##### Table of Contents









UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549




---

FORM 10-Q

|           |  |                                                                                                                                                                                                 |  | 
|---------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | 
|(Mark One) |  |                                                                                                                                                                                                 |  | 
|x          |  | QUARTERLY REPORT PURSUANT TO SECTION 13
    OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934
    For the quarterly period ended March 31, 2004                                               |  | 
|           |  | or                                                                                                                                                                                              |  | 
|          
|          
|o          |  | TRANSITION REPORT PURSUANT TO SECTION 13
    OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934
    For the transition period
    from                 to
     Commission File Number: 1-13625 |  | 

EOP OPERATING LIMITED PARTNERSHIP

(Exact name of registrant as specified in its
charter)


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

(312) 466-3300

(Registrants telephone number, including
area code)


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

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

On April 30, 2004, 451,968,841 Units were
outstanding.



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TABLE OF CONTENTS



|                                                                                                     |  |  |  |  |  |  |  | 
|---------------------------------------------------------------------------------------------------- |  |  |  |  |  |  |  | 
|PART I -- FINANCIAL INFORMATION                                                                     
|EOP OPERATING LIMITED PARTNERSHIP CONSOLIDATED BALANCE SHEETS                                       
|EOP OPERATING LIMITED PARTNERSHIP CONSOLIDATED STATEMENTS OF OPERATIONS                             
|CONSOLIDATED STATEMENTS OF NET COMPREHENSIVE INCOME                                                 
|CONSOLIDATED STATEMENTS OF CASH FLOWS                                                               
|EOP OPERATING LIMITED PARTNERSHIP                                                                   
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                                          
|PART II -- OTHER INFORMATION                                                                        
|FINANCIAL COVENANT CALCULATIONS AS OF MARCH 31, 2004 UNDER CERTAIN INDENTURE AGREEMENTS             
|EOP OPERATING LIMITED PARTNERSHIP UNSECURED NOTES FINANCIAL COVENANT COMPLIANCE AS OF MARCH 31, 2004
|SIGNATURES                                                                                          
|EXHIBIT INDEX                                                                                       
|Exhibit 10.1                                                                                        
|Exhibit 10.2                                                                                        
|Exhibit 10.3                                                                                        
|Certification                                                                                       
|Certification                                                                                       



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##### Table of Contents






PART I  FINANCIAL
INFORMATION



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






EOP OPERATING LIMITED PARTNERSHIP


CONSOLIDATED BALANCE SHEETS

|                                                                                                   |                                                                                                                                       |                                                                                                                                                     |                                                                                                                                               |                                                                                                         |              |            |            |            |            |            |            | 
|-------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------- | ------------ | ---------- | ---------- | ---------- | ---------- | ---------- | ---------- | 
|                                                                                                   |                                                                                                                                       | March 31,                                                                                                                                           |                                                                                                                                               |                                                                                                         | December 31, |           
|(Dollars in thousands, except per unit amounts)                                                    |                                                                                                                                       | 2004                                                                                                                                                |                                                                                                                                               |                                                                                                         | 2003         |           
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     |                                                                                                                                               |                                                                                                         |              |           
|                                                                                                   |                                                                                                                                       | (Unaudited)                                                                                                                                         |                                                                                                                                               |                                                                                                         |             
|Assets:                                                                                            |                                                                                                                                       |                                                                                                                                                     |                                                                                                                                               |                                                                                                         |              |            |            |           
|                                                                                                   | Investments in real estate                                                                                                            |                                                                                                                                                     | $                                                                                                                                             | 25,160,623                                                                                              |              |            | $          | 23,985,839 |           
|                                                                                                   | Developments in process                                                                                                               |                                                                                                                                                     |                                                                                                                                               | 64,377                                                                                                  |              |            |            | 75,232     |           
|                                                                                                   | Land available for development                                                                                                        |                                                                                                                                                     |                                                                                                                                               | 251,151                                                                                                 |              |            |            | 251,151    |           
|                                                                                                   | Accumulated depreciation                                                                                                              |                                                                                                                                                     |                                                                                                                                               | (2,825,922                                                                                              | )            |            |            | (2,578,082 | )         
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     |                                                                                                                                               |                                                                                                         |              |           
|                                                                                                   |                                                                                                                                       | Investments in real estate, net of accumulated
    depreciation                                                                                     |                                                                                                                                               |                                                                                                         | 22,650,229   |            |            |            | 21,734,140 |           
|                                                                                                   | Cash and cash equivalents                                                                                                             |                                                                                                                                                     |                                                                                                                                               | 54,984                                                                                                  |              |            |            | 69,398     |           
|                                                                                                   | Tenant and other receivables (net of allowance
    for doubtful accounts of $8,615 and $6,490, respectively)                          |                                                                                                                                                     |                                                                                                                                               | 85,890                                                                                                  |              |            |            | 79,880     |           
|                                                                                                   | Deferred rent receivable                                                                                                              |                                                                                                                                                     |                                                                                                                                               | 426,945                                                                                                 |              |            |            | 379,329    |           
|                                                                                                   | Escrow deposits and restricted cash                                                                                                   |                                                                                                                                                     |                                                                                                                                               | 60,281                                                                                                  |              |            |            | 75,186     |           
|                                                                                                   | Investments in unconsolidated joint ventures                                                                                          |                                                                                                                                                     |                                                                                                                                               | 972,675                                                                                                 |              |            |            | 1,127,232  |           
|                                                                                                   | Deferred financing costs (net of accumulated
    amortization of $55,682 and $48,176, respectively)                                   |                                                                                                                                                     |                                                                                                                                               | 70,643                                                                                                  |              |            |            | 64,337     |           
|                                                                                                   | Deferred leasing costs and other related
    intangibles (net of accumulated amortization of $175,110 and
    $157,445, respectively) |                                                                                                                                                     |                                                                                                                                               | 340,238                                                                                                 |              |            |            | 314,568    |           
|                                                                                                   | Prepaid expenses and other assets (net of
    discounts of $3,181 and $66,200, respectively)                                          |                                                                                                                                                     |                                                                                                                                               | 217,355                                                                                                 |              |            |            | 344,940    |           
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     |                                                                                                                                               |                                                                                                         |              |           
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     | Total Assets                                                                                                                                  |                                                                                                         | $            | 24,879,240 |            |            | $          | 24,189,010 |           
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     |                                                                                                                                               |                                                                                                         |              |           
|Liabilities, Minority Interests, Mandatorily
    Redeemable Preferred Units and Partners Capital: |                                                                                                                                       |                                                                                                                                                     |                                                                                                                                               |                                                                                                        
|                                                                                                   | Liabilities:                                                                                                                          |                                                                                                                                                     |                                                                                                                                               |                                                                                                         |              |            |            |            |           
|                                                                                                   |                                                                                                                                       | Mortgage debt (including a net (discount) of
    $(13,565) and $(13,663), respectively)                                                             |                                                                                                                                               | $                                                                                                       | 2,881,178    |            |            | $          | 2,315,889  |           
|                                                                                                   |                                                                                                                                       | Unsecured notes (including a net
    (discount)/premium of $(11,783) and $12,412, respectively)                                                     |                                                                                                                                               |                                                                                                         | 9,404,717    |            |            |            | 8,828,912  |           
|                                                                                                   |                                                                                                                                       | Line of credit                                                                                                                                      |                                                                                                                                               |                                                                                                         | 5,800        |            |            |            | 334,000    |           
|                                                                                                   |                                                                                                                                       | Accounts payable and accrued expenses                                                                                                               |                                                                                                                                               |                                                                                                         | 433,503      |            |            |            | 573,069    |           
|                                                                                                   |                                                                                                                                       | Distribution payable                                                                                                                                |                                                                                                                                               |                                                                                                         | 229,073      |            |            |            | 3,899      |           
|                                                                                                   |                                                                                                                                       | Other liabilities (net of a (discount) of
    $(30,741) and $0, respectively)                                                                       |                                                                                                                                               |                                                                                                         | 472,333      |            |            |            | 398,273    |           
|                                                                                                   |                                                                                                                                       | Commitments and contingencies                                                                                                                       |                                                                                                                                               |                                                                                                         |             |            |            |            |           |           
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     |                                                                                                                                               |                                                                                                         |              |           
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     |                                                                                                                                               | Total Liabilities                                                                                       |              |            | 13,426,604 |            |            |            | 12,454,042 | 
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     |                                                                                                                                               |                                                                                                         |              |           
|                                                                                                   | Minority interests  partially owned
    properties                                                                                   |                                                                                                                                                     |                                                                                                                                               | 192,156                                                                                                 |              |            |            | 183,863    |           
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     |                                                                                                                                               |                                                                                                         |              |           
|                                                                                                   | Mandatorily Redeemable Preferred Units:                                                                                               |                                                                                                                                                     |                                                                                                                                               |                                                                                                         |              |            |            |            |           
|                                                                                                   |                                                                                                                                       | 5.25% Series B Convertible, Cumulative
    Redeemable Preferred Units, liquidation preference $50.00 per
    unit, 5,990,000 issued and outstanding |                                                                                                                                               |                                                                                                         | 299,500      |            |            |            | 299,500    |           
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     |                                                                                                                                               |                                                                                                         |              |           
|                                                                                                   | Partners Capital:                                                                                                                    |                                                                                                                                                     |                                                                                                                                               |                                                                                                         |              |            |            |            |           
|                                                                                                   |                                                                                                                                       | Preferred Units, 100,000,000 authorized:                                                                                                            |                                                                                                                                               |                                                                                                         |              |            |            |            |            |           
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     | 8.625% Series C Cumulative Redeemable
    Preferred Units, liquidation preference $25.00 per unit, 0 and
    4,562,900 issued and outstanding |                                                                                                         |              |           |            |            |            | 114,073    |           
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     | 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 Partners Capital                                                                                                                      |                                                                                                         |              | 84,080     |            |            |            | 85,086     |           
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     | Limited Partners Capital                                                                                                                      |                                                                                                         |              | 10,747,748 |            |            |            | 10,855,488 |           
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     | Deferred compensation                                                                                                                         |                                                                                                         |              | (3,942     | )          |            |            | (5,889     | )         
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     | Accumulated other comprehensive loss (net of
    accumulated amortization of $22 and $(73), respectively)                                     |                                                                                                         |              | (79,406    | )          |            |            | (9,653     | )         
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     |                                                                                                                                               |                                                                                                         |              |           
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     |                                                                                                                                               | Total Partners Capital                                                                                 |              |            | 10,960,980 |            |            |            | 11,251,605 | 
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     |                                                                                                                                               |                                                                                                         |              |           
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     |                                                                                                                                               | Total Liabilities, Minority Interests,
    Mandatorily Redeemable Preferred Units and Partners Capital |              | $          | 24,879,240 |            |            | $          | 24,189,010 | 
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     |                                                                                                                                               |                                                                                                         |              |           

See accompanying notes.

2



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##### Table of Contents






EOP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF
OPERATIONS

(Unaudited)


|                                                                                                                                   |                                                                     |                                                                      |                            |             |          |          |         |             |          |          |  
|---------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------- | -------------------------------------------------------------------- | -------------------------- | ----------- | -------- | -------- | ------- | ----------- | -------- | -------- | -
|                                                                                                                                   |                                                                     |                                                                     
|                                                                                                                                   |                                                                     | For the three months ended                                           |                           
|                                                                                                                                   |                                                                     | March 31,                                                            |                           
|                                                                                                                                   |                                                                     |                                                                      |                           
|(Dollars in thousands, except per unit amounts)                                                                                    |                                                                     | 2004                                                                 |                            |             | 2003     |         
|                                                                                                                                   |                                                                     |                                                                      |                            |             |          |         
|Revenues:                                                                                                                          |                                                                     |                                                                      |                            |             |          |          |         |            
|                                                                                                                                   | Rental                                                              |                                                                      | $                          | 635,286     |          |          | $       | 634,651     |         
|                                                                                                                                   | Tenant reimbursements                                               |                                                                      |                            | 102,982     |          |          |         | 102,841     |         
|                                                                                                                                   | Parking                                                             |                                                                      |                            | 28,973      |          |          |         | 26,624      |         
|                                                                                                                                   | Other                                                               |                                                                      |                            | 25,912      |          |          |         | 19,617      |         
|                                                                                                                                   | Fee income                                                          |                                                                      |                            | 3,060       |          |          |         | 4,936       |         
|                                                                                                                                   |                                                                     |                                                                      |                            |             |          |         
|                                                                                                                                   |                                                                     |                                                                      | Total revenues             |             |          | 796,213  |         |             |          | 788,669  |  
|                                                                                                                                   |                                                                     |                                                                      |                            |             |          |         
|Expenses:                                                                                                                          |                                                                     |                                                                      |                            |             |          |          |         |            
|                                                                                                                                   | Depreciation                                                        |                                                                      |                            | 170,081     |          |          |         | 154,836     |         
|                                                                                                                                   | Amortization                                                        |                                                                      |                            | 17,743      |          |          |         | 14,243      |         
|                                                                                                                                   | Real estate taxes                                                   |                                                                      |                            | 84,443      |          |          |         | 89,533      |         
|                                                                                                                                   | Insurance                                                           |                                                                      |                            | 10,247      |          |          |         | 6,214       |         
|                                                                                                                                   | Repairs and maintenance                                             |                                                                      |                            | 79,556      |          |          |         | 78,135      |         
|                                                                                                                                   | Property operating                                                  |                                                                      |                            | 106,792     |          |          |         | 96,814      |         
|                                                                                                                                   | Ground rent                                                         |                                                                      |                            | 5,346       |          |          |         | 4,596       |         
|                                                                                                                                   | Corporate general and administrative                                |                                                                      |                            | 11,309      |          |          |         | 13,502      |         
|                                                                                                                                   |                                                                     |                                                                      |                            |             |          |         
|                                                                                                                                   |                                                                     |                                                                      | Total expenses             |             |          | 485,517  |         |             |          | 457,873  |  
|                                                                                                                                   |                                                                     |                                                                      |                            |             |          |         
|                                                                                                                                   |                                                                     |                                                                      | Operating income           |             |          | 310,696  |         |             |          | 330,796  |  
|                                                                                                                                   |                                                                     |                                                                      |                            |             |          |         
|Other income/expense:                                                                                                              |                                                                     |                                                                      |                            |             |          |          |         |            
|                                                                                                                                   | Interest/dividend income                                            |                                                                      |                            | 1,321       |          |          |         | 3,227       |         
|                                                                                                                                   | Realized gain on sale of marketable securities                      |                                                                      |                            |            |          |          |         | 8,143       |         
|                                                                                                                                   | Interest:                                                           |                                                                      |                            |             |          |          |         |             |         
|                                                                                                                                   |                                                                     | Expense incurred                                                     |                            |             | (205,538 | )        |         |             | (205,323 | )       
|                                                                                                                                   |                                                                     | Amortization of deferred financing costs and
    prepayment expenses |                            |             | (2,171   | )        |         |             | (1,692   | )       
|                                                                                                                                   |                                                                     |                                                                      |                            |             |          |         
|                                                                                                                                   |                                                                     |                                                                      | Total other income/expense |             |          | (206,388 | )       |             |          | (195,645 | )
|                                                                                                                                   |                                                                     |                                                                      |                            |             |          |         
|Income before income taxes, allocation to
    minority interests, and income from investments in
    unconsolidated joint ventures |                                                                     |                                                                      | 104,308                    |             |          |          | 135,151 |            
|Income taxes                                                                                                                       |                                                                     |                                                                      | 262                        |             |          |          | (996    | )          
|Minority interests  partially owned
    properties                                                                                |                                                                     |                                                                      | (2,574                     | )           |          |          | (2,516  | )          
|Income from investments in unconsolidated joint
    ventures                                                                       |                                                                     |                                                                      | 15,718                     |             |          |          | 20,764  |            
|                                                                                                                                   |                                                                     |                                                                      |                            |             |          |         
|Income from continuing operations                                                                                                  |                                                                     |                                                                      | 117,714                    |             |          |          | 152,403 |            
|Discontinued operations (including net gain on
    sales of real estate of $2,195 and $7,277, respectively)                        |                                                                     |                                                                      | 1,971                      |             |          |          | 22,089  |            
|                                                                                                                                   |                                                                     |                                                                      |                            |             |          |         
|Income before cumulative effect of a change in
    accounting principle                                                            |                                                                     |                                                                      | 119,685                    |             |          |          | 174,492 |            
|Cumulative effect of a change in accounting
    principle                                                                          |                                                                     |                                                                      | (33,697                    | )           |          |          |        |            
|                                                                                                                                   |                                                                     |                                                                      |                            |             |          |         
|Net income                                                                                                                         |                                                                     |                                                                      | 85,988                     |             |          |          | 174,492 |            
|Preferred distributions                                                                                                            |                                                                     |                                                                      | (12,748                    | )           |          |          | (15,461 | )          
|                                                                                                                                   |                                                                     |                                                                      |                            |             |          |         
|Net income available to unitholders                                                                                                |                                                                     | $                                                                    | 73,240                     |             |          | $        | 159,031 |            
|                                                                                                                                   |                                                                     |                                                                      |                            |             |          |         
|Earnings per unit  basic:                                                                                                         |                                                                     |                                                                      |                            |             |          |          |         |            
|                                                                                                                                   | Income from continuing operations per unit                          |                                                                      | $                          | 0.23        |          |          | $       | 0.30        |         
|                                                                                                                                   |                                                                     |                                                                      |                            |             |          |         
|                                                                                                                                   | Net income available to unitholders per unit                        |                                                                      | $                          | 0.16        |          |          | $       | 0.35        |         
|                                                                                                                                   |                                                                     |                                                                      |                            |             |          |         
|                                                                                                                                   | Weighted average Units outstanding                                  |                                                                      |                            | 448,652,065 |          |          |         | 458,337,480 |         
|                                                                                                                                   |                                                                     |                                                                      |                            |             |          |         
|Earnings per unit 
    diluted:                                                                                                   |                                                                     |                                                                      |                            |             |          |          |         |            
|                                                                                                                                   | Income from continuing operations per unit                          |                                                                      | $                          | 0.23        |          |          | $       | 0.30        |         
|                                                                                                                                   |                                                                     |                                                                      |                            |             |          |         
|                                                                                                                                   | Net income available to unitholders per unit                        |                                                                      | $                          | 0.16        |          |          | $       | 0.35        |         
|                                                                                                                                   |                                                                     |                                                                      |                            |             |          |         
|                                                                                                                                   | Weighted average Units outstanding and dilutive
    potential units |                                                                      |                            | 451,142,921 |          |          |         | 459,301,852 |         
|                                                                                                                                   |                                                                     |                                                                      |                            |             |          |         
|Distributions declared per Unit
    outstanding                                                                                    |                                                                     | $                                                                    | 0.50                       |             |          | $        | 0.50    |            
|                                                                                                                                   |                                                                     |                                                                      |                            |             |          |         

See accompanying notes.

3



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP






CONSOLIDATED STATEMENTS OF NET COMPREHENSIVE
INCOME


(Unaudited)


|                                   |                                                                                                 |                      |        |         |      |   |         |        |  
|---------------------------------- | ----------------------------------------------------------------------------------------------- | -------------------- | ------ | ------- | ---- | - | ------- | ------ | -
|                                   |                                                                                                 |                     
|                                   |                                                                                                 | For the three months |       
|                                   |                                                                                                 | ended March 31,      |       
|                                   |                                                                                                 |                      |       
|(Dollars in thousands)             |                                                                                                 | 2004                 |        |         | 2003 |  
|                                   |                                                                                                 |                      |        |         |      |  
|Net income                         |                                                                                                 | $                    | 85,988 |         |      | $ | 174,492 |       
|Other comprehensive income (loss): |                                                                                                 |                      |        |         |      |   |         |       
|                                   | Unrealized holding losses on forward starting
    interest rate swaps                           |                      |        | (22,569 | )    |   |         | (8,004 | )
|                                   | Reversal of unrealized holding loss on settlement
    of forward starting interest rate swap    |                      |        | 21,502  |      |   |         | 5,942  |  
|                                   | (Payments) proceeds from settlement of forward
    starting interest rate swaps                 |                      |        | (68,918 | )    |   |         | 768    |  
|                                   | Amortization of payments/(proceeds) from
    settlement of forward starting interest rate swaps |                      |        | 96      |      |   |         | (16    | )
|                                   | Unrealized holding gains (losses) from
    investments arising during the period                |                      |        | 136     |      |   |         | (90    | )
|                                   |                                                                                                 |                      |        |         |      |  
|Net comprehensive income           |                                                                                                 | $                    | 16,235 |         |      | $ | 173,092 |       
|                                   |                                                                                                 |                      |        |         |      |  

See accompanying notes.

4



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP






CONSOLIDATED STATEMENTS OF CASH
FLOWS


(Unaudited)


|                       |                                                                                       |                                                                                                                                               |                                           |          |          |          |   |         |         |         |  
|---------------------- | ------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------- | -------- | -------- | -------- | - | ------- | ------- | ------- | -
|                       |                                                                                       |                                                                                                                                              
|                       |                                                                                       | For the three months ended                                                                                                                    |                                          
|                       |                                                                                       | March 31,                                                                                                                                     |                                          
|                       |                                                                                       |                                                                                                                                               |                                          
|(Dollars in thousands) |                                                                                       | 2004                                                                                                                                          |                                           |          | 2003     |         
|                       |                                                                                       |                                                                                                                                               |                                           |          |          |         
|Operating Activities:  |                                                                                       |                                                                                                                                               |                                           |          |          |          |   |        
|                       | Net income                                                                            |                                                                                                                                               | $                                         | 85,988   |          |          | $ | 174,492 |        
|                       | Adjustments to reconcile net income to net cash
    provided by operating activities: |                                                                                                                                               |                                           |          |          |          |   |         |        
|                       |                                                                                       | Revenue recognized related to acquired lease
    obligations, net                                                                             |                                           |          | 370      |          |   |         |        |        
|                       |                                                                                       | Amortization of discounts included in interest/
    dividend income                                                                           |                                           |          | (89      | )        |   |         | (89     | )      
|                       |                                                                                       | Depreciation and amortization (including
    discontinued operations)                                                                         |                                           |          | 189,981  |          |   |         | 176,211 |        
|                       |                                                                                       | Ineffective portion of swap settlement payment
    included in interest expense                                                               |                                           |          | 212      |          |   |         |        |        
|                       |                                                                                       | Amortization of (premiums)/ discounts on
    unsecured notes and settled interest rate protection agreements
    included in interest expense |                                           |          | (2,705   | )        |   |         | (5,298  | )      
|                       |                                                                                       | Compensation expense related to restricted shares
    and stock options issued to employees by Equity Office                                  |                                           |          | 5,433    |          |   |         | 3,130   |        
|                       |                                                                                       | Income from investments in unconsolidated joint
    ventures                                                                                  |                                           |          | (15,718  | )        |   |         | (20,764 | )      
|                       |                                                                                       | Net distributions from unconsolidated joint
    ventures                                                                                      |                                           |          | 9,875    |          |   |         | 15,026  |        
|                       |                                                                                       | Net gain on sales of real estate (including
    discontinued operations)                                                                      |                                           |          | (2,195   | )        |   |         | (7,277  | )      
|                       |                                                                                       | Cumulative effect of a change in accounting
    principle                                                                                     |                                           |          | 33,697   |          |   |         |        |        
|                       |                                                                                       | Provision for doubtful accounts                                                                                                               |                                           |          | (804     | )        |   |         | 7,528   |        
|                       |                                                                                       | Income allocated to minority interests                                                                                                        |                                           |          | 2,574    |          |   |         | 2,516   |        
|                       | Changes in assets and liabilities:                                                    |                                                                                                                                               |                                           |          |          |          |   |         |        
|                       |                                                                                       | Decrease (increase) in rents receivables                                                                                                      |                                           |          | 866      |          |   |         | (4,539  | )      
|                       |                                                                                       | Increase in deferred rent receivables                                                                                                         |                                           |          | (27,721  | )        |   |         | (15,801 | )      
|                       |                                                                                       | Decrease in prepaid expenses and other assets                                                                                                 |                                           |          | 56,565   |          |   |         | 22,304  |        
|                       |                                                                                       | Decrease in accounts payable and accrued expenses                                                                                             |                                           |          | (116,210 | )        |   |         | (65,836 | )      
|                       |                                                                                       | Increase in other liabilities                                                                                                                 |                                           |          | 1,597    |          |   |         | 8,570   |        
|                       |                                                                                       |                                                                                                                                               |                                           |          |          |         
|                       |                                                                                       |                                                                                                                                               | Net cash provided by operating activities |          |          | 221,716  |   |         |         | 290,173 |  
|                       |                                                                                       |                                                                                                                                               |                                           |          |          |         
|Investing Activities:  |                                                                                       |                                                                                                                                               |                                           |          |          |          |   |        
|                       | Property acquisitions                                                                 |                                                                                                                                               |                                           | (62,777  | )        |          |   |        |        
|                       | Property dispositions                                                                 |                                                                                                                                               |                                           | 18,189   |          |          |   | 42,780  |        
|                       | Capital and tenant improvements                                                       |                                                                                                                                               |                                           | (121,208 | )        |          |   | (78,948 | )      
|                       | Lease commissions and other costs                                                     |                                                                                                                                               |                                           | (31,824  | )        |          |   | (39,220 | )      
|                       | Decrease (increase) in escrow deposits and
    restricted cash                        |                                                                                                                                               |                                           | 32,067   |          |          |   | (13,549 | )      
|                       | Investments in unconsolidated joint ventures                                          |                                                                                                                                               |                                           |         |          |          |   | (6,856  | )      
|                       | Investments in notes receivable                                                       |                                                                                                                                               |                                           |         |          |          |   | (96     | )      
|                       | Repayments of notes receivable                                                        |                                                                                                                                               |                                           |         |          |          |   | 734     |        
|                       |                                                                                       |                                                                                                                                               |                                           |          |          |         
|                       |                                                                                       |                                                                                                                                               | Net cash used for investing activities    |          |          | (165,553 | ) |         |         | (95,155 | )
|                       |                                                                                       |                                                                                                                                               |                                           |          |          |         

See accompanying notes.

