<PAGE>   1
 
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                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                            ------------------------
 
                                   FORM 10-Q
 
<TABLE>
<S>    <C>
X            QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                  OF THE SECURITIES EXCHANGE ACT OF 1934
 
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1999 OR
 
[ ]         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                  OF THE SECURITIES EXCHANGE ACT OF 1934
 
COMMISSION FILE NUMBER: 1-13625
</TABLE>
 
                       EOP OPERATING LIMITED PARTNERSHIP
             (Exact name of registrant as specified in its charter)
 
<TABLE>
<S>                                            <C>
                  DELAWARE                                      36-4156801
       (State or other jurisdiction of                       (I.R.S. Employer
       incorporation or organization)                       Identification No.)
          TWO NORTH RIVERSIDE PLAZA
        SUITE 2200, CHICAGO, ILLINOIS                              60606
  (Address of principal executive offices)                      (Zip Code)
</TABLE>
 
                                 (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 ____
 
                      APPLICABLE ONLY TO CORPORATE ISSUERS
 
    On April 30, 1999, 288,579,160 of the Registrant's Units were outstanding.
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<PAGE>   2
 
                        PART I -- FINANCIAL INFORMATION
 
ITEM 1. FINANCIAL STATEMENTS
 
                       EOP OPERATING LIMITED PARTNERSHIP
 
                          CONSOLIDATED BALANCE SHEETS
 
<TABLE>
<CAPTION>
        (DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)            MARCH 31, 1999    DECEMBER 31, 1998
------------------------------------------------------------    --------------    -----------------
                                                                 (UNAUDITED)
<S>                                                             <C>               <C>
ASSETS:
  Investment in real estate.................................     $13,718,021         $13,349,627
  Developments in process...................................         155,070             268,373
  Land available for development............................          78,264              65,819
  Accumulated depreciation..................................        (435,171)           (352,259)
                                                                 -----------         -----------
     Investment in real estate, net of accumulated
       depreciation.........................................      13,516,184          13,331,560
  Cash and cash equivalents.................................          41,966              67,080
  Tenant and other receivables (net of allowance for
     doubtful accounts of $983 and $1,013, respectively)....          46,409              36,193
  Deferred rent receivable..................................         103,655              87,115
  Escrow deposits and restricted cash.......................          28,566             159,576
  Investment in unconsolidated joint ventures...............         387,407             378,534
  Deferred financing costs (net of accumulated amortization
     of $8,281 and $6,242, respectively)....................          58,659              53,181
  Deferred leasing costs (net of accumulated amortization of
     $12,573 and $9,714, respectively)......................          72,600              65,090
  Prepaid expenses and other assets.........................          86,409              82,962
                                                                 -----------         -----------
          Total Assets......................................     $14,341,855         $14,261,291
                                                                 ===========         ===========
LIABILITIES AND PARTNERS' CAPITAL:
  Mortgage debt (including a net premium of $16,247 and
     $13,517, respectively).................................     $ 2,090,716         $ 2,350,088
  Unsecured notes (including a net premium of $996 and
     $4,317, respectively)..................................       3,455,996           2,459,317
  Lines of credit...........................................         528,000           1,216,000
  Accounts payable and accrued expenses.....................         278,351             347,970
  Due to affiliates.........................................           1,396               1,136
  Dividend/distribution payable.............................         109,438               5,080
  Other liabilities.........................................         106,883              93,022
                                                                 -----------         -----------
          Total Liabilities.................................       6,570,780           6,472,613
                                                                 -----------         -----------
  Commitments and contingencies.............................
  Minority Interests -- partially owned properties..........          28,762              28,360
                                                                 -----------         -----------
  Preferred Units, 100,000,000 authorized:
     8.98% Series A Cumulative Redeemable Preferred Units,
       liquidation preference $25.00 per unit, 8,000,000
       issued and outstanding...............................         200,000             200,000
     5.25% Series B Convertible, Cumulative Redeemable
       Preferred Units, liquidation preference $50.00 per
       unit, 6,000,000 issued and outstanding...............         300,000             300,000
     8.625% Series C Cumulative Redeemable Preferred Units,
       liquidation preference $25.00 per unit, 4,600,000
       issued and outstanding...............................         115,000             115,000
  General Partners Capital..................................         117,920             118,309
  Limited Partners Capital..................................       7,009,393           7,027,009
                                                                 -----------         -----------
          Total Partners' Capital...........................       7,742,313           7,760,318
                                                                 -----------         -----------
          Total Liabilities and Partners' Capital...........     $14,341,855         $14,261,291
                                                                 ===========         ===========
</TABLE>
 
                            See accompanying notes.
 
                                        2
<PAGE>   3
 
                       EOP OPERATING LIMITED PARTNERSHIP
 
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (UNAUDITED)
 
<TABLE>
<CAPTION>
                                                                FOR THE THREE MONTHS ENDED
                                                                        MARCH 31,
                                                                --------------------------
        (DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)               1999           1998
------------------------------------------------------------    -----------    -----------
<S>                                                             <C>            <C>
REVENUES:
  Rental....................................................    $   369,139    $   289,213
  Tenant reimbursements.....................................         68,159         52,989
  Parking...................................................         27,459         21,214
  Other.....................................................          5,474          6,177
  Fee income................................................          1,862          1,157
  Interest/dividends........................................          3,041          3,070
                                                                -----------    -----------
       Total revenues.......................................        475,134        373,820
                                                                -----------    -----------
EXPENSES:
  Interest:
     Expense incurred.......................................        104,480         69,884
     Amortization of deferred financing costs...............            746          2,145
  Depreciation..............................................         82,912         64,540
  Amortization..............................................          2,901          1,107
  Real estate taxes.........................................         61,801         50,034
  Insurance.................................................          2,322          2,243
  Repairs and maintenance...................................         51,384         41,977
  Property operating........................................         48,208         41,973
  Ground rent...............................................          1,846          1,638
  General and administrative................................         18,250         13,948
                                                                -----------    -----------
       Total expenses.......................................        374,850        289,489
                                                                -----------    -----------
Income before allocation to minority interests, income from
  investment in unconsolidated joint ventures and
  extraordinary items.......................................        100,284         84,331
Minority Interests -- partially owned properties............           (545)          (538)
Income from investment in unconsolidated joint ventures.....          1,835          3,634
                                                                -----------    -----------
Income before extraordinary items...........................        101,574         87,427
Extraordinary items.........................................         (3,183)        (6,959)
                                                                -----------    -----------
Net income..................................................         98,391         80,468
Preferred distributions.....................................        (10,881)        (6,271)
                                                                -----------    -----------
Net income available for Units..............................    $    87,510    $    74,197
                                                                ===========    ===========
Net income available per weighted average Unit
  outstanding -- Basic......................................    $      0.30    $      0.27
                                                                ===========    ===========
Weighted average Units outstanding -- Basic.................    288,554,860    278,797,811
                                                                ===========    ===========
Net income available per weighted average Units
  outstanding -- Diluted....................................    $      0.30    $      0.27
                                                                ===========    ===========
Weighted average Units outstanding -- Diluted...............    291,433,553    280,327,761
                                                                ===========    ===========
</TABLE>
 
                            See accompanying notes.
                                        3
<PAGE>   4
 
                       EOP OPERATING LIMITED PARTNERSHIP
 
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (UNAUDITED)
 
<TABLE>
<CAPTION>
                                                                 FOR THE THREE MONTHS ENDED
                                                                          MARCH 31,
                                                                -----------------------------
                   (DOLLARS IN THOUSANDS)                         1999               1998
------------------------------------------------------------    ---------         -----------
<S>                                                             <C>               <C>
OPERATING ACTIVITIES:
  Net income................................................    $  98,391         $    80,468
  Adjustments to reconcile net income before preferred
    distributions to net cash provided by operating
    activities:
    Depreciation and amortization...........................       86,559              67,792
    Amortization of premiums/discounts on unsecured notes
     and terminated interest rate protection agreements.....          893                 440
    Compensation related to restricted shares issued to
     employees by the Trust.................................        1,314                 474
    Income from investment in unconsolidated joint
     ventures...............................................       (1,835)             (3,634)
    Extraordinary items.....................................        3,183               6,959
    Provision for doubtful accounts.........................          291                (111)
    Allocation to minority interests........................          545                 538
    Changes in assets and liabilities:
      (Increase) in tenant and other receivables............      (10,507)               (666)
      (Increase) in deferred rent receivable................      (16,540)            (17,119)
      (Increase) in prepaid expenses and other assets.......       (3,489)             (2,624)
      (Decrease) in accounts payable and accrued expenses...      (69,619)            (69,511)
      Increase (decrease) in due to affiliates..............          260                (559)
      Increase in other liabilities.........................       13,466              48,318
                                                                ---------         -----------
      Net cash provided by operating activities.............      102,912             110,765
                                                                ---------         -----------
INVESTING ACTIVITIES:
  Property acquisitions.....................................     (101,704)           (260,850)
  Payments for capital and tenant improvements..............      (45,142)            (28,048)
  Distributions from unconsolidated joint ventures..........        3,977              31,162
  Investments in unconsolidated joint ventures..............      (11,015)                 --
  Payments of lease acquisition costs.......................      (10,369)             (9,060)
  Decrease (increase) in escrow deposits and restricted
    cash....................................................       10,320              (4,151)
                                                                ---------         -----------
      Net cash (used for) investing activities..............     (153,933)           (270,947)
                                                                ---------         -----------
FINANCING ACTIVITIES:
  Proceeds from exercise of share options...................          355               4,868
  Distributions to unitholders..............................       (1,599)               (392)
  Payment of preferred distributions........................      (11,100)             (4,478)
  Proceeds from sale of preferred units, net of offering
    costs...................................................           --             290,250
  Payment of offering costs.................................         (417)               (117)
  Distributions to minority interest in partially owned
    properties..............................................         (143)               (950)
  Proceeds from mortgage debt...............................          233                  --
  Proceeds from unsecured notes.............................      996,675           1,504,452
  Proceeds from lines of credit.............................      163,000             333,000
  Principal payments on mortgage debt.......................     (262,335)             (3,186)
  Principal payments on lines of credit.....................     (851,000)         (2,131,300)
  Payments of loan costs....................................       (7,762)            (10,860)
  Termination of interest rate protection agreements........           --             (38,277)
                                                                ---------         -----------
      Net cash provided by (used for) financing
       activities...........................................       25,907             (56,990)
                                                                ---------         -----------
  Net (decrease) in cash and cash equivalents...............      (25,114)           (217,172)
  Cash and cash equivalents at the beginning of the
    period..................................................       67,080             228,853
                                                                ---------         -----------
  Cash and cash equivalents at the end of the period........    $  41,966         $    11,681
                                                                =========         ===========
SUPPLEMENTAL INFORMATION:
  Interest paid during the period, including capitalized
    interest of $3,125 and $3,452, respectively.............    $ 114,733         $    64,777
                                                                =========         ===========
</TABLE>
 
                            See accompanying notes.
 
                                        4
<PAGE>   5
 
                       EOP OPERATING LIMITED PARTNERSHIP
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (UNAUDITED)
 
     DEFINITION OF TERMS. Capitalized terms used but not defined herein are as
defined in the Company's Annual Report on Form 10-K for the year ended December
31, 1998 (the "Form 10-K").
 
     The consolidated financial statements of the Company have been prepared
pursuant to the Securities and Exchange Commission ("SEC") rules and
regulations. The following notes highlight significant changes to the notes to
the December 31, 1998 audited consolidated and combined financial statements of
EOP Operating Limited Partnership and Equity Office Predecessors and should be
read in conjunction with the financial statements and notes thereto included in
the Form 10-K and present interim disclosures as required by the SEC.
 
NOTE 1 -- BUSINESS AND FORMATION OF THE COMPANY
 
     As used herein, "Company" means EOP Operating Limited Partnership, a
Delaware limited partnership and Equity Office Predecessors. The Company is a
subsidiary of the Trust which was formed on October 9, 1996 to continue and
expand the national office property business organized by Mr. Samuel Zell,
Chairman of the Board of Trustees of the Trust, and to complete the
Consolidation of the Equity Office Predecessors and the Trust's IPO. The Company
is a fully integrated and self-managed real estate company engaged in acquiring,
owning, managing, leasing and renovating office properties and parking
facilities. The Trust's assets, which include investments in joint ventures, are
owned by, and substantially all of its operations are conducted through the
Company. The Trust is the managing general partner of the Company. The Trust
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.
 
