##### Table of Contents









UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549


FORM 10-Q


|           |  |                                                                                             
|---------- |  | --------------------------------------------------------------------------------------------
|(Mark One) |  |                                                                                             
|þ          |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934 
|           |  | For the quarterly period ended September 30, 2006                                           
|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                                                           |  | 36-4156801                              
|(State or other jurisdiction of
    incorporation or organization) |  | (I.R.S. Employer
    Identification No.)
|                                                                  
|Two North Riverside Plaza,
    Suite 2100, Chicago, Illinois       |  | 60606                                   
|(Address of principal executive offices)                           |  | (Zip Code)                              

(312) 466-3300


Registrants telephone number, including area code


þ o


12b-2


þ o o


12b-2 o þ












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TABLE OF CONTENTS



|                                                               |                                                                                                |  |  |  |  |  |  | 
|-------------------------------------------------------------- | ---------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I -- FINANCIAL INFORMATION                               
|                                                               | Item 1. Financial Statements.                                                                 
|                                                               | 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.                                                                    
|                                                               | Item 1A. Risk Factors.                                                                        
|                                                               | Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.                          
|                                                               | Item 6. Exhibits.                                                                             
|Statement of Computation of Ratio of Earnings to Fixed Charges
|Certification                                                 
|Certification                                                 
|Certification                                                 



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##### Table of Contents






PART I  FINANCIAL INFORMATION







|        |                      
|------- | ---------------------
|Item 1. | Financial Statements.

EOP OPERATING LIMITED PARTNERSHIP


CONSOLIDATED BALANCE SHEETS


|                                                                                                   |                                                                                                                                                     |                                                                                                                                        |                                                                                                         |            |              |            |         |            |            |            | 
|-------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------- | ---------- | ------------ | ---------- | ------- | ---------- | ---------- | ---------- | 
|                                                                                                   |                                                                                                                                                     | September 30,                                                                                                                          |                                                                                                         |            | December 31, |           
|(Dollars in thousands, except per unit amounts)                                                    |                                                                                                                                                     | 2006                                                                                                                                   |                                                                                                         |            | 2005         |           
|                                                                                                   |                                                                                                                                                     |                                                                                                                                        |                                                                                                         |            |              |           
|                                                                                                   |                                                                                                                                                     | (Unaudited)                                                                                                                            |                                                                                                         |            |             
|Assets:                                                                                            |                                                                                                                                                     |                                                                                                                                        |                                                                                                         |            |              |            |         |           
|                                                                                                   | Investments in real estate                                                                                                                          |                                                                                                                                        | $                                                                                                       | 26,063,916 |              |            | $       | 22,929,606 |           
|                                                                                                   | Developments in process                                                                                                                             |                                                                                                                                        |                                                                                                         | 662,339    |              |            |         | 567,129    |           
|                                                                                                   | Land available for development                                                                                                                      |                                                                                                                                        |                                                                                                         | 148,006    |              |            |         | 176,868    |           
|                                                                                                   | Investments in real estate held for sale, net of accumulated
    depreciation                                                                       |                                                                                                                                        |                                                                                                         | 16,896     |              |            |         | 92,233     |           
|                                                                                                   | Accumulated depreciation                                                                                                                            |                                                                                                                                        |                                                                                                         | (3,958,587 | )            |            |         | (3,333,694 | )         
|                                                                                                   |                                                                                                                                                     |                                                                                                                                        |                                                                                                         |            |              |           
|                                                                                                   |                                                                                                                                                     | Investments in real estate, net of accumulated depreciation                                                                            |                                                                                                         |            | 22,932,570   |            |         |            | 20,432,142 |           
|                                                                                                   | Cash and cash equivalents                                                                                                                           |                                                                                                                                        |                                                                                                         | 196,371    |              |            |         | 78,164     |           
|                                                                                                   | Tenant and other receivables (net of allowance for doubtful
    accounts of $9,538 and $8,853, respectively)                                        |                                                                                                                                        |                                                                                                         | 88,217     |              |            |         | 94,858     |           
|                                                                                                   | Deferred rent receivable                                                                                                                            |                                                                                                                                        |                                                                                                         | 569,594    |              |            |         | 496,826    |           
|                                                                                                   | Escrow deposits and restricted cash                                                                                                                 |                                                                                                                                        |                                                                                                         | 336,501    |              |            |         | 38,658     |           
|                                                                                                   | Investments in unconsolidated joint ventures                                                                                                        |                                                                                                                                        |                                                                                                         | 118,085    |              |            |         | 947,989    |           
|                                                                                                   | Deferred financing costs (net of accumulated amortization of
    $50,093 and $45,920, respectively)                                                 |                                                                                                                                        |                                                                                                         | 92,755     |              |            |         | 58,809     |           
|                                                                                                   | Deferred leasing costs and other related intangibles (net of
    accumulated amortization of $345,640 and $232,024, respectively)                   |                                                                                                                                        |                                                                                                         | 705,288    |              |            |         | 522,926    |           
|                                                                                                   | Prepaid expenses and other assets                                                                                                                   |                                                                                                                                        |                                                                                                         | 261,044    |              |            |         | 303,181    |           
|                                                                                                   |                                                                                                                                                     |                                                                                                                                        |                                                                                                         |            |              |           
|                                                                                                   |                                                                                                                                                     |                                                                                                                                        | Total Assets                                                                                            |            | $            | 25,300,425 |         |            | $          | 22,973,553 | 
|                                                                                                   |                                                                                                                                                     |                                                                                                                                        |                                                                                                         |            |              |           
|                                                                                                  
|Liabilities, Minority Interests, Mandatorily Redeemable
    Preferred Units and Partners Capital: |                                                                                                                                                     |                                                                                                                                        |                                                                                                         |           
|Liabilities:                                                                                       |                                                                                                                                                     |                                                                                                                                        |                                                                                                         |            |              |            |         |           
|                                                                                                   | Mortgage debt (net of (discounts) of $(4,626) and $(5,185),
    respectively)                                                                       |                                                                                                                                        | $                                                                                                       | 3,219,288  |              |            | $       | 2,164,198  |           
|                                                                                                   | Unsecured notes (net of (discounts) of $(24,204) and
    $(23,936), respectively)                                                                   |                                                                                                                                        |                                                                                                         | 9,982,289  |              |            |         | 9,032,620  |           
|                                                                                                   | Lines of credit                                                                                                                                     |                                                                                                                                        |                                                                                                         | 1,886,000  |              |            |         | 1,631,000  |           
|                                                                                                   | Accounts payable and accrued expenses                                                                                                               |                                                                                                                                        |                                                                                                         | 634,299    |              |            |         | 574,225    |           
|                                                                                                   | Distribution payable                                                                                                                                |                                                                                                                                        |                                                                                                         | 131,711    |              |            |         | 3,736      |           
|                                                                                                   | Other liabilities (net of (discounts) of $(23,393) and
    $(25,597), respectively)                                                                 |                                                                                                                                        |                                                                                                         | 633,286    |              |            |         | 483,468    |           
|                                                                                                   | Commitments and contingencies                                                                                                                       |                                                                                                                                        |                                                                                                         |           |              |            |         |           |           
|                                                                                                   |                                                                                                                                                     |                                                                                                                                        |                                                                                                         |            |              |           
|                                                                                                   |                                                                                                                                                     |                                                                                                                                        | Total Liabilities                                                                                       |            |              | 16,486,873 |         |            |            | 13,889,247 | 
|                                                                                                   |                                                                                                                                                     |                                                                                                                                        |                                                                                                         |            |              |           
|Minority interests  partially owned properties                                                    |                                                                                                                                                     |                                                                                                                                        | 1,464,829                                                                                               |            |              |            | 172,278 |           
|                                                                                                   |                                                                                                                                                     |                                                                                                                                        |                                                                                                         |            |              |           
|Mandatorily Redeemable Preferred Units:                                                            |                                                                                                                                                     |                                                                                                                                        |                                                                                                         |            |              |            |         |           
|                                                                                                   | 5.25% Series B Convertible, Cumulative Redeemable Preferred
    Units, liquidation preference $50.00 per unit, 5,989,930
    issued and outstanding |                                                                                                                                        |                                                                                                         | 299,497    |              |            |         | 299,497    |           
|                                                                                                   |                                                                                                                                                     |                                                                                                                                        |                                                                                                         |            |              |           
|Partners Capital:                                                                                 |                                                                                                                                                     |                                                                                                                                        |                                                                                                         |            |              |            |         |           
|                                                                                                   | Preferred Units, 100,000,000 authorized:                                                                                                            |                                                                                                                                        |                                                                                                         |            |              |            |         |            |           
|                                                                                                   |                                                                                                                                                     | 7.75% Series G Cumulative Redeemable Preferred Units,
    liquidation preference $25.00 per unit, 8,500,000 issued
    and outstanding |                                                                                                         |            | 212,500      |            |         |            | 212,500    |           
|                                                                                                   | Other Partners Capital:                                                                                                                            |                                                                                                                                        |                                                                                                         |            |              |            |         |            |           
|                                                                                                   |                                                                                                                                                     | General Partner Capital                                                                                                                |                                                                                                         |            | 54,985       |            |         |            | 63,985     |           
|                                                                                                   |                                                                                                                                                     | Limited Partners Capital                                                                                                              |                                                                                                         |            | 6,832,642    |            |         |            | 8,392,937  |           
|                                                                                                   |                                                                                                                                                     | Deferred compensation                                                                                                                  |                                                                                                         |            |             |            |         |            | (533       | )         
|                                                                                                   |                                                                                                                                                     | Accumulated other comprehensive loss (net of accumulated
    amortization of $17,060 and $11,948, respectively)                        |                                                                                                         |            | (50,901      | )          |         |            | (56,358    | )         
|                                                                                                   |                                                                                                                                                     |                                                                                                                                        |                                                                                                         |            |              |           
|                                                                                                   |                                                                                                                                                     |                                                                                                                                        | Total Partners Capital                                                                                 |            |              | 7,049,226  |         |            |            | 8,612,531  | 
|                                                                                                   |                                                                                                                                                     |                                                                                                                                        |                                                                                                         |            |              |           
|                                                                                                   |                                                                                                                                                     |                                                                                                                                        | Total Liabilities, Minority Interests, Mandatorily Redeemable
    Preferred Units and Partners Capital |            | $            | 25,300,425 |         |            | $          | 22,973,553 | 
|                                                                                                   |                                                                                                                                                     |                                                                                                                                        |                                                                                                         |            |              |           



2



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


CONSOLIDATED STATEMENTS OF OPERATIONS


(Unaudited)


|                                                                                                                                                                                                   |                                                                 |                                                                  |                              |             |                           |          |         |             |          |          |         |             |          |           |          |             |          |           |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------- | ---------------------------------------------------------------- | ---------------------------- | ----------- | ------------------------- | -------- | ------- | ----------- | -------- | -------- | ------- | ----------- | -------- | --------- | -------- | ----------- | -------- | --------- | -
|                                                                                                                                                                                                   |                                                                 | For the three months ended                                       |                              |             | For the nine months ended |         
|                                                                                                                                                                                                   |                                                                 | September 30,                                                    |                              |             | September 30,             |         
|                                                                                                                                                                                                   |                                                                 |                                                                  |                              |             |                           |         
|(Dollars in thousands, except per unit amounts)                                                                                                                                                    |                                                                 | 2006                                                             |                              |             | 2005                      |          |         | 2006        |          |          | 2005    |            
|                                                                                                                                                                                                   |                                                                 |                                                                  |                              |             |                           |          |         |             |          |          |         |            
|Revenues:                                                                                                                                                                                          |                                                                 |                                                                  |                              |             |                           |          |         |             |          |          |         |             |          |           |          |            
|                                                                                                                                                                                                   | Rental                                                          |                                                                  | $                            | 661,808     |                           |          | $       | 563,347     |          |          | $       | 1,969,655   |          |           | $        | 1,676,432   |         
|                                                                                                                                                                                                   | Tenant reimbursements                                           |                                                                  |                              | 143,380     |                           |          |         | 100,466     |          |          |         | 389,406     |          |           |          | 277,658     |         
|                                                                                                                                                                                                   | Parking                                                         |                                                                  |                              | 36,967      |                           |          |         | 28,512      |          |          |         | 109,221     |          |           |          | 82,828      |         
|                                                                                                                                                                                                   | Other                                                           |                                                                  |                              | 16,867      |                           |          |         | 8,926       |          |          |         | 50,165      |          |           |          | 84,682      |         
|                                                                                                                                                                                                   | Fee income                                                      |                                                                  |                              | 1,402       |                           |          |         | 5,314       |          |          |         | 3,796       |          |           |          | 13,788      |         
|                                                                                                                                                                                                   |                                                                 |                                                                  |                              |             |                           |          |         |             |          |          |         |            
|                                                                                                                                                                                                   |                                                                 |                                                                  | Total revenues               |             |                           | 860,424  |         |             |          | 706,565  |         |             |          | 2,522,243 |          |             |          | 2,135,388 |  
|                                                                                                                                                                                                   |                                                                 |                                                                  |                              |             |                           |          |         |             |          |          |         |            
|Expenses:                                                                                                                                                                                          |                                                                 |                                                                  |                              |             |                           |          |         |             |          |          |         |             |          |           |          |            
|                                                                                                                                                                                                   | Depreciation                                                    |                                                                  |                              | 194,940     |                           |          |         | 158,428     |          |          |         | 572,990     |          |           |          | 467,361     |         
|                                                                                                                                                                                                   | Amortization                                                    |                                                                  |                              | 31,038      |                           |          |         | 24,009      |          |          |         | 99,613      |          |           |          | 66,210      |         
|                                                                                                                                                                                                   | Real estate taxes                                               |                                                                  |                              | 108,225     |                           |          |         | 83,813      |          |          |         | 313,944     |          |           |          | 246,346     |         
|                                                                                                                                                                                                   | Insurance                                                       |                                                                  |                              | 7,381       |                           |          |         | 16,208      |          |          |         | 24,347      |          |           |          | 28,520      |         
|                                                                                                                                                                                                   | Repairs and maintenance                                         |                                                                  |                              | 107,452     |                           |          |         | 76,947      |          |          |         | 301,136     |          |           |          | 221,263     |         
|                                                                                                                                                                                                   | Property operating                                              |                                                                  |                              | 116,804     |                           |          |         | 86,257      |          |          |         | 310,716     |          |           |          | 235,151     |         
|                                                                                                                                                                                                   | Ground rent                                                     |                                                                  |                              | 6,332       |                           |          |         | 6,097       |          |          |         | 18,864      |          |           |          | 16,208      |         
|                                                                                                                                                                                                   | General and administrative                                      |                                                                  |                              | 60,830      |                           |          |         | 43,007      |          |          |         | 144,529     |          |           |          | 121,254     |         
|                                                                                                                                                                                                   | Impairment                                                      |                                                                  |                              | 54,406      |                           |          |         |            |          |          |         | 54,406      |          |           |          | 24,382      |         
|                                                                                                                                                                                                   |                                                                 |                                                                  |                              |             |                           |          |         |             |          |          |         |            
|                                                                                                                                                                                                   |                                                                 |                                                                  | Total expenses               |             |                           | 687,408  |         |             |          | 494,766  |         |             |          | 1,840,545 |          |             |          | 1,426,695 |  
|                                                                                                                                                                                                   |                                                                 |                                                                  |                              |             |                           |          |         |             |          |          |         |            
|                                                                                                                                                                                                   |                                                                 |                                                                  | Operating income             |             |                           | 173,016  |         |             |          | 211,799  |         |             |          | 681,698   |          |             |          | 708,693   |  
|                                                                                                                                                                                                   |                                                                 |                                                                  |                              |             |                           |          |         |             |          |          |         |            
|Other income (expense):                                                                                                                                                                            |                                                                 |                                                                  |                              |             |                           |          |         |             |          |          |         |             |          |           |          |            
|                                                                                                                                                                                                   | Interest and dividend income                                    |                                                                  |                              | 6,799       |                           |          |         | 3,960       |          |          |         | 16,074      |          |           |          | 10,570      |         
|                                                                                                                                                                                                   | Interest:                                                       |                                                                  |                              |             |                           |          |         |             |          |          |         |             |          |           |          |             |         
|                                                                                                                                                                                                   |                                                                 | Expense incurred                                                 |                              |             | (231,424                  | )        |         |             | (195,721 | )        |         |             | (679,043 | )         |          |             | (615,823 | )        
|                                                                                                                                                                                                   |                                                                 | Amortization of deferred financing costs and prepayment expenses |                              |             | (3,819                    | )        |         |             | (3,362   | )        |         |             | (9,780   | )         |          |             | (8,751   | )        
|                                                                                                                                                                                                   |                                                                 |                                                                  |                              |             |                           |          |         |             |          |          |         |            
|                                                                                                                                                                                                   |                                                                 |                                                                  | Total other income (expense) |             |                           | (228,444 | )       |             |          | (195,123 | )       |             |          | (672,749  | )        |             |          | (614,004  | )
|                                                                                                                                                                                                   |                                                                 |                                                                  |                              |             |                           |          |         |             |          |          |         |            
|(Loss) income before income taxes, allocation to minority
    interests, income from investments in unconsolidated joint
    ventures and (loss) gain on sales of real estate                      |                                                                 |                                                                  | (55,428                      | )           |                           |          | 16,676  |             |          |          | 8,949   |             |          |           | 94,689   |            
|Income taxes                                                                                                                                                                                       |                                                                 |                                                                  | (1,335                       | )           |                           |          | (456    | )           |          |          | (2,398  | )           |          |           | (1,346   | )          
|Minority interests  partially owned properties                                                                                                                                                    |                                                                 |                                                                  | (12,325                      | )           |                           |          | (2,442  | )           |          |          | (38,840 | )           |          |           | (7,969   | )          
|Income from investments in unconsolidated joint ventures
    (including gain (loss) on sales of real estate of $0, $29, $(91)
    and $17,405, respectively)                                       |                                                                 |                                                                  | 315                          |             |                           |          | 10,683  |             |          |          | 405     |             |          |           | 48,882   |            
|(Loss) gain on sales of real estate                                                                                                                                                                |                                                                 |                                                                  | (219                         | )           |                           |          | 47,406  |             |          |          | 314     |             |          |           | 47,433   |            
|                                                                                                                                                                                                   |                                                                 |                                                                  |                              |             |                           |          |         |             |          |          |         |            
|(Loss) income from continuing operations                                                                                                                                                           |                                                                 |                                                                  | (68,992                      | )           |                           |          | 71,867  |             |          |          | (31,570 | )           |          |           | 181,689  |            
|Discontinued operations (including net gain (loss) on sales of
    real estate and provision for (loss) on properties held for sale
    of $58,713, $27,565, $175,656 and $(55,975), respectively) |                                                                 |                                                                  | (77,211                      | )           |                           |          | 41,290  |             |          |          | 51,037  |             |          |           | (167,625 | )          
|                                                                                                                                                                                                   |                                                                 |                                                                  |                              |             |                           |          |         |             |          |          |         |            
|Net (loss) income                                                                                                                                                                                  |                                                                 |                                                                  | (146,203                     | )           |                           |          | 113,157 |             |          |          | 19,467  |             |          |           | 14,064   |            
|Preferred distributions                                                                                                                                                                            |                                                                 |                                                                  | (8,700                       | )           |                           |          | (8,700  | )           |          |          | (26,102 | )           |          |           | (26,102  | )          
|                                                                                                                                                                                                   |                                                                 |                                                                  |                              |             |                           |          |         |             |          |          |         |            
|Net (loss) income available to unitholders                                                                                                                                                         |                                                                 | $                                                                | (154,903                     | )           |                           | $        | 104,457 |             |          | $        | (6,635  | )           |          | $         | (12,038  | )          
|                                                                                                                                                                                                   |                                                                 |                                                                  |                              |             |                           |          |         |             |          |          |         |            
|(Loss) earnings per unit  basic:                                                                                                                                                                  |                                                                 |                                                                  |                              |             |                           |          |         |             |          |          |         |             |          |           |          |            
|                                                                                                                                                                                                   | (Loss) income from continuing operations per unit               |                                                                  | $                            | (0.20       | )                         |          | $       | 0.14        |          |          | $       | (0.14       | )        |           | $        | 0.34        |         
|                                                                                                                                                                                                   |                                                                 |                                                                  |                              |             |                           |          |         |             |          |          |         |            
|                                                                                                                                                                                                   | Net (loss) income available to unitholders per unit             |                                                                  | $                            | (0.40       | )                         |          | $       | 0.23        |          |          | $       | (0.02       | )        |           | $        | (0.03       | )       
|                                                                                                                                                                                                   |                                                                 |                                                                  |                              |             |                           |          |         |             |          |          |         |            
|                                                                                                                                                                                                   | Weighted average Units outstanding                              |                                                                  |                              | 387,833,388 |                           |          |         | 452,847,362 |          |          |         | 400,765,403 |          |           |          | 451,549,093 |         
|                                                                                                                                                                                                   |                                                                 |                                                                  |                              |             |                           |          |         |             |          |          |         |            
|(Loss) earnings per unit  diluted:                                                                                                                                                                |                                                                 |                                                                  |                              |             |                           |          |         |             |          |          |         |             |          |           |          |            
|                                                                                                                                                                                                   | (Loss) income from continuing operations per unit               |                                                                  | $                            | (0.20       | )                         |          | $       | 0.14        |          |          | $       | (0.14       | )        |           | $        | 0.34        |         
|                                                                                                                                                                                                   |                                                                 |                                                                  |                              |             |                           |          |         |             |          |          |         |            
|                                                                                                                                                                                                   | Net (loss) income available to unitholders per unit             |                                                                  | $                            | (0.40       | )                         |          | $       | 0.23        |          |          | $       | (0.02       | )        |           | $        | (0.03       | )       
|                                                                                                                                                                                                   |                                                                 |                                                                  |                              |             |                           |          |         |             |          |          |         |            
|                                                                                                                                                                                                   | Weighted average Units outstanding and dilutive potential units |                                                                  |                              | 387,833,388 |                           |          |         | 457,343,521 |          |          |         | 400,765,403 |          |           |          | 455,370,659 |         
|                                                                                                                                                                                                   |                                                                 |                                                                  |                              |             |                           |          |         |             |          |          |         |            
|Distributions declared per Unit outstanding                                                                                                                                                        |                                                                 | $                                                                | 0.33                         |             |                           | $        | 0.50    |             |          | $        | 0.99    |             |          | $         | 1.50     |            
|                                                                                                                                                                                                   |                                                                 |                                                                  |                              |             |                           |          |         |             |          |          |         |            
|Allocation of net (loss) income available to unitholders:                                                                                                                                          |                                                                 |                                                                  |                              |             |                           |          |         |             |          |          |         |             |          |           |          |            
|                                                                                                                                                                                                   | General Partner                                                 |                                                                  | $                            | (1,549      | )                         |          | $       | 1,045       |          |          | $       | (66         | )        |           | $        | (120        | )       
|                                                                                                                                                                                                   | Limited Partners                                                |                                                                  |                              | (153,354    | )                         |          |         | 103,412     |          |          |         | (6,569      | )        |           |          | (11,918     | )       
|                                                                                                                                                                                                   |                                                                 |                                                                  |                              |             |                           |          |         |             |          |          |         |            
|                                                                                                                                                                                                   | Net (loss) income available to unitholders                      |                                                                  | $                            | (154,903    | )                         |          | $       | 104,457     |          |          | $       | (6,635      | )        |           | $        | (12,038     | )       
|                                                                                                                                                                                                   |                                                                 |                                                                  |                              |             |                           |          |         |             |          |          |         |            



3



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


CONSOLIDATED STATEMENTS OF NET COMPREHENSIVE
(LOSS) INCOME


(Unaudited)


|                                |                                                                                        |                      |          |       |                     |   |         |       |  |   |        |       |  |   |        |       |  
|------------------------------- | -------------------------------------------------------------------------------------- | -------------------- | -------- | ----- | ------------------- | - | ------- | ----- |  | - | ------ | ----- |  | - | ------ | ----- | -
|                                |                                                                                        | For the three months |          |       | For the nine months |  
|                                |                                                                                        | ended September 30,  |          |       | ended September 30, |  
|                                |                                                                                        |                      |          |       |                     |  
|(Dollars in thousands)          |                                                                                        | 2006                 |          |       | 2005                |   |         | 2006  |  |   | 2005   |      
|                                |                                                                                        |                      |          |       |                     |   |         |       |  |   |        |      
|Net (loss) income               |                                                                                        | $                    | (146,203 | )     |                     | $ | 113,157 |       |  | $ | 19,467 |       |  | $ | 14,064 |      
|Other comprehensive income:     |                                                                                        |                      |          |       |                     |   |         |       |  |   |        |       |  |   |        |      
|                                | Amortization of net payments in settlement of forward starting
    interest rate swaps |                      |          | 1,704 |                     |   |         | 1,704 |  |   |        | 5,112 |  |   |        | 5,111 |  
|                                | Unrealized holding gains (losses) from investments                                     |                      |          | 89    |                     |   |         | 19    |  |   |        | 345   |  |   |        | (46   | )
|                                |                                                                                        |                      |          |       |                     |   |         |       |  |   |        |      
|Net comprehensive (loss) income |                                                                                        | $                    | (144,410 | )     |                     | $ | 114,880 |       |  | $ | 24,924 |       |  | $ | 19,129 |      
|                                |                                                                                        |                      |          |       |                     |   |         |       |  |   |        |      



4



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


CONSOLIDATED STATEMENTS OF CASH FLOWS


(Unaudited)


|                       |                                                                                              |                                                                                                              |                                                              |                                                      |                           |         |          |          |         |         |         |          |          |         |          |            |         |         |           | 
|---------------------- | -------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------ | ---------------------------------------------------- | ------------------------- | ------- | -------- | -------- | ------- | ------- | ------- | -------- | -------- | ------- | -------- | ---------- | ------- | ------- | --------- | 
|                       |                                                                                              | For the three months ended                                                                                   |                                                              |                                                      | For the nine months ended |        
|                       |                                                                                              | September 30,                                                                                                |                                                              |                                                      | September 30,             |        
|                       |                                                                                              |                                                                                                              |                                                              |                                                      |                           |        
|(Dollars in thousands) |                                                                                              | 2006                                                                                                         |                                                              |                                                      | 2005                      |         |          | 2006     |         |         | 2005    |         
|                       |                                                                                              |                                                                                                              |                                                              |                                                      |                           |         |          |          |         |         |         |         
|Operating Activities:  |                                                                                              |                                                                                                              |                                                              |                                                      |                           |         |          |          |         |         |         |          |          |         |          |           
|                       | Net (loss) income                                                                            |                                                                                                              | $                                                            | (146,203                                             | )                         |         | $        | 113,157  |         |         | $       | 19,467   |          |         | $        | 14,064     |        
|                       | Adjustments to reconcile net (loss) income to net cash provided
    by operating activities: |                                                                                                              |                                                              |                                                      |                           |         |          |          |         |         |         |          |          |         |          |            |        
|                       |                                                                                              | Depreciation and amortization                                                                                |                                                              |                                                      | 236,308                   |         |          |          | 199,635 |         |         |          | 709,067  |         |          |            | 614,148 |        
|                       |                                                                                              | Compensation expense related to restricted shares and stock
    options issued to employees by Equity Office |                                                              |                                                      | 4,263                     |         |          |          | 6,628   |         |         |          | 18,499   |         |          |            | 19,950  |        
|                       |                                                                                              | Income from investments in unconsolidated joint ventures                                                     |                                                              |                                                      | (315                      | )       |          |          | (10,683 | )       |         |          | (405     | )       |          |            | (48,882 | )      
|                       |                                                                                              | Net distributions from (contributions to) unconsolidated joint
    ventures                                  |                                                              |                                                      | 505                       |         |          |          | 19,834  |         |         |          | (2,087   | )       |          |            | 43,444  |        
|                       |                                                                                              | Net (gain) loss on sales of real estate and provision for
    loss on properties held for sale               |                                                              |                                                      | (58,494                   | )       |          |          | (74,971 | )       |         |          | (175,970 | )       |          |            | 8,542   |        
|                       |                                                                                              | Impairment                                                                                                   |                                                              |                                                      | 188,928                   |         |          |          |        |         |         |          | 188,928  |         |          |            | 180,856 |        
|                       |                                                                                              | Provision for doubtful accounts                                                                              |                                                              |                                                      | 604                       |         |          |          | 1,847   |         |         |          | 4,443    |         |          |            | 5,376   |        
|                       |                                                                                              | Income allocated to minority interests                                                                       |                                                              |                                                      | 12,325                    |         |          |          | 2,442   |         |         |          | 38,840   |         |          |            | 38,409  |        
|                       |                                                                                              | Other                                                                                                        |                                                              |                                                      |                          |         |          |          |        |         |         |          |         |         |          |            | 448     |        
|                       |                                                                                              | Changes in assets and liabilities:                                                                           |                                                              |                                                      |                           |         |          |          |         |         |         |          |          |         |          |            |         |        
|                       |                                                                                              |                                                                                                              | (Increase) decrease in rent receivable                       |                                                      |                           | (11,236 | )        |          |         | 14,421  |         |          |          | 15,971  |          |            |         | 14,930  |          
|                       |                                                                                              |                                                                                                              | (Increase) in deferred rent receivable                       |                                                      |                           | (9,920  | )        |          |         | (14,768 | )       |          |          | (36,711 | )        |            |         | (51,443 | )        
|                       |                                                                                              |                                                                                                              | Decrease in prepaid expenses and other assets                |                                                      |                           | 641     |          |          |         | 37,392  |         |          |          | 44,788  |          |            |         | 13,890  |          
|                       |                                                                                              |                                                                                                              | Increase (decrease) in accounts payable and accrued expenses |                                                      |                           | 34,602  |          |          |         | 7,450   |         |          |          | (24,020 | )        |            |         | (52,318 | )        
|                       |                                                                                              |                                                                                                              | Increase (decrease) in other liabilities                     |                                                      |                           | 1,023   |          |          |         | 14,861  |         |          |          | (18,513 | )        |            |         | (15,841 | )        
|                       |                                                                                              |                                                                                                              |                                                              |                                                      |                           |         |          |          |         |         |         |         
|                       |                                                                                              |                                                                                                              |                                                              | Net cash provided by operating activities            |                           |         | 253,031  |          |         |         | 317,245 |          |          |         | 782,297  |            |         |         | 785,573   | 
|                       |                                                                                              |                                                                                                              |                                                              |                                                      |                           |         |          |          |         |         |         |         
|Investing Activities:  |                                                                                              |                                                                                                              |                                                              |                                                      |                           |         |          |          |         |         |         |          |          |         |          |           
|                       | Property acquisitions (including deposits made for property
    acquisitions)                |                                                                                                              |                                                              | (771,064                                             | )                         |         |          | (655,428 | )       |         |         | (935,687 | )        |         |          | (1,020,214 | )      
|                       | Property dispositions (including deposits received for property
    dispositions)            |                                                                                                              |                                                              | 266,666                                              |                           |         |          | 312,077  |         |         |         | 508,842  |          |         |          | 1,620,855  |        
|                       | Increase in cash upon consolidation of certain joint ventures                                |                                                                                                              |                                                              |                                                     |                           |         |          |         |         |         |         | 51,357   |          |         |          |           |        
|                       | Distributions from (investments in) unconsolidated joint ventures                            |                                                                                                              |                                                              | 2,385                                                |                           |         |          | 124,395  |         |         |         | (11,040  | )        |         |          | 186,696    |        
|                       | Capital and tenant improvements (including development costs)                                |                                                                                                              |                                                              | (116,136                                             | )                         |         |          | (90,945  | )       |         |         | (339,561 | )        |         |          | (241,908   | )      
|                       | Lease commissions and other costs                                                            |                                                                                                              |                                                              | (26,548                                              | )                         |         |          | (39,723  | )       |         |         | (91,133  | )        |         |          | (93,473    | )      
|                       | Decrease in escrow deposits and restricted cash                                              |                                                                                                              |                                                              | 46,291                                               |                           |         |          | 453,859  |         |         |         | 117,948  |          |         |          | 587,489    |        
|                       |                                                                                              |                                                                                                              |                                                              |                                                      |                           |         |          |          |         |         |         |         
|                       |                                                                                              |                                                                                                              |                                                              | Net cash (used for) provided by investing activities |                           |         | (598,406 | )        |         |         | 104,235 |          |          |         | (699,274 | )          |         |         | 1,039,445 | 
|                       |                                                                                              |                                                                                                              |                                                              |                                                      |                           |         |          |          |         |         |         |         