5



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


CONSOLIDATED STATEMENTS OF CASH
FLOWS  (Continued)

(Unaudited)


|                                                 |                                                                                                                                                |                                                                                                                                               |                                                             |            |        |          |   |          |         |          |  
|------------------------------------------------ | ---------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------- | ---------- | ------ | -------- | - | -------- | ------- | -------- | -
|                                                 |                                                                                                                                                |                                                                                                                                              
|                                                 |                                                                                                                                                | For the three months ended                                                                                                                    |                                                            
|                                                 |                                                                                                                                                | March 31,                                                                                                                                     |                                                            
|                                                 |                                                                                                                                                |                                                                                                                                               |                                                            
|(Dollars in thousands, unaudited)                |                                                                                                                                                | 2004                                                                                                                                          |                                                             |            | 2003   |         
|                                                 |                                                                                                                                                |                                                                                                                                               |                                                             |            |        |         
|Financing Activities:                            |                                                                                                                                                |                                                                                                                                               |                                                             |            |        |          |   |         
|                                                 | Principal payments on mortgage debt                                                                                                            |                                                                                                                                               | $                                                           | (172,289   | )      |          | $ | (10,438  | )      
|                                                 | Proceeds from unsecured notes                                                                                                                  |                                                                                                                                               |                                                             | 991,240    |        |          |   | 494,810  |        
|                                                 | Repayment of unsecured notes                                                                                                                   |                                                                                                                                               |                                                             | (400,000   | )      |          |   | (300,000 | )      
|                                                 | Proceeds from lines of credit                                                                                                                  |                                                                                                                                               |                                                             | 1,448,600  |        |          |   | 369,800  |        
|                                                 | Principal payments on lines of credit                                                                                                          |                                                                                                                                               |                                                             | (1,776,800 | )      |          |   | (575,500 | )      
|                                                 | Payments of loan costs                                                                                                                         |                                                                                                                                               |                                                             | (1,305     | )      |          |   | (216     | )      
|                                                 | Settlement of interest rate swap agreements                                                                                                    |                                                                                                                                               |                                                             | (69,130    | )      |          |   | 768      |        
|                                                 | Distributions to minority interests in partially
    owned properties                                                                          |                                                                                                                                               |                                                             | (1,828     | )      |          |   | (2,706   | )      
|                                                 | Payment of offering costs                                                                                                                      |                                                                                                                                               |                                                             | (20        | )      |          |   | (12      | )      
|                                                 | Proceeds from exercise of stock options                                                                                                        |                                                                                                                                               |                                                             | 39,056     |        |          |   | 1,364    |        
|                                                 | Distributions to unitholders                                                                                                                   |                                                                                                                                               |                                                             | (836       | )      |          |   | (623     | )      
|                                                 | Cancellation of Units through Equity
    Offices common share repurchase program                                                              |                                                                                                                                               |                                                             | (3,775     | )      |          |   | (151,874 | )      
|                                                 | Redemption of Units                                                                                                                            |                                                                                                                                               |                                                             | (795       | )      |          |   | (78      | )      
|                                                 | Redemption of preferred units                                                                                                                  |                                                                                                                                               |                                                             | (114,073   | )      |          |   |         |        
|                                                 | Payment of preferred distributions                                                                                                             |                                                                                                                                               |                                                             | (8,622     | )      |          |   | (15,461  | )      
|                                                 |                                                                                                                                                |                                                                                                                                               |                                                             |            |        |         
|                                                 |                                                                                                                                                |                                                                                                                                               | Net cash used for financing activities                      |            |        | (70,577  | ) |          |         | (190,166 | )
|                                                 |                                                                                                                                                |                                                                                                                                               |                                                             |            |        |         
|                                                 | Net (decrease) increase in cash and cash
    equivalents                                                                                       |                                                                                                                                               |                                                             | (14,414    | )      |          |   | 4,852    |        
|                                                 | Cash and cash equivalents at the beginning of the
    period                                                                                   |                                                                                                                                               |                                                             | 69,398     |        |          |   | 58,471   |        
|                                                 |                                                                                                                                                |                                                                                                                                               |                                                             |            |        |         
|                                                 | Cash and cash equivalents at the end of the period                                                                                             |                                                                                                                                               | $                                                           | 54,984     |        |          | $ | 63,323   |        
|                                                 |                                                                                                                                                |                                                                                                                                               |                                                             |            |        |         
|Supplemental Information:                        |                                                                                                                                                |                                                                                                                                               |                                                             |            |        |          |   |         
|                                                 | Interest paid during the period, including a
    reduction of interest expense for capitalized interest of $2,030
    and $3,598, respectively |                                                                                                                                               | $                                                           | 248,485    |        |          | $ | 248,340  |        
|                                                 |                                                                                                                                                |                                                                                                                                               |                                                             |            |        |         
|Non-Cash Investing and Financing
    Activities: |                                                                                                                                                |                                                                                                                                               |                                                             |            |        |          |   |         
|                                                 | Investing Activities:                                                                                                                          |                                                                                                                                               |                                                             |            |        |          |   |          |        
|                                                 |                                                                                                                                                | Escrow deposits related to property dispositions                                                                                              |                                                             | $          |       |          |   | $        | (19,339 | )       
|                                                 |                                                                                                                                                |                                                                                                                                               |                                                             |            |        |         
|                                                 |                                                                                                                                                | Mortgage loan repayment as a result of a property
    disposition                                                                             |                                                             | $          |       |          |   | $        | (16,279 | )       
|                                                 |                                                                                                                                                |                                                                                                                                               |                                                             |            |        |         
|                                                 |                                                                                                                                                | Mortgage loan assumed upon acquisition of property                                                                                            |                                                             | $          | 82,970 |          |   | $        |        |         
|                                                 |                                                                                                                                                |                                                                                                                                               |                                                             |            |        |         
|                                                 |                                                                                                                                                | Changes in accounts due to consolidation of
    existing interest in a property as a result of acquiring the
    remaining economic interest: |                                                             |            |        |          |   |          |         |         
|                                                 |                                                                                                                                                |                                                                                                                                               | Decrease in investment in unconsolidated joint
    ventures |            | $      | (157,659 | ) |          | $       |         |  
|                                                 |                                                                                                                                                |                                                                                                                                               |                                                             |            |        |         
|                                                 |                                                                                                                                                |                                                                                                                                               | Increase in investment in real estate                       |            | $      | 612,411  |   |          | $       |         |  
|                                                 |                                                                                                                                                |                                                                                                                                               |                                                             |            |        |         
|                                                 |                                                                                                                                                |                                                                                                                                               | Increase in accumulated depreciation                        |            | $      | (44,440  | ) |          | $       |         |  
|                                                 |                                                                                                                                                |                                                                                                                                               |                                                             |            |        |         
|                                                 |                                                                                                                                                |                                                                                                                                               | Increase in mortgage debt                                   |            | $      | (451,285 | ) |          | $       |         |  
|                                                 |                                                                                                                                                |                                                                                                                                               |                                                             |            |        |         
|                                                 |                                                                                                                                                |                                                                                                                                               | Increase in other assets and liabilities                    |            | $      | 40,973   |   |          | $       |         |  
|                                                 |                                                                                                                                                |                                                                                                                                               |                                                             |            |        |         
|                                                 | Financing Activities:                                                                                                                          |                                                                                                                                               |                                                             |            |        |          |   |          |        
|                                                 |                                                                                                                                                | Mortgage loan repayment as a result of a property
    disposition                                                                             |                                                             | $          |       |          |   | $        | 16,279  |         
|                                                 |                                                                                                                                                |                                                                                                                                               |                                                             |            |        |         

See accompanying notes.

6



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##### Table of Contents






EOP OPERATING LIMITED PARTNERSHIP






NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS


(Unaudited)


Our consolidated financial statements have been
prepared pursuant to the Securities and Exchange
Commissions (SEC) rules and regulations. The
following notes, which present interim disclosures as required
by the SEC, highlight significant changes to the notes to our
December 31, 2003 audited consolidated financial statements
and should be read together with the financial statements and
notes thereto included in our Form 10-K.

NOTE 1  BUSINESS AND FORMATION OF
EOP PARTNERSHIP

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

We are a fully integrated, self-administered and
self-managed real estate company principally engaged, through
our subsidiaries, in owning, managing, leasing, acquiring and
developing office properties. At March 31, 2004, we owned
or had an interest in 685 office properties comprising
approximately 123.0 million rentable square feet of office
space in 18 states and the District of Columbia and were located
in 27 markets and 125 submarkets (the Office
Properties). On a weighted average basis, the Office
Properties were 86.1% occupied at March 31, 2004.
Approximately 42.1% of the rentable square feet is located in
central business districts and approximately 57.9% of the
rentable square feet is located in suburban markets. At
March 31, 2004, we also owned 75 industrial properties
comprising approximately 5.8 million square feet of
industrial space (the Industrial Properties and
together with the Office Properties, the Properties)
and approximately 0.3 million rentable square feet of
office properties under development. On a weighted average
basis, the Industrial Properties were 85.7% occupied at
March 31, 2004.

NOTE 2  SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES



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

The consolidated financial statements represent
our financial condition and results of operations and those of
our subsidiaries. All intercompany transactions and balances
have been eliminated in consolidation. Property holding entities
and other subsidiaries of which we own 100% of the equity are
consolidated. For those joint ventures of which we own less than
100% of the equity interest, we consolidate the property if we
have the direct or indirect ability to make major decisions
about the entities activities based on the terms of the
respective joint venture agreements which specify the sharing of
participating and protective rights such as decisions regarding
major leases, encumbering the entities with debt and whether to
dispose of entities. We would also consolidate certain property
holding entities and other subsidiaries if we own less than a
100% equity interest if we are deemed to be the primary
beneficiary in a variable interest entity (as defined in FASB
Interpretation 46 Consolidation of Variable Interest
Entities, an Interpretation of ARB No. 51, as revised
(FIN 46)).

7



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

(Unaudited)




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

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



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

The consolidated financial statements as of and
for the three months ended March 31, 2004 and 2003 and
related footnote disclosures are unaudited. In the opinion of
management, such financial statements reflect all adjustments
necessary for a fair presentation of the results of the interim
periods. All such adjustments are of a normal and recurring
nature.



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

Certain reclassifications have been made to the
previously reported 2003 statements in order to provide
comparability with the 2004 statements reported herein. These
reclassifications have not changed the 2003 results of
operations or partners capital.



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

Prior to January 1, 2003, we used the
accounting provisions provided by Accounting Principles Board
Opinion No. 25 (APB 25) to account for the
issuance of share options and other equity awards. Effective
January 1, 2003, we adopted Statement of Financial
Accounting Standards No. 123 (Statement 123)
Accounting for Stock Based Compensation, which requires a
fair value based accounting method for determining compensation
expense associated with the issuance of share options and other
equity awards. We adopted the accounting provisions of Statement
123 to reflect the cost of issuing share options and other
equity awards. Statement of Financial Accounting Standards
No. 148 (Statement 148) Accounting for
Stock-Based Compensation  Transition and
Disclosure  an Amendment of FASB Statement
No. 123, issued December 2002 and effective for interim
periods beginning after December 15, 2002, provided various
methods of applying Statement 123. In accordance with Statement
148, we employed the prospective method for adopting Statement
123, which requires the recognition of compensation expense
based on the fair value method for share options and other
equity awards granted on or after January 1, 2003 and for
certain modifications made subsequent to December 31, 2002
to share options and other equity awards that were outstanding
as of December 31, 2002. Compensation expense is recognized
ratably over the respective vesting period of the award.

8



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

(Unaudited)


The following table illustrates the unaudited
effect on net income available to unitholders and earnings per
unit if the fair value based method had been applied to issued
share options for the three months ended March 31, 2004 and
2003. Compensation expense related to restricted share awards is
not presented in the table below because the expense amount is
the same under APB 25 and Statement 123 and therefore, is
already reflected in net income.

|                                                                                                                   |                                                |                      |        |      |      |   |         |      | 
|------------------------------------------------------------------------------------------------------------------ | ---------------------------------------------- | -------------------- | ------ | ---- | ---- | - | ------- | ---- | 
|                                                                                                                   |                                                |                     
|                                                                                                                   |                                                | For the three months |       
|                                                                                                                   |                                                | ended March 31,      |       
|                                                                                                                   |                                                |                      |       
|(Dollars in thousands, except per unit data)                                                                       |                                                | 2004                 |        |      | 2003 |  
|                                                                                                                   |                                                |                      |        |      |      |  
|Historical net income available to unitholders                                                                     |                                                | $                    | 73,240 |      |      | $ | 159,031 |     
|Add back compensation expense for share
    options
    included in historical net income available to unitholders |                                                |                      | 1,605  |      |      |   | 212     |     
|Deduct compensation expense for share options
    determined under fair value based method                         |                                                |                      | (2,894 | )    |      |   | (2,440  | )   
|                                                                                                                   |                                                |                      |        |      |      |  
|Pro forma net income available to unitholders                                                                      |                                                | $                    | 71,951 |      |      | $ | 156,803 |     
|                                                                                                                   |                                                |                      |        |      |      |  
|Earnings per unit  basic:                                                                                         |                                                |                      |        |      |      |   |         |     
|                                                                                                                   | Historical net income available to unitholders |                      | $      | 0.16 |      |   | $       | 0.35 | 
|                                                                                                                   |                                                |                      |        |      |      |  
|                                                                                                                   | Pro forma net income available to unitholders  |                      | $      | 0.16 |      |   | $       | 0.34 | 
|                                                                                                                   |                                                |                      |        |      |      |  
|Earnings per unit  diluted:                                                                                       |                                                |                      |        |      |      |   |         |     
|                                                                                                                   | Historical net income available to unitholders |                      | $      | 0.16 |      |   | $       | 0.35 | 
|                                                                                                                   |                                                |                      |        |      |      |  
|                                                                                                                   | Pro forma net income available to unitholders  |                      | $      | 0.16 |      |   | $       | 0.34 | 
|                                                                                                                   |                                                |                      |        |      |      |  

NOTE 3  ACQUISITIONS

In February 2004, we acquired the 15.53% economic
interest of one of our joint venture partners in the
1301 Avenue of the Americas office building for
approximately $60.7 million and we assumed our
partners share of the mortgage notes of approximately
$83.0 million. In addition, we acquired another joint
venture partners interest for approximately
$7.5 million which closed in April 2004. As a result of
these transactions, our economic interest in the joint venture
is now 100% and we control all major decisions. Accordingly, we
have consolidated the property. The consolidated mortgage debt
as of March 31, 2004 is approximately $533.7 million.

9



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

(Unaudited)


NOTE 4  DISCONTINUED
OPERATIONS

In January 2004, we sold the Cal Center office
property located in Sacramento, California to an unaffiliated
party for approximately $18.5 million. The total gain on
the sale of this property was approximately $2.2 million,
which is included in discontinued operations. Cal Center
consisted of one office building and approximately 118,172
square feet.

The net income for properties sold is reflected
in the consolidated statements of operations as Discontinued
Operations for the periods presented. The properties that were
partially sold during the three months ended December 31,
2003 are not required to be reflected as discontinued operations
in accordance with Statement 144. Below is a summary of the
results of operations for the properties sold, except for the
properties that were partially sold, through their respective
sale dates, which are classified as discontinued operations:

|                                                                           |                                                                                           |                            |                         |     |      |      |        |        |        |        | 
|-------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------- | -------------------------- | ----------------------- | --- | ---- | ---- | ------ | ------ | ------ | ------ | 
|                                                                           |                                                                                           |                           
|                                                                           |                                                                                           | For the three months       |                        
|                                                                           |                                                                                           | ended March 31,            |                        
|                                                                           |                                                                                           |                            |                        
|(Dollars in thousands)                                                     |                                                                                           | 2004                       |                         |     | 2003 |     
|                                                                           |                                                                                           |                            |                         |     |      |     
|Total revenues                                                             |                                                                                           | $                          | 293                     |     |      | $    | 30,864 |       
|                                                                           |                                                                                           |                            |                         |     |      |     
|Expenses:                                                                  |                                                                                           |                            |                         |     |      |      |        |       
|                                                                           | Depreciation and amortization                                                             |                            |                         | (12 | )    |      |        | 5,453  |       
|                                                                           | Property operating                                                                        |                            |                         | 537 |      |      |        | 10,396 |       
|                                                                           | Ground rent                                                                               |                            |                         |    |      |      |        | 18     |       
|                                                                           |                                                                                           |                            |                         |     |      |     
|                                                                           |                                                                                           | Total expenses             |                         |     | 525  |      |        |        | 15,867 |       
|                                                                           |                                                                                           |                            |                         |     |      |     
|                                                                           |                                                                                           |                            | Operating (loss) income |     |      | (232 | )      |        |        | 14,997 | 
|                                                                           |                                                                                           |                            |                         |     |      |     
|Other income/expense:                                                      |                                                                                           |                            |                         |     |      |      |        |       
|                                                                           | Interest/dividend income                                                                  |                            |                         | 1   |      |      |        | 38     |       
|                                                                           | Interest expense and amortization of deferred
    financing costs and prepayment expenses |                            |                         |    |      |      |        | (223   | )     
|                                                                           |                                                                                           |                            |                         |     |      |     
|                                                                           |                                                                                           | Total other income/expense |                         |     | 1    |      |        |        | (185   | )     
|                                                                           |                                                                                           |                            |                         |     |      |     
|(Loss) income before income taxes and net gain on
    sales of real estate |                                                                                           |                            | (231                    | )   |      |      | 14,812 |       
|Income taxes                                                               |                                                                                           |                            | 7                       |     |      |      |       |       
|Net gain on sales of real estate                                           |                                                                                           |                            | 2,195                   |     |      |      | 7,277  |       
|                                                                           |                                                                                           |                            |                         |     |      |     
|Net income                                                                 |                                                                                           | $                          | 1,971                   |     |      | $    | 22,089 |       
|                                                                           |                                                                                           |                            |                         |     |      |     
|Property net operating (loss) income from
    discontinued operations      |                                                                                           | $                          | (244                    | )   |      | $    | 20,468 |       
|                                                                           |                                                                                           |                            |                         |     |      |     



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

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

10



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

(Unaudited)


NOTE 5  INVESTMENTS IN
UNCONSOLIDATED JOINT VENTURES

Several Office Properties are owned by us and
other unaffiliated parties in joint ventures which we account
for using the equity method. Combined summarized financial
information for these unconsolidated joint ventures is as
follows:

|                                                                                                                                                                 |                                              |                                                              |         |           |              |   |           |           |           | 
|---------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------- | ------------------------------------------------------------ | ------- | --------- | ------------ | - | --------- | --------- | --------- | 
|                                                                                                                                                                 |                                              | March 31,                                                    |         |           | December 31, |  
|(Dollars in thousands)                                                                                                                                           |                                              | 2004                                                         |         |           | 2003         |  
|                                                                                                                                                                 |                                              |                                                              |         |           |              |  
|Balance Sheets:                                                                                                                                                  |                                              |                                                              |         |           |              |   |           |          
|                                                                                                                                                                 | Real estate, net of accumulated depreciation |                                                              | $       | 2,568,542 |              |   | $         | 3,258,009 |          
|                                                                                                                                                                 | Other assets                                 |                                                              |         | 283,786   |              |   |           | 339,835   |          
|                                                                                                                                                                 |                                              |                                                              |         |           |              |  
|                                                                                                                                                                 |                                              | Total Assets                                                 |         | $         | 2,852,328    |   |           | $         | 3,597,844 | 
|                                                                                                                                                                 |                                              |                                                              |         |           |              |  
|                                                                                                                                                                 | Mortgage debt                                |                                                              | $       | 772,895   |              |   | $         | 1,308,782 |          
|                                                                                                                                                                 | Other liabilities                            |                                                              |         | 105,281   |              |   |           | 140,259   |          
|                                                                                                                                                                 | Partners and shareholders equity           |                                                              |         | 1,974,152 |              |   |           | 2,148,803 |          
|                                                                                                                                                                 |                                              |                                                              |         |           |              |  
|                                                                                                                                                                 |                                              | Total Liabilities and Partners and
    Shareholders Equity |         | $         | 2,852,328    |   |           | $         | 3,597,844 | 
|                                                                                                                                                                 |                                              |                                                              |         |           |              |  
|Our share of equity                                                                                                                                              |                                              | $                                                            | 886,496 |           |              | $ | 1,040,373 |          
|Net excess of cost of investments over the net
    book value of underlying net assets, net of accumulated
    depreciation of $24,496 and $24,456, respectively |                                              |                                                              | 86,179  |           |              |   | 86,859    |          
|                                                                                                                                                                 |                                              |                                                              |         |           |              |  
|Carrying value of investments in unconsolidated
    joint ventures                                                                                               |                                              | $                                                            | 972,675 |           |              | $ | 1,127,232 |          
|                                                                                                                                                                 |                                              |                                                              |         |           |              |  
|Our share of unconsolidated non-recourse mortgage
    debt                                                                                                       |                                              | $                                                            | 344,989 |           |              | $ | 797,268   |          
|                                                                                                                                                                 |                                              |                                                              |         |           |              |  

|                          |                                                         |                                             |   |         |        |  |   |         |        | 
|------------------------- | ------------------------------------------------------- | ------------------------------------------- | - | ------- | ------ |  | - | ------- | ------ | 
|                          |                                                         |                                            
|                          |                                                         | For the three months                        |  
|                          |                                                         | ended March 31,                             |  
|                          |                                                         |                                             |  
|(Dollars in thousands)    |                                                         | 2004                                        |   |         | 2003   | 
|                          |                                                         |                                             |   |         |        | 
|Statements of Operations: |                                                         |                                             |   |         |        |  |   |        
|                          | Revenues                                                |                                             | $ | 122,735 |        |  | $ | 115,615 |       
|                          |                                                         |                                             |   |         |        | 
|                          | Expenses:                                               |                                             |   |         |        |  |   |         |       
|                          |                                                         | Interest expense and loan cost amortization |   |         | 13,347 |  |   |         | 17,355 | 
|                          |                                                         | Depreciation and amortization               |   |         | 28,888 |  |   |         | 21,798 | 
|                          |                                                         | Operating expenses                          |   |         | 48,653 |  |   |         | 43,182 | 
|                          |                                                         |                                             |   |         |        | 
|                          |                                                         | Total expenses                              |   |         | 90,888 |  |   |         | 82,335 | 
|                          |                                                         |                                             |   |         |        | 
|                          | Net income                                              |                                             | $ | 31,847  |        |  | $ | 33,280  |       
|                          |                                                         |                                             |   |         |        | 
|Our share of:             |                                                         |                                             |   |         |        |  |   |        
|                          | Net income                                              |                                             | $ | 15,718  |        |  | $ | 20,764  |       
|                          |                                                         |                                             |   |         |        | 
|                          | Interest expense and loan cost amortization             |                                             | $ | 8,102   |        |  | $ | 12,249  |       
|                          |                                                         |                                             |   |         |        | 
|                          | Depreciation and amortization (real estate
    related) |                                             | $ | 12,027  |        |  | $ | 12,603  |       
|                          |                                                         |                                             |   |         |        | 



| |                                              
| | ---------------------------------------------
| | Investment in 1301 Avenue of the
    Americas

We acquired the remaining economic interest in
the 1301 Avenue of the Americas office building, which was
previously unconsolidated. See Note 3-Acquisitions for more
information.