     As of March 31, 1999, the Company owned or had an interest in 287 office
properties (the "Office Properties") containing approximately 76.3 million
rentable square feet of office space and owned 19 stand-alone parking facilities
(the "Parking Facilities" and, together with the Office Properties, the
"Properties") containing approximately 18,059 parking spaces. The weighted
average occupancy of the Office Properties at March 31, 1999 was approximately
94.1%. The Office Properties are located in 81 submarkets in 36 markets in 24
states and the District of Columbia. The Office Properties, by rentable square
feet, are located approximately 53% in CBDs and 47% in suburban markets.
 
NOTE 2 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
Basis of Presentation
 
     The consolidated financial statements represent the financial condition and
results of the Company and its subsidiaries.
 
Use of Estimates
 
     The preparation of the consolidated financial statements of the Company in
conformity with generally accepted accounting principles 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 of the Company as of and for the
three months ended March 31, 1999 and 1998 and related footnote disclosures are
unaudited. In the opinion of management, such financial
 
                                        5
<PAGE>   6
                       EOP OPERATING LIMITED PARTNERSHIP
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
statements reflect all adjustments necessary for a fair presentation of the
results of the interim periods. All such adjustments are of a normal, recurring
nature.
 
Reclassifications
 
     Certain reclassifications have been made to the previously reported 1998
statements in order to provide comparability with the 1999 statements reported
herein. These reclassifications have not changed the 1998 results or partners'
capital.
 
NOTE 3 -- INVESTMENT IN REAL ESTATE
 
     During the three months ended March 31, 1999, the Company acquired the
Office Properties listed below. Each Office Property was purchased from an
unaffiliated party and was funded from credit facilities and working capital.
 
<TABLE>
<CAPTION>
  DATE                                                                    RENTABLE      TOTAL ACQUISITION
ACQUIRED                   PROPERTY                        LOCATION      SQUARE FEET         COST(1)
--------                   --------                        --------      -----------    -----------------
                                                                                           (Dollars in
                                                                                           thousands)
<C>       <S>                                            <C>             <C>            <C>
  1/7/99  Texas Commerce Tower.......................    Irving, TX         369,134         $ 55,254
  1/7/99  Computer Associates Tower..................    Irving, TX         360,815           51,294
 1/28/99  City Center Bellevue.......................    Bellevue, WA       472,587          115,915(2)
                                                                          ---------         --------
                                                         Total            1,202,536         $222,463
                                                                          =========         ========
</TABLE>
 
-------------------------
(1) Total acquisition cost includes the purchase price specified in the purchase
    contract, closing costs, acquisition costs and accounting adjustments
    recorded in accordance with GAAP.
 
(2) The total acquisition cost includes a vacant land parcel valued at $12.4
    million.
 
NOTE 4 -- INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
 
     The Company has several investments in unconsolidated joint ventures
consisting of Office Properties, Parking Facilities and a management company.
Combined summarized financial information of the unconsolidated joint ventures
is as follows:
 
<TABLE>
<CAPTION>
                   (DOLLARS IN THOUSANDS)                       MARCH 31, 1999    DECEMBER 31, 1998
------------------------------------------------------------    --------------    -----------------
<S>                                                             <C>               <C>
Balance Sheets:
  Real estate, net..........................................       $508,280           $488,997
  Other assets..............................................         81,529             78,623
                                                                   --------           --------
          Total Assets......................................       $589,809           $567,620
                                                                   ========           ========
  Mortgage debt.............................................       $256,511           $243,096
  Other liabilities.........................................         18,216             16,059
  Partners' and shareholders' equity........................        315,082            308,465
                                                                   --------           --------
          Total Liabilities and Partners' and Shareholders'
            Equity..........................................       $589,809           $567,620
                                                                   ========           ========
Company's share of equity...................................       $169,376           $159,092
Excess of cost of investments over the net book value of
  underlying net assets, net of accumulated depreciation of
  $7,265 and $5,854, respectively...........................        218,031            219,442
                                                                   --------           --------
Carrying value of investments in unconsolidated joint
  ventures..................................................       $387,407           $378,534
                                                                   ========           ========
Company's share of unconsolidated mortgage debt.............       $135,291           $124,282
                                                                   ========           ========
</TABLE>
 
                                        6
<PAGE>   7
                       EOP OPERATING LIMITED PARTNERSHIP
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
<TABLE>
<CAPTION>
                                                                   FOR THE THREE MONTHS ENDED
                                                                            MARCH 31,
                                                                   ---------------------------
                   (DOLLARS IN THOUSANDS)                            1999               1998
------------------------------------------------------------       --------           --------
<S>                                                                <C>                <C>
Statements of Operations:
  Revenues..................................................       $25,383            $28,448
                                                                   -------            -------
  Expenses:
     Interest expense.......................................         4,447              3,775
     Depreciation and amortization..........................         4,103              5,677
     Operating expenses.....................................        10,607              9,150
                                                                   -------            -------
          Total expenses....................................        19,157             18,602
                                                                   -------            -------
  Net income................................................       $ 6,226            $ 9,846
                                                                   =======            =======
  Company's share of net income.............................       $ 1,835            $ 3,634
                                                                   =======            =======
  Company's share of interest expense.......................       $ 2,201            $ 1,907
                                                                   =======            =======
  Company's share of depreciation and amortization (real
     estate related)........................................       $ 3,483            $ 3,941
                                                                   =======            =======
</TABLE>
 
NOTE 5 -- MORTGAGE DEBT
 
     The Company repaid the mortgage debt encumbering the following Properties
with proceeds from the $1.0 Billion Notes Offering:
 
<TABLE>
<CAPTION>
PAYOFF
 DATE                              PROPERTY                            PAYOFF AMOUNT
------                             --------                            -------------
                                                                        (Dollars in
                                                                        thousands)
<C>           <S>                                                      <C>
1/27/99       Boston Harbor Garage..............................         $ 34,571
1/28/99       150 Federal Street................................           56,086
1/29/99       1700 Higgins......................................            3,385
1/29/99       Northwest Center..................................            6,475
1/29/99       Franklin Plaza....................................           34,141
1/29/99       One Crosswoods Center.............................            3,455
1/29/99       One Columbus Building.............................           29,432
1/29/99       One Lakeway.......................................            9,712
1/29/99       Two Lakeway.......................................           14,715
1/29/99       Three Lakeway.....................................           17,045
 2/5/99       Tabor Center......................................           47,734
              Total.............................................         --------
                                                                         $256,751
                                                                         ========
</TABLE>
 
NOTE 6 -- UNSECURED NOTES
 
     On January 26, 1999, the Company issued $1.0 billion of unsecured notes
(the "$1.0 Billion Notes") in three tranches (the "$1.0 Billion Notes
Offering"). The $1.0 Billion Notes were issued at a discount of approximately
$3.3 million which is being amortized over the terms of the respective tranches
as an adjustment to interest expense. Net proceeds to the Company after offering
costs were approximately
 
                                        7
<PAGE>   8
                       EOP OPERATING LIMITED PARTNERSHIP
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
$989.2 million. The net proceeds were used to repay mortgage debt and amounts
outstanding on the $1.0 Billion Credit Facility. The terms of the tranches are
as follows:
 
<TABLE>
<CAPTION>
                      TRANCHE                            AMOUNT          STATED RATE       EFFECTIVE RATE(1)
                      -------                            ------          -----------       -----------------
                                                       (Dollars in
                                                       thousands)
<S>                                                    <C>               <C>               <C>
3 Year Notes due 2002..............................    $  200,000            6.4%                 6.6%
5 Year Notes due 2004..............................       300,000            6.5                  6.7
10 Year Notes due 2009.............................       500,000            6.8                  6.9
                                                       ----------            ---                  ---
     Subtotal......................................     1,000,000            6.6%                 6.8%
                                                                             ===                  ===
Net discount (net of accumulated amortization of
  $86).............................................        (3,239)
                                                       ----------
          Total....................................    $  996,761
                                                       ==========
</TABLE>
 
-------------------------
(1) Includes offering and transaction costs and the discount on the unsecured
    notes.
 
NOTE 7 -- PARTNERS' CAPITAL
 
Units
 
     The following table presents the changes in the Company's issued and
outstanding Units since December 31, 1998:
 
<TABLE>
<S>                                                             <C>
OUTSTANDING AT DECEMBER 31, 1998............................    288,547,356
Issued to the Trust related to Common Shares issued for
  share option exercises....................................         15,209
                                                                -----------
OUTSTANDING AT MARCH 31, 1999...............................    288,562,565
                                                                ===========
</TABLE>
 
Distributions
 
     The following table summarizes the distributions paid or declared on Units
and preferred units during the three months ended March 31, 1999:
 
<TABLE>
<CAPTION>
                                             DISTRIBUTION
                                                AMOUNT          DATE PAID       RECORD DATE
                                             ------------       ---------       -----------
<S>                                          <C>                <C>             <C>
Unitholders..............................      $   0.37          4/12/99          3/31/99
Series A Preferred Unit..................      $0.56125          3/15/99           3/1/99
Series B Preferred Unit..................      $0.65625          2/16/99           2/1/99
Series C Preferred Unit(1)...............      $0.58099          3/15/99           3/1/99
</TABLE>
 
-------------------------
(1) The distribution on the Series C Preferred Units represents a pro-rated
    distribution from December 8, 1998 (the closing date of the Series C
    Preferred Unit Offering) through March 14, 1999.
 
NOTE 8 -- EXTRAORDINARY ITEMS
 
     The Company incurred an extraordinary loss of approximately $3.2 million
during the three months ended March 31, 1999 due to the write-off of unamortized
mark-to-market adjustments in connection with the repayment of certain mortgage
debt. The mortgage debt was repaid with proceeds from the $1.0 Billion Notes
Offering.
 
                                        8
<PAGE>   9
                       EOP OPERATING LIMITED PARTNERSHIP
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
     The Company incurred an extraordinary loss of approximately $7.0 million
during the three months ended March 31, 1998 due to fees related to the
termination of $300 million of interest rate protection agreements in connection
with the issuance of the Series B Preferred Units.
 
NOTE 9 -- EARNINGS PER UNIT
 
     The following table sets forth the computation of basic and diluted
earnings per Unit:
 
<TABLE>
<CAPTION>
                                                                 FOR THE THREE MONTHS ENDED
                                                                          MARCH 31,
                                                                -----------------------------
          (DOLLARS IN THOUSANDS, EXCEPT UNIT DATA)                 1999              1998
------------------------------------------------------------    -----------       -----------
<S>                                                             <C>               <C>
NUMERATOR:
  Net income available for Units before extraordinary
     items..................................................    $    90,693       $    81,156
  Extraordinary items.......................................         (3,183)           (6,959)
                                                                -----------       -----------
  Numerator for basic and diluted earnings per Unit -- net
     income available for Units.............................    $    87,510       $    74,197
                                                                ===========       ===========
DENOMINATOR:
  Denominator for basic earnings per Unit -- weighted
     average Units..........................................    288,554,860       278,797,811
  Effect of dilutive securities:
     Units issuable upon exercise of share options and put
       options..............................................      2,878,693         1,529,950
                                                                -----------       -----------
  Denominator for diluted earnings per Unit -- adjusted
     weighted average Units and assumed conversions.........    291,433,553       280,327,761
                                                                ===========       ===========
BASIC EARNINGS AVAILABLE FOR UNITS PER WEIGHTED AVERAGE
  UNIT:
  Net income before extraordinary items.....................    $      0.32       $      0.29
  Extraordinary items.......................................          (0.02)            (0.02)
                                                                -----------       -----------
  Net income................................................    $      0.30       $      0.27
                                                                ===========       ===========
DILUTED EARNINGS AVAILABLE FOR UNIT PER WEIGHTED AVERAGE
  UNIT:
  Net income before extraordinary items.....................    $      0.31       $      0.29
  Extraordinary items.......................................          (0.01)            (0.02)
                                                                -----------       -----------
  Net income................................................    $      0.30       $      0.27
                                                                ===========       ===========
</TABLE>
 
     Options to purchase 3,453,098 Common Shares at a weighted average exercise
price of $30.15 per Common Share, warrants to purchase 5,000,000 Common Shares
at an exercise price of $39.375 per Common Share and the Series B Preferred
Shares at a conversion price of $35.70 per Common Share were outstanding during
the three months ended March 31, 1999, and were not included in the computation
of diluted earnings per Unit for the three months ended March 31, 1999, since
they would have an antidilutive effect. Upon exercise, the Company would issue a
corresponding number of Units to the Trust, on a one-for-one basis.
 
