                                                                |                                                              |                                   | (4,347     | )         |           |   | (20      | )            |   |        | (4,367     | )         |           |           | (2,361    | )         |              |   | (40      | )        |   |   | (2,401    | )        
|Income from investments in unconsolidated joint
    ventures                                                                      |                                                              |                                   | 40,491     |           |           |   | 1,219    |              |   |        | 41,710     |           |           |           | 81,218    |           |              |   | (1,293   | )        |   |   | 79,925    |          
|                                                                                                                                  |                                                              |                                   |            |           |           |   |          |              |   |        |            |           |           |           |           |           |              |  
|Income from continuing operations                                                                                                 |                                                              |                                   | 630,060    |           |           |   | (328,351 | )            |   |        | 301,709    |           |           |           | 746,303   |           |              |   | (323,561 | )        |   |   | 422,742   |          
|Discontinued operations (including net gain on
    sales of real estate of $51,725 and $2,490, respectively)                      |                                                              |                                   | 56,688     |           |           |   | (122     | )            |   |        | 56,566     |           |           |           | 24,674    |           |              |   | 531      |          |   |   | 25,205    |          
|                                                                                                                                  |                                                              |                                   |            |           |           |   |          |              |   |        |            |           |           |           |           |           |              |  
|Net income                                                                                                                        |                                                              | $                                 | 686,748    |           |           | $ | (328,473 | )            |   | $      | 358,275    |           |           | $         | 770,977   |           |              | $ | (323,030 | )        |   | $ | 447,947   |          
|                                                                                                                                  |                                                              |                                   |            |           |           |   |          |              |   |        |            |           |           |           |           |           |              |  
|Property net operating income from continuing
    operations                                                                      |                                                              | $                                 | 1,029,662  |           |           | $ | 19,001   |              |   | $      | 1,048,663  |           |           | $         | 1,103,125 |           |              | $ | 22,227   |          |   | $ | 1,125,352 |          
|Property net operating income from discontinued
    operations (see Note 4  Discontinued Operations)                             |                                                              |                                   | 6,787      |           |           |   | 65       |              |   |        | 6,852      |           |           |           | 29,444    |           |              |   | 670      |          |   |   | 30,114    |          
|                                                                                                                                  |                                                              |                                   |            |           |           |   |          |              |   |        |            |           |           |           |           |           |              |  
|Total property net operating income from
    continuing and discontinued operations                                               |                                                              | $                                 | 1,036,449  |           |           | $ | 19,066   |              |   | $      | 1,055,515  |           |           | $         | 1,132,569 |           |              | $ | 22,897   |          |   | $ | 1,155,466 |          
|                                                                                                                                  |                                                              |                                   |            |           |           |   |          |              |   |        |            |           |           |           |           |           |              |  
|Property operating margin from continuing and
    discontinued operations(b)                                                      |                                                              |                                   |            |           |           |   |          |              |   |        | 65.1       | %         |           |           |           |           |              |   |          |          |   |   | 66.0      | %        
|                                                                                                                                  |                                                              |                                   |            |           |           |   |          |              |   |        |            |           |           |           |           |           |              |  
|Property operating margin from continuing
    operations(b)                                                                       |                                                              |                                   |            |           |           |   |          |              |   |        | 65.2       | %         |           |           |           |           |              |   |          |          |   |   | 66.1      | %        
|                                                                                                                                  |                                                              |                                   |            |           |           |   |          |              |   |        |            |           |           |           |           |           |              |  
|Capital and tenant improvements                                                                                                   |                                                              | $                                 | 136,990    |           |           | $ | 9,597    |              |   | $      | 146,587    |           |           | $         | 127,757   |           |              | $ | 2,684    |          |   | $ | 130,441   |          
|                                                                                                                                  |                                                              |                                   |            |           |           |   |          |              |   |        |            |           |           |           |           |           |              |  
|Investments in unconsolidated joint ventures                                                                                      |                                                              | $                                 | 1,081,843  |           |           | $ | 8,051    |              |   | $      | 1,089,894  |           |           |           |           |           |              |   |          |          |   |   |           |          
|                                                                                                                                  |                                                              |                                   |            |           |           |   |          |              |   |        |            |           |           |           |           |           |              |  
|Total Assets                                                                                                                      |                                                              | $                                 | 24,051,346 |           |           | $ | 883,990  |              |   | $      | 24,935,336 |           |           |           |           |           |              |   |          |          |   |   |           |          
|                                                                                                                                  |                                                              |                                   |            |           |           |   |          |              |   |        |            |           |           |           |           |           |              |  




|    |  |                                                                                                                                                                                                         
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Interest expense for the Office Properties
    represents interest expense on property secured mortgage debt
    and does not include interest expense on the unsecured notes or
    the line of credit.

16



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Unaudited)




|    |  |                                                                                                                                                          
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) |  | Property operating margin represents property
    operating revenues less property operating expenses as a
    percentage of property operating revenues.

NOTE 12  SHARE BASED EMPLOYEE
COMPENSATION PLANS

Effective January 1, 2003, EOP Partnership
adopted Statement of Financial Accounting Standards No. 123
(SFAS No. 123) Accounting for Stock
Based Compensation, which requires a fair value based
accounting method for determining compensation expense
associated with the issuance by Equity Office of share options
and other equity awards. EOP Partnership decided to adopt the
accounting provisions of SFAS No. 123 to reflect the
cost to the company of issuing share options and other equity
awards to certain individuals in the consolidated financial
statements. EOP Partnership employed the prospective method for
adopting SFAS No. 123 which requires the recognition
of compensation expense for share options and other equity
compensation granted on or after January 1, 2003 and to
record compensation expense for modifications of share options
and other equity awards that were outstanding as of
December 31, 2002. Expense amounts will be recognized
ratably over the respective vesting period of the award.

The following table illustrates the effect on net
income and earnings per unit if the fair value based method had
been applied to all outstanding and unvested share options for
the three and six months ended June 30, 2003 and 2002.
Compensation expense related to restricted share awards is not
presented in the table below because the expense is the same
under APB No. 25 and SFAS No. 123 and is already
reflected in net income.

|                                                                                                    |                                            |                      |         |      |                          |   |         |      |  |   |         |      |  |   |         |      | 
|--------------------------------------------------------------------------------------------------- | ------------------------------------------ | -------------------- | ------- | ---- | ------------------------ | - | ------- | ---- |  | - | ------- | ---- |  | - | ------- | ---- | 
|                                                                                                    |                                            |                      |         |     
|                                                                                                    |                                            | For the three months |         |      | For the six months ended |  
|                                                                                                    |                                            | ended June 30,       |         |      | June 30,                 |  
|                                                                                                    |                                            |                      |         |      |                          |  
|(Dollars in thousands, except per unit data)                                                        |                                            | 2003                 |         |      | 2002                     |   |         | 2003 |  |   | 2002    |     
|                                                                                                    |                                            |                      |         |      |                          |   |         |      |  |   |         |     
|Net income available for Units, historical                                                          |                                            | $                    | 168,388 |      |                          | $ | 187,652 |      |  | $ | 327,419 |      |  | $ | 416,286 |     
|Add back compensation expense included in
    historical net income available for Units for options |                                            |                      | 1,163   |      |                          |   | 1,155   |      |  |   | 1,375   |      |  |   | 1,265   |     
|Deduct compensation expense determined under fair
    value based method for share options          |                                            |                      | (3,155  | )    |                          |   | (4,184  | )    |  |   | (5,746  | )    |  |   | (6,421  | )   
|                                                                                                    |                                            |                      |         |      |                          |   |         |      |  |   |         |     
|Pro forma net income available for Units                                                            |                                            | $                    | 166,396 |      |                          | $ | 184,623 |      |  | $ | 323,048 |      |  | $ | 411,130 |     
|                                                                                                    |                                            |                      |         |      |                          |   |         |      |  |   |         |     
|Earnings per unit  basic:                                                                          |                                            |                      |         |      |                          |   |         |      |  |   |         |      |  |   |         |     
|                                                                                                    | Net income available for Units, historical |                      | $       | 0.37 |                          |   | $       | 0.40 |  |   | $       | 0.72 |  |   | $       | 0.89 | 
|                                                                                                    | Pro forma net income available for Units   |                      | $       | 0.37 |                          |   | $       | 0.39 |  |   | $       | 0.71 |  |   | $       | 0.87 | 
|Earnings per unit  diluted:                                                                        |                                            |                      |         |      |                          |   |         |      |  |   |         |      |  |   |         |     
|                                                                                                    | Net income available for Units, historical |                      | $       | 0.37 |                          |   | $       | 0.40 |  |   | $       | 0.72 |  |   | $       | 0.88 | 
|                                                                                                    | Pro forma net income available for Units   |                      | $       | 0.37 |                          |   | $       | 0.39 |  |   | $       | 0.71 |  |   | $       | 0.87 | 



|          |                              
|--------- | -----------------------------
|NOTE 13  | COMMITMENTS AND CONTINGENCIES



| |                             
| | ----------------------------
| | Concentration of Credit Risk

EOP Partnership maintains its cash and cash
equivalents at financial institutions. The combined account
balances at each institution typically exceed FDIC insurance
coverage and, as a result, there is a concentration of credit
risk related to amounts on deposit in excess of FDIC insurance
coverage. Management of EOP Partnership believes that the risk
is not significant.

17



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Unaudited)




| |              
| | -------------
| | Environmental

EOP Partnership, as an owner of real estate, is
subject to various environmental laws of federal and local
governments. Compliance by EOP Partnership with existing laws
has not had a material adverse effect on EOP Partnerships
financial condition and results of operations, and management
does not believe it will have such an impact in the future.
However, EOP Partnership cannot predict the impact of unforeseen
environmental contingencies or new or changed laws or
regulations on its current Properties or on properties that it
may acquire in the future.



| |           
| | ----------
| | Litigation

Except as described below, EOP Partnership is not
presently subject to material litigation nor, to EOP
Partnerships knowledge, is any material litigation
threatened against EOP Partnership, other than routine actions
for negligence and other claims and administrative proceedings
arising in the ordinary course of business, some of which are
expected to be covered by liability insurance and all of which
collectively are not expected to have a material adverse effect
on the liquidity, results of operations, or financial condition
of EOP Partnership.

On May 8, 2003, Broadband Office, Inc. and
the official committee of unsecured creditors of Broadband
Office Inc., filed a complaint (the Complaint) in
the United States Bankruptcy Court for the District of Delaware
against one private and seven public real estate companies,
various affiliated entities (collectively the Corporate
Defendants) and certain individuals, including Equity
Office, EOP Partnership, David Helfand (a former executive vice
president of Equity Office), Spieker Properties, Inc. (which
Equity Office acquired in 2001) and Spieker Properties, L.P.
(which EOP Partnership acquired in 2001) and Craig Vought
(formerly co-chief executive officer of Spieker Properties, Inc.
and currently an Equity Office trustee). Under the terms of EOP
Partnerships and Equity Offices indemnification
agreements with Messrs. Helfand and Vought, EOP Partnership
and Equity Office may be responsible to reimburse them for the
effect of any judgment rendered against them personally as well
as the costs of their defense. EOP Partnership was an equity
investor in, landlord to and customer of Broadband Office, and
Messrs. Helfand and Vought were members of the board of
directors of Broadband Office until their resignations from the
board of Broadband Office on May 1, 2001 and May 2,
2001, respectively. Mr. Vought also served as a member of
Broadband Offices executive committee. Broadband Office
filed for bankruptcy protection on May 9, 2001. The
Complaint alleges, among other things, breaches of fiduciary
duty and seeks recovery of what it characterizes as preferential
payments and fraudulent transfers. It further seeks to hold EOP
Partnership and Equity Office liable for the outstanding debts
of the corporation, jointly and severally with all of the
Corporate Defendants, as an alleged general partner
of Broadband Office. The plaintiffs allege that the amount of
these claims exceeds $300 million in the aggregate.

Due to the inherent uncertainties of the judicial
process and the early stage of this action, EOP Partnership is
unable to predict the outcome of this matter with certainty. As
a result, EOP Partnership has not accrued for any potential
liability in connection with this litigation. EOP Partnership
intends to vigorously defend this matter and believes it has
meritorious defenses available to it. As in any litigation,
there can be no assurance that EOP Partnership will prevail.
Should the court not resolve this matter in EOP
Partnerships favor it could have a material adverse effect
on EOP Partnerships financial condition and results of
operations.



| |                                     
| | ------------------------------------
| | Forward-Starting Interest Rate Swaps

As of June 30, 2003 and December 31,
2002, EOP Partnership had $1.3 billion and
$1.1 billion of forward-starting interest rate swaps
outstanding, respectively. The outstanding swaps will hedge the
future interest payments of debt anticipated to be issued in
2004. The market value of the forward-starting interest

18



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Unaudited)


rate swaps at June 30, 2003 and
December 31, 2002 represented a liability to EOP
Partnership of approximately $68.6 million and
$18.6 million, respectively, and is included in other
liabilities and in other comprehensive income. As of
August 7, 2003, the market value of these forward-starting
interest rate swaps represented an asset to EOP Partnership of
approximately $17.5 million. The market value of the
forward-starting interest rate swaps is dependent upon changes
in market interest rates and swap spreads over time and is
subject to change.

Upon settlement of the swaps, EOP Partnership may
be obligated to pay the counterparties a settlement payment, or
alternatively to receive settlement proceeds from the
counterparties. In accordance with FASB Statement No. 133
Accounting for Derivative Instruments and Hedging
Activities, if the swaps are deemed to be effective hedges
upon settlement, any monies paid or received will be amortized
to interest expense over the term of the respective note
offering. If the swaps are deemed to be only partially effective
hedges upon settlement, a portion of the monies paid or received
will be immediately recognized in earnings and the remainder
will be amortized to interest expense over the term of the
respective note offering. If the swaps are deemed to be
completely ineffective hedges upon settlement, any monies paid
or received will be immediately recognized in earnings.



| |              
| | -------------
| | Contingencies

Certain Properties owned in joint ventures with
unaffiliated parties are subject to buy/sell options that may be
exercised by EOP Partnership to acquire the other partners
interest or by the joint venture partner to acquire EOP
Partnerships interest if certain conditions are met as set
forth in the respective joint venture agreement. In addition,
EOP Partnership has granted options to a tenant to purchase one
of its Office Properties.

In connection with the acquisition of certain
Properties, EOP Partnership has agreed not to sell such
Properties in taxable transactions for a period of time as
defined in their respective agreements unless EOP Partnership
makes certain additional payments to the respective sellers.



| |          
| | ---------
| | Insurance

Property Damage, Business Interruption,
Earthquake and Terrorism:The
insurance coverage provided through third-party insurance
carriers is subject to coverage limitations. For each type of
insurance coverage described below, should an uninsured or
underinsured loss occur, EOP Partnership could lose all or a
portion of its investment in, and anticipated cash flows from,
one or more of the Properties. In addition, there can be

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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Unaudited)


no assurance that third-party insurance carriers
will be able to maintain reinsurance sufficient to cover any
losses that may be incurred.

|                                             |  |                                                                                                                                                                               |  |                                          
|-------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -----------------------------------------
|Type of Insurance                            |  | EOP Partnership                                                                                                                                                               |  | Third-Party                              
|Coverage                                     |  | Loss Exposure/Deductible                                                                                                                                                      |  | Coverage Limitation                      
|                                             |  |                                                                                                                                                                               |  |                                          
|Property damage and business interruption(a) |  | $75 million annual aggregate exposure (which
    includes amounts paid for earthquake loss), plus $1 million
    per occurrence deductible                                    |  | $1.0 billion per occurrence(c)           
|Earthquake(a)(b)                             |  | $75 million annual aggregate exposure (which
    includes amounts paid for property damage and business
    interruption loss), plus $1 million per occurrence
    deductible |  | $325 million in the aggregate per year(c)
|Acts of terrorism(d)                         |  | $750,000 per occurrence deductible (plus 10%
    of each and every loss with a maximum per occurrence exposure of
    $33.25 million which includes the $750,000 deductible)  |  | $825 million per occurrence(e)           






|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | EOP Partnership retains up to $75 million of
    such loss calculated throughout the portfolio. In the event of a
    loss in excess of this retention limit, the third-party
    insurance carriers would be obligated to cover the losses up to
    the stated coverage amounts in the above table.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   
|(b) |  | The amount of the third-party insurance relating
    to earthquakes is based on maximum probable loss studies
    performed by independent third parties. The maximum annual
    aggregate payment amount for earthquake loss is
    $325 million, inclusive of EOP Partnerships loss
    exposure of $75 million plus $1 million per occurrence
    deductible. There can be no assurance that the maximum probable
    loss studies have accurately estimated losses that may occur.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   
|(c) |  | These amounts include EOP Partnerships loss
    exposure/deductible amount.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   
|(d) |  | Effective in February 2003, EOP Partnership
    amended its third-party insurance coverage for acts of terrorism
    as a result of the Terrorism Risk Insurance Act of 2002
    (TRIA) enacted by Congress and signed into law by
    President Bush on November 26, 2002. EOP Partnership
    cancelled its prior terrorism insurance program that provided a
    $270 million annual aggregate limit and replaced it with a
    new program with a per occurrence limit of $825 million.
    Under TRIA, EOP Partnership has a per occurrence deductible of
    $750,000 plus 10% of each and every loss up to a maximum of
    $33.25 million per occurrence, which includes the
    deductible amount. The new programs coverage is extended
    to include nuclear, chemical and biological events. The new
    coverage does not apply to non-TRIA events (which are terrorism
    events that are not committed by a foreigner or a foreign
    country). EOP Partnership maintains separate insurance with a
    $325 million annual aggregate limit subject to a deductible
    of $1 million for non-TRIA events. This separate coverage
    for non-TRIA events excludes nuclear, biological and chemical
    events.
|   
|(e) |  | This amount is in excess of EOP
    Partnerships deductible amounts.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

Pollution:EOP
Partnership has pollution and remediation insurance coverage for
both sudden and gradual events. Limits for this exposure are
$2 million per loss and $10 million aggregate per year
subject to a deductible of $100,000.

Workers Compensation, Automobile Liability and
General Liability:EOP Partnership has
per occurrence deductible amounts for workers compensation of
$500,000, auto liability of $250,000 and general liability of
$1,000,000.

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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Unaudited)




| |                               
| | ------------------------------
| | Off-Balance Sheet Arrangements

Commitments

In accordance with the agreement governing the
investment in Wright Runstad Associates Limited Partnership
(WRALP) made in 1997, EOP Partnership agreed, for a
period generally continuing until December 31, 2007, to
make available to WRALP up to $20.0 million in additional
financing or credit support for future development. As of
June 30, 2003, no amounts have been funded pursuant to this
agreement. However, EOP Partnership has unconditionally
guaranteed payment of WRALPs $19.5 million revolving
line of credit which has an outstanding balance of approximately
$12.9 million as of June 30, 2003. WRALPs
current line of credit matured in July 2003 and was extended for
one year to July 2004. EOP Partnership does not have a liability
recorded related to this guarantee. In the event EOP Partnership
makes payment on WRALPs line of credit and WRALP does not
repay EOP Partnership, EOP Partnership is entitled to
(i) terminate the credit facility provided to WRALP from
EOP Partnership and (ii) declare all amounts borrowed by
WRALP due and payable. EOP Partnership believes the risk of an
unrecovered loss is minimal at this time.

Letters of Credit

As of June 30, 2003, EOP Partnership had
provided approximately $5.8 million in letters of credit to
third parties. The letters of credit were required to be issued
under the provisions of our workers compensation insurance
policies and certain utility contracts.

NOTE 14  SUBSEQUENT
EVENTS

The following transactions occurred subsequent to
June 30, 2003 through August 7, 2003:

1. In 2000, EOP Partnership formed a joint
venture with Wilson Investors (WI, of which William
Wilson III, a trustee of Equity Office, is a principal),
through its interest in Wilson/Equity Office (W/EO,
of which 49.9% is owned by EOP Partnership and 50.1% is owned by
WI), and an unaffiliated party to develop, construct, lease and
manage Foundry Square IV, a 225,490 square foot office
building located in San Francisco, California. Through the
sale of the office building in July 2003, EOP Partnership
disposed of its 40% indirect interest which includes a 10%
interest through W/EO and WI disposed of its 10% indirect
interest through W/EO to an unaffiliated party. EOP
Partnerships share of the gain on the sale of this
property was approximately $7.0 million. EOP
Partnerships share of the gross proceeds from the sale was
approximately $56.6 million, including the repayment of a
$44.5 million construction loan. WIs share of the
proceeds were approximately $17.1 million.