11



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

(Unaudited)


NOTE 6  MORTGAGE DEBT

During the three months ended March 31,
2004, the following transactions occurred:

|                                |                                                                                                                                      |   |           |          |     
|------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------ | - | --------- | -------- | ----
|(Dollars in thousands)          |                                                                                                                                      |  
|                                |                                                                                                                                      |  
|Balance at December 31, 2003(a) |                                                                                                                                      | $ | 2,329,552 |         
|                                | Repayments and scheduled principal amortization                                                                                      |   |           | (172,289 | )(b)
|                                | Assumed through acquisition and consolidation of
    1301 Avenue of the Americas (See Note 3 
    Acquisitions)                     |   |           | 534,255  |     
|                                | Assumed through consolidation of Sun America
    Center
    (See Note 9  Cumulative Effect of a Change in
    Accounting Principle) |   |           | 203,225  |     
|                                |                                                                                                                                      |   |          
|Balance at March 31, 2004(a)    |                                                                                                                                      | $ | 2,894,743 |         
|                                |                                                                                                                                      |   |          



---



|    |  |                                                                                                                                                       
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Excludes net discount on mortgage debt of
    approximately $13.6 million and $13.7 million at
    March 31, 2004 and December 31, 2003, respectively.
|   
|(b) |  | Includes the repayment of mortgage debt
    encumbering the following properties: 580 California, BP Tower
    and 110 Atrium Place.                  



|         |                                                                                
|-------- | -------------------------------------------------------------------------------
|NOTE 7  | UNSECURED NOTES, DERIVATIVE FINANCIAL
    INSTRUMENTS AND LINES OF 
     CREDIT



| |                                                         
| | --------------------------------------------------------
| | Unsecured Notes and Derivative Financial
    Instruments

In January 2004, we repaid upon their maturity
$300 million of 6.50% unsecured notes and $100 million
of 6.90% unsecured notes.

In March 2004, we issued $1.0 billion of
4.75% senior unsecured notes due March 15, 2014. Equity
Office is the guarantor of the notes. The net cash proceeds from
the issuance were approximately $991.2 million and were
used to repay the outstanding balance on our $1.0 billion
revolving credit facility. In March 2004, we also paid
$69.1 million to settle $800 million of
forward-starting interest rate swaps that were previously
entered into to hedge the interest rate of the $1.0 billion
notes. Approximately $0.2 million of the settlement amount
was recognized in interest expense and the remaining
$68.9 million was recorded to other comprehensive income.
The amount recorded to other comprehensive income will be
amortized to interest expense over the 10-year term of the
notes. Including all offering expenses and the settlement of
$800 million of forward-starting swap agreements, the
all-in effective rate of the unsecured notes is 5.54%.

In March 2004, in conjunction with the debt
offering, we entered into $1.0 billion of fixed-to-floating
interest rate swap agreements that effectively convert the
interest rate of the $1.0 billion of unsecured notes issued
in March 2004 to a floating rate of LIBOR plus 43 basis points
plus 79 basis points of loan costs. Because these swaps are
considered perfect hedges of the $1.0 billion unsecured
notes, they are marked-to-market each quarter with a
corresponding mark-to-market adjustment on the $1.0 billion
notes. Any market adjustment on the swap agreements will be
reflected in other assets or other liabilities, and the
corresponding market adjustment on the unsecured notes will be
reflected as either a discount or premium on the unsecured
notes. Because the swap agreements are considered a perfectly
effective fair value hedge, there will be no effect on net
income from the mark-to-market adjustment as long as they are
outstanding.

12



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

(Unaudited)




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

In March 2004, we cancelled our $1.0 billion
364-day line of credit.

NOTE 8  PARTNERS CAPITAL
AND MANDATORILY REDEEMABLE PREFERRED UNITS



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

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

|                                 |                                                                                                        |  |             |           |  
|-------------------------------- | ------------------------------------------------------------------------------------------------------ |  | ----------- | --------- | -
|Outstanding at December 31, 2003 |                                                                                                        |  | 449,492,618 |          
|                                 | Repurchases/retired(a)                                                                                 |  |             | (38,664   | )
|                                 | Units redeemed for cash                                                                                |  |             | (31,550   | )
|                                 | Issued to Equity Office related to common shares
    issued for share options exercised                |  |             | 1,647,244 |  
|                                 | Issued to Equity Office related to restricted
    shares and share awards issued, net of cancellations |  |             | 1,040,923 |  
|                                 |                                                                                                        |  |            
|Outstanding at March 31, 2004    |                                                                                                        |  | 452,110,571 |          
|                                 |                                                                                                        |  |            






|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | During the first quarter 2004, 38,664 Equity
    Office common shares were repurchased and retired at an average
    price of $29.71 per share for approximately $1.1 million in
    the aggregate. An additional 88,585 common shares were
    repurchased, but were not yet retired as of March 31, 2004,
    at an average price of $29.65 per share for approximately
    $2.6 million in the aggregate. In April 2004, 925,834
    common shares were repurchased at an average price of $26.18 per
    share for approximately $24.2 million in the aggregate. In
    connection with the repurchases, we purchased from Equity Office
    and retired a corresponding number of Units for an aggregate
    purchase price equal to the aggregate purchase price for all
    Common Share repurchases.



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

|                            |  |              |           |  |           |  |                   |                        |  |  |                  | 
|--------------------------- |  | ------------ | --------- |  | --------- |  | ----------------- | ---------------------- |  |  | ---------------- | 
|                            |  | Quarterly    |           |  |           |  |                  
|                            |  | Distribution |           |  |           |  |                  
|                            |  | Amount       |           |  |           |  |                  
|                            |  | Per Unit     |           |  | Date Paid |  |                   | Unitholder Record Date | 
|                            |  |              |           |  |           |  |                   |                        | 
|Units                       |  | $            | .50       |  |           |  | April 15, 2004    |                        |  |  | March 31, 2004   | 
|Series B Preferred Units    |  | $            | .65625    |  |           |  | February 17, 2004 |                        |  |  | February 2, 2004 | 
|Series C Preferred Units(a) |  | $            | .12578125 |  |           |  | January 5, 2004   |                        |  |  | December 4, 2003 | 
|Series G Preferred Units    |  | $            | .484375   |  |           |  | March 15, 2004    |                        |  |  | March 1, 2004    | 






|    |  |                                                                                                                                                                                                             
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | The distribution amount represents a pro rated
    distribution from and including December 15, 2003, to, but
    excluding, January 5, 2004, the Series C redemption
    date. See Preferred Units below.



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

In January 2004, Equity Office redeemed all of
its 4,562,900 outstanding 8 5/8% Series C Cumulative
Redeemable Preferred Shares of Beneficial Interest. The
Series C Preferred Shares were redeemed at a redemption
price of $25.00 per share for an aggregate redemption price of
approximately $114.1 million. The deferred issuance cost of
approximately $4.1 million was reflected as a preferred
distribution. In connection with such redemption, we redeemed
all of the Series C Preferred Units from Equity Office.

13



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

(Unaudited)


NOTE 9  CUMULATIVE EFFECT OF A
CHANGE IN ACCOUNTING PRINCIPLE

Under the provisions of FIN 46, which we adopted
on January 1, 2004, we consolidated the financial condition
and results of operations of Sun America Center, an office
property located in Century City, California, which consists of
approximately 780,000 square feet, as we determined we were
the primary beneficiary in this variable interest entity. We own
an approximate 67% share of a $202.2 million
mezzanine-level debt position for which we paid approximately
$73.9 million in 1999. As of December 31, 2003, this
investment was recorded as a note receivable and was included in
other assets. The note matures in August 2014 and prior to then
interest is payable based on cash flow. Our maximum exposure to
loss as a result of the investment is currently equivalent to
the $73.9 million we invested in 1999. However, we may be
required to contribute additional funds to support the
operations of the property. Any additional funding will be in
the form of a shortfall note, which is repayable from available
cash flow. The shortfall notes may not exceed $2.5 million
in the aggregate, of which our share would be approximately 67%.
Our payment recourse is limited to the mezzanine borrower
entitys 100% interest in the property-owning entity.

As a result of the consolidation of Sun America
Center, we recorded a cumulative effect of a change in
accounting principle loss of approximately $33.7 million.
The effect on our financial condition as a result of the
consolidation of Sun America Center as of January 1, 2004
is as follows:

|                                                                          |  |   |          |     
|------------------------------------------------------------------------- |  | - | -------- | ----
|(Dollars in thousands)                                                    |  |  
|                                                                          |  |  
|Investment in real estate                                                 |  | $ | 330,787  |     
|Accumulated depreciation                                                  |  | $ | (31,219  | )   
|Mortgage debt                                                             |  | $ | (203,225 | )   
|Net other assets and liabilities, including a net
    discount of $31,476 |  | $ | (130,040 | )(a)



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | As of January 1, 2004, our joint venture
    partners share of the mezzanine-level debt of
    approximately $49.7 million is recorded in other
    liabilities, which is net of a discount of approximately
    $31.5 million. Interest expense on the approximate
    $66 million face amount of the joint venture partners
    debt is accrued at 7.25% per annum and the discount is amortized
    to interest expense through the maturity of the mezzanine-level
    loan in 2014.

NOTE 10  EARNINGS PER
UNIT

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

|                                             |                                                                                                            |                            |   |         |      |  |   |         |  
|-------------------------------------------- | ---------------------------------------------------------------------------------------------------------- | -------------------------- | - | ------- | ---- |  | - | ------- | -
|                                             |                                                                                                            |                           
|                                             |                                                                                                            | For the three months ended |  
|                                             |                                                                                                            | March 31,                  |  
|                                             |                                                                                                            |                            |  
|(Dollars in thousands, except per unit data) |                                                                                                            | 2004                       |   |         | 2003 | 
|                                             |                                                                                                            |                            |   |         |      | 
|Numerator:                                   |                                                                                                            |                            |   |         |      |  |   |        
|                                             | Income from continuing operations                                                                          |                            | $ | 117,714 |      |  | $ | 152,403 |  
|                                             | Preferred distributions                                                                                    |                            |   | (12,748 | )    |  |   | (15,461 | )
|                                             |                                                                                                            |                            |   |         |      | 
|                                             | Income from continuing operations available to
    unitholders                                             |                            |   | 104,966 |      |  |   | 136,942 |  
|                                             | Discontinued operations (including net gain on
    sales of real estate of $2,195 and $7,277, respectively |                            |   | 1,971   |      |  |   | 22,089  |  
|                                             | Cumulative effect of a change in accounting
    principle                                                  |                            |   | (33,697 | )    |  |   |        |  
|                                             |                                                                                                            |                            |   |         |      | 
|                                             | Numerator for basic and diluted earnings per
    unit  net income available to unitholders                |                            | $ | 73,240  |      |  | $ | 159,031 |  
|                                             |                                                                                                            |                            |   |         |      | 

14



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

(Unaudited)


|                                             |                                                                                                                     |                                                                                       |   |             |           |  |   |             |         | 
|-------------------------------------------- | ------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------- | - | ----------- | --------- |  | - | ----------- | ------- | 
|                                             |                                                                                                                     |                                                                                      
|                                             |                                                                                                                     | For the three months ended                                                            |  
|                                             |                                                                                                                     | March 31,                                                                             |  
|                                             |                                                                                                                     |                                                                                       |  
|(Dollars in thousands, except per unit data) |                                                                                                                     | 2004                                                                                  |   |             | 2003      | 
|                                             |                                                                                                                     |                                                                                       |   |             |           | 
|Denominator:                                 |                                                                                                                     |                                                                                       |   |             |           |  |   |            
|                                             | Denominator for basic earnings per
    unit  weighted average Units outstanding                                    |                                                                                       |   | 448,652,065 |           |  |   | 458,337,480 |        
|                                             | Effect of dilutive potential units:                                                                                 |                                                                                       |   |             |           |  |   |             |        
|                                             |                                                                                                                     | Units issuable upon exercise of Equity Office
    share options and restricted shares |   |             | 2,490,856 |  |   |             | 964,372 | 
|                                             |                                                                                                                     |                                                                                       |   |             |           | 
|                                             | Denominator for diluted earnings per
    unit  weighted average Units outstanding and dilutive
    potential units |                                                                                       |   | 451,142,921 |           |  |   | 459,301,852 |        
|                                             |                                                                                                                     |                                                                                       |   |             |           | 
|Earnings per unit  basic                    |                                                                                                                     |                                                                                       |   |             |           |  |   |            
|                                             | Income from continuing operations available to
    unitholders                                                      |                                                                                       | $ | 0.23        |           |  | $ | 0.30        |        
|                                             | Discontinued operations                                                                                             |                                                                                       |   |            |           |  |   | 0.05        |        
|                                             | Cumulative effect of a change in accounting
    principle                                                           |                                                                                       |   | (0.08       | )         |  |   |            |        
|                                             |                                                                                                                     |                                                                                       |   |             |           | 
|                                             | Net income available to unitholders(a)                                                                              |                                                                                       | $ | 0.16        |           |  | $ | 0.35        |        
|                                             |                                                                                                                     |                                                                                       |   |             |           | 
|Earnings per unit 
    diluted              |                                                                                                                     |                                                                                       |   |             |           |  |   |            
|                                             | Income from continuing operations available to
    unitholders                                                      |                                                                                       | $ | 0.23        |           |  | $ | 0.30        |        
|                                             | Discontinued operations                                                                                             |                                                                                       |   |            |           |  |   | 0.05        |        
|                                             | Cumulative effect of a change in accounting
    principle                                                           |                                                                                       |   | (0.07       | )         |  |   |            |        
|                                             |                                                                                                                     |                                                                                       |   |             |           | 
|                                             | Net income available to unitholders(a)                                                                              |                                                                                       | $ | 0.16        |           |  | $ | 0.35        |        
|                                             |                                                                                                                     |                                                                                       |   |             |           | 






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

The following securities were not included in the
diluted earnings per unit computation because they would have
had an antidilutive effect:

|                         |       |                  |       |                            |      |  |           |            |  |  |            |            | 
|------------------------ | ----- | ---------------- | ----- | -------------------------- | ---- |  | --------- | ---------- |  |  | ---------- | ---------- | 
|                         |       |                  |       |                           
|                         |       |                  |       | For the three months ended |     
|                         |       |                  |       | March 31,                  |     
|                         |       | Weighted Average |       |                            |      | 
|Antidilutive Securities  |       | Exercise Price   |       |                            | 2004 |  |           | 2003       | 
|                         |       |                  |       |                            |      |  |           |            | 
|Share options            |       | $                | 30.08 |                            |      |  | 6,740,216 |            |  |  |           |           
|Share options            |       | $                | 28.32 |                            |      |  |          |            |  |  | 14,949,646 |           
|Series B Preferred Units |       | $                | 35.70 |                            |      |  | 8,389,354 |            |  |  | 8,389,354  |           
|                         |       |                  |       |                            |      |  |           |            | 
|                         | Total |                  |       |                            |      |  |           | 15,129,570 |  |  |            | 23,339,000 | 
|                         |       |                  |       |                            |      |  |           |            | 

NOTE 11  SEGMENT
INFORMATION

As discussed in Note 1, our primary business
is the ownership and operation of Office Properties. We account
for each Office Property as an individual operating segment and
have aggregated the related operating accounts into a single
operating segment for financial reporting purposes due to the
fact that the individual operating segments have similar
economic characteristics. The net property operating income from
continuing operations generated at the Corporate and
Other segment consist primarily of the Industrial
Properties. The Other revenues generated at the
Corporate and Other segment consist primarily of fee
income from the management of office properties owned by third
parties, interest and dividend income from various investments
and realized gains on sale of certain marketable securities.

15



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

(Unaudited)


|                                                                                                                                  |                                                              |                                     |            |          |                            |   |          |              |   |        |            |          |           |           |          |          |              |   |          |          |   |   |          |          |  
|--------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------ | ----------------------------------- | ---------- | -------- | -------------------------- | - | -------- | ------------ | - | ------ | ---------- | -------- | --------- | --------- | -------- | -------- | ------------ | - | -------- | -------- | - | - | -------- | -------- | -
|                                                                                                                                  |                                                              |                                     |            |         
|                                                                                                                                  |                                                              | As of or for the three months ended |            |          | For the three months ended |  
|                                                                                                                                  |                                                              | March 31, 2004                      |            |          | March 31, 2003             |  
|                                                                                                                                  |                                                              |                                     |            |          |                            |  
|                                                                                                                                  |                                                              | Office                              |            |          | Corporate                  |   |          |              |   | Office |            |          | Corporate |           |          |         
|(Dollars in thousands)                                                                                                            |                                                              | Properties                          |            |          | and Other                  |   |          | Consolidated |   |        | Properties |          |           | and Other |          |          | Consolidated |  
|                                                                                                                                  |                                                              |                                     |            |          |                            |   |          |              |   |        |            |          |           |           |          |          |              |  
|Property operating revenues(a)                                                                                                    |                                                              | $                                   | 782,332    |          |                            | $ | 10,821   |              |   | $      | 793,153    |          |           | $         | 771,586  |          |              | $ | 12,147   |          |   | $ | 783,733  |         
|Property operating expenses(b)                                                                                                    |                                                              |                                     | (278,397   | )        |                            |   | (2,641   | )            |   |        | (281,038   | )        |           |           | (268,103 | )        |              |   | (2,593   | )        |   |   | (270,696 | )       
|                                                                                                                                  |                                                              |                                     |            |          |                            |   |          |              |   |        |            |          |           |           |          |          |              |  
|                                                                                                                                  | Property net operating income from continuing
    operations |                                     |            | 503,935  |                            |   |          | 8,180        |   |        |            | 512,115  |           |           |          | 503,483  |              |   |          | 9,554    |   |   |          | 513,037  |  
|                                                                                                                                  |                                                              |                                     |            |          |                            |   |          |              |   |        |            |          |           |           |          |          |              |  
|Adjustments to arrive at net income:                                                                                              |                                                              |                                     |            |          |                            |   |          |              |   |        |            |          |           |           |          |          |              |   |          |          |   |   |          |         
|                                                                                                                                  | Other revenues                                               |                                     |            | 1,229    |                            |   |          | 3,152        |   |        |            | 4,381    |           |           |          | 471      |              |   |          | 15,835   |   |   |          | 16,306   |  
|                                                                                                                                  | Interest expense(c)                                          |                                     |            | (53,009  | )                          |   |          | (154,700     | ) |        |            | (207,709 | )         |           |          | (43,612  | )            |   |          | (163,403 | ) |   |          | (207,015 | )
|                                                                                                                                  | Depreciation and amortization                                |                                     |            | (180,463 | )                          |   |          | (7,361       | ) |        |            | (187,824 | )         |           |          | (163,562 | )            |   |          | (5,517   | ) |   |          | (169,079 | )
|                                                                                                                                  | Ground rent                                                  |                                     |            | (5,346   | )                          |   |          |             |   |        |            | (5,346   | )         |           |          | (4,596   | )            |   |          |         |   |   |          | (4,596   | )
|                                                                                                                                  | General and administrative                                   |                                     |            |         |                            |   |          | (11,309      | ) |        |            | (11,309  | )         |           |          |         |              |   |          | (13,502  | ) |   |          | (13,502  | )
|                                                                                                                                  |                                                              |                                     |            |          |                            |   |          |              |   |        |            |          |           |           |          |          |              |  
|                                                                                                                                  | Total                                                        |                                     |            | (237,589 | )                          |   |          | (170,218     | ) |        |            | (407,807 | )         |           |          | (211,299 | )            |   |          | (166,587 | ) |   |          | (377,886 | )
|                                                                                                                                  |                                                              |                                     |            |          |                            |   |          |              |   |        |            |          |           |           |          |          |              |  
|Income before income taxes, allocation to
    minority interests and income from investments in unconsolidated
    joint ventures |                                                              |                                     | 266,346    |          |                            |   | (162,038 | )            |   |        | 104,308    |          |           |           | 292,184  |          |              |   | (157,033 | )        |   |   | 135,151  |         
|Income taxes                                                                                                                      |                                                              |                                     | 42         |          |                            |   | 220      |              |   |        | 262        |          |           |           | (177     | )        |              |   | (819     | )        |   |   | (996     | )       
|Minority interests                                                                                                                |                                                              |                                     | (2,567     | )        |                            |   | (7       | )            |   |        | (2,574     | )        |           |           | (2,506   | )        |              |   | (10      | )        |   |   | (2,516   | )       
|Income from investments in unconsolidated joint
    ventures                                                                      |                                                              |                                     | 15,354     |          |                            |   | 364      |              |   |        | 15,718     |          |           |           | 20,999   |          |              |   | (235     | )        |   |   | 20,764   |         
|                                                                                                                                  |                                                              |                                     |            |          |                            |   |          |              |   |        |            |          |           |           |          |          |              |  
|Income from continuing operations                                                                                                 |                                                              |                                     | 279,175    |          |                            |   | (161,461 | )            |   |        | 117,714    |          |           |           | 310,500  |          |              |   | (158,097 | )        |   |   | 152,403  |         
|Discontinued operations (including net gain on
    sales of real estate of $2,195 and $7,277, respectively)                       |                                                              |                                     | 1,971      |          |                            |   |         |              |   |        | 1,971      |          |           |           | 22,184   |          |              |   | (95      | )        |   |   | 22,089   |         
|                                                                                                                                  |                                                              |                                     |            |          |                            |   |          |              |   |        |            |          |           |           |          |          |              |  
|Income before cumulative effect of a change in
    accounting principle                                                           |                                                              |                                     | 281,146    |          |                            |   | (161,461 | )            |   |        | 119,685    |          |           |           | 332,684  |          |              |   | (158,192 | )        |   |   | 174,492  |         
|Cumulative effect of a change in accounting
    principle                                                                         |                                                              |                                     | (33,697    | )        |                            |   |         |              |   |        | (33,697    | )        |           |           |         |          |              |   |         |          |   |   |         |         
|                                                                                                                                  |                                                              |                                     |            |          |                            |   |          |              |   |        |            |          |           |           |          |          |              |  
|Net income                                                                                                                        |                                                              | $                                   | 247,449    |          |                            | $ | (161,461 | )            |   | $      | 85,988     |          |           | $         | 332,684  |          |              | $ | (158,192 | )        |   | $ | 174,492  |         
|                                                                                                                                  |                                                              |                                     |            |          |                            |   |          |              |   |        |            |          |           |           |          |          |              |  
|Property net operating income:                                                                                                    |                                                              |                                     |            |          |                            |   |          |              |   |        |            |          |           |           |          |          |              |   |          |          |   |   |          |         
|                                                                                                                                  | Continuing operations                                        |                                     | $          | 503,935  |                            |   | $        | 8,180        |   |        | $          | 512,115  |           |           | $        | 503,483  |              |   | $        | 9,554    |   |   | $        | 513,037  |  
|                                                                                                                                  | Discontinued operations                                      |                                     |            | (244     | )                          |   |          |             |   |        |            | (244     | )         |           |          | 20,454   |              |   |          | 14       |   |   |          | 20,468   |  
|                                                                                                                                  |                                                              |                                     |            |          |                            |   |          |              |   |        |            |          |           |           |          |          |              |  
|Total property net operating income                                                                                               |                                                              | $                                   | 503,691    |          |                            | $ | 8,180    |              |   | $      | 511,871    |          |           | $         | 523,937  |          |              | $ | 9,568    |          |   | $ | 533,505  |         
|                                                                                                                                  |                                                              |                                     |            |          |                            |   |          |              |   |        |            |          |           |           |          |          |              |  
|Property operating margin from continuing and
    discontinued operations(d)                                                      |                                                              |                                     |            |          |                            |   |          |              |   |        | 64.5       | %        |           |           |          |          |              |   |          |          |   |   | 65.5     | %       
|                                                                                                                                  |                                                              |                                     |            |          |                            |   |          |              |   |        |            |          |           |           |          |          |              |  
|Property operating margin from continuing
    operations(d)                                                                       |                                                              |                                     |            |          |                            |   |          |              |   |        | 64.6       | %        |           |           |          |          |              |   |          |          |   |   | 65.5     | %       
|                                                                                                                                  |                                                              |                                     |            |          |                            |   |          |              |   |        |            |          |           |           |          |          |              |  
|Capital and tenant improvements                                                                                                   |                                                              | $                                   | 113,756    |          |                            | $ | 7,452    |              |   | $      | 121,208    |          |           | $         | 76,610   |          |              | $ | 2,338    |          |   | $ | 78,948   |         
|                                                                                                                                  |                                                              |                                     |            |          |                            |   |          |              |   |        |            |          |           |           |          |          |              |  
|Investments in unconsolidated joint ventures                                                                                      |                                                              | $                                   | 973,589    |          |                            | $ | (914     | )            |   | $      | 972,675    |          |           |           |          |          |              |   |          |          |   |   |          |         
|                                                                                                                                  |                                                              |                                     |            |          |                            |   |          |              |   |        |            |          |           |           |          |          |              |  
|Total assets                                                                                                                      |                                                              | $                                   | 24,030,625 |          |                            | $ | 848,615  |              |   | $      | 24,879,240 |          |           |           |          |          |              |   |          |          |   |   |          |         
|                                                                                                                                  |                                                              |                                     |            |          |                            |   |          |              |   |        |            |          |           |           |          |          |              |  




|    |  |                                                                                                                                                                                                         
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Included in property operating revenues are
    rental revenues, tenant reimbursements, parking income and other
    income.                                                                            
|   
|(b) |  | Included in property operating expenses are real
    estate taxes, insurance, repairs and maintenance and property
    operating expenses.                                                              
|   
|(c) |  | Interest expense for the Office Properties
    represents interest expense on property secured mortgage debt
    and does not include interest expense on the unsecured notes or
    the line of credit.
|   
|(d) |  | Property operating margin is calculated by
    dividing property net operating income by property operating
    revenues.                                                                               

16



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

(Unaudited)


NOTE 12  COMMITMENTS AND
CONTINGENCIES



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

We maintain cash and cash equivalents at
financial institutions. The combined account balances at each
institution typically exceed FDIC insurance coverage and, as a
result, there is a concentration of credit risk related to
amounts on deposit in excess of FDIC insurance coverage. We
believe the risk is not significant.