     Options to purchase 726,500 Common Shares at a weighted-average exercise
price of $32.93 per Common Share, warrants to purchase 5,000,000 Common Shares
at an exercise price of $39.375 per Common Share and the Series B Preferred
Shares at a conversion price of $35.70 per Common Share were outstanding during
the three months ended March 31, 1998, were not included in the computation of
diluted earnings per Unit for the three months ended March 31, 1998, since they
would have an antidilutive effect. Upon exercise, the Company would issue a
corresponding number of Units to the Trust, on a one-for-one basis.
 
NOTE 10 -- SEGMENT INFORMATION
 
     As discussed in Note 1, the Company's primary business is the ownership and
operation of Office Properties. The Company's long-term tenants are in a variety
of businesses and no single tenant is significant
 
                                        9
<PAGE>   10
                       EOP OPERATING LIMITED PARTNERSHIP
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
to the Company's business. Information related to this segment for the three
months ended March 31, 1999 and 1998 is below:
 
<TABLE>
<CAPTION>
                                                                       FOR THE THREE MONTHS ENDED
                                                                             MARCH 31, 1999
                                                                ----------------------------------------
                                                                               CORPORATE
                                                                  OFFICE          AND
                   (DOLLARS IN THOUSANDS)                       PROPERTIES       OTHER      CONSOLIDATED
------------------------------------------------------------    ----------     ---------    ------------
<S>                                                             <C>            <C>          <C>
Property Operating Revenues.................................    $   461,168    $  9,063     $   470,231
Property Operating Expenses.................................       (161,691)     (2,024)       (163,715)
                                                                -----------    --------     -----------
  Net operating income......................................        299,477       7,039         306,516
                                                                -----------    --------     -----------
Adjustments to arrive at net income:
  Other revenues............................................            631       4,272           4,903
  Interest expense(1).......................................        (37,601)    (66,879)       (104,480)
  Depreciation and amortization.............................        (83,719)     (2,840)        (86,559)
  Ground rent...............................................         (1,833)        (13)         (1,846)
  General and administrative................................           (136)    (18,114)        (18,250)
                                                                -----------    --------     -----------
  Total adjustments to arrive at net income.................       (122,658)    (83,574)       (206,232)
                                                                -----------    --------     -----------
Income before allocation to minority interests, income from
  investment in unconsolidated joint ventures and
  extraordinary items.......................................        176,819     (76,535)        100,284
Minority interests..........................................           (310)       (235)           (545)
Income from investment in unconsolidated joint ventures.....          1,793          42           1,835
Extraordinary items.........................................         (3,183)         --          (3,183)
                                                                -----------    --------     -----------
Net income..................................................    $   175,119    $(76,728)    $    98,391
                                                                ===========    ========     ===========
Capital and tenant improvements.............................    $    41,811    $  3,331     $    45,142
                                                                ===========    ========     ===========
Total Assets................................................    $13,840,662    $501,193     $14,341,855
                                                                ===========    ========     ===========
</TABLE>
 
<TABLE>
<CAPTION>
                                                                       FOR THE THREE MONTHS ENDED
                                                                             MARCH 31, 1998
                                                                ----------------------------------------
                                                                               CORPORATE
                                                                  OFFICE          AND
                   (DOLLARS IN THOUSANDS)                       PROPERTIES       OTHER      CONSOLIDATED
------------------------------------------------------------    ----------     ---------    ------------
<S>                                                             <C>            <C>          <C>
Property Operating Revenues.................................    $   362,622    $  6,971     $   369,593
Property Operating Expenses.................................       (134,242)     (1,985)       (136,227)
                                                                -----------    --------     -----------
  Net operating income......................................        228,380       4,986         233,366
                                                                -----------    --------     -----------
Adjustments to arrive at net income:
  Other revenues............................................            332       3,895           4,227
  Interest expense(1).......................................        (34,027)    (35,857)        (69,884)
  Depreciation and amortization.............................        (64,337)     (3,455)        (67,792)
  Ground rent...............................................         (1,626)        (12)         (1,638)
  General and administrative................................             (7)    (13,941)        (13,948)
                                                                -----------    --------     -----------
Total adjustments to arrive at net income...................        (99,665)    (49,370)       (149,035)
                                                                -----------    --------     -----------
Income before allocation to minority interests, income from
  investment in unconsolidated joint ventures and
  extraordinary items.......................................        128,715     (44,384)         84,331
Minority interests..........................................           (469)        (69)           (538)
Income from investment in unconsolidated joint ventures.....          2,507       1,127           3,634
Extraordinary items.........................................             --      (6,959)         (6,959)
                                                                -----------    --------     -----------
Net income..................................................    $   130,753    $(50,285)    $    80,468
                                                                ===========    ========     ===========
Capital and tenant improvements.............................    $    26,477    $  1,571     $    28,048
                                                                ===========    ========     ===========
Total Assets................................................    $11,415,894    $388,100     $11,803,994
                                                                ===========    ========     ===========
</TABLE>
 
-------------------------
(1) Interest expense for the Office Properties does not include an allocation of
    interest expense on corporate unsecured debt.
 
                                       10
<PAGE>   11
                       EOP OPERATING LIMITED PARTNERSHIP
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
NOTE 11 -- NON-CASH INVESTING ACTIVITY
 
     For the three months ended March 31, 1999, approximately $120.8 million of
escrow deposits was used to acquire the three Office Properties in the first
quarter of 1999.
 
NOTE 12 -- COMMITMENTS AND CONTINGENCIES
 
Concentration of Credit Risk
 
     The Company maintains its cash and cash equivalents at financial
institutions. The combined account balances at each institution typically exceed
FDIC insurance coverage and, as a result, there is a concentration of credit
risk related to amounts on deposit in excess of FDIC insurance coverage.
Management of the Company believes that the risk is not significant. The Company
from time to time enters into interest rate protection agreements to effectively
convert floating rate debt to a fixed rate basis, as well as to hedge
anticipated financing transactions. The Company believes it has limited exposure
to the risk of non-performance by the swap counterparties since each
counterparty is a major U.S. financial institution; management does not
anticipate any such non-performance. Currently, the Company has one interest
rate protection agreement which effectively fixed the interest rate on a $93.6
million loan at 6.94% through the maturity of the loan on June 30, 2000.
 
Environmental
 
     The Company, as an owner of real estate, is subject to various
environmental laws of federal and local governments. Compliance by the Company
with existing laws has not had a material adverse effect on the Company's
financial condition and results of operations, and management does not believe
it will have such an impact in the future. However, the Company cannot predict
the impact of new or changed laws or regulations on its current Properties or on
properties that it may acquire in the future.
 
Litigation
 
     The Company has become a party to various legal actions resulting from the
operational activities transferred to the Operating Partnership in connection
with the Consolidation and the Beacon Merger. These actions are incidental to
the transferred business and management does not believe that these actions will
have a material adverse effect on the Company.
 
     Neither the Company nor any of the Properties is presently subject to any
material litigation nor, to the Company's knowledge, is any litigation
threatened against the Company or any of the Properties, other than actions
which the Company does not believe to be material, or routine actions for
negligence and other claims and administrative proceedings arising in the
ordinary course of business, some of which are expected to be covered by
liability insurance and all of which collectively are not expected to have a
material adverse effect on the liquidity, business, results of operations or
financial condition of the Company.
 
Geographical
 
     The Company carries earthquake insurance on all of the Properties,
including those located in California, subject to coverage limitations which the
Company believes are commercially reasonable. In light of the California
earthquake risk, California building codes since the early 1970s have
established construction standards for all new buildings. The current and
strictest construction standards were adopted in 1987. Of the 44 Properties
located in California, 13 have been built since January 1, 1988 and the Company
believes that all of the Properties were constructed in full compliance with the
applicable standards existing at the time of construction. No assurance can be
given that material losses in excess of insurance proceeds will not occur in the
future.
 
                                       11
<PAGE>   12
                       EOP OPERATING LIMITED PARTNERSHIP
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
Commitments
 
     In February 1998, the Company entered into a contract to purchase the 517
Marquette Garage (formerly known as "Rand Tower Garage") in Minneapolis,
Minnesota upon completion of the parking structure. This parking facility was
acquired on April 30, 1999 for approximately $19.0 million.
 
     In March 1998, the Board of Trustees of the Company approved the purchase
of Prominence, an office building development in Atlanta, Georgia. The property
will consist of approximately 425,706 square feet of office space and 1,350
parking spaces, and is expected to be acquired upon its completion in the third
quarter of 1999. The purchase price for the described assets and amounts to be
incurred for tenanting the property are expected to be approximately $87.0
million. A vacant land parcel will be purchased with the property for an
additional $7.0 million. This transaction is contingent upon certain terms and
conditions as set forth in the purchase agreement. There can be no assurance
that this transaction will be consummated as described above.
 
     In July 1998, the Company entered into an agreement to purchase the World
Trade Center project in Seattle, Washington. The property will consist of
approximately 186,787 square feet of office space, is scheduled for shell
completion in the second quarter of 1999 and is 100% preleased to a single
tenant. After the tenant takes full occupancy in early 2000, the Company is
expected to purchase the building for approximately $39.0 million. This
transaction is contingent upon certain terms and conditions as set forth in the
purchase agreement. There can be no assurance that this transaction will be
consummated as described above.
 
     In accordance with the agreement governing the Company's investment in
WRALP, the Company agreed to make available to WRALP up to $20.0 million in
additional financing or credit support for future development. As of March 31,
1999, no amounts have been funded pursuant to this agreement.
 
Contingencies
 
     Effective as of August 13, 1998, the Company amended a pre-existing put
option agreement with certain sellers of the Wright Runstad Properties (the "WR
Holders"). The WR Holders have the option on August 13, 1999 to require the
Company to purchase all or a portion of the 3,435,688 Common Shares, issued at
acquisition, at a price equal to $31.50 per Common Share. Prior to August 13,
1999, if the WR Holders sell all or a portion of their Common Shares to a third
party for a price less than $29.10625 per Common Share, then the Company shall
pay to the WR Holders an amount equal to the difference between such sales price
and $29.10625 multiplied by the number of Common Shares sold, not to exceed
$3.00 per Common Share. Any amounts paid by the Company as a result of such
sale, calculated as the difference between the sales price and $29.10625 not
exceeding $3.00 per Common Share, shall be recorded as a reduction of
shareholders' equity. For options exercised on August 13, 1999, any amounts paid
up to $29.10625 per Common Share would be reflected as a reduction to
shareholders' equity; the portion of any amounts paid in excess of $29.10625 per
Common Share (not to exceed $31.50 per Common Share) would be expensed by the
Company. The portion expensed would not exceed $2.39375 per Common Share. As of
March 31, 1999, the WR Holders have not exercised their option under the put
option agreement.
 
     Effective as of September 3, 1998, the Company amended its pre-existing put
option agreement with the seller of the Columbus America Properties (the "CA
Holder") related to 1,692,546 Units issued at acquisition. The CA Holder has the
option at any time after January 1, 1999 until the earlier of (a) September 3,
2000 or (b) the date the CA Holder has converted all of its Units to Common
Shares, to require the Company to purchase the Units at a price equal to $29.00
per Unit. Under the terms of the agreement, prior to September 3, 1999, the
option shall be limited to an aggregate of 846,273 Units. In the event of any
option exercise, the Company will recognize any cash paid as a reduction of
partners' capital. As of March 31, 1999, the CA Holder has not exercised its
option to require the Company to purchase the Units.
 