2. In July, EOP Partnership sold an
industrial property located in Pleasant Hill, California to an
unaffiliated party for approximately $7.5 million. The
property comprised approximately 156,600 square feet.

3. From July 1, 2003 through
July 31, 2003, Equity Office repurchased 375,000 Common
Shares under a share repurchase program at an average per share
price of $26.78 for approximately $10.0 million in the
aggregate. In connection with the repurchases, EOP Partnership
purchased from Equity Office and retired a corresponding number
of Units for an aggregate purchase price equal to the aggregate
price for all Common Share repurchases.

4. In August 2003, EOP Partnership prepaid
the mortgage debts that were secured by Canterbury Green, Three
Stamford Plaza and Four Stamford Plaza for approximately
$52.4 million which included accrued interest of
approximately $0.4 million. As a result of the mortgage
debt prepayment, these Office Properties are unencumbered.

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##### Table of Contents








|        |                                                                                           
|------- | ------------------------------------------------------------------------------------------
|ITEM 2. | Managements Discussion and Analysis
    of Financial Condition and Results of Operations.

Forward-Looking Statements

Statements contained in this
Managements Discussion and Analysis of Financial
Condition and Results of Operations, which are not
historical fact may be forward-looking statements. Such
statements (none of which is intended as a guarantee of
performance) are subject to certain risks and uncertainties,
which could cause actual results to differ materially from those
projected or anticipated. A number of important factors could
cause actual results to differ materially from those indicated
by the forward-looking statements, including, but not limited
to, the risks described in our current report on Form 8-K
filed with the Securities and Exchange Commission (the
SEC) on July 15, 2003, as the same may be
supplemented from time to time. Readers are cautioned not to
place undue reliance on these forward-looking statements, which
speak only as of the date this Form 10-Q is filed with the
SEC. Among the factors about which EOP Partnership has made
assumptions are the following:



| |   |                                                                                                                                                                   
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | changes in general economic conditions,
    including, in particular, those affecting industries in which
    our principal tenants and potential tenants compete;
|
| |  | the extent of any white-collar job growth in
    markets in which we have a presence;                                                                             
|
| |  | the extent of future demand for high-rise and
    other office space in markets in which we have a presence;                                                      
|
| |  | the domestic effect of any heightened
    geopolitical risks;                                                                                                     
|
| |  | the extent of tenant bankruptcies, financial
    difficulties and defaults;                                                                                       
|
| |  | the amount of any lease terminations in advance
    of the date specified in the leases and lease termination fees
    received, if any;                          
|
| |  | the availability of new competitive supply, which
    may become available by way of sublease rather than new
    construction;                                   
|
| |  | our ability to complete and lease current and
    future development projects on schedule, on budget and in
    accordance with expectations;                     
|
| |  | our ability to maintain occupancy and to timely
    lease or re-lease space at current or anticipated rents;                                                      
|
| |  | future demand for our debt and Equity
    Offices equity securities;                                                                                             
|
| |  | our ability to refinance our debt at reasonable
    terms upon maturity;                                                                                          
|
| |  | our ability to achieve economies of scale over
    time and to realize anticipated cost savings from the
    implementation of our EOPlus initiatives;            
|
| |  | changes in interest rates;                                                                                                                                        
|
| |  | changes in operating costs, including real estate
    taxes, utilities, insurance and security costs;                                                             
|
| |  | our ability to pay amounts due to our noteholders
    and preferred unitholders before any distribution to holders of
    Units; and                              
|
| |  | our ability to obtain, at a reasonable cost,
    adequate insurance coverage for catastrophic events, such as
    earthquakes and terrorist acts.                 

Overview

The following discussion and analysis is based
primarily on the consolidated financial statements of EOP
Partnership for the periods presented and should be read
together with the notes thereto contained in this
Form 10-Q. Terms employed herein as defined terms, but
without definition, shall have the meaning set forth in the
notes to the financial statements.

22



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##### Table of Contents



Key Transactions

During the six months ended June 30, 2003,
we completed the following key transactions:



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | disposed of 13 office properties, one industrial
    property and one vacant land parcel in various transactions to
    unaffiliated parties for approximately $310.4 million. The
    sold office properties consisted of approximately
    1,753,665 square feet and 32 residential units, and
    the industrial property consisted of approximately
    60,300 square feet;                                                                         
|
| |  | issued $500 million of unsecured notes due
    January 2013 at an all-in effective rate of 5.98% and used a
    portion of the net proceeds to repay $300 million of
    unsecured notes that matured in February 2003;                                                                                                                                                                                                                                 
|
| |  | Equity Office repurchased 13,861,400 Common
    Shares at an average price of $25.50 per share for a total
    of $353.4 million in the aggregate. In connection with the
    repurchases, EOP Partnership purchased from Equity Office and
    retired a corresponding number of Units for an aggregate
    purchase price equal to the aggregate purchase price for all
    Common Share repurchases;                                                 
|
| |  | sold 5.0 million common shares of Inktomi
    Corporation received in connection with a lease termination in
    2002 for approximately $8.1 million;                                                                                                                                                                                                                                                                                                   
|
| |  | Equity Office redeemed the 6,000,000 outstanding
    7.875% Series E Cumulative Redeemable Preferred Shares at a
    redemption price of $25.00 per share for an aggregate
    redemption price of approximately $151.9 million, which
    includes approximately $1.9 million of accrued and unpaid
    distributions. In connection with such redemption, EOP
    Partnership redeemed all of the Series E Preferred Units
    from Equity Office; and
|
| |  | Equity Office redeemed the 4,000,000 outstanding
    8.98% Series F Cumulative Redeemable Preferred Shares at a
    redemption price of $25.00 per share for an aggregate
    redemption price of $100.0 million. In connection with such
    redemption, EOP Partnership redeemed all of the Series F
    Preferred Units from Equity Office.                                                                                                          

Critical Accounting Policies and
Estimates

Refer to our 2002 Annual Report on Form 10-K
for a discussion of our critical accounting policies which
include revenue recognition and allowance for doubtful accounts,
impairment of long-lived assets, depreciation and the fair value
of financial instruments including derivative instruments. There
have been no material changes to these policies in 2003.

Accounting Policy Adopted in 2003



| |                                            
| | -------------------------------------------
| | Stock Based Employee Compensation
    Plans

Effective January 1, 2003, we adopted
Statement of Financial Accounting Standards No. 123
(SFAS No. 123) Accounting for Stock
Based Compensation,which requires a fair value based
accounting method for determining compensation expense
associated with the issuance of stock options and other equity
awards. See Note 12  Share Based Employee
Compensation Plans for more information.

Impact of New Accounting Standards



| |                           
| | --------------------------
| | Variable Interest Entities

In January 2003, the Financial Accounting
Standards Board (FASB) issued Interpretation
No. 46 Consolidation of Variable Interest Entities and
Interpretation of Accounting Research Bulletin
(ARB) No. 51 (FIN 46).
FIN 46 introduces a new consolidation model, the variable
interest model, which determines control (and consolidation)
based on potential variability in gains and losses of the entity
being evaluated for consolidation. The consolidation provisions
of FIN 46 apply immediately to variable interests in
variable interest entities created after January 31, 2003.
It applies in the first fiscal year or interim period beginning
after June 15, 2003 to variable interest entities in which
an enterprise that is a public company holds a variable

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##### Table of Contents



interest that it acquired before February 1,
2003. Management has reviewed the provisions of FIN 46 and
has determined that it will not have an impact on EOP
Partnerships financial condition and results of operations.




| |                       
| | ----------------------
| | Derivative Instruments

In April 2003, the FASB issued Statement
No. 149 Amendment of Statement 133 on Derivative
Instruments and Hedging Activities
(SFAS No. 149). SFAS No. 149 amends
and clarifies accounting for derivative instruments, including
certain derivative instruments embedded in other contracts, and
for hedging activities under Statement 133.
SFAS No. 149 is effective for contracts entered into
or modified after June 30, 2003, with some exceptions, and
for hedging relationships designated after June 30, 2003.
The guidance should be applied prospectively. Management does
not anticipate that the provisions of SFAS No. 149 will
have a material impact on EOP Partnerships financial
condition and results of operations.



| |                      
| | ---------------------
| | Financial Instruments

In May 2003, the FASB issued Statement
No. 150 Accounting for Certain Financial Instruments
with Characteristics of both Liabilities and Equity
(SFAS No. 150). This statement establishes
standards for classifying and measuring as liabilities certain
financial instruments that embody obligations of the issuer and
have characteristics of both liabilities and equity.
SFAS No. 150 is effective for all financial
instruments created or modified after May 31, 2003, and
otherwise is effective at the beginning of the first interim
period beginning after June 15, 2003 (July 1, 2003 for
calendar quarter companies). Management does not anticipate that
the provisions of SFAS No. 150 will have an impact on
EOP Partnerships financial condition and results of
operations.

Results of Operations



| |                                          
| | -----------------------------------------
| | Trends in Property Operating
    Revenues

We receive our income primarily from rental
revenue generated by leases at our Office Properties, including
tenant reimbursements for certain operating costs and parking
revenues. As a result of the current slowdown in economic
activity, we have experienced both a decrease in our occupancy
rates and a general decline in our overall market rental rates.
Below is a summary of our leasing activity for tenants taking
occupancy for the periods presented for our Office Properties.
Our 10 largest metropolitan statistical areas
(MSAs) in terms of property net operating income
from continuing operations in order from greatest to least are
Boston, San Francisco, San Jose, Seattle,
New York, Chicago, Washington D.C., Los Angeles,

24



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##### Table of Contents



Atlanta and Orange County. Our 10 largest
MSAs accounted for approximately 78.0% of property net operating
income from continuing operations in the second quarter of 2003.


|                        |                                                                                                          |                      |   |           |                    |  |   |                      |   |  |              |            |   |         |   |            |      |  |   |           |   |  |   |           |   |  |   |            |  
|----------------------- | -------------------------------------------------------------------------------------------------------- | -------------------- | - | --------- | ------------------ |  | - | -------------------- | - |  | ------------ | ---------- | - | ------- | - | ---------- | ---- |  | - | --------- | - |  | - | --------- | - |  | - | ---------- | -
|                        |                                                                                                          |                      |   |           |                    |  |   |                     
|                        |                                                                                                          | For the three months |   |           | For the six months |  |   | For the three months |   |  | For the      |           
|                        |                                                                                                          | ended June 30,       |   |           | ended June 30,     |  |   | ended March 31,      |   |  | year ended   |           
|                        |                                                                                                          |                      |   |           |                    |  |   |                      |   |  | December 31, |           
|Office Property Data:   |                                                                                                          | 2003                 |   |           | 2002               |  |   | 2003                 |   |  | 2002         |            |   | 2003(a) |   |            | 2002 |  |   | 2002      |  
|                        |                                                                                                          |                      |   |           |                    |  |   |                      |   |  |              |            |   |         |   |            |      |  |   |           |  
|10 Largest MSAs:        |                                                                                                          |                      |   |           |                    |  |   |                      |   |  |              |            |   |         |   |            |      |  |   |           |   |  |   |           |   |  |   |           
|                        | Portion of total portfolio based on square feet
    at end of period                                     |                      |   | 68.8      | %                  |  |   | 67.3                 | % |  |              | 68.8       | % |         |   | 67.3       | %    |  |   | 68.2      | % |  |   | 67.2      | % |  |   | 68.1       | %
|                        | Occupancy at end of period                                                                               |                      |   | 87.0      | %                  |  |   | 90.4                 | % |  |              | 87.0       | % |         |   | 90.4       | %    |  |   | 86.9      | % |  |   | 91.2      | % |  |   | 88.8       | %
|                        | Gross square footage for space occupied during
    the period                                            |                      |   | 3,185,048 |                    |  |   | 3,814,526            |   |  |              | 7,082,091  |   |         |   | 6,595,362  |      |  |   | 3,897,043 |   |  |   | 2,780,836 |   |  |   | 13,582,766 |  
|                        | Weighted average annual rent per square foot for
    space occupied during the period(b)(c)              |                      | $ | 29.07     |                    |  | $ | 32.37                |   |  | $            | 29.69      |   |         | $ | 34.82      |      |  | $ | 29.95     |   |  | $ | 38.21     |   |  | $ | 31.54      |  
|                        | Gross square footage for expiring and terminated
    leases during the period                            |                      |   | 3,409,363 |                    |  |   | 4,893,627            |   |  |              | 8,295,338  |   |         |   | 8,223,348  |      |  |   | 4,885,975 |   |  |   | 3,329,721 |   |  |   | 16,308,269 |  
|                        | Weighted average annual rent per square foot for
    expiring and terminated leases during the period(b) |                      | $ | 30.93     |                    |  | $ | 31.02                |   |  | $            | 31.78      |   |         | $ | 30.99      |      |  | $ | 32.77     |   |  | $ | 30.92     |   |  | $ | 31.19      |  
|Total Office Portfolio: |                                                                                                          |                      |   |           |                    |  |   |                      |   |  |              |            |   |         |   |            |      |  |   |           |   |  |   |           |   |  |   |           
|                        | Portion of total portfolio based on square feet
    at end of period                                     |                      |   | 100.0     | %                  |  |   | 100.0                | % |  |              | 100.0      | % |         |   | 100.0      | %    |  |   | 100.0     | % |  |   | 100.0     | % |  |   | 100.0      | %
|                        | Occupancy at end of period                                                                               |                      |   | 87.1      | %                  |  |   | 90.0                 | % |  |              | 87.1       | % |         |   | 90.0       | %    |  |   | 87.2      | % |  |   | 90.7      | % |  |   | 88.6       | %
|                        | Gross square footage for space occupied during
    the period                                            |                      |   | 4,632,148 |                    |  |   | 5,622,736            |   |  |              | 10,518,434 |   |         |   | 10,120,219 |      |  |   | 5,886,286 |   |  |   | 4,497,483 |   |  |   | 20,620,427 |  
|                        | Weighted average annual rent per square foot for
    space occupied during the period(b)(c)              |                      | $ | 26.61     |                    |  | $ | 29.58                |   |  | $            | 26.95      |   |         | $ | 30.77      |      |  | $ | 27.17     |   |  | $ | 32.13     |   |  | $ | 28.48      |  
|                        | Gross square footage for expiring and terminated
    leases during the period                            |                      |   | 4,755,613 |                    |  |   | 6,775,805            |   |  |              | 11,844,621 |   |         |   | 11,861,865 |      |  |   | 7,089,008 |   |  |   | 5,086,060 |   |  |   | 23,711,452 |  
|                        | Weighted average annual rent per square foot for
    expiring and terminated leases during the period(b) |                      | $ | 28.23     |                    |  | $ | 28.58                |   |  | $            | 28.89      |   |         | $ | 28.29      |      |  | $ | 29.38     |   |  | $ | 27.79     |   |  | $ | 28.61      |  



---



|    |  |                                                                                                                                                                                                                                                                                                       
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | This period has been restated due to an error in
    the previously disclosed calculation.                                                                                                                                                                                                            
|   
|(b) |  | These weighted average rental rates are based on
    the average annual base rent per square foot over the term of
    each of the leases and the current estimated tenant
    reimbursements, if any.                                                                                                
|   
|(c) |  | Weighted average annual rent per square foot for
    new office leases for which the tenants have occupied the space
    during the relevant period may lag behind market because leasing
    decisions typically are made anywhere from one month to 12 or
    more months prior to taking occupancy.

A significant contributor to the decline in
occupancy for our Office Properties has been the increased level
of early lease terminations. Since January 1, 2002 through
June 30, 2003, we have had approximately

25



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##### Table of Contents



8.6 million square feet of early lease
terminations and received lease termination fees of
approximately $177.1 million on a portion of the
terminations. These amounts include approximately
0.9 million square feet of early lease terminations and
approximately $11.5 million of lease termination fees for
the three months ended June 30, 2003. Future rental income
may be affected by future lease terminations as we are unlikely
to be able to collect upon termination the full contracted
amount payable under the leases as well as the additional cost
to relet the space. Although there is no way of predicting
future lease terminations, we currently anticipate that lease
termination fees will be significantly lower in 2003 as compared
to 2002.


As of June 30, 2003, approximately
60.0 million occupied square feet (approximately 55.5% of
the total occupied square feet) is expiring through 2007,
including approximately 6.6 million occupied square feet in
the remainder of 2003. If we are unable to release the expiring
space, we will experience further declines in occupancy and our
revenues and results of operations in subsequent periods will be
adversely affected. Occupancy as of June 30, 2003 was
relatively stable for the first time in 12 consecutive quarters,
although no assurance can be given that it will not decline in
subsequent periods.

In addition to the downward trends in occupancy
and market rents, we have continued to experience uncollectible
receivables relating to tenants in bankruptcy or experiencing
financial difficulty. For the three and six months ended
June 30, 2003, bad debt expense was approximately
$3.9 million and $11.4 million, respectively, and
$6.7 million and $13.6 million for the same periods in
2002. Although we have collateral from many of our tenants,
additional write-offs may occur in subsequent periods.



| |                                          
| | -----------------------------------------
| | Trends in Property Operating
    Expenses



| |       
| | ------
| | EOPlus

In 2001, we initiated a comprehensive analysis of
our operating structure with the help of a management consulting
firm and our employees. The goal of the analysis was to
significantly reduce operating expenses, streamline operations,
improve customer service, reduce lease cycle time, increase
occupancy and retain tenants. The analysis resulted in a
significant reengineering effort called EOPlus. As part of this
effort, many of the activities that occurred at the property
have been and are being centralized into regional offices with a
view towards allowing property managers to spend more time
building customer relationships. The centralization of each
regions operations is designed to provide higher service
to our customers at a lower cost. By consolidating our property
management offices, we expect to make available for leasing in
excess of 100,000 square feet of office space. Eight of the
ten regional office consolidations have been completed and we
anticipate this new model will be fully implemented in all of
our markets by the end of 2003. By the end of 2003, we expect to
have 15% fewer employees than at the end of 2001 as a result of
staff reductions and attrition. The related severance expenses
in 2003 will be approximately $2.8 million.