5



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


CONSOLIDATED STATEMENTS OF CASH FLOWS 
(Continued)


(Unaudited)


|                          |                                                                                                                          |                                                      |   |            |                           |  |   |            |          |   |      |             |        |  |   |            |            |  
|------------------------- | ------------------------------------------------------------------------------------------------------------------------ | ---------------------------------------------------- | - | ---------- | ------------------------- |  | - | ---------- | -------- | - | ---- | ----------- | ------ |  | - | ---------- | ---------- | -
|                          |                                                                                                                          | For the three months ended                           |   |            | For the nine months ended | 
|                          |                                                                                                                          | September 30,                                        |   |            | September 30,             | 
|                          |                                                                                                                          |                                                      |   |            |                           | 
|(Dollars in thousands)    |                                                                                                                          | 2006                                                 |   |            | 2005                      |  |   | 2006       |          |   | 2005 |            
|                          |                                                                                                                          |                                                      |   |            |                           |  |   |            |          |   |      |            
|Financing Activities:     |                                                                                                                          |                                                      |   |            |                           |  |   |            |          |   |      |             |        |  |   |           
|                          | Proceeds from mortgage debt                                                                                              |                                                      |   |           |                           |  |   |           |          |   |      | 584,107     |        |  |   | 150        |           
|                          | Principal payments on mortgage debt                                                                                      |                                                      |   | (213,067   | )                         |  |   | (534,356   | )        |   |      | (227,891    | )      |  |   | (889,877   | )         
|                          | Proceeds from unsecured notes                                                                                            |                                                      |   |           |                           |  |   | 10,389     |          |   |      | 1,470,000   |        |  |   | 38,758     |           
|                          | Repayment of unsecured notes                                                                                             |                                                      |   | (50,000    | )                         |  |   | (150,000   | )        |   |      | (550,063    | )      |  |   | (675,000   | )         
|                          | Proceeds from lines of credit                                                                                            |                                                      |   | 4,253,400  |                           |  |   | 4,106,300  |          |   |      | 19,130,399  |        |  |   | 8,106,900  |           
|                          | Repayment of lines of credit                                                                                             |                                                      |   | (3,516,200 | )                         |  |   | (3,988,300 | )        |   |      | (18,875,399 | )      |  |   | (7,843,900 | )         
|                          | Payments of loan costs and offering costs                                                                                |                                                      |   | (8,335     | )                         |  |   | (7,302     | )        |   |      | (11,067     | )      |  |   | (7,361     | )         
|                          | Settlement of interest rate swap agreements                                                                              |                                                      |   |           |                           |  |   | (8,677     | )        |   |      |            |        |  |   | (8,677     | )         
|                          | Contributions from minority interests in partially owned
    properties related to repayment of mortgage debt            |                                                      |   | 48,705     |                           |  |   |           |          |   |      | 48,705      |        |  |   |           |           
|                          | Distributions to minority interests in partially owned properties                                                        |                                                      |   | (18,697    | )                         |  |   | (1,457     | )        |   |      | (57,497     | )      |  |   | (9,317     | )         
|                          | Proceeds from exercise of stock options                                                                                  |                                                      |   | 43,690     |                           |  |   | 16,832     |          |   |      | 128,868     |        |  |   | 138,374    |           
|                          | Distributions to unitholders                                                                                             |                                                      |   | (128,517   | )                         |  |   | (227,382   | )        |   |      | (264,395    | )      |  |   | (454,140   | )         
|                          | Repurchase of Units through Equity Offices common share
    repurchase program and Supplemental Retirement Savings Plan |                                                      |   | (2,929     | )                         |  |   | (99,564    | )        |   |      | (1,217,649  | )      |  |   | (107,322   | )         
|                          | Redemption of Units                                                                                                      |                                                      |   | (10,885    | )                         |  |   |           |          |   |      | (98,791     | )      |  |   | (50,676    | )         
|                          | Payment of preferred distributions                                                                                       |                                                      |   | (8,047     | )                         |  |   | (8,047     | )        |   |      | (24,143     | )      |  |   | (24,143    | )         
|                          |                                                                                                                          |                                                      |   |            |                           |  |   |            |          |   |      |            
|                          |                                                                                                                          | Net cash provided by (used for) financing activities |   |            | 389,118                   |  |   |            | (891,564 | ) |      |             | 35,184 |  |   |            | (1,786,231 | )
|                          |                                                                                                                          |                                                      |   |            |                           |  |   |            |          |   |      |            
|                          | Net increase (decrease) in cash and cash equivalents                                                                     |                                                      |   | 43,743     |                           |  |   | (470,084   | )        |   |      | 118,207     |        |  |   | 38,787     |           
|                          | Cash and cash equivalents at the beginning of the period                                                                 |                                                      |   | 152,628    |                           |  |   | 615,997    |          |   |      | 78,164      |        |  |   | 107,126    |           
|                          |                                                                                                                          |                                                      |   |            |                           |  |   |            |          |   |      |            
|                          | Cash and cash equivalents at the end of the period                                                                       |                                                      | $ | 196,371    |                           |  | $ | 145,913    |          |   | $    | 196,371     |        |  | $ | 145,913    |           
|                          |                                                                                                                          |                                                      |   |            |                           |  |   |            |          |   |      |            
|Supplemental Information: |                                                                                                                          |                                                      |   |            |                           |  |   |            |          |   |      |             |        |  |   |           
|                          | Interest paid during the period (including capitalized interest
    of $9,139, $47, $16,179 and $51, respectively)       |                                                      | $ | 256,309    |                           |  | $ | 246,243    |          |   | $    | 711,913     |        |  | $ | 675,352    |           
|                          |                                                                                                                          |                                                      |   |            |                           |  |   |            |          |   |      |            

6



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


CONSOLIDATED STATEMENTS OF CASH FLOWS 
(Continued)


(Unaudited)


|                                             |                       |                                                                         |                                                                 |   |                           |   |  |      |          |         |      |   |          |            |   |   |          |         |  
|-------------------------------------------- | --------------------- | ----------------------------------------------------------------------- | --------------------------------------------------------------- | - | ------------------------- | - |  | ---- | -------- | ------- | ---- | - | -------- | ---------- | - | - | -------- | ------- | -
|                                             |                       | For the three months ended                                              |                                                                 |   | For the nine months ended |  
|                                             |                       | September 30,                                                           |                                                                 |   | September 30,             |  
|                                             |                       |                                                                         |                                                                 |   |                           |  
|(Dollars in thousands)                       |                       | 2006                                                                    |                                                                 |   | 2005                      |   |  | 2006 |          |         | 2005 |  
|                                             |                       |                                                                         |                                                                 |   |                           |   |  |      |          |         |      |  
|Non-Cash Investing and Financing Activities: |                       |                                                                         |                                                                 |   |                           |   |  |      |          |         |      |   |          |            |   |  
|                                             | Investing Activities: |                                                                         |                                                                 |   |                           |   |  |      |          |         |      |   |          |            |   |   |         
|                                             |                       | Escrow deposits related to property dispositions                        |                                                                 | $ | (160,122                  | ) |  | $    | (489,115 | )       |      | $ | (392,719 | )          |   | $ | (639,439 | )      
|                                             |                       |                                                                         |                                                                 |   |                           |   |  |      |          |         |      |  
|                                             |                       | Mortgage loan repayment as a result of a property disposition           |                                                                 | $ |                          |   |  | $    |         |         |      | $ |         |            |   | $ | (13,386  | )      
|                                             |                       |                                                                         |                                                                 |   |                           |   |  |      |          |         |      |  
|                                             |                       | Mortgage loan assumed upon acquisition of a property                    |                                                                 | $ |                          |   |  | $    |         |         |      | $ | 15,200   |            |   | $ | 44,975   |        
|                                             |                       |                                                                         |                                                                 |   |                           |   |  |      |          |         |      |  
|                                             |                       | Units issued in connection with a property acquisition                  |                                                                 | $ |                          |   |  | $    |         |         |      | $ |         |            |   | $ | 3,339    |        
|                                             |                       |                                                                         |                                                                 |   |                           |   |  |      |          |         |      |  
|                                             |                       | Changes in accounts due to consolidation of certain joint
    ventures: |                                                                 |   |                           |   |  |      |          |         |      |   |          |            |   |   |          |        
|                                             |                       |                                                                         | Decrease in investments in unconsolidated joint ventures        |   | $                         |  |  |      | $        |        |      |   | $        | (844,591   | ) |   | $        |        |  
|                                             |                       |                                                                         |                                                                 |   |                           |   |  |      |          |         |      |  
|                                             |                       |                                                                         | Increase in investments in real estate                          |   | $                         |  |  |      | $        |        |      |   | $        | 2,843,118  |   |   | $        |        |  
|                                             |                       |                                                                         |                                                                 |   |                           |   |  |      |          |         |      |  
|                                             |                       |                                                                         | Increase in accumulated depreciation                            |   | $                         |  |  |      | $        |        |      |   | $        | (286,569   | ) |   | $        |        |  
|                                             |                       |                                                                         |                                                                 |   |                           |   |  |      |          |         |      |  
|                                             |                       |                                                                         | Increase in mortgage debt, net of discounts                     |   | $                         |  |  |      | $        |        |      |   | $        | (681,986   | ) |   | $        |        |  
|                                             |                       |                                                                         |                                                                 |   |                           |   |  |      |          |         |      |  
|                                             |                       |                                                                         | Increase in minority interests  partially owned
    properties |   | $                         |  |  |      | $        |        |      |   | $        | (1,205,236 | ) |   | $        |        |  
|                                             |                       |                                                                         |                                                                 |   |                           |   |  |      |          |         |      |  
|                                             |                       |                                                                         | Increase in other assets and liabilities                        |   | $                         |  |  |      | $        |        |      |   | $        | 123,907    |   |   | $        |        |  
|                                             |                       |                                                                         |                                                                 |   |                           |   |  |      |          |         |      |  
|                                             |                       | Changes in accounts due to partial sale of real estate:                 |                                                                 |   |                           |   |  |      |          |         |      |   |          |            |   |   |          |        
|                                             |                       |                                                                         | Increase in investment in unconsolidated joint ventures         |   | $                         |  |  |      | $        | 36,349  |      |   | $        |           |   |   | $        | 36,349  |  
|                                             |                       |                                                                         |                                                                 |   |                           |   |  |      |          |         |      |  
|                                             |                       |                                                                         | Decrease in investments in real estate                          |   | $                         |  |  |      | $        | (43,931 | )    |   | $        |           |   |   | $        | (43,931 | )
|                                             |                       |                                                                         |                                                                 |   |                           |   |  |      |          |         |      |  
|                                             |                       |                                                                         | Decrease in accumulated depreciation                            |   | $                         |  |  |      | $        | 8,403   |      |   | $        |           |   |   | $        | 8,403   |  
|                                             |                       |                                                                         |                                                                 |   |                           |   |  |      |          |         |      |  
|                                             |                       |                                                                         | Increase in other assets and liabilities                        |   | $                         |  |  |      | $        | (940    | )    |   | $        |           |   |   | $        | (940    | )
|                                             |                       |                                                                         |                                                                 |   |                           |   |  |      |          |         |      |  
|                                             | Financing Activities: |                                                                         |                                                                 |   |                           |   |  |      |          |         |      |   |          |            |   |   |         
|                                             |                       | Mortgage loan repayment as a result of a property disposition           |                                                                 | $ |                          |   |  | $    |         |         |      | $ |         |            |   | $ | 13,386   |        
|                                             |                       |                                                                         |                                                                 |   |                           |   |  |      |          |         |      |  
|                                             |                       | Mortgage loan assumed upon acquisition of a property                    |                                                                 | $ |                          |   |  | $    |         |         |      | $ | (15,200  | )          |   | $ | (44,975  | )      
|                                             |                       |                                                                         |                                                                 |   |                           |   |  |      |          |         |      |  
|                                             |                       | Units issued in connection with a property acquisition                  |                                                                 | $ |                          |   |  | $    |         |         |      | $ |         |            |   | $ | (3,339   | )      
|                                             |                       |                                                                         |                                                                 |   |                           |   |  |      |          |         |      |  



7



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)


10-K.


NOTE 1  BUSINESS OF EOP PARTNERSHIP


10-Q




|                              |       |           |     |                        |             |  |                            |             |  |  |             |             |  |             |            |            |  |  |            |            | 
|----------------------------- | ----- | --------- | --- | ---------------------- | ----------- |  | -------------------------- | ----------- |  |  | ----------- | ----------- |  | ----------- | ---------- | ---------- |  |  | ---------- | ---------- | 
|                              |       |           |     | Total Office Portfolio |             |  | Effective Office Portfolio |            
|                              |       |           |     |                        |             |  |                            |            
|                              |       | Number of |     |                        | Occupied    |  |                            | Total       |  |  | Occupied    |             |  | Total       |           
|                              |       | Buildings |     |                        | Square Feet |  |                            | Square Feet |  |  | Square Feet |             |  | Square Feet |           
|                              |       |           |     |                        |             |  |                            |             |  |  |             |             |  |             |           
|Wholly-Owned Properties       |       |           | 528 |                        |             |  | 76,180,294                 |             |  |  | 83,947,320  |             |  |             | 76,180,294 |            |  |  | 83,947,320 |           
|Consolidated Joint Ventures   |       |           | 51  |                        |             |  | 19,522,074                 |             |  |  | 21,029,401  |             |  |             | 12,501,258 |            |  |  | 13,358,471 |           
|Unconsolidated Joint Ventures |       |           | 6   |                        |             |  | 3,097,506                  |             |  |  | 3,522,073   |             |  |             | 1,049,070  |            |  |  | 1,180,384  |           
|                              |       |           |     |                        |             |  |                            |             |  |  |             |             |  |             |           
|                              | Total |           |     | 585                    |             |  |                            | 98,799,874  |  |  |             | 108,498,794 |  |             |            | 89,730,622 |  |  |            | 98,486,175 | 
|                              |       |           |     |                        |             |  |                            |             |  |  |             |             |  |             |           
|Percent Occupied              |       |           |     |                        |             |  | 91.1                       | %           |  |  |             |             |  |             | 91.1       | %          |  |  |            |           
|                              |       |           |     |                        |             |  |                            |             |  |  |             |             |  |             |           
|Percent Leased                |       |           |     |                        |             |  | 93.0                       | %           |  |  |             |             |  |             | 93.0       | %          |  |  |            |           
|                              |       |           |     |                        |             |  |                            |             |  |  |             |             |  |             |           

NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES




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

Consolidation of Variable Interest Entities Determining Whether a General
Partner, or the General Partners as a Group, Controls a


8



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(Unaudited)




NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES  (Continued)


Limited Partnership or Similar Entity When the Limited
Partners Have Certain Rights 04-5),




| |                                                 
| | ------------------------------------------------
| | Minority Interests in Partially Owned Properties

Accounting for Certain Financial Instruments with
Characteristics of both Liabilities and Equity




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





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





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



9



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(Unaudited)




NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES  (Continued)




| |                                        
| | ---------------------------------------
| | Share Based Employee Compensation Plans

Share-Based
Payment Accounting for Stock-Based Compensation


Accounting for Stock Issued to Employees


|                                                                                                                      |                                                                |                    |         |      |                    |   |         |       |  
|--------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------- | ------------------ | ------- | ---- | ------------------ | - | ------- | ----- | -
|                                                                                                                      |                                                                | For the three      |         |      | For the nine       |  
|                                                                                                                      |                                                                | months ended       |         |      | months ended       |  
|(Dollars in thousands, except per unit amounts)                                                                       |                                                                | September 30, 2005 |         |      | September 30, 2005 |  
|                                                                                                                      |                                                                |                    |         |      |                    |  
|Historical net income (loss) available to unitholders                                                                 |                                                                | $                  | 104,457 |      |                    | $ | (12,038 | )    
|Add back compensation expense for share options included in
    historical net income (loss) available to unitholders |                                                                |                    | 1,879   |      |                    |   | 5,216   |      
|Deduct compensation expense for share options determined under
    fair value based method                            |                                                                |                    | (1,884  | )    |                    |   | (5,717  | )    
|                                                                                                                      |                                                                |                    |         |      |                    |  
|Pro forma net income (loss) available to unitholders                                                                  |                                                                | $                  | 104,452 |      |                    | $ | (12,539 | )    
|                                                                                                                      |                                                                |                    |         |      |                    |  
|Earnings (loss) per unit  basic:                                                                                     |                                                                |                    |         |      |                    |   |         |      
|                                                                                                                      | Historical net income (loss) available to unitholders per unit |                    | $       | 0.23 |                    |   | $       | (0.03 | )
|                                                                                                                      |                                                                |                    |         |      |                    |  
|                                                                                                                      | Pro forma net income (loss) available to unitholders per unit  |                    | $       | 0.23 |                    |   | $       | (0.03 | )
|                                                                                                                      |                                                                |                    |         |      |                    |  
|Earnings (loss) per unit  diluted:                                                                                   |                                                                |                    |         |      |                    |   |         |      
|                                                                                                                      | Historical net income (loss) available to unitholders per unit |                    | $       | 0.23 |                    |   | $       | (0.03 | )
|                                                                                                                      |                                                                |                    |         |      |                    |  
|                                                                                                                      | Pro forma net income (loss) available to unitholders per unit  |                    | $       | 0.23 |                    |   | $       | (0.03 | )
|                                                                                                                      |                                                                |                    |         |      |                    |  



| |                                   
| | ----------------------------------
| | Impact of New Accounting Standards

04-5,


10



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(Unaudited)




NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES  (Continued)


04-5


04-5,


|                 |  |                        |  |                                      
|---------------- |  | ---------------------- |  | -------------------------------------
|Rowes Wharf      |  | 10 & 30 South Wacker   |  | Pasadena Towers                      
|Promenade II     |  | SunTrust Center        |  | Columbia Center                      
|161 North Clark  |  | Prominence in Buckhead |  | World Trade Center East              
|Treat Towers     |  | Parkshore Plaza I & II |  | Bridge Pointe Corporate Center I & II
|1111 19th Street |  | 1620 L Street          |  | 1333 H Street                        
|Yahoo! Center    |  | 201 Mission Street     |  | 580 California                       

04-5


|                                                                            |  |                       |           | 
|--------------------------------------------------------------------------- |  | --------------------- | --------- | 
|(Dollars in thousands)                                                      |  | As of January 1, 2006 |          
|                                                                            |  |                       |          
|Increase in investments in real estate, net of accumulated
    depreciation |  | $                     | 2,556,549 | 
|Decrease in investments in unconsolidated joint ventures                    |  | $                     | 844,591   | 
|Increase in mortgage debt, net of (discounts) of
    $(0.2) million         |  | $                     | 681,986   | 
|Increase in minority interests  partially owned
    properties             |  | $                     | 1,205,236 | 
|Increase in net other assets and liabilities                                |  | $                     | 175,264   | 
|Change in total partners capital                                           |  | $                     |          | 



|                                                                         |  |                    |         |  |                    |   |         | 
|------------------------------------------------------------------------ |  | ------------------ | ------- |  | ------------------ | - | ------- | 
|                                                                         |  | For the three      |         |  | For the nine       |  
|                                                                         |  | months ended       |         |  | months ended       |  
|(Dollars in thousands)                                                   |  | September 30, 2006 |         |  | September 30, 2006 |  
|                                                                         |  |                    |         |  |                    |  
|Increase in total revenues                                               |  | $                  | 104,487 |  |                    | $ | 305,162 | 
|Increase in total operating expenses                                     |  | $                  | 75,381  |  |                    | $ | 216,927 | 
|Increase in other expense (primarily interest expense)                   |  | $                  | 9,410   |  |                    | $ | 27,581  | 
|Decrease in income from investments in unconsolidated joint
    ventures |  | $                  | 10,043  |  |                    | $ | 30,478  | 
|Increase in minority interests  partially owned
    properties          |  | $                  | 9,653   |  |                    | $ | 30,176  | 
|Change in income from continuing operations                              |  | $                  |        |  |                    | $ |        | 

Accounting for Uncertainty in Income Taxes, an interpretation
of FASB Statement No. 109


11



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(Unaudited)




NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES  (Continued)




Fair Value Measurements


NOTE 3  ACQUISITIONS




|                                   |                            |              |                |             |          |           |           |                            |   |                        |         |  |           |         |  |   |         |         | 
|---------------------------------- | -------------------------- | ------------ | -------------- | ----------- | -------- | --------- | --------- | -------------------------- | - | ---------------------- | ------- |  | --------- | ------- |  | - | ------- | ------- | 
|                                   |                            |              |                |             |          |           |           | Effective Office Portfolio |  
|                                   |                            |              |                |             |          |           |           |                            |  
|                                   |                            |              |                | Acquisition |          |           | Number of |                            |   | Square                 |         |  | Purchase  |        
|Property                           |                            | Location     |                | Date        |          |           | Buildings |                            |   | Feet                   |         |  | Price(a)  |        
|                                   |                            |              |                |             |          |           |           |                            |   |                        |         |  |           |        
|                                   |                            |              |                |             |          |           |           |                            |   | (Dollars in thousands) |        
|First Quarter 2006 Acquisitions:  
|Office properties:                 |                            |              |                |             |          |           |           |                            |   |                        |         |  |           |         |  |   |         |        
|                                   | One and Three Harbor Drive |              | Sausalito, CA  |             |          | 1/19/2006 |           |                            |   | 2                      |         |  |           | 111,772 |  |   | $       | 32,500  | 
|                                   | Pointe OHare              |              | Rosemont, IL   |             |          | 3/8/2006  |           |                            |   | 1                      |         |  |           | 262,991 |  |   |         | 55,675  | 
|Vacant land:                       |                            |              |                |             |          |           |           |                            |   |                        |         |  |           |         |  |   |         |        
|                                   | Pointe OHare Land(b)      |              | Rosemont, IL   |             |          | 3/8/2006  |           |                            |   |                       |         |  |           |        |  |   |         | 2,000   | 
|                                   |                            |              |                |             |          |           |           |                            |   |                        |         |  |           |        
|Total First Quarter Acquisitions:  |                            |              | 3              |             |          |           | 374,763   |                            |   | $                      | 90,175  | 
|                                   |                            |              |                |             |          |           |           |                            |  
|Second Quarter 2006 Acquisitions: 
|Office properties:                 |                            |              |                |             |          |           |           |                            |   |                        |         |  |           |         |  |   |         |        
|                                   | Fountaingrove II(c)        |              | Santa Rosa, CA |             |          | 4/21/2006 |           |                            |   |                       |         |  |           |        |  |   | $       | 9,597   | 
|                                   | 1200 Corporate Place(d)    |              | Boca Raton, FL |             |          | 5/24/2006 |           |                            |   | 1                      |         |  |           | 128,959 |  |   |         | 29,500  | 
|                                   | 77 South Bedford           |              | Burlington, MA |             |          | 5/31/2006 |           |                            |   | 1                      |         |  |           | 144,576 |  |   |         | 23,500  | 
|Other Investments(e)               |                            | New York, NY |                |             | 6/6/2006 |           |           |                            |  |                        |         |  |          |         |  |   | 12,375  |        
|                                   |                            |              |                |             |          |           |           |                            |   |                        |         |  |           |        
|Total Second Quarter Acquisitions: |                            |              | 2              |             |          |           | 273,535   |                            |   | $                      | 74,972  | 
|                                   |                            |              |                |             |          |           |           |                            |  
|Third Quarter 2006 Acquisitions:  
|Office properties:                 |                            |              |                |             |          |           |           |                            |   |                        |         |  |           |         |  |   |         |        
|                                   | 1540 Broadway              |              | New York, NY   |             |          | 7/11/2006 |           |                            |   | 1                      |         |  |           | 906,287 |  |   | $       | 525,057 | 
|                                   | Frost Bank Tower(f)        |              | Austin, TX     |             |          | 9/13/2006 |           |                            |   | 1                      |         |  |           | 530,533 |  |   |         | 188,000 | 
|                                   | 1221 Brickell(g)           |              | Miami, FL      |             |          | 9/28/2006 |           |                            |   | 1                      |         |  |           | 194,246 |  |   |         | 55,817  | 
|                                   |                            |              |                |             |          |           |           |                            |   |                        |         |  |           |        
|Total Third Quarter Acquisitions:  |                            |              | 3              |             |          |           | 1,631,066 |                            |   | $                      | 768,874 | 
|                                   |                            |              |                |             |          |           |           |                            |  
|                                   |                            |              |                |             | Total:   |           |           |                            | 8 |                        |         |  | 2,279,364 |         |  | $ | 934,021 |        
|                                   |                            |              |                |             |          |           |           |                            |   |                        |         |  |           |        

12



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(Unaudited)




NOTE 3 
ACQUISITIONS  (Continued)




|    |                                                                                                                                                                                                                                                                                                                                  
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | The purchase price shown above represents the gross purchase
    price related to property acquisitions, of which
    $73.5 million was recorded to intangible assets and
    $116.9 million was recorded to other liabilities (related
    to the value assigned to below market leases) on the
    consolidated balance sheets.



| |                                                                                                                                                                                                                                                
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The allocations of the purchase prices and other costs related
    to the acquisition of tangible and intangible assets are
    estimates and are subject to adjustment within one year of the
    closing date of each respective acquisition.



|    |                                                                                                                                                                                                                                                                                                                                               
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) | We acquired a 50% interest in a new joint venture formed with
    the seller of the Pointe OHare office property, who
    contributed a vacant land parcel and a parking structure to the
    joint venture. We accounted for our investment in the joint
    venture under the equity method.                                               
|   
|(c) | Fountaingrove II, which consists of one building comprising
    42,102 square feet, is a development property and,
    therefore, is not included in the total number of buildings or
    total square footage statistics.                                                                                                                    
|   
|(d) | The purchase price for 1200 Corporate Place includes the
    assumption of $15.2 million of mortgage debt at a fixed
    coupon rate of 5.60% maturing in June 2014. The effective
    interest rate on this mortgage debt is 5.67%.                                                                                                          
|   
|(e) | We acquired a 75%
    tenant-in-common
    interest in a land parcel and vacant building, which we account
    for under the equity method. The building, which comprises
    13,475 square feet, is classified as out of service and,
    therefore, is not included in the total number of buildings or
    total square footage statistics.



|    |                                            
|--- | -------------------------------------------
|(f) | This property is subject to a ground lease.



|    |                                                                                   
|--- | ----------------------------------------------------------------------------------
|(g) | We acquired a 50% interest in this property and consolidate the
    joint venture.