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

As an owner of real estate, we are subject to
various environmental laws of federal and local governments. Our
compliance with existing laws has not had a material adverse
effect on our financial condition and results of operations, and
we do not believe it will have a material adverse effect in the
future. However, we cannot predict the impact of unforeseen
environmental contingencies or new or changed laws or
regulations on our current Properties or on properties that we
may acquire.



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

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

On May 8, 2003, Broadband Office, Inc. and
the official committee of unsecured creditors of Broadband
Office Inc. (collectively, the Plaintiffs), filed a
complaint (the Complaint) in the United States
Bankruptcy Court for the District of Delaware against one
private and seven public real estate companies, various
affiliated entities (collectively the Corporate
Defendants) and certain individuals, including Equity
Office, EOP Partnership, David Helfand (a former executive vice
president of Equity Office), Spieker Properties, Inc. and
Spieker Properties, L.P. (which we acquired in 2001) and
Craig Vought (formerly co-chief executive officer of Spieker
Properties, Inc. and a former Equity Office trustee). On
August 25, 2003, Plaintiffs filed a First Amended
Complaint. Under the terms of our indemnification agreements
with Messrs. Helfand and Vought, we may be responsible to
reimburse them for the effect of any judgment rendered against
them personally as well as the costs of their defense. To date,
no separate defense costs have been incurred with respect to
these individuals. We were an equity investor in, landlord to
and customer of Broadband Office, and Messrs. Helfand and
Vought were members of the board of directors of Broadband
Office until their resignations on May 1, 2001 and
May 2, 2001, respectively. Mr. Vought also served as a
member of Broadband Offices executive committee. Broadband
Office filed for bankruptcy protection on May 9, 2001. The
First Amended Complaint alleges, among other things, breaches of
fiduciary duty and seeks recovery of what it characterizes as
preferential payments and fraudulent transfers. It further seeks
to hold us liable for the outstanding debts of the corporation,
jointly and severally with all of the Corporate Defendants, as
an alleged general partner of Broadband Office. The
Plaintiffs allege that the amount of these claims exceeds
$300 million in the aggregate. Due to the inherent
uncertainties of the judicial process, we are unable to predict
the outcome of this matter with certainty. We intend to
vigorously defend this matter and believe we have meritorious
defenses. As a result, we have not accrued for any potential
liability in connection with this litigation. As in any
litigation, there can be no assurance that we will prevail.
Should the court not resolve this matter in our favor it could
have a material adverse effect on our financial condition,
results of operations and liquidity.

17



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

(Unaudited)




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

As of March 31, 2004 and December 31,
2003, we had $0.5 billion and $1.3 billion of
forward-starting interest rate swaps outstanding, respectively.
As discussed in Note 7  Unsecured Notes,
Derivative Financial Instruments and Lines of Credit, we settled
$800 million of forward-starting interest rate swaps in
March 2004 in conjunction with the $1.0 billion debt
offering. The $0.5 billion of outstanding swaps at
March 31, 2004 will hedge the future interest payments of
debt that we anticipate issuing in 2004. The market value of the
swaps at March 31, 2004 represented a net liability to us
of approximately $11.5 million (approximately
$1.4 million is recorded in other assets and
$12.9 million is recorded in other liabilities). The market
value of the swaps at December 31, 2003 represented a net
liability to us of approximately $10.4 million
(approximately $11.1 million is recorded in other assets
and $21.5 million is recorded in other liabilities). The
corresponding net market value of these swaps is included in
accumulated other comprehensive income. No hedge ineffectiveness
has been recorded in earnings as these swaps were perfectly
effective. As of April 30, 2004, the market value of these
forward-starting interest rate swaps represented an asset to us
of approximately $16.8 million. The market value of the
forward-starting interest rate swaps is dependent upon existing
market interest rates and swap spreads, which change over time.

Upon settlement of the swaps, we may be obligated
to pay the counterparties a settlement payment, or alternatively
to receive settlement proceeds from the counterparties. If the
swaps are deemed to be effective hedges upon settlement, any
monies paid or received will be amortized to interest expense
over the term of the respective hedged interest payments. If the
swaps are deemed to be only partially effective hedges upon
settlement, a portion of the monies paid or received will be
immediately recognized in earnings and the remainder will be
amortized to interest expense over the term of the respective
hedged interest payments. If the swaps are deemed to be
completely ineffective hedges upon settlement, any monies paid
or received will be immediately recognized in earnings.



| |                                          
| | -----------------------------------------
| | Fixed-to-Floating Interest Rate
    Swaps

During 2004, we entered into fixed-to-floating
interest rate swap agreements in the notional amount of
$1.0 billion to hedge $1 billion of unsecured notes
issued in March 2004. We are the variable interest rate payer
and the counterparty is the fixed rate payer. The variable
interest rate is based on LIBOR plus 43 basis points. The
settlement dates correspond to the interest payment dates of the
respective unsecured notes being hedged. Each of the interest
rate swap agreements settle on the maturity date of the
respective unsecured notes being hedged.

The interest rate swap agreements and the hedged
unsecured notes are reflected at market value. Any market
adjustment on the swap agreements will be reflected in other
assets or other liabilities, and the corresponding market
adjustment on the unsecured notes will be reflected as either a
premium or discount on the unsecured notes. The market value of
the swaps at March 31, 2004 represented a liability to us
of approximately $16.8 million. As of April 30, 2004,
the market value of these interest rate swap agreements
represented a liability to us of approximately
$73.7 million. Because the swap agreements are considered a
perfectly effective fair value hedge, there will be no effect on
net income from the mark to market adjustments.



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

Certain joint venture agreements contain
buy / sell options in which each party has the option
to acquire the interest of the other party. Except for certain
agreements in which our partners in two of our Office Properties
can require us to buy their interests, such agreements do not
generally require that we buy our partners interests. The
exceptions allow our unaffiliated partners, at their election,
to require that we buy their interests (or 50% of their
interests, in one case) during specified future time periods,
commencing in 2009 and

18



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

(Unaudited)


at amounts that represent the fair market value
of their interests at that time. In addition, we have granted
options to each of two tenants to purchase the Office Property
it occupies.

In accordance with Statement of Accounting
Standards No. 5 Accounting for Contingencies, we
have not recorded a liability or the related asset that would
result from the acquisition in connection with the above
potential obligations because the probability of our
unaffiliated partners requiring us to buy their interests is not
currently determinable and we are unable to estimate the amount
of the payment required for that purpose.

Approximately 258 of our properties, consisting
of 33.2 million square feet, are subject to restrictions on
taxable dispositions under tax protection agreements entered
into with some of the contributors of the properties. The
carrying value of these properties was approximately
$6.8 billion at March 31, 2004. The restrictions on
taxable dispositions are effective for periods expiring at
different times through 2021. The terms of these tax protection
agreements generally prevent us from selling specific properties
in taxable transactions unless we indemnify the contributing
partners for their income tax liability on the portion of the
gain on sale allocated to them as a result of the
propertys value at the time of its contribution to us or,
in some cases, to our predecessor. We do not believe that the
tax protection agreements materially affect the conduct of our
business or our decisions whether to dispose of restricted
properties during the restriction period because we hold these
and our other properties for investment purposes, rather than
for sale. Historically, however, where we have deemed it to be
in our unitholders best interests to dispose of restricted
properties, we have done so through transactions structured as
tax-deferred transactions under section 1031 of the
Internal Revenue Code. We anticipate structuring most future
dispositions of restricted properties as transactions intended
to qualify for tax-deferred treatment. Therefore, we view the
likelihood of incurring any such material indemnification
obligations to be remote. Were we to dispose of a restricted
property in a taxable transaction, we generally would be
required to pay to a partner that is a beneficiary of one of the
tax protection agreements an amount based on the amount of
income tax the partner would be required to pay on the
incremental gain allocated to such partner as a result of the
built-in gain that existed with respect to such property at the
time of its contribution to us, or in some cases, to our
predecessor. In some cases there is a further requirement to
reimburse any additional tax liability arising from the
indemnification payment itself. The exact amount that would be
payable with respect to any particular taxable sale of a
restricted property would depend on a number of factors, many of
which can only be calculated at the time of any future sale,
including the sale price of the property at the time of the
sale, the partnerships basis in the property at the time
of the sale, the partners basis in the assets at the time
of the contribution, the partners applicable rate of
federal, state and local taxation at the time of the sale, and
the timing of the sale itself.



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

Property Damage, Business Interruption,
Earthquake and Terrorism:The
insurance coverage provided through third-party insurance
carriers is subject to coverage limitations. For each type of
insurance coverage described below, should an uninsured or
underinsured loss occur, we could lose all or a portion of our
investment in, and anticipated cash flows from, one or more of
the Properties. In addition, there can be no assurance that
third-party insurance carriers will be able to maintain
reinsurance sufficient to cover any losses that may be incurred.

19



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

(Unaudited)


|                                             |  |                                                                                                                                                                                         |  |                                          
|-------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -----------------------------------------
|Type of Insurance                            |  | Equity Office                                                                                                                                                                           |  | Third-Party Coverage                     
|Coverage                                     |  | Loss Exposure/ Deductible                                                                                                                                                               |  | Limitation                               
|                                             |  |                                                                                                                                                                                         |  |                                          
|Property damage and business interruption(a) |  | $75 million annual aggregate exposure (which
    includes amounts paid for earthquake loss), plus $1 million
    per occurrence deductible                                              |  | $1.0 billion per occurrence(c)           
|Earthquake(a)(b)                             |  | $75 million annual aggregate exposure (which
    includes amounts paid for property damage and business
    interruption loss), plus $1 million per occurrence
    deductible           |  | $325 million in the aggregate per year(c)
|Acts of terrorism(d)                         |  | $2.8 million per occurrence deductible (plus
    10% of each and every loss with a maximum per occurrence
    exposure of $35.3 million which includes the
    $2.8 million deductible) |  | $825 million per occurrence(e)           






|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | We retain up to $75 million of such loss
    throughout the portfolio. In the event of a loss in excess of
    this retention limit, the third-party insurance carriers would
    be obligated to cover the losses up to the stated coverage
    amounts in the above table.                                                                                                                                                                                                                         
|   
|(b) |  | The amount of the third-party insurance relating
    to earthquakes is based on maximum probable loss studies
    performed by independent third parties. The maximum annual
    aggregate payment amount for earthquake loss is
    $325 million, inclusive of our loss exposure of
    $75 million plus $1 million per occurrence deductible.
    There can be no assurance that the maximum probable loss studies
    have accurately estimated losses that may occur.                            
|   
|(c) |  | These amounts include our loss exposure/
    deductible amount.                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   
|(d) |  | The coverage includes nuclear, chemical and
    biological events. The coverage does not apply to non-TRIA
    (Terrorism Insurance Act of 2002) 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.
|   
|(e) |  | This amount is in excess of our deductible
    amounts.                                                                                                                                                                                                                                                                                                                                                                                                                                              

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

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

NOTE 13  SUBSEQUENT
EVENTS

The following transactions occurred subsequent to
March 31, 2004, through April 30, 2004:

1. In April 2004, we sold a vacant land
parcel in Orange, California for approximately $5.5 million.

2. In April 2004, we sold 48571 Milmont
Drive located in Fremont, California to an unaffiliated party
for approximately $4.7 million. 48571 Milmont Drive
consisted of one industrial building of approximately 64,000
square feet.

20



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

(Unaudited)


3. In April 2004, we sold the
125 Building in Perimeter Center located in Atlanta,
Georgia to an unaffiliated party for approximately
$25.5 million. In connection with the sale we repaid
approximately $5.5 million of the total mortgage debt
encumbering the Perimeter Center office complex. The
125 Building consisted of one office building of
approximately 213,112 square feet.

21



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##### Table of Contents



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

Forward-Looking Statements

Statements contained in this Form 10-Q which
are not historical fact may be forward-looking statements. Such
statements (none of which is intended as a guarantee of
performance) are subject to certain risks and uncertainties,
which could cause actual results to differ materially from those
projected or anticipated. A number of important factors could
cause actual results to differ materially from those indicated
by the forward-looking statements, including, but not limited
to, the risks described in our current report on Form 8-K
filed with the Securities and Exchange Commission (the
SEC) on March 22, 2004, as the same may be
supplemented from time to time. Readers are cautioned not to
place undue reliance on these forward-looking statements, which
speak only as of the date this Form 10-Q is filed with the
SEC. Among the factors about which we have made assumptions are
the following:



| |   |                                                                                                                                                                                                                                       
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | changes in general economic conditions;                                                                                                                                                                                               
|
| |  | the extent, duration and strength of any economic
    recovery;                                                                                                                                                                       
|
| |  | the extent of any tenant bankruptcies and
    insolvencies;                                                                                                                                                                           
|
| |  | our ability to maintain occupancy and to timely
    lease or re-lease space at anticipated net effective rents
    calculated after giving effect to any required tenant
    improvement and leasing costs as well as rent abatements;
|
| |  | the amount of lease termination fees, if any;                                                                                                                                                                                         
|
| |  | the cost and availability of debt and equity
    financing;                                                                                                                                                                           
|
| |  | our ability to timely complete and lease current
    and future development projects on budget and in accordance with
    expectations;                                                                                               
|
| |  | our ability to realize anticipated cost savings
    and to otherwise create and realize economic benefits of scale;                                                                                                                   
|
| |  | our ability to obtain, at a reasonable cost,
    adequate insurance coverage for catastrophic events, such as
    earthquakes and terrorist acts; and                                                                                 
|
| |  | other risks and uncertainties detailed from time
    to time in our filings with the SEC.                                                                                                                                             

Overview

The following discussion and analysis is based
primarily on the consolidated financial statements of EOP
Partnership for the periods presented and should be read
together with the notes thereto contained in this
Form 10-Q. Terms employed herein as defined terms, but
without definition, have the meanings set forth in the notes to
the financial statements (See Item 1. Financial Statements).

Executive Summary

Equity Office is the largest office REIT and
publicly held owner of office properties in the nation based on
market capitalization and square footage. We receive our revenue
primarily from rental revenues generated by leases for our
office space. The key factors that affect our business and
financial results are the following:



| |   |                                                                                                                                  
| | - | ---------------------------------------------------------------------------------------------------------------------------------
| |  | the current economic environment, including its
    effect on white-collar job growth in markets in which we have a
    presence;
|
| |  | occupancy rates;                                                                                                                 
|
| |  | rental rates on new leases;                                                                                                      
|
| |  | tenant improvement and leasing costs incurred to
    retain and obtain tenants;                                                  

22



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##### Table of Contents





| |   |                                                                               
| | - | ------------------------------------------------------------------------------
| |  | the extent of any early lease terminations and
    any lease termination fees;
|
| |  | operating expenses; and                                                       
|
| |  | the extent of any dispositions and acquisitions.                              

Current Economic Environment

In 2004, the economy seems to be recovering after
several years of economic slowdown marked by slow employment
growth and the highest office vacancy in the United States in
over 10 years. The poor economic environment and weak
office markets adversely impacted our financial results. Our
overall office occupancy declined from 88.6% at
December 31, 2002 to 86.1% at March 31, 2004. This was
due to early lease terminations, which totaled approximately
6.2 million square feet and equated to approximately 5.1%
of occupancy lost in our office portfolio. However, over the
last three quarters, our occupancy has been stable at
approximately 86% and we expect our average occupancy to
increase approximately 1% during 2004. We estimate that for each
1% change in the average occupancy of our Office Properties
there is a corresponding $30 million to $35 million
change in our annualized net operating income. Market rental
rates have declined since the beginning of 2003 and have
significantly declined from their peak levels. Although market
rental rates seem to have begun to stabilize in many of our
markets over the last several quarters, the roll down of rents
on our expiring leases will continue to adversely impact our
rental revenues, net income and funds from operations for the
foreseeable future, assuming market rental rates do not increase
from their existing levels. In addition, tenant improvement and
leasing costs have increased significantly as compared to
historical levels due to the competitive market conditions for
new and renewal leases. In 2004, we expect the cost to obtain
and keep tenants, such as tenant improvements, leasing
commissions, free rent and other concessions to approximate 2003
levels.

On a macroeconomic level, we believe office
markets are beginning to recover and there will only be a
minimal amount of new office space that will become available in
most of our core markets. We expect net absorption of 25 to
30 million square feet in our top 20 markets in 2004. We
anticipate annual growth in the gross domestic product in the
range of 4% to 4.5% and office job growth in our top 20
markets of approximately 2.5%, which we believe will lead to an
increase in our occupancy level. Any changes in these
assumptions could impact our financial results.

Capital Transactions

During 2003, we took advantage of favorable
market conditions for property sales by disposing of
approximately $951.6 million in assets. In addition, we
entered into joint ventures and sold a 75% to 80% interest
in 13 Office Properties for approximately
$596.5 million. We used the proceeds from these asset sales
to repay debt, redeem preferred units, acquire strategic assets
in core markets, partially fund distributions to unitholders and
repurchase Units. As part of our capital allocation strategy of
taking advantage of favorable market conditions to exit non-core
markets, we expect to be net sellers of real estate again in
2004, which will further reduce our income from continuing
operations and funds from operations, and may also result in
gains or losses on sales of properties and potential impairment
charges.

The remaining portion of our Managements
Discussion and Analysis of Financial Condition and Results of
Operations will help you understand:



| |   |                                                                                         
| | - | ----------------------------------------------------------------------------------------
| |  | the key transactions that we completed during the
    three months ended March 31, 2004;
|
| |  | our critical accounting policies and estimates;                                         
|
| |  | our results of operations for the three months
    ended March 31, 2004 and 2003;       
|
| |  | our liquidity and capital resources; and                                                
|
| |  | our funds from operations.                                                              

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Key Transactions in 2004

During the three months ended March 31,
2004, we completed the following key transactions:



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | disposed of one office property which consisted
    of approximately 118,172 square feet for approximately
    $18.5 million;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|
| |  | acquired one of our joint venture partners
    15.53% economic interest in the 1301 Avenue of the Americas
    office building for approximately $60.7 million and the
    assumption of our partners share of the mortgage notes of
    approximately $83.0 million and acquired another joint
    venture partners interest for approximately
    $7.5 million which closed in April 2004;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|
| |  | consolidated the financial condition and results
    of operations of the Sun America Center office property as of
    January 1, 2004 in accordance with FIN 46 and recognized a
    cumulative effect of a change in accounting principle loss of
    approximately $33.7 million (See Item 1. Financial
    Statements Note 9  Cumulative Effect of a Change
    in Accounting Principle);                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|
| |  | redeemed the 8 5/8% Series C Cumulative
    Redeemable Preferred Units of Beneficial Interest for
    approximately $114.1 million;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|
| |  | repaid $300 million of 6.50% unsecured notes
    and $100 million of 6.90% unsecured notes that matured in
    January 2004;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|
| |  | issued $1.0 billion of unsecured notes due
    March 2014 with a coupon interest rate of 4.75%. In connection
    with this issuance, we settled $800 million of
    forward-starting interest rate swaps for a payment of
    approximately $69.1 million. Approximately
    $0.2 million of this payment was considered an ineffective
    hedge and was expensed during the quarter. The remaining
    $68.9 million was considered an effective hedge and will be
    amortized to interest expense over the 10-year term of the
    $1.0 billion notes. The effective rate on these notes
    including issuance costs and the settlement of the
    forward-starting interest rate swaps is 5.54%. We then entered
    into several fixed-to-floating interest rate swap agreements
    that effectively converted the interest rate on the newly issued
    unsecured notes from a fixed rate of 5.54% to a floating rate of
    LIBOR plus 43 basis points plus 79 basis points of loan
    costs;
|
| |  | repaid approximately $160.2 million of
    mortgage debt; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|
| |  | cancelled a $1.0 billion standby 364-day
    line of credit.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

Critical Accounting Policies and
Estimates

Refer to our 2003 Annual Report on Form 10-K
for a discussion of our critical accounting policies, which
include allowance for doubtful accounts, impairment of
long-lived assets, depreciation and the fair value of financial
instruments. There have been no material changes to these
policies in 2004.