We have also created a central purchasing
function to review and analyze our goods and services
expenditures. The goal of the central purchasing function is to
obtain preferred pricing, reduce the number of our vendors and
reduce the number of invoices we process. We estimate that we
will recognize approximately $10 million of cost savings in
2003, net of the associated severance cost and the impact of
lower tenant reimbursements. Beginning in 2004, after the new
model is fully implemented, we expect annual cost savings of
$75 million to $100 million. We estimate that EOP
Partnership will realize approximately 45 percent to 50
percent of these annual cost savings.



| |                                         
| | ----------------------------------------
| | Acquisition and Disposition
    Activity

Below is a summary of our acquisition and
disposition activity since January 1, 2002. The buildings
and total square feet shown include properties we own in joint
ventures that we account for under the equity method of
accounting with other partners and reflect the total square feet
of the properties. Excluding the joint

26



---



##### Table of Contents



venture partners share of the square feet
of the office properties, we effectively owned
117,819,812 square feet of office space as of June 30,
2003.


|                        |                                  |                   |     |              |                       |  |             |                    |       |  |             |    |   |         |           |         |        |  |   |    |   |  |        |        |  
|----------------------- | -------------------------------- | ----------------- | --- | ------------ | --------------------- |  | ----------- | ------------------ | ----- |  | ----------- | -- | - | ------- | --------- | ------- | ------ |  | - | -- | - |  | ------ | ------ | -
|                        |                                  |                   |     |              |                       | 
|                        |                                  | Office Properties |     |              | Industrial Properties |  |             | Parking Facilities |      
|                        |                                  |                   |     |              |                       |  |             |                    |      
|                        |                                  |                   |     | Total Square |                       |  |             |                    | Total |  |             |   
|                        |                                  | Buildings         |     |              | Feet                  |  |             | Buildings          |       |  | Square Feet |    |   | Garages |           |         | Spaces | 
|                        |                                  |                   |     |              |                       |  |             |                    |       |  |             |    |   |         |           |         |        | 
|Properties owned as of: |                                  |                   |     |              |                       |  |             |                    |       |  |             |    |   |         |           |         |        |  |   |    |   |  |        |       
|January 1, 2002         |                                  |                   | 774 |              |                       |  | 128,233,987 |                    |       |  | 79          |    |   |         | 6,044,831 |         |        |  | 5 |    |   |  | 10,765 |       
|                        | Acquisitions                     |                   |     | 2            |                       |  |             | 260,372            |       |  |             |   |   |         |           |        |        |  |   |   |   |  |        |       |  
|                        | Developments placed in service   |                   |     | 3            |                       |  |             | 330,646            |       |  |             |   |   |         |           |        |        |  |   |   |   |  |        |       |  
|                        | Dispositions                     |                   |     | (45          | )                     |  |             | (3,113,189         | )     |  |             | (2 | ) |         |           | (77,072 | )      |  |   | (4 | ) |  |        | (7,464 | )
|                        | Building remeasurements          |                   |     |             |                       |  |             | 13,583             |       |  |             |   |   |         |           |        |        |  |   |   |   |  |        |       |  
|                        |                                  |                   |     |              |                       |  |             |                    |       |  |             |    |   |         |           |         |        | 
|December 31, 2002       |                                  |                   | 734 |              |                       |  | 125,725,399 |                    |       |  | 77          |    |   |         | 5,967,759 |         |        |  | 1 |    |   |  | 3,301  |       
|                        | Developments placed in service   |                   |     | 1            |                       |  |             | 225,490            |       |  |             |   |   |         |           |        |        |  |   |   |   |  |        |       |  
|                        | Dispositions                     |                   |     | (6           | )                     |  |             | (437,473           | )     |  |             | (1 | ) |         |           | (60,300 | )      |  |   |   |   |  |        |       |  
|                        | Building remeasurements          |                   |     |             |                       |  |             | 34,608             |       |  |             |   |   |         |           |        |        |  |   |   |   |  |        |       |  
|                        |                                  |                   |     |              |                       |  |             |                    |       |  |             |    |   |         |           |         |        | 
|March 31, 2003          |                                  |                   | 729 |              |                       |  | 125,548,024 |                    |       |  | 76          |    |   |         | 5,907,459 |         |        |  | 1 |    |   |  | 3,301  |       
|                        | Dispositions                     |                   |     | (7           | )                     |  |             | (1,316,192         | )     |  |             |   |   |         |           |        |        |  |   |   |   |  |        |       |  
|                        | Property taken out of service(a) |                   |     | (1           | )                     |  |             | (115,340           | )     |  |             |   |   |         |           |        |        |  |   |   |   |  |        |       |  
|                        | Building remeasurements          |                   |     |             |                       |  |             | 17,912             |       |  |             |   |   |         |           |        |        |  |   |   |   |  |        |       |  
|                        |                                  |                   |     |              |                       |  |             |                    |       |  |             |    |   |         |           |         |        | 
|June 30, 2003           |                                  |                   | 721 |              |                       |  | 124,134,404 |                    |       |  | 76          |    |   |         | 5,907,459 |         |        |  | 1 |    |   |  | 3,301  |       
|                        |                                  |                   |     |              |                       |  |             |                    |       |  |             |    |   |         |           |         |        | 






|    |                                                                                                                                                                       
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | One building consisting of 115,340 square
    feet (Cambridge Science Center (f/k/a Riverview I)) is now
    considered a development because it is being redeveloped.

The financial data presented in the consolidated
statements of operations show changes in revenues and expenses
from period-to-period. The following analysis shows changes
attributable to the Properties that were held during the entire
period for the periods being compared (the Core
Portfolio) and the changes in our aggregate total
portfolio of Properties (the Total Portfolio). The
significant differences between our Core and Total Portfolios
are revenues recorded and expenses incurred at the corporate
level, property acquisitions since the beginning of 2002 and
certain developments placed in service.

As reflected in the tables below, property
operating revenues include rental revenues, reimbursements from
tenants for certain expenses, parking revenue and other property
operating revenues, such as lease termination income. Property
operating expenses include real estate taxes, insurance, repairs
and maintenance and other types of operating expenses.

27



---



##### Table of Contents





| |                                                                        
| | -----------------------------------------------------------------------
| | Comparison of the three months ended
    June 30, 2003 to June 30, 2002

The table below represents selected operating
information for the Total Portfolio and for the Core Portfolio
consisting of 692 consolidated Office Properties and
76 Industrial Properties and 23 unconsolidated joint
venture Properties acquired or placed in service on or prior to
April 1, 2002.

|                                                                                                                                  |                |                 |         |           |                |   |         |            |  |   |         |           |   |      |       |      |      |   |         |            |  |   |         |         |  |   |         |         |   |  |       |      |  
|--------------------------------------------------------------------------------------------------------------------------------- | -------------- | --------------- | ------- | --------- | -------------- | - | ------- | ---------- |  | - | ------- | --------- | - | ---- | ----- | ---- | ---- | - | ------- | ---------- |  | - | ------- | ------- |  | - | ------- | ------- | - |  | ----- | ---- | -
|                                                                                                                                  |                |                 |         |          
|                                                                                                                                  |                | Total Portfolio |         |           | Core Portfolio |  
|                                                                                                                                  |                |                 |         |           |                |  
|                                                                                                                                  |                |                 |         | Increase/ |                |   | %       |            |  |   |         | Increase/ |   |      | %     |     
|(Dollars in thousands)                                                                                                            |                | 2003            |         |           | 2002           |   |         | (Decrease) |  |   | Change  |           |   | 2003 |       |      | 2002 |   |         | (Decrease) |  |   | Change  |        
|                                                                                                                                  |                |                 |         |           |                |   |         |            |  |   |         |           |   |      |       |      |      |   |         |            |  |   |         |        
|Property operating revenues                                                                                                       |                | $               | 803,738 |           |                | $ | 850,420 |            |  | $ | (46,682 | )         |   |      | (5.5  | )%   |      | $ | 798,829 |            |  | $ | 848,088 |         |  | $ | (49,259 | )       |   |  | (5.8  | )%  
|Fee income                                                                                                                        |                |                 | 3,526   |           |                |   | 3,977   |            |  |   | (451    | )         |   |      | (11.3 | )    |      |   |        |            |  |   |        |         |  |   |         |         |   |  |       |     
|Interest/ dividend income                                                                                                         |                |                 | 3,695   |           |                |   | 7,492   |            |  |   | (3,797  | )         |   |      | (50.7 | )    |      |   | 903     |            |  |   | 1,004   |         |  |   | (101    | )       |   |  | (10.1 | )   
|                                                                                                                                  |                |                 |         |           |                |   |         |            |  |   |         |           |   |      |       |      |      |   |         |            |  |   |         |        
|                                                                                                                                  | Total revenues |                 |         | 810,959   |                |   |         | 861,889    |  |   |         | (50,930   | ) |      |       | (5.9 | )    |   |         | 799,732    |  |   |         | 849,092 |  |   |         | (49,360 | ) |  |       | (5.8 | )
|                                                                                                                                  |                |                 |         |           |                |   |         |            |  |   |         |           |   |      |       |      |      |   |         |            |  |   |         |        
|Interest expense(a)                                                                                                               |                |                 | 206,604 |           |                |   | 202,741 |            |  |   | 3,863   |           |   |      | 1.9   |      |      |   | 47,295  |            |  |   | 50,161  |         |  |   | (2,866  | )       |   |  | (5.7  | )   
|Depreciation and amortization                                                                                                     |                |                 | 178,160 |           |                |   | 171,581 |            |  |   | 6,579   |           |   |      | 3.8   |      |      |   | 170,993 |            |  |   | 167,466 |         |  |   | 3,527   |         |   |  | 2.1   |     
|Real estate taxes                                                                                                                 |                |                 | 92,161  |           |                |   | 94,292  |            |  |   | (2,131  | )         |   |      | (2.3  | )    |      |   | 90,588  |            |  |   | 94,060  |         |  |   | (3,472  | )       |   |  | (3.7  | )   
|Property operating expenses                                                                                                       |                |                 | 191,412 |           |                |   | 202,178 |            |  |   | (10,766 | )         |   |      | (5.3  | )    |      |   | 189,033 |            |  |   | 200,864 |         |  |   | (11,831 | )       |   |  | (5.9  | )   
|Ground rent                                                                                                                       |                |                 | 4,870   |           |                |   | 5,287   |            |  |   | (417    | )         |   |      | (7.9  | )    |      |   | 4,793   |            |  |   | 5,107   |         |  |   | (314    | )       |   |  | (6.1  | )   
|Corporate general and administrative(b)                                                                                           |                |                 | 17,655  |           |                |   | 18,512  |            |  |   | (857    | )         |   |      | (4.6  | )    |      |   |        |            |  |   |        |         |  |   |        |         |   |  |      |     
|                                                                                                                                  |                |                 |         |           |                |   |         |            |  |   |         |           |   |      |       |      |      |   |         |            |  |   |         |        
|                                                                                                                                  | Total expenses |                 |         | 690,862   |                |   |         | 694,591    |  |   |         | (3,729    | ) |      |       | (0.5 | )    |   |         | 502,702    |  |   |         | 517,658 |  |   |         | (14,956 | ) |  |       | (2.9 | )
|                                                                                                                                  |                |                 |         |           |                |   |         |            |  |   |         |           |   |      |       |      |      |   |         |            |  |   |         |        
|Income before income taxes, allocation to
    minority interests and income from investments in unconsolidated
    joint ventures |                |                 | 120,097 |           |                |   | 167,298 |            |  |   | (47,201 | )         |   |      | (28.2 | )    |      |   | 297,030 |            |  |   | 331,434 |         |  |   | (34,404 | )       |   |  | (10.4 | )   
|Income taxes                                                                                                                      |                |                 | (1,575  | )         |                |   | (1,714  | )          |  |   | 139     |           |   |      | (8.1  | )    |      |   | (201    | )          |  |   | (1,755  | )       |  |   | 1,554   |         |   |  | (88.5 | )   
|Minority interests                                                                                                                |                |                 | (1,851  | )         |                |   | (995    | )          |  |   | (856    | )         |   |      | 86.0  |      |      |   | (2,231  | )          |  |   | (995    | )       |  |   | (1,236  | )       |   |  | 124.2 |     
|Income from investments in unconsolidated joint
    ventures                                                                      |                |                 | 20,946  |           |                |   | 22,297  |            |  |   | (1,351  | )         |   |      | (6.1  | )    |      |   | 14,813  |            |  |   | 21,522  |         |  |   | (6,709  | )       |   |  | (31.2 | )   
|                                                                                                                                  |                |                 |         |           |                |   |         |            |  |   |         |           |   |      |       |      |      |   |         |            |  |   |         |        
|Income from continuing operations                                                                                                 |                |                 | 137,617 |           |                |   | 186,886 |            |  |   | (49,269 | )         |   |      | (26.4 | )    |      |   | 309,411 |            |  |   | 350,206 |         |  |   | (40,795 | )       |   |  | (11.6 | )   
|Discontinued operations (including net gain on
    sales of real estate of $44,448 and $5,499, respectively)                      |                |                 | 46,166  |           |                |   | 16,597  |            |  |   | 29,569  |           |   |      | 178.2 |      |      |   |        |            |  |   |        |         |  |   |        |         |   |  |      |     
|                                                                                                                                  |                |                 |         |           |                |   |         |            |  |   |         |           |   |      |       |      |      |   |         |            |  |   |         |        
|Net income                                                                                                                        |                | $               | 183,783 |           |                | $ | 203,483 |            |  | $ | (19,700 | )         |   |      | (9.7  | )%   |      | $ | 309,411 |            |  | $ | 350,206 |         |  | $ | (40,795 | )       |   |  | (11.6 | )%  
|                                                                                                                                  |                |                 |         |           |                |   |         |            |  |   |         |           |   |      |       |      |      |   |         |            |  |   |         |        
|Property net operating income from continuing
    operations(c)                                                                   |                | $               | 520,165 |           |                | $ | 553,950 |            |  | $ | (33,785 | )         |   |      | (6.1  | )%   |      | $ | 519,208 |            |  | $ | 553,164 |         |  | $ | (33,956 | )       |   |  | (6.1  | )%  
|                                                                                                                                  |                |                 |         |           |                |   |         |            |  |   |         |           |   |      |       |      |      |   |         |            |  |   |         |        
|Deferred rental revenue                                                                                                           |                | $               | 19,632  |           |                | $ | 18,778  |            |  | $ | 854     |           |   |      | 4.5   | %    |      | $ | 19,501  |            |  | $ | 18,771  |         |  | $ | 730     |         |   |  | 3.9   | %   
|                                                                                                                                  |                |                 |         |           |                |   |         |            |  |   |         |           |   |      |       |      |      |   |         |            |  |   |         |        
|Lease termination fees                                                                                                            |                | $               | 9,268   |           |                | $ | 12,212  |            |  | $ | (2,944  | )         |   |      | (24.1 | )%   |      | $ | 9,268   |            |  | $ | 12,212  |         |  | $ | (2,944  | )       |   |  | (24.1 | )%  
|                                                                                                                                  |                |                 |         |           |                |   |         |            |  |   |         |           |   |      |       |      |      |   |         |            |  |   |         |        






|    |  |                                                                                                                                                                                                                             
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Interest expense for the Core Portfolio
    represents interest expense on property secured mortgage debt
    and does not include interest expense on the unsecured notes or
    the line of credit.                       
|   
|(b) |  | Corporate general and administrative is not
    allocated to the Core Portfolio because the types of expenses
    included in Corporate general and administrative are not
    directly identifiable to specific Properties.
|   
|(c) |  | Represents segment data. See Note 11-Segment
    Information.                                                                                                                                                               



| |                            
| | ---------------------------
| | Property Operating Revenues

The decrease in property operating revenues in
the Total Portfolio is primarily attributable to reduced
occupancy in the Core Portfolio from 90.5% at April 1, 2002
to 86.7% at June 30, 2003 and lower lease termination fees.
A large portion of the decrease in occupancy was due to early
lease terminations. In addition to the decline in occupancy,
rental revenues declined as a result of average rental rates on
new leases being lower than the average rental rates on expiring
leases.



| |                          
| | -------------------------
| | Interest/ Dividend Income

Interest and dividend income decreased for the
Total Portfolio by approximately $3.8 million primarily
from a reduction of interest and dividends from various notes
receivable and investments.

28



---



##### Table of Contents





| |                 
| | ----------------
| | Interest Expense

Interest expense for the Total Portfolio
increased primarily as a result of an increase in unsecured note
balances from June 30, 2002 to June 30, 2003. Interest
expense for the Core Portfolio decreased primarily as a result
of mortgage debt repayments.



| |                              
| | -----------------------------
| | Depreciation and Amortization

Total Portfolio and Core Portfolio depreciation
and amortization expense increased from the prior period
primarily as a result of capital and tenant improvements made
since the beginning of the prior period and from an increase in
deferred leasing costs.



| |                  
| | -----------------
| | Real Estate Taxes

Real estate taxes decreased for the Total and
Core Portfolio primarily due to a decrease in real estate taxes
in California as a result of property tax appeals.



| |                            
| | ---------------------------
| | Property Operating Expenses

For the Core Portfolio, property operating
expenses decreased primarily as a result of lower utility
expense of approximately $1.9 million and lower insurance
expense of approximately $3.6 million primarily as a result
of changes in our insurance coverage. In addition, for the Core
Portfolio, maintenance expense decreased by approximately
$3.5 million primarily due to lower occupancy and new
contracts that were renegotiated as part of our EOPlus
initiative. Payroll expense decreased by approximately
$0.8 million due to staff reductions. These decreases in
property operating expenses were partially offset by severance
expense of approximately $0.7 million incurred in the
second quarter of 2003.



| |            
| | -----------
| | Ground Rent

Ground rent decreased primarily due to our
acquisition in the fourth quarter of 2002 of the land underlying
an Office Property which had been subject to a ground lease.



| |                                                  
| | -------------------------------------------------
| | Corporate General and Administrative
    Expenses

Beginning in fiscal 2003, we reclassified
regional property operating expenses and other costs directly
associated with property operations from corporate general and
administrative expense to property operating expense.
Approximately $22.1 million and $19.7 million were
reclassified for the three months ended June 30, 2003 and
2002, respectively. The regional offices exist to manage and
lease the Properties. Accordingly, these expenses are classified
as property operating expenses and the prior periods have been
reclassified to provide for comparability. This reclassification
did not change the prior period results or shareholders
equity.

In addition, we incurred approximately
$4.2 million of severance expense in the second quarter of
2003 compared to $4.3 million in the second quarter of
2002. The severance expense consists of the accelerated vesting
of share options and restricted shares and cash payments.



| |                                                             
| | ------------------------------------------------------------
| | Income from Investments in Unconsolidated
    Joint Ventures

Income from investments in unconsolidated joint
ventures decreased for the Core Portfolio primarily due to a
decrease in lease termination fees from $5.9 million to
$2.2 million and a decrease in property operating revenues
primarily attributable to reduced occupancy and rental rates on
new leases being lower than the average rental rates on expiring
leases.



| |                        
| | -----------------------
| | Discontinued Operations

The increase in discontinued operations is
primarily due to the gain on the sale of the properties sold
during the current period as compared to the gain on the sale of
the properties sold during the prior period.