13



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(Unaudited)


NOTE 4  SALES OF REAL ESTATE




| |                     
| | --------------------
| | Sales of Real Estate



|                                   |                                                                                                                          |          |                   |             |        |           |           |                        |    |        |         |  |           |           |  |   |         |         | 
|---------------------------------- | ------------------------------------------------------------------------------------------------------------------------ | -------- | ----------------- | ----------- | ------ | --------- | --------- | ---------------------- | -- | ------ | ------- |  | --------- | --------- |  | - | ------- | ------- | 
|                                   |                                                                                                                          |          |                   |             |        |           |           | Effective Office       |   
|                                   |                                                                                                                          |          |                   |             |        |           |           | Portfolio              |   
|                                   |                                                                                                                          |          |                   |             |        |           |           |                        |   
|                                   |                                                                                                                          |          |                   | Disposition |        |           | Number of |                        |    | Square |         |  | Sales     |          
|Property                           |                                                                                                                          | Location |                   | Date        |        |           | Buildings |                        |    | Feet   |         |  | Price     |          
|                                   |                                                                                                                          |          |                   |             |        |           |           |                        |    |        |         |  |           |          
|                                   |                                                                                                                          |          |                   |             |        |           |           | (Dollars in thousands) |   
|First Quarter 2006 Dispositions:   |                                                                                                                          |          |                   |             |        |           |           |                        |    |        |         | 
|                                   | 120 Montgomery(a)                                                                                                        |          | San Francisco, CA |             |        | 1/20/2006 |           |                        |    | 1      |         |  |           | 430,523   |  |   | $       | 67,500  | 
|                                   | Westridge                                                                                                                |          | San Diego, CA     |             |        | 2/8/2006  |           |                        |    | 1      |         |  |           | 53,326    |  |   |         | 10,500  | 
|                                   | Pacific Corporate Plaza                                                                                                  |          | San Diego, CA     |             |        | 2/8/2006  |           |                        |    | 2      |         |  |           | 104,847   |  |   |         | 20,000  | 
|                                   | 8-16 Perimeter(a)                                                                                                        |          | Atlanta, GA       |             |        | 2/17/2006 |           |                        |    | 5      |         |  |           | 65,350    |  |   |         | 10,712  | 
|                                   | One Crosswoods                                                                                                           |          | Columbus, OH      |             |        | 3/3/2006  |           |                        |    | 1      |         |  |           | 129,583   |  |   |         | 5,300   | 
|                                   | 3001 Stender Way(a)(b)                                                                                                   |          | Santa Clara, CA   |             |        | 3/23/2006 |           |                        |    |       |         |  |           |          |  |   |         | 2,875   | 
|                                   |                                                                                                                          |          |                   |             |        |           |           |                        |    |        |         |  |           |          
|Total First Quarter Dispositions:  |                                                                                                                          |          | 10                |             |        |           | 783,629   |                        |    | $      | 116,887 | 
|                                   |                                                                                                                          |          |                   |             |        |           |           |                        |   
|Second Quarter 2006 Dispositions:  |                                                                                                                          |          |                   |             |        |           |           |                        |    |        |         | 
|                                   | Southgate Office Plaza I & II                                                                                            |          | Renton, WA        |             |        | 4/6/2006  |           |                        |    | 2      |         |  |           | 267,810   |  |   | $       | 47,000  | 
|                                   | Paces West                                                                                                               |          | Atlanta, GA       |             |        | 4/19/2006 |           |                        |    | 2      |         |  |           | 646,471   |  |   |         | 112,750 | 
|                                   | California Circle II                                                                                                     |          | Milpitas, CA      |             |        | 6/9/2006  |           |                        |    | 3      |         |  |           | 95,774    |  |   |         | 10,007  | 
|                                   | Brea Corporate Plaza                                                                                                     |          | Brea, CA          |             |        | 6/21/2006 |           |                        |    | 1      |         |  |           | 117,195   |  |   |         | 25,260  | 
|                                   | Brea Park Centre                                                                                                         |          | Brea, CA          |             |        | 6/21/2006 |           |                        |    | 3      |         |  |           | 168,315   |  |   |         | 34,740  | 
|                                   | Crosby Corporate Center I & II                                                                                           |          | Bedford, MA       |             |        | 6/21/2006 |           |                        |    | 9      |         |  |           | 588,918   |  |   |         | 70,745  | 
|                                   |                                                                                                                          |          |                   |             |        |           |           |                        |    |        |         |  |           |          
|Total Second Quarter Dispositions: |                                                                                                                          |          | 20                |             |        |           | 1,884,483 |                        |    | $      | 300,502 | 
|                                   |                                                                                                                          |          |                   |             |        |           |           |                        |   
|Third Quarter 2006 Dispositions:   |                                                                                                                          |          |                   |             |        |           |           |                        |    |        |         | 
|Office properties:                 |                                                                                                                          |          |                   |             |        |           |           |                        |    |        |         |  |           |           |  |   |         |        
|                                   | One Pacific Square                                                                                                       |          | Portland, OR      |             |        | 8/23/2006 |           |                        |    | 1      |         |  |           | 240,338   |  |   | $       | 47,950  | 
|                                   | One Ninety One Peachtree Tower                                                                                           |          | Atlanta, GA       |             |        | 9/13/2006 |           |                        |    | 1      |         |  |           | 1,215,288 |  |   |         | 153,200 | 
|                                   | Lake Marriott Business Park                                                                                              |          | Santa Clara, CA   |             |        | 9/26/2006 |           |                        |    | 7      |         |  |           | 401,402   |  |   |         | 75,225  | 
|                                   | Perimeter Center (including 211, 219 and 223 Perimeter Center,
    1051 Hammond Drive Land and Central Park Vacant Land) |          | Atlanta, GA       |             |        | 9/28/2006 |           |                        |    | 3      |         |  |           | 483,445   |  |   |         | 112,750 | 
|                                   | Trinity Place                                                                                                            |          | Denver, CO        |             |        | 9/29/2006 |           |                        |    | 1      |         |  |           | 189,163   |  |   |         | 29,387  | 
|Vacant land:                       |                                                                                                                          |          |                   |             |        |           |           |                        |    |        |         |  |           |           |  |   |         |        
|                                   | Centerpointe III Land                                                                                                    |          | Fairfax, VA       |             |        | 7/20/2006 |           |                        |    |       |         |  |           |          |  |   |         | 16,500  | 
|                                   |                                                                                                                          |          |                   |             |        |           |           |                        |    |        |         |  |           |          
|Total Third Quarter Dispositions:  |                                                                                                                          |          | 13                |             |        |           | 2,529,636 |                        |    | $      | 435,012 | 
|                                   |                                                                                                                          |          |                   |             |        |           |           |                        |   
|                                   |                                                                                                                          |          |                   |             | Total: |           |           |                        | 43 |        |         |  | 5,197,748 |           |  | $ | 852,401 |        
|                                   |                                                                                                                          |          |                   |             |        |           |           |                        |    |        |         |  |           |          



|    |                                                                                                                                                                                                                                         
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | These properties were classified as held for sale at
    December 31, 2005.                                                                                                                                                             
|   
|(b) | This property, which consists of one building comprising
    61,825 square feet, was previously taken out of service
    and, therefore, was no longer included in the total number of
    buildings or total square footage statistics.

14



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(Unaudited)




NOTE 4  SALES OF REAL
ESTATE  (Continued)




| |                         
| | ------------------------
| | Properties Held for Sale



|                |  |          |             |           |           |  |                  |                       |  |  |         | 
|--------------- |  | -------- | ----------- | --------- | --------- |  | ---------------- | --------------------- |  |  | ------- | 
|                |  |          |             | Number of |           |  | Effective Office |                      
|Property        |  | Location |             |           | Buildings |  |                  | Portfolio Square Feet | 
|                |  |          |             |           |           |  |                  |                       | 
|20-32 Perimeter |  |          | Atlanta, GA |           |           |  | 7                |                       |  |  | 176,143 | 



| |                                                                                                       
| | ------------------------------------------------------------------------------------------------------
| | Gains/ Losses on Sales of Real Estate, Impairments and
    Provisions for Loss on Assets Held for Sale



15



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(Unaudited)




NOTE 4  SALES OF REAL
ESTATE  (Continued)




|                                                                                                                |                                                |                                                                 |         |          |                     |   |        |        |        |   |         |          |          |   |         |          |          |  
|--------------------------------------------------------------------------------------------------------------- | ---------------------------------------------- | --------------------------------------------------------------- | ------- | -------- | ------------------- | - | ------ | ------ | ------ | - | ------- | -------- | -------- | - | ------- | -------- | -------- | -
|                                                                                                                |                                                | For the three months                                            |         |          | For the nine months |  
|                                                                                                                |                                                | ended September 30,                                             |         |          | ended September 30, |  
|                                                                                                                |                                                |                                                                 |         |          |                     |  
|(Dollars in thousands)                                                                                          |                                                | 2006                                                            |         |          | 2005                |   |        | 2006   |        |   | 2005    |         
|                                                                                                                |                                                |                                                                 |         |          |                     |   |        |        |        |   |         |         
|(Loss) gain on partial sales of real estate included in Income
    from Continuing Operations(c)                |                                                | $                                                               | (219    | )        |                     | $ | 47,406 |        |        | $ | 314     |          |          | $ | 47,433  |         
|Gain on sales of real estate included in Discontinued
    Operations(d)                                         |                                                |                                                                 | 58,713  |          |                     |   | 31,098 |        |        |   | 176,859 |          |          |   | 147,288 |         
|Minority interests share of gain on sales of real estate                                                       |                                                |                                                                 |        |          |                     |   |       |        |        |   |        |          |          |   | (29,699 | )       
|Our share of gain (loss) on sales of real estate classified as
    income from unconsolidated joint ventures(e) |                                                |                                                                 |        |          |                     |   | 29     |        |        |   | (91     | )        |          |   | 17,405  |         
|                                                                                                                |                                                |                                                                 |         |          |                     |   |        |        |        |   |         |         
|                                                                                                                |                                                | Our share of the gains on sales of real estate                  |         | $        | 58,494              |   |        | $      | 78,533 |   |         | $        | 177,082  |   |         | $        | 182,427  |  
|                                                                                                                |                                                |                                                                 |         |          |                     |   |        |        |        |   |         |         
|Impairment on properties anticipated to be sold deducted from
    Income from Continuing Operations             |                                                | $                                                               | (54,406 | )        |                     | $ |       |        |        | $ | (54,406 | )        |          | $ | (24,382 | )       
|Discontinued Operations:                                                                                        |                                                |                                                                 |         |          |                     |   |        |        |        |   |         |          |          |   |         |         
|                                                                                                                | Impairment on properties sold                  |                                                                 |         | (134,522 | )                   |   |        |       |        |   |         | (134,522 | )        |   |         | (156,474 | )       
|                                                                                                                | Loss on properties sold                        |                                                                 |         |         |                     |   |        | (523   | )      |   |         | (1,203   | )        |   |         | (166,451 | )       
|                                                                                                                | Provision for loss on properties held for sale |                                                                 |         |         |                     |   |        | (3,010 | )      |   |         |         |          |   |         | (36,812  | )       
|                                                                                                                |                                                |                                                                 |         |          |                     |   |        |        |        |   |         |         
|                                                                                                                |                                                | Total non-cash impairment charges and losses on properties sold |         | $        | (188,928            | ) |        | $      | (3,533 | ) |         | $        | (190,131 | ) |         | $        | (384,119 | )
|                                                                                                                |                                                |                                                                 |         |          |                     |   |        |        |        |   |         |         



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(c) | The $0.2 million loss for the three months ended
    September 30, 2006 represents an adjustment to the gain
    previously recorded on properties sold in prior periods.                                                                                                                                                                                                                                                                                                                                                                                                                        
|   
|(d) | The gain on sales of real estate included in Discontinued
    Operations for the nine months ended September 30, 2006
    includes the recognition of a $25.6 million gain on sale
    related to a property sold in 2005. The recognition of this gain
    had previously been deferred until we collected our outstanding
    $66.3 million note receivable from the buyer in January
    2006. As of December 31, 2005, the deferred gain was
    included in Prepaid expenses and other assets on the
    consolidated balance sheet, as an offset against the related
    note receivable.
|   
|(e) | The $91 thousand loss for the nine months ended
    September 30, 2006 represents an adjustment to the gain
    previously recorded on properties sold in prior periods.                                                                                                                                                                                                                                                                                                                                                                                                                         

16



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(Unaudited)




NOTE 4  SALES OF REAL
ESTATE  (Continued)




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

Accounting for the Impairment or
Disposal of Long-Lived Assets


|                                                                                                                                                                           |                                                                                           |                      |                              |         |                     |          |        |        |        |        |          |         |         |          |          |         |         |         |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------- | -------------------- | ---------------------------- | ------- | ------------------- | -------- | ------ | ------ | ------ | ------ | -------- | ------- | ------- | -------- | -------- | ------- | ------- | ------- | -
|                                                                                                                                                                           |                                                                                           | For the three months |                              |         | For the nine months |         
|                                                                                                                                                                           |                                                                                           | ended September 30,  |                              |         | ended September 30, |         
|                                                                                                                                                                           |                                                                                           |                      |                              |         |                     |         
|(Dollars in thousands)                                                                                                                                                     |                                                                                           | 2006                 |                              |         | 2005                |          |        | 2006   |        |        | 2005     |        
|                                                                                                                                                                           |                                                                                           |                      |                              |         |                     |          |        |        |        |        |          |        
|Property operating revenues                                                                                                                                                |                                                                                           | $                    | 7,321                        |         |                     | $        | 45,463 |        |        | $      | 50,937   |         |         | $        | 236,108  |        
|                                                                                                                                                                           |                                                                                           |                      |                              |         |                     |          |        |        |        |        |          |        
|Expenses:                                                                                                                                                                  |                                                                                           |                      |                              |         |                     |          |        |        |        |        |          |         |         |          |          |        
|                                                                                                                                                                           | Depreciation and amortization                                                             |                      |                              | 3,723   |                     |          |        | 11,251 |        |        |          | 16,403  |         |          |          | 65,001  |        
|                                                                                                                                                                           | Property operating and ground rent                                                        |                      |                              | 4,885   |                     |          |        | 20,175 |        |        |          | 24,820  |         |          |          | 94,535  |        
|                                                                                                                                                                           | General and administrative                                                                |                      |                              | 134     |                     |          |        | 70     |        |        |          | 252     |         |          |          | 70      |        
|                                                                                                                                                                           | Impairment                                                                                |                      |                              | 134,522 |                     |          |        |       |        |        |          | 134,522 |         |          |          | 156,474 |        
|                                                                                                                                                                           |                                                                                           |                      |                              |         |                     |          |        |        |        |        |          |        
|                                                                                                                                                                           |                                                                                           | Total expenses       |                              |         | 143,264             |          |        |        | 31,496 |        |          |         | 175,997 |          |          |         | 316,080 |        
|                                                                                                                                                                           |                                                                                           |                      |                              |         |                     |          |        |        |        |        |          |        
|                                                                                                                                                                           |                                                                                           |                      | Operating (loss) income      |         |                     | (135,943 | )      |        |        | 13,967 |          |         |         | (125,060 | )        |         |         | (79,972 | )
|                                                                                                                                                                           |                                                                                           |                      |                              |         |                     |          |        |        |        |        |          |        
|Other income (expense):                                                                                                                                                    |                                                                                           |                      |                              |         |                     |          |        |        |        |        |          |         |         |          |          |        
|                                                                                                                                                                           | Interest income                                                                           |                      |                              | 19      |                     |          |        | 57     |        |        |          | 458     |         |          |          | 346     |        
|                                                                                                                                                                           | Interest expense and amortization of deferred financing costs
    and prepayment expenses |                      |                              |        |                     |          |        | (299   | )      |        |          |        |         |          |          | (1,519  | )      
|                                                                                                                                                                           |                                                                                           |                      |                              |         |                     |          |        |        |        |        |          |        
|                                                                                                                                                                           |                                                                                           |                      | Total other income (expense) |         |                     | 19       |        |        |        | (242   | )        |         |         | 458      |          |         |         | (1,173  | )
|                                                                                                                                                                           |                                                                                           |                      |                              |         |                     |          |        |        |        |        |          |        
|(Loss) income before income taxes, allocations to minority
    interests, net gain (loss) on sales of real estate and provision
    for (loss) on properties held for sale |                                                                                           |                      | (135,924                     | )       |                     |          | 13,725 |        |        |        | (124,602 | )       |         |          | (81,145  | )      
|Income taxes                                                                                                                                                               |                                                                                           |                      |                             |         |                     |          |       |        |        |        | (17      | )       |         |          | (65      | )      
|Income allocated to minority interests  partially
    owned properties (including gains on sales of real estate of $0,
    $0, $0 and $29,699, respectively)              |                                                                                           |                      |                             |         |                     |          |       |        |        |        |         |         |         |          | (30,440  | )      
|Net gain (loss) on sales of real estate                                                                                                                                    |                                                                                           |                      | 58,713                       |         |                     |          | 30,575 |        |        |        | 175,656  |         |         |          | (19,163  | )      
|Provision for (loss) on properties held for sale                                                                                                                           |                                                                                           |                      |                             |         |                     |          | (3,010 | )      |        |        |         |         |         |          | (36,812  | )      
|                                                                                                                                                                           |                                                                                           |                      |                              |         |                     |          |        |        |        |        |          |        
|Net (loss) income                                                                                                                                                          |                                                                                           | $                    | (77,211                      | )       |                     | $        | 41,290 |        |        | $      | 51,037   |         |         | $        | (167,625 | )      
|                                                                                                                                                                           |                                                                                           |                      |                              |         |                     |          |        |        |        |        |          |        
|Property net operating income from discontinued operations                                                                                                                 |                                                                                           | $                    | 1,869                        |         |                     | $        | 25,532 |        |        | $      | 26,013   |         |         | $        | 144,318  |        
|                                                                                                                                                                           |                                                                                           |                      |                              |         |                     |          |        |        |        |        |          |        



17



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(Unaudited)


NOTE 5  CORPORATE RESTRUCTURING






NOTE 6  INVESTMENTS IN UNCONSOLIDATED JOINT
VENTURES


04-5,


|                                                                                                                                                                     |                                                         |                                                              |         |         |                   |   |         |           |           | 
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------- | ------------------------------------------------------------ | ------- | ------- | ----------------- | - | ------- | --------- | --------- | 
|(Dollars in thousands)                                                                                                                                               |                                                         | September 30, 2006                                           |         |         | December 31, 2005 |  
|                                                                                                                                                                     |                                                         |                                                              |         |         |                   |  
|Balance Sheets:                                                                                                                                                      |                                                         |                                                              |         |         |                   |   |         |          
|                                                                                                                                                                     | Assets:                                                 |                                                              |         |         |                   |   |         |           |          
|                                                                                                                                                                     | Real estate, net of accumulated depreciation            |                                                              | $       | 496,850 |                   |   | $       | 3,002,906 |          
|                                                                                                                                                                     | Other assets                                            |                                                              |         | 61,165  |                   |   |         | 356,016   |          
|                                                                                                                                                                     |                                                         |                                                              |         |         |                   |  
|                                                                                                                                                                     |                                                         | Total Assets                                                 |         | $       | 558,015           |   |         | $         | 3,358,922 | 
|                                                                                                                                                                     |                                                         |                                                              |         |         |                   |  
|                                                                                                                                                                     | Liabilities and Partners and Shareholders
    Equity: |                                                              |         |         |                   |   |         |           |          
|                                                                                                                                                                     | Mortgage debt                                           |                                                              | $       | 476,296 |                   |   | $       | 1,138,455 |          
|                                                                                                                                                                     | Other liabilities                                       |                                                              |         | 45,384  |                   |   |         | 151,303   |          
|                                                                                                                                                                     | Partners and shareholders equity                      |                                                              |         | 36,335  |                   |   |         | 2,069,164 |          
|                                                                                                                                                                     |                                                         |                                                              |         |         |                   |  
|                                                                                                                                                                     |                                                         | Total Liabilities and Partners and Shareholders
    Equity |         | $       | 558,015           |   |         | $         | 3,358,922 | 
|                                                                                                                                                                     |                                                         |                                                              |         |         |                   |  
|Our share of historical partners and shareholders
    equity                                                                                                       |                                                         | $                                                            | 8,429   |         |                   | $ | 878,225 |          
|Net excess of cost of investments over the net book value of
    underlying net assets (net of accumulated depreciation of
    $29,611 and $21,303, respectively)(a) |                                                         |                                                              | 109,656 |         |                   |   | 69,764  |          
|                                                                                                                                                                     |                                                         |                                                              |         |         |                   |  
|Carrying value of investments in unconsolidated joint ventures                                                                                                       |                                                         | $                                                            | 118,085 |         |                   | $ | 947,989 |          
|                                                                                                                                                                     |                                                         |                                                              |         |         |                   |  
|Our share of unconsolidated non-recourse mortgage debt                                                                                                               |                                                         | $                                                            | 167,741 |         |                   | $ | 473,725 |          
|                                                                                                                                                                     |                                                         |                                                              |         |         |                   |  



|    |                                                                                                                                                                                                                                                                                                                                                                                                                          
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | This amount represents the aggregate difference between our
    historical cost basis and the basis reflected at the joint
    venture level, which is typically amortized over the life of the
    related asset. The basis differentials occur primarily upon the
    transfer of assets that were previously owned by us into a joint
    venture or the acquisition of partial interests in joint
    ventures by us.

18



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(Unaudited)




NOTE 6  INVESTMENTS IN UNCONSOLIDATED JOINT
VENTURES  (Continued)


|                          |                                                      |                                                                             |                |        |                     |        |   |         |        |         |      |        |        |        |   |         |         |         | 
|------------------------- | ---------------------------------------------------- | --------------------------------------------------------------------------- | -------------- | ------ | ------------------- | ------ | - | ------- | ------ | ------- | ---- | ------ | ------ | ------ | - | ------- | ------- | ------- | 
|                          |                                                      | For the three months                                                        |                |        | For the nine months |       
|                          |                                                      | ended September 30,                                                         |                |        | ended September 30, |       
|                          |                                                      |                                                                             |                |        |                     |       
|(Dollars in thousands)    |                                                      | 2006                                                                        |                |        | 2005                |        |   | 2006    |        |         | 2005 |       
|                          |                                                      |                                                                             |                |        |                     |        |   |         |        |         |      |       
|Statements of Operations: |                                                      |                                                                             |                |        |                     |        |   |         |        |         |      |        |        |        |   |        
|                          | Revenues                                             |                                                                             | $              | 33,319 |                     |        | $ | 130,859 |        |         | $    | 96,857 |        |        | $ | 387,609 |        
|                          |                                                      |                                                                             |                |        |                     |        |   |         |        |         |      |       
|                          | Expenses:                                            |                                                                             |                |        |                     |        |   |         |        |         |      |        |        |        |   |         |        
|                          |                                                      | Interest expense and loan cost amortization                                 |                |        | 7,670               |        |   |         | 13,909 |         |      |        | 20,749 |        |   |         | 39,554  |        
|                          |                                                      | Depreciation and amortization                                               |                |        | 6,016               |        |   |         | 33,093 |         |      |        | 16,809 |        |   |         | 95,991  |        
|                          |                                                      | Operating expenses, ground rent and general and administrative
    expenses |                |        | 17,446              |        |   |         | 61,011 |         |      |        | 53,486 |        |   |         | 180,128 |        
|                          |                                                      |                                                                             |                |        |                     |        |   |         |        |         |      |       
|                          |                                                      |                                                                             | Total expenses |        |                     | 31,132 |   |         |        | 108,013 |      |        |        | 91,044 |   |         |         | 315,673 | 
|                          |                                                      |                                                                             |                |        |                     |        |   |         |        |         |      |       
|                          | Net income before gain (loss) on sale of real estate |                                                                             |                | 2,187  |                     |        |   | 22,846  |        |         |      | 5,813  |        |        |   | 71,936  |        
|                          | Gain (loss) on sale of real estate                   |                                                                             |                |       |                     |        |   | 107     |        |         |      | (12    | )      |        |   | 39,652  |        
|                          |                                                      |                                                                             |                |        |                     |        |   |         |        |         |      |       
|                          | Net income                                           |                                                                             | $              | 2,187  |                     |        | $ | 22,953  |        |         | $    | 5,801  |        |        | $ | 111,588 |        
|                          |                                                      |                                                                             |                |        |                     |        |   |         |        |         |      |       
|Our share of:             |                                                      |                                                                             |                |        |                     |        |   |         |        |         |      |        |        |        |   |        
|                          | Net income                                           |                                                                             | $              | 315    |                     |        | $ | 10,683  |        |         | $    | 405    |        |        | $ | 48,882  |        
|                          |                                                      |                                                                             |                |        |                     |        |   |         |        |         |      |       
|                          | Interest expense and loan cost amortization          |                                                                             | $              | 2,474  |                     |        | $ | 5,444   |        |         | $    | 7,247  |        |        | $ | 15,347  |        
|                          |                                                      |                                                                             |                |        |                     |        |   |         |        |         |      |       
|                          | Depreciation and amortization (real estate related)  |                                                                             | $              | 2,952  |                     |        | $ | 12,787  |        |         | $    | 8,611  |        |        | $ | 37,555  |        
|                          |                                                      |                                                                             |                |        |                     |        |   |         |        |         |      |       
|                          | Gain (loss) on sale of real estate                   |                                                                             | $              |       |                     |        | $ | 29      |        |         | $    | (91    | )      |        | $ | 17,405  |        
|                          |                                                      |                                                                             |                |        |                     |        |   |         |        |         |      |       

NOTE 7  MORTGAGE DEBT




|                                 |                                                            |                        |           |         |         |  
|-------------------------------- | ---------------------------------------------------------- | ---------------------- | --------- | ------- | ------- | -
|                                 |                                                            | (Dollars in thousands) |          
|                                 |                                                            |                        |          
|Balance at December 31, 2005(a)  |                                                            | $                      | 2,169,383 |        
|                                 | Scheduled principal amortization prior to maturity         |                        |           | (14,824 | )      
|                                 | Consolidation of mortgage debt(b)                          |                        |           | 682,222 |        
|                                 | Mortgage financings(c)                                     |                        |           | 585,000 |        
|                                 | Assumed through a property acquisition (see Note 3)        |                        |           | 15,200  |        
|                                 |                                                            |                        |          
|Balance at June 30, 2006(a)      |                                                            |                        | 3,436,981 |        
|                                 | Scheduled principal amortization prior to maturity         |                        |           | (6,914  | )      
|                                 | Repayment of debt encumbering the following properties(d): |                        |           |         |        
|                                 |                                                            | Bayhill Office Center  |           |         | (83,862 | )
|                                 |                                                            | Promenade II(e)        |           |         | (97,409 | )
|                                 |                                                            | E.J. Randolph          |           |         | (13,050 | )
|                                 |                                                            | Northridge I           |           |         | (11,832 | )
|                                 |                                                            |                        |          
|Balance at September 30, 2006(a) |                                                            | $                      | 3,223,914 |        
|                                 |                                                            |                        |          



|    |                                                                                                                                                                                
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Excludes net discounts on mortgage debt of $5.2 million,
    $5.0 million and $4.6 million as of December 31,
    2005, June 30, 2006 and September 30, 2006,
    respectively.

19



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(Unaudited)




NOTE 7  MORTGAGE
DEBT  (Continued)




|    |                                                                                                                                                                                                                                                                         
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) | Upon adoption of
    EITF 04-5,
    effective January 1, 2006, we consolidated
    $682.2 million of mortgage debt, excluding discounts, as
    shown in the table below. Our share of the total mortgage debt
    consolidated is $306.9 million as of January 1, 2006.

|                |       |                        |         |         |                   |   |         |             |  |  |                |   |  |               |      |   |  |  |           |  | 
|--------------- | ----- | ---------------------- | ------- | ------- | ----------------- | - | ------- | ----------- |  |  | -------------- | - |  | ------------- | ---- | - |  |  | --------- |  | 
|                |       | Principal              |         |         | Our Share of the  |   |         |             |  |  |                |  
|Property        |       | Balance                |         |         | Principal Balance |   |         | Coupon Rate |  |  | Effective Rate |   |  | Maturity Date |     
|                |       |                        |         |         |                   |   |         |             |  |  |                |   |  |               |     
|                |       | (Dollars in thousands) |         |         |                   |   |         |             | 
|Promenade II    |       | $                      | 80,641  |         |                   | $ | 40,320  |             |  |  | 7.84           | % |  |               | 7.84 | % |  |  | 10/1/2006 | 
|Promenade II    |       |                        | 18,967  |         |                   |   | 9,484   |             |  |  | 6.90           | % |  |               | 6.90 | % |  |  | 10/1/2006 | 
|Pasadena Towers |       |                        | 60,614  |         |                   |   | 15,153  |             |  |  | 6.92           | % |  |               | 6.92 | % |  |  | 8/1/2008  | 
|Columbia Center |       |                        | 195,000 |         |                   |   | 97,695  |             |  |  | 4.48           | % |  |               | 4.48 | % |  |  | 1/4/2010  | 
|Yahoo! Center   |       |                        | 250,000 |         |                   |   | 125,000 |             |  |  | 5.27           | % |  |               | 5.27 | % |  |  | 10/1/2015 | 
|SunTrust Center |       |                        | 77,000  |         |                   |   | 19,250  |             |  |  | 5.34           | % |  |               | 5.34 | % |  |  | 1/1/2016  | 
|                |       |                        |         |         |                   |   |         |             |  |  |                |   |  |               |     
|                | Total |                        | $       | 682,222 |                   |   | $       | 306,902     |  |  |                |   |  |               |      |   |  |  |           |  | 
|                |       |                        |         |         |                   |   |         |             |  |  |                |   |  |               |     



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(c) | During February 2006, the ownership of the Sixty State Street
    property was restructured. Pursuant to this restructure, we
    converted our former debt position in this property into an
    approximate 95% equity interest. In addition, new mortgage
    financing was obtained on the property. The new mortgage loan
    has a principal balance of $180.0 million, bears interest
    at a fixed coupon rate of 5.63% and matures in March 2011. The
    effective interest rate on this loan is 5.67%. Following this
    restructure, we will continue to consolidate the financial
    position and results of operations of this property.



| |                                                                                                                                                                                                                                                                                                
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | During May 2006, we obtained mortgage financing for the 100
    Summer Street property. The mortgage loan has a principal
    balance of $180.0 million, bears interest at a fixed coupon
    rate of 5.96% and matures in June 2016. The effective interest
    rate on this loan is 5.98%.   
|
| | During June 2006, we obtained mortgage financing for the 225
    Franklin Street property. The mortgage loan has a principal
    balance of $225.0 million, bears interest at a fixed coupon
    rate of 6.19% and matures in July 2016. The effective interest
    rate on this loan is 6.20%.



|    |                                                                                                                       
|--- | ----------------------------------------------------------------------------------------------------------------------
|(d) | This debt was repaid, at par, prior to its scheduled maturity
    date.                                               
|   
|(e) | We own a 50% interest in this property, which we consolidate.
    Our share of the total debt repaid is $48.7 million.

NOTE 8  UNSECURED NOTES






| |                          
| | -------------------------
| | Unsecured Notes  Issued:

co-issuer


20



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(Unaudited)




NOTE 8  UNSECURED
NOTES  (Continued)










| |                          
| | -------------------------
| | Unsecured Notes  Repaid:

|             |                         |                       |         |         |             |  |      |                   |   |  |      |      |  
|------------ | ----------------------- | --------------------- | ------- | ------- | ----------- |  | ---- | ----------------- | - |  | ---- | ---- | -
|Month Repaid |                         | Amount                |         |         | Coupon Rate |  |      | Effective Rate(a) |  
|             |                         |                       |         |         |             |  |      |                   |  
|             |                         | (Dollar in thousands) |         |         |             |  |     
|February     |                         | $                     | 20      |         |             |  | 4.00 | %                 |   |  | 4.24 | %   
|March        |                         |                       | 23      |         |             |  | 4.30 | %                 |   |  | 4.53 | %   
|March        |                         |                       | 500,000 |         |             |  | 8.38 | %                 |   |  | 7.65 | %   
|April        |                         |                       | 20      |         |             |  | 4.40 | %                 |   |  | 4.71 | %   
|September    |                         |                       | 50,000  |         |             |  | 7.44 | %                 |   |  | 7.74 | %   
|             |                         |                       |         |         |             |  |      |                   |  
|             | Total/ Weighted Average |                       | $       | 550,063 |             |  |      | 8.29              | % |  |      | 7.66 | %
|             |                         |                       |         |         |             |  |      |                   |  



|    |                                                                                                                                                    
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Includes the effect of settled interest rate protection and
    interest rate swaps, offering and transaction costs and premiums
    and discounts.