Results of Operations

Trends
in Occupancy, Rental Rates, Lease Terminations and Tenant
Improvements and Leasing Costs

Below is a summary of our leasing activity for
tenants taking occupancy for the periods presented for our
Office Properties. Our 10 largest markets in terms of property
net operating income from continuing operations in order from
greatest to least are Boston, San Francisco, San Jose, New York,
Seattle, Los

24



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##### Table of Contents



Angeles, Chicago, Washington D.C., Atlanta
and Orange County. These markets accounted for approximately
78.9% of our property net operating income from continuing
operations in the first quarter of 2004.


|                        |                                                                                                                 |                            |   |           |              |  |   |           |   |  |   |            |  
|----------------------- | --------------------------------------------------------------------------------------------------------------- | -------------------------- | - | --------- | ------------ |  | - | --------- | - |  | - | ---------- | -
|                        |                                                                                                                 |                            |   |          
|                        |                                                                                                                 | For the three months ended |   |           | For the year | 
|                        |                                                                                                                 | March 31,                  |   |           | ended        | 
|                        |                                                                                                                 |                            |   |           | December 31, | 
|                        |                                                                                                                 | 2004                       |   |           | 2003         |  |   | 2003      |  
|Office Property Data:   |                                                                                                                 |                            |   |           |              |  |   |           |  
|10 Largest Markets:     |                                                                                                                 |                            |   |           |              |  |   |           |   |  |   |           
|                        | Portion of total office portfolio based on square
    feet at end of period                                     |                            |   | 69.6      | %            |  |   | 68.2      | % |  |   | 69.4       | %
|                        | Occupancy at end of period                                                                                      |                            |   | 86.0      | %            |  |   | 86.9      | % |  |   | 86.1       | %
|                        | Gross square footage for tenants whose lease term
    commenced during the period                               |                            |   | 3,660,820 |              |  |   | 3,897,043 |   |  |   | 15,218,840 |  
|                        | Weighted average annual rent per square foot for
    tenants whose lease term commenced during the period(a)(b) |                            | $ | 26.70     |              |  | $ | 29.95     |   |  | $ | 27.93      |  
|                        | Gross square footage for expiring and terminated
    leases during the period                                   |                            |   | 3,736,902 |              |  |   | 4,885,975 |   |  |   | 15,932,288 |  
|                        | Weighted average annual rent per square foot for
    expiring and terminated leases during the period(a)        |                            | $ | 29.65     |              |  | $ | 32.77     |   |  | $ | 31.12      |  
|Total Office Portfolio: |                                                                                                                 |                            |   |           |              |  |   |           |   |  |   |           
|                        | Occupancy at end of period                                                                                      |                            |   | 86.1      | %            |  |   | 87.2      | % |  |   | 86.3       | %
|                        | Gross square footage for tenants whose lease term
    commenced during the period                               |                            |   | 5,414,412 |              |  |   | 5,886,286 |   |  |   | 22,684,488 |  
|                        | Weighted average annual rent per square foot for
    tenants whose lease term commenced during the period(a)(b) |                            | $ | 24.50     |              |  | $ | 27.17     |   |  | $ | 25.68      |  
|                        | Gross square footage for expiring and terminated
    leases during the period                                   |                            |   | 5,605,011 |              |  |   | 7,089,008 |   |  |   | 23,976,592 |  
|                        | Weighted average annual rent per square foot for
    expiring and terminated leases during the period(a)        |                            | $ | 26.74     |              |  | $ | 29.38     |   |  | $ | 28.14      |  



---



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

The decline in occupancy for our Office
Properties since the beginning of 2003 was a result of early
lease terminations. Although lease termination fees increase
current period income, future rental income will most likely be
reduced. Given the decline in market rents, it is unlikely we
will lease the space to new tenants at the same rate which had
been payable under the terminated leases. We will also often
incur downtime and additional costs to relet the space. Although
there is no way of predicting future lease terminations, we
currently anticipate that lease termination fees will be
relatively stable in 2004 as compared to 2003 and the affected
square feet should be less in 2004 than 2003. The amount of
lease termination fees are not necessarily proportionate to the
square footage of leases being terminated.

As indicated in the table above, due to the weak
economy, there has been a general decline in market rental rates
for Office Properties as reflected by the difference between the
weighted average annual rent per square foot for expiring and
terminated leases compared to the weighted average annual rent
per square foot for tenants whose lease term commenced during
the same period. This roll down in rents adversely affects our
rental revenues and until market rental rates increase
substantially from their current levels, we expect it to
adversely affect our rental revenues in subsequent periods as we
enter into new leases. We currently estimate that the average
annual total rent of approximately $30.32 per square foot as of
March 31, 2004 for all our Office Properties is
approximately $3.50 to $4.00 per square foot above market rent
and expect this trend to

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##### Table of Contents



continue in 2004. As of March 31, 2004,
approximately 62.2 million square feet of occupied space
(approximately 58.7% of the total occupied square feet) is
scheduled to expire through 2008. The square footage of leases
scheduled to expire through 2008 and the average annual rent per
square foot for these leases is presented below.


|                 |  |                 |            |                 |                |   |       | 
|---------------- |  | --------------- | ---------- | --------------- | -------------- | - | ----- | 
|                 |  |                 |            | Annualized Rent |               
|                 |  | Square Feet of  |            |                 | per Occupied   |  
|Year(a)          |  | Expiring Leases |            |                 | Square Foot(b) |  
|                 |  |                 |            |                 |                |  
|2004 (remainder) |  |                 | 8,686,751  |                 |                | $ | 26.90 | 
|2005             |  |                 | 13,505,736 |                 |                | $ | 30.40 | 
|2006             |  |                 | 13,551,827 |                 |                | $ | 29.86 | 
|2007             |  |                 | 12,636,810 |                 |                | $ | 28.70 | 
|2008             |  |                 | 13,800,174 |                 |                | $ | 27.82 | 
|                 |  |                 |            |                 |                |  
|Total/ Average   |  |                 | 62,181,298 |                 |                | $ | 28.88 | 
|                 |  |                 |            |                 |                |  






|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Based on the contractual termination date of the
    lease without regard to any early lease termination and/or
    renewal options.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   
|(b) |  | Annualized rent is the monthly contractual rent
    as of the reporting date, or if the current rent payable is $0
    then the first monthly rent payment due, under existing leases
    as of March 31, 2004 multiplied by 12 months
    (Annualized Rent). This amount reflects total base
    rent and estimated expense reimbursements from tenants as of
    March 31, 2004 without regard to any rent abatements and
    contractual increases or decreases in rent subsequent to
    March 31, 2004. Total rent abatements for leases in place
    as of March 31, 2004, for the period from April 1,
    2004 to March 31, 2005 are approximately
    $31.8 million. We believe Annualized Rent is a useful
    measure because this information can be used for comparison to
    current market rents as published by various third party sources.

During 2003 and continuing in 2004, we
experienced substantial increases in tenant improvement and
leasing costs as compared to historical levels as a result of
competitive market conditions for new and renewal leases. The
weighted average tenant improvement and leasing cost per square
foot incurred for office leases which commenced during the three
months ended March 31, 2004 was approximately $17.14, a
substantial increase compared to the cost of $14.21 per
square foot incurred in the same period in 2003. These increases
in tenant improvement and leasing costs resulted in a decrease
in net effective rents (contract rents reduced by tenant
improvement costs, leasing commissions and any free rent
periods) for lease renewals and retenanted properties. We expect
tenant improvement and leasing costs to be approximately $18 to
$20 per square foot in 2004.

Period-to-Period Comparisons

Acquisition
and Disposition Activity

Below is a summary of our acquisition and
disposition activity since January 1, 2003. The buildings
and total square feet shown include properties we own in joint
ventures with other partners that we either consolidate or
account for under the equity method. The total square feet of
these unconsolidated properties is included in the table.
Excluding the joint venture partners share of the square
feet of the office properties, we effectively owned
114,518,235 square feet of office space as of
March 31, 2004.

26



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##### Table of Contents



|                        |                                     |                   |     |     |                       |  |             |            |   |  |             |    |   |  |           |          |  
|----------------------- | ----------------------------------- | ----------------- | --- | --- | --------------------- |  | ----------- | ---------- | - |  | ----------- | -- | - |  | --------- | -------- | -
|                        |                                     |                   |     |    
|                        |                                     | Office Properties |     |     | Industrial Properties | 
|                        |                                     |                   |     |     |                       | 
|                        |                                     | Buildings         |     |     | Square Feet           |  |             | Buildings  |   |  | Square Feet |   
|                        |                                     |                   |     |     |                       |  |             |            |   |  |             |   
|Properties owned as of: |                                     |                   |     |     |                       |  |             |            |   |  |             |    |   |  |           |         
|December 31, 2002       |                                     |                   | 734 |     |                       |  | 125,725,399 |            |   |  | 77          |    |   |  | 5,967,759 |         
|                        | Acquisitions                        |                   |     | 2   |                       |  |             | 829,293    |   |  |             |   |   |  |           |         |  
|                        | Developments placed in service      |                   |     | 5   |                       |  |             | 1,218,215  |   |  |             |   |   |  |           |         |  
|                        | Dispositions(a)                     |                   |     | (53 | )                     |  |             | (5,182,707 | ) |  |             | (2 | ) |  |           | (216,900 | )
|                        | Properties taken out of service(b)  |                   |     | (4  | )                     |  |             | (450,548   | ) |  |             |   |   |  |           |         |  
|                        | Building remeasurements             |                   |     |    |                       |  |             | 115,273    |   |  |             |   |   |  |           |         |  
|                        |                                     |                   |     |     |                       |  |             |            |   |  |             |   
|December 31, 2003       |                                     |                   | 684 |     |                       |  | 122,254,925 |            |   |  | 75          |    |   |  | 5,750,859 |         
|                        | Consolidation of Sun America Center |                   |     | 1   |                       |  |             | 780,063    |   |  |             |   |   |  |           |         |  
|                        | Developments placed in service(c)   |                   |     | 1   |                       |  |             | 114,955    |   |  |             |   |   |  |           |         |  
|                        | Dispositions                        |                   |     | (1  | )                     |  |             | (118,172   | ) |  |             |   |   |  |           |         |  
|                        | Building remeasurements             |                   |     |    |                       |  |             | 1,501      |   |  |             |   |   |  |           | 1,875    |  
|                        |                                     |                   |     |     |                       |  |             |            |   |  |             |   
|March 31, 2004          |                                     |                   | 685 |     |                       |  | 123,033,272 |            |   |  | 75          |    |   |  | 5,752,734 |         
|                        |                                     |                   |     |     |                       |  |             |            |   |  |             |   



---



|    |  |                                                                                                                                                                                    
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Excludes partial sales of real estate because the
    properties are still included in our portfolio.                                                                              
|   
|(b) |  | Cambridge Science Center (f/k/a Riverview
    I) is now considered a development and 175 Wyman has
    been taken out of service and is being held for potential
    redevelopment.
|   
|(c) |  | Douglas Corporate Center II, a development
    at December 31, 2003, is included in the office portfolio
    as an operational property in the first quarter 2004.                 

The financial data presented in the consolidated
statements of operations show changes in revenues and expenses
from period-to-period. We do not believe our period-to-period
financial data are necessarily comparable because we acquire and
dispose of properties on an ongoing basis. The following tables
show results attributable to the Properties that were held
during both periods being compared (the Same Store
Portfolio) and the changes in our aggregate total
portfolio of Properties (the Total Portfolio). The
significant differences between our Same Store and Total
Portfolios are:



| |   |                                                                                                                                                                                               
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | revenues recorded and expenses incurred at the
    corporate level;                                                                                                                           
|
| |  | the consolidations of 1301 Avenue of the Americas
    and Sun America Center in the first quarter of 2004;                                                                                    
|
| |  | the consolidation of Key Center in the third
    quarter of 2003;                                                                                                                             
|
| |  | the acquisition of U.S. Bank Tower in the
    third quarter of 2003;                                                                                                                          
|
| |  | the acquisition of 225 West Santa Clara in
    the fourth quarter of 2003;                                                                                                                    
|
| |  | certain developments placed in service; and                                                                                                                                                   
|
| |  | the properties sold in 2003 and 2004, including
    the partial sale of 13 properties in December 2003 which
    are included in income from investments in unconsolidated joint
    ventures.

Included in property operating revenues are
rental revenue, tenant reimbursements, parking and other income.
Included in property operating expenses are insurance, repairs
and maintenance and property operating expenses.

27



---



##### Table of Contents





| |                                                                                                     
| | ----------------------------------------------------------------------------------------------------
| | Comparison of the three months ended
    March 31, 2004 to the three months ended March 31,
    2003

The table below represents selected operating
information for the Total Portfolio and for the Same Store
Portfolio consisting of 639 consolidated Office Properties,
75 Industrial Properties and 23 unconsolidated joint
venture Properties acquired or placed in service on or prior to
January 1, 2003.

|                                                                                                                                  |                |                             |          |         |                      |   |          |         |          |   |         |        |         |      |        |     |      |   |         |         |         |   |         |         |         |   |         |        |         |   |        |      |      |  
|--------------------------------------------------------------------------------------------------------------------------------- | -------------- | --------------------------- | -------- | ------- | -------------------- | - | -------- | ------- | -------- | - | ------- | ------ | ------- | ---- | ------ | --- | ---- | - | ------- | ------- | ------- | - | ------- | ------- | ------- | - | ------- | ------ | ------- | - | ------ | ---- | ---- | -
|                                                                                                                                  |                |                             |          |        
|                                                                                                                                  |                | Total Portfolio             |          |         | Same Store Portfolio |  
|                                                                                                                                  |                |                             |          |         |                      |  
|                                                                                                                                  |                |                             |          |         |                      |   |          |        
|                                                                                                                                  |                |                             |          | Change  |                      |   |          |         | Change   |  
|                                                                                                                                  |                |                             |          |         |                      |   |          |         |          |  
|(Dollars in thousands)                                                                                                            |                | 2004                        |          |         | 2003                 |   |          | $       |          |   | %       |        |         | 2004 |        |     | 2003 |   |         | $       |         |   | %       |        
|                                                                                                                                  |                |                             |          |         |                      |   |          |         |          |   |         |        |         |      |        |     |      |   |         |         |         |   |         |        
|Property operating revenues                                                                                                       |                | $                           | 793,153  |         |                      | $ | 783,733  |         |          | $ | 9,420   |        |         |      | 1.2    | %   |      | $ | 744,964 |         |         | $ | 754,823 |         |         | $ | (9,859  | )      |         |   | (1.3   | )%  
|Fee income                                                                                                                        |                |                             | 3,060    |         |                      |   | 4,936    |         |          |   | (1,876  | )      |         |      | (38.0  | )   |      |   |        |         |         |   |        |         |         |   |        |        |         |   |       |     
|                                                                                                                                  |                |                             |          |         |                      |   |          |         |          |   |         |        |         |      |        |     |      |   |         |         |         |   |         |        
|                                                                                                                                  | Total revenues |                             |          | 796,213 |                      |   |          | 788,669 |          |   |         | 7,544  |         |      |        | 1.0 |      |   |         | 744,964 |         |   |         | 754,823 |         |   |         | (9,859 | )       |   |        | (1.3 | )   
|                                                                                                                                  |                |                             |          |         |                      |   |          |         |          |   |         |        |         |      |        |     |      |   |         |         |         |   |         |        
|Depreciation and amortization                                                                                                     |                |                             | 187,824  |         |                      |   | 169,079  |         |          |   | 18,745  |        |         |      | 11.1   |     |      |   | 174,100 |         |         |   | 161,047 |         |         |   | 13,053  |        |         |   | 8.1    |     
|Real estate taxes                                                                                                                 |                |                             | 84,443   |         |                      |   | 89,533   |         |          |   | (5,090  | )      |         |      | (5.7   | )   |      |   | 79,303  |         |         |   | 85,126  |         |         |   | (5,823  | )      |         |   | (6.8   | )   
|Property operating expenses                                                                                                       |                |                             | 196,595  |         |                      |   | 181,163  |         |          |   | 15,432  |        |         |      | 8.5    |     |      |   | 186,776 |         |         |   | 175,611 |         |         |   | 11,165  |        |         |   | 6.4    |     
|Ground rent                                                                                                                       |                |                             | 5,346    |         |                      |   | 4,596    |         |          |   | 750     |        |         |      | 16.3   |     |      |   | 4,595   |         |         |   | 4,456   |         |         |   | 139     |        |         |   | 3.1    |     
|General and administrative(a)                                                                                                     |                |                             | 11,309   |         |                      |   | 13,502   |         |          |   | (2,193  | )      |         |      | (16.2  | )   |      |   |        |         |         |   |        |         |         |   |        |        |         |   |       |     
|                                                                                                                                  |                |                             |          |         |                      |   |          |         |          |   |         |        |         |      |        |     |      |   |         |         |         |   |         |        
|                                                                                                                                  | Total expenses |                             |          | 485,517 |                      |   |          | 457,873 |          |   |         | 27,644 |         |      |        | 6.0 |      |   |         | 444,774 |         |   |         | 426,240 |         |   |         | 18,534 |         |   |        | 4.3  |     
|                                                                                                                                  |                |                             |          |         |                      |   |          |         |          |   |         |        |         |      |        |     |      |   |         |         |         |   |         |        
|                                                                                                                                  |                | Operating income            |          |         | 310,696              |   |          |         | 330,796  |   |         |        | (20,100 | )    |        |     | (6.1 | ) |         |         | 300,190 |   |         |         | 328,583 |   |         |        | (28,393 | ) |        |      | (8.6 | )
|                                                                                                                                  |                |                             |          |         |                      |   |          |         |          |   |         |        |         |      |        |     |      |   |         |         |         |   |         |        
|Interest/ dividend income                                                                                                         |                |                             | 1,321    |         |                      |   | 3,227    |         |          |   | (1,906  | )      |         |      | (59.1  | )   |      |   | 1,072   |         |         |   | 875     |         |         |   | 197     |        |         |   | 22.5   |     
|Realized gain on sale of marketable securities                                                                                    |                |                             |         |         |                      |   | 8,143    |         |          |   | (8,143  | )      |         |      | (100.0 | )   |      |   |        |         |         |   |        |         |         |   |        |        |         |   |        |     
|Interest expense(b)                                                                                                               |                |                             | (207,709 | )       |                      |   | (207,015 | )       |          |   | (694    | )      |         |      | 0.3    |     |      |   | (43,432 | )       |         |   | (47,371 | )       |         |   | 3,939   |        |         |   | (8.3   | )   
|                                                                                                                                  |                |                             |          |         |                      |   |          |         |          |   |         |        |         |      |        |     |      |   |         |         |         |   |         |        
|                                                                                                                                  |                | Total other income/ expense |          |         | (206,388             | ) |          |         | (195,645 | ) |         |        | (10,743 | )    |        |     | 5.5  |   |         |         | (42,360 | ) |         |         | (46,496 | ) |         |        | 4,136   |   |        |      | (8.9 | )
|                                                                                                                                  |                |                             |          |         |                      |   |          |         |          |   |         |        |         |      |        |     |      |   |         |         |         |   |         |        
|Income before income taxes, allocation to
    minority interests and income from investments in unconsolidated
    joint ventures |                |                             | 104,308  |         |                      |   | 135,151  |         |          |   | (30,843 | )      |         |      | (22.8  | )   |      |   | 257,830 |         |         |   | 282,087 |         |         |   | (24,257 | )      |         |   | (8.6   | )   
|Income taxes                                                                                                                      |                |                             | 262      |         |                      |   | (996     | )       |          |   | 1,258   |        |         |      | (126.3 | )   |      |   | 5       |         |         |   | (178    | )       |         |   | 183     |        |         |   | (102.8 | )   
|Minority interests                                                                                                                |                |                             | (2,574   | )       |                      |   | (2,516   | )       |          |   | (58     | )      |         |      | 2.3    |     |      |   | (2,897  | )       |         |   | (2,545  | )       |         |   | (352    | )      |         |   | 13.8   |     
|Income from investments in unconsolidated joint
    ventures                                                                      |                |                             | 15,718   |         |                      |   | 20,764   |         |          |   | (5,046  | )      |         |      | (24.3  | )   |      |   | 11,436  |         |         |   | 15,825  |         |         |   | (4,389  | )      |         |   | (27.7  | )   
|                                                                                                                                  |                |                             |          |         |                      |   |          |         |          |   |         |        |         |      |        |     |      |   |         |         |         |   |         |        
|Income from continuing operations                                                                                                 |                |                             | 117,714  |         |                      |   | 152,403  |         |          |   | (34,689 | )      |         |      | (22.8  | )   |      |   | 266,374 |         |         |   | 295,189 |         |         |   | (28,815 | )      |         |   | (9.8   | )   
|Discontinued operations (including net gain on
    sales of real estate of $2,195 and $7,277, respectively)                       |                |                             | 1,971    |         |                      |   | 22,089   |         |          |   | (20,118 | )      |         |      | (91.1  | )   |      |   |        |         |         |   |        |         |         |   |        |        |         |   |       |     
|                                                                                                                                  |                |                             |          |         |                      |   |          |         |          |   |         |        |         |      |        |     |      |   |         |         |         |   |         |        
|Income before cumulative effect of a change in
    accounting principle                                                           |                |                             | 119,685  |         |                      |   | 174,492  |         |          |   | (54,807 | )      |         |      | (31.4  | )   |      |   | 266,374 |         |         |   | 295,189 |         |         |   | (28,815 | )      |         |   | (9.8   | )   
|Cumulative effect of a change in accounting
    principle                                                                         |                |                             | (33,697  | )       |                      |   |         |         |          |   | (33,697 | )      |         |      |       |     |      |   |        |         |         |   |        |         |         |   |        |        |         |   |       |     
|                                                                                                                                  |                |                             |          |         |                      |   |          |         |          |   |         |        |         |      |        |     |      |   |         |         |         |   |         |        
|Net income                                                                                                                        |                | $                           | 85,988   |         |                      | $ | 174,492  |         |          | $ | (88,504 | )      |         |      | (50.7  | )%  |      | $ | 266,374 |         |         | $ | 295,189 |         |         | $ | (28,815 | )      |         |   | (9.8   | )%  
|                                                                                                                                  |                |                             |          |         |                      |   |          |         |          |   |         |        |         |      |        |     |      |   |         |         |         |   |         |        
|Property net operating income from continuing
    operations(c)                                                                   |                | $                           | 512,115  |         |                      | $ | 513,037  |         |          | $ | (922    | )      |         |      | (0.2   | )%  |      | $ | 478,885 |         |         | $ | 494,086 |         |         | $ | (15,201 | )      |         |   | (3.1   | )%  
|                                                                                                                                  |                |                             |          |         |                      |   |          |         |          |   |         |        |         |      |        |     |      |   |         |         |         |   |         |        
|Deferred rental revenue                                                                                                           |                | $                           | 21,761   |         |                      | $ | 11,606   |         |          | $ | 10,155  |        |         |      | 87.5   | %   |      | $ | 19,677  |         |         | $ | 10,971  |         |         | $ | 8,706   |        |         |   | 79.4   | %   
|                                                                                                                                  |                |                             |          |         |                      |   |          |         |          |   |         |        |         |      |        |     |      |   |         |         |         |   |         |        
|Lease termination fees                                                                                                            |                | $                           | 19,760   |         |                      | $ | 13,171   |         |          | $ | 6,589   |        |         |      | 50.0   | %   |      | $ | 14,083  |         |         | $ | 12,811  |         |         | $ | 1,272   |        |         |   | 9.9    | %   
|                                                                                                                                  |                |                             |          |         |                      |   |          |         |          |   |         |        |         |      |        |     |      |   |         |         |         |   |         |        






|    |  |                                                                                                                                                                                                 
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Corporate 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.

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|    |  |                                                                                                                                                                                                                                                                                             
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) |  | Interest expense (including amortization of
    deferred financing costs and prepayment expenses) for the Same
    Store Portfolio represents interest expense on property secured
    mortgage debt and does not include interest expense on the
    unsecured notes or the line of credit.
|   
|(c) |  | Represents segment data. See Item 1.
    Financial Statements Note 11  Segment
    Information.                                                                                                                                                                                            



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

The decrease in property operating revenues in
the Same Store Portfolio was primarily attributable to reduced
occupancy in the Same Store Portfolio from 87.9% at
December 31, 2002 to 86.0% at March 31, 2004. The
decrease in occupancy was due to early lease terminations. In
addition to the decline in occupancy, rental revenues declined
as a result of decreased average rental rates on new leases as
compared to average rental rates on expiring leases.



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

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



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

Real estate taxes decreased for the Total
Portfolio and Same Store Portfolio primarily due to a decrease
in real estate taxes in the California regions of approximately
$3.0 million and the Boston region of approximately
$3.6 million, partially offset by an increase in real
estate taxes in the New York region of approximately
$1.2 million.



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

For the Same Store Portfolio, property operating
expenses increased primarily as a result of higher utility
expense of approximately $3.9 million, higher insurance
expense of approximately $3.9 million because of a true up
to the accrual in the prior period which reduced the prior
period expense, and an increase in property operating general
and administrative expenses which include legal, advertising,
leasing, payroll and severance.