                                       12
<PAGE>   13
                       EOP OPERATING LIMITED PARTNERSHIP
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
     In connection with the acquisition of Worldwide Plaza on October 1, 1998,
the Company issued a transferable put option on Units exercisable only on the
third anniversary of closing with an estimated fair value of approximately $27.4
million. This option entitles its holder to additional Common Shares, the number
of which shall be determined using a formula based on the extent, if any, that
the Common Shares are then trading at less than $29.05 per share.
 
NOTE 13 -- SUBSEQUENT EVENTS
 
(1) On April 1, 1999, the Company repaid a $240.0 million mortgage note
    encumbering ten Office Properties and incurred a prepayment penalty of
    approximately $13.6 million. The Company used the proceeds from the $1.0
    Billion Notes Offering to repay the mortgage note and to pay the prepayment
    penalty.
 
(2) In April 1999, the Board of Trustees of the Trust declared a second quarter
    distribution for the Series B Preferred Shares of $0.65625 per share. The
    distribution will be paid on May 17, 1999 to holders of record as of May 3,
    1999.
 
(3) On April 19, 1999, the Company issued $200 million of unsecured notes due
    April 19, 2029 (the "$200 Million Notes") in an offering to institutional
    investors (the "200 Million Notes Offering"). The net proceeds after
    discount and offering expenses were approximately $196.6 million and were
    used to repay amounts outstanding on the $1.0 Billion Credit Facility. The
    $200 Million Notes bear interest at a stated rate of 7.5% per annum and have
    an effective annual rate of 7.6%.
 
                                       13
<PAGE>   14
 
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
 
OVERVIEW
 
     The following discussion and analysis of the consolidated financial
condition and results of operations should be read in conjunction with the
Consolidated Financial Statements of the Company and Notes thereto contained
herein. Terms employed herein as defined terms, but without definition, shall
have the meaning set forth in the financial statements. Statements contained in
this "Management's Discussion and Analysis of Financial Condition and Results of
Operations" including without limitation, the "Developments" and "Year 2000"
disclosures, which are not historical facts may be forward-looking statements.
Such statements are subject to certain risks and uncertainties which could cause
actual results to differ materially from those projected or anticipated. Readers
are cautioned not to place undue reliance on these forward-looking statements
which speak only as of March 31, 1999. Among the factors about which the Company
has made assumptions are the following:
 
     - Future economic conditions which may impact upon the demand for office
       space and tenant ability to pay rent, either at current or increased
       levels.
 
     - Prevailing interest rates.
 
     - The extent of any inflation on operating expenses.
 
     - The Company's ability to reduce various expenses as a percentage of
       revenues.
 
     - The Company's continuing ability to pay amounts due to its noteholders
       and preferred unitholders prior to any distribution to holders of its
       Units.
 
     - The cost to complete and lease-up pending developments.
 
     - The continued availability of the $1.0 Billion Credit Facility.
 
     During the three months ended March 31, 1999, the Company acquired an
additional three Office Properties containing approximately 1.2 million square
feet. The aggregate purchase price for these acquisitions was approximately
$222.5 million. In addition, the Company issued the $1.0 Billion Notes in three
tranches with an effective interest rate of 6.8% per annum.
 
RESULTS OF OPERATIONS
 
GENERAL
 
     The following discussion is based primarily on the consolidated financial
statements of the Company as of March 31, 1999 and December 31, 1998 and for the
three months ended March 31, 1999 and 1998.
 
     The Company receives income primarily from rental revenue from the Office
Properties (including reimbursements from tenants for certain operating costs)
and from parking revenue from Office Properties and Parking Facilities.
 
                                       14
<PAGE>   15
 
     Below is a summary of the Company's acquisition and disposition activity
since December 31, 1997:
 
<TABLE>
<CAPTION>
                                                               OFFICE PROPERTIES        PARKING FACILITIES
                                                            ------------------------    -------------------
                                                                            TOTAL
                                                            BUILDINGS    SQUARE FEET    GARAGES     SPACES
                                                            ---------    -----------    -------     ------
<S>                                                         <C>          <C>            <C>         <C>
Properties owned as of:
  December 31, 1997.....................................       258       65,291,790        17       16,749
     Acquisitions.......................................        28       10,425,595         2        1,310
     Developments placed in service.....................         3          257,528        --           --
     Dispositions.......................................        (5)        (986,391)       --           --
     Building remeasurements............................        --          112,205        --           --
                                                               ---       ----------        --       ------
  December 31, 1998.....................................       284       75,100,727        19       18,059
     Acquisitions.......................................         3        1,202,536        --           --
     Building remeasurements............................        --            8,818        --           --
                                                               ---       ----------        --       ------
  March 31, 1999 ("Total Portfolio")....................       287       76,312,081        19       18,059
                                                               ===       ==========        ==       ======
</TABLE>
 
     As a result of the growth in the size of the Total Portfolio and the
disposition of properties, the financial data presented shows large changes in
revenues and expenses from period to period. For the foregoing reasons, the
Company does not believe its period to period financial data are comparable.
Therefore, the analysis below shows changes resulting from Properties that were
held during the entire period for the periods being compared (the "Core
Portfolio") and the changes in the Total Portfolio.
 
                                       15
<PAGE>   16
 
COMPARISON OF THE THREE MONTHS ENDED MARCH 31, 1999 TO MARCH 31, 1998
 
     The table below represents selected operating information for the Total
Portfolio and for the Core Portfolio consisting of 252 Office Properties and 17
Parking Facilities acquired or placed in service prior to January 1, 1998.
 
<TABLE>
<CAPTION>
                                           TOTAL PORTFOLIO                                  CORE PORTFOLIO
                             --------------------------------------------    --------------------------------------------
                                                     INCREASE/       %                               INCREASE/       %
(DOLLARS IN THOUSANDS)         1999        1998      (DECREASE)    CHANGE      1999        1998      (DECREASE)    CHANGE
-------------------------    --------    --------    ----------    ------    --------    --------    ----------    ------
<S>                          <C>         <C>         <C>           <C>       <C>         <C>         <C>           <C>
Property revenues........    $470,231    $369,593     $100,638     27.2%     $381,763    $362,920     $18,843        5.2%
Fee income...............       1,862       1,157          705      60.9           --          --          --          --
Interest/dividend
  income.................       3,041       3,070          (29)     (0.9)         581         364         217        59.6
                             --------    --------     --------     -----     --------    --------     -------      ------
    Total revenues.......     475,134     373,820      101,314      27.1      382,344     363,284      19,060         5.2
                             --------    --------     --------     -----     --------    --------     -------      ------
Interest expense.........     104,480      69,884       34,596      49.5       35,205      37,907      (2,702)       (7.1)
Depreciation and
  amortization...........      86,559      67,792       18,767      27.7       70,729      64,792       5,937         9.2
Property operating
  expenses...............     163,715     136,227       27,488      20.2      133,673     133,547         126         0.1
Ground rent..............       1,846       1,638          208      12.7        1,746       1,626         120         7.4
General and
  administrative.........      18,250      13,948        4,302      30.8          136           7         129      1842.9
                             --------    --------     --------     -----     --------    --------     -------      ------
    Total expenses.......     374,850     289,489       85,361      29.5      241,489     237,879       3,610         1.5
                             --------    --------     --------     -----     --------    --------     -------      ------
Income before allocation
  to minority interests,
  income from investment
  in unconsolidated joint
  ventures and
  extraordinary items....     100,284      84,331       15,953      18.9      140,855     125,405      15,450        12.3
Minority interests.......        (545)       (538)          (7)      1.3         (545)       (538)         (7)        1.3
Income from
  unconsolidated joint
  ventures...............       1,835       3,634       (1,799)    (49.5)       2,202       2,795        (593)      (21.2)
Extraordinary items......      (3,183)     (6,959)       3,776     (54.3)      (3,183)         --      (3,183)         --
                             --------    --------     --------     -----     --------    --------     -------      ------
Net income...............    $ 98,391    $ 80,468     $ 17,923     22.3%     $139,329    $127,662     $11,667        9.1%
                             ========    ========     ========     =====     ========    ========     =======      ======
Property revenues less
  property operating
  expenses before
  depreciation and
  amortization, general
  and administrative,
  ground rent and
  interest expense.......    $306,516    $233,366     $ 73,150     31.3%     $248,090    $229,373     $18,717        8.2%
                             ========    ========     ========     =====     ========    ========     =======      ======
</TABLE>
 
Property Revenues
 
     The increase in rental revenues, tenant reimbursements, parking income and
other income ("Property Revenues") in the Core Portfolio resulted from a
combination of occupancy and rental rate increases. The weighted average
occupancy of the Core Portfolio increased from approximately 93.9% at January 1,
1998 to 94.8% as of March 31, 1999. This increase represents approximately 0.7
million square feet of additional occupancy in the Core Portfolio between
January 1, 1998 and March 31, 1999.
 
     Property Revenues for the Total Portfolio include lease termination fees of
approximately $2.1 million and $2.9 million for the three months ended March 31,
1999 and 1998, respectively, and Property Revenues for the Core Portfolio
include lease termination fees of approximately $2.0 million and $2.9 million
for the three months ended March 31, 1999 and 1998, respectively (included in
the "other revenue" category on the consolidated statements of operations).
These fees are related to specific tenants who have paid a fee to terminate
their lease obligations before the end of the contractual term of their lease.
Although the Company has historically experienced similar levels of such
termination fees, there is no way of predicting the timing or amounts of future
lease termination fees.
 
                                       16
<PAGE>   17
 
     Property Revenues for the Total Portfolio includes a straight-line rent
adjustment of approximately $16.5 million and $17.1 million for the three months
ended March 31, 1999 and 1998, respectively. Property Revenues for the Core
Portfolio includes a straight-line rent adjustment of approximately $13.1
million and $16.7 million for the three months ended March 31, 1999 and 1998,
respectively.
 
Interest Expense
 
     Interest expense increased for the Total Portfolio as a result of having
more debt outstanding during the three months ended March 31, 1999 than in the
three months ended March 31, 1998. The increase in total debt and the related
increase in interest expense were directly attributable to property
acquisitions. The Company's total debt as a percentage of total assets increased
from approximately 33.8% of total assets at March 31, 1998 to 42.4% of total
assets at March 31, 1999, and the Company's interest coverage ratio decreased
from approximately 3.2 times in 1998 to 2.8 times in 1999. The weighted average
interest rate on the Company's debt decreased from approximately 7.2% at March
31, 1998 to approximately 7.0% at March 31, 1999. The decrease in interest
expense in the Core Portfolio is primarily due to the replacement of secured
debt with unsecured debt which is not allocated to the Core Portfolio.
 
Depreciation and Amortization
 
     Depreciation and amortization expense for the Total Portfolio increased as
a result of Properties acquired and capital and tenant improvements made during
1999 and 1998. Depreciation and amortization expense for the Core Portfolio
increased as a result of capital and tenant improvements made to the Properties.
 
Property Operating Expenses
 
     Real estate taxes, insurance, repairs and maintenance and other property
operating expenses ("Property Operating Expenses") increased slightly for the
Core Portfolio. Repairs and maintenance expense increased approximately $1.5
million from the prior period partially offset by a decrease in real estate
taxes, insurance and other property operating expenses.
 
General and Administrative Expenses
 
     The primary reason for the increase in general and administrative expenses
is the increase in the size of the Company's portfolio and increased expenses
associated with being a public company. While general and administrative
expenses will continue to increase as the size of the Company's portfolio
increases, it is currently anticipated that the Company's general and
administrative expenses as a percentage of total revenues will remain stable
with future growth. General and administrative expense was approximately 3.8%
and 3.7% of total revenues for the three months ended March 31, 1999 and 1998,
respectively.
 
                                       17
<PAGE>   18
 
PARKING OPERATIONS
 
     The Total Portfolio and Core Portfolio selected operating information for
the three months ended March 31, 1999 and 1998 presented above includes results
of operations from the Parking Facilities. Summarized information for the
Parking Facilities is presented below.
 