NOTE 9  LINES OF CREDIT






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





| |           
| | ----------
| | Term Loans



21



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(Unaudited)




NOTE 9  LINES OF
CREDIT  (Continued)








NOTE 10  PARTNERS CAPITAL AND
MANDATORILY REDEEMABLE PREFERRED UNITS




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



|                                  |                                                                                                                                              |  |             |             |  
|--------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------- | ----------- | -
|Outstanding at December 31, 2005  |                                                                                                                                              |  | 424,314,764 |            
|                                  | Repurchased and retired under Equity Offices open market
    repurchase program (at an average purchase price of
    $34.03 per unit)(a)    |  |             | (35,593,840 | )
|                                  | Repurchased and retired under Equity Offices Supplemental
    Retirement Savings Plan (at an average purchase price of
    $33.76 per unit) |  |             | (102,570    | )
|                                  | Issued to Equity Office upon exercise of share options                                                                                       |  |             | 3,068,002   |  
|                                  | Units redeemed for cash (at an average purchase price of
    $30.89 per unit)                                                                |  |             | (2,845,536  | )
|                                  | Issued to Equity Office related to restricted shares issued to
    employees, net of cancellations                                           |  |             | 548,143     |  
|                                  | Units issued to fund Equity Offices Board of Trustee fees                                                                                   |  |             | 17,412      |  
|                                  |                                                                                                                                              |  |            
|Outstanding at June 30, 2006      |                                                                                                                                              |  | 389,406,375 |            
|                                  | Repurchased and retired under Equity Offices Supplemental
    Retirement Savings Plan (at an average purchase price of
    $38.08 per unit) |  |             | (76,908     | )
|                                  | Issued to Equity Office upon exercise of share options                                                                                       |  |             | 1,541,069   |  
|                                  | Units redeemed for cash (at an average purchase price of
    $37.17 per unit)                                                                |  |             | (292,841    | )
|                                  | Issued to Equity Office related to restricted share
    cancellations, net of restricted shares issued to employees                          |  |             | (184,640    | )
|                                  | Units issued to fund Equity Offices Board of Trustee fees                                                                                   |  |             | 6,849       |  
|                                  |                                                                                                                                              |  |            
|Outstanding at September 30, 2006 |                                                                                                                                              |  | 390,399,904 |            
|                                  |                                                                                                                                              |  |            



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Under Equity Offices open market repurchase program
    announced in July 2002, as amended, Equity Offices Board
    of Trustees has authorized the repurchase of up to
    $2.6 billion of Common Shares in the open market or in
    privately-negotiated transactions through May 31, 2007. As
    of September 30, 2006, $296.6 million of unexercised
    authority remains available to repurchase Common Shares under
    the program. Common Shares repurchased to fund Equity
    Offices employee benefit programs, including the Employee
    Share Purchase Plan and Supplemental Retirement Savings Plan,
    are not considered part of the repurchase program.



| |                                                                                                                                                                                                                                                                                                                              
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In June 2006, in a separate authorization, Equity Offices
    Board of Trustees also approved the repurchase of an additional
    $450.0 million of Common Shares concurrent with our
    issuance of $1.5 billion exchangeable unsecured notes (see
    Note 8). Of the Common Shares repurchased during the six
    months

22



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(Unaudited)




|          |                                                                               
|--------- | ------------------------------------------------------------------------------
|NOTE 10  | PARTNERS CAPITAL AND MANDATORILY REDEEMABLE PREFERRED
    UNITS  (Continued)



| |                                                                                                                                                                                                                                           
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | ended June 30, 2006, 17,196,740 Common Shares were
    repurchased concurrently with our issuance of the
    $1.5 billion exchangeable unsecured notes.                                                                                   
|
| | In conjunction with such repurchases, we purchased from Equity
    Office and retired a corresponding number of Units for an
    aggregate cash purchase price equal to the aggregate purchase
    price for all Common Share repurchases.



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



|                         |  |              |          |  |           |  |                    |                        |  |  |                    | 
|------------------------ |  | ------------ | -------- |  | --------- |  | ------------------ | ---------------------- |  |  | ------------------ | 
|                         |  | Distribution |          |  |           |  |                   
|                         |  | per Unit     |          |  | Date Paid |  |                    | Unitholder Record Date | 
|                         |  |              |          |  |           |  |                    |                        | 
|Units                    |  | $            | 0.33     |  |           |  | October 16, 2006   |                        |  |  | September 29, 2006 | 
|Series B Preferred Units |  | $            | 0.65625  |  |           |  | August 15, 2006    |                        |  |  | August 1, 2006     | 
|Series G Preferred Units |  | $            | 0.484375 |  |           |  | September 15, 2006 |                        |  |  | September 1, 2006  | 

NOTE 11  (LOSS) EARNINGS PER UNIT




|                                                |                                                                                                                                                                                                    |                            |   |          |                           |  |   |         |   |  |      |         |   |  |   |          |  
|----------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------- | - | -------- | ------------------------- |  | - | ------- | - |  | ---- | ------- | - |  | - | -------- | -
|                                                |                                                                                                                                                                                                    | For the three months ended |   |          | For the nine months ended | 
|                                                |                                                                                                                                                                                                    | September 30,              |   |          | September 30,             | 
|                                                |                                                                                                                                                                                                    |                            |   |          |                           | 
|(Dollars in thousands, except per unit amounts) |                                                                                                                                                                                                    | 2006                       |   |          | 2005                      |  |   | 2006    |   |  | 2005 |        
|                                                |                                                                                                                                                                                                    |                            |   |          |                           |  |   |         |   |  |      |        
|Numerator:                                      |                                                                                                                                                                                                    |                            |   |          |                           |  |   |         |   |  |      |         |   |  |   |         
|                                                | (Loss) income from continuing operations                                                                                                                                                           |                            | $ | (68,992  | )                         |  | $ | 71,867  |   |  | $    | (31,570 | ) |  | $ | 181,689  |  
|                                                | Preferred distributions                                                                                                                                                                            |                            |   | (8,700   | )                         |  |   | (8,700  | ) |  |      | (26,102 | ) |  |   | (26,102  | )
|                                                |                                                                                                                                                                                                    |                            |   |          |                           |  |   |         |   |  |      |        
|                                                | (Loss) income from continuing operations available to unitholders                                                                                                                                  |                            |   | (77,692  | )                         |  |   | 63,167  |   |  |      | (57,672 | ) |  |   | 155,587  |  
|                                                | Discontinued operations (including net gain (loss) on sales of
    real estate and provision for (loss) on properties held for sale
    of $58,713, $27,565, $175,656 and $(55,975), respectively) |                            |   | (77,211  | )                         |  |   | 41,290  |   |  |      | 51,037  |   |  |   | (167,625 | )
|                                                |                                                                                                                                                                                                    |                            |   |          |                           |  |   |         |   |  |      |        
|                                                | Numerator for basic and diluted (loss) earnings per
    unit  net (loss) income available to unitholders                                                                                          |                            | $ | (154,903 | )                         |  | $ | 104,457 |   |  | $    | (6,635  | ) |  | $ | (12,038  | )
|                                                |                                                                                                                                                                                                    |                            |   |          |                           |  |   |         |   |  |      |        

23



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(Unaudited)




NOTE 11  (LOSS) EARNINGS PER
UNIT  (Continued)


|                                                |                                                                                                                        |                                                                                       |   |             |                           |  |   |             |           |  |      |             |   |  |   |             |           | 
|----------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------- | - | ----------- | ------------------------- |  | - | ----------- | --------- |  | ---- | ----------- | - |  | - | ----------- | --------- | 
|                                                |                                                                                                                        | For the three months ended                                                            |   |             | For the nine months ended | 
|                                                |                                                                                                                        | September 30,                                                                         |   |             | September 30,             | 
|                                                |                                                                                                                        |                                                                                       |   |             |                           | 
|(Dollars in thousands, except per unit amounts) |                                                                                                                        | 2006                                                                                  |   |             | 2005                      |  |   | 2006        |           |  | 2005 |            
|                                                |                                                                                                                        |                                                                                       |   |             |                           |  |   |             |           |  |      |            
|Denominator:                                    |                                                                                                                        |                                                                                       |   |             |                           |  |   |             |           |  |      |             |   |  |   |            
|                                                | Denominator for basic (loss) earnings per unit 
    weighted average Units outstanding                                |                                                                                       |   | 387,833,388 |                           |  |   | 452,847,362 |           |  |      | 400,765,403 |   |  |   | 451,549,093 |          
|                                                | Effect of dilutive potential units:                                                                                    |                                                                                       |   |             |                           |  |   |             |           |  |      |             |   |  |   |             |          
|                                                |                                                                                                                        | Units issuable upon exercise of Equity Office share options and
    restricted shares |   |             |                          |  |   |             | 4,496,159 |  |      |             |  |  |   |             | 3,821,566 | 
|                                                |                                                                                                                        |                                                                                       |   |             |                           |  |   |             |           |  |      |            
|                                                | Denominator for diluted (loss) earnings per unit 
    weighted average Units outstanding and dilutive potential units |                                                                                       |   | 387,833,388 |                           |  |   | 457,343,521 |           |  |      | 400,765,403 |   |  |   | 455,370,659 |          
|                                                |                                                                                                                        |                                                                                       |   |             |                           |  |   |             |           |  |      |            
|(Loss) earnings per unit  basic:               |                                                                                                                        |                                                                                       |   |             |                           |  |   |             |           |  |      |             |   |  |   |            
|                                                | (Loss) income from continuing operations available to unitholders                                                      |                                                                                       | $ | (0.20       | )                         |  | $ | 0.14        |           |  | $    | (0.14       | ) |  | $ | 0.34        |          
|                                                | Discontinued operations                                                                                                |                                                                                       |   | (0.20       | )                         |  |   | 0.09        |           |  |      | 0.13        |   |  |   | (0.37       | )        
|                                                |                                                                                                                        |                                                                                       |   |             |                           |  |   |             |           |  |      |            
|                                                | Net (loss) income available to unitholders(a)                                                                          |                                                                                       | $ | (0.40       | )                         |  | $ | 0.23        |           |  | $    | (0.02       | ) |  | $ | (0.03       | )        
|                                                |                                                                                                                        |                                                                                       |   |             |                           |  |   |             |           |  |      |            
|(Loss) earnings per unit  diluted:             |                                                                                                                        |                                                                                       |   |             |                           |  |   |             |           |  |      |             |   |  |   |            
|                                                | (Loss) income from continuing operations available to unitholders                                                      |                                                                                       | $ | (0.20       | )                         |  | $ | 0.14        |           |  | $    | (0.14       | ) |  | $ | 0.34        |          
|                                                | Discontinued operations                                                                                                |                                                                                       |   | (0.20       | )                         |  |   | 0.09        |           |  |      | 0.13        |   |  |   | (0.37       | )        
|                                                |                                                                                                                        |                                                                                       |   |             |                           |  |   |             |           |  |      |            
|                                                | Net (loss) income available to unitholders(a)                                                                          |                                                                                       | $ | (0.40       | )                         |  | $ | 0.23        |           |  | $    | (0.02       | ) |  | $ | (0.03       | )        
|                                                |                                                                                                                        |                                                                                       |   |             |                           |  |   |             |           |  |      |            



|    |                                                                                                                          
|--- | -------------------------------------------------------------------------------------------------------------------------
|(a) | Net (loss) income available to unitholders per unit may not
    total the sum of the per unit components due to rounding.

24



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(Unaudited)




NOTE 11  (LOSS) EARNINGS PER
UNIT  (Continued)




|                            |       |                  |       |                            |      |  |                           |            |  |  |           |           |  |      |            |            |  |  |           |           | 
|--------------------------- | ----- | ---------------- | ----- | -------------------------- | ---- |  | ------------------------- | ---------- |  |  | --------- | --------- |  | ---- | ---------- | ---------- |  |  | --------- | --------- | 
|                            |       |                  |       | For the three months ended |      |  | For the nine months ended |           
|                            |       |                  |       | September 30,              |      |  | September 30,             |           
|                            |       | Weighted Average |       |                            |      |  |                           |            | 
|Antidilutive Securities     |       | Exercise Price   |       |                            | 2006 |  |                           | 2005       |  |  | 2006      |           |  | 2005 |           
|                            |       |                  |       |                            |      |  |                           |            |  |  |           |           |  |      |           
|Share options               |       | $                | 28.47 |                            |      |  | 16,599,458                |            |  |  |          |           |  |      |           |            |  |  |          |          
|Share options               |       | $                | 28.48 |                            |      |  |                          |            |  |  |          |           |  |      | 18,575,196 |            |  |  |          |          
|Share options               |       | $                | 32.99 |                            |      |  |                          |            |  |  |          |           |  |      |           |            |  |  | 530,371   |          
|Restricted Shares           |       | $                | 29.34 |                            |      |  | 2,122,057                 |            |  |  |          |           |  |      |           |            |  |  |          |          
|Restricted Shares           |       | $                | 29.07 |                            |      |  |                          |            |  |  |          |           |  |      | 2,120,991  |            |  |  |          |          
|Series B Preferred Units(b) |       | $                | 35.70 |                            |      |  | 8,389,256                 |            |  |  | 8,389,256 |           |  |      | 8,389,256  |            |  |  | 8,389,267 |          
|                            |       |                  |       |                            |      |  |                           |            |  |  |           |           |  |      |           
|                            | Total |                  |       |                            |      |  |                           | 27,110,771 |  |  |           | 8,389,256 |  |      |            | 29,085,443 |  |  |           | 8,919,638 | 
|                            |       |                  |       |                            |      |  |                           |            |  |  |           |           |  |      |           



|    |                                                                 
|--- | ----------------------------------------------------------------
|(b) | The amounts shown represent the resulting Units upon conversion.

NOTE 12  SEGMENT INFORMATION




|                                                        |                         |                                                          |      |         |                     |  |      |         |         |  |      |           |           |  |      |           |           | 
|------------------------------------------------------- | ----------------------- | -------------------------------------------------------- | ---- | ------- | ------------------- |  | ---- | ------- | ------- |  | ---- | --------- | --------- |  | ---- | --------- | --------- | 
|                                                        |                         | For the three months                                     |      |         | For the nine months | 
|                                                        |                         | ended September 30,                                      |      |         | ended September 30, | 
|                                                        |                         |                                                          |      |         |                     | 
|(Dollars in thousands)                                  |                         | 2006                                                     |      |         | 2005                |  |      | 2006    |         |  | 2005 |          
|                                                        |                         |                                                          |      |         |                     |  |      |         |         |  |      |          
|Property Operating Revenues:                            |                         |                                                          |      |         |                     |  |      |         |         |  |      |           |           |  |      |          
|                                                        | Rental                  |                                                          | $    | 661,808 |                     |  | $    | 563,347 |         |  | $    | 1,969,655 |           |  | $    | 1,676,432 |          
|                                                        | Tenant reimbursements   |                                                          |      | 143,380 |                     |  |      | 100,466 |         |  |      | 389,406   |           |  |      | 277,658   |          
|                                                        | Parking                 |                                                          |      | 36,967  |                     |  |      | 28,512  |         |  |      | 109,221   |           |  |      | 82,828    |          
|                                                        | Other(a)                |                                                          |      | 16,867  |                     |  |      | 8,926   |         |  |      | 50,165    |           |  |      | 84,682    |          
|                                                        |                         |                                                          |      |         |                     |  |      |         |         |  |      |          
|                                                        |                         | Total Property Operating Revenues                        |      |         | 859,022             |  |      |         | 701,251 |  |      |           | 2,518,447 |  |      |           | 2,121,600 | 
|                                                        |                         |                                                          |      |         |                     |  |      |         |         |  |      |          
|Property Operating Expenses:                            |                         |                                                          |      |         |                     |  |      |         |         |  |      |           |           |  |      |          
|                                                        | Real estate taxes       |                                                          |      | 108,225 |                     |  |      | 83,813  |         |  |      | 313,944   |           |  |      | 246,346   |          
|                                                        | Insurance               |                                                          |      | 7,381   |                     |  |      | 16,208  |         |  |      | 24,347    |           |  |      | 28,520    |          
|                                                        | Repairs and maintenance |                                                          |      | 107,452 |                     |  |      | 76,947  |         |  |      | 301,136   |           |  |      | 221,263   |          
|                                                        | Property operating      |                                                          |      | 116,804 |                     |  |      | 86,257  |         |  |      | 310,716   |           |  |      | 235,151   |          
|                                                        |                         |                                                          |      |         |                     |  |      |         |         |  |      |          
|                                                        |                         | Total Property Operating Expenses                        |      |         | 339,862             |  |      |         | 263,225 |  |      |           | 950,143   |  |      |           | 731,280   | 
|                                                        |                         |                                                          |      |         |                     |  |      |         |         |  |      |          
|                                                        |                         | Property Net Operating Income from Continuing Operations |      | $       | 519,160             |  |      | $       | 438,026 |  |      | $         | 1,568,304 |  |      | $         | 1,390,320 | 
|                                                        |                         |                                                          |      |         |                     |  |      |         |         |  |      |          
|Property Operating Margin from Continuing Operations(b) |                         |                                                          | 60.4 | %       |                     |  | 62.5 | %       |         |  | 62.3 | %         |           |  | 65.5 | %        
|                                                        |                         |                                                          |      |         |                     |  |      |         |         |  |      |          

25



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(Unaudited)




NOTE 12  SEGMENT
INFORMATION  (Continued)


|                                                                                                                                |                                                          |                      |         |          |                     |   |         |          |   |   |           |          |   |   |           |          |  
|------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------- | -------------------- | ------- | -------- | ------------------- | - | ------- | -------- | - | - | --------- | -------- | - | - | --------- | -------- | -
|                                                                                                                                |                                                          | For the three months |         |          | For the nine months |  
|                                                                                                                                |                                                          | ended September 30,  |         |          | ended September 30, |  
|                                                                                                                                |                                                          |                      |         |          |                     |  
|(Dollars in thousands)                                                                                                          |                                                          | 2006                 |         |          | 2005                |   |         | 2006     |   |   | 2005      |         
|                                                                                                                                |                                                          |                      |         |          |                     |   |         |          |   |   |           |         
|Reconciliation of Property Net Operating Income from
    Continuing Operations to (Loss) Income from Continuing
    Operations: |                                                          |                      |         |          |                     |   |         |          |   |   |           |          |   |   |           |         
|Property Net Operating Income from Continuing Operations                                                                        |                                                          | $                    | 519,160 |          |                     | $ | 438,026 |          |   | $ | 1,568,304 |          |   | $ | 1,390,320 |         
|Add:                                                                                                                            |                                                          |                      |         |          |                     |   |         |          |   |   |           |          |   |   |           |         
|                                                                                                                                | Fee income                                               |                      |         | 1,402    |                     |   |         | 5,314    |   |   |           | 3,796    |   |   |           | 13,788   |  
|Less:                                                                                                                           |                                                          |                      |         |          |                     |   |         |          |   |   |           |          |   |   |           |         
|                                                                                                                                | Depreciation                                             |                      |         | (194,940 | )                   |   |         | (158,428 | ) |   |           | (572,990 | ) |   |           | (467,361 | )
|                                                                                                                                | Amortization                                             |                      |         | (31,038  | )                   |   |         | (24,009  | ) |   |           | (99,613  | ) |   |           | (66,210  | )
|                                                                                                                                | Ground rent                                              |                      |         | (6,332   | )                   |   |         | (6,097   | ) |   |           | (18,864  | ) |   |           | (16,208  | )
|                                                                                                                                | General and administrative                               |                      |         | (60,830  | )                   |   |         | (43,007  | ) |   |           | (144,529 | ) |   |           | (121,254 | )
|                                                                                                                                | Impairment                                               |                      |         | (54,406  | )                   |   |         |         |   |   |           | (54,406  | ) |   |           | (24,382  | )
|                                                                                                                                |                                                          |                      |         |          |                     |   |         |          |   |   |           |         
|Operating Income                                                                                                                |                                                          |                      | 173,016 |          |                     |   | 211,799 |          |   |   | 681,698   |          |   |   | 708,693   |         
|Less:                                                                                                                           |                                                          |                      |         |          |                     |   |         |          |   |   |           |          |   |   |           |         
|                                                                                                                                | Other expenses, primarily interest expense               |                      |         | (228,444 | )                   |   |         | (195,123 | ) |   |           | (672,749 | ) |   |           | (614,004 | )
|                                                                                                                                | Income taxes                                             |                      |         | (1,335   | )                   |   |         | (456     | ) |   |           | (2,398   | ) |   |           | (1,346   | )
|                                                                                                                                | Minority interests  partially owned properties          |                      |         | (12,325  | )                   |   |         | (2,442   | ) |   |           | (38,840  | ) |   |           | (7,969   | )
|Add:                                                                                                                            |                                                          |                      |         |          |                     |   |         |          |   |   |           |          |   |   |           |         
|                                                                                                                                | Income from investments in unconsolidated joint ventures |                      |         | 315      |                     |   |         | 10,683   |   |   |           | 405      |   |   |           | 48,882   |  
|                                                                                                                                | (Loss) gain on sales of real estate                      |                      |         | (219     | )                   |   |         | 47,406   |   |   |           | 314      |   |   |           | 47,433   |  
|                                                                                                                                |                                                          |                      |         |          |                     |   |         |          |   |   |           |         
|(Loss) Income from Continuing Operations                                                                                        |                                                          | $                    | (68,992 | )        |                     | $ | 71,867  |          |   | $ | (31,570   | )        |   | $ | 181,689   |         
|                                                                                                                                |                                                          |                      |         |          |                     |   |         |          |   |   |           |         



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Other income consists primarily of income from early lease
    terminations and ancillary income from tenants. Income from
    early lease terminations was $2.9 million and
    $4.2 million for the three months ended September 30,
    2006 and 2005, respectively, and $11.3 million and
    $66.1 million for the nine months ended September 30,
    2006 and 2005, respectively. The total for the nine months ended
    September 30, 2005 includes a significant lease termination
    of $48.7 million related to one lease.
|   
|(b) | Defined as Property Net Operating Income from Continuing
    Operations divided by Total Property Operating Revenues.                                                                                                                                                                                                                                                                                                                                                                                                                  

NOTE 13  RELATED PARTY TRANSACTIONS




NOTE 14  COMMITMENTS AND CONTINGENCIES




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



26



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(Unaudited)




|          |                                            
|--------- | -------------------------------------------
|NOTE 14  | COMMITMENTS AND CONTINGENCIES  (Continued)





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





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





| |                      
| | ---------------------
| | Property Acquisitions





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

Accounting for
Contingencies,




27



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(Unaudited)




|          |                                            
|--------- | -------------------------------------------
|NOTE 14  | COMMITMENTS AND CONTINGENCIES  (Continued)





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

Property Damage, Business Interruption, Earthquake and
Terrorism:


|                                             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |                                                                                              
|-------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------
|                                             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  | Third-Party Coverage                                                                         
|Type of Insurance Coverage                   |  | Our Loss Exposure/Deductible                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  | Limitation                                                                                   
|                                             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |                                                                                              
|Property damage and business interruption(a) |  | $50 million per occurrence and $75 million annual
    aggregate exposure (which includes amounts paid for earthquake
    loss), plus $1 million per occurrence deductible                                                                                                                                                                                                                                                                                                                                        |  | $1.0 billion per occurrence(c);
    $825 million per occurrence for wind and flood losses (c)
|                                            
|Earthquake(a)(b)                             |  | $75 million per occurrence and 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)                         |  | $4.9 million per occurrence deductible (plus 10% of the
    remainder of each and every loss with a maximum per occurrence
    exposure of $37.4 million which includes the
    $4.9 million deductible); however, TRIEA provides that if
    the aggregate industry loss as a result of any such foreign
    terrorism occurrence is less than $50 million
    ($100 million in 2007), we are responsible for 100% of such
    loss. Our intent is to insure such amounts in excess of
    $50 million in 2007. |  | $825 million per occurrence(e)                                                               

28



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(Unaudited)




|          |                                            
|--------- | -------------------------------------------
|NOTE 14  | COMMITMENTS AND CONTINGENCIES  (Continued)



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | We retain up to $75 million annual aggregate loss
    throughout the portfolio. In the event of a loss in excess of
    the per occurrence or annual aggregate amount, the third-party
    insurance carriers would be obligated to cover the losses up to
    the stated coverage amounts in the table above.                                                                                                                                                                                                                                                                                                               
|   
|(b) | The amount of the third party insurance relating to earthquakes
    is based on loss studies performed by independent third parties.
    These studies are based on numerous assumptions, not all of
    which may prove correct in the event of a catastrophic
    earthquake. The maximum annual aggregate payment amount for
    earthquake loss is $325 million, inclusive of our loss
    exposure of $75 million plus $1 million per occurrence
    deductible. There can be no assurance that the actual losses
    suffered in the event of an earthquake would not exceed the
    amount of such insurance coverage.
|   
|(c) | These amounts include our loss exposure/deductible amount.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   
|(d) | This coverage includes nuclear, chemical and biological events
    under the Terrorism Risk Insurance Act of 2002
    (TRIA). This coverage does not apply to non-TRIA
    events (which are terrorism events that are not committed by a
    foreigner or a foreign country). We maintain 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.                                                                                           



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | TRIA established the Terrorism Risk Insurance Program
    (TRIP) to mandate that insurance carriers offer
    insurance covering physical damage from terrorist incidents
    certified by the U.S. government as foreign terrorist acts.
    Under TRIP, the federal government shares in the risk of loss
    associated with certain future terrorist acts. TRIA was extended
    for two years under the Terrorism Risk Insurance Extension Act
    (TRIEA), which established new requirements and
    expires on December 31, 2007. TRIEA created a new program
    trigger for any certified act of terrorism occurring after
    March 31, 2006 that prohibits payment of federal
    compensation unless the aggregate industry insured losses
    resulting from that act of terrorism exceed $50 million for
    2006 and $100 million for 2007.



|    |                                                    
|--- | ---------------------------------------------------
|(e) | This amount is in excess of our deductible amounts.

Pollution:


Workers Compensation, Automobile Liability and General
Liability:


NOTE 15  SUBSEQUENT EVENTS






29



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EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(Unaudited)




|          |                                
|--------- | -------------------------------
|NOTE 15  | SUBSEQUENT EVENTS  (Continued)



|                             |  |          |           |             |      |  |           |                        |  |        |      |  |          |       |         |  |  |   |         | 
|---------------------------- |  | -------- | --------- | ----------- | ---- |  | --------- | ---------------------- |  | ------ | ---- |  | -------- | ----- | ------- |  |  | - | ------- | 
|                             |  |          |           |             |      |  |           | Effective Office       | 
|                             |  |          |           |             |      |  |           | Portfolio              | 
|                             |  |          |           |             |      |  |           |                        | 
|                             |  |          |           | Acquisition |      |  | Number of |                        |  | Square |      |  | Purchase |      
|Property                     |  | Location |           |             | Date |  |           | Buildings              |  |        | Feet |  |          | Price |        
|                             |  |          |           |             |      |  |           |                        |  |        |      |  |          |       |        
|                             |  |          |           |             |      |  |           | (Dollars in thousands) | 
|Wachovia Financial Center(a) |  |          | Miami, FL |             |      |  | 10/3/2006 |                        |  |        | 1    |  |          |       | 574,401 |  |  | $ | 194,000 | 
|                             |  |          |           |             |      |  |           |                        |  |        |      |  |          |       |        
|                             |  |          |           |             |      |  | Total     |                        |  |        | 1    |  |          |       | 574,401 |  |  | $ | 194,000 | 
|                             |  |          |           |             |      |  |           |                        |  |        |      |  |          |       |        



|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | We acquired a 50% interest in this property, which we
    consolidate. Upon acquisition, we assumed $162.3 million of
    variable rate mortgage debt, which matures in December 2009, and
    a corresponding $150.0 million
    floating-to-fixed
    interest rate swap, which matures in August 2009. The swap
    effectively converted $150.0 million of the mortgage debt
    to a fixed interest rate of 5.56%. The fair value of the swap as
    of the acquisition date was $2.4 million. The remaining
    $12.3 million of mortgage debt assumed bears interest at
    LIBOR plus 125 basis points. Our share of the total debt
    encumbering this property is $81.2 million.



|                      |  |          |              |             |      |  |            |                        |  |        |      |  |       |       |         |  |  |   |         | 
|--------------------- |  | -------- | ------------ | ----------- | ---- |  | ---------- | ---------------------- |  | ------ | ---- |  | ----- | ----- | ------- |  |  | - | ------- | 
|                      |  |          |              |             |      |  |            | Effective Office       | 
|                      |  |          |              |             |      |  |            | Portfolio              | 
|                      |  |          |              |             |      |  |            |                        | 
|                      |  |          |              | Disposition |      |  | Number of  |                        |  | Square |      |  | Sales |      
|Property              |  | Location |              |             | Date |  |            | Buildings              |  |        | Feet |  |       | Price |        
|                      |  |          |              |             |      |  |            |                        |  |        |      |  |       |       |        
|                      |  |          |              |             |      |  |            | (Dollars in thousands) | 
|Cerritos Towne Center |  |          | Cerritos, CA |             |      |  | 10/27/2006 |                        |  |        | 5    |  |       |       | 461,794 |  |  | $ | 114,000 | 
|                      |  |          |              |             |      |  |            |                        |  |        |      |  |       |       |        
|                      |  |          |              |             |      |  | Total      |                        |  |        | 5    |  |       |       | 461,794 |  |  | $ | 114,000 | 
|                      |  |          |              |             |      |  |            |                        |  |        |      |  |       |       |        

30



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

Forward-Looking Statements


10-Q




| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | while our occupancy and market rents are increasing, we continue
    to experience rent roll down in certain markets (although at
    levels that are significantly less than recent years) as leases
    expire and are renewed at current rates; our operations also may
    continue to be negatively impacted by the effect of increased
    expenses (including energy, real estate taxes, insurance and
    repairs and maintenance expense) and significant tenant
    improvement and leasing costs;
|
| |  | although new construction in our principal markets is not high
    relative to historic levels, we may face increased competition
    in certain of our markets as buildings currently planned or
    under development are completed and begin to lease up;                                                                                                                                                                                                                                                
|
| |  | our long-term leases cause our operating results to lag
    improving market conditions;                                                                                                                                                                                                                                                                                                                                                                                                                    
|
| |  | our geographic market diversity may cause our overall operating
    results to be less favorable than operating results in the
    strongest markets;                                                                                                                                                                                                                                                                                                                                                       
|
| |  | in order to continue to pay distributions to our unitholders at
    anticipated levels, we must borrow funds or sell assets;                                                                                                                                                                                                                                                                                                                                                                                
|
| |  | we were a net seller of real estate in 2005 and expect to
    continue to sell a significant amount of assets during the
    remainder of 2006 and in 2007, which may further reduce our
    income from continuing operations and funds from operations;                                                                                                                                                                                                                                                   
|
| |  | future disposition activity may also result in gains or losses
    on sale of real estate, earnings dilution and impairment charges;                                                                                                                                                                                                                                                                                                                                                                        
|
| |  | our performance and unit value are subject to risks associated
    with the real estate industry; new acquisitions may fail to
    perform as expected;                                                                                                                                                                                                                                                                                                                                                     
|
| |  | our ability to dispose of assets on terms we find acceptable
    will be subject to market conditions we do not control;                                                                                                                                                                                                                                                                                                                                                                                    
|
| |  | our properties face significant leasing competition;                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|
| |  | competition for acquisitions or an oversupply of properties for
    sale could adversely affect us;                                                                                                                                                                                                                                                                                                                                                                                                         
|
| |  | we face potential adverse effects from tenant bankruptcies or
    insolvencies;                                                                                                                                                                                                                                                                                                                                                                                                                             
|
| |  | a hurricane, earthquake or terrorist act could adversely affect
    our business and, as a result of our self-insurance levels, such
    losses, or other potential losses, will not be fully covered by
    third-party insurance.                                                                                                                                                                                                                                                                         