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

General and administrative expense decreased
primarily as a result of approximately $3.4 million related
to consulting expenses incurred in 2003 as a result of our
EOPlus initiatives, partially offset by approximately
$1.4 million of corporate level severance expense in 2004.



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

During 2002, we entered into an early lease
termination agreement with a tenant that was scheduled to occupy
an entire building. As part of the consideration for the lease
termination, we received five million shares of common stock.
These securities were sold during the first quarter of 2003 at a
gain of approximately $8.1 million.



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

Interest expense for the Same Store Portfolio
decreased primarily as a result of mortgage debt repayments.



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

We acquired the remaining economic interests in
1301 Avenue of the Americas and Key Center office buildings
and consolidated these properties. The consolidation caused a
decrease in income from investments

29



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in unconsolidated joint ventures for the Total
Portfolio. In the three months ended March 31, 2003, the
net income from these properties that was included in income
from investments in unconsolidated joint ventures was
approximately $4.7 million compared to net income in the
three months ended March 31, 2004 of $1.1 million.
This decrease was partially offset by the 13 office
properties that were partially sold in the fourth quarter 2003
and are now accounted for under the equity method. These
properties contributed approximately $3.3 million to income
from investments in unconsolidated joint ventures in the first
quarter 2004.


Income from investments in unconsolidated joint
ventures for the Total and Same Store Portfolio decreased
because property operating revenues declined but were partially
offset by an increase in lease termination fees from
$0.2 million in the first quarter 2003 to $3.0 million
in the first quarter 2004. The decrease in property operating
revenues was primarily attributable to reduced occupancy and
lower average rental rates on new leases as compared to average
rental rates on expiring leases.



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

The decrease in discontinued operations was the
result of a lower net gain on the sale of properties during the
three months ended March 31, 2004 as compared to the prior
period, and by the loss of net income due to the sales.
Discontinued operations for the three months ended
March 31, 2003 included the net income of properties sold
in 2003 and 2004 whereas the discontinued operations in 2004
only included the net income of properties sold during the three
months ended March 31, 2004.



| |                                                          
| | ---------------------------------------------------------
| | Cumulative Effect of a Change in Accounting
    Principle

Under the provisions of FIN 46, we consolidated
the financial condition and results of operations of SunAmerica
Center effective January 1, 2004, and recorded a cumulative
effect of a change in accounting principle resulting in a loss
of approximately $33.7 million. See Item 1. Financial
Statements Note 9  Cumulative Effect of a Change
in Accounting Principle.



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

See Item 1. Financial Statements
Note  4 Discontinued Operations for a summary of the
results of operations of properties sold.

Liquidity and Capital Resources



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

Our net cash provided by operating activities is
primarily dependent upon the occupancy level of our properties,
the rental rates on our leases, the collectibility of rent from
our tenants, the level of operating and other expenses, and
other factors. Our net cash provided by operating activities,
including our share of net cash provided by operating activities
from unconsolidated joint ventures, has been our primary source
of liquidity to fund debt service, capital improvements, tenant
improvements and leasing costs for operating properties as well
as distributions to our unitholders. We expect that our line of
credit will adequately provide for any additional amounts which
may be needed to fund working capital and unanticipated cash
needs as well as acquisitions and development costs.

A material adverse change in our net cash
provided by operating activities may affect our ability to fund
these items and may affect the financial performance covenants
under our line of credit and unsecured notes. If we fail to meet
our financial performance covenants and are unable to reach a
satisfactory resolution with our lenders, the maturity dates for
our unsecured notes could be accelerated, and our line of credit
could become unavailable to us or the interest charged on the
line of credit could increase. The interest charged on the line
of credit could also increase if our debt ratings adversely
change. Any of these circumstances could adversely affect our
ability to fund working capital and unanticipated cash needs,
acquisitions and development costs.

In order to qualify as a REIT for federal income
tax purposes, Equity Office must distribute at least 90% of its
taxable income (excluding capital gains) to its shareholders.
Equity Office currently distributes capital

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##### Table of Contents



gains to its shareholders; however, these gains
can be retained by Equity Office and taxed at the corporate tax
rate. Our partnership agreement generally requires us to
distribute substantially all of the net cash from operations
each quarter and to make reasonable efforts to distribute to
Equity Office enough cash for it to meet the 90% distribution
requirement. Accordingly, we currently intend, although we are
not legally obligated, to continue to make regular quarterly
distributions to holders of Units and preferred units. The
declaration of dividends on capital shares is at the discretion
of Equity Offices Board of Trustees, which decision is
made from time to time by Equity Offices Board of Trustees
based on then prevailing circumstances.




| |                   
| | ------------------
| | Net Free Cash Flow

Lower occupancy levels, reduced rental rates, and
reduced revenues as a result of asset sales have had the effect
of reducing our net cash provided by operating activities. In
addition, our tenant improvement and leasing costs have
increased significantly as compared to historical levels due to
competitive market conditions for new and renewal leases. During
the three months ended March 31, 2004 and the year ended
December 31, 2003, our net free cash flow was insufficient
to pay capital improvements, tenant improvements and leasing
costs and distributions to our unitholders by approximately
$30.0 million and $179.1 million, respectively. We
funded this net free cash flow deficit primarily with a
combination of borrowings under our line of credit and proceeds
from property dispositions.

We define net free cash flow as (a) net cash
provided by operating activities determined in accordance with
GAAP plus funds from operations (FFO) from our joint
venture activities and minority interests (which we view as an
integral part of our business) plus changes in non-cash items
and assets and liabilities, such as rents receivable and
accounts payable, which are expected to be settled in cash but
are not reflected in net cash provided by operating activities
determined in accordance with GAAP due to timing differences
between the accrual of the receivable or payable and the cash
settlement of such items, less (b) expenditures for capital
improvements, tenant improvements and leasing costs and
distributions to our unitholders. Net free cash flow is a
non-GAAP financial measure and is reconciled to net cash
provided by operating activities, the most directly comparable
GAAP measure, for the periods presented below. Our calculation
of net free cash flow is not necessarily comparable to similar
measures that may be presented by other companies.

|                                                                                                                                                                                                                                              |  |                      |          |   |                    |   |           |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------- | -------- | - | ------------------ | - | --------- | -
|                                                                                                                                                                                                                                              |  | For the three months |          |   | For the year ended |  
|                                                                                                                                                                                                                                              |  | ended March 31,      |          |   | December 31,       |  
|(Dollars in thousands)                                                                                                                                                                                                                        |  | 2004                 |          |   | 2003               |  
|                                                                                                                                                                                                                                              |  |                      |          |   |                    |  
|Net cash provided by operating activities                                                                                                                                                                                                     |  | $                    | 221,716  |   |                    | $ | 1,132,303 |  
|Plus: Net joint venture and minority interest FFO
    excluding non-cash items (deferred rent, loan amortization and
    non-real estate depreciation)                                                                                        |  |                      | 23,152   |   |                    |   | 112,800   |  
|Plus: Total changes in assets and liabilities in
    net cash provided by operating activities, net of provision for
    doubtful accounts and deferred rent and net distributions from
    unconsolidated joint ventures                     |  |                      | 54,732   |   |                    |   | 31,249    |  
|Plus: Other timing differences and changes in
    non-cash items                                                                                                                                                                              |  |                      | 1,934    |   |                    |   | 11,665    |  
|Less: Distributions to unitholders, including
    amount accrued at March 31, 2004                                                                                                                                                            |  |                      | (225,994 | ) |                    |   | (901,259  | )
|Less: Capital improvements, tenant improvements
    and leasing costs (for leases which commenced during the period)
    and other costs including our share of joint venture capital
    improvements, tenant improvements and leasing costs |  |                      | (96,873  | ) |                    |   | (512,036  | )
|Less: Preferred distributions (excluding deferred
    issuance costs of $4,126 and $0 respectively)                                                                                                                                           |  |                      | (8,620   | ) |                    |   | (53,841   | )
|                                                                                                                                                                                                                                              |  |                      |          |   |                    |  
|Net Free Cash Flow Shortfall                                                                                                                                                                                                                  |  | $                    | (29,953  | ) |                    | $ | (179,119  | )
|                                                                                                                                                                                                                                              |  |                      |          |   |                    |  

If our net cash from operating activities and
tenant improvements and leasing costs continue at these levels,
and if Equity Offices Board of Trustees continues to
declare distributions on our units at current levels,

31



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##### Table of Contents



we expect that our net free cash flow shortfall
will continue in subsequent periods and that we will fund this
shortfall in a similar manner. We currently anticipate that the
shortfall for 2004 will be similar to 2003. We believe the
shortfall in 2005 should be lower than in 2004 and we believe we
can cover the current distribution level, should Equity
Offices Board of Trustees choose to retain such level,
starting in 2006. This is predicated on the underlying
assumption that the economic recovery remains fairly robust and
employment growth continues at moderate levels. We also assume
that we will achieve some occupancy growth in 2004 and 2005. In
addition, we have $0.9 billion of debt maturing through
December 31, 2004. Because our anticipated distributions
will not allow us to retain sufficient cash to repay all of our
debt as it comes due using only cash from operating activities,
we will be required to repay most of our maturing debt with
proceeds from asset sales and debt offerings. Although there can
be no assurance that such funding at acceptable terms will be
available to us, we believe that net cash provided by operating
activities, draws under our line of credit, proceeds from other
financing sources that we expect to be available to us and
proceeds from anticipated asset sales will together provide
sufficient liquidity to meet our cash needs during this period.




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

In the first quarter 2004, Equity Offices
Board of Trustees declared distributions on preferred units as
reflected below:

|                            |  |                 |            |  |              |                        |        |                        |  |   |       | 
|--------------------------- |  | --------------- | ---------- |  | ------------ | ---------------------- | ------ | ---------------------- |  | - | ----- | 
|                            |  |                 |            |  |              | Distributions incurred |       
|                            |  | Distribution    |            |  | Annualized   |                        |        | for the three months   | 
|                            |  | Declared for    |            |  | Distribution |                        |        | ended March 31, 2004   | 
|Security                    |  | Current Quarter |            |  | Per Unit     |                        |        | (Dollars in thousands) | 
|                            |  |                 |            |  |              |                        |        |                        | 
|Series B Preferred Units    |  | $               | 0.65625    |  |              | $                      | 2.625  |                        |  | $ | 3,931 | 
|Series C Preferred Units(a) |  | $               | 0.12578125 |  |              |                        |       |                        |  | $ | 4,700 | 
|Series G Preferred Units    |  | $               | 0.484375   |  |              | $                      | 1.9375 |                        |  | $ | 4,117 | 






|    |  |                                                                                                                                                                                                                                                            
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | The Series C Preferred Units were redeemed
    in January 2004. The $4.7 million of distributions for the
    current quarter includes approximately $4.1 million of
    deferred issuance costs that were recognized upon the redemption
    of the units.

Equity Offices Board of Trustees also
declared distributions on the Units for the first quarter of
2004, at the rate of $.50 per unit.

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

As of March 31, 2004, we were subject to
certain material contractual payment obligations as described in
the table below. We were not subject to any material capital
lease obligations or unconditional purchase obligations as of
March 31, 2004.

|                                                            |                    |                                       |           |           |            |   |         |         |         |   |        |           |           |      |        |         |           |   |        |            |           |   |         |         |           |   |           |           |           |  
|----------------------------------------------------------- | ------------------ | ------------------------------------- | --------- | --------- | ---------- | - | ------- | ------- | ------- | - | ------ | --------- | --------- | ---- | ------ | ------- | --------- | - | ------ | ---------- | --------- | - | ------- | ------- | --------- | - | --------- | --------- | --------- | -
|                                                            |                    |                                      
|                                                            |                    | Payments Due by Period                |          
|                                                            |                    |                                       |          
|                                                            |                    |                                       |           | Remainder |            |   |        
|(Dollars in thousands)                                      |                    | Total                                 |           |           | of 2004    |   |         | 2005    |         |   | 2006   |           |           | 2007 |        |         | 2008      |   |        | Thereafter |          
|                                                            |                    |                                       |           |           |            |   |         |         |         |   |        |           |           |      |        |         |           |   |        |            |          
|Contractual Obligations:                                    |                    |                                       |           |           |            |   |         |         |         |   |        |           |           |      |        |         |           |   |        |            |           |   |         |         |           |   |           |          
|Long-term debt:                                             |                    |                                       |           |           |            |   |         |         |         |   |        |           |           |      |        |         |           |   |        |            |           |   |         |         |           |   |           |          
|                                                            | Mortgage debt(a)   |                                       | $         | 2,894,743 |            |   | $       | 265,510 |         |   | $      | 1,099,569 |           |      | $      | 292,249 |           |   | $      | 239,763    |           |   | $       | 134,984 |           |   | $         | 862,668   |          
|                                                            | Unsecured notes(b) |                                       |           | 9,416,500 |            |   |         | 480,000 |         |   |        | 675,000   |           |      |        | 650,000 |           |   |        | 976,500    |           |   |         | 775,000 |           |   |           | 5,860,000 |          
|Line of Credit                                              |                    |                                       | 5,800     |           |            |   |        |         |         |   |       |           |           |      | 5,800  |         |           |   |       |            |           |   |        |         |           |   |          |          
|Series B Preferred Units                                    |                    |                                       | 299,500   |           |            |   |        |         |         |   |       |           |           |      |       |         |           |   |       |            |           |   | 299,500 |         |           |   |          |          
|Share of mortgage debt of unconsolidated joint
    ventures |                    |                                       | 344,989   |           |            |   | 112,100 |         |         |   | 19,270 |           |           |      | 52,283 |         |           |   | 2,622  |            |           |   | 16,989  |         |           |   | 141,725   |          
|Operating leases                                            |                    |                                       | 1,256,415 |           |            |   | 12,437  |         |         |   | 16,649 |           |           |      | 16,748 |         |           |   | 16,646 |            |           |   | 16,660  |         |           |   | 1,177,275 |          
|Share of ground leases of unconsolidated joint
    ventures |                    |                                       | 128,262   |           |            |   | 912     |         |         |   | 1,216  |           |           |      | 1,258  |         |           |   | 1,294  |            |           |   | 1,294   |         |           |   | 122,288   |          
|Construction contracts on developments                      |                    |                                       | 4,463     |           |            |   | 4,463   |         |         |   |       |           |           |      |       |         |           |   |       |            |           |   |        |         |           |   |          |          
|                                                            |                    |                                       |           |           |            |   |         |         |         |   |        |           |           |      |        |         |           |   |        |            |          
|                                                            |                    | Total Contractual Obligations         |           | $         | 14,350,672 |   |         | $       | 875,422 |   |        | $         | 1,811,704 |      |        | $       | 1,018,338 |   |        | $          | 1,236,825 |   |         | $       | 1,244,427 |   |           | $         | 8,163,956 |  
|                                                            |                    |                                       |           |           |            |   |         |         |         |   |        |           |           |      |        |         |           |   |        |            |          
|                                                           
|Weighted Average Interest Rates on Maturing
    Debt:       |                    |                                       |           |           |            |   |         |         |         |   |        |           |           |      |        |         |           |   |        |            |           |   |         |         |           |   |           |          
|                                                            |                    |                                       |           |           |            |   |         |         |         |   |        |           |           |      |        |         |           |   |        |            |          
|Long-term debt:                                             |                    |                                       |           |           |            |   |         |         |         |   |        |           |           |      |        |         |           |   |        |            |           |   |         |         |           |   |           |          
|                                                            | Mortgage debt      |                                       |           | 7.64      | %          |   |         | 7.00    | %       |   |        | 7.67      | %         |      |        | 7.21    | %         |   |        | 7.87       | %         |   |         | 7.48    | %         |   |           | 7.86      | %        
|                                                            | Unsecured notes    |                                       |           | 6.55      | %          |   |         | 5.76    | %       |   |        | 5.67      | %         |      |        | 7.52    | %         |   |        | 7.52       | %         |   |         | 7.27    | %         |   |           | 6.35      | %        
|Line of credit                                              |                    |                                       | 1.93      | %         |            |   |        |         |         |   |       |           |           |      | 1.93   | %       |           |   |       |            |           |   |        |         |           |   |          |          
|Share of mortgage debt of unconsolidated joint
    ventures |                    |                                       | 4.64      | %         |            |   | 2.21    | %       |         |   | 1.97   | %         |           |      | 7.66   | %       |           |   |       |            |           |   | 6.92    | %       |           |   | 5.43      | %        
|                                                            |                    |                                       |           |           |            |   |         |         |         |   |        |           |           |      |        |         |           |   |        |            |          
|                                                            |                    | Total Weighted Average Interest Rates |           |           | 6.74       | % |         |         | 5.64    | % |        |           | 6.86      | %    |        |         | 7.40      | % |        |            | 7.59      | % |         |         | 7.29      | % |           |           | 6.53      | %
|                                                            |                    |                                       |           |           |            |   |         |         |         |   |        |           |           |      |        |         |           |   |        |            |          






|    |  |                                                                  
|--- |  | -----------------------------------------------------------------
|(a) |  | Balance excludes a net unamortized discount of
    $13.6 million.
|   
|(b) |  | Balance excludes a net unamortized discount of
    $11.8 million.



| |                                                               
| | --------------------------------------------------------------
| | Forward-Starting and Fixed-to-Floating
    Interest Rate Swaps

See Item 1. Financial Statements
Note  12 Commitments and Contingencies for
information on our forward-starting and fixed-to-floating
interest rate swaps.



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

In an ongoing effort to control energy costs,
from time to time we enter into contracts for the purchase of
gas or electricity for properties in states which have
deregulated their energy markets. Typically, these contracts
provide for a term of one to three years. Although all or a
portion of the commodity price under these contracts is
generally fixed, the amounts actually expended under these
contracts will vary in accordance

33



---



##### Table of Contents



with actual energy usage or the timing of energy
usage during the period. As a result, the amounts to be expended
under these contracts are difficult to predict.




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

We do not have any off-balance sheet arrangements
with any unconsolidated investments or joint ventures that we
believe have or are reasonably likely to have a material effect
on our financial condition, results of operations, liquidity or
capital resources.



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



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

The table below summarizes our consolidated
mortgage debt, unsecured notes and line of credit indebtedness
at March 31, 2004 and December 31, 2003.

|                                         |                  |                         |   |            |              |   |   |            |            |  
|---------------------------------------- | ---------------- | ----------------------- | - | ---------- | ------------ | - | - | ---------- | ---------- | -
|                                         |                  | March 31,               |   |            | December 31, |  
|(Dollars in thousands)                   |                  | 2004                    |   |            | 2003         |  
|                                         |                  |                         |   |            |              |  
|Balance                                  |                  |                         |   |            |              |   |   |           
|                                         | Fixed rate       |                         | $ | 11,142,931 |              |   | $ | 11,108,801 |           
|                                         | Variable rate(a) |                         |   | 1,148,764  |              |   |   | 370,000    |           
|                                         |                  |                         |   |            |              |  
|                                         |                  | Total                   |   | $          | 12,291,695   |   |   | $          | 11,478,801 |  
|                                         |                  |                         |   |            |              |  
|Percent of total debt                    |                  |                         |   |            |              |   |   |           
|                                         | Fixed rate       |                         |   | 90.7       | %            |   |   | 96.8       | %         
|                                         | Variable rate(a) |                         |   | 9.3        | %            |   |   | 3.2        | %         
|                                         |                  |                         |   |            |              |  
|                                         |                  | Total                   |   |            | 100.0        | % |   |            | 100.0      | %
|                                         |                  |                         |   |            |              |  
|Effective interest rate at end of period |                  |                         |   |            |              |   |   |           
|                                         | Fixed rate       |                         |   | 7.23       | %            |   |   | 7.11       | %         
|                                         | Variable rate(a) |                         |   | 2.63       | %            |   |   | 1.93       | %         
|                                         |                  |                         |   |            |              |  
|                                         |                  | Effective interest rate |   |            | 6.80         | % |   |            | 6.94       | %
|                                         |                  |                         |   |            |              |  



---



|    |  |                                                                                                                                                                                                                                                                                                                                                
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | The variable rate debt as of March 31, 2004
    includes $1.0 billion of fixed rate unsecured notes that
    were converted to a variable rate based on LIBOR plus 122 basis
    points through several interest rate swap agreements. The
    interest rates for the remaining variable rate debt are based on
    various spreads over LIBOR.

The increase in total consolidated debt of
approximately $812.9 million from December 31, 2003 to
March 31, 2004 was primarily due to the following
transactions:

|                                                                  |  |   |           |     
|----------------------------------------------------------------- |  | - | --------- | ----
|(Dollars in thousands)                                            |  |  
|                                                                  |  |  
|Consolidation of Sun America Center                               |  | $ | 203,225   |     
|Consolidation of 1301 Avenue of the Americas                      |  |   | 534,255   |     
|Mortgage debt repayments                                          |  |   | (172,289  | )   
|Issuance of unsecured notes                                       |  |   | 1,000,000 |     
|Repayment of unsecured notes                                      |  |   | (400,000  | )   
|Net activity on the line of credit                                |  |   | (328,200  | )(b)
|Increase in net discount on mortgage debt and
    unsecured notes |  |   | (24,097   | )   
|                                                                  |  |   |          
|                                                                  |  | $ | 812,894   |     
|                                                                  |  |   |          



---



|    |  |                                                                                                                                                                                             
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) |  | The amounts repaid on the line of credit
    primarily represented a borrowing in the fourth quarter 2003 in
    order to repay the $400 million of notes that matured in
    November 2003.

34



---



##### Table of Contents





| |                    
| | -------------------
| | Unconsolidated Debt

Our share of unconsolidated debt was
approximately $345.0 million and $797.3 million at
March 31, 2004 and December 31, 2003, respectively.
The decrease of approximately $452.3 million was due to the
consolidation of 1301 Avenue of the Americas of which our
share of the mortgage debt was approximately $451.3 million
and there was approximately $1.0 million of principal
amortization.



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

As of March 31, 2004, total mortgage debt
(excluding our share of the mortgage debt encumbering
unconsolidated properties of approximately $345.0 million)
consisted of approximately $2,738.2 million of fixed rate
debt with a weighted average interest rate of approximately
7.81% and $143.0 million of variable rate debt based on
various spreads over LIBOR (the average effective rate on
variable rate debt was 4.40% as of March 31, 2004 which
includes the spread over LIBOR). See Liquidity and Capital
Resources  Contractual Obligations for annual
payment obligations under our mortgage debt.

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



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

We have a $1.0 billion revolving credit
facility that was obtained in May 2003 and matures in May 2006.
As of May 3, 2004 and March 31, 2004,
$396.0 million and $5.8 million was outstanding under
this facility, respectively. The line of credit bears interest
at LIBOR plus 60 basis points and has an annual facility
fee of 20 basis points payable quarterly. In addition, a
competitive bid option, whereby the lenders participating in the
credit facility may bid on the interest to be charged resulting
in an interest rate lower than LIBOR plus 60 basis points,
is available for up to $350 million of the borrowings under
the credit facility. The effective rate on the line of credit at
March 31, 2004 was approximately 1.93%.



| |                       
| | ----------------------
| | 364-Day Line of Credit

We canceled this facility in March 2004.



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

Unsecured notes increased to approximately
$9,404.7 million at March 31, 2004 compared to
approximately $8,828.9 million at December 31, 2003,
as a result of the issuance in March 2004 of $1.0 billion
4.75% unsecured notes due March 15, 2014, partially offset
by the repayment of $300 million 6.50% unsecured notes and
$100 million 6.90% unsecured notes in January 2004.