29



---



##### Table of Contents



The net income of properties sold since
January 1, 2002 is included in discontinued operations up
to the respective disposition date.




| |                                                                      
| | ---------------------------------------------------------------------
| | Comparison of the six months ended
    June 30, 2003 to June 30, 2002

The table below represents selected operating
information for the Total Portfolio and for the Core Portfolio
consisting of 691 consolidated Office Properties and
76 Industrial Properties and 23 unconsolidated joint
venture Properties acquired or placed in service on or prior to
January 1, 2002.

|                                                                                                                                  |                |                 |           |           |                |   |           |            |  |   |          |           |   |      |       |      |      |   |           |            |  |   |           |           |  |   |          |          |   |  |       |      |  
|--------------------------------------------------------------------------------------------------------------------------------- | -------------- | --------------- | --------- | --------- | -------------- | - | --------- | ---------- |  | - | -------- | --------- | - | ---- | ----- | ---- | ---- | - | --------- | ---------- |  | - | --------- | --------- |  | - | -------- | -------- | - |  | ----- | ---- | -
|                                                                                                                                  |                |                 |           |          
|                                                                                                                                  |                | Total Portfolio |           |           | Core Portfolio |  
|                                                                                                                                  |                |                 |           |           |                |  
|                                                                                                                                  |                |                 |           | Increase/ |                |   | %         |            |  |   |          | Increase/ |   |      | %     |     
|(Dollars in thousands)                                                                                                            |                | 2003            |           |           | 2002           |   |           | (Decrease) |  |   | Change   |           |   | 2003 |       |      | 2002 |   |           | (Decrease) |  |   | Change    |          
|                                                                                                                                  |                |                 |           |           |                |   |           |            |  |   |          |           |   |      |       |      |      |   |           |            |  |   |           |          
|Property operating revenues                                                                                                       |                | $               | 1,609,029 |           |                | $ | 1,703,337 |            |  | $ | (94,308  | )         |   |      | (5.5  | )%   |      | $ | 1,592,709 |            |  | $ | 1,696,166 |           |  | $ | (103,457 | )        |   |  | (6.1  | )%  
|Fee income                                                                                                                        |                |                 | 8,462     |           |                |   | 8,055     |            |  |   | 407      |           |   |      | 5.1   |      |      |   |          |            |  |   |          |           |  |   |         |          |   |  |      |     
|Interest/ dividend income                                                                                                         |                |                 | 6,954     |           |                |   | 14,332    |            |  |   | (7,378   | )         |   |      | (51.5 | )    |      |   | 1,813     |            |  |   | 1,941     |           |  |   | (128     | )        |   |  | (6.6  | )   
|Realized gain on sale of marketable securities                                                                                    |                |                 | 8,143     |           |                |   |          |            |  |   | 8,143    |           |   |      |      |      |      |   |          |            |  |   |          |           |  |   |         |          |   |  |      |     
|                                                                                                                                  |                |                 |           |           |                |   |           |            |  |   |          |           |   |      |       |      |      |   |           |            |  |   |           |          
|                                                                                                                                  | Total revenues |                 |           | 1,632,588 |                |   |           | 1,725,724  |  |   |          | (93,136   | ) |      |       | (5.4 | )    |   |           | 1,594,522  |  |   |           | 1,698,107 |  |   |          | (103,585 | ) |  |       | (6.1 | )
|                                                                                                                                  |                |                 |           |           |                |   |           |            |  |   |          |           |   |      |       |      |      |   |           |            |  |   |           |          
|Interest expense(a)                                                                                                               |                |                 | 411,927   |           |                |   | 407,761   |            |  |   | 4,166    |           |   |      | 1.0   |      |      |   | 94,464    |            |  |   | 100,055   |           |  |   | (5,591   | )        |   |  | (5.6  | )   
|Depreciation and amortization                                                                                                     |                |                 | 352,735   |           |                |   | 339,435   |            |  |   | 13,300   |           |   |      | 3.9   |      |      |   | 339,155   |            |  |   | 330,349   |           |  |   | 8,806    |          |   |  | 2.7   |     
|Real estate taxes                                                                                                                 |                |                 | 183,393   |           |                |   | 189,830   |            |  |   | (6,437   | )         |   |      | (3.4  | )    |      |   | 180,293   |            |  |   | 188,865   |           |  |   | (8,572   | )        |   |  | (4.5  | )   
|Property operating expenses                                                                                                       |                |                 | 376,973   |           |                |   | 388,155   |            |  |   | (11,182  | )         |   |      | (2.9  | )    |      |   | 371,222   |            |  |   | 385,972   |           |  |   | (14,750  | )        |   |  | (3.8  | )   
|Ground rent                                                                                                                       |                |                 | 9,466     |           |                |   | 10,797    |            |  |   | (1,331   | )         |   |      | (12.3 | )    |      |   | 9,249     |            |  |   | 10,437    |           |  |   | (1,188   | )        |   |  | (11.4 | )   
|Corporate general and administrative(b)                                                                                           |                |                 | 31,157    |           |                |   | 35,808    |            |  |   | (4,651   | )         |   |      | (13.0 | )    |      |   |          |            |  |   |          |           |  |   |         |          |   |  |      |     
|                                                                                                                                  |                |                 |           |           |                |   |           |            |  |   |          |           |   |      |       |      |      |   |           |            |  |   |           |          
|                                                                                                                                  | Total expenses |                 |           | 1,365,651 |                |   |           | 1,371,786  |  |   |          | (6,135    | ) |      |       | (0.4 | )    |   |           | 994,383    |  |   |           | 1,015,678 |  |   |          | (21,295  | ) |  |       | (2.1 | )
|                                                                                                                                  |                |                 |           |           |                |   |           |            |  |   |          |           |   |      |       |      |      |   |           |            |  |   |           |          
|Income before income taxes, allocation to
    minority interests and income from investments in unconsolidated
    joint ventures |                |                 | 266,937   |           |                |   | 353,938   |            |  |   | (87,001  | )         |   |      | (24.6 | )    |      |   | 600,139   |            |  |   | 682,429   |           |  |   | (82,290  | )        |   |  | (12.1 | )   
|Income taxes                                                                                                                      |                |                 | (2,571    | )         |                |   | (8,720    | )          |  |   | 6,149    |           |   |      | (70.5 | )    |      |   | (377      | )          |  |   | (1,801    | )         |  |   | 1,424    |          |   |  | (79.1 | )   
|Minority interests                                                                                                                |                |                 | (4,367    | )         |                |   | (2,401    | )          |  |   | (1,966   | )         |   |      | 81.9  |      |      |   | (4,776    | )          |  |   | (2,401    | )         |  |   | (2,375   | )        |   |  | 98.9  |     
|Income from investments in unconsolidated joint
    ventures                                                                      |                |                 | 41,710    |           |                |   | 79,925    |            |  |   | (38,215  | )         |   |      | (47.8 | )    |      |   | 31,747    |            |  |   | 40,125    |           |  |   | (8,378   | )        |   |  | (20.9 | )   
|                                                                                                                                  |                |                 |           |           |                |   |           |            |  |   |          |           |   |      |       |      |      |   |           |            |  |   |           |          
|Income from continuing operations                                                                                                 |                |                 | 301,709   |           |                |   | 422,742   |            |  |   | (121,033 | )         |   |      | (28.6 | )    |      |   | 626,733   |            |  |   | 718,352   |           |  |   | (91,619  | )        |   |  | (12.8 | )   
|Discontinued operations (including net gain on
    sales of real estate of $51,725 and $2,490, respectively)                      |                |                 | 56,566    |           |                |   | 25,205    |            |  |   | 31,361   |           |   |      | 124.4 |      |      |   |          |            |  |   |          |           |  |   |         |          |   |  |      |     
|                                                                                                                                  |                |                 |           |           |                |   |           |            |  |   |          |           |   |      |       |      |      |   |           |            |  |   |           |          
|Net income                                                                                                                        |                | $               | 358,275   |           |                | $ | 447,947   |            |  | $ | (89,672  | )         |   |      | (20.0 | )%   |      | $ | 626,733   |            |  | $ | 718,352   |           |  | $ | (91,619  | )        |   |  | (12.8 | )%  
|                                                                                                                                  |                |                 |           |           |                |   |           |            |  |   |          |           |   |      |       |      |      |   |           |            |  |   |           |          
|Property net operating income from continuing
    operations(c)                                                                   |                | $               | 1,048,663 |           |                | $ | 1,125,352 |            |  | $ | (76,689  | )         |   |      | (6.8  | )%   |      | $ | 1,041,194 |            |  | $ | 1,121,329 |           |  | $ | (80,135  | )        |   |  | (7.1  | )%  
|                                                                                                                                  |                |                 |           |           |                |   |           |            |  |   |          |           |   |      |       |      |      |   |           |            |  |   |           |          
|Deferred rental revenue                                                                                                           |                | $               | 32,472    |           |                | $ | 38,413    |            |  | $ | (5,941   | )         |   |      | (15.5 | )%   |      | $ | 32,076    |            |  | $ | 38,093    |           |  | $ | (6,017   | )        |   |  | (15.8 | )%  
|                                                                                                                                  |                |                 |           |           |                |   |           |            |  |   |          |           |   |      |       |      |      |   |           |            |  |   |           |          
|Lease termination fees                                                                                                            |                | $               | 22,821    |           |                | $ | 30,017    |            |  | $ | (7,196   | )         |   |      | (24.0 | )%   |      | $ | 22,821    |            |  | $ | 30,017    |           |  | $ | (7,196   | )        |   |  | (24.0 | )%  
|                                                                                                                                  |                |                 |           |           |                |   |           |            |  |   |          |           |   |      |       |      |      |   |           |            |  |   |           |          






|    |  |                                                                                                                                                                                                                             
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Interest expense for the Core Portfolio
    represents interest expense on property secured mortgage debt
    and does not include interest expense on the unsecured notes or
    the line of credit.                       
|   
|(b) |  | Corporate general and administrative is not
    allocated to the Core Portfolio because the types of expenses
    included in Corporate general and administrative are not
    directly identifiable to specific Properties.
|   
|(c) |  | Represents segment data. See Note 11-Segment
    Information.                                                                                                                                                               

30



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##### Table of Contents





| |                            
| | ---------------------------
| | Property Operating Revenues

The decrease in property operating revenues in
the Total Portfolio is primarily attributable to reduced
occupancy in the Core Portfolio from 91.7% at January 1,
2002 to 86.7% at June 30, 2003 and lower lease termination
fees. A large portion of the decrease in occupancy was due to
early lease terminations. In addition to the decline in
occupancy, rental revenues declined as a result of average
rental rates on new leases being lower than the average rental
rates being paid on expiring leases since the middle of 2002.



| |                          
| | -------------------------
| | Interest/ Dividend Income

Interest and dividend income decreased for the
Total Portfolio by approximately $7.4 million primarily
from a reduction of interest and dividends from various notes
receivable and investments.



| |                                                   
| | --------------------------------------------------
| | Realized Gain on Sale of Marketable
    Securities

During 2002, we entered into an early lease
termination with Inktomi Corporation for a 398,460-square-foot
building in Redwood Shores, California. As part of the
consideration for the lease termination, we received five
million shares of Inktomi Corporation common stock. These
securities were sold during the first quarter of 2003 at a gain
of approximately $8.1 million.



| |                 
| | ----------------
| | Interest Expense

Interest expense for the Total Portfolio
increased primarily as a result of an increase in unsecured note
balances from June 30, 2002 to June 30, 2003. Interest
expense for the Core Portfolio decreased primarily as a result
of mortgage debt repayments.



| |                              
| | -----------------------------
| | Depreciation and Amortization

Total Portfolio and Core Portfolio depreciation
and amortization expense increased from the prior period
primarily as a result of capital and tenant improvements made
since the beginning of the prior period and from an increase in
deferred leasing costs.



| |                  
| | -----------------
| | Real Estate Taxes

Real estate taxes decreased for the Total and
Core Portfolio primarily due to a decrease in real estate taxes
in California as a result of property tax appeals.



| |                            
| | ---------------------------
| | Property Operating Expenses

For the Core Portfolio, property operating
expenses decreased primarily as a result of lower utility
expense of approximately $3.0 million and lower insurance
expense of approximately $5.5 million primarily as a result
of changes in our insurance coverage. In addition, for the Core
Portfolio, maintenance expense decreased by approximately
$5.3 million primarily due to lower occupancy and new
contracts that were renegotiated as part of our EOPlus
initiative. Payroll expense decreased by approximately
$1.4 million due to staff reductions. These decreases in
property operating expenses were partially offset by severance
expense of approximately $2.1 million incurred in the six
months ended June 30, 2003.



| |            
| | -----------
| | Ground Rent

Ground rent decreased primarily due to our
acquisition in the fourth quarter of 2002 of the land underlying
an Office Property which had been subject to a ground lease.



| |                                                  
| | -------------------------------------------------
| | Corporate General and Administrative
    Expenses

Beginning in fiscal 2003, we reclassified
regional property operating expenses and other costs directly
associated with property operations from corporate general and
administrative expense to property operating expense.
Approximately $41.8 million and $35.3 million were
reclassified for the six months ended June 30,

31



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##### Table of Contents



2003 and 2002, respectively. The regional offices
exist to manage and lease the Properties. Accordingly, these
expenses are classified as property operating expenses and the
prior periods have been reclassified to provide for
comparability. This reclassification did not change the prior
period results or shareholders equity.


In addition, we incurred approximately
$4.2 million of severance expense in the six months ended
June 30, 2003 compared to $7.4 million in the six
months ended June 30, 2002. The severance expense consists
of the accelerated vesting of share options and restricted
shares and cash payments.



| |             
| | ------------
| | Income Taxes

A corporate subsidiary of ours had an indirect
interest in the Foundry Square I joint venture which we
sold in December 2002, for which we accrued approximately
$5.0 million of income taxes as a result of a
$40.0 million lease termination in the first quarter of
2002. (See Income from Investment in Unconsolidated Joint
Ventures below).



| |                                                             
| | ------------------------------------------------------------
| | Income from Investments in Unconsolidated
    Joint Ventures

Income from investments in unconsolidated joint
ventures decreased for the Total Portfolio primarily due to a
decrease in lease termination fees from $45.9 million to
$2.3 million and a decrease in property operating revenues,
partially offset by a decrease in interest expense on variable
rate mortgage debt at the Core Portfolio. The decrease in
property operating revenues is primarily attributable to reduced
occupancy and rental rates on new leases being lower than the
average rental rates on expiring leases.



| |                        
| | -----------------------
| | Discontinued Operations

The increase in discontinued operations is
primarily due to the gain on the sale of the properties sold
during the current period as compared to the gain on the sale of
the properties sold during the prior period. The net income of
properties sold since January 1, 2002 is included in
discontinued operations up to the respective disposition date.

Discontinued Operations

The net income and gain/(loss) on sales of real
estate for properties sold subsequent to December 31, 2001
are reflected in the consolidated statements of operations as
Discontinued Operations for the periods

32



---



##### Table of Contents



presented. Below is a summary of the results of
operations of these properties through their respective
disposition dates:


|                                                                    |                |                      |        |       |                    |   |        |        |  |   |        |        |  |   |        |        | 
|------------------------------------------------------------------- | -------------- | -------------------- | ------ | ----- | ------------------ | - | ------ | ------ |  | - | ------ | ------ |  | - | ------ | ------ | 
|                                                                    |                |                      |        |      
|                                                                    |                | For the three months |        |       | For the six months |  
|                                                                    |                | ended June 30,       |        |       | ended June 30,     |  
|                                                                    |                |                      |        |       |                    |  
|(Dollars in thousands)                                              |                | 2003                 |        |       | 2002               |   |        | 2003   |  |   | 2002   |       
|                                                                    |                |                      |        |       |                    |   |        |        |  |   |        |       
|Property revenues                                                   |                | $                    | 3,373  |       |                    | $ | 22,640 |        |  | $ | 12,679 |        |  | $ | 46,166 |       
|Interest income                                                     |                |                      | 1      |       |                    |   | 21     |        |  |   | 7      |        |  |   | 24     |       
|                                                                    |                |                      |        |       |                    |   |        |        |  |   |        |       
|                                                                    | Total revenues |                      |        | 3,374 |                    |   |        | 22,661 |  |   |        | 12,686 |  |   |        | 46,190 | 
|                                                                    |                |                      |        |       |                    |   |        |        |  |   |        |       
|Interest expense                                                    |                |                      |       |       |                    |   | (58    | )      |  |   | 236    |        |  |   | (257   | )     
|Depreciation and amortization                                       |                |                      | 126    |       |                    |   | 3,507  |        |  |   | 1,762  |        |  |   | 7,389  |       
|Property operating expenses                                         |                |                      | 1,528  |       |                    |   | 7,883  |        |  |   | 5,827  |        |  |   | 16,052 |       
|Ground rent                                                         |                |                      |       |       |                    |   | 44     |        |  |   | 18     |        |  |   | 104    |       
|                                                                    |                |                      |        |       |                    |   |        |        |  |   |        |       
|                                                                    | Total expenses |                      |        | 1,654 |                    |   |        | 11,376 |  |   |        | 7,843  |  |   |        | 23,288 | 
|                                                                    |                |                      |        |       |                    |   |        |        |  |   |        |       
|Income before income taxes and net gain on sales
    of real estate |                |                      | 1,720  |       |                    |   | 11,285 |        |  |   | 4,843  |        |  |   | 22,902 |       
|Income taxes                                                        |                |                      | (2     | )     |                    |   | (187   | )      |  |   | (2     | )      |  |   | (187   | )     
|Net gain on sales of real estate                                    |                |                      | 44,448 |       |                    |   | 5,499  |        |  |   | 51,725 |        |  |   | 2,490  |       
|                                                                    |                |                      |        |       |                    |   |        |        |  |   |        |       
|Net income                                                          |                | $                    | 46,166 |       |                    | $ | 16,597 |        |  | $ | 56,566 |        |  | $ | 25,205 |       
|                                                                    |                |                      |        |       |                    |   |        |        |  |   |        |       
|Property net operating income from discontinued
    operations      |                | $                    | 1,845  |       |                    | $ | 14,757 |        |  | $ | 6,852  |        |  | $ | 30,114 |       
|                                                                    |                |                      |        |       |                    |   |        |        |  |   |        |       



| |                  
| | -----------------
| | Segment Reporting

For segment reporting purposes, the office
properties, apartment properties and the land parcels that were
sold are included in the Office Properties segment
and the industrial properties and parking facilities that were
sold are included in the Corporate and Other segment.

Liquidity and Capital Resources



| |          
| | ---------
| | Liquidity

Net cash flow from operations represents the
primary source of liquidity to fund distributions, debt service,
capital improvements and tenant improvements. We expect that our
$1.0 billion line of credit will provide an additional
source for funding of working capital, unanticipated cash needs,
acquisitions and development costs.

Our net cash flow from operations is dependent
upon the occupancy level of our properties, the rental rates on
our leases, the collectibility of rent from our tenants, the
level of operating and other expenses, and other factors.
Material changes in these factors may adversely affect our net
cash flow from operations. Such changes, in turn, would
adversely affect our ability to fund distributions, debt
service, capital improvements and tenant improvements. In
addition, a material adverse change in our net cash flow from
operations may affect the financial performance covenants under
our line of credit and unsecured notes. If we fail to meet our
financial performance covenants, our line of credit may become
unavailable to us or the interest charged on the line of credit
may increase. Either of these circumstances could adversely
affect our ability to fund working capital and unanticipated
cash needs, acquisitions and development costs.

In order to qualify as a REIT for federal income
tax purposes, Equity Office must distribute at least 90% of its
REIT taxable income (excluding capital gains). Our partnership
agreement generally requires us to distribute substantially all
of the net cash from operations each quarter and to make
reasonable efforts to distribute to Equity Office enough cash
for it to meet the 90% distribution requirement. Accordingly, we
currently intend, although we are not legally obligated, to
continue to make regular quarterly distributions to holders of
Units and preferred units.