10-K 10-Q


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Overview







|   |                  
|-- | -----------------
|I. | Executive Summary



| |                                                                                              
| | ---------------------------------------------------------------------------------------------
| | A description of our business as well as key factors and
    trends that affect our business.



| |                              
| | -----------------------------
| | II.     Results of Operations



| |                                                                                                                                  
| | ---------------------------------------------------------------------------------------------------------------------------------
| | Period-to-period comparison of our results of
    operations for the three and nine months ended
    September 30, 2006 and 2005.



| |                                             
| | --------------------------------------------
| | III.     Liquidity and Capital
    Resources



| |                                                                                                                                                                                                                                                                                                      
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | A discussion of our liquidity and capital resources,
    including distributions to our unitholders, contractual
    obligations, debt financing, market risk, equity securities,
    capital improvements, tenant improvements and leasing costs,
    developments, cash flows and additional items.



| |                                                       
| | ------------------------------------------------------
| | IV.     Critical Accounting Policies
    and Estimates



| |                                                                                                                                                
| | -----------------------------------------------------------------------------------------------------------------------------------------------
| | A review of the critical accounting policies and estimates
    that affect the financial statements and impact of new
    accounting standards.



|   |                      
|-- | ---------------------
|V. | Funds From Operations



| |                                                                                                                  
| | -----------------------------------------------------------------------------------------------------------------
| | A reconciliation of this non-GAAP financial measure to net
    income, the most directly comparable GAAP measure.



|   |                  
|-- | -----------------
|I. | Executive Summary



|            |  |               |  |                 
|----------- |  | ------------- |  | ----------------
|Austin      |  | Oakland       |  | San Jose        
|Boston      |  | Orange County |  | Seattle         
|Chicago     |  | Portland      |  | Stamford        
|Denver      |  | Sacramento    |  | Washington, D.C.
|Los Angeles |  | San Diego     |  |                 
|New York    |  | San Francisco |  |                 

32



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##### Table of Contents











| |   |                                                                           
| | - | --------------------------------------------------------------------------
| |  | the economic environment;                                                 
|
| |  | our investment activity and our use of the proceeds from
    dispositions;
|
| |  | our liquidity and capital resources; and                                  
|
| |  | our operating and leasing results.                                        

Economic Environment








Investment Activity




33



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34



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##### Table of Contents



Liquidity and Capital Resources




Operating and Leasing Results




| |                                                                   
| | ------------------------------------------------------------------
| | Operating Results for the Nine Months Ended
    September 30, 2006





| |              
| | -------------
| | Total Company





35



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| |           
| | ----------
| | Same Store





| |                
| | ---------------
| | Leasing Results



| |          
| | ---------
| | Occupancy





| |             
| | ------------
| | Rental Rates







| |                         
| | ------------------------
| | Early Lease Terminations



36



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##### Table of Contents





| |                                      
| | -------------------------------------
| | Tenant Improvements and Leasing Costs



Trends in Occupancy and Rental Rates for the Total Office
Portfolio




|                                                 |                                                                                                                                                    |                                                                |  |           |                     |    |  |           |       |    |      |            |       |    |  |            |       |   
|------------------------------------------------ | -------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------- |  | --------- | ------------------- | -- |  | --------- | ----- | -- | ---- | ---------- | ----- | -- |  | ---------- | ----- | --
|                                                 |                                                                                                                                                    | For the three months                                           |  |           | For the nine months |   
|                                                 |                                                                                                                                                    | ended September 30,                                            |  |           | ended September 30, |   
|                                                 |                                                                                                                                                    |                                                                |  |           |                     |   
|                                                 |                                                                                                                                                    | 2006                                                           |  |           | 2005                |    |  | 2006      |       |    | 2005 |           
|                                                 |                                                                                                                                                    |                                                                |  |           |                     |    |  |           |       |    |      |           
|Office Property Data for Total Office Portfolio: |                                                                                                                                                    |                                                                |  |           |                     |    |  |           |       |    |      |            |       |    |  |           
|                                                 | Occupancy at end of period                                                                                                                         |                                                                |  | 91.1      | %                   |    |  | 89.2      | %     |    |      | 91.1       | %     |    |  | 89.2       | %    
|                                                 | Gross square footage for tenants whose lease term commenced
    during the period                                                                  |                                                                |  | 3,935,836 |                     |    |  | 5,575,587 |       |    |      | 12,780,518 |       |    |  | 16,275,329 |      
|                                                 | Weighted average annual rent per square foot for tenants whose
    lease term commenced during the period:                                         |                                                                |  |           |                     |    |  |           |       |    |      |            |       |    |  |            |      
|                                                 |                                                                                                                                                    | GAAP basis(a,b)                                                |  | $         | 28.98               |    |  | $         | 25.71 |    |      | $          | 28.59 |    |  | $          | 26.68 |   
|                                                 |                                                                                                                                                    | Cash basis(b,c)                                                |  | $         | 27.90               |    |  | $         | 24.89 |    |      | $          | 27.70 |    |  | $          | 25.69 |   
|                                                 | Gross square footage for expiring and terminated leases during
    the period                                                                      |                                                                |  | 3,724,216 |                     |    |  | 5,009,972 |       |    |      | 12,817,959 |       |    |  | 15,631,862 |      
|                                                 | Weighted average annual rent per square foot for expiring and
    terminated leases during the period:                                             |                                                                |  |           |                     |    |  |           |       |    |      |            |       |    |  |            |      
|                                                 |                                                                                                                                                    | GAAP basis(a)                                                  |  | $         | 30.11               |    |  | $         | 29.13 |    |      | $          | 29.68 |    |  | $          | 29.11 |   
|                                                 |                                                                                                                                                    | Cash basis(c)                                                  |  | $         | 31.60               |    |  | $         | 29.90 |    |      | $          | 30.60 |    |  | $          | 29.89 |   
|                                                 | Change in weighted average annual rent per square foot between
    expiring and terminated leases and leases that commenced during
    the period: |                                                                |  |           |                     |    |  |           |       |    |      |            |       |    |  |            |      
|                                                 |                                                                                                                                                    | GAAP basis  change in annual rent per square foot             |  | $         | (1.13               | )  |  | $         | (3.42 | )  |      | $          | (1.09 | )  |  | $          | (2.43 | ) 
|                                                 |                                                                                                                                                    | GAAP basis  percent change in annual rent per square
    foot |  |           | (3.8                | )% |  |           | (11.7 | )% |      |            | (3.7  | )% |  |            | (8.3  | )%
|                                                 |                                                                                                                                                    | Cash basis  change in annual rent per square foot             |  | $         | (3.70               | )  |  | $         | (5.01 | )  |      | $          | (2.90 | )  |  | $          | (4.20 | ) 
|                                                 |                                                                                                                                                    | Cash basis  percent change in annual rent per square
    foot |  |           | (11.7               | )% |  |           | (16.8 | )% |      |            | (9.5  | )% |  |            | (14.1 | )%



|    |                                                                                                                                                                                                                                                           
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Based on the average annual base rent per square foot over the
    lease term and current estimated tenant reimbursements, if any.                                                                                                                        
|   
|(b) | Weighted average annual rent per square foot for new leases for
    tenants whose lease term commenced during the period may lag the
    market because leasing decisions typically are made one month to
    12 or more months prior to taking occupancy.

37



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##### Table of Contents





|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(c) | Based on the monthly contractual rent when the lease commenced,
    expired or terminated multiplied by 12 months. For new and
    renewal leases, if the monthly contractual rent when the lease
    commenced is $0 (as a result of rent abatements), then the
    rental rate represents the first monthly rent payment due
    multiplied by 12 months (Annualized Cash Rent).
    The contractual rent amounts include total base rent and
    estimated expense reimbursements from tenants before any
    adjustments for rent abatements and contractual increases or
    decreases in rent. We believe Annualized Cash Rent is a useful
    measure because this information can be used for comparison to
    current market rents as published by various third party sources.



|    |                      
|--- | ---------------------
|II. | Results of Operations



| |                                 
| | --------------------------------
| | Period-to-Period
    Comparisons

period-to period-to




|                        |                    |                                   |  |              |           |   |                  |             |             |   |  |             |             |  
|----------------------- | ------------------ | --------------------------------- |  | ------------ | --------- | - | ---------------- | ----------- | ----------- | - |  | ----------- | ----------- | -
|                        |                    |                                   |  | Square Feet  |          
|                        |                    |                                   |  |              |          
|                        |                    |                                   |  | Total Office |           |   | Effective Office |            
|                        |                    | Buildings                         |  |              | Portfolio |   |                  | Portfolio   |            
|                        |                    |                                   |  |              |           |   |                  |             |            
|Properties owned as of: |                    |                                   |  |              |           |   |                  |             |             |   |  |            
|                        | December 31, 2004  |                                   |  | 698          |           |   |                  | 125,713,245 |             |   |  | 115,279,743 |            
|                        |                    | Acquisitions                      |  |              | 55        |   |                  |             | 3,959,956   |   |  |             | 3,959,956   |  
|                        |                    | Development placed in service     |  |              | 1         |   |                  |             | 115,340     |   |  |             | 115,340     |  
|                        |                    | Dispositions                      |  |              | (131      | ) |                  |             | (18,275,376 | ) |  |             | (17,644,205 | )
|                        |                    | Property taken out of service(a)  |  |              | (1        | ) |                  |             | (61,825     | ) |  |             | (61,825     | )
|                        |                    | Building remeasurements           |  |              |          |   |                  |             | 57,713      |   |  |             | 59,282      |  
|                        |                    |                                   |  |              |           |   |                  |             |            
|                        | December 31, 2005  |                                   |  | 622          |           |   |                  | 111,509,053 |             |   |  | 101,708,291 |            
|                        |                    | Acquisitions                      |  |              | 3         |   |                  |             | 374,763     |   |  |             | 374,763     |  
|                        |                    | Dispositions                      |  |              | (10       | ) |                  |             | (783,629    | ) |  |             | (783,629    | )
|                        |                    | Building remeasurements and other |  |              |          |   |                  |             | 22,133      |   |  |             | (15,081     | )
|                        |                    |                                   |  |              |           |   |                  |             |            
|                        | March 31, 2006     |                                   |  | 615          |           |   |                  | 111,122,320 |             |   |  | 101,284,344 |            
|                        |                    | Acquisitions                      |  |              | 2         |   |                  |             | 273,535     |   |  |             | 273,535     |  
|                        |                    | Development placed in service     |  |              | 1         |   |                  |             | 93,349      |   |  |             | 93,349      |  
|                        |                    | Dispositions                      |  |              | (20       | ) |                  |             | (1,884,483  | ) |  |             | (1,884,483  | )
|                        |                    | Property taken out of service(a)  |  |              | (1        | ) |                  |             | (313,333    | ) |  |             | (313,333    | )
|                        |                    | Building remeasurements and other |  |              | (2        | ) |                  |             | (94,660     | ) |  |             | (71,162     | )
|                        |                    |                                   |  |              |           |   |                  |             |            
|                        | June 30, 2006      |                                   |  | 595          |           |   |                  | 109,196,728 |             |   |  | 99,382,250  |            
|                        |                    | Acquisitions                      |  |              | 3         |   |                  |             | 1,825,312   |   |  |             | 1,631,066   |  
|                        |                    | Dispositions                      |  |              | (13       | ) |                  |             | (2,529,636  | ) |  |             | (2,529,636  | )
|                        |                    | Building remeasurements and other |  |              |          |   |                  |             | 6,390       |   |  |             | 2,495       |  
|                        |                    |                                   |  |              |           |   |                  |             |            
|                        | September 30, 2006 |                                   |  | 585          |           |   |                  | 108,498,794 |             |   |  | 98,486,175  |            
|                        |                    |                                   |  |              |           |   |                  |             |            

38



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|    |                                                                                                                                                              
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | The properties taken out of service represent office properties
    we are no longer attempting to lease which may be
    redeveloped  or sold in the future.





| |                 
| | ----------------
| | JV Consolidation

Determining Whether a General Partner, or the General
Partners as a Group, Controls a Limited Partnership or Similar
Entity When the Limited Partners Have Certain Rights 04-5), 04-5


|                                                                            |  |                       |           | 
|--------------------------------------------------------------------------- |  | --------------------- | --------- | 
|(Dollars in thousands)                                                      |  | As of January 1, 2006 |          
|                                                                            |  |                       |          
|Increase in investments in real estate, net of accumulated
    depreciation |  | $                     | 2,556,549 | 
|Decrease in investments in unconsolidated joint ventures                    |  | $                     | 844,591   | 
|Increase in mortgage debt, net of (discounts) of
    $(0.2) million         |  | $                     | 681,986   | 
|Increase in minority interests  partially owned
    properties             |  | $                     | 1,205,236 | 
|Increase in net other assets and liabilities                                |  | $                     | 175,264   | 
|Change in total partners capital                                           |  | $                     |          | 



|                                                                         |  |                            |         |  |                           |   |         | 
|------------------------------------------------------------------------ |  | -------------------------- | ------- |  | ------------------------- | - | ------- | 
|                                                                         |  | For the three months ended |         |  | For the nine months ended |  
|(Dollars in thousands)                                                   |  | September 30, 2006         |         |  | September 30, 2006        |  
|                                                                         |  |                            |         |  |                           |  
|Increase in total revenues                                               |  | $                          | 104,487 |  |                           | $ | 305,162 | 
|Increase in total operating expenses                                     |  | $                          | 75,381  |  |                           | $ | 216,927 | 
|Increase in other expense (primarily interest expense)                   |  | $                          | 9,410   |  |                           | $ | 27,581  | 
|Decrease in income from investments in unconsolidated joint
    ventures |  | $                          | 10,043  |  |                           | $ | 30,478  | 
|Increase in minority interests  partially owned
    properties          |  | $                          | 9,653   |  |                           | $ | 30,176  | 
|Change in income from continuing operations                              |  | $                          |        |  |                           | $ |        | 

39



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| |                                                                                                         
| | --------------------------------------------------------------------------------------------------------
| | Comparison of the three months ended September 30, 2006
    to the three months ended September 30, 2005



|                                                                                                                                                                              |                               |                              |                  |         |                            |            |          |                  |          |         |                   |          |          |          |         |         |         |         |          |          |          |         |         |          |          |         |         |         |         |         |       |       |       |       |          |         |          |         |        |        |       |       |  
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------- | ---------------------------- | ---------------- | ------- | -------------------------- | ---------- | -------- | ---------------- | -------- | ------- | ----------------- | -------- | -------- | -------- | ------- | ------- | ------- | ------- | -------- | -------- | -------- | ------- | ------- | -------- | -------- | ------- | ------- | ------- | ------- | ------- | ----- | ----- | ----- | ----- | -------- | ------- | -------- | ------- | ------ | ------ | ----- | ----- | -
|                                                                                                                                                                              |                               |                              |                  |         |                            | Same Store |          |                  |         
|                                                                                                                                                                              |                               | For the three months ended   |                  |         | For the three months ended |            |          | Portfolio Change |          |         | Total Company     |         
|                                                                                                                                                                              |                               | September 30, 2006           |                  |         | September 30, 2005         |            |          | Favorable/       |          |         | Change Favorable/ |         
|                                                                                                                                                                              |                               |                              |                  |         |                            |            |          | (Unfavorable)    |          |         | (Unfavorable)     |         
|                                                                                                                                                                              |                               | Same Store                   |                  |         | Non-Same                   |            |          | Total            |          |         | Same Store        |          |          | Non-Same |         |         | Total   |         |          |          |          |         |         |         
|(Dollars in thousands)                                                                                                                                                        |                               | Portfolio                    |                  |         | Store                      |            |          | Company          |          |         | Portfolio         |          |          | Store    |         |         | Company |         |          | Amount   |          |         | %       |          |          | Amount  |         |         | %       |        
|                                                                                                                                                                              |                               |                              |                  |         |                            |            |          |                  |          |         |                   |          |          |          |         |         |         |         |          |          |          |         |         |          |          |         |         |         |         |        
|Revenues:                                                                                                                                                                     |                               |                              |                  |         |                            |            |          |                  |          |         |                   |          |          |          |         |         |         |         |          |          |          |         |         |          |          |         |         |         |         |         |       |       |       |       |          |         |          |         |        |       
|                                                                                                                                                                              | Property operating revenues   |                              | $                | 724,682 |                            |            | $        | 134,340          |          |         | $                 | 859,022  |          |          | $       | 695,081 |         |         | $        | 6,170    |          |         | $       | 701,251  |          |         | $       | 29,601  |         |         |       | 4.3   | %     |       | $        | 157,771 |          |         |        | 22.5   | %    
|                                                                                                                                                                              | Fee income                    |                              |                  |        |                            |            |          | 1,402            |          |         |                   | 1,402    |          |          |         |        |         |         |          | 5,314    |          |         |         | 5,314    |          |         |         |        |         |         |       |      |       |       |          | (3,912  | )        |         |        | (73.6  | )    
|                                                                                                                                                                              |                               |                              |                  |         |                            |            |          |                  |          |         |                   |          |          |          |         |         |         |         |          |          |          |         |         |          |          |         |         |         |         |        
|                                                                                                                                                                              |                               | Total revenues               |                  |         | 724,682                    |            |          |                  | 135,742  |         |                   |          | 860,424  |          |         |         | 695,081 |         |          |          | 11,484   |         |         |          | 706,565  |         |         |         | 29,601  |         |       |       | 4.3   |       |          |         | 153,859  |         |        |        | 21.8  |      
|                                                                                                                                                                              |                               |                              |                  |         |                            |            |          |                  |          |         |                   |          |          |          |         |         |         |         |          |          |          |         |         |          |          |         |         |         |         |        
|Expenses:                                                                                                                                                                     |                               |                              |                  |         |                            |            |          |                  |          |         |                   |          |          |          |         |         |         |         |          |          |          |         |         |          |          |         |         |         |         |         |       |       |       |       |          |         |          |         |        |       
|                                                                                                                                                                              | Depreciation and amortization |                              |                  | 183,576 |                            |            |          | 42,402           |          |         |                   | 225,978  |          |          |         | 176,906 |         |         |          | 5,531    |          |         |         | 182,437  |          |         |         | (6,670  | )       |         |       | (3.8  | )     |       |          | (43,541 | )        |         |        | (23.9  | )    
|                                                                                                                                                                              | Real estate taxes             |                              |                  | 86,439  |                            |            |          | 21,786           |          |         |                   | 108,225  |          |          |         | 82,369  |         |         |          | 1,444    |          |         |         | 83,813   |          |         |         | (4,070  | )       |         |       | (4.9  | )     |       |          | (24,412 | )        |         |        | (29.1  | )    
|                                                                                                                                                                              | Insurance                     |                              |                  | 4,934   |                            |            |          | 2,447            |          |         |                   | 7,381    |          |          |         | 16,090  |         |         |          | 118      |          |         |         | 16,208   |          |         |         | 11,156  |         |         |       | 69.3  |       |       |          | 8,827   |          |         |        | 54.5   |      
|                                                                                                                                                                              | Repairs and maintenance       |                              |                  | 86,163  |                            |            |          | 21,289           |          |         |                   | 107,452  |          |          |         | 75,947  |         |         |          | 1,000    |          |         |         | 76,947   |          |         |         | (10,216 | )       |         |       | (13.5 | )     |       |          | (30,505 | )        |         |        | (39.6  | )    
|                                                                                                                                                                              | Property operating            |                              |                  | 99,156  |                            |            |          | 17,648           |          |         |                   | 116,804  |          |          |         | 85,030  |         |         |          | 1,227    |          |         |         | 86,257   |          |         |         | (14,126 | )       |         |       | (16.6 | )     |       |          | (30,547 | )        |         |        | (35.4  | )    
|                                                                                                                                                                              | Ground rent                   |                              |                  | 5,471   |                            |            |          | 861              |          |         |                   | 6,332    |          |          |         | 6,020   |         |         |          | 77       |          |         |         | 6,097    |          |         |         | 549     |         |         |       | 9.1   |       |       |          | (235    | )        |         |        | (3.9   | )    
|                                                                                                                                                                              | General and administrative(a) |                              |                  |        |                            |            |          | 60,830           |          |         |                   | 60,830   |          |          |         |        |         |         |          | 43,007   |          |         |         | 43,007   |          |         |         |        |         |         |       |      |       |       |          | (17,823 | )        |         |        | (41.4  | )    
|                                                                                                                                                                              | Impairment                    |                              |                  | 51,469  |                            |            |          | 2,937            |          |         |                   | 54,406   |          |          |         |        |         |         |          |         |          |         |         |         |          |         |         | (51,469 | )       |         |       |      |       |       |          | (54,406 | )        |         |        |       |      
|                                                                                                                                                                              |                               |                              |                  |         |                            |            |          |                  |          |         |                   |          |          |          |         |         |         |         |          |          |          |         |         |          |          |         |         |         |         |        
|                                                                                                                                                                              |                               | Total expenses               |                  |         | 517,208                    |            |          |                  | 170,200  |         |                   |          | 687,408  |          |         |         | 442,362 |         |          |          | 52,404   |         |         |          | 494,766  |         |         |         | (74,846 | )       |       |       | (16.9 | )     |          |         | (192,642 | )       |        |        | (38.9 | )    
|                                                                                                                                                                              |                               |                              |                  |         |                            |            |          |                  |          |         |                   |          |          |          |         |         |         |         |          |          |          |         |         |          |          |         |         |         |         |        
|                                                                                                                                                                              |                               |                              | Operating income |         |                            | 207,474    |          |                  |          | (34,458 | )                 |          |          | 173,016  |         |         |         | 252,719 |          |          |          | (40,920 | )       |          |          | 211,799 |         |         |         | (45,245 | )     |       |       | (17.9 | )        |         |          | (38,783 | )      |        |       | (18.3 | )
|                                                                                                                                                                              |                               |                              |                  |         |                            |            |          |                  |          |         |                   |          |          |          |         |         |         |         |          |          |          |         |         |          |          |         |         |         |         |        
|Other income (expense):                                                                                                                                                       |                               |                              |                  |         |                            |            |          |                  |          |         |                   |          |          |          |         |         |         |         |          |          |          |         |         |          |          |         |         |         |         |         |       |       |       |       |          |         |          |         |        |       
|                                                                                                                                                                              | Interest and dividend income  |                              |                  | 1,816   |                            |            |          | 4,983            |          |         |                   | 6,799    |          |          |         | 1,414   |         |         |          | 2,546    |          |         |         | 3,960    |          |         |         | 402     |         |         |       | 28.4  |       |       |          | 2,839   |          |         |        | 71.7   |      
|                                                                                                                                                                              | Interest expense(b)           |                              |                  | (46,411 | )                          |            |          | (188,832         | )        |         |                   | (235,243 | )        |          |         | (38,091 | )       |         |          | (160,992 | )        |         |         | (199,083 | )        |         |         | (8,320  | )       |         |       | (21.8 | )     |       |          | (36,160 | )        |         |        | (18.2  | )    
|                                                                                                                                                                              |                               |                              |                  |         |                            |            |          |                  |          |         |                   |          |          |          |         |         |         |         |          |          |          |         |         |          |          |         |         |         |         |        
|                                                                                                                                                                              |                               | Total other income (expense) |                  |         | (44,595                    | )          |          |                  | (183,849 | )       |                   |          | (228,444 | )        |         |         | (36,677 | )       |          |          | (158,446 | )       |         |          | (195,123 | )       |         |         | (7,918  | )       |       |       | (21.6 | )     |          |         | (33,321  | )       |        |        | (17.1 | )    
|                                                                                                                                                                              |                               |                              |                  |         |                            |            |          |                  |          |         |                   |          |          |          |         |         |         |         |          |          |          |         |         |          |          |         |         |         |         |        
|Income (loss) before income taxes, allocation to minority
    interests, income from investments in unconsolidated joint
    ventures and (loss) gain on sales of real estate |                               |                              | 162,879          |         |                            |            | (218,307 | )                |          |         | (55,428           | )        |          |          | 216,042 |         |         |         | (199,366 | )        |          |         | 16,676  |          |          |         | (53,163 | )       |         |         | (24.6 | )     |       |       | (72,104  | )       |          |         | (432.4 | )     
|Income taxes                                                                                                                                                                  |                               |                              |                 |         |                            |            | (1,335   | )                |          |         | (1,335            | )        |          |          | (6      | )       |         |         | (450     | )        |          |         | (456    | )        |          |         | 6       |         |         |         | 100.0 |       |       |       | (879     | )       |          |         | (192.8 | )     
|Minority Interests:                                                                                                                                                           |                               |                              |                  |         |                            |            |          |                  |          |         |                   |          |          |          |         |         |         |         |          |          |          |         |         |          |          |         |         |         |         |         |       |       |       |       |          |         |          |         |        |       
|                                                                                                                                                                              | Partially owned properties    |                              |                  | (2,669  | )                          |            |          | (9,656           | )        |         |                   | (12,325  | )        |          |         | (2,442  | )       |         |          |         |          |         |         | (2,442   | )        |         |         | (227    | )       |         |       | (9.3  | )     |       |          | (9,883  | )        |         |        | (404.7 | )    
|Income from investments in unconsolidated joint ventures
    (including gain on sales of real estate of $0 and $29,
    respectively)                                         |                               |                              | 349              |         |                            |            | (34      | )                |          |         | 315               |          |          |          | (210    | )       |         |         | 10,893   |          |          |         | 10,683  |          |          |         | 559     |         |         |         | 266.2 |       |       |       | (10,368  | )       |          |         | (97.1  | )     
|(Loss) gain on sales of real estate                                                                                                                                           |                               |                              | (34              | )       |                            |            | (185     | )                |          |         | (219              | )        |          |          |        |         |         |         | 47,406   |          |          |         | 47,406  |          |          |         | (34     | )       |         |         |      |       |       |       | (47,625  | )       |          |         | (100.5 | )     
|                                                                                                                                                                              |                               |                              |                  |         |                            |            |          |                  |          |         |                   |          |          |          |         |         |         |         |          |          |          |         |         |          |          |         |         |         |         |        
|Income (loss) from continuing operations                                                                                                                                      |                               |                              | 160,525          |         |                            |            | (229,517 | )                |          |         | (68,992           | )        |          |          | 213,384 |         |         |         | (141,517 | )        |          |         | 71,867  |          |          |         | (52,859 | )       |         |         | (24.8 | )     |       |       | (140,859 | )       |          |         | (196.0 | )     
|Discontinued operations (including net gain on sales of real
    estate and provision for (loss) on properties held for sale of
    $58,713 and $27,565, respectively)        |                               |                              |                 |         |                            |            | (77,211  | )                |          |         | (77,211           | )        |          |          |        |         |         |         | 41,290   |          |          |         | 41,290  |          |          |         |        |         |         |         |      |       |       |       | (118,501 | )       |          |         | (287.0 | )     
|                                                                                                                                                                              |                               |                              |                  |         |                            |            |          |                  |          |         |                   |          |          |          |         |         |         |         |          |          |          |         |         |          |          |         |         |         |         |        
|Net income (loss)                                                                                                                                                             |                               | $                            | 160,525          |         |                            | $          | (306,728 | )                |          | $       | (146,203          | )        |          | $        | 213,384 |         |         | $       | (100,227 | )        |          | $       | 113,157 |          |          | $       | (52,859 | )       |         |         | (24.8 | )%    |       | $     | (259,360 | )       |          |         | (229.2 | )%    
|                                                                                                                                                                              |                               |                              |                  |         |                            |            |          |                  |          |         |                   |          |          |          |         |         |         |         |          |          |          |         |         |          |          |         |         |         |         |        
|Selected Items from Continuing Operations:                                                                                                                                    |                               |                              |                  |         |                            |            |          |                  |          |         |                   |          |          |          |         |         |         |         |          |          |          |         |         |          |          |         |         |         |         |         |       |       |       |       |          |         |          |         |        |       
|Property net operating income(c)                                                                                                                                              |                               | $                            | 447,990          |         |                            | $          | 71,170   |                  |          | $       | 519,160           |          |          | $        | 435,645 |         |         | $       | 2,381    |          |          | $       | 438,026 |          |          | $       | 12,345  |         |         |         | 2.8   | %     |       | $     | 81,134   |         |          |         | 18.5   | %     
|                                                                                                                                                                              |                               |                              |                  |         |                            |            |          |                  |          |         |                   |          |          |          |         |         |         |         |          |          |          |         |         |          |          |         |         |         |         |        
|Property operating margin (c,d)                                                                                                                                               |                               |                              | 61.8%            |         |                            |            | 53.0     | %                |          |         | 60.4              | %        |          |          | 62.7    | %       |         |         | 38.6     | %        |          |         | 62.5    | %        |          |         |         |         |         |         | (0.9  | )%    |       |       |          |         |          |         | (2.1   | )%    
|                                                                                                                                                                              |                               |                              |                  |         |                            |            |          |                  |          |         |                   |          |          |          |         |         |         |         |          |          |          |         |         |          |          |         |         |         |         |        
|Deferred rental revenue                                                                                                                                                       |                               | $                            | 4,361            |         |                            | $          | 2,565    |                  |          | $       | 6,926             |          |          | $        | 13,834  |         |         | $       | 282      |          |          | $       | 14,116  |          |          | $       | (9,473  | )       |         |         | (68.5 | )%    |       | ($    | 7,190    | )       |          |         | (50.9  | )%    
|                                                                                                                                                                              |                               |                              |                  |         |                            |            |          |                  |          |         |                   |          |          |          |         |         |         |         |          |          |          |         |         |          |          |         |         |         |         |        
|Income from early lease terminations                                                                                                                                          |                               | $                            | 2,866            |         |                            | $          | 41       |                  |          | $       | 2,907             |          |          | $        | 4,186   |         |         | $       |         |          |          | $       | 4,186   |          |          | $       | (1,320  | )       |         |         | (31.5 | )%    |       | ($    | 1,279    | )       |          |         | (30.6  | )%    
|                                                                                                                                                                              |                               |                              |                  |         |                            |            |          |                  |          |         |                   |          |          |          |         |         |         |         |          |          |          |         |         |          |          |         |         |         |         |        



|    |  |                                                                                                                                                                                                                                                                                                                                   
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | General and administrative expense is not allocated to the Same
    Store Portfolio because these expenses are not directly incurred
    in connection with any specific property.                                                                                                                                                
|   
|(b) |  | Interest expense (including amortization of deferred financing
    costs and prepayment expenses) for the Same Store Portfolio
    represents interest expense on mortgage debt and does not
    include interest expense on the unsecured notes or the lines of
    credit.                                                      
|   
|(c) |  | Property net operating income consists of property operating
    revenues minus property operating expenses. Included in property
    operating revenues are rental revenue, tenant reimbursements,
    parking and other income, which includes income from early lease
    terminations. Included in property operating expenses

40



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##### Table of Contents



|    |  |                                                                                                                                                         
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------
|    |  | are real estate taxes, insurance, repairs and maintenance and
    property operating expenses. See Item 1 
    Note 12 for more information.           
|   
|(d) |  | Property operating margin is determined by dividing property
    operating revenues less property operating expenses by property
    operating revenues.