35



---



##### Table of Contents



The table below summarizes the unsecured notes
outstanding as of March 31, 2004:

|                           |                            |                        |           |      |           |  |      |           |   |   |           |           |  |  |          |  | 
|-------------------------- | -------------------------- | ---------------------- | --------- | ---- | --------- |  | ---- | --------- | - | - | --------- | --------- |  |  | -------- |  | 
|                           |                            | Coupon                 |           |      | Effective |  |      | Principal |   |   | Maturity  |          
|Original Term              |                            | Rate                   |           |      | Rate(a)   |  |      | Balance   |   |   | Date      |          
|                           |                            |                        |           |      |           |  |      |           |   |   |           |          
|                           |                            |                       
|                           |                            | (Dollars in thousands) |          
|Fixed interest rate:       |                            |                        |           |      |           |  |      |           |   |   |           |           |  |  |          | 
|5 Years                    |                            |                        | 6.80      | %    |           |  | 6.10 | %         |   | $ | 200,000   | (b)       |  |  | 05/01/04 | 
|6 Years                    |                            |                        | 6.50      | %    |           |  | 5.31 | %         |   |   | 250,000   | (b)       |  |  | 06/15/04 | 
|7 Years                    |                            |                        | 7.24      | %    |           |  | 7.26 | %         |   |   | 30,000    | (b)       |  |  | 09/01/04 | 
|8 Years                    |                            |                        | 6.88      | %    |           |  | 6.40 | %         |   |   | 125,000   |           |  |  | 02/01/05 | 
|7 Years                    |                            |                        | 6.63      | %    |           |  | 4.99 | %         |   |   | 400,000   |           |  |  | 02/15/05 | 
|7 Years                    |                            |                        | 8.00      | %    |           |  | 6.49 | %         |   |   | 100,000   |           |  |  | 07/19/05 | 
|8 Years                    |                            |                        | 7.36      | %    |           |  | 7.69 | %         |   |   | 50,000    |           |  |  | 09/01/05 | 
|6 Years                    |                            |                        | 8.38      | %    |           |  | 7.65 | %         |   |   | 500,000   |           |  |  | 03/15/06 | 
|9 Years                    |                            |                        | 7.44      | %    |           |  | 7.74 | %         |   |   | 50,000    |           |  |  | 09/01/06 | 
|10 Years                   |                            |                        | 7.13      | %    |           |  | 6.74 | %         |   |   | 100,000   |           |  |  | 12/01/06 | 
|9 Years                    |                            |                        | 7.00      | %    |           |  | 6.80 | %         |   |   | 1,500     |           |  |  | 02/02/07 | 
|9 Years                    |                            |                        | 6.88      | %    |           |  | 6.83 | %         |   |   | 25,000    |           |  |  | 04/30/07 | 
|9 Years                    |                            |                        | 6.76      | %    |           |  | 6.76 | %         |   |   | 300,000   |           |  |  | 06/15/07 | 
|10 Years                   |                            |                        | 7.41      | %    |           |  | 7.70 | %         |   |   | 50,000    |           |  |  | 09/01/07 | 
|7 Years                    |                            |                        | 7.75      | %    |           |  | 7.91 | %         |   |   | 600,000   |           |  |  | 11/15/07 | 
|10 Years                   |                            |                        | 6.75      | %    |           |  | 6.97 | %         |   |   | 150,000   |           |  |  | 01/15/08 | 
|10 Years                   |                            |                        | 6.75      | %    |           |  | 7.01 | %         |   |   | 300,000   |           |  |  | 02/15/08 | 
|8 Years (c)                |                            |                        | 7.25      | %    |           |  | 7.64 | %         |   |   | 325,000   |           |  |  | 11/15/08 | 
|10 Years                   |                            |                        | 6.80      | %    |           |  | 6.94 | %         |   |   | 500,000   |           |  |  | 01/15/09 | 
|10 Years                   |                            |                        | 7.25      | %    |           |  | 7.14 | %         |   |   | 200,000   |           |  |  | 05/01/09 | 
|11 Years                   |                            |                        | 7.13      | %    |           |  | 6.97 | %         |   |   | 150,000   |           |  |  | 07/01/09 | 
|10 Years                   |                            |                        | 8.10      | %    |           |  | 8.22 | %         |   |   | 360,000   |           |  |  | 08/01/10 | 
|10 Years                   |                            |                        | 7.65      | %    |           |  | 7.20 | %         |   |   | 200,000   |           |  |  | 12/15/10 | 
|10 Years                   |                            |                        | 7.00      | %    |           |  | 6.83 | %         |   |   | 1,100,000 |           |  |  | 07/15/11 | 
|10 Years                   |                            |                        | 6.75      | %    |           |  | 7.02 | %         |   |   | 500,000   |           |  |  | 02/15/12 | 
|10 Years                   |                            |                        | 5.88      | %    |           |  | 5.98 | %         |   |   | 500,000   |           |  |  | 01/15/13 | 
|20 Years                   |                            |                        | 7.88      | %    |           |  | 8.08 | %         |   |   | 25,000    |           |  |  | 12/01/16 | 
|20 Years                   |                            |                        | 7.35      | %    |           |  | 8.08 | %         |   |   | 200,000   |           |  |  | 12/01/17 | 
|20 Years                   |                            |                        | 7.25      | %    |           |  | 7.54 | %         |   |   | 250,000   |           |  |  | 02/15/18 | 
|30 Years                   |                            |                        | 7.50      | %    |           |  | 8.24 | %         |   |   | 150,000   |           |  |  | 10/01/27 | 
|30 Years                   |                            |                        | 7.25      | %    |           |  | 7.31 | %         |   |   | 225,000   |           |  |  | 06/15/28 | 
|30 Years                   |                            |                        | 7.50      | %    |           |  | 7.55 | %         |   |   | 200,000   |           |  |  | 04/19/29 | 
|30 Years                   |                            |                        | 7.88      | %    |           |  | 7.94 | %         |   |   | 300,000   |           |  |  | 07/15/31 | 
|                           |                            |                        |           |      |           |  |      |           |   |   |           |          
|                           | Weighted Average/ Subtotal |                        |           | 7.16 | %         |  |      | 7.04      | % |   |           | 8,416,500 |  |  |          |  | 
|Variable-interest rate(d): |                            |                        |           |      |           |  |      |           |   |   |           |           |  |  |          | 
|10 Years                   |                            |                        | 4.75      | %    |           |  | 2.38 | %         |   |   | 1,000,000 |           |  |  | 3/15/14  | 
|                           |                            |                        |           |      |           |  |      |           |   |   |           |          
|                           | Weighted Average/ Subtotal |                        |           | 6.90 | %         |  |      | 6.55      | % |   |           | 9,416,500 |  |  |          |  | 
|                           |                            |                        |           |      |           |  |      |           |   |   |           |          
|Net discount               |                            |                        | (11,783)  |      |           |  |      |          
|                           |                            |                        |           |      |           | 
|Total                      |                            | $                      | 9,404,717 |      |           |  |      |          
|                           |                            |                        |           |      |           | 



---



|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Includes the effect of settled interest rate
    protection and interest rate swap agreements, offering and
    transaction costs and premiums and discounts on certain
    unsecured notes.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   
|(b) |  | Through 2004, $480 million of unsecured
    notes will mature and become payable. Our options for repaying
    the remaining notes include proceeds from our lines of credit,
    proceeds from additional debt and/or equity offerings or
    proceeds from property dispositions.                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   
|(c) |  | The notes are exchangeable into Equity Office
    Common Shares at an exchange rate of $34.00 per share. If the
    closing price of a Common Share at the time a holder exercises
    its exchange right is less than the exchange price of $34.00,
    the holder will receive, in lieu of Common Shares, cash in an
    amount equal to 97% of the product of the number of Common
    Shares into which the principal amount of notes subject to such
    exercise would otherwise be exchangeable and the current market
    price per Common Share. Upon exchange of a $1,000 note for
    Common Shares of Equity Office, we would issue a corresponding
    number of Units to Equity Office on a one-for-one basis.

36



---



##### Table of Contents





|    |  |                                                                                                                                                                                                 
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(d) |  | As of March 31, 2004, $1.0 billion of
    unsecured notes were converted to a variable interest rate based
    on LIBOR plus 122 basis points through several interest rate
    swap agreements.

As of April 30, 2004, $600 million was
available for issuance under a previously filed
$4.0 billion shelf registration statement.



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

Agreements or instruments relating to our lines
of credit and unsecured notes contain certain financial
restrictions and requirements regarding total debt-to-assets
ratios, debt service coverage ratios, minimum ratio of
unencumbered assets to unsecured debt and other limitations. As
of March 31, 2004, we were in compliance with each of these
financial restrictions and requirements. If we fail to comply
with any of these restrictions and requirements, then the
indebtedness could become due and payable before its stated due
date.

Set forth below are the financial restrictions
and requirements to which we are subject under our unsecured
note indentures and our performance under each covenant as of
March 31, 2004:

|                                                                                                             |  |                    |      | 
|------------------------------------------------------------------------------------------------------------ |  | ------------------ | ---- | 
|Covenants(a) (in each case as defined in the respective indenture)                                           |  | Actual Performance |     
|                                                                                                             |  |                    |     
|Debt to Adjusted Total Assets may not be greater
    than 60%                                                |  |                    | 47%  | 
|Secured Debt to Adjusted Total Assets may not be
    greater than 40%                                        |  |                    | 12%  | 
|Consolidated Income Available for Debt Service to
    Annual Debt Service charge may not be less than 1.50:1 |  |                    | 2.35 | 
|Total Unencumbered Assets to Unsecured Debt may
    not be less than 150%(b)                                 |  |                    | 214% | 



---



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



| |                   
| | ------------------
| | Capital Securities

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

|                                 |                                                                     |               |             |           |       |  |            |          |   |  |             |           |  
|-------------------------------- | ------------------------------------------------------------------- | ------------- | ----------- | --------- | ----- |  | ---------- | -------- | - |  | ----------- | --------- | -
|                                 |                                                                     | Common Shares |             |           | Units |  |            | Total    |  
|                                 |                                                                     |               |             |           |       |  |            |          |  
|Outstanding at December 31, 2003 |                                                                     |               | 400,460,388 |           |       |  | 49,032,230 |          |   |  | 449,492,618 |          
|                                 | Share options exercised                                             |               |             | 1,647,244 |       |  |            |         |   |  |             | 1,647,244 |  
|                                 | Common Shares repurchased/ retired (a)                              |               |             | (38,664   | )     |  |            |         |   |  |             | (38,664   | )
|                                 | Units redeemed for Common Shares                                    |               |             | 236,553   |       |  |            | (236,553 | ) |  |             |          |  
|                                 | Units redeemed for cash                                             |               |             |          |       |  |            | (31,550  | ) |  |             | (31,550   | )
|                                 | Restricted shares and share awards issued, net of
    cancellations |               |             | 1,040,923 |       |  |            |         |   |  |             | 1,040,923 |  
|                                 |                                                                     |               |             |           |       |  |            |          |  
|Outstanding at March 31, 2004    |                                                                     |               | 403,346,444 |           |       |  | 48,764,127 |          |   |  | 452,110,571 |          
|                                 |                                                                     |               |             |           |       |  |            |          |  



---



|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | During the first quarter 2004, Common Shares were
    repurchased by Equity Office at an average price of $29.71 for
    approximately $1.1 million in the aggregate. An additional
    88,585 common shares were repurchased by Equity Office, but
    were not yet retired as of March 31, 2004, at an average
    price of $29.65 per share for approximately
    $2.6 million in the aggregate. In April 2004,
    925,834 common shares were repurchased by Equity Office at
    an average price of $26.18 per share for approximately
    $24.2 million in the aggregate. In connection with the
    repurchases, we retired a corresponding number of Units for an
    aggregate purchase price equal to the aggregate purchase price
    for all Common Share repurchases.

37



---



##### Table of Contents





| |           
| | ----------
| | Cash Flows

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



| |                                               
| | ----------------------------------------------
| | Three Months Ended March 31, 2004 and
    2003

Cash and cash equivalents decreased by
approximately $14.4 million to $55.0 million at
March 31, 2004, compared to $69.4 million at
December 31, 2003. This decrease was the net result of
approximately $221.7 million provided by operating
activities, approximately $165.6 million used for investing
activities (consisting primarily of approximately
$62.8 million used for a property acquisition and
approximately $153.0 million used for capital and tenant
improvements, lease commissions and other costs) and
approximately $70.6 million used for financing activities.

Additional Items for 2004



| |                        
| | -----------------------
| | Developments in Process

Developments in process decreased by
approximately $10.9 million to $64.4 million at
March 31, 2004 compared to $75.2 million at
December 31, 2003. This decrease was a result of one
development placed in service (Douglas Corporate Center II of
which total costs incurred at December 31, 2003 were
approximately $13.6 million), partially offset by
additional costs of $2.7 million spent on current
developments.



| |                         
| | ------------------------
| | Deferred Rent Receivable

Deferred rent receivable increased by
approximately $47.6 million to $426.9 million at
March 31, 2004, compared to $379.3 million at
December 31, 2003. This increase was a result of a
$21.6 million increase in receivables recorded from tenants
for the current difference between the straight-line rent and
the rent that is contractually due from tenants, a
$5.6 million increase related to the consolidation of Sun
America Center and a $15.6 million increase related to the
consolidation of the 1301 Avenue of the Americas office building
after we acquired the remaining economic interest in the joint
venture.



| |                                                 
| | ------------------------------------------------
| | Investments in Unconsolidated Joint
    Ventures

Investments in unconsolidated joint ventures
decreased by approximately $154.6 million to
$972.7 million at March 31, 2004, compared to
$1,127.2 million at December 31, 2003. This decrease
was primarily a result of a $157.7 million investment at
December 31, 2003 in the 1301 Avenue of the Americas office
building, which was consolidated in February 2004 after we
acquired the remaining economic interest in the joint venture.



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

Prepaid expenses and other assets decreased by
approximately $127.6 million to $217.4 million at
March 31, 2004 compared to $344.9 million at
December 31, 2003. This decrease was primarily a result of
an $82.2 million note receivable related to the Sun America
Center whose financial condition and results of operations were
consolidated in 2004, a $21.5 million decrease in prepaid
real estate taxes and a $9.7 million decrease in the market
value of forward-starting interest rate swaps.



| |                                          
| | -----------------------------------------
| | Accounts Payable and Accrued
    Expenses

Accounts payable and accrued expenses decreased
by approximately $139.6 million to $433.5 million at
March 31, 2004 compared to $573.1 million at
December 31, 2003. This decrease was primarily a result of
a $19.0 million decrease in accrued real estate taxes, a
$38.2 million decrease in accrued interest expense and a
$39.2 million decrease in accrued non-operating expenses
mainly consisting of accrued tenant improvements and leasing
costs.

38



---



##### Table of Contents





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

Distribution payable increased by approximately
$225.2 million to approximately $229.1 million at
March 31, 2004 compared to $3.9 million at
December 31, 2003. This increase was a result of the unit
distribution declaration for the first quarter of 2004, which
was paid in April 2004. The fourth quarter 2003 distribution was
declared and paid in the fourth quarter of 2003 and therefore,
it was not accrued for at December 31, 2003.

Market Risk

Since December 31, 2003 there were no
material changes in the information regarding market risk that
was provided in the Form 10-K for the year ended
December 31, 2003, except as noted below:



| |                                     
| | ------------------------------------
| | Interest Rate Risk 
    Derivatives



| |                                                               
| | --------------------------------------------------------------
| | Forward-Starting and Fixed-to-Floating
    Interest Rate Swaps

In March 2004, in conjunction with a
$1.0 billion debt offering, we settled $800 million of
forward-starting interest rate swaps that were outstanding as of
December 31, 2003 and entered into $1.0 billion of
fixed-to-floating interest rate swap agreements. See
Item 1. Financial Statements Note 12 
Commitments and Contingencies for information on our
forward-starting and fixed-to-floating interest rate swaps
outstanding as of March 31, 2004.

Capital Improvements, Tenant Improvements and
Leasing Costs



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

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



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

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

|                       |                      |                                      |   |                |             |  |   |              |                |  |             |        |        |  |   |       |       | 
|---------------------- | -------------------- | ------------------------------------ | - | -------------- | ----------- |  | - | ------------ | -------------- |  | ----------- | ------ | ------ |  | - | ----- | ----- | 
|                       |                      |                                     
|                       |                      | For the three months ended March 31, |  
|                       |                      |                                      |  
|                       |                      |                                      |   |               
|                       |                      | 2004                                 |   |                | 2003        | 
|                       |                      |                                      |   |                |             | 
|                       |                      |                                      |   | Unconsolidated |             |  |   |              | Unconsolidated | 
|                       |                      | Consolidated                         |   |                | Properties  |  |   | Consolidated |                |  | Properties  |       
|(Dollars in thousands) |                      | Properties                           |   |                | (our share) |  |   | Properties   |                |  | (our share) |       
|                       |                      |                                      |   |                |             |  |   |              |                |  |             |       
|Capital Improvements:  |                      |                                      |   |                |             |  |   |              |                |  |             |        |        |  |   |      
|                       | Capital improvements |                                      | $ | 5,272          |             |  | $ | 589          |                |  | $           | 5,040  |        |  | $ | 275   |      
|                       | Development costs(a) |                                      |   | 19,945         |             |  |   | 150          |                |  |             | 23,597 |        |  |   | 4,546 |      
|                       | Redevelopment costs  |                                      |   | 357            |             |  |   |             |                |  |             | 3,671  |        |  |   |      |      
|                       |                      |                                      |   |                |             |  |   |              |                |  |             |       
|                       |                      | Total capital improvements           |   | $              | 25,574      |  |   | $            | 739            |  |             | $      | 32,308 |  |   | $     | 4,821 | 
|                       |                      |                                      |   |                |             |  |   |              |                |  |             |       



---



|    |                                                                                                                                                                          
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Includes amounts incurred for properties
    currently under development and first-time lease up costs of
    properties previously classified as development properties.

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

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

The amounts shown below represent the total
tenant improvement and leasing costs for leases which commenced
during the period, regardless of when such costs were actually
paid.

|                                                         |  |                                      |        |            |             |   |       |             |            |   |             |  |  |   |       | 
|-------------------------------------------------------- |  | ------------------------------------ | ------ | ---------- | ----------- | - | ----- | ----------- | ---------- | - | ----------- |  |  | - | ----- | 
|                                                         |  |                                     
|                                                         |  | For the three months ended March 31, |       
|                                                         |  |                                      |       
|                                                         |  |                                      |        |           
|                                                         |  | 2004                                 |        |            | 2003        |  
|                                                         |  |                                      |        |            |             |  
|                                                         |  |                                      |        | Total Cost |             |   |       |             | Total Cost |  
|                                                         |  |                                      |        | per Square |             |   |       |             | per Square |  
|(Dollars in thousands except per square foot amounts)    |  | Total Costs                          |        |            | Foot Leased |   |       | Total Costs |            |   | Foot Leased | 
|                                                         |  |                                      |        |            |             |   |       |             |            |   |             | 
|Consolidated Properties:                                 |  |                                      |        |            |             |   |       |             |            |   |             |  |  |   |       | 
|                                                         |  |                                      |        |            |             |   |       |             |            |   |             | 
|Office Properties:                                       |  |                                      |        |            |             |   |       |             |            |   |             |  |  |   |       | 
|Renewals                                                 |  | $                                    | 16,951 |            |             | $ | 8.95  |             |            | $ | 23,818      |  |  | $ | 8.94  | 
|Retenanted                                               |  |                                      | 55,778 |            |             |   | 21.85 |             |            |   | 43,258      |  |  |   | 17.46 | 
|                                                         |  |                                      |        |            |             |   |       |             |            |   |             | 
|Total/ Weighted Average                                  |  | $                                    | 72,729 |            |             | $ | 16.36 |             |            | $ | 67,076      |  |  | $ | 13.05 | 
|                                                         |  |                                      |        |            |             |   |       |             |            |   |             | 
|Industrial Properties:                                   |  |                                      |        |            |             |   |       |             |            |   |             |  |  |   |       | 
|Renewals                                                 |  | $                                    | 1,231  |            |             | $ | 2.24  |             |            | $ | 145         |  |  | $ | 0.99  | 
|Retenanted                                               |  |                                      | 958    |            |             |   | 4.72  |             |            |   | 232         |  |  |   | 1.99  | 
|                                                         |  |                                      |        |            |             |   |       |             |            |   |             | 
|Total/ Weighted Average                                  |  | $                                    | 2,189  |            |             | $ | 2.91  |             |            | $ | 377         |  |  | $ | 1.43  | 
|                                                         |  |                                      |        |            |             |   |       |             |            |   |             | 
|Unconsolidated Joint
    Ventures(a):                    |  |                                      |        |            |             |   |       |             |            |   |             |  |  |   |       | 
|                                                         |  |                                      |        |            |             |   |       |             |            |   |             | 
|Renewals                                                 |  | $                                    | 7,219  |            |             | $ | 24.17 |             |            | $ | 8,193       |  |  | $ | 36.99 | 
|Retenanted                                               |  |                                      | 3,596  |            |             |   | 27.79 |             |            |   | 2,157       |  |  |   | 25.46 | 
|                                                         |  |                                      |        |            |             |   |       |             |            |   |             | 
|Total/ Weighted Average                                  |  | $                                    | 10,815 |            |             | $ | 25.26 |             |            | $ | 10,350      |  |  | $ | 33.80 | 
|                                                         |  |                                      |        |            |             |   |       |             |            |   |             | 
|Total Properties (renewals and retenanted
    combined): |  |                                      |        |            |             |   |       |             |            |   |             |  |  |   |       | 
|                                                         |  |                                      |        |            |             |   |       |             |            |   |             | 
|Office (consolidated and unconsolidated)                 |  | $                                    | 83,544 |            |             | $ | 17.14 |             |            | $ | 77,426      |  |  | $ | 14.21 | 
|Industrial                                               |  |                                      | 2,189  |            |             |   | 2.91  |             |            |   | 377         |  |  |   | 1.43  | 
|                                                         |  |                                      |        |            |             |   |       |             |            |   |             | 
|Total/ Weighted Average                                  |  | $                                    | 85,733 |            |             | $ | 15.24 |             |            | $ | 77,803      |  |  | $ | 13.63 | 
|                                                         |  |                                      |        |            |             |   |       |             |            |   |             | 






|    |  |                                                                                                                         
|--- |  | ------------------------------------------------------------------------------------------------------------------------
|(a) |  | Represents our share of unconsolidated joint
    venture tenant improvement and leasing costs for office
    properties.

Since the middle of 2003, we have seen evidence
suggesting that rents may have begun to stabilize. Tenant
improvements and leasing costs, however, have increased
significantly as compared to historical levels due to
competitive market conditions for new and renewal leases. These
increases in tenant improvement and leasing costs resulted in a
decrease in net effective rents (contract rents reduced by
tenant improvement costs, leasing commissions and any free rent
periods) for lease renewals and retenanted properties.