COMPARISON OF THE THREE MONTHS ENDED MARCH 31, 1999 TO MARCH 31, 1998
 
     The table below represents selected operating information for the Total
Portfolio and the Core Portfolio consisting of 17 Parking Facilities acquired
prior to January 1, 1998.
 
<TABLE>
<CAPTION>
                                                  TOTAL PORTFOLIO                              CORE PORTFOLIO
                                      ----------------------------------------    ----------------------------------------
                                                          INCREASE/       %                           INCREASE/       %
(DOLLARS IN THOUSANDS)                 1999      1998     (DECREASE)    CHANGE     1999      1998     (DECREASE)    CHANGE
----------------------------------    ------    ------    ----------    ------    ------    ------    ----------    ------
<S>                                   <C>       <C>       <C>           <C>       <C>       <C>       <C>           <C>
Property revenues.................    $9,063    $6,971      $2,092       30.0%    $8,153    $6,971      $1,182       17.0%
Interest/dividend income..........         3        33         (30)     (90.9)         3        33         (30)     (90.9)
                                      ------    ------      ------      -----     ------    ------      ------      -----
    Total revenues................     9,066     7,004       2,062       29.4      8,156     7,004       1,152       16.5
                                      ------    ------      ------      -----     ------    ------      ------      -----
Interest expense..................       928     1,368        (440)     (32.2)       887     1,368        (481)     (35.2)
Depreciation and amortization.....     1,450     1,402          48        3.4      1,450     1,402          48        3.4
Property operating expenses.......     2,024     1,985          39        2.0      1,992     1,985           7         .4
Ground rent.......................        13        12           1        8.3         13        12           1        8.3
                                      ------    ------      ------      -----     ------    ------      ------      -----
    Total expenses................     4,415     4,767        (352)      (7.4)     4,342     4,767        (425)      (8.9)
                                      ------    ------      ------      -----     ------    ------      ------      -----
Income before allocation to
  minority interests and income
  from investment in
  unconsolidated joint ventures...     4,651     2,237       2,414      108.0      3,814     2,237       1,577       70.5
Minority interests................      (235)      (69)       (166)     240.6       (235)      (69)       (166)     240.6
Income from unconsolidated joint
  ventures........................       409       681        (272)     (39.9)       409       681        (272)     (39.9)
                                      ------    ------      ------      -----     ------    ------      ------      -----
Net income........................    $4,825    $2,849      $1,976       69.4%    $3,988    $2,849      $1,139       40.0%
                                      ======    ======      ======      =====     ======    ======      ======      =====
Property revenues less property
  operating expenses before
  depreciation and amortization,
  general and administrative,
  ground rent and interest
  expense.........................    $7,039    $4,986      $2,053       41.2%    $6,161    $4,986      $1,175       23.6%
                                      ======    ======      ======      =====     ======    ======      ======      =====
</TABLE>
 
LIQUIDITY AND CAPITAL RESOURCES
 
LIQUIDITY
 
     Net cash provided from operations represents the primary source of
liquidity to fund distributions, debt service, recurring capital costs and
non-revenue enhancing tenant improvements. The Company currently intends to
continue to make, but has not contractually bound itself to make, regular
quarterly distributions to holders of Units and preferred units. The Company has
established annual distribution rates as follows: $1.48 per annum per Unit,
8.98% per annum ($2.245 per unit) for each Series A Preferred Unit, 5.25% per
annum ($2.625 per unit) for each Series B Preferred Unit and 8.625% per annum
($2.15625 per unit) for each Series C Preferred Unit.
 
     The Company intends to continue to fund distributions, debt service,
recurring capital costs and non-revenue enhancing tenant improvements from cash
from operations and draws under the $1.0 Billion Credit Facility. The Company
also expects that the $1.0 Billion Credit Facility will provide for temporary
working capital, the funding of capital improvements and revenue enhancing
tenant improvements, unanticipated cash needs and funding of acquisitions and
development costs.
 
     Since the anticipated size of the Company's distributions will not allow
the Company, using only cash from operations, to retire all of its debt as it
comes due, the Company will be required to repay maturing debt with funds from
debt and/or equity financing.
 
                                       18
<PAGE>   19
 
DEBT FINANCING
 
     The table below summarizes the mortgage debt, unsecured notes and lines of
credit indebtedness outstanding at March 31, 1999 and December 31, 1998,
including a net premium on mortgage debt and unsecured notes (net of accumulated
amortization of approximately $1.3 million and $2.7 million) of approximately
$17.2 million and $17.8 million, respectively, recorded in connection with the
Consolidation, debt assumed in connection with certain of the Company's
acquisitions, and issuance of unsecured notes.
 
<TABLE>
<CAPTION>
(DOLLARS IN THOUSANDS)                               MARCH 31, 1999    DECEMBER 31, 1998
-------------------------------------------------    --------------    -----------------
<S>                                                  <C>               <C>
DEBT SUMMARY:
  BALANCE
     Fixed rate..................................      $5,476,093         $4,739,018
     Variable rate...............................         598,619          1,286,387
                                                       ----------         ----------
       Total.....................................      $6,074,712         $6,025,405
                                                       ==========         ==========
PERCENT OF TOTAL DEBT:
     Fixed rate..................................            90.1%              78.7%
     Variable rate...............................             9.9%              21.3%
                                                       ----------         ----------
       Total.....................................           100.0%             100.0%
                                                       ==========         ==========
EFFECTIVE INTEREST RATE AT END OF PERIOD:
     Fixed rate..................................             7.2%               7.3%
     Variable rate...............................             5.7%               6.4%
                                                       ----------         ----------
       Effective interest rate...................             7.0%               7.1%
                                                       ==========         ==========
</TABLE>
 
     A majority of the variable rate debt shown above bears interest at an
interest rate based on LIBOR.
 
MORTGAGE FINANCING
 
     As of March 31, 1999, the Company's total mortgage debt (excluding the
Company's share of unconsolidated debt of approximately $135.3 million)
consisted of approximately $2.0 billion of fixed rate debt with an effective
interest rate of approximately 7.6% and $70.6 million of variable rate debt
based on various spreads over LIBOR. The Company's mortgage debt at March 31,
1999 will mature as follows:
 
<TABLE>
<CAPTION>
(Dollars in thousands)
--------------------------------------------------------------------------
<S>                                                             <C>
1999........................................................    $   17,349
2000........................................................       183,257
2001........................................................       437,953
2002........................................................        75,111
2003........................................................       186,565
Thereafter..................................................     1,174,234
                                                                ----------
  Subtotal..................................................     2,074,469
Net premium (net of accumulated amortization of $1.5
  million)..................................................        16,247
                                                                ----------
  Total.....................................................    $2,090,716
                                                                ==========
</TABLE>
 
     In the first quarter of 1999, the Company repaid approximately $256.8
million of mortgage debt and on April 1, 1999 the Company repaid $240.0 million
of mortgage debt with proceeds from the $1.0 Billion Notes Offering. The debt
maturity schedule above reflects the $240.0 million of mortgage debt maturing in
the year 2001, its contractual maturity date.
 
     The instruments encumbering the Properties restrict transfer of the
mortgaged Properties subject to the terms of the mortgage indebtedness, prohibit
additional liens and require payment of taxes on the mortgaged Properties,
maintenance of the mortgaged Properties in good condition, maintenance of
insurance on the mortgaged Properties and obtaining lender consent to leases
with material tenants.
 
                                       19
<PAGE>   20
 
CREDIT FACILITIES
 
Line of Credit
 
     The $1.0 Billion Credit Facility matures on May 29, 2001. The interest rate
is based on the Company's investment grade credit rating on its unsecured debt
and is currently LIBOR plus 60 basis points with a facility fee equal to 20
basis points in respect to the entire facility, payable quarterly. In addition,
a competitive bid option, whereby the lenders participating in the facility bid
on the interest rate to be charged, is available for up to $350 million of the
facility. Subsequent to March 31, 1999 the Company borrowed $100.0 million on
the $1.0 Billion Credit Facility.
 
Term Loan Facilities
 
     The $328 Million Credit Facility is priced at 90-day LIBOR plus 80 basis
points and is prepayable on any interest payment date and matures on August 15,
2000.
 
     The $200 Million Credit Facility bears interest at either a money market
rate or LIBOR plus 50 basis points, with a facility fee equal to 20 basis points
per annum, at the Company's option. As of March 31, 1999, the Company elected
the money market rate which equated to 5.6%. The interest rate may be reset
after the first twelve months for an additional six months and again after
eighteen months for an additional six months for a ten basis point fee.
 
UNSECURED NOTES
 
     The table below summarizes the Company's unsecured notes as of April 30,
1999:
 
<TABLE>
<CAPTION>
                                                                    STATED       EFFECTIVE
                   TRANCHE                          AMOUNT           RATE         RATE(1)
                   -------                          ------          ------       ---------
                                                  (Dollars in
                                                  thousands)
<S>                                               <C>               <C>          <C>
3 Year Notes due 2002(2)......................    $  200,000         6.4%           6.6%
4 Year MOPPRS due 2002(3).....................       250,000         6.4%           6.3%
5 Year Notes due 2003.........................       300,000         6.4%           6.8%
5 Year Notes due 2004(2)......................       300,000         6.5%           6.7%
6 Year Notes due 2004.........................       250,000         6.5%           6.7%
7 Year Notes due 2004.........................        30,000         7.2%           7.3%
7 Year Notes due 2005.........................       400,000         6.6%           7.0%
8 Year Notes due 2005.........................        50,000         7.4%           7.7%
9 Year Notes due 2006.........................        50,000         7.4%           7.7%
9 Year Notes due 2007(4)......................       300,000         6.8%           6.8%
10 Year Notes due 2007........................        50,000         7.4%           7.7%
10 Year Notes due 2008........................       300,000         6.8%           7.0%
10 Year Notes due 2009(2).....................       500,000         6.8%           6.9%
20 Year Notes due 2018........................       250,000         7.3%           7.6%
30 Year Notes due 2028........................       225,000         7.3%           7.3%
30 Year Notes due 2029(5).....................       200,000         7.5%           7.6%
                                                  ----------         ---            ---
     Subtotal.................................    $3,655,000         6.8%           7.0%
                                                  ==========         ===            ===
</TABLE>
 
-------------------------
(1) Includes the cost of terminated interest rate protection agreements,
    offering and transaction costs, the premium on the warrants and the discount
    on unsecured notes.
 
(2) These notes were issued on January 26, 1999. The net proceeds of
    approximately $989.2 million were used to repay mortgage debt and amounts
    outstanding on the $1.0 Billion Credit Facility.
 
(3) The MOPPRS are subject to mandatory redemption in 2002 but do not mature
    until 2012.
 
(4) These notes were issued along with 300,000 warrants to purchase an
    additional $300 million in unsecured notes at a later date. Each warrant
    entitles its holder thereof to purchase a new $1,000 note at par on December
    15, 1999 (or in certain circumstances on January 18, 2000) at a stated rate
    of 6.763%, which
 
                                       20
<PAGE>   21
 
    will mature on June 15, 2008 and will have other terms substantially similar
    to the $300 million nine year notes due 2007.
 
(5) These notes were issued in April 1999. The net proceeds of approximately
    $196.6 million were used to repay amounts outstanding on the $1.0 Billion
    Credit Facility.
 
     The Company filed a shelf registration statement, which was declared
effective on July 22, 1998, relating to the potential issuance from time to time
of up to $2.0 billion of unsecured debt securities and warrants exercisable for
debt securities in amounts, at initial prices and on terms to be determined at
the time of offering. The securities may be issued separately or together, in
separate series and in amounts, at prices and on terms to be described in one or
more supplements to the prospectus. The Company sold $1.0 billion of unsecured
notes in January 1999 and $200 million of unsecured notes in April 1999 under
this registration statement.
 
Restrictions and Covenants
 
     Agreements or instruments relating to the unsecured notes and lines of
credit contain certain restrictions and requirements regarding total debt to
assets ratios, secured debt to total assets ratios, debt service coverage
ratios, minimum ratio of unencumbered assets to unsecured debt and other
limitations.
 