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







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







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







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









| |                        
| | -----------------------
| | Repairs and Maintenance



41



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##### Table of Contents









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









| |                           
| | --------------------------
| | General and Administrative





| |           
| | ----------
| | Impairment





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







42



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##### Table of Contents





| |                                               
| | ----------------------------------------------
| | Minority Interest  Partially Owned Properties





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





| |                             
| | ----------------------------
| | Gain on Sales of Real Estate

Accounting for
the Impairment and Disposal of Long-Lived Assets




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



43



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Comparison of the nine months ended September 30, 2006
to the nine months ended September 30, 2005




|                                                                                                                                                                                 |                               |                              |                  |           |                           |            |          |                  |          |         |                   |           |           |          |           |           |           |         |          |          |          |          |           |           |           |         |         |         |          |          |        |         |      |       |          |          |          |         |        |        |       |      |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------- | ---------------------------- | ---------------- | --------- | ------------------------- | ---------- | -------- | ---------------- | -------- | ------- | ----------------- | --------- | --------- | -------- | --------- | --------- | --------- | ------- | -------- | -------- | -------- | -------- | --------- | --------- | --------- | ------- | ------- | ------- | -------- | -------- | ------ | ------- | ---- | ----- | -------- | -------- | -------- | ------- | ------ | ------ | ----- | ---- | -
|                                                                                                                                                                                 |                               |                              |                  |           |                           | Same Store |          |                  |         
|                                                                                                                                                                                 |                               | For the nine months ended    |                  |           | For the nine months ended |            |          | Portfolio Change |          |         | Total Company     |          
|                                                                                                                                                                                 |                               | September 30, 2006           |                  |           | September 30, 2005        |            |          | Favorable/       |          |         | Change Favorable/ |          
|                                                                                                                                                                                 |                               |                              |                  |           |                           |            |          | (Unfavorable)    |          |         | (Unfavorable)     |          
|                                                                                                                                                                                 |                               | Same Store                   |                  |           | Non-Same                  |            |          | Total            |          |         | Same Store        |           |           | Non-Same |           |           | Total     |         |          |          |          |          |           |          
|(Dollars in thousands)                                                                                                                                                           |                               | Portfolio                    |                  |           | Store                     |            |          | Company          |          |         | Portfolio         |           |           | Store    |           |           | Company   |         |          | Amount   |          |          | %         |           |           | Amount  |         |         | %        |         
|                                                                                                                                                                                 |                               |                              |                  |           |                           |            |          |                  |          |         |                   |           |           |          |           |           |           |         |          |          |          |          |           |           |           |         |         |         |          |         
|Revenues:                                                                                                                                                                        |                               |                              |                  |           |                           |            |          |                  |          |         |                   |           |           |          |           |           |           |         |          |          |          |          |           |           |           |         |         |         |          |          |        |         |      |       |          |          |          |         |        |       
|                                                                                                                                                                                 | Property operating revenues   |                              | $                | 2,103,300 |                           |            | $        | 415,147          |          |         | $                 | 2,518,447 |           |          | $         | 2,087,127 |           |         | $        | 34,473   |          |          | $         | 2,121,600 |           |         | $       | 16,173  |          |          |        | 0.8     | %    |       | $        | 396,847  |          |         |        | 18.7   | %    
|                                                                                                                                                                                 | Fee income                    |                              |                  |          |                           |            |          | 3,796            |          |         |                   | 3,796     |           |          |           |          |           |         |          | 13,788   |          |          |           | 13,788    |           |         |         |        |          |          |        |        |      |       |          | (9,992   | )        |         |        | (72.5  | )    
|                                                                                                                                                                                 |                               |                              |                  |           |                           |            |          |                  |          |         |                   |           |           |          |           |           |           |         |          |          |          |          |           |           |           |         |         |         |          |         
|                                                                                                                                                                                 |                               | Total revenues               |                  |           | 2,103,300                 |            |          |                  | 418,943  |         |                   |           | 2,522,243 |          |           |           | 2,087,127 |         |          |          | 48,261   |          |           |           | 2,135,388 |         |         |         | 16,173   |          |        |         | 0.8  |       |          |          | 386,855  |         |        |        | 18.1  |     
|                                                                                                                                                                                 |                               |                              |                  |           |                           |            |          |                  |          |         |                   |           |           |          |           |           |           |         |          |          |          |          |           |           |           |         |         |         |          |         
|Expenses:                                                                                                                                                                        |                               |                              |                  |           |                           |            |          |                  |          |         |                   |           |           |          |           |           |           |         |          |          |          |          |           |           |           |         |         |         |          |          |        |         |      |       |          |          |          |         |        |       
|                                                                                                                                                                                 | Depreciation and amortization |                              |                  | 531,899   |                           |            |          | 140,704          |          |         |                   | 672,603   |           |          |           | 509,360   |           |         |          | 24,211   |          |          |           | 533,571   |           |         |         | (22,539 | )        |          |        | (4.4    | )    |       |          | (139,032 | )        |         |        | (26.1  | )    
|                                                                                                                                                                                 | Real estate taxes             |                              |                  | 248,736   |                           |            |          | 65,208           |          |         |                   | 313,944   |           |          |           | 240,176   |           |         |          | 6,170    |          |          |           | 246,346   |           |         |         | (8,560  | )        |          |        | (3.6    | )    |       |          | (67,598  | )        |         |        | (27.4  | )    
|                                                                                                                                                                                 | Insurance                     |                              |                  | 16,723    |                           |            |          | 7,624            |          |         |                   | 24,347    |           |          |           | 27,610    |           |         |          | 910      |          |          |           | 28,520    |           |         |         | 10,887  |          |          |        | 39.4    |      |       |          | 4,173    |          |         |        | 14.6   |      
|                                                                                                                                                                                 | Repairs and maintenance       |                              |                  | 240,987   |                           |            |          | 60,149           |          |         |                   | 301,136   |           |          |           | 216,381   |           |         |          | 4,882    |          |          |           | 221,263   |           |         |         | (24,606 | )        |          |        | (11.4   | )    |       |          | (79,873  | )        |         |        | (36.1  | )    
|                                                                                                                                                                                 | Property operating            |                              |                  | 259,608   |                           |            |          | 51,108           |          |         |                   | 310,716   |           |          |           | 229,447   |           |         |          | 5,704    |          |          |           | 235,151   |           |         |         | (30,161 | )        |          |        | (13.1   | )    |       |          | (75,565  | )        |         |        | (32.1  | )    
|                                                                                                                                                                                 | Ground rent                   |                              |                  | 16,813    |                           |            |          | 2,051            |          |         |                   | 18,864    |           |          |           | 15,968    |           |         |          | 240      |          |          |           | 16,208    |           |         |         | (845    | )        |          |        | (5.3    | )    |       |          | (2,656   | )        |         |        | (16.4  | )    
|                                                                                                                                                                                 | General and administrative(a) |                              |                  |          |                           |            |          | 144,529          |          |         |                   | 144,529   |           |          |           |          |           |         |          | 121,254  |          |          |           | 121,254   |           |         |         |        |          |          |        |        |      |       |          | (23,275  | )        |         |        | (19.2  | )    
|                                                                                                                                                                                 | Impairment                    |                              |                  | 50,600    |                           |            |          | 3,806            |          |         |                   | 54,406    |           |          |           | 4,204     |           |         |          | 20,178   |          |          |           | 24,382    |           |         |         | (46,396 | )        |          |        | (1103.6 | )    |       |          | (30,024  | )        |         |        | (123.1 | )    
|                                                                                                                                                                                 |                               |                              |                  |           |                           |            |          |                  |          |         |                   |           |           |          |           |           |           |         |          |          |          |          |           |           |           |         |         |         |          |         
|                                                                                                                                                                                 |                               | Total expenses               |                  |           | 1,365,366                 |            |          |                  | 475,179  |         |                   |           | 1,840,545 |          |           |           | 1,243,146 |         |          |          | 183,549  |          |           |           | 1,426,695 |         |         |         | (122,220 | )        |        |         | (9.8 | )     |          |          | (413,850 | )       |        |        | (29.0 | )   
|                                                                                                                                                                                 |                               |                              |                  |           |                           |            |          |                  |          |         |                   |           |           |          |           |           |           |         |          |          |          |          |           |           |           |         |         |         |          |         
|                                                                                                                                                                                 |                               |                              | Operating income |           |                           | 737,934    |          |                  |          | (56,236 | )                 |           |           | 681,698  |           |           |           | 843,981 |          |          |          | (135,288 | )         |           |           | 708,693 |         |         |          | (106,047 | )      |         |      | (12.6 | )        |          |          | (26,995 | )      |        |       | (3.8 | )
|                                                                                                                                                                                 |                               |                              |                  |           |                           |            |          |                  |          |         |                   |           |           |          |           |           |           |         |          |          |          |          |           |           |           |         |         |         |          |         
|Other income (expense):                                                                                                                                                          |                               |                              |                  |           |                           |            |          |                  |          |         |                   |           |           |          |           |           |           |         |          |          |          |          |           |           |           |         |         |         |          |          |        |         |      |       |          |          |          |         |        |       
|                                                                                                                                                                                 | Interest and dividend income  |                              |                  | 4,852     |                           |            |          | 11,222           |          |         |                   | 16,074    |           |          |           | 5,675     |           |         |          | 4,895    |          |          |           | 10,570    |           |         |         | (823    | )        |          |        | (14.5   | )    |       |          | 5,504    |          |         |        | 52.1   |      
|                                                                                                                                                                                 | Interest expense(b)           |                              |                  | (126,517  | )                         |            |          | (562,306         | )        |         |                   | (688,823  | )         |          |           | (137,038  | )         |         |          | (487,536 | )        |          |           | (624,574  | )         |         |         | 10,521  |          |          |        | 7.7     |      |       |          | (64,249  | )        |         |        | (10.3  | )    
|                                                                                                                                                                                 |                               |                              |                  |           |                           |            |          |                  |          |         |                   |           |           |          |           |           |           |         |          |          |          |          |           |           |           |         |         |         |          |         
|                                                                                                                                                                                 |                               | Total other income (expense) |                  |           | (121,665                  | )          |          |                  | (551,084 | )       |                   |           | (672,749  | )        |           |           | (131,363  | )       |          |          | (482,641 | )        |           |           | (614,004  | )       |         |         | 9,698    |          |        |         | 7.4  |       |          |          | (58,745  | )       |        |        | (9.6  | )   
|                                                                                                                                                                                 |                               |                              |                  |           |                           |            |          |                  |          |         |                   |           |           |          |           |           |           |         |          |          |          |          |           |           |           |         |         |         |          |         
|Income before income taxes, allocation to minority interests,
    income from investments in unconsolidated joint ventures and
    gain on sales of real estate                  |                               |                              | 616,269          |           |                           |            | (607,320 | )                |          |         | 8,949             |           |           |          | 712,618   |           |           |         | (617,929 | )        |          |          | 94,689    |           |           |         | (96,349 | )       |          |          | (13.5  | )       |      |       | (85,740  | )        |          |         | (90.5  | )     
|Income taxes                                                                                                                                                                     |                               |                              | (1,160           | )         |                           |            | (1,238   | )                |          |         | (2,398            | )         |           |          | (388      | )         |           |         | (958     | )        |          |          | (1,346    | )         |           |         | (772    | )       |          |          | (199.0 | )       |      |       | (1,052   | )        |          |         | (78.2  | )     
|Minority Interests:                                                                                                                                                              |                               |                              |                  |           |                           |            |          |                  |          |         |                   |           |           |          |           |           |           |         |          |          |          |          |           |           |           |         |         |         |          |          |        |         |      |       |          |          |          |         |        |       
|                                                                                                                                                                                 | Partially owned properties    |                              |                  | (8,661    | )                         |            |          | (30,179          | )        |         |                   | (38,840   | )         |          |           | (7,969    | )         |         |          |         |          |          |           | (7,969    | )         |         |         | (692    | )        |          |        | (8.7    | )    |       |          | (30,871  | )        |         |        | (387.4 | )    
|Income from investments in unconsolidated joint ventures
    (including (loss) gain on sales of real estate of $(91) and
    $17,405, respectively)                              |                               |                              | 542              |           |                           |            | (137     | )                |          |         | 405               |           |           |          | 196       |           |           |         | 48,686   |          |          |          | 48,882    |           |           |         | 346     |         |          |          | 176.5  |         |      |       | (48,477  | )        |          |         | (99.2  | )     
|Gain on sales of real estate                                                                                                                                                     |                               |                              | 313              |           |                           |            | 1        |                  |          |         | 314               |           |           |          |          |           |           |         | 47,433   |          |          |          | 47,433    |           |           |         | 313     |         |          |          |       |         |      |       | (47,119  | )        |          |         | (99.3  | )     
|                                                                                                                                                                                 |                               |                              |                  |           |                           |            |          |                  |          |         |                   |           |           |          |           |           |           |         |          |          |          |          |           |           |           |         |         |         |          |         
|Income (loss) from continuing operations                                                                                                                                         |                               |                              | 607,303          |           |                           |            | (638,873 | )                |          |         | (31,570           | )         |           |          | 704,457   |           |           |         | (522,768 | )        |          |          | 181,689   |           |           |         | (97,154 | )       |          |          | (13.8  | )       |      |       | (213,259 | )        |          |         | (117.4 | )     
|Discontinued operations (including net gain (loss) on sales of
    real estate and provision for (loss) on properties held for sale
    of $175,656 and $(55,975), respectively) |                               |                              |                 |           |                           |            | 51,037   |                  |          |         | 51,037            |           |           |          |          |           |           |         | (167,625 | )        |          |          | (167,625  | )         |           |         |        |         |          |          |       |         |      |       | 218,662  |          |          |         | 130.4  |       
|                                                                                                                                                                                 |                               |                              |                  |           |                           |            |          |                  |          |         |                   |           |           |          |           |           |           |         |          |          |          |          |           |           |           |         |         |         |          |         
|Net income (loss)                                                                                                                                                                |                               | $                            | 607,303          |           |                           | $          | (587,836 | )                |          | $       | 19,467            |           |           | $        | 704,457   |           |           | $       | (690,393 | )        |          | $        | 14,064    |           |           | $       | (97,154 | )       |          |          | (13.8  | )%      |      | $     | 5,403    |          |          |         | 38.4   | %     
|                                                                                                                                                                                 |                               |                              |                  |           |                           |            |          |                  |          |         |                   |           |           |          |           |           |           |         |          |          |          |          |           |           |           |         |         |         |          |         
|Selected Items from Continuing Operations:                                                                                                                                       |                               |                              |                  |           |                           |            |          |                  |          |         |                   |           |           |          |           |           |           |         |          |          |          |          |           |           |           |         |         |         |          |          |        |         |      |       |          |          |          |         |        |       
|Property net operating income(c)                                                                                                                                                 |                               | $                            | 1,337,246        |           |                           | $          | 231,058  |                  |          | $       | 1,568,304         |           |           | $        | 1,373,513 |           |           | $       | 16,807   |          |          | $        | 1,390,320 |           |           | $       | (36,267 | )       |          |          | (2.6   | )%      |      | $     | 177,984  |          |          |         | 12.8   | %     
|                                                                                                                                                                                 |                               |                              |                  |           |                           |            |          |                  |          |         |                   |           |           |          |           |           |           |         |          |          |          |          |           |           |           |         |         |         |          |         
|Property operating margin (c,d)                                                                                                                                                  |                               |                              | 63.6%            |           |                           |            | 55.7%    |                  |          |         | 62.3              | %         |           |          | 65.8      | %         |           |         | 48.8     | %        |          |          | 65.5      | %         |           |         |         |         |          |          | (2.2   | )%      |      |       |          |          |          |         | (3.2   | )%    
|                                                                                                                                                                                 |                               |                              |                  |           |                           |            |          |                  |          |         |                   |           |           |          |           |           |           |         |          |          |          |          |           |           |           |         |         |         |          |         
|Deferred rental revenue                                                                                                                                                          |                               | $                            | 18,231           |           |                           | $          | 9,554    |                  |          | $       | 27,785            |           |           | $        | 44,427    |           |           | $       | 2,393    |          |          | $        | 46,820    |           |           | $       | (26,196 | )       |          |          | (59.0  | )%      |      | $     | (19,035  | )        |          |         | (40.7  | )%    
|                                                                                                                                                                                 |                               |                              |                  |           |                           |            |          |                  |          |         |                   |           |           |          |           |           |           |         |          |          |          |          |           |           |           |         |         |         |          |         
|Income from early lease terminations                                                                                                                                             |                               | $                            | 9,267            |           |                           | $          | 2,072    |                  |          | $       | 11,339            |           |           | $        | 66,059    |           |           | $       |         |          |          | $        | 66,059    |           |           | $       | (56,792 | )       |          |          | (86.0  | )%      |      | $     | (54,720  | )        |          |         | (82.8  | )%    
|                                                                                                                                                                                 |                               |                              |                  |           |                           |            |          |                  |          |         |                   |           |           |          |           |           |           |         |          |          |          |          |           |           |           |         |         |         |          |         



|    |  |                                                                                                                                                                                                                                                                             
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | General and administrative expense is not allocated to the Same
    Store Portfolio because these expenses are not directly incurred
    in connection with any specific property.                                                                                          
|   
|(b) |  | Interest expense (including amortization of deferred financing
    costs and prepayment expenses) for the Same Store Portfolio
    represents interest expense on mortgage debt and does not
    include interest expense on the unsecured notes or the lines of
    credit.

44



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|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(c) |  | Property net operating income consists of property operating
    revenues minus property operating expenses. Included in property
    operating revenues are rental revenue, tenant reimbursements,
    parking and other income, which includes income from early lease
    terminations. Included in property operating expenses are real
    estate taxes, insurance, repairs and maintenance and property
    operating expenses. See Item 1  Note 12 for
    more information.
|   
|(d) |  | Property operating margin is determined by dividing property
    operating revenues less property operating expenses by property
    operating revenues.                                                                                                                                                                                                                                                                                                                            



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







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







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







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







45



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##### Table of Contents





| |                        
| | -----------------------
| | Repairs and Maintenance







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









| |                           
| | --------------------------
| | General and Administrative





| |           
| | ----------
| | Impairment





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





46



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| |                                               
| | ----------------------------------------------
| | Minority Interest  Partially Owned Properties





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





| |                             
| | ----------------------------
| | Gain on Sales of Real Estate





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





|     |                                
|---- | -------------------------------
|III. | Liquidity and Capital Resources



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







47



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##### Table of Contents

















48



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##### Table of Contents



Distributions




|                         |  |                  |          |  |              |                        |        |                          |  |   |                          |  |  |   |        | 
|------------------------ |  | ---------------- | -------- |  | ------------ | ---------------------- | ------ | ------------------------ |  | - | ------------------------ |  |  | - | ------ | 
|                         |  |                  |          |  |              | Total Distributions    |       
|                         |  | Quarterly        |          |  | Annual       |                        |        |                          | 
|                         |  | Distribution per |          |  | Distribution |                        |        | For the three months     |  |   | For the nine months      | 
|Security                 |  | Unit             |          |  | per Unit     |                        |        | ended September 30, 2006 |  |   | ended September 30, 2006 | 
|                         |  |                  |          |  |              |                        |        |                          |  |   |                          | 
|                         |  |                  |          |  |              | (Dollars in thousands) |       
|Series B Preferred Units |  | $                | 0.65625  |  |              | $                      | 2.625  |                          |  | $ | 3,931                    |  |  | $ | 11,793 | 
|Series G Preferred Units |  | $                | 0.484375 |  |              | $                      | 1.9375 |                          |  | $ | 4,117                    |  |  | $ | 12,351 | 



Contractual Obligations




|                                                        |                               |                        |            |            |      |   |         |         |  |   |         |           |  |      |         |           |      |   |         |            |  |   |           |           |  |   |           |           | 
|------------------------------------------------------- | ----------------------------- | ---------------------- | ---------- | ---------- | ---- | - | ------- | ------- |  | - | ------- | --------- |  | ---- | ------- | --------- | ---- | - | ------- | ---------- |  | - | --------- | --------- |  | - | --------- | --------- | 
|                                                        |                               | Payments due by Period |           
|                                                        |                               |                        |           
|(Dollars in thousands)                                  |                               | Total                  |            |            | 2006 |   |         | 2007    |  |   | 2008    |           |  | 2009 |         |           | 2010 |   |         | Thereafter | 
|                                                        |                               |                        |            |            |      |   |         |         |  |   |         |           |  |      |         |           |      |   |         |            | 
|Mortgage debt(a)                                        |                               | $                      | 3,223,914  |            |      | $ | 6,122   |         |  | $ | 242,464 |           |  | $    | 219,699 |           |      | $ | 634,352 |            |  | $ | 449,654   |           |  | $ | 1,671,623 |          
|Unsecured notes(a)                                      |                               |                        | 10,006,493 |            |      |   | 102,924 |         |  |   | 988,523 |           |  |      | 490,333 |           |      |   | 862,475 |            |  |   | 1,564,207 |           |  |   | 5,998,031 |          
|Line of Credit                                          |                               |                        | 1,886,000  |            |      |   |        |         |  |   |        |           |  |      |        |           |      |   |        |            |  |   | 1,886,000 |           |  |   |          |          
|Series B Preferred Units                                |                               |                        | 299,497    |            |      |   |        |         |  |   |        |           |  |      | 299,497 |           |      |   |        |            |  |   |          |           |  |   |          |          
|Share of mortgage debt of unconsolidated joint ventures |                               |                        | 167,741    |            |      |   | 548     |         |  |   | 2,245   |           |  |      | 2,403   |           |      |   | 9,922   |            |  |   | 3,297     |           |  |   | 149,326   |          
|Consolidated operating lease obligations(b)             |                               |                        | 1,409,883  |            |      |   | 5,836   |         |  |   | 23,556  |           |  |      | 23,292  |           |      |   | 23,079  |            |  |   | 23,165    |           |  |   | 1,310,955 |          
|                                                        |                               |                        |            |            |      |   |         |         |  |   |         |           |  |      |         |           |      |   |         |            | 
|                                                        | Total Contractual Obligations |                        | $          | 16,993,528 |      |   | $       | 115,430 |  |   | $       | 1,256,788 |  |      | $       | 1,035,224 |      |   | $       | 1,529,828  |  |   | $         | 3,926,323 |  |   | $         | 9,129,935 | 
|                                                        |                               |                        |            |            |      |   |         |         |  |   |         |           |  |      |         |           |      |   |         |            | 



|    |                                             
|--- | --------------------------------------------
|(a) | Balance excludes net discounts and premiums.



|    |  |                                                                                                                                                          
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) |  | Represents payments due under long-term leases in which we are
    the lessee of ground parcels and air rights associated with our
    office properties.





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





| |                 
| | ----------------
| | Energy Contracts



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





| |                      
| | ---------------------
| | Property Acquisitions



Debt Financing




| |                  
| | -----------------
| | Consolidated Debt



|                                           |                                     |                                     |       |       |              |            |            |      |           |            |            | 
|------------------------------------------ | ----------------------------------- | ----------------------------------- | ----- | ----- | ------------ | ---------- | ---------- | ---- | --------- | ---------- | ---------- | 
|                                           |                                     | September 30,                       |       |       | December 31, |           
|(Dollars in thousands)                     |                                     | 2006                                |       |       | 2005         |           
|                                           |                                     |                                     |       |       |              |           
|Balance (includes discounts and premiums): |                                     |                                     |       |       |              |            |            |     
|                                           | Fixed rate:                         |                                     |       |       |              |            |            |      |          
|                                           |                                     | Mortgage debt                       |       | $     | 3,043,467    |            |            | $    | 1,988,377 |           
|                                           |                                     | Unsecured notes                     |       |       | 9,737,289    |            |            |      | 8,787,620 |           
|                                           |                                     |                                     |       |       |              |           
|                                           |                                     |                                     | Total |       |              | 12,780,756 |            |      |           | 10,775,997 |           
|                                           |                                     |                                     |       |       |              |           
|                                           | Variable rate(a):                   |                                     |       |       |              |            |            |      |          
|                                           |                                     | Mortgage debt                       |       |       | 175,821      |            |            |      | 175,821   |           
|                                           |                                     | Unsecured notes and lines of credit |       |       | 2,131,000    |            |            |      | 1,876,000 |           
|                                           |                                     |                                     |       |       |              |           
|                                           |                                     |                                     | Total |       |              | 2,306,821  |            |      |           | 2,051,821  |           
|                                           |                                     |                                     |       |       |              |           
|                                           |                                     |                                     |       | Total |              | $          | 15,087,577 |      |           | $          | 12,827,818 | 
|                                           |                                     |                                     |       |       |              |           
|Percent of total debt:                     |                                     |                                     |       |       |              |            |            |     
|                                           | Fixed rate                          |                                     |       | 84.7  | %            |            |            | 84.0 | %        
|                                           | Variable rate(a)                    |                                     |       | 15.3  | %            |            |            | 16.0 | %        
|                                           |                                     |                                     |       |       |              |           
|                                           |                                     |                                     | Total |       |              | 100.0      | %          |      |           | 100.0      | %         
|                                           |                                     |                                     |       |       |              |           
|                                           | Mortgage debt                       |                                     |       | 21.3  | %            |            |            | 16.9 | %        
|                                           | Unsecured notes and lines of credit |                                     |       | 78.7  | %            |            |            | 83.1 | %        
|                                           |                                     |                                     |       |       |              |           
|                                           |                                     |                                     | Total |       |              | 100.0      | %          |      |           | 100.0      | %         
|                                           |                                     |                                     |       |       |              |           

50



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|                                          |                   |                                     |                         |       |              |      |      |   |      |      |      |  
|----------------------------------------- | ----------------- | ----------------------------------- | ----------------------- | ----- | ------------ | ---- | ---- | - | ---- | ---- | ---- | -
|                                          |                   | September 30,                       |                         |       | December 31, |     
|(Dollars in thousands)                    |                   | 2006                                |                         |       | 2005         |     
|                                          |                   |                                     |                         |       |              |     
|Effective interest rate at end of period: |                   |                                     |                         |       |              |      |      |  
|                                          | Fixed rate:       |                                     |                         |       |              |      |      |   |     
|                                          |                   | Mortgage debt                       |                         |       | 6.43         | %    |      |   | 7.01 | %   
|                                          |                   | Unsecured notes                     |                         |       | 6.34         | %    |      |   | 6.80 | %   
|                                          |                   |                                     |                         |       |              |     
|                                          |                   |                                     | Effective interest rate |       |              | 6.36 | %    |   |      | 6.84 | %   
|                                          |                   |                                     |                         |       |              |     
|                                          | Variable rate(a): |                                     |                         |       |              |      |      |   |     
|                                          |                   | Mortgage debt                       |                         |       | 6.13         | %    |      |   | 5.17 | %   
|                                          |                   | Unsecured notes and lines of credit |                         |       | 6.05         | %    |      |   | 5.02 | %   
|                                          |                   |                                     |                         |       |              |     
|                                          |                   |                                     | Effective interest rate |       |              | 6.05 | %    |   |      | 5.03 | %   
|                                          |                   |                                     |                         |       |              |     
|                                          |                   |                                     |                         | Total |              |      | 6.31 | % |      |      | 6.55 | %
|                                          |                   |                                     |                         |       |              |     



|    |  |                                                                                           
|--- |  | ------------------------------------------------------------------------------------------
|(a) |  | The interest rates for the variable rate debt are based on
    various spreads over LIBOR.



| |                                  
| | ---------------------------------
| | Unconsolidated Joint Venture Debt



|                                           |               |               |   |         |              |   |   |         |         |  
|------------------------------------------ | ------------- | ------------- | - | ------- | ------------ | - | - | ------- | ------- | -
|                                           |               | September 30, |   |         | December 31, |  
|(Dollars in thousands)                     |               | 2006          |   |         | 2005         |  
|                                           |               |               |   |         |              |  
|Balance (includes discounts and premiums): |               |               |   |         |              |   |   |        
|                                           | Fixed rate    |               | $ | 163,891 |              |   | $ | 472,372 |        
|                                           | Variable rate |               |   | 3,850   |              |   |   | 1,353   |        
|                                           |               |               |   |         |              |  
|                                           |               | Total         |   | $       | 167,741      |   |   | $       | 473,725 |  
|                                           |               |               |   |         |              |  
|Effective interest rate at end of period:  |               |               |   |         |              |   |   |        
|                                           | Fixed rate    |               |   | 5.41    | %            |   |   | 5.47    | %      
|                                           | Variable rate |               |   | 8.72    | %            |   |   | 10.40   | %      
|                                           |               |               |   |         |              |  
|                                           |               | Total         |   |         | 5.49         | % |   |         | 5.48    | %
|                                           |               |               |   |         |              |  

51



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##### Table of Contents





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



|                                 |                                                         |                        |           |         |         |  
|-------------------------------- | ------------------------------------------------------- | ---------------------- | --------- | ------- | ------- | -
|                                 |                                                         | (Dollars in thousands) |          
|                                 |                                                         |                        |          
|Balance at December 31, 2005(a)  |                                                         | $                      | 2,169,383 |        
|                                 | Scheduled principal amortization prior to maturity      |                        |           | (14,824 | )      
|                                 | Consolidation of mortgage debt                          |                        |           | 682,222 |        
|                                 | Mortgage financings                                     |                        |           | 585,000 |        
|                                 | Assumed through a property acquisition                  |                        |           | 15,200  |        
|                                 |                                                         |                        |          
|Balance at June 30, 2006(a)      |                                                         |                        | 3,436,981 |        
|                                 | Scheduled principal amortization prior to maturity      |                        |           | (6,914  | )      
|                                 | Repayment of debt encumbering the following properties: |                        |           |         |        
|                                 |                                                         | Bayhill Office Center  |           |         | (83,862 | )
|                                 |                                                         | Promenade II           |           |         | (97,409 | )
|                                 |                                                         | E.J. Randolph          |           |         | (13,050 | )
|                                 |                                                         | Northridge I           |           |         | (11,832 | )
|                                 |                                                         |                        |          
|Balance at September 30, 2006(a) |                                                         | $                      | 3,223,914 |        
|                                 |                                                         |                        |          



|    |  |                                                                                                                                                                                
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Excludes net discounts on mortgage debt of $5.2 million,
    $5.0 million and $4.6 million as of December 31,
    2005, June 30, 2006 and September 30, 2006,
    respectively.





| |                                           
| | ------------------------------------------
| | Unconsolidated Joint Venture Mortgage Debt



|                              |                                                    |                        |         |          |  
|----------------------------- | -------------------------------------------------- | ---------------------- | ------- | -------- | -
|                              |                                                    | (Dollars in thousands) |        
|                              |                                                    |                        |        
|Balance at December 31, 2005  |                                                    | $                      | 473,725 |         
|                              | Scheduled principal amortization prior to maturity |                        |         | (1,061   | )
|                              | Consolidation of mortgage debt                     |                        |         | (306,902 | )
|                              |                                                    |                        |        
|Balance at June 30, 2006      |                                                    |                        | 165,762 |         
|                              | Scheduled principal amortization prior to maturity |                        |         | (518     | )
|                              | 1700 Market Street refinancing                     |                        |         | 2,497    |  
|                              |                                                    |                        |        
|Balance at September 30, 2006 |                                                    | $                      | 167,741 |         
|                              |                                                    |                        |        



| |                              
| | -----------------------------
| | Restrictions on Mortgage Debt





| |                
| | ---------------
| | Lines of Credit



| |           
| | ----------
| | Term Loans



52



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##### Table of Contents











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







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



|                                 |            |                        |            |           |  
|-------------------------------- | ---------- | ---------------------- | ---------- | --------- | -
|                                 |            | (Dollars in thousands) |           
|                                 |            |                        |           
|Balance at December 31, 2005(a)  |            | $                      | 9,056,556  |          
|                                 | Repayments |                        |            | (500,063  | )
|                                 | Issuance   |                        |            | 1,500,000 |  
|                                 |            |                        |           
|Balance at June 30, 2006(a)      |            |                        | 10,056,493 |          
|                                 | Repayments |                        |            | (50,000   | )
|                                 |            |                        |           
|Balance at September 30, 2006(a) |            | $                      | 10,006,493 |          
|                                 |            |                        |           



|    |                                                                                                                                                           
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Excludes net discounts of $23.9 million, $24.4 million
    and $24.2 million at December 31, 2005, June 30,
    2006 and September 30, 2006, respectively.