33



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Subject to the foregoing, we have established
quarterly distribution rates which, if annualized, would be as
follows:

|                       |   |                         |      |         | 
|---------------------- | - | ----------------------- | ---- | ------- | 
|                       |   | Annualized Distribution |     
|Security               |   | Per Unit                |     
|                       |   |                         |     
|Units                  |   | $                       | 2.00 |        
|Preferred Unit Series: |   |                         |      |        
|                       | B |                         | $    | 2.625   | 
|                       | C |                         | $    | 2.15625 | 
|                       | G |                         | $    | 1.9375  | 

Since our anticipated distributions will not
allow us to retain sufficient cash to repay all of our debt as
it comes due using only cash from operations, we will be
required to repay most of our maturing debt with proceeds from
debt and/or equity offerings. There can be no assurance that
such financing will be available to us or on acceptable terms if
available.



| |                        
| | -----------------------
| | Contractual Obligations

As of June 30, 2003, we were subject to
certain contractual payment obligations as described in the
table below. We were not subject to material capital lease
obligations or unconditional purchase obligations as of
June 30, 2003.

|                                                            |                    |                                       |           |           |            |   |         |         |         |   |         |         |           |      |         |         |           |   |         |            |           |   |        |         |           |   |           |           |           |  
|----------------------------------------------------------- | ------------------ | ------------------------------------- | --------- | --------- | ---------- | - | ------- | ------- | ------- | - | ------- | ------- | --------- | ---- | ------- | ------- | --------- | - | ------- | ---------- | --------- | - | ------ | ------- | --------- | - | --------- | --------- | --------- | -
|                                                            |                    |                                      
|                                                            |                    | Payments Due by Period                |          
|                                                            |                    |                                       |          
|                                                            |                    |                                       |           | Through   |            |   |        
|Contractual Obligations:                                    |                    |                                       |           | Remainder |            |   |        
|(Dollars in thousands)                                      |                    | Total                                 |           |           | of 2003    |   |         | 2004    |         |   | 2005    |         |           | 2006 |         |         | 2007      |   |         | Thereafter |          
|                                                            |                    |                                       |           |           |            |   |         |         |         |   |         |         |           |      |         |         |           |   |         |            |          
|Long-term debt:                                             |                    |                                       |           |           |            |   |         |         |         |   |         |         |           |      |         |         |           |   |         |            |           |   |        |         |           |   |           |          
|                                                            | Mortgage debt(1)   |                                       | $         | 2,483,250 |            |   | $       | 81,040  |         |   | $       | 448,381 |           |      | $       | 568,768 |           |   | $       | 343,941    |           |   | $      | 237,024 |           |   | $         | 804,096   |          
|                                                            | Unsecured notes(2) |                                       |           | 9,216,500 |            |   |         | 400,000 |         |   |         | 880,000 |           |      |         | 675,000 |           |   |         | 650,000    |           |   |        | 976,500 |           |   |           | 5,635,000 |          
|Line of Credit                                              |                    |                                       | 282,900   |           |            |   |        |         |         |   |        |         |           |      |        |         |           |   | 282,900 |            |           |   |       |         |           |   |          |          
|Share of mortgage debt of unconsolidated joint
    ventures |                    |                                       | 815,667   |           |            |   | 105,601 |         |         |   | 117,023 |         |           |      | 466,410 |         |           |   | 51,182  |            |           |   | 1,454  |         |           |   | 73,997    |          
|Ground leases                                               |                    |                                       | 1,189,605 |           |            |   | 9,312   |         |         |   | 16,145  |         |           |      | 15,838  |         |           |   | 15,742  |            |           |   | 15,640 |         |           |   | 1,116,928 |          
|Share of ground leases of unconsolidated joint
    ventures |                    |                                       | 185,147   |           |            |   | 721     |         |         |   | 1,442   |         |           |      | 1,738   |         |           |   | 1,922   |            |           |   | 1,958  |         |           |   | 177,366   |          
|                                                            |                    |                                       |           |           |            |   |         |         |         |   |         |         |           |      |         |         |           |   |         |            |          
|                                                            |                    | Total Contractual Obligations         |           | $         | 14,173,069 |   |         | $       | 596,674 |   |         | $       | 1,462,991 |      |         | $       | 1,727,754 |   |         | $          | 1,345,687 |   |        | $       | 1,232,576 |   |           | $         | 7,807,387 |  
|                                                            |                    |                                       |           |           |            |   |         |         |         |   |         |         |           |      |         |         |           |   |         |            |          
|                                                           
|Weighted Average Interest Rates on Maturing
    Debt:       |                    |                                       |           |           |            |   |         |         |         |   |         |         |           |      |         |         |           |   |         |            |           |   |        |         |           |   |           |          
|                                                            |                    |                                       |           |           |            |   |         |         |         |   |         |         |           |      |         |         |           |   |         |            |          
|Long-term debt:                                             |                    |                                       |           |           |            |   |         |         |         |   |         |         |           |      |         |         |           |   |         |            |           |   |        |         |           |   |           |          
|                                                            | Mortgage debt      |                                       |           | 7.61      | %          |   |         | 7.73    | %       |   |         | 7.12    | %         |      |         | 7.87    | %         |   |         | 7.15       | %         |   |        | 7.88    | %         |   |           | 7.79      | %        
|                                                            | Unsecured notes    |                                       |           | 6.98      | %          |   |         | 7.55    | %       |   |         | 5.42    | %         |      |         | 5.67    | %         |   |         | 7.52       | %         |   |        | 7.52    | %         |   |           | 7.18      | %        
|Line of credit                                              |                    |                                       | 2.06      | %         |            |   |        |         |         |   |        |         |           |      |        |         |           |   | 2.06    | %          |           |   |       |         |           |   |          |          
|Share of mortgage debt of unconsolidated joint
    ventures |                    |                                       | 5.81      | %         |            |   | 1.94    | %       |         |   | 2.30    | %       |           |      | 7.33    | %       |           |   | 7.67    | %          |           |   |       |         |           |   | 5.42      | %        
|                                                            |                    |                                       |           |           |            |   |         |         |         |   |         |         |           |      |         |         |           |   |         |            |          
|                                                            |                    | Total Weighted Average Interest Rates |           |           | 6.92       | % |         |         | 6.55    | % |         |         | 5.68      | %    |         |         | 6.85      | % |         |            | 6.27      | % |        |         | 7.59      | % |           |           | 7.24      | %
|                                                            |                    |                                       |           |           |            |   |         |         |         |   |         |         |           |      |         |         |           |   |         |            |          






|    |                                                                                                                                      
|--- | -------------------------------------------------------------------------------------------------------------------------------------
|(1) | Balance excludes a net discount of
    $(13.2) million, which is net of accumulated amortization
    of approximately $(6.6) million.
|   
|(2) | Balance excludes a net premium of
    $25.8 million, which is net of accumulated amortization of
    approximately $(29.2) million.  

34



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| |                                         
| | ----------------------------------------
| | Forward-Starting Interest Rate
    Swaps

As of June 30, 2003 and December 31,
2002, we had $1.3 billion and $1.1 billion of
forward-starting interest rate swaps outstanding, respectively.
The outstanding swaps will hedge the future interest payments of
debt anticipated to be issued in 2004. The market value of the
forward-starting interest rate swaps at June 30, 2003 and
December 31, 2002 represented a liability to us of
approximately $68.6 million and $18.6 million,
respectively and is included in other liabilities and in other
comprehensive income. As of August 7, 2003, the market
value of these forward-starting interest rate swaps represented
an asset to us of approximately $17.5 million. The market
value of the forward-starting interest rate swaps is dependent
upon changes in market interest rates and swap spreads over time
and is subject to change.

Upon settlement of the swaps, we may be obligated
to pay the counterparties a settlement payment, or alternatively
to receive settlement proceeds from the counterparties. In
accordance with FASB Statement No. 133 Accounting for
Derivative Instruments and Hedging Activities, if the swaps
are deemed to be effective hedges upon settlement, any monies
paid or received will be amortized to interest expense over the
term of the respective note offering. If the swaps are deemed to
be only partially effective hedges upon settlement, a portion of
the monies paid or received will be immediately recognized in
earnings and the remainder will be amortized to interest expense
over the term of the respective note offering. If the swaps are
deemed to be completely ineffective hedges upon settlement, any
monies paid or received will be immediately recognized in
earnings.



| |                                   
| | ----------------------------------
| | Off-Balance Sheet
    Arrangements



| |            
| | -----------
| | Commitments

In accordance with the agreement governing the
investment in Wright Runstad Associates Limited Partnership
(WRALP) made in 1997, we agreed, for a period
generally continuing until December 31, 2007, to make
available to WRALP up to $20.0 million in additional
financing or credit support for future development. As of
June 30, 2003, no amounts have been funded pursuant to this
agreement. However, we have unconditionally guaranteed payment
of WRALPs $19.5 million revolving line of credit
which has an outstanding balance of approximately
$12.9 million as of June 30, 2003. WRALPs
current line of credit matured in July 2003 and was extended for
one year to July 2004. We do not have a liability recorded
related to this guarantee. In the event we make payment on
WRALPs line of credit and WRALP does not repay us, we are
entitled to (i) terminate the credit facility provided to
WRALP from us and (ii) declare all amounts borrowed by
WRALP due and payable. We believe the risk of an unrecovered
loss is minimal at this time.



| |                  
| | -----------------
| | Letters of Credit

As of June 30, 2003, we had provided
approximately $5.8 million in letters of credit to third
parties. The letters of credit were required to be issued under
the provisions of our workers compensation insurance
policies and certain utility contracts.



| |               
| | --------------
| | Debt Financing

The table below summarizes our consolidated
mortgage debt, unsecured notes and line of credit indebtedness
at June 30, 2003 and December 31, 2002. The amounts
shown are net of an unamortized discount on mortgage debt of
approximately $(13.2) million and $(12.6) million,
respectively, and an unamortized premium on unsecured notes of
$25.8 million and $41.2 million, respectively. The
discounts and

35



---



##### Table of Contents



premiums were originally recorded in connection
with certain property acquisitions, mergers, issuances of
unsecured notes and interest rate swap settlements.


|                                                |                  |                         |   |            |              |   |   |            |            |  
|----------------------------------------------- | ---------------- | ----------------------- | - | ---------- | ------------ | - | - | ---------- | ---------- | -
|                                                |                  | June 30,                |   |            | December 31, |  
|(Dollars in thousands)                          |                  | 2003                    |   |            | 2002         |  
|                                                |                  |                         |   |            |              |  
|Balance                                         |                  |                         |   |            |              |   |   |           
|                                                | Fixed rate       |                         | $ | 11,676,340 |              |   | $ | 11,529,541 |           
|                                                | Variable rate(a) |                         |   | 318,900    |              |   |   | 241,700    |           
|                                                |                  |                         |   |            |              |  
|                                                |                  | Total                   |   | $          | 11,995,240   |   |   | $          | 11,771,241 |  
|                                                |                  |                         |   |            |              |  
|Percent of total debt                           |                  |                         |   |            |              |   |   |           
|                                                | Fixed rate       |                         |   | 97.3       | %            |   |   | 97.9       | %         
|                                                | Variable rate(a) |                         |   | 2.7        | %            |   |   | 2.1        | %         
|                                                |                  |                         |   |            |              |  
|                                                |                  | Total                   |   |            | 100.0        | % |   |            | 100.0      | %
|                                                |                  |                         |   |            |              |  
|All in/effective interest rate at end of period |                  |                         |   |            |              |   |   |           
|                                                | Fixed rate       |                         |   | 7.13       | %            |   |   | 7.17       | %         
|                                                | Variable rate(a) |                         |   | 2.04       | %            |   |   | 2.37       | %         
|                                                |                  |                         |   |            |              |  
|                                                |                  | Effective interest rate |   |            | 6.99         | % |   |            | 7.08       | %
|                                                |                  |                         |   |            |              |  



---



|    |  |                                                                                         
|--- |  | ----------------------------------------------------------------------------------------
|(a) |  | The variable rate debt bears interest at a rate
    based on various spreads over LIBOR.



| |              
| | -------------
| | Mortgage Debt

As of June 30, 2003, total mortgage debt
(excluding our share of the mortgage debt at our unconsolidated
joint ventures of approximately $815.7 million) consisted
of approximately $2,434.0 million of fixed rate debt, net
of an unamortized discount of approximately $13.2 million,
with a weighted average interest rate of approximately 7.7% and
$36.0 million of variable rate debt based on LIBOR plus
55 basis points (as of June 30, 2003, the variable
rate was approximately 1.82%). See Liquidity and Capital
Resources  Contractual Obligations for annual
payment obligations under our mortgage debt.

The instruments encumbering the properties
restrict title transfer of the respective properties subject to
the terms of the mortgage, prohibit additional liens, require
payment of real estate taxes on the properties, maintenance of
the properties in good condition, maintenance of insurance on
the properties and a requirement to obtain lender consent to
enter into material tenant leases.



| |               
| | --------------
| | Line of Credit

In May, our existing line of credit matured and
we obtained a new $1.0 billion revolving credit facility.
The new line of credit bears interest at LIBOR plus
60 basis points and matures in May 2006. The financial
covenants and restrictions under the new line of credit are
substantially similar to those we were subject to under the
previous line of credit.



| |                
| | ---------------
| | Unsecured Notes

Unsecured notes increased to approximately
$9,242.3 million, at June 30, 2003 compared to
approximately $9,057.7 million at December 31, 2002,
as a result of the issuance in January 2003 of $500 million
5.875% unsecured notes due January 15, 2013, partially
offset by the repayment of $300 million 6.375% unsecured
notes and amortization of discounts and premiums.

36



---



##### Table of Contents



The table below summarizes the unsecured notes
outstanding as of June 30, 2003:

|                                                                                 |                           |                        |           |       |           |  |  |           |       |  |          |           |           |  |  |          |  | 
|-------------------------------------------------------------------------------- | ------------------------- | ---------------------- | --------- | ----- | --------- |  |  | --------- | ----- |  | -------- | --------- | --------- |  |  | -------- |  | 
|                                                                                 |                           | Coupon/                |           |       | All-in    |  |  |           |       | 
|                                                                                 |                           | Stated                 |           |       | Effective |  |  | Principal |       |  | Maturity |          
|Original Term (in years)                                                         |                           | Rate                   |           |       | Rate(a)   |  |  | Amount    |       |  | Date     |          
|                                                                                 |                           |                        |           |       |           |  |  |           |       |  |          |          
|                                                                                 |                           |                       
|                                                                                 |                           | (Dollars in thousands) |          
|                                                                                 | 3 Year Unsecured Notes    |                        |           | 7.38% |           |  |  | 7.55%     |       |  | $        | 400,000   | (b)       |  |  | 11/15/03 | 
|                                                                                 | 5 Year Unsecured Notes    |                        |           | 6.50% |           |  |  | 4.59%     |       |  |          | 300,000   | (b)       |  |  | 01/15/04 | 
|                                                                                 | 9 Year Unsecured Notes    |                        |           | 6.90% |           |  |  | 6.27%     |       |  |          | 100,000   | (b)       |  |  | 01/15/04 | 
|                                                                                 | 5 Year Unsecured Notes    |                        |           | 6.80% |           |  |  | 6.10%     |       |  |          | 200,000   | (b)       |  |  | 05/01/04 | 
|                                                                                 | 6 Year Unsecured Notes    |                        |           | 6.50% |           |  |  | 5.31%     |       |  |          | 250,000   | (b)       |  |  | 06/15/04 | 
|                                                                                 | 7 Year Unsecured Notes    |                        |           | 7.24% |           |  |  | 7.26%     |       |  |          | 30,000    | (b)       |  |  | 09/01/04 | 
|                                                                                 | 8 Year Unsecured Notes    |                        |           | 6.88% |           |  |  | 6.40%     |       |  |          | 125,000   |           |  |  | 02/01/05 | 
|                                                                                 | 7 Year Unsecured Notes    |                        |           | 6.63% |           |  |  | 4.99%     |       |  |          | 400,000   |           |  |  | 02/15/05 | 
|                                                                                 | 7 Year Unsecured Notes    |                        |           | 8.00% |           |  |  | 6.49%     |       |  |          | 100,000   |           |  |  | 07/19/05 | 
|                                                                                 | 8 Year Unsecured Notes    |                        |           | 7.36% |           |  |  | 7.69%     |       |  |          | 50,000    |           |  |  | 09/01/05 | 
|                                                                                 | 6 Year Unsecured Notes    |                        |           | 8.38% |           |  |  | 7.65%     |       |  |          | 500,000   |           |  |  | 03/15/06 | 
|                                                                                 | 9 Year Unsecured Notes    |                        |           | 7.44% |           |  |  | 7.74%     |       |  |          | 50,000    |           |  |  | 09/01/06 | 
|                                                                                 | 10 Year Unsecured Notes   |                        |           | 7.13% |           |  |  | 6.74%     |       |  |          | 100,000   |           |  |  | 12/01/06 | 
|                                                                                 | 9 Year Unsecured Notes    |                        |           | 7.00% |           |  |  | 6.80%     |       |  |          | 1,500     |           |  |  | 02/02/07 | 
|                                                                                 | 9 Year Unsecured Notes    |                        |           | 6.88% |           |  |  | 6.83%     |       |  |          | 25,000    |           |  |  | 04/30/07 | 
|                                                                                 | 9 Year Unsecured Notes    |                        |           | 6.76% |           |  |  | 6.76%     |       |  |          | 300,000   |           |  |  | 06/15/07 | 
|                                                                                 | 10 Year Unsecured Notes   |                        |           | 7.41% |           |  |  | 7.70%     |       |  |          | 50,000    |           |  |  | 09/01/07 | 
|                                                                                 | 7 Year Unsecured Notes    |                        |           | 7.75% |           |  |  | 7.91%     |       |  |          | 600,000   |           |  |  | 11/15/07 | 
|                                                                                 | 10 Year Unsecured Notes   |                        |           | 6.75% |           |  |  | 6.97%     |       |  |          | 150,000   |           |  |  | 01/15/08 | 
|                                                                                 | 10 Year Unsecured Notes   |                        |           | 6.75% |           |  |  | 7.01%     |       |  |          | 300,000   |           |  |  | 02/15/08 | 
|                                                                                 | 8 Year Unsecured Notes(c) |                        |           | 7.25% |           |  |  | 7.64%     |       |  |          | 325,000   |           |  |  | 11/15/08 | 
|                                                                                 | 10 Year Unsecured Notes   |                        |           | 6.80% |           |  |  | 6.94%     |       |  |          | 500,000   |           |  |  | 01/15/09 | 
|                                                                                 | 10 Year Unsecured Notes   |                        |           | 7.25% |           |  |  | 7.14%     |       |  |          | 200,000   |           |  |  | 05/01/09 | 
|                                                                                 | 11 Year Unsecured Notes   |                        |           | 7.13% |           |  |  | 6.97%     |       |  |          | 150,000   |           |  |  | 07/01/09 | 
|                                                                                 | 10 Year Unsecured Notes   |                        |           | 8.10% |           |  |  | 8.22%     |       |  |          | 360,000   |           |  |  | 08/01/10 | 
|                                                                                 | 10 Year Unsecured Notes   |                        |           | 7.65% |           |  |  | 7.20%     |       |  |          | 200,000   |           |  |  | 12/15/10 | 
|                                                                                 | 10 Year Unsecured Notes   |                        |           | 7.00% |           |  |  | 6.83%     |       |  |          | 1,100,000 |           |  |  | 07/15/11 | 
|                                                                                 | 10 Year Unsecured Notes   |                        |           | 6.75% |           |  |  | 7.02%     |       |  |          | 500,000   |           |  |  | 02/15/12 | 
|                                                                                 | 10 Year Unsecured Notes   |                        |           | 5.88% |           |  |  | 5.98%     |       |  |          | 500,000   |           |  |  | 01/15/03 | 
|                                                                                 | 20 Year Unsecured Notes   |                        |           | 7.88% |           |  |  | 8.08%     |       |  |          | 25,000    |           |  |  | 12/01/16 | 
|                                                                                 | 20 Year Unsecured Notes   |                        |           | 7.35% |           |  |  | 8.08%     |       |  |          | 200,000   |           |  |  | 12/01/17 | 
|                                                                                 | 20 Year Unsecured Notes   |                        |           | 7.25% |           |  |  | 7.54%     |       |  |          | 250,000   |           |  |  | 02/15/18 | 
|                                                                                 | 30 Year Unsecured Notes   |                        |           | 7.50% |           |  |  | 8.24%     |       |  |          | 150,000   |           |  |  | 10/01/27 | 
|                                                                                 | 30 Year Unsecured Notes   |                        |           | 7.25% |           |  |  | 7.31%     |       |  |          | 225,000   |           |  |  | 06/15/28 | 
|                                                                                 | 30 Year Unsecured Notes   |                        |           | 7.50% |           |  |  | 7.55%     |       |  |          | 200,000   |           |  |  | 04/19/29 | 
|                                                                                 | 30 Year Unsecured Notes   |                        |           | 7.88% |           |  |  | 7.94%     |       |  |          | 300,000   |           |  |  | 07/15/31 | 
|                                                                                 |                           |                        |           |       |           |  |  |           |       |  |          |          
|                                                                                 |                           | Total                  |           |       | 7.15%     |  |  |           | 6.98% |  |          |           | 9,216,500 |  |  |          |  | 
|                                                                                 |                           |                        |           |       |           |  |  |           |       |  |          |          
|Net premium (net of accumulated amortization of
    approximately $29.2 million) |                           |                        | 25,820    |       |           |  |  |          
|                                                                                 |                           |                        |           |       |           | 
|Total                                                                            |                           | $                      | 9,242,320 |       |           |  |  |          
|                                                                                 |                           |                        |           |       |           | 



---

|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Includes the effect of settled interest rate
    protection and interest rate swap agreements, offering and
    transaction costs and premiums and discounts on certain
    unsecured notes.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   
|(b) |  | Through 2004, $1.28 billion of unsecured
    notes will mature and become payable. We anticipate repaying the
    maturing unsecured notes with proceeds from debt and/or equity
    offerings or property dispositions.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   
|(c) |  | The notes are exchangeable into Equity Office
    Common Shares at an exchange rate of $34.00 per share. If
    the closing price of a Common Share of Equity Office at the time
    a holder exercises its exchange right is less than the exchange
    price of $34.00, the holder will receive, in lieu of Common
    Shares, cash in an amount equal to 97% of the product of
    the number of Common Shares into which the principal amount of
    notes subject to such exercise would otherwise be exchangeable
    and the current market price per Common Share. Upon exchange of
    a $1,000 note for Common Shares of Equity Office, we would issue
    a corresponding number of Units to Equity Office on a
    one-for-one basis.