EQUITY SECURITIES
 
     During the three months ended March 31, 1999, the Trust issued 15,209
Common Shares as a result of share options exercised and, as a result, the
Company issued a corresponding number of Units to the Trust. There were also
180,552 Units redeemed into Common Shares on a one-for-one basis.
 
CAPITAL IMPROVEMENTS
 
     The Company takes capital improvements and revenue enhancing tenant
improvements into consideration at the time of acquisition in determining the
amount of equity and debt financing required to purchase the property and fund
the improvements. Therefore, capital improvements made in the year of
acquisition and the two following years are treated separately from typical
recurring capital expenditures, non-revenue enhancing tenant improvements and
leasing commissions required once these Properties have reached stabilized
occupancy, and deferred maintenance and renovations planned at the time of
acquisition have been completed. Capital improvements (including tenant
improvements and leasing commissions for shell space) for the three months ended
March 31, 1999 were approximately $4.6 million or $0.06 per square foot. These
amounts exclude capital and tenant improvements of approximately $21.2 million
for developments.
 
     The Company considers capital expenditures to be recurring expenditures
relating to the ongoing maintenance of the Office Properties. The table below
summarizes capital expenditures for the three months ended March 31, 1999. The
capital expenditures set forth below are not necessarily indicative of future
capital expenditures.
 
<TABLE>
<S>                                                             <C>
Number of Office Properties.................................      287
Rentable square feet (in millions)..........................     76.3
Capital expenditures per square foot........................    $0.04
</TABLE>
 
TENANT IMPROVEMENTS AND LEASING COMMISSION COSTS
 
     The Company distinguishes its tenant improvements and leasing commissions
between those that are revenue enhancing (i.e., required for space which is
vacant at the time of acquisition or that has been vacant for nine months or
more) and non-revenue enhancing (i.e., required to maintain the revenue being
generated from currently leased space). The table below summarizes the revenue
enhancing and non-revenue enhancing tenant improvements and leasing commissions
for the three months ended March 31, 1999, excluding amounts attributable to
developments. The tenant improvement and leasing commission costs set forth
below
 
                                       21
<PAGE>   22
 
are presented on an aggregate basis and do not reflect significant regional
variations and, in any event, are not necessarily indicative of future tenant
improvements and leasing commission costs:
 
<TABLE>
<CAPTION>
                                                                  FOR THE THREE
                                                                  MONTHS ENDED
                                                                MARCH 31, 1999(1)
                                                                -----------------
<S>                                                             <C>
Number of Office Properties.................................             287
Rentable square feet (in millions)..........................            76.3
Revenue enhancing tenant improvements and leasing
  commissions:
  Amounts (in thousands)....................................         $ 5,570
  Per square foot improved..................................         $ 18.54
  Per total square foot.....................................         $  0.29
Non-revenue enhancing tenant improvements and leasing
  commissions:
Renewal space:
     Amounts (in thousands).................................         $ 8,997
     Per square foot improved...............................         $  7.37
     Per total square foot..................................         $  0.47
Retenanted space:
     Amounts (in thousands).................................         $11,559
     Per square foot improved...............................         $ 13.23
     Per total square foot..................................         $  0.61
                                                                     -------
Total non-revenue enhancing (in thousands)..................         $20,556
Per square foot improved....................................         $  9.81
Per total square foot.......................................         $  1.08
</TABLE>
 
-------------------------
(1) The per square foot calculations as of March 31, 1999 are calculated taking
    the total dollars anticipated to be incurred on tenant improvements for
    tenants taking occupancy during the three months ended March 31, 1999,
    divided by the total square footage being improved or total building square
    footage. The actual amounts incurred for the three months ended March 31,
    1999 for revenue enhancing, non-revenue enhancing renewal and retenanted
    space are summarized below:
 
<TABLE>
<CAPTION>
                            (Dollars in thousands)
    ----------------------------------------------------------------------
    <S>                                                             <C>
    Revenue enhancing...........................................    $4,460
    Non-revenue enhancing renewal...............................    $4,027
    Non-revenue enhancing retenanted............................    $6,408
</TABLE>
 
                                       22
<PAGE>   23
 
DEVELOPMENTS
 
     In connection with the Beacon Merger and other acquisitions, the Company
acquired certain Properties that are currently in various stages of development
or pre-development. The Company funds these developments with proceeds from
working capital and the credit facilities. Specifically identifiable direct and
indirect acquisition, development and construction costs are capitalized
including, where applicable, salaries and related costs, real estate taxes,
interest and certain pre-construction costs essential to the development of a
property. As of March 31, 1999, the Company had incurred approximately $156.8
million of costs in connection with the Properties being developed. The
Properties under development as of March 31, 1999 are as follows:
 
<TABLE>
<CAPTION>
                                              ESTIMATED                     ESTIMATED                      TOTAL
                                              PLACE IN        PERCENT    RENTABLE SQUARE    COSTS        ESTIMATED
      PROPERTY             LOCATION        SERVICE DATE(A)    LEASED         FOOTAGE       INCURRED      COSTS(A)
      --------             --------        ---------------    -------    ---------------   --------      ---------
                                                                                           (Dollars in thousands)
<S>                    <C>                 <C>                <C>        <C>               <C>           <C>
Reston Town Center
  Garage.............  Reston, VA              4Q/1999          N/A               (b)      $  3,818      $ 13,000
150 California.......  San Francisco, CA       1Q/2000            0%          201,554        21,390        66,000
John Marshall III....  McLean, VA              1Q/2000          100%          180,000        24,939        46,000
Riverside Center.....  Newton, MA              2Q/2000            0%          494,710        39,694       112,000
Other Projects(c)....  Various                      --           --                --        66,272            --
                                                                            ---------      --------      --------
    Total............................................................         876,264      $156,113(d)   $237,000
                                                                            =========      ========      ========
</TABLE>
 
     In addition, the Company has entered into agreements to acquire the
following properties upon completion:
 
<TABLE>
<CAPTION>
                                              ESTIMATED                     ESTIMATED                      TOTAL
                                              PLACE IN        PERCENT    RENTABLE SQUARE    COSTS        ESTIMATED
      PROPERTY             LOCATION        SERVICE DATE(A)    LEASED         FOOTAGE       INCURRED      COSTS(A)
      --------             --------        ---------------    -------    ---------------   --------      ---------
                                                                                           (Dollars in thousands)
<S>                    <C>                 <C>                <C>        <C>               <C>           <C>
517 Marquette
  Garage.............  Minneapolis, MN         2Q/1999          N/A               (e)      $     98      $ 19,000
Prominence(f)........  Atlanta, GA             3Q/1999            1%          425,706           596        87,000
World Trade
  Center(g)..........  Seattle, WA             1Q/2000          100%          186,787            34        39,000
                                                                            ---------      --------      --------
    Total............................................................         612,493      $    728      $145,000
                                                                            =========      ========      ========
</TABLE>
 
     The above transactions are contingent upon certain terms and conditions as
set forth in their respective purchase agreements. There can be no assurance
that these transactions will be consummated as described above.
 
     In addition, the Company has entered into separate joint ventures to
develop the following properties:
 
<TABLE>
<CAPTION>
                                              ESTIMATED                     ESTIMATED                      TOTAL
                                              PLACE IN        PERCENT    RENTABLE SQUARE    COSTS        ESTIMATED
      PROPERTY             LOCATION        SERVICE DATE(A)    LEASED         FOOTAGE       INCURRED      COSTS(A)
      --------             --------        ---------------    -------    ---------------   --------      ---------
                                                                                           (Dollars in thousands)
<S>                    <C>                 <C>                <C>        <C>               <C>           <C>
Metropoint II(h).....  Denver, CO              2Q/1999           36%          150,181      $  9,032      $ 17,000
Sunset North
  Corporate
  Campus(i)..........  Bellevue, WA            4Q/1999           42%          460,663        39,779        81,000
Three Bellevue
  Center(j)..........  Bellevue, WA            1Q/2000            0%          471,635         9,567        72,000
                                                                            ---------      --------      --------
    Total............................................................       1,082,479      $ 58,378      $170,000
                                                                            =========      ========      ========
</TABLE>
 
-------------------------
(a) The Estimated Place in Service Date represents the date the certificate of
    occupancy has been or is anticipated to be obtained. Subsequent to obtaining
    the certificate of occupancy, the Property will
 
                                       23
<PAGE>   24
 
    undergo a lease up period. The Total Estimated Costs include amounts
    attributable to tenanting the Property.
 
(b) This property is a parking facility that will consist of approximately 530
    parking spaces and 34,700 square feet of retail space.
 
(c) Represents various land parcels where the Company has obtained zoning and
    entitlement approvals, but has not finalized a specific development plan.
    The Company has taken the necessary steps to continue the development
    process while it evaluates its alternatives with respect to these projects.
 
(d) Includes $1,771 related to deferred leasing costs. Deferred leasing costs
    are classified separately on the Company's balance sheet.
 
(e) This parking facility (formerly known as "Rand Tower Garage") consists of
    approximately 589 parking spaces and was acquired on April 30, 1999.
 
(f) The estimated cost of this property excludes a vacant land parcel valued at
    approximately $7.0 million, that will be purchased with the building.
 
(g) The Company expects to acquire this property upon lease up in 2000. The
    building is scheduled to be completed in April 1999.
 
(h) The Costs Incurred and Total Estimated Costs reflect the Company's 70%
    interest in this project. The total cost of the project including the joint
    venture partner's share is approximately $24 million.
 
(i) The Costs Incurred and Total Estimated Costs reflect the Company's 80%
    interest in this project including the Company's pro-rata share of the
    development loan. The total cost of the project including the joint venture
    partner's share is approximately $101 million of which up to $68 million
    will be funded by a development loan. The Company's share of the development
    loan outstanding at March 31, 1999 is approximately $14.6 million.
 
(j) The Costs Incurred and Total Estimated Costs reflect the Company's 80%
    interest in this project including the Company's pro-rata share of the
    development loan. The total cost of the project including the joint venture
    partner's share is approximately $90 million of which up to $60 million will
    be funded by a development loan. The Company's share of the development loan
    outstanding at March 31, 1999 is approximately $.3 million.
 
    In addition to the properties described above, the Company owns various
land parcels available for development. However, no significant development
activity is taking place on these sites at this time.
 
YEAR 2000
 
OVERVIEW OF Y2K PROBLEM
 
    The Year 2000 or "Y2K" problem refers to the inability of many existing
computer programs to properly recognize a year that begins with "20" instead of
the familiar "19". If left uncorrected, many computer programs having
time-sensitive software may recognize a date using "00" as the year 1900 rather
than the year 2000. The failure to accurately recognize the year 2000 and other
key dates could result in a variety of problems from data miscalculations to the
failure of entire systems. Among the assumptions the Company has made in the
course of this discussion are the following:
 
     - The Company's ability to accurately determine its Y2K readiness on a cost
       effective basis.
 
     - The availability of personnel and systems as required to correct any Y2K
       problems known to the Company.
 
     - The continued availability of such personnel and systems on a
       commercially reasonable basis throughout 1999.
 
THE YEAR 2000 PROGRAM
 
     In the early months of 1998, the Company formed a Year 2000 committee for
the purpose of creating a program (the "Program") to identify, understand and
address the myriad of issues associated with the Y2K
 
                                       24
<PAGE>   25
 
problem. Such committee is comprised of representatives from senior management
and various departments at the home and regional offices, including the legal,
engineering, telecommunications, information systems and office services
departments. Due to the wide ranging implications of the Y2K problem, management
decided to carry out the Program in multiple phases during 1998 and 1999. What
follows is a description of the activities that have been or are expected to be
conducted in each phase of the Program, including a summary of the results
obtained to date and a time table for completion. Although many of the phases of
the Program are being carried out simultaneously, the various phases will be
discussed separately.
 
PHASE ONE -- ASSESSING THE COMPANY'S Y2K READINESS
 
     The initial step in assessing the Company's Y2K readiness consists of
conducting a study to identify any systems and applications (collectively
referred to as "systems") that are date sensitive and, accordingly, could have
potential Y2K problems. The study includes an examination of information
technology and non-information technology systems at the Company's home and
regional offices and at the Company's Properties. For the most part, the initial
step of identifying potentially problematic systems has been completed by the
Company's Information Services department, building engineers and third party
consultants through a combination of physical inspections and informational
interviews with Company employees.
 