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



53



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##### Table of Contents







| |            
| | -----------
| | Market Risk

10-K




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



|                                  |                                                                                                                                              |  |             |             |  
|--------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------- | ----------- | -
|Outstanding at December 31, 2005  |                                                                                                                                              |  | 424,314,764 |            
|                                  | Repurchased and retired under Equity Offices open market
    repurchase program (at an average purchase price of
    $34.03 per unit)(a)    |  |             | (35,593,840 | )
|                                  | Repurchased and retired under Equity Offices Supplemental
    Retirement Savings Plan (at an average purchase price of
    $33.76 per unit) |  |             | (102,570    | )
|                                  | Issued to Equity Office upon exercise of share options                                                                                       |  |             | 3,068,002   |  
|                                  | Units redeemed for cash (at an average purchase price of
    $30.89 per unit)                                                                |  |             | (2,845,536  | )
|                                  | Issued to Equity Office related to restricted shares issued to
    employees, net of cancellations                                           |  |             | 548,143     |  
|                                  | Units issued to fund for Equity Offices Board of Trustees
    fees                                                                          |  |             | 17,412      |  
|                                  |                                                                                                                                              |  |            
|Outstanding at June 30, 2006      |                                                                                                                                              |  | 389,406,375 |            
|                                  | Repurchased and retired under Equity Offices Supplemental
    Retirement Savings Plan (at an average purchase price of
    $38.08 per unit) |  |             | (76,908     | )
|                                  | Issued to Equity Office upon exercise of share options                                                                                       |  |             | 1,541,069   |  
|                                  | Units redeemed for cash (at an average purchase price of
    $37.17 per unit)                                                                |  |             | (292,841    | )
|                                  | Issued to Equity Office related to restricted share
    cancellations, net of restricted shares issued to employees                          |  |             | (184,640    | )
|                                  | Units issued to fund Equity Offices Board of Trustees fees                                                                                  |  |             | 6,849       |  
|                                  |                                                                                                                                              |  |            
|Outstanding at September 30, 2006 |                                                                                                                                              |  | 390,399,904 |            
|                                  |                                                                                                                                              |  |            



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Under Equity Offices open market repurchase program
    announced in July 2002, as amended, Equity Offices Board
    of Trustees has authorized the repurchase of up to
    $2.6 billion of Common Shares in the open market or in
    privately-negotiated transactions through May 31, 2007. As
    of September 30, 2006, $296.6 million of unexercised
    authority remains available to repurchase Common Shares under
    the program. Common Shares repurchased to fund Equity
    Offices employee benefit programs, including the Employee
    Share Purchase Plan and Supplemental Retirement Savings Plan,
    are not considered part of the repurchase program.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In June 2006, in a separate authorization, Equity Offices
    Board of Trustees also approved the repurchase an additional
    $450.0 million of Common Shares concurrent with our
    issuance of $1.5 billion exchangeable unsecured notes (see
    Item 1  Note 8). Of the Common Shares
    repurchased during the six months ended June 30, 2006,
    17,196,740 Common Shares were repurchased concurrently with our
    issuance of $1.5 billion of exchangeable unsecured notes.
|
| | In conjunction with such repurchases, we purchased from Equity
    Office and retired a corresponding number of Units for an
    aggregate cash purchase price equal to the aggregate purchase
    price for all Common Share repurchases.                                                                                                                                                                                                                                                

54



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##### Table of Contents



Capital Improvements, Tenant Improvements and Leasing
Costs




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





| |   |                                                                                                                                                                                                                                                                                                            
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Capital Improvements  costs for 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  costs
    associated with the development or redevelopment of a property
    including construction costs, tenant improvements, leasing
    commissions, capitalized interest and operating costs incurred
    while the property is made ready for its intended use.



|                       |                                           |                                          |   |              |             |  |       |             |              |  |            |              |     |             |       |        |             |  |   |     |     |  |   |   |   | 
|---------------------- | ----------------------------------------- | ---------------------------------------- | - | ------------ | ----------- |  | ----- | ----------- | ------------ |  | ---------- | ------------ | --- | ----------- | ----- | ------ | ----------- |  | - | --- | --- |  | - | - | - | 
|                       |                                           | For the three months ended September 30, |  
|                       |                                           |                                          |  
|                       |                                           | 2006                                     |   |              | 2005        | 
|                       |                                           |                                          |   |              |             | 
|                       |                                           |                                          |   | Consolidated |             |  |       |             | Consolidated | 
|                       |                                           |                                          |   | Consolidated |             |  | Joint |             |              |  |            | Consolidated |     |             | Joint |       
|                       |                                           | Wholly-                                  |   |              | Joint       |  |       | Ventures    |              |  | Wholly-    |              |     | Joint       |       |        | Ventures    | 
|                       |                                           | Owned                                    |   |              | Ventures    |  |       | (JV Partner |              |  | Owned      |              |     | Ventures    |       |        | (JV Partner | 
|(Dollars in thousands) |                                           | Properties                               |   |              | (Our Share) |  |       | Share)      |              |  | Properties |              |     | (Our Share) |       |        | Share)      | 
|                       |                                           |                                          |   |              |             |  |       |             |              |  |            |              |     |             |       |        |             | 
|Capital Improvements:  |                                           |                                          |   |              |             |  |       |             |              |  |            |              |     |             |       |        |             |  |   |     |     |  |   |  
|                       | Capital improvements                      |                                          | $ | 19,672       |             |  | $     | 1,484       |              |  | $          | 950          |     |             | $     | 11,846 |             |  | $ | 556 |     |  | $ | 9 |  
|                       | Development costs and redevelopment costs |                                          |   | 51,166       |             |  |       |            |              |  |            |             |     |             |       | 1,977  |             |  |   |    |     |  |   |  |  
|                       |                                           |                                          |   |              |             |  |       |             |              |  |            |              |     |             |       |        |             | 
|                       |                                           | Total capital improvements               |   | $            | 70,838      |  |       | $           | 1,484        |  |            | $            | 950 |             |       | $      | 13,823      |  |   | $   | 556 |  |   | $ | 9 | 
|                       |                                           |                                          |   |              |             |  |       |             |              |  |            |              |     |             |       |        |             | 

|                       |                                           |                                         |   |              |             |  |       |             |              |  |            |              |       |             |       |        |             |  |   |       |       |  |   |    |    | 
|---------------------- | ----------------------------------------- | --------------------------------------- | - | ------------ | ----------- |  | ----- | ----------- | ------------ |  | ---------- | ------------ | ----- | ----------- | ----- | ------ | ----------- |  | - | ----- | ----- |  | - | -- | -- | 
|                       |                                           | For the nine months ended September 30, |  
|                       |                                           |                                         |  
|                       |                                           | 2006                                    |   |              | 2005        | 
|                       |                                           |                                         |   |              |             | 
|                       |                                           |                                         |   | Consolidated |             |  |       |             | Consolidated | 
|                       |                                           |                                         |   | Consolidated |             |  | Joint |             |              |  |            | Consolidated |       |             | Joint |       
|                       |                                           | Wholly-                                 |   |              | Joint       |  |       | Ventures    |              |  | Wholly-    |              |       | Joint       |       |        | Ventures    | 
|                       |                                           | Owned                                   |   |              | Ventures    |  |       | (JV Partner |              |  | Owned      |              |       | Ventures    |       |        | (JV Partner | 
|(Dollars in thousands) |                                           | Properties                              |   |              | (Our Share) |  |       | Share)      |              |  | Properties |              |       | (Our Share) |       |        | Share)      | 
|                       |                                           |                                         |   |              |             |  |       |             |              |  |            |              |       |             |       |        |             | 
|Capital Improvements:  |                                           |                                         |   |              |             |  |       |             |              |  |            |              |       |             |       |        |             |  |   |       |       |  |   |   
|                       | Capital improvements                      |                                         | $ | 53,629       |             |  | $     | 4,206       |              |  | $          | 4,739        |       |             | $     | 26,991 |             |  | $ | 1,358 |       |  | $ | 27 |   
|                       | Development costs and redevelopment costs |                                         |   | 107,023      |             |  |       |            |              |  |            |             |       |             |       | 6,672  |             |  |   |      |       |  |   |   |   
|                       |                                           |                                         |   |              |             |  |       |             |              |  |            |              |       |             |       |        |             | 
|                       |                                           | Total capital improvements              |   | $            | 160,652     |  |       | $           | 4,206        |  |            | $            | 4,739 |             |       | $      | 33,663      |  |   | $     | 1,358 |  |   | $  | 27 | 
|                       |                                           |                                         |   |              |             |  |       |             |              |  |            |              |       |             |       |        |             | 





| |                                      
| | -------------------------------------
| | Tenant Improvements and Leasing Costs





55



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##### Table of Contents



|                                                       |                                               |                                          |   |        |              |  |   |             |       |  |              |         |         |  |   |       |       | 
|------------------------------------------------------ | --------------------------------------------- | ---------------------------------------- | - | ------ | ------------ |  | - | ----------- | ----- |  | ------------ | ------- | ------- |  | - | ----- | ----- | 
|                                                       |                                               | For the three months ended September 30, |  
|                                                       |                                               |                                          |  
|                                                       |                                               | 2006                                     |   |        | 2005         | 
|                                                       |                                               |                                          |   |        |              | 
|                                                       |                                               | Tenant                                   |   |        | Weighted     |  |   | Tenant      |       |  | Weighted     |        
|                                                       |                                               | Improvement                              |   |        | Average Cost |  |   | Improvement |       |  | Average Cost |        
|                                                       |                                               | and Leasing                              |   |        | per Square   |  |   | and Leasing |       |  | per Square   |        
|(Dollars in thousands, except per square foot amounts) |                                               | Costs                                    |   |        | Foot Leased  |  |   | Costs       |       |  | Foot Leased  |        
|                                                       |                                               |                                          |   |        |              |  |   |             |       |  |              |        
|Wholly-Owned Properties:                               |                                               |                                          |   |        |              |  |   |             |       |  |              |         |         |  |   |      
|                                                       | Renewals                                      |                                          | $ | 12,039 |              |  | $ | 9.16        |       |  | $            | 21,988  |         |  | $ | 11.02 |      
|                                                       |                                               |                                          |   |        |              |  |   |             |       |  |              |        
|                                                       | Retenanted                                    |                                          |   |        |              |  |   |             |       |  |              |         |         |  |   |       |      
|                                                       |                                               | Vacant for less than 12 months           |   |        | 33,166       |  |   |             | 23.75 |  |              |         | 51,793  |  |   |       | 25.84 | 
|                                                       |                                               | Vacant longer than 12 months             |   |        | 17,890       |  |   |             | 33.91 |  |              |         | 20,462  |  |   |       | 25.14 | 
|                                                       |                                               |                                          |   |        |              |  |   |             |       |  |              |        
|                                                       | Total Retenanted                              |                                          |   | 51,056 |              |  |   | 26.53       |       |  |              | 72,255  |         |  |   | 25.64 |      
|                                                       |                                               |                                          |   |        |              |  |   |             |       |  |              |        
|                                                       |                                               | Total/ Weighted Average                  |   |        | 63,095       |  |   |             | 19.48 |  |              |         | 94,243  |  |   |       | 19.58 | 
|                                                       |                                               |                                          |   |        |              |  |   |             |       |  |              |        
|Consolidated Joint Ventures (Our Share):               |                                               |                                          |   |        |              |  |   |             |       |  |              |         |         |  |   |      
|                                                       | Renewals                                      |                                          |   | 1,298  |              |  |   | 14.00       |       |  |              | 233     |         |  |   | 9.05  |      
|                                                       |                                               |                                          |   |        |              |  |   |             |       |  |              |        
|                                                       | Retenanted                                    |                                          |   |        |              |  |   |             |       |  |              |         |         |  |   |       |      
|                                                       |                                               | Vacant for less than 12 months           |   |        | 3,090        |  |   |             | 20.60 |  |              |         | 4,947   |  |   |       | 32.34 | 
|                                                       |                                               | Vacant longer than 12 months             |   |        | 3,405        |  |   |             | 52.49 |  |              |         | 205     |  |   |       | 24.78 | 
|                                                       |                                               |                                          |   |        |              |  |   |             |       |  |              |        
|                                                       | Total Retenanted                              |                                          |   | 6,495  |              |  |   | 30.23       |       |  |              | 5,152   |         |  |   | 31.95 |      
|                                                       |                                               |                                          |   |        |              |  |   |             |       |  |              |        
|                                                       |                                               | Total/ Weighted Average                  |   |        | 7,793        |  |   |             | 25.34 |  |              |         | 5,385   |  |   |       | 28.80 | 
|                                                       |                                               |                                          |   |        |              |  |   |             |       |  |              |        
|Consolidated Joint Ventures (JV Partner Share):        |                                               |                                          |   |        |              |  |   |             |       |  |              |         |         |  |   |      
|                                                       | Renewals                                      |                                          |   | 1,290  |              |  |   | 25.53       |       |  |              | 108     |         |  |   | 10.38 |      
|                                                       |                                               |                                          |   |        |              |  |   |             |       |  |              |        
|                                                       | Retenanted                                    |                                          |   |        |              |  |   |             |       |  |              |         |         |  |   |       |      
|                                                       |                                               | Vacant for less than 12 months           |   |        | 2,298        |  |   |             | 14.96 |  |              |         | 206     |  |   |       | 16.84 | 
|                                                       |                                               | Vacant longer than 12 months             |   |        | 2,647        |  |   |             | 47.07 |  |              |         | 1       |  |   |       | 1.39  | 
|                                                       |                                               |                                          |   |        |              |  |   |             |       |  |              |        
|                                                       | Total Retenanted                              |                                          |   | 4,945  |              |  |   | 23.56       |       |  |              | 207     |         |  |   | 15.69 |      
|                                                       |                                               |                                          |   |        |              |  |   |             |       |  |              |        
|                                                       |                                               | Total/ Weighted Average                  |   |        | 6,235        |  |   |             | 23.94 |  |              |         | 315     |  |   |       | 13.35 | 
|                                                       |                                               |                                          |   |        |              |  |   |             |       |  |              |        
|Unconsolidated Joint Ventures (Our Share):             |                                               |                                          |   |        |              |  |   |             |       |  |              |         |         |  |   |      
|                                                       | Renewals                                      |                                          |   | 151    |              |  |   | 22.24       |       |  |              | 922     |         |  |   | 21.33 |      
|                                                       |                                               |                                          |   |        |              |  |   |             |       |  |              |        
|                                                       | Retenanted                                    |                                          |   |        |              |  |   |             |       |  |              |         |         |  |   |       |      
|                                                       |                                               | Vacant for less than 12 months           |   |        | 33           |  |   |             | 17.31 |  |              |         | 3,211   |  |   |       | 32.28 | 
|                                                       |                                               | Vacant longer than 12 months             |   |        | 3,290        |  |   |             | 75.71 |  |              |         | 3,898   |  |   |       | 45.53 | 
|                                                       |                                               |                                          |   |        |              |  |   |             |       |  |              |        
|                                                       | Total Retenanted                              |                                          |   | 3,323  |              |  |   | 73.26       |       |  |              | 7,109   |         |  |   | 38.41 |      
|                                                       |                                               |                                          |   |        |              |  |   |             |       |  |              |        
|                                                       |                                               | Total/ Weighted Average                  |   |        | 3,474        |  |   |             | 66.62 |  |              |         | 8,031   |  |   |       | 35.18 | 
|                                                       |                                               |                                          |   |        |              |  |   |             |       |  |              |        
|Totals:                                                |                                               |                                          |   |        |              |  |   |             |       |  |              |         |         |  |   |      
|                                                       | Our share of Total/ Weighted Average          |                                          |   | 74,362 |              |  |   | 20.66       |       |  |              | 107,659 |         |  |   | 20.59 |      
|                                                       | JV partners share of Total/ Weighted Average |                                          |   | 6,235  |              |  |   | 23.94       |       |  |              | 315     |         |  |   | 13.35 |      
|                                                       |                                               |                                          |   |        |              |  |   |             |       |  |              |        
|                                                       |                                               | Total/ Weighted Average                  |   | $      | 80,597       |  |   | $           | 20.88 |  |              | $       | 107,974 |  |   | $     | 20.57 | 
|                                                       |                                               |                                          |   |        |              |  |   |             |       |  |              |        

56



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##### Table of Contents



|                                                       |                                               |                                         |   |         |              |  |   |             |       |  |              |         |         |  |   |       |       | 
|------------------------------------------------------ | --------------------------------------------- | --------------------------------------- | - | ------- | ------------ |  | - | ----------- | ----- |  | ------------ | ------- | ------- |  | - | ----- | ----- | 
|                                                       |                                               | For the nine months ended September 30, |  
|                                                       |                                               |                                         |  
|                                                       |                                               | 2006                                    |   |         | 2005         | 
|                                                       |                                               |                                         |   |         |              | 
|                                                       |                                               | Tenant                                  |   |         | Weighted     |  |   | Tenant      |       |  | Weighted     |        
|                                                       |                                               | Improvement                             |   |         | Average Cost |  |   | Improvement |       |  | Average Cost |        
|                                                       |                                               | and Leasing                             |   |         | per Square   |  |   | and Leasing |       |  | per Square   |        
|(Dollars in thousands, except per square foot amounts) |                                               | Costs                                   |   |         | Foot Leased  |  |   | Costs       |       |  | Foot Leased  |        
|                                                       |                                               |                                         |   |         |              |  |   |             |       |  |              |        
|Wholly-Owned Properties:                               |                                               |                                         |   |         |              |  |   |             |       |  |              |         |         |  |   |      
|                                                       | Renewals                                      |                                         | $ | 42,024  |              |  | $ | 9.00        |       |  | $            | 69,450  |         |  | $ | 11.06 |      
|                                                       |                                               |                                         |   |         |              |  |   |             |       |  |              |        
|                                                       | Retenanted                                    |                                         |   |         |              |  |   |             |       |  |              |         |         |  |   |       |      
|                                                       |                                               | Vacant for less than 12 months          |   |         | 95,209       |  |   |             | 21.99 |  |              |         | 103,270 |  |   |       | 21.94 | 
|                                                       |                                               | Vacant longer than 12 months            |   |         | 46,454       |  |   |             | 29.00 |  |              |         | 64,761  |  |   |       | 27.09 | 
|                                                       |                                               |                                         |   |         |              |  |   |             |       |  |              |        
|                                                       | Total Retenanted                              |                                         |   | 141,663 |              |  |   | 23.89       |       |  |              | 168,031 |         |  |   | 23.67 |      
|                                                       |                                               |                                         |   |         |              |  |   |             |       |  |              |        
|                                                       |                                               | Total/ Weighted Average                 |   |         | 183,687      |  |   |             | 17.33 |  |              |         | 237,481 |  |   |       | 17.75 | 
|                                                       |                                               |                                         |   |         |              |  |   |             |       |  |              |        
|Consolidated Joint Ventures (Our Share):               |                                               |                                         |   |         |              |  |   |             |       |  |              |         |         |  |   |      
|                                                       | Renewals                                      |                                         |   | 6,940   |              |  |   | 13.18       |       |  |              | 22,524  |         |  |   | 40.31 |      
|                                                       |                                               |                                         |   |         |              |  |   |             |       |  |              |        
|                                                       | Retenanted                                    |                                         |   |         |              |  |   |             |       |  |              |         |         |  |   |       |      
|                                                       |                                               | Vacant for less than 12 months          |   |         | 10,916       |  |   |             | 25.60 |  |              |         | 13,146  |  |   |       | 21.45 | 
|                                                       |                                               | Vacant longer than 12 months            |   |         | 8,219        |  |   |             | 51.18 |  |              |         | 1,682   |  |   |       | 32.13 | 
|                                                       |                                               |                                         |   |         |              |  |   |             |       |  |              |        
|                                                       | Total Retenanted                              |                                         |   | 19,135  |              |  |   | 32.60       |       |  |              | 14,828  |         |  |   | 22.29 |      
|                                                       |                                               |                                         |   |         |              |  |   |             |       |  |              |        
|                                                       |                                               | Total/ Weighted Average                 |   |         | 26,075       |  |   |             | 23.42 |  |              |         | 37,352  |  |   |       | 30.52 | 
|                                                       |                                               |                                         |   |         |              |  |   |             |       |  |              |        
|Consolidated Joint Ventures (JV Partner Share):        |                                               |                                         |   |         |              |  |   |             |       |  |              |         |         |  |   |      
|                                                       | Renewals                                      |                                         |   | 3,230   |              |  |   | 11.29       |       |  |              | 185     |         |  |   | 8.79  |      
|                                                       |                                               |                                         |   |         |              |  |   |             |       |  |              |        
|                                                       | Retenanted                                    |                                         |   |         |              |  |   |             |       |  |              |         |         |  |   |       |      
|                                                       |                                               | Vacant for less than 12 months          |   |         | 8,425        |  |   |             | 24.28 |  |              |         | 432     |  |   |       | 22.89 | 
|                                                       |                                               | Vacant longer than 12 months            |   |         | 5,855        |  |   |             | 44.08 |  |              |         | 108     |  |   |       | 23.91 | 
|                                                       |                                               |                                         |   |         |              |  |   |             |       |  |              |        
|                                                       | Total Retenanted                              |                                         |   | 14,280  |              |  |   | 29.76       |       |  |              | 540     |         |  |   | 23.08 |      
|                                                       |                                               |                                         |   |         |              |  |   |             |       |  |              |        
|                                                       |                                               | Total/ Weighted Average                 |   |         | 17,510       |  |   |             | 22.86 |  |              |         | 725     |  |   |       | 16.32 | 
|                                                       |                                               |                                         |   |         |              |  |   |             |       |  |              |        
|Unconsolidated Joint Ventures (Our Share):             |                                               |                                         |   |         |              |  |   |             |       |  |              |         |         |  |   |      
|                                                       | Renewals                                      |                                         |   | 230     |              |  |   | 12.81       |       |  |              | 2,048   |         |  |   | 13.31 |      
|                                                       |                                               |                                         |   |         |              |  |   |             |       |  |              |        
|                                                       | Retenanted                                    |                                         |   |         |              |  |   |             |       |  |              |         |         |  |   |       |      
|                                                       |                                               | Vacant for less than 12 months          |   |         | 980          |  |   |             | 43.63 |  |              |         | 9,830   |  |   |       | 32.42 | 
|                                                       |                                               | Vacant longer than 12 months            |   |         | 4,824        |  |   |             | 59.61 |  |              |         | 13,374  |  |   |       | 50.22 | 
|                                                       |                                               |                                         |   |         |              |  |   |             |       |  |              |        
|                                                       | Total Retenanted                              |                                         |   | 5,804   |              |  |   | 56.14       |       |  |              | 23,204  |         |  |   | 40.75 |      
|                                                       |                                               |                                         |   |         |              |  |   |             |       |  |              |        
|                                                       |                                               | Total/ Weighted Average                 |   |         | 6,034        |  |   |             | 49.72 |  |              |         | 25,252  |  |   |       | 34.91 | 
|                                                       |                                               |                                         |   |         |              |  |   |             |       |  |              |        
|Totals:                                                |                                               |                                         |   |         |              |  |   |             |       |  |              |         |         |  |   |      
|                                                       | Our share of Total/ Weighted Average          |                                         |   | 215,796 |              |  |   | 18.23       |       |  |              | 300,085 |         |  |   | 19.58 |      
|                                                       | JV partners share of Total/ Weighted Average |                                         |   | 17,510  |              |  |   | 22.86       |       |  |              | 725     |         |  |   | 16.32 |      
|                                                       |                                               |                                         |   |         |              |  |   |             |       |  |              |        
|                                                       |                                               | Total/ Weighted Average                 |   | $       | 233,306      |  |   | $           | 18.51 |  |              | $       | 300,810 |  |   | $     | 19.57 | 
|                                                       |                                               |                                         |   |         |              |  |   |             |       |  |              |        



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|                                                                                                             |                                                                   |                            |        |         |         |  |       |         |         | 
|------------------------------------------------------------------------------------------------------------ | ----------------------------------------------------------------- | -------------------------- | ------ | ------- | ------- |  | ----- | ------- | ------- | 
|                                                                                                             |                                                                   | For the three months ended |       
|                                                                                                             |                                                                   | September 30,              |       
|                                                                                                             |                                                                   |                            |       
|(Dollars in thousands)                                                                                       |                                                                   | 2006                       |        |         | 2005    | 
|                                                                                                             |                                                                   |                            |        |         |         | 
|Capital improvements:                                                                                        |                                                                   |                            |        |         |         |  |       |        
|                                                                                                             | Wholly-owned properties                                           |                            | $      | 19,672  |         |  | $     | 11,846  |        
|                                                                                                             | Consolidated joint ventures (our share)                           |                            |        | 1,484   |         |  |       | 556     |        
|                                                                                                             | Consolidated joint ventures (JV partner share)                    |                            |        | 950     |         |  |       | 9       |        
|Tenant improvements and leasing costs:                                                                       |                                                                   |                            |        |         |         |  |       |        
|                                                                                                             | Wholly-owned properties                                           |                            |        | 63,095  |         |  |       | 94,243  |        
|                                                                                                             | Consolidated joint ventures (our share)                           |                            |        | 7,793   |         |  |       | 5,385   |        
|                                                                                                             | Consolidated joint ventures (JV partner share)                    |                            |        | 6,235   |         |  |       | 315     |        
|Expenditures for corporate furniture, fixtures and equipment,
    software, leasehold improvements and other |                                                                   |                            | 1,823  |         |         |  | 8,839 |        
|                                                                                                             |                                                                   |                            |        |         |         | 
|                                                                                                             | Subtotal                                                          |                            |        | 101,052 |         |  |       | 121,193 |        
|Development and redevelopment costs                                                                          |                                                                   |                            | 51,166 |         |         |  | 1,977 |        
|Timing differences                                                                                           |                                                                   |                            | (9,534 | )       |         |  | 7,498 |        
|                                                                                                             |                                                                   |                            |        |         |         | 
|                                                                                                             | Total capital improvements, tenant improvements and leasing costs |                            | $      | 142,684 |         |  | $     | 130,668 |        
|                                                                                                             |                                                                   |                            |        |         |         | 
|Selected items from the consolidated statements of cash
    flows:                                           |                                                                   |                            |        |         |         |  |       |        
|                                                                                                             | Capital and tenant improvements (including development costs)     |                            | $      | 116,136 |         |  | $     | 90,945  |        
|                                                                                                             | Lease commissions and other costs                                 |                            |        | 26,548  |         |  |       | 39,723  |        
|                                                                                                             |                                                                   |                            |        |         |         | 
|                                                                                                             |                                                                   | Total                      |        | $       | 142,684 |  |       | $       | 130,668 | 
|                                                                                                             |                                                                   |                            |        |         |         | 

|                                                                                                             |                                                                   |                           |         |         |         |  |        |         |         | 
|------------------------------------------------------------------------------------------------------------ | ----------------------------------------------------------------- | ------------------------- | ------- | ------- | ------- |  | ------ | ------- | ------- | 
|                                                                                                             |                                                                   | For the nine months ended |        
|                                                                                                             |                                                                   | September 30,             |        
|                                                                                                             |                                                                   |                           |        
|(Dollars in thousands)                                                                                       |                                                                   | 2006                      |         |         | 2005    | 
|                                                                                                             |                                                                   |                           |         |         |         | 
|Capital improvements:                                                                                        |                                                                   |                           |         |         |         |  |        |        
|                                                                                                             | Wholly-owned properties                                           |                           | $       | 53,629  |         |  | $      | 26,991  |        
|                                                                                                             | Consolidated joint ventures (our share)                           |                           |         | 4,206   |         |  |        | 1,358   |        
|                                                                                                             | Consolidated joint ventures (JV partner share)                    |                           |         | 4,739   |         |  |        | 27      |        
|Tenant improvements and leasing costs:                                                                       |                                                                   |                           |         |         |         |  |        |        
|                                                                                                             | Wholly-owned properties                                           |                           |         | 183,687 |         |  |        | 237,481 |        
|                                                                                                             | Consolidated joint ventures (our share)                           |                           |         | 26,075  |         |  |        | 37,352  |        
|                                                                                                             | Consolidated joint ventures (JV partner share)                    |                           |         | 17,510  |         |  |        | 725     |        
|Expenditures for corporate furniture, fixtures and equipment,
    software, leasehold improvements and other |                                                                   |                           | 11,577  |         |         |  | 16,823 |        
|                                                                                                             |                                                                   |                           |         |         |         | 
|                                                                                                             | Subtotal                                                          |                           |         | 301,423 |         |  |        | 320,757 |        
|Development and redevelopment costs                                                                          |                                                                   |                           | 107,023 |         |         |  | 6,672  |        
|Timing differences                                                                                           |                                                                   |                           | 22,248  |         |         |  | 7,952  |        
|                                                                                                             |                                                                   |                           |         |         |         | 
|                                                                                                             | Total capital improvements, tenant improvements and leasing costs |                           | $       | 430,694 |         |  | $      | 335,381 |        
|                                                                                                             |                                                                   |                           |         |         |         | 
|Selected items from the consolidated statements of cash
    flows:                                           |                                                                   |                           |         |         |         |  |        |        
|                                                                                                             | Capital and tenant improvements (including development costs)     |                           | $       | 339,561 |         |  | $      | 241,908 |        
|                                                                                                             | Lease commissions and other costs                                 |                           |         | 91,133  |         |  |        | 93,473  |        
|                                                                                                             |                                                                   |                           |         |         |         | 
|                                                                                                             |                                                                   | Total                     |         | $       | 430,694 |  |        | $       | 335,381 | 
|                                                                                                             |                                                                   |                           |         |         |         | 