37



---



##### Table of Contents



As of July 31, 2003, $1.6 billion was
available for issuance under a previously filed
$4.0 billion shelf registration statement.



| |                                                            
| | -----------------------------------------------------------
| | Restrictions and Covenants under Unsecured
    Indebtedness

Agreements or instruments relating to our line of
credit and unsecured notes contain certain financial
restrictions and requirements regarding total debt-to-assets
ratios, debt service coverage ratios, minimum ratio of
unencumbered assets to unsecured debt and other limitations. As
of June 30, 2003, we were in compliance with each of these
financial restrictions and requirements. If we fail to comply
with any of these restrictions and requirements, then the
indebtedness could become due and payable before its stated due
date.

Set forth below are the financial restrictions
and requirements to which we are subject under our unsecured
note indentures and our performance under each covenant as of
June 30, 2003:

|                                                                                                                |  |                    |      | 
|--------------------------------------------------------------------------------------------------------------- |  | ------------------ | ---- | 
|Covenants(a) (in each case as defined in the respective indenture)                                              |  | Actual Performance |     
|                                                                                                                |  |                    |     
|Debt to Adjusted Total Assets may not be greater
    than 60%                                                   |  |                    | 48%  | 
|Secured Debt to Adjusted Total Assets may not be
    greater than 40%                                           |  |                    | 12%  | 
|Consolidated Income Available for Debt Service to
    Annual Debt Service Charge may not be less than 1.50 to 1 |  |                    | 2.58 | 
|Total Unencumbered Assets to Unsecured Debt may
    not be less than 150%(b)                                    |  |                    | 214% | 



---



|    |  |                                                                                                                     
|--- |  | --------------------------------------------------------------------------------------------------------------------
|(a) |  | The calculations of our actual performance under
    each covenant are included as Appendix A to this
    Form 10-Q.
|   
|(b) |  | The unsecured notes assumed in the merger with
    Spieker Partnership are subject to a minimum ratio of 165%.      



| |                  
| | -----------------
| | Equity Securities

The following table presents the changes in
Equity Offices issued and outstanding Common Shares and
EOP Partnerships issued and outstanding Units (exclusive
of Units owned by Equity Office) since March 31, 2003:

|                              |                                                                     |               |             |            |       |  |            |          |   |  |             |            |  
|----------------------------- | ------------------------------------------------------------------- | ------------- | ----------- | ---------- | ----- |  | ---------- | -------- | - |  | ----------- | ---------- | -
|                              |                                                                     | Common Shares |             |            | Units |  |            | Total    |  
|                              |                                                                     |               |             |            |       |  |            |          |  
|Outstanding at March 31, 2003 |                                                                     |               | 406,243,857 |            |       |  | 49,916,390 |          |   |  | 456,160,247 |           
|                              | Share options exercised                                             |               |             | 269,273    |       |  |            |         |   |  |             | 269,273    |  
|                              | Common Shares repurchased/retired(a)                                |               |             | (7,644,900 | )     |  |            |         |   |  |             | (7,644,900 | )
|                              | Units redeemed for Common Shares                                    |               |             | 382,609    |       |  |            | (382,609 | ) |  |             |           |  
|                              | Units redeemed for cash                                             |               |             |           |       |  |            | (81,185  | ) |  |             | (81,185    | )
|                              | Restricted shares and share awards issued, net of
    cancellations |               |             | 12,744     |       |  |            |         |   |  |             | 12,744     |  
|                              |                                                                     |               |             |            |       |  |            |          |  
|Outstanding at June 30, 2003  |                                                                     |               | 399,263,583 |            |       |  | 49,452,596 |          |   |  | 448,716,179 |           
|                              |                                                                     |               |             |            |       |  |            |          |  



---



|    |  |                                                                                                                                                                                                                                                                                                                                                                                                       
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Equity Office repurchased 7,644,900 Common Shares
    at an average per share price of $26.37 for a total of
    $201.6 million in the aggregate. In connection with the
    repurchases, EOP Partnership purchased from Equity Office and
    retired a corresponding number of Units for an aggregate
    purchase price equal to the aggregate purchase price for all
    Common Share repurchases.

Cash Flows

The following summary discussion of our cash
flows is based on the consolidated statements of cash flows in
Item 1.  Financial Statements and is
not meant to be an all-inclusive discussion of the changes in
our cash flows for the periods presented below.

38



---



##### Table of Contents





| |                                   
| | ----------------------------------
| | Six Months Ended June 30,
    2003

Cash and cash equivalents decreased by
approximately $0.9 million to approximately
$57.6 million at June 30, 2003, compared to
$58.5 million at December 31, 2002. This decrease was
the net result of the receipt of approximately
$550.5 million provided by operating activities,
approximately $70.7 million provided by investing
activities (consisting primarily of approximately
$265.6 million provided by property dispositions partially
offset by approximately $218.7 million used for capital and
tenant improvements and lease acquisition costs) and
approximately $622.1 million used for financing activities
(primarily Unit and preferred unit repurchases).

Additional Items



| |                     
| | --------------------
| | Distribution Payable

Distribution payable increased by approximately
$221.8 million to approximately $227.4 million at
June 30, 2003, compared to $5.7 million at
December 31, 2002. This increase was a result of the unit
distribution declaration for the second quarter 2003 which was
paid in July 2003. The fourth quarter 2002 distribution was
declared and paid in the fourth quarter of 2002.



| |                      
| | ---------------------
| | Deferred Compensation

Deferred compensation decreased by approximately
$5.8 million to approximately $9.7 million at
June 30, 2003, compared to $15.5 million at
December 31, 2002. This decrease was a result of the
continued amortization of restricted shares issued prior to
2003, which were accounted for under APB 25 prior to our
adoption of SFAS No. 123.

Market Risk

Since December 31, 2002 there were no
material changes in the information regarding market risk that
was provided in the Form 10-K for the year ended
December 31, 2002, except as noted below:



| |                                         
| | ----------------------------------------
| | Forward-Starting Interest Rate
    Swaps

See  Contractual
Obligations for the current status of our outstanding
derivative financial instruments.

Capital Improvements, Tenant Improvements and
Leasing Commissions



| |                     
| | --------------------
| | Capital Improvements

Significant renovations and improvements which
improve or extend the useful life of our Properties are
capitalized. We categorize these capital expenditures as follows:



| |   |                                                                                                                                                                                                                                                                                                                                                      
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Capital
    Improvements improvements
    that enhance the value of the property such as lobby
    renovations, roof replacement, significant renovations for
    Americans with Disabilities Act compliance, chiller replacement
    and elevator upgrades.                                                                                        
|
| |  | Development and Redevelopment
    Costs include costs
    associated with the development or redevelopment of a property
    including tenant improvements, leasing commissions, capitalized
    interest and operating costs incurred during completion of the
    property and incurred while the property is made ready for its
    intended use.

39



---



##### Table of Contents



The table below details the costs incurred for
each type of improvement.

|                       |                        |                            |   |                |                            |  |   |              |                |  |                      |        |        |  |   |        |        | 
|---------------------- | ---------------------- | -------------------------- | - | -------------- | -------------------------- |  | - | ------------ | -------------- |  | -------------------- | ------ | ------ |  | - | ------ | ------ | 
|                       |                        |                            |   |               
|                       |                        | For the three months ended |   |                | For the three months ended | 
|                       |                        | June 30, 2003              |   |                | June 30, 2002              | 
|                       |                        |                            |   |                |                            | 
|                       |                        |                            |   | Unconsolidated |                            |  |   |              | Unconsolidated | 
|                       |                        | Consolidated               |   |                | Properties (EOP            |  |   | Consolidated |                |  | Properties (EOP      |       
|(Dollars in thousands) |                        | Properties                 |   |                | Partnerships share)       |  |   | Properties   |                |  | Partnerships share) |       
|                       |                        |                            |   |                |                            |  |   |              |                |  |                      |       
|Capital Improvements:  |                        |                            |   |                |                            |  |   |              |                |  |                      |        |        |  |   |       
|                       | Capital improvements   |                            | $ | 8,767          |                            |  | $ | 1,401        |                |  | $                    | 4,660  |        |  | $ | 269    |       
|                       | Development costs      |                            |   | 22,170         |                            |  |   | (215         | )(b)           |  |                      | 30,339 |        |  |   | 35,580 |       
|                       | Redevelopment costs(a) |                            |   | 1,874          |                            |  |   |             |                |  |                      | 10,001 |        |  |   |       |       
|                       |                        |                            |   |                |                            |  |   |              |                |  |                      |       
|                       |                        | Total capital improvements |   | $              | 32,811                     |  |   | $            | 1,186          |  |                      | $      | 45,000 |  |   | $      | 35,849 | 
|                       |                        |                            |   |                |                            |  |   |              |                |  |                      |       

|                       |                        |                            |   |                |                          |  |   |              |                |  |                      |        |        |  |   |        |        | 
|---------------------- | ---------------------- | -------------------------- | - | -------------- | ------------------------ |  | - | ------------ | -------------- |  | -------------------- | ------ | ------ |  | - | ------ | ------ | 
|                       |                        |                            |   |               
|                       |                        | For the six months ended   |   |                | For the six months ended | 
|                       |                        | June 30, 2003              |   |                | June 30, 2002            | 
|                       |                        |                            |   |                |                          | 
|                       |                        |                            |   | Unconsolidated |                          |  |   |              | Unconsolidated | 
|                       |                        | Consolidated               |   |                | Properties (EOP          |  |   | Consolidated |                |  | Properties (EOP      |       
|(Dollars in thousands) |                        | Properties                 |   |                | Partnerships share)     |  |   | Properties   |                |  | Partnerships share) |       
|                       |                        |                            |   |                |                          |  |   |              |                |  |                      |       
|Capital Improvements:  |                        |                            |   |                |                          |  |   |              |                |  |                      |        |        |  |   |       
|                       | Capital improvements   |                            | $ | 13,807         |                          |  | $ | 1,676        |                |  | $                    | 14,978 |        |  | $ | 643    |       
|                       | Development costs      |                            |   | 45,767         |                          |  |   | 4,331        |                |  |                      | 55,261 |        |  |   | 65,453 |       
|                       | Redevelopment costs(a) |                            |   | 5,545          |                          |  |   |             |                |  |                      | 18,490 |        |  |   |       |       
|                       |                        |                            |   |                |                          |  |   |              |                |  |                      |       
|                       |                        | Total capital improvements |   | $              | 65,119                   |  |   | $            | 6,007          |  |                      | $      | 88,729 |  |   | $      | 66,096 | 
|                       |                        |                            |   |                |                          |  |   |              |                |  |                      |       



---

|    |  |                                                                                                                                                                                                                           
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Properties included in redevelopment costs are
    Tabor Center, Polk and Taylor Buildings and Worldwide Plaza.
    Redevelopments for 2002 included 500-600 City Parkway, Tabor
    Center and Polk and Taylor Buildings.
|   
|(b) |  | The negative development costs represent an
    overaccrual of costs incurred in a prior period.                                                                                                                          



| |                                                
| | -----------------------------------------------
| | Tenant Improvements and Leasing
    Commissions

Costs related to the renovation, alteration or
build-out of existing office space, as well as related leasing
commissions, are capitalized and depreciated or amortized over
the lease term. These tenant improvements may include, but are
not limited to, floor coverings, ceilings, walls, HVAC,
mechanical, electrical, plumbing and fire protection systems.

40



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The amounts shown below represent the total
tenant improvement and leasing commissions for leases which took
occupancy during the period, regardless of when such costs were
actually paid, which is a useful measure of the total tenant
improvement and leasing commission costs for the periods
presented.

|                                                      |  |                      |        |            |                      |   |       |             |            |   |             |  |  |   |       | 
|----------------------------------------------------- |  | -------------------- | ------ | ---------- | -------------------- | - | ----- | ----------- | ---------- | - | ----------- |  |  | - | ----- | 
|                                                      |  |                      |        |           
|                                                      |  | For the three months |        |            | For the three months |  
|                                                      |  | ended June 30,       |        |            | ended June 30,       |  
|                                                      |  |                      |        |           
|                                                      |  | 2003                 |        |            | 2002                 |  
|                                                      |  |                      |        |            |                      |  
|                                                      |  |                      |        | Total Cost |                      |   |       |             | Total Cost |  
|                                                      |  |                      |        | per Square |                      |   |       |             | per Square |  
|(Dollars in thousands except per square foot amounts) |  | Total Costs          |        |            | Foot Leased          |   |       | Total Costs |            |   | Foot Leased | 
|                                                      |  |                      |        |            |                      |   |       |             |            |   |             | 
|Consolidated Properties:                              |  |                      |        |            |                      |   |       |             |            |   |             |  |  |   |       | 
|                                                      |  |                      |        |            |                      |   |       |             |            |   |             | 
|Office Properties:                                    |  |                      |        |            |                      |   |       |             |            |   |             |  |  |   |       | 
|Renewals                                              |  | $                    | 32,497 |            |                      | $ | 12.47 |             |            | $ | 18,491      |  |  | $ | 6.79  | 
|Retenanted                                            |  |                      | 35,340 |            |                      |   | 20.08 |             |            |   | 40,227      |  |  |   | 17.14 | 
|                                                      |  |                      |        |            |                      |   |       |             |            |   |             | 
|Total/ Weighted Average                               |  | $                    | 67,837 |            |                      | $ | 15.54 |             |            | $ | 58,718      |  |  | $ | 11.58 | 
|                                                      |  |                      |        |            |                      |   |       |             |            |   |             | 
|Industrial Properties:                                |  |                      |        |            |                      |   |       |             |            |   |             |  |  |   |       | 
|Renewals                                              |  | $                    | 336    |            |                      | $ | 15.28 |             |            | $ | 271         |  |  | $ | 0.42  | 
|Retenanted                                            |  |                      | 361    |            |                      |   | 5.95  |             |            |   | 240         |  |  |   | 3.74  | 
|                                                      |  |                      |        |            |                      |   |       |             |            |   |             | 
|Total/ Weighted Average                               |  | $                    | 697    |            |                      | $ | 8.43  |             |            | $ | 511         |  |  | $ | 0.72  | 
|                                                      |  |                      |        |            |                      |   |       |             |            |   |             | 
|Unconsolidated Joint
    Ventures(a):                 |  |                      |        |            |                      |   |       |             |            |   |             |  |  |   |       | 
|                                                      |  |                      |        |            |                      |   |       |             |            |   |             | 
|Renewals                                              |  | $                    | 1,697  |            |                      | $ | 17.01 |             |            | $ | 436         |  |  | $ | 3.09  | 
|Retenanted                                            |  |                      | 673    |            |                      |   | 11.19 |             |            |   | 455         |  |  |   | 6.37  | 
|                                                      |  |                      |        |            |                      |   |       |             |            |   |             | 
|Total/ Weighted Average                               |  | $                    | 2,370  |            |                      | $ | 14.82 |             |            | $ | 891         |  |  | $ | 4.19  | 
|                                                      |  |                      |        |            |                      |   |       |             |            |   |             | 

|                                                      |  |                    |         |            |                    |   |       |             |            |   |             |  |  |   |       | 
|----------------------------------------------------- |  | ------------------ | ------- | ---------- | ------------------ | - | ----- | ----------- | ---------- | - | ----------- |  |  | - | ----- | 
|                                                      |  |                    |         |           
|                                                      |  | For the six months |         |            | For the six months |  
|                                                      |  | ended June 30,     |         |            | ended June 30,     |  
|                                                      |  |                    |         |           
|                                                      |  | 2003               |         |            | 2002               |  
|                                                      |  |                    |         |            |                    |  
|                                                      |  |                    |         | Total Cost |                    |   |       |             | Total Cost |  
|                                                      |  |                    |         | per Square |                    |   |       |             | per Square |  
|(Dollars in thousands except per square foot amounts) |  | Total Costs        |         |            | Foot Leased        |   |       | Total Costs |            |   | Foot Leased | 
|                                                      |  |                    |         |            |                    |   |       |             |            |   |             | 
|Consolidated Properties:                              |  |                    |         |            |                    |   |       |             |            |   |             |  |  |   |       | 
|                                                      |  |                    |         |            |                    |   |       |             |            |   |             | 
|Office Properties:                                    |  |                    |         |            |                    |   |       |             |            |   |             |  |  |   |       | 
|Renewals                                              |  | $                  | 56,315  |            |                    | $ | 10.56 |             |            | $ | 30,213      |  |  | $ | 6.70  | 
|Retenanted                                            |  |                    | 78,598  |            |                    |   | 19.16 |             |            |   | 71,215      |  |  |   | 16.78 | 
|                                                      |  |                    |         |            |                    |   |       |             |            |   |             | 
|Total/ Weighted Average                               |  | $                  | 134,913 |            |                    | $ | 14.30 |             |            | $ | 101,428     |  |  | $ | 11.59 | 
|                                                      |  |                    |         |            |                    |   |       |             |            |   |             | 
|Industrial Properties:                                |  |                    |         |            |                    |   |       |             |            |   |             |  |  |   |       | 
|Renewals                                              |  | $                  | 481     |            |                    | $ | 2.89  |             |            | $ | 271         |  |  | $ | 0.41  | 
|Retenanted                                            |  |                    | 593     |            |                    |   | 3.45  |             |            |   | 240         |  |  |   | 3.74  | 
|                                                      |  |                    |         |            |                    |   |       |             |            |   |             | 
|Total/ Weighted Average                               |  | $                  | 1,074   |            |                    | $ | 3.17  |             |            | $ | 511         |  |  | $ | 0.71  | 
|                                                      |  |                    |         |            |                    |   |       |             |            |   |             | 
|Unconsolidated Joint
    Ventures(a):                 |  |                    |         |            |                    |   |       |             |            |   |             |  |  |   |       | 
|                                                      |  |                    |         |            |                    |   |       |             |            |   |             | 
|Renewals                                              |  | $                  | 9,889   |            |                    | $ | 31.06 |             |            | $ | 923         |  |  | $ | 4.66  | 
|Retenanted                                            |  |                    | 2,830   |            |                    |   | 20.51 |             |            |   | 1,662       |  |  |   | 11.14 | 
|                                                      |  |                    |         |            |                    |   |       |             |            |   |             | 
|Total/ Weighted Average                               |  | $                  | 12,719  |            |                    | $ | 27.87 | (b)         |            | $ | 2,585       |  |  | $ | 7.44  | 
|                                                      |  |                    |         |            |                    |   |       |             |            |   |             | 



---



|    |  |                                                                                                                                                                                                                                                                                                     
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Represents our share of unconsolidated joint
    venture tenant improvement and leasing costs. All joint venture
    information included above is from office properties.                                                                                                                          
|   
|(b) |  | This amount is significantly higher than costs
    incurred in prior periods and should not be indicative of future
    lease costs. The higher costs were due to several leases that
    required significant tenant improvements. The weighted average
    lease term was approximately 7.6 years.