     After identifying systems that could have a potential Y2K problem, the
second step of Phase 1 was to attempt to determine which of the systems actually
have a Y2K problem. Much of the required information is within the exclusive
control of the Company's vendors and manufacturers, who have been contacted
through standard form letters and telephone calls requesting information. In
many cases, information was also available on vendor and manufacturer web sites.
Even if a particular system has been represented to be Y2K ready or compliant,
the Company, in many cases, will not consider the system to be Y2K ready until
after the Company has confirmed the system's readiness by independent testing.
The Company currently plans to test all systems whose failure could have a
significant adverse effect on the daily operation of any of the Company's
departments. In addition to examining the Company's systems for Y2K readiness,
the Company continues to assess the progress of the Building Owners and Managers
Association ("BOMA"), the General Services Administration ("GSA") and other
industry leaders that are monitoring the compliance efforts of the major utility
and telecommunications companies. The following is a summary of the Phase One
results obtained to date.
 
BUILDING MANAGEMENT SYSTEMS
 
     The Company has identified six categories of building management systems in
which it has the most exposure to potential Y2K problems. These categories
include:
 
     - Building automation (e.g. energy management, HVAC)
 
     - Security card access
 
     - Fire and life safety
 
     - Elevator
 
     - Garage revenue control
 
     - Telephone
 
     Prior to January 1999, the Company completed a preliminary Y2K readiness
study of the building management systems outlined above at each of the Company's
Properties. Based upon this study, the Company will upgrade or replace specific
building management systems that were represented not to be Y2K ready or
compliant. The estimated cost of such upgrades and replacements is described in
the Phase Two summary that follows. It is possible that the independent testing
of the building management systems may reveal the need for additional upgrades
and replacements.
 
                                       25
<PAGE>   26
 
INFORMATION SYSTEMS
 
     The Company's information systems falls into four general categories:
accounting and property management, network operating systems, desktop software
and secondary systems.
 
ACCOUNTING AND PROPERTY MANAGEMENT
 
     Management believes that it has determined the Company's exposure with
respect to the Company's accounting and property management software.
Specifically, although the general ledger system is believed to be Y2K ready,
the accounts payable and property management systems are not. The Company's
current expected schedule for Y2K readiness is as follows:
 
     - Test software upgrades-- In Progress
 
     - Begin installation of upgrades--In Progress
 
     - Full Y2K readiness -- Second to Third Quarter 1999
 
     If the planned upgrades to the Company's accounting and property management
software do not perform in a manner that satisfies the Company's performance
criteria, the Company may elect to accelerate the implementation of an
accounting and property management software package that is currently scheduled
for usage beginning in the year 2000.
 
NETWORK OPERATING SYSTEMS
 
     Management believes that the network operating servers are currently
approximately 50% Y2K ready. The servers that are not currently Y2K ready
require a software patch that is being acquired from the software manufacturer.
Upgrades of the Company's network operating systems are expected to be installed
in the first and second quarters of 1999, bringing the network operating servers
into full Y2K readiness. Management believes that testing of this new software
may not be necessary, as it has already been proven in the industry to be Y2K
compliant.
 
DESKTOP SOFTWARE
 
     Management believes that all of the Company's desktop systems and software
applications have been reviewed. Management has identified those that are not in
compliance and compiled a list of necessary upgrades. The efforts to ready the
Company's desktop systems for Y2K are being directed towards a broader Company
initiative referred to as EO 2000. As part of the EO 2000 program, the Company
currently intends to install Windows NT and Microsoft Office 97 in all field and
home office desktop systems.
 
     The Company's time frame for EO 2000 is expected to be as follows:
 
     - Systems (hardware and software) testing for Y2K readiness -- Complete
 
     - Install updated software that will also provide Y2K readiness -- In
       Progress
 
     - Complete installation/full Y2K readiness -- October 1999
 
SECONDARY INFORMATION SYSTEMS
 
     The Company's "secondary" information systems include, but are not limited
to: payroll, human resources, fixed-asset system, forecasting modeling software,
and all types of internally developed software, such as the Company's budget
program and tenant-services system. The Company has retained a third party
consultant to assist in identifying and assessing the readiness of its
information systems, including the secondary systems. The initial step of
identifying any non-compliant systems was completed during the first quarter
1999 at a cost of approximately $.3 million. Such cost represents the cost of
work performed by third party consultants and does not attribute a dollar value
to any time spent by Company employees. As mentioned above, the Company
currently plans to test a number of the systems, including secondary systems,
that were represented by the vendors or manufacturers to be Y2K ready or
compliant. The Company is currently working with its third party consultant to
determine an appropriate scope and budget for the testing.
 
                                       26
<PAGE>   27
 
The initial budget for third party costs in connection with testing the
Company's selected information systems is approximately $.5 million.
 
TELECOMMUNICATION SYSTEMS
 
     Management generally believes that the Company's internal telephone systems
are not date sensitive and should not be materially affected by Y2K problems.
Although there could be some convenience issues such as inaccurate voice-mail
message date stamps, such problems are not expected to be material and, in large
part, should be corrected prior to the year 2000.
 
PHASE TWO -- DETERMINING THE COST OF ACHIEVING Y2K READINESS AND IMPLEMENTING
THE Y2K ACTION
PLAN
 
     Based upon the preliminary studies that were completed in January 1999, the
Company has budgeted approximately $7.4 million for the upgrade and replacement
of building management systems having potential Y2K related problems. This
amount equates to an average of approximately $.10 per rentable square foot at
each of the Company's Properties. It is management's belief that a large part of
the cost of bringing the building management systems into compliance will be
considered to be reimbursable to the Company under most tenant leases or is
being incurred as part of a broader initiative to improve building operating
systems. The estimated cost of the EO 2000 initiative is $1.7 million. Most of
the work related to EO 2000 is not Y2K related. The Company is still in the
process of completing Phases One and Two of the Program with respect to
Information Systems. As discussed above, approximately $.3 million was spent in
Phase I to identify information systems that could have potential Y2K problems
and to obtain information from the vendors and manufacturers of such systems as
to Y2K readiness. Based on the Company's initial budget, it is anticipated an
additional $.5 million will be spent to test selected information systems. Upon
completion of the testing, the Company will prepare a budget and action plan for
Y2K readiness.
 
PHASE THREE -- ASSESSING THE RISKS TO THE COMPANY OF NON-COMPLIANCE
 
     Management does not currently believe that the impact of the Y2K problem
will have a material adverse effect on the Company's financial condition and
results of operations. Such belief is based on management's analysis of the
risks to the Company related to the Company's own potential Y2K problems
discussed above, as well as its assessment of the Y2K problems of the Company's
vendors, suppliers and customers.
 
FAILURE OF BUILDING MANAGEMENT SYSTEMS
 
     Management believes that the Y2K risks to the Company's financial condition
and operation associated with a failure of building management systems is
immaterial due to the fact that most building management systems can be operated
in a manual or by-pass mode, thereby negating the Y2K problem until it can be
corrected. In addition, each of the Company's Properties has, for the most part,
separate building management systems. Accordingly, a Y2K problem that is
experienced at one Property should have no effect on other Properties. In
addition, based upon the study results received to date, management believes
that the Company will have sufficient time to correct those system problems
within its control before the year 2000. The Company has currently performed
preliminary testing of building systems at over 50% of the Company's Properties.
Testing of essential building management systems will continue throughout 1999.
 
     In the event the Company does experience a failure of essential building
management systems at one or more of the Company's buildings, whether due to a
failure of one of its systems or an interruption of utilities, management
believes that the individual tenant leases will protect the Company from claims
of constructive eviction or other remedies that could result in a termination of
lease rights. It is also management's belief that most of its leases eliminate,
limit or quantify the rights of a tenant to receive an abatement under such
circumstances. Although there is always a risk of claims being brought on a
non-contractual basis (e.g. in tort), it is the Company's belief that its
efforts to identify and solve Y2K problems will minimize such risk. The Company
has also attempted to allocate the risk of non-compliance to the vendors and
manufacturers of
 
                                       27
<PAGE>   28
 
the building management and information systems by establishing standard riders
and addenda to be attached to new contracts for systems using time sensitive
data.
 
FAILURE OF INFORMATION SYSTEMS
 
     Since the Company's major source of income is rental payments under long
term leases, the failure of key information systems is not expected to have a
material adverse effect on the Company's financial condition and results of
operations. Even if the Company were to experience problems with its information
systems, the payment of rent under the leases would not be excused. In addition,
the Company expects to correct those information system problems within its
control before the year 2000, thereby minimizing or avoiding the increased cost
of correcting problems after the fact.
 
THE Y2K PROBLEMS OF THE COMPANY'S VENDORS
 
     The success of the Company's business is not closely tied to the operations
of any one manufacturer, vendor or supplier. Accordingly, if any of the
Company's manufacturers, vendors or suppliers ceases to conduct business due to
Y2K related problems, the Company expects to be able to contract with alternate
providers without experiencing any material adverse effect on the Company's
financial condition and results of operations.
 
THE Y2K PROBLEMS OF THE COMPANY'S CUSTOMERS
 
     Due to our broad customer/tenant base, the success of the Company's
business is not closely tied to the success of any particular tenant.
Accordingly, management believes that there should not be a material adverse
effect on the Company's financial condition and results of operations if any one
of its tenants ceased to conduct business (and pay rent) due to Y2K related
problems. This would not necessarily be the case, however, were Y2K problems
sufficiently pervasive as to affect the financial conditions of a material
number of the Company's tenants. As part of its efforts to keep its tenants
advised as to the steps the Company is taking to address potential Y2K problems,
the Company has also requested that its tenants provide it with periodic updates
as to their Y2K readiness.
 
DOOMSDAY SCENARIO
 
     The Company is aware that it is generally believed that the world's Y2K
problem, if uncorrected, may result in an economic crisis of global proportions.
The Company is unable to determine whether such predictions are true or false.
As mentioned above, the Company expects that the nature of its income (rent from
good credit tenants under long term leases) should serve as a hedge against any
short term disruptions of business. However, if the doomsday scenarios prove
true, all companies (including Equity Office Properties Trust) will experience
the effects.
 
PHASE FOUR -- DEVELOPING CONTINGENCY PLANS
 
     The Company is beginning to take the initial steps in the development of
contingency plans for the operation of the Company's individual corporate
departments. In addition, the Company expects to develop a contingency plan for
the operation of the company's Properties during the third Quarter of 1999.
 
INFLATION
 
     Substantially all of the office leases require the tenant to pay, as
additional rent, a portion of any increases in real estate taxes (except, in the
case of certain California leases, which limit the ability of the landlord to
pass through to the tenants the effect of increased real estate taxes
attributable to a sale of real property interests) and operating expenses over a
base amount. In addition, many of the office leases provide for fixed increases
in base rent or indexed escalations (based on the Consumer Price Index or other
measures). The Company believes that inflationary increases in expenses will be
offset, in part, by the expense reimbursements and contractual rent increases
described above.
 
                                       28
<PAGE>   29
 
FUNDS FROM OPERATIONS
 
     Management of the Company believes Funds from Operations, as defined by the
National Association of Real Estate Investment Trusts, Inc. ("NAREIT"), to be an
appropriate measure of performance for an equity REIT. While Funds from
Operations is a relevant and widely used measure of operating performance of
equity REITs, it does not represent cash flow from operations or net income as
defined by generally accepted accounting principles ("GAAP"), and it should not
be considered as an alternative to these indicators in evaluating liquidity or
operating performance of the Company.
 