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Developments in Process




|                                   |       |                |         |  |          |  |                   |           |  |                        |       |   |             |         |           |           |          |   |            |         |  |   |         |           |  |  |    |    |  
|---------------------------------- | ----- | -------------- | ------- |  | -------- |  | ----------------- | --------- |  | ---------------------- | ----- | - | ----------- | ------- | --------- | --------- | -------- | - | ---------- | ------- |  | - | ------- | --------- |  |  | -- | -- | -
|                                   |       | Estimated      |         |  |          |  |                   |           |  |                        |       |   |             |         |          
|                                   |       | Certificate of |         |  |          |  |                   |           |  |                        | Costs |   |             | Total   |           |           |         
|                                   |       | Occupancy      |         |  |          |  | Number of         |           |  | Square                 |       |   | Incurred to |         |           | Estimated |          |   | Percentage |        
|Property                           |       | Date(a)        |         |  | Location |  |                   | Buildings |  |                        | Feet  |   |             | Date(b) |           |           | Costs(c) |   |            | Leased  | 
|                                   |       |                |         |  |          |  |                   |           |  |                        |       |   |             |         |           |           |          |   |            |         | 
|                                   |       |                |         |  |          |  |                   |           |  | (Dollars in thousands) |       |   |            
|Kruse Oaks II(d)                   |       |                | Q4 2006 |  |          |  | Portland, OR      |           |  |                        | 1     |   |             |         | 102,000   |           |          | $ | 14,262     |         |  | $ | 20,119  |           |  |  | 21 | % 
|Bridge Pointe Corporate Center III |       |                | Q4 2006 |  |          |  | San Diego, CA     |           |  |                        | 2     |   |             |         | 150,000   |           |          |   | 26,308     |         |  |   | 35,967  |           |  |  | 0  | % 
|1095 Avenue of the Americas(e)     |       |                | Q2 2008 |  |          |  | New York, NY      |           |  |                        | 1     |   |             |         | 1,023,998 |           |          |   | 556,537    |         |  |   | 913,864 |           |  |  | 23 | % 
|Foundry Square I (Barclays)        |       |                | Q4 2007 |  |          |  | San Francisco, CA |           |  |                        | 1     |   |             |         | 335,890   |           |          |   | 43,393     |         |  |   | 144,789 |           |  |  | 96 | % 
|City Center Plaza West             |       |                | Q1 2008 |  |          |  | Bellevue, WA      |           |  |                        | 1     |   |             |         | 572,000   |           |          |   | 28,030     |         |  |   | 196,242 |           |  |  | 0  | % 
|Fountaingrove II                   |       |                | Q2 2006 |  |          |  | Santa Rosa, CA    |           |  |                        | 1     |   |             |         | 42,102    |           |          |   | 9,915      |         |  |   | 11,698  |           |  |  | 31 | % 
|                                   |       |                |         |  |          |  |                   |           |  |                        |       |   |             |         |           |           |          |   |            |         | 
|                                   | Total |                |         |  |          |  |                   |           |  |                        |       | 7 |             |         |           | 2,225,990 |          |   | $          | 678,445 |  |   | $       | 1,322,679 |  |  |    | 27 | %
|                                   |       |                |         |  |          |  |                   |           |  |                        |       |   |             |         |           |           |          |   |            |         | 



|    |  |                                                                                                                                                                                                                                       
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | This date represents the date the certificate of occupancy was
    obtained or is currently anticipated to be obtained. Subsequent
    to obtaining the certificate of occupancy, the property will
    undergo a lease-up
    period.
|   
|(b) |  | The Costs Incurred to Date are presented in the balance sheet as
    follows:                                                                                                                                                         

|                                                                                              |                              |                        |         |         | 
|--------------------------------------------------------------------------------------------- | ---------------------------- | ---------------------- | ------- | ------- | 
|                                                                                              |                              | (Dollars in thousands) |        
|                                                                                              |                              |                        |        
|Developments in process                                                                       |                              | $                      | 662,339 |        
|Deferred leasing costs and other related intangibles (excluding
    accumulated amortization) |                              |                        | 16,106  |        
|                                                                                              |                              |                        |        
|                                                                                              | Total costs incurred to date |                        | $       | 678,445 | 
|                                                                                              |                              |                        |        



|    |  |                                                                                                                                                                                                                                                                                                                                 
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(c) |  | The Total Estimated Costs include the acquisition cost of the
    land and building in addition to the costs to develop the
    property. The Total Estimated Costs are subject to change upon,
    or prior to, the completion of the development and include
    amounts required to
    lease-up the property.               
|   
|(d) |  | We lease the land underlying this development from a third
    party. We have the right to acquire this land under certain
    conditions. Total Estimated Costs do not reflect potential costs
    to acquire the land at a future date.                                                                                       
|   
|(e) |  | On September 29, 2005, we acquired 79% of the square
    footage of 1095 Avenue of the Americas. Verizon, the sole
    tenant, occupied 96.8% of the portion of the property acquired
    by us at its acquisition. Verizon moved out in phases throughout
    2006 and, as of September 30, 2006, had vacated the
    premises.



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##### Table of Contents



Inflation




Cash Flows






|                                                         |                                                      |                           |         |          |      |   |         |            |  
|-------------------------------------------------------- | ---------------------------------------------------- | ------------------------- | ------- | -------- | ---- | - | ------- | ---------- | -
|                                                         |                                                      | For the nine months ended |        
|                                                         |                                                      | September 30,             |        
|                                                         |                                                      |                           |        
|(Dollars in thousands)                                   |                                                      | 2006                      |         |          | 2005 |  
|                                                         |                                                      |                           |         |          |      |  
|Cash and cash equivalents at the beginning of the period |                                                      | $                         | 78,164  |          |      | $ | 107,126 |           
|                                                         | Net cash provided by operating activities            |                           |         | 782,297  |      |   |         | 785,573    |  
|                                                         | Net cash (used for) provided by investing activities |                           |         | (699,274 | )    |   |         | 1,039,445  |  
|                                                         | Net cash provided by (used for) financing activities |                           |         | 35,184   |      |   |         | (1,786,231 | )
|                                                         |                                                      |                           |         |          |      |  
|Cash and cash equivalents at the end of the period       |                                                      | $                         | 196,371 |          |      | $ | 145,913 |           
|                                                         |                                                      |                           |         |          |      |  



| |                     
| | --------------------
| | Operating Activities



60



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##### Table of Contents





| |                     
| | --------------------
| | Investing Activities





| |                     
| | --------------------
| | Financing Activities



Analysis of Selected Balance Sheet Items




|                                                                              |  |               |         |  |              |   |         |        |  |   |         |  
|----------------------------------------------------------------------------- |  | ------------- | ------- |  | ------------ | - | ------- | ------ |  | - | ------- | -
|                                                                              |  | September 30, |         |  | December 31, |   |         |       
|(Dollars in thousands)                                                        |  | 2006          |         |  | 2005         |   |         | Change | 
|                                                                              |  |               |         |  |              |   |         |        | 
|Investments in real estate held for sale, net of accumulated
    depreciation |  | $             | 16,896  |  |              | $ | 92,233  |        |  | $ | (75,337 | )
|Escrow deposits and restricted cash                                           |  | $             | 336,501 |  |              | $ | 38,658  |        |  | $ | 297,843 |  
|Deferred financing costs                                                      |  | $             | 92,755  |  |              | $ | 58,809  |        |  | $ | 33,946  |  
|Deferred leasing costs and other related intangibles                          |  | $             | 705,288 |  |              | $ | 522,926 |        |  | $ | 182,362 |  
|Prepaid expenses and other assets                                             |  | $             | 261,044 |  |              | $ | 303,181 |        |  | $ | (42,137 | )
|Distribution payable                                                          |  | $             | 131,711 |  |              | $ | 3,736   |        |  | $ | 127,975 |  
|Other liabilities                                                             |  | $             | 633,286 |  |              | $ | 483,468 |        |  | $ | 149,818 |  



| |                                                                             
| | ----------------------------------------------------------------------------
| | Investment in Real Estate Held for Sale, Net of Accumulated
    Depreciation





| |                                    
| | -----------------------------------
| | Escrow Deposits and Restricted Cash



61



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##### Table of Contents





| |                         
| | ------------------------
| | Deferred Financing Costs





| |                                                     
| | ----------------------------------------------------
| | Deferred Leasing Costs and Other Related Intangibles

Business Combinations




| |                                  
| | ---------------------------------
| | Prepaid Expenses and Other Assets





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





| |                  
| | -----------------
| | Other Liabilities



Related Party Transactions




Subsequent Events






|    |                                           
|--- | ------------------------------------------
|IV. | Critical Accounting Policies and Estimates

10-K






|   |                              
|-- | -----------------------------
|V. | Funds From Operations (FFO)





62



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##### Table of Contents





|                                                                |                                        |                                                                               |  |  |      |   |          |   |         |   |  |  |  |   |         |   |         |  
|--------------------------------------------------------------- | -------------------------------------- | ----------------------------------------------------------------------------- |  |  | ---- | - | -------- | - | ------- | - |  |  |  | - | ------- | - | ------- | -
|                                                                |                                        | For the three months ended September 30,                                      | 
|                                                                |                                        |                                                                               | 
|                                                                |                                        | 2006                                                                          |  |  | 2005 |  
|(Dollars in thousands, except per unit amounts)                 |                                        |                                                                               |  |  |      |  
|                                                                |                                        |                                                                               |  |  |      |   |          |  
|Reconciliation of net (loss) income to FFO(a):                  |                                        |                                                                               |  |  |      |   |          |   |         |   |  |  |  |   |         |  
|Net (loss) income                                               |                                        |                                                                               |  |  |      | $ | (146,203 | ) |         |   |  |  |  | $ | 113,157 |  
|Adjustments:                                                    |                                        |                                                                               |  |  |      |   |          |   |         |   |  |  |  |   |         |  
|                                                                | Plus depreciation and amortization:    |                                                                               |  |  |      |   |          |   |         |   |  |  |  |   |         |   |        
|                                                                |                                        | Included in income from continuing operations and discontinued
    operations |  |  |      |   |          |   | 229,701 |   |  |  |  |   |         |   | 193,688 |  
|                                                                |                                        | Included in income from investments in unconsolidated joint
    ventures      |  |  |      |   |          |   | 2,952   |   |  |  |  |   |         |   | 12,926  |  
|                                                                |                                        | Allocated to minority interests in partially owned properties                 |  |  |      |   |          |   | (17,632 | ) |  |  |  |   |         |   | (1,440  | )
|                                                                |                                        | Non-real estate related depreciation and amortization                         |  |  |      |   |          |   | (5,016  | ) |  |  |  |   |         |   | (3,407  | )
|                                                                | Less net gain on sales of real estate: |                                                                               |  |  |      |   |          |   |         |   |  |  |  |   |         |   |        
|                                                                |                                        | Included in income from continuing operations and discontinued
    operations |  |  |      |   |          |   | (58,494 | ) |  |  |  |   |         |   | (78,505 | )
|                                                                |                                        | Included in income from investments in unconsolidated joint
    ventures      |  |  |      |   |          |   |        |   |  |  |  |   |         |   | (29     | )
|                                                                |                                        |                                                                               |  |  |      |   |          |   |         |   |  | 
|FFO                                                             |                                        |                                                                               |  |  |      |   | 5,308    |   |         |   |  |  |  |   | 236,390 |  
|Preferred distributions                                         |                                        |                                                                               |  |  |      |   | (8,700   | ) |         |   |  |  |  |   | (8,700  | )
|                                                                |                                        |                                                                               |  |  |      |   |          |   |         |   |  | 
|FFO available to unitholders  basic                            |                                        |                                                                               |  |  |      | $ | (3,392   | ) |         |   |  |  |  | $ | 227,690 |  
|                                                                |                                        |                                                                               |  |  |      |   |          |   |         |   |  | 
|Net (loss) income available to unitholders per Unit 
    basic |                                        |                                                                               |  |  |      | $ | (0.40    | ) |         |   |  |  |  | $ | 0.23    |  
|                                                                |                                        |                                                                               |  |  |      |   |          |   |         |   |  | 
|FFO available to unitholders per Unit  basic                   |                                        |                                                                               |  |  |      | $ | (0.01    | ) |         |   |  |  |  | $ | 0.50    |  
|                                                                |                                        |                                                                               |  |  |      |   |          |   |         |   |  | 

|                                                                                 |  |          |             |   |        |   |             |            |  |   |             |   |  |   |             |  
|-------------------------------------------------------------------------------- |  | -------- | ----------- | - | ------ | - | ----------- | ---------- |  | - | ----------- | - |  | - | ----------- | -
|                                                                                 |  | Net Loss |             |   | FFO(b) |   |             | Net Income |  |   | FFO(b)      |  
|                                                                                 |  |          |             |   |        |   |             |            |  |   |             |  
|Adjustments to arrive at net (loss) income and FFO available
    to unitholders: |  |          |             |   |        |   |             |            |  |   |             |   |  |   |             |  
|Net (loss) income and FFO                                                        |  | $        | (146,203    | ) |        | $ | 5,308       |            |  | $ | 113,157     |   |  | $ | 236,390     |  
|Preferred distributions                                                          |  |          | (8,700      | ) |        |   | (8,700      | )          |  |   | (8,700      | ) |  |   | (8,700      | )
|                                                                                 |  |          |             |   |        |   |             |            |  |   |             |  
|Net (loss) income and FFO available to unitholders 
    diluted                 |  | $        | (154,903    | ) |        | $ | (3,392      | )          |  | $ | 104,457     |   |  | $ | 227,690     |  
|                                                                                 |  |          |             |   |        |   |             |            |  |   |             |  
|Weighted average Units and dilutive potential units outstanding                  |  |          | 387,833,388 |   |        |   | 393,266,923 |            |  |   | 457,343,521 |   |  |   | 457,343,521 |  
|                                                                                 |  |          |             |   |        |   |             |            |  |   |             |  
|Net (loss) income and FFO available to unitholders per
    Unit  diluted        |  | $        | (0.40       | ) |        | $ | (0.01       | )          |  | $ | 0.23        |   |  | $ | 0.50        |  
|                                                                                 |  |          |             |   |        |   |             |            |  |   |             |  

|                                                                                                                  |                                                                                              |                            |             |   |  |  |  |  |  |  |             |           | 
|----------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------- | -------------------------- | ----------- | - |  |  |  |  |  |  | ----------- | --------- | 
|                                                                                                                  |                                                                                              | Units and unit equivalents |            
|                                                                                                                  |                                                                                              |                            |            
|Weighted average Units outstanding (used for both net (loss)
    income and FFO basic per unit calculation)       |                                                                                              |                            | 387,833,388 |   |  |  |  |  |  |  | 452,847,362 |          
|Effect of dilutive potential units:                                                                               |                                                                                              |                            |             |   |  |  |  |  |  |  |             |          
|                                                                                                                  | Share options and restricted shares which are dilutive to both
    net (loss) income and FFO |                            |             |  |  |  |  |  |  |  |             | 4,496,159 | 
|                                                                                                                  |                                                                                              |                            |             |   |  |  |  |  | 
|Weighted average Units and dilutive potential units used for net
    (loss) income available to unitholders       |                                                                                              |                            | 387,833,388 |   |  |  |  |  |  |  | 457,343,521 |          
|Impact of share options and restricted shares which are dilutive
    to FFO but not dilutive to net (loss) income |                                                                                              |                            | 5,433,535   |   |  |  |  |  |  |  |            |          
|                                                                                                                  |                                                                                              |                            |             |   |  |  |  |  | 
|Weighted average Units and dilutive potential units used for the
    calculation of FFO available to unitholders  |                                                                                              |                            | 393,266,923 |   |  |  |  |  |  |  | 457,343,521 |          
|                                                                                                                  |                                                                                              |                            |             |   |  |  |  |  | 



|    |                                                                                                                                                              
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | FFO is a non-GAAP financial measure. The most directly
    comparable GAAP measure is net (loss) income, to which it is
    reconciled. See definition below.



|    |  |                                                                                                                                                                                                                                                                                                                                                                                                    
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) |  | FFO for the three months ended September 30, 2006 and 2005
    includes $188.9 million and $3.5 million,
    respectively, of non-cash impairment charges and losses on
    properties sold and properties held for sale, which is
    equivalent to $0.48 and $0.01 per Unit on a diluted basis,
    respectively. These charges are not added back to net (loss)
    income when calculating FFO.

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##### Table of Contents





|                                                     |                                        |                                                                               |                                                                               |  |      |   |         |   |          |         |   |  |  |   |         |   |          |         |  
|---------------------------------------------------- | -------------------------------------- | ----------------------------------------------------------------------------- | ----------------------------------------------------------------------------- |  | ---- | - | ------- | - | -------- | ------- | - |  |  | - | ------- | - | -------- | ------- | -
|                                                     |                                        | For the nine months ended September 30,                                       |                                                                              
|                                                     |                                        |                                                                               |                                                                              
|(Dollars in thousands, except per unit amounts)      |                                        | 2006                                                                          |                                                                               |  | 2005 |  
|                                                     |                                        |                                                                               |                                                                               |  |      |  
|Reconciliation of net income to FFO(a):              |                                        |                                                                               |                                                                               |  |      |   |         |   |          |         |   |  |  |   |         |  
|Net income                                           |                                        |                                                                               |                                                                               |  |      | $ | 19,467  |   |          |         |   |  |  | $ | 14,064  |  
|Adjustments:                                         |                                        |                                                                               |                                                                               |  |      |   |         |   |          |         |   |  |  |   |         |  
|                                                     | Plus depreciation and amortization:    |                                                                               |                                                                               |  |      |   |         |   |          |         |   |  |  |   |         |   |         
|                                                     |                                        |                                                                               | Included in income from continuing operations and discontinued
    operations |  |      |   |         |   |          | 689,006 |   |  |  |   |         |   |          | 598,572 |  
|                                                     |                                        |                                                                               | Included in income from investments in unconsolidated joint
    ventures      |  |      |   |         |   |          | 8,613   |   |  |  |   |         |   |          | 37,974  |  
|                                                     |                                        |                                                                               | Allocated to minority interests in partially owned properties                 |  |      |   |         |   |          | (51,771 | ) |  |  |   |         |   |          | (4,419  | )
|                                                     |                                        |                                                                               | Non-real estate related depreciation and amortization                         |  |      |   |         |   |          | (13,411 | ) |  |  |   |         |   |          | (10,429 | )
|                                                     | Less net gain on sales of real estate: |                                                                               |                                                                               |  |      |   |         |   |          |         |   |  |  |   |         |   |         
|                                                     |                                        | Included in income from continuing operations and discontinued
    operations |                                                                               |  |      |   |         |   | (177,173 | )       |   |  |  |   |         |   | (194,721 | )      
|                                                     |                                        | Included in income from investments in unconsolidated joint
    ventures(b)   |                                                                               |  |      |   |         |   | 91       |         |   |  |  |   |         |   | (17,405  | )      
|                                                     |                                        | Allocated to minority interests in partially owned properties                 |                                                                               |  |      |   |         |   |         |         |   |  |  |   |         |   | 29,699   |        
|                                                     |                                        |                                                                               |                                                                               |  |      |   |         |   |          |         |   | 
|FFO                                                  |                                        |                                                                               |                                                                               |  |      |   | 474,822 |   |          |         |   |  |  |   | 453,335 |  
|Preferred distributions                              |                                        |                                                                               |                                                                               |  |      |   | (26,102 | ) |          |         |   |  |  |   | (26,102 | )
|                                                     |                                        |                                                                               |                                                                               |  |      |   |         |   |          |         |   | 
|FFO available to unitholders  basic                 |                                        |                                                                               |                                                                               |  |      | $ | 448,720 |   |          |         |   |  |  | $ | 427,233 |  
|                                                     |                                        |                                                                               |                                                                               |  |      |   |         |   |          |         |   | 
|Net (loss) available to unitholders per Unit  basic |                                        |                                                                               |                                                                               |  |      | $ | (0.02   | ) |          |         |   |  |  | $ | (0.03   | )
|                                                     |                                        |                                                                               |                                                                               |  |      |   |         |   |          |         |   | 
|FFO available to unitholders per Unit  basic        |                                        |                                                                               |                                                                               |  |      | $ | 1.12    |   |          |         |   |  |  | $ | 0.95    |  
|                                                     |                                        |                                                                               |                                                                               |  |      |   |         |   |          |         |   | 

|                                                                          |  |            |             |   |        |   |             |        |  |   |             |   |  |   |             |  
|------------------------------------------------------------------------- |  | ---------- | ----------- | - | ------ | - | ----------- | ------ |  | - | ----------- | - |  | - | ----------- | -
|                                                                          |  | Net Income |             |   |        |   | Net Income  |        |  |  
|                                                                          |  | (Loss)     |             |   | FFO(c) |   |             | (Loss) |  |   | FFO(c)      |  
|                                                                          |  |            |             |   |        |   |             |        |  |   |             |  
|Adjustments to arrive at net (loss) and FFO available to
    unitholders: |  |            |             |   |        |   |             |        |  |   |             |   |  |   |             |  
|Net income and FFO                                                        |  | $          | 19,467      |   |        | $ | 474,822     |        |  | $ | 14,064      |   |  | $ | 453,335     |  
|Preferred distributions                                                   |  |            | (26,102     | ) |        |   | (26,102     | )      |  |   | (26,102     | ) |  |   | (26,102     | )
|                                                                          |  |            |             |   |        |   |             |        |  |   |             |  
|Net (loss) and FFO available to unitholders  diluted                     |  | $          | (6,635      | ) |        | $ | 448,720     |        |  | $ | (12,038     | ) |  | $ | 427,233     |  
|                                                                          |  |            |             |   |        |   |             |        |  |   |             |  
|Weighted average Units and dilutive potential units outstanding           |  |            | 400,765,403 |   |        |   | 405,660,072 |        |  |   | 455,370,659 |   |  |   | 455,370,659 |  
|                                                                          |  |            |             |   |        |   |             |        |  |   |             |  
|Net (loss) and FFO available to unitholders per Unit 
    diluted        |  | $          | (0.02       | ) |        | $ | 1.11        |        |  | $ | (0.03       | ) |  | $ | 0.94        |  
|                                                                          |  |            |             |   |        |   |             |        |  |   |             |  

|                                                                                                                 |                                                                                       |                            |             |   |  |  |  |  |  |  |             |           | 
|---------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------- | -------------------------- | ----------- | - |  |  |  |  |  |  | ----------- | --------- | 
|                                                                                                                 |                                                                                       | Units and unit equivalents |            
|                                                                                                                 |                                                                                       |                            |            
|Weighted average Units outstanding (used for both net (loss) and
    FFO basic per unit calculation)             |                                                                                       |                            | 400,765,403 |   |  |  |  |  |  |  | 451,549,093 |          
|Effect of dilutive potential units:                                                                              |                                                                                       |                            |             |   |  |  |  |  |  |  |             |          
|                                                                                                                 | Share options and restricted shares which are dilutive to both
    net (loss) and FFO |                            |             |  |  |  |  |  |  |  |             | 3,821,566 | 
|                                                                                                                 |                                                                                       |                            |             |   |  |  |  |  | 
|Weighted average Units and dilutive potential units used for net
    (loss) available to unitholders             |                                                                                       |                            | 400,765,403 |   |  |  |  |  |  |  | 455,370,659 |          
|Impact of share options and restricted shares which are dilutive
    to FFO but not dilutive to net (loss)       |                                                                                       |                            | 4,894,669   |   |  |  |  |  |  |  |            |          
|                                                                                                                 |                                                                                       |                            |             |   |  |  |  |  | 
|Weighted average Units and dilutive potential units used for the
    calculation of FFO available to unitholders |                                                                                       |                            | 405,660,072 |   |  |  |  |  |  |  | 455,370,659 |          
|                                                                                                                 |                                                                                       |                            |             |   |  |  |  |  | 



|    |                                                                                                                                                       
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | FFO is a non-GAAP financial measure. The most directly
    comparable GAAP measure is net income, to which it is
    reconciled. See definition below.



|    |  |                                                                                                                                                                                                                                                                                                                                                                                              
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) |  | The loss for the nine months ended September 30, 2006
    represents an adjustment to the gain previously recorded on
    properties sold in prior periods.                                                                                                                                                                                                                                  
|   
|(c) |  | FFO for the nine months ended September 30, 2006 and 2005
    includes $190.1 million and $384.1 million,
    respectively, of non-cash impairment charges and losses on
    properties sold and properties held for sale, which is
    equivalent to $0.47 and $0.84 per Unit on a diluted basis,
    respectively. These charges are not added back to net income
    when calculating FFO.

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##### Table of Contents



FFO Definition:









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








|        |                         
|------- | ------------------------
|Item 4. | Controls and Procedures.

Evaluation
of Disclosure Controls and Procedures


13a-15(e) 15d-15(e)


Changes
in Internal Control over Financial Reporting




65



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##### Table of Contents






PART II  OTHER INFORMATION







|        |                   
|------- | ------------------
|Item 1. | Legal Proceedings.








|         |              
|-------- | -------------
|Item 1A. | Risk Factors.

10-K 10-Q







|        |                                                                 
|------- | ----------------------------------------------------------------
|Item 2. | Unregistered Sales of Equity Securities and Use of
    Proceeds.



|                 |                    |                     |         |         |                    |                    |       |                    |                       |  |                     |   |  |  |   |  | 
|---------------- | ------------------ | ------------------- | ------- | ------- | ------------------ | ------------------ | ----- | ------------------ | --------------------- |  | ------------------- | - |  |  | - |  | 
|                 |                    |                     |         |         |                    | Total Number of    |       |                    |                      
|                 |                    |                     |         |         |                    | Units Purchased as |       |                    | Dollar Value of Units | 
|                 |                    |                     |         |         |                    | Part of Publicly   |       |                    | That May Yet be       | 
|                 |                    | Total Number of     |         |         | Average Price Paid |                    |       | Announced Plans or |                       |  | Purchased Under the |  
|Period           |                    | Units Purchased (a) |         |         | Per Unit           |                    |       | Programs           |                       |  | Plans or Programs   |  
|                 |                    |                     |         |         |                    |                    |       |                    |                       |  |                     |  
|July 1  31      |                    |                     | 88,288  |         |                    | $                  | 36.69 |                    |                       |  |                    |   |  |  |  | 
|August 1  31    |                    |                     | 206,723 |         |                    |                    | 37.43 |                    |                       |  |                    |   |  |  |  | 
|September 1  30 |                    |                     | 101,827 |         |                    |                    | 37.94 |                    |                       |  |                    |   |  |  |  | 
|                 |                    |                     |         |         |                    |                    |       |                    |                       |  |                     |  
|                 | Third quarter 2006 |                     |         | 396,838 |                    |                    | $     | 37.40              |                       |  |                     |  |  |  |   |  | 
|                 |                    |                     |         |         |                    |                    |       |                    |                       |  |                     |  



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | The number of Units purchased is comprised of the redemption of
    Units held by our limited partners, excluding Equity Office.
    Units redeemed in exchange for Common Shares are not considered
    a repurchase and are, therefore, excluded from the table above.
    At any time on or after the first anniversary of the date of
    issuance, our limited partners have the right to require EOP
    Partnership to redeem their Units, subject to certain
    limitations. Equity Office, on behalf of and as the general
    partner of EOP Partnership, has the right to cause the
    redemption obligation to be satisfied by issuance of an
    equivalent number of Common Shares, or by a cash payment equal
    to the value of such Common Shares. Also included in the total
    number of Units purchased are Units redeemed in response to
    repurchases made by Equity Office, including repurchases of
    Equity Office Common Shares in the open market (a) as part
    of its Supplemental Retirement Savings Plan, (b) to fund
    shares purchased under its 1997 Employee Share Purchase Plan and
    (c) to fund fees paid in Equity Office Common Shares to
    each of its non-employee trustees, except Mr. Zell, as well
    as Equity Office Common Shares surrendered to Equity Office to
    satisfy withholding obligations in connection with the vesting
    of restricted stock issued to employees.






|        |          
|------- | ---------
|Item 6. | Exhibits.



66



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##### Table of Contents



SIGNATURES






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



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

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



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



| |                                               
| | ----------------------------------------------
| | Richard D. Kincaid                            
| | President and Chief Executive Officer         
| | of Equity Office Properties Trust, the general
| | partner of EOP Operating Limited Partnership  





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



| |                                                     
| | ----------------------------------------------------
| | Marsha C. Williams                                  
| | Executive Vice President and Chief Financial Officer
| | of Equity Office Properties Trust, the general      
| | partner of EOP Operating Limited Partnership        

67



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##### Table of Contents



EXHIBIT INDEX


|        |    |    |             |                                                                                                                                                                                                                          |          |                                                                                                                                                               
|------- | -- | -- | ----------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | -------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |    |             |                                                                                                                                                                                                                          |         
|No.     |    |    | Description |                                                                                                                                                                                                                          | Location
|        |    |    |             |                                                                                                                                                                                                                          |         
|        | 10 | .1 |             | Revolving Credit Agreement for $2,500,000,000 Revolving Credit
    Facility dated as of September 22, 2006 among EOP Operating
    Limited Partnership and the Banks listed therein, and related
    Guaranty of Payment |          | Incorporated by reference to Exhibit 10.1 to EOP
    Partnerships and Equity Offices Current Report on
    Form 8-K filed with the SEC on September 28, 2006
|        | 12 | .1 |             | Statement of Computation of Ratio of Earnings to Fixed Charges                                                                                                                                                           |          | Filed herewith                                                                                                                                                
|        | 31 | .1 |             | Certifications of Chief Executive Officer pursuant to
    Rule 13a-14(a) and Rule 15d-14(a) of the Securities
    Exchange Act, as amended                                                                               |          | Filed herewith                                                                                                                                                
|        | 31 | .2 |             | Certifications of Chief Financial Officer pursuant to
    Rule 13a-14(a) and Rule 15d-14(a) of the Securities
    Exchange Act, as amended                                                                               |          | Filed herewith                                                                                                                                                
|        | 32 | .1 |             | Certifications of Chief Executive Officer and Chief Financial
    Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002                                           |          | Filed herewith                                                                                                                                                

68