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The above information includes actual capital
improvements incurred and tenant improvements and leasing
commissions for leases which took occupancy during the period
shown. The amounts included in the consolidated statement of
cash flows represent the cash expenditures made during the
period. The differences between these amounts represent timing
differences between the time at which a tenant takes occupancy
and the actual cash expenditures as well as expenditures for
corporate furniture, fixtures and equipment, software, leasehold
improvements and other non-tenant related costs that are
capitalized. The reconciliation between the amounts above for
the consolidated properties and the amounts disclosed in the
consolidated statements of cash flows is as follows:

|                                                                                                                            |                       |                      |         |        |                    |   |        |        |  |   |         |         |  |   |         |         | 
|--------------------------------------------------------------------------------------------------------------------------- | --------------------- | -------------------- | ------- | ------ | ------------------ | - | ------ | ------ |  | - | ------- | ------- |  | - | ------- | ------- | 
|                                                                                                                            |                       |                      |         |       
|                                                                                                                            |                       | For the three months |         |        | For the six months |  
|                                                                                                                            |                       | ended June 30,       |         |        | ended June 30,     |  
|                                                                                                                            |                       |                      |         |        |                    |  
|(Dollars in thousands)                                                                                                      |                       | 2003                 |         |        | 2002               |   |        | 2003   |  |   | 2002    |        
|                                                                                                                            |                       |                      |         |        |                    |   |        |        |  |   |         |        
|Total capital improvements                                                                                                  |                       | $                    | 32,811  |        |                    | $ | 45,000 |        |  | $ | 65,119  |         |  | $ | 88,729  |        
|Tenant improvements and leasing
    commissions:                                                                            |                       |                      |         |        |                    |   |        |        |  |   |         |         |  |   |         |        
|                                                                                                                            | Office Properties     |                      |         | 67,837 |                    |   |        | 58,718 |  |   |         | 134,913 |  |   |         | 101,428 | 
|                                                                                                                            | Industrial Properties |                      |         | 697    |                    |   |        | 511    |  |   |         | 1,074   |  |   |         | 511     | 
|Expenditures for corporate furniture, fixtures
    and equipment, software, leasehold improvements and other                |                       |                      | 6,515   |        |                    |   | 1,229  |        |  |   | 8,371   |         |  |   | 2,306   |        
|Timing differences                                                                                                          |                       |                      | 16,185  |        |                    |   | (8,259 | )      |  |   | 9,176   |         |  |   | (20,810 | )      
|                                                                                                                            |                       |                      |         |        |                    |   |        |        |  |   |         |        
|Total capital improvements, tenant improvements
    and leasing commissions on the consolidated statement of cash
    flows |                       | $                    | 124,045 |        |                    | $ | 97,199 |        |  | $ | 218,653 |         |  | $ | 172,164 |        
|                                                                                                                            |                       |                      |         |        |                    |   |        |        |  |   |         |        
|Capital and tenant improvements from consolidated
    statement of cash flows                                               |                       | $                    | 88,809  |        |                    | $ | 72,226 |        |  | $ | 146,587 |         |  | $ | 130,441 |        
|Lease commissions and other costs from
    consolidated statement of cash flows                                             |                       |                      | 35,236  |        |                    |   | 24,973 |        |  |   | 72,066  |         |  |   | 41,723  |        
|                                                                                                                            |                       |                      |         |        |                    |   |        |        |  |   |         |        
|Total capital improvements, tenant improvements
    and leasing commissions on the consolidated statement of cash
    flows |                       | $                    | 124,045 |        |                    | $ | 97,199 |        |  | $ | 218,653 |         |  | $ | 172,164 |        
|                                                                                                                            |                       |                      |         |        |                    |   |        |        |  |   |         |        

Developments

We currently own directly and through joint
ventures several properties in various stages of development or
pre-development. These developments are funded by working
capital and the line of credit. Specifically identifiable direct
acquisition, development and construction costs are capitalized,
including, where applicable,

42



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##### Table of Contents



salaries and related costs, real estate taxes and
interest essential to the development of a property. The
properties under development and all figures stated below are as
of June 30, 2003.


|                              |  |           |         |  |          |                   |           |  |   |                        |           |  |            |          |         |         |       |       |           |         |         |           |         |   |            |  |    |   |         |  |  |  |    |  
|----------------------------- |  | --------- | ------- |  | -------- | ----------------- | --------- |  | - | ---------------------- | --------- |  | ---------- | -------- | ------- | ------- | ----- | ----- | --------- | ------- | ------- | --------- | ------- | - | ---------- |  | -- | - | ------- |  |  |  | -- | -
|                              |  |           |         |  |          |                   |           |  |   |                        |           |  |            |         
|                              |  |           |         |  |          |                   |           |  |   | EOP Partnerships      |           |  |            |          |        
|                              |  |           |         |  |          |                   |           |  |   |                        |           |  |            |          |        
|                              |  | Estimated |         |  |          |                   |           |  |   |                        |           |  | Costs      |          |         |         |       | Total |           |         |        
|                              |  | Placed in |         |  |          |                   |           |  |   |                        | Ownership |  |            | Incurred |         |         | Total |       |           | Project |         |           | Current |  
|                              |  | Service   |         |  |          |                   | Number of |  |   | Square                 |           |  | Percentage |          |         | To Date |       |       | Estimated |         |         | Estimated |         |   | Percentage | 
|                              |  | Date(a)   |         |  | Location |                   | Buildings |  |   | Feet                   |           |  | (a)        |          |         | (a)     |       |       | Costs(a)  |         |         | Costs(a)  |         |   | Leased     | 
|                              |  |           |         |  |          |                   |           |  |   |                        |           |  |            |          |         |         |       |       |           |         |         |           |         |   |            | 
|                              |  |           |         |  |          |                   |           |  |   |                        |           | 
|                              |  |           |         |  |          |                   |           |  |   | (Dollars in thousands) |           |  |           
|Wholly-Owned                  |  |           |         |  |          |                   |           |  |   |                        |           |  |            |          |         |         |       |       |           |         |         |           |         |   |            |  |    |   |         |  |  |  |    |  
|                              |  |           |         |  |          |                   |           |  |   |                        |           |  |            |          |         |         |       |       |           |         |         |           |         |   |            | 
|Kruse Woods V                 |  |           | 3Q/2003 |  |          | Lake Oswego, OR   |           |  | 1 |                        |           |  | 184,000    |          |         |         | 100   | %     |           | $       | 21,862  |           |         | $ | 33,900     |  |    | $ | 33,900  |  |  |  | 6  | %
|Douglas Corporate Center II   |  |           | 3Q/2003 |  |          | Roseville, CA     |           |  | 1 |                        |           |  | 108,000    |          |         |         | 100   | %     |           |         | 10,806  |           |         |   | 16,800     |  |    |   | 16,800  |  |  |  | 21 | %
|Cambridge Science Center      |  |           | 1Q/2004 |  |          | Cambridge, MA     |           |  | 1 |                        |           |  | 131,000    |          |         |         | 100   | %     |           |         | 22,144  |           |         |   | 50,200     |  |    |   | 50,200  |  |  |  | 0  | %
|                              |  |           |         |  |          |                   |           |  |   |                        |           |  |            |          |         |         |       |       |           |         |         |           |         |   |            | 
|                              |  |           |         |  |          |                   |           |  | 3 |                        |           |  | 423,000    |          |         |         |       |       |           |         | 54,812  |           |         |   | 100,900    |  |    |   | 100,900 |  |  |  | 8  | %
|                              |  |           |         |  |          |                   |           |  |   |                        |           |  |            |          |         |         |       |       |           |         |         |           |         |   |            | 
|                             
|Joint Ventures                |  |           |         |  |          |                   |           |  |   |                        |           |  |            |          |         |         |       |       |           |         |         |           |         |   |            |  |    |   |         |  |  |  |    |  
|                              |  |           |         |  |          |                   |           |  |   |                        |           |  |            |          |         |         |       |       |           |         |         |           |         |   |            | 
|Ferry Building(b)             |  |           | 3Q/2002 |  |          | San Francisco, CA |           |  | 1 |                        |           |  | 242,000    |          |         |         | (b)   |       |           |         | 71,187  |           |         |   | 87,000     |  |    |   | 110,500 |  |  |  | 70 | %
|Foundry Square II(c)          |  |           | 3Q/2002 |  |          | San Francisco, CA |           |  | 1 |                        |           |  | 502,200    |          |         |         | 87.5  | %     |           |         | 130,093 |           |         |   | 176,400    |  |    |   | 184,400 |  |  |  | 55 | %
|Waters Edge Phase I(d)       |  |           | 3Q/2002 |  |          | Los Angeles, CA   |           |  | 2 |                        |           |  | 240,000    |          |         |         | 87.5  | %     |           |         | 54,815  |           |         |   | 74,300     |  |    |   | 76,500  |  |  |  | 0  | %
|                              |  |           |         |  |          |                   |           |  |   |                        |           |  |            |          |         |         |       |       |           |         |         |           |         |   |            | 
|                              |  |           |         |  |          |                   |           |  | 4 |                        |           |  | 984,200    |          |         |         |       |       |           |         | 256,095 |           |         |   | 337,700    |  |    |   | 371,400 |  |  |  | 45 | %
|                              |  |           |         |  |          |                   |           |  |   |                        |           |  |            |          |         |         |       |       |           |         |         |           |         |   |            | 
|Grand Total/ Weighted Average |  |           | 7       |  |          |                   | 1,407,200 |  |   |                        |           |  |            | $        | 310,907 |         |       | $     | 438,600   |         |         | $         | 472,300 |   |            |  | 34 | %
|                              |  |           |         |  |          |                   |           |  |   |                        |           |  |            |          |         |         |       |       |           |         |        

|                                                                    |               |   |         |         | 
|------------------------------------------------------------------- | ------------- | - | ------- | ------- | 
|Balance Sheet Reconciliation of
    Developments:                   |               |   |         |        
|Consolidated developments  costs
    incurred as reflected above:  |               |   |         |        
|                                                                    | Wholly-owned  |   | $       | 54,812  | 
|                                                                    | Joint venture |   |         | 256,095 | 
|Minority interests portion of consolidated
    developments         |               |   | 31,431  |        
|                                                                    |               |   |        
|Total developments in process on the consolidated
    balance sheet |               | $ | 342,338 |        
|                                                                    |               |   |        






|    |  |                                                                                                                                                                                                                                                                   
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | The Estimated Placed in Service Date represents
    the date the certificate of occupancy was or is currently
    anticipated to be obtained. Subsequent to obtaining the
    certificate of occupancy, the property is expected to undergo a
    lease-up period.



| |                                                                                                                                                                                                                                                                                             
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | For joint ventures, EOP Partnerships Costs
    Incurred To Date and the Total Estimated Costs represent our
    required capital based on EOP Partnerships Ownership
    Percentage plus any financing or preferred equity provided by us
    as described in each of the footnotes below.
|
| | The Total Project Estimated Costs represent 100%
    of the developments estimated costs (including the
    acquisition cost of the land and building, if any) including
    ours and any unaffiliated parties portions.                                                                  
|
| | The Total Estimated Costs and the Total Project
    Estimated Costs are subject to change upon, or prior to, the
    completion of the development and include amounts required to
    lease the property.                                                                                  



|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) |  | A joint venture between us and other unaffiliated
    parties leased the Ferry Building from the City and County of
    San Francisco, through its Port Commission (the
    Port). Under this lease, the Port is paid a stated
    base rent. In addition, once the lessee has received from the
    project a cumulative preferred return of 8% (prior to
    stabilization) and 11% (after stabilization), then 50% of the
    proceeds from the operation and ownership of the project are
    paid to the Port as percentage rent.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The joint venture is redeveloping the Ferry
    Building in a manner to permit the use of federal rehabilitation
    tax credits (Historic Tax Credits). Since the
    original members of the joint venture could not take full
    advantage of the Historic Tax Credits, the joint venture
    admitted a new member who could do so. This investor member has
    contributed approximately $21.3 million in equity, will
    contribute an

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| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | additional $2.2 million to fund a portion of
    the Total Project Estimated Costs for the project, and will be
    entitled to a preferred return with an effective annual rate of
    approximately 3% on its capital investment. The investor
    members interest in the joint venture is subject to
    put/call rights during the sixth and seventh years after the
    Ferry Building is placed in service. Upon the purchase of the
    investor members interest pursuant to the put/call, it is
    estimated that the joint venture will retain approximately
    $11 million of the capital contributed by the investor
    member, based on a formula to determine the purchase price for
    the investor members interest and after taking into
    account the preferred return that will have been paid to the
    investor member by such time.



|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(c) |  | Our joint venture partner funded $8 million
    of capital. We will fund the balance of the capital required for
    the project. We will also provide financing for up to 70% of the
    Total Project Estimated Costs at an interest rate at the greater
    of 6.5% or LIBOR plus 3.25%, generally maturing 36 months
    after initial funding or earlier at our option in the event
    alternative financing sources are available on terms reasonably
    acceptable to the joint venture partner. At June 30, 2003,
    we had committed to finance approximately $117 million, of
    which approximately $94 million was outstanding.                                                                                                                                                                                                                                                                                                                                                                                              
|   
|(d) |  | In June 2001, we and a third party entered into a
    joint venture agreement for the purpose of developing,
    constructing, leasing and managing Waters Edge
    Phase I with Total Project Estimated Costs of approximately
    $77 million and acquired an adjacent vacant land parcel for
    approximately $14 million for a total project outlay of
    $91 million. At closing, the joint venture partner
    contributed approximately $4 million for Waters Edge
    Phase I and the Waters Edge vacant land. We have
    committed to fund the remaining balance of the equity up to
    $87 million in the form of common equity of approximately
    $29 million and preferred equity of up to approximately
    $58 million. We will receive a preferred return of 16% for
    $13 million and LIBOR plus 2.5% for $45 million.
    Subsequent to June 30, 2003, this property was fully leased
    to a single tenant. The lease includes an option for the tenant
    to buy the property as stipulated in the agreement.

In addition to the developments described above,
we own or have under option various land parcels available for
development. These sites represent possible future development
of up to approximately 12 million square feet of office
space. The development of these sites will be impacted by the
timing and likelihood of success of the entitlement process,
both of which are uncertain. These various sites include, among
others: Russia Wharf, Boston, MA; Reston Town Center, Reston,
VA; Prominence in Buckhead, Atlanta, GA; Perimeter Center,
Atlanta, GA; Tabor Center, Denver, CO; Bridge Pointe,
San Diego, CA; La Jolla Centre, San Diego, CA;
Orange Center, Orange, CA; Waters Edge, Los Angeles, CA; Skyport
Plaza, San Jose, CA; Foundry Square, San Francisco,
CA; San Rafael Corporate Center, San Rafael, CA;
Station Oaks, Walnut Creek, CA; Parkshore Plaza, Folsom, CA;
City Center Bellevue; Bellevue, WA; and 8th Street, Bellevue, WA.

Consolidated developments in process increased to
approximately $342.3 million at June 30, 2003 from
$284.7 million at December 31, 2002, primarily due to
Cambridge Science Center which was taken out of service and
placed into development and additional expenditures on the
existing developments made during 2003.

Subsequent Events

See Note 14  Subsequent Events
for transactions that occurred subsequent to June 30, 2003
through August 7, 2003.

Inflation

Substantially all of our office leases require
the tenant to pay, as additional rent, a portion of any
increases in real estate taxes (except in the case of certain
California leases, which limit the ability of the landlord to
pass through to the tenants the effect of increased real estate
taxes attributable to a sale of real property interests) and
operating expenses over a base amount. In addition, many of our
office leases provide for fixed increases in base rent or
indexed escalations (based on the Consumer Price Index or other
measures). We

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believe that the majority of inflationary
increases in expenses will be offset, in part, by the expense
reimbursements and contractual rent increases described above.


Funds From Operations
(FFO)

FFO is a non-GAAP financial measure. We believe
FFO, as defined by the Board of Governors of the National
Association of Real Estate Investment Trusts
(NAREIT), to be an appropriate measure of
performance for a real estate company, for the reasons, and
subject to the qualifications, specified in footnote
(a) below. The following table reflects the reconciliation
of FFO to net income available for Units, the most directly
comparable GAAP measure, for the periods presented:

|                                                             |                                                                                                                                            |                      |         |         |                    |   |         |         |   |   |         |         |   |   |         |         |  
|------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------ | -------------------- | ------- | ------- | ------------------ | - | ------- | ------- | - | - | ------- | ------- | - | - | ------- | ------- | -
|                                                             |                                                                                                                                            |                      |         |        
|                                                             |                                                                                                                                            | For the three months |         |         | For the six months |  
|                                                             |                                                                                                                                            | ended June 30,       |         |         | ended June 30,     |  
|                                                             |                                                                                                                                            |                      |         |         |                    |  
|(Dollars in thousands)                                       |                                                                                                                                            | 2003                 |         |         | 2002               |   |         | 2003    |   |   | 2002    |        
|                                                             |                                                                                                                                            |                      |         |         |                    |   |         |         |   |   |         |        
|Reconciliation of Net income available for
    Units to FFO: |                                                                                                                                            |                      |         |         |                    |   |         |         |   |   |         |         |   |   |         |        
|Net income available for Units                               |                                                                                                                                            | $                    | 168,388 |         |                    | $ | 187,652 |         |   | $ | 327,419 |         |   | $ | 416,286 |        
|Add back (deduct):                                           |                                                                                                                                            |                      |         |         |                    |   |         |         |   |   |         |         |   |   |         |        
|                                                             | Real estate related depreciation and amortization
    (including EOP Partnerships share of unconsolidated joint
    ventures)             |                      |         | 185,905 |                    |   |         | 180,791 |   |   |         | 367,387 |   |   |         | 356,164 |  
|                                                             | Real estate related depreciation and amortization
    less net (gain)/loss on sales of real estate included in
    discontinued operations |                      |         | (44,109 | )                  |   |         | (1,973  | ) |   |         | (49,737 | ) |   |         | 4,938   |  
|                                                             | Net gain on sale of unconsolidated joint venture                                                                                           |                      |         |        |                    |   |         | (150    | ) |   |         |        |   |   |         | (429    | )
|                                                             |                                                                                                                                            |                      |         |         |                    |   |         |         |   |   |         |        
|FFO(a)                                                       |                                                                                                                                            | $                    | 310,184 |         |                    | $ | 366,320 |         |   | $ | 645,069 |         |   | $ | 776,959 |        
|                                                             |                                                                                                                                            |                      |         |         |                    |   |         |         |   |   |         |        

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|                                                                               |                                                                                                                                            |                            |             |          |                          |   |             |          |   |   |             |          |   |   |             |          |  
|------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------ | -------------------------- | ----------- | -------- | ------------------------ | - | ----------- | -------- | - | - | ----------- | -------- | - | - | ----------- | -------- | -
|                                                                               |                                                                                                                                            |                            |             |         
|                                                                               |                                                                                                                                            | For the three months ended |             |          | For the six months ended |  
|                                                                               |                                                                                                                                            | June 30,                   |             |          | June 30,                 |  
|                                                                               |                                                                                                                                            |                            |             |          |                          |  
|(Dollars in thousands, except per unit data)                                   |                                                                                                                                            | 2003                       |             |          | 2002                     |   |             | 2003     |   |   | 2002        |         
|                                                                               |                                                                                                                                            |                            |             |          |                          |   |             |          |   |   |             |         
|Cash flow provided by (used for):                                              |                                                                                                                                            |                            |             |          |                          |   |             |          |   |   |             |          |   |   |             |         
|                                                                               | Operating Activities                                                                                                                       |                            | $           | 298,950  |                          |   | $           | 363,639  |   |   | $           | 550,537  |   |   | $           | 642,220  |  
|                                                                               | Investing Activities                                                                                                                       |                            |             | 127,251  |                          |   |             | (32,250  | ) |   |             | 70,682   |   |   |             | 144,980  |  
|                                                                               | Financing Activities                                                                                                                       |                            |             | (431,929 | )                        |   |             | (334,987 | ) |   |             | (622,095 | ) |   |             | (548,081 | )
|                                                                               |                                                                                                                                            |                            |             |          |                          |   |             |          |   |   |             |         
|Net (decrease) increase in cash and cash
    equivalents                       |                                                                                                                                            | $                          | (5,728      | )        |                          | $ | (3,598      | )        |   | $ | (876        | )        |   | $ | 239,119     |         
|                                                                               |                                                                                                                                            |                            |             |          |                          |   |             |          |   |   |             |         
|Ratio of Earnings to Combined Fixed Charges
    and Preferred Distributions(c) |                                                                                                                                            |                            | 1.6         | x        |                          |   | 2.0         | x        |   |   | 1.6         | x        |   |   | 1.9         | x       
|                                                                               |                                                                                                                                            |                            |             |          |                          |   |             |          |   |   |             |         
|Reconciliation of diluted earnings per unit to
    diluted FFO per unit:       |                                                                                                                                            |                            |             |          |                          |   |             |          |   |   |             |          |   |   |             |         
|Net income available for Units                                                 |                                                                                                                                            | $                          | 0.37        |          |                          | $ | 0.40        |          |   | $ | 0.72        |          |   | $ | 0.88        |         
|                                                                               | Real estate related depreciation and amortization
    (including EOP                                                                       |                            |             |          |                          |   |             |          |   |   |             |          |   |   |             |          |  
|                                                                               | Partnerships share of unconsolidated joint
    ventures)                                                                                  |                            |             | 0.41     |                          |   |             | 0.38     |   |   |             | 0.81     |   |   |             | 0.75     |  
|                                                                               | Real estate related depreciation and amortization
    less net (gain)/loss on sales of real estate included in
    discontinued operations |                            |             | (0.10    | )                        |   |             |         |   |   |             | (0.11    | ) |   |             | 0.01     |  
|                                                                               |                                                                                                                                            |                            |             |          |                          |   |             |          |   |   |             |         
|FFO available for Units(b)                                                     |                                                                                                                                            | $                          | 0.69        |          |                          | $ | 0.78        |          |   | $ | 1.42        |          |   | $ | 1.64        |         
|                                                                               |                                                                                                                                            |                            |             |          |                          |   |             |          |   |   |             |         
|Weighted average Units and unit equivalents
    outstanding  Diluted          |                                                                                                                                            |                            | 452,010,570 |          |                          |   | 472,610,590 |          |   |   | 455,646,938 |          |   |   | 472,726,956 |         
|                                                                               |                                                                                                                                            |                            |             |          |                          |   |             |          |   |   |             |         






|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | FFO is defined as net income, computed in
    accordance with accounting principles generally accepted in the
    United States (GAAP), excluding gains (or losses)
    from sales of properties (which we believe includes impairments
    on properties held for sale), plus real estate related
    depreciation and amortization and after adjustments for
    unconsolidated partnerships and joint ventures. We believe that
    FFO is helpful to investors as one of several measures of the
    performance of a real estate company. We further believe that by
    excluding the effect of depreciation and gains (or losses) from
    sales of properties (all of which are based on historical costs
    which may be of limited relevance in evaluating current
    performance), FFO can facilitate comparison of operating
    performance between real estate companies. Investors should
    review FFO along with GAAP net income available for Units and
    cash flow from operating activities, investing activities and
    financing activities, when trying to understand a real estate
    companys operating performance. We compute FFO in
    accordance with standards established by NAREIT, which may not
    be comparable to FFO reported by other real estate companies
    that do not define the term in accordance with the current
    NAREIT definition or that interpret the current NAREIT
    definition differently than us. FFO does not represent cash
    generated from operating activities in accordance with GAAP, nor
    does it represent cash available to pay distributions and should
    not be considered as an alternative to net income, determined in
    accordance with GAAP, as an indication of our financial
    performance, or to cash flow from operating activities,
    determined in accordance with GAAP, as a measure of our
    liquidity, nor is it indicative of funds available to fund our
    cash needs, including its ability to make cash distributions.
|   
|(b) |  | FFO per unit may not total the sum of the per
    unit components in the reconciliation due to rounding.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