The above information includes capital
improvements, tenant improvements and leasing costs incurred for
leases which commenced during the period shown. The amounts
included in the consolidated statement of cash flows represent
the cash expenditures made during the period. The differences
between these amounts represent timing differences between the
lease commencement dates and the actual cash expenditures. In
addition, the figures below include expenditures for corporate
furniture, fixtures and equipment, software,

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leasehold improvements and other. The
reconciliation between the amounts above for the consolidated
properties and the amounts disclosed in the consolidated
statements of cash flows is as follows:


|                                                                                                                    |                       |                      |         |        |      |   |         |        | 
|------------------------------------------------------------------------------------------------------------------- | --------------------- | -------------------- | ------- | ------ | ---- | - | ------- | ------ | 
|                                                                                                                    |                       |                     
|                                                                                                                    |                       | For the three months |        
|                                                                                                                    |                       | ended March 31,      |        
|                                                                                                                    |                       |                      |        
|(Dollars in thousands)                                                                                              |                       | 2004                 |         |        | 2003 |  
|                                                                                                                    |                       |                      |         |        |      |  
|Total capital improvements                                                                                          |                       | $                    | 25,574  |        |      | $ | 32,308  |       
|Tenant improvements and leasing
    costs:                                                                          |                       |                      |         |        |      |   |         |       
|                                                                                                                    | Office Properties     |                      |         | 72,729 |      |   |         | 67,076 | 
|                                                                                                                    | Industrial Properties |                      |         | 2,189  |      |   |         | 377    | 
|Expenditures for corporate furniture, fixtures
    and equipment, software, leasehold improvements and other        |                       |                      | 5,279   |        |      |   | 1,856   |       
|Timing differences                                                                                                  |                       |                      | 47,261  |        |      |   | 16,551  |       
|                                                                                                                    |                       |                      |         |        |      |  
|Total capital improvements, tenant improvements
    and leasing costs                                               |                       | $                    | 153,032 |        |      | $ | 118,168 |       
|                                                                                                                    |                       |                      |         |        |      |  
|Capital and tenant improvements from the
    consolidated statement of cash flows                                   |                       | $                    | 121,208 |        |      | $ | 78,948  |       
|Lease commissions and other costs from the
    consolidated statement of cash flows                                 |                       |                      | 31,824  |        |      |   | 39,220  |       
|                                                                                                                    |                       |                      |         |        |      |  
|Total capital improvements, tenant improvements
    and leasing costs from the consolidated statement of cash flows |                       | $                    | 153,032 |        |      | $ | 118,168 |       
|                                                                                                                    |                       |                      |         |        |      |  

Developments

We own directly several properties in various
stages of development or pre-development. These developments are
funded by working capital and our line of credit. Specifically
identifiable direct acquisition, development and construction
costs are capitalized, including, where applicable, salaries and
related costs, real estate taxes and interest incurred in
developing the property. The properties under development and
all figures stated below are as of March 31, 2004.

|                         |  |           |         |  |          |                 |           |  |   |        |       |  |          |       |  |           |         |  |            |   |        |  |  |  |    |  
|------------------------ |  | --------- | ------- |  | -------- | --------------- | --------- |  | - | ------ | ----- |  | -------- | ----- |  | --------- | ------- |  | ---------- | - | ------ |  |  |  | -- | -
|                         |  | Estimated |         |  |          |                 |           |  |   |        |       |  |          |       | 
|                         |  | Placed in |         |  |          |                 |           |  |   |        | Costs |  |          | Total |  |           | Current | 
|                         |  | Service   |         |  |          |                 | Number of |  |   | Square |       |  | Incurred |       |  | Estimated |         |  | Percentage |  
|(Dollars in thousands)   |  | Date(a)   |         |  | Location |                 | Buildings |  |   | Feet   |       |  | to Date  |       |  | Costs(b)  |         |  | Leased     |  
|                         |  |           |         |  |          |                 |           |  |   |        |       |  |          |       |  |           |         |  |            |  
|Wholly-Owned             |  |           |         |  |          |                 |           |  |   |        |       |  |          |       |  |           |         |  |            |   |        |  |  |  |    |  
|Kruse Woods V            |  |           | 4Q/2003 |  |          | Lake Oswego, OR |           |  | 1 |        |       |  | 184,000  |       |  | $         | 28,541  |  |            | $ | 33,900 |  |  |  | 60 | %
|Cambridge Science Center |  |           | 2Q/2004 |  |          | Cambridge, MA   |           |  | 1 |        |       |  | 131,000  |       |  |           | 35,836  |  |            |   | 52,400 |  |  |  | 19 | %
|                         |  |           |         |  |          |                 |           |  |   |        |       |  |          |       |  |           |         |  |            |  
|                         |  |           |         |  |          |                 |           |  | 2 |        |       |  | 315,000  |       |  | $         | 64,377  |  |            | $ | 86,300 |  |  |  | 43 | %
|                         |  |           |         |  |          |                 |           |  |   |        |       |  |          |       |  |           |         |  |            |  






|    |  |                                                                                                                                                                                                                                                                                                                         
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | The Estimated Placed in Service Date represents
    the date the certificate of occupancy was or is currently
    anticipated to be obtained. Subsequent to obtaining the
    certificate of occupancy, the property is expected to undergo a
    lease-up period.                                                      
|   
|(b) |  | The Total Estimated Costs represent 100% of the
    developments estimated costs, including the acquisition
    cost of the land and building, if any. The Total Estimated Costs
    are subject to change upon, or prior to, the completion of the
    development and include amounts required to lease the property.

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

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Douglas Corporate Center II, a development at
December 31, 2003, is included in the office portfolio as
an operational property during the first quarter 2004.

There are no unconsolidated joint venture
properties under development as of March 31, 2004.

Subsequent Events

See Note 13  Subsequent Events
for transactions that occurred subsequent to March 31, 2004
through April 30, 2004.

Inflation

Substantially all of our office leases require
the tenant to pay, as additional rent, a portion of real estate
taxes and operating expenses. In addition, many of our office
leases provide for fixed increases in base rent or indexed
escalations (based on the Consumer Price Index or other
measures). We believe that the majority of inflationary
increases in expenses will be offset, in part, by the expense
reimbursements and contractual rent increases described above.

Funds From Operations
(FFO)

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

|                                                                                                                                                                                                                                  |  |                                                 |         |              |                 |   |       |         |              |   |                 |   |  |   |       |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------- | ------- | ------------ | --------------- | - | ----- | ------- | ------------ | - | --------------- | - |  | - | ----- | -
|                                                                                                                                                                                                                                  |  |                                                
|                                                                                                                                                                                                                                  |  | For the three months ended March 31,            |        
|                                                                                                                                                                                                                                  |  |                                                 |        
|                                                                                                                                                                                                                                  |  |                                                 |         |             
|                                                                                                                                                                                                                                  |  | 2004                                            |         |              | 2003            |  
|                                                                                                                                                                                                                                  |  |                                                 |         |              |                 |  
|                                                                                                                                                                                                                                  |  |                                                 |         | Per Weighted |                 |   |       |         | Per Weighted |  
|                                                                                                                                                                                                                                  |  | Dollars                                         |         |              | Average Unit(b) |   |       | Dollars |              |   | Average Unit(b) |  
|                                                                                                                                                                                                                                  |  |                                                 |         |              |                 |   |       |         |              |   |                 |  
|                                                                                                                                                                                                                                  |  |                                                
|                                                                                                                                                                                                                                  |  | (Dollars in thousands, except per unit amounts) |        
|Reconciliation of net income to
    FFO(a):                                                                                                                                                                                       |  |                                                 |         |              |                 |   |       |         |              |   |                 |   |  |   |       |  
|Net income                                                                                                                                                                                                                        |  | $                                               | 85,988  |              |                 | $ | 0.19  |         |              | $ | 174,492         |   |  | $ | 0.38  |  
|Real estate related depreciation and amortization
    and net gain on sales of real estate, including our share of
    unconsolidated joint ventures and adjusted for minority
    interests share in partially owned properties |  |                                                 | 191,566 |              |                 |   | 0.43  |         |              |   | 175,854         |   |  |   | 0.38  |  
|Cumulative effect of a change in accounting
    principle                                                                                                                                                                         |  |                                                 | 33,697  |              |                 |   | 0.08  |         |              |   |                |   |  |   |      |  
|                                                                                                                                                                                                                                  |  |                                                 |         |              |                 |   |       |         |              |   |                 |  
|FFO                                                                                                                                                                                                                               |  |                                                 | 311,251 |              |                 |   | 0.69  |         |              |   | 350,346         |   |  |   | 0.76  |  
|Preferred distributions                                                                                                                                                                                                           |  |                                                 | (12,748 | )            |                 |   | (0.03 | )       |              |   | (15,461         | ) |  |   | (0.03 | )
|                                                                                                                                                                                                                                  |  |                                                 |         |              |                 |   |       |         |              |   |                 |  
|FFO available to unitholders  basic                                                                                                                                                                                              |  | $                                               | 298,503 |              |                 | $ | 0.67  |         |              | $ | 334,885         |   |  | $ | 0.73  |  
|                                                                                                                                                                                                                                  |  |                                                 |         |              |                 |   |       |         |              |   |                 |  

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|                                                                                                                                                                    |  |                                                 |             |   |      |                            |             |   |  |   |             |   |  |   |             |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------- | ----------- | - | ---- | -------------------------- | ----------- | - |  | - | ----------- | - |  | - | ----------- | -
|                                                                                                                                                                    |  |                                                
|                                                                                                                                                                    |  | For the three months ended March 31,            |            
|                                                                                                                                                                    |  |                                                 |            
|                                                                                                                                                                    |  |                                                 |             |  
|                                                                                                                                                                    |  | 2004                                            |             |   | 2003 |                           
|                                                                                                                                                                    |  |                                                 |             |   |      |                           
|                                                                                                                                                                    |  |                                                 |             |   |      |                            |             |  
|                                                                                                                                                                    |  |                                                
|                                                                                                                                                                    |  | (Dollars in thousands, except per unit amounts) |            
|Adjustments to arrive at FFO available to
    unitholders plus assumed conversions:                                                                                 |  |                                                 | Net Income  |   |      |                            | FFO         |   |  |   | Net Income  |   |  |   | FFO         |  
|                                                                                                                                                                    |  |                                                 |             |   |      |                            |             |   |  |   |             |  
|Net income and FFO                                                                                                                                                  |  | $                                               | 85,988      |   |      | $                          | 311,251     |   |  | $ | 174,492     |   |  | $ | 350,346     |  
|Preferred distributions                                                                                                                                             |  |                                                 | (12,748     | ) |      |                            | (12,748     | ) |  |   | (15,461     | ) |  |   | (15,461     | )
|                                                                                                                                                                    |  |                                                 |             |   |      |                            |             |   |  |   |             |  
|Net income and FFO available to unitholders                                                                                                                         |  |                                                 | 73,240      |   |      |                            | 298,503     |   |  |   | 159,031     |   |  |   | 334,885     |  
|Preferred distributions on Series B
    preferred units, of which is assumed to be converted into Units                                                             |  |                                                 |            |   |      |                            | 3,931       |   |  |   |            |   |  |   | 3,931       |  
|                                                                                                                                                                    |  |                                                 |             |   |      |                            |             |   |  |   |             |  
|Net income and FFO available to unitholders plus
    assumed conversions                                                                                            |  | $                                               | 73,240      |   |      | $                          | 302,434     |   |  | $ | 159,031     |   |  | $ | 338,816     |  
|                                                                                                                                                                    |  |                                                 |             |   |      |                            |             |   |  |   |             |  
|Weighted average Units, dilutive potential units
    plus assumed conversions outstanding                                                                           |  |                                                 | 451,142,921 |   |      |                            | 459,532,275 |   |  |   | 459,301,852 |   |  |   | 467,691,206 |  
|                                                                                                                                                                    |  |                                                 |             |   |      |                            |             |   |  |   |             |  
|Net income and FFO available to unitholders plus
    assumed conversions per unit                                                                                   |  | $                                               | 0.16        |   |      | $                          | 0.66        |   |  | $ | 0.35        |   |  | $ | 0.72        |  
|                                                                                                                                                                    |  |                                                 |             |   |      |                            |             |   |  |   |             |  
|                                                                                                                                                                    |  |                                                 |             |   |      | Units and unit equivalents
|                                                                                                                                                                    |  |                                                 |             |   |     
|Weighted average Units outstanding (used for both
    net income and FFO basic calculation)                                                                         |  |                                                 |             |   |      |                            | 448,652,065 |   |  |   |             |   |  |   | 458,337,480 |  
|Impact of share options and restricted units
    which are dilutive to both net income and FFO                                                                      |  |                                                 |             |   |      |                            | 2,490,856   |   |  |   |             |   |  |   | 964,372     |  
|                                                                                                                                                                    |  |                                                 |             |   |      |                            |             |   |  |   |             |  
|Weighted average Units and dilutive potential
    units used for net income available to unitholders                                                                |  |                                                 |             |   |      |                            | 451,142,921 |   |  |   |             |   |  |   | 459,301,852 |  
|Impact of conversion of Series B preferred
    units, which are dilutive to FFO, but not net income                                                                 |  |                                                 |             |   |      |                            | 8,389,354   |   |  |   |             |   |  |   | 8,389,354   |  
|                                                                                                                                                                    |  |                                                 |             |   |      |                            |             |   |  |   |             |  
|Weighted average Units, dilutive potential units
    plus assumed conversions used for the calculation of FFO
    available to unitholders plus assumed conversions |  |                                                 |             |   |      |                            | 459,532,275 |   |  |   |             |   |  |   | 467,691,206 |  
|                                                                                                                                                                    |  |                                                 |             |   |      |                            |             |   |  |   |             |  



---



|    |  |                                                                                                                                                       
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------
|(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) |  | FFO per unit may not total the sum of the per
    unit components in the reconciliation due to rounding.                                              

FFO Definition:

FFO is defined as net income, computed in
accordance with accounting principles generally accepted in the
United States (GAAP), excluding gains or losses from
sales of properties, plus real estate related depreciation and
amortization, and after adjustments for unconsolidated
partnerships and joint ventures. Adjustments for unconsolidated
partnerships and joint ventures are calculated to reflect funds
from operations

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on the same basis. We believe that FFO is helpful
to investors as one of several measures of the performance of a
real estate company. We further believe that by excluding the
effect of depreciation, amortization and gains or losses from
sales of real estate, all of which are based on historical costs
and which may be of limited relevance in evaluating current
performance, FFO can facilitate comparisons of operating
performance between periods and between other real estate
companies. Investors should review FFO, along with GAAP net
income when trying to understand a real estate companys
operating performance. We compute FFO in accordance with
standards established by NAREIT, which may not be comparable to
FFO reported by other real estate companies that do not define
the term in accordance with the current NAREIT definition or
that interpret the current NAREIT definition differently than we
do. FFO does not represent cash generated from operating
activities in accordance with GAAP, nor does it represent cash
available to pay distributions and should not be considered as
an alternative to net income, determined in accordance with
GAAP, as an indication of our financial performance, or to cash
flow from operating activities, determined in accordance with
GAAP, as a measure of our liquidity, nor is it indicative of
funds available to fund our cash needs, including our ability to
make cash distributions.




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

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



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

Evaluation of Disclosure Controls and
Procedures

Equity Offices principal executive officer,
Richard D. Kincaid, and principal financial officer, Marsha C.
Williams, evaluated as of March 31, 2004 the effectiveness
of the design and operation of our disclosure controls and other
procedures that are designed to ensure that information required
to be disclosed by us in the reports that we file or submit
under the Securities Exchange Act of 1934 is recorded,
processed, summarized and reported within the time periods
specified in the SECs rules and forms. As a result of this
evaluation, these executive officers have concluded that, as of
such date, the design and operation of our disclosure controls
and procedures were effective.

Changes in Internal Control over Financial
Reporting

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

44



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##### Table of Contents






PART II  OTHER
INFORMATION



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

Legal proceedings are incorporated herein by
reference from Item 1.  Financial
Statements  Note 12  Commitments and
Contingencies.



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

(a) Exhibits:

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

(b) Reports on Form 8-K

The following reports on Form 8-K were filed
during the quarterly period ended March 31, 2004:

|               |  |                                              
|-------------- |  | ---------------------------------------------
|Date of Event  |  | Items Reported/Financial Statements Filed    
|               |  |                                              
|March 22, 2004 |  | Item 5. Other Events                         
|               |  | Item 7. Financial Statements and
    Exhibits
|March 26, 2004 |  | Item 5. Other Events                         
|               |  | Item 7. Financial Statements and
    Exhibits

45



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##### Table of Contents



APPENDIX A





FINANCIAL COVENANT CALCULATIONS AS OF
MARCH 31, 2004

UNDER CERTAIN INDENTURE AGREEMENTS





EOP OPERATING LIMITED PARTNERSHIP

UNSECURED NOTES FINANCIAL COVENANT COMPLIANCE
AS OF MARCH 31, 2004


(Dollars in thousands)


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

This section presents such ratios as of
March 31, 2004 to show that EOP Partnership was in
compliance with the applicable financial covenants contained in
the unsecured note indentures, copies of which have been filed
as exhibits to the EOP Partnerships periodic reports filed
with the SEC. Management is not presenting these ratios and the
related calculations for any other purpose or for any other
period, and is not intending for these measures to otherwise
provide information about EOP Partnerships financial
condition or results of operations. Investors should not rely on
these measures other than for the purpose of testing EOP
Partnerships compliance with the financial covenants
contained in the unsecured note indentures as of March 31,
2004.

Debt to Adjusted Total Assets

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



| |      |                                                                                                                                                                                                                                                                                                                                    
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (i)  | Total Assets as of the end of the fiscal quarter
    covered in EOP Partnerships Annual Report on
    Form 10-K or Quarterly Report on Form 10-Q, as the
    case may be, most recently filed with the SEC prior to the
    incurrence of such additional Debt and                                                                
|
| | (ii) | the increase or decrease in Total Assets from the
    end of such quarter including, without limitation, any increase
    in Total Assets resulting from the incurrence of such additional
    Debt (such increase or decrease together with EOP
    Partnerships Total Assets is referred to as the
    Adjusted Total Assets).

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##### Table of Contents



|                                                                                     |                       |   |            |            | 
|------------------------------------------------------------------------------------ | --------------------- | - | ---------- | ---------- | 
|Mortgage debt (excluding a net discount of
    $(13,565))                            |                       | $ | 2,894,743  |           
|Unsecured notes (excluding a net discount of
    $(11,783))                          |                       |   | 9,416,500  |           
|Line of credit                                                                       |                       |   | 5,800      |           
|EOP Partnerships share of unconsolidated
    non-recourse mortgage debt             |                       |   | 344,989    |           
|                                                                                     |                       |   |           
|                                                                                     | Debt                  |   | $          | 12,662,032 | 
|                                                                                     |                       |   |           
|Investments in real estate                                                           |                       | $ | 25,160,623 |           
|Developments in process                                                              |                       |   | 64,377     |           
|Land available for development                                                       |                       |   | 251,151    |           
|Cash and cash equivalents                                                            |                       |   | 54,984     |           
|Escrow deposits and restricted cash                                                  |                       |   | 60,281     |           
|Investments in unconsolidated joint ventures                                         |                       |   | 972,675    |           
|Prepaid expenses and other assets (net of
    discount of $3,181)                    |                       |   | 217,355    |           
|Change in cash subsequent to March 31, 2004
    as a result of property dispositions |                       |   | 6,987      |           
|                                                                                     |                       |   |           
|                                                                                     | Adjusted Total Assets |   | $          | 26,788,433 | 
|                                                                                     |                       |   |           
|Ratio                                                                                |                       |   | 47         | %         
|                                                                                     |                       |   |           
|Maximum Ratio                                                                        |                       |   | 60         | %         
|                                                                                     |                       |   |           

Secured Debt to Adjusted Total
Assets

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

|                                                                         |                       |   |           |            | 
|------------------------------------------------------------------------ | --------------------- | - | --------- | ---------- | 
|Mortgage debt (excluding a net discount of
    $(13,565))                |                       | $ | 2,894,743 |           
|EOP Partnerships share of unconsolidated
    non-recourse mortgage debt |                       |   | 344,989   |           
|                                                                         |                       |   |          
|                                                                         | Secured Debt          |   | $         | 3,239,732  | 
|                                                                         |                       |   |          
|                                                                         | Adjusted Total Assets |   | $         | 26,788,433 | 
|                                                                         |                       |   |          
|Ratio                                                                    |                       |   | 12        | %         
|                                                                         |                       |   |          
|Maximum Ratio                                                            |                       |   | 40        | %         
|                                                                         |                       |   |          

Consolidated Income Available for Debt Service
to Annual Debt Service Charge

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



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

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##### Table of Contents





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

|                                                                            |                                                |   |         |           | 
|--------------------------------------------------------------------------- | ---------------------------------------------- | - | ------- | --------- | 
|Pro forma net income                                                        |                                                | $ | 390,604 |          
|Pro forma interest expense                                                  |                                                |   | 815,421 |          
|Pro forma amortization of mark to market
    discounts/premiums             |                                                |   | (4,290  | )        
|Pro forma provision for taxes                                               |                                                |   | 3,945   |          
|Pro forma amortization and depreciation                                     |                                                |   | 733,006 |          
|Pro forma charge from a change in accounting
    principle                  |                                                |   | 33,697  |          
|Less pro forma income from investments in
    unconsolidated joint ventures |                                                |   | (63,538 | )        
|                                                                            |                                                |   |        
|                                                                            | Consolidated Income Available for Debt Service |   | $       | 1,908,845 | 
|                                                                            |                                                |   |        
|Pro forma interest expense                                                  |                                                | $ | 815,421 |          
|Pro forma amortization of mark to market
    discounts/premiums             |                                                |   | (4,290  | )        
|                                                                            |                                                |   |        
|                                                                            | Annual Debt Service Charge                     |   | $       | 811,131   | 
|                                                                            |                                                |   |        
|Ratio                                                                       |                                                |   | 2.35    |          
|                                                                            |                                                |   |        
|Minimum Ratio                                                               |                                                |   | 1.50    |          
|                                                                            |                                                |   |        

Total Unencumbered Assets to Unsecured
Debt

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

|                                                                        |                           |   |            |            | 
|----------------------------------------------------------------------- | ------------------------- | - | ---------- | ---------- | 
|Total undepreciated real estate assets                                  |                           | $ | 19,058,892 |           
|Cash and cash equivalents                                               |                           |   | 54,984     |           
|Escrow deposits and restricted cash                                     |                           |   | 60,281     |           
|Prepaid expenses and other assets (net of
    discount of $3,181)       |                           |   | 217,355    |           
|Unencumbered investments in unconsolidated joint
    venture properties |                           |   | 802,403    |           
|                                                                        |                           |   |           
|                                                                        | Total Unencumbered Assets |   | $          | 20,193,915 | 
|                                                                        |                           |   |           
|Unsecured notes (excluding a net discount of
    $(11,783))             |                           | $ | 9,416,500  |           
|Line of credit                                                          |                           |   | 5,800      |           
|                                                                        |                           |   |           
|                                                                        | Unsecured Debt            |   | $          | 9,422,300  | 
|                                                                        |                           |   |           
|Ratio                                                                   |                           |   | 214        | %         
|                                                                        |                           |   |           
|Minimum Ratio (a)                                                       |                           |   | 150        | %         
|                                                                        |                           |   |           






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

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##### Table of Contents






SIGNATURES

Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report
to be signed on its behalf by the undersigned thereunto duly
authorized.



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



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

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

Date: May 10, 2004

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

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

Date: May 10, 2004

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

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





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##### Table of Contents






EXHIBIT INDEX

|        |  |                                                                                                                                                                                                                                                               |  |                                                                                                                                              
|------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                                                                                                                                               |  |                                                                                                                                              
|No.     |  | Description                                                                                                                                                                                                                                                   |  | Location                                                                                                                                     
|        |  |                                                                                                                                                                                                                                                               |  |                                                                                                                                              
|4.1     |  | Indenture, dated August 29, 2000, by and
    between EOP Partnership and U.S. Bank National Association
    (formerly known as U.S. Bank Trust National Association)                                                                                          |  | Incorporated by reference to Exhibit 4.1 to
    EOP Partnerships Registration Statement on Form S-3,
    as amended (SEC File No. 333-43530)
|       
|4.2     |  | First Supplemental Indenture, dated June 18,
    2001, among EOP Operating Limited Partnership, Equity Office and
    U.S. Bank National Association (formerly known as
    U.S. Bank Trust National Association)                                             |  | Incorporated by reference to Exhibit 4.2 to
    Equity Offices Registration Statement on Form S-3, as
    amended (SEC File No. 333-58976)  
|       
|4.3     |  | $500,000,000 43⁄4% Note due March 15,
    2014, and related Guarantee (another $500,000,000 43⁄4% Note
    due March 15, 2014 and related Guarantee, identical in all
    material respects to the Note incorporated herein by reference,
    has not been filed) |  | Incorporated herein by reference to
    Exhibit 4.3 to EOP Partnerships Current Report on
    Form 8-K filed with the SEC on March 26, 2004 
|       
|10.1   |  | Change in Control Agreement by and between EOP
    Partnership, Equity Office and Marsha C. Williams                                                                                                                                                          |  | Filed herewith                                                                                                                               
|       
|10.2   |  | Assumption to Change in Control Agreement by and
    between Equity Office Management L.L.C., Equity Office, EOP
    Partnership and Marsha C. Williams                                                                                                       |  | Filed herewith                                                                                                                               
|       
|10.3   |  | Change in Control Agreement by and between Equity
    Office Management L.L.C., Equity Office and Jeffrey L. Johnson                                                                                                                                          |  | Filed herewith                                                                                                                               
|       
|31.1    |  | Rule 13a-14(a)/15d-14(a) Certifications                                                                                                                                                                                                                       |  | Filed herewith                                                                                                                               
|       
|32.1    |  | Section 1350 Certification                                                                                                                                                                                                                                    |  | Filed herewith                                                                                                                               



---

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