     The following table reflects the calculation of the Company's Funds from
Operations for the three months ended March 31, 1999 and 1998 on a historical
basis:
 
<TABLE>
<CAPTION>
                                                             THREE MONTHS ENDED
                                                                 MARCH 31,
                                                           ----------------------
                (DOLLARS IN THOUSANDS)                       1999         1998
-------------------------------------------------------    ---------    ---------
<S>                                                        <C>          <C>
Income before allocation to minority interests, income
  from investment in unconsolidated joint ventures and
  extraordinary items:.................................    $ 100,284    $  84,331
Add back (deduct):
  (Income) allocated to minority interests for
     partially owned properties........................         (545)        (538)
  Income from investment in unconsolidated joint
     ventures..........................................        1,835        3,634
  Depreciation and amortization (real estate
     related)..........................................       89,088       69,406
  Net amortization of net premium on mortgage debt.....         (453)         274
  Preferred distributions..............................      (10,881)      (6,271)
                                                           ---------    ---------
Funds from Operations before effect of adjusting
  straight-line rental revenue and expense included in
  Funds from Operations to a cash basis(1).............      179,328      150,836
  Deferred rental revenue..............................      (16,540)     (17,119)
  Deferred rental expense..............................          653          555
                                                           ---------    ---------
Funds from Operations excluding straight-line rental
  revenue and expense adjustments......................    $ 163,441    $ 134,272
                                                           =========    =========
Cash Flow Provided By (Used For):
  Operating Activities.................................    $ 102,912    $ 110,765
  Investing Activities.................................    $(153,933)   $(270,947)
  Financing Activities.................................    $  25,907    $ (56,990)
Ratio of earnings to combined fixed charges and
  preferred unit distributions.........................          1.7          1.9
</TABLE>
 
-------------------------
(1) The White Paper on Funds from Operations approved by the Board of Governors
    of the National Association of Real Estate Investment Trusts ("NAREIT") in
    March 1995 defines Funds from Operations as net income (loss) (computed in
    accordance with GAAP), excluding gains (or losses) from debt restructuring
    and sales of properties, plus real estate related depreciation and
    amortization and after adjustments for unconsolidated partnerships and joint
    ventures. The Company believes that Funds from Operations is helpful to
    investors as a measure of the performance of an equity REIT because, along
    with cash flow from operating activities, financing activities and investing
    activities, it provides investors with an indication of the ability of the
    Company to incur and service debt, to make capital expenditures and to fund
    other cash needs. The Company computes Funds from Operations in accordance
    with standards established by NAREIT which may not be comparable to Funds
    from Operations reported by other REITs that do not define the term in
    accordance with the current NAREIT definition or that interpret the current
    NAREIT definition differently than the Company. Funds from Operations 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 the Company's financial performance or to
    cash flow from operating activities (determined in accordance with GAAP) as
    a measure of the Company's liquidity, nor is it indicative of funds
    available to fund the Company's cash needs, including its ability to make
    cash distributions.
 
                                       29
<PAGE>   30
 
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
     The Company's future earnings, cash flows and fair values relevant to
financial instruments are dependent upon prevalent market rates. Market risk is
the risk of loss from adverse changes in market prices and interest rates. The
Company manages its market risk by matching projected cash inflows from
operating activities, financing activities and investing activities with
projected cash outflows to fund debt payments, acquisitions, capital
expenditures, distributions and other cash requirements. The majority of the
Company's outstanding debt (maturing at various times through 2029) has a fixed
interest rate, which minimizes the interest rate risk. The Company also utilizes
certain derivative financial instruments at times to limit market risk. Interest
rate protection agreements are sometimes used to convert floating rate debt to a
fixed rate basis or to hedge anticipated financing transactions. Derivatives are
used for hedging purposes rather than speculation. The Company does not enter
into financial instruments for trading purposes.
 
     The Company has total outstanding debt of approximately $6.1 billion at
March 31, 1999, of which approximately $0.6 billion, or 9.9 %, is variable rate
debt. If market rates of interest on the Company's variable rate debt increase
by ten percent (or approximately 57 basis points), the increase in interest
expense on the Company's variable rate debt would decrease future earnings and
cash flows by approximately $.9 million for a three month period. If market
rates of interest increase by ten percent, the fair value of the Company's total
outstanding debt would decrease by approximately $131 million. If market rates
of interest on the Company's variable rate debt decrease by ten percent (or
approximately 57 basis points), the decrease in interest expense on the
Company's variable rate debt would increase future earnings and cash flows by
approximately $.9 million for a three month period. If market rates of interest
decrease by ten percent, the fair value of the Company's total outstanding debt
would increase by approximately $146 million.
 
     At March 31, 1999, the Company has put option agreements outstanding in
connection with the acquisition of the Wright Runstad Properties and Columbus
America Properties. On August 13, 1999, the holders of Wright Runstad options
(the "WR Holders"), can require the Company to purchase all or a portion of the
3,435,668 Common Shares issued at acquisition at a price equal to $31.50 per
Common Share. Prior to August 13, 1999, if the WR Holders sell all or a portion
of their Common Shares to a third party for a price less than $29.10625, then
the Company is obligated to pay to the WR Holders an amount equal to the
difference between such sale price and $29.10625 multiplied by the number of
Common Shares sold, not to exceed $3.00 per Common Share. Any amounts paid by
the Company as a result of such sales, calculated as the difference between the
sale price and $29.10625 not exceeding $3.00 per Common Share, shall be recorded
as a reduction of shareholders' equity. For options exercised on August 13,
1999, any amounts paid up to $29.10625 per Common Share would be reflected as a
reduction to shareholders' equity; the portion of any amounts paid in excess of
$29.10625 per Common Share (not to exceed $2.39375 per Common Share up to an
aggregate of approximately $8.2 million) would be expensed by the Company. The
Company will not incur any loss on this transaction if the put option is not
exercised.
 
     The Company's cash flows could decrease by up to $10.3 million if, prior to
August 13, 1999, the WR Holders sell all their Common Shares to third parties.
Cash flows of the Company may decrease by up to approximately $108 million if
the WR Holders exercise their rights under the put option agreement on August
13, 1999. There will be no impact on cash flows from this transaction if the put
option is not exercised. As of March 31, 1999, the WR Holders have not exercised
their option under the put option agreement.
 
     The Company has a put option agreement outstanding with the seller of the
Columbus America Properties (the "CA Holder") related to 1,692,546 Units issued
at acquisition. The CA Holder has the option at any time after January 1, 1999
until the earlier of September 3, 2000 or the date the CA Holder has converted
all of its Units to Common Shares, to require the Company to purchase the Units
at a price equal to $29.00 per Unit. Under the terms of the agreement, prior to
September 3, 1999, the option shall be limited to an aggregate of 846,273 Units.
In the event of any option exercise the Company will recognize any cash paid as
a reduction in Partners' Capital. The Company's cash flows could decrease by up
to $24.5 million if, prior to September 3, 1999, the CA Holder exercises its
option on the 846,273 Units. Cash flows of the Company may decrease by up to
$49.1 million if the CA Holder exercises its option on or after September 3,
1999. There will
 
                                       30
<PAGE>   31
 
be no impact on cash flows from this transaction if the put option is not
exercised. As of March 31, 1999, the CA Holder has not exercised its option to
require the Company to purchase the Units.
 
     These amounts were determined by considering the impact of hypothetical
interest rates and equity prices on the Company's financial instruments. These
analyses do not consider the effects of the reduced level of overall economic
activity that could exist in such an environment. Further, in the event of a
change of such magnitude, management would likely take actions to further
mitigate its exposure to the change. However, due to the uncertainty of the
specific actions that would be taken and their possible effects, these analyses
assumes no changes in the Company's financial structure.
 
                                       31
<PAGE>   32
 
                                    PART II
 
                               OTHER INFORMATION
 
ITEM 5.  OTHER INFORMATION
 
     On January 6, 1999, the Company received a Private Letter Ruling from the
Internal Revenue Service to the effect that revenue received by the Company with
respect to telecommunication services provided to tenants of the Company will
qualify as "rents from real property" for purposes of the REIT qualifying income
requirements and that the provision of telecommunication services will not cause
otherwise qualifying income to fail to qualify as "rents from real property".
"Telecommunication services" were defined in the Ruling as "telephone and other
communications, e-mail, video communications, electronic research, internet
access, communications networking, safety and security systems, and
environmental control systems."
 
     As a result of this Ruling, the Company is proceeding with various
telecommunication service arrangements, the most significant of which are the
following:
 
        (a) The Company has entered into agreements with Allied Riser
Communications, Inc. ("ARC") for the provision of telecommunication services
currently consisting of high-speed internet access and private networking to
tenants of 57 of the Company's Office Properties. Each of these agreements
obligates ARC to install a fiber optic telecommunications riser within the
subject building for the purpose of delivering such telecommunication services
to subscribing tenants and to pay the Company a fee generally equal to an agreed
percentage of the gross receipts generated from such delivery. Each of these
agreements is for a term of five years, subject to a right of ARC to extend for
an additional five-year term.
 
     At the suggestion of its chairman, Mr. Samuel Zell, the Company previously
considered the feasibility of an investment in ARC. Its independent trustees,
however, ultimately determined not to proceed with this investment (due
primarily to its uncertain tax treatment at the time the investment was offered
to the Company) and, in so doing, acknowledged Mr. Zell's right to invest for
his own account. Subsequent to that determination, Mr. Zell purchase $15 million
of the $66 million of ARC's issued and outstanding preferred stock and
approximately 21.5% of ARC's issued and outstanding common stock (all of which
common stock was issued for nominal consideration). Although representatives of
Mr. Zell sit on the Board of ARC, he is not active in the day-to-day business
activities of ARC.
 
     The Company believes its agreements with ARC are on competitive market
terms. The Company further believes that the undertaking of ARC (unlike that of
other providers) to install fiber optic telecommunication riser facilities
within an Office Property prior to having first signed up customers within the
Property is a competitive benefit to the Company in attracting and maintaining
tenants. During the first quarter of 1999, the Company received nominal amounts
of revenue as a result of its license agreement with ARC and an additional $.2
million as rent for ARC's use of office space. ARC has advised the Company that,
as of March 31, 1999, ARC's investment in the subject buildings exceeded $9.4
million and was expected to increase with further installations.
 
        (b) The Company has also entered into telecommunication service
agreements with WinStar Wireless, Inc. ("WinStar") granting it a non-exclusive
license to locate equipment and sell telecommunication services to tenants in 88
of the Company's Office Properties (some of which are also subject to agreements
with ARC as described above). Under the terms of these agreements, WinStar has
agreed to pay the Company an initial administration fee per building as well as
a fixed monthly access fee. The Company does not otherwise share in the gross
receipts of WinStar. The agreements with WinStar are for a five-year term and,
in the case of "hub" buildings, allow WinStar the option of extending for an
additional five-year period.
 
     The licenses granted under the terms of the agreements with both ARC and
WinStar are non-exclusive in order to preserve the benefits of competition in
terms of pricing and quality of service for telecommunications services provided
to the Company's tenants.
 
                                       32
<PAGE>   33
 
         ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
 
     (a) Exhibits:
 
     (27) Financial Data Schedule
 
     (b) Reports on Form 8-K:
 
     (1)  A report on Form 8-K, dated January 7, 1999 containing Item 2, Item 5,
Item 7 and the following financial statements:
 
         - Pro Forma Condensed Combined Financial Statements as of and for the
           nine months ended September 30, 1998 and for the year ended December
           31, 1997;
 
         - Statements of Revenue and Certain Expenses for Park Avenue Tower for
           the year ended December 31, 1997 and the period from January 1, 1998
           through May 31, 1998;
 
         - Combined Statements of Revenue and Certain Expenses for Worldwide
           Plaza for the year ended December 31, 1997 and the period from
           January 1, 1998 through August 31, 1998.
 
     (2) A report on Form 8-K, dated January 21, 1999 containing Item 5.
 
                                       33
<PAGE>   34
 
                                   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
 
<TABLE>
<S>                                             <C>
Date: May 10, 1999                                             By: /s/ STANLEY M. STEVENS
                                                  ----------------------------------------------------
                                                                   Stanley M. Stevens
                                                               Executive Vice President,
                                                           Chief Legal Counsel and Secretary
Date: May 10, 1999                                             By: /s/ RICHARD D. KINCAID
                                                  ----------------------------------------------------
                                                                   Richard D. Kincaid
                                                               Executive Vice President,
                                                                Chief Financial Officer
</TABLE>
 
                                       34