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|    |  |                                                                                                
|--- |  | -----------------------------------------------------------------------------------------------
|(c) |  | This ratio is calculated in accordance with the
    definition provided by the SEC, as follows:



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The term earnings is the amount
    resulting from adding and subtracting the following items. Add
    the following: (a) Pre-tax income from continuing
    operations before adjustment for minority interests in
    consolidated subsidiaries or income or loss from equity
    investees, (b) fixed charges, (c) amortization of
    capitalized interest, (d) distributed income of equity
    investees, and (e) our share of pre-tax losses of equity
    investees for which charges arising from guarantees are included
    in fixed charges. From the total of the added items, subtract
    the following: (a) capitalized interest,
    (b) preference security dividend requirements of
    consolidated subsidiaries and (c) the minority interest in
    pre-tax income of subsidiaries that have not incurred fixed
    charges. Equity investees are investments that we account for
    using the equity method of accounting.
|
| | The term fixed charges and preferred
    distributions means the sum of the following:
    (a) interest expensed and capitalized interest,
    (b) amortized premiums, discounts and capitalized expenses
    related to indebtedness, (c) an estimate of the interest
    within rental expense, and (d) preference security dividend
    requirements of consolidated subsidiaries.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

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|        |                                                                
|------- | ---------------------------------------------------------------
|ITEM 3. | Quantitative and Qualitative Disclosures
    About Market Risk.

Quantitative and qualitative disclosures about
market risk are incorporated herein by reference from
Item 2.  Managements Discussion and
Analysis of Financial Condition and Results of
Operations  Market Risk.






|        |                         
|------- | ------------------------
|ITEM 4. | Controls and Procedures.

Evaluation of Disclosure Controls and
Procedures

The principal executive officer of Equity Office,
Richard D. Kincaid, and the principal financial officer of
Equity Office, Marsha C. Williams, evaluated as of June 30,
2003 the effectiveness of the design and operation of our
disclosure controls and other procedures that are designed to
ensure that information required to be disclosed by us in the
reports that we file or submit under the Securities Exchange Act
of 1934 is recorded, processed, summarized and reported within
the time periods specified in the SECs rules and forms. As
a result of this evaluation, these executive officers have
concluded that, as of such date, the design and operation of our
disclosure controls and procedures were effective.

Changes in Internal Controls over Financial
Reporting

There were no changes in our internal controls
over financial reporting identified in connection with the
evaluation referred to above that have materially affected, or
are reasonably likely to materially affect, our internal
controls over financial reporting.




PART II. OTHER INFORMATION






|        |                   
|------- | ------------------
|ITEM 1. | Legal Proceedings.

On May 8, 2003, Broadband Office, Inc. and
the official committee of unsecured creditors of Broadband
Office Inc., filed a complaint (the Complaint) in
the United States Bankruptcy Court for the District of Delaware
against one private and seven public real estate companies,
various affiliated entities (collectively the Corporate
Defendants) and certain individuals, including Equity
Office, EOP Partnership, David Helfand (a former executive vice
president of Equity Office), Spieker Properties, Inc. (which
Equity Office acquired in 2001) and Spieker Properties, L.P.
(which EOP Partnership acquired in 2001) and Craig Vought
(formerly co-chief executive officer of Spieker Properties, Inc.
and currently an Equity Office trustee). Under the terms of EOP
Partnerships and Equity Offices indemnification
agreements with Messrs. Helfand and Vought, EOP Partnership
and Equity Office may be responsible to reimburse them for the
effect of any judgment rendered against them personally as well
as the costs of their defense. EOP Partnership was an equity
investor in, landlord to and customer of Broadband Office, and
Messrs. Helfand and Vought were members of the board of
directors of Broadband Office until their resignations from the
board of Broadband Office on May 1, 2001 and May 2,
2001, respectively. Mr. Vought also served as a member of
Broadband Offices executive committee. Broadband Office
filed for bankruptcy protection on May 9, 2001. The
Complaint alleges, among other things, breaches of fiduciary
duty and seeks recovery of what it characterizes as preferential
payments and fraudulent transfers. It further seeks to hold EOP
Partnership and Equity Office liable for the outstanding debts
of the corporation, jointly and severally with all of the
Corporate Defendants, as an alleged general partner
of Broadband Office. The plaintiffs allege that the amount of
these claims exceeds $300 million in the aggregate.

Due to the inherent uncertainties of the judicial
process and the early stage of this action, EOP Partnership is
unable to predict the outcome of this matter with certainty. As
a result, EOP Partnership has not accrued for any potential
liability in connection with this litigation. EOP Partnership
intends to vigorously defend this matter and believes it has
meritorious defenses available to it. As in any litigation,
there can be no assurance that EOP Partnership will prevail.
Should the court not resolve this matter in EOP
Partnerships favor it could have a material adverse effect
on EOP Partnerships financial condition and results of
operations.

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|        |                                      
|------- | -------------------------------------
|ITEM 6. | Exhibits and Reports on
    Form 8-K.

(a) Exhibits:

The exhibits required by this item are set forth
on the Exhibit Index attached hereto.

(b) Reports on Form 8-K

There were no reports on Form 8-K filed
during the quarterly period ended June 30, 2003.

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APPENDIX A


FINANCIAL COVENANT CALCULATIONS AS OF
JUNE 30, 2003

UNDER CERTAIN INDENTURE AGREEMENTS


EOP OPERATING LIMITED PARTNERSHIP

UNSECURED NOTES FINANCIAL COVENANT COMPLIANCE
AS OF JUNE 30, 2003

(Dollars in thousands)


Compliance with these financial covenants
requires EOP Partnership to apply specialized terms, the
definitions of which are set forth in the related unsecured note
indentures, and to calculate ratios in the manner prescribed in
the indentures.

This section presents such ratios as of
June 30, 2003 to show that EOP Partnership was in
compliance with the applicable financial covenants contained in
the unsecured note indentures, copies of which have been filed
as exhibits to EOP Partnerships periodic reports filed
with the SEC. Management is not presenting these ratios and the
related calculations for any other purpose or for any other
period, and is not intending for these measures to otherwise
provide information about EOP Partnerships financial
condition or results of operations. Investors should not rely on
these measures other than for the purpose of testing EOP
Partnerships compliance with the financial covenants
contained in the unsecured note indentures as of June 30,
2003.

Debt to Adjusted Total Assets

EOP Partnership may not, and may not permit a
Subsidiary to, incur any Debt, other than intercompany Debt, if,
immediately after giving effect to the incurrence of such
additional Debt, the aggregate principal amount of all
outstanding Debt of EOP Partnership and its Subsidiaries on a
consolidated basis determined in accordance with GAAP is greater
than 60% of the sum of:



| |     |                                                                                                                                                                                                                                                                    
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (i) | Total Assets as of the end of the fiscal quarter
    covered in EOP Partnerships Annual Report on
    Form 10-K or Quarterly Report on Form 10-Q, as the
    case may be, most recently filed with the SEC prior to the
    incurrence of such additional Debt and



| |      |                                                                                                                                                                                                                                                                                                                                    
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (ii) | the increase or decrease in Total Assets from the
    end of such quarter including, without limitation, any increase
    in Total Assets resulting from the incurrence of such additional
    Debt (such increase or decrease together with EOP
    Partnerships Total Assets is referred to as the
    Adjusted Total Assets).

|                                                                         |      |   |           |            | 
|------------------------------------------------------------------------ | ---- | - | --------- | ---------- | 
|Mortgage debt (excluding a net discount of
    $(13,230))                |      | $ | 2,483,250 |           
|Unsecured notes (excluding a net premium of
    $25,820)                 |      |   | 9,216,500 |           
|Line of credit                                                           |      |   | 282,900   |           
|EOP Partnerships share of unconsolidated
    non-recourse mortgage debt |      |   | 815,667   |           
|                                                                         |      |   |          
|                                                                         | Debt |   | $         | 12,798,317 | 
|                                                                         |      |   |          

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|                                                                                                                      |                       |   |            |            | 
|--------------------------------------------------------------------------------------------------------------------- | --------------------- | - | ---------- | ---------- | 
|Investment in real estate                                                                                             |                       | $ | 24,456,255 |           
|Developments in process                                                                                               |                       |   | 342,338    |           
|Land available for development                                                                                        |                       |   | 245,058    |           
|Cash and cash equivalents                                                                                             |                       |   | 57,595     |           
|Escrow deposits and restricted cash                                                                                   |                       |   | 33,692     |           
|Investments in unconsolidated joint ventures                                                                          |                       |   | 1,089,894  |           
|Prepaid expenses and other assets (net of
    discount of $66,378)                                                    |                       |   | 307,746    |           
|Change in cash subsequent to June 30, 2003
    as a result of a property disposition and common stock
    repurchases |                       |   | (4,623     | )         
|                                                                                                                      |                       |   |           
|                                                                                                                      | Adjusted Total Assets |   | $          | 26,527,955 | 
|                                                                                                                      |                       |   |           
|Ratio                                                                                                                 |                       |   | 48         | %         
|                                                                                                                      |                       |   |           
|Maximum Ratio                                                                                                         |                       |   | 60         | %         
|                                                                                                                      |                       |   |           

Secured Debt to Adjusted Total
Assets

EOP Partnership may not, and may not permit any
Subsidiary to, incur any Secured Debt of EOP Partnership or any
Subsidiary if, immediately after giving effect to the incurrence
of such additional Secured Debt, the aggregate principal amount
of all outstanding Secured Debt of EOP Partnership and its
Subsidiaries on a consolidated basis is greater than 40% of
Adjusted Total Assets.

|                                                                         |                       |   |           |            | 
|------------------------------------------------------------------------ | --------------------- | - | --------- | ---------- | 
|Mortgage debt (excluding a net discount of
    $(13,230))                |                       | $ | 2,483,250 |           
|EOP Partnerships share of unconsolidated
    non-recourse mortgage debt |                       |   | 815,667   |           
|                                                                         |                       |   |          
|                                                                         | Secured Debt          |   | $         | 3,298,917  | 
|                                                                         |                       |   |          
|                                                                         | Adjusted Total Assets |   | $         | 26,527,955 | 
|                                                                         |                       |   |          
|Ratio                                                                    |                       |   | 12        | %         
|                                                                         |                       |   |          
|Maximum Ratio                                                            |                       |   | 40        | %         
|                                                                         |                       |   |          

Consolidated Income Available for Debt Service
to Annual Debt Service Charge

EOP Partnership may not, and may not permit any
Subsidiary to, incur any Debt, other than intercompany Debt
(provided that, in the case of Debt owed to Subsidiaries, such
Debt is subordinate in right of payment to the debt securities),
if the ratio of Consolidated Income Available for Debt Service
to Annual Debt Service Charge (in each case as defined below)
for the period consisting of the four consecutive fiscal
quarters most recently ended prior to the date on which the
additional Debt is to be incurred shall have been less than
1.5 to 1 on a pro forma basis after giving effect to the
incurrence of such Debt and to the application of the proceeds
therefrom, and calculated on the assumption that:



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | such Debt and any other Debt incurred by EOP
    Partnership or a Subsidiary since the first day of such
    four-quarter period, which was outstanding at the end of such
    period, had been incurred at the beginning of such period and
    continued to be outstanding throughout such period, and the
    application of the proceeds of such Debt, including to refinance
    other Debt, had occurred at the beginning of such period;
|
| |  | the repayment or retirement of any other Debt by
    EOP Partnership or a Subsidiary since the first day of such
    four-quarter period had been repaid or retired at the beginning
    of such period, except that, in determining the amount of Debt
    so repaid or retired, the amount of Debt under any revolving
    credit facility is computed based upon the average daily balance
    of such Debt during such period;             
|
| |  | in the case of Acquired Indebtedness or Debt
    incurred in connection with any acquisition since the first day
    of the four-quarter period, the related acquisition had occurred
    as of the first day of the period with                                                                                                                                                                                                               

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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   | the appropriate adjustments with respect to the
    acquisition being included in the pro forma calculation; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|
| |  | in the case of any increase or decrease in Total
    Assets, or any other acquisition or disposition by EOP
    Partnership or any Subsidiary of any asset or group of assets,
    since the first day of such four-quarter period, including by
    merger, stock purchase or sale, or asset purchase or sale, such
    increase, decrease or other acquisition or disposition or any
    related repayment of Debt had occurred as of the first day of
    such period with the appropriate adjustments to revenues,
    expenses and Debt levels with respect to such increase, decrease
    or other acquisition or disposition being included in such pro
    forma calculation.

|                                                                            |                                                |   |         |           | 
|--------------------------------------------------------------------------- | ---------------------------------------------- | - | ------- | --------- | 
|Pro forma net income                                                        |                                                | $ | 627,767 |          
|Pro forma interest expense                                                  |                                                |   | 806,050 |          
|Pro forma amortization of mark to market
    discounts/ premiums            |                                                |   | (5,528  | )        
|Pro forma provision for taxes                                               |                                                |   | 3,159   |          
|Pro forma amortization and depreciation                                     |                                                |   | 701,495 |          
|Less pro forma income from investments in
    unconsolidated joint ventures |                                                |   | (68,637 | )        
|                                                                            |                                                |   |        
|                                                                            | Consolidated Income Available for Debt Service |   | $       | 2,064,306 | 
|                                                                            |                                                |   |        
|Pro forma interest expense                                                  |                                                | $ | 806,050 |          
|Pro forma amortization of mark to market
    discounts/ premiums            |                                                |   | (5,528  | )        
|                                                                            |                                                |   |        
|                                                                            | Annual Debt Service Charge                     |   | $       | 800,522   | 
|                                                                            |                                                |   |        
|Ratio                                                                       |                                                |   | 2.58    |          
|                                                                            |                                                |   |        
|Minimum Ratio                                                               |                                                |   | 1.50    |          
|                                                                            |                                                |   |        

Total Unencumbered Assets to Unsecured
Debt

EOP Partnership is required at all times to
maintain Total Unencumbered Assets of not less that 150% of the
aggregate outstanding principal amount of all outstanding
Unsecured Debt of EOP Partnership and its Subsidiaries on a
consolidated basis.

|                                                                        |                           |   |            |            | 
|----------------------------------------------------------------------- | ------------------------- | - | ---------- | ---------- | 
|Total undepreciated real estate assets                                  |                           | $ | 19,286,570 |           
|Cash and cash equivalents                                               |                           |   | 57,595     |           
|Escrow deposits and restricted cash                                     |                           |   | 33,692     |           
|Prepaid expenses and other assets (net of
    discount of $66,378)      |                           |   | 307,746    |           
|Unencumbered investments in unconsolidated joint
    venture properties |                           |   | 690,373    |           
|                                                                        |                           |   |           
|                                                                        | Total Unencumbered Assets |   | $          | 20,375,976 | 
|                                                                        |                           |   |           
|Unsecured notes (excluding a net premium of
    $25,820)                |                           | $ | 9,216,500  |           
|Line of credit                                                          |                           |   | 282,900    |           
|                                                                        |                           |   |           
|Unsecured Debt                                                          |                           | $ | 9,499,400  |           
|                                                                        |                           |   |           
|Ratio                                                                   |                           |   | 214%       |           
|                                                                        |                           |   |           
|Minimum Ratio(a)                                                        |                           |   | 150%       |           
|                                                                        |                           |   |           



---



|    |  |                                                                                                               
|--- |  | --------------------------------------------------------------------------------------------------------------
|(a) |  | The unsecured notes assumed in the merger with
    Spieker Partnership are subject to a minimum ratio of 165%.

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##### Table of Contents






SIGNATURES

Pursuant to the requirements 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.



| |                                  
| | ---------------------------------
| | EOP OPERATING LIMITED PARTNERSHIP



| |     |                               
| | --- | ------------------------------
| | By: | EQUITY OFFICE PROPERTIES TRUST

| |                    
| | -------------------
| | its general partner

Date: August 14, 2003

| |     |                       
| | --- | ----------------------
| | By: | /s/ RICHARD D. KINCAID

| |                                          
| | -----------------------------------------
| |                                          
| | Richard D. Kincaid                       
| | President and Chief Executive
    Officer

Date: August 14, 2003

| |     |                       
| | --- | ----------------------
| | By: | /s/ MARSHA C. WILLIAMS

| |                            
| | ---------------------------
| |                            
| | Marsha C. Williams         
| | Executive Vice President   
| | and Chief Financial Officer





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##### Table of Contents






EXHIBIT INDEX

|            |  |                                                                                                                                                                                                                                                                                           |  |          |  | 
|----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------- |  | 
|Exhibit No. |  | Description                                                                                                                                                                                                                                                                               |  | Page No. | 
|            |  |                                                                                                                                                                                                                                                                                           |  |          | 
|3.1         |  | Second Amendment to the Third Amended and
    Restated Agreement of Limited Partnership of EOP Operating
    Limited Partnership entered into on June 27, 2003
    (incorporated by reference to Exhibit 10.1 to Equity
    Offices Form 10-Q filed with the SEC on
    August 14, 2003) |  |          |  | 
|10.1       |  | Severance Agreement by and between David A.
    Helfand and Equity Office Properties Trust dated April 28,
    2003 (incorporated by reference to Exhibit 10.4 to Equity
    Offices Form 10-Q filed with the SEC on
    August 14, 2003)                                                |  |          |  | 
|12.1        |  | Statement of Earnings to Combined Fixed Charges
    and Preferred Distributions                                                                                                                                                                                                           |  |          |  | 
|31.1        |  | Rule 13a-14(a)/15d-14(a) Certifications                                                                                                                                                                                                                                                   |  |          |  | 
|32.1        |  | Section 1350 Certifications                                                                                                                                                                                                                                                               |  |          |  | 



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|- |  | ---------------------------------------------------------------------------------
| |  | Represents a management contract or compensatory
    plan, contract or agreement.